Kenneth Rijock

Kenneth Rijock

Thursday, January 19, 2017


Compliance officers all over North America are closely watching the suit brought by FinCEN, against Tom Haider, the former compliance officer at MoneyGram, which seek to enforce a $1m penalty, levied against Mr. Haider, individually. While all parties to litigation have a constitutional right to access to legal counsel of their choosing, in my humble opinion, Haider's counsel, while seeking, in the litigation, to have their client evade responsibility for his alleged compliance malpractice, through a technical argument, denying FinCEN's legal right to impose individual liability for compliance failures, shows that their client believes that only his former MSB is liable, for his intentional torts.

This is clearly wrong; compliance officers, like all professionals, are personally liable for their individual malpractice, and trying to pass the buck to their company says that they do not accept responsibility for their actions. One cannot hide behind a corporate shield, especially where one's actions are egregious, repeated, and chronic. That is not what compliance officers are about; we are the trusted gatekeepers for our bank, or NBFI, or MSB, or CU clients, and to seek to avoid the consequences of our mistakes, through technical or procedural means, is not only dishonest, but interferes with the trust established between compliance, and bank leadership, who is depending upon us to protect their entity.

If there are no personal consequences for intentional compliance misconduct, then the level of due care a compliance officer takes with his or her work could not only decline, compliance apathy, about quality of work product might ensue, which translates to a substantial raise in operational risk. Keep the bar high, in the compliance field, by supporting good work, and by punishing intentional acts that subject a client to sanctions, monetary damages, or worse.



The shape of things to come in Panama tomorrow ?
The citizens of Panama City are organizing a major street protest for tomorrow, Friday, to demand that the names of the former government officials, in the previous Martinelli administration, who received part of the $59m, in bribes paid by the multinational construction giant, Odebrecht, to obtain lucrative contracts, to disclosed, and that the guilty parties be prosecuted. For some reason, there has been no public release of the names of the recipients of the illicit payments, some of whom reportedly are private citizens, and were not either in the prior, or present, governments.

After an unofficial list was circulated, which asserts that it came from a US law enforcement source, the public calls for naming & shaming, directed to the Government of Panama's anti-corruption prosecutors, who are conducting the investigation, increased. This far, the only former government officials publicly named is the fugitive former leader of Panama, Ricardo Martinelli, who is alleged, with his sons, to have received over $6m, from Odebrecht, some of which appears to be held in accounts, recently frozen by Swiss authorities, who are requesting information, about the account holders, from Panama.

Wednesday, January 18, 2017


The New York State Supreme Court, in a opinion* dated January 5, 2017, has disbarred David J Boden, who was the in-house attorney at Scott Rothstein's law firm. Boden pled guilty to Conspiracy to Commit Wire Fraud. a Federal felony, for which he was sentenced to 18 months of incarceration, and one year of Supervised Release, and he was released in November of 2016. The Court noted that he failed to notify the State of New York of his conviction, which is itself a violation of New York bar rules, I understand, as it is in other jurisdictions.

The Court held that Boden's conviction was for a crime that was essentially similar to the state felony of Scheme to Defraud in the First Degree, and also found that he had been automatically disbarred "by operation of law at the time of his conviction."Boden had asked for a postponement, to permit him to seek an "expungement," through an as yet unfiled motion, but the Court denied his request, and granted the Disciplinary Committee's request for Disbarment.

One puzzle remains: what is a lawyer, not admitted to practice in the jurisdiction, doing in a law firm where all the other counsel are lawyers who are admitted ? I have often wondered why he did not simply take the Florida Bar Examination. Otherwise, his utility was limited to office practice, and if everybody else is a lawyer, why have someone not admitted on staff, as counsel ? Who was he advising ?

 If he was charged with supervising the "investment contracts" that the victims all signed, detailing the bogus legal settlements, and bogus judgments of phantom client, his level of culpability was indeed higher, and his sentence, therefore, was too lenient, in my humble opinion. That being said, he has paid for his crimes, and deserves an opportunity for rehabilitation; let us hope we will not be writing about him in the future.
*Matter of Boden, 2017 NY Slip Opinion 0092 (Sup. Ct. App. Div.).


