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The Ponzi Scheme Blog: July 2014 Ponzi Scheme Roundup

The Ponzi Scheme Blog: July 2014 Ponzi Scheme Roundup | Global Corruption | Scoop.it

A summary of the activity reported for July 2014. The reported stories reflect: 10 guilty pleas or convictions in pending cases; over 20 years of newly imposed sentences for people involved in Ponzi schemes; at least 8 newly discovered schemes allegedly involving over $440 million and over 25,000 victims; and an average age of approximately 51 for the alleged Ponzi schemers in the stories reported. 

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Global Corruption
Corruption is a particularly viral form of cancer. It is caught here and there but it reappears somewhere else as soon as vigilance is relaxed. It is not eliminated, just driven underground. The corrupt merely suspend their operations temporarily. It lingers, hovering always in the background for its next opportunity.<br>                                                                         - Gerald E. Caiden <br>
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Ecuador Quake 'Deathtrap' Perpetrators Will Face Jail: Correa

Ecuador Quake 'Deathtrap' Perpetrators Will Face Jail: Correa | Global Corruption | Scoop.it

cuadorean President Rafael Correa announced the government is prepared to press charges against those responsible for building poorly designed infrastructure in light of the 7.8-magnitude earthquake that devastated the country on April 16, killing hundreds and injuring thousands more.

“There are individuals who acted with the intention to save a few extra pennies, and by doing so constructed death traps that were approved by local authorities,” President Correa stated via Twitter.

In the days after the earthquake, recovery officials reported numerous instances of poorly built housing structures. Initial government reports state that 805 buildings were destroyed and 608 were damaged. Meanwhile, preliminary surveys indicate that at least 119 schools have been damaged or collapsed.

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Why We Should Be Really Worried About the Panama Papers

Why We Should Be Really Worried About the Panama Papers | Global Corruption | Scoop.it

"In a world seemingly inured to financial scandals, the Panama Papers leak has reminded us of their capacity to shock. This huge document dump, which has revealed thousands of offshore accounts held in the tax haven of Panama by the world’s new superwealthy class, has already shaken British Prime Minister David Cameron, pointed to Russian President Vladimir Putin and led to the resignation of Iceland’s prime minister. At its core, the affair provides a window into something we knew existed, but whose scale we couldn’t always imagine: offshore zones of total lawlessness that fuel kleptocratic governments and undermine the rule of law across the globe.

This kind of high-stakes tax evasion might appear to be a product of the new global economy, but at its heart, the problem is actually astonishingly old. Tax avoidance has a deep history, one as ancient as taxation itself—after all, whenever a tax is created, someone creates a way around it. And what this long history reveals is that the way in which societies confront tax evasion is integral to their survival: Large amounts of untaxed national wealth inevitably lead to income inequality and higher government deficits, in turn stirring popular discontent. Eventually, these ineffective tax systems can lead to violent revolutions and complete societal collapse. Given the recent economic and social instability in the European Union and Brazil, financial transparency and accountability are things the United States must be careful to consider.


Taxes have been around since ancient Mesopotamia. Over time, as tax systems grew more sophisticated, so too did the tools to avoid paying them. In Renaissance Florence, where modern banking was in part invented, government inspectors determined how to tax citizens and businesses by individually auditing their (often highly technical) account books. In reaction, citizens—particularly the wealthy ones—often kept two books: a libro segreto, or “secret ledger,” for internal use and a libro mastro for government audits and for public business.

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The Ponzi Scheme Blog: April 2016 Ponzi Scheme Roundup

The Ponzi Scheme Blog: April 2016 Ponzi Scheme Roundup | Global Corruption | Scoop.it
The reported stories reflect: 3 guilty pleas or convictions in pending cases; over 26 years of newly imposed sentences for people involved in Ponzi schemes; at least 10 new Ponzi schemes worldwide; and an average age of approximately 50 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. And please remember that I am just relaying what’s in the news, not writing or verifying it.

    Alisa Adler, 55, was indicted on a wire charge relating to an alleged Ponzi scheme run through ASG Real Estate Services Group. The indictment alleged that Adler took about $740,000 from 3 investors, promising them returns through real estate transactions. The wire charge was added to other charges brought against Adler last year.

