International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Wednesday, April 4, 2018

Trade in Counterfeit Goods and Free Trade Zones

Cover for Trade in Counterfeit Goods and Free Trade Zones
This study examines the potential for the misuse of Free Trade Zones (FTZs) for trade in counterfeit and pirated goods. It presents the evolution of the FTZs and the international legal framework in which they operate, the reasons for establishing such zones and the benefits they offer businesses, and, finally, the role these zones play in fuelling trade in counterfeit and pirated goods. It also analyses the links between the FTZs and trade in counterfeit products and provides data on these links.

Download Free Trade Zones and Counterfeit Goods

 

 

 
 

April 4, 2018 in OECD | Permalink | Comments (0)

Tuesday, April 3, 2018

National Security Considerations with Respect to Country-by-Country Reporting

Notice 2018-31 provides additional guidance concerning country-by-country (CbC) reporting requirements under section 6038 and §1.6038-4. In consideration of the national security interests of the United States, this notice addresses modifications to the reporting requirement under §1.6038-4 with respect to certain U.S. multinational enterprise (MNE) groups. 

Based on subsequent consultations with the Department of Defense, the Treasury Department and the IRS have determined that national security interests require modifications to the reporting requirements for U.S. MNE groups that are specified national security contractors.

The Treasury Department and the IRS intend to amend §1.6038-4 to provide the definition of specified national security contractor and modifications to the manner of reporting on Form 8975 for such U.S. MNE groups. The amended regulations will provide that U.S. MNE groups that have a Form 8975 filing obligation under §1.6038-4 and are specified national security contractors may provide Form 8975 and Schedules A (Form 8975) in the following manner:


• Complete Form 8975 with a statement at the beginning of Part II, Additional Information, that the U.S. MNE group is a specified national security contractor as defined in this notice;
• Complete one Schedule A (Form 8975) for the Tax Jurisdiction of the United States with aggregated financial and employee information for the entire U.S. MNE group in Part I, Tax Jurisdiction Information, and only the ultimate parent entity’s information in Part II, Constituent Entity Information; and
• Complete one Schedule A (Form 8975) for the Tax Jurisdiction “Stateless” with zeroes in Part I, Tax Jurisdiction Information, and only the ultimate parent entity’s information in Part II, Constituent Entity Information.

No other Schedule A (Form 8975) or additional information is required.

A specified national security contractor that has already filed Form 8975 and Schedules A (Form 8975) for prior reporting periods may file an amended Federal income tax return (following the instructions for filing of amended Federal income tax returns) and attach an amended Form 8975 and Schedules A (Form 8975) in the manner provided in section 3.02 with the amended report checkbox on Form 8975 marked. 

Download Natl security irs and cbcr

April 3, 2018 in BEPS | Permalink | Comments (0)

Monday, April 2, 2018

IRS issues guidance on business interest expense limitations

The Treasury Department and the Internal Revenue Service (IRS) today issued Notice 2018-28, which provides guidance for computing the business interest expense limitation under recent tax legislation enacted on Dec. 22, 2017.   Download Bus interest limitation

In general, newly amended section 163(j) of the Internal Revenue Code imposes a limitation on deductions for business interest incurred by certain large businesses. For most large businesses, business interest expense is limited to any business interest income plus 30 percent of the business’ adjusted taxable income.

Today’s notice describes aspects of the regulations that the Treasury Department and the IRS intend to issue, including rules addressing the calculation of the business interest expense limitation at the level of a consolidated group of corporations and other rules to clarify certain aspects of the law as it applies to corporations. The notice clarifies the treatment of interest disallowed and carried forward under section 163(j) prior to enactment of the recent tax legislation. Finally, the notice makes it clear that partners in partnerships and S corporation shareholders cannot interpret newly amended section 163(j) to inappropriately “double count” the business interest income of a partnership or S corporation.

Today’s notice requests comments on the rules described in the notice and also requests comments on what additional guidance should be issued to assist taxpayers in computing the business interest expense limitation under section 163(j). The Treasury Department and the IRS expect to issue additional guidance in the future.

Today’s notice, Notice 2018-28, will be published in IRB 2018-16 on April 16, 2018.

April 2, 2018 in Tax Compliance | Permalink | Comments (0)

IRS Issues Additional Guidance on Transition Tax on Foreign Earnings

The Treasury Department and the Internal Revenue Service provided additional guidance (Notice 2018-26) for computing the “transition tax” on the untaxed foreign earnings of foreign subsidiaries of U.S. companies under the Tax Cuts and Jobs Act enacted on Dec. 22, 2017. The Treasury Department and the IRS provided prior guidance on the transition tax in Notice 2018-07, Notice 2018-13, and Revenue Procedure 2018-17.

Today’s notice describes regulations that the Treasury Department and the IRS intend to issue, including rules intended to prevent the avoidance of section 965, rules and procedures relating to certain special elections under section 965, and guidance on the reporting and payment of the transition tax. The notice also provides relief to taxpayers from certain estimated tax requirements and penalties arising from the enactment of the transition tax and the change to existing stock attribution rules in the Tax Cuts and Jobs Act.

Additionally, Treasury and the IRS request comments on the rules described in the notice and requests comments on what additional guidance should be issued to assist taxpayers in computing the transition tax. The Treasury Department and the IRS expect to issue additional guidance in the future.

Download April notice on transition tax

April 2, 2018 in Tax Compliance | Permalink | Comments (0)

IRS Issues Guidance on Withholding on the Transfer of Partnership Interests by Foreign Persons

IR-2018-81, April 2, 2018

WASHINGTON ―The Treasury Department and the Internal Revenue Service issued guidance regarding the withholding on the transfer of non-publicly traded partnership interests under the recently enacted Tax Cuts and Jobs Act.

In general, the new law treats a foreign taxpayer’s gain or loss on the sale or exchange of a partnership interest as effectively connected with the conduct of a trade or business in the United States to the extent that gain or loss would be treated as effectively connected with the conduct of a trade or business in the United States if the partnership sold all of its assets.

In this circumstance, the new law also imposes a withholding tax on the disposition of a partnership interest by a foreign taxpayer.

Notice 2018-29 announces that the Treasury Department and the IRS intend to issue regulations, including rules and procedures relating to qualifying for exemptions from withholding or reductions in the amount of withholding under this section of the law. The notice also includes interim guidance designed to allow for the effective and orderly implementation of this section. In addition, the notice suspends secondary partnership level withholding requirements.

The guidance in this notice does not affect the tax liability imposed as a result of the new law. This notice does not affect the suspension of the application of withholding in the case of a disposition of certain publicly traded partnership interests as announced in Notice 2018-08, 2018-7 I.R.B. 352.

Today’s notice requests comments on the rules described in the notice and also requests comments on what additional guidance should be issued to assist taxpayers in applying section these sections of law. The Treasury Department and the IRS expect to issue additional guidance in the future.

Today’s notice, Notice 2018-29, will be published in IRB 2018-16 on April 16, 2018.    Download Withholding on partnership transfers offshore

April 2, 2018 in Tax Compliance | Permalink | Comments (1)

Tax Challenges Arising from Digitalization – Interim Report 2018

This interim report of the OECD/G20 Inclusive Framework on BEPS is a follow-up to the work delivered in 2015 under Action 1 of the BEPS Project on addressing the tax challenges of the digital economy. It sets out the Inclusive Framework’s agreed direction of work on digitalization and the international tax rules through to 2020. It describes how digitalization is also affecting other areas of the tax system, providing tax authorities with new tools that are translating into improvements in taxpayer services, improving the efficiency of tax collection and detecting tax evasion.   Download Digitalization tax interim report 2018

April 2, 2018 in BEPS, OECD | Permalink | Comments (0)

FCPA Blog publishes its FCPA enforcement report for Q1 2018

The FCPA Blog has published its 2018Q1 report analyzing the FCPA statistics from January 1 through March 31, 2018, contrasting those with previous years, and providing a detailed background of the current enforcement actions and prosecutions.  Read the entire report on the FCPA blog here.

Highlights are:

  • three corporate FCPA enforcement actions
  • three individuals pleaded guilty to FCPA-related charges and four were sentenced
  • two indicted for criminal FCPA offenses
  • seven corporate declinations

April 2, 2018 in AML | Permalink | Comments (0)

Saturday, March 31, 2018

U.S. Net International Investment Position Fourth Quarter and Year 2017

Fourth Quarter 2017

The U.S. net international investment position decreased to -$7,845.8 billion (preliminary) at the end of the fourth quarter from -$7,739.7 billion (revised) at the end of the third quarter, according to statistics released by the Bureau of Economic Analysis (BEA). The $106.1 billion decrease reflected a $727.2 billion increase in U.S. assets and an $833.3 billion increase in U.S. liabilities (table 1).

The $106.1 billion decrease in the net investment position reflected net financial transactions of -$52.4 billion and net other changes in position, such as price and exchange-rate changes, of -$53.8 billion (table A).

The net investment position decreased 1.4 percent in the fourth quarter, compared with an increase of 3.3 percent in the third quarter. The net investment position decreased an average of 5.0 percent per quarter from the first quarter of 2011 through the second quarter of 2017.

U.S. assets increased $727.2 billion to $27,632.8 billion at the end of the fourth quarter, mostly reflecting increases in portfolio investment and direct investment assets.

