Kenneth Rijock

Kenneth Rijock

Tuesday, February 21, 2017


The PM and Venezuela's president
The love affair, that Dominica's Prime Minister, the beleaguered Roosevelt Skerrit, is having with the Bolivarian Republic of Venezuela, will not end well for the Commonwealth of Dominica. Given that the latest estimates now, for the first time, place Venezuela below Haiti, as the poorest country in the Western Hemisphere, and that US Dollars have become rare as hen's teeth, unless they are criminal profits, or Iranian capital, one must expect that all of the promised "investment funding" sent to Dominica from Venezuela will neither be clean, nor free of strings.

Remember, scores of Venezuelan nationals, from senior military officers, to the Vice President himself, are on the OFAC sanctions list, known in Latin America as the Clinton List, because it was created during the administration of Bill Clinton. This means that Dominican businessmen who accept funding from Venezuela may later learn that the source of the funds transferred to them may be tainted, land them on the OFAC sanctions list, or cause them to be banned from entering the US as visitors.

The money may also be laundered narco-profits, which could land unwitting Dominican recipients in a 200-person Federal indictment, filed somewhere in the US, as co-conspirators in some vast cocaine smuggling enterprise. Not a happy outcome, to be sure.

Iranian capital, though cleverly disguised as Venezuelan, might just place Dominica front and center in a future American-Iranian conflict, economic rather than military, as the US seeks to reduce the influence of its global adversaries in the Caribbean Basin. While Gunboat Diplomacy is a vestige from America's past, there are far more subtle ways for the United States to keep foreign influence out of the Western Hemisphere. The Monroe Doctrine is far from dead; Ask Grenada and the Republic of Panama.

If Dominica accepts suspect investment from Venezuela, the risk of future OFAC sanctions problems, even potential exposure to US criminal charges, serves to further increase Country Risk. We trust that cooler heads will prevail, and Venezuelan, or Iranian, dollars will not find their way into Dominica. Remember, Iran is regarded as a State Sponsor of Terrorism, and no matter how much greed the Skerrit government possesses, how can it take money from a radical islamic dictatorship, which treats its people, especially minorities, worse than Nazi Germany ?

Monday, February 20, 2017


The risk-based compliance programs that North American banks have implemented, to suppress money laundering and terrorist financing, can only succeed if they extend effective risk reduction to their correspondent banks. This means Know your Customer's Customer, or KYCC, is not longer an option, if banks are to retain their correspondents.

Correspondent often have compliance shortcomings for various reasons, including but not limited to:
(1)  The constantly increasing cost of new AML/CFT technology
(2)  Budgetary constraints that make it impossible to engage sufficient fully trained & experienced compliance staff, and a functional financial intelligence unit
(3) A lack of sufficient recurrent in-country compliance training.
(4)  Developing nations' local economies, which operate at a level that fails to sustain sustain successful profit margins for an excessive number of local and regional banks
(5)  Strong competition from local branches or affiliates of international banks

there are also many other contributing factors. Banking best practices, at the level practiced by North American banks, is thus the rare exception, rather than the rule. The problems are often more severe in countries in the developing world.

The sole acceptable solution is to require that your correspondents enable you to have full & complete access to their clients' information, that they close accounts for customers who your inquiry finds present an unacceptable level of risk, or are on sanctions, and that legitimate customers who subsequently engage in conduct that is not acceptable, are also asked to leave the bank.

This is not all bad news for the correspondent banks, because by working with their onshore banks, they insure that their prized relationship will not be terminated, for risk-related reasons. To understand the reverse of the problem, that experienced by your correspondents, read my recent article, How Caribbean Banks can keep their Correspondents by utilizing KYCC Technology  .

 With KYCC, both the onshore bank, and the overseas correspondent, can retain their valued relationship.
For further information, or for questions about this article:


Many of the world's major cruise lines have their headquarters here in Miami, especially those for whom travel to the Caribbean represent a major portion of their business operations. I am monitoring all Internet traffic to blog articles dealing with the diplomatic passport crisis in Dominica, and I am seeing, for the first time, visits to those stories, from cruise lines serving the East Caribbean. I have never seen specific attention paid to any of my articles about the Caribbean, by this industry, and this indicates a new focus on Dominica's current situation.

If you understand that cruise lines, like most large corporation, follow risk-based guidelines, and have been known to delete travel destinations, without prior notice, when weather, crime, political unrest, or any other number of negative events, raise risk levels, this is cause for concern, as cruise visits bring much-needed tourist dollars, follow-up visits by tourists who are intrigued by what they see, and provide a shot in the arm to local economies.

Pictures of individuals setting fires, and causing vandalism to downtown stores did appear in some global media, which certainly hurt tourism, and the most disturbing aspect of that violence is the allegation that the persons causing the damage were employed by the Prime Minister's Labour Party, to precipitate a crisis, requiring police intervention. That allegation was was received from two different sources, and it later appeared in the media. I expect such tactics in a Latin American dictatorship, not in an East Caribbean democracy. In any even, we  will soon see if Dominica is deemed too unsettled for cruise line tourists.

Behind the vandalism ??


Nidal Waked Hatum,  a Colombian "businessman" who allegedly led a multi-million dollar enterprise in Panama, that engaged in laundering criminal profits for Colombian & Mexican drug traffickers, has been denied bond for the second time, in a Miami Federal courtroom. He was extradited from Colombia in January, and many of his companies placed on the OFAC list.

A US Magistrate Judge originally denied him bond, and his attorney took the issue to the District Judge who will try his case. At the hearing it was revealed that Waked has a Spanish passport, A Panamanian passport, and is a resident of Canada. The judge, noting that he has no ties to the US, and that his wife was refused entry, ruled that he was a wealthy flight risk, who should be subject to pretrial detention, until his case is heard.