    Aequitas Capital Management and its founder and CEO, Robert J. Jesenik, 56, executive vice president, Brian A. Oliver, 51, and chief operating officer, N. Scott Gillis, 62, were the subject of SEC charges that they were running a “Ponzi-like” scheme. The company agreed to the appointment of a receiver about one month after it had announced layoffs and hired a consulting firm to help it wind down the business. Aequitas stopped making payments on over $300 million in private notes that it sold to investors. Aequitas had entered into an agreement to buy hundreds of millions of dollars’ worth of student loans from Corinthian Colleges, which itself ended up in bankruptcy. The Corinthian notes may have accounted for 74% of Aequitas’ debt-buying business and had been paying $4 million to $7 million to Aequitas prior to defaulting on the obligations to Aequitas. Aequitas promised interest to investors of 5% to 15% on the $350 million it brought in from investors from January 2014 to January 2016.
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Corruption Currents: Islamic State Turns Fishmonger for Funds

Corruption Currents: Islamic State Turns Fishmonger for Funds | Global Corruption | Scoop.it
Bribery:

An Australian inquiry will look at a construction project after testimony from a former executive alleged bribery. (Sydney Morning Herald)

Four former U.S. army officers were acquitted of bribery charges. (Washington Times)

In local politics: Lawyers for a convicted New York State lawmaker say their client was only 12% corrupt. An arrested Cambodian official’s family said a payment was charity, not a bribe. (NY Daily News, Phnom Penh Post)

Money Laundering:

India asked the U.K. to deport Vijay Mallya, a business tycoon under investigation for tax evasion and money laundering. Mr. Mallya broke his silence on the allegations. (BBC, NY Times) Financial Times)

The Philippines anti-money laundering officials filed a criminal case against executives at a remittance firm over the hacking heist. The central bank said de-risking put pressure on remittance firms. Manila assured Bangladesh that its money, laundered in the hacking heist, is on its way. A banker warned against piecemeal reform. (Reuters, Inquirer, Standard, Inquirer)

Nigeria asked the World Bank for help with recovering money laundered by Sani Abacha. (Bloomberg)

Scotland Yard submitted a money-laundering case to U.K. prosecutors involving a Pakistani political party. Pakistan is unhappy with the pace. (The News, The News)

Sinaloa pressure: An associate to El Chapo pleaded guilty in Chicago to money laundering. Another was charged with drug drafficking. (ABC7, Chicago Tribune TPUB +3.94%, NY Daily News)

The U.S. removed a Pakistani man it said was laundering proceeds of terrorism. (press release)

Peru detected $250 million in money-laundering schemes last year. (Andina, inSight)

Qatar is setting up an anti-money laundering center. (Peninsula)

A warrant was issued against a former Indian minister as part of a money-laundering case. (Times of India, Indian Express)

Sanctions:

Russia wants the U.N. to blacklist Syrian rebels. (Al Jazeera)

Iran’s supreme leader said the U.S. is using “Iranphobia” to block foreign investment and banking. Washington denies this. Banks are working on a solution. (Al Monitor, Al Monitor, European Sanctions, SKY)

Washington says Europe extended its sanctions on Russia. (EUObserver)
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10 corruption risks keeping charities awake at night (Blog)

10 corruption risks keeping charities awake at night (Blog) | Global Corruption | Scoop.it
Despite ranked as the most 'trusted' institutions in the world, NGOs & charities face a number of inherent vulnerabilities and corruption risks
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Corruption: What NGOs don't want you to know (Blog)

Despite the growing level of funds channelled through NGOs (or maybe because of it), fraud and corruption continue to be a highly sensitive topic, with most NGOs reluctant to openly discuss it.  This was highlighted a few years ago, when Médecins du Monde initiated a study in an attempt to open up discussion on corruption within the humanitarian aid sector (one of the most corruption prone areas of development).  Of the 17 largest French NGOs contacted for a confidential interview, accounting for more than 80% of all French humanitarian aid, 11 refused to participate. Attitudes such as this, a general lack of transparency within the sector, and a scarcity of empirical evidence available on fraud and corruption, has resulted in the topic avoiding appropriate scrutiny.
Following on from my article on NGO accountability, this is the second in a series of three blogs examining NGO accountability and corruption.  Its focus will be on what we know about actual corruption within the NGOs.
‘Rose-tinted’ glasses’:  Corruption only happens in NGOs working in the developing world … or does it!
When the topic of corruption is raised, the natural inclination is to point the finger elsewhere.  In the case of Northern NGOs, this tends to be at their counter-parts operating in the developing environments of the South.  This was brought home to me in a discussion with a CEO & President of a North American based INGO last week, who stated with absolute conviction, that the ‘real’ need for anti-corruption measures was in Southern NGOs, as those in the North (like his) could safely “rely” on their external auditors and internal risk management systems to prevent it from happening.  When I pointed out that the latest ACFE fraud survey showed that he had twice the chance of uncovering a fraud within his INGO by accident (at 6%) then it being uncovered by his external auditors (at 3%), he was a little taken aback.  That aside, just how accurate was his assertion that the problem of fraud and corruption within the NGO / non-profit sector is limited to certain parts of the world?
While research available on NGO corruption is predominantly drawn from newspaper articles of fraud reported in national NGOs in the North, it represents the tip of the iceberg, as a KPMG survey has found that 77% of all fraud investigations never reach the public domain, and 54% are not even communicated internally.  In a 2014 survey into fraud in the Australian NGO sector, 54% of respondents advised that they did not report fraud to the Police because of “concerns relating to the impact of future funding opportunities, and potential damage to the organisation’s reputation”. While over 90% of respondent’s viewed it as a problem for the non-profit sector as a whole (in another show of ‘finger pointing’), only 1 in 4 saw it as a problem for their own organisation!
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Jury deadlocks on most counts in Washington auditor fraud trial

