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FCPA Blog Daily News

Entries in Securency (12)

Wednesday
Jul302014

Australia clamps ‘embarrassing’ gag order on global banknote bribe case

Wikileaks Tuesday released what it said is "an unprecedented Australian censorship order concerning a multi-million dollar corruption case explicitly naming the current and past heads of state of Indonesia, Malaysia and Vietnam, their relatives and other senior officials."

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Friday
Mar152013

Global Contagion Report: Securency International

Country: Australia

Company Involved: Securency International

Industry: Financials

Industry Subsector: Banks

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Monday
Feb182013

Global Contagion Report: Securency International

Country: Nigeria

Company Involved: Securency International

Industry: Consumer Services

Industry Subsector: Printing

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Tuesday
Oct092012

Plot thickens in Aussie Reserve Bank corruption probe

The government investigation into the Reserve Bank of Australia led last week to RBA’s subsidiary, Austrade, and allegations of massive bribes paid to a Vietnamese spy by his Australian lover.

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Friday
Sep142012

Witnesses: Australia Reserve Bank bosses covered up bribery for years

There was explosive testimony this week during parliamentary hearings into bribery allegations against a unit of the Reserve Bank of Australia.

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Thursday
Sep152011

U.K. Arrest In Securency Case

The Guardian today reported the arrest of a British businessman who allegedly paid for the son of a Vietnamese state bank governor to attend Durham University in the U.K. in exchange for a banknote printing deal.

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Monday
Oct182010

Nigeria Bribes Alleged In Securency Case

U.K. authorities detained and questioned three more people last week in the corruption investigation of Securency International Pty Ltd, the polymer banknote maker half owned by the Reserve Bank of Australia.

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Thursday
Oct072010

Securency Case Blows Wide Open

The long-simmering Securency scandal erupted this week, with arrests in the U.K. and Spain, and searches of houses and businesses in England, Spain, and Australia.

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Wednesday
Jul072010

Bribes That Breach Security

Hologram on a 50-Euro bill.Last week Canadian authorities said they've charged Nazir Karigar, a Canadian citizen, with violating the Corruption of Foreign Public Officials Act. He allegedly bribed an Indian official to win a contract for his company.

According to the Globe, Karigar worked for Cryptometrics of Ottawa. The company develops facial recognition software for airports and governments around the globe and its "engineers are accustomed to dealing with the security industry." 

Is the security aspect of the case important? It could be.

Karigar is the first individual charged under the Corruption of Foreign Public Officials Act. He can't be the first Canadian involved in bribery abroad. Was he charged because his alleged crime compromised airport security in India, a country with security problems that concern the rest of the world?

The White House this year said overseas corruption is "a severe impediment to development and global security." We've reported that Kenyan airport and border security contracts were allegedly tainted by corruption. That led the U.S. to bar entry of some Kenyan officials and the U.K. did likewise. (President Obama went to Kenya in 2006 and talked about the sleaze there.)

The Australian federal police are investigating Securency, the polymer banknote-maker half owned by the Reserve Bank of Australia. The case has security implications. There have been persistent rumors that Securency paid bribes and offered favors to win currency-printing contracts in Asia, Africa and Latin America. The integrity of any country's printed money supply is a global concern.

An older U.S. case with security-related loose ends involves American Bank Note Holographics. It prints currencies, travelers and other checks, and produces credit cards and holograms for use on security-sensitive surfaces. In July 2001, Joshua Cantor, the company's president, pleaded guilty to a four-count federal criminal information. It charged him with conspiracy to defraud the U.S., a books-and-records violation, making false statements to auditors, and conspiracy to violate the FCPA. The charges arose from bribes paid on behalf of American Bank Note in Saudi Arabia. Then in August 2003, Morris Weissman, the former CEO and chairman of the company, was convicted of fraud after a long trial in Manhattan.

Neither Cantor nor Weissman have been sentenced yet, despite a nine-year-old guilty plea and a seven-year-old jury-trial conviction. Is it because of their knowledge of the security-related industry? Have they been helping American and other authorities track down corruption that might make borders leaky and put currencies at risk?

There may not be any visible links among Cantor and Weissman, Securency, Kenyan graft, and Nazir Karigar. But there's a common thread of global security running through them.

Wednesday
Jun232010

The Strange Case Of Joshua Cantor

In July 2001, the president of American Bank Note Holographics pleaded guilty to a four-count federal criminal information. It charged him with conspiracy to defraud the U.S., a books-and-records violation, making false statements to auditors, and conspiracy to violate the FCPA. The charges arose from bribes paid on behalf of American Bank Note in Saudi Arabia.

Joshua Cantor was scheduled to be sentenced in 2003. Bail was set at $250,000 and he was ordered to surrender his "travel documents and other international travel papers."

Cantor wasn't sentenced in 2003. According to the court docket (available here), sentencing was postponed a couple of times. The last date the court set was December 6, 2006. Sentencing didn't happen then, however, and no new date was ever set. So nearly nine years after pleading guilty to four bribery-related felonies, Cantor is out on bail without a sentencing date.

What's life been like for him? Apparently normal. He travels a lot. Since 2003, the court has approved trips to Puerto Rico and Israel (twice each), Brazil, Canada, the British Virgin Islands, Spain, the Dominican Republic and Barbados. Presumably the trips are for business.

Meanwhile, according to the court docket, most of which is sealed, the case has been dormant for two years, with no new activity reported to the public.