We wonder, given that Waked's money laundering activities were well known, how he, at the time of his arrest, held a Spanish passport, and residence in Canada. This economic citizenship problems, where dodgy individuals pay a lot of money to obtain a passport in another country. continue to confront  law enforcement, when the target's multiple access to passports is exposed at his arrest, seem to be increasing, but no international movement to ban them is on the horizon.


CSJ Magistrate Judge Harry Diaz

According to published reports, there may be as many as four separate money laundering cases now filed against Panama City office practitioners, Jurgen Mossack and Ramón Fonseca Mora. Both lawyers, accused for running a massive tax evasion, corruption laundering, and money laundering operation, in the Brazilian scandal known as the "car wash" case, have been detained, to prevent them from fleeing the jurisdiction, or further engaging in criminal activities.

Now, at the Supreme Court of Justice, Magistrate Judge Harry Diaz González de Mendoza, has lodged a formal objection to the consolidation of the pending cases, to another magistrate. Diaz has beena ssigned one of the Mossack cases. His motives are unclear, since judicial economy is to be observed whereafter possible in complex litigation. Diaz was closely linked to the fugitive former president of Panama, Ricardo Martinelli, and also visited the offices of a Waked-controlled company, when it was about to be sanctioned by OFAC, and he may have designs on delaying the prosecution of the Mossack partners, to deny the swift imposition of justice, on the orders of corrupt Panamanian officials, present of former.

Unfortunately, there are not real procedures in place to discipline Supreme Court judges, so his sins and transgressions have been roundly ignored by the court, but Martinelli's undue influence could be the reason for Diaz' efforts to keep one of the Mossack and Fonseca cases. 


Last year, when the Panama Papers information was publicly disclosed, two senior members of the Government of Malta were shown to be using the law firm of Mossack and Fonseca, to conduct suspicious offshore financial business. Malta's reputation as a corruption-free jurisdiction was tarnished as the direct and proximate result, but the injury is believed to have much more severe than mere reputation damage.

Since the  release of the Panama Papers, Maltese media have reported that a number of local banks have lost their correspondent relationships with US financial institutions. The situation became so serious that the country's prime minister traveled to New York, in what many observers believe was a mission to seek to restore those corespondent accounts, and assure the global banking community that the two instances of possible corruption were an aberrant event, and that Malta can be trusted.

Damage control, regarding the roles of the government official named, appears to be ineffective, due in part to a lack of action against those officials, and Malta will now have to move in a direction to assure American bankers that its client base has no surprises, and that corruption is non-existent.  That can only happen through total transparency, regarding bank customers, and again we remind our readers that KYCC, Know your Customer's Customer, appears to be the only solution that major onshore banks will accept. We hope that Malta's bankers will respond to the challenge, and offer our advice and assistance, as we do for all of our readers with a compliance problem.

Sunday, February 19, 2017


A classic tax fraud case, the object of which was to evade taxes, by making it appear that the profits of a Canadian company, generated abroad, had been sent to Canada, when it was an elaborate fiction, demonstrates that there was nothing that the law firm of Mossack and Fonseca would engage in, when it came to facilitating client criminal activity.

Tax treaties, between certain countries in South America, and Canada, provide that companies do not pay taxes upon their income, if taxes on those sums was being paid in Canada. A corrupt "tax consultant." created dummy contracts and false invoices, and even bogus records of wire transfers, ostensibly to Canada, but in truth and in fact, the money was wired to Mossack Fonseca, who followed client instructions, and sent the funds to Swiss accounts.

The only question I have is, why did it take the Government of Panama so long to finally arrest the Mossack partners ?


Notwithstanding the attention being paid to major problems, regarding unqualified foreign nationals receiving passports, and even diplomatic passports, through the Citizenship by Investment programs being operated in several Caribbean jurisdictions, the offshore industry has scheduled a boatload of events in 2017, to showcase these programs for interested, and therefore affluent, purchasers.

The proliferation of CBI programs means that compliance officers should be alert for new clients, offering these documents, as proof of identity. Remember well these procedures:

(1) If the client, seeking to open an account, or commence a new relationship, offers you a passport from one of the countries listed below(all of whom are advertising some sort of program or other), check their place of birth. if it is NOT in the country where the passport is from, initiate enhanced due diligence immediately, for you may have one of the CBI passports.

(2) Is the passport brand new, and without the usual visas and entry/exit stamps affluent client are likely to have ? This is another red flag of a possible CBI passport.

(3) Does the passport holder fluently speak the official language of that country ?

(4) Does the passport holder appear to be of an ethnic or racial background other than those normally found in that country ? This is not profiling, but seeking to rule out any prospective client that is too high risk for you to accept at account opening.

While this list is probably not complete, all these countries are scheduled to make CBI presentations this year:

Whether you wish to examine, in detail, clients with US and UK passports, is optional, due to the
fact that strict vetting is conducted in this jurisdictions.

The days when compliance officers can accept a passport at face value are, sadly, gone forever, due to the expansion of CBI programs, and their uneven, and often, unacceptable levels of due diligence.

Saturday, February 18, 2017


Attorneys for Jurgen Mossack and Ramón Fonseca Mora, the arrested senior partners of the law firm that bears their name, named in a serious money laundering case, are trying any procedural trick possible, in what will probably be a futile effort to cheat Panamanian justice. The attorneys filed an appeal from the intermediate appellate court order, which extended indefinitely the trial court ruling on the investigation being conducted by the Office of the Prosecutor against Organized Crime.

The case now goes to the Supreme Court of Justice, Panama's highest court. Mossfon SA, the Mossack partners' corporate entity, also filed the appeal, which any objective legal observer would consider totally without any merit at law, and designed solely to delay the criminal case further.



