politically exposed person

Real estate and the promise of ready money – who cares if the cash is dirty?

The UK welcomes wealthy foreign investors, but does it really care where their money comes from? Estate agents in London’s super expensive neighbourhoods are apparently agreeing to house purchases with ‘corrupt’ Russian politicians.FCA London Property

If you are in the UK, tune in to Channel 4 this evening to watch a revealing documentary about what really goes on between agents and super rich buyers. In ‘From Russia with Cash‘,  undercover reporters pose as an ‘unscrupulous’ Russian government official “Boris’ who wants to buy a house in London for his mistress, ‘Nastya’. Despite ‘Boris’ making is clear to the agents that his funds are not from a legitimate source, the estate agents he deals with are apparently happy to go ahead with the sale and even recommend ways for ‘Boris’ to keep a low profile, according to the Guardian report.

Channel 4’s reporters used hidden cameras to film meetings with estate agents, who talked openly about previous dealings with foreign clients, government ministers – politically exposed persons, and the amount of deals which are made with some degree of anonymity. Politically exposed persons (PEPS) are individuals with access to national coffers, funds which belong to the electorate. They are government officials, their families, their associates and beyond.

Property, or real estate, is widely recognised as the best way to invest. So it should be no surprise that the proceeds of crime have found a natural home in bricks and mortar. Rules on investing and moving dirty cash are well publicised. In the UK and many other countries, Financial institutions, lawyers, accountants, dealers in high value goods and real estate agents are required to report transactions of dubious origin – those which could be hiding the proceeds of crime – to law enforcement. The penalties for not reporting suspicious transactions are severe for the institution and the individual.

Corruption and billionaires  

FCA - TITransparency International’s ‘Unmask the Corrupt‘ campaign looks closely at how UK property launders funds for corrupt individuals, many of whom are politically exposed persons. Funds designated for schools and hospitals – ‘Boris’ claims his money comes from a government health budget – is sent to offshore havens, shrouded in secrecy and then passed on to ‘enablers’ or gatekeepers in the UK who advise and facilitate investment. The thing is, the practice is nothing new. This is how the big money has always moved – the only difference is that now it is under scrutiny.

Forbes, the register of all things super-rich, lists London as third in the world of ‘Billionaire Cities‘.  Five of the remaining nine are Asian cities – Hong Kong, Tokyo, Shanghai, Singapore and Mumbai sit alongside Paris, Moscow, New York and Sydney. If the corrupt are managing to get money into the UK property market, they are certainly managing it in the other countries on this list.

Will the estate agencies and law firms mentioned in this programme be investigated and will this give rise to increased scrutiny of the real estate sector in the UK? Financial Crime Asia is keen to find out.


Egypt court sentences ousted leader Mubarak to 3 years in jail

CAIRO May 21 (Reuters) – An Egyptian court on Wednesday sentenced ousted president Hosni Mubarak to three years in prison on charges of stealing public funds.

“The court orders Mohamed Hosni Mubarak to be sent to jail for three years,” said the judge as Mubarak looked on from a cage flanked by his sons, who were sentenced to four years in jail on the same charges. (Reporting By Cairo newsroom; Writing by Maggie Fick; Editing by Michael Geory)


Source: Reuters Africa

Sanctions: US lists 7 PEPs, 17 entities.

The US Office of Foreign Assets Control has added 24 new names to its sanctions lists. A group of seven politically exposed persons (PEPs), and 17 entities are now on the Specially Designated Nationals (SDN) list.

The PEPs include Putin’s envoy to the Crimea, the CEO of Rostec –  the state defence and arms company – and the CEO of Rosneft, the state oil company.

Three banks are also on the SDN list; Investcapital Bank, JSB Sobin Bank and SMP Bank.

