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The New Voice of The Whistleblower

Ethics & Compliance Matters™ by NAVEX Global -

Seven years after the launch of the U.S. Securities and Exchange Commission’s (SEC) whistleblower program, the voice of the whistleblower is starting to sound very different. It’s a little stronger, a little bolder, and a little louder. Learn what the landscape of modern whistleblower reporting looks like in 2018.

Gerry Zack on What Led Him to The Society of Corporate Compliance and Ethics & Health Care Compliance Association [Video Podcast]

The Compliance & Ethics Blog -

By Adam Turteltaub On October 16, 2017 Gerry Zack was named as the Incoming CEO of the SCCE/HCCA.  Take a look at these videos (or listen in to the audio-only versions) to get to know Gerry. Part 1 In Part 1 he discusses his background in audit, fraud, and compliance.  He also shares his […]

Annual Data Privacy Day to Focus on Safeguarding Data

Risk Management Monitor -

Last year was certainly a turning point in the history of online privacy and cyber security. Between ransomware attacks, the Equifax breach and the Federal Communication Commission’s vote to repeal net neutrality regulations—just to name a few high-profile incidents in the United States—businesses and citizens have more reasons than ever to safeguard their information.

To address this important issue, the annual Data Privacy Day (DPD) will be held Jan. 28, with online and in-person events leading up to it now that celebrate individual users’ rights to privacy and aim to prevent cyber theft and risk. DPD has been led by the National Cyber Security Alliance (NCSA) in the U.S. since 2011 and “highlights our ever-more connected lives and the critical roles consumers and businesses play in protecting personal information and online privacy,” said NCSA Executive Director Michael Kaiser.

DPD was created to commemorate the 1981 signing of Convention 108 by the Council of Europe and is observed by more than 47 countries. It was the first legally binding international treaty dealing with privacy and data protection and officially recognized privacy as a human right. NCSA also co-hosts National Cybersecurity Awareness Month and the Department of Homeland Security’s Stop.Think.Connect. campaign, which aims to increase the public’s understanding of cyber threats.

“Our personal information and our habits and interests fuel the next generation of technological advancement, like the Internet of Things, which will connect devices in our homes, schools and workplaces,” Kaiser said. “Consumers must learn how best to protect their information and businesses must ensure that they are transparent about the ways they handle and protect personal information.”
On Jan. 25, LinkedIn will live-stream an event from its San Francisco office exploring the theme of “Respecting Privacy, Safeguarding Data and Enabling Trust.” The broadcast will feature TED-style talks and panel discussions with experts focusing on the pressing issues that affect businesses and consumers. Additional DPD happenings include Twitter chats and networking gatherings to maintain a dialogue about the importance of privacy rights.
The relevance does not end on Jan. 29, noted Richard Purcell, DPD advisory board member and chief executive officer of Corporate Privacy Group. He has witnessed the event’s evolution and its impact on risk management and privacy professionals.

“The community of privacy professionals is not made up of private people. They want to share information,” noted Purcell, who was named Microsoft’s first corporate privacy officer in 2000. “They initiate a dialogue that the officers bring back to their companies. I have seen how it has stimulated events inside corporations and universities that were inspired by Data Privacy Day networking discussions. The professional development aspects of the day are profound.”
Newly released information from NCSA demonstrates how privacy is impacted in both personal and professional environments—from healthcare and retail to social media, home devices and parenting. Some statistics include:

  • In 2016, 2.2 billion data records were compromised and vulnerabilities were uncovered in internet of things products from leading brands.
  • 41% of Americans have been personally subjected to harassing behavior online and nearly one in five (18%) has been subjected to particularly severe forms of harassment online, such as physical threats, harassment over a sustained period, sexual harassment or stalking.
  • Nearly one-third of consumers do not know that many of the “free” online services they use are paid for via targeted advertising made possible by the tracking and collecting of their personal data.
  • About 78% of respondents to a recent survey of healthcare professionals said they have had either a malware and/or ransomware attack in the last 12 months.

Customs Fraud, Wildlife Crime, and the Value of Whistleblowers

Whistleblower Protection Blog -

In late 2017, federal prosecutors in the Southern District of New York (considered one of America’s most important judicial districts) settled a case against Notations, a garment wholesaler. In a case originally brought by a qui tam relator (a.k.a. a whistleblower), Notations admitted to ignoring repeated warning signs that its Chinese importer was lying about the value of its imported goods to avoid paying customs fees. As a result, Notations has agreed to pay $1 million in fees.

While the Department of Justice did not release the portion of the award that went to the whistleblower, under the False Claims Act a whistleblower plaintiff is entitled to somewhere between 15% and 30% of the total reward.

The principles of this case can and should be applied to the wildlife crime context. As Stephen M. Kohn, Executive Director of the National Whistleblower Center, explained in his award-winning article, expanded use of wildlife whistleblowing could be a boon to animals and the environment. Criminal networks that import wildlife have been known to falsely label their animal products when they enter the country. This is a crime. Customs officials need to be trained to detect such fraud and prosecutors should seek to bring more wildlife crime cases.