In what appears to be the first favorable ruling handed down in the case, the US District Judge presiding over the Reza Zarrab Iran sanctions violations case has denied the motion, filed by the US Attorney in New York to disqualify key members of the defense team. In an eleven page opinion, the Court held that there was no conflict of interest.

The Court, after extensive consideration, a Curcio hearing, and extensive briefing of the law by both sides, in a well-reasoned and detailed opinion containing profuse citations, found:

(1) That the defendant accepted counsel, notwithstanding there there were potential conflicts and limitations, regarding the attorneys' defense of him; He waived the conflict.
(2) Based upon the information furnished to the Court, by the parties, the conflicts to not appear, at this time, to disqualify the attorneys from representing Zarrab.
(3) The Court advised the parties that, should there be a change in circumstances, they are to advise the Court.

The trial date has been set for August 21, 2017. The defendant's brother Mohammad, who was charged, but is not in Federal custody, may not be the only other individual indicted. It is known that there are several other co-conspirators, but any indictments that exist will be sealed, until such time as arrests are made, to avoid their flight to avoid prosecution. Some of the unknown defendants may not be Iranian or Turkish nationals, and given the importance which the Department of Justice is prosecuting Zarrab, due to the issues raised, it is probable that there are additional defendants.



The Attorney General of the Islamic Republic of Iran, Mohammad Jaafar Montazeri has announced that his government will not execute the convicted master embezzler of the country's oil profits, Babak Zanjani, until the entire $3bn, that Babak, Reza Zarrab, and Alireza Monfared,  allegedly stole from their own government. Zanjani's hanging was to be scheduled in March, but it will now be placed on hold.

Zarrab is defending himself in an Iran sanctions violations case in US District Court in New York City;  Monfared was recently extradited back to Iran, from the Dominican Republic. His possession of a diplomatic passport from Dominica has ignited a firestorm of public protest against the government of Prime Minister Roosevelt Skerrit, who is an associate of Monfared,  a known sanctions evader, and who allegedly facilitated the issuance of the passport to Skerrit, allegedly for a large sum of money, in a major corrupt scandal where his resignation has been demanded, by a large percentage of Dominicans

Curiously, it does not appear that Iran has withdrawn its previous offer, to cancel the death penalty, provided that the entire $3bn owed is returned. The present statement infers that Zanjani will ultimately meet the hangman, but only has been granted a temporary reprieve. Zarrab is believed to control a fortune estimated at $6bn.

Whether Monfared, who was apparently a close associate, will turn over control of his overseas assets, to avoid execution himself, is unknown. When he fled Malaysia, escaping an Iranian extradition request, and using his Dominican diplomatic passport to evade justice, he probably carried with him information about his accounts, as well as bearer financial instruments or gems, but it is not known if he deposited any of his assets in Dominica, or owns real property there, using front men or attorneys. It should be noted that Dominica refused an Iranian extradition request, while Monfared resided there, and it is unlikely that the government will cooperate with Iran, in any efforts to seize assets.

Friday, February 17, 2017


The potential loss of correspondent banking accounts in the United States is dominating conversations among Caribbean bankers recently, especially since a number of American financial institutions have terminated many of those longtime relationships. It is perhaps the most pressing problem bankers in that region face. is there a viable solution ? Yes, there is.

The US banks, operating under risk-based compliance programs, are reducing risk wherever possible, and the Caribbean which, through the accident of geography is both a transit zone for narcotics, and a favored money laundering destination. unless the Caribbean financial institutions have a means of assuring the onshore US banks that their clients/customers are all legitimate, correspondent relationships, even those which have been maintained for decades, are at risk.

The American banks need to know who your customers are, in essence, Know Your Customer's Customer, or KYCC is the solution. Armed with this knowledge, the risk managers can ascertain whether any of the Caribbean bank's own customers pose a threat, and should be terminated. This procedure also helps the Caribbean bank reduce its own risk level, and therefore improve anti-money laundering, and countering the financing of terrorism programs.

New technological advances in compliance programs allow users to identify unsatisfactory, or high-risk customers, or good customers who later have issues which raises their risk levels, as well as all your low-risk clients who should be retained. Space on this blog does not permit an adequate and illustrated description of those programs, and why they are an acceptable means of restoring your correspondent's confidence in your client base, and AML/CFT program, but if any readers are not familiar with those programs, feel free to send me an email at:  with your query, and I will respond to you in detail.

While it is the Caribbean banks that are reporting the most terminations of correspondent relationships, a recent report from other areas of the developing world also that similar situations were occurring in Latin America, Asia & Africa. We hope that those banks also choose an effective solution, before they also suffer what might be a catastrophic loss in correspondent relationships.


The law firm of Mossack and Fonseca,  its name partners in custody, has closed one of its offices in Luxembourg. the problem is, it left the other one open, and they both have deceptively similar names. Therefore, any client who cannot get "service" at one, due to its being closed, can easily find the other.


                          MOSFON LUXEMBOURG S.A.R.L.

Why has the government in Luxembourg not yet closed it down, I wonder ?


Dominican lawyer Anthony Astaphan, who, though he refuses to admit it on the record, is Dominica PM Roosevelt Skerrit's attorney and chief spokesman, has been filling Dominican newspapers with commentary, hawking his support for the illegal diplomatic passport scheme, has a darker side to him that is not generally known in Dominica. He has been responsible for interfering with the the administration of  American justice, involving individuals responsible for Antigua's Stanford International Bank scheme.

