In this episode of This Week in AML, Elliot Berman and John Byrne dive into a wide range of developments shaping financial crime compliance worldwide. From controversial U.S. pardons and their implications for corruption cases, to Australia’s staggering $82 billion organized crime costs, and the UK’s new anti-fraud campaign targeting crypto scams—there’s plenty to unpack. The discussion also covers the Bank of England’s stablecoin limits, the latest Global Organized Crime Index findings, intelligence-sharing breakdowns between allies, major sanctions relief for Syria, and a record AML fine against JP Morgan in Germany.
Global Financial Crime Trends: Pardons, Sanctions Shifts, and Rising Risks - Transcript
Elliot Berman: Hey, John, how are you today?
John Byrne: I'm good, Elliot. How are you doing?
Elliot Berman: I'm good too. We're having a, uh, a little bit of a Fall warmup here. It had been chilly, but, uh, we're gonna have five days in a row in the fifties, which for us is a big deal. Wow, that's good. I know you're gonna come and enjoy that weather.
John Byrne: I'm coming out 'cause this morning here in Virginia, it was 25 degrees at, uh, 7:00 AM but it's in, it's in the fifties now. And you, you get your weather reports from us doing This Week in AML. 'Cause I know people want to hear how our weather's going in Northern Virginia and Milwaukee. So we're helping 'em out.
Elliot Berman: Right. Everybody between us can sort of figure out just by adding a half a day, a full day or a day and a half, what their weather's gonna be.
John Byrne: That's right. I thought I'd start with, all of the pardons being done by this administration run the gamut, and some people are pretty familiar with, but I noticed one just from the other day. We talk about the issue of corruption. Trump is pardoned the former Tennessee speaker and their ex-chief of staff. Interestingly enough this particular speaker, his last name is Casada, uh, was sentenced to three years in prison for his role in a kickback scheme after a jury convicted him on multiple counts of fraud, bribery, theft, conspiracy, and money laundering, a connection with a shell company called Phoenix Solutions.
So interesting that there was a pardon of this particular person. But it's not the first time someone has been pardoned for being involved in money laundering. I'll just leave it at that. But this is one of many. He also pardoned a number of election deniers, including Ed Martin, who's in the Justice Department, or I, I think that's where he is, and Rudy Giuliani. So, um, some of these are, what do they call these, pardons when they're done prior to any indictment. So they're not pre pardons, but I forget what the phrase is. But it, some of these cases, there's been no action against these individuals.
Elliot Berman: Preemptive.
John Byrne: Preemptive, that's it. But it does, it doesn't prevent state action. So we'll see what happens, uh, in these cases. So, so jumping ahead, something that we talked about briefly before we recorded. We've been trying to cover some issues down in Australia. They've done a lot of work in a variety of spaces, AUSTRAC and some of the other organizations.
The Australian Institute of Criminology has released a report and it focuses on the cost of serious and organized crime in Australia from, 2023 to 2024. So just a couple quick highlights, $82.3 billion its cost Australia in those two years. There's also some details regarding money laundering and organized crime. But if you're interested in the backdrop of that take a look. It's Statistical Report 55, and it's The Cost of Serious and Organized Crime in Australia from 2023 to 2024.
Elliot Berman: Staying international. Couple things coming outta the UK. First the UK's National Economic Crime Center has launched a major anti-fraud program. The effort is to focus on crypto investment fraud. To raise awareness of that kind of fraud that costs the public's millions every year and can have a real, uh, negative impact on, uh, on people's lives.
It points out that victims come from across the community, but it particularly targets men under 45 years of age who are commonly defrauded. The victims are targeted directly on social media. They tend to be inexperienced investors or people who have not traded cryptocurrencies or assets in the past.
Uh, they've generated a great information sheet, which you can, uh, download. And they point out that losing money through crypto investment fraud is not a genuine trading loss and that the money has actually been stolen. And so, uh, it's important to understand that distinction. There's also information on how to report fraud and other remediation efforts. So that's one thing from the UK.
Secondly the Bank of England is looking at setting limits on the individual level of investment in stable coins. And why do we care? Well, it's really the UK's first real test of how far regulation will go to control digital money before it scales and limits, like the ones that are being enacted by the Bank of England will build confidence or could quietly choke innovation.
And so either way, they'll shape where and how stablecoin projects go forward in the future in the UK. And this is on the ground real life effort with what has been, I don't wanna say theoretical, but you know, a market or a product in the making, um, that different jurisdictions are dealing with differently.
So something to follow there. John, what else would you like to talk about?
John Byrne: Another report, the Global Organized Crime Index, uh, came out. Interesting report. You can look at various regions, specific countries. The focus is on a number of things, including global drug trafficking they say shifts to a duopoly. Forms of nonviolent organized crime are exerting a growing impact. Counterfeiting is at a crossroads and growth in an unstable global economy.
They have an index data set, the criminality indicators. And, uh, also they, uh, part of the report is where do we go from here in terms of, uh, recommendations. A lot of information you could do, a whole couple of webinars on this. So I would urge folks to take a look at the, uh, at the index. It does rankings so you can get a sense of where different countries are. Just looking in like Africa, for example. The, uh, overall score for criminality according to the index is 5.25 was sort of in the middle. Which is interesting.
But then they go to individual countries. So the overall score is 5.25. Algeria, for example, is 4.88, Ethiopia, 5.68. You can look at the full profile and what are the various indicators. Uh, and they cover all sorts of crimes, defining criminality. We mentioned human trafficking. Illicit trade in, uh, exsizeable goods, arms trafficking all sorts of things. So a really fascinating report. They updated every two years. And this is the 2025 version.