The False Claims Act and other laws with whistleblowers provisions like the Lacey Act have the potential to be powerful tools for unearthing wildlife crime. NWC, as a part of its mandate as a Grand Prize Winner of the Global Crime Tech Challenge, is promoting the existence of these reward laws and has a global wildlife program to inform wildlife whistleblowers of their rights.

The Notations case demonstrates how falsified customs documents, whistleblowers, and the False Claims Act intersect. The next frontier for such cases should be wildlife crime.

Read the full DOJ press release here.

Delaware’s Prudent Approach to the Cleansing Effect of Stockholder Approval

The Harvard Law School Forum on Corporate Governance and Financial Regulation -

Posted by William Savitt, Wachtell, Lipton, Rosen & Katz, on Tuesday, January 16, 2018 Editor's Note: William Savitt is a partner at Wachtell, Lipton, Rosen & Katz. This post is based on a Wachtell publication by Mr. Savitt, Ryan A. McLeod, and Anitha Reddy, and is part of the Delaware law series; links to other posts in the series are available here.

In Corwin v. KKR Financial Holdings LLC, 125 A.3d 304 (Del. 2015), the Delaware Supreme Court held that a non-controlling stockholder transaction approved by informed, unaffiliated stockholders is protected by the business judgement rule and that any lawsuit challenging such a transaction should be dismissed absent well-pleaded allegations of corporate waste. Recognizing that today’s sophisticated stockholder body can and does protect its own interests, Corwin held that in the great run of cases, stockholders—rather than plaintiffs’ lawyers or courts—should have the last word.


2017 Year in Review: Securities Litigation and Regulation

The Harvard Law School Forum on Corporate Governance and Financial Regulation -

Posted by Jason Halper, Kyle DeYoung and Adam Magid, Cadwalader, Wickersham and Taft LLP, on Tuesday, January 16, 2018 Editor's Note: Jason Halper is partner and Co-Chair of the Global Litigation Group, Kyle DeYoung is partner, and Adam Magid is Special Counsel at Cadwalader, Wickersham and Taft LLP.  This post is based on a Cadwalader publication by Mr. Halper, Mr. DeYoung, Mr. Magid, Jared Stanisci, James Orth and Aaron Buchman.

The securities litigation and regulatory landscape in 2017 defies simple categorization. Plaintiffs filed 226 new federal class actions in the first half of 2017, more than double the average rate over the last 20 years, and an additional 99 federal class actions in the third quarter of 2017. In contrast, new SEC enforcement proceedings declined. After staying on pace with the prior two years with 45 new enforcement actions against public company-related defendants in the first half of fiscal year 2017, the SEC filed only 17 new enforcement actions against public company-related defendants in the second half of the year. The apparent decrease in initiation of enforcement proceedings coincides with the arrival at the SEC of Chairman Walter J. Clayton, who has expressed the view that enforcement actions against issuers rather than individual wrongdoers too often punish the very investors they seek to protect.


How Transparent are Firms about their Corporate Venture Capital Investments?

The Harvard Law School Forum on Corporate Governance and Financial Regulation -

Posted by Sophia J.W. Hamm (The Ohio State University), Michael J. Jung (New York University), and Min Park (The Ohio State University), on Tuesday, January 16, 2018 Editor's Note: Sophia J.W. Hamm is Assistant Professor of Accounting at The Ohio State University Fisher College of Business; Michael J. Jung is Assistant Professor of Accounting at NYU Stern School of Business; and Min Park is a PhD candidate at The Ohio State University Fisher College of Business. This post is based on their recent paper. Related research from the Program on Corporate Governance includes Carrots & Sticks: How VCs Induce Entrepreneurial Teams to Sell Startups, by Jesse Fried and Brian Broughman (discussed on the Forum here).

Corporate venture capital (CVC) refers to direct minority equity investments made by established, publicly-traded firms in privately-held entrepreneurial ventures. CVC investing differs from pure venture capital investing in that financial returns are not the primary consideration, but rather, strategic gains are often the driving motivation to invest. While established firms in the technology, industrial, and healthcare sectors such as Google, General Electric, and Johnson & Johnson have set up CVC subsidiaries to invest billions of dollars in startups, younger firms such as Twitter with relatively smaller cash balances are starting to engage in venture capital investing as well. According to data from CB Insights, firms’ CVC investments in the U.S. were $17.9B in 2015 and $16.1B in 2016, involving 1,603 deals that accounted for nearly one-fifth of overall venture capital deals. CVC investments are now at the highest levels since the dot com era. The motivating research questions we are interested in examining in this setting are: 1) how transparent are firms about their CVC investments, and 2) is CVC investing a productive use of a firm’s capital resources?


Catastrophic Events Drive Innovation in the Reinsurance Market

BRINK News -

Recent major weather events in Australia, Mexico, the Caribbean and the United States, including three hurricanes that were Category 4 or greater, have resulted in catastrophe losses exceeding $100 billion for the third year on record.

But the large insured loss, currently estimated at a record $111 billion before accounting for National Flood Insurance Program losses and the California wildfires, has created a perfect opportunity for the reinsurance market to showcase its ability to adapt solutions to the unique risk profiles of individual clients.

