International Financial Law Prof Blog

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

Monday, October 31, 2016

FATF Outcomes of the October 2016 Plenary meeting

Under the Spanish Presidency of Mr. Juan Manuel Vega-Serrano, the first Plenary meeting of Plenary year FATF-XXVIII was held. FATF logo

The main issues dealt with by this Plenary meeting were :


Outreach to the FinTech / RegTech communities

Technology-based innovations are rapidly changing the financial industry, introducing efficiencies and providing alternatives for traditional financial products.  Consequently, it is important for the FATF to engage with the FinTech/RegTech communities to remain involved in these developments.  A close partnership will allow FATF to be proactive in refining its standards to effectively regulate financial innovations.  The FATF Plenary approved an initiative which will focus on the FATF President’s objective of developing a partnership with the FinTech/RegTech community.  Such a partnership will build awareness within the industry of potential ML/TF risks and allow FATF to explore ways to meet the regulatory and supervisory challenges of new innovations. 

Forum of the Heads of FATF Financial Intelligence Units

Financial intelligence Units (FIUs) play an important role in efforts to combat money laundering and terrorist financing, analysing suspicious transaction reports submitted by financial institutions in their country and reporting new trends and methods that criminals use to launder the proceeds of their crime and terrorists use to raise and move their funds.  In the margins of this Plenary meeting, the first forum of Heads of FIUs took place, which explored both the challenges and the best practices in obtaining beneficial ownership information, and the role of FIUs in information sharing for counter-terrorist financing purposes.  Participants at the meeting also discussed the role of FIUs in determining the effectiveness of a country’s use of financial intelligence during the FATF’s mutual evaluation process.

Discussion of the mutual evaluation reports of Switzerland and the United States

The Plenary discussed the mutual evaluation reports of Switzerland and the United States which set out the level of effectiveness of their AML/CFT systems and their level of compliance with the FATF Recommendations. The reports were prepared on the basis of the FATF Methodology for assessments, which requires countries to take into account the effectiveness with which AML/CFT measures are implemented, as well as technical compliance for each of the FATF Recommendations.  The mutual evaluation of the United States was conducted jointly with the Asia/Pacific Group on Money Laundering, of which the country is also a member.

The Plenary discussed the assessment team’s key findings, priority actions, and recommendations regarding each country’s AML/CFT regime. The FATF will finalise the mutual evaluation reports for publication after the quality and consistency review, in accordance with its procedures.

Update on and recognition of AML/CFT improvements in Guyana

The FATF congratulated Guyana for the significant progress it has made in addressing the strategic AML/CFT deficiencies earlier identified by the FATF and included in its action plan. Guyana will no longer be subject to the FATF’s monitoring under its on-going global AML/CFT compliance process. The country will work with the Caribbean Financial Action Task Force (CFATF), of which it is a member, to further strengthen its AML/CFT regime.

October 31, 2016 | Permalink | Comments (0)

Sunday, October 30, 2016

Former California-Based Global Vice President of International Technology Company and Two Others Indicted in Scheme to Commit Insider Trading and Money Laundering

A former Palo Alto, California, based global vice president of SAP SE and two other individuals were charged in a federal indictment for their roles in a scheme to commit insider trading and money laundering that allegedly resulted in hundreds of thousands of dollars in profits.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Inspector in Charge Regina L. Faulkerson of the U.S. Postal Inspection Service’s (USPIS) Criminal Investigations Group made the announcement.

Christopher G. Salis, 39, of San Mateo, California, a former SAP global vice president; Douglas M. Miller, 40, of Dyer, Indiana; and Edward M. Miller, 43, of Munster, Indiana, were charged in a 17-count indictment returned yesterday by a federal grand jury in the Northern District of Indiana.

The indictment charges all defendants with one count of conspiracy to commit wire fraud and securities fraud, one count of conspiracy to commit money laundering and one count of Postal inspectorconspiracy to structure currency transactions involving a financial institution for the purpose of evading the reporting requirements.  In addition, Salis is charged with four counts of wire fraud and five counts of securities fraud; Douglas Miller is charged with six counts of wire fraud, five counts of securities fraud and one count of making false statements; and Edward Miller is charged with one count of wire fraud, one count of securities fraud, one count of witness harassment and one count of obstruction of justice.

According to allegations in the indictment, while Salis was employed as a SAP global vice president, he obtained material, non-public information about SAP’s acquisition of Concur, which he disclosed to Douglas Miller in violation of a duty of confidentiality.  Douglas Miller, Edward Miller and others then allegedly purchased securities in Concur based on this information for the purposes of profiting from these transactions and returning a portion of the profits to Salis.  Following the acquisition, the indictment alleges that Douglas Miller and Edward Miller sold the securities and Douglas Miller made approximately $119,000 and Edward Miller made approximately $149,000.  Other traders who allegedly used the information profited a total of approximately $237,000.  In order to conceal the nature of the proceeds, the Millers allegedly used cash, money orders and checks to transfer some of their trading profits to Salis.  In total, Salis allegedly received nearly $90,000 from his co-conspirators.

October 30, 2016 in Financial Regulation | Permalink | Comments (0)

Saturday, October 29, 2016

Attorney General Loretta E. Lynch Delivers Remarks on Department of Justice Efforts in the Fight Against International Fraud and Corruption

The work done by so many of the public servants in this room – fighting corruption in all of its forms – is vital to ensuring that these values remain at the heart of society.  Before Justice logobecoming Attorney General, I prosecuted federal public corruption cases in Brooklyn, New York.  And like many of you, I have seen firsthand how corruption, at bottom, is about breaking trust.  It is about undermining citizens’ belief in their elected officials.  It is about betraying the people’s faith that when public monies are spent on services for citizens – from infrastructure to education – none of those funds will be misappropriated for selfish ends.  And it is about poisoning the civic spirit of a people – displacing passion with cynicism, and solidarity with suspicion.  And that is why the U.S. Department of Justice has made it a priority to root out, prosecute, and prevent corruption.  What is at stake is not just a sum of money or a single contract:  it is the public’s trust that one set of rules apply to all of its members, that we have ordered our markets and our governmental institutions in a fundamentally fair manner, and that our societies will uphold and respect the rule of law.  I am proud to say that with the help of our domestic and international partners, we are working tirelessly to detect corruption and bring wrongdoers to justice – no matter how powerful the actors, no matter how complex the crimes, and no matter where the crimes take place. 

In pursuing this mission, the Justice Department has had the benefit of several powerful tools.  The public integrity units in our Criminal Division, our U.S. Attorney’s Offices, and our Federal Bureau of Investigation have prosecuted and convicted corrupt officials at all levels of the American government.  And since 2009, under the Foreign Corrupt Practices Act, the department has brought more than 65 individual criminal cases and more than 65 cases against corporations in connection with foreign bribery charges – many of them in coordination with our foreign law enforcement partners.  These investigations have resulted in the collection of more than $4.4 billion in penalties, and they have had the welcome effect of increasing corporate self-scrutiny, incentivizing companies to better train, monitor, and discipline their own agents and subsidiaries around the world.  In the same period, our colleagues at the Securities and Exchange Commission have brought suit against more than 100 companies and 40 individuals, resulting in approximately $2.6 billion in monetary relief.  The message we are seeking to send through these enforcement actions is simple: We expect businesses and organizations – and anyone acting on behalf of these entities – to play by the rules, whether they act overseas or in the United States. 

