In this episode, Elliot Berman and John Byrne break down a wide‑ranging set of regulatory and enforcement developments shaping the global financial crime landscape. The conversation covers major U.S. bank settlements tied to the Epstein litigation, a closely watched Capital One debanking case involving Trump‑affiliated entities, and key overseas actions—from Australia’s expanded AML regime to the UK’s sanctions enforcement against Apple and a massive scam operation in Cambodia.
The discussion also dives into the OECD’s latest anti‑bribery report, FinCEN’s proposed whistleblower award program, emerging healthcare fraud typologies, and renewed concerns over the weakening of the U.S. Corporate Transparency Act. Wrapping up, Elliot and John assess developments tied to FATF’s mutual evaluation of the United States, nonprofit de‑risking, and new OFAC guidance on sham transactions—offering critical context for compliance professionals navigating a rapidly shifting risk environment.
Sanctions, Scams, and Scrutiny: Global Enforcement Signals Financial Institutions Can’t Ignore - Transcript
Elliot Berman: Hey John, how are you today?
John Byrne: Good Elliot. We're recording on April Fool's Day, but it is not April Fool's. It's the fourth week of the war against Iran. Obviously there are things related to sanctions and national security that others are covering, but wanted to mention that.
Couple things in the US to start with. CNBC is reporting that Bank of America has agreed to pay $72.5 million to settle a lawsuit filed by a victim of Jeffrey Epstein. The settlement is part of a broader effort. Several other cases that have been brought. It covers all women who were sexually abused or trafficked by Epstein, or connected to his sex trafficking venture between June 30th, 2008 and July 6th, 2019.
The settlement amount for class members will be determined, according to the story, by various factors, including the severity and extent of alleged abuse or trafficking. There's been other bank settlements I think we've reported in the past. So that, again, reported by CNBC just the other day.
Unrelated, but another case regarding a bank, Capital One won at least the initial round of a case. This was a case dealing with the account closure suit brought by Trump's business entities. So a federal judge in Florida has dismissed a lawsuit brought by Trump's business entities that accused Capital One of closing hundreds of accounts after the January 6th Capitol riot. It does leave according to the report here, the door open for plaintiffs to try again if they revise their complaint. The district judge granted Capital One's motion to dismiss during last Friday's hearing, ruling that the complaint was, quote, deficient unquote, but again, allowed the Trump entity time to seek limited evidence and then amend their claims.
Important case on the whole issue of reputational risk and account closures, de banking. So this is gonna be closely watched certainly by our community.
Elliot Berman: Indeed. So a couple things overseas. One is that and we've reported on this, there's some key milestones in the Australian update to its anti-money laundering and anti-fraud regime.
Beginning this week businesses that are newly covered under the expanded regulations can now start enrolling into the process through AUSTRAC's online platform. And their chief executive, Brendan Thomas , was quoted as saying that the reforms are about closing longstanding gaps, lifting protections across the economy and making it harder for criminals to hide, move, or enjoy the proceeds of crime.
So the actual, obligation to report kicks in July 1st. The folks that are being brought in include lawyers, accountants, and real estate agents. So again that whole group of gatekeepers, a number of whom are not covered here in the US. But these groups are covered in the UK. They're covered under AMLA in the EU, so it's interesting how the US continues to be a bigger and bigger outlier with regard to gatekeepers.
And staying outside the US, the UK fined Apple for breaching Russian sanctions. It was a about a 500,000 US dollar fine. An Apple related company, made funds available to a designated sanctioned person without getting a license. This goes back to 2022. Apple made a statement that said they follow the laws in the countries where the company operates and that it takes sanctions compliance extremely seriously. Interesting to see how even a big company with lots of resources can get tripped up.
And then the UK issued sanctions against what it's describing as the largest scam center in Cambodia. And we've talked about these large scam centers in Southeast Asia. And so this is the latest attempt by the UK to disrupt, what is it called a fast growing network of scam centers in Southeast Asia where workers end up confined in guarded compounds and forced to commit online fraud. And, it noted that this particular scam center had capacity for 20,000 traffic workers.
