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 the SEC's charges on a Florida-based healthcare company on COVID-19 related fraud. Read the full story and more news below:
SEC Charges Florida Based Company and CEO for COVID-19 Scam:
The U.S. Securities and Exchange Commission (SEC) announced charges against Florida-based healthcare company Praxsyn Corp. and its CEO for COVID-19 related fraud allegations. Praxsyn was charged for issuing false information indicating it had obtained a large supply of N95 masks and was in close contact with suppliers that would provide them with more masks to meet soaring demand. In their press release, the company's CEO Frank Brady stated that the company was only accepting face mask orders of a minimum of 100,000. It later turned out that the company did not place any orders for face masks, nor had any contact with potential suppliers to obtain the masks. The SEC filed its complaints in a Florida federal court charging Praxsyn and its CEO with violating antifraud provisions of federal securities laws. The SEC is also seeking to bar Brody from holding office or serving as a director at any public company.
Falcon Private Bank Could Lose Swiss License in Wake of 1MDB Case:
Swiss financial watchdog FINMA announced it was considering withdrawing the bank's license to operate in Switzerland due to ongoing shortcomings in implementing AML regulatory requirements. Falcon became involved in the 1MDB scandal in 2016 after FINMA confirmed the bank failed to conduct appropriate background checks on transactions associated with the 1MDB state fund in Switzerland, Singapore, and Hong Kong. At the time, Falcon was threatened of losing its license if similar offenses were repeated in the future. Swiss prosecutors have opened a criminal investigation into new potential failings.
Former Asia Media CEO Sought by Securities Commission Over Money Laundering Offenses:
Malaysian authorities have started an international search for Asia Media's former CEO and founder Wong Shee Kai, commonly known as Ricky Wong, for suspected money laundering financing. Asia Media is widely recognized as Malaysia's largest Transit-TV network operator. Malaysia's Securities Commission stated Wong failed to appear before his hearing at the Kuala Lumpur's Magistrate's Court where an arrest warrant was issued against him. If Wong is found, he could face up to five years in prison and a fine amounting to over USD 700,000.
Interamerican Development Bank Debars Brazilian Engineering Company:
The Inter-American Development Bank (IDB) announced the debarment of the Brazilian engineering company Andrade Gutierrez Engenharia S.A (A.G. Engenharia) after the company was found to have engaged in corrupt practices in connection to four contacts financed by the IDB. It was found that the engineering company gave bribes to public officials in exchange for contracts for two IDB projects centered around sanitation in Brazil from 2009 to 2012. The company admitted to having agreed to pay public officials a percentage of the value of the contracts in both projects. The total value of the bribe payments was estimated to be more than USD 48.9 million. A.G. Engenharia is barred from entering any IDB contracts for 3 years and 1 month and has committed to reporting on its compliance program through an existing independent monitor.
SEC Awards Over USD 18 Million to Whistleblower:
The U.S. Securities and Exchange Commission announced a USD 18 million award to a whistleblower that contributed with information that led to important enforcement action. The whistleblower reportedly raised concerns about the identified problems internally. According to the SEC, the whistleblower's actions led to millions of dollars of savings for harmed investors.
Brazil’s Top Court Allows Probe Into Allegations Against Bolsonaro:
After the resignation of Brazil's Justice Minister Sergio Moro, known for leading the Operation Carwash investigations that uncovered several high-level corruption scandals in the country, the Brazilian supreme court has approved a new probe into corruption allegations against Jair Bolsonaro. Upon Moro's resignation, the former Minister accused Bolsonaro of firing the federal police chief for political reasons. Moro's accusations and several reports from Brazilian media involving Bolsonaro's family members led federal prosecutors to request a probe in the Supreme Court. If evidence from the federal police's probe into the Bolsonaro family is found, the president could face charges of obstruction of justice, coercion, corruption, and identity fraud.
South Africa's Zuma Abandons Attempt to Halt Corruption Trial:
South Africa's former president Jacob Zuma, who has been subject to a long-running corruption trial, has abandoned a legal bid to halt the prosecution. The charges relate to a 1999 arms deal in which Zuma is alleged to have received USD 220,000 worth in bribes from French defense giant Thales during his deputy presidency. Previously, Zuma had denied all allegations and had applied for a permanent stay of prosecution against him in the Supreme Court. After having had his application rejected by the Supreme Court, he appealed the decision in South Africa's Constitutional Court. On Wednesday, Zuma's foundation stated he was withdrawing his application against prosecution and will instead prepare for trial on May 6.
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The DOJ updates its guidance on corporate compliance programs