Global Investigations Review - The law and practice of international investigations


Wednesday, 11 September 2019

Ex-KPMG banker sentenced to year and a day in fraud case

A judge in the US District Court for the Southern District of New York has sentenced David Middendorf, a former executive at KPMG, to a year and a day in prison, according to reports.

Middendorf was found guilty of three counts of wire fraud and one count of conspiracy to commit wire fraud alongside ex-Public Company Accounting Oversight Board (PCAOB) executive Jeffrey Wada on 11 March. The two took part in a scheme to steal information to fraudulently help KPMG pass inspections conducted by the PCAOB.

Prosecutors had previously recommended a jail sentence of between 37 and 46 months for Middendorf. Wada is yet to be sentenced.

Commerzbank raided again in cum-ex investigation

Prosecutors raided Commerzbank’s Frankfurt office on 10 September in connection with ongoing investigations into fraudulent tax practices, Handelsblatt reports.

The German daily reports that Cologne’s public prosecutor carried out the raid. The Frankfurt prosecutor raided the same office in November 2017 as part of its own investigation into the broad-reaching cum-ex tax scandal.

A spokesman for the German bank reportedly said: “We are fully cooperating with the authorities and hope the matter is resolved as quickly as possible.”

Treasury Department and FATF monitoring Facebook cryptocurrency

The US Treasury Department and global money-laundering watchdog the Financial Action Task Force (FATF) are monitoring the launch of Facebook cryptocurrency Libra, which is slated for June 2020, Reuters reports. 

Both agencies have reportedly said that Libra needs to meet the highest international regulatory standards if it is to avoid becoming a go-to currency for terrorists and money launderers.

A US Treasury Department official reportedly said that Libra must “build in” controls on terrorism financing and money laundering, while the president of the Paris-based FATF warned: The anonymity afforded by virtual assets is being exploited by serious criminals.” 

A spokesman for Libra reportedly said: “The Libra Association maintains that financial inclusion, regulatory compliance, and consumer protection are not competing objectives.”

Suspect named in Indonesia’s “oil mafia” investigation

Indonesian authorities have announced charges against a former managing director at the state-run energy company PT Pertamina.

Bambang Irianto, who worked at the energy company’s now-defunct trading arm, has reportedly been accused of receiving bribes worth at least $2.9 million between 2010 and 2013 from Singaporean firm Kernel Oil.

Indonesia’s main anti-corruption body the Corruption Eradication Commission say they began investigating the “oil and gas mafia” case in June 2014.

Transparency International: proposed law change threatens anti-corruption in Indonesia

Transparency International say that the revision of an existing anti-corruption law being considered by Indonesian lawmakers would jeopardise the independence of the country’s main anti-corruption body.

Protests have been reported across Indonesia in response to a plan by the House of Representatives to alter a 2000 law setting out the scope and authority of the Corruption Eradication Commission (KPK).

The international anti-corruption NGO said the law change will significantly reduce the KPK’s authority and “undermine the fight against corruption”. The KPK has also said the proposed amendment will cripple its functions.

Football agent arrested over money laundering allegations linked to transfer fee

An unidentified football agent and their assistant have reportedly been arrested at the direction of a Belgian anti-corruption judge over the £13 million transfer of footballer Alexander Mitrovic from Anderlecht to Newcastle United in 2015.

The agent was reportedly arrested in Monaco while his assistant was picked up by police in Liege. 

The Belgian prosecutor has alleged that the transfer fee was part of “money laundering operations” that have seen investigators conduct raids in Monaco, Belgium and London in recent days.

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