Wednesday, November 26, 2014


Imprisoned former banker/$7bn Ponzi schemer R Allen Stanford (Stanford International Bank) continues to have problems with the Fifth Circuit Court of Appeals, where he has brought a Pro Se appeal of his conviction and sentence. Whoever the jailhouse lawyers are who are assisting him need to follow the Federal Rules of Appellate Procedure, because his actions are not winning him any friends on the Court.

As you may recall, he has already butt heads with the Court more than once, over the size of his initial brief, and exhibits, and lost each time. Now, the problems are becoming more serious, and his tactics surely are not endearing him to court staff, and the same judges who will decide his fate.

After filing his ( reduced in size, to comply with rules) brief, he attempted an end run around the rules, by seeking, twice to supplement his brief. The US Attorney, of course, objected, and the Court  denied his motion. Then, things got worse.

The US Attorney obtained an extension from the Court, on its Brief of Appellee, and Stanford sought, unsuccessfully, to obtain an reversal of the ruling allowing the extension. Then, he had the gall to file a formal motion, which the Court actually not only denied, but pointedly refused to consider and accept for filing, apparently upon the grounds that it was moot. He followed neither the Appellate Rules, nor the 5th Circuit Local Rules, in his approach; no wonder he was not successful.

When Stanford objected to the US Attorney's motion for extension of time, he not only lost whatever future professional courtesy he might have received for his own requests, but obviously marked himself with the Court as a problem litigant. If I was doing 110 years on my sentence, I would be bending over backwards to make a good, professional impression with the the judges who will ultimately rule on how I am going to spend the rest of my life.

Considering that Allen Stanford was, in large part, due to his lobbying efforts, a major obstacle to the enactment of many AML/CFT legislative reforms, prior to 9/11, we should not be surprised at these antics, but he's only hurting himself. 

Monday, November 24, 2014


for those readers who have been wondering where Ricardo Martinelli and his Cabinet got the money to make all those large purchases of Petaqilla Minerals Ltd. stock, which they later sold for an obscene profit, trading on insider information, and stock price manipulation, wonder no longer. The Source of Funds was cash stolen from master Colombian Ponzi schemer David Eduardo Helmut Murcia Guzmán, who fleeced victims in Colombia, and throughout the Western Hemisphere, through his company, DMG.

Some of the money used to purchase the stock reportedly was brought into the Financial Pacific offices in cash, in sacks. Murcia smuggled his DMG Ponzi cash, from Colombia, into neighboring Panama, via speedboat, and several witnesses have reported that some of it was actually damp from being transported in open boats. Murcia was seeking to invest these funds in Panama.

A number of prominent Panamanian businessmen who accepted the illicit funds from Murcia, after his arrest and extradition, converted the money to their own personal use, and it ended up funding the massive insider trading scheme, where corrupt Panamanian PEPs, including several ministers, realized huge profits through the sale of their holdings in Petaquilla securities. Murcia, who was later extradited from Colombia, to the United States, to serve a long prison term, has never returned to Panama to claim their funds that he invested.


The scandal popularly known in the media as "Fast & Furious," where a US law enforcement agency permitted the sales of vast amounts of weapons, to Mexican Cartel agents, and then reportedly failed to track those purchases, some of which were later used against American law enforcement agents, has now resulted in the release, through an FOIA request, of some of the documents that detail the case.

Readers who wish to review them can access them here*; They are in pdf format.

Sunday, November 23, 2014


Is the Arab Bank case the shape of things to come ? There was a civil suit filed recently, in Federal Court, in the Eastern District of New York. It is styled Charlotte Freeman, et al, Plaintiff vs. HSBC Holdings PLC, HSBC Bank Middle East Limited, HSBC Bank USA, NA., Barclays, Standard Chartered Bank, Royal Bank of Scotland, NV, Credit Suisse, Bank Saderat PLC, et al, Defendants. It is an action, brought against five of Europe's largest financial institutions, pursuant to the Anti-Terrorism Act, alleging that the banks conspired with Iranian banks to alter and mask wire transfers, to evade American sanctions against Iran. It charges that the Iranian banks sent more than $100m to Iraq-based military and terrorist organizations, and that those groups killed and wounded American soldiers, using arms purchased with those funds. In essence, it sounds much like a conspiracy case; whether it will be successful is unknown, due to a lack of relevant case law; It could make new law in this field.