The value of reinsurance as a capital substitute was apparent during the 2008 financial crisis, when debt and equity financing was difficult to obtain. In its place, the reinsurance market demonstrated its ability to protect balance sheets, manage earnings and reduce volatility. Now, the series of catastrophic events in 2017—earthquakes in Mexico and Hurricanes Harvey, Irma and Maria—is reminding corporations, primary insurers and reinsurers that (re)insurance is one of the most effective ways to protect corporate capital bases from these events.

The third quarter of 2017 is likely to be one of the costliest in the insurance industry’s history. While it is still early and loss estimates will likely fluctuate, total catastrophe losses of just $75 billion would mean a combined ratio of 106 percent for the world’s top 20 reinsurers, according to A.M. Best. Although there appears to be little risk to solvency, earnings of individual insurers will be impacted, and in some cases, excess capital positions and catastrophe budgets may be eroded, which could result in ratings actions.

Record Capital Levels

Fortunately, the U.S. property and casualty industry is sitting on record capital levels and the global reinsurance market adds another $427 billion, so the sector is well-positioned to absorb such losses. But despite years of low reinsurance rates and low interest rates that have reduced the industry’s profitability since the last material rate increase after Hurricane Katrina, we do not expect a similar price revision this time around. Reinsurers have built up cash during the recent favorable years, while capital-market investors seeking non-correlated investments, such as hedge funds and pension funds, have put record amounts of money into catastrophe coverages.

Harvey on its own will probably not require an increase of industry capital; the addition of the cumulative effect of the earthquake in Mexico and Hurricanes Irma and Maria, however, could create a capital event. Yet with abundant capacity—and, of course, depending on the final numbers—the aggregate impact may be a one-time firming of rates within specified regions or coverages or a halting of decreases that recently began to moderate as reinsurers’ margins approached breakeven. We also expect casualty reinsurance rates to continue their recent trend of declining year-over-year rate reductions.

Rise of Insurance-Linked Securities

Insurance-linked securities (ILS), which provide approximately $82 billion of the reinsurance industry’s capital base, will likely continue to generate demand and augment traditional reinsurer capacity. Though the recent events may provide the first real test of alternative capital, investors have indicated they are prepared to recapitalize or increase their current positions, and in some cases they already have.

Earthquakes and hurricanes provide an opportunity to define the viability and effectiveness of catastrophe bonds, creating either a day of reckoning or a day of glory for the ILS market.

Thus far, we have seen these catastrophe bonds demonstrate their effectiveness and serve their intended purpose. Of course, the eagerness of investors to return to the market may be tempered by a possible capital lockup. Until all claims are settled, investors’ assets collateralizing the transaction cannot be released, which could cause them to offset any new ILS capacity offered against these withheld funds. The ability to trade certain classes of cat bonds in the secondary market enhances their liquidity if funds are withheld. Insurance company sponsors are monitoring payout patterns compared to the traditional market. Any payment disputes from ILS investors could provide reinsurers an opportunity to demonstrate their value-add to clients.

The series of catastrophic events in 2017 is reminding corporations, primary insurers and reinsurers that (re)insurance is one of the most effective ways to protect corporate capital bases from these events.

Assuming the ILS market responds to these catastrophes as defined, this capacity will likely remain an integral part of insurers’ capital structure, even when interest rates rise. Most ILS issuances define interest rates as a risk spread on top of return on U.S. Treasuries or to LIBOR, so the asset class will remain attractive as interest rates rise. ILS is now very much ingrained in the overall risk community, creating a pool of diverse capacity collectively serving and supporting the (re)insurance industry.

Technological Innovation

Overall, we expect the reinsurance marketplace to remain vibrant and continue offering a full range of products, supporting growth in reinsurance purchasing in virtually all its forms. Industry capital is at an all-time high, and clients are expanding covers, fully leveraging a broader array of solutions as the industry modernizes in the face of technological innovation. In addition to transactional products, reinsurers and ILS providers are developing more comprehensive, consultative value propositions, such as capital advisory and enterprise risk management services. These offerings withstand market cycles and macroeconomic factors and provide insurance companies with a dedicated, informed partner to support new product development and growth initiatives. This creates opportunity by leveraging advanced platforms and innovative customized solutions, such as coverage features applying to specific industries or risks unique to specific clients.

Advanced Modeling Techniques

As economic growth and demographic patterns impact risk concentrations, advanced modeling techniques will help ensure sufficient vertical and horizontal reinsurance coverage to support post-event liquidity and close the protection gap, especially around historically difficult risks such as floods. Only 27 percent of those affected by Hurricane Harvey had flood insurance, and sustained industry profitability will depend on increasing global insurance penetration. Complex emerging exposures such as cyber and terror are also increasingly finding solutions in the reinsurance market, and optimal structuring of coverage can also minimize regulatory capital. By tapping a variety of capital sources, structures and modeling capabilities, insurers are matching more efficient, customized solutions to their unique risk profiles, whether they are focused on protecting earnings against attritional losses or shielding their capital base from catastrophe losses.