John Byrne: Wow.
Elliot Berman: Yeah. I'll shift it back to you. I know FinCEN had a couple things.
John Byrne: Just quick before we go to that, just wanted to mention something else that I've just seen and I haven't gone through it yet, but OECD, their working group on bribery and international business transactions has issued their 2025 annual report. It's a pretty short document. It's about 30 pages long.
OECD has done a tremendous amount of work over time dealing with this issue. It breaks out how the working group is comprised. They had meetings in March, June, October and December. Then put the report together. It's always useful to see issues regarding what they're calling for, foreign bribery issues.
And like I said, they walk through the process outcomes of the meetings. Law enforcement's involved with these exchanges, they're very supportive, global dialogue. And then just in terms of how they monitor the anti-bribery convention and recommendation of OECD they go through four phases.
They evaluate the adequacy of the country's legal framework. The second phase is whether a country is applying the legislation in practice. Third phase is focusing on enforcement and what they call cross-cutting issues. And then finally, the enforcement tailored to country specific needs and what are unimplemented recommendations, that sort of thing.
So again, the OECD, obviously well-respected organization, anti bribery and other things that they do. So that's available on their website.
Elliot Berman: I saw that report. Just to fill a little more background for our listeners, the working group as you mentioned, comes out of the convention that was put in place, but that convention goes back to May of 1997. So this is work that's been going on now for almost 30 years. The convention's purpose is its focus on disrupting the supply side of transnational corruption. You and I have talked a lot about corruption in the last 12 months, and I think this is something that I don't wanna say gets lost, but it's important to remember that it's a mosaic of things by a lot of organizations, but this is a very important one and I think the report is worth people's time.
John Byrne: I agree. I teach a class at George Mason, a graduate class on money laundering, corruption and terrorism. And this is a focal point of least one of the classes. We talk in depth on corruption issues from how the US handles the Foreign Corrupt Practices Act, to issues like OECD and the like.
You mentioned FinCEN, two things to reference. They issued a notice of proposed rule making to pay whistleblowers. It's a notice you get chance to comment. The proposal lists, procedures for whistleblowers to share information about potential violations. The violations they're focused on is fraud related ones or sanctions programs. And they say several other laws, the eligibility criteria for making awards of 10 to 30% of the monetary penalties whose tip leads to quote, successful enforcement by Treasury or DOJ. And protection for those whistleblowers. So that's one item that FinCEN released last week.
And then the other one was an advisory on healthcare fraud targeting Medicare, Medicaid, and other federal and state healthcare benefit programs. Again, the advisory is on FinCEN's website. It gives you money laundering typologies, and red flag indicators and strongly encourages FIs to voluntary report, suspicious activity of FinCEN, which of course they do when they see it and they notify it. So that's an obvious statement, but that is in the advisory as well.
Elliot Berman: I thought it was interesting that the first topology was use of straw owners and shell companies to register as healthcare providers and suppliers. And I thought it was interesting that it was at the top of the list since the recent changes to the Corporate Transparency Act have reduced our ability to figure out who the real owners are of shell companies.
We can pay attention to the topology, but I don't know that we can do a lot about it.
John Byrne: Related to that. Couple days ago a letter was sent to the Treasury Department from several senators and Maxine Waters on the House side. And of the context of the letter is the concern that you just mentioned, and this is a quote from the letter, Treasury has taken this approach, meaning what they believe is gutting of the CTA, despite ample evidence that criminals and foreign adversaries use shell companies or opaque corporate structures in the US. This includes Sinaloa Cartel operatives, Iranian sanctions of aiders, and those stealing technology for China's military.
