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Top Story Security Related

03/05/2021

FATF guidance on risk-based approach to AML/CFT supervision

The Financial Action Task Force (FATF) has issued "Guidance for a Risk-Based Approach" to AML/CFT supervisors to help them address the full spectrum of risks and focus resources where the risks are highest. A risk-based approach is less burdensome on lower risk sectors or activities, which is critical for maintaining or increasing financial inclusion.

03/05/2021

Charity fraud telefunding operation shut down

The Federal Trade Commission, along with 46 agencies from 38 states and D.C., has stopped a massive telefunding operation that bombarded 67 million consumers with 1.3 billion deceptive charitable fundraising calls (mostly illegal robocalls). The defendants collected more than $110 million using their deceptive solicitations.

Associated Community Services (ACS) and a number of related defendants have agreed to settle charges by the FTC and state agencies that they duped generous Americans into donating to charities that failed to provide the services they promised. The complaint names ACS and its sister companies Central Processing Services and Community Services Appeal; their owners, Dick Cole, Bill Burland, Barbara Cole, and Amy Burland; and ACS senior managers Nikole Gilstorf, Tony Lia, John Lucidi, and Scot Stepek. In addition, the complaint names two fundraising companies allegedly operated by Gilstorf and Lia as spin-offs of ACS, Directele, and The Dale Corporation.

According to the complaint, the defendants knew that the organizations for which they were fundraising spent little or no money on the charitable causes they claimed to support—in some cases as little as one-tenth of one percent. The defendants kept as much as 90 cents of every dollar they solicited from generous donors on behalf of the charities. The complaint also charges ACS with making harassing calls, noting that ACS called more than 1.3 million phone numbers more than ten times in a single week and 7.8 million numbers more than twice in an hour. More than 500 phone numbers were even called 5,000 times or more.

The funds being surrendered by the defendants will be paid to an escrow fund held by the State of Florida and, following a motion by the participating states and approval by the court, be contributed to one or more legitimate charities that support causes similar to those for which the defendants solicited.

03/04/2021

FTC launches new fraud initiative

The Federal Trade Commission is launching a new initiative aimed at partnering with community legal aid organizations to expand its outreach to lower-income communities to encourage them to report fraud and provide them with advice to help recover. The Community Advocate Center initiative will provide a new way for organizations that provide free and low-cost legal services to report fraud and other illegal business practices their clients have experienced directly to the FTC on behalf of their clients.

03/04/2021

OFAC targets drug cartel facilitator

The Treasury Department has announced that OFAC has designated Mexican national Juan Manuel Abouzaid El Bayeh as a Specially Designated Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). OFAC designated Abouzaid El Bayeh for his high-level role in facilitating drug shipments and money laundering for the Cartel de Jalisco Nueva Generacion (CJNG), a violent Mexican drug trafficking organization that is responsible for trafficking a significant proportion of the fentanyl and other deadly drugs that enter the United States. Identification information on Abouzaid El Bayeh can be found in yesterday's BankersOnline OFAC Update.

Since June 2000, more than 2,200 entities and individuals have been sanctioned pursuant to the Kingpin Act for their role in international narcotics trafficking. Penalties for violations of the Kingpin Act range from civil penalties of up to $1,503,470 per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines of up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals could face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act.

03/03/2021

OFAC sanctions Yemeni militants and Russian officials

The Treasury Department announced yesterday that OFAC has sanctioned two key militants of the Iranian-backed Ansarallah, sometimes referred to as the Houthis, whose actions have prolonged Yemen’s civil war and exacerbated the country’s humanitarian crisis. Treasury said that Mansur Al-Sa’adi and Ahmad ‘Ali Ahsan al-Hamzi are responsible for orchestrating attacks by Houthi forces impacting Yemeni civilians, bordering nations, and commercial vessels in international waters. Those actions, which were done to advance the Iranian regime’s destabilizing agenda, have fueled the Yemeni conflict, displacing more than one million people and pushing Yemen to the brink of famine.

