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Treasury Sanctions Corrupt Actors in Africa and Asia

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Global Magnitsky designations target corrupt actors and their networks on International Anti-Corruption Day

Today, on International Anti-Corruption Day, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is targeting corrupt actors and their networks across several countries in Africa and Asia. Today’s actions are taken pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act, and targets perpetrators of corruption and serious human rights abuse.

“On International Anti-Corruption Day, Treasury remains fully committed to imposing costs on those who facilitate corruption at the expense of the people,” said Deputy Secretary Justin G. Muzinich.

To raise public awareness for anti-corruption initiatives, International Anti-Corruption Day has been observed annually on December 9 since the United Nations General Assembly adopted the United Nations Convention against Corruption (UNCAC) on October 31, 2003. There are currently 187 States parties to the UNCAC. In addition to sending a message against corrupt behavior, Treasury uses its tools to increase transparency, accountability, and the rule of law. With these designations, Treasury encourages all governments to implement anti-money laundering reforms to address corruption vulnerabilities.

CORRUPTION IN LIBERIA: Harry Varney Gboto-Nambi Sherman

Harry Varney Gboto-Nambi Sherman (Sherman), now a prominent lawyer, Liberian senator, and Chair of the Liberian Senate Judiciary Committee, offered bribes to multiple judges associated with his trial for a 2010 bribery scheme, and he had an undisclosed conflict of interest with the judge who ultimately returned a not guilty verdict in July 2019. Sherman has routinely paid judges to decide cases in his favor, and he has allegedly facilitated payments to Liberian politicians to support impeachment of a judge who has ruled against him.

In the 2010 scheme that led to this trial, Sherman was hired by a British mining company in an effort to obtain one of Liberia’s last remaining mining assets, the Wologizi iron ore concession. Sherman advised the company that, in order to obtain the contract, they first had to get Liberia’s procurement and concessions law changed by bribing senior officials. In 2016, Sherman was indicted by the Liberian government, along with several other government officials, for their involvement in the USD 950,000 bribery scheme. In 2019, the presiding judge acquitted all individuals accused of being involved in the bribery scheme. Sherman’s acts of bribery demonstrate a larger pattern of behavior to exercise influence over the Liberian judiciary and the Ministry of Justice.

Sherman is designated for being a foreign person who is a current or former government official responsible for or complicit in, or directly or indirectly engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.

CORRUPTION IN THE KYRGYZ REPUBLIC: Raimbek Matraimov

Raimbek Matraimov (Matraimov), a former deputy of the Kyrgyz Customs Service, was involved in a customs scheme in which at least USD 700 million was laundered from the Kyrgyz Republic. The scheme involved a company and their evasion of customs fees. The company would bribe customs officials, and, in return, these customs officials would clear more expensive products as low-value goods allowing for maximum profits. Additionally, the company’s goods would pass more quickly through customs terminals. The goods of other companies, not associated with this company and not paying bribes, would often be thoroughly inspected, unloaded from the trucks, and sit in customs warehouses for weeks, if not months. Matraimov used his position to ensure that the company’s goods would be able to seamlessly pass through the borders of the Kyrgyz Republic. Matraimov was in charge of collecting and distributing bribes that came from this company. Furthermore, Matraimov assisted this company in smuggling cash into the Kyrgyz Republic via couriers. When these couriers, carrying a large amount of cash, would be approached by Kyrgyz law enforcement at an airport, the couriers would use Matraimov’s name in an attempt to continue with their journey. Matraimov, utilizing his former position as deputy of the Kyrgyz Customs Service, made hundreds of millions of dollars as a result of his involvement in the customs scheme.

Matraimov is designated for being a foreign person who is a current or former government official responsible for or complicit in, or directly or indirectly engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.

CORRUPTION IN SOUTHEAST ASIA: Broken Tooth

Wan Kuok Koi, also commonly known as “Broken Tooth,” is a member of the Communist Party of China’s (CCP) Chinese People’s Political Consultative Conference, and is a leader of the 14K Triad, one of the largest Chinese organized criminal organizations in the world that engages in drug trafficking, illegal gambling, racketeering, human trafficking, and a range of other criminal activities. In addition to bribery, corruption, and graft, the 14K Triad has engaged in similar illicit activities in Palau.

Broken Tooth is designated for being a foreign person who is a leader or official of an entity, including any government entity, that has engaged in, or whose members have engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.

OFAC also designated three entities that are owned or controlled by Broken Tooth:

•    World Hongmen History and Culture Association, based in Cambodia and established in 2018 by Broken Tooth;
•    Dongmei Group, based in Hong Kong; and
•    Palau China Hung-Mun Cultural Association, based in Palau.

In 2018, Broken Tooth established the headquarters of the World Hongmen History and Culture Association in Cambodia. Hongmen (or “Hung Mun”) is a global Chinese fraternal organization established in the mid-1600s and is synonymous with “Triad” in Hong Kong and Macau. The 14K Triad is utilizing Broken Tooth’s World Hongmen History and Culture Association as an effort to legitimize itself.

The World Hongmen History and Culture Association has managed to co-opt elite figures in Malaysia and Cambodia. This continues a pattern of overseas Chinese actors trying to paper over illegal criminal activities by framing their actions in terms of China’s Belt and Road Initiative (BRI), the China Dream, or other major initiatives of the CCP. The World Hongmen History and Culture Association is spreading across Southeast Asia, establishing a powerful business network involved in the development and launching of crypto currencies, real estate, and most recently a security company specialized in protecting BRI investments.

The Chinese enterprises behind the BRI projects have several things in common: their leadership has links to criminal networks or actors involved in illicit activities in other parts of Southeast Asia, as well as China; they have pre-existing organizations engaged in casinos and crypto currencies; they advertise themselves online to be associated with Beijing’s BRI and flaunt connections with key Chinese government agencies; and all of them have established associations that actively seek to assist Chinese nationals.

In addition to furthering the CCP’s BRI via the World Hongmen History and Culture Association, Broken Tooth also heads the Dongmei Group. The Dongmei Group is the key investor in the Saixigang Zone in Burma.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the persons above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or otherwise exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person or the receipt of any contribution or provision of funds, goods, or services from any such person.

GLOBAL MAGNITSKY

Building upon the Global Magnitsky Human Rights Accountability Act, the President signed E.O. 13818 on December 20, 2017, in which the President found that the prevalence of human rights abuse and corruption that have their source, in whole or in substantial part, outside the United States, had reached such scope and gravity that it threatens the stability of international political and economic systems. Human rights abuse and corruption undermine the values that form an essential foundation of stable, secure, and functioning societies; have devastating impacts on individuals; weaken democratic institutions; degrade the rule of law; perpetuate violent conflicts; facilitate the activities of dangerous persons; and undermine economic markets. The United States seeks to impose tangible and significant consequences on those who commit serious human rights abuse or engage in corruption, as well as to protect the financial system of the United States from abuse by these same persons.

View more information on the individuals and entities designated today.

This news item was originally published by the US Department of the Treasury (UST US). For more information, please see the Source Link.

Regulator Information

Abbreviation: UST
Jurisdiction: United States

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