We have also sought to root out fraud and misappropriation in public funds and government contracts by bringing actions under the False Claims Act (FCA).  That statute is powered by a unique whistleblower provision that allows private parties to file suit on behalf of the U.S. government and receive a portion of the funds recovered through successful litigation.  Indeed, our own Ambassador [John] Phillips worked closely with the Senate to create the whistleblower provisions of the FCA.  Since its inception in 1986, the FCA has allowed for the recovery of more than $53 billion in industries ranging from health care to defense. 

In our increasingly globalized world, the United States is determined not only to hold U.S. citizens and officials accountable for their crimes, but also to ensure that our financial system offers no haven to those perpetrating corruption abroad.  The Justice Department created the Kleptocracy Asset Recovery Initiative in 2010 for this very purpose: to detect fraud that passes through our financial system, and to ensure that, where possible, stolen assets are returned to or used to benefit the people wronged by corrupt actors.  Just this past August, we brought the largest single action in the initiative’s brief history, filing suit to recover more than $1 billion in assets associated with an international conspiracy to allegedly steal funds from a Malaysian public trust and launder the funds through U.S. financial institutions.   

These are wonderful accomplishments, and I could not be prouder of the hardworking men and women of the Department of Justice for the work they do every day to protect the integrity of our markets and public enterprises.  But of course, in the 21stcentury, no nation can fight corruption on its own.  As the U.N. Convention Against Corruption makes clear, international cooperation is more important than ever in dismantling transnational schemes, thwarting attempts to hide ill-gotten assets, and bringing perpetrators to justice.  And a leading recent example of the importance of international cooperation is our ongoing investigation of bribery and corruption in international football.  I know the importance of this investigation here in Italy, where football is not simply a pastime – it is woven into the very fabric of Italy’s national identity and national pride.  Italian fans root for the Azzuri with the faith that the game is fair, that referees will make the correct calls, and that games will be won and lost honestly and without interference.  What’s more, the beautiful game helps to teach our children about character, teamwork and fair play.  And it underscores our fundamental belief that the best way to success is through hard work and honest effort. 

Last year, the Justice Department announced charges against more than 40 defendants affiliated with FIFA who had failed to uphold these fundamental principles, and who had corrupted the business of worldwide soccer to serve their personal interests.  These officials were entrusted with keeping soccer open and accessible to all in a number of ways, from building soccer fields for children in developing countries to organizing the World Cup.  But for decades, these individuals abdicated their responsibilities to fairly govern international soccer.  In an enormous affront to values held by soccer fans worldwide, these individuals engaged in rampant corruption for decades with the aim of amassing personal fortunes.  Some of them accepted millions of dollars in bribes and kickbacks in awarding lucrative media and marketing contracts; bought and sold votes for World Cup hosting bids; and even rigged leadership elections in FIFA.  Their betrayals did not simply undermine trust in FIFA.  They struck at the very core of who we are and who we aspire to be.

Our ongoing investigation into FIFA would not have been possible without the cooperation of several of our international partners – including our partners here in Italy, who helped us apprehend one of the defendants last December.  Our coordinated efforts in the FIFA case show what is possible when the international community takes a united stand against corruption.  They demonstrate that no one is beyond the reach of the law.  They prove that we do not have to accept corruption as a way of life, or simply the “cost of doing business.”  And they show that we can uphold the basic values of trust, transparency and good faith that form the bedrock of our societies.

October 29, 2016 | Permalink | Comments (0)

Friday, October 28, 2016

Network of more than 1 000 relationships now in place to automatically exchange information between tax authorities

As a further step to implement the OECD Common Reporting Standard (CRS), the first series of bilateral automatic exchange relationships were established among the first batch of jurisdictions committed to exchanging information automatically as of 2017.
With still a year to go before the first exchanges of information on financial accounts pursuant to the OECD Common Reporting Standard (CRS), there are now more than 1 000 bilateral relationships in place across the globe, most of them based on the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (the CRS MCAA). The full list of automatic exchange relationships that are now in place under the CRS MCAA and other legal instruments can be accessed here.
More jurisdictions will nominate the partners with which they will undertake automatic exchanges in the coming months. The next update on the latest bilateral exchange relationships will be published before the end of 2016, with updates to follow on a periodic basis. In total, 101 jurisdictions have agreed to start automatically exchanging financial account information in September 2017 and 2018, under the CRS.
This wave of activations of bilateral exchange relationships is an important step towards the timely implementation of the OECD-developed international standard for the automatic exchange of financial account information, the CRS, and reflects the determination of jurisdictions around the world to deliver on their political commitment to fight tax evasion.This section shows all bilateral exchange relationships that are currently in place for the automatic exchange of CRS information. The relationships shown included those under the OECDframework of Article 6 of the Multilateral Convention and the CRS MCAA, as well as exchange relationships based on bilateral agreements and the EU framework.

As of October 2016, and with still almost a year to go until the first exchange date on 30 September 2017, there are now already over 1000 bilateral exchange relationships activated with respect to jurisdictions committed to a 2017 timeline.

Activated exchange relationships can be sorted and displayed from both the perspective of a particular sending jurisdiction (“FROM”) or a particular receiving jurisdiction (“TO”). For each exchange relationship, the legal basis and, where appropriate, the effective date and/or the activation date are shown. The number in brackets behind each jurisdiction in the drop-down menu indicates the total number of bilateral exchange relationships that are currently activated with respect to that jurisdiction. Further information on the process for activating bilateral exchange relationships under the CRS MCAA can be found in our Questions and Answers.

Lexis Guide to FATCA and CRS Compliance – NEW 2016 Edition 

Over 1,800 pages of analysis of the FATCA and CRS compliance challenges,  73 chapters by FATCA and CRS contributing experts from over 30 countries.  Besides in-depth, practical analysis, the 2016 edition includes examples, charts, time lines, links to source documents, and compliance analysis pursuant to the IGA and local regulations for many U.S. trading partners and financial centers.   The Lexis Guide to FATCA Compliance, designed from interviews with over 100 financial institutions and professional firms, is a primary reference source for financial institutions and service providers, advisors and government departments.  The 19 newest chapters include by example an in-depth analysis of designing a FATCA internal policy that is compliant with the initial two year soft enforcement initiative, designing an equivalent form to the W-8, reporting accounts, reporting payments, operational specificity of the mechanisms of information capture, management and exchange by firms and between countries, insights as to the application of FATCA, CRS, and the IGAs within BRIC, SEA and European country chapters.  This fourth edition will provide the financial enterprise’s FATCA compliance officer the tools for developing and maintaining a best practices compliance strategy.No filler of forms and regs – it’s all beef !  See Lexis’ order site and request a copy of the forthcoming 2016 edition –

October 28, 2016 in GATCA, OECD | Permalink | Comments (0)

Thursday, October 27, 2016

Bank Secrecy, Exchange of Taxpayer Data, Search and EU Law: the case of K.S. AND M.S. v. GERMANY


1. The case originated in an application (no. 33696/11) against the Federal Republic of Germany lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two German nationals, Mr K.S. and Mrs M.S. (“the applicants”), on 27 May 2011. The President of the Section acceded to the applicants’ request not to have their names disclosed (Rule 47 § 4 of the Rules of Court).

