Kenneth Rijock

Kenneth Rijock

Tuesday, February 28, 2012

QUOTE FROM HSBC FILING RE: EXPOSURE

I have seen too many articles today summarising HSBCs statements in its annual filing with the Securities and Exchange Commission, which reportedly involves the civil and criminal investigations into alleged violations of Iranian Sanctions regulations. Perhaps the readers would prefer to read the relevant text in the appropriate paragraph:

Other US Regulatory and law enforcement investigations

"It is likely that there will be some form of formal enforcement action which may be criminal or civil in nature in respect of some or all of the ongoing investigations ... Based on the facts currently known, it is not practicable at this time for HSBC to determine the terms on which the ongoing investigations will be resolved or the timing of such resolution or for HSBC to estimate the amounts, or range of possible amounts of any fines and/or penalties. As matters progress, it is possible that any fines and/or penalties could be significant.* "
______________________________________________________________________________
*http://sec.gov/Archives/edgar/data/1089113/000119163812000216/hsba201202276k7.htm 

ACCUSED FRAUDSTER STANFORD DECLINES TO TESTIFY

The defence rested yesterday in the Federal criminal trial against financier R Allen Stanford, accused of operating a $7bn Ponzi scheme from his bank in Antigua. Stanford's attorneys has declared, in opening statement, that their client would testify in his own defence, but apparently decided against it, though Stanford reportedly wanted to take the stand in the trial, which has been going on for six weeks.

Final argument of counsel will occur on Wednesday, and the case will then go to the jury. We shall report any verdict as soon as it is announced.

Sunday, February 26, 2012

VIKTOR BOUT ORDERED TRANSFERRED FROM SOLITARY CONFINEMENT

The Federal Judge who will be sentencing convicted arms trafficker Viktor Bout on 12 March has ordered* that he be released from solitary confinement, and transferred to general population, in New York's Metropolitan Correctional Centre (MCC) "forthwith." Bout, who has been held in the jail's SHU, or Special Housing Unit, for the past fifteen months, since his arrival from the Orient, is currently housed in a small room 23 hours a day, with only minimal contact with the outside world, contended that he was being held under unduly harsh conditions, without any apparent reason. He has been called, by the global media, the "Lord of War," and the "Merchant of Death," due to his reputedly long arms trafficking career in Africa and Asia.

Bout was convicted by a jury on 2 November, 2011 of;

(1) Conspiracy to kill US nationals.
(2) Conspiracy to kill officers and employees of the United States.
(3) Conspiracy to acquire, transfer  and use, anti-aircrart missiles.
(4) Conspiracy to provide Material Support to a designated terrorist organisation (the FARC).

The Bureau of Prisons was holding Bout in the SHU for the following reasons:

(A) Bout had access to "vast resources," which he could all upon to manage his escape, or to harm third parties.
(B) The nature of Bout's crimes, which involve a designated terrorist organisation.
(C) Bout possesses leadership ability, which he could use to control other inmates.
(D) Bout had previously had a relationship with former Liberian President Charles Taylor.

The Court, in an 18-page ruling, compared Bout to criminals who posed a greater threat, but who were released from such restrictive confinement conditions,  dismissed the BOP concerns, and ordered him to be transferred to general population, effective immediately.

Remember, Bout is a former Russian Air Force officer. On a personal note, some of my readers may recall that I once spent some time as a "guest" in the Special Housing Unit at the Federal Prison in Tallahassee, under the exact conditions, and it can be stressful. You watch the sun come up, and go down, each day, and the routine is only broken by the arrival of a meal tray, pushed through a slot in the door. You shower & shave only three times a week, and you are restrained any time you leave your cell. Recreation, which is also solitary, is infrequent.

 I found the daily arrival of a mental health professional, checking on my composure, a sign that others similarly situated, might not have had military experience, and prior incarceration at other facilities, to help them cope with the extreme boredom and close quarter confinement. Some of the SHU guests had problems, which they verbalised, especially at night. Even I found it hard to endure at times, and I eventually grew a beard, rather than deal with the constant stubble. I was happy to get out of there, even though I only going to another jail.
____________________________________________________________________________
*Opinion and Order entered 24 March, 2012. Case No.: 08-000365-SAS (SDNY).