Elliot Berman: The thing that I saw that caught my eye, and I believe this was in the section, uh, Where do We go From Here? They talked about one of the things that the index measures is resilience. And now I'm gonna quote from the report, while many criminal markets are witnessing growth, resilience scores appear to have plateaued. As an example of this is international cooperation. While this indicator usually outperforms the other 11 resilience indicators, an increasingly fractured international system and a retreat from multilateralism suggests that states are less willing to cooperate to fight crime.
And as we know, uh, most of the crimes they're talking about, and most of the crimes we all talk about are borderless. Uh, they don't stop where the jurisdiction changes. They don't stop where the continents change. I found that to be interesting and more than mildly concerning. And I think that's a good launching pad to talk about something that the UK did this week that I know you wanted to talk about.
John Byrne: An exclusive report by CNN. The United Kingdom is no longer sharing intelligence with our country about suspected drug trafficking vessels in the Caribbean because again, according to the report, does not want to be complicit in US military strikes, and they believe those attacks are illegal. So that's a significant break. It's obviously one of our closest allies. Uh, the fact that they're not willing to share information, so a lack of trust. Obviously to, to the US.
This can only get worse. Whether you agree with, uh, the premise or not regarding, uh, drug trafficking outside of Venezuela. There has clearly been no actual due process done in, in case where typically it was customs and different parts of the US that would capture these boats. And then go to prosecution or indictment or what have you. That's not what's happening here. So the UK government has said we're not part of this anymore.
Elliot Berman: Another news outlet also has reported that. Colombia has suspended intelligence sharing with the US. Probably not as significant as the UK suspension, however, another player in that Northern Latin American Caribbean area. So, uh, an ongoing thing to pay attention to.
John, where else do you want to go? How about the sanctions and export control relief on Syria?
John Byrne: That was announced by the Treasury. And what's interesting about that is, I just did an interview today with the Human Security C ollective that talked about de-risking and issues of sanctions. And there was a lot of concern about trying to get monies and other items into Syria to help with conflicts. And now the US has done a 180 'cause they believe that Syria now the government is, is changing, which it is. And so those sanctions have been lifted. And so there, there's a value there for helping people in, in that area.
But I thought that was interesting because if we had talked about this, you know, a year ago there would be, there would've been concerns there. So they made that announcement late last week is what I recall. And if you want to figure out if you're a practitioner, how to handle that, I would just take a look at the OFAC website and look through that, unless you want to add something to that.
Elliot Berman: The big picture is that the comprehensive sanctions have been terminated. And the transfer of most basic civilian use, US Origin Goods is allowed. However, there are still some things that are in place. The, uh, the sanctions against. Bashar al-Assad and his friends that's still in place. And at least at the moment, Syria's designation as a state sponsor of terrorism remains, although it's under review. And at this point, most of the commerce control list items going to Syria still require an export license. Definitely a major relaxation based on an executive order issued by the White House in June.
John Byrne: Treasury also announced an audit of all contracts and task orders to look at fraud possibilities. So they're gonna look at the potential misuse of SBAs business development programs and other federal contracting preferences. That's designed to look at potential fraud in contracting, which I would imagine there has been over time. So depending on what the outcome is a positive audit, I would argue.
Elliot Berman: One last item. JP Morgan in Germany, has, recently been fined by BaFin, which is the regulator in Germany 45 million. Euros, which is a record for a fine issued in Germany, related to deficiencies in its money laundering prevention.
This goes back to the period from October 2021 to September 2022, and it was a systemic failure. JP Morgan has indicated that they've upgraded their processes and the like. But I think it's an indication that the European regulators are becoming noticeably more active and aggressive uh, in the anti-money laundering space.
And with AMLA coming fully online over the next year and a half or so I think that that's a trend we'll continue to see. So, John, you mentioned one of your podcasts. I know you did another one this week. You wanna talk about that one?
John Byrne: Yeah, so interviewed, Dan Tanenbaum from Oliver Oliver Wyman, who's a well-known sanctions expert, and he talked about the Syrian and Iranian situations, uh, relevant to what he'll talk about in the interview, the Caesar Act. 'Cause uh, uh, that was part of the sanctions lifting that the Caesar Act was suspended except for particular transactions with Russia and Iran. Dan goes into detail regarding the state of sanctions today, both in the US and globally. He gives us a good primer on how the EU handles sanctions, which is different than the US process wise, obviously.
And also I ask him his concerns going forward. You'll have to listen to see whether he's optimistic about the value proposition of sanctions going forward. And as I mentioned, the Human Security Collective which I just interviewed today. They talked about a number of concerns. They talk about uh, that we in the AML community and they humanitarian advocates and works work with charities. We just need to communicate better to better understand each other in terms of risk issues, which I think is super important so that that'll go up in a couple of weeks as well.
Elliot Berman: And we have our November webinar, which is uh, global Regulatory Trends in Financial Crime Compliance. That'll stream on November 20th. There is still time to register at our website to get a seat, and, uh, I think you'll find that the expert panel, uh, will be interesting to listen to and very insightful. John, I know I am gonna see you the end of this week. We're recording on Wednesday, but I will see you Friday and Saturday. So travel safely and I'll see you then.
John Byrne: Take care.
Elliot Berman: You too. Bye.