Global Investigations Review - The law and practice of international investigations


Monday, 12 August 2019

Former KPMG executive receives 8-month prison sentence

Cynthia Holder, a former employee of KPMG, has received an eight-month prison sentence over a scheme to help the auditing firm cheat watchdog inspections, the US Department of Justice announced on 9 August.

The US District Court for the Southern District of New York chose not to hand down a fine however, after the DOJ asked the court to impose a $150,000 penalty.

Holder pleaded guilty in October 2018 to taking part in a scheme to steal a confidential list of companies the Public Company Accounting Oversight Board (PCAOB), which oversees audits of US companies, was due to audit.

KPMG received a $50 million fine over the matter from the US Securities and Exchange Commission (SEC) in June. The SEC investigation is ongoing.

Mozambique indicts 20 more over Tuna Bond scandal

Mozambique’s attorney general reportedly announced charges against 20 people, including the sons of former President Armando Guebuza, over a fraud scam known as the “Tuna Bond” scandal.

The most recent group of individuals charged, which also includes the former head of state security and the chief executive of three state-owned companies, follows after Mozambique indicted 18 individuals in January.

The indviduals have not commented publicly on the charges.

The scandal centres on $2 billion in loans for a maritime project that never came to fruition.

Several executives from Swiss bank Credit Suisse, which raised the money alongside Russia’s VTB Capital, have been charged over the matter in the US. Most recently, former executive Andrew Pearse, pleaded guilty to one count of conspiracy to commit wire fraud in a Manhattan court in July.

Bank’s internal investigation into cum-ex leaked to German media

German newspaper Süddeutsche Zeitung published details of an internal investigation into cum-ex transactions at state-owned lender HSH Nordbank.

According to reports on 12 August, the internal investigation, by magic circle firm Clifford Chance, found that a stockbroker told superiors that the bank had a “moral problem” in relation to cum-ex deals, especially after the bank received a €13 billion state-funded bailout in 2009.

HSH Nordbank was privatised and renamed Hamburg Commercial Bank in 2014. According to Süddeutsche Zeitung the bank repaid €126 million to German tax authorities in the same year and did not face a criminal investigation.

El Salvador to launch Guatemala-style anti-corruption committee

El Salvador’s president Nayib Bukele has said that he will launch an International Commission against Impunity in El Salvador (CICIES) in early September.

“Within the first 100 days we will launch the CICIES,” Bukele said on Twitter on 9 August. Bukele assumed office on 1 June and vowed to root out corruption.

The CICIES would be similar to the International Commission against Impunity in Guatemala (CICIG), a UN-sponsored agency that conducts independent investigations and works with local prosecutors.

Guatemala’s president, Jimmy Morales, unilaterally expelled the CICIG in January on allegations that it endangered national security and after the body began investigating him for alleged corruption. The constitutional court suspended the expulsion until September 2019.

Guatemala elected a new president, Alejandro Giammattei, on 11 August. He will assume office in January 2020.

Ramaphosa’s lawyers ask court to seal public protector’s report

Lawyers for South African President Cyril Ramaphosa have asked the Gauteng High Court in Pretoria to seal a report by the Public Protector’s Office arguing that information in the report was obtained unlawfully, according to reports.

Public protector Busisiwe Mkhwebane said in a report that Ramaphosa had misled parliament about donations he received for his 2017 campaign to become leader of the governing African National Congress party and that the protector's investigation found evidence of money laundering. 

Mkhwebane has denied using illegally obtained evidence and said her report relied on subpoenas to banks as well as copies of affidavits and letters.

Iranian woman guilty of conspiracy to export US technology to Iran

Iranian national Negar Ghodskani, 40, pleaded guilty on 9 August at a federal court in Minneapolis for participating in a scheme to export communication equipment to Iran.

Justice Department prosecutors say Ghodskani represented a shell company, Green Wave, which she set up in Malaysia with co-defendant Alireza Jalali in order to purchase synthesisers on behalf of a sanctioned Iranian company. Jalali pleaded guilty to the charges in 2017.

The case has attracted significant media attention. Ghodskani was pregnant when she was arrested in Australia on a US warrant and gave birth in detention while challenging extradition.   

In April, Iran’s foreign minister proposed a prisoner swap to exchange Ghodskani for Nazanin Zaghari-Ratcliffe, a British-Iranian mother detained in Tehran. Then-British foreign secretary, Jeremy Hunt, reportedly described the offer as a “vile” diplomatic ploy.

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