Kenneth Rijock

Kenneth Rijock

Saturday, September 24, 2016

WHY CAYMAN ISLANDS CORPORATE FORMATION SPECIALISTS INCORPORATE THEIR CLIENTS IN THE BVI


If you were wondering why Grand Cayman corporate service formation firms are forming companies for their clients in the British Virgin Islands (BVI), and not the Cayman Islands, where you would think they would prefer to incorporate, read on.

 Take a good look at the Companies (Amendment) Law 2016; it removes the power of Cayman Islands exempted corporations to issue bearer shares. All existing bearer shares were required to be converted into registered shares before June 13,2016, or they will be considered void. Thus means that there are no companies formed in the Cayman Islands, with bearer shares, hereafter, and all the old one must be converted.

Now take the British Virgin Islands: it continues to be the jurisdiction of choice for financial professionals who must conceal the identity of their client, the beneficial owner. It is the favorite corporate formation destination of the dodgy lawyers at Mossack and Fonseca, according to the Panama Papers documents, because of the ability to form a company with bearer shares. It remains one of the last of the unreformed offshore financial centers, where "don't ask, don't tell" is the watchword of the day, for it pays all the bills in Road Town. THAT'S why the good people in the Cayman islands corporate services firms take all their illicit business to the BVI.


BAHAMAS LEAKS SHOW CANADA'S BIGGEST BANKS SERVED CLIENTS IN OFFSHORE TAX HAVENS



The Bahamas Papers/Bahamas Leaks documents have identified Canada's largest banks as participants in the formation, and servicing, of Canadian money in offshore accounts, for companies, trysts and foundations. Here are the number of tax haven accounts served by these banks. I will let you draw your own conclusions as to whether they are facilitating tax evasion, money laundering, or both.

The ICIJ data found this:
(1) Royal Bank of Canada (RBC) - 847 companies
(2) Canadian Imperial Bank of Commerce(CIBC) - 632 companies
(3) Nova Scotia Bank (Scotia) - 481 companies


These banks are actually physically in the Bahamas:
(A) Scotia Bank of the Bahamas & Nova Scotia Bank in Nassau.
(B) CIBC Trust Company Bahamas Ltd. & First Caribbean International Bank (subsidiary), in Nassau.
(C) RBC Royal Bank Bahamas Ltd., & Royal Bank of Canada, in Nassau


Let us hope that Canada's regulatory agencies, and law enforcement agencies, take a hard look at this information, and at the banks.



PROMINENT EL PASO LAWYER CONVICTED OF MONEY LAUNDERING, IN SECOND CASE


Remember the case of Marco Antonio Delgado, the prominent El Paso attorney who laundered drug profits for the Milenio Cartel, and who was closely linked to powerful Mexican political figures, including the wife of the President of Mexico ? He was convicted in that case, and now he was convicted in a new case, involving wire fraud and money laundering, unrelated to the first.

That case was of great public interest, when it was disclosed that he was acting as a Confidential Informant for a US law enforcement agency, when he committed multiple offenses* The original 20-year sentence, handed down by the trial judge was reversed by the 5th Circuit in 2015; this year, he was resentenced, and received a 16-year sentence, which he is also appealing.

In the second case, Delgado represented a corporation that entered into a $121m agreement with a Mexican state-owned utility, the CFE. He illegally diverted $12m from the transaction, for his own personal use, and had the money deposited in an account in a Caribbean tax haven.

He was convicted, by a jury of :

(1) Wire Fraud - 3 counts.
(2)  Money Laundering - 7 counts.
(3) Engaging in Monetary Transactions of Criminally-Derived Property - 9 counts.

We shall be covering the appeal on this blog.
____________________________________________________________________
* Perhaps the most interesting aspect of the first case was the effort, on behalf of his counsel, to have his mental health examined, when the defendant declined to enter into what was stated to be a plea negotiation. Perhaps defense counsel might have considered the fact that any cooperation on his part could very well have resulted in his assassination, by his Cartel client.


Friday, September 23, 2016

ST KITTS CALLS IN REGIONAL MILITARY UNIT TO COMBAT RUNAWAY CRIME


Though not being reported outside the East Caribbean, the Federation of St Kitts & Nevis recently requested emergency assistance from the Regional Security System (RSS), a caribbean-based military force that is generally used to assist in natural disasters, due to the exploding homicide rate on St Kitts, and the widespread availability of arms and ammunition, and its distribution to criminal elements. The RSS has arrived on the island, to assist Kittitian military and security forces.

The lack of domestic stability is a primary factor in the assessment of Country Risk, and you may wish to revise your calculations upward at this time.


CANADIAN WEALTH ADVISER SOLD BOGUS HYIP INVESTMENTS, PROMISING 30% PER MONTH RETURNS




William (Bill) Tynkaluk, the senior Director at Leon Frazer & Associates, Inc., a Canadian firm, sold the firm's clients, and non-clients, what he described as a unique High Yield Investment Program (HYIP), guaranteed by Tyunkaluk to return 400% interest, per annum. The only problem was, the investment program did not exist.

