Kenneth Rijock

Kenneth Rijock

Thursday, June 30, 2016

MEXICO HALTS EL CHAPO EXTRADITION


For those compliance officers who feel that the current high level assessment, imposed upon Country Risk for Mexico, is not justified by the facts, consider this: the courts there have halted the pending extradition, on money laundering, drug trafficking, murder, and other charges, of Joaquín Guzmán Loera, commonly known as El Chapo, and Shorty. This stay means that Shorty's lawyers could delay extradition for years.

The sad thing about it is that the Mexican judges were not required to stay the proceedings, and Shorty should, right now, be on his way to the United States. The fact that he is still in Mexico speaks volumes about the country's justice system's fatal flaws.

The arguments made by Shorty's lawyers were legal garbage:
(1) The Statute of Limitations had run on some of the US charges. Nonsense, every lawyer knowns that the Statute tolls when a defendant is outside the jurisdiction.
(2) Some of the charges are based upon hearsay. More nonsense; extradition requests must only prove that the individual sought is indeed the one sought. You do not argue the case on the merits; save it for the trial, abogados.

Remember, the defendant escaped not once, but twice, from custody. After asserting some sort of primary claim over him initially, and denying the US Shorty, Mexico changed its tune after the defendant embarrassed the government, but now, if the US does not get Shorty, due to some other bogus excuse or manufactured issue, then compliance officers should take that into consideration, when assessing Country Risk. If you cannot trust the courts in Mexico to act, when they should, then Country Risk levels skyrocket towards the unsatisfactory plateau.   

Wednesday, June 29, 2016

ALL-TIME LARGEST CASH SEIZURE IN MIAMI

$24m


Just when you thought all significant money laundering had gone paperless, Miami-Dade law enforcement make their all-time largest seizure of bulk cash: Twenty Four Million Dollars !($24,000,000)  Yes, the perpetrators, marijuana traffickers, were also charged with money laundering, in addition to drug charges.

In custody.


The money, which was well hidden in the residence, was sealed inside a large number of "Homer's all-purpose Buckets," which can be found at your neighborhood Home Depot store. The takeaway here; cash remains king, meaning that someone, somewhere still has to place this mega-seizure in a commercial bank. Just don't let it be yours.

Where the $ was found.

NEW REPORT ON TRADE-BASED MONEY LAUNDERING DESERVES A READ


The recently-released report, by the Congressional Research Service, on trade-based money laundering is recommended for readers of this blog who serve in the compliance field. Entitled Trade-Based Money Laundering: Overview and Policy Issues, the report has a good summary of the various permutations and combinations of tactics that trade-based money launderers employ, with general success, as the average compliance officer does not have a well-rounded understanding of the subject.


You can access the complete text here.

Tuesday, June 28, 2016

GUILTY VERDICT FOR MURDERER OF ROTHSTEIN PONZI SCHEME PARTNER


Scot Rothstein and the late Melissa Lewis
A jury in a criminal case in Fort Lauderdale, Florida has found the former husband of a law partner  convicted in the case of Ponzi schemer/attorney Scott Rothstein, guilty of murder, and the Court gave him a mandatory life sentence. Rothstein firm attorney Melissa Lewis, who was the best friend of convicted firm CEO Debra Villegas, was killed by Villegas' ex-husband.

The trial of the case was delayed several years, due to insanity defense issues. Debra Villegas was sentenced to ten years in Federal Prison for her role in the billion dollar Ponzi scheme, orchestrated primarily by attorney Scott Rothstein, who sold bogus out-of-court settlements in discrimination and sexual harassment cases to unsuspecting investors. In truth and in fact, he was paying older investors with money received from new victims. Rothstein is serving a 50-year sentence for his Ponzi scheme.

 Debra Villegas sentence was subsequently reduced for Substantial Assistance, and she testified at trial against her former husband, Tony Villegas.


INVESTIGATING JUDGE IN PANAMA ASKS FOR INTERPOL RED NOTICE ON EX-PRESIDENT MARTINELLI


The investigating judge handling some of the dozen criminal cases pending against the fugitive ex-president, Ricardo Martinelli, has asked the Foreign Ministry to request that INTERPOL issue a Red Notice against him. Such an act could result in his arrest and detention, should Martinelli seek to leave Miami, where he is currently living, for another jurisdiction.

While is it believed that Martinelli has been barred from entering Paraguay, where he set up a villa for his exile from Panama, it is feared that Martinelli may seek to establish himself in another country, from which he cannot be extradited. Some of the victims of Martinelli's crimes, especially the illegal surveillance he set up in Panama, to spy on his opponents, have complained bitterly about the extensive delays in extraditing him for prosecution, and have openly questioned the Varela government about whether Martinelli will ever see the inside of a Panama City courtroom, to answer for his crimes.

Sunday, June 26, 2016

PALESTINIAN TERRORIST WHO BOMBED BRITISH CONSULATE TO GET A NEW TRIAL ON IMMIGRATION FRAUD CONVICTION


Rasmea Odeh, whose conviction and sentence, in a US District Court, for immigration fraud, was reversed, to allow her counsel to enter expert testimony at trial, will be tried again in January, 2017. Odeh, who was convicted, in Israel, for bombing a British Consulate, and a supermarket, which resulted in multiple fatalities and casualties, failed to disclose her conviction, and terrorist association, when applying for American citizenship. She was a known member of the Popular Front for the Liberation of Palestine, a designated terrorist organization.

