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☆ American Lawyer Pleads Guilty Over Work for Sanctioned Russian Oligarch
▼ + stars: | 2023-04-26 | by ( Dylan Tokar | ) www.wsj.com time to read: 1 min

Russian oligarch Viktor Vekselberg was blacklisted by the U.S. in 2018. Photo: Sergei Bobylev/Zuma PressA New York lawyer has pleaded guilty to criminal charges stemming from payments he made for Russian oligarch Viktor Vekselberg , the latest in a crackdown on the white-collar professionals who federal prosecutors say are key enablers of the Kremlin’s sanctions-evasion efforts. The lawyer, Robert Wise , helped Mr. Vekselberg make about $3.8 million in payments to maintain six properties in New York and Florida owned by the Russian billionaire, prosecutors say. The Pelham, N.Y., resident pleaded guilty in Manhattan federal court Tuesday to one count of conspiring to commit international money laundering and agreed to pay $210,000.

☆ Seagate to Pay $300 Million for Violating Export Restrictions on China’s Huawei
▼ + stars: | 2023-04-20 | by ( Dylan Tokar | ) www.wsj.com time to read: 1 min

Seagate continued to sell hard drives to Huawei despite tightened export controls imposed on Huawei in 2020, the Commerce Department said. Photo: Justin Sullivan/Getty ImagesTwo subsidiaries of Seagate Technology Holdings PLC have agreed to pay $300 million for violating export restrictions placed on Huawei Technologies Co. over fears the Chinese telecommunications company posed a threat to U.S. national security. The data-storage equipment provider continued to sell hard drives to Huawei despite tightened export controls imposed on Huawei in 2020, the U.S. Commerce Department said Wednesday.

☆ Microsoft to Pay $3 Million Over Russia Sanctions, Export Controls Violations
▼ + stars: | 2023-04-07 | by ( Dylan Tokar | ) www.wsj.com time to read: 1 min

The sanctions violations, which occurred between 2012 and 2019, predate Russia’s 2022 invasion of Ukraine. Microsoft Corp. has agreed to pay more than $3 million in fines for allegedly violating U.S. sanctions on Russia and other countries after its software and services ended up in the hands of blacklisted companies and persons in the Crimea region of Ukraine. The U.S. Treasury and Commerce Departments on Thursday said they had reached a joint settlement with Microsoft over the apparent violations of U.S. sanctions and export controls rules, which the software giant voluntarily disclosed.

☆ U.S. Treasury to Change Proposed Corporate-Ownership Reporting Form
▼ + stars: | 2023-03-28 | by ( Dylan Tokar | ) www.wsj.com time to read: 1 min

Treasury’s Financial Crimes Enforcement Network says it is focused on implementing reporting rules to maximizes its ability to conduct compliance and enforcement reviews. The U.S. Treasury Department said it would change its plans for rolling out a corporate-ownership database, after its release of a draft reporting form appeared to give companies a way to opt out of providing certain information and prompted criticism by lawmakers and advocacy groups. “FinCEN is working to issue an updated beneficial ownership information reporting form as soon as possible,” Himamauli “Him” Das, the acting director of the Treasury’s Financial Crimes Enforcement Network, said in a statement.

☆ FinCEN’s Efforts to Implement Shell-Company Law Draw Criticism
▼ + stars: | 2023-03-23 | by ( Dylan Tokar | ) www.wsj.com time to read: +1 min

A bipartisan group of senators last week sent a letter to Treasury Secretary Janet Yellen about the department’s proposed rule on accessing a corporate-ownership database. Two years into the process of building a corporate-ownership database to tamp down on the use of anonymous shell companies, U.S. Treasury Department officials are facing mounting concerns around what supporters of the database view as potential loopholes in their plans for collecting and managing the information it will eventually hold. Lawmakers, bankers and advocacy groups have written to the Treasury about several recent proposals around the database that they say would defeat the purposes of creating it. In letters this week, the various groups criticized a proposed reporting form that would give companies the option to say that they were unable to identify their owners, and to mark “unknown” with respect to key information about any owners.

