IELR Blog

Official Blog of the International Enforcement Law Reporter

5th Circuit Appellate Court Stays and then Reinstates Nationwide Injunction to Corporate Transparency Act by Texas District Court

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On December 26, 2024, the U.S. Court of Appeals for the Fifth Circuit  vacated the stay and reinstated the nationwide preliminary injunction enjoining enforcement of the CTA and its Reporting Rule, as well as impending reporting deadlines. Hence, no filings under the CTA are at present required. This includes initial beneficial ownership information reports for companies formed or registered prior to 2024 that were due by January 13, 2025.

On December 27, 2024, FinCEN issued a new alert on its website: In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

The Fifth Circuit Court of Appeals reasoned that, requiring parties and other persons impacted to file beneficial ownership reports before an expedited appeal would prejudice the rights of the plaintiffs prior to a decision on the merits.

The fact that this matter is pending in other circuits and there are divergent and conflicting rulings means that the matter may not be resolved soon.  In addition, the U.S. legislative and executive branches are in transition.  It appears that the new administration and Congress may not be very receptive to implementing the CTA.

Regardless of the outcome of the Texas Top Cop Shop and other U.S. cases, the CTA is merely the U.S. effort to implement entity transparency. This rule has been part of the international standards set forth by FATF since 2006.  Many jurisdictions that have promoted international financial services based on anonymity, such as Panama, have now enacted entity transparency laws. In the EU, such information is available to the public.  Hence, notwithstanding the Texas Top Cop Shop decision, the U.S. will need to comply with entity transparency, or it will continue to be an outlier, and its outlier position eventually will result in adverse consequences.  Nevertheless, in the immediate future, the fact that the U.S. has one of the largest and most lucrative markets, has not fully reciprocated on FACTA IGAs, has not joined the Common Reporting Standards (CRS), and has not met the FATF gatekeeper standards, enables the U.S. to attract significance business.

With plans for the incoming Trump Administration and Congress to reject the Global Minimum Tax and digital services taxes and impose significant tariffs, there are high chances for tax wars.  Some of these skirmishes will occur in bodies such as the OECD, FATF, and the World Bank Group, as well as informal groups such as the G7 and the G20.  Other battles will be bilateral.

 

 

5th Circuit Court of Appeals Grants US Government’s Emergency Motion to Stay Preliminary Injunction Against the CTA Issued by Texas District Court

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On December 23, 2024, the Fifth Circuit Court of Appeal in a per curiam opinion granted the U.S. Government’s  emergency motion for a stay. The opinion was based, among other reasons, on the U.S. Government’s showing of likelihood of success on appeal, that it would be irreparably harmed without a stay, and that the CTA was in the public interest.[1]

On December 3, 2014, the U.S. District Court for the Eastern District of Texas granted the plaintiff’s motion for a preliminary injunction, making it effective nationwide.[2]  Judge Amos L. Mazzant preliminarily enjoined the Corporate Transparency Act and Reporting Rule enforcement. The decision also postponed the effective date of the Reporting Rule.

Enacted in 2021, the CTA obligates corporations, limited liability companies, and certain other entities created or, in the case of non-U.S. entities, registered to do business in any U.S. state or tribal jurisdiction to file a Beneficial Ownership Information (BOI) report with the U.S. Financial Crimes Enforcement Network (FinCEN), transmitting information about the natural persons who are beneficial owners of the entity.  FinCEN has issued the Reporting Rule, a regulation, to implement the CTA by providing more information on the reporting requirements and providing compliance deadlines, including a January 1, 2025, deadline for companies established or registered to do business in the U.S. before January 1, 2024.[3]

On December 23, FinCEN issued the following notice:  “In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline as follows:

Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)

Reporting companies created or registered in the United States on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN.

Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.

Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.

Reporting companies that are created or registered in the United States on or after January 1, 2025 have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.

As indicated in the alert titled “Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)”, Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)—namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024)—are not currently required to report their beneficial ownership information to FinCEN at this time.

[1]  Texas Top Cop Shop, Inc. et al. v. Garland et al., U.S. Court of Appeals for the Fifth Circuit, No. 24-40792, Unpublished Order, Sec. 23, 2024.

[2]  Texas Top Cop Shop, Inc. et al. v. Garland et al., No. 4:24-CV-478, Dkt. 30 (E.D. Tex. Dec. 3, 2024).

[3]  31 C.F.R. § 1010.380.

