Fraud Newsletter No. 77 March 2023

April 4, 2023

Meaning, consideration and extent of “use” of Mutual Legal Assistance material in collateral proceedings: FCA v Papadimitrakopoulos: [2022] EWHC 2792 (Ch).

Duty of care might be owed by software developers who look after BitCoin to its owners (reversing decision below): TTL owned approx $4B of Bitcoin which it could not access because of a hack on the CEO’s computer: matter to proceed to full trial: Tulip Trading v van der Laan and Ors: [2023] EWCA Civ 83.

Sentencing & Confiscation

Maximum prison term for tax fraud to be doubled to 14 years: Spring Budget 2023: HM Treasury 15 Mar 23.

Director SFO v Achilleas Kallakis and Michalis Kallakis (interested party): effect of school donation on available amount: 17 Mar 23.

Bills, Statutes & SIs

ML and TF Financing (Amendment) (No 2) Regs 2022: reg 9 (reporting material discrepancies) and regs 16-17 amending primary legislation) in force as from 1 April 2023: Reg 1(4).

Register of Overseas Entities (Definition of Foreign Limited Partner, Protection and Rectification) Regulations 2023 laid before Parliament 20 Mar 23: Explanatory Memo: DBEIS.

Consultations, guidance, circulars and reports

Final Report: Guidelines on customer due diligence factors re ML/TF risks: EBA 31 Mar 23

Final report: Guidelines on policies and controls for the effective management of ML/TF risks when providing access to financial services: EBA 31 Mar 23

Economic Crime Plan 2: 2023-26: HO/HM Treasury: 30 Mar 23.

Tackling fraud and corruption against government: NAO: HC 1199: 30 Mar 23: Summary: estimated fraud against taxpayer for 2 years: 2018/19 to 19/20 – £5.5B; for 20/21 to 20/22 – £21B.

European Parliament proposes strong measures for corporate transparency and endorse progressive provisions to EU AML package: Trans. Int: 28 Mar 23

Draft Codes of Practice issued under POCA 2002 and Terrorism Act 2000: Consultation re Economic Crime and Transparency Bill provisions Home Office: 28 Mar 23. Consultation ends 20 Jun 23.

SARS Reporter Booklet March 23: UKFIU: 27 Mar 23.

COVID-19 business grant schemes: NAO: 23 Mar 23. Estimated £1.1B losses in errors and fraud: £11.4m (1%) recovered.

Cross-Government Fraud Landscape: Annual Report 2022: PSFA (Pub. Sector Fraud Auth.): 21 Mar 23.

Countering Ransomware Financing: FATF Report: 14 Mar 23.

R&D – still changing after all these years: fraudand error in schemes total over £1.1 b in last 3 years: Tax Watch: 14 Mar 23

Guidance on submitting better quality SARs (v.8) UKFIU: updated 9 Mar 23.

Gov. Response: HL Fraud Act 2006 and Digital Fraud Select C’tee Report: Fighting Fraud: Breaking the Chain (HL87): 9 Mar 23. Advocates inter alia, review of disclosure guidelines.

Requesting a defence from the NCA under POCA and TACT: NCA: updated 7 March 23.

Revisions to Part II of AML and CTF Guidance: JMLSG 6 Mar 23 and submitted to HM Treasury for approval re wealth management; consumer credit providers; private equity; cryptoasset exchange providers. Further amendments submitted: 17 Mar 23.

The Criminal Use of ChatGPT. The impact of Large Language Models on Law Enforcement: Europol: 27 Mar 23


Max Hill KC to step down as DPP in October: BBC Sounds (Law in Action): 21 Mar 23

LME warehouse delivers stones instead of nickel to Trafigura – Reuters: 22 Mar 23.

Construction firms fined nearly £60m for breaking competition law by bid rigging: CMA: 23 Mar 23.

Clients of fraudster lawyer sue £6bn lender used by convicted solicitor to obtain loans of their property allegedly without their consent: Times (paywall) 19 Mar 23. See Is Stephen David Jones Britain’s most corrupt lawyer yet? S.Times (paywall): 3 Dec 22

Ponzi scheme fraudster jailed for £13m fraud can only pay back £800: BBC News: 13 Mar 23.

WANDisco launches inquiry into potential fraud over sales figures: The Times (Paywall) 11 Mar 23.

Abraaj’s Naqvi Loses Bid to Challenge Extradition to the US: fraud allegations after investment collapse owing $1B: BNN Bloomberg: 8 Mar 23

Proposals to reimburse scam victims “half-baked”: Treasury C’tee: 4 Mar 23.

Credit Suisse ‘Seriously Breached’ Risk Management Obligations in Greensill Case according to Finma (Swiss banking regulator): Insurance Jo: 1 Mar 23.

Small UK companies set to be excluded from failure to prevent offences: F.T. 13 Mar 23

EU & Abroad

Wyden Investigation Finds Credit Suisse Complicit in Ongoing Tax Evasion by Ultra-Wealthy Americans: major violations of plea agreement and ongoing potential criminal tax conspiracy re $100m in undeclared offshore accounts: US Senate Finance C’tee: 29 Mar 23

Bankman-Fried accused of Chinese bribe – “at least $40m”: BBC News: 28 Mar 23.

Prosecutors Raid France’s Biggest Banks in Tax Fraud Sweep (including HSBC Paris office) re alleged “cum-cum” trading (avoiding payment of French dividend taxes) estimated French losses $17B. Similar to German’s “cum-ex” scandal. Estimated losses to European states total £55B: New York Times: 28 Mar 23.

Do Kwon: Fugitive ‘cryptocrash’ boss arrested in Montenegro: charged with fraud re $40B collapse of terraUSD and Luna: BBC News: 24 Mar 23.

Guo Wengui: US accuses Chinese tycoon of billion-dollar fraud: BBC News: 16 Mar 23

Ex-Goldman Sachs Malaysia boss gets 10 years for 1MDB scheme (£3.9 B alleged stolen): BBC News: 10 Mar 23

SEC Charges Rio Tinto plc with Bribery Controls Failures: SEC: 6 Mar 23: SEC Cease and Desist Order: 6 Mar 23.

Jersey companies can self report to avoid prosecution: BBC: 3 Mar 23.

Ericsson to pay $207m for breaches of 2019 DPA over FCPA violations: Compliance Week: 3 Mar 23.