As the industry enters the 2018 renewal, the market remains strong with a variety of solutions to deliver the right capital to risks. Following the recent catastrophes, reinsurers are adjusting business plans for opportunities in marine, energy, flood and specialty lines of business. In today’s world of unprecedented disruption, the (re)insurance solution for managing capital and earnings is as relevant as its solution for severity protection.

People on the Move: January 2018

Loss Prevention Media -

Professional advancement and building a successful loss prevention career can mean many things to many different people. For some individuals, it may mean reaching a top leadership position at a particular company, perhaps serving as a director or vice president of loss prevention/asset protection. For others, it may involve gaining experience in multiple professional fields in order to establish a unique and versatile role that capitalizes on all of our various skill sets.

Some aspire to be the best at a particular skill or discipline, building a base of knowledge and expertise that sets us apart from the rest. There are those who strive to leave a professional legacy, leaving a lasting mark on the present and future of the loss prevention industry. And there are still others who simply want the recognition that comes with reaching a particular level of performance and the security that it provides.

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There are many different ways to evaluate our career vision and professional aspirations. But what is most important is that we find the path that fits us best. We need to fashion and follow a professional development plan that leads us forward and builds our future. Especially when involved in a profession that is evolving as quickly as retail loss prevention, career growth is essential to professional survival. Whatever our professional goals and aspirations might be; whatever skills and experiences have helped forge our personal loss prevention career path, we have to find and seize the opportunities to learn, grow, and progress.

All of us throughout the loss prevention community are proud of the accomplishments of those that have worked hard and earned a new place along the loss prevention career path. Please join us in congratulating the following individuals on their recent career moves and promotions.

January 2018


Jim Mires has been named vice president of loss prevention and safety at Sally Beauty Click here to learn more

Oksana Montvydiene was promoted to analytics manager global corporate security & asset protection at Ralph Lauren

Sharon Nawrocki Paige LPC was promoted to ecommerce fraud manager at Follett Higher Education

Courtland Greer is now a regional loss prevention manager at Amazon

Sheldon Carlson is now a zone asset protection manager at Rent-A-Center

Jennifer Ochs is now an organized retail theft investigator at Weis Markets

Mike Reilly is now an area loss prevention manager at Bed Bath & Beyond

Tony Leon was promoted to regional assets protection manager at CVS Health

David L. Maxim Jr. LPQ, CCFI was promoted to area loss prevention investigator at Sephora

Ed Van Allen was promoted to regional director of asset protection at Ocean State Job Lot

Steve Hewitt was named head of loss prevention at Waitrose (UK)

John O. Nicholson is now a regional loss prevention manager at Nordstrom

Derek McCarthy was named director of loss prevention at MadRag/10Spot

Mike Limauro, LPC named senior director of asset protection at Whole Foods Market  Click here to learn more

Tina Sellers has been named director of asset protection at Retail Business Services

Michael Tortorici is now a regional asset protection manager at Hannaford

Michael LaCroix has been named director of asset protection at Food Lion

Walt Hall, LPC was promoted to Director of Loss Prevention & Safety at Office Depot  Click here to learn more

Lea Tamarack, CFI is now a regional asset protection manager at Weis Markets

Claire (Birchall) Bouzane was promoted to organized external theft investigator at The TJX Companies

Nancy Orozco is now a regional loss prevention representative at adidas

Filiberto Arroyo was promoted to asset protection district manager-IT at RiteAid

Bobby Sydnor was promoted to director of asset protection at HD Supply Facilities Maintenance

Kennarios Kirk is now an area loss prevention manager at Ross Stores

Shelley Grant was promoted to senior manager of assets, analytics and insights at CVS Health

Vince Giacinto, CFI was promoted to regional asset protection manager at Goodwill Industries of Southeastern Wisconsin

Adrian Rivera is now a regional asset protection manager at Whataburger

Zachery Erb is now a district asset protection manager at Weis Markets

Damien Barne was promoted to head of profit protection at Compass Group (UK & Ireland)

Diana Workman, CPhT is now an asset protection district manager at Walgreens

Joseph Wojcik is now a senior investigator at Pappas Restaurants

Rocco Speziale, LPC was promoted to director of asset protection, home services at Sears Holdings Corporation

Ryan Waldow is now a regional loss prevention manager at Family Dollar

Romeo Acevedo, LPQ is now corporate loss prevention specialist at Guitar Center

Sean Trepiccione was promoted to distribution safety and risk manager for Ollies Bargain Outlet

Brian Csorba, CFI was promoted to director of loss prevention at T-Mobile

David Broom, CFE, CFI, LPC was promoted to director of loss prevention at T-Mobile

Erik Buttlar has been promoted to vice president of asset protection at Best Buy  Click here to learn more


To review the December 2017 “People on the Move” click here.

Many of the loss prevention / asset protection career moves and promotions are reported to us by our career advisor partners. We are grateful for their collective efforts and diligence in delivering this information. If you would like to provide information pertaining to a recent promotion or career move that is not listed below, please email submissions to peopleonthemove (at) lpportal (dot) com.

The post People on the Move: January 2018 appeared first on LPM.

