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Case study: Money can buy you a lot of freedom. The Golden «Golden Passports» o « Investment Visas ». It consists golden passports ﹝typology: influence-peddling﹞ of investing large amounts of moneycitizenship in or a (legal) country residence. in If exchange you forobtain have a the passport money, from it another is country. easyseem, And to despite there how is it no may need to turn to the black market, nor is it illegal. Passport has become a business thataround moves the billions world of each dollars year. Thisdirty is money why and it a can way be to anfrom launder entry sufficient said point and money. for are Regulations used are farescape to the the advantage consequences of of those the who crimes wishillicit from and whence to corrupt they money. acquired • What it is • • How it’s abused • MTS RUSIA NEWS: launder money. . id

Former military chief arrested inUS ; Fake identification documents are obtained through identity theft or document People who are physically similar/identical, but who have different names and/or person).

released shortly thereafter similar people, different names ﹝typology: money laundering﹞ surnames carry out several high-risk activities*same (perhaps they are related or maybe even the forgery. In this fashion, one singleidentification person may documents carry and out can several carry legal outenforcement transactions activities had using that they different would used give their rise real to suspicion from law *Commercial activities historically used to HowisitthatthisRussiantelecom • What it is • • How it’s abused • In a mere 42 days a Mexican former general went from being detained by the DEA on 4 federal charges of drug-trafficking and money-laundering, to being

companycametobeentangledin $ 10,000), the bank is obligated to file a report. However, technically not William Barr

usd safely released in his home country. The Attorney General of theUS issued a memorandum ad- Our criminal takes out a loan in their preferred bank. When the bank loans the funds,

Cienfuegos was head of the Mexican Whenever someone makes a cash deposit at a bank and this deposit exceeds a certain amount a costly corruption scandal. armed forces in the Enrique Peña On October 15th, Salvador Cienfuegos Zepeda* was arrested in a Los Angeles, dressed to federal prosecutors instructing them to inves- * Nieto administration (2012-2018). transferred) freely.

loan-and-mortgage laundering ﹝typology: money-laundering﹞ (generally, the equivalent of all payments made in cash countmade as on “deposits”. loans For do example, not for some formally constitute countries a payments/installments deposit and, therefore, need not be reported. this money is already integrated intoor the financial system and can be used (and smurfed, disseminated Over the course of months thein criminal amounts simply that makes do (“dirty”) cash not payments arise on suspicion. the The loan money is at laundered. intervals and A Grand Jury formally accused

• What it is • • How it’s abused • CA airport in aDEA operation and for several crimes related to drug-trafficking*. tigate the election fraud and irregularities notably claimed Cienfuegos of the crimes of * conspiracy to: 1.Importing heroin, cocaine, me- The office of the Mexican Attorney General (Fiscalía General) reacted im- by Donald Trump. thamphetamine, and marijuana into the usa; 2. Distribution of these drugs internationally; mediately, stating that they were not made aware of the arrest, and that there 3. Distribution of these drugs in the USA; and 4. Laundering the proceeds from are cooperation treaties in place between the two countries.Later on, Me- In the document Barr authorized prosecutors “to pursue drug-trafficking. FACTS: WHO GAVE WHAT TO WHOM AND WHY? xican authorities reached out to their American counterparts to address the is- substantial allegations of voting and vote tabulation irregu- Gulnara Karimova, daughter to former president of Uzbekistan Islam Karimov, was accused of being sue. As a result of these exchanges, on November 17thUS authorities requested larities…”, invited them to handle “serious allegations of vo-

