British banks handled vast sums of laundered Russian money

In an exclusive investigative report published by the Guardian on Monday, March 20,2017, the Guardian uncovers an ongoing exceptional international money laundering scheme. Mr. L. Burke Files, President of The AACI, was the only cited expert whom the Guardian showed details of the transfers. 

"Documents seen by the Guardian show that at least $20bn appears to have been moved out of Russia during a four-year period between 2010 and 2014. The true figure could be $80bn, detectives believe.......The Global Laundromat banking records were obtained by the Organized Crime and Corruption Reporting Project (OCCRP) and Novaya Gazeta from sources who wish to remain anonymous. OCCRP shared the data with the Guardian and media partners in 32 countries.

The documents include details of about 70,000 banking transactions, including 1,920 that went through UK banks and 373 via US banks."

"The Guardian showed details of the transfers to L Burke Files, an international financial investigator. He said compliance checks at many western banks were desultory, and often little more than “box ticking”.

“Typically the compliance and investigations department is treated like an unwanted step-child. The directors of a bank see compliance as an expense without any return. The compliance professionals are underpaid, underskilled and receive little or no effective training in spotting criminal patterns.”

Files added: “Most of the transactions I’m seeing here would have required substantial enhanced due diligence. It isn’t just individual transactions. It’s the repeated pattern.”

Click here to read the complete news report.

The following are integral parts of the Guardian exclusive investigative report:

The Global Laundromat: how did it work and who benefited?

How 'dirty money' from Russia flooded into the UK – and where it went 

Russian money and the 'Global Laundromat': what banks said

Part 1(B): Fraud and Corruption Prevention - Government Entities

What is the resilience of an entity in preventing, deterring, and detecting fraud and corruption?

Tempe, February 27, 2017

Technical Staff

As we stated in Part 1(A): Fraud and Corruption Prevention - Government Entities, there is not a cut-and-dry measurement for fraud and corruption risks. These risks should be addressed at the following levels: internally and externally.

The following questions and their respective answers would constitute a foundation for identifying and assessing the fraud and corruption risks attributed to the external environment of a government entity. The process should include the following factors:

• Constituents and customers
• Suppliers and creditors
• Public expectations of services
• State audit
• Local laws, rules, and regulations
• Society social norms, values, and culture
• Prevailing corruption or perceived corruption in the community / country

Constituents and Customers

1. Does the government entity have a documented current system to receive, process, and respond timely and appropriately to constituents and customers' suspected corruption complaints?
2. Does the government entity interact with its constituents and customers via social media platforms? If yes, does the government entity monitor its constituents and customers' perception of its integrity and ethical practices?

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Part 1(A): Fraud and Corruption Prevention - Government Entities

What is the resilience of an entity in preventing, deterring, and detecting fraud and corruption?

Tempe, February 27, 2017
Technical Staff

Where to Start?

A smart start at an entity to prevent fraud and corruption would be seeking an answer to the following question:

What is the current status of fraud and corruption in the government entity?

The answer to this question could be qualitative or quantitative. Qualitative responses, for example, could be very low, low, medium, medium-high, high, and catastrophic! Quantitative answers could be a point on a numeric or percentage scale.

This is what we call fraud and corruption risk identification, or sometimes we call it fraud and corruption risk mapping. Fraud and corruption risk is a business risk. Because it is a business risk, it should be embedded in the organization’s strategy. Needless to say that neither this risk nor the strategy is static: they are dynamic.

Fraud and Corruption Risks in a Government Entity

There is not a cut-and-dry measurement for fraud and corruption risks. These risks should be addressed at the following levels: internally and externally.

The following questions and their respective answers would constitute a foundation for identifying and assessing the fraud and corruption risks attributed to the internal environment of the government entity.

Are the elected public officials financially literate?

Is there an orientation program for senior officials and newly elected public officials

Is there an effective internal audit function?

Should circumstances warrant, does the government entity have effective and competent functions similar to those applied in its industry?

Does the government entity have effective compliance function?

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If you are not a member, join us today.

We will start rolling over the CACM via exam in selected countries and regions. CACM candidates of these countries will find the CACM Review material helpful.