The following individuals have been added to OFAC’s SDN List:
  1. BELAVENCEV, Oleg Evgenyevich (a.k.a. BELAVENTSEV, Oleg); DOB 15 Sep 1949; Russian Presidential Envoy to the Crimean District; Member of the Russian Security Council (individual) [UKRAINE2].
  2. CHEMEZOV, Sergei (a.k.a. CHEMEZOV, Sergey Viktorovich); DOB 20 Aug 1952; POB Cheremkhovo, Irkutsk, Russia (individual) [UKRAINE2].
  3. KOZAK, Dmitry; DOB 07 Nov 1958; POB Kirovograd, Ukraine; Deputy Prime Minister of the Russian Federation (individual) [UKRAINE2].
  4. MUROV, Evgeniy Alekseyevich (a.k.a. MUROV, Evgeny; a.k.a. MUROV, Yevgeniy; a.k.a. MUROV, Yevgeny); DOB 18 Nov 1945; POB Zvenigorod, Moscow, Russia; Director of the Federal Protective Service of the Russian Federation; Army General (individual) [UKRAINE2].
  5. PUSHKOV, Aleksei Konstantinovich (a.k.a. PUSHKOV, Alexei); DOB 10 Aug 1954; Chairman of State Duma Committee on International Affairs (individual) [UKRAINE2].
  6. SECHIN, Igor; DOB 07 Sep 1960; POB St. Petersburg, Russia (individual) [UKRAINE2].
  7. VOLODIN, Vyacheslav; DOB 04 Feb 1964; POB Alexeyevka, Khvalynsk district, Saratov, Russia; First Deputy Chief of Staff of the Presidential Executive Office (individual) [UKRAINE2].
The following entities have been added to OFAC’s SDN List:
  1. AQUANIKA (a.k.a. AQUANIKA LLC; a.k.a. LLC RUSSKOYE VREMYA; a.k.a. OBSHCHESTVO S OGRANICHENNOI OTVETSTVENNOSTYU RUSSKOE VREMYA; a.k.a. RUSSKOE VREMYA OOO; a.k.a. RUSSKOYE VREMYA LLC), 47A, Sevastopolskiy Ave., of. 304, Moscow 117186, Russia; 1/2 Rodnikovaya ul., Savasleika s., Kulebakski raion, Nizhegorodskaya oblast 607007, Russia; Website http://www.aquanika.com; alt. Website http://aquanikacompany.ru; Email Address office@aquanika.com; Registration ID 1075247000036 [UKRAINE2].
  2. AVIA GROUP LLC (a.k.a. AVIA GROUP LTD), Terminal Aeroport Sheremetyevo Khimki, 141400 Moskovskaya obl., Russia; Website http://www.avia-group.su/ [UKRAINE2].
  3. AVIA GROUP NORD LLC, 17 A, Stratoyava St., Saint Petersburg, Russia; Website http://www.ag-nord.ru [UKRAINE2].
  4. CJSC ZEST (a.k.a. ZEST LEASING), pr. Medikov 5, of. 301, St. Petersburg, Russia; 2 Liter a Pl. Rastrelli, St. Petersburg 191124, Russia; Website http://www.zest-leasing.ru; Registration ID 1027809190507; Government Gazette Number 44323193 [UKRAINE2].
  5. INVESTCAPITALBANK (a.k.a. INVESTKAPITALBANK; a.k.a. OJSC INVESTCAPITALBANK; a.k.a. OPEN JOINT STOCK COMPANY INVESTCAPITALBANK), 100/1, Dostoevskogo Street, Ufa, Bashkortostan Republic 450077, Russia; SWIFT/BIC INAKRU41; Website http://www.investcapitalbank.ru; License 2377 [UKRAINE2].
  6. JSB SOBINBANK (a.k.a. SOBINBANK), 15 Korp. 56 D. 4 Etazh ul. Rochdelskaya, Moscow 123022, Russia; 15/56 Rochdelskaya Street, Moscow 123022, Russia; SWIFT/BIC SBBARUMM; Website http://www.sobinbank.ru; Registration ID 1027739051009; Government Gazette Number 09610355 [UKRAINE2]
  7. SAKHATRANS LLC (a.k.a. OBSHCHESTVO S OGRANICHENNOI OTVETSTVENNOSTYU SAKHA (YAKUTSKAYA) TRANSPORTNAYA KOMPANIYA; a.k.a. SAKHATRANS OOO), 14 ul. Molodezhnaya Rabochi Pos. Vanino, 682860 Vaninski, Raion Khabarovski Krai, Russia [UKRAINE2].
  8. SMP BANK (a.k.a. BANK SEVERNY MORSKOY PUT; a.k.a. SMP BANK OPEN JOINT-STOCK COMPANY), 71/11 Sadovnicheskaya Street, Moscow 115035, Russia; SWIFT/BIC SMBKRUMM; Website http://www.smpbank.ru; Email Address smpbank@smpbank.ru [UKRAINE2].
  9. STROYGAZMONTAZH (a.k.a. LIMITED LIABILITY COMPANY STROYGAZMONTAZH; a.k.a. STROYGAZMONTAZH CORPORATION; a.k.a. “SGM”), 53 prospekt Vernadskogo, Moscow 119415, Russia; Website http://www.ooosgm.com; alt. Website http://www.ooosgm.ru; Email Address info@ooosgm.ru [UKRAINE2].
  10. STROYTRANSGAZ GROUP (a.k.a. STROYTRANSGAZ; a.k.a. “STG GROUP”), 3 Begovaya Street, Building #1, Moscow 125284, Russia; Website http://www.stroytransgaz.ru [UKRAINE2].
  11. STROYTRANSGAZ HOLDING (a.k.a. STG HOLDING LIMITED; a.k.a. STG HOLDINGS LIMITED; a.k.a. STROYTRANSGAZ HOLDING LIMITED; a.k.a. “STGH”), 33 Stasinou Street, Office 2 2003, Nicosia Strovolos, Cyprus [UKRAINE2].
  12. STROYTRANSGAZ LLC (a.k.a. OOO STROYTRANSGAZ), House 65, Novocheremushkinskaya, Moscow 117418, Russia [UKRAINE2].
  13. STROYTRANSGAZ OJSC (a.k.a. OAO STROYTRANSGAZ), House 58, Novocheremushkinskaya St., Moscow 117418, Russia [UKRAINE2].
  14. STROYTRANSGAZ-M LLC, 26th Meeting of the Communist Party Street, House 2V, Novy Urengoy, Tyumenskaya Oblast, Yamalo-Nenetsky Autonomous Region 629305, Russia [UKRAINE2].
  15. THE LIMITED LIABILITY COMPANY INVESTMENT COMPANY ABROS (a.k.a. LLC IC ABROS), 2 Liter a Pl. Rastrelli, St. Petersburg 191124, Russia; Government Gazette Number 72426791; Telephone: 7812 3358979 [UKRAINE2]
  16. TRANSOIL (a.k.a. LIMITED LIABILITY COMPANY TRANSOIL; f.k.a. OBSHCHESTVO S ORGANICHERNNOI OTVETSTVENNOSTYU TRANSOIL; a.k.a. TRANSOIL LLC; a.k.a. TRANSOYL SNG LTD.), 18A Petrogradskaya nab., St. Petersburg 197046, Russia; Website http://www.transoil-spb.ru; alt. Website http://transoil.com; Email Address info@toil.spb.ru; Registration ID 1037835069986 [UKRAINE2].
  17. VOLGA GROUP (a.k.a. VOLGA GROUP INVESTMENTS; f.k.a. VOLGA RESOURCES; f.k.a. VOLGA RESOURCES GROUP), 3, rue de la Reine L-2418, Luxembourg; Russia [UKRAINE2].
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China: Hainan vice governor in corruption investigation

