Tuesday, April 22, 2014


Okke Ornstein
One of Panama's most prolific career white-collar criminals, on the run from the police, is still trying to game the system. Okke Ornstein, who has four criminal convictions, and is in hiding from Panamanian authorities, has, through his counsel requested Clemency*, seeking to avoid serving his consecutive sentences. Ornstein has additional criminal charges pending, which he avoided by fleeing the country.

His attorney has asserted that Ornstein, presently a fugitive from justice, is in poor health, and he fears that he may come to harm in a Panamanian prison. Unfortunately, Panamanian law on Clemency is quite clear: a petitioner may only qualify for Clemency if he has only one conviction, and he cannot have engaged in criminal conduct since that conviction.

The petition is an obvious ploy, made solely for the purposes of delay; Ornstein cannot be arrested during the approximately 30-day period while the Court considers his request. Perhaps the Panamanian court will allow justice to be served, and dismiss the bogus Clemency petition forthwith.

One of his criminal convictions can be see here:


* In the United States, in my experience, a fugitive defendant must surrender himself before he can seek any affirmative relief from a court. It appears that Panama has no such protection of the public interest.


Miami is the epicenter of the Venezuelan expat community, and it is often accused of being the focal point for the laundering of illicitly-acquired wealth coming from Venezuela, but if we are to use the amount of Venezuelan "flight capital" being laundered as the yardstick by which we measure which American city is guilty of moving the most Venezuelan dirty money, Houston, Texas may very well top the list. Here is a summary of my reasons why:

(1) The money laundering operations in Houston are dominated by, but not limited to, trade-based money laundering through the petrochemical industry, involving suppliers of goods and services to Venezuela's government-owned oil conglomerate, PdVSA, and other companies, all of whose deliberately non-transparent financial operations provide a cover for their illicit activities. Goods are provided for prices far in excess of global market pricing, and services, if they are rendered at all, are seriously inflated.

(2) Some of the purported "payments for goods and services" are drug profits, which have been folded into the PdVSA treasury and accounts, by narcotics kingpins. This is a well-known fact among former PdVSA staff, many of whom have left both the company, and their country, for a life of exile. Since PdVSA receives dollars, for its oil exports, and narco-profits are also earned in dollars, mixing the illicit income with the legitimate does not present as problem, especially in a corrupt environment where all participants are either bought off, or otherwise silenced, preventing any internal whistle blowing.

(3) Additionally, the proceeds of extortion and kidnapping operations, conducted in Venezuela, have also found their way into Houston, in this manner, where the legitimate sales of goods, albeit for inflated prices, serves to wash the dirt off this cash. The funds are later transferred, upon the orders of the groups involved in this organized activity.

(2) The companies, most of whom were originally inexperienced shell corporations that magically secured lucrative contracts with PdVSA, resulting in what I can only describe as obscene profits, in the many millions of dollars, per transaction, have become major players.

(3) The owners of these companies are living the high life in Houston, with luxury homes, and all the major adult toys, leading jet-set glamorous lives. If you are familiar with Venezuelan politics, you would recognize a number of them, as they are mostly members of the so-called Bolivarian Elite, all Politically Exposed Persons, PEPs, with close ties to both the Venezuelan Government, and the senior management of PdVSA.

(4) After the wash, dry & fold spin cycle, the squeaky-clean "profits" find their way into tax haven bank accounts of Venezuelan Government officials, including the PdVSA leadership, looking like anything other than the bribes and kickbacks which they are. Some of the profits, of course. remain with the Houston operators; A money launderer's gotta eat, right ?

(5) Some of the now-clean profits actually are contributed to bona fide charitable operations, though a number of those beneficiaries provide support for radical leftist operations within the United States, some of whom have engaged in disruptive and destabilizing street demonstrations and actions that have threatened the peace of urban areas.

(6)) My investigation has identified eighteen corporations that are engaged in what I can only describe as racketeer-influenced corrupt activities. The best estimates are that more than three billion dollars has been laundered through these companies. Rumors abound about ongoing criminal investigations of these companies, as there are obvious Foreign Corrupt Practices Act, as well as money laundering, and RICO, violations, but I have not seen any arrests, yet.

(7) The participants do not skimp on protection: full-time bodyguards on staff, coupled with the state of art security, at a level one generally only sees for senior government figures. They also have retained the services of one of Venezuela's most notorious "reputation protection" firm, whose duty is to flood the Internet with so much garbage that any serious inquiry will require one to wade through page after page of fluff, meaningless web entries, all designed to obscure damaging information about the activities of the subject of your inquiry. This is a common practice among the Bolivarian Elite, whose sweetheart government contracts, with excessive profits built in for them, are the rule, rather than the exception. Also, some of the Bolivarian Elite are convicted felons, accused murderers, and major white-collar criminals, and they do not like to have those facts exposed on the web, hence the widespread use of Internet protection companies.

Are any of your bank clients involved in purchases or sales with any firms in the petrochemical industry, in the Houston area ? If so, I recommend that you examine both your client, and its customers, closely, under a compliance microscope. You do not want to be one of the banks later identified, in any major Federal criminal case, as an unwitting participant in a major money laundering operation.

Monday, April 21, 2014


The candidates debate; Arias is at center
José Domingo Arias, the choice of the ruling political party as the next president of the Republic of Panama, and the favorite, has promised his supporters that, should be be elected, he will reinstate the country's tax law, requiring all corporations to pay income tax of 30%  of their foreign-derived profits. This pronouncement, which he has made several times while on the campaign trail, could in theory result in a balanced budget for Panama, but the potential economic fallout could be catastrophic for Panama.