☆ Missteps by Ericsson and Its Lawyers Led to New Sanctions Against Company
▼ + stars: | 2023-03-17 | by ( Dylan Tokar | ) www.wsj.com time to read: +1 min

Ericsson agreed to a $206.7 million settlement with the Justice Department after the agency found that the company had breached an earlier agreement. A court filing by federal prosecutors earlier this month lays out details about a series of alleged missteps that led Ericsson SA to agree to pay $207 million in fines. Prosecutors highlighted in particular how failures by the Swedish telecommunication company’s outside lawyers contributed to their decision to seek the new penalties. The Justice Department in early March said it would take the rare step of tearing up a $1 billion settlement that Ericsson entered into in 2019 to resolve bribery offenses in China, Djibouti and three other countries. In a filing explaining how Ericsson allegedly breached the agreement, prosecutors attributed specific missteps to Ericsson’s outside legal counsel, including lawyers at firms Simpson Thacher & Bartlett and Freeh Sporkin & Sullivan.

☆ Former Blue Bell CEO Pleads Guilty to Misdemeanor Over Listeria Outbreak
▼ + stars: | 2023-03-09 | by ( Dylan Tokar | ) www.wsj.com time to read: 1 min

Shelves sit empty of Blue Bell ice cream at a Dallas grocery store after Blue Bell Creameries LP recalled its products in 2015. U.S. prosecutors are dropping felony fraud charges they brought against a former chief executive of ice cream maker Blue Bell Creameries LP in the wake of a 2015 listeria outbreak that led to three deaths. As part of a settlement reached Wednesday, Paul Kruse , Blue Bell’s CEO from 2004 until 2017, will plead guilty to a misdemeanor charge over food safety violations. He will pay a $100,000 fine and avoid jail time, according to a plea agreement filed in federal court in Austin, Texas.

☆ Justice Department Policy Seeks to Spread the Pain of Corporate Fines
▼ + stars: | 2023-03-02 | by ( Dylan Tokar | ) www.wsj.com time to read: +3 min

The Justice Department is looking to hit lawbreaking corporate executives where it hurts: their paychecks. “Our goal is simple: to shift the burden of corporate wrongdoing away from shareholders, who frequently play no role in misconduct, onto those directly responsible,” Ms. Monaco said. PREVIEWThe use of executive compensation in the fight against corporate crime was first floated by Ms. Monaco in a speech last year. Companies that seek to recoup pay from such employees will be able to deduct it from their own criminal penalties, Ms. Monaco said. Further details about the new policy will be released on Friday, Ms. Monaco said.

☆ Justice Department Seeks to Spread the Pain of Corporate Fines to Executives at Fault
▼ + stars: | 2023-03-02 | by ( Dylan Tokar | ) www.wsj.com time to read: +3 min

☆ Justice Department Hiring Dozens of New Prosecutors to Enforce Russian Sanctions
▼ + stars: | 2023-03-02 | by ( Dylan Tokar | Ian Talley | ) www.wsj.com time to read: +5 min

The new prosecutors will work with corporations to investigate sanctions and export control evasion, and also bring criminal charges against companies when they commit violations, he said. Some of the additional prosecutors are new hires, while some are being reallocated from different sections, according to officials. The U.A.E.’s enforcement of sanctions differs between the emirates, officials say, as the separate governments treat the sanctions with varying degrees of compliance. For their part, Justice Department officials have pointed to a growing nexus between their work on corporate crime and national security. In addition to hiring more prosecutors, Mr. Olsen said the counterintelligence section would also hire a lawyer to advise on investigations involving corporations.

☆ Glencore Subsidiary Sentenced, Ordered to Pay $30 Million to Medical Company
▼ + stars: | 2023-02-28 | by ( Dylan Tokar | Richard Vanderford | ) www.wsj.com time to read: +4 min

A Glencore lawyer on Tuesday said the company now expects to pay as much as $1.5 billion in total penalties, up from the $1.2 billion it initially agreed to pay last year. Glencore faced several restitution claims after agreeing to its settlement last year, including from Petróleos Mexicanos SA de CV, or Pemex, Mexico’s state-owned oil company. The negotiated monetary penalty paid by the Glencore subsidiary is lower than what is called for under federal sentencing guidelines, a reflection of Glencore’s cooperation, Judge Schofield said at Tuesday’s sentencing. Glencore gave prosecutors more than a million documents, including from overseas, where prosecutors lack subpoena power, the judge said. The company also agreed to overhaul its compliance program and will be under an independent monitorship for three years, she said.

