Tag Archives: H. Christopher Boehning

FATF “Gray Lists” Turkey, Citing Concerns with Turkey’s Banking and Real Estate Sectors and Potential Terrorism Financing

by H. Christopher Boehning, Jessica Carey, Christopher Frey, Michael Gertzman, Roberto Gonzalez, Brad Karp, Richard Elliott, Rachel Fiorill, and Jacobus Schutte

In a significant move, the Financial Action Task Force (“FATF”), the international anti-money laundering body tasked with developing policies to combat money laundering and terrorism financing, has added Turkey to its list of jurisdictions subject to increased monitoring (also known as the FATF “Gray List”).[1] With the addition of Turkey (as well as, through separate actions, Jordan and Mali), the FATF Gray List now includes 23 countries that FATF has determined to have “strategic deficiencies” in their anti-money laundering (“AML”) and counter-terrorism financing (“CFT”) laws and regulations compared to international best practices and the standards maintained by FATF. [2] Turkey is the largest economy to be included on the Gray List.

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CFTC and FinCEN Impose $100 Million Penalty on BitMEX

by H. Christopher Boehning, Walter Brown, Jessica S. Carey, Manuel S. Frey, Michael E. Gertzman, Mark F. Mendelsohn, Rachel Fiorill, Jacobus J. Schutte, and Bailey K. Williams

On August 10, 2021 the Commodity Futures Trading Commission (CFTC) and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced $100 million in civil money penalties against BitMEX, a convertible virtual currency (CVC) derivatives exchange, for violations of the Currency Exchange Act (CEA) and the Bank Secrecy Act (BSA).[i] This was FinCEN’s first enforcement action against a futures commission merchant (FCM), and the latest in a series of regulatory enforcement actions in the cryptocurrency space. Continue reading →

NYDFS Fines First Unum and Paul Revere Insurance Companies $1.8 Million for Violations Arising Out of Data Breaches

by H. Christopher Boehning, Michael E. Gertzman, Roberto J. Gonzalez, Jeannie S. Rhee, Richard C. Tarlowe, Steven C. Herzog, and Cole A. Rabinowitz

On May 13, 2021, the New York Department of Financial Services (“NYDFS”) announced a consent order with First Unum Life Insurance Company of America (“First Unum”) and Paul Revere Life Insurance Company (“Paul Revere”) (collectively the “Companies”), which imposed a $1.8 million penalty for violations of NYDFS’s Cybersecurity Regulation (23 NYCRR 500) (“Part 500”), including false certifications of compliance under 23 NYCRR 500.17. Continue reading →

Update on Communist Chinese Military Companies (CCMCs) Sanctions (Part II of II)

by H. Christopher Boehning, Jessica S. Carey, Christopher D. Frey, Michael E. Gertzman, Roberto J. Gonzalez, Brad S. Karp, Xiaoyu Greg Liu, Richard S. Elliott, Rachel M. Fiorill, and Karen R. King

In response to the Trump administration’s CCMC sanctions (discussed in Part I of this post), the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) has released additional guidance and its first two general licenses. The U.S. Department of Commerce also responded to the sanctions; it published on December 21, 2020 the first ever Military End User List pursuant to the Export Administration Regulations as well as a warning that exports to CCMCs will raise red flags and require due diligence. Continue reading →

Update on Communist Chinese Military Companies (CCMCs) Sanctions (Part I of II)

On November 12, 2020, President Trump issued an Executive Order titled “Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies” (the “Order”), which went into effect on January 11, 2021 (after a 60-day grace period).[1] The Order prohibits U.S. persons[2] from engaging in transactions in publicly traded securities (or any securities that are derivative or otherwise designed to provide investment exposure to such publicly traded securities) of any identified “Communist Chinese Military Companies” (“CCMCs”). In the Order, President Trump cited the national security threat posed by the People’s Republic of China’s (the “PRC”) national strategy of Military-Civil Fusion, and, specifically, the threat posed by PRC companies that sell securities to U.S. investors and then invest this capital to finance the development and modernization of the Chinese military. Continue reading →

United States Imposes Sanctions on Turkey under CAATSA Section 231 for Purchase of Russian Missile System

by H. Christopher Boehning, Jessica S. Carey, Christopher D. Frey, Michael E. Gertzman, Roberto J. Gonzalez, Brad S. Karp, Mark F. Mendelsohn, Richard S. Elliott, Rachel Fiorill, Karen R. King, and Maria E. Eliot

