1 June 2023

10 min read

Red Flag Bulletin | June 2023

June 2023
Red Flag Bulletin | June 2023 placeholder thumbnail


This month’s Red Flag Bulletin includes the following stories:

  • Former Brazilian president Fernando Collor convicted of corruption and money laundering;
  • US ambassador accuses South Africa of supplying arms to Russia despite non-aligned stance; and
  • Meta fined EUR 1.2 billion in Ireland over breach of GDPR.



Ireland: Meta fined EUR 1.2 billion over breach of GDPR

On 22 May, the Irish Data Protection Authority (IDPA) issued a EUR 1.2 billion fine against Meta Platforms Ireland Limited, the parent company of Facebook, for violation of GDPR. According to an investigation by IDPA, Meta’s Facebook service had transferred the personal data of European citizens to the United States since July 2020. It is the largest fine imposed to-date under the GDPR regulation, which came into effect in the European Union countries in May 2018: in 2021, Amazon was fined USD 887 million in Luxembourg and WhatsApp USD 267 million in Ireland for GDPR violations. In 2020, The European Court of Justice struck down a data flows agreement between the EU and the US over fears regarding the US intelligence services’ surveillance practices. However, in 2022, US President Joe Biden and European Commission president Ursula von der Leyen announced the outlines of a new data deal between the US and the EU which could come into force between July and October 2023.



Cuba: Biden administration includes Cuba on list of countries not cooperating with antiterrorism efforts

On 8 May, the Biden administration once again designated Cuba as one of five countries that the administration considers are not fully cooperating with the US in its antiterrorism efforts. Cuba was listed along with Iran, North Korea, Venezuela, and Syria. While the Biden administration has lifted some restrictions on travel to Cuba imposed by the former administration of US President Donald Trump, the assessment regarding Cuba’s antiterrorism efforts has persisted throughout the current administration. In January 2021, the administration of former US President Donald Trump had also separately designated Cuba as a state sponsor of terrorism. This designation is still under review by the government.


Brazil: Supreme Court convicts former Brazilian president on charges of corruption and money laundering

On 25 May, the Supremo Tribunal Federal (STF), Brazil’s highest court, convicted former Brazilian president Fernando Collor (1990-1992) on charges of corruption and money laundering, reportedly committed between 2010 and 2014. According to the court’s decision, information which emerged from Operação Lava Jato, Brazil’s largest anti-corruption probe, identified Collor as the recipient of at least BRL 20 million (USD 7.4 million) in bribes paid in exchange for his influence on the operations of a subsidiary of Petróleo Brasileiro SA (Petrobras), Brazil’s state-owned oil and gas company. From 2007 to February 2023, Collor was a member of the Brazilian senate, representing the state of Alagoas, northeast Brazil. The STF is expected to rule on the length of Collor’s sentence in early June. Collor denied the accusations.



Hong Kong: 23 individuals arrested following match-fixing investigation

On 15 May, Hong Kong’s anti-graft watchdog committee arrested 23 people including players from local football team Happy Valley, their coach, and members of a local bookmaking syndicate following a year-long match-fixing investigation. The local syndicate had allegedly bribed each player several thousand Hong Kong dollars to influence match outcomes. In Hong Kong, the Gambling Ordinance stipulates that all gambling activities are illegal except for those run by the Jockey Club or provided by those licensed by the Home Affairs Bureau.


Indonesia: Former minister arrested on corruption charges

On 17 May, Indonesia’s former Communications and Information Minister Johnny G. Plate was arrested for corruption relating to a multi-year infrastructure project – known as the BTS project – he oversaw and that will provide internet access to almost 8,000 villages. Plate’s net worth and assets allegedly increased dramatically over the project period, while construction stalled and authorities found that multiple procurement costs throughout the project had become highly inflated. His activities allegedly cost the state over USD 500 million in losses. Some political analysts have suspected that the arrest may be politically motivated and part of an attempt to tarnish Plate’s political party, Nasdem, ahead of next year’s general election. Nasdem has declared its support for Anies Baswedan, who is one of three presidential candidates. President Joko Widodo is known to oppose Baswedan’s candidacy in favour of Central Java Governor Ganjar Pranowo, and Minister for Defence Prabowo Subianto. Plate has denied the charges.