☆ Stanley Black & Decker Discloses Possible Foreign Bribery Violations
▼ + stars: | 2023-02-27 | by ( Dylan Tokar | ) www.wsj.com time to read: +2 min

Stanley Black & Decker Inc. has identified transactions among its international operations that may have violated U.S. antibribery laws, the company said. Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. PREVIEWStanley Black & Decker in its filing didn’t disclose where the violations may have occurred. The company’s annual revenue rose to $16.9 billion at the end of its fourth quarter, up 11% from the prior year, Stanley Black & Decker said. Stanley Black & Decker last month said it was appointing a new chief financial officer to address inflation and supply-chain challenges.

☆ Former Freepoint Commodities Trader Charged With Bribing Brazilian Officials
▼ + stars: | 2023-02-17 | by ( Dylan Tokar | ) www.wsj.com time to read: +2 min

A former employee of U.S. oil trader Freepoint Commodities LLC and its Brazilian agent were indicted Friday for their alleged role in a scheme to bribe Brazilian officials to win contracts with the country’s state-owned oil company, Petróleo Brasileiro SA. Mr. Innecco, who acted as a broker for the firm, remains at large, the spokesman said. A lawyer for Mr. Oztemel said his client denied the allegations. Mr. Oztemel began working for Stamford, Conn.-based Freepoint around 2012. A spokeswoman for Freepoint, which wasn’t named in the indictment, said Mr. Oztemel had retired from the company more than two years ago.

☆ U.S. Launches ‘Strike Force’ to Keep Disruptive Tech Away From Adversaries
▼ + stars: | 2023-02-17 | by ( Dylan Tokar | ) www.wsj.com time to read: +4 min

Export controls are a set of regulations that restrict the sale of technologies with both commercial and military uses. They are administered by the Commerce Department’s Bureau of Industry and Security, which can bring civil penalties against companies that allow such “dual use” items to fall into the wrong hands. The Commerce Department’s Bureau of Industry and Security last year said it was making several changes to give its rules sharper teeth. “Our goal is simple but essential: to strike back against adversaries trying to siphon our best technology,” Ms. Monaco said. The committee is also turning its gaze from inbound investment in physical assets to sensitive data and digital innovations that could be used to pose data and cybersecurity risks, she said.

☆ Justice Department to Increase Scrutiny of Technology Exports, Investments
▼ + stars: | 2023-02-16 | by ( Dylan Tokar | ) www.wsj.com time to read: +4 min

A senior Justice Department official on Thursday said the agency would intensify its efforts to block foreign adversaries such as China and Russia from obtaining sensitive data and technologies, including by launching a new partnership with the U.S. Commerce Department. Export controls are a set of regulations that restrict the sale of technologies with both commercial and military uses. The Commerce Department’s Bureau of Industry and Security last year said it was making several changes to give its rules sharper teeth. “Our goal is simple but essential: to strike back against adversaries trying to siphon our best technology,” Ms. Monaco said. Although many of the Justice Department’s export controls cases in recent years have focused on individuals, prosecutors in 2021 fined German software company SAP SE for violating export regulations by providing millions of dollars in software to Iran.

☆ Banking Group Asks Treasury to Withdraw Ownership Database Proposal
▼ + stars: | 2023-02-14 | by ( Dylan Tokar | ) www.wsj.com time to read: +4 min

The American Bankers Association was one of the biggest proponents of a new corporate ownership registry, saying it hoped the project would help cut regulatory costs for its members. The legislation approved by Congress outlines a range of civil and criminal penalties for individuals or entities that fail to disclose ownership information, or that intentionally disclose inaccurate information. To use the database, banks would have to identify and correct discrepancies, which would require additional staff and resources, the group said. FinCEN’s proposal is its second related to the new ownership database. The Treasury bureau has said it would issue a third rule addressing banks’ due diligence obligations related to the database.

