Welcome to This Week In Compliance: GAN’s weekly news roundup, where we curate the latest stories on compliance and anti-corruption to keep you informed. This week we cover an Exelon Unit's bribery settlement involving a speaker of the Illinois House. Read the full story and more news below:
Exelon Unit to Pay USD 200 Million to Settle Bribery Case Involving Illinois House Speaker:
Exelon Corp.’s Commonwealth Edison unit entered a deferred prosecution agreement with Illinois authorities and has agreed to pay a USD 200 million fine to settle bribery allegations. The U.S. attorney for the Northern District of Illinois found that the company had given jobs and contracts that involved little to no work to several associates of one of the Western state's most powerful politicians, Michael Madigan. Exelon said that it had conducted an internal investigation that found that a small number of senior employees were implicated in the bribery scheme, and also announced they had taken robust action to enhance their compliance governance. Madigan, in turn, has denied all allegations and confirmed that he would cooperate with the investigation. Professors at the University of Illinois indicate that based on overall convictions of public officials per capita since the 1970s, Illinois is the third most corrupt state in the U.S.
Two More Ex-Wirecard Execs Arrested:
Two former executives of the scandal-ridden fintech company Wirecard were jailed as part of the investigation German authorities are running into the alleged fraud committed by the company. Wirecard's former CFO and Head of Accounting were arrested under accusations of inflating the value of the company and subsequently defrauding investors for USD 3.7 billion. Former CEO Markus Braun has also been put back into custody after being released on bail in June. The arrests come after Wirecard publicly admitted that there was a USD 2.2 billion hole in their balance sheet, which has now been linked to the company's use of regional third parties for payment processing.
Two Companies Fined NZD 7.5 Million for AML Violations:
New Zealand's Auckland High Court charged two remittance companies for breaching AML prevention rules between 2014 and 2019. OTT Trading Group was fined NZD 3.1 million and was as barred from conducting work as a legally recognized financial institution. MSI Group Ltd., incorporated in 2014, was given an NZD 4.4 million fine. MSI Group failed to register itself as a financial services firm and processed at least NZD 213 in customer transactions without legal registration. OTT, which was incorporated later in 2014, did register itself as a financial services firm. However, it failed to conduct enhanced due diligence procedures on accounts that required it, processing over NZD 196 million in customer transactions.
Judge Orders Seizure of GBP 5 Million London Flat Linked to Petrobras Scandal:
A court in the U.K. has ordered the seizure of a GBP 5 million luxury apartment in London due to its connection with the Petrobras corruption scandal. The property is linked to funds obtained by Julio Faerman, a middle man in the laundering of dirty proceeds coming from a bribery scheme at Brazil's state-owned petrol company and funneled in the Swiss financial system. The apartment was seized in connection to the U.K. Serious Fraud Office's long-running investigation into the Swiss bank accounts used to launder money.
Powerful Ohio Law Marker Arrested in USD 60 Million Corruption Scheme:
Larry Householder, a former member of Ohio's House of Representatives, as well as four of his associates, were arrested in a federal bribery scheme involving USD 60 million related to a tax-payer funded bailout of two nuclear power plants. According to the indictment, Householder was one of the main orchestrators behind the bailout action. A criminal complaint received by the FBI states that Generation Now, a pro-bailout group, received USD 60 million from an unidentified financial entity over the past three years in exchange for working to pass a bill that would approve the bailout of the nuclear plant. The funds were allegedly appropriated by Householder and used for his personal gain. The politician faces a potential 20-year prison sentence if proven guilty. The former owners of the plant also funded parts of Householder's political campaign in 2018, which is also under investigation.
Spain and Switzerland Open Money Laundering Investigations Into Former Spanish King:
After Swiss authorities opened a probe into a USD 100 million gift received by former Spanish King Juan Carlos from the Saudi King in 2008, Spanish prosecutors announced the start of an investigation into King Juan Carlos this June. The gift was received through a foundation set-up in Panama titled the Lucum Foundation and then donated to the King's former partner Ms. Zu Sayn-Wittgenstein. The gift is allegedly connected to a EUR 6.7 billion contract awarded to a Spanish consortium for the construction of a high-speed railway in Saudi Arabia. While Juan Carlos maintains immunity from prosecution for any act committed before his abdication in 2014, he does not count on immunity from prosecution in Switzerland. Spanish experts say that the former King is not likely to face any charges in Spain as the offenses most likely took place before his abdication.