Ibero-American Institute of The Hague Publishes Anti-Corruption Books

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The link to the publication of the new manuscript published today as a result of the Network’s Work on Responses to Corruption Associated with the TOC: “RESPONSES TO CORRUPTION FROM THE GENERAL PART OF CRIMINAL LAW. Particular attention to corruption associated with transnational organized crime. PART I. Natural persons”

The book has come out as Volume 33 of the Ibero-American Perspectives on Justice Collection, published by the Tirant lo Blanch Publishing House and the Ibero-American Institute of The Hague.

The book can be downloaded for free from the following link:

https://editorial.tirant.com/free_ebooks/9788410714557.pdf

The book will also be disseminated through the social networks of the Ibero-American Institute in The Hague, and will soon be sent to the Dialnet Foundation Database so that it can be subject to text searches in Latin America and Spain. It will also be uploaded to the Repository of the Universidad del Rosario and the website of the Ibero-American Institute of The Hague.

Likewise, the rest of the books in the Ibero-American Perspectives on Justice collection (including the 18 books that have been published so far as a result of the Research Program on Responses to Corruption associated with Transnational Organized Crime) can be downloaded free of charge from the following link:

https://editorial.tirant.com/es/colecciones/perspectivas-iberoamericanas-sobre-la-justicia

The presentation of the research results of the Program on Corruption associated with Transnational Organized Crime, which will take place  in the Hague Wednesday, May 28, 2025 as part of the XII Ibero-American Week of International Justice (The Hague, May 21-30, 2025):

https://www.iberoamericaninstituteofthehague.org/actividades/semana-iberoamericana-de-la-justicia-internacional-y-los-derechos-humanos

 

STEP Public Policy Committee Publishes New Report on Tackling Economic Crime

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By Emily Hong

The STEP Public Policy Committee has recently published a critical new report, Tackling Economic Crime, which delves into global efforts to combat financial crime and offers pragmatic recommendations to address the gaps in existing Anti Money Laundering (AML) and Counter-Terrorist Financing (CTF) frameworks. As an organization representing professionals in trust and estate planning across 95 countries, STEP leverages its members’ extensive expertise to offer technical and policy advice.1 This input aims to foster more effective AML and CTF strategies, particularly in succession planning, where trusts often play a central role.

Financial crimes, such as money laundering, tax evasion, and terrorist financing, persist as major threats to global financial systems. Despite the establishment of measures like AML frameworks and trust regulations, these crimes continue to thrive due to inefficiencies in reporting and administrative processes.2 Trusts, though legitimate tools for wealth management and succession planning, are sometimes exploited for illicit purposes, making them a focal point in global discussions on economic crime prevention.

Tackling Economic Crime examines the current measures in place to combat these crimes and offers recommendations to strengthen these systems rather than suggesting an increase in regulations. STEP advocates for improving the quality of existing data and enhancing the implementation of established frameworks – emphasizing that while global efforts like those from the Financial Action Task Force (FATF) and the European Union have been effective in collecting significant amounts of information, the focus now should be on improving how this information is processed, administered, and used.3

One of the report’s main proposals is improving the quality and processing of Suspicious Activity Reports (SARs), which play a critical role in identifying economic crime. A lack of detailed guidance for filing these reports has led to an overwhelming number of incorrect or unnecessary submissions, which strain government resources and dilute the effectiveness of the system. By investing in more detailed guidance and enhancing the processing mechanisms for SARs, authorities can focus on legitimate threats and improve the overall efficiency of their AML efforts.

The report also addresses the growing burden of compliance checks across jurisdictions, which has resulted in rising costs for customers and a significant duplication of efforts. STEP recommends introducing a ‘compliance passport’ that would streamline the verification process across borders.4 Such a passport would allow entities to demonstrate AML compliance in multiple jurisdictions, reducing the distortions in transparency regimes and simplifying the compliance landscape. This would be particularly beneficial for multinational entities operating in multiple regulatory environments, as it would enhance the certainty of their AML compliance while reducing regulatory friction.

Additionally, the report emphasizes the need to verify beneficial ownership information in company and trust registers. In many countries, beneficial ownership data is not verified, which severely limits the practical utility of this information in combatting money laundering and other illegal activities.5 STEP advocates for requiring obliged entities to verify this data, which would make it more difficult for criminals to conceal their identities behind complex corporate structures. In cases where entities do not have a registrable beneficial owner, STEP proposes that these entities be required to provide a fuller explanation for their status – this would give authorities greater certainty and allow them to focus their resources on cases where criminal intent may be suspected.

Strengthening whistleblowing frameworks globally is another recommendation put forward in the report: Whistleblowing is a crucial tool in uncovering corruption, fraud, and other forms of economic crime, but in many jurisdictions, whistleblowers face risks such as compromised safety and legal repercussions. STEP calls for jurisdictions with weak whistleblowing protections to review and strengthen their frameworks, ensuring that whistleblowers can report wrongdoing without fear of retaliation.

