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  • BDO's AML Watch - August 21st, 2023

BDO's AML Watch

21 August 2023

Richard Carty, Director, RAS |

Caribbean AML/FCP

Son of Colombia’s President Arrested on Money Laundering Charges

  • Prosecutors arrested the son of Colombia’s President Gustavo Petro on money laundering and illicit enrichment charges. Nicolas Petro and his ex-wife Daysuris Vasquez were arrested in the Caribbean port city Barranquilla on Saturday morning, the Prosecutor General’s Office said in a statement. According to newspaper El Espectador, which has seen investigation documents, Petro allegedly received more than $150 thousand (COP600 million) from convicted drug trafficker Samuel Santander, a.k.a. “Marlboro Man,” and alleged mafia associate Alfonso Hilsaca, a.k.a. “The Turk.” The president’s son allegedly didn’t forward the donation to his father’s campaign, but used the money to purchase a home and invest in businesses in the Caribbean region.


Are Caribbean Banks Held to a Double Standard?

  • To be sure, the Caribbean is rightly known for its tax havens and as a center for money laundering. But financial wrongdoing also occurs in the U.S. and Europe, where much of the money comes from in the first place; even U.S. Treasury Secretary Janet Yellen said recently that “the best place to hide and launder ill-gotten gains is actually the United States.” And given the limited resources available to Caribbean economies, it is not fair to hold them to the same standards as larger nations, said Channing Mavrellis, illicit trade director at the Global Financial Integrity think tank based in Washington. “The huge challenge in Caribbean countries is just capacity … It’s wrong that we expect so much from them [given] what they’re working with.”


Global AML/FCP

US Set to Unveil Long-Awaited Crackdown on Real Estate Money Laundering

  • The U.S. Treasury Department will soon propose a rule that would effectively end anonymous luxury-home purchases, closing a loophole that the agency says allows corrupt oligarchs, terrorists and other criminals to hide ill-gotten gains. The long-awaited rule is expected to require that real estate professionals such as title insurers report the identities of the beneficial owners of companies buying real estate in cash to the Treasury's Financial Crimes Enforcement Network (FinCEN). While banks have long been required to understand the source of customer funds and report suspicious transactions, no such rules exist nationwide for the real estate industry.


JPMorgan Chase is Fined by SEC After Mistakenly Deleting 47 Million Emails

  • JPMorgan Chase has been fined $4 million by the U.S. Securities and Exchange Commission after about 47 million emails belonging to its retail banking group were mistakenly and permanently deleted. The emails dated from Jan. 1 to April 23, 2018, and were deleted in June 2019 from about 8,700 mailboxes, including those belonging to as many as 7,500 employees who regularly worked with customers. Many of the emails were business records that the largest U.S. bank was required under SEC rules to keep for three years. The deletions occurred after JPMorgan's corporate compliance technology department, which had been trying unsuccessfully to delete some communications from the 1970s and 1980s, sought help from an outside vendor managing the bank's email storage.


Romania Requested to Strengthen Measures to Combat Money Laundering
  • In a recent report, the Council of Europe’s anti-money laundering body MONEYVAL calls on the Romanian authorities to further strengthen measures to combat money laundering (ML) and the financing of terrorism (TF) (See Executive Summary). Since 2014, when MONEYVAL last evaluated Romania, the country has taken a number of actions to strengthen its legal and institutional framework to tackle money laundering and the financing of terrorism (AML/CTF) and has started to put in place the elements of an AML/CTF effective system. MONEYVAL notes that Romania has achieved moderate levels of effectiveness in all areas assessed except for international cooperation, where it has achieved a substantial level of effectiveness and has been commended by other countries for its constructive assistance. Romania is expected to report back to MONEYVAL under the enhanced follow-up reporting process in May 2025.

Industry Updates

AI Tops the Chart as the Forefront Tool in Anti-Money Laundering Efforts

  • Artificial intelligence (AI) has emerged as the preferred choice for battling money laundering challenges, according to The State of Global Anti Money Laundering Compliance Report 2023 conducted by Feedzai. A significant revelation is that 46 per cent of these professionals have voiced concerns over the rise of complex money laundering strategies, especially those employing generative AI. This has escalated the threat from generative AI-linked technology to be the primary challenge in 2023, surpassing concerns related to regulation and cryptocurrency, as well as blockchain, which were prominent in 2022.