Kenneth Rijock

Kenneth Rijock

Wednesday, August 15, 2018


Trump and Martinelli at the Trump Ocean Club
 While corruption prosecutors in the Republic of Panama joust with Ricardo Martinelli's criminal defense team, there's some nasty unfinished business back in Federal Court in Miami, where Martinelli's closed Habeus Corpus extradition case remains strangely unavailable to the press and public. What are they hiding ?

The Martinelli District Court case, which he filed to stop the enforcement of a Federal court order requiring his extradition, to face criminal chages in his native Panama, where he had served as perhaps the country's most corrupt president, was, from the beginning, not available to view. It was not done through a sealing order, but through a curious administrative act: someone at the District Court simply denied total access to the public, to the pleadings and documents on file.

Observers in Panama have long asuspected, ands have repeatedly alleged, that there are two embarrassing reasons why the United States doesn't want the press, and the public to see this information in Martinelli's petition. Exactly how Martinelli was able to enter the US, due to the rampant corruption allegations in Panama is also an open question. The allegations:

(1) Ex-President Ricardo Martinelli was a confidential informant for a US law enforcement agency, or an intelligence service, and he detailed that relationship in his petition, and in subsequent filings.

(2) Then private businessman Donald Trump, when visiting Panana City in support of the Trump Ocean Club Hotel and Resort, participated in certain "extra-curricular leisure activities" which Martinelli's national security agency had captured on video, and Martinelli disclosed this fact in the petition.

(3) Martinelli also holds recordings of actions taken by US Government agencies in Latin America that would severely damage American diplomatic relations with its regional allies.

Is the public being denied access to the court file, long after it is closed, to save embarrassment to President Trump and/or US Government agencies ? We cannot say, but there has never been any mainstream press coverage of the mere fact that the file has never been available. It makes you wonder what is in that file.


When looking for ways to achieve an effective Enhanced Due Diligence solution, regarding Ctizenship by Investment (CBI/CIP) programs, we must be mindful of the profiles of the applicants:

(1) If you are aware of the public statistics, released by the five East Caribbean CBI states, you know that one-half of the CBI passports issued by Antigua & Barbuda have been to applicants from China, and allmost one hundred per cent of the CBI passports issued by Grenada have gone to individuals from China.

(2) Many of the other successful applicants for CBI passports, whether they choose European or Caribbean jurisdictions, are from countries using non-Latin alphabets, such as the Middle East (Arabic and Farsi), and East Asia (Korean, Malaysian and Thai, to name a few).

(3) When transliterating applicant's names, from the non-Latin characters, into the English language equivalent, there are universally accepted translation norms to guide us. Therefore, any number of correct variations on an English language name are deemed acceptable, which is a recipe for disaster.

CBI applicants, most of whom come from countries of elevated risk, often include financial criminals, assorted other bad actors, fugitives from justice, and international  sanctions evaders. Others are PEPs, Politically Exposed Persons, who are artfully concealing their PEP status, whether because they are corrupt bribe or kickback recipients, or tax evaders at home, or are closely associated with one who is such. He may have even come to you with an alias, all properly documented by his government, but accomplished through corrupt payments for a bogus passport.

So, you end up with an individual being arbitrarily assigned what you hope and trust is the genuine English equivalnt to his original name, which may mean that his high-risk status is never discovered through normal data inquiries. How do we identify him ?

The answer is to employ a facial recognition software platform, which will cull through news photographs, passports, social media images, newspaper and magazine articles, CCTV footage and other sources, and extract from them your target's image, verifying his stated identity, or show him to be a completely different person altogether. Without facial recognition confirmation, the chances that the CBI jurisdiction has issued a passport, under a clean alias, to a career criminal, foreign intelligence agent, or other unsuitable party, is unfortunately good. Due to the elevated level of risk with CBI applications, it has become a necessary, and yes, even mandatory, element of their Enhanced Due Diligence efforts. Let us hope that the agencies operating these programs get the message, as facial recognition software is the only effective solution.

Tuesday, August 14, 2018


Industry reports confirm that the European Commissioner for Justice, Vera Jourová, has made a public announcement that the upcoming agency report on Citizenship by Investment (CBI) programs has been advanced several months. There are rumors that the new report will attempt to set down specific guidelines, for national security reasons, for CBI programs.

Nonprofits and industry advocacy groups are expected to present comprerhensive responses to any negative findings and conclusions, especially in the area of due diligence, which to most objective observers has been an intentional failure, allowing career criminals, terrorist financiers, international sanctions evaders, and other unacceptable risks to acquire CBI passports. Without Enhanced Due Diligence (EDD), unsuitable applicants will continue to acquire CBI passports, and use them to launder the proceeds of crime.

We hope that the Commissioner's recommendations result in the passage of regulations that will result in the actual imposition of EDD requirements on all CBI passports, whether they are issued in the European Union, or the Caribbean, and in the event that this is not strictly adhered to, visa-free entry will be terminated, and visa procedures will be strict.