Regulators Slap Banks, MSBs and Card Club with AML Violation Penalties

Corruption, Crime & Compliance Blog -

Financial institutions face enormous pressures with respect to anti-money laundering compliance.  These burdens are about to grow with implementation of customer due diligence rules.  In 2017, federal and state regulators stepped up AML enforcement.  Here is a quick rundown of some of the enforcement actions:

Citibank paid a $70 million penalty  to the Office of the Comptroller of the Currency (here) for violating its 2012 consent order relating to Bank Secrecy Act and AML deficiencies.   The original 2012 order found that Citibank failed to file suspicious activity reports (SARs) and conduct customer due diligence and enhanced due diligence on accounts.  Citibank’s BSA/AML function missed systemic deficiencies identified by the OCC during the examination process.

Merrill Lynch paid $26 million, half to the Securities and Exchange Commission (here), and half to the Financial Industry Regulatory Authority (here), for failing to detect and report suspicious banking activity involving billions of dollars in transactions.  Merrill’s AML system and its parent Bank of America’s system failed to identify suspicious activities of high-risk customers.

In particular, FINRA noted that Merrill and Bank of America failed to link accounts with common owners between the institutions.  The SEC specifically cited Merrill’s failure to exclude transactions of more than $22 billion in retirement and managed accounts and accounts involving securities-based loans from its AML monitoring system.  In 2013, these omitted accounts registered 2.5 million transactions that were not monitored.

The SEC also noted that Merrill excluded approximately 12 million transactions involving $105 billion to and from Merrill accounts via checks, ATM withdrawals, cash deposits, wires and ACH transactions.  As an example, the SEC noted that Merrill’s San Diego branch had unreported suspicious transactions, including patterns of large currency deposits through ATMs to off-shore company accounts where there was no apparent business reason for such deposits; accounts that moved large, even-dollar funds through transactions involving third-party institutions in high-risk jurisdictions; and customers withdrawing currency via debit-card cash advances and ATM withdrawals in an apparent attempt to circumvent reporting requirements.

Wells Fargo paid a $3.5 million civil penalty to the SEC (here) for failure to file suspicious activity reports (SARS) with FinCEN.  The SEC maintains an ongoing monitoring program focused on broker-dealers and their compliance with SARS filing requirements.  Broker-dealers are required to file SARs with FinCEN when, FinCEN requires SARs filings within 90 -120 days of a pattern of suspicious transactions.  Wells Fargo implemented changes to its SARs system and eliminated “continuing activity” review, and instead insisted that a SAR required proof of illegal activity.  As a result, the number of filed SARs fell and relevant notes were not maintained about activity.

California Card Club, Artichoke Joe’s, paid FinCEN $8 million penalty (here) for failure to implement and maintain an effective AML program and failed to detect, deter and report suspicious transactions. In addition, FinCEN determined that Artichoke Joe violated reporting requirement under Section 1021.320 of the BSA by blindly ignoring loan sharking, suspicious transfers of high-value gaming chips and criminal activity occurring in plain sight.

The Loan Star National Bank, a private bank operating in Texas, paid FinCEN a $2 million penalty (here) for violations of BSA and AML monitoring programs.  Lone Star failed to follow due diligence requirements when establishing and conducting its correspondent bankin relationship with a Mexican bank. As a result, the Mexican bank moved hundreds of millions of US dollars through suspicious cash shipments.

Loan Star failed to identify public information regarding the owner of the Mexican Bank; to verify the correspondent bank’s description of the source of funds or purpose; to investigate inexplicable justifications of the source of US dollars and unusual wire transactions and cash transactions. Finally, FinCEN found that Lone Star failed to institute an adequate AML monitoring program to file SARs reports for high-risk accounts and customers.

Deutsche Bank paid a $41 million penalty to the Federal Reserve Board (here) for AML deficiencies.  Specifically, Deutsche Bank’s monitoring program prevented it from properly assessing BSA/AML risks involving billions of dollars in potentially suspicious transactions for affiliates in Europe.

BTC-e a/k/a Canton Business Corporation, one of the largest digital currency traders, was assessed a $110 million civil penalty, and Alexander Vinnik was assessed a $12 million civil penalty by FinCEN.  (Here). BTC permitted users to trade in bitcoin with anonymity, and had numerous customers that used the exchange to facilitate criminal activity and launder proceeds.

A parallel criminal indictment was unsealed at the same time in the Northern District of California.  (Here).  BTC was an unregistered money service business.  BTC was noted for its role in numerous ransomware and other cyber-crime activity.  Vinnik is a notorious criminal involved in theft of identities, facilitated drug trafficking and helped to launder proceeds from syndicates around the world.  Vinnik allegedly received funds from the infamous computer hack of Mt. Gox, a digital currency exchange that eventually failed.

In addition to federal enforcement efforts, the New York Department of Financial Services continues to make its mark in AML regulatory and enforcement actions.

Habib Bank, Pakistan’s largest bank, paid the NYDFS $225 million for failure to comply with AML laws and regulations at the bank’s New York branch.  (Here)  Habib Bank also agreed to surrender its license to operate the New York branch.  Habib Bank’s facilitated billions of dollars of transactions with a Saudi-bank with reported links to Al Qaeda, allowed at least 13,000 transactions to flow through the branch with omitted information, and used a ‘good guy’ list to enable at least $250 million in transactions with an identified terrorist, international arms dealer, and other potentially sanctioned entities and persons.