Jury deadlocks on most counts in Washington auditor fraud trial | Global Corruption | Scoop.it
The first Washington state official indicted in 35 years escaped conviction at his five-week federal fraud trial, but that doesn't mean others in state government are any happier that he remains in office.

"Unfortunately, the people of Washington state do not yet have much-needed closure to Troy Kelley's ongoing legal battles," Gov. Jay Inslee said in a statement after jurors announced Tuesday they could not reach a decision on the key charges against Kelley. "Regardless of the outcome in court today, serious questions remain about Troy Kelley's ability to successfully fulfill his role as state auditor."

Kelley, a Democrat elected in 2012, is the state official charged with rooting out waste and fraud in government operations. He took a seven-month leave before returning to work in December, but has otherwise spent the past year rebuffing calls for his resignation.

He vowed to clear his name, and his lawyers said the trial's result was a big step in that direction.

Prosecutors accused Kelley of pocketing $3 million in fees that they said he should have refunded to homeowners when he ran a real-estate services business during the height of last decade's real-estate boom.
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Brazil Prosecutor Vows to Keep Petrobras Corruption Probe on Course

Brazil Prosecutor Vows to Keep Petrobras Corruption Probe on Course | Global Corruption | Scoop.it
A member of the prosecutorial team spearheading Brazil’s landmark corruption investigation says he and his colleagues will press forward with the vast criminal probe, despite fears that a new government coalition might try to shut it down.

The future of Operation Car Wash, which uncovered a yearslong embezzlement ring centered on state oil company Petróleo Brasileiro SA, or Petrobras, is among the questions raised by the prospect of President Dilma Rousseff being removed from office.

Ms. Rousseff, who was chairwoman of Petrobras during much of the alleged wrongdoing, hasn’t been implicated by prosecutors in the scandal. She faces impeachment on separate charges of violating federal budget laws, allegations that she denies.

Vice President Michel Temer, who would take over if Ms. Rousseff is ousted from office, has been linked to the scandal. So have the leaders of the House and Senate. All have denied wrongdoing.

‘I sense in the air a smell, an effort to bury operation Car Wash.’
—Former Brazilian Senator Pedro Simon
All three are members of the centrist Brazilian Democratic Movement Party, which recently split with the Ms. Rousseff’s ruling coalition. Known as the PMDB, the centrist party is working with other parties, some of whose members also are under investigation, to form a new government in anticipation of the president’s ouster.

Vice President Temer insists that the new government he plans to lead won't interfere with the investigation. “The executive leader shouldn’t position himself for or against the investigation,” he said. “It is in the judiciary branch’s realm.”
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IT glitch allowed theft of documents, PwC auditor says

"Shutting off whistle-blowers, without whom we would not even be talking about cracking down on tax avoidance, would be immensely harmful to the public campaign for tax justice," said Fabio de Masi, a left-wing German member of the European Parliament who will testify at the trial in support of the accused. "If they are found guilty, and potentially even sentenced to prison, this could have enormous effects in Luxembourg and beyond."

Deltour is among three men to face charges from theft to laundering and violating business secrecy, in the six-day trial that started in Luxembourg Tuesday.

He and Raphael Halet, 39, who both worked for PwC before, risk as long as five years in jail for allegedly stealing hundreds of private documents cataloging tax pacts between big companies and Luxembourg authorities. Journalist Edouard Perrin, 44, another French national, is the third man to stand trial, charged with being Halet's accomplice and urging the ex-PwC staffer in his search for secret files at the firm.

