SmartSearch comments on former FBI official charged for sanction evasion

24 January 2023

Martin Cheek, managing director of SmartSearch and a qualified lawyer said: “If the allegations are true, this shocking case serves as a reminder to all regulated firms to remain vigilant in the ongoing fight against sanction evasion and money laundering. No matter a person’s position, profile or responsibilities, regulated firms must remember their legal duties and ensure each client follows the same robust compliance process. Otherwise, firms could be seen as enablers and face fines, investigations and even criminal prosecution.

“While Mr McGonigal entered a not guilty plea, US prosecutors allege the former FBI official, and an ex-Russian diplomat violated sanctions by agreeing to provide services to a Russian billionaire. They are reported to have used shell companies to send and receive payments from the billionaire. It’s a stark warning to those regulated firms who do not carry out vital UBO (Ultimate Beneficial Owner) checks as part of their due diligence. Without this, firms could easily get caught up in any criminal activity.

“Tools such as robust sanction screening, high risk country reporting and electronic verification (EV) must also remain essential parts of every firm’s compliance procedure. These powerful tools are only accessible as part of a wider digital compliance solution, providing firms with the visibility required in such a dynamic and changeable environment.”