Deutsche Bank paid the NYDFS a $425 million fine for violations of New York AML laws relating to “mirror trading” schemes among the bank’s Moscow, London and New York offices that laundered $10 billion out of Russia.  (Here).  According to the NYFDS , the offsetting transactions among the banks were not justified by any business purpose.  The NYFDS enforcement action was coordinated with the UK’s Financial Conduct Authority.

Deutsche Bank failed to monitor the trading scheme which involved purchase of Russian stocks with rubles, and a related counterparty sale of the same stock in the same quantity at the same price.  The counterparties were closely related, linked by beneficial owners, management or agents, and paid for in US dollars from an offshore territory.

The post Regulators Slap Banks, MSBs and Card Club with AML Violation Penalties appeared first on Corruption, Crime & Compliance.

Jim Mires Named Vice President of Loss Prevention and Safety at Sally Beauty

Loss Prevention Media -

Jim Mires has been named vice president loss prevention and safety with Dallas area-based Sally Beauty. Mires is the former vice president of store operations for Town Shoes, the Canadian division of DSW. He was also the former vice president of loss prevention with DSW. He has also held loss prevention positions with Pottery Barn, Gap/Old Navy, and Six Flags Theme Parks.

Sally Beauty Holdings, Inc. through its affiliates is the world’s largest distributor of professional beauty supplies.


Congratulations Jim!


Information provided by our partners at Loss Prevention Recruiters

The post Jim Mires Named Vice President of Loss Prevention and Safety at Sally Beauty appeared first on LPM.

Breaking News in the Industry: January 15, 2018

Loss Prevention Media -

Woman charged with armed robbery after holding up stores with stun gun

A 23-year-old woman was charged Saturday with armed robbery after she was accused of holding up at least three stores with a stun gun, Chicago police said. T’Keyah Herbert was charged with armed robbery, aggravated assault and retail theft over $300, police said. The charges stem from three incidents that happened between Dec. 26, 2017, and Jan. 10. About 8 p.m. Dec. 26, Herbert entered a department store in the first block of South State Street, grabbed merchandise from the display and fled without paying, police said. She went back to the same location shortly before 3 p.m. Tuesday, armed with a stun gun. When she was confronted by security, Herbert left the stun gun and fled the store, police said. About 3:15 p.m. the next day, Herbert went to a store in the 1500 block of North Clybourn Avenue and got into an argument with employees before pulling out a stun gun and threatening them. She then grabbed merchandise and fled, police said. She was arrested Thursday shortly before 7 p.m., police said. Herbert was scheduled Saturday to appear at a bail hearing, where she was released on a signature bond. [Source: Chicago Tribune]

Two arrested in what appears to be nationwide ID theft ring

Local police believe they’ve helped crack a national identity theft ring after arresting two Philadelphia men outside the Tilton Lowe’s store, waiting to cart away plenty of stolen merchandise Thursday.

Store officials first reported to Tilton police Thursday morning that a large phone pick-up order of some appliances appeared to be fraudulent. They told police the person with the credit card who had placed the order from outside New Hampshire denied having anything to do with the purchase.

 About noon time, police said the men arrived at the store, located at 49 Lowes Drive, in a rented U-Haul van to pick up the order.

Inside the van, police recovered numerous gift cards with stolen credit card information and a large number of stolen identities.

Police officials said this appeared to be a stolen identity and gift card theft ring that moved from state to state. 

Tilton detectives decided this was sufficient evidence to arrest the two in the van on charges of identify fraud and criminal liability for another.

 Kyseem Tyhee Hawkins, 22, and Charles Roshek Gibbs Jr., 23, both of Philadelphia, were arraigned Friday at Belknap County Superior Court Friday. They each remain held on $50,000 cash bail.

Tilton Police Chief Robert Cormier said a search uncovered many victims from New Jersey to California and the theft clearly amounted to thousands of dollars in many states.

“I could easily see 50 or 60 victims on the list,” Cormier said.

 The U-Haul van with Arizona plates was impounded as evidence and the case remains under investigation.

Anyone with information about this matter or these men is urged to call the Tilton police detectives at 286-8207, ext. 210, or 286-4442.
 [Source: NH Union Leader]

Woman accused of theft from employer

A Greenfield, New York, woman was arrested on a grand larceny charge for allegedly stealing more than $1,000 from the store where she worked, police said. Tanya M. Blowers, 29, of Middle Grove, was accused of stealing more than $1,000 from the Hannaford store where she worked over a two-month period, ending earlier this month, according to the Saratoga County Sheriff’s Office. Blowers was charged with fourth-degree grand larceny, a felony, and released pending prosecution in Milton Town Court. [Source: The Post News]

Business owner accused in retail theft ring

The Wakulla County Sheriff’s Office says a Crawfordville, Florida, business owner has been arrested, accused of running an elaborate retail theft operation. Following an investigation, on Thursday, deputies arrested Sylvia Pritchard, the owner of Wakulla Gold Buyers, LLC. and Lighthouse Lady Cleaning Service, Inc. WCSO says the investigation began after the thefts of multiple bicycles from the Walmart in Crawfordville, during which a suspect was captured on surveillance video. Detectives with the Criminal Investigations Division reviewed the video footage, took screenshots of the thief, and posted them to Facebook. With the assistance of Wakulla County citizens, the thief was identified. Detectives also identified three other individuals who assisted with the theft. WCSO says, during an interview, the suspects admitted to participation in these crimes and explained Sylvia Pritchard’s alleged role in the thefts. WCSO says,  “The investigation revealed that this bicycle theft was not a “typical” retail theft; rather, it was one of multiple retail thefts committed by an organized cadre of thieves working in conjunction with one another on behalf of Sylvia Pritchard.