The reported $59m settlement, between the Brazilian construction giant, Norberto Odebrecht SA, and the Government of Panama, which Panama asserts is the amount of bribe money paid to land major contracts in Panama, may be lower than the actual amount of bribe and kickback money payments made to Panamanians, according to reliable sources, who claim the true figure is much higher.

Many prominent Panamanians, both in and out of government, are said to have each received millions of dollars, to approve major construction contracts with Odebrecht. The fugitive former president of Panama, Ricardo Martinelli, allegedly received over $6m, distributed to him, and his sons. The fact that the payments were so widespread in Panama is extremely disturbing, and further confirms that a culture of corruption, at the highest levels, continues to flourish, uncontrolled, notwithstanding the reputed reform efforts of the present Varela administration.

When additional details;, regarding the discovery of new information about additional bribe payments, becomes public, we shall analyze it on this blog.

Tuesday, January 17, 2017


In what can only be regarded as utter arrogance, in the face of what should have been the last gasp of a scoundrel, the king of the Ponzi schemers, R Allen Stanford, whose Stanford International Bank ruined hundreds of lives, has filed a petition for rehearing, upon the US Supreme Court's denial of his Petition for a Writ of Certiorari. You may recall that his original cert petition, to the high court, was denied, without opinion, on November 28, 2016; his District Court conviction was affirmed by the Fifth Circuit, in his only appeal as a matter of right. US Supreme Court proceedings are discretionary with the Court.

Stanford, who is seeking to overturn his conviction, and 110-year sentence, lists grounds that most lawyers would decline to assert for fear that they might be disciplined, for arguing issues that have no basis in either fact or law, or are a good faith argument to overturn existing law. Does not the word hubris apply to Stanford in this proceeding ?

His issues:
(1) The pretrial civil seizure of his assets precluded him from retaining the counsel of his choice, in his Federal criminal case, and appointed counsel, who was overburdened, and his defense suffered as a result.
(2) Amazingly, Stanford also argued that he would receive true justice from a nine-person Court; cert in his case was denied by the existing eight-person Court. He actually  claimed that a future Trump appointee to the Court would insure justice in his case.

We trust that the justices of the Supreme Court will swiftly examine the petition, and render the appropriate decision, to add finality our coverage of this massive Ponzi scheme.

Monday, January 16, 2017


We continue to hear from investors who sent in money to the broker-dealer, Panama Wall Street, SA, shuttered by order of the Superintendency of Securities (SMV). The victims have been told that the Government of Panama has frozen all the assets of the firm, in the Intervention, though the truth appears to be that the company was a Ponzi scheme, and no significant assets were seized. Securities fraud has been alleged.

Panama Wall Street's principal, Joachim Bernard Buse, a citizen of the Netherlands, who previously operated a fictional "High Yield Investment Program (HYIP)," is known to have spent huge sums of investor funds on jewelry, for his Peruvian paramour, and to have made other purchases of expensive personal items.

Persons or entities unknown to this blog have attempted to hack into, corrupt, and otherwise interfere with, previous articles about the fraud committed at Panama Wall Street, but all such efforts have been unsuccessful. Readers who wish to review the Intervention Order against Panama Wall Street SA can find it on previous articles published by this blog.


Visa for Panama
The Government of Panama has announced that it will no longer accept visa-free entry of individuals who hold multiple-entry visas from the European Union; they will be required to obtain Panamanian visas prior to their visit. The holders of visas from the UK, the USA and Australia, valid for at least one year, are still allowed visa-free entry. The change is claimed to be an effort to improve immigration controls.

Whether this is an effort to exclude individuals from the developing world, who engage in transporting financial instruments into Panamanian banks, for tax evasion or money laundering purposes, is not known. Add this to the recent refusal of Panamanian banks to open new accounts for foreign nationals, which some observers see as a possible response to the Panama Papers scandal, and it could represent a trend, towards the suppression of money laundering activity in the Republic. Some are pointing to the fine assessed, against Odebrecht, as an example of a sea change in Panama's policies.

 Of course, to be truly effective, Panama will have to actually arrest, try and imprison offenders for money laundering offenses, which is not currently the case in Panama City, where bankers move dirty money with total impunity, working with both foreign money launderers, principally from Venezuela, and Panama's powerful Syrian organized crime syndicate.