This month’s top stories:
- Airline manufacturer Boeing agrees to pay USD 487.2 million fine in plea deal to settle fraud charges after violating Deferred Prosecution Agreement in 737 Max aircraft case;
- Lithuanian law enforcement imposes record EUR 9.3 million fine on Lithuanian operator of cryptocurrency platform for sanctions breaches and money laundering violations involving Russian clients; and
- Board of directors of Zambia’s Anti-Corruption Commission dismissed after board member accuses fellow board directors of accepting bribes from Zambian politicians under investigation.
Europe
Albania: Former health minister arrested on suspicion of misappropriating EU funds
On 4 July, Ilir Beqaj, former health minister of Albania (2013-2017), was arrested on suspicion of misappropriating EU funds through fictitious public tenders. The Albanian Special Prosecutor’s Office against Corruption and Organised Crime (SPAK) alleges that Beqaj set up fictitious procurement procedures in at least eight tender competitions for EU-financed projects in Albania during his tenure at the Albanian State Agency for Strategic Programming and Aid Coordination (SASPAC), a national agency established to oversee national and regional EU financial programmes. SPAK’s investigation found that, between 2022 and 2023, SASPAC issued fraudulent invoices for incomplete services that were billed as legitimate expenses. These totalled hundreds of thousands of euros and implicated Beqaj’s close associates. Beqaj was arrested on charges of passive and active corruption; refusal to declare, non-declaration, concealment or false declaration of assets; fraud; and violation of the equality of participants in tenders. Beqaj has denied all charges. If convicted, he could face a maximum prison sentence of 26 years.
Lithuania: Law enforcement agency imposes record EUR 9.3 million fine on operator of cryptocurrency platform for sanctions breaches
On 10 July, the Lithuanian Financial Crime Investigation Service (FCIS) imposed a record fine of EUR 9.3 million on UAB Payeer, a Lithuanian cryptocurrency platform operator, for sanctions and money laundering violations involving Russian clients. According to the FCIS, Payeer had allowed Russian customers to carry out transactions in Russian roubles by transferring funds between Payeer’s platform and Russian banks that are sanctioned by the EU. Payeer also allegedly offered cryptocurrency wallet, account management, and storage services to Russian individuals and entities. The FCIS additionally found that, to avoid losing revenue, Payeer had not carried out the necessary KYC checks on its customers. Payeer reportedly relocated to Lithuania after losing its licence in Estonia when Estonia tightened regulations for cryptocurrency firms.
Middle east and north africa
US / Egypt / Qatar: US Senator found guilty of accepting bribes to benefit Qatar and Egypt
On 16 July, US Senator for New Jersey Bob Menendez was found guilty of 16 charges related to bribery, corruption, and acting as a foreign agent. He was convicted by jury after a nine-week trial, during which the prosecution accused Menendez of accepting bribes in the form of cash and gold bars in return for helping the governments of Qatar and Egypt. Menendez has maintained his innocence and announced that he intends to appeal the jury's verdict. Menendez subsequently resigned from the Senate on 23 July and his final date in office will be 20 August 2024. His official sentencing is set for 29 October 2024. He could face up to 20 years in prison.
Sub-saharan Africa
Zambia: President Hichilema dismisses board of anti-corruption commission
On 18 July, Zambian President Hakainde Hichilema dismissed the entire board of directors of the Zambian Anti-Corruption Commission (ACC), the country’s anti-graft agency. This occurred after then-board member O’Brien Kaaba accused ACC officials, including its then-director general Thom Shamakamba, of having accepted bribes from Zambian politicians investigated by the ACC, in return for amnesty. The ACC’s board of directors denies the accusations. On 16 July, Shamakamba resigned from the ACC, reportedly amid pressure from President Hichilema. Since President Hichilema’s election on an anti-corruption platform in 2021, Zambian authorities have been investigating allegations of corruption committed under the administration of Hichilema’s predecessor, Edgar Lungu (2015-2021). The dismissal of the ACC board calls into question the efficacy of President Hichilema’s anti-corruption efforts.
