Author: Nicola Sharp 16 February 2021
Nicola Sharp of financial crime specialists Rahman Ravelli believes new US legislation should reduce the chance of similar offending.
Europol says it has dismantled an organised crime group that defrauded more than 50 US banks out of an estimated $14.4M.
It has announced that, on one day last October, an international operation led by Spanish police and the United States Secret Service carried out 40 house searches, arrested 37 suspects, seized 13 luxury cars and froze 87 bank accounts. In total, the operation – known as Operation Secreto - led to 88 house searches and 105 arrests.
The criminal scheme, which Europol has said was run mainly by Greek nationals, involved creating shell companies in the US alongside bank accounts and cards. Spanish retailers would then use all the credit available on the bank cards before laundering the money through other bank accounts in a number of European countries.
Europol coordinated the operation with help from police in Austria, Denmark and Greece and the US’ Department of Justice and Financial Crimes Enforcement Network (FinCEN). A co-ordination centre was set up at Europol’s headquarters in the Netherlands. Europol also ensured the exchange of information between the agencies involved and provided analytical support for the operation, which took eight months.
The USA has previously been particularly susceptible to fraud and money laundering schemes, due in part to the majority of states allowing companies to be formed without providing information on the beneficial owners.
The US is tackling this issue. The newly-passed Corporate Transparency Act (incorporated within the Anti-Money Laundering Control Act) aims to remove the possibility of using US-incorporated shell companies for fraud or money laundering schemes. Under it, the US Financial Crimes Enforcement Network (FinCEN) will be required to establish a database of the beneficial owners of a number of types of companies, including - but not limited to - non-exempt corporations and limited liability companies. These provisions will hopefully help further identify the use of shell companies by organised crime groups for the purpose of fraud and money laundering.
Nicola is known for her fraud, civil recovery, arbitration and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.