Saturday, February 25, 2012

FEDERAL JUDGE COMMENTS ON ATLANTIC RIM

A recent court ruling may provide some guidance to individuals and entities seeking to conduct due diligence on a company holding itself out as a funding source to borrowers seeking multi-million dollar loans.

The United States Bankruptcy Judge in the Elkins Park* case, Eric Frank, on 21 February, has entered an Order that  reflect the Court's observations concerning the Debtor's unsuccessful efforts to secure funding, and to later obtain the return of its escrowed deposit, from the Las Vegas corporation known as Atlantic Rim Funding Corp.

The debtor, the Land Conservancy of Elkins Park, Inc., had sought to obtain a loan early last year from Atlantic Rim Funding, to finance real property it had purchased from the Dominican Congregation of St. Catherine De'Ricci, and it had deposited, into what it understood to be escrow, $600,000, whilst funding was being processed. When 5 July, 2011, the funding date, came and went, it sought a refund of the escrow, which did not occur, and an Adversary Complaint, within the context of the Chapter Eleven  proceeding, was filed in December.

The debtor, believing that it would get the funding timely, or in the alternative, repayment from escrow of the $600,000, entered into a Settlement Agreement with the Congregation, that provided for three interim payments, and the balance in 2012. Neither the promised funding, nor the oft-promised return of the escrowed funds occurred, and the Congregation sought relief from the Automatic Stay of any non-bankruptcy legal proceedings, so that it could obtain possession of the subject property.

The debtor has opposed this, citing a legal principle that holds where performance is rendered impossible, due to the actions of a third party, which was not foreseeable, enforcement is barred, on equitable grounds. it sought to vacate the parties' agreement.

The Court denied Elkins Park's motion, and stated, in the Order

" In this case, given the history of the Debtor's relationship with Atlantic Rim, which consisted of a series of Atlantic Rim's broken promises to fund a loan, it was certainly foreseeable that Atlantic Rim might not timely perform its obligation to return the Debtor's $600,000 deposit. "

Readers, who are urged to review the complete opinion, can access it at:  www.leagle.com/
_____________________________________________________________________
*Case No.: 10-19522 ELF ( ED PA) [Bankruptcy]
 Adversary Case No.: 10-0449

Friday, February 24, 2012

BULK CASH COURIER GETS PROBATION IN ILLINOIS

A cash courier transporting $43,000, in shrink-wrapped packages, was intercepted on Interstate 88, just west of Chicago, and charged with money laundering, which reportedly has a maximum penalty of seven years' imprisonment under Illinois law. The charges were reduced to a misdemeanor charge of Attempted Money Laundering for the California resident, and he was sentenced to probation, and fined $500 court costs.

Seventy per cent of the funds were retained by Kane County authorities; 30% went back to the courier, under a plea agreement that is extremely disturbing; probation for money laundering ? Clearly, justice was not served here, but the coffers of a suburban Illinois county were.

The next time I see someone reduce money laundering to a misdemeanor, particularly bulk cash smuggling, I will try not to get upset, but it is a travesty.

Tuesday, February 21, 2012

LAWYER WITH FELONY CONVICTION EXPOSED REPRESENTING A CLIENT IN A CRIMINAL PROCEEDING

There was a bit of a flap recently, in a criminal case* pending in US District Court in White Plains, New York, when it was revealed that the attorney for Defendant Nathan Rothschild, a New Jersey resident named Michael W Burnbaum, was currently the subject of a bar disciplinary proceeding in the Supreme Judicial Court of Massachusetts, that state's highest court, seeking to revoke his law license there. The  Massachusetts Bar Association had recently filed a Notice of Conviction of Serious Crime, and Petition for Reciprocal Discipline.

