Kenneth Rijock

Kenneth Rijock

Thursday, June 21, 2018

A FOUR MONTH SENTENCE FOR LAUNDERING $100m ? GET OUTTA TOWN !



A father and son team, who laundered one hundred million dollars, coming to them from Venezuela, into and through the United States, were sentenced in US District Court in New York to only eight and four months' imprisonment, in a case which will definitely not serve as a deterrent to others tempted to engage in criminal activity. The defendants, Luis Diaz jr., and Luis Javier Diaz, who will also be subject to two years of Superviased Release, face substantial forfeiture proceedings, but no more prison time, although the US Probation Office suggested a five year sentence, and the US Sentencing Guidelines computation was 13 years or more.

The defendants used their Miami-based company, Miami Equipment & Export VO., to transfer funds from Venezuela, for a fee, as an unlicensed money transmitter, using fake invoices, which recited that they were for "consulting services," and deducting fees for those illicit services. Much of the wired funds went to a British Virgin Islands corporation controlled by their Venezuelan clients.

How can sentences of only a few months operate as a deterrent to others ? What is a fair sentence for money laundering large amounts of money ? We cannot point to a specific sentence that is sufficient to act as a deterrent to others, to promote respect for the law, and to establish accountability, but what we see here is definitely insufficient. Indeed, it might just be regarded as such a small slap on the wrist, as to encourage others to become money launderers.


WILL NORTH KOREA DROP ITS FINANCIAL NUCLEAR WEAPON, THE SERIES 2006 SUPERNOTE ?



The most lethal weapon that the DPRK has is not nuclear, it is financial. It is the Series 2006 Supernote, the latest counterfeit USD$100 bill, printed in North Koreas, on plates crafted by the North's organized crime syndicate in the ROK, and sitting, well-guarded, in seven secure warehouses in the south, awaiting orders for global distribution. Will Kim Jong Un make that call in 2018 ?

Only a few of these bogus notes have surfaced in recent years:
(1) A number were passed In North China in 2016.
(2) One was identified in Seoul, South Korea, in late 2017.
(3) Advertized for bulk sale in 2018, in Singapore.
(4) A large quantity was reportedly stolen by a defecting DPRK Colonel in China in early 2018.



Will Trump anger Kim to the point that he opens up all those pallets of Supernotes ? We cannot say, but  considering that the United States is in denial over their existence in quantity, as well as the relationship between the dominent South Korean organized crime syndicate and the DPRK, expect that it will later be written off as just another intelligence failure, when the Supernotes fly.









 

Wednesday, June 20, 2018

NEW LEAK OF MOSSACK AND FONSECA DOCUMENTS SHOWS THE LAW FIRM DID NOT KNOW WHO THEIR CLIENTS WERE

A new leak of internal documents at the now-closed law firm of Mossack and Fonseca has revealed that, in the aftermath of the chaos created by the release of the "Panama Papers,"the firm desperately sought to identify the beneficial owners behind the thousands of shell corporations it formed in several offshore tax havens.

The International Consortium of Investigative Journalists (ICIJ), which exposed the original Panama Papers, reports that the law firm tried to make up for years of neglect, in attempting to conduct the due diligence it had deliberately neglected when it formed all those dodgy shell companies. The ICIJ has acquired correspondence from the firm in the period after the release of the Panama Papers, until the firm closed.

Readers who wish to follow Panama Papers 2.0, should access the ICIJ website at   www.icij.org/

DOMINICA SEEKS TO PASS OVERBROAD ANTI-TERRORISM LAW TO SUPPRESS POLITICAL OPPOSITION




The House of Assembly,  Dominica's Parliament, is set to consider on June 25 an Anti-Terrorism Law that will effectively eliminate all politial dissent or opposition to the administration presently in power, by improperly classifying all types of opposition, including peaceful protest, as a terrorist act. The overly broad definition, as contained in the proposed law, will prevent Dominicans from exercising their Constitutional right to dissent and protest, against a corrupt, incompetent government.

Unilke anti-terrorism laws in other countries, the proposed Act does not contain any provision excluding acceptable forms of peaceful protest asnd dissent from the definition of a terrorist act.The impact of this legislation, if it becomes law, is to allow the govenment to charge dissenters and protesters, even if peaceful, as terrorists, and impose a prison sentence upon them, of up to twenty-five years. Dissent is being criminalized, under the guise of fighting terrorism.

The net effect of this new law will be to eliminate the Opposition, in all forms, and to turn Dominica permanently into a one-party state, as all dissent will be classified as a criminal terrorist act, and suppressed.  