Finally, STEP recommends the adoption of a unified global standard for AML and CTF compliance. While many jurisdictions have adopted FATF’s recommendations, inconsistencies remain, with some countries implementing divergent standards. This lack of uniformity exposes systems to criminal risks and undermines global efforts to combat financial crime. STEP advocates for all jurisdictions to agree on one global standard, ensuring that international financial regulations are consistent and non-discriminatory.

Citations:

Emily Hong is a fall editorial intern for the IELR. She is a sophomore at Johns Hopkins studying International Studies and Economics.

[1] STEP (2024). Tackling Economic Crime: Expert analysis of existing measures to combat financial crime and practical recommendations on how to address the gaps, STEP, https://www.step.org/knowledge-hub/tackling-economic-crime

[2] IMF (2024). Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), IMF, https://www.imf.org/en/Topics/Financial-Integrity/amlcft

[3] STEP, supra note 1.

[4] Id.

[5] FATF (2014). GUIDANCE ON TRANSPARENCY AND BENEFICIAL OWNERSHIP, FATF, https://www.fatf-gafi.org/content/dam/fatf-gafi/guidance/Guidance-transparency-beneficial-ownership.pdf.coredownload.pdf

Webinar The arms trafficking menace in the Caribbean: Understanding the Crime & Litigation Dynamics

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On Thursday September 26, from 5:00-7:00 p.m. Eastern Standard Time, the Institute of International Relations, University of the West Indies, St. Augustine, Trinidad, the Caribbean Policy Consortium, and the American Bar Association Criminal Justice Section will host a webinar on

The arms trafficking  menace in the Caribbean: Understanding the Crime & Litigation Dynamics

Moderator: Prof. Ivelaw Griffith, will moderate.

Dr Malisa Neptune-Figaro,  Department of Behavioural Sciences, The University, of the West Indies, T&T, will discuss “Unveiling the Threats: Illicit Firearms in the Caribbean;”

Dr. Tres-Ann Kremer,  Caribbean Regional Director, Tony Blair Institute for Global Change, will discuss “Strategy, Policy and Delivery: Addressing Guns and Violence as a Public Health Issue in the Caribbean;”

Mr. Callixtus Joseph,  Assistant Director, Policy, Strategy and Innovation, CARICOM IMPACS, will address “Impact and Implications of Illicit Firearms: Pathways to Change;”

Mr. Ivan Carpio,  State Department, Caribbean Security Initiative, will focus on “Examining US Government, initiatives Including Cooperation with Caribbean Governments;”

Mr. Bruce Zagaris,  Partner, Berliner Corcoran & Rowe LLP and  Fellow, Caribbean Policy Consortium, will look at the “Status of U.S. litigation against gun manufacturers and distributors: Suits  outside the U.S.”

Registration is free.  A registration link is below:

https://sta-uwi-edu.zoom.us/webinar/register/WN_dGY8rk_2QmeDp7yRC3kh4w

 

Fugitive Italian Crime Leader Caught in Slovenia After Six Months on the Run

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By Emily Hong

On August 20, 2024, authorities from Italy and Slovenia, supported by Eurojust, successfully apprehended Salvatore Roberto Perricciolo, leader of an Italian organized crime group (OCG). Perricciolo, 40, is a fugitive of Calabrian origin who had been on the run for six months following his conviction for crimes including drug trafficking, extortion, and kidnapping.1 His arrest in Koper, Slovenia, marks a significant achievement in the ongoing battle against organized crime in Europe.

As leader of an OCG, Perricciolo not only oversaw cocaine trafficking operations across Italy but also was involved in robbery, fraud, embezzlement, extortion, kidnapping, and illegal possession of weapons. In a separate trial, he was found guilty of mafia-related offenses, further solidifying his position as a dangerous figure within the criminal network.2

In February of 2024, before his final sentencing by Italy’s Court of Cassation, Perricciolo promptly fled – escaping his impending 21-year prison sentence and prompting a national and European Arrest Warrant. Despite the challenges law enforcement officials faced during their months of investigation, they were able to track Perricciolo to Slovenia, where he had been hiding in the port city of Koper.