Astaphan has long represented the fugitive Antiguan former banking regulator, Leroy King, who has been wanted in the United States, to face justice for his prominent role in concealing convicted fraudster R Allen Stanford's massive Ponzi scheme, from American regulators and investigators. King is the only major target of the Stanford case  not yet in custody, and Mr. Astaphan has had a major role in keeping him out of an American courtroom. Remember, King is the Antiguan regulator who reportedly swore a blood oath, in the dark of night, at an isolated airfield, to Stanford, and his criminal enterprise, for which he was certainly well compensated, as were many other senior Antiguan leaders. A search of Antigua newspaper articles confirms that Astaphan is shown as counsel for King, though he apparently now is denying it.

How has he accomplished this legal feat ? Simple, as the dominant person on King's legal team, he has, through delays, changes in assigned judges, and tactics not supported in either the law, or the facts, delayed King's extradition to the US, for 8 years. Given that the judicial assignment to the King case has been intentionally passed around, like a basketball, which is one of the ways that justice is infinitely denied. Obviously, Mr. Astaphan has found a way to game the system, to insure that King never is ordered extradited, to face the music. He has engaged in dilatory practice, to deny the administration of justice.

Leroy King, fugitive from justice

Why is Astaphan so focused on the King case ? His father-in-law, a former Antiguan Prime Minister allegedly received large sums of money from Stanford. Remember, Stanford's banks were licensed in Antigua. If King is ever extradited, to US District Court in Texas, where Allen Stanford received a 110-year sentence, King faces a probable long sentence, which might even amount to the rest of his natural life; He certainly will not desire that outcome.

The only way that he can reduce that sentence is to render Substantial Assistance, to the extent that others are indicted, and criminal proceeds money received. Just who do you think Mr. King will offer damaging testimony against ? The former PM, definitely; Mr. Astaphan himself, as a co-conspirator in the Stanford Ponzio scheme ? Possibly; remember, Astaphan has represented his father-in-law for many years, in a wide variety of matters, and broad American conspiracy statutes might easily be applied to his conduct. Under US law, the attorney-client privilege does not apply when the lawyer engages in criminal activities with his client, even if the lawyer is unaware that he is facilitating a crime. This is
called the Crime or Fraud Exception. I wonder how much Mr. Astaphan knows about  American Federal criminal law ? He is potentially exposed there.

Allen Stanford: 110-year sentence
Antigua was seriously, and permanently, damaged, by the scandal generated by Stanford's criminal enterprise. Dominica should take heed of that sad story, and cast off its covert diplomatic passport money machine, and its supporters, as soon as possible.

Thursday, February 16, 2017


Home of Panama's fugitive President

Rumors are flying about in Panama City, to the effect that the Attorney General plans to seize the Super 99 grocery store chain, whose majority owner is the country's fugitive former president, Ricardo Martinelli. Notwithstanding a reportedly properly filed extradition request, Martinelli, who associates were dubbed the "Monkey Mafia" by angry Panameños, seems to be flaunting his luxurious Miami lifestyle, on a condominium on the city's upscale Brickell Avenue. He is even living in the same building that was featured in the opening shots of "Miami Vice," which is more than appropriate.

The stalled status of his extradition, to face more than a dozen criminal cases, has led many to suspect that the former president has an established, yet covert, confidential informant relationship, with a US law enforcement agency, which is protecting him from deportation to Panama. Does he have the proverbial Get-Out-of-Jail-Free-Card ?

In a related matter, the INTERPOL Red Notices, demanded by the government, have now been issued, against Martinelli's two grown sons, who allegedly received $6m in bribes, from Norberto Odebrecht SA, the Brazilian mega-contractor who landed huge projects in Panama, after making illicit payments, to "facilitate" approval by the Martinelli administration. 


Lic. Maria Mercedes Riaño Quijano 

A Mossack Fonseca attorney, Maria Mercedes Riaño Quijano, now in custody for her alleged role in facilitating the laundering of bribes and kickbacks, paid by Norberto Odebrecht, the Brazilian construction giant, is trying to evade liability, through a novel, but apparently bogus, theory: she claims she was merely the lawyer for MF in Brazil. Her attorney asserts that she has a written contract to prove up her position. The issue is, of course, in dispute.

 The arrested partners in the firm, Jurgen Mossack and Ramón Fonseca Mora, say she ran a franchise operation in Brazil, acted independently of the MF home office in Panama, and had sole control over that operation. They are obviously looking to duck legal responsibility for the actions of the Brazilian office, whose illegal conduct was responsible for their recent detention and arrest, on money laundering charges. In truth and in fact, no information has emerged to support the MF partners' allegations; MF overseas offices appear to have been adroitly controlled from Panama, though the evidence has not yet been publicly revealed.

Wednesday, February 15, 2017


I have been searching for a legal solution to the problem. The "unofficial" diplomatic passport sales program of the Commonwealth of Dominica is clearly out of control. A look at the foreign nationals who are known to have purchase diplomatic credentials from Dominican government officials reveals a rogues' gallery of financial criminals, sanctions evaders, and other suspects, none of whom you would want dating your worst enemy, let alone gaining inspection-free entry into many of the world's airports and other ports of entry.

Since the corrupt senior Dominican government officials, and the "sales agents" who earn obscenely high commissions for steering wealthy (but dodgy) foreigners to that prized diplomatic passport, will not kill their golden goose, the program, and the rule of law seems to have gone on vacation in Roseau,, what can be done ?

This is not Grenada, or Panama; don't expect a US Marine Expeditionary Force to land, subdue the SSU, imprison the Prime Minister, and his cabinet, and establish a provisional government, but the Office of Foreign Assets Control (OFAC) can certainly wield economic power. It is as simple as imposing a designation for WMD, or Iran sanctions, for the actions of the program facilitated Iran sanctions evasion activities. if pressed, we may find other unrelated criminal conduct, on the part of the other diplomatic passport holders, to justify other OFAC designations.