Attorney Burnbaum was arrested in 1995**, after he asked a jailed inmate to draw him a map of the location of a shipment of cocaine he had stored before his arrest. The lawyer, a former Federal prosecutor, was reportedly acting on orders of the inmate's drug cartel kingpin, his client. He was arrested, and charged with Conspiracy, with Intent to Distribute, Cocaine. At his sentencing in Florida in 1999, he received 105 months in Federal Prison, plus four years of Supervised Release, which is a form of post-incarceration parole. He resigned from the Florida Bar, and he has not been readmitted.

For some reason, the Massachusetts Bar never learnt of his felony conviction from the Florida court, and Mr. Burnbaum apparently never disclosed it to the organisation. Generally, when a practising lawyer is sentenced in Federal Court, the trial judge inquires of the lawyer whether he is admitted in any other jurisdictions, other than the state his office is located in. It appears that Mr, Burnbaum  may have failed to inform the judge that he held a license in Massachusetts, a clear lapse of ethics on his part. Of course, since he was going off to prison for more than seven years, it may not have seemed important to him at the time; it is now.

After his release in 2006, Burnbaum moved to New Jersey. In a number of social networking sites, he identifies himself as a lawyer. He successfully had his Supervised Release terminated early, and in 2011, he undertook to defend Nathan Rothschild, in a corruption case in US District Court in New York State.  He actually obtained a Certificate of Good Standing from the State of Massachusetts, in order to be admitted pro hac vice***  in New York, and he stated in his application that he had no pending disciplinary actions against him in any court. This statement may be true, but, did he not have a duty of candor to the court ?  Was he being deceptive ?

When his past caught up to him, it was properly noted that he was, at that moment, still a member of the Massachusetts Bar in Good Standing, that his client (who was sentenced to a year and a day) stated that he was aware of it, and he wanted Mr. Burnbaum to continue as his defence counsel.

I see that he has filed, in the court in Massachusetts, an objection to the introduction of a copy of the Florida disciplinary action against him there. These procedural tactics will only serve to gain a short delay in the inevitable, as Mr. Burnbaum certainly knows. He will ultimately lose his license in Massachusetts.

 There will be other consequences; any chance that he may have had to gain admission, or readmission, to the bar of any state at a later date has most likely been greatly diminished by his actions in the New York case, as well as his attempts to evade the consequences of his criminal conviction. Honesty is, and will remain, the only policy, particularly for lawyers, who are held to a higher standard of care than non-lawyers.
___________________________________________________________________________
*United States vs. Rothschild,  Case No.: 11-cr-00345-KMK (SD NY).
** United States vs. Burnbaum, Case No.: 95000481-AJ (SD FL).
*** "For this event,"  meaning that a lawyer is admitted to practice before the court for the limited purpose of that proceeding only.






Sunday, February 19, 2012

LAWSUIT SAYS ATLANTIC RIM FUNDING IS A PONZI SCHEME

The controversy over Atlantic Rim Funding Corp. continues; its supporters claim it is a bona fide investment source, but its detractors allege it is a Ponzi scheme or Advance Fee Fraud. A new civil suit may answer that question.

The Land Conservancy of Elkins Park, Inc., a Pennsylvania nonprofit corporation, last month filed an Adversary Complaint* in US Bankruptcy Court in Pennsylvania against Atlantic Rim Funding Corp., a Nevada Corporation, alleging that the defendant failed to provide funding, and thereafter failed to honor its contractual obligation to return the Plaintiff corporation's $600,000 escrow deposit on request.

The Plaintiff, who needed to raise $6.2m to pay off a mortgage, alleges that Atlantic Rim defaulted last July on an agreement to supply funding, and since that time has failed to return the Plaintiff's $600,000 escrow deposit, which allegedly is no longer under the control of the Defendant Atlantic Rim, and has been reduced to only $400,000. The Plaintiff was forced to file for bankruptcy when the financing fell through, and its ability to make a partial payment was lost when the promised return of the escrow did not materialise. The Plaintiff has filed an email from Defendant Dean Kennedy, in which he threatened to "lock-up" the missing deposit if suit was filed.