2. The applicants were represented by Mr F. Bielefeld, a lawyer practising in Munich. The German Government (“the Government”) were represented by one of their Agents, Mrs K. Behr, of the Federal Ministry of Justice and Consumer Protection.

3. The applicants alleged, in particular, that the search of their residential premises had violated Article 8 of the Convention, as the search warrant had been based on evidence which had been obtained in breach of international and domestic law.

A. The background to the case

6. In 2006 the German secret service (Bundesnachrichtendienst) bought a data carrier from a certain K. for a considerable amount of money. The data carrier contained financial data from the Liechtenstein L. Bank relating to 800 people. K., who had formerly been an employee of the L. Bank, had illegally copied the data. The data carrier was submitted to the German tax investigation authorities, which subsequently instigated proceedings against, inter alia, the applicants, in relation to tax evasion crimes.

8. The search warrant indicated that, in the course of investigations against another suspect, the prosecution had obtained information that the applicants had established the “K. Foundation” on 17 January 2000 and the “T.U. S.A.” on 14 June 2000. The applicants were suspected of having made financial investments via these two associations with the L. Bank in Liechtenstein, for which they were liable for tax in Germany. According to the search warrant, the applicants had failed to declare about 50,000 euros (EUR) of the yearly interest accrued from the capital of both the K. Foundation and T.U. S.A. in their tax returns for the years 2002 to 2006. It indicated that the applicants had evaded tax payments of EUR 16,360 in 2002, EUR 24,270 in 2003, EUR 22,500 in 2004, EUR 18,512 in 2005 and EUR 18,000 in 2006. The search warrant stated that the house search was urgently needed in order to find further evidence and that, weighing the seriousness of the alleged crimes against the constitutional rights of the applicants, the house search was proportionate.

9. On 23 September 2008 the applicants’ flat was searched and one envelope containing L. Bank documents and five computer files were seized.


1. Declares the complaint under Article 8 of the Convention admissible and the remainder of the application inadmissible;

 2. Holds that there has been no violation of Article 8 of the Convention.

October 27, 2016 | Permalink | Comments (0)

Wednesday, October 26, 2016

Panama will publish sanctions for breach of the AML law

The measure was adopted by the National Commission Against Money Laundering to strengthen transparency. 

The National Commission Against Money Laundering requested that the Superintendence of Banks, the Superintendence of Insurance, the Administration Office for Supervision and FATF logoRegulation of Non-Financial Subjects and the Panama Cooperative Institute (IPACOOP), bodies responsible for monitoring and preventing money laundering, make public the sanctions for the violation of the law, as it currently does the Superintendence of Securities, reported Dulcidio De La Guardia, Minister of Economy and Finance.

De La Guardia gave statements during the 1st International Financial Summit of Business and Investment, an event organized by the Banking Association of Panama, in which he stressed that the measure seeks to make the Panamanian Financial System more transparent. Each one of the monitoring bodies must submit a Road Map to carry out this task, specifying how and when will comply with the mandate given this week by the Commission

October 26, 2016 | Permalink | Comments (0)

EU Council conclusions on tax transparency

CONSIDERS the proposals by the Commission for revision of the Directive on Administrative Cooperation and of the Anti- EU CommissionMoney Laundering Directive in view of the synergies between these two areas as timely and INTENDS to work towards their swift adoption in accordance with the EU legislative process;

7.       CONFIRMS that there is a need for more effective and efficient cooperation between tax authorities and other agencies involved in the fight against tax evasion, money laundering and terrorist financing in line with the appropriate legal safeguards;

8.       STRESSES the need to prevent the large-scale concealment of funds which hinders the effective fight against tax evasion, money laundering and terrorist financing, and to ensure that  the identities of beneficial owners of companies, legal entities or legal arrangements are known;

9.       WELCOMES the initiative for the automatic exchange of information on ultimate beneficial owners whereby many jurisdictions, including all Member States, have agreed to exchange information on the beneficial owners of companies, legal entities and legal arrangements and LOOKS FORWARD to rapid international progress;

10.     INVITES the Commission to analyse the possibility for a  proposal on improving the cross-border access to information on ultimate beneficial owners on the basis of the ongoing work at international level;

11.     NOTES that at its October 2016 meeting the G20 heard initial proposals by OECD and FATF on ways to improve the implementation of the international standards on transparency, including on the availability of beneficial ownership information;

October 26, 2016 | Permalink | Comments (0)

The Bahamas Papers? Leaked documents of 175,000 Bahamian companies registered between 1990 and 2016

ICIJ publishes the details of 175,000 Bahamas companies leaked to it, in the ICIJ searchable offshore database.  A cache of leaked documents provides names of politicians and others Journalists logolinked to more than 175,000 Bahamian companies registered between 1990 and 2016.  The ICIJ reports that a former EU official is among the politicians uncovered in this Bahamas Papers.  

See ICIJ's new story here.

ICIJ wrote in its descriptive abstract that the new revelations reveal fresh information about offshore companies in the Bahamas.  The leaked Bahamian files reveal details of the offshore activities of prime ministers, ministers, princes and convicted felons.

Alongside detailed reporting, ICIJ is making details from the Bahamas corporate registry available to the public. This creates, for the first time, a free, online and publicly-searchable database of offshore companies set up in the island nation that has sometimes been called “The Switzerland of the West.”  

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October 26, 2016 in GATCA, Tax Compliance | Permalink | Comments (0)

Tuesday, October 25, 2016

Bank branches: the future

The BBA article here discusses the following question: 

"Yet while consumers increasingly prefer to engage with their bank via digital channels, there is still a need for branches. Accenture’s recent survey of UK consumers found nearly 70% use BBA logo them for important financial decision making. Branches also still play a key role in brand positioning for banks and are seen as vital in building customer trust despite lower usage. Banks need to recognise that their customers still want branches even if they don’t use them as much.

So how to marry what appear two conflicting forces – the rise of digital banking and lower use of branches and consumers demand for a physical, “expensive” large branch network?"