  • Assets excluding financial derivatives increased $809.8 billion to $26,010.4 billion. The increase resulted from other changes in position of $658.8 billion and financial transactions of $151.0 billion (table A). Other changes in position mostly reflected (1) foreign equity price increases that raised the value of portfolio investment and direct investment equity assets and (2) the appreciation of major foreign currencies against the U.S. dollar that raised the value of foreign-currency-denominated assets in dollar terms. Financial transactions mostly reflected net acquisition of portfolio investment debt securities and direct investment equity assets.
  • Financial derivatives decreased $82.6 billion to $1,622.5 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.
Table A. Quarterly Change in the U.S. Net International Investment PositionBillions of dollars, not seasonally adjusted
  Position, 2017:III Change in position in 2017:IV Position, 2017:IV
Total Attributable to:
Financial transactions Other changes in position 1
U.S. net international investment position -7,739.7 -106.1 -52.4 -53.8 -7,845.8
Net position excluding financial derivatives -7,773.5 -100.6 -53.2 -47.5 -7,874.1
Financial derivatives other than reserves, net 33.8 -5.5 0.8 -6.3 28.3
U.S. assets 26,905.6 727.2 (2) (2) 27,632.8
Assets excluding financial derivatives 25,200.5 809.8 151.0 658.8 26,010.4
Financial derivatives other than reserves 1,705.1 -82.6 (2) (2) 1,622.5
U.S. liabilities 34,645.3 833.3 (2) (2) 35,478.6
Liabilities excluding financial derivatives 32,974.0 910.5 204.2 706.3 33,884.4
Financial derivatives other than reserves 1,671.3 -77.1 (2) (2) 1,594.2
1 Disaggregation of other changes in position into price changes, exchange-rate changes, and other changes in volume and valuation is only presented for annual statistics released in June each year.
2 Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

U.S. liabilities increased $833.3 billion to $35,478.6 billion at the end of the fourth quarter, mostly reflecting increases in portfolio investment and direct investment liabilities.

  • Liabilities excluding financial derivatives increased $910.5 billion to $33,884.4 billion. The increase resulted from other changes in position of $706.3 billion and financial transactions of $204.2 billion (table A). Other changes in position mostly reflected U.S. equity price increases that raised the value of portfolio investment and direct investment equity liabilities. Financial transactions reflected net incurrence of liabilities in all major investment categories.
  • Financial derivatives decreased $77.1 billion to $1,594.2 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.

Updates to Statistics

Table B. Updates to Third Quarter 2017 International Investment Position AggregatesBillions of dollars, not seasonally adjusted
  Preliminary estimate Revised estimate
U.S. net international investment position -7,768.7 -7,739.7
  U.S. assets 26,854.9 26,905.6
    Direct investment at market value 8,580.6 8,595.4
    Portfolio investment 11,860.1 11,905.5
    Financial derivatives other than reserves 1,705.1 1,705.1
    Other investment 4,252.5 4,243.0
    Reserve assets 456.6 456.6
  U.S. liabilities 34,623.6 34,645.3
    Direct investment at market value 8,452.8 8,454.1
    Portfolio investment 19,043.2 19,057.9
    Financial derivatives other than reserves 1,671.3 1,671.3
    Other investment 5,456.2 5,461.9

Year 2017

The U.S. net international investment position increased to -$7,845.8 billion (preliminary) at the end of 2017 from -$8,318.4 billion at the end of 2016. The $472.6 billion increase reflected a $3,783.4 billion increase in U.S. assets and a $3,310.8 billion increase in U.S. liabilities.

U.S. assets increased $3,783.4 billion to $27,632.8 billion at the end of 2017, mostly reflecting increases in portfolio investment and direct investment assets that were partly offset by a decrease in financial derivatives.

  • Assets excluding financial derivatives increased $4,369.9 billion to $26,010.4 billion. The increase resulted from other changes in position of $3,157.5 billion and financial transactions of $1,212.4 billion (table C). Other changes in position mostly reflected (1) foreign equity price increases that raised the value of portfolio investment and direct investment equity assets and (2) the appreciation of major foreign currencies against the U.S. dollar that raised the value of foreign-currency-denominated assets in dollar terms. Financial transactions reflected net acquisition of assets in all major investment categories, except reserve assets.
  • Financial derivatives decreased $586.5 billion to $1,622.5 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.
Table C. Annual Change in the U.S. Net International Investment PositionBillions of dollars
  Position, 2016 Change in position in 2017 Position, 2017
Total Attributable to:
Financial transactions Other changes in position 1
U.S. net international investment position -8,318.4 472.6 -349.2 821.8 -7,845.8
Net position excluding financial derivatives -8,379.7 505.6 -375.6 881.2 -7,874.1
Financial derivatives other than reserves, net 61.3 -33.0 26.4 -59.4 28.3
U.S. assets 23,849.4 3,783.4 (2) (2) 27,632.8
Assets excluding financial derivatives 21,640.5 4,369.9 1,212.4 3,157.5 26,010.4
Financial derivatives other than reserves 2,209.0 -586.5 (2) (2) 1,622.5
U.S. liabilities 32,167.8 3,310.8 (2) (2) 35,478.6
Liabilities excluding financial derivatives 30,020.1 3,864.3 1,587.9 2,276.4 33,884.4
Financial derivatives other than reserves 2,147.7 -553.5 (2) (2) 1,594.2
1Disaggregation of other changes in position into price changes, exchange-rate changes, and other changes in volume and valuation is only presented for annual statistics released in June each year.
2Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

U.S. liabilities increased $3,310.8 billion to $35,478.6 billion at the end of 2017, mostly reflecting increases in portfolio investment and direct investment liabilities that were partly offset by a decrease in financial derivatives.

  • Liabilities excluding financial derivatives increased $3,864.3 billion to $33,884.4 billion. The increase resulted from other changes in position of $2,276.4 billion and financial transactions of $1,587.9 billion (table C). Other changes in position mostly reflected U.S. equity price increases that raised the value of portfolio investment and direct investment equity liabilities. Financial transactions reflected net incurrence of liabilities in all major investment categories.
  • Financial derivatives decreased $553.5 billion to $1,594.2 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.

March 31, 2018 in Economics | Permalink | Comments (0)

U.S. Net International Investment Position Fourth Quarter and Year 2017

Fourth Quarter 2017

The U.S. net international investment position decreased to -$7,845.8 billion (preliminary) at the end of the fourth quarter from -$7,739.7 billion (revised) at the end of the third quarter, according to statistics released by the Bureau of Economic Analysis (BEA). The $106.1 billion decrease reflected a $727.2 billion increase in U.S. assets and an $833.3 billion increase in U.S. liabilities (table 1).

The $106.1 billion decrease in the net investment position reflected net financial transactions of -$52.4 billion and net other changes in position, such as price and exchange-rate changes, of -$53.8 billion (table A).

The net investment position decreased 1.4 percent in the fourth quarter, compared with an increase of 3.3 percent in the third quarter. The net investment position decreased an average of 5.0 percent per quarter from the first quarter of 2011 through the second quarter of 2017.

U.S. assets increased $727.2 billion to $27,632.8 billion at the end of the fourth quarter, mostly reflecting increases in portfolio investment and direct investment assets.

  • Assets excluding financial derivatives increased $809.8 billion to $26,010.4 billion. The increase resulted from other changes in position of $658.8 billion and financial transactions of $151.0 billion (table A). Other changes in position mostly reflected (1) foreign equity price increases that raised the value of portfolio investment and direct investment equity assets and (2) the appreciation of major foreign currencies against the U.S. dollar that raised the value of foreign-currency-denominated assets in dollar terms. Financial transactions mostly reflected net acquisition of portfolio investment debt securities and direct investment equity assets.
  • Financial derivatives decreased $82.6 billion to $1,622.5 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.
Table A. Quarterly Change in the U.S. Net International Investment PositionBillions of dollars, not seasonally adjusted
  Position, 2017:III Change in position in 2017:IV Position, 2017:IV
Total Attributable to:
Financial transactions Other changes in position 1
U.S. net international investment position -7,739.7 -106.1 -52.4 -53.8 -7,845.8
Net position excluding financial derivatives -7,773.5 -100.6 -53.2 -47.5 -7,874.1
Financial derivatives other than reserves, net 33.8 -5.5 0.8 -6.3 28.3
U.S. assets 26,905.6 727.2 (2) (2) 27,632.8
Assets excluding financial derivatives 25,200.5 809.8 151.0 658.8 26,010.4
Financial derivatives other than reserves 1,705.1 -82.6 (2) (2) 1,622.5
U.S. liabilities 34,645.3 833.3 (2) (2) 35,478.6
Liabilities excluding financial derivatives 32,974.0 910.5 204.2 706.3 33,884.4
Financial derivatives other than reserves 1,671.3 -77.1 (2) (2) 1,594.2
1 Disaggregation of other changes in position into price changes, exchange-rate changes, and other changes in volume and valuation is only presented for annual statistics released in June each year.
2 Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

U.S. liabilities increased $833.3 billion to $35,478.6 billion at the end of the fourth quarter, mostly reflecting increases in portfolio investment and direct investment liabilities.