Former Fort Lauderdale attorney/fraudster Scott Rothstein, who is currently in the Federal Witness Protection Program (WITSEC), and serving a fifty year sentence for  a billion dollar Ponzi scheme, simply refuses to face the fact that he will not be receiving a Rule 35(b) sentence reduction in his case. He has filed an appeal from the District Court's order granting the Government's motion to reduce his sentence, and to also deny him an evidentiary hearing on the matter.

You may remember that the Government asked that the pending, generic motion for reduction of Rothstein's sentence be withdrawn, on the grounds that he engaged in misconduct, in connection with his former wife's efforts to hide their jewelry from being used to reimburse victims of the Ponzi. Considering the Government's sole discretion, in considering whether to reduce a sentence, Rothstein's contract argument was weak at best, and now he is appealing what appears to have been a sound judicial decision, based upon the rule of law. Nevertheless, the appeal is proceeding.

While the Appellate Brief has not yet been filed a proposed draft, presented to the Court in connection with a request to file it late indicated these are the issues presented:

(1)  The Court erred when it rules that the Governmen's sole discretion to file a Rule 35 motion includes the discretion to withdraw it.

(2) The Plea Agreement does not give the Government the right to withdraw a previously-filed Rule 35.

(3) The Court erred when it refused to give the appellant an evidentiary hearing on the issues.

Rothstein's counsel has requested Oral Argument.

Monday, August 13, 2018


The Government has filed its brief in the the 11th Circuit appeal it brought after the trial judge declined to enter an Order of Forfeiture against convicted Panamanian money launderer Nidal Ahmed Waked Hatum. It claims that the Court committed reversible error, by refusing to order Sr. Waked to forfeit properrtty, or by failing to enter a forfeiture money judgment, even through he had laundered over $10m.

The issues presented on appeal:

(1) Criminal Forfeiture is mandatory pursuant to US law. The Court apparently considered that the statutory $520m sum would violate the 8th Amendment's Excessive Fines Clause.
(2) The fact that Waked no longer possessed the funds involved in the money laundering conspiracy does not preclude forfeiture judgment of an equivalent amount.
(3) a forfeiture amount for Waked's money laundering conspiracy cannot be reduced or eliminated merely because Waked had repaid the defrauded bank. (The banks sustsained no losses).
(4) The District Court's subsequent misinterpretation of language in the Plea Agreement to forego entry of a forfeiture order against Waked also is reversible error.

The brief detailed how Waked moved funds, through wire transfers, from Panama to Miami, and back to Panama, outward bound from International Commercial Bank of China (ICBC) to Ocean Bank of Miami, and return to ISBC. He gave bogus invoices to the banks in support of the criminal money laundering scheme, in an amount in excess of $10.4m, to draw on lines of credit.

At sentencing, the Government requested 51 months' imprisonment, but the Courrt only imposed a sentence of 27 months, noting that the banks had suffered no losses, and that Waked's role was not paramount. Legal observers have been puzzed about the length of the sentence, the fact that he was not obligated to testify against any other individuals, and the lack of a forfeiture judgment against an individual who is known to have been a major player in the Waked Money Laundering Organization.

The Waked MLO operated openly* for more than a decade in Panama, and Central America, reportedly cleaning narco-profits for Colombian and Mexican cartels. Waked has since served his short sentence and returned to Panama, through still personally sanctioned by OFAC. Why was a member of a prominent money laundering organization not sentenced to 20 years ? Justice does not appear to have been served in this case, as the punishment did not fit the crime.
* The authorities in the Republic of Panama had overwhelming evidence of money laundering in the Waked companies for at least eight years prior to Waked's arrest in Colombia on US charges,, but corrupt officials in government there protected him and his associates.


The District Judge in the DC case involving Russian-linked companies involved in the social media campaign to affect the 2016 Presidential Election, Concord Management & Consulting LLC, has refused to dismiss the charges, due to the alleged unauthorized appointment, (and therefore lack of authority) of the Special Counsel.

 Above are the first and last pages of the 41-page Memorandum Opinion.

Sunday, August 12, 2018


Although there has been no press coverage of the New York Federal case against Reza Zarrab since his Turkish banker, Mehmet Atilla, was convicted earlier this year, the investigation continues. The fact that Zarrab, months after he agreed to cooperate with prosecutors, has not yet been sentenced, speaks volumes about the extensive debriefings that he must be undergoing, and those are strictly for the purpose of obtaining indictments against others in the multi-billion dollar oil sanctions evasion conspiracy.

If you need an indicator of the zeal with which the Government continues to act in this case, look at this. Although it has not been reported, a search of the docket of the Second Circuit Court of Appeals reveals that The United States Attorney in the Southern District of New York has quietly appealed the 32-month sentence handed down against Zarrab's Turkish banker, Mehmet Atilla. Only if Atilla is facing a long prison term will be be more inclined to implicate others.

Whether Zarrab's information has resulted in additional indictments is not known, but there are a large number of sealed filings in the case, which can mean indictments of individuals out of the reach of the long arm of the US Justice Department, be they in Turkey, Iran, or elsewhere.

(A) The sanctions evasion syndicate, in which Zarrab was a principal player, has a number of members active oustide Iran.Who are the other members, and have they been indicted yet ?