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October 25, 2016 in Financial Regulation | Permalink | Comments (0)

Agencies Issue Advanced Notice of Proposed Rulemaking on Enhanced Cyber Risk Management Standards

The three federal banking regulatory agenciesapproved an advance notice of proposed rulemaking (ANPR) inviting comment on a set of potential enhanced cybersecurity Federal_Reserve_Governors_sealrisk-management and resilience standards that would apply to large and interconnected entities under their supervision. The standards would apply as well to services provided by third parties to these firms.

The Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency are considering applying the enhanced standards to depository institutions and depository institution holding companies with total consolidated assets of $50 billion or more, the U.S. operations of foreign banking organizations with total U.S. assets of $50 billion or more, and financial market infrastructure companies and nonbank financial companies supervised by the Board. The proposed enhanced standards would not apply to community banks.

The standards would be tiered, with an additional set of higher standards for systems that provide key functionality to the financial sector. For these sector-critical systems, the agencies are considering requiring firms to substantially mitigate the risk of a disruption or failure due to a cyber event.

To benefit from comments on all aspects of the potential enhanced standards, the agencies are issuing an ANPR before developing a more detailed proposal for consideration. The agencies are also asking for comments on potential methodologies that could be used to quantify cyber risk and to compare cyber risk at entities across the financial sector. Comments on the ANPR are due January 17, 2017.

Proposed Federal Register Notice of ANPR

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October 25, 2016 | Permalink | Comments (0)

Monday, October 24, 2016

Directors’ personal data is gold dust for cyber criminals

The British Banker's Association has published an interesting article on Directors’ personal data is gold dust for cyber criminals BBA logo

It asks the risk management question: "what should directors – or a company secretary – do to reduce the risk of personal data falling into the wrong hands?  The article states: "Be aware
of what can happen when data goes missing, for example, having your identify stolen. This can usher in a period of hell if it happens to you."

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October 24, 2016 | Permalink | Comments (0)

Big fines for banks not effective, says FINMA head

According Mark Branson, head of the Switzerland’s financial regulatory body, FINMA, slapping big fines on banks guilty of money laundering is no guarantee of good behaviour. “Some of our counterparts have handed down extremely high fines and yet violations have continued. And in the end, the fines are paid by shareholders and not by bank officials,” he said. 

Read the SwissInfo article and interview here.

October 24, 2016 | Permalink | Comments (0)

G20/OECD BEPS Project advances tax certainty agenda with the launch of global review of MAP programmes

The OECD released key documents, approved by the Inclusive Framework on BEPS, that will form the basis of the Mutual Agreement Procedure (MAP) peer review and monitoring process under Action 14 of the BEPS Action Plan.

The Action Plan on Base Erosion and Profit Shifting identified 15 actions to address BEPS in a comprehensive manner. Recognising that the actions to counter BEPS must be OECDcomplemented with actions that ensure certainty and predictability for business, Action 14 calls for effective dispute resolution mechanisms to resolve tax treaty-related disputes. The BEPS package endorsed by the G20 Finance Ministers in October 2015 contains the report on Action 14 (Making Dispute Resolution Mechanisms More Effective), which outlines the minimum standards and best practices for resolving treaty-related disputes under the Mutual Agreement Procedure (MAP).

The documents released today form the basis on which this process will be moving forward. The compilation includes the Terms of Reference which translate the minimum standard approved in the final Action 14 report into a basis for peer review; the Assessment Methodology for the peer review and monitoring process and the MAP statistics reporting framework which reflects the collaborative approach competent authorities will take to resolve MAP cases and will ensure greater transparency on statistical information relating to the inventory, types and outcome of MAP cases through common reporting of MAP cases going forward andGuidance on information and documentation to be submitted with a MAP request.

Through rigorous peer reviews and continual collection of data, the Action 14 BEPS deliverables seek to eliminate taxation not in accordance with treaty provisions and help resolve any tax-treaty related disputes in a timely and efficient manner. The involvement of the Inclusive Framework throughout the peer review process ensures that the effort to streamline MAP incorporates the experience of both developing and developed countries. The peer review and monitoring process will be conducted by the FTA MAP Forum, with all members participating on an equal footing.

The review will take place on the basis of the existing treaties and there is no requirement for jurisdictions to negotiate any new treaties. Furthermore, the methodology released today contains the possibility for developing countries to defer the peer review, recognising their capacity constraints and often relatively small MAP pipeline.

Consistent with its efforts to enhance transparency, the OECD will also publish updated MAP profiles of all members of the Inclusive Framework, which contain information about each member's Competent Authorities' contact details, domestic guidelines for MAP and other useful information for both tax authorities and taxpayers. The actual peer reviews will be conducted in batches, with the first batch commencing in December 2016. We will be seeking taxpayer input before the launch of these reviews and a questionnaire for taxpayer input seeking such input will be published shortly, together with a schedule for review.

October 24, 2016 in BEPS | Permalink | Comments (0)

Sunday, October 23, 2016

Plaza Construction Charged With Overbilling Clients and Fraud

Will Pay More Than $9 Million In Restitution And Penalties For Defrauding Clients In A Thirteen-Year Overbilling Scheme 

Projects Included the Empire State Building, Brooklyn Navy Yard, Bronx Terminal Market, Federal Reserve Bank of New York, and New York University

The U.S. Attorney’s Office for the Eastern District of New York (the Office) filed fraud charges in Brooklyn federal court against Plaza Construction LLC, successor to DOJ-U-S-ATTORNEYS-OFFICEPlaza Construction Corp. (Plaza Construction), one of the largest construction firms in New York City.  Plaza Construction is charged with mail and wire fraud conspiracy for improperly billing its clients more than $2.2 million over a thirteen-year period for hours not worked and for inserting a hidden surcharge into its bills for the purpose of obtaining payments to offset administrative costs.  As a result, Plaza Construction has entered into a deferred prosecution agreement with the Office in which it admitted to fraudulently overbilling clients and agreed to pay more than $9 million in restitution to victims, and forfeiture and penalties to the federal government.  The company has additionally instituted far-reaching corporate reforms designed to eliminate future problems and enforce best industry practices. 

Today’s deferred prosecution agreement marks the fourth resolution by the Office aimed at rooting out fraud in the construction industry.  In April 2012, Lend Lease (US) Construction LMB Inc. (formerly Bovis Lend Lease LMB Inc.) was charged with defrauding its clients, entered into a deferred prosecution agreement, and paid $56 million in restitution and penalties for engaging in a ten-year overbilling scheme.  In May 2015, Hunter Roberts Construction Group, LLC entered into a non-prosecution agreement and agreed to pay more than $7 million in restitution and penalties for engaging in an eight-year fraudulent overbilling scheme.  In December 2015, Tishman Construction Corporation was charged with defrauding its clients, entered into a deferred prosecution agreement, and paid more than $20 million in restitution and penalties for engaging in a ten-year overbilling scheme. 