The success of this operation can largely be attributed to the involvement of Eurojust, the European Union Agency for Criminal Justice Cooperation. Eurojust played a pivotal role by executing a European Investigation Order (EIO), a crucial legal tool that allowed for swift and coordinated investigative measures across borders. The EIO is a “a judicial decision which has been issued or validated by a judicial authority of a Member State to have one or several specific investigative measure(s) carried out in another Member State” without the lengthy procedures typically associated with mutual legal assistance treaties.3

The EIO issued in this case authorized extensive surveillance activities in Slovenia – phone tapping, physical tailing, and other forms of monitoring – to pinpoint Perricciolo’s exact location within just ten days of its execution.4 The success of the operation underscores the importance of surveillance in modern law enforcement, especially in cases involving high-profile fugitives with the resources and expertise to evade capture. In particular, wiretapping, when conducted legally and with proper oversight, can provide invaluable real-time information that is often crucial for the success of such operations.

Perricciolo’s arrest highlights the evolving nature of European law enforcement in addressing transnational crime. The effectiveness of Eurojust in this case demonstrates its growing importance in the European legal landscape, particularly in complex cases requiring swift action and rapid coordination between borders. Furthermore, the use of the EIO in this operation exemplifies its value as a tool for a streamlined and efficient approach to law enforcement. The quick execution of the EIO in this case shows how it can be leveraged to expedite justice and prevent criminals from taking advantage of bureaucratic delays.

The success of this operation sets a precedent for future international cooperation in law enforcement – demonstrating that when countries work collaboratively, supported by institutions like Eurojust, they can effectively tackle even the most challenging of criminal cases. However, it also highlights how cross-border judicial coordination and communication between national authorities will be crucial to ensure that such operations can be conducted swiftly and successfully.

 

 

Emily Hong is a fall editorial intern for the IELR. She is a sophomore at Johns Hopkins studying International Studies and Economics.

 

[1] Eurojust (2024). Fugitive Italian crime leader arrested in Slovenia, Eurojust, https://www.eurojust.europa.eu/news/fugitive-italian-crime-leader-arrested-slovenia#:~:text=A%20fast%20and%20coordinated%20action,a%2021%2Dyear%20prison%20sentence.

[2] Castori (2024). The super fugitive Salvatore Perricciolo arrested in Koper, il Resto del Carlino, https://www.ilrestodelcarlino.it/marche/cronaca/tesoro-latitante-casa-auto-confisca-perricciolo-4f77ea5d

[3] Directive 2014/41/EU of the European Parliament and of the Council of 3 April 2014 regarding the European Investigation Order in criminal matters, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0041

[4] The Slovenia Times (2024). Fugitive Italian crime boss arrested in Slovenia, Slovenia Times, https://sloveniatimes.com/40761/fugitive-italian-crime-boss-arrested-in-slovenia

 

 

SUPREME COURT DECIDES THAT DEFENDANTS ACCUSED OF SECURITIES ANTIFRAUD VIOLATIONS BY THE SEC ARE ENTITLED TO A JURY TRIAL IN FEDERAL COURT

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The Implications of the SEC v. Jarkesy Supreme Court Decision

By Morinsola Tinubu and Bruce Zagaris

 

On June 27, 2024, the Supreme Court issued a decision in SEC v. Jarkesy, finding that when the Securities Exchange Commission (SEC) claims a defendant has violated securities antifraud provisions and pursues civil penalties, the defendant is entitled to a jury trial in federal court according to the Seventh Amendment. This decision is significant because it places limitations on the SEC’s use of its in-house tribunal with administrative law judges (ALJs), which the SEC commonly uses when presenting antifraud claims. The decision also has important implications for international enforcement cases involving civil penalties.

In 2011, the SEC launched an investigation into George Jarkesy and Patriot28, LLC., his firm. Two years later, the SEC pursued an enforcement action seeking civil penalties against Jarkesy and his firm. According to the SEC, Jarkesy allegedly misled investors regarding certain features of funds he managed, “including the fund’s strategies, service providers, and value, in violation of the antifraud provisions of the federal securities laws.”1 The SEC adjudicated the matter through its in-house tribunal and an ALJ determined Jarkesy was liable for securities fraud and must pay $300,000 as a civil monetary penalty. Shortly after the ALJ decision, Jarkesy presented the case to the U.S. Court of Appeals for the Fifth Circuit for their review. The U.S. Court of Appeals reversed the decision and remanded the case, claiming the SEC violated Jarkesy’s Seventh Amendment right to a jury trial when it adjudicated the case in-house.