If such an action occurred tomorrow, I am afraid that the Prime Minister would be barred from traveling to New York, to stay at his residence there, and could not visit his wife and child, who arrived there recently, and some of those now obscenely wealthy cabinet members would not be able to throw money around in Miami, but it may be the only way to insure that no more counterfeit diplomats obtain the tools to commit crimes, evade international sanctions, smuggle everything and anything, and appear to be emissaries of a sovereign government, when they are only common criminals. If the Dominican Government will not stop the diplomatic passport program, sanction the government that runs it.

Economic bombing of Roseau is more effective than the real thing



Iranian online news media is claiming that accused Russian Iran sanctions violator, Reza Zarrab, fled to the United States to escape arrest in Turkey, and extradition to face extortion charges in Iran, and that he is cooperating with the US. This statement is not credible, however, if one looks at both the tough treatment Zarrab received from US Customs & Border Protection, when he arrived in Miami, and the hard-fought, no quarter given or expected, nature of his attorneys' defense of his case. There is no evidence of any cooperation, and Zarrab has assembled a large team of lawyers, which is vigorously fighting the charges.

There may be political reasons for this obvious attempt at disinformation; both Turkey & Iran have asked that the United States turn Zarrab over to them; Turkey's president appear to be an ally of the gold trader, who reportedly sold over $400m in internationally-sanctioned Iranian oil. Iran wants Zarrab, because he allegedly has access to the $3bn Iran says was stolen by his partner, Babak Zanjani, and his  associates, which includes Alireza Monfared, recently arrested in the Dominican Republic and brought to Iran, to face embezzlement charges. Also, given the extremely poor nature of the American-Iranian relationship, this may just be another attempt to portray the US in a bad light, by accusing it of being allied with a known major criminal.

Tuesday, February 14, 2017


The SDNTK designation, imposed by OFAC upon Venezuela's new Vice President, Tareck El Aissami, presents compliance officers at US banks with a dilemma; how does one safely engage in any transactions with Venezuelan banks, when even the country's second in command is OFAC- sanctioned ? He allegedly has drug trafficking ties, as well as being involved in the distribution Venezuelan identification to terrorists. Is anything in that country low-risk ?

Add to the mix the sad fact that a full two-thirds of the major money launderers operating in the Republic of Panama, are Venezuelan nationals, busy cleaning their clients' drug profits, proceeds of corruption, criminal profits, and terrorist financing profits, and all that dirty money is coming out of Venezuela, where your bank client is engage in international trade. What is one to do ?

If possible, you can redline all transactions with Venezuela, directly or indirectly, that are passing through your bank, but your exposure to existing debt, letters of credit, outstanding balances, and current client contractual obligations, all complicate your ability to extricate yourself from the financial nightmare that is today's Venezuela.

Perhaps the best thing is to decline any future business, and wind up what you have on your plate,  as quickly as possible, while watching closely for front men, and other evidence of intermediaries. All Venezuelan transactions hereafter should be the subject of enhanced due diligence, lest you find yourself on the short end of a criminal investigation of a former Venezuelan client. You may be moving  drug profits, without even being aware of it; be careful.


A month later, court watchers are still closely monitoring the Reza Zarrab's Iran sanctions case, pending in US District Court in New York, waiting for a ruling on the Government's motion to disqualify some of Zarrab's best attorneys, on the grounds of Conflict of Interest. The lawyers' firm merged with one which represents many of the US banks who were allegedly victims of Zarrab's sanctions evasion maneuvers, using US Dollars.

Considering that the Court has been ruling, in a relatively swift manner, on other pending motions, is is curious that this issues remains unresolved, especially since the case has been set for trial later this year, and if additional counsel are brought in, assuming that the motion is granted, the longer this matter is pending, the better an argument new counsel will have for a continuance of the trial.

Any defense appeal of a ruling on an order granting the Government's motion will be a problem, since it is not a final order or judgment, and existing case law, concerning the ability to appeal of such an interlocutory order, is not favorable, with a few rare exceptions.

We will continue to monitor the case, and report back when a decision is handed down. 

Monday, February 13, 2017


I have been reading, over and over again, that the due diligence investigation, conducted upon applicants of Dominica's diplomatic passport program, was more than adequate; it searched all the sanctions lists, and failing to find any negative information, approved an Iranian national, living in Malaysia, with a Malaysian passport, and engaged in massive international trade. Attorney Anthony Astaphan, himself without any experience or training, in the field of compliance, says everything was properly done.

Nothing could be more wrong. Iranian nationals, given international sanctions, including strict US sanctions, in force upon Iran , are by definition high-risk, which means that Enhanced Due Diligence is required. EDD demands actual inquiries, in the real and virtual worlds, be conducted, and one never, ever limits such searches to obsolete sanctions list. To try to claim that all which should have been done, was done, is bloody insulting to the intelligence of compliance officers.

As I have previously stated, US regulations, effective in 2010, call for accessing any information that is "knowable," which I personally did in 2011, when checking out Reza Zarrab. I found that his associates, Babak Zanjani, and Alireza Monfared, were his partners in an illicit oil sales operation. I did not use any restricted information to arrive at that conclusion, just a few well-placed emails and interviews, conducted by others. If I knew these facts, then they were in the public domain, and definitely knowable. So why did the large search firm not catch it ? Obviously, someone did not want the truth to come out, so it did not.

As a former compliance officer, I know a compliance failure when I see it. Mr. Astaphan, apologist for a government which issued a diplomatic passport to a member of one of the most dangerous criminal organizations on earth, is beginning to sound more like a propagandist, than a lawyer who deals in facts.