  • Liabilities excluding financial derivatives increased $910.5 billion to $33,884.4 billion. The increase resulted from other changes in position of $706.3 billion and financial transactions of $204.2 billion (table A). Other changes in position mostly reflected U.S. equity price increases that raised the value of portfolio investment and direct investment equity liabilities. Financial transactions reflected net incurrence of liabilities in all major investment categories.
  • Financial derivatives decreased $77.1 billion to $1,594.2 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.

Updates to Statistics

Table B. Updates to Third Quarter 2017 International Investment Position AggregatesBillions of dollars, not seasonally adjusted
  Preliminary estimate Revised estimate
U.S. net international investment position -7,768.7 -7,739.7
  U.S. assets 26,854.9 26,905.6
    Direct investment at market value 8,580.6 8,595.4
    Portfolio investment 11,860.1 11,905.5
    Financial derivatives other than reserves 1,705.1 1,705.1
    Other investment 4,252.5 4,243.0
    Reserve assets 456.6 456.6
  U.S. liabilities 34,623.6 34,645.3
    Direct investment at market value 8,452.8 8,454.1
    Portfolio investment 19,043.2 19,057.9
    Financial derivatives other than reserves 1,671.3 1,671.3
    Other investment 5,456.2 5,461.9

Year 2017

The U.S. net international investment position increased to -$7,845.8 billion (preliminary) at the end of 2017 from -$8,318.4 billion at the end of 2016. The $472.6 billion increase reflected a $3,783.4 billion increase in U.S. assets and a $3,310.8 billion increase in U.S. liabilities.

U.S. assets increased $3,783.4 billion to $27,632.8 billion at the end of 2017, mostly reflecting increases in portfolio investment and direct investment assets that were partly offset by a decrease in financial derivatives.

  • Assets excluding financial derivatives increased $4,369.9 billion to $26,010.4 billion. The increase resulted from other changes in position of $3,157.5 billion and financial transactions of $1,212.4 billion (table C). Other changes in position mostly reflected (1) foreign equity price increases that raised the value of portfolio investment and direct investment equity assets and (2) the appreciation of major foreign currencies against the U.S. dollar that raised the value of foreign-currency-denominated assets in dollar terms. Financial transactions reflected net acquisition of assets in all major investment categories, except reserve assets.
  • Financial derivatives decreased $586.5 billion to $1,622.5 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.
Table C. Annual Change in the U.S. Net International Investment PositionBillions of dollars
  Position, 2016 Change in position in 2017 Position, 2017
Total Attributable to:
Financial transactions Other changes in position 1
U.S. net international investment position -8,318.4 472.6 -349.2 821.8 -7,845.8
Net position excluding financial derivatives -8,379.7 505.6 -375.6 881.2 -7,874.1
Financial derivatives other than reserves, net 61.3 -33.0 26.4 -59.4 28.3
U.S. assets 23,849.4 3,783.4 (2) (2) 27,632.8
Assets excluding financial derivatives 21,640.5 4,369.9 1,212.4 3,157.5 26,010.4
Financial derivatives other than reserves 2,209.0 -586.5 (2) (2) 1,622.5
U.S. liabilities 32,167.8 3,310.8 (2) (2) 35,478.6
Liabilities excluding financial derivatives 30,020.1 3,864.3 1,587.9 2,276.4 33,884.4
Financial derivatives other than reserves 2,147.7 -553.5 (2) (2) 1,594.2
1Disaggregation of other changes in position into price changes, exchange-rate changes, and other changes in volume and valuation is only presented for annual statistics released in June each year.
2Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

U.S. liabilities increased $3,310.8 billion to $35,478.6 billion at the end of 2017, mostly reflecting increases in portfolio investment and direct investment liabilities that were partly offset by a decrease in financial derivatives.

  • Liabilities excluding financial derivatives increased $3,864.3 billion to $33,884.4 billion. The increase resulted from other changes in position of $2,276.4 billion and financial transactions of $1,587.9 billion (table C). Other changes in position mostly reflected U.S. equity price increases that raised the value of portfolio investment and direct investment equity liabilities. Financial transactions reflected net incurrence of liabilities in all major investment categories.
  • Financial derivatives decreased $553.5 billion to $1,594.2 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.

March 31, 2018 in Economics | Permalink | Comments (0)

Friday, March 30, 2018

IMF Hiring Counsel/Senior Counsel for Financial Regulatory Advice

Counsel/Senior Counsel (Job Number: 1800197)

  • This vacancy shall be filled by a 3-year Term appointment in accordance with the Fund’s new employment rules taking effect on May 1, 2015.

Description 

The International Monetary Fund (IMF) is seeking to fill a Term staff Counsel/Senior Counsel position in the Financial and Fiscal Law Unit (FFL Unit) of its Legal Department.

The primary objective of the FFL Unit is to provide high-quality legal advice in the context of IMF surveillance, financial assistance programs, technical assistance, and Financial Sector Assessment Programs (FSAPs). The FFL Unit provides advice to member countries on laws and regulations respecting central banks, financial institutions and markets (e.g., the regulation and resolution of financial institutions, financial markets infrastructures, Fintech) as well as fiscal laws (taxation and public financial management (PFM)). It contributes to the formulation of legal policies in its areas of expertise, within the Fund and with other international organizations (Financial Stability Board (FSB), Organization for Economic Cooperation and Development (OECD), and the United Nations (UN)), and advises on the design and implementation of legal reforms under Fund-supported programs. The FFL Unit also provides legal advice regarding the intersection of fiscal law with financial law (e.g. banking sector taxation, public debt instruments, temporary public funding to distressed financial institutions). The successful candidate will be appointed on a three-year Term appointment.

Duties and Responsibilities

Under the overall direction of the General Counsel and Director of the Legal Department (LEG), and the supervision of the Deputy General Counsel responsible for the FFL Unit, the successful candidate will work as Counsel/Senior Counsel and carry out a number of duties and responsibilities, in particular in the areas of regulation and resolution of financial institutions and PFM.

The primary duties and responsibilities will include:

  1. In the context of IMF surveillance, FSAPs, financial assistance programs, and TA, providing legal advice in the area of financial sector and PFM legislation to the Fund’s Executive Board, Fund management, other departments, and to other units within the Legal Department as required;
  2. Drafting of, and advising on, financial sector and PFM legislation in IMF member countries;
  3. Participating in Fund missions and engaging in pre- and post-mission research and reviews;
  4. Engaging in research and reviews in the field of financial sector legislation and PFM law;
  5. Contributing to, commenting on, Fund policy and analytical papers as well as other publications of the Fund in the area of financial sector and PFM, and on areas at the intersection between fiscal law and financial law;
  6. Organizing and delivering presentations and seminars at the premises of the Fund and in member countries; and
  7. Carrying out other assignments as instructed by the General Counsel or the Deputy General Counsel in charge of the FFL Unit.

Qualifications 

The successful candidate will have an advanced university degree in law. The successful candidate will have at least five years of significant, relevant professional legal experience. In particular, the successful candidate will have advised on the legal and regulatory issues related to the regulation and resolution of financial institutions (such as supervisory regimes and financial regulatory issues, financial safety nets, resolution regime and deposit guarantee agency schemes) or to PFM (such as budget laws, public debt frameworks, fiscal responsibility frameworks, fiscal oversight of state-owned enterprises, sovereign wealth funds, public investment management, and public-private partnerships). The successful candidate will have reviewed and drafted legislation or regulation in at least some of these fields. This working experience, acquired in the public or private sectors, should include advising on these matters from a public policy perspective.

Previous experience in both areas – regulation and resolution of financial institutions and PFM - would be an asset. However, it is recognized that the candidate may not have expertise on both PFM and financial sector. It is expected that the successful candidate will be willing to gain expertise on both areas and to advise on issues at the intersection between financial and fiscal law.

The successful candidate will have excellent analytical skills, written and oral communication skills, sound judgment, and a strong drive for results. He/she will have strong interpersonal skills and a demonstrated ability to build effective working relations within and outside the Fund. Knowledge of languages other than English with professional-level fluency would be an asset.

March 30, 2018 in Financial Regulation | Permalink | Comments (0)

Thursday, March 29, 2018

Barclays Agrees to Pay $2 Billion in Civil Penalties to Resolve Claims for Fraud in the Sale of Residential Mortgage-Backed Securities

Two Former Barclays Executives Agree to Pay $2 Million to Resolve Claims Brought Against Them Individually

The United States has reached agreement with Barclays Capital, Inc. and several of its affiliates (together, Barclays) to settle a civil action filed in December 2016 in which the United States sought civil penalties for alleged conduct related to Barclays’ underwriting and issuance of residential mortgage-backed securities (RMBS) between 2005 and 2007.  Barclays will pay the United States two billion dollars ($2,000,000,000) in civil penalties in exchange for dismissal of the Amended Complaint.

Following a three-year investigation, the complaint in the action, United States v. Barclays Capital, Inc., alleged that Barclays caused billions of dollars in losses to investors by engaging in a fraudulent scheme to sell 36 RMBS deals, and that it misled investors about the quality of the mortgage loans backing those deals.  It alleged violations of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), based on mail fraud, wire fraud, bank fraud, and other misconduct. 