The Adversary Complaint alleges that Atlantic's principal, and officers, made misstatements of material fact regarding the company's ability to obtain funding, that the company is a shell, with no assets, office, employees, telephone number, or day-to-day business or finances. It also claims that Atlantic Rim is merely the alter ego of Defendant Kennedy, whose representations that he had access to funding through a trust holding $13bn in assets were relied upon by the Plaintiff, to its damage and detriment. After the funding date passed, Atlantic and Kennedy represented that they had no assets with which to repay the deposit. Do the $13bn in bonds actually exist ? If so, why can't the company easily refund Elkins Park Conservancy its deposit from other sources.

The Plaintiff has alleged that Atlantic Rim Funding is a Ponzi scheme, where deposits from failed funding contracts are applied to repay other investors who are owed their deposits. A Federal Judge has since ordered the return of the deposit, but it has not been forthcoming. A Motion for Contempt is pending. It is also alleged that there are a number of investors whose escrow deposits have not been timely returned to them.

One of Atlantic Rim Funding principals has made the following representations on the Internet; When taken in the context of this lawsuit, they raise significant questions about the company that remain unanswered:

(1) "Atlantic Rim Funding has over $13bn in assets to fund loans at this time."

(2) "Atlantic Rim is looking for good projects to fund ... we use our own money."

(3) "Atlantic Rim can offer a "no-qualifying" loan because Atlantic Rim approves all of our loans in-house."

(4) "Atlantic Rim provides loans from lines of credit that are established with the top global banks, secured by government securities provided in partnership with Atlantic."

We shall report on all major developments in this case for our readers.
_______________________________________________________________________
* Land Conservancy of Elkins Park Inc. vs. Atlantic Rim Funding Corp., Dean Kennedy and J. Mac Rust, Case No.: 10-19522-ELF, Adversary Case No.: 12-007 (ED PA). 

PRIMARY BANK FOR PONZI SCHEMER AGREES TO PAY MULTI-MILLION DOLLAR SETTLEMENT

Banks can pay a heavy price for failing to identify clients who are Ponzi schemers. Gibraltar Private Bank and Trust, where convicted attorney/Ponzi schemer Scott Rothstein's law firm banked, has reportedly agreed to pay a large settlement to Herbert Stettin, the bankruptcy trustee for Rothstein Rosenfelt Adler (RRA). The trustee alleged that Gibraltar bankers routinely permitted hundreds of overdrafts in RRA accounts,  many in the hundreds of thousands of dollars, and that the Ponzi scheme could not have been perpetrated without the bank's help. The bank was the subject of an Order to Cease and Desist*, for failing to maintain and effective and adequate anti-money laundering programme.

The reported terms of settlement:

(1) Ten million dollars will be paid directly to the trustee.
(2) Ten million dollars will be contributed by Gibraltar's insurers.
(3) The bank's $50m claim against its liability insurers, who have denied coverage, is to be assigned to the trustee.

Note that there are additional lawsuits pending against the bank, but the settlement, if approved by the United States Bankruptcy Judge, is said to bar those actions. One alone is reported to be for $200m.

Another bank used in Rothstein's elaborate Ponzi scheme, where investors purchased non-existent claims for discrimination and harassment, allegedly against prominent companies and individuals, Toronto-Dominion Bank, recently was hit with a $67m judgment. It was alleged that the bank gave investors assurances, later found to be untrue, that their money was safe, whilst the accounts were being depleted by Rothstein.

Over on the criminal side, RRA administrative assistant Marybeth Feiss has entered a guilty plea in US District Court** in Florida, to Conspiracy to Defraud the United States. Feiss, who illegally "bundled" campaign contributions for local, state and national candidates supported by Rothstein, who was seeking to gain influence, violated Federal Election campaign laws when she made contributions in the names of individuals whom were not the actual contributors. Feiss will be sentenced on 4 May, and could receive up to five years in Federal Prison; she has been cooperating with law enforcement.
____________________________________________________________________________
*Order No.: SE-10-046
http://ots.treas.gov/_files/enforcement/97490.pdf
**United States vs. Feiss, Case No.: 11-cr-60282-KAM (SD FL).