The charges and disposition were announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Michael Nestor, Inspector General, Port Authority of New York and New Jersey (PANYNJ); William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Carol Fortine Ochoa, Inspector General, General Services Administration (GSA), Office of Inspector General; Scott S. Dahl, Inspector General, U.S. Department of Labor (DOL), Office of Inspector General; and Mark G. Peters, Commissioner, New York City Department of Investigation (DOI).

“For more than a decade, Plaza Construction overbilled its clients by charging them for unworked time and by fraudulently inserting a hidden surcharge to help offset its administrative costs.  By doing so, the company defrauded its clients and abused the trust placed in it to provide construction services at some of New York’s most storied sites.  Today’s criminal charges and resolution, the fourth resolution in this area, demonstrate our steadfast efforts in combating and eliminating fraud in New York City’s construction industry,” stated U.S. Attorney Capers.  Mr. Capers thanked the investigative agencies for their outstanding commitment and dedication over the course of this multi-year industry investigation.

“Plaza’s conduct that perpetuated an industry-wide fraud for more than a decade has come to an end.  Government contracting agencies, and private clients alike, deserve to be billed strictly for what they bargained for, not duped into overpaying for gratuitous or phantom services.  Responsible for overseeing one of the largest government contracting agencies in the region, the Port Authority Office of Inspector General will continue to uproot fraud and corruption within the area’s construction industry,” stated PANYNJ Inspector General Nestor.  Mr. Nestor thanked his law enforcement partners for their dedication and professionalism in investigating these practices.

“Fraudulent business practices put consumers, employees, and other industry competitors at a significant disadvantage.  Trust, once broken, is difficult to restore.  Companies, no matter how large or small, are reminded to exercise due diligence in alerting authorities about crimes of this nature.  We, along with our partners, take crimes of fraud seriously, and we will continue to seek justice to the full extent of the law,” stated FBI Assistant Director-in-Charge Sweeney.

“Plaza Construction used deceitful practices to bilk the American taxpayers.  The GSA OIG is committed to working with our law enforcement partners to hold accountable contractors who defraud the United States,” said GSA Inspector General Ochoa.

“Plaza Construction defrauded their clients by charging them for work that was not performed and by charging them prohibited fees.  Today’s resolution holds Plaza accountable for their actions and deters those who would contemplate similar misconduct in the future.  We will continue to work with our law enforcement partners to vigorously pursue fraud in the construction industry that has a negative impact on the American workforce,” stated DOL Inspector General Dahl.

DOI Commissioner Peters said, “These fraudulent overbilling schemes involved some of the highest profile construction projects in New York City, driving up costs, exploiting overtime, and siphoning millions of dollars in unearned, ill-gotten gains.  DOI will continue to work with its law enforcement partners to expose and stop this type of corruption, and ensure construction sites and companies are following the rules and operating lawfully.”

The Overbilling Scheme

As alleged in the felony information, Plaza Construction engaged in a fraudulent overbilling scheme that impacted a number of its projects for at least a thirteen-year period.  These projects included the Brooklyn Navy Yard, Bronx Terminal Market, Federal Reserve Bank of New York, New York University, and Empire State Building. 

Plaza Construction’s role on construction projects was typically that of a construction manager, which often required it to supply workers from certain trade unions and to supervise the work done by subcontractors or trade contractors.  From at least 1999 through approximately February 2012, Plaza Construction submitted bills to clients, including government contracting and funding agencies, that contained numerous false statements and material misrepresentations and omissions.  From August 2004 through February 2012, Plaza Construction systemically inserted a hidden surcharge in its bills to clients that was specifically prohibited and secretly generated additional revenue to offset certain administrative costs. 

Additionally, from at least 1999 until 2009, Plaza Construction also billed its clients for hours not worked by labor foremen from Local 79 Mason Tenders’ District Council of Greater New York and carried out this fraudulent overbilling by: (a) allowing labor foremen to be absent from work for major holidays and certain vacation days; (b) providing between five and seven hours of guaranteed overtime per day, whether worked or not, for a particular senior labor foreman; and (c) adding one to two hours of unworked or unnecessary “guaranteed” overtime per day to the time sheets for certain labor foremen.  In furtherance of this overbilling scheme, Plaza Construction completed and submitted time sheets to its clients as though the labor foremen had actually worked.

The Deferred Prosecution Agreement

Pursuant to the deferred prosecution agreement filed today, Plaza Construction accepted responsibility for its fraudulent billing practices and agreed to offer restitution to its clients in the amount of $2,226,270.19 and pay a penalty of $5,619,269.92 and forfeit $1,350,317.43 to the government over a two-year period.  In consideration of Plaza Construction’s remedial actions to date and its commitment to, among other actions: (a) accept and acknowledge responsibility for its conduct; (b) continue its cooperation; (c) make restitution available to victims; and (d) make the payment of forfeiture and a financial penalty to the government; the government agreed to defer the prosecution for a period of 24 months and to obtain an exclusion of time to allow Plaza Construction to demonstrate good conduct and compliance with the terms of this agreement.[1]  Plaza Construction’s remedial measures include the creation of the positions of General Counsel, Associate General Counsel and Compliance Director at the company; establishing a Compliance Committee; instituting annual training for all officers and non-union employees regarding its Code of Business Ethics; establishing an ethics hotline for employees to report ethics violations or concerns; and the revision of time sheet recording and client billing policies. 

October 23, 2016 | Permalink | Comments (0)

Saturday, October 22, 2016

Cantor Fitzgerald Affiliate To Pay More Than $16 Million In Penalties And Forfeiture For Engaging In Illegal Gambling And Money Laundering Schemes

CG Technology, LP, formerly doing business as Cantor Gaming (CG Technology and Cantor Gaming),[1]one of the largest race and sports book operators in the United States, has DOJ-U-S-ATTORNEYS-OFFICEentered into a non-prosecution agreement and agreed to pay $16.5 million in penalties and forfeiture to the federal government to resolve a criminal investigation into the company’s past involvement in illegal gambling and money laundering schemes.  In addition, pursuant to the agreement, CG Technology will provide continuing cooperation and has undertaken far-reaching reforms to its business and compliance operations.  Michael Colbert, a former senior executive officer at Cantor Gaming, who was the Director of Risk Management, previously pleaded guilty in the United States District Court for the Eastern District of New York to conspiring to participate in an illegal gambling business.  Colbert faces up to five years’ imprisonment for his involvement in criminal activity at Cantor Gaming.

The resolution was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Daniel G. Bogden, United States Attorney for the District of Nevada; Philip Bartlett, Inspector in Charge, United States Postal Inspection Service, New York Division (USPIS); Richard Weber, Chief, Internal Revenue Service, Criminal Investigation (IRS-CI); and James P. O’Neill, Commissioner, New York City Police Department (NYPD).