Odeh, who was serving a life sentence for her involvement in these two terrorist bombings, and who was found to have bomb-making materials and explosive bricks, in addition to functional bombs, in her residence, was later freed, as a part of a prisoner exchange. She subsequently entered the United States through Jordan, under another name.

The defendant denied that she was ever advised that all foreign convictions were required to be disclosed, and it appears that she used an alias, in her citizenship application. After her Federal Court conviction, she was sentenced to 18 months in prison, and a revocation of her US citizenship.

On appeal, the defendant's counsel argued that it was error to bar expert testimony by an individual experienced in torture matters; Odeh claimed that her confession in the Israel case was obtained by torture, but has not explained her possession of explosive materials. The Sixth Circuit reversed and remanded, and sent the case back down to the trial court; it is scheduled to be heard in January.

The case has generated a large amount of media, as well as public, attention, due to the national debate over the threats posed by terrorism within the United States, and the well-founded fear that terrorists, from the Middle East, will be entering America, undetected, creating a clear and present danger. Her supporters, who have included Iranian-Americans, have used her case as a forum for anti-American, anti-Semitic and anti-Israel remarks, including against those Officers of the Court who are Jewish, and ignored findings of fact in the original terrorist case, seeking to make a political statement.

There will be a pre-trial hearing, to determine whether the defendant's expert witness will be allowed to testify at the re-trial.


FATF BACKS OFF ON IRAN FOR TWELVE MONTHS, BUT WATCH YOURSELF


The Financial Action Task Force (FATF/GAFI) has, in its June 2016 Public Statement, regarding Iran, "suspended counter-measures for twelve months, in order to monitor iran's progress for implementing the Action Plan."  Counter-measures, which mean calling upon FATF members to take steps to protect themselves from Iranian AML/CFT, will be reimposed after a year, if Iran failed to "demonstrate sufficient progress."

This is NOT a blanket excuse to ignore sanctions that are in place in your jurisdiction. Readers who wish to review the complete text of the Public Statement can access it on the FATF website:
 http://www.fatf-gafi.org/  and click on High Risk and Non-Cooperative Jurisdictions.




Saturday, June 25, 2016

HEZBOLLAH WAR DRUMS ALONG THE LITANI COULD LEAD TO THE DESTRUCTION OF THE BEIRUT FINANCIAL CENTER

Downtown Beirut in 2017 ?
Recent statements, coming from senior Hezbollah officials, indicate that the terrorist organization intends, in the next round of hostilities between it and Israel, to invade Galilee, occupy villages and towns, and take civilian hostages. The concept is that Israel will be deterred from attacking targets inside Lebanon, for fear that Hezbollah will kill its hostages in retaliation. This arrogant misplaced reliance could prove to be be a fatal mistake, where the country's financial center, located in downtown Beirut, is concerned. Allow me to explain.

Many Israeli general officers have, publicly, stated that the IDF is committed to the Dahiya Doctrine, in the next Hezbollah-Israel war; this policy, which includes a massive response against the Lebanese infrastructure, in the event that hostilities occur, was seen, in part, during the last conflict. The result was the complete destruction of a large part of the Shi'ite neighborhood in the south of Beirut. The next war will most likely see Israel attacking downtown Beirut, damaging or destroying the nation's financial center, which, in the present absence of tourism, is the most important sector in the Lebanese economy.

Without the brick and mortar structures that house the financial industry, with the attendant records and documents, and the individuals that staff those institutions, Beirut's banks will not be able to operate, let along support, any postwar Lebanese recovery program. Lebanon would be thrown into chaos, and the loss of life, which would then impact the Sunni, as well as Christian, communities, for the first time, could return Beirut to the stricken state it was in, during the 1975-1991 Lebanese Civil War, or worse.

Imagine Beirut without its banks and financial advisers; given that Hezbollah has bragged that its rockets and missiles will kill scores of civilians in Israel, in the event of war, one cannot expect that the Lebanese capital will be spared by Israeli retaliation, and given Israeli air superiority, every bank in Beirut could be out of business in one terrible day.

I bring this dark scenario up, for the purposes of risk assessment by compliance; should more Hezbollah officials come to believe that their organization could successfully invade Israel, and occupy a large amount of territory, then this nightmare for Lebanon becomes a distinct possibility. Perhaps Lebanese leaders might want to take a look at photographs of 1945 Berlin, to get an idea of what their capital could look like, and then see what they can do to prevent the unthinkable from happening in 2016.


PANAMA'S ORGANIZED CRIME SYNDICATE LAUGHS ALL THE WAY TO THE BANK

Mayer Mizrachi Matalon
Most seasoned Panama observers were not surprised this week, when they learned that Mayer Mizrachi Matalon, the son of fugitive Panamanian organized crime figure Aaron Mizrachi, bribed his way out of Picota maximum security prison, where he was being held, pending extradition to his native Panama. Mizrachi is wanted in Panama in a major corruption scandal, but he probably will never see the inside of a Panamanian prison.

Mayer's father, Aaron "Roni" Mizrachi, is the brother-in-law of Panama's fugitive former leader, President Ricardo Martinelli. Both Mizrachis, and Martinelli, participated in massive corruption activities while Martinelli was president. I will not bore you with the details, and they have appeared on this blog many, many times. Aaron Mizrachi, having fled Panama, is now living comfortably in the Middle East, and his extradition, to face justice in Panama City, is extremely unlikely. Martinelli is himself living high on the hog in Miami, where dirty former leaders often go to enjoy their ill-gotten gains.

