As global terrorism trends continue to evolve through the imposition of a variety of factors, counter terrorism financing (CTF) programs have too evolved to meet the new challenges posed. Terror financing is one of the key factors that has recently lead to the ascent of some terrorist groups, while also ultimately leading to the demise of others. Procedures for the detection of terror trends are all the more important in this regard, specifically in the ability to differentiate between relevant and irrelevant financial information that can potentially aid law enforcement in their counter-terror efforts. Initiatives aimed at denying terrorists and criminals the ability to exploit respective financial markets around the globe have been widespread over the past several years. The fact remains however that each new day brings about new possibilities for these “opportunists” to find loopholes in current financial regulations. The emergence and unprecedented rise of the cryptocurrency markets seen in 2017 is also an area of concern, especially when considering that financial criminals may soon be able to take advantage of these markets once they have grown accustomed to the technology involved – allowing them to operate in relative anonymity due to the current lack of global regulation on this market. These factors make the need for the proper security controls all the more indispensable for financial institutions both domestically and abroad.
U.S. News recently reported on an announcement made by the Trump administration earlier this week that proclaimed Iran as the world’s leading state sponsor of terrorism, a title that the troubled sovereign state has maintained for several years. The annually published “Country Reports on Terrorism” determined that “Iran was firm in its backing of anti-Israel groups as well as proxies that have destabilized already devastating conflicts in Iraq, Syria and Yemen” (Lee, 2017). The subject of various U.S. sanctions since the mid-1980’S, the report also found that Iran has continued to actively pursue Afghani and Pakistani Shiite soldiers to aid in their ongoing battles in Syria and Iraq. The threat that groups supported by Iran pose to the United States and U.S. allies is at the forefront of the current conflict between the two countries. While the number of global terrorist attacks declined between 2015 and 2016, the number of total attacks and terror-related deaths in 2016 was largely contributed to by Iran, with Iran’s partners committing strikes in over 20 countries.
According to the article, “The report also accused Iran of supplying weapons, money and training to militant Shia groups in Bahrain, maintaining a ‘robust’ cyberterrorism program and refusing to identify or prosecute senior members of the al-Qaida network that it has detained” (Lee, 2017). The Trump administration is in the process of reviewing its current policy on Iran, which should be completed by August of 2017. The review comes as a result of President Trump’s open criticism of the Iran nuclear deal, which was adopted towards the end of President Obama’s final term. In his final days as President, Obama also suspended some of the long-standing sanctions against Sudan based on improvements made in their counter-terror controls. Sudan and Syria were two additional countries that were identified as state sponsors of terrorism within the report released this week. The sanctions relief efforts in Sudan included the removal of a trade embargo and the unblocking of Sudanese government assets that were previously frozen. Although they were set to re-assess Sudan’s CTF progress earlier this month, the Trump administration has since decided to delay its decision on the state of its sanctions against Sudan for an additional three months. Overall however, the number of terrorist attacks in 2016 increased by 9% from 2015 (11,774 to 11,072), and there was also a 13% decrease in deaths over the same period of time.
Indictments Made in U.S. Healthcare Fraud Case
Physicians across the globe are generally trusted to provide the proper care necessary to both ensure and improve the overall health and wellbeing of their patients. As a result, the headlines that emerged this past week regarding the largest healthcare fraud probe in the history of the United States has outraged much of the general public, bringing about a state of distrust for medical professionals based on the actions of several crooked doctors. According to the U.S. Department of Justice (DOJ), “more than 100 doctors and health care professionals were charged with healthcare fraud for their role in stealing $1.3 billion from taxpayers” (De Lea, 2017). In total, 412 individuals were involved in issuing false invoices and claims to Medicare, Medicaid, and other health insurance bodies adding up to the aforementioned total. The claims were made for prescription medications whose purchases were never authorized by patients, and medical treatments that were either unnecessary or never completed. One instance in Florida also saw a fake rehabilitation facility recruit citizens with substance abuse issues with monetary payments in order to disguise improper medical claims of nearly $60 million USD.