In June 2024, the Supreme Court, in a six to three decision written by Chief Justice Roberts, supported the Court of Appeals’ decision, claiming Jarkesy is entitled to a jury trial according to the Seventh Amendment. More specifically, the court emphasized that the Seventh Amendment guarantees the right to a jury trial for “suits at common law” including statutory claims that appear to be “legal in nature.”2 The Court argued that the civil monetary penalties the SEC sought were “legal in nature” and were created to “punish and deter” wrongdoers versus establishing a public right or restoring the “status quo.”3  Additionally, the Court argued that the “cause of action” for securities fraud centers around the same behavior forbidden by common law fraud which further suggests that the claims are legal and therefore subject to the Seventh Amendment.4

The SEC claimed their case fell under the criteria for the public rights exception to the Seventh Amendment, which grants Congress permission to designate certain matters for decision by federal agencies instead of juries if the case could be decided solely by the legislative or executive branches of government.5 However, the majority opinion of the Court sustained that the goal of the suit takes precedence over its basis. In this case, the SEC sought to pursue legal claims similar to those at common law which meant the public right exception was not applicable despite the suit’s statutory foundation.6 According to Chief Justice John Roberts, the determining factor of whether something is a public right is if it is “made of the stuff traditional actions at common law tried by the courts at Westminster in 1789.”7 To further his point, Roberts referred to the “government’s ‘power to collect revenue’, Congress’ ‘plenary power of immigration’, and the ‘exclusive power’ of the ‘political branches’ over tariffs” as prime examples of cases in which the jury trial does not apply.8 Roberts also frequently referenced the Granfinanciera v. Nordberg decision of 1989, which held that the public rights exception did “not protect a claim in a bankruptcy proceeding to recover a fraudulent conveyance.”9 The similarities between the statutory action for fraudulent conveyance and the current case further supported the Supreme Court’s decision.

 

Analysis

The SEC v. Jarkesy decision means the SEC will no longer be permitted to require defendants accused of securities fraud to stand before an ALJ and defend themselves. This has significant implications for the SEC and other federal regulatory agencies. One concern is the limited resources of federal regulatory agencies. Generally, in-house tribunal proceedings cost less than jury trials which means many agencies will be forced to spread their current resources thin. For example, the majority of IRS cases do not reach federal court and like most other agencies, they lack the resources to have frequent trials. This dynamic may incentivize agencies to be more selective of which cases they choose to take to trial. Another outcome is that the SEC and other agencies may present federal courts with more time-consuming cases.

The decision may also create more obstacles for federal regulatory agencies seeking to make claims tied to common law or civil penalties involving international enforcement. It is unclear, for example, whether the Environmental Protection Agency claims will require a jury trial. In some ways, one could argue that because the EPA pursues penalties that are similar in nature to the common-law claim that does not qualify as a public right. Therefore, if the EPA were to make a claim that is connected to a “historical cause of action available at common law,” the Jarkesy decision may be applicable.10 However, the fate of federal regulatory agencies in general is unclear and cases will have to be examined individually to determine whether they fall under the Jarkesy decision.

The bulk of IRS international enforcement cases involving civil penalties pursuant to IRC § 6662 (for accuracy-related penalties) and I.R.C. §§ 6677 and 6038 (for foreign information return penalties, do not involve trials.  The dissenting opinion by Justice Sotomayor, in which Justices Kagan and Jackson joined, pointed out that there are, at the very least, more than two dozen agencies that can impose civil penalties in administrative proceedings.  They include many agencies with substantial amounts of international enforcement authority and cases, such as the Department of Justice, the Commodities Future Trading Commission, and the U.S. Department of Treasury. Hence, we can expect a ton of litigation in international enforcement cases involving civil penalties.

 

 

Morin is a legal assistant at Berliner Corcoran & Rowe. She recently graduated from Williams College where she studied Political Science and Spanish.

[1] Meghan E. Flinn, Varu Chilakamarri, Theodore L. Kornobis, Michael Culhane Harper, Jarkesy’s Impact on Agency Enforcement Proceedings: Potential Implications for the SEC and Beyond, July 3, 2024, K&L Gates.

Jarkesy’s Impact on SEC In-House Proceedings: Potential Implications for SEC Enforcement and Beyond | HUB | K&L Gates (klgates.com)

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Id.

[7] Ronald Mann, Justices limit major SEC tool to penalize fraud, June 28, 2024, SCOTUSblog.

Justices limit major SEC tool to penalize fraud – SCOTUSblog

[8] Id.

[9] Id.

[10] Jarkesy’s Potential Implications for EPA Administrative Proceedings, July 10, 2024, Sidley.

Jarkesy’s Potential Implications for EPA Administrative Proceedings | Environmental and Energy Brief (sidley.com)

EUROPOL OPERATION RESULTS IN ARREST OF MINISTRY OF INTERIOR OF NORTH MACEDONIA EMPLOYEE FOR EURO COUNTERFEITING.

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Employee Who Allegedly Produced Hundreds of Thousands of Euros was Arrested in Kosovo.