It is believed the bribery The group of companies that the judge in charge of the case dismiss the charges (without prejudice). ter fraud […] with great care”, yet reminded them that schemed spanned over from which Karimova connected to a complex scheme of bribes* paid by telecommunication companyMTS and others**. * decades and amounts to * received bribes also several millions of dollars. * includes VimpelCom The Attorneys General of both countries issued a joint statement announcing “specious, speculative, fanciful or far-fetched claims should ltd., of Russia; and Telia Companyab , of Sweden. The Russian mobile telecoms provider, MTS, and its Uzbek subsidiary Kolorit Dizayn Ink., breached the Foreign the dismissal explaining that “[i]n recognition of the strong law enforcement not be a basis for initiating federal inquiries.” * Theus statute that makes it a crime to pay bribes abroad. Corrupt Practices Act* (FCPA). The company engaged in egregious misconduct for nearly a decade, secretly partnership between Mexico and the United States, and in the interests of paying hundreds of millions of dollars to a Karimova. demonstrating [a] united front against all forms of criminality” American au- Barr also included language to make it clear that the De- thorities would turn over available evidence to the Mexican authorities so the partment of Justice does not have evidence nor the belief WHY THIS CASE MATTERS latter may continue their investigations. that voting fraud has occurred, and made a point of clari- fying that his memorandum only had the purpose of This is the largest individual bribery case ever prosecuted under theFCPA. On November 18th, Cienfuegos arrived at Toluca airport, underwent a medical emphasizing the importance of “[addressing] voting irregu- Following a settlement with the Department of Justice(DOJ) and Securities and Exchange Commission(SEC) , examination, gave the authorities his personal information and telephone larities so […] people […] can have full confidence in the re- MTSagreed to pay an aggregate amount ofUSD $850M in penalties following multinational number, and was released. sults of our elections.” naturals persons﹓ what we should be asking ourselves is: why now?; the speed with which theus released Cienfuegos is, to say the least, peculiar. Why did what we should be asking ourselves is:if federal prosecutors already know that election fraud is a crime greatest bribery cases: investigations into the firm’s activities in Uzbekistan. they not wait for a formal extradition process which could have been addressed, say, after the 20th of January?Cui Bono?; The current Mexican administration they should investigate and prosecute, why was this memo necessary? An employee of the Department of Justice said no one asked nor has sought to expose previous governments and bring them to justice. Who could possibly gain from releasing a Secretary of Defense from a former government? ordered Barr to issue his memo, and it has broadly circulated that the current administration will fire anyone looking for a job in Fine amounts inusd millions ﹞. Who has sufficient clout to get the Mexican government to do something like this? anticipation of a Biden victory. What message is Barr trying to send? As per the official communiqué issued by the DOJ,“Thisisthethirdinstalmentinatrilogyof

Alejandro Andrade Cedeño [Petroleos de Venezuela] $1,000M cases arising from an almostUSD $1 billion bribery scheme that reached the highest echelons

Gulnara Karimova ﹝mts﹞ $850M of the Uzbekistan government and was orchestrated by some of the largest Daniel S. Och & Joel M. Frank [Och-Ziff] ongd $201.2M telecommunications companies in the world. The settlement and associated charges against Wr oer Jeffrey Tesler﹝kbr /Technip] t $149.7M individuals sent a bold, unequivocal message that theUS financial system is not in business to en Tim Leissner﹝1mdb﹞ $43.7M enable foreign bribery or money laundering”. in he Special Anti-Robbery Squadⁱ has, of late, been accused of becoming a criminal syndicate that engages in extortion, torture, and extra-judicial execu- m T tions, all the while enjoying impunity. In a video that went viral on October 3rd, sars officers are shown killing a man seemingly without provocation. Nigerian authorities claimed the video o was fake and arrested the person who recorded it. This arrest led to several demonstration in Lagos⁲. LESSONS LEARNED r On October 8th the demonstrations (organized via social media; #EndSARS). Early on, demonstrations were only against abuses and human rights violations by thesars and demanded it be disbanded. However, demonstrations broadened their scope and participants now condemn the poor hand- CRIMINAL LIABILITY: ThoughFCPA prosecutions most often target legal persons, one would do well to keep in mind that the P ling of thecovid-19 pandemic and demand an end to the corruption that has rendered Nigeria a “captured state⁳”. · Legal Person[MTS], On October 12th, President Muhammadu Buhari disbandedsars explaining that it was “the first step in [a] commitment to extensive police reform”. · Natural Persons [ongoing]. However, on the 20th of October, a peaceful demonstration in Lekki —a town neighboring the city of Lagos— ended when government forces opened statute allows for the prosecution of natural persons, and that both theDOJ andSEC can and do investigate fire on demonstrators. The Buhari administration has responded by implementing curfews, outlawing demonstrations, and deploying military forces to repress them; several individuals for foreign bribery. political actors have called for censorship of social media.

Obtaining a resolution of the Uzbek investigations was in the company´s best interests, the settlement allowed A specialized unit of Nigerian Recall that Lagos is the largest Nigerian city, and its 1.government created in 1984 and 2.urban area is home to a population of 14 million. SANCTIONS: supposedly devoted to preventing robberies, carjackings and A captured state is a government that has so been Even the lies best hidden eventually come to light. MTS: total penalty MTS to focus fully on its core business.MTS has systematically and pro-actively developed its current anti- kidnappings, and briefly praised for 3.infiltrated and influenced by corrupt actors or groups $850 millones[USD] : reducing crime in Nigeria. that, in effect, these actors have full control over it. i r · Adm. Fine,SEC : $100M; corruption compliance framework in line with international best practices. a h u · Criminal Fine ,DOJ : $710M; b u d · Forfeiture,DOJ : $40M. a m m a h u Monitor: WHAT TYPE OF CORRUPTION IS IT AND WHAT CRIMES DOES IT ENTAIL? m 3 years.