High Yield Investment Programs are fraudulent schemes that rely upon a promised extraordinary return upon investment to trick the victim into participating. In truth and in fact, there are no such programs available, anywhere, anywhere, that pay such amazing rates of interest. It promises a fiscal impossibility, that succeeds, based upon the greed and avarice of the victims, who fail to conduct even rudimentary due diligence, before investing, and who never recover their money, let alone make a profit. HYIP schemes often dazzle their intended targets with stories that seem to be too good to be true, because they are.




Broker-dealer William Tynkaluk entertained those investors whom he sought to participate in his $10m financial fantasy, at Toronto's prestigious Albany Club, at Leon Frazer's expense, where he introduced his marks to the "financial professionals" who offered the HYIP, for which referrals Bill T would earn substantial commissions. those investors who did not have the entire $10m were encouraged to pool their money, and several were known to have done so.  The victims relied upon Tynkaluk's long association with Leon Frazer, and his promises of unbelievable returns upon investment, to their damage and detriment.

Tynkaluk actually had the temerity to warrant that the program was being operated through the US Federal Reserve, and even distributed written materials to that effect. The materials were, unfortunately, created by brokers, and the Fed had no part in this scam, though the victims were suitably impressed. Other evidence of payment, by the victims does, fortunately exist,

Once paid, not only was the HYIP investment never seen again, let alone a return, and victim resulted in promises to inquire, but no follow-up by Tynkaluk was known to occur; excuses were politely offered, but since the investment, though seemingly guaranteed, was made through a third party, Mr. T  was not responsible, though the badges of fraud were painfully evident.

Let us hope that the wheels of justice turn swiftly, and that all those individuals, and companies, that illegally profited from the sale of these totally bogus HYIP investments, be punished for their role in the fraud.



PRESIDENT OF COLOMBIA: FARC MUST DISGORGE CRIMINAL PROCEEDS FOR REHABILITATION



As we expected, and as we predicted on this blog last year, the President of Colombia, Juan Manuel Santos, has now gone on record as stating that the FARC, whom Colombians will shortly vote to approve a comprehensive settlements, must now release the billions of dollars in drug and kidnapping profits that it holds. This is now a matter of Colombian national policy, and not subject to negotiation. The money is to be used to restore damaged lives, businesses, and rehabilitate those who suffered injuries at the hands of FARC soldiers, who committed terrorist acts for 50 years.

Inasmuch as the criminal proceeds are believed to have been mostly laundered, and invested around the globe, as well as on deposit in banks of the world's tax havens, the process will take years to accomplish. It also depends upon whether some FARC leaders will then choose to keep that money for themselves, and flee, rather than face expected prison terms, for murder, kidnapping, theft, and drug trafficking. Don't expect soldiers who are, in truth and in fact, operating as career criminals, to change overnight.

Compliance officers at international banks, where wire transfers from tax haven banks, of FARC "flight capital," are most likely to transit, en route to other, more remote and obscure offshore financial centers, should watch the October vote in Colombia, closely, and thereafter alert their staff about the risk of fleeing FARC criminals, or their money launderers, moving assets to "safety." FARC so-called diplomats would be my choice to be the individuals designated for this task.

It is also important to remember that much of the FARC's cash went straight into any one of a dozen dirty, cooperating Panama city banks, and into accounts held anonymously by bearer-share corporations, or foundations, and could have gone anywhere at that point.

Thursday, September 22, 2016

MORE DIRTY TRICKS FROM CAYMAN GANG OF FOUR RINGLEADER, SHARON LEXA LAMB


Sharon Lexa Lamb, who stole hundreds of millions of dollars from clients, while she was Senior Vice President of Dundee Merchant Bank, with the help of William Tynkaluk, the director at Leon Frazer & Associates, Inc., and the principals at Northland Wealth Management, Inc., is a real piece of work. This cashiered banker, who has gone into hiding, has now sunk to a new low in dirty tricks.

Due to the suit filed against her,and the pending criminal investigations, she reportedly cannot open new bank accounts in the world's tax havens any more, making it difficult for her to conceal the money she stole from her victims. Lamb has sent letters to law enforcement agencies, regulatory authorities, and government, in a dozen countries, trying to discredit the victims, and the whistleblowers, and seeking to destroy their reputations, and credibility. She has thrown bogus money laundering charges around, desperately trying to shoot the messenger.

Lamb then sent poison pen email letters, to all the regulators in the British Virgin Islands, where she had formed a corporation for one of her victims, 90-years old Lawrence Heath, alleging that the retired Canadian attorney was laundering money. Of course, the regulators now have asked the financial professional now handling heath's corporation for more than 40 documents, to verify his legitimate status, and the source of his funds. Lawrence Heath is a Queen's Counsel, and a prominent attorney; This was done with malice aforethought.

What Lamb did was not only time-consuming and expensive for the victims, it was despicable. She deserves what every fraudster who launders the proceeds of crime through US banking centers should get: a 20-year prison term, to keep her from defrauding any other clients. Personally, I prefer that she receive a life sentence, due to the gravity of her offenses, because there is no parole in the US any more. She would die in Federal Prison; I think her victims would agree.