“During an investigation, detectives determined that Pritchard had organized the theft of numerous items from multiple businesses. Investigators say Pritchard would provide a “shopping list” of items to be stolen to one of multiple thieves, who would then steal the items and deliver them to Pritchard. Pritchard would allegedly determine what the retail price was for the stolen item by scanning the bar code with an app on her cellphone, then compensate the thieves in cash with half of what the retail price would have been for the stolen items. During her arrest, investigators also obtained a search warrant for Pritchard’s residence on Bettywood Circle in Crawfordville. During the search, investigators recovered and seized numerous items they say were obtained as part of the theft scheme, including four bicycles, a Disney Cinderella 24-volt kids electric car valued at $398, household supplies, pet food, portable electronic hardware, and personal hygiene products. Pritchard’s daughter, Starla Brooke Pritchard, was also arrested on an outstanding warrant for violation of probation. Richard is charged with one count of organized dealing in stolen property and three counts of dealing in stolen property, all felony charges. Pritchard and her daughter were both booked into the Wakulla County Jail.  [Source: WCTV News]

Retail theft trio allegedly targeted retail stores

A 19-year-old Oakland Gardens NY woman, and two New York males who are considered juveniles by age, were arrested Monday and charged by North Coventry police with identity theft, theft by deception, and access device fraud after they allegedly used fraudulent credit cards to buy merchandise at the Kohl’s department store in Coventry Mall, West Schuylkill Road. A Kohl’s loss prevention team reported the alleged crimes to the police on Dec. 13, when the holiday shopping season was in full swing. It identified an Asian female, Fan Yang, and the juveniles – whose names were not released – as having used the Kohl’s cards to illegally obtain merchandise of significant value.

The police department website stated Yang allegedly purchased goods valued at about $409; one of the juveniles obtained merchandise valued at $1,129; and the second bought goods valued at about $485. The trio wasn’t caught in the township, however, or by township police. The three instead traveled to Warminster Township, Bucks County, and arrived at another Kohl’s. They were nabbed by Warminster police, the North Coventry department reported, and were arrested there on additional charges as well.  [Source: Potts Town Post]

Walmart to close 63 Sam’s Club locations; lay off thousands

Walmart unexpectedly announced it is closing 63 Sam’s Club locations across the U.S., potentially impacting up to 11,000 workers, Business Insider reports. According to Business Insider, many employees were unaware of the store closures until showing up for shifts to closed stores with notices on the doors. Employees at other locations were sent away by police. “After a thorough review, it became clear we had built clubs in some locations that impacted other clubs, and where population had not grown as anticipated,” Sam’s Club CEO John Furner says in an email sent company-wide Jan. 11. “We will be closing some clubs, and we notified them today.” In his email, Furner says some of the closed locations will be turned into e-commerce fulfillment centers. Business Insider reports that employees whose positions were eliminated by store closures will have the opportunity to apply for jobs at the centers. The company didn’t say how many employees would be impacted by the closures.
[Source: Hardware Retailing]

The post Breaking News in the Industry: January 15, 2018 appeared first on LPM.

Armed Robbery Suspects in Fatal Officer-Involved Shooting ID’d

Loss Prevention Media -

Edward Mitchell, 21, Curtis Watkins 25, and Vincent Harvey, 21, all residents of Palmdale, CA, were arrested on a slew of charges, including armed robbery, kidnapping, and deputy-involved Shooting. The name of the deceased adult black male is being withheld pending identification and notification of next of kin, officials said. It happened at about 8:00 pm, when deputies from the Victorville Police Department were advised of an armed robbery that had just occurred at a Verizon Wireless retail store (A Wireless).

Officials said the suspects entered the cell phone retail store, three of them were armed with handguns and forced the victims to move from one area of the store to another by gunpoint. An estimated $80,000. – $100,000 worth of merchandise was stolen. Deputies located the suspect vehicle, a black Jeep Cherokee in the unincorporated area of Adelanto and attempted to conduct a traffic stop.

“The suspects failed to yield, and a pursuit ensued with the suspects traveling recklessly on various highways at high rates of speed, and at times, on the wrong side of the road,” sheriff officials said in a news release. During the pursuit, the suspects were seen throwing items outside the vehicle onto the roadway.

The pursuit terminated after deputies initiated a pursuit intervention technique. “Shortly after that, a traffic collision occurred between the deputy and suspect vehicles, at which time the pursuit terminated, and a deputy-involved shooting occurred.  A suspect was struck by gunfire and pronounced deceased at the scene,” stated the release.