(B) No further information has been made public exactly how the syndicate was able to accomplish its goals of covert sales, outside of the details appearing regarding Alireza Monfared, the Iranian holding a Dominica diplomatic passport, and working out of Labuan. Are there other counterfeit diplomats in the network, and what Diplomatic and CBI poassports are they employing to cover their operations ?

We will continue to look for signs of progress in the continuing investigation of the Iran Oil-for-Gold sanctions evasion scandal. 


Saturday, August 11, 2018


While corrupt Caribbean officials wonder whether they are next, details surrounding the Federal money laundering charges filed in New York, against Donville Inniss, a prominent former minister and ex-Member of Parliament in Barbados, in a bribery scandal involving a Bermuda-owned insurance company, remain a mystery.

Inniss was arrested in Florida, and posted a $50,000 bond in Federal Court in Tampa; the case is pending in the Eastern District of New York. The court file remains sealed to the public, which is a good indication that there are addditional named defendants outside the jurisdiction of the Court, meaning overseas, and the US Attorney in that district does not wish to alert them before they are in custody.

The fact that there will be additional parties defendant in the Inniss case will only serve in increase the fear of arrest for corruption among East Caribbean government officials with something to hide, meaning the acceptance of bribes or kickbacks, especially if they were careless about moving those criminal proceeds through the US financial system, which confers jurisdiction in the United States.


Have you ever seen the motion picture Groundhog Day ? In that film, actor Bill Murray is forced to repeat the same day's bad events, over and over again, ad nauseum. That is what is happening again in Antigua, where the government sees to it that that fugitives from foreign extradition requests never see the inside of a criminal courtroom, anywhere, so that Antiguan corruption is never publicly exposed abroad, or bad actors charge with crimes there.

In the United States, we are painfully aware of this sordid fact; for a decade, Antiguan courts, which follow the lead of their senior government officials, rather than the Rule of Law, have prevented the extradition of the country's former banking regulator, Leroy King. Mr. King artfully, and illegally, kept US regulators from the truth of Allen Stanford's billion dollar Ponzi scheme for years, and reportedly financially benefitted royally at the time, as did Antigua's power structure, from his actiions.

Fugitive Leroy King

When the US Department of Justice sought his extradition, the local court system began a campaign of engaging in extremely dilatory measures, all designed to keep King out of an American courtroom indefinitely. Many in Antigua have stated that, should he be extradited, and eventually cooperate with Stanford case prosecutors, he will implicate many of Antigua's present, and former government leaders, including members of the Bird family, Bird's alleged fixer, Asot Michael, and current Prime Minister Gaston Browne.

Disgraced former minister Asot Michael

 The legal tactics, which are obviously intended to interpose delay, include these dodgy tricks:

(1) The Court repeatedly changes the judge or judges assigned to the case. Each time, the newly-appointed member of the judiciary claims that he or she needs sufficient time to "review" a routine extradition request, adding six months to year to the already lengthy time frame.

(2) The Court assigns judges from other countries in the East Caribbean to hear the multiple, and meritless, appeals, filed by King's legal team, who allegedly have their own schedules and workload, which also extends the time they require to respond.

(3) The sitting judges grant King repeated, and legally improper, appeals and further proceedings, long after two court rulings have ordered his extradition to the United States. Many of his legal arguments to the local courts, and appellate courts, are totally bogus, but they are not dismissed out of hand by the cooperating members of the judiciary.

(4) The defense brings in prominent additional local, as well as regional, attorneys, who have immense influence upon the local judiciary. They file Constitutional motions and briefs, endlessly challenging the right of the US to extradite King; still more delays ensue.

Asot Michael and PM Gaston Browne
Most legal observers believe that King, who travels around Antigua with several bodyguards, to avoid being detained and removed to the United States by bounty hunters or US Marshals, will never be extradited. He has reportedly declined settlement offers from the United States.

Now, this legal nightmare is happening again, in a new case involving the fugitive Indian billionaire Mehul Choksi. India correctly fears that Antigua will delay his extradition, which is duly authorized from one Commonwealth country to another, while it enjoys the financial advantages of a free-spending financial criminal's immense pocketbook. Also, many Antiguans are concerned that the Choksi case will focus so much negative attention upon their country's rampant corruption, that foreign investment, which is in serious decline, will completely dry up.

Antigua has already planted the first intentional legal obstacle to Choksi's extradition. Governement sources have told local media that the Public Prosecutor, who overseas extradition rerquests, is conveniently on vacation for 30 days, and that the matter must be handled by him alone. Are there no other government attorneys on staff in Antigua, we wonder ? It seems to be legal Groundhog Day all over again in Antigua, where justice delayed and therefore denied is the only thing on the menu.

Friday, August 10, 2018


It's the Leroy King scandal all over again; a prominent fugitive from international justice,  India's most wanted financial fraudster, the billionaire Mehul Choksi, having obtained a CBI passport in Antigua, is openly living a lavish lifestyle there. He has been boasting that he is protected by senior officials in the Antiguan government, and is enjoying fine dining there, and all that Antigua has to offer. What happened to PM Gaston Browne's statement that Antigua extradites it foreign criminals ? Leroy King is proof positive that such statements are outright lies.

