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, Wells Fargo has been ordered to pay USD 145M in a 401k fraud scheme. Read the full story and more news below:
Wells Fargo to Pay USD 145M Fine in 401k Fraud
Financial institution Wells Fargo has been ordered to pay USD 145M in a 401k fraud conspiracy that it conducted from 2013-2018. The Labor Department said that the bank overpaid for its own company stock through its employee 401k plan and used the difference to pay off stock loans that the company took, thereby eliminating the company’s own financial commitment to the employee 401k. The Labor Department fine will recoup any lost costs to employees that participated in the plan, as well as a penalty of about USD 13M.
Iran Intelligence Ministry Sanctioned in Hacking Probe
The United States imposed strict sanctions this week on the Iranian Intelligence Ministry for its alleged role in a cyberattack against the U.S. The Treasury Department alleges that the Iranian Ministry of Intelligence and Security (MOIS) conducted coordinated cyber operations against private businesses and government entities in the U.S. The sanctions will bar all U.S. companies and government entities from doing business with the MOIS. These sanctions are the latest in a series of allegations against the Iranian government for its cyber attacks on the U.S.
Venezuelan Businessman Charged in Bribery and Money Laundering Scheme
A Venezuelan businessman has been charged with bribery and money laundering schemes involving a U.S. oil company. Rixon Rafael Moreno Oropeza allegedly paid millions of dollars in bribes to Petropiar, a U.S. and Venezuelan oil venture company, to secure inflated business contracts for medical devices. By paying millions in bribes to senior officials at the company, Moreno secured contracts that were inflated up to 100 times their actual cost. Moreno then pocketed and laundered the difference through personal real estate transactions, a private jet, and other luxury items. If convicted, Moreno faces a maximum penalty of 20 years in prison for each count of money laundering and conspiracy to commit money laundering and up to 10 years in prison for each count of engaging in transactions in criminally derived property.
VMware Charged with Misleading Investors Over False Financial Statements
VMware is being charged by the Securities and Exchange Commission over allegedly misleading its investors with false financial reporting. The company is accused of pushing the revenue attributed to backlogged orders and contracts to future quarters to intentionally obscure poor financial performance, a move that was intended to meet proposed financial projections. VMware did not confirm or deny wrongdoing but will have to pay USD 8M in penalties.
SFO Trial Against Shuttered Steel Company Kicks Off
The UK Serious Fraud Office (SFO) has kicked off its trial against collapsed steel manufacturing company Balli Group. The company is accused of defrauding five banks to secure loans worth GBP 150M to keep the company afloat. Over a period of several years, executives from Balli Group lied to investors about the financial health of the company, securing loans that allowed them to pay employee salaries. In some cases, Balli Group paid off earlier investors with loans from new investors. The trial is expected to run into 2023.
Federal appeals court upholds 5.6B USD Visa and Mastercard settlement
The DOJ updates its guidance on corporate compliance programs
Founder and former FTX CEO arrested, indicted on eight fraud charges