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 Wells Fargo’s USD 3 billion fraud settlement with US enforcement authorities. Keep reading for this breaking story and find more news below:
Wells Fargo to Pay USD 3 Billion to Settle Fake Accounts Scandal:
U.S. banking giant Wells Fargo agreed last Friday to pay USD 3 billion to settle long-running civil and criminal investigations into accusations of widespread fraudulent sales practices. Of the fine, the Securities and Exchange Commission (SEC) will receive USD 500 million, with the balance going towards the Department of Justice (DOJ). Part of the funds will be used to offer compensation to defrauded customers. The scandal involved rank-and-file employees opening millions of savings and checking accounts for customers without their knowledge or approval in response to aggressive cross-selling targets set by the company. The misconduct came to light in 2016 when a number of U.S. government agencies fined the company a combined USD 185 million. The bank has since settled civil and criminal lawsuits for an additional USD 2.7 billion, not including the fine issued last Friday.
Judge Throws Out Hoskins FCPA Charges, Lets Money-Laundering Convictions Stand
Lawrence Hoskins, the former Alstom SA executive who was found guilty of bribery charges at trial last year, gained some relief this week after a federal judge threw out all bribery charges against Hoskins. The move is regarded as a setback for U.S. prosecutors in the trial that was widely seen as testing the scope of the FCPA’s reach. Hoskins, who worked for Alstom in Asia, was charged in 2012 with conspiring to bribe Indonesian officials. The judge let Hoskins’ conviction on four money laundering charges stand. Hoskins is due to be sentenced next week on March 6th.
SITA Settles Allegations of Terrorist Sanctions Violations:
Société Internationale de Télécommunications Aéronautiques (SITA) SCRL, a provider of commercial services and software to airlines, settled charges this week with the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) over allegations that it provided services to airlines based in Irna, Syria, and Iraq that were designed terrorist organizations by the OFAC. The total penalty amounts to USD 7.8 million. The company provided services to various sanctioned airlines between 2013 and 2018.
Swiss Financial Watchdog to Probe Julias Baer Employees in FIFA Bribery Scandal:
Switzerland’s financial watchdog FINMA said this week it will probe the actions of individuals at Swiss bank Julius Baer after it previously reprimanded the bank for ignoring money-laundering risks in relation to world football organization FIFA and Venezuela. FINMA said that possible consequences for individuals include employment bans. In its report last week, FINMA criticized the bank for, among other things, accepting a transfer of CHF 70 million from a Venezuelan customer in 2014 despite being aware he was accused of corruption.
Former Mexican President Enrique Pena Nieto Under Investigation for Corruption:
Former Mexican President Enrique Pena Nieto is under investigation by Mexican authorities as part of an investigation into corruption centering around Emilio Lozoya, the former CEO of Mexico’s state oil company popularly known as Pemex. It was not immediately clear why the investigation has embroiled Pena Nieto. President Andres Manuel Lopez Obrador, who was elected on a platform of anti-graft, has previously indicated he does not wish to pursue former presidents in court, but he has suggested possibly holding a referendum on whether former presidents should face trial.
U.S. Grants Political Asylum to Guatemala Ex Anti-Corruption Prosecutor:
After Guatemala's current government closed down the country's anti-corruption agency, the country's former chief prosecutor, Thelma Aldana, who led the prosecution of a series of high profile corruption investigations, was accused of embezzlement. Amid the accusations, which Aldana classified as retaliation against her anti-corruption work, the former prosecutor has been granted political asylum in the US.
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