Kenneth Rijock

Kenneth Rijock

Thursday, November 26, 2015


Miami Federal Detention Center
We have been getting inquires from readers, requesting an update into the status of the appeal of Richard Chichakli, the Syrian-American CPA who worked with the Russian arms trafficker, Viktor Bout. The case has generated great public interest, not only because of the defendant's ties to Bout, but due to his allegations of governmental misconduct, against both himself & Bout.

 Chichakli is still being housed at the Federal Detention Center (FDC) in downtown Miami, which is primarily a pre-trial holding facility, and not designed for permanent placement of inmates serving their sentences, unless there are special circumstances. He will not be released until June, 2017, and I can find no reason to relocate him to Miami.

 Given that Chichakli had numerous objections, regarding his inability to adequately prepare for trial, while being confined in an FDC in New York, there is clearly a question as to the propriety of his swift post-conviction transfer to Florida, which is far from the venue of his appeal, the Second Circuit, and whether it was done for punitive reasons by the BOP.

The United States has filed its brief in the appeal, and here are the pertinent point covered in the 75-page, well-documented and with profuse citations, filing. Readers who wish more detail should access the document on PACER, or at terminals available to the public at the Court.

(1)  The District Court properly admitted the Bout laptop and exhibits.
(2)  The Court properly admitted the summary exhibits, and the testimony describing them.
(3)  The Government did not suborn perjury.
(4)  The Indictment was valid.
(5)  There was no violation of the Rule of Specialty.
(6)  The appellant has no cognizable claim for ineffective assistance of counsel.
(7)  There was no instructional error.
(8)  There was nothing improper regarding the Government's references to Bout.
(9)  There was no "secret" evidence admitted against Chichakli.
(10) There were no Discovery violations.
(11) Chichakli's placement in the Special Housing Unit (SHU) was not part of the Government's trial strategy.
(12)  The District Court's Guidelines calculations were correct.
(13)  The Forfeiture order should not be disturbed.
(14)  There was no evidence of juror misconduct.

The US Attorney's Office has requested Oral Argument, which is unusual, as it generally desires to have the cases decided solely upon the briefs filed, but then again, it is a case of great public interest, with multiple issues raised by the appellant.

There is a possibility that, should the Court delay somewhat in its decision, or there be significant extensions of time granted, that the defendant could complete his sentence, and actually be released before a ruling is handed down. Can this be considered a case with political implications ? We cannot say at this time, but we will continue to follow the progress of the appeal on this blog.


Wednesday, November 25, 2015


Barracuda Networks, inc.,  a US seller of "web filtering products, including products that could be used to block or censor Internet activity, " and whose UK subsidiary sold Internet security products, and related software subscriptions, to individuals and entities in Iran, Sudan & Syria, some of whom were SDNs, was fined $38,930 by OFAC.

Although designated a non-egregious case, I disagree. These products have no benign applications, other than to keep minor children from accessing mature Internet sites.  The software damaged any democracy advocates in those countries, and prevented individuals from seeing the truth, unclouded by evil national interests that are in conflict with Western values. The officers richly deserve some Federal Prison time, and allowing this to remain a strictly civil case is a miscarriage of justice, in my humble opinion.

Add to this the fact that Barracuda Networks, Inc. had no OFAC compliance program in place, and we end up with a mere slap in the wrist, for reckless violations. You may read the complete text of the Enforcement Information for November 24, 2015, here*.

Tuesday, November 24, 2015


Ayyan Ali, regarded by many to be Pakistan's top supermodel, and who was stopped, in March, 2015, when she attempted to board a flight to Dubai, carrying an undeclared $508,000, has been charged with money laundering. While the long delay in bringing her case has often been attributed to her threats to name names, regarding her clients, she has been indicted by the Customs Court, and a hearing has been set for December.

Ali's many previous trips to the UAE, as she is now thought to have been a regular bulk cash smuggler for prominent Pakistani businessmen, has highlighted the potential role of celebrities in financial crime. Most celebrities are rarely stopped, let alone searched, when they jet around the globe, and customs agents, who are often in awe of them, are usually prone to avoid properly discharging their law enforcement duties, when confronted by a famous film or television star.

A number of international celebrities have been found to be carrying large amounts of cash, under circumstances that suggest criminal activity, including tax evasion, either for themselves, or others. Compliance officers should take that into account when bank staff has been receiving unusual requests for large amounts of cash, or the purchase of significant amounts of foreign currency; Don't let their stardom dazzle you. 

Saturday, November 21, 2015


The Brief of Appellee in the Second Circuit appeal, by the Venezuelan Ponzi schemer, Francisco Illarramendi, states that the trial judge did not commit error in its calculation of loss. The appellant, who has gone through no less than five lawyers in this case, delayed sentencing for three years with his arguments regarding the losses suffered by the victims.

The various estimates of the total loss were $382m, $300m, $380m, and $275m. The defendant's gain was estimated as $20m, but it may have been as high as $22m.