Thursday, February 16, 2012

WHEN WHITE COLLAR CRIME BECOMES MONEY LAUNDERING - PART SIX

For regular readers of this series who have been wondering why this case is so important; it  exposes a larger problem, which we are covering it in this segment. If this is the first time you are reading When White Collar Crime becomes Money Laundering, you are encouraged to read the earlier segments here* on this blog.

For those of you who read the articles appearing recently in the media, about how the Mexican Cartels, The former Cali Cartel, and the Norte del Valle Cartel, have used US law enforcement agencies to unwittingly assist them in their criminal operations, and have also been following the so-called "Fast & Furious" case, where firearms were allowed by US law enforcement to be shipped in bulk to Mexico, where they were used in homicides, this case appears to be connected to individuals affiliated with the paramilitaries, who have received favourable treatment by US law enforcement, with the assistance of Colombian and American attorneys. Cooperation often frustrates the ends of justice, especially where lawyers experienced in tempting US law enforcement with potentially major indictments down the road receive favours that the public, if it was disclosed, would certainly object to. When you assist a narcotics criminal, no matter what the reason, you hinder the global war on drugs.

Whilst we have previously documented, in this series, this treatment, it is now time to detail how counsel for individuals who have committed embezzlement and money laundering manipulate law enforcement, and the criminal justice system, have acted for the benefit of their clients, at the expense of legitimate companies and individuals, and frankly, manipulated the system.

Briefly, this case involves an individual who, when presented with evidence that she embezzled a large sum of  money from her employer, went to a criminal defence attorney to help her reduce the risk that she would be charged with these crimes. He took what some regard as an improper step; suing the victim.

(1) Her attorney, Richard J Diaz, of Coral Gables, Florida,  then filed a civil action against her employer,  though it was totally devoid of any legal merit, and without any factual basis, probably because he knew that the overworked State Attorney's Office in Miami, is inclined to avoid filing criminal cases that are already embroiled in civil litigation. He was gaming the system, seeking to evade the filing of state criminal charges. His client's cooperation with Federal law enforcement was his scheme to avoid any Federal charges, through skillful management of his client's relationship with thr Drug Enforcement Agency.

(2) Her lawyer has reportedly pressed hard for a settlement of the civil case, knowing full well that it would, for all intents and purposes, include a general release, and therefore eliminate the possibility that a criminal case will ever be filed against his client; More manipulation.

(3) The most egregious acts committed by Cajale, other than the embezzlement, were her unsolicited statements, made repeatedly to law enforcement and prosecutors, to the effect that her employer may have been involved in money laundering. She offered no factual basis for these bogus statements, and apparently law enforcement has taken no action to investigate her admittedly baseless allegations. Officers at the company that formerly employed her, where she embezzled funds, lost the ability to enter the US on business as the direct and proximate consequence, since her statements resulted in the revocation of their visas, due to the reports filed by law enforcement as the direct result of her untrue allegations. The net result is that company officers cannot come to the US to personally assist in the civil case,  to testify at deposition, and help defend the lawsuit. if Cajale wins the lawsuit on the merits, the risk that a criminal case would be filed becomes microscopic.

(4) There is another issue; The inability of the two principal officers to be present in the US, due to Cajale's statements, has interfered with the company's ability to conduct its international business, resulting in a diminution in income. Was this not an intentional consequence of Cajale's unfounded statements to DEA, after she was terminated from her position at the company ? To decrease the company's chances of a successful outcome, which minimises any possible criminal charges, perhaps.

(5) According to her sworn testimony, Cajale and her attorney met, a number of times, with US law enforcement agents (DEA), in Richard Diaz' law offices. The testimony appears to confirm that she, and her husband Didimo Alberto Navarro,  among others, have received preferential treatment, as the direct and proximate result of their "substantial assistance." In this case, they simply made up the information, and have benefited from it. Did Navarro receive an "S" Visa, which is given to individuals who assist US law enforcement ? I am sure that we will learn the answer to that question as the case unfolds.

