Are Pro Golfers Committing Financial Fraud? — Medium

Friendly, but big stakes betting amongst a few PGA Tour players raises questions about the potential for financial shenanigans

Professional golfer Phil Mickelson (aka ‘Lefty’), who has won 42 tournaments and five majors on the PGA Tour, was inducted into the World Golf Hall of Fame in 2011. Mickelson has earned more than $77 million over three decades and also has “lucrative endorsement deals with Callaway, Barclays, KPMG, Exxon Mobil, Rolex and Amgen that collectively pay him more than $40 million annually,” according to Forbes.

Mickelson also seemingly has a gambling problem. It has put him in the crosshairs of a number of federal investigations related to financial fraud, be it money laundering, insider trading, or trying to send illicit funds off-shore.

As the US Open begins play today at Oakmont Country Club, Mickelson will likely be considered one of the favorites. He hopes to win the one major championship that has so far escaped him in his career, and where he has finished runner-up a frustrating six times. I suspect that when the tournament concludes on Father’s Day, Mickelson will be nowhere near the lead. In fact, I think his game and interest have faded over the past few years to the point where he is more interested in the easy gains offered by gambling on Sportsbooks than in facing the pressures, frustrations and potential embarrassments often exposed during final rounds at major championships (see Jordan Spieth at this year’s Masters Championship). And I further suspect that he’d rather make easy money by needling younger opponents foolish enough to join his infamous money games during the Tour’s Tuesday practice rounds.

Click here to read the rest of this story: Are Pro Golfers Committing Financial Fraud? — Medium

Do financial crimes pay off? — Medium

How much do you really know about your neighbor?

In the course of analyzing the ins and outs of financial crimes for the world’s banks, I’ve studied enough cases of money laundering to enable me to do it should I ever decide to become a criminal. In fact, what I’ve learned is that it pays to be a criminal. Rarely does the restitution in finance-related legal decisions match the amount of money originally stolen. And depending on the type of person you were before your crime spree, your punishment could be just a short vacation in a crime camp as opposed to an extended stay in prison. Regardless, the rest of your stolen loot is waiting for you upon your exit so you can go legit and eventually become a pillar of your community.

Case in point: the most famous financial criminal of all time, Frank Abagnale. He is now a recognized expert in the fight against financial fraud, has worked for the FBI and became a bestselling author by telling his story in a book called, Catch Me if You Can. You probably know Abagnale better as Leo DiCaprio’s main character in the Steven Spielberg-directed film adaptation of his book, which presented Abagnale’s style of financial fraud as a glamorous, cash-filled party. As with his crimes, he issued a laissez faire statement in response to questions raised by the press regarding the validity of the ‘stories’ in the book. . .

Click here to read the rest of this story: Do financial crimes pay off? — Medium

5 things drug cartels love about Hong Kong — Medium

The Big Buddha, the nightlife and other reasons drug kings love to stash cash in The Pearl of the Orient

Latin American drug cartels have apparently infiltrated Hong Kong with cocaine and methamphetamine, and as a result, new reports of money laundering are starting to leak out of the Asian peninsula. According to media covering this emerging story, three Columbian individuals based in Guangzhou, China have been accused of laundering more than five billion dollars for drug cartels based in Mexico and Colombia. They operate in Hong Kong, using bank accounts based there and in mainland China.

Investigations by the South China Morning Post (SCMP) show that the infamous Mexican Sinaloa cartel, run by the equally infamous El Chapo, has established a criminal and legitimate corporate presence in Hong Kong. In addition to trafficking cocaine and meth to the city, the SCMP says the “group also ran front companies and bank accounts which it used to launder drug funds, according to official Mexican documents and interviews with law enforcement sources.”

A violent Sinaloa spin-off, the Jalisco New Generation cartel, is quickly making inroads in Hong Kong too. . .  Click here to read the rest of this story: 5 things drug cartels love about Hong Kong — Medium

A chink in the prince’s armor? — Medium

Has Erik Prince fallen from a trusted provider to the U.S. government to a known bad actor?

Erik Prince’s real life reads like fiction. Son of a wealthy industrialist, he’s been a White House intern, attended the prestigious Naval Academy, is a former Navy Seal, founder and former chairman of the defunct Blackwater USA, current chairman of Frontier Services Group…and now, an accused money launderer? According to a piece published in The Intercept, Prince is under investigation by the U.S. Department of Justice and other federal agencies for attempting to broker military services to foreign governments and possible money laundering.

How did an intelligent, wealthy, well-educated and well-connected Prince fall so far out of favor? After forming Blackwater’s notorious mercenary services organization in 1997, Prince either served as the American society’s hero or villain, depending upon which side of the political aisle one was standing on. The Republican Party embraced Blackwater, while the Democrats saw legal and moral issues; regardless, in 2010 the Obama administration still funded Blackwater to the tune of $220 million for State Department and CIA support. All told, the company received over two billion dollars in government security contracts between 1997–2010.

Prince resigned as Blackwater’s chairman in 2009 after he was exposed in the press as an alleged CIA asset by former CIA director Leon Panetta. . . Click here to read the rest of this story: A chink in the prince’s armor? — Medium

Is a money laundering avalanche about to smack Canada? — Medium

If you believe some of today’s headlines, the answer is yes

According to a report issued by Transparency International, Canada is one of the least corrupt countries in the world. And, thanks to its FINTRAC unit, it has long been rumored to be one of the toughest enforcers of money laundering regulations at the government level unit. However, reports are now emerging in its media outlets about new money laundering opportunities and threats in Canada — proof that no country is truly immune to the evils of financial fraud. My take? Since these are just threats and not real cases, I think they may be indicators of Canada’s strength, rather than weakness.