The ripple effects of LuxLeaks sped beyond Luxembourg, causing European Union regulators to expand a tax subsidy probe and propose new laws to fight corporate tax dodging, while EU lawmakers created a special committee to probe fiscal deals across the 28-nation bloc.
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USA: Secretary of State Kerry, Heinz Family Have Millions Invested In Offshore Tax Havens

USA: Secretary of State Kerry, Heinz Family Have Millions Invested In Offshore Tax Havens | Global Corruption | Scoop.it
Secretary of State John Kerry and his wife Teresa Heinz have invested millions of U.S. dollars through family trusts in at least 11 offshore tax havens, according to an analysis by The Daily Caller News Foundation.

The revelation comes on the heels of the release of the Panama Papers, a treasure trove of 11.5 million legal and financial records documenting how some of the world’s richest and most powerful people have used offshore bank accounts to conceal their wealth and avoid taxes.

Since the release of the papers, no American politician has been identified as using the secretive offshore accounts.

A DCNF investigation has confirmed that the former Massachusetts Democratic senator and his billionaire wife, using an elaborate set of Heinz family trusts, have invested “more than $1 million” each into 11 separate offshore accounts — mainly hedge funds in the Cayman Islands.
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USA: Millions of tax dollars lost in Sandy contractor fraud | Di Ionno

USA: Millions of tax dollars lost in Sandy contractor fraud | Di Ionno | Global Corruption | Scoop.it
The money came and the money went, and nobody was watching.

Now, it's a police problem.

That is the abridged version of the hurricane-related contractor fraud that has left thousands of homeowners stuck in the "disaster after the disaster" known as the Sandy recovery.

No place is it worse than sprawling Ocean County, where the storm left the most damage over the largest area.

"The government wanted to get recovery money into the hands of the people who were devastated as quickly as possible," said Ocean County Prosecutor Joseph D. Coronato. "Unfortunately, there are people out there taking advantage of other people's misery. They were victimized a second time."

Coronato's office has already secured 49 indictments involving Sandy-related fraud, and there are another 50 active investigations. Several small cases were previously adjudicated through restitution or the pretrial intervention, Coronato said, but the bigger cases are now being lined up for trials or pleas.

And while those numbers don't seem staggering, the contractors are alleged to each have victimized an average of four to five homeowners. Several are accused of defrauding 20 to 30 clients.
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University of Texas Admissions Scandal: An Overview of Our 60+ Story Investigation - Watchdog.org

University of Texas Admissions Scandal: An Overview of Our 60+ Story Investigation - Watchdog.org | Global Corruption | Scoop.it

What started as a small investigation into the University of Texas law school’s admission process has grown into a Texas-sized scandal indicating that the University of Texas Law School has been knowingly accepting underqualified students who had connections to the politically powerful.

In the most extreme cases — 18 of which have come to light — students’ test scores on the Law School Admissions Test wouldn’t get them into the weakest law schools in the country.

Wallace Hall, a Gov. Rick Perry appointee to the University of Texas Board of Regents, blew the whistle on the influence peddling. Yet he was accused by the University and by the media of making wild accusations. In fact, as Jon Cassidy proved, Hall was right: a bipartisan group of legislators had for years been using the UT admissions process as their own spoils system.

Jon went to work developing sources in the legislature and the university. He built a database that tracked over a decade’s worth of academic data from students admitted to UT and then traced the individual students who later performed poorly on the Texas Bar exam. Then he found the smoking gun: documents that linked each under-qualified student to a powerful lawmaker or state official.

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SWIFT warns customers of multiple cyber fraud cases

SWIFT warns customers of multiple cyber fraud cases | Global Corruption | Scoop.it
SWIFT, the global financial network that banks use to transfer billions of dollars every day, warned its customers on Monday that it was aware of "a number of recent cyber incidents" where attackers had sent fraudulent messages over its system.

The disclosure came as law enforcement authorities in Bangladesh and elsewhere investigated the February cyber theft of $81 million from the Bangladesh central bank account at the New York Federal Reserve Bank. SWIFT has acknowledged that the scheme involved altering SWIFT software on Bangladesh Bank's computers to hide evidence of fraudulent transfers.

Monday's statement from SWIFT marked the first acknowledgement that the Bangladesh Bank attack was not an isolated incident but one of several recent criminal schemes that aimed to take advantage of the global messaging platform used by some 11,000 financial institutions.

"SWIFT is aware of a number of recent cyber incidents in which malicious insiders or external attackers have managed to submit SWIFT messages from financial institutions' back-offices, PCs or workstations connected to their local interface to the SWIFT network," the group warned customers on Monday in a notice seen by Reuters.