South Africa / The DRC / Zambia: US Treasury sanctions ISIS agents
On 23 July, the US Treasury sanctioned three individuals linked to the Africa-based operations of the Islamic State of Iraq and Syria (ISIS), a Jihadist militant group and terrorist organisation. The individuals are based in South Africa, Zambia, and the Democratic Republic of Congo (DRC). According to the US Treasury, they serve as ISIS financiers and operatives, enabling the activities of ISIS across Central, Eastern, and Southern Africa. The US sanctions come against the backdrop of South Africa and the DRC’s continued inclusion in the Financial Action Task Force (FATF) grey list, a list of jurisdictions under increased monitoring in relation to financial crime and terrorism financing. Both countries were placed on the FATF grey list owing to deficient anti-money laundering and counter-terrorism financing controls. While the sanctions represent a positive development in global counter-terrorism efforts, the presence of ISIS operatives in South Africa and the DRC may negatively impact these countries’ efforts towards removal from the FATF grey list.
Americas
US: Treasury sanctions three individuals tied to Sinaloa Cartel and Chinese money laundering organisation
On 1 July, the US Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three individuals associated with the Sinaloa Cartel, the Mexican crime organisation known for transnational drug trafficking and money laundering. OFAC sanctioned a Mexican national who allegedly assisted the Sinaloa Cartel by hiding and collecting proceeds of drug trafficking. Two Chinese nationals were sanctioned for being members of a US-based Chinese money laundering organisation (CMLO). The US Department of Treasury recently described CMLOs as one of the key actors in global money laundering operations. The OFAC sanctions complement indictments issued by the US Department of Justice in June 2024 following a multi-year investigation which was supported by Chinese and Mexican law enforcement and which found that Sinaloa Cartel associates laundered over USD 50 million in drug trafficking proceeds through a California-based CMLO.
Brazil: Former president Bolsonaro indicted for money laundering and embezzlement
On 5 July, the Brazilian Federal Police indicted former president Jair Bolsonaro (2019-2022) on charges of money laundering, embezzlement, and criminal association. According to the Federal Police, in late 2021, the government of Saudi Arabia gifted Bolsonaro diamond jewellery worth more than USD 3 million, which he did not declare. He allegedly attempted to smuggle the jewellery into Brazil to evade customs and sold two luxury watches that were also gifts from Saudi Arabia. An investigation was launched in March 2023 and Bolsonaro testified before the Federal Police in April 2023. This is Bolsonaro’s second indictment since leaving office, following one in March 2024 in which he was accused of falsifying his COVID-19 vaccination records. Bolsonaro has denied both sets of accusations.
US: Department of Justice and Boeing file plea deal to settle fraud charges
On 24 July, the US Department of Justice (DOJ) and airline manufacturer The Boeing Company filed a plea agreement under which Boeing pleaded guilty to federal fraud charges and agreed to pay a USD 487.2 million fine for violating the terms of a Deferred Prosecution Agreement (DPA) it had concluded in 2021. The DPA settled criminal charges filed by the DOJ against Boeing for misleading the US Federal Aviation Administration over the safety of its 737 Max aircraft’s flight control systems, which had been linked to two fatal crashes that killed 346 people in 2018 and 2019. As part of the latest plea deal, the DOJ installed an independent monitor to oversee Boeing’s compliance over the next three years, and the company agreed to invest USD 455 million in safety and compliance programmes.
Russia and CIS
UK: National Crime Agency seizes funds used to evade sanctions
On 29 July, the UK’s National Crime Agency (NCA) permanently seized GBP 780,000 held “for the benefit of” sanctioned Russian businessman Petr Aven. The funds had been held by Aven’s wife and estate manager, and the NCA suspected that transactions involving the funds had violated sanctions imposed on Aven in 2022. An NCA spokesperson clarified that the permanent seizure of the funds was secured under the Proceeds of Crime Act on the basis of the alleged sanctions evasion, and not because the funds belonged to a sanctioned individual. Aven’s estate manager agreed to forfeit the funds at Westminster Magistrates Court, but Aven and his estate manager have not admitted any wrongdoing. This forfeiture sets a precedent for the UK’s fight against sanctions evasion.