BEIJING — China’s ruling Communist Party said Tuesday a vice governor of the southern island province of Hainan is underFCA - JI Wenlininvestigation for serious violations, an apparent reference to corruption.

Ji Wenlin is the latest high-ranking official to be investigated since party leader and President Xi Jinping launched an anti-corruption campaign after taking over as head of the ruling Communist Party last spring.

As with several others who have fallen in the campaign, Ji has personal and professional connections to the powerful former Chinese security czar Zhou Yongkang, currently the subject of a rumored investigation.

The party’s disciplinary body said in a one-line statement that Ji is suspected of serious violations of regulations and the law. That’s almost always a reference to accepting bribes and kickbacks, providing unauthorized favors, and other forms of personal malfeasance.

The statement gave no details.

Xi has made fighting widespread graft a key campaign of his leadership so far, with promises to target both junior and high-level officials.

Investigations have so far targeted businesspeople, senior executives in the state oil sector — Zhou’s former power base — and most recently, a vice minister of public security. Ji was a key aide to Zhou in a last three of his central government positions, before taking up a series of positions in Hainan’s local government.

Although rumors are rife, no official word has been released about any investigation into Zhou, until 2012 a member of the party’s all-powerful Politburo Standing Committee.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Source: AP/The Washington Post

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The great Thai land grab under a dusty magnifying glass

Location map of Thailand Equirectangular proje...