By Kaila Hall

 

On August 6, 2024, Europol announced1 that authorities in Pristina, Kosovo had arrested an employee of the Ministry of Interior of North Macedonia for allegedly counterfeiting hundreds of thousands of €2 coins over the last two years. The suspect, a 34-year-old male, was arrested on August 4. Authorities also seized a counterfeiting currency machine as well as thousands of assembled coins, rings, and core blanks found in North Macedonia.

In the months leading up to the arrest, Kosovar and North Macedonian authorities worked with Europol and Eurojust to launch a joint investigation team (JIT) and share critical intelligence on the suspect’s activities. Participants in the JIT included the Special Prosecution Office of the Republic of Kosovo, the Basic Prosecution in Skopje, and Eurojust’s Western Balkans Criminal Justice Project. Additionally, the Kosovo Police, the Investigative Centre of the Public Prosecutor’s Office Skopje, and the Ministry of Interior of North Macedonia conducted investigative activities.

In May 2023, Eurojust launched2 the Western Balkans Criminal Justice Project to “enhance judicial cooperation within and with the Western Balkans.” The initiative also “aims to strengthen judicial cooperation within the Western Balkans as well as between the region and the EU in the fight against organised crime and terrorism.” Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro, and Serbia are involved in this project. Given Kosovo’s volatile political situation and increased threats of terrorism, Eurojust’s ability to initiate and coordinate JITs is critical.

To combat euro counterfeiting, Europol also provides intelligence and operational support to investigations on behalf of the European Union Central Office. Europol utilizes advanced technology to identify and target counterfeiting networks. The European Multidisciplinary Platform Against Criminal Threats (EMPACT),3 which “strengthens intelligence, strategic and operational” cross-border cooperation, funded the investigation.

News of this latest euro counterfeiting operation in the Republic of Kosovo comes as the nation grapples with increasing currency counterfeiting in recent years. Although Kosovo is not in the Eurozone, it adopted the euro as its currency in 2002. As of September 2023, the Pristina Police’s forensic laboratory announced it had examined over 30,000 fake 2-euro coins- a drastic increase compared to 4,451 coins confiscated last year.4 In April 2023, police arrested two individuals for trying to smuggle over 10,000 counterfeit coins into Kosovo from North Macedonia.

In January 2023, the Central Bank of the Republic of Kosovo issued5 a warning to consumers as a result of counterfeit coins in circulation. The Central Bank reiterated that “counterfeiting money is a criminal offense and is sanctioned according to Article 296 of the Criminal Code No. 06/L-074 of the Republic of Kosovo and Articles 19 and 20 of Law No. 03/L-209 on Central Bank of the Republic of Kosovo, anyone who produces, puts into circulation, transports, accepts, uses or possesses counterfeit money to put it into circulation as genuine, is punished by a fine or imprisonment.”

 

Kaila Hall is an intern at IELR. She is a rising senior at Cornell University.

 

[1] Europol (2024). Employee of the Ministry of Interior of North Macedonia arrested in Kosovo* for euro counterfeiting, Europol Media & Press,

https://www.europol.europa.eu/media-press/newsroom/news/employee-of-ministry-of-interior-of-north-macedonia-arrested-in-kosovo-for-euro-counterfeiting

 

[2] Eurojust (2023). Launch of new project to enhance judicial cooperation within and with the Western Balkans, Eurojust Press Releases and News,

https://www.eurojust.europa.eu/news/launch-new-project-enhance-judicial-cooperation-within-and-western-balkans

 

[3] Eurojust (2024). EMPACT, Eurojust ​​​​​​​​​​​​https://www.eurojust.europa.eu/empact

 

[4] Fatos Bytyci (2023). Kosovo so awash with fake euro coins they are accepted as payment, Reuters,

​​https://www.reuters.com/world/europe/kosovo-so-awash-with-fake-euro-coins-they-are-accepted-payment-2023-09-21/

 

[5] Central Bank of the Republic of Kosovo (2023). The Central Bank of the Republic of Kosovo gives additional instructions for increased caution from counterfeit coins in circulation, Central Bank of the Republic of Kosovo

https://bqk-kos.org/the-central-bank-of-the-republic-of-kosovo-gives-additional-instructions-for-increased-caution-from-counterfeit-coins-in-circulation/?lang=en

 

INTERPOL RECOVERS $40 MILLION FROM INTERNATIONAL EMAIL SCAM

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Timor Leste and Singapore Crack Down on Business Email Fraud

By Kaila Hall

 

On August 6, the International Criminal Police Organization (INTERPOL) announced1 that it worked with Singapore and Timor Leste to recover over $40 million defrauded in an international business email compromise scam. INTERPOL’s Global Rapid Intervention of Payments (I-GRIP) mechanism facilitated the coordination efforts between international law enforcement entities and helped successfully recuperate the money.