Aaron Mizrachi
Mayer has now reportedly requested Political Asylum in Colombia, which is curious, because he is merely a white-collar career criminal, and is not wanted in Panama for anything related to his politics, or opposition to the government of President Juan Carlos Varela. Mizrachi was born into what I refer to as Panama's Syrian organized crime syndicate, due to the fact that many of its members' parents and grandparents are known to have been from Homs, and others from various Middle Eastern countries. You would be stunned to learn who Mayer's relatives are.

Another relative: Gabriel Betesh, also now living in the Middle East

The syndicate is a shadowy organization, many of whose members have married into related families, much like the American Mafia, creating an interlocking directorate, which engages in drug money laundering, fraud, official corruption, and theft of government funds on a grand scale. Their power, in the financial, as well as governmental, spheres, has rendered them immune from criminal prosecution, and the United States, anxious to preserve its valuable listening post on Latin America, is not inclined to interfere, notwithstanding the massive money laundering, through US banks, that the syndicate conducts. The Black Market Peso Exchange, through the Colon Free Zone, is merely the tip of the iceberg for this group.

While the Panama Papers, the Financial Pacific/Petaquilla Mine insider trading case, and assorted other financial scandals, will rock Panama, from time to time, the syndicate will continue to thrive, so long as North America and Europe continue to have their love affair with dangerous drugs from South America. for someone has to launder that money, and what better place than a jurisdiction where questions about Source of Funds, and Beneficial Ownership, never come up. 

Readers who have wondered why I place Country Risk for Panama at such elevated levels now should have a better understanding of one of my reasons.



REGULATOR DETAILS REASONS FOR LIQUIDATION OF PANAMA WALL STREET


The Stock Market Superintendency (Superintendencia de Mercado de Valores) of Panama has published lengthy findings of fact, as its grounds for the forced liquidation of the broker-dealer firm, trading as Panama Wall Street SA. In a well-prepared, comprehensive list of deficiencies, the regulator has detailed a massive number of problems the company failed to correct, notwithstanding prior audits, which uncovered these issues.

The principal problems:

(1)  The company is a repeat offender in lack of internal controls, in AML/CFT, accounting, technology, customer management, management of files & customer files. This is the third name the company has had, and the two prior identities all had major issues found by the regulator. The last deficiencies, published when the company was known as Thales Securities SA, occurred in 2011.

(2) High employee turnover, resulting in a lack of experience among staff.

(3) Extremely poor customer service. Clients complained bitterly about being ignored.

(4) Unwarranted advanced distribution of dividends to some investors.

(5) Lack of internal operating manuals and procedures, no established IT backup of information, and general IT deficiencies, which threatened the stability of information.

(6) The company had no listed compliance officer, leading to the presumption that there was no compliance division.

It would appear, from the extensive list of problems, that the brokerage firm represented a clear and present danger to the public, hence the liquidation proceedings. Panama Wall Street was delaying investor redemption for as long as 90 days, according to reports circulating in Panama; and multiple consumer complaints have been filed with regulators. Other clients have asserted that they have not received any money, notwithstanding repeated demands. 

Friday, June 24, 2016

SPAIN INCREASES ITS DEMAND FOR JOINT SOVEREIGNTY IN GIBRALTAR



In the aftermath of the landmark British vote to leave the European Union, the Government of Spain has ramped up its call for joint British-Spanish sovereignty over the Overseas Territory of Gibraltar. Though Gibraltar has been British since 1713, in a negotiated postwar exchange of territories that the Spanish Government seems to have forgotten about, Spain has persistently claimed that the Rock should revert to Spanish sovereignty, alleging that it is a vestige of colonialism.

Many observers have correctly pointed out that Spain has retained several territories in Morocco, and that its claims upon Gibraltar, whose citizens have steadfastly voted to remain British, are inconsistent with its own national policies. 95% of Gibraltarians who voted opted for the UK to remain within the EU.

The issue for the global financial community is what Spanish dominion, even if joint with the UK, will do to Gibraltar as an offshore financial center; Spain's economy, specifically its out-of-control unemployment rates for young workers, might result in the imposition of taxes in Gibraltar that could radically change its status as a tax haven. While the UK has consistently opposed any Spanish control over Gibraltar, and we trust that this support will continue, the UK exit from the EU may have unforeseen consequences for Gibraltar.



Wednesday, June 22, 2016

WHAT WILL HAPPEN T0 THE MILLIONS THAT THE FARC EARNS FROM DRUG TRAFFICKING ?


All the signs point to, after all these years of negotiation, the probable signing of a peace treaty, between the Government of Colombia, and the Revolutionary Armed Forces of Colombia, more commonly known as the FARC, sometime next month. Though many details must need to be worked out, the parties appear to be close to a final agreement.

This raises the question: what will happen to the estimated $600m that the FARC makes annually, from narcotics trafficking ? Much of that money was exported, and has ended up God knows where; Caribbean tax haven banks, Switzerland, and yes, even global investments, after the money was laundered. So what will become of it ? Will there be still more rich men appearing in Miami, with funds whose provenance is foggy at best ?

Whether greedy FARC commanders will simply disappear with bulk cash that they have on hand, in-country, and FARC "diplomats" in Europe take over the money in their organization's laundered EU bank accounts, is anybody's guess. The bearer share accounts in Panama, and Swiss banked wealth, should be surrendered to Colombia, but probably will not.