☆ Judge Denies Boeing 737 MAX Families’ Request to Reject DOJ Deal
▼ + stars: | 2023-02-10 | by ( Dylan Tokar | Andrew Tangel | ) www.wsj.com time to read: +3 min

A federal judge in Texas denied a request by families of those killed in two 737 MAX crashes to throw out or modify a two-year-old settlement between Boeing Co. and the U.S. Department of Justice. “This court has immense sympathy for the victims and loved ones of those who died in the tragic plane crashes resulting from Boeing’s criminal conspiracy,” Judge O’Connor wrote in his ruling. The decision by Judge O’Connor is his third substantive ruling on the legal challenge launched by the 737 MAX victims’ relatives group. The judge last year ruled that the families of those who died in the 2018 and 2019 crashes were victims of the safety failures outlined by prosecutors. In January, Judge O’Connor presided over an arraignment the families had requested.

☆ Prosecutors Charge Russian Who Managed Oligarch Viktor Vekselberg’s U.S. Properties
▼ + stars: | 2023-02-07 | by ( Dylan Tokar | ) www.wsj.com time to read: +2 min

A U.S. permanent resident who managed Russian billionaire Viktor Vekselberg ‘s properties in Florida and New York has been charged with money laundering and sanctions evasion after fleeing the U.S., federal prosecutors said. Mr. Voronchenko, who was also charged with participating in an effort to sell two of Mr. Vekselberg’s properties, fled the U.S. in May after receiving a grand jury subpoena, prosecutors said. Mr. Vekselberg was sanctioned by the U.S. Treasury Department in 2018. After Mr. Vekselberg was sanctioned, the source of the funds used to maintain the properties changed, prosecutors said. Mr. Voronchenko was served with a subpoena to testify before a grand jury in May while on Fisher Island, prosecutors said.

☆ ABA Passes Resolution Opposing Suspicious-Transaction Reporting Rule for Lawyers
▼ + stars: | 2023-02-07 | by ( Dylan Tokar | ) www.wsj.com time to read: +5 min

The association also is considering changes to its professional conduct rules around the vetting of clients. The ABA’s rules for professional conduct are typically used as a basis for the rules enforced by state courts, which serve as primary regulators of the legal trade. Under current rules, lawyers have an ethical obligation to keep confidential all information relating to the representation of their clients. Requiring lawyers to report suspicious transactions by their clients also could undermine attorney-client privilege, the group argued in their resolution. Those committees are expected to file a resolution at the annual meeting of the ABA’s policy arm later this year.

☆ McDonald’s Ruling Shifts Oversight Liability Focus to Corporate Officers
▼ + stars: | 2023-02-02 | by ( Dylan Tokar | ) www.wsj.com time to read: +9 min

Photo: McDonald’sThe ruling by Vice Chancellor Laster focuses on the claims against Mr. Fairhurst specifically. At the time of his termination, Mr. Fairhurst had been the subject of multiple reports of sexual harassment during his tenure, according to the Delaware ruling. Emerging oversight liabilityThe legal doctrine driving the McDonald’s shareholder lawsuit extends back to a 1996 Delaware Court of Chancery decision. The ultimate impact of Judge Laster’s ruling vis-à-vis McDonald’s shareholders is as of yet unclear. If the judge approves the McDonald’s directors’ motion to dismiss, the claims against Mr. Fairhurst would be moot.