Agreement has also been reached with the two former Barclays executives who were named as defendants in the suit:  Paul K. Menefee, of Austin, Texas, who served as Barclays’ head banker on its subprime RMBS securitizations, and John T. Carroll, of Port Washington, New York, who served as Barclays’ head trader for subprime loan acquisitions.  In exchange for dismissal of the claims against them, Menefee and Carroll agree to pay the United States the combined sum of two million dollars ($2,000,000) in civil penalties.

The settlement was announced by Richard P. Donoghue, United States Attorney for the Eastern District of New York, and Laura S. Wertheimer, Inspector General, of the Federal Housing Finance Agency Office of the Inspector General (FHFA-OIG).

“This settlement reflects the ongoing commitment of the Department of Justice, and this Office, to hold banks and other entities and individuals accountable for their fraudulent conduct,” stated United States Attorney Donoghue. “The substantial penalty Barclays and its executives have agreed to pay is an important step in recognizing the harm that was caused to the national economy and to investors in RMBS.”

“The actions of Barclays and the two individual defendants resulted in enormous losses to the investors who purchased the Residential Mortgage-Backed Securities backed by defective loans,” stated FHFA-OIG Inspector General Wertheimer.  “Today’s settlement holds accountable those who waste, steal or abuse funds in connection with FHFA or any of the entities it regulates.  We are proud to have partnered with the U.S. Department of Justice and the U.S Attorney’s Office for the Eastern District of New York on this matter.”

The scheme alleged in the complaint involved 36 RMBS deals in which over $31 billion worth of subprime and Alt-A mortgage loans were securitized, more than half of which loans defaulted.  The complaint alleged that in publicly filed offering documents and in direct communications with investors and rating agencies, Barclays systematically and intentionally misrepresented key characteristics of the loans it included in these RMBS deals.  In general, the borrowers whose loans backed these deals were significantly less creditworthy than Barclays represented, and these loans defaulted at exceptionally high rates early in the life of the deals.  In addition, as alleged in the complaint, the mortgaged properties were systematically worth less than what Barclays represented to investors.  These are allegations only, which the Defendants dispute, and there has been no trial or adjudication or judicial finding of any issue of fact or law. 

March 29, 2018 in Financial Regulation | Permalink | Comments (0)

USA personal income and outlays, February 2018

Personal income increased $67.3 billion (0.4 percent) in February according to estimates released today
by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $53.9 billion (0.4 percent)
and personal consumption expenditures (PCE) increased $27.7 billion (0.2 percent).

Real DPI increased 0.2 percent in February and Real PCE increased less than 0.1 percent. The PCE price
index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

                                                         2017                  2018
                                                Oct.     Nov.     Dec.     Jan.     Feb.
                                                   Percent change from preceding month
Personal income:
 Current dollars                                0.4      0.3      0.4      0.4      0.4
Disposable personal income:
 Current dollars                                0.3      0.3      0.4      1.0      0.4
 Chained (2009) dollars                         0.1      0.1      0.2      0.6      0.2
Personal consumption expenditures (PCE):
 Current dollars                                0.3      0.7      0.5      0.2      0.2
 Chained (2009) dollars                         0.2      0.5      0.3     -0.2      0.0
Price indexes:
 PCE                                            0.2      0.2      0.1      0.4      0.2
 PCE, excluding food and energy                 0.2      0.1      0.2      0.3      0.2

Price indexes:                                   Percent change from month one year ago
 PCE                                            1.6      1.7      1.7      1.7      1.8
 PCE, excluding food and energy                 1.5      1.5      1.5      1.5      1.6

The increase in personal income in February primarily reflected increases in wages and salaries and nonfarm
proprietors’ income (table 3).

The $1.4 billion increase in real PCE in February reflected an increase of $1.0 billion in spending for goods
and a $0.5 billion increase in spending for services (table 7). Within goods, recreational goods and vehicles
was the leading contributor to the increase. Within services, financial services and insurance was the leading
contributor to the increase. Detailed information on monthly real PCE spending can be found in Table 2.3.6U.

Personal outlays increased $27.8 billion in February (table 3). Personal saving was $497.4 billion in February and
the personal saving rate, personal saving as a percentage of disposable personal income, was 3.4 percent (table 1).

                                2017 Personal Income and Outlays

Personal income (table 6) increased 3.1 percent in 2017 (that is, from the 2016 annual level to the 2017 annual level),
compared with an increase of 2.4 percent in 2016. DPI increased 2.9 percent in 2017 compared with an increase of
2.6 percent in 2016. In 2017, PCE increased 4.5 percent, compared with an increase of 4.0 percent in 2016.

Real DPI increased 1.2 percent in 2017, compared with an increase of 1.4 percent in 2016. Real PCE (table 8) increased
2.8 percent, compared with an increase of 2.7 percent in 2016.

                                Updates to Personal Income and Outlays

Estimates have been updated for October through January. The percent change from the preceding month for current-dollar
personal income, and for current-dollar and chained (2009) dollar DPI and PCE  -- revised and as published in last month's
release -- are shown below.

                                                        Change from preceding month
                                               December                                   January
                                Previous   Revised   Previous   Revised   Previous   Revised   Previous   Revised
                               (Billions of dollars)      (Percent)      (Billions of dollars)      (Percent)
Personal income:
 Current dollars                    63.2      67.8        0.4       0.4       64.7      74.7        0.4       0.4
Disposable personal income:
 Current dollars                    52.2      56.4        0.4       0.4      134.8     142.7        0.9       1.0
 Chained (2009) dollars             27.4      31.5        0.2       0.2       71.0      75.7        0.6       0.6
Personal consumption expenditures:
 Current dollars                    53.1      62.7        0.4       0.5       31.2      21.3        0.2       0.2
 Chained (2009) dollars             29.3      38.1        0.2       0.3      -17.0     -27.7       -0.1      -0.2

                                Next release:  April 30, 2018 at 8:30 A.M. EDT
                                   Personal Income and Outlays:  March 2018

March 29, 2018 in Economics | Permalink | Comments (0)

Wednesday, March 28, 2018

GDP for 2017: National Income, Corporate Profits, and Product Accounts Looking Strong

Real gross domestic product (GDP) increased at an annual rate of 2.9 percent in the fourth quarter of
2017 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the
third quarter, real GDP increased 3.2 percent.

The GDP estimate released today is based on more complete source data than were available for the
"second" estimate issued last month.  In the second estimate, the increase in real GDP was 2.5 percent.
With this third estimate for the fourth quarter, the general picture of economic growth remains the
same; personal consumption expenditures (PCE) and private inventory investment were revised up (see
"Updates to GDP" on page 2).

 
Real GDP: Percent Change from Preceding Quarter
Real gross domestic income (GDI) increased 0.9 percent in the fourth quarter, compared with an
increase of 2.4 percent in the third. The average of real GDP and real GDI, a supplemental measure of
U.S. economic activity that equally weights GDP and GDI, increased 1.9 percent in the fourth quarter,
compared with an increase of 2.8 percent in the third quarter (table 1).
The increase in real GDP in the fourth quarter primarily reflected positive contributions from PCE,
nonresidential fixed investment, exports, residential fixed investment, state and local government
spending, and federal government spending that were partly offset by a negative contribution from
private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased
(table 2).

The deceleration in real GDP growth in the fourth quarter reflected a downturn in private inventory
investment that was partly offset by accelerations in PCE, exports, state and local government spending,
nonresidential fixed investment, and federal government spending, and an upturn in residential fixed
investment. Imports, which are a subtraction in the calculation of GDP, turned up.

Current-dollar GDP increased 5.3 percent, or $253.5 billion, in the fourth quarter to a level of $19,754.1
billion. In the third quarter, current-dollar GDP increased 5.3 percent, or $250.6 billion (table 1 and table
3).

The price index for gross domestic purchases increased 2.5 percent in the fourth quarter, compared
with an increase of 1.7 percent in the third quarter (table 4). The PCE price index increased 2.7 percent,
compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index
increased 1.9 percent, compared with an increase of 1.3 percent (appendix table A).


Updates to GDP

The upward revision to the percent change in real GDP reflected upward revisions to PCE and private
inventory investment.   For more information, see the Technical Note. A detailed "Key Source Data and
Assumptions" file is also posted for each release.  For information on updates to GDP, see the
"Additional Information" section that follows.

                                           Advance Estimate     Second Estimate     Third Estimate
                                                   (Percent change from preceding quarter)
Real GDP                                         2.6                 2.5                2.9
Current-dollar GDP                               5.0                 4.9                5.3
Real GDI                                         ...                 ...                0.9
Average of Real GDP and Real GDI                 ...                 ...                1.9
Gross domestic purchases price index             2.5                 2.5                2.5
PCE price index                                  2.8                 2.7                2.7


2017 GDP

Real GDP increased 2.3 percent in 2017 (that is, from the 2016 annual level to the 2017 annual level),
compared with an increase of 1.5 percent in 2016 (table 1).

The increase in real GDP in 2017 primarily reflected positive contributions from PCE, nonresidential fixed
investment, and exports. These contributions were partly offset by a decline in private inventory
investment. Imports, which are a subtraction in the calculation of GDP, increased (table 2).

The acceleration in real GDP from 2016 to 2017 reflected upturns in nonresidential fixed investment and
in exports and a smaller decrease in private inventory investment.  These movements were partly offset
by decelerations in residential fixed investment and in state and local government spending. Imports,
which are a subtraction in the calculation of GDP, accelerated.

