Friday, October 24, 2014

WILL CHINA'S PROFESSED NEW ADHERENCE TO THE RULE OF LAW CHANGE COUNTRY RISK ?

The Government of China has announced what it asserts are new procedures designed to implement the Rule of Law in Chinese courts, which are notorious for bowing to the direction of powerful PEPs, who often direct the judges to enter rulings favorable to their interests, and contrary to both the evidence and the law.

A word of advice: don't reduce your Country Risk assessment for China just yet, for the entrenched Communist Party, and the corrupt senior officials who run China, are not so easily removed from their position of influence. Should there be actual reform, and it shows up in court decisions that actually apply the Rule of Law, we will know that soon enough, but meanwhile Country Risk for foreign companies operating in China must remain elevated. So long as foreign corporations do not get a fair shake in Chinese courts, risk levels must remain elevated.


Wednesday, October 22, 2014

SENTENCING OF HEDGE FUND PONZI SCHEMER ILLARRAMENDI RESCHEDULED FOR SIXTH TIME



The US District Court has again,for what must be a record sixth time, reset the sentencing date for Francisco Illarramendi, the hedge fund operator convicted of operating a Ponzi scheme whose victims lost $300-500m. Counsel for the defendant, who again  argued that he has not completed his preparation, blamed the poor facilities where his client is being detained, the vast amount of information that must be reviewed, and the critical issue of calculating the exact amount of the monetary loss suffered by the victims, for the delay.

Counsel's concerns are real.;Illaramendi, who has gone through three attorneys during his case, could in theory receive a life sentence, if the Court decides to accept the loss estimates of the US Attorney's Office. A stiff sentence in this case, which is richly deserved, could serve a larger purpose; it would resonate in the hedge fund and alternative investment industry, and serve as a powerful deterrent to operators and managers of hedge funds. 

Tuesday, October 21, 2014

RUSSIAN HACKER, ROMAN SELEZNEV, IN CUSTODY IN SEATTLE, HAS HIS TRIAL PREPARATION CONCERNS ADDRESSED

Roman Seleznev
Roman Seleznev, the high-profile Russian hacker who is charged with massive credit card theft in two states, who has asserted that he cannot adequately prepare for trial, given his restrictive custody situation, where he is regarded as high-risk, has had his attorneys' objections settled, through an agreement with the US Attorney's office in Seattle. The stipulation's terms


"... While housed in general population, Defendant will be permitted to visit with counsel in the general population visiting area, which permits contact visits between the visitor and the inmate. Counsel will be subject to enhanced screening before the legal visits, and the defendant will be subject to enhanced screening after the legal visits." Joint Submission Re: Legal Visits.

The case goes to trial on November 3, 2014. The defendant's father, Valery, is a member of the Russian Duma, the country's Parliament, and he has alleged that the circumstances of his son's arrest in the Republic of the Maldives, which is outside US territory, amounted to an illegal kidnapping by American law enforcement agents. Readers can find the answer to that question in US vs. Alvarez-Machain, 504 US 655 (1992), in which the United States Supreme Court held that a trial court's jurisdiction is not affected by the manner in which the accused is brought before it.

Valery Seleznev



Monday, October 20, 2014

SAN DIEGO ATTORNEY USED IOTA ACCOUNT FOR MONEY LAUNDERING VENTURE



The law is clear: a money service business must have both a FinCEN, and a state license, to legally operate in the United States. That point was painfully brought home a couple of years ago in the Rosemont Financial Corporation case, which cost many Venezuelan businesses obscene fines and civil penalties, but it appears that one San Diego attorney failed to read any of the articles covering the matter. Richard Medina, Jr., Esquire, and a co-conspirator, have been charged with multiple Federal felonies, including money laundering, for operating an unlicensed money transmitter business from that city. They operated what can only be described as a full-service money laundering money transmitter.

It gets better; the defendants allegedly advertised that they could pick up six figure cash shipments, anywhere in the United States, and transfer the money globally, for clients who needed this money laundering service, with no questions asked about Source of Funds, or Beneficial Ownership of the cash. For the defendants, the customer was always right. Didn't this lawyer grasp the importance of an MSB license, or the AML/CFT laws and regulations for a money service business ?