In 1923, INTERPOL was established2 to facilitate police cooperation in investigations worldwide. Currently, INTERPOL has 196 member countries and has developed its legal framework and procedures. INTERPOL enables police agencies across the world to share and access data on crimes and criminals through the I-24/7 communications platform.

On July 15, 2024, a Singapore firm received a fraudulent email and transferred $42.3 million to the supplier via a bank account in Timor Leste a few days later. A week later, the Singaporean firm identified the fraud after the legitimate supplier notified them that they had not been paid. The Singapore Police Force filed a report and began coordinating the recovery operation through I-GRIP, which expedites assistance requests in the event of financial crime. On July 24, INTERPOL confirmed that it had recovered over $39 million with the assistance of Timor Leste authorities. In the days following the initial operation, Timor Leste arrested seven individuals in connection with the email scam and intercepted an additional $2 million.

Established in 2022, the I-GRIP mechanism assists in INTERPOL’s financial recovery efforts in the event of fraud. In June 2024, INTERPOL used the mechanism to intercept3 $331,000 of Spanish money in a fraudulent email compromise originating in Hong Kong, China. During the June operation, 6,745 bank accounts worldwide had been frozen and over $257 million in assets were confiscated.

In response to the July 2024 recovery operation, Isaac Oginni, Director of INTERPOL’s Financial Crime and Anti-Corruption Centre stated that “Speed is crucial to successfully intercepting the proceeds of online scams, with police, financial intelligence units and banks cooperating across multiple jurisdictions in a race against time.” Oginni also praised the cooperation between authorities in Singapore and Timor Leste as “exemplary” and stated how it “demonstrates how quick action through INTERPOL can help recover funds taken from the fraud victims and identify the perpetrators.”

Singapore’s Director Commercial Affairs Department, David Chew, affirmed that “When money flees across our borders, law enforcement must be able to not just sense-make but also have the available legal and international systems in place to speedily follow and seize it. It can do it with the help of supranational bodies like INTERPOL and law enforcement in the recipient country. The successful recovery of more than USD 40 million in this case stands as a testament to law enforcement’s ability to do this. This achievement underscores the invaluable crime-fighting role of cross-border partnership in safeguarding the global financial system.”4

Amid the rise of transnational organized crime and financial crimes, INTERPOL has warned5 consumers and businesses of theft, fraud, deception, blackmail, and money-laundering. INTERPOL has also released common sense rules individuals and corporations can follow to reduce their risk of falling for phishing and other forms of fraud. Last month, the U.S. Treasury Department’s Financial Crimes Enforcement Network and the Office of Foreign Assets Control also released a joint notice6 with the Federal Bureau of Investigation warning financial institutions of timeshare fraud by Mexican transnational criminal organizations.

 

Kaila Hall is an intern at IELR. She is a rising senior at Cornell University.

 

[1] INTERPOL (2024). Police recover over USD 40 million from international email scam, INTERPOL News,

https://www.interpol.int/News-and-Events/News/2024/Police-recover-over-USD-40-million-from-international-email-scam

[2] INTERPOL. What is INTERPOL?, INTERPOL. https://www.interpol.int/Who-we-are/What-is-INTERPOL.

 

[3] INTERPOL (2024). USD 257 million seized in global police crackdown against online scams, INTERPOL News, https://www.interpol.int/en/News-and-Events/News/2024/USD-257-million-seized-in-global-police-crackdown-against-online-scams

 

[4] Singapore Police Force (2024). International Cooperation Leading To The Biggest Recovery Of Over Usd 40 Million Linked To Business Email Compromise Scam, Singapore Police Force Media Room,

https://www.police.gov.sg/Media-Room/News/20240803_international_cooperation_leading_to_the_biggest_recovery_of_over_usd_40_mil

 

[5] INTERPOL (2024). Financial crime – don’t become a victim!, INTERPOL Financial Crime, https://www.interpol.int/Crimes/Financial-crime/Financial-crime-don-t-become-a-victim

 

[6] Financial Crimes Enforcement Network (2024).

FinCEN, OFAC, and FBI Joint Notice on Timeshare Fraud Associated with Mexico-Based Transnational Criminal Organizations, FinCEN.

https://www.fincen.gov/sites/default/files/shared/FinCEN-Joint-Notice-Timeshare-Mexico-508C-FINAL.pdf

 

 

INTERNATIONAL OPERATION RESULTS IN 15 ARRESTS OF ALLEGED MEMBERS OF ALBANIAN ORGANIZED CRIME GROUP

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Operation GORGON Raids Lead to Seizure of Real Estate and Cash Assets

By Kaila Hall

 

On July 31, 2024, European authorities1 conducted raids in Tirana, Albania that resulted in the arrests of 15 suspected members of a major Albanian organized crime group. During Operation GORGON, Albanian, Belgian, Dutch, and French authorities worked with the European Union Agency for Law Enforcement Cooperation (Europol) to carry out raids that seized real estate and €1 million in cash.