“Cantor Gaming quickly grew into one of the largest race and sports book operators in the United States.  Unacceptably, this growth came at the expense of compliance with the law, and as a result Cantor Gaming became a place where at least two large-scale illegal bookmakers could launder their ill-gotten proceeds.  The Cantor Gaming senior officer who oversaw the illegal conduct has pleaded guilty for his involvement in this criminal activity.  The non-prosecution agreement recognizes Cantor Gaming’s decision to accept full responsibility, provide complete cooperation, and take remedial measures to enforce best industry practices going forward,” stated U.S. Attorney Capers.  Mr. Capers thanked the investigative agencies for their outstanding commitment and dedication over the course of this investigation.  Mr. Capers also thanked the District Attorney’s Office for Queens County, the Financial Crimes Enforcement Network of the Department of the Treasury, and the Nevada Gaming Control Board, Enforcement Division for their assistance with the investigation. 

“CG Technology’s admissions that it violated federal laws by accepting messenger betting, out-of-state betting, and processing large amounts of monies which were the proceeds of illegal activities, are significant victories for the government,” said U.S. Attorney Bogden. 

“CG Technology, formerly Cantor Gaming, ran its enterprise with total disregard for government regulations and the penalties associated with breaking the law.  As Postal Inspectors and their law enforcement partners continue to prove, greed and eagerness to ‘game’ the system will never be tolerated, and those who choose to ignore the law will be brought to justice,” said USPIS Inspector Bartlett.  

“Cantor Gaming bet on never getting caught but this wager didn’t pay off,” said Chief Weber, IRS Criminal Investigation.  “Financial transactions always leave a money trail and IRS-CI Special Agents relentlessly follow that trail.  This large scale illegal bookmaking investigation uncovered the kind of widespread corruption that is too often associated with criminal enterprises.  Working with our law enforcement partners, we will continue to pursue these types of investigations to keep the books clean for consumers and corporations who are following the law.”

“Illegal sports betting is a multi-million-dollar business often involving other illicit activity.  There is good reason why this activity needs to be regulated and operated according to the law and industry standards.  The ‎illegal conduct forming the basis for this investigation was clearly motivated by greed and deliberate disregard for the rules of the gaming industry.  This settlement should serve as a message to those who try to beat the system,” stated NYPD Commissioner O’Neill.

Pursuant to the non-prosecution agreement signed today, Cantor Gaming, which is now known as CG Technology, acknowledged and accepted responsibility for aiding and abetting the operation of an illegal gambling business and money laundering from approximately 2009 through 2013.  Cantor Gaming, an affiliate of the financial services company Cantor Fitzgerald, LP, operates race and sports books in the following eight casinos all located in Las Vegas, Nevada: the Venetian, the Palazzo, the M Resort Spa Casino, the Hard Rock Hotel and Casino, the Tropicana, the Cosmopolitan, the Palms Casino Resort, and the Silverton Casino Hotel.

Cantor Gaming’s strategy to grow its business required it to attract and retain bettors who frequently placed large wagers on sporting contests.  To do so, Cantor Gaming offered higher betting limits than other sports books and gave the important bettors preferential treatment, including direct access to Michael Colbert, whose job was to set the lines and odds for the betting contests.  Important bettors interacted with Colbert and his staff rather than the “front of the house” staff that was under the supervision of Cantor Gaming’s chief operating officer, which normally handled interactions with bettors.  To accommodate some of the important bettors, Colbert and his staff facilitated violations of state and federal laws, including: (a) knowingly accepting and facilitating “messenger betting”[2] in its sports books on repeated occasions; (b) knowingly accepting and facilitating out-of-state betting activity through wire communications; and (c) processing large cash deposits and withdrawals and third-party wire transfers, knowing that the property involved represented the proceeds of some form of illegal activity.  As set forth in the Statement Facts, which is attached to the non-prosecution agreement, two of these important high volume bettors ran illegal bookmaking operations and were able to launder their illegal proceeds through Cantor Gaming wagering accounts.

On or about August 21, 2013, Michael Colbert pleaded guilty in the Eastern District of New York to conspiracy to conduct an illegal gambling business, in violation of Title 18, United States Code, Section 371, and faces a term of imprisonment of up to five years when sentenced. 

In light of CG Technology’s complete acceptance of responsibility for the full breadth of its unlawful conduct, cooperation, and far-reaching remedial measures, the government has agreed not to prosecute CG Technology for its criminal conduct, provided that CG Technology complies for two years with all the terms of the agreement executed today. 

The government’s case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys James P. Loonam and Matthew Amatruda are in charge of the case, with assistance from Assistant United States Attorney Brian Morris of the Office’s Civil Division, which is responsible for the forfeiture of assets, as well as Assistant United States Attorney Nicholas Dickinson of the District of Nevada.   

[1] Cantor Gaming changed its name to CG Technology, LP in January 2014.  The conduct which was the subject of the criminal investigation occurred while the company was doing business as Cantor Gaming.

[2] The practice of having an agent or “runner” place a bet on behalf of a third-party in exchange for compensation is known as “messenger betting.”  It is illegal for a licensed sports book in Nevada to knowingly accept wagers from compensated agents.

Interested in money laundering risk-management and resilience standards?  The Texas A&M Risk Management program provides you the knowledge and skills you need to work successfully in a fast paced, highly-structured, deadline driven culture. We’ve designed the program with both lawyer and non-lawyer professionals in mind, and have built courses that help connect the dots across a number of issues, such as compliance, fiduciary management, corporate governance, and more. Engage, innovate, and interact in a dynamic environment that mimics the real world of risk management.

October 22, 2016 | Permalink | Comments (0)

Friday, October 21, 2016

Several new jurisdictions sign transfer pricing automatic sharing of corporate country-by-country reports and CRS financial information about individuals

As part of continuing efforts to boost transparency by multinational enterprises (MNEs), Brazil, Guernsey, Jersey, the Isle of Man and Latvia signed today the Multilateral Competent Authority Agreement (MCAA) for the automatic exchange of Country-by-Country reports, bringing the total number of signatories to 49.  This marks a further milestone towards the implementation of the OECD/G20 BEPS Project and a significant increase in cross-border cooperation on tax matters.

The MCAA will enable consistent and swift implementation of new transfer pricing reporting standards developed under Action 13 of the BEPS Action Plan. It will ensure that tax administrations obtain a complete understanding of the way MNEs structure their operations through the annual automatic exchange of country-by-country reports, while also ensuring that the confidentiality of such information is safeguarded.

Country-by-country reporting will require MNEs to provide aggregate information annually, in each jurisdiction where they do business, relating to the global allocation of income and taxes paid, together with other indicators of the location of economic activity within the MNE group. It will also cover information about which entities do business in a particular jurisdiction and the business activities each entity engages in.


From left/right: Senator Ian Gorst, Jersey, Secretary-General Angel Gurría, OECD, Deputy Lyndon Trott, Guernsey and Howard Quayle MHK, Isle of Man.