Current-dollar GDP increased 4.1 percent, or $766.1 billion, in 2017 to a level of $19,390.6 billion,
compared with an increase of 2.8 percent, or $503.8 billion, in 2016 (table 1 and table 3).

The price index for gross domestic purchases increased 1.8 percent in 2017, compared with an increase
of 1.0 percent in 2016 (table 4). The PCE price index increased 1.7 percent, compared with an increase
of 1.2 percent. Excluding food and energy prices, the PCE price index increased 1.5 percent, compared
with an increase of 1.8 percent (appendix table A).

During 2017 (measured from the fourth quarter of 2016 to the fourth quarter of 2017), real GDP
increased 2.6 percent, compared with an increase of 1.8 percent during 2016.  The price index for gross
domestic purchases increased 1.9 percent during 2017, compared with an increase of 1.4 percent during
2016 (table 7).


Corporate Profits (table 12)

Profits from current production (corporate profits with inventory valuation adjustment and capital
consumption adjustment) decreased $1.1 billion in the fourth quarter, in contrast to an increase of
$90.2 billion in the third quarter.

Profits of domestic financial corporations decreased $14.6 billion in the fourth quarter, in contrast to
an increase of $47.8 billion in the third. Profits of domestic nonfinancial corporations increased $19.4
billion, compared with an increase of $10.4 billion. Rest-of-the-world  profits decreased $5.9 billion, in
contrast to an increase of $32.0 billion. In the fourth quarter, receipts increased $14.9 billion, and
payments increased $20.8 billion.

In 2017, profits from current production increased $91.2 billion, in contrast to a decrease of $44.0
billion in 2016. Profits of domestic financial corporations increased $15.7 billion, in contrast to a
decrease of $2.0 billion. Profits of domestic nonfinancial corporations increased $37.4 billion, in contrast
to a decrease of $51.7 billion. The rest-of-the-world component of profits increased $38.0 billion,
compared with an increase of $9.8 billion.


The 2017 Tax Cuts and Jobs Act includes several provisions that impact the business income and
personal income statistics in the national income and product accounts (NIPAs). The provisions do not
impact corporate profits for current production or GDI but do impact net cash flow in the fourth quarter
of 2017. For more information, see the Technical Note.

March 28, 2018 in Economics | Permalink | Comments (0)

Tuesday, March 27, 2018

Former CEO of Israeli Sales and Marketing Company Charged for Role in Fraudulent Binary Options Scheme

The former CEO of the Israel-based company Yukom Communications, a purported sales and marketing company, was charged in an indictment filed on March 22, for her alleged participation in a scheme to defraud investors in the United States and across the world in financial instruments known as “binary options.” 

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and Assistant Director in Charge Andrew W. Vale of the FBI’s Washington Field Office made the announcement.

Lee Elbaz, 36, of Israel, was charged in the District of Maryland with one count of conspiracy to commit wire fraud and three counts of wire fraud. The indictment alleges that Yukom provided investor “retention” services for two websites, known as BinaryBook and BigOption, that were used to promote and market purported binary options, and that those binary options were fraudulently sold and marketed.  The indictment further alleges that in her role as CEO of Yukom, Elbaz, along with her co-conspirators and subordinates, misled investors using BinaryBook and BigOption by falsely claiming to represent the interests of investors but that, in fact, the owners of BinaryBook and BigOption profited when investors lost money; by misrepresenting the suitability of and expected return on investments through BinaryBook and BigOption; by providing investors with false names and qualifications and falsely claiming to be working from London; and by misrepresenting whether and how investors could withdraw funds from their accounts.  Representatives of BinaryBook and BigOption, working under Elbaz’s supervision, misrepresented the terms of so-called “bonuses,” “risk free trades” and “insured trades,” and deceptively used these supposed benefits in a manner that in fact harmed investors, according to the indictment. 

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. This case was investigated by the FBI’s Washington Field Office.  Trial Attorneys Ankush Khardori and Tracee Plowell of the Criminal Division’s Fraud Section are prosecuting the case.

 Download Elbaz Indictment

March 27, 2018 in AML | Permalink | Comments (0)

Monday, March 26, 2018

IRS reminds taxpayers to report virtual currency transactions

The Internal Revenue Service today reminded taxpayers that income from virtual currency transactions is reportable on their income tax returns.

Virtual currency transactions are taxable by law just like transactions in any other property. The IRS has issued guidance in IRS Notice 2014-21 for use by taxpayers and their return preparers that addresses transactions in virtual currency, also known as digital currency.

Taxpayers who do not properly report the income tax consequences of virtual currency transactions can be audited for those transactions and, when appropriate, can be liable for penalties and interest.

In more extreme situations, taxpayers could be subject to criminal prosecution for failing to properly report the income tax consequences of virtual currency transactions. Criminal charges could include tax evasion and filing a false tax return. Anyone convicted of tax evasion is subject to a prison term of up to five years and a fine of up to $250,000. Anyone convicted of filing a false return is subject to a prison term of up to three years and a fine of up to $250,000.

Virtual currency, as generally defined, is a digital representation of value that functions in the same manner as a country’s traditional currency. There are currently more than 1,500 known virtual currencies. Because transactions in virtual currencies can be difficult to trace and have an inherently pseudo-anonymous aspect, some taxpayers may be tempted to hide taxable income from the IRS.

Notice 2014-21 provides that virtual currency is treated as property for U.S. federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency. Among other things, this means that:

  • A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.
  • Payments using virtual currency made to independent contractors and other service providers are taxable, and self-employment tax rules generally apply.  Normally, payers must issue Form 1099-MISC.
  • Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2 and are subject to federal income tax withholding and payroll taxes.
  • Certain third parties who settle payments made in virtual currency on behalf of merchants that accept virtual currency from their customers are required to report payments to those merchants on Form 1099-K, Payment Card and Third Party Network Transactions.
  • The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.

March 26, 2018 in Tax Compliance | Permalink | Comments (0)

Nine Iranians Charged with Conducting Massive Cyber Theft Campaign Against Universities

Mabna Institute Hackers Penetrated Systems Belonging to Hundreds of Universities, Companies, and Other Victims to Steal Research, Academic and Proprietary Data, and Intellectual Property

An Indictment charging Gholamreza Rafatnejad, 38; Ehsan Mohammadi, 37; Abdollah Karima, aka Vahid Karima, 39; Mostafa Sadeghi, 28; Seyed Ali Mirkarimi, 34; Mohammed Reza Sabahi, 26; Roozbeh Sabahi, 24; Abuzar Gohari Moqadam, 37; and Sajjad Tahmasebi, 30, all citizens and residents of Iran, was unsealed today.  The defendants were each leaders, contractors, associates, hackers-for-hire or affiliates of the Mabna Institute, an Iran-based company that, since at least 2013, conducted a coordinated campaign of cyber intrusions into computer systems belonging to 144 U.S. universities, 176 universities across 21 foreign countries, 47 domestic and foreign private sector companies, the U.S. Department of Labor, the Federal Energy Regulatory Commission, the State of Hawaii, the State of Indiana, the United Nations, and the United Nations Children’s Fund.  Through the defendants’ activities, the Mabna Institute stole more than 31 terabytes of academic data and intellectual property from universities, and email accounts of employees at private sector companies, government agencies, and non-governmental organizations.  The defendants conducted many of these intrusions on behalf of the Islamic Republic of Iran’s (Iran) Islamic Revolutionary Guard Corps (IRGC), one of several entities within the government of Iran responsible for gathering intelligence, as well as other Iranian government and university clients.  In addition to these criminal charges, today the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated the Mabna Institute and the nine defendants for sanctions for the malicious cyber-enabled activity outlined in the Indictment.

The charges were announced by Deputy Attorney General Rod J. Rosenstein; Assistant Attorney General for National Security John C. Demers; U.S. Attorney Geoffrey S. Berman for the Southern District of New York; FBI Director Christopher A. Wray; Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Division; and Treasury Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker.

“These nine Iranian nationals allegedly stole more than 31 terabytes of documents and data from more than 140 American universities, 30 American companies, five American government agencies, and also more than 176 universities in 21 foreign countries,” said Deputy Attorney General Rosenstein.  “For many of these intrusions, the defendants acted at the behest of the Iranian government and, specifically, the Iranian Revolutionary Guard Corps.  The Department of Justice will aggressively investigate and prosecute hostile actors who attempt to profit from America’s ideas by infiltrating our computer systems and stealing intellectual property.  This case is important because it will disrupt the defendants’ hacking operations and deter similar crimes.”

“Today, in one of the largest state-sponsored hacking campaigns ever prosecuted by the Department of Justice, we have unmasked criminals who normally hide behind the ones and zeros of computer code,” said U.S. Attorney Berman.  “As alleged, this massive and brazen cyber-assault on the computer systems of hundreds of universities in 22 countries and dozens of private sector companies and governmental organizations was conducted on behalf of Iran’s Islamic Revolutionary Guard.  The hackers targeted innovations and intellectual property from our country’s greatest minds.  These defendants are now fugitives from American justice, no longer free to travel outside Iran without risk of arrest.  The only way they will see the outside world is through their computer screens, but stripped of their greatest asset – anonymity.”   