SHOULD CBI PROGRAMS HAVE ANNUAL LIMITS ON APPLICATIONS ?



We note that the Government of St. Kitts has reported that it has taken in 1200 applicants for its low-cost $150,000 Hurricane Relief CIU (CBI) Program. At the same time,  the Government of Cyprus has announced that it is limiting the total number of CBI passports issued annually this year to 700, and it will take up to six months to conduct enhanced due diligence upon the applicants. Does Cyprus know something the authorities in St Kitts don't ? Absolutely.

The short answer is that individuals conducting due diligence on CBI applicants (which should be enhanced due diligence, not merely due diligence-level compliance) must have sufficient time to thoroughly examine each applicant, wait for inquiries made abroad to return, and if necessary perform follow-up on the results. If they are under pressure to complete files, due to a large backlog of pending cases, true enhanced due diligence, which cannot be rushed, may suffer, and unsuitable applicants will be approved, only to subsequently get arrested, with their CBI passports in hand.

CBI jurisdictions must accept only quality applicants, which they cannot do if they are into quantity, for the sole reason of maximizing cash flow. Given St Kitts' past history of abject failures in its CIU program, unless it wants to see further compliance failures, with the attendant negative publicity it would do well to put a ceiling on passport issuance, and at the same time truly raise its level of inquiry to enhanced due diligence, which history tells us it does not conduct upon its applicants.  

Tuesday, June 19, 2018

ST. KITTS SENDS IT BEST TO CANADA, TO CONVINCE IT TO OPEN ITS DOORS TO CBI PURCHASERS


St. Kitts & Nevis recently sent an official contingent to the capital of Canada, in a full court diplomatic press, intent on convincing senior leaders to again allow visa-free entry of its passport holders to Canada. The Kittitian diplomats who met with government officials, which included its Minister of Foreign Affairs, and the SKN High Comissioner to Canada, have long been seeking to abolish the Canadian visa requirement, without success, and sought to use family ties, and trade and investment connections, to pursuade Canada's officials to bend to their will. It appears that they failed.

The personal meetings, which included House of Commons leaders,  and Canada's Minister of Immigration, Refugees and Citizenship, had a serious business goal. St. Kitts' Citizenship by Investment, or CBI, program, allows its passport holders visa-free admission to all Commonwealth of Nations jurisdictions, unless otherwise restricted, which Canada does. Of all the visa-free countries CBI passport holders wish to have access to, Canada is at the top of the list. Unless Canada revokes it visa requirement, the SKN CBI passport is not as valuable as those of competing East Caribbean States with CBI programs. This means fewer lucrative CBI sales, hence the personal visit to Ottawa.

Unfortunately, since the St; Kitts CBI program has still not upgraded its CBI applicant vetting procedures, to the level of Enhanced Due Diligence, both Canada and the United States will contiue to regard the holders of SKN passports as high-risk, punishing legitimate native-born Kittitians, as they troll for dodgy CBI passport holders. Someone should tell that to the SKN Minister of Foreign Affairs.

Monday, June 18, 2018

ARE THERE MORE INDICTMENTS IN THE PILATUS BANK $115m IRAN SANCTIONS EVASIONS CASE ?


Ali Sadr Hashemi Nejad
A number of curious filings thus week in the Ali Sadr Hashemi Nejad case, in US District Court in New York, raises a number of questions. Look at these docket entries and see if you can make heads or tails out of it:

(1) the last six documents in the case were all filed under seal. Why so many sealed filings so early on in the case ? These could be sealed indictments of additional defendants who are outside the United States, and not in custody. They could be also sealed due to national security reasons involving Iran.

(2) The court has rescheduled the Status Conference for mid-July, a delay of thirty days, "in the Interests of Justice," a phrase which is often used to grant additional time to cooperating defendants, so that their cooperation can further be exploited.

It is important to remember that he is charged with funneling more than $115m, paid under a Venezuelan construction contract, through the US financial system, for the benefit of Iranian individuals and entities. It is a major sanctions evasions case, and Nejad certainly has first-hand information about the pipelines through which Iran has, for years, moved billions of dollars through the US financial system, details of corruption at the highest levels, in Malta, where he effortlessly obtained a banking license, notwithstanding his and his family's background in sanctioned entities.

The other question is whether the Substantial Assistance being rendered by the kingpin of Iran sanctions evaders, Reza Zarrab, was instrumental in obtaining the indictment against Nejad. Do these cases intersect, and if so, who is next to be charged ?