Leslie Caldwell
Bloomberg
NOV 30, 2016

Leaders from around the globe will converge Thursday in Panama City to discuss the next steps in the international fight against corruption.

That meeting will highlight for the world — and for our newly elected president and Congress — that the U.S. is in danger of falling behind our global partners in preventing the flow of illicit money through our financial markets. We have failed to enact legislation that would require the disclosure of the people behind legal entities — legislation that would assist law enforcement in stopping those who corrupt the U.S. and international financial systems.

It is no secret that the U.S. financial system is an attractive playground: We have the deepest, most liquid and most stable markets, and criminals seek to use the tools of our financial and banking systems to serve their illicit purposes. For an illegal enterprise to succeed, criminals must be able to hide, move and get access to their proceeds without detection. And when they are successful, their actions serve as a dual threat: Their criminal conduct itself can threaten the safety and security of all citizens, and their use of the financial and banking systems to hide their gains — or to fund additional criminal conduct — undermines the integrity of those systems.

One prominent example is a case the Justice Department filed seeking to forfeit and recover more than $1.2 billion in assets that were involved in, or traceable to, an international conspiracy to launder funds stolen from the people of Malaysia. The government of Malaysia wholly owns 1Malaysia Development Bhd., a strategic investment and development fund. As alleged in the complaint, over a six-year period, 1MDB associates took more than $3.5 billion from the development fund to purchase luxury condominiums, a $35 million jet, expensive works of art and a motion picture company that used the money to finance, among other things, the production of “The Wolf of Wall Street.” Read the rest of this entry »

By Bradley Hope and Nicolas Parasie
The Wall Street Journal
02 December 2016

When Barclays needed to raise capital in 2008, the Abu Dhabi sovereign wealth fund, known as IPIC, invested more than $5 billion in the UK bank. Through a subsidiary, IPIC acquired holdings in German auto maker Daimler and Swiss commodities powerhouse Glencore. It helped finance the ultraluxury New York skyscraper One57, nicknamed the Billionaire Building.

Driving IPIC was Khadem Al Qubaisi, a nightclub aficionado with slicked-back hair, a taste for the good life and close ties to princes who rule the emirate.

In June, Abu Dhabi’s crown prince abruptly ordered an end to the 32-year-old sovereign wealth fund’s existence as a standalone firm, saying it would be merged with another state entity.

Al Qubaisi? He now sits in an Abu Dhabi jail, fired and under investigation for money laundering, corruption and other possible offenses, according to people familiar with his situation.

Among the deals Al Qubaisi engineered at IPIC was one with 1Malaysia Development Bhd, or 1MDB, the embattled Malaysian state fund from which billions of dollars are missing, at least $800 million of which some investigators have said flowed into personal accounts of Malaysian Prime Minister Najib Razak. Read the rest of this entry »

by Anshuman Daga and Marius Zaharia | SINGAPORE
Reuters
Dec 2, 2016

Singapore’s central bank imposed penalties on the local units of U.K.-based Standard Chartered (STAN.L) and private bank Coutts for money laundering breaches related to Malaysia’s scandal-tainted 1MDB fund and said it was nearing the end of its probes.

The penalties – of S$5.2 million ($3.65 million) and S$2.4 million, respectively – were the latest punitive measures taken by the central bank in its crackdown on money laundering, having ordered the closure earlier this year of the local units of Swiss banks BSI and Falcon.

The Monetary Authority of Singapore (MAS) is also in the process of issuing a prohibition order against Tim Leissner, Goldman Sachs’ former Southeast Asia chairman.

“These actions send a strong signal that we will not tolerate the abuse of Singapore’s financial system for illicit purposes,” said Ravi Menon, the managing director of MAS.

“The supervisory investigations into the intricate web of international fund flows have been a learning experience for financial institutions as well as for MAS,” he said.

The inspection at Standard Chartered “revealed significant lapses in the bank’s customer due diligence measures and controls for ongoing monitoring,” MAS said. bit.ly/2h0ZMJQ

While the 28 breaches were “serious”, the central bank did not find “wilful misconduct.” Read the rest of this entry »

By TOM WRIGHT and JAKE MAXWELL WATTS
Wall Street Journal
Dec. 2, 2016

Executive allegedly wrote unauthorized reference letter for Malaysian U.S. authorities say is at the center of fraud at state investment fund

Singapore’s probe into a multibillion-dollar financial scandal touched Goldman Sachs Group Inc. for the first time on Friday as its central bank said it was planning to ban the Wall Street firm’s former top executive in Southeast Asia from operating in the city-state’s financial system for 10 years.

The executive, Tim Leissner, was Goldman’s point man on deals involving Malaysian state investment fund 1Malaysia Development Bhd., or 1MDB. The Monetary Authority of Singapore, the central bank, announced the proposed ban on Mr. Leissner after it found he had written a recommendation letter for a Malaysian financier, Jho Low, in June 2015. In it, Mr. Leissner claimed that Goldman had performed due diligence on Mr. Low.

“These statements were untrue and were made by Mr. Leissner without Goldman Sachs’ knowledge or consent,” the MAS statement said.

Goldman Sachs said in a statement Friday that it had discovered the matter in January 2016 and reported it to Singapore authorities. Mr. Leissner left Goldman in February after Goldman put him on leave. Read the rest of this entry »