Kenneth Rijock

Kenneth Rijock

Thursday, December 13, 2018


The First District Court of Appeal of Florida, which is not known to have a crowded court docket, has sat on what should qualify as a landmark case, involving the use of facial recognition software by law enforcement, for more than one year since the briefs were filed. For some unknown reason, the Court has failed to enter a decision.

We have previously reported on this case, in the article entitled If you Identify a financial criminal through Facial Recognition Software, must you disclose that ?   The issue presented is whether prosecutors must disclose all the results of the use of facial recognition software in criminal Discovery, when the facial recognition software was employed to identify the defendant.

The defendants' appeal has been pending since 2016, and the last brief was filed a year ago. Why can't the Court hand down its decision ? we cannot say, but We will continue to monitor the case docket until a ruling is filed. It appears that Case Management staff at the 1st DCA are not doing their jobs.

Readers are encouraged to access the hyperlink above, to have a full understanding of the issue on appeal.


INTERPOL, the international police organization, has issued a Red Notice against Indian fugitive Mehul Choksi, which is a request directed to all the countries that are members of the organization to detain and arrest him. Choksi, who is is said to be India's most wanted fugitive, is safe from arrest for the moment in Antigua & Barbuda, where he purchased a CBI passport as Indian criminal investigators closed in on him and his associates in the PNB bank fraud case.

The Government of Antigua, which received an extradition request from India in August, claims that it is "reviewing" the documents, but in truth and in fact, it is engaged in a program of unofficial delay in the matter, designed to drag out the proceedings indefinitely. Choksi is represented by the same attorney as Leroy King, whose extradition to the United States, to face justice in the Stanford International Bank scandal, has languished for a decade in a corrupt court system where the Rule of Law is trumped by politician's orders.

The Choksi case has dealt Antigua a major blow to its international reputation; the fact that he was issued a CBI passport when major criminal investigations were pending against him has exposed the CIU due diligence program as a sham. Antigua's dilatory tactics, and foot-dragging on India's extradition request, have reinforced the perception abroad that the country's law enforcement and court systems are corrupt, and not to be trusted. This perception has caused foreign investment in Antigua to tank, and the odds that its government will accept dodgy applicants have increased exponentially. which causes investors to immediately look elsewhere to place their capital.   


Victims are reporting what is definitely looking like a Ponzi scheme. Investors placed $15,000 with the Sealand Capital Galaxy Limited's wholly-owned subsidiary SECURECOM MEDIA HOLDINGS LIMITED, and were to receive daily payments, totaling $90,000 over five years, plus Sealand stock. The sales reps were Amir Badawy and Austin Prakesh. Securecom lured investors through a high-pressure marketing event in Dubai at the Atlantis Hotel. Investors who received payments were encouraged to place additional sums with Sealand, but the company divested itself of Securecom in June 2018.  Sealand is a Cayman Islands corporation; its stock has had problems; trading was suspended for six months, and currently a share  is worth £ 3.25 .

Apparently payments ceased in March, 2017. We have reviewed the documents given to investors, and they confirm the investors' information. Hong Kong investors have reported losses of HK$40m. Asian media are calling it a pyramid scheme.


While commercial-off-the shelf databases of high risk individuals and entities usually display information in English, what is essentially the globally accepted language of choice, when compliance officers deal with new clients who are foreign nationals, these databases often fail to identify bad actors, due to language and name issues. These include, but are not limited to:

(1)The letters in the customer's language may use a non-Latin alphabet, such as The Cyrillic, the Arabic, or the Asian scripts. Transliteration into English results in several variations, all completely acceptable. What's the customer's name ?

(2) Sometimes the given name is expressed in a local language variation, or diminutive, but the client uses the English equivalent while abroad, but when at home reverts to his local version of the name, in his own language. The name-centric program cannot adapt and find the target.

(3) Sometimes family names are expressed before the given names, or abbreviations are used for specific given names, and database searches generally fail to recognize them, as they do not conform precisely to the customer's name as it appears. Some languages append prefixes or suffixes to names, again confounding the program searching for your target.

(4) Some customers do not like their given name, and use their middle name, even in legal correspondence, and identity documents. Their use of their middle name may cause them to be ruled out, as the checks will ignore his full legal name where it appears on sanctions lists.

(5) The purchase of a passport, such as a Citizenship by Investment (CBI) passport, under an alias, could result in the client's OFAC Specially Designated National name not being inked to him. Given the ability, due to corruption, to obtain official identification, such as a passport, using an alias, name searches are rendered useless.