Informed sources within Antigua have confirmed that Choksi reportedly paid USD$2.5m for his CBI passport, which was obtained when anyone who searched the Internet would have learned of his involvement in criminal activities, as Indian media has repeatedly asserted. Also, India's principal law enforcement agency denied that INTERPOL had ever been contacted it about him, which conflicts with Antiguan assurances that it cleared him prior to the issuance of a passport. It is doubtful that Antigua's CIP Unit did any more than check for a Red Notice online, which constitutes compliance malpractice.

Fugitive Leroy King and convicted fraudster R Allen Stanford
Apparently, the Government of Antigua is betting that its unexplained delay in extraditing this master criminal will be ignored by both the United States and the EU, as his crimes occurred in Asia, but the US is reportedly looking into the matter. Sources in Antigua have also reported that Choksi moved some of his illicit wealth through Antigua, using locally formed companies; inasmuch as the American financial system probably had a role in the transference of funds, which invokes US jurisdiction for, among other things, money laundering. The Antiguan attorneys who formed those shell companies might want to consider engaging their own lawyers at this time, given the international attention given to the Choksi case.

Choksi has been a familiar figure in Antigua of late, but as he is currently unescorted, will he be detained, and removed to face justice in India ? We cannot say, but his fellow fugitive Leroy King, wanted in the US for a decade, in the Stanford International Bank scandal, has 24-hour bodyguards, protecting him from being taken to Texas, to face a Federal criminal trial. We wonder if Mr. Choksi believes the promises of protection, given to him by some officials in Antigua's leadership, are real.  

Thursday, August 9, 2018


There has been much made in the Caribbean of late about the alleged lack of interest, on the part of US law enforcement agencies, in the rampant corruption that occurs among many senior government officials that hold high public office in the East Caribbean states. Fortunately, there truly are pending investigations, and we recently have seen one emerge, when an Indictment was filed in US District Court in New York*. Inniss is a permanent resident of the US, living in Florida.

Donville Inniss, the former Minister of Industry, and Member of Parliament, in Barbados, was charged with Conspiracy to Commit Money Laundering, and Money Laundering. Inniss accepted bribes totalling $36,000 from a Bermuda-based insurance company, after which he approved a renewal of insurance contracts. The US nexus occurred when Inniss laundered the bribes through a third company in the State of New York, showing them as "consulting contracts."

Readers who wish to review the complete text of the Indictment may access it here. Go to the EDNY page on the link, and download the Indictment under "attachment."

The penalty for violations of the Barbados Prevention of Corruption Act is sadly only a misdemeanor, meaning less than one year of incarceration, but the Federal penalties for the three money laundering changes could result in decades of inprisonment in the United States for the former minister. Let's hope the East Caribbean politicians all get the message loud and clear.
* United States vs. Donville Inniss,  Case No. 18-cr-00134 (EDNY).

Sunday, August 5, 2018


The Chief Judge in the DC District Court filed a Memorandum Opinion, holding that  the appointment of the Special Counsel by the Deputy Attorney General, then as Acting AG, because the Attorney General had recused himself, was proper. The Court, in an extensive 92-page opinion, held that the DAG had statutory authority to appoint, direct and supervise Special Counsel, in the ongoing investigation of Russian interference in the 2016 Presidential Election.

Though a portion of the opinion was redacted, it appears that the issue was presented in connection with an unnamed Witness' Motion to Quash a Grand Jury Subpoena. Readers who wish to review the complete text of the Memorandum Opinion may access it here.


The publication of Europol's European Union Terrorism Situation and Trend Report 2018  has focused attention upon*, among other issues, the actions of Lebanese money launderers performing illicit services for European organized crime groups, and then using the income they derive from those activities to deliver financial support to Hezbollah, which is a Specially Designated Global Terorist (SDGT) organization in the US, and also sanctioned in the EU.

Readers who wish to review the complete text of the 70-page Report may access it here.
See Page 11.

Saturday, August 4, 2018


Immigration consultants, whose task it is to guide clients to succesful results in their applications for residency or citizenship, sometimes run into a legal obstacle that their clients do not anticipate; The client fails his final government due diligence investigation. When this happens, not only are the clients disappointed, but the immigration consultants, who have  worked diligently for months on their behalf, are usually not paid for their efforts.

To illustrate this point, in Canada, the application of thirty percent of all those who seek residency are declined, after the country's law enforcement and intelligence community perform a routine inquiry for criminal convictions, or other serious negative information on an applicant's record. The immigration consultants who assisted these clients lose a significant portion of their projected income as the result, and the clients are unhappy.

There is a method of reducing the number of failed applicants; immigration consultants and firms must have a competent compliance professional undertake an Enhanced Due Diligence (EDD) investigation, before an application is even prepared and filed, on all new clients. EDD checks consist of exhaustive inquiries, on a global basis, into the client's civil, criminal and business background; the result is a profile on a level that will insure that, if there is any negative information on an applicant which would bar him from residency, the immigration consultant learns of it in advance, and thus futile and costly unsuccessful applications are eliminated.

When EDD is performed on all prospective residency applicants, in advance, there are no rejected applications, and the immigration consultancy receives its fees on literally 100% of its clients'  applications.  Both the clients, as well as the immigration consultants, are happy, due to successful outcomes.

