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, COVID-19 relief fraud in the U.S. tops USD 100B. Read the full story and more news below:
U.S. COVID-19 Relief Fraud Surpasses USD 100B
More than USD 100B in fraudulent COVID-19 relief claims have been given out since the beginning of the COVID-19 pandemic, according to a statement released by the U.S. Secret Service last week. That number accounts for about 3% of total relief funding given by the U.S. government. The statement said that while fraud related to personal protective equipment (PPE) was expected, the majority of ongoing fraud cases deal with individuals and criminal networks taking advantage of the Coronavirus Aid, Relief and Economic Security Act (CARES).
SEC Awards Over USD 13M To Whistleblower
The Securities and Exchange Commission (SEC) awarded an unnamed whistleblower more than USD 13M for providing information which led to enforcement action against an also unnamed company. The whistleblower alerted the SEC of the ongoing fraud and provided extensive evidence and assistance, helping to put a stop to the fraud and minimize investor losses. The SEC has awarded approximately $1.2 billion to 238 individuals since issuing its first award in 2012.
U.K. Delivers Largest Ever Sentence for Money Laundering
Two men were sentenced to a total of 33 years in prison for laundering nearly USD 95M and fraudulently claiming more than USD 13M in COVID-19 relief loans for fake companies. Artem Terzyan, 38, from Russia was sentenced to 17 and Deivis Grochiatskij, 44, from Lithuania to 16 years in prison after a seven-week-long trial in September. Their sentences are believed to be one of the largest ever handed down in the U.K. for money laundering.
Former BMW Employee Charged with Contracts Fraud
A former BMW employee has been charged with fraud and corruption of millions of euros by the German automaker. The unnamed defendant was charged with 18 counts of commercial corruption and 33 counts of breach of trust at the expense of the carmaker, a court spokesperson said. The ex-employee allegedly received more than EUR 2M in kickbacks in exchange for awarding consulting contracts.
Elizabeth Holmes Found Guilty on 4 out of 11 Charges of Fraud
Elizabeth Holmes, the former CEO of Theranos, a blood-testing company which claimed to revolutionize the industry with a machine that could test for hundreds of ailments with a single drop of blood, was found guilty this week on 4 out of 11 total charges. Holmes was accused of deliberately defrauding and lying to investors about the efficacy of Theranos’ blood testing machine. Prosecutors claimed that Holmes knowingly lied to investors, while her defense team claimed that it was a case of a simple business and product failure. Holmes faces up to 20 years in prison upon sentencing.
DOJ issues further guidance, warnings on ephemeral messaging apps
Federal appeals court upholds 5.6B USD Visa and Mastercard settlement
The DOJ updates its guidance on corporate compliance programs