If you are able to review the entire 207-page complaint, you will learn that the defendant banks, all of whom have been sanctioned by US regulators, appear to have maintained a culture of deception, in that they maintained covert sanctions evasions programs that deliberately aimed to deceive, through a well-planned and executed, system of deletion of incriminating information. The goal of these illicit programs was clear: to push funds through the American financial structure, notwithstanding that it was illegal to do so.

The plaintiffs are seeking to make the biggest European banks responsible for the injuries and deaths of American soldiers, in a war zone, for the reason that the banks' conduct facilitated sanctioned activities, which ultimately financed IEDs that killed and maimed Americans.

I ask the question: must it take the American trial bar to do what US regulatory agencies cannot,  to once and for all, suppress the global Iran sanctions evasion programs that European banks are engaged in ? Here's the problem:

(1)  All the American regulators have done is levy heavy civil fines and penalties. That is chicken feed to the big banks; indeed many still can pay their shareholders a dividend after such fines.
(2) No bank director or global compliance officer has been indicted, notwithstanding their guilt. Read the complaint; I guarantee that you will be insulted by the absolute arrogance of these bankers.
(3) I see that, if anything, the Iran sanctions evasion programs have expanded, not decreased. The fines only drove the bankers to use more circuitous routes, through third-world countries in obscure places, and through new, creative techniques.

It is a sad situation, when our own regulators cannot stop widespread sanctions evasion; I imagine a British banker in the City, from one of the banks named as defendants, who has been laughing out loud at American regulatory ineffectiveness, getting into his Bentley Mulsanne this Christmas, off to a obscenely expensive holiday on the Continent. Perhaps now he might want to watch the American trial lawyers, because they work long and hard, and could ultimately do things to his bank that US regulators have been unable or unwilling to do; take effective punitive action to stop the sieve that is Iran sanctions evasion, in London and Geneva.


News about a law enforcement operation in Mexico, where a team from the US Marshals Service, dressed as Mexican Marines (Infantería de Marina), and appropriately armed, engaged a group of wanted Mexican criminals, where two Americans were wounded, reminds me that you should always be aware of what are known as false flag operations. This is especially true when it comes to contact between your bank staff, and individuals who display credentials of a US law enforcement agency, to obtain information or cooperation, even on a informal basis.

False flag operations occur when an individual, group of individuals, agency or organization, deceptively hold themselves out as some other identity, to accomplish a particular purpose. it may be for a legitimate governmental purpose, to commit criminal acts, or to cause a third party to respond in a specific way, to meet the aims and goals of the individual using such tactics.

When visited by Special Agents of the Federal Bureau of Investigation, most bankers accept at face value the qualifications of the individuals who sit before them. We tend to accept authority, especially Federal authority, at face value, and generally strive to cooperate, as we believe that we are facilitating a law enforcement purpose; That is how American bankers conduct themselves.

But, for the sake of argument, what if that Special Agent in front of you is not what he represents himself to be ? Let's look at two of the possibilities:

(1) Fraudsters have been victimizing account holders for decades with this scam: posing as law enforcement, they contact a wealthy individual, who is one of your bank customers, and, claiming that they are seeking to expose specific criminal activity, ask the victim to transfer some of his or her money into an account that they control. What would you do if your client comes in with this story, or what if he or she names an individual that they believe to be a law enforcement agent, who is running the matter ? What of the "agent" actually comes into the bank, with your client ? Can you independently verify that the person is who they process to be ?