Readers who find themselves in need of Enhanced due Diligence  may wish to access this company's solution. Canada Immigration Experts (CIE), which has a fifteen year record of success for its clients, and a licensed member of the Immigration Consultants of Canads regulatory Council, has selected EDDI-IQ INC. for all its Enhanced Due Diligence investigations. EDDI-IQ, which uses  its proprietary Second Generation, cloud-based system,. incorporating facial recognition software, a negative news platform, and social media resources, resulting in a superior product. It is specially designed for immigration and citizenship applications. For further information:  or  .   

Friday, August 3, 2018


The Office of Foreigh Assets Control (OFAC) has named Russia's COMMERICAL BANK AGROSOYUZ as a Specially Designated National (SDN), for moving funds for a DPRK bank, and for two front companies acting for the North Korean Government.

The bank's address us Ulanskiy Pereulok, Number 13 Building 1, Moscow 101000, Russia.  SWIFT Codes are AGSZRU31 and 33. Readers who require more detail please see the Treasury press release below.

Thursday, August 2, 2018


Earlier this year, the news from the Commonwealth of Dominica was the announcement that it had appointed an ambassador to the Russian Federation, who would be resident in Moscow. Four months later, Dominicans are reporting that they are unable to find any embassy or diplomatic office in the Russian capital. Futhermore, Internet searches of Commonwealth Government websites have failed to find any address or telephone numbers for any diplomatic office. Where is Dominica's Embassy in Moscow ?

The individual who has been awarded the title of Resident Ambassador is the principal of a private company that offers Citizenship by Investment (CBI) passport products, with offices in several countries including Dominica, and the other East Caribbean states which sell economic citizenships. Diplomacy is, by definition, a full-time occupation, which precludes operating a commercial enterprise at the same time.

Furthermore, the Vienna Treaty on Diplomatic Relations, of which Dominica is a signatory, severely restricts commercial activities of diplomats where they derive financial benefits as a result of their status. Inasmuch as Dominica chooses to ignore its responsibilities under international law, perhaps the United Nations, which has already revoked Dominica's voting privileges, for non-payment of dues, might want to impose additional sanctions.   

Wednesday, August 1, 2018


Media reports from the Palestinian Territory of Gaza have confirmed that it is awash with counterfeit currency, including copies of the US one hundred dollar bill. Reliable sources have confirmed that Hamas, which governs the territory with an iron fist, and controls all cash movement, is placing the counterfeits into circulation.

While this information may not be unexpected, given the reputed financial needs of that Specially Designated Global Terrorist (SDGT) organization, the specific item reliable sources have identified as the type of counterfeit is the elusive Series 2006 one hundred dollar bill. The last, and arguably the best, in a long chain of North Korean-manufactured bogus US hundreds, and popularly known as the "Supernote," this Series has been in cold storage in the DPRK, China, and in the Republic of Korea (South Korea), but it is not known to have been in distribution. Just how did it end up in Gaza ?

The most logical conduit is Iran, which distributes funds, as well as weapons and explosives, to Hamas, but precisely how the valuable counterfeits were delivered to it, and in what quantity, is not known. The release of quantities of the Supernote into the global monetary system could cause serious damage to international faith in the Dollar, and both Hamas and Iran have made no secret of their dislike of the foreign policy of the United States. Are they seeking to damage international confidence in the Dollar ?   

Tuesday, July 31, 2018


Our recent article regarding the fact that an Indian purchaser of a CBI passport from Antigua & Barbuda apparently was never informed that acquisition resulted in severe consequences, is not a unique situation. Russian nationals who obtain a dual citizenship thru CBI also face restrictions and controls, and if they were adequately advised, in advance, of those issues, they might choose to reconsider becoming dual nationals.

Here are the restrictions and prohibitions:

(1) Russian citizens who acquire dual citizenship are required to notify the Government of their country within sixty (60) days. Should they fail to do so, fines on an increasing scale are imposed. There are reports that violators oft he notification regulation have had their Russian passports summarily confiscated, and all subsequent efforts to obtain a replacement are not successful. Inasmuch as most CBI passport holders do not wish to inform their home country about that fact, for tax, law enforcement or other reasons, Russian government action is a real threat.

(2) Dual nationality is expressly prohibited for Russian nationals who hold most government, administrative and political positions, and violators face severe criminal penalties. Given that the rule of law essentially does not exist in the Russian court system, convictions will invariably occur upon the orders of the country's leadership.

 Corrupt PEPs happen to constitute a large segment of CBI passport applicants. It is doubtful that East Caribbean CBI jurisdictions ever notify their Russian clients, in writing, of these restrictions. Given the large number of Russian nationals known to have acquired CBI passports in St Kitts & Nevis, and in Dominica, we wonder how many have run afoul of the Russian criminal justice system, or will the next time they pull out that CBI passport at an international airport.

How many other foreign nationals are in violation of the law when they are handed a CBI passport ? Why don't the CBI agencies warn their applicants ?


No, not this type of GTO; the FinCEN Geographic Targeting Orders that require real estate purchasers in Miami, New York, Texas, California & Hawaii who pay cash and use shell companies to disclose the identities of the Beneficial Owners of those corporations. US Senator Marco Rubio wants them extended to cover the entire United States; He has a valid point.