If you are familiar with the Whitey Bulger scandal, you know that the FBI agents who gave a career criminal in Boston a pass on his criminal activities, in exchange for information, are now serving sentences in Federal Prison, because their actions strengthened Bulger's organisation.  The same thing is happening, on a much larger scale, when US law enforcement gives narco-criminals immunity from prosecution, allows them to launder the proceeds of crime, to pass freely into and out of the United States, and thus allows itself to be grossly manipulated, in exchange for information that might, perhaps, result in future indictments. It is not worth it, in my humble opinion.

Members of the US Congress are disturbed by these methods of law enforcement; perhaps you should be, too.
______________________________________________________________________________
*When White Collar Crime Becomes Money Laundering (Parts One through Five)
http://rijock.blogspot.com/2011/10/when-white-collar-crime-becomes-money.html
http://rijock.blogspot.com/2011/11/key-witness-confirms-that-fraudster.html
http://rijock.blogspot.com/2011/12/when-white-collar-crime-becomes-money.html
http://rijock.blogspot.com/2012/01/when-white-collar-crime-becomes-money.html
http://rijock.blogspot.com/2012/02/when-white-collar-crime-becomes-money.html

Wednesday, February 15, 2012

IS DEA MONEY LAUNDERING PROGRAMME OUT OF CONTROL ?

The flap over the seizure of bulk cash carried on board a chartered American business jet that landed in Panama demonstrates that the anti-money laundering programme run by the Drug Enforcement Administration needs tighter controls. The pilots, operating under the understanding that the funds they were transporting were the property of the US Government, appear to have unwittingly bulk cash smuggled criminal proceeds into Panama. They are not free to leave Panama, and the US Government does not seem to be assisting them.

The incident has publicly exposed the existence of an operation whereby DEA agents, in an undercover capacity, move dirty money for criminal organisations, ostensibly to learn more about the target groups. Unfortunately, in the process, the agency is assisting the criminal organisation achieve financial success. What's wrong with this picture ?

Unless the undercover operation results in a major intelligence coup, and resulting indictments of kingpins, and senior associates, laundering drug profits for an extended period is counterproductive. It only helps the narcotics traffickers. Perhaps this programme, if not subject to outside oversight, needs to be terminated, in favour of one that hurts, not helps, drug trafficking organisations.




Sunday, February 12, 2012

LOWER COUNTRY RISK FOR SOUTH AFRICA

Readers who have had concerns lately about country risk for South Africa will be interested in two pieces of favourable news, regarding the future of the country's politics, and private economy.

 First, the ruling African National Congress (ANC) has affirmed a decision to suspend its polarising youth leader, Julius Malema. Mr. Malema, who enjoys widespread political support in the country, seeks to appropriate white-owned land, and has taken a radical nationalist anti-white position, which has resonated with many unemployed youths. He sang an anti-white song previously banned by the ANC as divisive at a political rally. Malema's suspension is for a period of five years.

Second, the ANC has indicated that it will recommend against nationalisation of the country's mines, and instead will support increased taxes on the mining industry. Investors had worried that state takeover in the mining sector would increase country risk, as there are doubts as to whether the government could effectively operate them.

In my opinion, these two events operate to reduce country risk for South Africa.

Monday, February 6, 2012

RAISE COUNTRY RISK FOR EGYPT

If you have not been following the events in Egypt, the government has announced that senior staff members of a number of foreign non-governmental organisations involved in supporting emerging democratic groups have been prevented from leaving the country, and that they will now be charged with criminal activities. A number of Americans are included on that list, including the son of the US Secretary of Transportation, Raymond La Hood. Other nationals whose exits have been blocked include those from a number of Middle Eastern Countries, and Germany. Their offices were previously raided and closed by law enforcement action, the contents carried away, and their funds confiscated.

Apparently the military government is employing an old law, left over from the Mubarak regime, that severely restricts the operation of foreign NGOs. This action has been condemned by the Government of the United States. American aid to Egypt, billions of dollars a year, is in jeopardy, and if it is cut off, as has been threatened by the US Congress, the Egyptian economy could be seriously affected, as will the operation of the military, which largely operates on this aid.

Watch American actions closely, and if it appears that aid will be diminished or cut, consider raising country risk for Egypt.