Perhaps it is time for the Colombian Government to deputize a number of financial investigators, and have the fan out, and seek to repatriate that (formerly) dirty money, for the good of the people of Colombia, who have lost so many innocent civilians to actions of the Marxist FARC. 

EUROPEAN PARLIAMENT SETS UP COMMITTEE OF INQUIRY ON MONEY LAUNDERING AND TAX EVASION


In the wake of the Panama Papers disclosures, the European Parliament has announced the formation of  Committee of Inquiry, examining EU members' actions on money laundering, and tax evasion. Readers who wish to read the complete text of the relevant documents can do so here. Mossack Fonseca is specifically named in the Statement.

For the record, the members of the European union that have designated the Republic of Panama as a tax haven are:

France
Bulgaria
Croatia
Greece
Latvia
Lithuania
Poland
Portugal
Slovenia

Compliance officers at financial institutions located in those countries are required to take the designation into account when calculating Country Risk for Panama, and when regularly considering whether or not to implement enhanced due diligence inquiries on specific transactions, and clients.

Monday, June 20, 2016

SPURNED BY BROKER-DEALER IN PANAMA, GARY LUNDGREN HAS COMPANY CLOSED THROUGH BRIBERY



Gary James Lundgren, whose licenses to sell securities in the United States have been revoked for life by FINRA, attempted recently to purchase a successful brokerage house in Panama City, which he planned use use as a front for his unlicensed high-yield investment program. Unfortunately for Lundgren, the owner declined to sell, at any price.

In response, Mr. Lundgren's attorney* reportedly paid a substantial bribe to the office of the Superintendency of Securities, and in return, the broker-dealer was closed down, by order of the agency; This action ruined the owner financially. Rumors abound around Panama, to the effect that Lundgren have, for many years, avoided arrest in Panama, by acting as an informant, but in this case, he paid to have the company he could not have shut down.

We can expect to see Gary Lundgren seeking to acquire, by legal means or otherwise, a firm with a securities license in Panama City; his grown children, James Lundgren, and ZacGary Lundgren, have reportedly been making trades, in the United States, for his clients, to evade US regulators, but Lundgren appears to be intent upon the purchase of a front company.

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* The attorney who, panama insiders say, paid the bribe, was Gaspar Lee Pedereschi, Gary Lundgren's current in-house attorney. 

THRICE CONVICTED IN PANAMA, FRAUDSTER OKKE ORNSTEIN PICKS UP A FOURTH CONVICTION IN THE NETHERLANDS


When he was operating in the Republic of Panama, the career fraudster, Okke Ornstein a/k/a Okke Van Ooijan, collected three criminal convictions, each carrying with them each a term of years of imprisonment. Additionally, a court in Panama entered a final judgment against Ornstein, in the amount of $5m, for damages, in a civil proceeding. His parents, Harald Ornstein, and Anne Ke Van Ooijen,  and his company, Bananama Republic, also has judgments entered against them.  That judgment remains unsatisfied of record, and unpaid. Other victims in Panama also have claims pending against him for fraud.

Having fled Panama, to avoid imminent imprisonment, Ornstein has relocated to the Netherlands, where criminal charges were subsequently brought against him, for Libel and Slander, resulting in an additional sentence of eighteen (18) months in a Dutch prison. Additionally, Internet postings containing the libel have been ordered permanently deleted.


Ornstein originally moved to Panama, while he was being investigated for the manufacture, sale and distribution of child pornography; the status of that case is not known. He continued his online pornography sales while living in Panama. He was a partner with the notorious Ponzi schemer, Mark Harris, and his unregistered securities business, the Tulip Fund, was shut down by the Panamanian Government. He is a suspect in an unsolved homicide in Panama City..

 He is also known to be wanted by Hamas, the Palestinian terrorist organization, for grand theft; he reportedly stole charitable donations intended for refugee camps in the Middle East. A declared Anti-Semite, Ornstein, and his immediate family, have long been linked to Dutch nationals who collaborated with the Nazi regime in wartime Holland.


Your blogger, as well as other whistleblowers who have exposed this career criminal, have also be libeled online, for reporting on his crimes, but we will continue to cover this pornographer, until he  ends up serving time for his actions.






Sunday, June 19, 2016

IF THE CARIBBEAN COUNTRIES CONTINUE TO PROTECT THEIR CORRUPT PEPS, THEN CLOSE UP THEIR BANKS' CORRESPONDENT ACCOUNTS IN NEW YORK



This week's news, that a court in Trinidad will not assist the United States Department of Justice, in its Extradition efforts against one of the most corrupt officials in the FIFA football scandal, is just one more instance of Caribbean non-cooperation. I am sure that the US is still smarting over the egregious failure of Antigua & Barbuda to extradite its former financial regulator, who deceived American regulatory agencies about Allen Stanford's mega-Ponzi scheme, and is wanted in Texas. That individual has been requested for several years, to no avail, because he has evidence of corruption in Antigua, at the highest level.


If the nations of the East Caribbean want American banks to assume higher levels of risk, by continuing to allow Caribbean banks, which have a long history of facilitating drug money laundering, perhaps these nations might consider allow the US to being West Indians who break American laws to justice. Stop protecting corrupt PEPs, please, or face the possible consequences of being pushed out of the New York banking center.

