Saturday, February 28, 2015


If I was the convicted Ponzi schemer Allen Stanford, whose current release date is April 17, 2105, when he will be 154 years old, I would tread softly when dealing with the Fifth Circuit Court of Appeals, who literally holds my life in its hands. Stanford, who is appealing his conviction and sentence, continues to ask the Court for favors, which it does not choose to grant.

Stanford filed numerous objections to extensions of time granted to the Government attorney handling the appeal, and even resorted to personal attacks on the lawyer herself, which surely will not endear him to the Court. Finally, when he did not prevail in his objections, he asked the Court to allow him to file a supplemental brief, which in essence was using the Governmental delay as excuse to add to his initial brief, which the Court previously restricted in size. He stated that he wanted to brief four additional issues.

Supplemental briefs are rarely permitted, for instance when a new issue has been raised by the Court during Oral Argument. I do not see where the Rules of Appellate Procedure provide for it in his situation, and I am wondering whether his actions merely reflect the arrogant nature of his personality, which was well known to his associates, when he operated the fraud known as Stanford International Bank, in Antigua.

You may recall that Stanford has been dueling with the Court on various issues, with a lack of success; his actions have resulted in both the Court, and the Clerk, being required to take valuable time to repeatedly respond to what many certainly feel were excessive requests.

Now, the Court has entered an order denying his motion for leave to file a supplemental brief, which is but one more time his motions have been rebuffed. One wonder when Mr. Stanford will get the message, and stop pestering the Court, unless he has something with merit.  

Friday, February 27, 2015


For readers who have seen the many articles commenting upon Citigroup's Form 10-K disclosure, filed on February 25, 2015, about its receipt of subpoenas, including a reference to a Grand Jury subpoena, regarding the bank's BSA and AML compliance program, here is the complete text of the Citigroup statement. If you can disregard the legalese, it appears to be a warning that the bank's affiliate, Banamex USA, is a target of both law enforcement, and regulatory agencies, for BSA and AML deficiencies.

The paragraph appears at page 296 of the filing:

"Citigroup and Related parties, including Citigroup's indirect, wholly-owned subsidiary,
 Banamex USA (BUSA), a California state-chartered bank, have received Grand Jury
 Subpoenas issued by the United States Attorney's Office for the District of Massachusetts,
 concerning, among other issues, policies, procedures and activities related to compliance
 with the Bank Secrecy Act (BSA) and anti-money laundering (AML) requirements, under
 applicable federal laws and banking regulations. Banamex USA also has received a subpoena
 from the FDIC, related to its BSA and AML compliance programs. Citigroup and BUSA also
 have received inquiries, and requests for information, from other regulators, including the
 Financial Crimes Enforcement Network and the California Department of Business Oversight, concerning BSA- and AML- related issues. Citigroup is cooperating fully with these inquiries."

Thursday, February 26, 2015


Ignacio Fábrega, the former Director of Supervision at the Superintendency of Securities, the Panamanian securities regulator, has been arrested by the Third Anti-Corruption Prosecutor, and is reportedly scheduled to be immediately interrogated upon suspicion that he violated public order, meaning corruption. Regular readers of this blog will recall that we identified Sr. Fábrega, last year, as the central figure in the Financial Pacific/Petaquilla Mining Ltd. insider trading scandal.

Fábrega is alleged to have quashed the government's initial investigation into misconduct by a number of sitting ministers, and other suspects, all of whom reportedly traded upon non-public inside information that they received, including former President Ricardo Martinelli, to illegally earn huge profits, at the expense of other investors. 


In any Ponzi scheme, there are often consequences for individuals who have participated, even on the margins, of the fraud.  Prominent Fort Lauderdale jeweler Mark Levinson, who was closely associated with one of his major clients, attorney & Ponzi schemer Scott Rothstein, has taken his own life.

Levinson sold Rothstein jewelry for his high-maintenance wife, and his own use, and also quantities of loose diamonds, reportedly for cash. The figure of $20m in total sales has been thrown around in the media, but details of their relationship remain murky. Levinson did disgorge some of his profits to the court-appointed Receiver for the defunct Rothstein Rosenfeldt Adler law firm, but whether he had other exposure, either to a criminal charge, or to further civil actions, remains a mystery, particularly the cash-for-diamonds issue.

Did the jeweler, facing a major problem not publicly known, decide to end his life, unable to cope with the shame and disgrace that was ahead of him ? We cannot say, but there have been rumors of additional upcoming criminal cases, and you may recall that a key former RRA (RRA) staff member was released from custody early, specifically to be available to testify in court in the future. Was this a pending Grand Jury proceeding ? Whatever it is, it is sad when any individual in dire straits commits suicide.