The solution is to employ an effective facial recognition software system, which will troll through social media, social networking, online images, image databases, official records, newspaper photos, CCTV film, newsreel footage, and many other  resources, to identify the customer, even when ordinary name searches fail, do to one or more of the issues identified above. The images will conclusively establish, or rule out, the client's identity, and they can only be located through a facial recognition software platform, when combined with  access to the many categories of image resources that are detailed above. 

the use of databases of high risk individuals alone is not longer considered banking best practices; only though the proper use of facial recognition software, can true identity be established, to the exclusion of any reasonable doubt.

Wednesday, December 12, 2018


The thousands of individuals who hold Citizenship by Investment (CBI) passports believe that their passports not only confers upon them all the privileges and of citizenship, but that the government of the Commonwealth of Dominica will protect them. Obviously, they have never read their passports.

CBI passports contain this provision; it can be found on the back page, in Note #7, entitled DUAL NATIONALITY:

 " Citizens of the Commonwealth of Dominica who are also citizens of foreign countries cannot avail themselves of the protection of the Representative of Dominica, against the authorities of that foreign country, and are not exempt by reason of possessing Dominica citizenship from any obligation (such as military service) to which they may be liable under foreign law."

In other words, Dominica CBI passport holders are on their own, when foreign law enforcement comes calling; they cannot hide behind that CBI passport, use it abroad to evade the long arm of justice, nor to use it to avoid the consequences of the laws of other jurisdictions. Bad boys, when they come for you, Dominica will not step in a protect you.

We wonder aloud just how many Dominica CBI passport holders have actually read their passports. More importantly,  was this fine print explained by the CBI consultancies when they sold them the passports ? We doubt it, for the risks associated with the acquisition and use of a CBI passport issued by one of the five East Caribbean states are rarely explained to applicants. Meanwhile, CBI passport holders are in for a nasty surprise, when they rely upon the passport to protect them.


Turkish media has reported that Ebru Gundes, the wife of Iran oil sanctions evader Reza Zarrab, has moved to the United States, together with the couple's daughter. She is said to be staying in America for the next six months. This news appears to confirm that Zarrab, who has been released from custody, and is living in New York under an unusual arrangement, while he cooperates with US law enforcement, has expanded his role of assisting in matters involving Iran.

It is also important to point out that Zarrab has been talking to the Office of Special Prosecutor, headed by Robert Mueller, although the exact nature of his cooperation with that office is not known. Zarrab is known to have moved Iranian oil profits to Russia, but there has not been any indication that he had any contact with the Trump Presidential Campaign, Russian military intelligence hackers who broke into American email accounts, or any other facet of the Russia investigation.


Many of the global companies hawking Citizenship by Investment (CBI) passports are located in the United Arab Emirates (UAE), which is puzzling, because UAE law expressly prohibits its nationals from holding dual citizenship, under any circumstances. In fact, it is difficult for foreign nationals to acquire Emirati citizenship, unless you marry one for at least three years, or live there for thirty years, unless you are from the small list of Arab countries which allows you to become an Emirati in only a couple of years. So why has the country become a haven for the sales of citizenships of other countries, where there are no such restrictions ?

For example, at this time there are no less than thirteen agents, authorized by the Commonwealth of Dominica, all of which operate out of Dubai, except on is in Sharjah (Montreal Management Consultants Est. Ltd.). One company, Citizenship Invest, lists a Roseau address, but has a Dubai telephone number.

CBI consultancies are an unregulated industry in the UAE, which exists in a gap between being strictly a sales organization and a law firm.

(1) Its senior staff, many of whom refer to themselves as "legal specialists" and not lawyers, seem to be supplying legal advice to their applicants, but even those who are law school graduates from somewhere abroad are not formally admitted to practice in the UAE. I leave it the experts as to whether they are engaged in the unlicensed practice of law.

(2) the frontline sales people tout the positive advantages of the various CBI programs, but rarely, if ever, spell out the possibility of negative events down the line, such as that revocation of an applicant's CBI passport is completely within the discretion of the jurisdiction that issued it, and that the local courts will obey the wishes of local leaders, not adhere to the rule of law, should you seek a legal remedy for any reason.