Saturday, February 4, 2012

WHERE IS THE DIRTY SWISS FLIGHT CAPITAL GOING ?

As expected, now American law enforcement agencies are targeting the regional and cantonal Swiss banks that picked up the American tax cheats who were fleeing the big banks, fearing that they would be reported. It appears that a targeted campaign directed at those tax evaders resulted in the placement of large sums of untaxed American money in a bank that boasted it had no US branch, agency or office, and that it completely observed the Swiss tradition of bank secrecy.

A few criminal indictments later, the realisation that Switzerland is no longer a safe place for your "flight capital" will sink in, especially after a number of Swiss bankers find themselves in Federal Prison.

Look then for creative money launderers to be  dispensing advice on where to go for their offshore needs. Though The Far East is the logical choice, due in part to lack of US presence and influence,  some of this money may be seeking a safe haven in other jurisdictions. Remember, in the business of money laundering, you are only limited by your imagination.

Have you seen any incoming wire transfers from regional, local or cantonal Swiss banks since last week ? If so, you are advised to examine them, the remitter, and your client, thoroughly.





KEN RIJOCK TO LECTURE AT FFIEC FINANCIAL CRIMES SEMINAR

if you are with a Federal or state regulatory agency, and are planning on attending the Financial Crimes Seminar, sponsored by the Federal Financial Institutions Examination Council (FFIEC)*, 12-15 March, I will be making a special four-hour presentation there on 14 March, at 1:00 PM.

The programme, which is held several times each year at the FDIC Seidman Centre in Arlington, Virginia, is directed at OCC,FRB, OTS, NCUA, and other agencies, and is also attended by representatives from state regulatory agencies.

My presentation consists of:
(1) Confessions of  a Money Launderer : my personal story of what it was like to be a career money launderer in Miami for ten years.
(2) Know your Customer :  a practical lecture on how money launderers operate in financial institutions, designed for auditors in regulatory agencies.

if you are with another Federal or state agency, and are interested in attending, I will be presenting this lecture three times this year:

(A) 14 March, 2012
(B) 13 June, 2012
(C) 19 September, 2012

You can obtain details from the FFIEC at:  (703) 516-5588. The Senior Programme Administrator is Darlene Callis.
____________________________________________________________________
*http://www.ffiec.gov/

Thursday, February 2, 2012

TRUST, BUT VERIFY, YOUR DATABASE INFORMATION

Has this ever happened to you ? You run a prospective client through your best high-risk database and get a negative. You then search the Internet for any recent major newspaper or magazine articles, and find out, to your dismay, that he is a major financial criminal. Why didn't your favourite database alert you to the danger ? The answers may surprise you.

(1) It is impossible to keep all the entries current, especially where there are more than one million individuals and entities in a database. Did you check to see when it was last updated ? How many years ago, please ? Can they update it for you by request ?

(2) If you performed an exact name search, the database will ignore even minute variations in spelling. Are you sure you have his correct name ? Financial criminals delight in changing one letter of their names, knowing full well that it confounds the computer. Remember, always supplement your exact name search with phonetic searches, and partial name searches. You may not have the individual's name right, or he may use a number of aliases. Doers your database cover known aliases ?

(3) Was the name transliterated from a language and alphabet that uses different ( i.e. non-Roman) characters ? Perhaps the translation is inaccurate, or it does not meet commonly-accepted standards for equivalent letters. If so, there may be a number of alternative spellings. have you checked them all ?

What about the flip side, where you get a positive, but the client says it is either incorrect, incomplete, or inaccurate ?

(1) Did the case occur in a jurisdiction where justice has a price ? Does the Rule of Law exist where the conviction occurred, or is it suspect by virtue of the jurisdiction itself ? Be sure before you act on such criminal history records.

(2) Was the client's criminal case filed purely for political, religious, or racial reasons ? If so, can you ignore it?

What I am saying is clear: do not blindly accept what you get from your database search as gospel, no more that you accept unaccredited information from the Internet. Check out the story behind the entry before you reject the client, based solely upon what the database tell you. They have been known to be wrong, outdated and incorrect.