Agreements: · Deferred Prosecution Agreement,DOJ; Pfizer; in headlines Peru; 6 days, · Administrative Order, SEC. BRIBERY FOREIGN MONEY BRIBERY LAUNDERING for the good and for the bad 2 ousted presidents In the first half of November the world-famous pharmaceutical company has On November 9th, the Peruvian congress removed from

SOURCES: been in the news for very different reasons. Mr. Martín Vizcarra¹ from the presidency in a process known as “motion to vacate”²; their reason? “permanent • fcpa: http://fcpa.stanford.edu/fullsearch.html?q=mts+telecommunications On the one hand, Pfizer announced that the vaccine it developed in tandem moral turpitude”³, as evidenced by alleged acts of co- with German pharma company Biontech, has a rate of effectiveness of 90- rruption carried out when Vizcarra was the governor of 95%, sparking —in the process— major expectations and around the world. the Peruvian state of Moquegua4.

It is common for a person —or, most often, law firms— to set up commercial On the other hand, it also announced that the Department of Justice and the Broadly speaking, it is perfectly legal to create several companies and it is possible Securities and Exchange Commission, both of theUSA , have launched probes The following day, Manuel Merino5 was appointed used in laundering, simulation and concealment schemes. shelf companies ﹝typology: money laundering, simulation, cover-up﹞ that —for legitimate reasons— these companies have prolonged periods of inactivity. companies that are never used, butand which rights. do These accrue companies seniority are benefits, held andbe over certain time legal and, interests later, at a suitable moment, are sold ready to • What it is • • How it’s abused • into the company’s activities in Russia and China, and into possible violations interim president, which sparked daily protests throu- Goldman Sachs oftheFCPA. ghout the nation. Some groups protested the removal The Goldman Sachs Group, Inc. was accused of partaking in the1MDB corrup- The legal actions related to this issue also include several people, from office of Vizcarra6, and others the repression by the among which stand out Najib Razak¹, Riza Aziz²,andJhoLow³,who For the moment, these inquiries have not yet materialized into formal accusa- police of the former. After a count of 2 dead, over 100 tion scandal (see gazettes for Q2 andQ3, 2020) and of paying USD $1.6B in Recall that, in 2012, Pfizer paid aroundusd $60m in * sanctions for corrupt bribes to public officials of Malaysia and Abu Dhabi in exchange for financial is still a fugitive from justice. practices carried out in tions, and it is possible they never do. However, should they turn that way, it is injured and 41 missing, most of Merino’s ministers resig- Bulgaria, China, Croatia, Czechia, Italy, Kazakhstan, services contracts worth overUSD $6.5B withthe1MDB fund. To pay these what we should be asking ourselves is: where has Jho Low been??? Well, apparently in Macau. The Al-Jazeera Russia, and Serbia. possible that Pfizer will face complex and severe processes, as a repeat offender*. ned, Congress invited Merino to do the same, and he fi- documentary “Jho Low: Hunt for a fugititve” reportedly found that Low and his cronies are under protection from the Chinese government and have been hiding in the Macau house of a high-level member of the Communist Party of China. bribes, Goldman Sachs employees misappropriated overUSD $2.7Bfromthe what we should be asking ourselves is: if formal charges are brought, it is almost certain that this would impact stock prices. If that nally resigned on November 15th. On November 17th the happens, what effects could it have on the distribution of the vaccine? Conversely, is it ethical for law enforcement to take into consideration economic or public health factors in deciding how to do their job? Would it be ethical if they didn’t? bonds issued by the selfsame1MDB fund. Former Prime Minister of Malaysia, charged with several Also known as Low Take Jho, he is the Malaysian banker Peruvian congress appointed Francisco Sagasti as 1.crimes, all related to the looting ofusd ﹩700+ m from the 3.famous for throwing ridiculously lavish parties and who, 1mdbfund. allegedly, orchestrated the entire1mdb scheme. interim president. Stepson to Razak and producer of such movies as “Wolf 2.of Wall Street”, “Horns”, and “Dumb and dumber to”. As a result of this, on October 22nd theUSA Department of Justice entered into a Deferred Prosecution Agreement with Goldman Sachs under which the bank Peru’s recent history is complicated7 and these two for- must payUSD $3 B in penalties CA mer presidents, with their actions toward and surrounding ERI AM OF the presidency, have only served to complicate it further. ES

T . It sanction, is a not criminal

These penalties include several sanctions paid to various government authori- TA fcpa S fines Goldman Sachs for D ties for violations to multiple laws (see graph). E us Vizcarra came to power in 2018, when Pedro Pablo Kuczynski