The warning, which SWIFT issued in a confidential alert sent over its network, did not name any victims or disclose the value of any losses from the previously undisclosed attacks. SWIFT confirmed to Reuters the authenticity of the notice.
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Auditors rebuke U.N. development agency after U.S. indictments

Auditors rebuke U.N. development agency after U.S. indictments | Global Corruption | Scoop.it
An internal U.N. Development Program audit published on Tuesday gave the agency an "unsatisfactory" rating for its management of the U.N. Office for South-South Cooperation, saying it failed to properly vet a donor linked to a bribery scandal.

The UNDP carried out the audit of its Office for South-South Cooperation in response to U.S. charges against John Ashe, General Assembly president in 2013-2014, and six other people over an alleged bribery scheme. The main UN internal investigations office last month released a related but separate audit of the United Nations interaction with groups linked to the scandal but that audit did not touch on the UNDP. It also recommended improvements.

The UNDP, an autonomous United Nations agency with its own budget that focuses on development projects, said the agency's Office of Audit and Investigations (OAI) found a number of management shortcomings at the Office for South-South Cooperation (OSSC).

The "unsatisfactory" grade was because auditors found "internal controls, government and risk-management processes were either not established or not functioning well," it said.

The OSSC had received $1.5 million last May from Macau-based Sun Kian Ip Group, headed by billionaire Macau real estate developer Ng Lap Seng.

Ng and six others were charged by the U.S. attorney's office in Manhattan for alleged involvement in a scheme to get John Ashe, U.N. General Assembly President in 2013-14 and former ambassador of Antigua and Barbuda, $1.3 million in bribes to build a U.N.-sponsored conference centre in Macau.

The auditors found that OSSC had not properly vetted Sun Kian Ip.

"The donor's risk assessment performed by the Office at the time of receiving the $1.5 million contribution was ineffective," the audit said.
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PERU: Caso Lava Jato: Los Pagos Oscuros 

PERU: Caso Lava Jato: Los Pagos Oscuros  | Global Corruption | Scoop.it
El esquema financiero que emple� Odebrecht, a trav�s de consorcios y offshores para hacer transferencias de dinero desde y hacia el Per� en 2007, para perderse en el anonimato del cash o las offshore.
Hasta hace poco, los ladrones multimillonarios llevaban gran ventaja a los investigadores anti-corrupci�n. No solo por su capacidad de �romper manos� con el poderoso jiu-jitsu de la codicia sino, sobre todo, por la tecnolog�a. Capas tras capas de compa��as offshore en el mundo entero pod�an ocultar eficazmente al due�o real de los botines, permiti�ndole a la vez un f�cil acceso a ellos.
Los corruptos eran cosmopolitas funcionales, mientras los investigadores chequeaban sus visas. Eso ya cambi�.

Nada ilustra mejor que el caso Lava Jato y los Panama Papers la transformaci�n veloz en la ecolog�a de la lucha anti-corrupci�n en el mundo y especialmente en Latinoam�rica.

En esa nueva ecolog�a, esta investigaci�n busc� responder algunas preguntas dif�ciles:

�C�mo movi� Odebrecht dinero desde sus offshores (las propias y las alquiladas) hacia y desde el Per�? �Cu�ndo lo hizo, a trav�s de qui�nes?
Esta investigaci�n se hizo en estrecha colaboraci�n con La Prensa de Panam�.
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Dorsey Anti-Corruption Digest - April

In this edition, among the many topics discussed, we report on the FCPA enforcement pilot program under which a company that self-reports a violation of the FCPA and which meets a number of requirements will be eligible to receive substantial mitigation credit or a possible declination of prosecution; the $9 million settlement between Las Vegas Sands and the SEC following an investigation into the company that involved allegations of bribery;  the former vice president of government relations for LAZ Parking pleading guilty to taking $90,000 in bribes in exchange for granting a contract to supply parking meters to a specific bidder.

Updates from the U.K. include a report on the SFO charging the President of Alstom’s U.K. operations with corruption regarding the supply of trains to the Budapest Metro; and the $3.2 million civil settlement paid by Braid Group (Holdings) Limited regarding potentially corrupt contracts entered into by its subsidiary.

Global updates include news from Brazil that Joseph Safra, the majority stakeholder in Banco Safra, allegedly conspired to bribe officials in order to reduce the bank’s corporation tax bill; updates regarding anti-corruption enforcements in China and the announcement that corruption cases in China that involve $463,000 or more may incur the death penalty; the publication of Ernst & Young’s 14th Global Fraud Survey in which bribery and corruption was identified as an “ongoing challenge”; an update from Kuwait regarding an internal investigation initiated by Petrofac Plc relating to allegations of bribery; plus anti-corruption developments in Egypt, Serbia, and more from around the globe.
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Vatican Watchdog Says Suspicious Transactions Almost Quadrupled

Vatican Watchdog Says Suspicious Transactions Almost Quadrupled | Global Corruption | Scoop.it
The Vatican’s financial watchdog registered 544 suspicious transactions in 2015—almost four times as many as the previous year—but officials said Thursday it reflected greater vigilance rather than any rise in illicit financial activities.