Treasury also announced that OFAC joined the U.S. Departments of State and Commerce in imposing sanctions in response to Russia’s poisoning and subsequent imprisonment of Russian opposition figure Aleksey Navalny. Specifically, OFAC designated seven Russian government officials: Federal Security Service (FSB) Director Aleksandr Bortnikov, Chief of the Presidential Policy Directorate Andrei Yarin, First Deputy Chief of Staff of the Presidential Executive Office Sergei Kiriyenko, Deputy Minister of Defense Aleksey Krivoruchko, Deputy Minister of Defense Pavel Popov, Federal Penitentiary Service (FSIN) director Alexander Kalashnikov, and Prosecutor General Igor Krasnov pursuant to Executive Order 13661 for serving as officials of the Russian government. OFAC also designated Bortnikov pursuant to E.O. 13382 for acting or purporting to act for or on behalf of, directly or indirectly, the Federal Security Service (FSB).

Identify information for those designated by these two OFAC actions can be found in yesterday's BankersOnline OFAC Update.

03/03/2021

Fed bans former bankers for taking customer funds

The Federal Reserve Board has announced it has issued consent orders of prohibition to:

  • a former teller at Gateway Bank, Rison, Arkansas, having found that over two years starting in 2018, she misappropriated $49,485 from a bank customer's account for her personal benefit, causing the bank to suffer a loss of that amount (she resigned and has separately begun a repayment program to reimburse the bank).
  • a former teller coordinator at Suntrust Bank, Atlanta, Georgia, having found that he misappropriated funds from a bank customer's account for his personal benefit (he disclosed his conduct to the bank and paid restitution in full).

03/02/2021

Whistleblowers awarded over $500,000

The Securities and Exchange Commission has announced an award of over $500,000 to two whistleblowers whose tips revealed an ongoing fraud and resulted in multiple SEC actions and a related action from another government agency. Both whistleblowers provided substantial, ongoing assistance that conserved the agencies’ time and resources.

Approximately $753 million has been awarded to 140 individuals since the SEC issued its first award in 2012. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the Commission by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. Whistleblowers may be eligible for an award when they voluntarily provide the Commission with original, timely, and credible information that leads to a successful enforcement action. Awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.

03/02/2021

FDIC releases January enforcement actions

On Friday, the FDIC released a list of its enforcement actions taken in the month of January 2021. Among other actions on the list, there were two civil money penalties and two removal/prohibition orders.

  • Mountain Valley Bank, Dunlap, Tennessee, received an order to pay a $4,000 civil money penalty for violations of flood insurance requirements.
  • A former loan relationship manager with Blue Hills Bank, Boston, Massachusetts (now merged with Rockland Trust Company, Rockland, Massachusetts) received a removal/prohibition order and an assessment of a $50,000 civil money penalty for unsafe or unsound banking acts and practices and breaching his fiduciary duty to the bank. He was also charged with and plead guilty to violating 18 U.S.C. § 1005 (participation in loan with intent to defraud a financial institution).
  • A former loan officer with First Southern State Bank, Stevenson, Alabama, was issued a removal/prohibition order for fraudulently originating 17 loans to 8 of his loan customers under false pretenses, and creating fictitious collateral for the loans, causing the bank to suffer financial loss, while he received financial gain.

03/01/2021

NCUA bans former credit union official

The National Credit Union Administration issued one prohibition notice in February, banning an individual from participating in the affairs of any federally insured financial institution. The prohibited individual is a former member of the supervisory committee for Municipal Credit Union in New York, New York, who had been sentenced in July 2020 on a charge of embezzlement in connection with his role at the credit union.

03/01/2021

U.S. sanctions former Saudi official and Rapid Intervention Force

OFAC has sanctioned Ahmad Hassan Mohammed al Asiri, Saudi Arabia’s former Deputy Head of General Intelligence Presidency, and Saudi Arabia’s Rapid Intervention Force in connection with the 2018 murder of journalist Jamal Khashoggi. The designations were made pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world. Identity information can be found in BankersOnline's OFAC Update.

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