We salute him, and support any bona fide effort to crack down on foreign nationals laundering criminal proceeds through American real estate investments. According to a report, cash sales using shell companies declined 95% when the GTO was placed into effect in Miami-Dade County. This isn't about privacy, it is about money laundering.


While there have been many articles about the House of Commons Interim Report Disinformation and 'Fake News', hyperlinks to the original source are not being inserted in the stories, so readers who wish to review it may access it here.

Monday, July 30, 2018


The ongoing flap over how a prominent fugitive fraudster from India was granted a CBI passport last year by Antigua & Barbuda has just gotten worse. Reliable sources with expertise in the law of India have declared that Choksi's acquisition of a second passport was a violation of the Constitution, as India does not allow dual citizenship, under any circunstances.

The punishment for an Indian national obtaining dual citizenship is automatic forfeiture of Indian citizenship, as well as other criminal penalties. Furthermore, every Indian passport always carries a printed warning to that effect. Readers are directed to the image appearing below:

This means that:

(1) The CIP unit in Antigua, which would have received the applicant's Indian passport, failed to even read it, because if they did, the warning that appeared therein would have required them to give the applicant written notice of the forfeiture of his Indian passport. Prudently, they should have rejected his application forthwith.

(2) The CIP unit obviously never checks local laws of applicants' jurisdictions, to ascertain whether the issuance of a CBI passport causes the applicant to violate the law. This leads me to believe that virtually all CBI applications are processed by clerks and secretaries, and that in-house attorneys, if they even exist, do not review applications. Even the most junior lawyer would have researched the law, before signing off on the applicant. Again, this is further evidence of zero due diligence.

This brings up the issue of validity of CBI passports in general. Are a number of them void as a matter of law, due to the laws of the applicant's country of origin, or voidable, at that country's option ?  Can banks in North America and The European be found liable for onboarding new customers presenting CBI passports that are later held to be void ab initio ?  Without a historical  look-back at all the outstanding CBI passports, issued by Antigua, St Kitts, Dominica, St Lucia & Grenada, we will never know for sure.

Sunday, July 29, 2018


Remember this Wanted poster of Boko Haram members from last year ? Agents of the Government of Nigeria took news photographs, newsreels and captured video footage of the members of this sanctioned terrorist organization, and employed facial recognition software to identify the individuals, using social media resources*. This was a textbook lesson in the utility of facial recognition software, in the field of counter-terrorism.

We all know tbat many law enforcement agencies extensively use facial recognition software to identify suspects, witnesses, and sometimes even victims of crimes, but what about if we take it a step further, into uncharted territory. Could facial recognition software identify not only money launderers and financial criminals, but actually place them in dodgy jurisdictions and circumstances as well ?

For example, I know that suspect A is a well-known money launderer for Asian organized crime groups, but what if I was to place him in Basseterre, the capital of St. Kitts, outside the offices of an attorney who that very day formed a number of shell companies later linked to the Suspect ?

Or, what if I had information regarding Suspect B, a Russian national involved in a massive ponzi scheme, and what if I had an image of him entering a Venezuelan-controlled offshore bank linked to him, in Roseau, the capital of Dominica ? And what was in all those obviously heavy suitcases his assistants were lugging in the door ?

Or,  Supect C, a Chinese national, known to be a fugitive from justice at home for corruption, but convenientlyt holding a CBI passport, is identified making a large real estate investment in Antigua, and is seen leaving a real estate office with his sellers ?

All these scenarios are possible, due to the explosion of CCTV installation in the Caribbean this decade. Although ostensibly placed for the purposes of suppressing the increase in violent crime in these countries, it is also a window upon Opposition activities, protests and other threats to the parties in power. An unexpected additional benefit to the proliferation of CCTV cameras is the possibility that the footage, if made available to Western law enforcement agencies , would greatly increase the changes of conducting successful money laundering investigations.

Suspects' actual itineraries in dodgy tax havens could be constructed from CCTV footage, that documented their appearance in the jurisdiction, visits to financial service providers, or local banks, as well as the identification of known associates and professionals who may themselves also be charged.

The addition of this Caribbean CCTV footage into facial recognition software platforms would greatly assist prosecutors who happened to be users of the platform, using these products seeking to prove money laundering charges, as the footage would prove suspects travel into a specific tax haven, or offshore financial center, on specific dates, confirm via images many of the locations he visited, and who accompanied him in these operations.

The question remains, however, how will international law enforcement agencies arrange to receive feeds of the Caribbean CCTV footage ?
Terrorist Wanted Poster drew information from Social Media

Saturday, July 28, 2018


Readers are urged to review the new white paper on Concelment of Beneficial Ownership, recently published as a joint effort of the Financial Action Task Force and the Egmont Group. The outstanding 100-page effort contains extensive case studies. The complete text of the pdf document may be accessed here.


Friday, July 27, 2018


A United Kingdom bank that onboarded new clients, via automated compliance checks, has reportedly discovered potential money laundering activity. What's wrong with this picture ? Given that money launderers are nothing if not innovative, how can any financial institution rely upon non-human compliance policies and procedures to interdict them, on a real-time basis ?