IT M $400 N $154 M 1.renounced the office of president in the midst of his second 6.With only 5 months until the next election. U motion to vacate. $150 M Recall that the last 4 Peruvian presidents were

An official political trial process necessary to remove a sitting 7.accused of accepting bribes from Odebrecht:

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FED﹝federal : reserve﹞ The specific meaning of “moral turpitude” is not clearly defined in motion to vacate. The centralhaving bank violated of the certain banking regulations that are not necessarily related to Anti-Corruption. 3.Peruvian law. Therefore, the country’s congress has broad powers · ollanta humala (2011-2016): to decide exactly what makes the president fraught with “moral Under house arrest awaiting trial. turpitude”. · alan garcìa (2006-2011): NYSDFS: Committed suicide minutes before being ﹝new york state department He is accused of accepting bribes form companies in exchange for apprehended by police. of financial services﹞ $606 M 4.public works contracts. · alejandro toledo (2001-2006): The local finance authority fines Goldman Sachs for having violated certain banking regulations that are In custody in theusa awaiting extradition. not necessarily related to Anti-Corruption. 5.Up until that point, Merino presided the Peruvian congress. M GOV.: A ﹝governmentscheme. of malaysia﹞ With this action (which may be criminal L Goldman Sachs got into trouble with A The government of Malaysia was the main victim of the 1mdb Y Would you like to learn and/or civil) it recovers some of the lost assets. S IA more about corruption the government of several coun- and anti-corruption? Follow this link to the tries. The financial services Streiner digital library: giant was involved in one

of the most notorious By structuring operations and using the services of several professionals without an In very complex deals, it is common —and perfectly legal— to recruit the services of several

U micro-compartmentalizing ﹝typology: money-laundering﹞ professionals such as lawyers, accountants, auditors, fixers,of etc. the to operation make easier all and the have parts,For properly instance, stages coordinated. the or first aspects time the stockassistance of from expert a particular advisors well company versed is inprofessionals sold the plays in law, a an finance, necessary exchange accounting, role tends etc. in to Each the require of transaction. these apparent reason to justify it ornumber by of structuring operations participants, that of are stages unnecessarily orIf complicated of someone in elements. wishes the to launder dirtybeing money, reported, but then cannot what carry they out do thestages is necessary to split legal different these operations professionals. legal without operations inThe several result stages is and that assign no different single operation one that of needs the to people be who reported tenderedlaunderer to their did the services achieve authorities carried the (and, out end thus, 100% result they of of do an bringing not about report all it), the but different our “parts” money- of the transaction.

N • What it is • • How it’s abused • corruption scandals I T E D

K I $126 M N in recent history: G UKFCA D & UKPRA: O M ﹝u.k. financial conduct authority 1MDB. ﹠ prudential regulation authority﹞ The central bank and the financial regulator of the fine Goldman Sachs for having violated certain u.k. S Banking regulations that are not necessarily related to Anti-Corruption. $122 M I N

G AUTHORITIES: A P May include fines, civil penalties, disgorgement, etc. O S

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H Criminal penalty Disgorgement

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SFC: $100 M N ﹝securities and futures comission﹞ DOJ : $1,263 M G ﹝department of justice﹞ The financial market regulator fines Goldman Sachs K for having violated certain banking regulations that are + O not necessarily related to Anti-Corruption. It is not a

Of a total sanction ofUSD $3+ B, Fine imposed on Goldman Sachs Sendirian Berhad criminal sanction, rather it is an administrative (civil) N penalty (imposed by the government and without need (Goldman Sachs Malaysia). The amount of the sanction for a trial). G Civil penalty Monitorship must follow specific judicial guidelines and —in theory— here are the key figures:USD] [ : must be effective, proportional, and dissuasive. $0 + $3,000 M

in the year 62 bc, Rome was the scene of the Bona Dea scandal. A celebration about which little is known, we do know that only women were allowed to partake. Naturally, this included Pompeia; the wife of Julius Caesar. During the celebration, either intentionally or by accident, several things went awry and the result was a scandal that led the people to question the integrity of the wife of Caesar. The reaction of the latter was to separate from his wife, arguing that the wife of Caesar must not only be beyond reproach, but must also appear beyond reproach. Today, the Bona Dea e h os scandal is not as relevant, however this notion remained and the collective conscience still recognizes to this day that when something is as ̏the wife of Caesar˝, it is beyond reproach and above any form of criticism and doubt;beyond even the appearance of impropriety. Our gazette borrows this page from historybecause we wish to reflect that this is the standard by which we measure ourselves. Here we strive to provide you with content that can help all of us be as The Wife of Caesar. s a e a