They also expressed particular concern regarding Elon Musk's involvement in they say the gutting of the Corporate Transparency Act. Again, according from the letter, new reporting has revealed that Mr. Musk uses a network of dozens of secretive companies, potentially the type of entities that under the CTA are required to report ownership information to the Treasury Department. It would be deeply troubling if Mr. Musk intervened in any way to limit those transparency requirements. So that letter was just sent. There has not yet been a response from the Treasury Department.
Elliot Berman: I saw an interesting thing on the website, The Hill, and it is an opinion piece by a fellow named Mark Recktenwald. He is the former chief Justice of the Hawaii Supreme Court. He was an assistant US attorney earlier in his career. And he has a very interesting piece and it has to do with the recent announcement by the DOJ that they're issuing a proposed rule that would allow the DOJ to override state legal requirements. You and I both are lawyers. We each got our law license from a particular state. We are subject to the disciplinary rules of that state. Each individual state has its own ethics code, although many of them follow the ABA model code. So they're very similar.
There have been a number of judicial opinions from the federal court recently complaining about unethical behavior, failure to follow court orders and things like that of DOJ lawyers. The DOJ is now trying to supersede state ethics enforcement rules even to the point the proposed rule has a provision that DOJ could take action against states if they didn't cooperate in DOJ investigations of their own employees. So I think it's worth a read. There are a number of citations to previous cases as well as a piece of legislation that's been around for quite a while that was put in place by Congress according to the author to stop just this type of activity.
I've always thought as a lawyer that I was responsible for doing the right thing, even if it was the uncomfortable thing. And I think that's true of my friends and colleagues over the years who I know worked for the Justice Department and felt the same way. This is just a bad idea.
John Byrne: The last thing I wanna mention we have posted several podcasts related to the very topical and current issue of the mutual evaluation of the US from FATF. The podcasts have been interviewing people in the humanitarian and charity space, and their ongoing concern about them being either de-risked or having problems getting financial access in part due to the following of Recommendation Eight, which is the terrorist financing recommendation. But also the laws and regulations dealing with money laundering and anti-terrorism.
The one thing I wanted to mention is the United Nations Human Rights Council issued a very similar statement late last week for the evaluators to consider. This came from a professor Ben Saul, who's on that council, and basically he is urged the following.
He encourages the FATF of assessors to rate the US as partially compliant on quote, on Recommendation Eight concerning efforts to address the terrorist financing risk of nonprofit organizations. It's a short two page document, a number of the concerns that he lists. And this is dated March 26th.
In practice regulators of financial institutions still tend to treat NPOs as high risk. Despite official guidance with negative impacts on their ability to freely operate and applicability applicable strict liability offenses can result in disproportionate penalties. And there are other ones there that are arguing that some NPOs are being targeted.
So the bottom line, it's gonna be very interesting. We've talked about this before. The in-person evaluation period is now over, and so the report now will be crafted. We believe that report will see the light of day sometime in October. But we'll continue to follow this.
Elliot Berman: Anything else, John?
John Byrne: That's that's all I have on my end. You wanna mention what we're doing for our April webinar?
Elliot Berman: We're gonna be talking about scams, targeting elder abuse and sex exploitation. It's gonna live stream at 1:00 PM on April 23rd. We're lining up as usual a great group of experts. And John, I know you're gonna moderate that. Any other things that you have in the pipeline?
John Byrne: I won't mention the the guest just yet, but somebody from one of the industries that have AML obligations that we haven't talked to in a while has been given permission to sit down for an interview. So we're gonna work on that most likely during the Easter break in the next week or so. And that will post week or two after that. So that's we're efforting that. And I forgot to mention OFAC did do one other thing that I know you saw and identified and they issued a guidance yesterday basically on sham transactions and sanctions evaision.
So it is a five page document, it gives some examples of sham transactions and some direction to all of us that see these what they're calling commercially unreasonable transactions and what our requirements should be to deal with that.
Elliot Berman: I did see that and worth a look.
So John you have a good rest of the week and I will talk to you next week.
John Byrne: Stay safe.
Elliot Berman: You too. Bye-bye.