The final insult to our intelligence: the money was funneled through the lawyer's IOTA account. IOTA, which stands for Interest on Trust Account program, applied to attorney checking trust accounts, which hold client's money short-term, and which exist to send the interest earned thereon to fund court-approved programs. Using an IOTA account to launder money is not only stupid, as they are routinely audited, but a personal insult to the state bar association, and the judiciary, which selects the programs to fund. We trust that the Court applies an appropriate term of imprisonment for this attorney; perhaps he can read up on the requirements for operating an MSB in the prison law library.





   


CANADIAN IS ON DHS/ICE MOST WANTED LIST


This is Calvin Ayre, a Canadian national believed to be currently residing in Antigua, but who has also been seen in Canada. He is on the Department of Homeland Security/Immigration and Customs Enforcement Most Wanted Fugitive List, due to his indictment in the District of Maryland, for money laundering, and for massive violations of the Unlawful Internet Gambling Enforcement Act of 2006. His billion dollar offshore Internet gambling empire, Bodog, using corporations domiciled in Malta, relies upon third-party financial institutions, outside of the United States, to pay its winners.

In the event that an individual who looks like this photo seeks to open a corporate account relationship with you, his DOB is May25,1961, he is 6'2" tall, and weighs approximately 200 pounds.


WATCH TURKISH BANK TRANSFERS CLOSELY WHEN GAZA RECONSTRUCTION PAYMENTS BEGIN

The leaders of Turkey & Hamas, holding hands.
Turkey, which has become a major political supporter of the Hamas government in the Gaza Strip, and is playing host to a number of senior Hamas officials, who now openly operate from there, bears close watching, when donor funds for Gaza reconstruction begin to flow into the Palestinian Authority. Given the long and sordid history, of Hamas leaders siphoning off money for themselves, you can expect a portion of the reconstruction funds to be cleverly diverted into their pockets.

Since all money stolen in the Territories cannot be safely kept there, due to the threat of discovery, and since Turkey is a known supporter, it is reasonable to expect that at least some of the diverted funds will end up transiting through Turkish banks, who will most certainly not ask the tough questions about Source of funds, and Beneficial Ownership of the cash.

Therefore, once the funding begins, it becomes prudent to thoroughly examine all large corporate wire transfers, originating from Turkish banks, where the sender does not appear to be actively engaged in ongoing business, where the company sending the funds is newly organized, and where you cannot ascertain the purpose of payments. You do not want to unwittingly bank dirty money from an official who is with a designated terrorist organization, and whose illicit fortune is later exposed in a law enforcement investigation.

   


Sunday, October 19, 2014

IS IT TIME FOR THE EU TO ERECT THOSE CUSTOMS BARRIERS AT THE SWISS BORDER AGAIN ?



In what must be the absolute height of arrogance, the Swiss Government fined one of its nationals* for violating the country's bank secrecy laws. Trouble is, the man, who was a cooperating witness in the American UBS case involving Swiss bankers who entered the US to assist American tax evaders, was himself a criminal defendant whose guilt was adjudicated, and who was punished for his crimes. He frankly had no choice but to cooperate, given that he has immediate family residing in the US. Switzerland is trying to tell the US and the EU that it is cooperating, and it goes and burns a Swiss national, one of their own, for doing do ? The original purpose of the Swiss laws, hiding money from the Nazi regime, no longer exists, and, in a post- 9/11 world, things have to change.

It is high time that the archaic Swiss bank secrecy laws be abolished, and the two trillion dollars of "flight capital", much of which is untaxed wealth, and some of which is dirty money, be repatriated to the countries of origin. Failing that, let us remember that Switzerland, which has chosen not to be a member of either NATO nor the European Union, is not critical to the economies of Western Europe.

For good cause, preferential customs and immigration benefits extended to Switzerland can be revoked. Shall we put up the customs barriers again, or will Switzerland kindly join the rest of the financial world, and abandon its position as a shelter for tax cheats, corrupt dictators, drug barons, and terrorist financiers ?

My advice to FATF: remember that the Government of Switzerland deliberately and intentionally, delayed its negotiations with the United States, over the disclosure of the names of US clients, for several years. Don't be fooled; designate Switzerland now as a 'black" uncooperative tax haven.
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*Renzo Gadola.