Photo:OECD/Marco Illuminati

On the occasion of the signing in Paris, OECD Secretary-General Angel Gurría discussed the international tax agenda with Deputy Lyndon Trott, of Guernsey, Howard Quayle MHK, of Isle of Man, and Senator Ian Gorst, of Jersey. “I congratulate Brazil, Guernsey, Jersey the Isle of Man and Latvia on their efforts toward implementing the BEPS package, and on their important role in advancing greater international tax cooperation and transparency,” Mr Gurría said.

The OECD/G20 BEPS Project set out 15 key actions to reform the international tax framework and ensure that profits are reported where economic activities are carried out and value created. BEPS is of major significance for developing countries due to their heavy reliance on corporate income tax, particularly from MNEs.

G20 Leaders endorsed a wide-ranging BEPS package in November 2015 that marks an historic opportunity for improving the effectiveness of the international tax system. The package was the result of more than two years of discussion involving all OECD and G20 countries, as well as more than a dozen developing countries. Following endorsement of the BEPS measures, the focus has shifted to designing and putting in place an inclusive framework for monitoring BEPS and supporting implementation of the measures, where currently 85 jurisdictions participate on an equal footing.

For more information about the MCAA Country-By-Country Reporting, see:

Brazil joins the CRS MCAA

In addition to signing the Country by Country MCAA, Brazil today also signed the CRS Multilateral Competent Authority Agreement‎ (CRS MCAA), re-confirming its commitment to implementing the automatic exchange of financial account information pursuant to the OECD/G20 Common Reporting Standard (CRS) in time to commence exchanges in 2018. Brazil is the 85th jurisdiction to sign the CRS MCAA.

The Convention on Mutual Administrative Assistance in Tax Matters (the "Convention"), by virtue of its Article 6, is the legal basis for both Multilateral Competent Authority Agreements. 104 countries and jurisdictions currently participate in the Convention.

October 21, 2016 in BEPS, GATCA, OECD | Permalink | Comments (0)

Brooklyn Resident And Two Russian Nationals Arrested In Connection With Scheme To Illegally Export Controlled Technology To Russia

Defendants Used Brooklyn-Based Front Companies to Procure Sophisticated Military and Satellite Technology on Behalf of Russian End-Users

Alexey Barysheff of Brooklyn, New York, a naturalized citizen of the United States, was arrested on federal charges of illegally exporting controlled technology from the FBISealUnited States to end-users in Russia.  Simultaneously, two Russian nationals, Dmitrii Aleksandrovich Karpenko and Alexey Krutilin, were arrested in Denver, Colorado, on charges of conspiring with Barysheff and others in the scheme.  Federal agents also executed search warrants at two Brooklyn locations that were allegedly used as front companies in Barysheff’s illegal scheme. 

Barysheff is scheduled to make his initial appearance today at 2:00 p.m. at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York, before Chief United States Magistrate Judge Roanne L. Mann.  Karpenko and Krutilin are scheduled to make their initial appearances today at the United States Courthouse in Denver, Colorado, where the government will seek their removal in custody to the Eastern District of New York.

The arrests and charges were announced by U.S. Attorney Robert L. Capers of the Eastern District of New York; Assistant Attorney General for National Security John P. Carlin; Special Agent in Charge Angel M. Melendez, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) for New York; FBI Assistant Director in Charge William F. Sweeney, Jr., New York Field Office; Special Agent in Charge Jonathan Carson, U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office; and Craig Rupert, Special Agent in Charge of the Department of Defense, Defense Criminal Investigative Service, North East Field Office.

The complaints allege that Barysheff, Karpenko, Krutilin, and others were involved in a conspiracy to obtain technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech products to Russia, while evading the government licensing system set up to control such exports.  The Department of Commerce, pursuant to authority granted by the President of the United States, has placed restrictions on the export and re-export of items that it has determined could make a significant contribution to the military potential and weapons proliferation of other nations and that could be detrimental to the foreign policy and national security of the United States.  The microelectronics shipped to Russia included, among other products, digital-to-analog converters and integrated circuits, which are frequently used in a wide range of military systems, including radar and surveillance systems, missile guidance systems, and satellites.  These electronic devices required a license from the Department of Commerce to be exported to Russia and have been restricted for anti-terrorism and national security reasons. 

As further detailed in the complaints, in 2015 Barysheff registered the Brooklyn, New York-based companies BKLN Spectra, Inc. (Spectra) and UIP Techno Corp. (UIP Techno).  Since that time, the defendants, and others have used those entities as U.S.-based front companies to purchase, attempt to purchase, and illegally export controlled technology.  To induce U.S.-based manufacturers and suppliers to sell them high-tech, export-controlled microelectronics and to evade applicable controls, the defendants and their co-conspirators purported to be employees and representatives of Spectra and UIP Techno and provided false end-user information in connection with the purchase of the items, concealed the fact that they were exporters, and falsely classified the goods they exported on records submitted to the Department of Commerce.  To conceal the true destination of the controlled microelectronics from the U.S. suppliers, the defendants and their co-conspirators shipped the items first to Finland and subsequently to Russia.      

“U.S. export laws exist to prevent potentially dangerous technology from falling into the wrong hands,” said U.S. Attorney Capers.  “Those who seek to evade the scrutiny of U.S. regulatory and law enforcement agencies by operating in the shadows present a danger to our national security and our allies abroad.  We will continue to use all of our available national security options to hold such individuals and corporations accountable.”

“According to the complaints, Barysheff, Karpenko, and Krutilin conspired among themselves and with others to send sensitive U.S. technology surreptitiously to Russia in violation of U.S. export law,” said Assistant Attorney General Carlin.  “These laws are in place to protect the national security, and we will spare no effort in pursuing and holding accountable those who seek to harm the national security by illegally procuring strategic commodities for foreign entities.”

“Had law enforcement not interceded, the alleged perpetrators would have exported materials that are known to be used in a wide range of military devices,” said Melendez, Special Agent in Charge for HSI New York.  “HSI will continue to partner with other law enforcement agencies while focusing its efforts on national security and stopping the illegal flow of sensitive technology.”

“Export controls were established to prevent certain individuals, organizations, or nations from obtaining protected technology and information.  When the laws are evaded, we become vulnerable to the many threats posed by our adversaries.  The FBI will continue to protect our national security assets as we work with our partners to prevent the exportation of restricted materials,” said Sweeney, FBI Assistant Director in Charge, New York Field Office.

“Today’s arrest is a collaborative effort among law enforcement agencies.  I commend our colleagues for their efforts,” said Special Agent in Charge Carson, U.S. Department of Commerce Bureau of Industry and Security, Office of Export Enforcement, New York Field Office. “The Office of Export Enforcement will continue to use our unique authorities as the regulator and enforcer of our nation's export control laws to keep the most dangerous goods out of the most dangerous hands.”

“The attempted theft of restricted U.S. technology by foreign actors severely threatens the United States’ defensive posture,” said Special Agent in Charge Craig Rupert, DCIS Northeast Field Office.  “DCIS will continue to pursue these investigations with our Federal partners to shield America's investment in national defense.”

