Kenneth Rijock

Kenneth Rijock

Wednesday, June 29, 2016

NEW REPORT ON TRADE-BASED MONEY LAUNDERING DESERVES A READ


The recently-released report, by the Congressional Research Service, on trade-based money laundering is recommended for readers of this blog who serve in the compliance field. Entitled Trade-Based Money Laundering: Overview and Policy Issues, the report has a good summary of the various permutations and combinations of tactics that trade-based money launderers employ, with general success, as the average compliance officer does not have a well-rounded understanding of the subject.


You can access the complete text here.

Tuesday, June 28, 2016

GUILTY VERDICT FOR MURDERER OF ROTHSTEIN PONZI SCHEME PARTNER


Scot Rothstein and the late Melissa Lewis
A jury in a criminal case in Fort Lauderdale, Florida has found the former husband of a law partner  convicted in the case of Ponzi schemer/attorney Scott Rothstein, guilty of murder, and the Court gave him a mandatory life sentence. Rothstein firm attorney Melissa Lewis, who was the best friend of convicted firm CEO Debra Villegas, was killed by Villegas' ex-husband.

The trial of the case was delayed several years, due to insanity defense issues. Debra Villegas was sentenced to ten years in Federal Prison for her role in the billion dollar Ponzi scheme, orchestrated primarily by attorney Scott Rothstein, who sold bogus out-of-court settlements in discrimination and sexual harassment cases to unsuspecting investors. In truth and in fact, he was paying older investors with money received from new victims. Rothstein is serving a 50-year sentence for his Ponzi scheme.

 Debra Villegas sentence was subsequently reduced for Substantial Assistance, and she testified at trial against her former husband, Tony Villegas.


INVESTIGATING JUDGE IN PANAMA ASKS FOR INTERPOL RED NOTICE ON EX-PRESIDENT MARTINELLI


The investigating judge handling some of the dozen criminal cases pending against the fugitive ex-president, Ricardo Martinelli, has asked the Foreign Ministry to request that INTERPOL issue a Red Notice against him. Such an act could result in his arrest and detention, should Martinelli seek to leave Miami, where he is currently living, for another jurisdiction.

While is it believed that Martinelli has been barred from entering Paraguay, where he set up a villa for his exile from Panama, it is feared that Martinelli may seek to establish himself in another country, from which he cannot be extradited. Some of the victims of Martinelli's crimes, especially the illegal surveillance he set up in Panama, to spy on his opponents, have complained bitterly about the extensive delays in extraditing him for prosecution, and have openly questioned the Varela government about whether Martinelli will ever see the inside of a Panama City courtroom, to answer for his crimes.

Sunday, June 26, 2016

PALESTINIAN TERRORIST WHO BOMBED BRITISH CONSULATE TO GET A NEW TRIAL ON IMMIGRATION FRAUD CONVICTION


Rasmea Odeh, whose conviction and sentence, in a US District Court, for immigration fraud, was reversed, to allow her counsel to enter expert testimony at trial, will be tried again in January, 2017. Odeh, who was convicted, in Israel, for bombing a British Consulate, and a supermarket, which resulted in multiple fatalities and casualties, failed to disclose her conviction, and terrorist association, when applying for American citizenship. She was a known member of the Popular Front for the Liberation of Palestine, a designated terrorist organization.

Odeh, who was serving a life sentence for her involvement in these two terrorist bombings, and who was found to have bomb-making materials and explosive bricks, in addition to functional bombs, in her residence, was later freed, as a part of a prisoner exchange. She subsequently entered the United States through Jordan, under another name.

The defendant denied that she was ever advised that all foreign convictions were required to be disclosed, and it appears that she used an alias, in her citizenship application. After her Federal Court conviction, she was sentenced to 18 months in prison, and a revocation of her US citizenship.

On appeal, the defendant's counsel argued that it was error to bar expert testimony by an individual experienced in torture matters; Odeh claimed that her confession in the Israel case was obtained by torture, but has not explained her possession of explosive materials. The Sixth Circuit reversed and remanded, and sent the case back down to the trial court; it is scheduled to be heard in January.

The case has generated a large amount of media, as well as public, attention, due to the national debate over the threats posed by terrorism within the United States, and the well-founded fear that terrorists, from the Middle East, will be entering America, undetected, creating a clear and present danger. Her supporters, who have included Iranian-Americans, have used her case as a forum for anti-American, anti-Semitic and anti-Israel remarks, including against those Officers of the Court who are Jewish, and ignored findings of fact in the original terrorist case, seeking to make a political statement.

There will be a pre-trial hearing, to determine whether the defendant's expert witness will be allowed to testify at the re-trial.


FATF BACKS OFF ON IRAN FOR TWELVE MONTHS, BUT WATCH YOURSELF


The Financial Action Task Force (FATF/GAFI) has, in its June 2016 Public Statement, regarding Iran, "suspended counter-measures for twelve months, in order to monitor iran's progress for implementing the Action Plan."  Counter-measures, which mean calling upon FATF members to take steps to protect themselves from Iranian AML/CFT, will be reimposed after a year, if Iran failed to "demonstrate sufficient progress."