Authorities believe that this criminal group is responsible for contract killings, drug trafficking, and cryptocurrency money laundering. Several police agencies have linked this criminal group with at least seven murders both inside and outside Albania between 2019 and 2020. Europol did not release the name of the high-profile Albanian crime organization.

Based on SKY ECC data, Europol established key details on the criminal network’s activities. This information was subsequently provided to the Albanian Special Prosecution Office for Anticorruption and Organised Crime, which launched an investigation. Additionally, authorities found that the criminal network had hired assassins to execute members of rival Albanian gangs.

On July 31, Europol sent three members from its European Serious Organised Crime Centre and European Cybercrime Centre to Tirana to help carry out the raids. Additional participants in the investigation include Albania’s National Bureau of Investigation and State Police, as well as Belgium’s Federal Police, France’s National Police, and the Dutch National Police.

Europol announced that it had arrested a “prominent money launderer” in Albania’s capital. The individual revealed that he had collaborated with numerous high-profile gangs. He was predominantly involved in murders, corruption, and large-scale drug trafficking.

Founded in 1998, Europol aims to “support its Member States in preventing and combating all forms of serious international and organized crime, cybercrime and terrorism.”2 Europol’s mission and international law enforcement capabilities have helped conduct investigations into transnational organized crime and drug trafficking operations.

The July 31 operation was Europol’s second anti-drug trafficking operation that led to the arrests of Albanian gang members this year. In February 2024, Italian and Albanian authorities worked with Eurojust and Europol to conduct an operation against a major drug trafficking network.3 Authorities found heroin, cocaine, and marijuana smuggled into Germany and Spain. The operation led to 59 arrests in Albania, Italy, Germany, and the United Kingdom.

In recent years, Albania has dealt with a surge in transnational organized crime. In February 2024, police in Ecuador and Spain arrested4 over 30 people as part of an investigation into Albanian organized crime in February as well. In 2019, British news outlets reported5 that the Albanian mafia had seized control of the UK drug trafficking industry, primarily smuggling cocaine in east London.

To combat the rise in transnational organized crime, Eurojust and Albania signed a Cooperation Agreement in October 2018.6 In December 2023, the United Nations Security Council also adopted the Presidential Statement7 on Transnational Organized Crime, of which Albania is a signatory. The statement urges states to bolster international cooperation, laws, and borders to combat crime.

 

Kaila Hall is an intern at IELR. She is a rising senior at Cornell University.

 

[1] Europol (2024). 15 arrested in crackdown on high-profile Albanian criminal network, Europol Media & Press, https://www.europol.europa.eu/media-press/newsroom/news/15-arrested-in-crackdown-high-profile-albanian-criminal-network

 

[2] Europol (2024). Our Thinking, About Europol,

https://www.europol.europa.eu/about-europol/our-thinking

 

[3] Europol (2024). Major blow to Albanian drug trafficking network: 59 arrests across Europe, Europol Media & Press, https://www.europol.europa.eu/media-press/newsroom/news/major-blow-to-albanian-drug-trafficking-network-59-arrests-across-europe

 

[4] Alexandra Valencia (2024). At least 30 arrested in Ecuador, Spain in Albanian mafia probe, Reuters, https://www.reuters.com/world/least-30-arrested-ecuador-spain-during-investigation-into-albanian-mafia-2024-02-06/

 

[5] Mark Townsend (2019). Kings of cocaine: how the Albanian mafia seized control of the UK drugs trade, The Guardian, https://www.theguardian.com/world/2019/jan/13/kings-of-cocaine-albanian-mafia-uk-drugs-crime

 

[6] European Union Agency for Criminal Justice Cooperation (2024). Albania, European Union Agency for Criminal Justice Cooperation,

https://www.eurojust.europa.eu/states-and-partners/third-countries/liaison-prosecutors/albania#:~:text=Eurojust%20and%20Albania%20signed%20a,and%2022%20joint%20investigation%20teams

 

[7] United Nations Security Council (2023). Security Council Adopts Presidential Statement on Transnational Organized Crime, Urges States to Ramp Up Cooperation, Laws, Borders to Combat It, UN Meetings Coverage and Press Releases,

https://press.un.org/en/2023/sc15516.doc.htm

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