On December 14, 2020, the U.S. imposed sanctions on the Republic of Turkey’s Presidency of Defense Industries (“SSB”) pursuant to Section 231 of the Countering America’s Adversaries Through Sanctions Act (“CAATSA”), which mandates the imposition of sanctions against non-U.S. persons who conduct “significant” transactions with Russia’s defense or intelligence sectors.[1] The U.S. State Department determined that SSB’s acquisition of a Russian S-400 surface-to-air missile from Rosoboronexport (“ROE”) qualified as a significant transaction under Section 231. Continue reading →

Congress to Include Significant Expansion of Beneficial Ownership Disclosure Requirements for U.S. Companies and Non-U.S. Companies Registered to Do Business in the United States as a Part of the 2021 NDAA

by H. Christopher Boehning, Jessica S. Carey, Michael E. Gertzman, Roberto J. Gonzalez, Brad S. Karp, Mark F. Mendelsohn, Richard S. Elliott, Rachel M. Fiorill, Karen R. King, Anand Sithian, and Joshua R. Thompson

As has been widely reported[1] and announced in statements by members of both the House and Senate,[2] Congress has included a significant expansion of beneficial ownership disclosure requirements for companies in the United States as a part of the fiscal year 2021 National Defense Authorization Act (the “2021 NDAA”), a spending bill that is expected to pass by the end of the year. The most recent version of the 2021 NDAA reported out of conference to the House last week includes new beneficial ownership (defined for purposes of the 2021 NDAA as those individuals who own 25 percent or more of the ownership interests of a company and/or who exercise “substantial control” over a company) reporting requirements for companies that closely track the Corporate Transparency Act of 2019,[3] which passed the House in October 2019, although certain changes were made to make the disclosure provisions somewhat more business-friendly. Nonetheless, if the 2021 NDAA is passed and signed into law in its current form,[4] the law would impose new beneficial ownership disclosure requirements on many U.S. companies—and non-U.S. companies that are registered to do business in the United States (collectively, “reporting companies”)—that previously had not been required to disclose their beneficial owners. Continue reading →

NY DFS Files Enforcement Action Against Opioid Manufacturer for Insurance Fraud

by H. Christopher Boehnig, Roberto Finzi, Michael E. Gertzman, Roberto J. Gonzalez, Brad S. Karp, Elizabeth M. Sacksteder, and Patrick Cordova

On April 16, 2020, the New York Department of Financial Services (“DFS”) issued a Statement of Charges and Notice of Hearing against Irish pharmaceutical company Mallinckrodt plc and several of its U.S. subsidiaries (collectively, “Mallinckrodt”). [1] The administrative hearing will take place on August 24, 2020, before a hearing officer appointed by the DFS Superintendent. According to DFS, Mallinckrodt committed insurance fraud in violation of New York law by allegedly misrepresenting the efficacy and safety of opioids to patients and healthcare professionals, causing an over-prescription of its drugs, the cost of which was ultimately passed on to New York insurance companies and their policyholders. Continue reading →

OFAC Cites the Use of U.S.-Origin Software and U.S. Network Infrastructure in Reaching a Nearly $8 Million Settlement with a Swiss Commercial Aviation Services Company

by H. Christopher Boehning, Jessica S. Carey, Christopher D. Frey, Michael E. Gertzman, Roberto J. Gonzalez, Brad S. Karp, Rachel M. Fiorill, Karen R. King and Jacob A. Braly

On February 26, 2020, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) announced a $7,829,640 settlement agreement with Geneva-based Société Internationale de Télécommunications Aéronautiques SCRL (“SITA”), to settle its potential civil liability for 9,256 apparent violations of the Global Terrorism Sanctions Regulations (“GTSR”).[1] The case involved the alleged provision of commercial services and software subject to U.S. jurisdiction for the benefit of certain airline customers designated by OFAC as specially designated global terrorists (“SDGTs”) between April 2013 and February 2018.[2] Continue reading →

FinCEN Imposes Its First Penalty on a Bank Compliance Officer for $450,000 for Failing to Prevent AML Violations

On March 4, 2020, the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) issued a consent order assessing a $450,000 civil money penalty against Michael LaFontaine, a former Chief Operational Risk Officer at U.S. Bank NA (“U.S. Bank”), for his alleged failure to prevent Bank Secrecy Act/anti-money laundering (“BSA/AML”) violations that took place during his tenure.[1] This action—which follows U.S. Bank’s 2018 BSA/AML-related resolution with FinCEN, the U.S. Department of Justice (“DOJ”), the Office of the Comptroller of the Currency (“OCC”) and the Federal Reserve for a combined $613 million in financial penalties—marks the first time FinCEN has imposed a penalty on a bank compliance officer for his role in failing to prevent BSA/AML compliance program failures.[2] Continue reading →

Compliance and Enforcement