Friday, June 17, 2016

STATEMENTS MADE BY HONG KONG BOOKSELLER SHOW CHINA DOES NOT WANT OFFICIAL CORRUPTION EXPOSED


One of the five missing Hong Kong booksellers held a press conference this week, to discuss what happened during his detention in Mainland China, where the authorities are clearly seeking to interdict the distribution of books that detail corruption in the Peoples' Republic. officially-sanctioned kidnappings, choreographed television appearances, and lies in official press releases, detail what must have been a nightmare for the booksellers, who only offense was spreading the truth about corrupt Politically Exposed Persons (PEPs).

These actions, on the part of China, may reduce the availability of information about corruption among china's leaders, and their extended families, which will further impede research, by Western compliance officers, and enhanced due diligence of Chinese nationals who wish to become clients of EU and North American financial institutions. While that is obviously not the primary objective of China's ruling elite, who do not want their corruption known in the West, it will have a definite effect upon our compliance results.

When compliance officers cannot ascertain whether a potential client is, or is not, engaged in suspicious activity, for lack of access to relevant information, On-boarding new clients becomes a dangerous game.



SAUDI ARABIA MONITORING PAYMENTS BY LEBANESE, FOR HEZBOLLAH CONNECTION



Lebanese nationals living and working inside Saudi Arabia are reportedly complaining that money transfers, that they are sending to Lebanon, are taking three to four days to process. Apparently, Saudi compliance officers inn government are performing due diligence checks, to insure that neither the remitter, nor the recipient, of such payments, has any links to Hezbollah, or any other terrorist organizations.

Saudi Arabia designated Hezbollah as a terrorist entity in April; and some Lebanese nationals believed to be affiliated with Hezbollah have been expelled from a number of countries in the Gulf, including Saudi, where some Hezbollah terrorist financiers were allegedly operating.  

Thursday, June 16, 2016

MOSSACK FONSECA AGAIN ATTEMPTS SPIN CONTROL


The news from Geneva, to the effect that the authorities have detained a computer technician from the firm's local Swiss office, and are investigating whether he was the source of the so-called Panama papers, the data theft, and subsequent disclosure, of millions of Mossack documents, showing dodgy offshore corporations formed its client, for obviously illicit purposes.

You may recall that the initial Mossack press release stated that the data theft was as a result of a massive computer hack. Now, the spin doctors working for the Mossack law firm are claiming it was an inside job, just as we declared, on this blog, several weeks ago.

The problem is that the arrest of the Swiss tech is in conflict with our original information, obtained months ago, from former MF staff members who, themselves, were selling MF data on the open market, from time to time. Our sources swear that the data theft took place, not in Switzerland, but in Panama.

Is Mossack Fonseca simply looking to distract investigators from the truth, or  does the law firm not want us to delve too deeply into its former employees ? Can they possibly tell us about the money laundering tactics that the Mossack partners engaged in, at Panamanian banks ? The sordid truth is in Panama, and Mossack does not want the press probing there.

WHAT MAKES AN EFFECTIVE COMPLIANCE OFFICER ?



This poster, to entice Americans to enlist in NASA, for its upcoming push to not only explore Mars, in the coming decades, but to colonize it, could easily apply to compliance officers. What the financial community needs, most of all, are compliance officers who can discharge their duties with enthusiasm, and effectiveness.

What, in my humble opinion, makes a good compliance officer? here are my thoughts;

1. An effective compliance officer must be a renaissance man, or woman. This means a good liberal arts education, where they are exposed to not just history, geography, but language, technology, and yes, even literature, to be able to meet the challenges they face daily. Moving someone over from other divisions in the bank, to become a compliance officer, does not always work if they do not already have a well-rounded education as a foundation; they must be explorers of information.

2. A good compliance officer is not afraid to take on customer relationship/business development/ sales staff, when their need to new business is trumped by genuine compliance concerns.

3. He or she knows the tradecraft, the actual methods and tactics, of financial criminals, especially money launderers and fraudsters. if you don;t know how crime works, you cannot identify, and interdict it, in real time.

4. A effective compliance officer has a good relationship with both house counsel, and the outside attorneys who advise the bank. When potential compliance issues come up, a good lawyer on your side can make the difference between winning, and losing, your argument with senior bankers, who may be more intent on maximizing profits, at the expense of AML/CFT compliance.

5. Finally, a great compliance officer know where to go for reliable sources of non-public information, and never relies strictly upon commercial off-the-shelf data, when making major decisions.

Let's remember that an effective compliance officer never simply checks the box; he or she always looks further than the law, or best banking practices, requires, to get the answers;  Explore away.





Wednesday, June 15, 2016

ALERT: HEZBOLLAH PUSHES BACK ON LEBANESE BANK ACCOUNTS


In addition to blowing up the facade of BLOM Bank, to make a point, regarding its distaste regarding the closing of the closing of Hezbollah-linked bank accounts, the designated terrorist organization has now demanded a concession from Beirut bankers and the Central Bank (Banque du Liban), that could result in the complete isolation of Lebanon from the US, and possibly the world's, banking systems.

Hezbollah wants a "guarantee" that Shi'ites (obviously Hezbollah party members, and their associates) will have access to bank accounts, and it affirms that it will be submitting a white paper, detailing how such a program should be conducted, to Riad Salameh, the director of the Central Bank. On his part, Salameh reportedly has retreated from the statements made during his interviews with the press, saying that no Hezbollah member whose account is closed will be able to open another one in Lebanon. He is now saying his comments were "taken out of context." It sounds ominously like he is under intense pressure to retreat from his stated position.

