Bruna Szego to be approved as AMLA Chair by MEPs, shell companies linked to 100k US drug deaths, TD Bank worker arrested

From Paul O'Donoghue at AMLi

ITALY’s Bruna Szego will formally be approved as Chair of Europe’s new Anti-Money Laundering Authority (AMLA) by MEPs next week, it’s been learned.

It comes as members of the European People’s Party (EPP) – the largest bloc in the chamber – did not raise any formal objections to her candidacy despite murmurings over the last few weeks.

Before a mid-week plenary vote, the Economic Affairs (ECON) and Civil Liberties (LIBE) committees will vote on the appointment on Monday evening. It will be unopposed as AML Intelligence has learned that Ms Szego’s name is the only one being put in front of the committees.

Then on Wednesday next, the parliament meeting in Strasbourg will vote on approving Ms Szego as AMLA chair. We have the full story on the AML Intelligence homepage now.

SHELL COMPANIES

AML discussions often skew theoretical. It can be hard to draw a straight line between money laundering rules and their real world impact.

But anti-corruption expert Elaine Dezenski aims to do just that.

She has pointed out that shell companies play a large part in enabling the fentanyl trade to flourish in the US, contributing to the deaths of tens of thousands of people a year from drug overdoses.

Shell companies are corporate entities which are often used anonymously by criminals as a means of laundering drug profits. Dezenski points out there is a simple solution - find out who’s behind those companies.

To do that, she says the U.S. must stick to its guns and introduce beneficial ownership reporting. This is a rule where companies would be obliged to identify their owners to authorities.

While the U.S. did introduce that requirement earlier this year, the rollout has recently become complicated…

‘CHAOS’: Beneficial ownership reporting actually was being steadily rolled out in the U.S., with most companies due to ile information on who owned them by the end of 2024.

But that was before a court in Texas issued an injunction effectively blocking enforcement of the new rules.

FinCEN, the AML unit of the Department of the Treasury, has admitted that while the injunction is in place, complying with beneficial ownership rules is now ‘voluntary’ for businesses.

The Department of Justice, on behalf of the Department of the Treasury, has entered a notice of appeal in the case.

But Dan Stipano , a former senior official with the Office of the Comptroller of the Currency, called the ruling “chaos”, and said the confusion will almost certainly cause an extension in the beneficial ownership deadline beyond the end o 2024.

CANADA ARREST

TD BANK: The bad AML news simply doesn’t let up for TD Bank.

A former employee who had worked at the Canadian bank’s U.S. operation has been arrested and charged with conspiracy to commit money laundering.

He is accused of facilitating the transfer of drug proceeds to Colombia through the financial institution, with claims that millions in narcotics proceeds were laundered via ATM withdrawals.

Leonardo Ayala, 24, appeared in Miami federal court and faces further proceedings in New Jersey. If convicted, he could receive up to 20 years in prison. Sentencing will depend on U.S. Sentencing Guidelines and other legal considerations.

The conviction comes as Canada-based TD Bank has been plagued with a string of AML-related issues stemming from its U.S. arm. This recently led regulators to hitting the company with a $3 billion fine and a U.S. asset cap.

FINE: CANADA'S financial crime watchdog, FinTRAC, has fined the Exchange Bank of Canada $2.46 million for shortcomings in its AML controls.

The Toronto-based bank specializes in foreign currency exchange and international payment services for corporate clients.

FinTRAC said an inspection uncovered various AML violations, including failing to report suspicious transactions, neglecting to monitor business relationships based on risk, and not reporting large cash transactions.

The bank has appealed the fine, stating it is “not commensurate with the alleged violations” and emphasizing that the penalty does not imply involvement in money laundering or terrorist financing.

This enforcement action is part of FinTRAC’s heightened scrutiny ahead of the Financial Action Task Force’s (FATF) 2025 review of Canada’s financial crime controls.

The European Anti-Financial Crime Summit will take place on May 7th of next year in Dublin, Ireland. This in-person event is set to be the stand-out Anti-Financial Crime Summit event of 2025. This unmissable conference takes place at the RDS Convention Centre near central Dublin and will feature regulators, policymakers, industry leaders and law enforcement chiefs. Leading speakers, panellists and sponsor partners will be announced soon. PRE-CHRISTMAS EARLY BIRD TICKETS AVAILABLE

CRACKDOWN

AUSTRALIA: The U.S. isn’t the only country grappling with beneficial ownership rules - Australia is set to introduce new beneficial ownership reporting requirements alongside an overhaul of its AML regime.

Under the proposed rules, businesses such as real estate firms, law firms, and accounting practices will need to identify and verify beneficial ownership.

But the Australian government recently announced that it plans to restrict public access to a registry of beneficial owners for unlisted entities. Initially, only law enforcement, regulators, journalists, and academics will have access, based on privacy recommendations from the Australian Government Solicitor.

The Australian Treasury defended the decision, citing privacy concerns and the need to prevent misuse of the registry. However, it acknowledged that this limited access deviates from international standards.

IRS-CI: Finally, the IRS Criminal Investigation (IRS-CI) unit in the U.S. said it secured a 90% conviction rate over the last year.

The organization's annual report said it achieved 1,571 convictions, while its investigations uncovered $2.12 billion in tax fraud and $7.03 billion from other financial crimes.

IRS-CI Chief Guy Ficco described the year as “one for the history books,” highlighting increased staff levels and major milestones, including prosecutions of syndicated conservation easements and cryptocurrency-related crimes.

IRS-CI grew its workforce by over 10%, reaching 3,474 employees, including 2,290 special agents - the highest level in nearly a decade.

Despite this growth, the workforce remains below its 2010 peak of over 4,000 employees, reflecting years of budget cuts.

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Have a great Friday👋

Stephen and the team at AMlintelligence.