The exclusive news story, recently released by Cable News Network (CNN), regarding the issuance of legitimate Venezuelan identity cards, and passports, to dozens of Hezbollah terrorists, may have surprised most Americans, but, in truth and in fact, US law enforcement agencies have had copies of those identity documents for several years*; they conveniently classified that information, keeping it out of the hands of the Americans who need it most, the country's financial institutions, money service businesses, casas de cambio, and foreign exchange firms.

Unfortunately, our government fails to see that, denying bank compliance officers the names and photographs of known terrorists, means that they can walk into a Miami bank, with official, legitimate Venezuelan identity documents, and open an account, their Hezbollah affiliation not known. If the depositor is indeed facilitating the financing of a terrorist operation, secrecy of the identity card and passport has been deemed more important than preventing such acts.

I know this because I have seen those documents,. and they were turned in by others; the Arab names of the terrorists have been turned into Hispanic versions, to successfully survive compliance scrutiny. Perhaps if Americans knew more details, regarding the penetration of Latin America, by terrorist organizations dedicated to the destruction of the United States, effective action might be taken to detain, or imprison, those agents.


Jurgen Mossack and Ramón Fonseca Mora, the senior partners in a law firm whose massive money laundering and tax evasion operations were brutally exposed by the Panama Papers, are in custody, being held for interrogation, on suspicion of money laundering. What is not publicly known is that they are in accommodations described as "luxury," and they have 24-hour visiting privileges. What's wrong with this picture ?

For those readers who are not familiar with the business culture in the Republic of Panama, it may be summarized thus: so long as a business brings cash into Panama, nobody will inquire into the Source of Funds, or the background of the clients. No wonder Mossack and Fonseca are being treated like Mafia kingpins, for they were responsible for bringing a large portion of the dirty money influx,  that drives new construction, real estate sales, and pays the exorbitant fees of the lawyers.

 I wonder if  M & F have conjugal visits ?

Sunday, February 12, 2017


Senator Fontaine
In a scene more reminiscent of a banana republic dictatorship, than a functional democracy, armed Special Service Unit (SSU) officers arrested Dominica's Senator Thomson Fontaine, of the opposition United Workers' Party (UWP) today, as he exited from his weekly radio program. Some Opposition leaders reportedly have gone into hiding, after 6 AM police raids were conducted, upon their residences, and violations of the Constitution of the Commonwealth of Dominica are alleged to have occurred.

The situation, where law enforcement is being used to intimidate, imprison, and immobilize Opposition leadership, is fast deteriorating, and reports that outside intervention is being considered have been received. It is important to note that, when such actions occurred in Grenada, it was then-Prime Minister Dame Eugenia Charles that contacted American President Ronald Reagan, to urge military intervention in that troubled nation. Then, Grenada was unduly influenced by Cuba; now, Dominica has come under the Iranian sphere of influence, and China is also playing a role. Will history repeat itself ?

While we may only see economic or political sanctions imposed against Dominica, whether by the UN, US or OAS, they would cripple the nation's weakened economy. Cutting off remittances from abroad have been mentioned. Cooler heads need to prevail here, and the government needs to resign en masse, lest sanctions make Dominica begin to look like Haiti.

This has been published since the arrest
UPDATE: Dominican sources have stated that, after the reputed intercession of an unnamed diplomat, Mr. Fontaine has been released.


Lic. Edison Teano

Panama attorney Edison Teano, known to be a partner at the law firm of Mossack & Fonseca, was detained for questioning by the authorities, reportedly around the same time that the name partners of that firm were also taken into custody. Teano is said to have been involved in the use of Panamanian corporations to hide bribes received by members of a Brazilian political party; He is being investigated for money laundering, according to published reports in Panama.

The role, played by a number of lesser known attorneys at the Mossak firm, has thus far escaped media attention, though this blog has identified several of them. Many MF lawyers are seeking to avoid scrutiny, by quietly moving to Panama City law firms, obviously hoping to escape being charged with money laundering. Whether Panamanian authorities move against them is not known, but given that there are no real disciplinary agencies in Panama, to control attorney misconduct, unless the prosecutors arrest them, they will effectively evade justice for their crimes.

In related news, both MF name partners, Jurgen Mossack & Ramón Fonseca Mora, were denied bail, due to flight risk considerations. Their lawyers were busy denying that there was sufficient evidence that they were guilty of money laundering, but one doubts whether anyone was listening to them.

Saturday, February 11, 2017


Alireza Monfared; Dominica's Allen Stanford ?

Has Alireza Monfared become an albatross around the neck of Dominica ? Look closely at the economic, social, political and human damage that Stanford wreaked upon Antigua. Years after Stanford started serving a sentence of 110 years, Antigua still suffers from the negative publicity generated by its failure to extradite its banking regulator. Leroy King has never had to face justice in the United States, which has permanently damaged its previously cordial relationship with America. Will its failure to extradite Roosevelt Skerrit to New York, for conspiring to evade international and American sanctions on Iran, and money laundering, have the same effect ?

R Allen Stanford

Moreover, will the United States now stake some sort of claim upon assets (or cash) located in Dominica, asserting that they are either Monfared's property, or that they were the fruit of illegal activity, with the money coming from Monfared ? And what about the three billion dollars that Babak Zanjani must pay Iran, to avoid summary execution. His attorney says that Monfared was the true trader of sanctioned oil; whether Iran makes a billion dollar claim in Dominica is unknown, but entirely possible. Iran cannot be happy that Dominica sheltered Monfared, and accepted money that he embezzled from oil sales; Do the math.

Nobody can estimate the total amount of fallout, in its many forms, from the Monfared diplomatic passport scandal, but the longer that Dominican officials try to cover up the truth, the worse the story is going to get. Dominica has already had one national disgrace, in 1979, involving the sale of passports to Iranians, which caused the fall of a Prime Minister. Will history repeat itself ?