The problem is that, should US regulators see that Hezbollah members ( and not just those with OFAC sanctions entered against them) have accounts in Beirut, in today's zero-tolerance climate, Treasury could bar the offending banks from accessing the US banking structure, close all their correspondent accounts, and even freeze assets. Such a move would isolate those banks, and probably be a death sentence, as clients, who could not trade with US customers, would fee in droves.

Some Lebanese banks may soon face a difficult choice: obey the American HIFPA law, and take on Hezbollah, a battle which they cannot win, or disregard it, and pay the price, when sanctions are imposed. What will they do ?




MOSSACK FONSECA ABANDONS ITS CLIENTS IN UNITED STATES



The Secretary of State of the State of Wyoming, one of the so-called "user-friendly" states, often used to form shell companies by offshore financial services providers, has advised that MF Corporate Services Wyoming LLC, the Mossack-controlled company that acts as Registered Agent for its clients there, has resigned, with regard to all the Wyoming corporations it serves. The owners of those companies face dissolution of their corporations within 60 days, according to state statutes, should they fail to obtain a new Registered Agent in a timely manner.

Longtime readers of this blogger may recall that I first detailed the reasons money launderers and tax evaders are attracted to Wyoming, in an article I wrote in 2004 for Complinet. Corporate statutes allow one to migrate over to Wyoming all the provisions of a charter from a sister state, when qualifying one to transact business in Wyoming. This means that if you could obtain one of the old Nevada corporations, with bearer shares, you could domesticate it, with that distinct advantage, in Wyoming.




In assence, Mossack Fonseca is abandoning its clients who have Wyoming entities. What this will mean for the continued existence of the law firm is obvious; Its end is fast approaching. Lawyers who leave their clients high & dry soon find they have no new clients coming in the door.

The State of Wyoming, meaning for law enforcement and regulators, has indicated that its investigation of Mossack will continue. Whether criminal charges are eventually filed against the law firm's partners is not known, but we will be watching.



Tuesday, June 14, 2016

HAMAS CADRE OPERATING IN TURKEY IDENTIFIED



Buried in an article by a reliable Middle East expert are the names of the senior Hamas leadership currently working from their base in Turkey. These individuals are believed to be supervising the building of Hamas cells in Judea & Samaria (The West Bank), and send money, weapons, and agents, in the territory for the sole purpose of forming small terrorist units, to carry out attacks on unarmed civilian targets in Israel. They have been allowed to maintain their safe harbor within Turkey, by the present government of the country, which considers them allies.

Some of these individuals are known to have acquired Turkish passports; their names may have modified, but compliance officers at international banks that have a substantial Middle Eastern clientele should be alert for them. Check the place of birth on all Turkish passports; was the holder born in Israel, or the Territories, or anywhere else outside of Turkey ? If so, you may have a terrorist, pretending that he is a Turk.

The Hamas leaders in Turkey are below; They are all terrorists, with murder of unarmed civilians, kidnapping, or other crimes of violence on their records. Many were expelled from Israel, in a prisoner exchange.

(1) Bakri Hanifa, a terrorist financier said to have moved funds from Qatar to Turkey. He formerly operated in the Hamas headquarters in Syria.

(2) Maher Ubeid, another reported Hamas financial operative.

(3) Mahmoud  Attoun, a convicted killer of civilians.

(4) Majed Hassan Ragheb Abu Qtesh, another convicted murderer.

(5) Musa Muhammad Daud Akari, still another convicted murderer.

(6) Taysir Suleiman, one more convicted murderer.

(7) Fahed Sabri Barhan al-Shaludi.

(8) Walid Zakariya Abd al-Hadi Aqel. Had a life sentence.

(9) Harin Mansur Ya'aqub Nasser al-Din. Ex-convict.

(10) Ayman Muhannad Abd al-Rahim Abu Khalil. Life sentence.

Monday, June 13, 2016

HEZBOLLAH, SEEKING TO AVOID THE CONSEQUENCES OF HIFPA, BLOWS UP BEIRUT BANK


If you were looking for that first overt display of anger, from Hezbollah, to try to persuade Lebanese banks from following the Hezbollah International Financing Prevention Act, look no further, A bomb exploded on Sunday, outside the front entrance to Blom Bank, in Beirut's financial district, injuring two, and causing major damage to the windows and facade.

The chief of Lebanese Internal Security Forces was quoted as stating that Hezbollah was behind the attack, which took place at 8:00 PM, when most people were breaking their Ramadan fast, and the streets empty. Blom Bank, said to be the second largest bank in the country, by deposits, has been following the provisions of HIFPA, and closing accounts linked to Hezbollah.

If this is the first of a wave of bombings in Beirut, Country Risk for Lebanon; already elevated, due to Hezbollah's participation in the civil war in Syria, and warlike posturing against Israel, will skyrocket further. Israel is sensitive to the situation; there are media reports of a 48-hour battle simulation, recently conducted by the Israel Defense Forces (IDF), against Hezbollah.

 The Beirut financial center is an important part of the Lebanese economy, in a country with no significant exports, or natural resources; should it experience capital flight, due to a lack of confidence, on the part of foreign investors, the country will suffer.

Are you sure ?





A NOTE TO THOSE PANAMANIANS WHO DENY THAT THEIR COUNTRY IS OVERRUN WITH MONEY LAUNDERERS



We have been fielding a number of Panamanian protests, regarding the content of certain articles that have appeared on this blog, regarding rampant money laundering. Anyone who actually believes that there is adequate anti-money laundering compliance at Panama's largest ten banks is living in total denial, or making so much money from crime so to be practicing willful blindness.