Wednesday, February 25, 2015


Okke Ornstein, the prolific Dutch white-collar criminal and pornographer, who is being sought by the authorities in the Republic of Panama, so that he can begin serving a four year sentence, reportedly eluded capture recently, by literally jumping in the Pacific Ocean, and escaping from Panamanian law enforcement. Ornstein,  a  criminal wanted in his native Netherlands for questioning regarding a child pornography ring operating in Europe, has made a career out of defrauding foreign expats residing in Panama. Most Panamanians remember him as the general manager of the notorious Marc Harris Ponzi scheme; subsequent to that, he operated the fraudulent Tulip Fund, which was shut down by regulators as a scam.

Our articles about Ornstein's activities have made this blogger a target of libelous Internet articles posted by him; nevertheless we shall continue to cover his cases, as he represents a clear & present danger to individuals seeking to invest in Panama.

He is not your typical mild-mannered white-collar criminal; he is a suspect in two homicides that occurred in Panama, and is known to have attempted to blackmail local residents in Panana City. There are several additional criminal cases pending against Ornstein, as well as a $5m civil judgment that is outstanding. Should you encounter this individual, please notify law enforcement immediately; do not attempt to detain him, as he may be armed.

Tuesday, February 24, 2015


Stuart Gulliver, HSBCs chief executive, whose public apology about the reprehensible conduct of his institution's Swiss private bank, himself was playing the Panama corporation game, with his own accounts at the bank. And this is the person that we are trusting to reform HSBC ?

Gulliver reportedly was the beneficial owner of:
(1) Worcester Equities, Inc.  a Panama corporation, meaning bearer shares.
(2) Worcester Foundation, a Panamanian foundation, that has no shareholders or members.

Apparently, the HSBC CEO parked $7.6m there, which represented bonus payments, and which he reportedly did not want his Hong Kong co-workers to know about. Gulliver lived and worked in the former British Crown Colony for many years, and he is cleverly still domiciled there for tax reasons.

One final note; Gulliver is employed, according to published reports, by the bank's Dutch affiliate, HSBC BV, and not by the UK parent holding company. One cannot help wondering what tax avoidance scheme is the reason for this, remembering the flap over the use, by multinationals of the so-called "Dutch-Irish sandwich," to evade corporate taxes. Who benefits from HSBC having a reported 350 staff members listed as Dutch employees, notwithstanding that they are certainly not working in the Netherlands ?

It is axiomatic that anyone who is in command must lead by example. By artfully concealing the ownership of his wealth through Panama entities, Mr. Gulliver is doing precisely what his Swiss private bank assisted their American clients in doing; obscuring beneficial ownership within a tax haven shell company, and hiding inside a strict bank secrecy, non-cooperative jurisdiction. No wonder regulators are so busy these days.

Monday, February 23, 2015


Alejandro Moncada Luna, the former Chief of the Panama Supreme Court of Justice, who has been under criminal investigation for corruption, has entered a plea of guilty, and will receive a five year sentence. Moncada Luna, whose controversial purchase of two luxury properties, involving large amounts of undeclared cash, entered a guilty plea today to two of the four criminal charges pending against him, Unjust Enrichment, and Falsification of Documents. The other two counts are said to be dismissed, as part of the agreement.

In addition to the prison sentence, the two luxury residences will be forfeited, and he will lose his license to practice law in Panama. The published reports of the plea do not cover bank accounts seized by law enforcement agencies of the Government of Panama, and the disposition of those accounts is unknown.

Chief Justice Moncada Luna is accused of taking bribes to fix Supreme Court cases; some cases were improperly delayed for many years, without any legal justification; others had decisions entered that were contrary to existing law, which were bought by litigants; others were deliberately not heard, notwithstanding that they had sufficient legal merit. He is also believed to have been paid to dismiss the money laundering charges filed against the pyramid schemer, David Murcia Guzmán, and to have him summarily deported to Colombia.

Whether the former judge will actually serve time in prison is not known, because Panama allows early release to house arrest, especially for medical reasons, and Moncada Luna's attorney has stated that his client suffers from health problems, and emotional issues.

Systemic corruption, at Panama's court of last resort, is one of the principal reasons that Country Risk for the Republic of Panama is elevated; its is hoped that the appointment of jurists who will not sell their votes on the Court will change the judicial system for the better, and significantly lower Country Risk.