Mitchell, Watkins, and Harvey fled into the surrounding neighborhood and were subsequently located and arrested without incident.  “Investigators did locate evidence inside the vehicle at the termination of the pursuit confirmed to have been stolen during the robbery,” officials said. Anyone with information regarding this investigation should contact Detective James Williams at (909)387-3589.  Callers wishing to remain anonymous are urged to call the We-tip Hotline at 1-800-78-CRIME (27463), or you may leave information on the We Tip Website [Source: Victor Valley News ]

The post Armed Robbery Suspects in Fatal Officer-Involved Shooting ID’d appeared first on LPM.

Day 15 of 31 Days to a More Effective Compliance Program-How Do You Evaluate a Risk Assessment?

FCPA Compliance & Ethics -

After you complete your risk assessment, you must then translate it into a risk profile, as Rick Messick has noted, to estimate where bribery is likely occur, so prevention efforts will be properly targeted. Ben Locwin explained, in “Quality Risk Assessment and Management Strategies for Biopharmaceutical Companies”, “Once we have assessed risks and determined a process [...]

The post Day 15 of 31 Days to a More Effective Compliance Program-How Do You Evaluate a Risk Assessment? appeared first on Compliance Report.

Tyco Retail collaborates with Google Cloud to power new store solutions for digital transformation

Loss Prevention Media -

Tyco Retail Solutions today announced it is collaborating with Google Cloud to strengthen its market leadership in next generation real-time analytics and store execution and performance solutions. Google Cloud Platform provides a future proof infrastructure with global scale, security and high performance for Tyco Retail’s world-class global retail customers.

The adoption of the Google Cloud Platform signals Tyco’s commitment to the evolution of its solution platforms for the development and deployment of its next generation of retail analytics and store solutions. Tyco Retail and Google Cloud will collaborate to deliver use cases marrying real-time edge intelligence and decision-making with core cloud computing.

The initial phase of the partnership integrates Tyco’s real-time data intelligence and application capabilities across store inventory, loss prevention and traffic on the Google Cloud Platform for fast, consistent, scalable performance and measurable retailer value. This integration will provide retailers with a real-time view into accurate inventory availability for unified commerce fulfillment as well as in-store traffic data and insights for improved customer engagement. The new Google Cloud-based service for store shrink management enables retailers to enhance productivity, and increase reliability and performance of EAS systems for a new generation of innovative loss prevention. In addition, retailers will be able to incorporate external market, customer and retail data from Google Analytics and Tyco into the new extensible analytics platform for unmatched retail insights.

The Google Cloud Platform provides a highly flexible infrastructure with state of the art security and data protection. It allows for simple deployment, rapid development and cost effective use. Tyco Retail will tap into Google Cloud’s big data and machine learning solutions to build better products and fuel amazing new solutions.

“We are excited to partner with Google Cloud and offer retailers our highly predictive analytics and innovative solutions through leading edge technology with the Google Cloud Platform,” said Amin Shahidi, vice president of strategy, Tyco Retail Solutions. “With best-in-class people, processes and technologies together we can deliver cutting edge insights for strategic retail outcomes.”

This innovative collaboration is currently being demonstrated at the National Retail Federation (NRF) 107th Annual Convention & EXPO at the Jacob K. Javits Convention Center in New York City. Visit booth #3103 from January 14-16 to see firsthand how Tyco Retail Solutions is helping retailers “Experience What’s in Store.”


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Tyco Retail Solutions to incorporate new data into ShopperTrak Analytics for holistic view of in-store shoppers

Loss Prevention Media -

Tyco Retail Solutions today announced a new program for select retailers to incorporate shopper data into its ShopperTrak traffic analytics platform. This includes store visitor insights at the audience level from Facebook and additional empirical data from other sources. Connecting shopper preferences and insights from third party sources with store level traffic data will enable retailers to better understand key characteristics of shopper groups to help drive sales conversion and an improved customer experience.

Brick-and-mortar retailers can now better understand shopper audiences in combination with in-store traffic patterns. Insights from this new data enables retailers to tailor their marketing and merchandising strategies to more effectively deliver on the promise of a seamless unified commerce experience. Additionally, store-level managers and retail leaders can leverage a richer set of data to contextualize store performance and identify sales opportunities.

“Retailing is now a seamless, ever-present activity with shopper engagement happening at many touch points between the customer and the brand,” said Amin Shahidi, vice president of strategy for Tyco Retail Solutions. “By combining our retail traffic data with store visitor demographic insights, we are able to help retailers better understand the complete shopper journey. This holistic understanding of shoppers allows retailers to optimize staffing, merchandising and operations to create tailored, enhanced shopping experiences.”

These innovative insights are currently being demonstrated at the National Retail Federation (NRF) 107th Annual Convention & EXPO at the Jacob K. Javits Convention Center in New York City. Visit booth #3103 from Jan. 14-16 to see firsthand how Tyco Retail Solutions is helping retailers “Experience What’s in Store.”

Note: In preparation for this collaboration, Facebook has ensured that user-level data will not be compromised as only aggregated and anonymized data will be shared.


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