PAKISTAN: Arrest of former Pakistan Prime Minister's close aide for money laundering

On 13 April, the Pakistan Federal Investigation Agency arrested Iftikhar Rasool Ghumman, the security chief of the former Pakistan Prime Minister Imran Khan, for his alleged involvement in an international money-laundering scheme. The scheme reportedly involved a network of individuals operating through Hundi and Hawala channels with over 40 shell companies used to transfer billions of rupees overseas. Ghumman was allegedly one of three individuals operating the scheme. Imran Khan referred to the arrest as another attempt by the Pakistan Government to arrest him and bring back the previous PM, Nawaz Sharif, to power. Notably, Imran Khan was ousted in April 2022 through a parliamentary vote of no-confidence. He and his supporters have since faced dozens of charges including abetment of violence, corruption, and terrorism for protesting against Imran Khan’s removal. The legal proceedings against Khan are ongoing.


MACAU: Junket operator convicted for illegal gambling and operating criminal syndicates

On 21 April, the Macanese court convicted Levo Chan Weng-lin, the founder of Macau’s second largest junket operator Tak Chun, on 34 charges, including illegal gambling, running criminal syndicates, fraud, and money laundering. The illegal activities reportedly earned Chan’s businesses around MOP 1.5 billion (USD 185 million). The court sentenced Chan to 14 years in prison, and ordered him to pay the Macanese Government and the casinos MOP 773 million (USD 99 million) for the taxation and financial loss caused by his illegal activities. Four of Chan’s business associates were also given prison sentences ranging between 7 to 11 years for similar illegal activities. The crackdown on high-profile junket operators in Macau has been ongoing since 2021, starting from arresting the largest junket operator in the city, Alvin Chow Cheok Wa, the founder of Suncity Group.



Russia: G7 countries announce further sanctions targeting Russia

At the G7 summit in Hiroshima, Japan, in late May, the G7 countries resolved to strengthen sanctions against Russia in response to the ongoing war in Ukraine. The new sanctions would target, in total, 300 individuals, entities, vessels, and aircraft. The renewed sanctions aim to target the circumvention of sanctions, as well as Russia’s energy and extractives capabilities. As part of the UK’s effort, the country implemented new import bans on Russian diamonds, copper, aluminium and nickel. In addition to these trade measures, the UK targeted 86 individuals and companies connected to Russia’s  energy, metals and shipping sectors, as well as those connected to the theft and resale of Ukrainian grain. Analysts have commented that the UK sanctions will have a limited impact on Russia as exports of these materials had already dropped following the imposition of tariffs. Ukraine’s presidential administration called for further restrictive measures on Russia’s financial sector.


Kazakhstan: Another Nazarbayev family member faces criminal charges

On 4 May, Gulmira Satybaldy, the ex-wife of former Kazakh President Nursultan Nazarbayev’s nephew, was the latest member of the Nazarbayev family to face criminal charges. She was arrested along with her ex-husband, Qairat Satybaldy, in March 2022 just weeks after violent anti-government unrest which led to Nazarbayev being stripped of his role as head of the country’s security council. After years of immunity under Nazarbayev, Satybaldy was accused of leveraging her political influence to raid and seize the shares of two major beverage companies, Galnaz and Maxi Bottlers. The prosecution also alleged that Satybaldy abducted the owner of the latter and threatened to kill her children. Satybaldy wassentenced to seven years in prison on charges of abduction and actions aiding a crime, while proceedings relating to the corporate raiding charges are ongoing. Satybaldy has refuted the accusations and stated that they are politically motivated. In September 2022, her ex-husband QairatSatybaldy was charged with defrauding the national telecommunications giant Kazakhtelecom and Temir Zholy, the country’s national railway company, out of 12 billion tenge (USD 27 million) and 28 billion tenge (USD 62.7 million), respectively.



South Africa: US ambassador accuses South Africa of supplying arms to Russia despite non-aligned stance

On 11 May, the US ambassador to South Africa, Reuben Brigety, accused South Africa of secretly providing arms to Russia in December 2022. Speaking to local media, Brigety claimed that US officials “were confident” that Lady R, a sanctioned Russian cargo vessel, unloaded unspecified weapons and ammunition while docked at a South African naval base in Simon’s Town, near Cape Town, between 6 and 8 December 2022, before continuing its journey to Russia. The South African government, which reports to maintain a non-aligned position on Russia’s 2022 invasion of Ukraine, denied the allegations, and expressed its disappointment at Brigety’s comments. South Africa’s foreign ministry reported that Brigety had apologised in private to South Africa’s foreign minister for the allegations. South African president Cyril Ramaphosa has ordered an independent inquiry into the veracity of the allegations.



The latest news from our regional desks about financial crime, corruption, sanctions, and integrity issues worldwide.

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