Of the 412, more than ¼ were licensed medical professionals, many of whom were also found to be illegally distributing drugs to patients, a self-fulfilling, addiction-forming practice that Attorney General Jeff Sessions described as doctors “turning their practices into multimillion dollar criminal enterprises” (De lea, 2017). As a result of these findings, the U.S. Department of Health and Human Services has begun the process of license suspension against 295 providers involved in the case.
Indonesian Politician Accused of Corruption
A prominent Indonesian politician with close ties to the United States was recently named a suspect in a governmental corruption scandal that has sent shockwaves across Southeast Asia. The scandal involves numerous politicians, government officials, and several companies that are alleged to have taken more than $170 million (USD) from the government altogether. Setya Novanto, Indonesia’s speaker of parliament, has been accused of pilfering more than $40 million (USD) of government funds himself. According to sources, the network of over 80 individuals reportedly “used the introduction of a $440 million electronic identity card system in 2011 and 2012 to steal more than a third of the allotted funds” (AP, 2017). In a statement on the case, Indonesia’s chief of their Corruption Eradication Commission (CEC) announced that the governmental body had gathered enough evidence to name Novanto a primary suspect, and believes that Novanto was one of the leaders of the ploy.
The case emerged as Indonesian President Joko Widodo tightened the screws on governmental and statewide corruption within the sovereign state, as corruption has had a significant impact on economic development within the nation. Indonesia has become synonymous with corruption in recent years, having been ranked 90th out of the 176 countries by Transparency International in their annual corruption report despite valiant efforts to improve their anti-corruption efforts. Global RADAR will provide an update on this case as more information arises in the coming weeks.
Dirty Money Engulfs Australian Real Estate
After promising the adoption of new, extensive anti-money laundering legislation to better govern their real estate market in 2006, the Australian government is now reeling to address its growing reputation as a haven for illicit money. Regarded by experts as “the failure of successive governments to deal with money laundering in Australian real estate”, the statutes that were called for over a decade ago are in even more dire need today (Kostarelis, 2017). The lack of regulation seen in Australia has made it one of the world’s most attractive countries for international money launderers to harbor their dirty money through the purchase of luxurious homes. Statistics gathered by the Australian Transaction Reports and Analysis Centre (AUSTRAC), an Australian financial intelligence agency that monitors financial transactions to identify money laundering, organized crime, tax evasion, and terrorism, shows that the vast majority of suspicious real estate purchases in recent years have come from Chinese investors. This is ironic considering regulations were recently imposed by both China and Australia with the intent of making the purchase of Australian property more difficult for capitalists residing in China.
The large influx of Chinese funds is believed to be a result of Chinese investors attempting to move their funds into other markets before the state’s currency – the renminbi – devalues in the coming years. Without the necessary controls in place, it is likely that the number of overall Australian real estate purchases made with the purpose of hiding money from tax authorities or concealing illicit money in general is likely to increase exponentially. As matters currently stand, Australian lawyers and accountants are not subjected to Anti-Money Laundering and Counter Terrorism Financing Act of 2006, meaning property purchases are occurring despite virtually no due diligence being conducted on the individuals making purchases and their funds sources. However, reports have indicated that those operating in the Australian real estate market, including the President of the Real Estate Institute of Australia, are not opposed to enacting further legislation to clean up the market. The issue with the implementation of new regulation would be the burden placed on Australian real estate agents to be well-versed in the AML laws that would govern them, meaning that the proper education would be essential for the program to be effective. Clearly drastic measures are needed in order to address the growing issues facing the Australian real estate market and to reduce the global rates of money laundering in general.
Associated Press. “Indonesia’s Parliament Speaker Denies Corruption Allegations.” Fox News. FOX News Network, 18 July 2017. Web.
Kostarelis, Stefan. “Australian Real Estate an Easy Target for Money Launderers.” SA Real Estate News. 16 July 2017. Web.
Lea, Brittany De. “DOJ Busts 115 Medical Professionals in $1.3B Fraud Case.” Fox Business. Fox Business, 13 July 2017. Web.
Lee, Matthew. “US: Iran Still Top State Terror Sponsor; Global Attacks Down.” U.S. News. 19 July 2017. Web.