Back in September, we noted, in our article entitled  HSBC Delays Prompt Resolution of its Appeal of Judge's Order to release Monitor's Report, that HSBC appeared to be intentionally delaying the progress of its Second Circuit appeal of a District Judge's order, releasing the restricted report of the Independent Report of the court-appointed Monitor. HSBC's argument, that public release of the report might affect its employees cooperation, failed, and the Court ordered its release; it is believed that the  report exposes what has been called a dysfunctional AML/CFT program, still not yet sufficiently improved to meet minimum banking best practices standards, notwithstanding that time has elapsed since the Monitor came on board.

Finally, though, the Court has scheduled Oral Argument for March 1, 2017. Some observers have theorized that, since the 2nd Circuit decision, due to delays they blame squarely upon HSBC, that it will be more than a year after the appeal was filed, when a decision is finally handed down. HSBC, if it loses the appeal, can then argue that its AML program is much improved, from the now-dated report, in the manner of damage control.

Compliance officers universally want to see an unredacted version of the report; the LinkedIn article "Why is this Bank still in Business ?" pretty much sums up their opinion of the global bank's successive problems with money laundering. We all hope to see that report soon.


In what might be the most extreme example of tax haven hubris, the staff of the law firm of Mossack and Fonseca, exposed by the Panama Papers as a global facilitator of drug money laundering, corruption, tax evasion, and every type of financial crime you can imagine, were out in the streets yesterday, protesting the recent arrest, detention and interrogation of MF partners, Jurgen Mossack and Ramón Fonseca Mora. The fact that the Panama Papers have clearly established the guilt of the firm partners, to the exclusion of any reasonable doubt, means that the staff members protesting are supporting their place of employment, knowing that it is a criminal enterprise.

Most bankers, who were wondering whether the Government of Panama were ever going to get around to the law firm's principals, have welcomed this development, and are regarding the MF staff protests as absolute madness, as they feel much of the staff deserve prison sentences, and lifetime bans from ever working in the legal, or financial services, field again, after their release from custody.

Additional search warrants have been executed by investigators, including at law firms that contain former MF attorneys, who have already left the firm. We have previously identified many of those ex-MF lawyers, who have settled in other positions arounds Panama City, in prior articles. Due to their documented role in the formation of corporate structures, for known criminals, PEPs, and other individuals suspected of tax evasion, readers are urged to avoid those lawyers, who may also face justice in Panama, or elsewhere. They may also be continuing to form companies for criminal organizations.  


Russian Businessman, Vladimir Kokorev, as well as his wife and son, remain behind bars in the Canary Islands, held for more than 15 months on a dodgy material witness warrant, in a money laundering investigation, with political overtones, that violates European Union laws on human rights.

Any possible prosecution of the Kokorev family is barred by the Statute of Limitations, as well as res judicata, as the case was closed years ago, but due to greedy Spanish commercial interests, who covet the oil of Equatorial Guinea, and think Kokorev will ultimately implicate EG President Obiang, and drive him from office. They remain in custody in a case that smacks of the  Dreyfuss Affair.

A judge in the Court of Instruction, in Las Palmas, Ana Isabel de Vega Serrano, has intentionally, and maliciously, extended the incarceration many times, claimed the file and all information therein are secret, and in general held Kokorev incommunicado, for more than a year, in an effort to get him to confess to crimes he did not commit. If this sounds like a scenario from a Kafka novel, it is truly much worse.

This case should be heard by the European Court on Human Rights, forthwith, and these people released. Furthermore, Judge Serrano should be fired, and arrested, for using the bench to further the purposes of Spanish commercial and moneyed interests. Some judicial supervisory officials in Madrid have a lot of explaining to do; they let a provincial judge repeatedly break the law. Let these people go free.


Zanjani (Iranian press)
Babak Zanjani, the Iranian oil sanctions trader, who was a partner of Reza Zarrab and Alireza Monfared, now facing a death sentence, will reportedly not be executed before the beginning of the Iranian solar year, which begins March 21. Iranian media has stated that a member of the country's Oil Ministry, who was charged with recovering the $2.7m had requested that Zanjani die before that date, but Zanjani's attorney asserted that he has not yet filed his appeal of the sentence, and that Iranian law provides that appellate remedies must first be exhausted, before the sentence is carried out.

Reza Zarrab
 Last year, Iran did execute a banker sentenced to death, which certainly must be on Zanjani's mind. The seizure (it was not a proper extradition), of his partner, Alireza Monfared*, may also have something to do with the fact that no execution date has yet been announced , though most observers believe it is Reza Zarrab alone that has access to the $3bn Zanjani needs to escape the hangman, and Zarrab is himself busy in New York, fighting American charges that could result in a 75-year sentence, for Iran sanctions evasion. Whether he ever obtains access to the money, and succeeds in having his sentence changed to life in prison remains an open question.

Monfared and Dominica PM Roosevelt Skerrit
* There has been no public information, out of Iran, regarding Monfared, since he was taken into Iranian custody, under mysterious circumstances, other than statements, made by Zanjani's attorney, that his testimony will support Zanjani's claims of innocence, though a conviction has already occurred.  


Lic. Mossack y Fonseca
Jurgen Mossack and Ramón Fonseca Mora have been detained by Panamanian authorities, for investigation of money laundering, as well as another lawyer at the law firm, and a judge has ordered pre-trial detention for all, to prevent their flight out of the country to avoid prosecution. Whether they are ultimately charged with criminal activities, however, remains an open question, given Panama's utterly corrupt judicial system; Many experienced Panama hands insist that neither attorney will ever face justice in a Panama City courtroom.