“This investigation involved a complex threat in a dynamic landscape, but today’s announcement highlights the commitment of the FBI and our partners to vigorously pursue those that threaten U.S. property and security,” said Director Wray.  “Today, not only are we publicly identifying the foreign hackers who committed these malicious cyber intrusions, but we are also sending a powerful message to their backers, the Government of the Islamic Republic of Iran: your acts do not go unnoticed.  We will protect our innovation, ideas and information, and we will use every tool in our toolbox to expose those who commit these cyber crimes.  Our memory is long; we will hold them accountable under the law, no matter where they attempt to hide.”

According to the allegations contained in the Indictment unsealed today in Manhattan federal court:

Background on the Mabna Institute

Gholamreza Rafatnejad and Ehsan Mohammadi, the defendants, founded the Mabna Institute in approximately 2013 to assist Iranian universities and scientific and research organizations in stealing access to non-Iranian scientific resources.  In furtherance of its mission, the Mabna Institute employed, contracted, and affiliated itself with hackers-for-hire and other contract personnel to conduct cyber intrusions to steal academic data, intellectual property, email inboxes and other proprietary data, including Abdollah Karima, aka Vahid Karima, Mostafa Sadeghi, Seyed Ali Mirkarimi, Mohammed Reza Sabahi, Roozbeh Sabahi, Abuzar Gohari Moqadam, and Sajjad Tahmasebi.  The Mabna Institute contracted with both Iranian governmental and private entities to conduct hacking activities on their behalf, and specifically conducted the university spearphishing campaign on behalf of the IRGC.  The Mabna Institute is located at Tehran, Sheikh Bahaii Shomali, Koucheh Dawazdeh Metri Sevom, Plak 14, Vahed 2, Code Posti 1995873351.

University Hacking Campaign

The Mabna Institute, through the activities of the defendants, targeted more than 100,000 accounts of professors around the world.  They successfully compromised approximately 8,000 professor email accounts across 144 U.S.-based universities, and 176 universities located in foreign countries, including Australia, Canada, China, Denmark, Finland, Germany, Ireland, Israel, Italy, Japan, Malaysia, Netherlands, Norway, Poland, Singapore, South Korea, Spain, Sweden, Switzerland, Turkey and the United Kingdom.  The campaign started in approximately 2013, continued through at least December 2017, and broadly targeted all types of academic data and intellectual property from the systems of compromised universities.  Through the course of the conspiracy, U.S.-based universities spent more than approximately $3.4 billion to procure and access such data and intellectual property.

The members of the conspiracy used stolen account credentials to obtain unauthorized access to victim professor accounts, which they used to steal research, and other academic data and documents, including, among other things, academic journals, theses, dissertations, and electronic books.  The defendants targeted data across all fields of research and academic disciplines, including science and technology, engineering, social sciences, medical, and other professional fields.  The defendants stole at least approximately 31.5 terabytes of academic data and intellectual property, which they exfiltrated to servers outside the United States that were under the control of members of the conspiracy.

In addition to stealing academic data and login credentials for the benefit of the Government of Iran, the defendants also sold the stolen data through two websites, Megapaper.ir (Megapaper) and Gigapaper.ir (Gigapaper).  Megapaper was operated by Falinoos Company, a company controlled by Abdollah Karima, aka Vahid Karima, the defendant, and Gigapaper was affiliated with Karima.  Megapaper sold stolen academic resources to customers within Iran, including Iran-based public universities and institutions, and Gigapaper sold a service to customers within Iran whereby purchasing customers could use compromised university professor accounts to directly access the online library systems of particular U.S.-based and foreign universities.

Accompanying Mitigation Efforts

Prior to the unsealing of the Indictment, the FBI provided foreign law enforcement partners with detailed information regarding victims within their jurisdictions, so that victims in foreign countries could be notified and foreign partners could assist in remediation efforts.

Also, in connection with the unsealing of the Indictment, today the FBI provided private sector partners detailed information regarding the vulnerabilities targeted and the intrusion vectors used by the Mabna Institute in their campaign against private sector companies.  This information will assist the public in its network defense and mitigation efforts.

*                *                *

Rafatnejad, Mohammadi, Karima, Sadeghi, Mirkarimi, Sabahi, Sabahi, Moqadam and Tahmasebi was each is charged with one count of conspiracy to commit computer intrusions, which carries a maximum sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; two counts of unauthorized access of a computer, each of which carries a maximum sentence of five years in prison; two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the assigned judge.

For the U.S. Department of Treasury’s press release announcing corresponding sanctions click here.

For many decades, the United States has led the world in science, technology, research, and development. Hostile individuals, organizations and nation-states have taken note of our success.  They increasingly attempt to profit from America’s ingenuity by infiltrating our computer systems, stealing our intellectual property, and evading our controls on technology exports.  When hackers gain unlawful access to computers, it can take only a few minutes to steal discoveries produced by many years of work and many millions of dollars of investment.  That type of criminal activity does not just cause economic harm. It also threatens our national security.  Identifying and prosecuting computer hackers is a priority for the Department of Justice.   We are here today to announce that a federal grand jury in the Southern District of New York indicted nine Iranians for conspiring to hack into computers and defraud American and foreign universities, businesses, and government agencies. I want to caution you that an indictment is not a finding of guilt.  In the American judicial system, defendants are presumed innocent unless and until they are proven guilty in a court of law. The indictment alleges that the defendants worked on behalf of the Iranian government, specifically the Islamic Revolutionary Guard Corps.  They hacked the computer systems of approximately 320 universities in 22 countries. 144 of the victims are American universities. The defendants stole research that cost the universities approximately $3.4 billion to procure and maintain.  The stolen information was used by the Revolutionary Guard or sold for profit in Iran.  The defendants worked for the Mabna Institute, an organization that two of the defendants founded with the stated purpose of helping Iranian universities access scientific research.

Their work consisted of stealing research through illegal computer intrusions. The indictment charges nine defendants for committing seven federal crimes. The charges include computer fraud, wire fraud, conspiracy, and identity theft.  I want to make two additional points before I turn over the microphone to United States Attorney Geoffrey Berman, who will describe the charges in greater detail. First, every sector of our economy is a target of malicious cyber activity. Everyone who owns a computer needs to be vigilant to prevent attacks. Academic institutions are prime targets for foreign cyber criminals. Universities can thrive as marketplaces of ideas and engines of research and development only if their work is protected from theft. The events described in this indictment highlight the need for universities and other organizations to emphasize cyber security, increase threat awareness, and harden their computer networks. The second important point is that our work on this case is critically important because it will disrupt the criminal operations of the Mabna Institute and deter similar crimes by others.

The indictment publicly identifies the alleged perpetrators.  This type of public identification helps deter state-sponsored computer intrusions by stripping them of anonymity and imposing consequences. Revealing the Mabna Institute's nefarious activities makes it harder for them to do business.  Additionally, we are working with foreign law enforcement agencies and providing the private sector with information to help neutralize Mabna’s hacking infrastructure.   By bringing these criminal charges, we reinforce a norm that most of the civilized world accepts: nation-states should not steal intellectual property for the purpose of giving domestic industries a competitive advantage. As a result of the indictment, the defendants are now fugitives from justice. There are more than 100 countries where they cannot travel without fear of arrest and extradition.  And, thanks to the Treasury Department, the defendants will find it difficult to engage in business or financial transactions outside of Iran. By making clear that criminal actions have consequences, we deter schemes to victimize the United States, its companies, and its citizens, and we help protect foreign allies.  In summary, the United States is taking several coordinated actions to coincide with unsealing the indictment. We are imposing financial sanctions on the individual defendants and the Mabna Institute. We are releasing information about cyber vulnerabilities. And we are enlisting the assistance of international law enforcement partners.

 

March 26, 2018 in AML | Permalink | Comments (0)

17th Annual Security Conference Topics Announced

It's the end of March and that means that the world's foremost security researchers and government professionals will once again gather for three days to share cutting-edge research,  issues, and papers for security. 

My topic, by invitation of Dr. Dionysios Demetis (University of Hull), a leading anti-money laundering and information systems academic, is the leveraging of gathered financial information to promote good behaviour.  I am also invited to participate for two Ph.D. rigorosum panels being convened by Dr. Dionysis and Dr. Robert J Munro (retired, Florida), in the evenings for the public defense of doctoral dissertations regarding security risk topics. One rigorosum for her second doctorate is Dr. Nathalie RÉBÉ, who holds her first doctorate for a dissertation regarding strategic decision and risk from the Paris School of Business.