This is NOT a blanket excuse to ignore sanctions that are in place in your jurisdiction. Readers who wish to review the complete text of the Public Statement can access it on the FATF website:
 http://www.fatf-gafi.org/  and click on High Risk and Non-Cooperative Jurisdictions.




Saturday, June 25, 2016

HEZBOLLAH WAR DRUMS ALONG THE LITANI COULD LEAD TO THE DESTRUCTION OF THE BEIRUT FINANCIAL CENTER

Downtown Beirut in 2017 ?
Recent statements, coming from senior Hezbollah officials, indicate that the terrorist organization intends, in the next round of hostilities between it and Israel, to invade Galilee, occupy villages and towns, and take civilian hostages. The concept is that Israel will be deterred from attacking targets inside Lebanon, for fear that Hezbollah will kill its hostages in retaliation. This arrogant misplaced reliance could prove to be be a fatal mistake, where the country's financial center, located in downtown Beirut, is concerned. Allow me to explain.

Many Israeli general officers have, publicly, stated that the IDF is committed to the Dahiya Doctrine, in the next Hezbollah-Israel war; this policy, which includes a massive response against the Lebanese infrastructure, in the event that hostilities occur, was seen, in part, during the last conflict. The result was the complete destruction of a large part of the Shi'ite neighborhood in the south of Beirut. The next war will most likely see Israel attacking downtown Beirut, damaging or destroying the nation's financial center, which, in the present absence of tourism, is the most important sector in the Lebanese economy.

Without the brick and mortar structures that house the financial industry, with the attendant records and documents, and the individuals that staff those institutions, Beirut's banks will not be able to operate, let along support, any postwar Lebanese recovery program. Lebanon would be thrown into chaos, and the loss of life, which would then impact the Sunni, as well as Christian, communities, for the first time, could return Beirut to the stricken state it was in, during the 1975-1991 Lebanese Civil War, or worse.

Imagine Beirut without its banks and financial advisers; given that Hezbollah has bragged that its rockets and missiles will kill scores of civilians in Israel, in the event of war, one cannot expect that the Lebanese capital will be spared by Israeli retaliation, and given Israeli air superiority, every bank in Beirut could be out of business in one terrible day.

I bring this dark scenario up, for the purposes of risk assessment by compliance; should more Hezbollah officials come to believe that their organization could successfully invade Israel, and occupy a large amount of territory, then this nightmare for Lebanon becomes a distinct possibility. Perhaps Lebanese leaders might want to take a look at photographs of 1945 Berlin, to get an idea of what their capital could look like, and then see what they can do to prevent the unthinkable from happening in 2016.


PANAMA'S ORGANIZED CRIME SYNDICATE LAUGHS ALL THE WAY TO THE BANK

Mayer Mizrachi Matalon
Most seasoned Panama observers were not surprised this week, when they learned that Mayer Mizrachi Matalon, the son of fugitive Panamanian organized crime figure Aaron Mizrachi, bribed his way out of Picota maximum security prison, where he was being held, pending extradition to his native Panama. Mizrachi is wanted in Panama in a major corruption scandal, but he probably will never see the inside of a Panamanian prison.

Mayer's father, Aaron "Roni" Mizrachi, is the brother-in-law of Panama's fugitive former leader, President Ricardo Martinelli. Both Mizrachis, and Martinelli, participated in massive corruption activities while Martinelli was president. I will not bore you with the details, and they have appeared on this blog many, many times. Aaron Mizrachi, having fled Panama, is now living comfortably in the Middle East, and his extradition, to face justice in Panama City, is extremely unlikely. Martinelli is himself living high on the hog in Miami, where dirty former leaders often go to enjoy their ill-gotten gains.

Aaron Mizrachi
Mayer has now reportedly requested Political Asylum in Colombia, which is curious, because he is merely a white-collar career criminal, and is not wanted in Panama for anything related to his politics, or opposition to the government of President Juan Carlos Varela. Mizrachi was born into what I refer to as Panama's Syrian organized crime syndicate, due to the fact that many of its members' parents and grandparents are known to have been from Homs, and others from various Middle Eastern countries. You would be stunned to learn who Mayer's relatives are.

Another relative: Gabriel Betesh, also now living in the Middle East

The syndicate is a shadowy organization, many of whose members have married into related families, much like the American Mafia, creating an interlocking directorate, which engages in drug money laundering, fraud, official corruption, and theft of government funds on a grand scale. Their power, in the financial, as well as governmental, spheres, has rendered them immune from criminal prosecution, and the United States, anxious to preserve its valuable listening post on Latin America, is not inclined to interfere, notwithstanding the massive money laundering, through US banks, that the syndicate conducts. The Black Market Peso Exchange, through the Colon Free Zone, is merely the tip of the iceberg for this group.

While the Panama Papers, the Financial Pacific/Petaquilla Mine insider trading case, and assorted other financial scandals, will rock Panama, from time to time, the syndicate will continue to thrive, so long as North America and Europe continue to have their love affair with dangerous drugs from South America. for someone has to launder that money, and what better place than a jurisdiction where questions about Source of Funds, and Beneficial Ownership, never come up. 

Readers who have wondered why I place Country Risk for Panama at such elevated levels now should have a better understanding of one of my reasons.