The US Attorney's office in Connecticut made these points:

(1) The District Court did not commit procedural error in calculating the loss amount under the Sentencing Guidelines.
(2) The District Court properly determined that Illarramendi's fraudulent conduct caused a very substantial loss.
(3) The District Court cautiously determined that the loss amount could not be determined with sufficient precision.
(4) The District Court acted well within its discretion, in declining to conduct an evidentiary hearing, regarding the loss amount, and the gain attribution.
(5) The District Court properly used Illarramendi's gain as an alternative measure of loss.
(6) If there was Procedural Error, it constituted Harmless Error.

The Appellant's Reply Brief is due in late December; He is currently serving a 13-year sentence.

Friday, November 20, 2015


Most compliance officers are familiar with the cases involving billions of dollars of Medicare payments fraudulently obtained by criminal organizations in Florida. Generally, the front man relocates to Cuba, where he has enjoyed immunity from extradition to US District Court in Miami. There are, however, other classes of criminals who take full advantage of the "Sugar Cane Curtain" that allows them to flee to Cuba, and enjoy the fruits of their American criminal pursuits.

The Wanted poster above illustrates a different type of criminal conspiracy; the offenders fake automobile accidents, and then, using corrupt physicians to assist them, file multiple claims against the insurance companies that cover the motor vehicles. One such criminal organization existed in South Florida; the law enforcement operation that targeted the fraudsters is called Operation Sledgehammer.

As you can see, all the principal bad actors have fled to Cuba, thereby avoiding criminal prosecution. One wonders what the position of the Government of Cuba will be, when diplomatic relations are finally normalized between the two countries ? There are a large number of fugitives from justice living in Cuba at this time. Will Cuba give them up, when sanctions are completely removed ?

Thursday, November 19, 2015


Insiders in the Cayman Islands advise that the financial pirates known as the Gang of Four, through their reputed ringleader, Sharon Lexa Lamb, purchased a yacht for the Cuban national, José Fernandez Santana, at a cost of USD$3.5m. Lamb married Santana earlier this year, in what appears to be strictly a business arrangement, resulting in Ms. Lamb receiving not only residency in the Republic of Cuba, but the right to purchase real property there.

Lamb & Santana
Exactly what services Señor Santana provides for the Gang of Four has never been verified, but he frequently sails his yacht between Cuba and Grand Cayman, and his other ports of call include a number of offshore financial centers, including the Turks & Caicos Islands. If you follow financial crime stories in the Cayman Islands, you will recall that Joshua VanDyk, who was convicted in the United States of money laundering, worked at Ryan Bateman's B & C Capital Ltd., during the time he was involved in offering tax evasion & money laundering services to American clients, moving money through TC and into the Cayman Islands. Was Santana providing illicit maritime courier services for the players in this scheme ?

Sr. Santana is known to be a Person of Interest to certain US law enforcement agencies; his intimate relationship with Ms. Lamb raises the question: what was the extent of his involvement in the $450m trading scam, allegedly perpetrated by the Four ?

For the benefits of readers who are not familiar with this scandal, the Gang of Four comprise Ms. Lamb, Derek Buntain, Ryan Bateman, and Fernando Moto Mendes. Buntain & Bateman are Canadians; Mendes has Portuguese citizenship, and Ms. Lamb is originally from the Isle of Man. All but Mendes abruptly left the Cayman Islands, and their present whereabouts are unknown, scattered to the four winds.

Wednesday, November 18, 2015


According to a reliable source close to the operation, the Trump Organization was one of the 150 targets of former Panamanian President Ricardo Martinelli's illegal audio and video surveillance system. The ex-president is facing criminal charges for his secret spying operation, which utilized sophisticated equipment, and his National Security team. Many prominent Panamanians, and their spouses, were targeted, and the affairs his staff recorded later used by Martinelli for his own ends, some of which involved blackmailing individuals into having sexual relations.

This particular subject of Martinelli's cameras and microphones, the Panama staff of the Trump Organization, was spied upon for purely commercial reasons. The conversations were delivered to longtime Martinelli associate, Gary Lundgren, a/k/a Gary James Lundgren. Mr. Lundgren reportedly used that confidential information to great advantage, in his dealings with both the Trump Organization, and Newland International Properties Corp., the developer of Trump Ocean Club.

The current location of those tapes, which were recorded in violation of Panamanian law, is not known, as well as whether multiple copies exist, but the Martinelli agents who recorded the private meetings of Trump executives may have been the primary source of this information, and leaked it, or it may have come from one of the offices of an Anti-Corruption Prosecutor, who has some of those records.

Did Gary Lundgren make certain purchases of Newland bonds*, armed with inside information ? Did he illegally acquire condominium units, through his in-house lawyer, Alcides Bartolo Peña Araya, and become a director, and later Chairman, and lead unit owner, due to confidential information ? We cannot say, but rumors continue to circulate, to the effect that Gary Lundgren covets the casino at the Trump Ocean Club. Will he get it?

Gary Lundgren

More importantly, will Trump now bring suit against Gary Lundgren ?
* Gary Lundgren purchased 15% of the total amount of Newland bonds; the source of his funds was never disclosed, but Panamanian sources assert that it was all drug cash brought in by the convicted Colombian Pyramid schemer, David Murcia Guzmán, and later stolen by Lundgren, after Murcia was deported.