The Week Of: March 2, 2020

This week’s news and stories of interest to the AML community. If you prefer a news roundup sent to you, subscribe to our weekly newsletter.

Don’t forget about the Panama Papers

The Panama Papers made a splash when they were published by the International Consortium of Investigative Journalists (ICIJ) in 2016. The cache of data that revealed the ownership structure of hundreds of thousands of offshore firms led to resignations and removals of world leaders and public embarrassment for celebrities, politicians, and other global elites.

The Panama Papers also birthed other leaked data sets that continue to out the wealthy who hide their money, including the Paradise Papers, Bahamas Leaks, and Luanda Leaks.

These leaks may have brought some panic to the one percent of the one percent, but one country stood out for remaining relatively unscathed by the scandal: the United States.

While the Papers’ reach spanned much of the world, things were quieter in the U.S., for a variety of reasons. Indeed, the first American, a Massachusetts accountant named Richard Gaffey, wasn’t charged until late 2018.

Public interest faded quickly. A search of the Panama Papers as a search keyword in Google Trends reveals a flurry of interest upon the initial release, and then very quickly dropping in the span of a month.

Gaffey is just one of a handful to have faced charges from U.S. prosecutors. He pleaded guilty last week to eight felonies, including conspiring with multiple U.S. taxpayers to evade taxes, commit wire fraud, and launder money. Prosecutors recommended nine years in prison; he will be sentenced in June.

While it may be discouraging for some that relatively few people have faced judgment for hiding or helping to hide such vast wealth, it is also a testament to the dogged determination of journalists at the ICIJ, the risks taken by anonymous whistleblowers, and the slow-but-steady case-building process undertaken by prosecutors that anyone has been punished at all.

Trade misinvoicing costs South Africa billions in tax revenue

A U.S.-based think tank has found that South Africa loses billions every year due to trade misinvoicing, which occurs when “importers and exporters falsify the prices of goods to transfer money across international borders to evade tax and customs duties, launder money, circumvent currency controls and move profits to tax havens.”

The report published by Global Financial Integrity said that such practices contributed to an average annual trade gap of $19.9 billion between 2008 and 2017.

Trade misinvoicing is a global problem but hits African countries particularly hard. “Of the 10 countries with the largest average value gap from 2008-2017, six are in Africa and are among the poorest countries in the world, including São Tomé and Principe, The Gambia, and Burundi,” said [GFI CEO Tom] Cardamone.

Read more at the Daily Maverick.

DOJ announces elder fraud charges against 400, launches hotline

On March 3, U.S. Attorney General William Barr announced that prosecutors had charged more than 400 defendants so far this year for allegedly defrauding the elderly of more than $1 billion.

A similar sweep last year charged 260 defendants; the increase this year highlights the seriousness in which federal officials are taking such crimes.

Barr placed an emphasis on foreign-based fraud schemes, which make up a large number of cases in the sweep.

The DOJ also introduced a National Elder Fraud Hotline that will provide help to seniors who believe they may be victims of fraud. Case managers will assist callers with reporting the suspected fraud to relevant agencies and by providing resources and referrals to other appropriate services as needed, according to a press release. The hotline number is 1-833-372-8311.

Read more from UPI.