What's up with this case? Has Cantor slipped through the cracks in the federal criminal justice system? Or does his special treatment mean he's somehow helping the government? Is he a cooperating witness in related bribery investigations?

There have been persistent rumors that Securency, the polymer banknote-maker half owned by the Reserve Bank of Australia, paid bribes and offered favors to win contracts in Asia, Africa and Latin America. Last month we heard unconfirmed reports about Australian federal police visiting Washington to meet with the DOJ's FCPA team. Was a chat with Joshua Cantor, who's from the same industry as Securency, on the agenda?

U.S. v. Cantor was filed on July 17, 2001 in the U.S. District Court, United States District Court for the Southern District of New York (Foley Square), Criminal Docket #: 1:01-cr-00687-BSJ-1. The case is currently assigned to Judge Barbara S. Jones.

Wednesday
May262010

Rumblings From Oz

A month ago we asked what's wrong in Australia. Despite multiple overseas bribery scandals, there's been no sign of enforcement activity by the Australian Securities & Investments Commission -- the chief anti-corruption agency -- or anyone else down under. That's now changing.

The Australian federal police are digging into allegations about Securency, the polymer banknote-maker half owned by the Reserve Bank of Australia. There have been persistent rumors that it paid bribes and offered favors to win contracts in Asia, Africa and Latin America. 

Now the federal police reportedly have a witness from the inside. According to a report in The Age:

The witness has said that one of the most senior Securency managers told him to arrange an Asian prostitute for a visiting deputy governor of a foreign central bank. The witness, who was a Securency employee, has given the Australian Federal Police his diary in which he recorded the middleman telling him in 2007 that the ''governor would be very happy if the commission [payment] was increased."

We'd heard an unconfirmed report about a small group from the Australian federal police traveling recently to Washington to meet with the DOJ's FCPA team. Whether that visit, if it happened, and the recent developments in the Securency case are related, we don't know. It's also unclear whether the federal police investigation will spur the Australian Securities & Investments Commission into action. The police are also reported to be working directly with the Malaysian Anti-Corruption Commission on the Securency investigation.

In March, the Securency board released an audit showing agents had been paid almost $50 million in commissions since 2003. After the audit's release, according to The Age, two top executives left the company.

The press said former Malaysian deputy prime minister, now opposition leader Anwar Ibrahim, and Nigerian central bank governor Lamido Sanusi, have urged the Australian government to provide details about "how far the [Reserve Bank of Australia's] bribery scandal reaches. 'How could Securency allow . . . huge bribes in the name of commissions?' Mr Ibrahim said."

Friday
Apr232010

What's Wrong Down Under?

Australia is the world's sixth largest country by land mass, only slightly smaller than America's lower 48 states. With just 22 million people and abundant resources, the country exports coal, iron ore, gold, uranium, alumina, meat, wool and wheat, as well as wine, olives, fruit and vegetables.

Its open trade policy produced 17 consecutive years of economic growth before the global financial crisis, which hardly slowed the progress. Last year the economy managed 1.5% growth during the first three quarters -- the best performance in the OECD.

But for overseas anti-corruption enforcement, Australia is an international laggard, a recalcitrant country without any numbers on the scoreboard. What's going on?

This week, one of Australia's biggest natural resource firms, BHP Billiton, disclosed that it's the target of a U.S. SEC investigation for potential FCPA offenses. The company would only say the investigation relates to "certain terminated minerals exploration projects" and involves "possible violations of applicable anti-corruption laws involving interactions with government officials."

It hasn't said where the compliance problems may have occurred. There are large-scale copper projects in Chile and Zambia, nickel targets in Australia, manganese targets in Gabon, and diamond targets in Canada. It explores for iron ore, coal, bauxite and manganese at home and in South America, Russia, and West Africa.

U.K. investigators also said this week they're looking into BHP's operations in Cambodia and beyond; they've reportedly identified several possible instances of multi-million dollar bribes to foreign officials.

BHP isn't the only Australian company under the gun. Rio Tinto, the world's largest mining company and a superpower in the iron-ore business, is making headlines. Last month, four of its executives were given long jail sentences -- up to 14 years -- by a court in China. They were convicted of bribery and industrial espionage. (Germany's Cartel Office is examining the planned merger of the iron-ore production of BHP and Rio Tinto, which would create a duopoly in control of most of the world's supply.)

Another Aussie company in international hot water is Securency -- half owned by the Reserve Bank of Australia. Late last year, the Central Bank of Nigeria began investigating whether a Securency company called Note Printing Australia bribed Nigerian officials in return for a banknote supply contract. Australian police were said to be looking into what a press report described as "a series of multi-million-dollar payments made by the RBA companies to politically connected middlemen to help win contracts in Asia, Africa and Latin America."

Meanwhile, the Australian Securities & Investments Commission -- the chief anti-corruption enforcement agency -- hasn't said whether it's investigating BHP or the other companies.

That's the problem. Australia hasn't recorded any enforcement against bribery abroad. The OECD scores the country in the worst category -- "little or no enforcement" -- along with 21 other slumbering members. In October last year, the head of the OECD's anti-corruption group, Patrick Moulette, complained that Australia hasn't "launched a single prosecution for foreign bribery offences in the decade since it joined dozens of nations in ratifying an anti-bribery convention."

At home, Australia is perceived to be among the cleanest countries in the world for business -- it ranked 8th in Transparency International's latest survey. Abroad, however, its reputation is taking a beating and its OECD partners appear to be losing patience. What will Australia do?