For those who have voiced an opinion regarding my ability to comment upon Panamanian money laundering, be advised that I have been personally observing the issues facing Panamanian banking system for 36 years, up close and personal, and consulting, in Panama, on AML/CFT. Perhaps you might like ask one of your business associates who attended my keynote lecture, given several years ago, at the conference of the Asociación Bancaria de Panamá, where I not only detailed the money laundering techniques in use in Panama, but identified several of the money launderers, and gave out a handout, with their names, to anyone who wanted it, after the program. 

Sunday, June 12, 2016

HEZBOLLAH OBJECTS WHEN BEIRUT BANKS CLOSE OVER 100 ACCOUNTS OF PARTY MEMBERS

                           

Senior Parliament of Lebanon members, affiliated with Hezbollah, unhappy when Beirut's financial institutions, and the country's Central Bank, Banque Du Liban, rushed to comply with the Hezbollah International Financing Prevention Act, by closing over 100 Beirut bank accounts, have stooped to appeals to patriotism, and made threats, in a futile effort to reverse the account closings. Hezbollah spokesmen have stated that the actions are a violation of national sovereignty, and could affect internal stability in Lebanon.

Hezbollah's position is that only specific individuals, or entities, that are designated SDN by OFAC, should suffer account closure, but the US law, which provides for sanctions against anyone who engaged in terrorist financing, is not limited to sanctioned parties. Banks who violate the law could be fined, or, in extreme cases, totally barred from the US banking structure, which would be fatal to the operation of any international bank.

The Central Bank, fearful of being isolated from the international banking structure, has advised Lebanese banks to fully comply, and to promptly close Hezbollah accounts, or those linked to the terrorist organization. This is not sitting well with Hezbollah, though its Secretary-General, Hassan Nasrallah, claimed recently that his organization has no accounts in Lebanon's banks, a statement which now appears to be untrue.

Reportedly, individuals whose accounts are close, pursuant to reputed Hezbollah affiliation, will not be allowed to open any new accounts, at any other Lebanese bank, in any currency.


 Hezbollah is thought to use the Syrian financial system as a conduit to receive $400m annually, from Iran, but obviously there are also accounts in Beirut. Rumors are flying that 3000 additional accounts will ultimately be closed, which could seriously disrupt Hezbollah's payments within Lebanon.

Will Hezbollah now act more directly, against local banks, given that the Central Bank has indicated that it will not retreat from its position ? If it does, Beirut banks will be caught in the middle.

WAS THE UNITED NATIONS STATEMENT ON SAUDI ARABIA WITHOUT FACTUAL BASIS ?


The UN backed off last week in its pronouncement that Saudi Arabia was guilty of killing minors in the civil war in Yemen, after the Saudi Government stated that it would stop payment to it, unless its name was removed from a list of countries whose military unnecessarily causes children to become casualties of war.

The matter raises the question: was the UN statement on Saudi Arabia not supported by the facts ? We have previously reported on United Nations publications, and "fact findings," which were totally untrue. Was this latest UN inclusion of Saudi Arabia on a blacklist not supported by fact ?

Given that many of the individuals responsible for findings, in UN documents, hail from dictatorships, or from countries with a political agenda that is in opposition to both truth and human rights, we are now in the position that we must, as compliance officers, doubt the accuracy of anything coming out of the United Nations. 

Saturday, June 11, 2016

GARY LUNDGREN OPERATES 82 PANAMANIAN FRONT COMPANIES TO DEFRAUD FOREIGN INVESTORS

Gary James Lundgren
A whistleblower website that specializes in exposing boiler-room stock fraudsters, has posted eight-two Panamanian shell companies that Gary James Lundgren, the securities trader banned for life by regulators, controls, in open defiance of the SEC and FINRA, in order to defraud American investors. These companies are used to confuse US law enforcement, and to conceal from them his beneficial ownership of an illegal boiler-room operation, working out of a locked and guarded office in Panama.

A complete list of the Lundgren front companies can be accessed by visiting the website of Global Investor Alerts  at :  http://www.globalinvestoralerts.org/global_finance_investments_sa_gfisa.shtml  Compliance officers may want to check outgoing wire transfer records at their bank, to determine whether any payments were ever made, from bank clients, to any of these shell companies. Additionally, alerts for all the listed corporate names should be entered into your internal operating procedures.

We have previously detailed how Lundgren, using a telephone number with a New York City area code, deceives the investing public, while claiming to operate as a legitimate broker-dealer, notwithstanding that his former brokerage no longer has a license to market securities. All his personal American licenses were revoked, after he repeatedly failed to submit his accounts to FINRA, for an audit. Panamanian businessmen who have done business with Lundgren have asserted that he laundered drug profits for Colombian Cartels operating in Medellín, through his trading accounts, and for that reason would not turn over his ledgers, and bank records.


Additional information, made available by reliable sources in the investment industry in Panama, where Lundgren makes his illegal trades from, have added that, in addition to the Panamanian front companies, he has shell corporations in the US Virgin Islands, as well as the BVI. Lundgren promises North American investors ten or fifteen per cent, per month, through purported high-yield programs that have no basis in fact, and he pays off older investors, through the Ponzi scheme method.



