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German finance ministry raided on money laundering suspicions

This week’s roundup covers the raid of Germany’s financial intelligence unit, the latest in the Crown casinos money laundering saga, and Manchester’s new super-sized courtroom.

Napier AI
September 10, 2021

This week saw Germany’s financial intelligence unit raided on suspicion of ignoring money laundering complaints, while in Australia things look bleak for Crown casinos after numerous probes into money laundering allegations, and Manchester gets a super-sized courtroom to deal with drug trafficking cases.

Find out more on these stories below.

German prosecutors say anti-money laundering watchdog failed to act on suspicious transactions  

German prosecutors raided the finance and justice ministries in Berlin on Thursday. The Osnabrück public prosecutor’s office is probing the Financial Intelligence Unit (FIU) on suspicion that the unit had failed to act on irregular payments to Africa totalling millions of euros between 2018 and 2020.  

The authorities allege that the unit had noted concerns that the funds were linked to arms and drugs trafficking and terrorist financing but failed to alert law enforcement. Since the FIU took control of anti-money laundering in 2017, suspicious activity reports have dropped dramatically.

Both the FIU and Germany’s financial regulator, BaFin, have been in the spotlight for not detecting problems at former blue-chip company Wirecard, which collapsed in 2020. The country’s anti-money laundering regime is also currently under review by the Financial Action Task Force (FATF).  

The raid also comes at a decisive time for Finance Minister Olaf Scholz. As the Social Democratic Party candidate for chancellor in the upcoming German elections later this month, he had impressed at the polls until now.

Responding to the allegations, the finance ministry said it supports the investigation, and that “the underlying suspicion is expressly not directed against employees of the finance ministry.”

Read more on this story at CNBC.

Crown Resorts faces bleak future on back of numerous money laundering allegations  

Crown Resorts, one of Australia’s largest casino operators, were warned on Thursday that the multiple money laundering probes into its operations both locally and abroad cast serious doubt on the company’s future.

Auditors for the company reported that the findings (published in the 2021 annual report) are the culmination of several years of money laundering scandals, exacerbated by the impact of the COVID-19 pandemic.  

The Crown Melbourne charges include allegations that iProperty fraudster Michael Gu laundered AUS$8m (£4.26m) through the casino between 2014 and 2017, while in February 2021 the state of New South Wales found the company unfit to hold a gambling license there. The probe has also been extended to include investigation into the company’s operations in Western Australia.  

The auditor added that the Australian Transaction Reports and Analysis Centre (AUSTRAC) is likely to launch civil action against Crown Resorts, with probable substantial penalties. Meanwhile, Crown shares have fallen 26% in value since 2019.

Responding to the allegations, Crown Resorts issued a statement  saying that “Crown will continue to act on any changes necessary to ensure Crown is a company with the highest standards of corporate governance and broad respect for its social licence.”

Read more on this story in Reuters.

Manchester gets super-sized court to handle large-scale drug trafficking and money laundering cases

Manchester Crown Court has opened a ‘super courtroom’ three times the size of a normal court room, which has the capacity to hear the cases of up to 12 defendants simultaneously. It will be used for gang-related trials and to hear cases involving money laundering, drug trafficking and murder.

A backlog of trials which require this much space, known as multi-handers, have built up during the COVID-19 pandemic owing to social distancing restrictions which limit the number of court staff, lawyers, witnesses, and defendants allowed in court at a time.  

Meanwhile, the Ministry of Justice has about 23 Nightingale courts - temporary courts set up to address case backlogs caused by the pandemic - operating in England and Wales, and it plans to extend to 32 courtrooms until March 2022. Sixty Crown courtrooms are scheduled to reopen as lockdown restrictions ease throughout the country.

Court Minister Lord Wolfson praised the super courtroom, calling it another step in overcoming the impact of the pandemic, adding that “we’re not stopping here, though, and continue to pursue every option as we reduce delays and deliver speedier justice for victims.”

Read more on this story in the Evening Standard.

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