The Financial Information Authority, or AIF, said it turned over 17 of those cases, mostly involving potential money laundering, to Vatican prosecutors.

“I would like to see the figure zero,” René Brülhart, the AIF’s president told reporters. “But it doesn’t reflect reality. Wherever you have financial transactions, financial activity, you always see something potentially suspicious.”

Mr. Brülhart said the Vatican’s oversight system uses a “rather low reporting threshold,” in part to raise awareness of potential problems. He said it was a “fair assessment” that none of the suspicious activity was related to the financing of terrorism.

Thursday’s annual report was the fourth published by the AIF, which Pope Benedict XVI set up in 2010 to work toward compliance with international standards on financial crimes. That step began a series of financial reforms at the Vatican, which have been continued by Pope Francis.

Mr. Brülhart touted a December 2015 report by the Council of Europe’s Moneyvaal committee, which praised the “intensive review process” at the scandal-plagued Vatican bank. The bank has closed more than 4,800 accounts, in some cases because a client’s profile didn’t conform with the bank’s stated mission to serve “works of religion.”
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Trouble in Paradise: NGO Accountability & Corruption (Blog)

Trouble in Paradise: NGO Accountability & Corruption (Blog) | Global Corruption | Scoop.it
In the first of a series of three blogs on corruption and the NGO / non-profit sector, we explore the concept of NGO accountability
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Five Points on Ley 3de3 and Battling Corruption in Mexico | AS/COA

Five Points on Ley 3de3 and Battling Corruption in Mexico | AS/COA | Global Corruption | Scoop.it
What are the three words that Mexicans think of when they hear the word “Mexico”? Country, culture, and corruption. Nearly 78 percent consider corruption as the factor that’s most damaging to the economy, per a 2014 nationwide survey of 32,000 people. On top of that, seven in 10 surveyed consider the public sector to be more corrupt than the private, and that it’ll be difficult for Mexico to do away with corruption. 

It may be hard, but one piece of legislation, known as Ley 3de3, or the “3for3 Law,” could help Mexico move closer to that goal. Currently up for debate in Mexico’s Congress, the citizen-backed measure seeks to hold officials accountable. AS/COA’s Carin Zissis spoke about the initiative with Max Kaiser, anticorruption director at the Mexican Institute for Competitiveness (IMCO) and one of the bill’s authors, about what’s involved and why the law’s timing is so important.

1. Ley 3de3 has its roots in an online platform seeking transparency from public officials. 

In the months leading up to Mexico’s midterm vote of June 2015, IMCO and another civil society group, Transparencia Mexicana, launched an online platform called 3de3, named as such because it asks candidates to disclose three pieces of information: personal assets, possible conflicts of interest, and taxes. Only a couple hundred officials made these declarations, but Kaiser says it drew huge public interest to the tune of tens of thousands of daily website visits, with voters checking to see if candidates had disclosed their financial information. 

2. Politicians didn’t feel compelled to participate, so the next step involved drafting legislation to make it a legal obligation.

AQ: Mexico's Next Big Chance to Tackle Corruption

After the 2015 midterms ended, it became clear that the only way politicians would be compelled to make these disclosures were if doing so became a legal requirement. Not only that, but ensuring the veracity of the declarations requires government involvement. 

To that end, civil society groups developed Ley 3de3, which obligates politicians to make their declarations and to do so publicly. The law also sets a code of conduct for public officials and defines 10 types of corruption that would earn them punishments, like being forced to step down or getting barred from holding office again. 

At the time of this report, corruption is undefined in Mexico’s legal system. 
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Kickbacks, dirty deals and more: The corruption scandals plaguing Latin America

Kickbacks, dirty deals and more: The corruption scandals plaguing Latin America | Global Corruption | Scoop.it

The massive bribery scandal that has enraged Brazilians and pushed President Dilma Rousseff to the verge of impeachment is just one flashpoint among many right now across Latin America.

The usual kickback schemes and dirty deal-making of the past just aren’t the same anymore. They can be even more wildly profitable, yes. But corruption also appears to be getting more difficult to cover up.

More Latin American leaders and governments are engulfed in scandals right now than at perhaps any other time in recent memory. In countries where democratic institutions have grown stronger, a more independent judiciary and the political activism of an Internet-powered citizenry are challenging the old way of doing business by graft. It looks like hard-fought progress.