☆ Former Allianz Fund Manager Accuses Firm and Its Lawyers of Double-Crossing Him
▼ + stars: | 2023-01-31 | by ( Dylan Tokar | ) www.wsj.com time to read: +5 min

In his brief, Mr. Tournant excerpted a slide containing photos of himself and two other former Allianz executives, which his lawyers likened to a most-wanted poster. Mr. Tournant was also represented by a third firm that wasn’t jointly retained by Allianz, according to his motion. The firms’ agreements required them to inform Mr. Tournant in the event that a conflict of interest arose, according to his motion. Allianz’s posture toward Mr. Tournant changed after Mr. Bond-Nelson broke ties with the firm’s defense team and began shifting blame to Mr. Tournant, according to his brief. The pivot was a direct result of the policies outlined in recent years by officials such as Deputy Attorney General Lisa Monaco, according to Mr. Tournant.

☆ U.S. Warns Banks to Watch for Russian Oligarchs Investing in Commercial Real Estate
▼ + stars: | 2023-01-26 | by ( Dylan Tokar | ) www.wsj.com time to read: +3 min

Banks should be on alert for Russian oligarchs attempting to circumvent U.S. sanctions by investing in commercial real estate, a U.S. Treasury Department watchdog said. Sanctioned individuals may try to use pooled investment vehicles or offshore funds to avoid due-diligence processes, FinCEN said in its alert. Sanctioned individuals could keep lowering their stakes to avoid detection, while still maintaining control of the fund, FinCEN said. Sanctioned individuals aren’t just investing in high-end or luxury properties, according to the alert. Federal prosecutors have warned that lawyers, consultants and other service providers who work for sanctioned individuals could run afoul of the law.

☆ Former FBI Agent Charged With Taking Payments From Russian Oligarch Oleg Deripaska
▼ + stars: | 2023-01-23 | by ( Dylan Tokar | C. Ryan Barber | ) www.wsj.com time to read: +2 min

A former high-level FBI agent was indicted on charges he violated U.S. sanctions by accepting secret payments from Russian businessman Oleg Deripaska for work he did investigating a rival oligarch. Mr. McGonigal, who also supervised investigations into Mr. Deripaska and other Russian oligarchs before departing the Federal Bureau of Investigation in 2018, began conspiring to provide services to Mr. Deripaska in 2021, prosecutors said. Additionally, the former FBI agent in 2019 participated in an unsuccessful effort to have the sanctions on Mr. Deripaska lifted, prosecutors said. PREVIEWAn indictment unsealed on Monday charged Mr. McGonigal and a former Russian diplomat, Sergey Shestakov, with violating and conspiring to violate U.S. sanctions imposed on Mr. Deripaska in 2018, as well as with related money-laundering charges. Prosecutors in October also announced the indictment of a British businessman who worked as a property manager for Mr. Deripaska.

☆ Islamic Bank Fined in U.K. for Anti-Money-Laundering Violations
▼ + stars: | 2023-01-12 | by ( Dylan Tokar | ) www.wsj.com time to read: +2 min

Al Rayan Bank, the U.K.’s largest Islamic bank, will pay £4 million, equivalent to about $4.9 million, for failing to maintain sufficient money-laundering protections, regulators said Wednesday. The regulator on Tuesday imposed a £7.6 million fine on Guaranty Trust Bank UK Ltd., the U.K. subsidiary of Nigerian bank Guaranty Trust Bank PLC, for failing to undertake customer risk assessments. PREVIEWAl Rayan is a subsidiary of Masraf Al Rayan, Qatar’s second largest bank by market value. After an inspection by the FCA in 2017, Al Rayan agreed not to take on additional high-risk customers. Al Rayan received a 30% discount off its fine for agreeing not to dispute the regulator’s finding, the FCA said.

☆ Intel’s New Compliance Chief Navigates Geopolitics, Supply-Chain Shift
▼ + stars: | 2022-12-23 | by ( Dylan Tokar | ) www.wsj.com time to read: +6 min

Carol Tate is the chief compliance officer at Intel. “It’s an exciting time to lead a global team with a company that’s at the center of those things.”Ms. Tate spoke with Risk & Compliance Journal about the supply-chain shift, layoffs and other topics. WSJ: What role does compliance play when it comes to these massive geopolitical pressures around the chip industry? Newsletter Sign-up WSJ | Risk and Compliance Journal Our Morning Risk Report features insights and news on governance, risk and compliance. We refer to it as CRIS [compliance risk intelligence system].

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