Compliance officers use their experience, as well as their familiarity with current money laundering tactics and strategies, to identify, and suppress, suspicious techniques, whether they follow a pattern, or are unique or mutating. How can an automated program match the critical thinking of a compliance officer, who can sense emerging threats and trends; The answer is it cannot.

It is the seasoned frontline compliance officer, backed up by his or her director of compliance, who is the gatekeeper best equipped, by both training and experience, to spot possible money laundering trends. Since money launderers are skilled at creating credible profiles, automated compliance programs could be easily manipulated, hence the admission by its user bank that it was ineffective.


Some of the members of the US Congress
 A test, conducted by the American Civil Liberties Union (ACLU) on a prominent facial recognition software platform, confirmed that compliance officers who are considering what program to acquire should carefully check the effectiveness of each program, prior to purchasing it for Enhanced Due Diligence AML/CFT investigations.

The ACLU, using a commercially available FRS program, ran the photographs of the Members of the United States Congress through it, and, to its consternation, returned 28 positives from criminal mugshots. While the provider immediately noted that the ACLU was working with 80% confidence, and stated that a 95% rating would be more appropriate, 80%, which is the default rating, is the rating curently in use by American law enforcement agencies using that specific tool.  Members of Congress who were Persons of Color had More than 40% of the false positives, although they represent less than 30% of the group, which has fueled concerns that the program is neither accurate nor effective.

Before committing to a specific FRS product for AML purposes, you need to be assured that it will be effective, through actual testing, until a consistent pattern of effectiveness emerges. Just as many data companies jumped on the AML compliance bandwagon after 9/11, althrough they had no background in the field, and their products were often ineffective, the emerging facial recognition software industry has had its share of eager firms, all  seeking a part of the market share, but without an effective product; Let the buyer beware.

Thursday, July 26, 2018


The Interim Report,* for the second half of 2017 of the Financial Reporting Authority of Cayman Islands Government, shows a curious deviation from the norm. Suspicious Activity Reports, more commonly known as SARs, increased ninety per cent from the same six month period in 2016. One noteworthy statistic: 220 SARs were filed during the month of December, 2017.

The most commonly reported subjects were:
(1) Suspected tax evasion.
(2) Suspicious financial activity.
(3) Fraud.
(4) Corruption.
(5) Money Laundering.

This anomaly may have been caused, say Caymanians, by compliance officer awareness of the 4th round of the CFATF, Mutual evaluation, but there may be another cause. Was the increased SAR activity a response to the pressure of media coverage of what came to be known as the Cayman Gang of Four scandal, which was the theft of a reported hundreds of millions of dollars of assets owned by elderly Canadian pensioners and retired businessmen and professionals.

 Although the stress of loss of their life savings caused at least two of the victims to pass away, none of the four Cayman Gang of Four, who were all residents of the Cayman Islands, were ever charged or arrested for their crimes. The Cayman Islands Royal Police Service opened a criminal investigation, and the Cayman Islands Monetary Authority made inquiries, but justice was never served. Perhaps the heat from the Cayman Gang of Four scandal served to further sensitize Cayman financial services professionals to suspicious transactions.

*Financial Reporting Authority Interim Report (1 July-31 December


Readers who have heard and seen the public statements of the Prime Minister of Antigua & Barbuda, Gaston Browne, stating that his country's Citizenship by Investment (CIP/CBI) Program receives Enhanced Due Diligence reports on all its applicants from the United States Government Embassy in Barbados, we made inquiries with the individuals who would have received such queries, and we have learned that no such requests for information have never been made by Antigua's CIU. Browne's assurances, which the global banking community has relied upon, when dealing with CBI passport holders, have turned out to be without a basis in fact.

When you add this information to our previous article*, which confirmed that INTERPOL is not being used to supply information to Antigua, through its members, one must regretfully conclude that there is little to no due diligence being initiated on CBI applicants, notwithstanding the hefty fees being charged. An audit, if conducted at the CIU, will quickly determine where those fees were diverted to, and who the recipient was.

The problem is that, in the rush to process CBI applicants for the programs being administered by the five East Caribbean states, shortcuts have been taken by government officials, to reduce processing time, and proper Enhanced Due Diligence investigations appear to be the first items cut out. That is why the programs require effective and qualified experts in the EDD field, from outside government, to administer the investigations. Anything else is pure folly, what we call governmental malpractice.

*India says Antigua CBI Agency did not perform necessary Due Diligence Inquiry on Indian Fraudster

Wednesday, July 25, 2018


The Indian fraudster and fugitive, Mehul Choksi, was granted a CBI passport by the Citizenship by Investment Unit (CIU) of Antigua & Barbuda, in November of 2017, without previously conducting even a modicum of due diligence in advance, and later lying about it when Antiguan media, and the voters of the country, demanded answers. This is proof positive that a complete housecleaning at CIU is in order.

When the CIU was confronted on the issue, it alleged that INTERPOL was consulted during the due diligence process, but the Indian government agency that handles such inquiries, the Central Bureau of Investigation, has stated that it received no such inquiry. This means the Antigua CBI made a material misrepresentation of the facts surrounding its due diligence efforts.