If all the expats who take advantage of Panama's tax exemption for profits earned outside the Republic were to pack their bags (including their bank accounts) and leave, Panama would not only be plunged into depression, with unemployment quickly rising, but dirty money would find another tax haven to do business. Do you have clients who are invested in Panama ? What are they to do, I wonder ?

Is this really going to happen ? Just the threat of across-the-board taxation is enough to fill the outbound Copa flights. We will be monitoring the situation as we get closer to the election; pay attention.


The Reserve Bank of South Africa,  the country's central bank, has levied major multi-million Rand fines upon four major financial institutions, for deficiencies, in Anti-money Laundering and Counter-terrorist financing. The banks are:

(1) First Rand Ltd. (FSR).

(2) Nedbank Group Ltd. (NED).

(3) Barclays Plc (BARC).

(4) Standard Bank Group Ltd.  (SBK).

The deficiencies were in these areas:

(A) Verification of customer information.

(B) Maintenance of records.

(C) Managing and processing Suspicious Transactions.

If your bank clients are engaged in international trade into South Africa, and any of these banks are routinely involved, you should perform, at the every least, due diligence procedures upon all companies and entities in South Africa that they are doing business with, to rule out any potential money laundering or terrorist financing issues. 


President Martinelli and David Murcia Guzmán

New evidence has emerged to confirm previous allegations that the convicted Colombian Ponzi schemer, David Helmut Murcia Guzmán, was laundering his criminal proceeds through two companies* owned and controlled by Ricardo Martinelli, during the 2009 election campaign of the current president of the Republic of Panama. We have previously made those charges on this blog, based upon the accounts of witnesses with personal knowledge of the operation, but the discovery of documentary evidence now leaves no doubt as to the truth and accuracy of their information. We have previously reported that as a newly-elected president, Martinelli ordered the Attorney General of Panama to close a pending criminal investigation into the allegations in 2010 and later accused her of illegal wiretapping, to discredit her.

The checks were written on accounts of corporations owned by David Murcia, and have caused a political firestorm in Panama City. Martinelli's wife is a candidate for vice president, and the president has stated that he intends to maintain control over his country, after he leaves office, behind the scenes, which has alarmed many of the American expats residing there.

Whether an effective criminal investigation will now be mounted is unclear, given the strength of presidential power, and the rampant corruption that pervades government agencies. As soon as the actual checks are made public, we shall post them on this blog.
* Ricamar SA, and CD SA.

Sunday, April 20, 2014


Irene Shammon
We continue to see lesser players in the Scott Rothstein $1.2bn Ponzi scheme charged with criminal activity, due to their role in the massive fraud, where Rothstein's law firm sold phantom legal settlements to investors. Irene Shannon, formerly known as Irene Stay*, was charged with Conspiracy to Commit an Offense against the United States, specifically being money laundering, and bank fraud.

The defendant, who was the bookkeeper at the now-defunct Rothstein, Rosenfeldt Adler law firm, and who later was designated Chief Financial Officer, allegedly:

(1) Unlawfully moved investor money from the firm's trust accounts, into the RRA operating account, to pay firm operating expenses, and bank overdrafts, and to pay for houses, luxury automobiles, and other extravagances of Scott Rothstein and his wife, both of which are presently serving sentences in Federal Prison.

(2) Engaged in check kiting, using checks given by co-conspirators in the scheme, to temporarily fatten up firm bank accounts, so that it qualified for interim financing at those financial institutions. The total amount of money she moved in that way exceeded $10m. This constitutes bank fraud.

The charging document was a Criminal Information, which is generally an indication that she is cooperating with law enforcement in the case. The maximum penalty is five years in Federal Prison, plus three years of Supervised Release, and a substantial fine.

Who at the firm will be charged next ?
*Case No. 14-cr-60081-RSR (SD FL).

Saturday, April 19, 2014


Richard Chichakli has filed a detailed list of errors that he asserts were committed at his trial, in a 37-page pleading that appears to be supplemental to his Rule 33 Motion for a New Trial, which is still pending, together with other post-trial motions that we have covered in earlier articles on this blog.

To briefly summarize the defendant's position:

(1) There was ineffective assistance of counsel. One should remember, however, that Chichakli chose to defend himself, and he only has Stand-by counsel.

(2)The Court improperly admitted the lay opinion of the bob-expert witness, Al Monica.

(3) There was jury misconduct.

(4) The Court improperly used Federal Evidence Rule 404(b) evidence, which cover prior criminal conduct, as a basis for the conviction.

(5) The Court erred in charging the jury.

(6) The Court failed to rule on defendant's motion concerning "secret evidence," and improperly precluded admission of relevant evidence helpful to the defendant.

(7) The Government failed to produce the search warrant authorizing the search of defendant's property in May 2005, and failed to produce the evidence seized from the search in Discovery.

(8) Notwithstanding missing witnesses, defendant's cross-examination of government witness, concerning an adverse finding regarding credibility, was improperly denied.

(9) The Court failed to issue a jury charge on a missing witness.

(10) The Court's jury instruction on the indictment was prejudicial to the defendant.

(11) The Court improperly charged the jury regarding the evidence.

(12)  The defendant was not afforded a fair trial, and was prevented from preparing a meaningful defense.

It has, of course, occurred to me that the presentation of these issues serves to preserve them for the purposes of any appeal from the defendant's conviction, should the Court deny his motion for a New Trial, as such motions are rarely granted in Federal Court.