I fear too many North American readers of news stories today only catch the headlines and fail to digest the actual content. They see a headline that says liquor stores, casinos or real estate companies in Canada could fall victim to money laundering schemes, and walk away from the article thinking that the country has somehow lost its tough grip on its regulations. In actuality, nothing could be farther from the truth.

Unlike most government operations, FINTRAC is very proactive. Here are some examples. . . Click here to read the rest of this story: Is a money laundering avalanche about to smack Canada? — Medium

Crying Wolf on Money Laundering? – Medium

Banks and the media that covers them are crying wolf on money laundering cases, here’s why that could be bad

We’ve all heard the Aesop fable about the ‘boy who cried wolf,’ teaching us that false reporting will do more harm than good. I am reminded of this story daily in reading the all-to-frequent headlines on money laundering that land in my inbox. I’ve long felt that the media was, in many cases making unfounded accusations of money laundering in headlines covering financial fraud cases.

Upon further digging, I discovered a working paper from the IMF that determined ‘crying wolf,’ or false — and too frequent — reporting on money laundering can overwhelm the governing agencies and fail to improve the prosecution rates for money laundering crimes. What’s the solution? Simply put, it’s on all of us, including financial institutions and the media, to do better.

In the Media:

Since my consulting business focuses on helping banks navigate the many regulations tied to money laundering, I receive daily news alerts on the topic. Every day, there are 10–15 new headlines about money laundering. At first I was surprised, even though I know money laundering happens all over the world on a daily basis. . . Click here to read the rest of the story on Medium.com.

Goldman Sachs’ Leissner to Take Fall For Bank?

Is Goldman Sachs in trouble in the tropics? One of its top executives, Tim Leissner, the Singapore-based chairman of Goldman’s Southeast Asia operations, remains under investigation by the FBI for his connections to embattled Malaysian Prime Minister Najib Razak. Razak has come under fire from the Malaysian government regarding $681 million in funds that were mysteriously transferred to his personal bank account by the Saudi Arabian government.

In addition, Leissner is being investigated for his role in striking deals worth $6.5 billion for his employer with the Malaysian financial fund 1Malaysia Development Berhad (1MDB), owned by Razak, for which Goldman Sachs earned an almost $600 million commission, amounting to 9.1 percent of the money raised. The average commission for an investment bank is about five percent, or less.

Leissner, 45, who was married to model and fashion designer Kimora Lee Simmons in 2013 (Simmons is the former wife of hip-hop mogul Russell Simmons), reportedly was considered one of the financial firm’s ‘Golden Boys’. . . Click here to read the rest of this story on Medium.com.

Israel’s Addition to Financial Action Task Force Long Overdue – Medium

Data proves some existing FATF member countries have much deeper AML issues than Israel

The worldwide Financial Action Task Force (FATF) on money laundering recently announced that Israel will join the organization as an observer starting in June 2016. Considering Israel’s tough stand on terrorists, adding it as an observer is a big step forward for the prestigious FATF, which sets global rules and standards for combating money laundering and terror financing. To date, only 34 countries make up its membership; countries that don’t meet FATF’s standards land on the task force’s blacklist.

In order for Israel to become a full member of FATF, it will have to pass comprehensive international inspection, showing that it has improved identification requirements at its financial institutions and expanded its AML regulations. The rewards for doing this work and joining the organization are that Israel will be able to participate in shaping global policy dealing with financial fraud and position itself as one of the leading countries in the worldwide fight against money laundering and terror financing.

Knowing the other 34 countries already accepted as full FATF members, I’m surprised it took this long to start the membership process for Israel. . . Click here to read the rest of this story on Medium.com.

High-Priced Bongs, and Other Ways Pot Businesses Handle Cash – American Baker’s BankThink

Screen Shot 2016-06-20 at 3.51.48 PMThe good, the bad and the ugly of the legal marijuana business

With medical marijuana now legal in 23 states and recreational marijuana legal in Colorado, Washington, Alaska and Oregon, cannabis is a legitimate growth industry generating substantial income. In Colorado alone, the pot industry is expected to pour an estimated $120 million in tax revenue in the state’s coffers for 2015. Nationwide, medical and recreational marijuana as an industry is expected to net between $2 and $3 billion per year in revenue.

You might think banks would be lining up to do business with these cash-rich entrepreneurs, but nothing could be further from the truth. The banks, rightfully so, in my opinion, assume they are putting themselves at risk with the federal government by engaging in marijuana-based businesses, as marijuana is still considered an illegal substance on the federal level. And the reality is today’s banking industry is all about risk mitigation, especially when it comes to cash-based businesses and the potential for rampant money laundering.

Yet, as I stated above, this is a quickly growing and legitimate industry in the states where it is legal. In its infancy, however, marijuana entrepreneurs are facing a mountain of regulatory and financial issues. The biggest of these issues is the lack of access to banking services. Here are what I’d consider the good, the bad and the ugly stories related to legal marijuana banking and taxation.

To read the rest of this story at American Banker’s BankThink blog, please click here.

Originally published at www.americanbanker.com on February 29, 2016.