Mehul Choksi, fugitive, flees to Antigua

This was not some five year old case; Choksi got his passport at the end of 2017. It is conclusive proof that Antigua's CIU continues to approve criminal applicants for CBI passports, without any meaningful due diligence whatsoever. Without meaningful Enhanced Due Diligence in place, you can expect to see much more of the same in 2018.


The BVI government's perennial position, that it will not release to the public a register of beneficial owners of BVI companies, until other jurisdictions follow suit, has just lost that argument. The United Kingdom, by 2021, is requiring foreign corporations that own real estate in the UK to publicly disclose their ultimate beneficial owners. Both the BVI and the Cayman islands have been playing that game for years, but fortunately they will no longer be able to hide behind that excuse, and it may result in a major decrease in their lucrative shell company business.

Violators will reportedly face potential prison terms of up to five years, and an unlimited fine. The British Virgin Islands has been the global jurisdiction of choice for attorneys whose clients wish to conceal their ownership of expensive real estate, and the majority of pricey London real estate sales in recent years have been to shell companies, including many from the BVI.

We wonder how many top-drawer London estates will now be put up for sale by their Russian owners, ahead of the effective date of this reported amendment to the Criminal Finances Act, which became effective in 2017. 


Tuesday, July 24, 2018


 A large number of compliance officers at international banks, where they regularly onboard affluent foreign clients, continue to regard the use of facial recognition software as optional, or ignore its usefulness altogether. This is a major mistake, for criminals, whether they be engaged in money laundering operations or other financial crimes, terrorist financiers or sanctions evaders, all enploy what has come to be known as Identity Management, to successfully outwit even the most experienced compliance officer., unless he employs a facial recognition platform, to confirm identity.

Here's how it works:

(1) the criminal actor, through payment to a corrupt government agencies and entities, obtains solid, albeit bogus, proof of identity, generally a passport & drivers' license, from his home country. He will supplement this alias identity with all the usual indicia of identity that confirm who he is, and where he ostensibly lives and works.   

(2) Having established his counterfeit identity, he will open bank accounts,  buy into, establish or acquire a business relationship, to satisfy and routine queries into his wealth.

(3) Finally, using third  parties, he will apply for, and obtain, a Citizenship by Investment, known as CBI/CIP, passport from one of the European or Caribbean jurisdictions engaged in their sale. He now has created two layers of protection, between the truth and his documented evidence of identity.

Now, this individual seeks to open a major account relationship with a North American or European financial institution, professing to be a wealthy international businessman. In truth and in fact, he has either a criminal record, links to countries or entities supporting terroriasm, or is an accomplished evader of international sanctions. His new identity is totally clean, and if a compliance officer engaged in Enhanced Due Diligence of data alone makes inquiries, he will most likely pass scrutiny.

However, if that same compliance officer were to utilize an effective facial recognition platform, he would learn of the prospective client's true identitty, and his scheme would be foiled before any funds could be deposited and transferred globally. Either an image from his dark criminal past, passport photograph, social media image, or other photographic evidence would immediately serve to rule him out as a client or customer.

Given the expansion of jurisdictions issuing CBI passports over the last decade, the use of facial recognition software to properly identify new clients has become a mandatory element of AML/CFT compliance programs; it is time for all compliance officers, in any financial industry, to move into the twenty-first century and incorporate it into their programs, lest they be continually fooled by Identity Management techniques.

Sunday, July 22, 2018


The Financial Action Task Force recently published a President's Paper entitled Anti-Money Laundering and Counter Terrorist Financing for Judges and Prosecutors. Readers who wish to review the white paper may access it here.

Saturday, July 21, 2018


The Federal Bureau of Investigation has released the complete text of the 412 page Verified Petition that was filed to obtain a FISA warrant against Carter Page. Readers who wish to review the document may access it here.

While the document has been declassified, kindly note that a substantial portion has been redacted, but enough remains to detail the multiple elements of Russian intelligence activity that were alleged in support of the petition.


The media has been covering the Consent Order, between UBS AG, both its Swiss headquarters, as well as its US branches in New York, Connecticut and Florida, and the Office of the Comptroller of the Currency, regarding its BSA/AML deficiencies; readers who wish to review the complete text of the 34-page order may access it here.


Thursday, July 19, 2018


Jho Low, accused of diverting billions of dollars from Malaysia's sovereign wealth fund 1MDB, has been a fugitive on the run from his country's law enforcement agencies. International media from China is reporting that Chinese authorities arested Jho when he attempted to  enter the Peoples' Republic from Hiong Kong. I imagine he was quite surprised when taken into custody.

Jho was reportedly depending upon his Dt Kitts CBI passport to protect him from the law in his home country, and abroad, but apparently China disagreed. It detained Jho, when he attempted to further evade justice by entering China.  Some sources claim he was en route to St Kitts, from which he could not be extradited.

This is a testbook lesson in the reality that a CBI document is not the Golden Passport that its sellers claim it to be. Jho might not be extradited to face the music in Malaysia, for political reasons, but might now be doomed to spend a couple of decades behind bars in a nasty Chinese prison, trapped in a form of legal limbo which he cannot easily escape from.