Experts caution that lasting change will come slowly, and not without setbacks. The United States has come a long way from the days of Tammany Hall, and there are still plenty of governors, lawmakers and public officials who get busted by the FBI and go to jail in ignominy.

Yet something does appear to be changing in Latin America, where stagnant growth has left voters in a foul mood and put incumbents and their budgets under greater scrutiny.

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Estonian Cybercriminal Sentenced For Infecting 4 Million Computers In 100 Countries With Malware In Multimillion-Dollar Fraud Scheme | USAO-SDNY | Department of Justice

VLADIMIR TSASTSIN was sentenced in Manhattan federal court to more than seven years in prison for perpetrating a massive internet fraud scheme by infecting more than four million computers in over 100 countries with malware.  The malware secretly altered the settings on infected computers, enabling TSASTSIN and his co-conspirators to digitally hijack users’ Internet searches and re-route their computers to certain websites and advertisements.  As a result, the defendants received millions of dollars in fees from advertisers who paid the defendants to bring customers to their websites or ads, but were unaware that the defendants did so by digitally hijacking victims’ computers.  The malware also prevented the installation of anti-virus software and operating system updates on millions of infected computers, leaving those computers and their users unable to detect or stop the malware, and exposing them to attacks by other malware.  On July 8, 2015, TSASTSIN pled guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit computer intrusion.  U.S. District Judge Lewis A. Kaplan sentenced TSASTSIN earlier today.

U.S. Attorney Preet Bharara said: “Vladimir Tsastin was sentenced today to 87 months in prison for his role in a massive fraud scheme, which victimized more than four million Internet users in 100 countries.  By falsely collecting advertising fees for every ‘click’ their victims made, Tsastsin and his co-conspirators collected over $14 million. Together with our law enforcement partners all over the globe, this Office will continue to investigate and prosecute sophisticated cyber frauds.”
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Are Bad Guys Using Good Deeds to Cover Their Tracks?

Are Bad Guys Using Good Deeds to Cover Their Tracks? | Global Corruption | Scoop.it
Plenty of people wear philanthropy like a mantle of sainthood, but as anyone with a passing familiarity with the business section (or the works of Charles Dickens) knows, good deeds do not a good person make. Before we knew them as criminals, Lance Armstrong, Michael Milken, Jeffrey Epstein, and Bernie Madoff had carefully-cultivated their charitable reputations. 

Now a new case has tangled the worlds of bad finance and good works. Last Saturday, Andrew Caspersen, a 39-year-old Wall Streeter, was arrested and charged with securities and wire fraud. (He's pictured above, exiting federal court in Manhattan on March 28.) By the time he was caught by the United States Attorneys office, Caspersen had allegedly reduced a $25 million investment from a philanthropic fund to a ghostly looking bank account with little more than $40,000.

Caspersen's pedigree makes his case all the more compelling. He moved seamlessly from blue-blood schools—Groton, Princeton, Harvard Law—to blue blazer hedge funds—Blackstone and Park Hill Groups. Somewhere along the way he picked up an expensive addiction to high-risk options trading, one that he funded, apparently, by seeking investments from well-heeled private foundations. His primary target, according to recent speculation in Bloomberg, was the conservationist Moore Charitable Foundation, founded by the avid birdwatcher Louis Bacon. That non-profit's recent hesitation about the investment vehicle, prompted by Caspersen's ill-advised attempts to seek a second sizable investment from the Foundation, led to investigation that culminated in his arrest, in LaGuardia airport on Saturday night. Talk about birds in flight.
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U.N. news outlet at center of bribery case defends its integrity

U.N. news outlet at center of bribery case defends its integrity | Global Corruption | Scoop.it
A United Nations-focused news outlet whose U.N. accreditation has come under review after U.S. prosecutors linked it to a scheme to bribe a former General Assembly president is striking back at its critics.

South-South News, which for six years has published articles related to the U.N. and development issues, in an open letter dated Monday posted on its website defended its reputation, which it said "has been tainted by some unscrupulous acts."

"Many media and administrative professionals have proudly worked for South-South News and can attest to the integrity of our media operation," South-South News said.

The letter came a month after Francis Lorenzo, a suspended deputy United Nations ambassador from the Dominican Republic and South-South News' former president, pleaded guilty to participating in the bribery scheme.

He is one of seven people charged since October for engaging in a scheme to pay $1.3 million in bribes to John Ashe, a former U.N. ambassador from Antigua and Barbuda who was U.N. General Assembly president from 2013 to 2014.