Location map of Thailand Equirectangular projection, N/S stretching 103 %. Geographic limits of the map: N: 20.6° N S: 5.4° N W: 97.1° E E: 106.0° E (Photo credit: Wikipedia)

The Thai government is investigating the illegal acquisition and sale of some 12,000 rai of land across the Kingdom, from Chiang Mai in the north to the southern provinces, according to the regional press. One rai is the equivalent of 1,600m squared, so the total land under investigation is 19.2km2. More than one third of that land is on Phuket itself, Of the island’s 224km2,  3,600 rai or 5.76kmis under scrutiny.

The Phuket News, the island’s English language news rag has published the story. Browse through any newspaper or magazine in Thailand and you will find dozens of advertisements for real estate firms in English, Russian, Swedish and Thai. One of the first things I noticed when I turned up in south Thailand with a bag was the amount of money flying around the tourist spots, who were way removed from the traveller crowd. Much energy is spent trying to channel that money into property and land. Why spend two weeks in paradise when you can make it your home?

I have spent a little time in Thailand, exclusively in the south on paradise-like islands. A swathe of one island is a designated national park, where the lush green flora of the tropics can flourish. Visitors pay a nominal fee to walk through the park’s trails and camp on the unspoiled white sand beach. A walk right through the park leads to a secluded, bizarrely situated and eccentrically designed resort, boasting different types of accommodation including rooms in boats, half finished air conditioned apartments and tree houses. There is a small pool surrounded by plaster of paris giraffes and elephants and fake street lights. The resort is an eclectic projection of the owners’ tastes which sadly do not appeal to many tourists, aside from me perhaps. When I first stayed there, I lived in a tree house and one of the boat houses. I organised parties, promoted the resort online and took tourists on bike rides across the island to visit the place. In all, I bought in.

The owners with the strange taste in decor were a charming old Thai couple. A former state governor and a former high court judge – politically exposed persons who held influential positions and at least in the case of the ex-governor, had access to public funds. They spent their retirement between this property and the others they owned, including rubber and fruit plantations. a birds’ nest farm and homes in southern Thailand. The ex-governor and I once drove in his clapped out old Mercedes to a city on the mainland. He proudly showed me his identity badge, which showed his former minister status, and mentioned this would mean he paid no fee at toll booths and never had to bribe traffic cops.

“And if that doesn’t work,” he laughed slapping the side of his seat, “there’s always this.” He pointed to an ivory handled pistol which looked as old as the car shoved between the driver’s seat and and the gear stick.

Somewhere between Chiang Mai and the border wi...

Somewhere between Chiang Mai and the border with Myanmar. (Photo credit: Wikipedia)


I have no idea whether the land this man had acquired was actually a part of the national park. When I asked to see plans of the resort’s plot, none were produced. Many people on the island claim he took what he wanted from the national park to build the resort.  While I was there, at least three tourists made him offers for the land, which he declined. The man tells a romantic story of finding the land one day while exploring the jungle on the island. He staked his claim unimpeded and the local people from nearby villages brought him fish to eat while he stayed there. This bucolic image of an old man sat at the edge of a beach surrounded by tall trees and screeching monkeys and barefoot locals climbing over rocks to deliver him food is almost certainly embellished. The man’s children and employees recite the tale with ease, even the part about him using his influence to acquire identity cards for unregistered citizens. This, in fact, is what the King of Thailand did for many indigenous communities to stop them from growing heroin in the Golden Triangle. I even heard myself telling these stories in the combined voice of wisdom and naivety. Certainly, everyone was made to understand that this man, with an enormous piece of land in a protected part of the national park, an ex-governor whose wife was a high court judge, was well beloved and respected throughout. The locals, I was told once, called him ‘Phuwaa’, a term I had to research, which means ‘speaker’ and is given to the village chief.

I don’t know if this man and his wife are still alive, or where they are. Their children are running the resort as their inheritance and the deeds will no doubt be passed down to their children after them until the real title of the land is lost. I have not named the island, resort or family in question, although it would not be difficult to find out where it is. I do believe that this story is not unusual in Thailand and the sense of entitelement felt by the certain groups has filtered down to the rest of society.

The influx of organised criminals from abroad who have chosen to invest their dubiously acquired wealth in Thailand has not been accidental. Apart from the country’s stunning natural beauty, there are other appeals to someone who wants to invest without questions. Corruption in local public officials and the ability to turn a blind eye for the right price are common place and lauded by criminals. I do wonder, though, if the land I know of is under investigation, and if the probe takes any real momentum, will the losers be the foreigners who tried to cash in on cheap deals in paradise, or the national buyers.

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