Of the three days of high level research being presented, topics of 2018 include:  

  • Design Principles and Guidelines for Targeted Security Awareness
  • Commercial Drones: Security and Privacy Concerns
  • Financial Impact of Data Breaches and Insurance
  • Cryptocurrencies & Cyber-Money Laundering
  • Adding Network Exposure to Environmental Measures in Security Risk Scoring Models
  • Current Situation Analysis of Information Security Level in Municipalities
  • Going Dark: An investigation into willing nondisclosure on social platforms
  • Nuclear Applications for Blockchain
  • Does an individual’s ethical preference impact their decision to take voluntary security actions?
  • Towards the Elucidation of Organizational Cyber Threat Intelligence
  • A Machine-Learning Based Wireless Intrusion Detection System
  • Exploring Information Centrality for Intrusion Detection in Large Networks
  • Lessons Learned from Capture the Flag Competitions,
  • Malicious QR Codes: Unexpected and Unwanted
  • A 2nd order cybernetics approach to anti-money laundering risk
  • Exploring cyberterrorism prevention objectives
  • Attacks and security mechanisms in cyber-physical systems
  • MITM Spoofing in Machine to Machine Communications
  • Facial Recognition in Low Light
  • A Study on Various Signature Detection Methods to handle Zer0-Day Worms
  • Enhanced Security Mechanisms for the selected cyber attacks in UAV networks

Looking forward to networking with attendees during the workshops and activities.  I'll be wearing my standard white linen. See you there.

March 26, 2018 in AML | Permalink | Comments (0)

Sunday, March 25, 2018

U.S. International Transactions: Fourth Quarter and Year 2017

The U.S. current-account deficit increased to $128.2 billion (preliminary) in the fourth
quarter of 2017 from $101.5 billion (revised) in the third quarter, according to statistics
released by the Bureau of Economic Analysis (BEA). The deficit was 2.6 percent of current-
dollar gross domestic product (GDP) in the fourth quarter, up from 2.1 percent in the third
quarter.

Quarterly U.S. Current-Account and Component Balance

The $26.7 billion increase in the current-account deficit mostly reflected increases in the
deficits on goods and secondary income and a decrease in the surplus on primary income.

                  Current-Account Transactions, Fourth Quarter (tables 1-5)

Exports of goods and services and income receipts

Exports of goods and services and income receipts increased $16.6 billion in the fourth quarter
to $878.8 billion.

    * Goods exports increased $14.2 billion to $400.7 billion, mostly reflecting an increase
      in industrial supplies and materials, primarily petroleum and products.

    * Primary income receipts increased $6.0 billion to $243.9 billion, mostly reflecting
      increases in direct investment income and in portfolio investment income.

    * Secondary income receipts decreased $5.9 billion to $35.3 billion, partly offsetting the
      increases in goods exports and in primary income receipts. The decrease in secondary
      income receipts mostly reflected a decrease in U.S. government transfers, primarily fines
      and penalties.

Quarterly U.S. Current-Account Transactions

Imports of goods and services and income payments

Imports of goods and services and income payments increased $43.3 billion to $1,006.9 billion.

    * Goods imports increased $33.1 billion to $614.9 billion, mostly reflecting increases in
      industrial supplies and materials, primarily petroleum and products, and in consumer
      goods except food and automotive.

    * Primary income payments increased $7.3 billion to $186.7 billion, primarily reflecting an
      increase in direct investment income.

                          Capital Account, Fourth Quarter (table 1)

The balance on the capital account shifted to a deficit of less than $0.1 billion in the fourth
quarter from a surplus of $24.9 billion in the third quarter. The third-quarter transactions
reflected receipts from foreign insurance companies for losses resulting from hurricanes Harvey,
Irma, and Maria. For more information, see “What are the effects of hurricanes and other disasters 
on the international economic accounts?”

                  Financial Account, Fourth Quarter (tables 1, 6, 7, and 8)

Net U.S. borrowing measured by financial-account transactions was $29.8 billion in the fourth
quarter, a decrease from net borrowing of $121.8 billion in the third quarter.

Financial assets

Net U.S. acquisition of financial assets excluding financial derivatives decreased $172.8
billion to $177.9 billion.

    * Net U.S. acquisition of portfolio investment assets decreased $95.9 billion to $83.3
      billion, reflecting a shift to net U.S. sales of foreign equity and investment fund
      shares from third-quarter net purchases.

    * Transactions in other investment assets shifted to net U.S. liquidation of $10.7 billion
      in the fourth quarter from net acquisition of $74.7 billion in the third quarter, mostly
      reflecting a shift to net foreign repayment of loans from third-quarter net U.S.
      provision of loans to foreigners.

Liabilities

Net U.S. incurrence of liabilities excluding financial derivatives decreased $282.6 billion to
$208.4 billion.

    * Net U.S. incurrence of portfolio investment liabilities decreased $211.5 billion to $84.9
      billion, reflecting a decrease in net foreign purchases of U.S. long-term debt securities
      and a shift to net foreign sales of U.S. equity and investment fund shares from third-
      quarter net foreign purchases.

    * Net U.S. incurrence of direct investment liabilities decreased $49.6 billion to $54.1
      billion, primarily reflecting a shift to net U.S. repayment of debt instrument
      liabilities from third-quarter net incurrence.

    * Net U.S. incurrence of other investment liabilities decreased $21.4 billion to $69.5
      billion, reflecting largely offsetting changes in transactions in loan and deposit
      liabilities. In loans, transactions shifted to net U.S. repayment of loan liabilities
      from third-quarter net incurrence. In deposits, transactions shifted to net incurrence of
      deposit liabilities from third-quarter net foreign withdrawal of deposits in the United
      States.


Financial derivatives

Transactions in financial derivatives other than reserves reflected fourth-quarter net lending
of $0.8 billion, a decrease of $17.8 billion from the third quarter.

                      Statistical Discrepancy, Fourth Quarter (table 1)

The statistical discrepancy was $98.4 billion in the fourth quarter, after a statistical
discrepancy of -$45.2 billion in the third quarter.

         Updates to Third Quarter 2017 International Transactions Accounts Aggregates
                           Billions of dollars, seasonally adjusted

                                                      Preliminary estimate    Revised estimate


Current-account balance                                       -100.6               -101.5
Goods balance                                                 -195.3               -195.3
   Services balance                                             60.9                 60.0
   Primary-income balance                                       57.0                 58.5
   Secondary-income balance                                    -23.2                -24.7
Net lending (+)/borrowing (-) from
   financial-account transactions                             -105.6               -121.8
Statistical discrepancy                                        -29.9                -45.2

                             Current-Account Balance, Year 2017

The current-account deficit increased to $466.2 billion (preliminary) in 2017 from $451.7
billion in 2016.  The deficit was 2.4 percent of current-dollar GDP in 2017, the same
percentage as in 2016.

The $14.6 billion increase in the deficit reflected a $58.7 billion increase in the deficit on
goods and a $4.9 billion decrease in the surplus on services that were partly offset by a $43.8
billion increase in the surplus on primary income and a $5.3 billion decrease in the deficit on
secondary income.

                    Current-Account Transactions, Year 2017 (tables 1-5)

Exports of goods and services and income receipts

Exports of goods and services and income receipts increased $250.9 billion in 2017 to $3,408.2
billion.

    * Primary income receipts increased $112.9 billion to $926.9 billion, led by an increase in
      direct investment income.

    * Goods exports increased $95.0 billion to $1,550.7 billion, led by an increase in
      industrial supplies and materials.

    * Services exports increased $28.5 billion to $780.9 billion, led by increases in other
      business services and in financial services.

Imports of goods and services and income payments

Imports of goods and services and income payments increased $265.5 billion to $3,874.4 billion.

    * Goods imports increased $153.7 billion to $2,361.9 billion, led by increases in
      industrial supplies and materials and in capital goods except automotive.

    * Primary income payments increased $69.1 billion to $709.9 billion, led by increases in
      portfolio investment income and in other investment income.

    * Services imports increased $33.5 billion to $538.1 billion, led by increases in travel
      (for all purposes including education) and in other business services.

                             Capital Account, Year 2017 (table 1)

Capital transfer receipts were $24.9 billion in 2017. The transactions reflected receipts from
foreign insurance companies for losses resulting from hurricanes Harvey, Irma, and Maria. For
more information, see “What are the effects of hurricanes and other disasters on the
international economic accounts?"

                     Financial Account, Year 2017 (tables 1, 6, 7, and 8)

Net U.S. borrowing measured by financial-account transactions was $349.2 billion in 2017, a
decrease from net borrowing of $377.7 billion in 2016.

Financial assets

Net U.S. acquisition of financial assets excluding financial derivatives increased $864.5
billion to $1,212.4 billion.

    * Net U.S. acquisition of portfolio investment assets increased $548.9 billion to $589.5
      billion, reflecting increases in net U.S. purchases of foreign debt securities and in net
      purchases of foreign equity and investment fund shares.

    * Transactions in other investment assets shifted to net U.S. acquisition of $200.1 billion
      in 2017 from net liquidation of $6.4 billion in 2016, primarily reflecting a shift to net
      U.S. acquisition of foreign deposits in 2017 from net withdrawal in 2016.

    * Net U.S. acquisition of direct investment assets increased $112.8 billion to $424.4
      billion, reflecting a shift to net U.S. acquisition of debt instruments in 2017 from net
      foreign repayment in 2016 and an increase in net acquisition of equity assets.

Liabilities

Net U.S. incurrence of liabilities excluding financial derivatives increased $846.5 billion to
$1,587.9 billion.

    * Net U.S. incurrence of portfolio investment liabilities increased $599.7 billion to
      $837.1 billion, reflecting a shift to net foreign purchases of U.S. equity and investment
      fund shares in 2017 from net foreign sales in 2016 and an increase in net foreign
      purchases of U.S. long-term debt securities.

