Cooks assist in $300m scam case

Wednesday July 17, 2019 Written by Published in National

The Financial Intelligence Unit, Crown Law Office, and the Cook Islands Police Service helped US investigation into the multi-million dollar fraud case, reports Rashneel Kumar and Melina Etches.

 

 

Cook Islands authorities played a major role in exposing a $300 million share scam committed by a United States stockbroker.

The Financial Intelligence Unit, Crown Law Office, and Cook Islands Police Service assisted the US investigation into the multi-million dollar fraud case.

The case involved Beverly Hills stockbroker Todd Ficeto who has been found guilty of 18 federal criminal charges for participating in a stock manipulation scheme designed to inflate the reported profits of hedge funds.

Ficeto wired NZ$15m (in two tranches of US$5m) to his bank account at ANZ Cook Islands, before denying that he had any overseas bank accounts to US Securities and Exchange Commission investigators.

Walter Henry, the senior intelligence analyst at the Financial Intelligence Unit, said the case was the subject of a report and Official Information request from US authorities in January, 2013.

“The $6 million identified at the date of the investigation was immediately served a formal Financial Intelligence Unit freezing instruction and duly repatriated to the appropriate US authorities with the assistance of Crown Law, relevant domestic stakeholders and the following US authorities – US Marshalls and US Department of Justice,” Henry said.

The Financial Intelligence Unit provided intelligence analysis and freezing instructions. It also provided an Intelligence Dissemination Report to the US Department of Justice, Federal Bureau of Investigation, US Internal Revenue Service and US Securities Exchange Commission.

The Crown Law Office assisted the US Department of Justice with the ongoing evidence and legal discussion concerning the case and talks concerning the repatriation of the funds.

It also received a mutual legal assistance request from US Department of Justice on production of orders and seizure warrant. Crown Law assisted US Marshalls on discussion concerning the repatriation of the funds.

The Cook Islands Police served production orders and seizure warrant and identified and seized evidence of documentation and digital records.

Cook Islands is well placed in the region in terms of financial transaction monitoring and reporting. The country is now one of the most compliant jurisdictions on the world for anti-money laundering.

Henry said there were mechanisms in place especially in administering and enforcing a number of Acts to detect crime such as this scam.

To assist reporting institutions to address their obligations under the Financial Transactions Reporting Act 2017, Henry said the Financial Intelligence Unit has released guidance on a number of matters.

They include risk assessments, customer due diligence, record keeping, the reporting of cash transactions over the threshold amount of NZ$10,000, the reporting of electronic reports in and out of the Cook Islands, reporting of suspicious activity, and implementation of a compliance regime.

In addition, he said the Unit is a member of international organisations whose primary role is to combat money laundering, terrorist financing and serious crime.

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