There have been repeated rumors, to the effect that Gary Lundgren has not entered the United States for several years, due to a sealed Federal Indictment, but whether it is for money laundering, tax evasion, securities fraud, wire fraud, sexual offenses, or some other charges, has not been verified.


Gary Lundgren's attorney, GASPAR LEE PEDRESCHI


Friday, June 10, 2016

ANGRY PANAMANIANS TAKE IT OUT ON FOREIGN BUSINESSES

Panama City, 2017 ?
The one-two punch of the Waked Money Laundering Organization scandal, and the Panama Papers, have resulted in major outbreaks of violence and vandalism, against foreign-owned (meaning predominantly American) businesses. Canadian and American expats, who have businesses in the Republic of Panama, are reporting gangs roaming the streets of cities and towns, throwing rocks at business facades, and defacing store and business exteriors.

While the level of violence has not yet approached crisis levels, nor the Anti-American posture that Panama exhibited at the end of the Noriega regime, before the US invasion, it is a reflection of the anger the Panamanian street feels towards American nationals. They are being blamed for the OFAC sanctions, imposed upon local businesses, in the Waked matter, as well as the embarrassment felt nationwide, due to the Panama Papers scandal. Though the ICIJ, which released the Panama Papers, is an international organization, it was founded in the US, and its global headquarters is in Washington.

Clearly, the Panamanian economy is suffering, and not just as the result of the above scandals; The country's former president, Ricardo Martinelli, whose extradition from Miami is said to be imminent ( but may never happen), and his corrupt ministers, looted national funds, increased government debt, due to the increased prices that resulted from bribes & kickbacks, and failed to timely collect massive amounts of tax revenue .

In truth and in fact, the country runs on its offshore financial center, and the influx of foreign capital, much of which is of suspect origin. Should it dry up, the consequences for Panama could be severe; hence the anger, focused on the gringo population.  Let us hope that it does not increase, for such a development would effectively place Panama off limits for foreign investors, and expats, whether the be legitimate, or criminal. In that case, Country Risk would fly off the charts, and Panama's attractiveness for flight capital, or as a tropical residence, become a thing of the past.

Thursday, June 9, 2016

PANAMANIANS CRY FOUL OVER OFAC DESIGNATIONS OF WAKED MONEY LAUNDERING COMPANIES


Some Panamanian lawyers are crying bloody murder, over OFACs designation of 68 entities of the Waked Money Laundering organization. Inasmuch as patriotism is the last refuge of a scoundrel, they are citing Panama's Constitution, and the Universal Declaration of Human Rights, in a desperate move to compel the Government of Panama to ask the United States to remove the OFAC sanctions. It's not going to happen, licenciados.

The OFAC List of Specially Designated Nationals is commonly, but inaccurately, known in Latin America as the "Clinton List," as it refers to the former President of the United States, who in 1995, by Executive Order, created the SDN List. The nickname just appears to be a back-handed slap at the gringos who are north of the Rio Grande.

The Panamanian Constitution does, in fact, require the Government to protect the life, honor and property of its nationals, and foreigners residing in the country, to insure individual and social rights, but OFAC designation only restricts US citizens, and permanent residents, from doing business with the sanctioned individuals or entities.

Panamanian lawyers are screaming lack of Due Process, Presumption of Innocence, and the Right of Self-Defense, but there are administrative steps that sanctioned individuals can take, in the United States, to seek removal from the OFAC SDN List, if they are truly innocent, which is doubtful. Many duly qualified attorneys, especially in Washington, are available to handle these matters.

 Perhaps, instead of complaining about how their clients are being damaged, without any evidence, they should seek competent counsel. Specially Designated Nationals are released from the OFAC list regularly; just look at the Treasury website, under Financial Sanctions, to confirm this.

Of course, it may just be more likely that the Waked companies are guilty of money laundering of  billions of dollars of narcotics profits, and their lawyers are angry that one more Panamanian criminal syndicate has been exposed, and which no longer has ready access to the US financial network; Qué Lástima.









Wednesday, June 8, 2016

BANNED STOCK TRADER OPERATES VIRTUAL MANHATTAN SALES OFFICE, DEFYING FINRA


Gary James Lundgren, the American stockbroker and fraudster who lives in Panama, is no stranger to this blog; over the years we have covered his bearer share fraud, insider trading in Panama, sex crimes, money laundering, and sundry other crimes and transgressions. Lundgren, who was banned for life from trading in securities by FINRA, when he refused to open his accounts to FINRA review, has now openly defied the ruling of the regulatory agency, by opening a virtual office, appearing to be located in New York City.

Lundgren is currently maintaining a landline telephone, whose number, (646) 403-4540, he is forwarding to his Panama location. This is a Manhattan area code, and callers hear a voicemail message, confirming that they have reached Mr. Lundgren's office, at Inter-Pacific, his now-closed American broker-dealer company, and assume that he has a satellite office in New York. This is a deliberate misstatement of a material fact.

Nothing could be further from the truth; Mr. Lundgren is far outside the Continental United States, but he is offering so-called high-yield investment products, which claim to pay 10% interest, on a monthly basis, but fail to deliver. His New York telephone number is a deceptive device to assure potential customers that he is a legitimate trader, when, in truth and in fact, he is a known investment fraudster, and trader on inside information, illegally offering fraudulent investments to US and Canadian victims. Lundgren represents a clear and present danger to the North American investing public.


Gary Lundgren with his two sons, James and ZacGary, who are sending in his trades

The Venezuelan attorney who is giving the Lundgren's advice on evading FINRA.