    * Net U.S. incurrence of other investment liabilities increased $377.6 billion to $402.2
      billion, reflecting a shift to net U.S. incurrence of deposit liabilities in 2017 from
      net foreign withdrawal in 2016 and a shift to net U.S. incurrence of loan liabilities in
      2017 from net repayment in 2016.

    * Net U.S. incurrence of direct investment liabilities decreased $130.7 billion to $348.7
      billion, partly offsetting the increases in net U.S. incurrence of portfolio investment
      liabilities and other investment liabilities. The decrease in net U.S. incurrence of
      direct investment liabilities reflected decreases in net incurrence of debt instrument
      liabilities and equity liabilities.

Financial derivatives

Transactions in financial derivatives other than reserves reflected net lending of $26.4
billion in 2017, an increase of $10.5 billion from 2016.

March 25, 2018 in Economics | Permalink | Comments (0)

Saturday, March 24, 2018

Florida Man Pleads Guilty to Conspiracy to Illegally Export Defense Articles to Russia

Vladimir Nevidomy, 31, of Hallandale Beach, Florida, pleaded guilty on March 19, to conspiring to illegally export military-grade night vision and thermal vision devices and ammunition primers to Russia.

Assistant Attorney General for National Security John C. Demers, U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida, Special Agent in Charge Robert Lasky of the FBI’s Miami Field Office, and Special Agent in Charge Mark Selby of Homeland Security Investigation’s (HSI) Miami Field Office made the announcement. 

According to information contained in court documents, from as early as April 2013 through November 2013, customers in Russia contacted Nevidomy by email requesting night vision rifle scopes, thermal monoculars and ammunition primers, all of which were on the U.S. Munitions List and subject to export control by the U.S. Department of State.  Nevidomy proceeded to obtain at least three ATN MARS 4x4 night-vision rifle scopes and an ODIN 61BW thermal multi-purpose monocular from U.S. vendors by falsely representing to the vendors that the items were not for export.

On or about April 16, 2013, a co-defendant caused a wire transfer from a Shanghai, China bank account in the amount of $11,755 for the purchase and shipment of two ATN MARS 4x4 night-vision rifle scopes.  That same day, Nevidomy paid $9,599 to a U.S. vendor for the purchase of those two night-vision rifle scopes.  On or about May 2, 2013, Nevidomy also caused a wire transfer in the amount of $10,000 to be sent to a U.S. vendor for the purchase of the ODIN 61BW thermal multi-purpose monocular.

Later, Nevidomy’s co-defendant caused a wire transfer from a bank account in Riga, Latvia in the amount of $18,036, part of which was for the purchase of a third ATN Mars 4X4 night-vision rifle scope. On the same day, Nevidomy caused a wire transfer in the amount of $9,599 to a U.S. vendor, part of which was for the purchase of the third ATN Mars 4X4 night-vision rifle scope.

After the U.S. vendors sent the night vision devices to Nevidomy in South Florida, he exported them to the co-defendant in Russia by either concealing the defense articles in household goods shipments sent through a freight forwarding company or using a private Russian postal service that operated in South Florida.  In June 2013, Nevidomy aided and abetted the export of the ATN MARS 4x4 night-vision rifle scopes from the U.S. to the co-defendant in Russia, and in August 2013, he exported the ODIN 61BW thermal multi-purpose monocular from the U.S. to the co-defendant in Russia. 

On or about July 19, 2013, the same co-defendant sent an email to Nevidomy requesting 1,000 large-rifle ammunition primers to be shipped to Vladivostok, Russia.  On or about Oct. 2, 2013, Nevidomy attempted to export 1,000 Sellier & Bellot ammunition primers from the U.S. to the co-defendant in Vladivostok, Russia.  These ammunition primers were seized by U.S. Customs and Border Protection.

These night vision rifle scopes, thermal monocular, and ammunition primers required a license or other authorization from the U.S. Department of State before being exported from the U.S. since they were on the U.S. Munitions List.  A certified license history check revealed that neither Nevidomy nor his associates ever applied or attempted to apply for an export license from the State Department for the night-vision equipment or ammunition primers.

Sentencing is scheduled before U.S. District Judge Kathleen Williams, on May 25. Nevidomy, a Ukraine-born naturalized U.S. citizen, faces a maximum sentence of 5 years imprisonment. 

In addition, on Feb. 5, in a separate federal case, Nevidomy pleaded guilty to passport fraud and conspiracy to commit passport fraud in the Southern District of Florida.

March 24, 2018 in AML | Permalink | Comments (0)

Friday, March 23, 2018

Iranian National Arrested for Scheme to Evade U.S. Economic Sanctions by Illicitly Sending More Than $115 Million From Venezuela Through the U.S. Financial System

An indictment was unsealed today charging Ali Sadr Hashemi Nejad (Sadr) for his alleged involvement in a scheme to evade U.S. economic sanctions against Iran, to defraud the U.S., and to commit money laundering and bank fraud.  Sadr was charged with participating in a scheme in which more than $115 million in payments for a Venezuelan housing complex were illegally funneled through the U.S. financial system for the benefit of Iranian individuals and entities.

Assistant Attorney General for National Security John C. Demers, U.S. Attorney Geoffrey S. Berman for the Southern District of New York, New York County District Attorney Cyrus Vance Jr., and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office made the announcement.

Sadr was arrested yesterday on a six-count Indictment (the Indictment) and presented this afternoon in U.S. District Court for the Eastern District of Virginia.  Sadr’s case has been assigned to U.S. District Judge Andrew L. Carter Jr. in the Southern District of New York. 

According to the Indictment unsealed today:

Beginning in 1979, the President, pursuant to the International Emergency Economic Powers Act (the IEEPA), has repeatedly found that the actions and policies of the government of Iran constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and declared a national emergency to deal with the threat.  In accordance with these presidential declarations, the United States has instituted a host of economic sanctions against Iran and Iranian entities.  This sanctions regime prohibits, among other things, financial transactions involving the United States or U.S. persons that were intended for the benefit of the Government of Iran or Iranian individuals or entities. 

In August 2004, the Governments of Iran and Venezuela entered into an agreement (the Agreement), whereby they agreed to cooperate in certain areas of common interest.  The following year, both governments supplemented the Agreement by entering into a Memorandum of Understanding regarding an infrastructure project in Venezuela (the Project), which was to involve the construction of thousands of housing units in Venezuela. 

The Project was led by Stratus Group, an Iranian conglomerate controlled by Sadr and his family with international business operations in the construction, banking, and oil industries.  In December 2006, Stratus Group incorporated a company in Tehran, which was then known as the Iranian International Housing Corporation (IIHC).  IIHC was responsible for construction for the Project.  Thereafter, IIHC entered into a contract with a subsidiary of a Venezuelan state-owned energy company (the VE Company), which called for IIHC to build approximately 7,000 housing units in Venezuela in exchange for approximately $475,734,000.  Stratus Group created the Venezuela Project Executive Committee to oversee the execution of the Project.  Sadr was a member of the committee and was responsible for managing the Project’s finances.

In connection with his role on the Project, Sadr took steps to evade U.S. economic sanctions and to defraud U.S. banks by concealing the role of Iran and Iranian parties in U.S. dollar payments sent through the U.S. banking system.  For example, in 2010, Sadr and a co-conspirator used St. Kitts and Nevis passports and a United Arab Emirates address to incorporate two entities outside Iran that would receive U.S. dollar payments related to the Project on behalf of IIHC.  The first entity, Clarity Trade and Finance (Clarity), was incorporated in Switzerland, and the second, Stratus International Contracting, J.S., aka Stratus Turkey, aka Straturk, was incorporated in Turkey.  Stratus Turkey and Clarity were both owned and controlled by Sadr and his family members in Iran.  Sadr then opened U.S. dollar bank accounts for Clarity and Stratus Turkey at a financial institution located in Switzerland. 

Thereafter, Sadr and others conducted a series of international financial transactions using Clarity and Stratus Turkey for the benefit of Iranian parties in a manner that concealed the Iranian nexus to the payments, in violation of U.S. economic sanctions.  Specifically, between April 2011 and November 2013, the VE Company, at the direction of Sadr and others, made approximately 15 payments to IIHC through Stratus Turkey or Clarity, totaling approximately $115,000,000.  

Sadr and others directed that payments be routed through banks in the U.S. to Stratus Turkey’s or Clarity’s bank accounts at the financial institution in Switzerland.  The majority of the funds were then transferred to another offshore entity located in the British Virgin Islands, which had been incorporated by Sadr and others in 2009.  In addition, on Feb. 1, 2012, Clarity wired more than $2,000,000 of proceeds from the Project directly into the United States.  Those proceeds were then used to purchase real property in California.

*                *                *

The Indictment charges Sadr with: one count of Conspiracy to Defraud the United States which carries a maximum penalty of 5 years in prison; one count of Conspiracy to Violate IEEPA which carries a maximum penalty of 20 years in prison; one count of Bank Fraud which carries a maximum penalty of 30 years in prison; one count of Conspiracy to Commit Bank Fraud which carries a maximum penalty of 30 years in prison; one count of Money Laundering which carries a maximum penalty of 20 years in prison; and one count of Conspiracy to Commit Money Laundering which carries a maximum penalty of 20 years in prison.

March 23, 2018 in AML | Permalink | Comments (0)