Prosecutors alleged that Lorenzo facilitated bribe payments to Ashe from Ng Lap Seng, a billionaire real estate developer in Macau who authorities say funded South-South News and who was seeking to build a U.N.-sponsored conference center in Macau.

Following Lorenzo's plea and agreement to cooperate with prosecutors, authorities last month arrested Julia Vivi Wang, who had been the vice president of South-South News, in connection with the bribery investigation.

While South-South News itself has not been charged in the case, prosecutors have alleged that it was used as a conduit for bribes.
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USA: A University, Veterans and $35 Million Fraud Allegation

Federal authorities last week charged a Pennsylvania man with creating a scheme that resulted in $35 million in fraudulent payments for the education of veterans, NJ.com reported. The man's company told veterans that they were being educated by faculty members at Caldwell University, a private institution in New Jersey, when the veterans were actually enrolled in ED4MIL, an unaccredited online and correspondence program. The complaint charges that a former associate dean, who left Caldwell to work for ED4MIL, helped get the university to sign on to a collaboration. And the federal charges say that another university employee signed off on the deal, knowing that the university's faculty members wouldn't be doing the teaching.
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Fraud Upon Fraud - Watchdog.org

Desperation is a dangerous state of mind. The Lewiston-Auburn Sun Journal has the story of one mother in Maine, who, in addition to submitting falsified applications for welfare, sold her son’s prescription ADHD medication for cash—and did so within a drug-free zone.

According to the report, this Mainer’s legal problems began in 2014, when she attempted to illegally secure welfare benefits by submitting fraudulent materials to the state’s Department of Health and Human Services (DHHS). These materials included forged notes that appeared to be written by people such as her father, a landlord and a property manager, and were meant to serve as evidence of precarious housing accommodations. (Tough love won out—none of them backed her lies.) Perhaps not surprisingly, she got caught and was hit with forgery charges that together could have brought a maximum prison sentence of thirty years.

But before the state even had a chance to hold a trial, she made another attempt to pilfer welfare benefits. As a result of a false claim she made to DHHS, stating that her young son lived with her, the agency paid her an excess $842. To make matters even worse, the woman attempted to coerce two witnesses into lying to investigators on her behalf. (At least her bail was then revoked to put an end to this downward spiral.)

Authorities hit this sloppy scammer with a lengthy list of subsequent charges, including forgery, theft, witness tampering, aggravated trafficking of a scheduled drug—all felonies—and violating a condition of her release—a misdemeanor. She pleaded guilty to almost all of the second set of charges; she ended up pleading guilty to a lower drug charge and, for that, was hit with a $400 fine. For the theft charge related to her collection of benefits from the Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families and MaineCare, the state’s Medicaid program, she received a five-year prison sentence with all but nine months suspended. She received a nine-month prison sentence for the forgery charge, an additional nine months for witness tampering and another six months for violating the conditions of her release.

Then she pleaded guilty to three charges of aggravated forgery, related to her original attempt to defraud DHHS. She was given six years in prison with 54 months suspended for one count and nine-month prison sentences for the other two, which she will serve concurrently with the first sentence. (In case you’re having trouble keeping track, the bottom line is 18 months behind bars.) She also must pay $3,323 in restitution to DHHS. Once she gets out of prison, she will serve three years of probation, must enroll in and complete a substance abuse treatment program and may be subject to random searches and drug testing.
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It's time for Canada to back an International Anti-Corruption Court

It's time for Canada to back an International Anti-Corruption Court | Global Corruption | Scoop.it
Corrupt dealings undercut development, distort national priorities, accentuate inequality, and enrich conniving elites. Where governance is weak, corruption enables whole populations to be deprived of educational opportunities or access to health benefits. Corruption gives rise to civil conflict and its profits fuel long internal wars such as those in Afghanistan and the Democratic Republic of the Congo.


Now, a proposed International Anti-Corruption Court provides an innovative way to punish corrupt political leaders and those who feed off corrupt practices and thus to minimize the crimes of corruption globally. Canada could play a major role in creating such a court.

Mark Wolf, until recently chief judge of the Massachusetts Federal District Court and a number of international advocates are leading the charge to create such a court. It is modelled on the International Criminal Court, which aims to punish gross human-rights violators and on the several international tribunals for Rwanda, Yugoslavia, and Sierra Leone, each of which punished people who participated in genocidal and ethnic-cleansing activity.

An International Anti-Corruption Court (IACC) would, by arresting, trying and punishing corrupt officials across the globe, help to reduce impunity and thus deter grand corruption. It would bring increased attention and notoriety to the excesses of corruption and to kleptocracy more generally. It would also give the kind of international (presumably UN-supported) legitimacy to anti-corruption efforts that national court systems often lack.
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