(2) Individuals from America's intelligence community, in a post-9/11 world, may pose as law enforcement, in order to gain information about a target of their agency. I personally have seen people that I know to be with the CIA, bearing FBI identification, at conferences. Always independently verify the credentials of any person purporting to be from a government agency, on official business; you may choose to have your investigator perform this task.

I am not telling you to decline to cooperate with bona fide law enforcement, just to verify that you really are speaking to a law enforcement officer, and not a fraudster seeking to fleece your client, or an intelligence agent wanting to pick your brain about a client, before you open up to them. Still confused ? Ask your bank counsel.


The unfolding Financial Pacific insider trading securities scandal, in the Republic of Panama, is alleged to have resulted in millions of dollars in illicit profits, for former President Ricardo Martinelli, and several of the ministers in his Cabinet. Since it is reasonable to assume that the guilty parties have previously transferred their criminal proceeds out of Panama, and into accounts in banks located in North America, and in other jurisdictions, it is suggested that you run the names of the Martinelli ministers.

 Should any of these individuals happen to be current bank clients, you will want to take a hard look at their accounts. If there have ever been funds on deposit in excess of the known estimated income and assets of the client, you should consult bank counsel for advice forthwith, for you may have a duty to report to regulatory authorities, and where appropriate, exit account relationships. It is imperative that you have records that verify Source of Funds for any Panamanian PEPs that you are banking.

These are the ministers of state who were listed officeholders when Martinelli left office earlier this year:

(1)   Oscar Armando Osorio, Minister of Agriculture.
(2)   Romulo Alberto Roux Moses, Minister of Canal Affairs.
(3)   Ricardo Quijano Jimenez, Minister of Commerce.
(4)   Frank de Lima, Minister of Economy.
(5)   Lucinda Molinar, Minister of Education.
(6)   Franklin Vergara, Minister of Health.
(7)   Carlos Alberto Duboy Sierra, Minister of Housing.
(8)   Jorge Ricardo Fabrega, Minister of Government.
(9)   Demetrio Papadimitriu, Minister of the Presidency.
(10)  Jose Raul Mulino Quintero, Minister of Public Security.
(11)  Federico Jose Suarez, Minister of Public Works.
(12)  Giselle de Calcagno, Minister of Small & Medium Enterprises.
(13) Antonio Ferrufino Benitez. Minister of Social Development.
(14) Alma Lorena Cortes Aguilar, Minister of Labor.
(15)  Ana Isabel Belfon Vejas, Attorney General.
(16) Dario Berbey, Manager, National Bank of Panama.
(17)  Mario Jaramillo, Ambassador of Panama to the United States.
(18) Pablo Antonio Thalassinos, Permanent representative to UN.

You should also note that corrupt public officials in Panama often use corporations to hide their illicit wealth, and have been known to list close family members as corporate officers and directors.

Saturday, November 22, 2014


Aerial photographs show that China is not only dredging Fiery Cross Reef, a large island in the disputed Spratley chain, located in an area of the South China Sea that is far from the mainland, and any legitimate territorial claim, but the emerging island will contain a 3000 meter runway. This changes the equation in the region, when it comes to the calculation of risk.

The new runway, when completed will be able to accommodate Chinese fighter aircraft, and allow them to range throughout all areas of the South China Sea, including those areas extremely close to the territory of the Philippines,Vietnam, and Malaysia, where China continues to advance claims that are not only unsupported by history, but violate international maritime law. The Chinese arrogance about these colorable claims will now be supported by military might.

Do we really need the introduction of fighter jets into the region ? It increases the risk of an incident, of loss of life, and the threat of actual military engagements, between China and its nervous neighbors, all supported by the United States. All this could occur, when Chinese fighter pilots buzz aircraft or naval or coastal vessels of other countries in the region.  You may wish to consider raising Country Risk upon Vietnam, the Philippines, and Malaysia.