If convicted of the charges, the defendants face up to 25 years in prison and a $1 million fine.

The Defendants:

ALEXEY BARYSHEFF Age: 36 Brooklyn, New York



October 21, 2016 | Permalink | Comments (0)

Thursday, October 20, 2016

Former President Of The Costa Rican Soccer Federation And Member-Elect Of The FIFA Executive Committee Pleads Guilty To Racketeering And Corruption Charges

Eduardo Li pleaded guilty to racketeering conspiracy, wire fraud, and wire fraud conspiracy in connection with his receipt of bribes in exchange for his awarding contracts for the media DOJ-U-S-ATTORNEYS-OFFICE and marketing rights to FIFA World Cup qualifier matches and his authorization of international friendly matches played by the Costa Rican national soccer team, among other conduct.  Li, the president of the Costa Rican soccer federation (FEDEDUT) from 2007 to 2015, was a member-elect of the FIFA executive committee at the time of his arrest in Zurich on May 27, 2015 and a member of the CONCACAF executive committee from 2013 to 2015.  As part of his plea, Li agreed to forfeit $668,000.  At sentencing, Li faces a maximum sentence of 20 years for each count.  Today’s plea proceeding took place before United States District Judge Pamela K. Chen.

The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director in Charge, FBI, New York Field Office; and Acting Special Agent in Charge Anthony J. Orlando, IRS Criminal Investigation, Los Angeles Field Office.

According to court filings and facts presented during the plea proceeding, Li negotiated and accepted bribes totaling hundreds of thousands of dollars in exchange for exercising his influence as the president of FEDEFUT to award a Florida sports marketing company a contract for the media and marketing rights to the Costa Rican national soccer team’s home World Cup qualifier matches for the 2022 edition of the World Cup.  These bribes were transmitted from U.S. bank accounts to Li using intermediaries in the United States and Costa Rica.  Li also accepted tens of thousands of dollars in bribes, which were also transmitted from bank accounts in the United States, in exchange for exercising his influence as president of FEDEFUT to authorize friendly matches played by the Costa Rican national soccer team. 

In addition, Li agreed to accept a $500,000 bribe from intermediaries in Panama in exchange for exercising his influence as president of FEDEFUT to award an American company the contract to serve as the uniform sponsor for the Costa Rican national soccer team.  The intermediaries told Li not to tell anyone at the uniform sponsor about the bribe.  Li received approximately $230,000 of the bribe money from the intermediaries in cash United States currency in 2014 and 2015 but was arrested before he could receive the balance.

Finally, Li embezzled for his own use over $90,000 of funds that FIFA sent to FEDEFUT to support the 2014 Under 17 FIFA Women’s World Cup soccer tournament, which was held in Costa Rica.  Li diverted these funds through a scheme involving bogus invoices.

The guilty plea announced today is part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI New York Field Office, and the IRS-CI Los Angeles Field Office.  The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Asset Forfeiture and Money Laundering Section, and the Fraud Section, as well as from INTERPOL Washington. 

Interested in money laundering and bribery risk-management and resilience standards?  The Texas A&M Risk Management program provides you the knowledge and skills you need to work successfully in a fast paced, highly-structured, deadline driven culture. We’ve designed the program with both lawyer and non-lawyer professionals in mind, and have built courses that help connect the dots across a number of issues, such as compliance, fiduciary management, corporate governance, and more. Engage, innovate, and interact in a dynamic environment that mimics the real world of risk management.

October 20, 2016 | Permalink | Comments (0)

Wednesday, October 19, 2016

OECD launches business survey on tax certainty to support G20 tax agenda

The OECD received a strong endorsement from both the G20 Leaders and Finance Ministers to work on solutions to support certainty in the tax system with the aim to promote OECDinvestment, trade and balanced growth.

As part of a wider project, the OECD launches a Business Survey to invite businesses and other stakeholders to contribute their views on tax certainty.

The survey is an open and wide-spread consultation which supports the G20 future tax policy work. At the Hangzhou Summit in September 2016, the G20 Leaders emphasised the benefits of tax certainty in promoting investment, trade and balanced growth. Together with the IMF, the OECD was asked to continue working to enhance tax certainty.

Senior tax specialists are cordially invited to participate in the survey and contribute their experience and views to support the development of practical and concrete policy options aimed at fostering certainty in the tax system.

The survey will run from 18 October to 16 December 2016, and will also be an opportunity to identify specific tax policy issues for the future G20 tax agenda and to shape practical and concrete solutions for a more certain and predictable tax system.

This survey is strictly confidential and anonymous; no individual or organisation-specific information will be disclosed. Results will only be made available in aggregated format and presented to the G20 in 2017.

“This survey provides a unique opportunity for businesses to share their views and experiences related to tax certainty. Tax administrations and policy makers as well as civil society organisations will of course have later on a chance to comment on the findings”, said Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration.

» The Business Survey on Taxation is accessible at:

» A Q&A session via webinar will be delivered on Tuesday 25 October at 15:00 (CEST). To register please go to

October 19, 2016 in BEPS, OECD, Tax Compliance | Permalink | Comments (0)

Tuesday, October 18, 2016

Scholarships and Cigars: Cuba Sanctions Easing

Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Department of Commerce’s Bureau of Industry and Security (BIS) are announcing new amendments to OFAC the Cuban Assets Control Regulations (CACR) and Export Administration Regulations (EAR), respectively. These amendments help create more economic opportunity for Cubans and Americans, further implementing the direction toward Cuba that President Obama laid out in December 2014. The changes will take effect on October 17, 2016.   Download Cuba_fact_sheet_10142016

Humanitarian-related Transactions – Providing Additional Grant Opportunities and Strengthening Cuban Infrastructure

Grants, scholarships, and awards. OFAC is expanding the authorization for grants, scholarships, and awards to Cuba or Cuban nationals to include grants, scholarships, and awards related to scientific research and religious activities.

Travel-related Transactions – Supporting People-to-People Contact by Facilitating Authorized Travel and Commerce

Importation of Cuban-origin merchandise as accompanied baggage for personal use: OFAC is removing the $100 monetary value limitations on what authorized travelers may import from Cuba into the United States as accompanied baggage. This includes the value limitation on alcohol and tobacco products. Persons subject to U.S. jurisdiction will be further authorized to import Cuban-origin merchandise acquired in third countries into the United States as accompanied baggage, again without value limitations. OFAC is also removing the prohibition on foreign travelers importing Cuban-origin alcohol and tobacco products into the United States as accompanied baggage. In all cases, the Cuban origin goods must be imported for personal use, and normal limits on duty and tax exemptions will apply.

Remittances. Persons subject to U.S. jurisdiction will be authorized to make remittances to third-country nationals for travel by third-country nationals to, from, or within Cuba, provided the travel would be authorized by general license for a person subject to U.S. jurisdiction.

October 18, 2016 | Permalink | Comments (0)