President Juan Carlos Varela
On another front, an independent commission has been set up, under orders to investigate Panamanian President Juan Carlos Varela, regarding allegations of corruption, in the expanding Odebrecht scandal. He is now believed to have accepted many millions of dollars, to approve major government contracts for the Brazilian construction giant. Dark rumors persist in Panama, to the effect that the country's former president, Ricardo Martinelli, disassociated himself from Martinelli, when Varela was his vice president, due to Varela's reputed grossly excessive corruption, and this speaks volumes, given Martinelli's own corruption allegations.

Finally, the Superintendency of Banking has taken over the Panama office of the Brazilian bank, FPB Bank, Inc., over allegations that the bank was involved in the Brazilian Lava Jato (Car Wash)* scandal, in which lucrative contracts for the government oil entity, Petrobras were obtained through bribery.

More than fifty Brazilian politicians, including those at the highest level, have been implicated. In the bank's Panama operation, there was reportedly a total and complete lack of any Know Your Customer procedures, regarding accounts opened to foreigners, and that FPB was a conduit for laundering corrupt payments.
* Known by this title, because the initial investigation found car washes and laundries were being used to launder the corrupt payments made to government officials.

Friday, February 10, 2017


One of the Seven Deadly Sins ?
Individuals in Dominica, with first-hand knowledge of the facts, have alleged that Dr. Kenneth Darroux, Minister of Environment, Natural Resources, Physical Planning & Fisheries, accepted gifts, but not cash, from the Iranian national recently arrested, Alireza Monfared;  Such an act is a violation of the Integrity in Public Office (IPO) Act. Dr. Darroux may not be a target of any criminal investigation, but it is possible that he could later be called upon to give testimony, regarding other individuals he has been associated with. Darroux is reportedly unworried about his past conduct.

Inasmuch as there has been absolutely no mention of IPO Act violations, in connection with the diplomatic passport fiasco, I must only assume that everyone in government is studiously ignoring that law.

Certain other Dominican officials are suspected of receiving what can only be described as bribes, from Mr. Monfared. Did they receive this money while on the governmental trip to Malaysia ? We cannot say, but one rumor has them concerned about possible exposure to criminal charges; Here's why.

Any Dominican government officials that have accepted bribes, kickbacks, or other illegal compensation from Monfared have serious cause for concern, for should they have deposited any portion of that money, in a bank account, they may later be found to have committed an American money laundering violation, which has a maximum penalty of twenty years' imprisonment. Under US law, the processing of any US Dollar deposits, which end up in transit through the New York banking center, confers jurisdiction; Additionally the courts have held that there is extraterritorial jurisdiction for money laundering offenses. This mean that, even if the offender never enters the US, he can be found guilty of money laundering.

Alireza Monfared on the far left,  Kenneth Darroux far right.

A final note; I am, thus far, still unable to confirm the rumor, passed to me recently, that there is a confidential informant, also known as a cooperating individual, in the Cabinet, in some capacity, but there seems to be a lot of information being bandied about, regarding the details of the Malaysia trip. 


Lic.Kenia Porcell

The Attorney General of Panama, Kenia Porcell, has publicly stated that a second raid has now been conducted, upon the law offices of Mossack and Fonseca, who were implicated in massive money laundering, tax evasion, and criminal enterprises of their clients, in the Panama Papers.

Mossack name partner, Ramón Fonseca, reportedly has given evidence against Panamanian President Juan Carlos Varela, including an accusation that Varela received bribes from the Brazilian construction giant, Odebrecht, who obtained lucrative government contracts in Panama. One source claims that the Mossack office, which is under police guard, is not occupied by MF staff today.

Longtime readers of my articles will recall that a local whistleblower exposed the Mossack law firm's criminal activities, way back in 2009, in a report that he sent to a local DEA Special Agent. Pursuant to standard US policy, the agent shared the information with the then-Organized Crime prosecutor, now Supreme Court President, José Ayú Prado. Prado saw that the DEA agent was swiftly transferred, and gave that restricted information to Mossack & Fonseca, who then threatened the whistleblower, causing him to flee for his life. Neither Mossack nor Fonseca was ever charged, and rumors of a large bribe paid to Prado, for illegally sharing that intelligence, swirled around Panama City for months. It is just another example of America's "hands-off" policy, regarding Panamanian rampant official corruption.


Thursday, February 9, 2017


Given the allegations of exorbitant application fees and costs, concerning Dominica's opaque diplomatic passport program, and the reasonable suspicion that much of this illicit wealth has found its way into the hands of corrupt government officials, it may now be time to seek outside law enforcement assistance, to locate, and seize, these criminal proceeds, before they can be further hidden, in the world's more obscure tax havens.

Given that a number of Swiss financial institutions have been named, in unverified, but still credible, reports, it follows that Swiss banks themselves, or the authorities, are the appropriate party to investigate. The recent Swiss success, in locating, and freezing, bribes paid to Panamanian officials, by the construction giant, Odebrecht, speaks volumes about the ability of Swiss banking regulators, & law enforcement agencies, to timely identify large accounts containing funds of Politically Exposed Persons (PEPs).

While we must stress that this information has not been verified, as any attempt to do so, would probably violate Swiss confidentiality laws, it is high time to air it in a public venue, in the hope that some agency will then open an investigation. Note that prudence dictates that we redact listed bank account numbers, last known balances and personal information, only leaving the names of the financial institutions, and trusting that either said institutions will take notice, and check their records, or that their regulators will decide to do so.

(1) Credit Suisse.
(2) UBS.
(3) HSBC.

Any funds located and seized are certainly the property of the Commonwealth of Dominica, and should be repatriated to the Treasury Department.