Our issues:

 (A) We wonder just how much of the application fees, costs and revenues generated by CBI sales in the UAE is diverted, and never arrives at the Treasury of the Commonwealth of Dominica

(B) Given that there is no oversight or regulatory control over CBI consultancies in the UAE, what legal remedies are available to an unhappy client who has lost money, or been cheated out of his promised passport and deposit, or is in need legal or equitable relief of some sort ? There is no agency designated to assist him in the UAE, and the consultancy, which is composed of expats, might simply close up shop and relocates outside the Middle East, having Already moved its cash to another offshore financial center. Such remedies as the local courts may offer may be too little and too late to obtain any recovery. There may even be venue and Forum Non Conveniens issues, especially where the client is in one part of the world, the CBI consultancy in another, its local agent in still another, and the CBI jurisdiction in yet another country.

On balance, applicants who choose to do business with a UAE-based CBI consultancy are shouldering a substantial amount of risk, especially since none of them appear to have personal lawyers assisting them in making an objective assessment of the situation, and in entering into an ironclad contractual relationship with what cold be a dodgy salesman, working for a dodgy firm; Let the applicant beware.

Tuesday, December 11, 2018


The British Columbia Supreme Court granted the Chief Executive Officer of Huawei Technologies, Meng Wanzhou, a/k/a Sabrina Meng bond in the amount of $10m. She was detained on December first, and faces extradition to the United States, to reportedly face charges that she ran a five-year operation that evaded US sanctions on Iran. The bail conditions, which include a $7m cash payment, a curfew, and monitoring via angle bracelet, appear to be strict, but were opposed by the Crown, due to elevated risk of flight.

Ms. Meng, who is the daughter of the owner of Huawei Technologies, is not a resident of Canada, nor is her husband. She reportedly has avoided entering the United States since April 2017, when Huawei allegedly learned of the American investigation. The Hong Kong-Mexico trip she was traveling on avoided changing planes in the US, by arriving in Vancouver.

Immediately after Ms. Meng was taken into custody, China arrested a former Canadian diplomat in the Peoples' Republic, which raises questions regarding whether Canada responded to pressure, in granting bond. Officials in the Chinese Government issued what amounted to threats, against both the United States and China. The senior American diplomat in Canada, when speaking to the media, denied Chinese claims that the arrest was politically motivated. China also conducted a public relations campaign designed to pressure Canada to free Meng.

Further proceedings have been scheduled by the Court for February 6, 2019. The 60-day period in which the US Government must complete its extradition filing ends on January 8, 2019.


Wealthy nations from India are applying for Citizenship by Investment (CBI) passports in record numbers in 2018, according several of the world's largest CBI consultancies. The usual reason is visa-free access to the European Union Schengen Zone and the countries of the Commonwealth of nations, former UK colonies.

The problem is that India does not recognize dual citizenship, and should the government learn that a citizen of India holds another nationality, they are in jeopardy of losing their Indian citizenship. While the impact of that law may not concern most CBI applicants, if they later acquire a CBI passport, and subsequently have their Indian citizenship revoked, tey could become stateless, if the CBI jurisdiction cancels their passport for any reason.

The East Caribbean CBI states have been known to cancel a CBI passport if there is information that the holder has been charged with a serious crime abroad. This governmental action has been known to occur when arrest warrants become public knowlege, and long before any conviction occurs. The Mehul Choksi case, where Antigua could later revoke his CBU passport, could leave Choksi stateless, notwithstanding his vast wealth, allegedly obtained through bank fraud.

Unfortunately, this possible outcome is not explained to CBI applicants from India, as they are told only that their CBI passport can be revoked if they make a misstatement of material fact on their CBI application. Most CBI applicants are not represented by an attorney when they make their application, and therefore potential negative risks are rarely explained to them.


Companies House will, effective tomorrow, December 12, 2018, begin checking all new corporation filings against the United Nations Designated Persons (DP) List of all individuals sanctioned for genocide or terrorism by the UN. Filings that are found to contain any sanctioned individuals will bE returned for corrections.

If you are unfamiliar with the DP List, formally entitled Consolidated List of Financial Sanctions Targets in the UK, and wish to access it for compliance purposes, it is available online here.

Monday, December 10, 2018


Francine Baron
When members of Dominica's legislature, the National Assembly, asked their Minister of Foreign Affairs, Francine Baron, to publish the names of all individuals who hold diplomatic passports acquired from the Commonwealth, she issued this statement:

"The Government has never, as a rule, publicized sensitive details of these appointments outside of the corresponding countries to which persons are engaged. Effective foreign policy is never practiced in the media or the public domain. While the Government could have no difficulty sharing the number of diplomatic appointments and postings established, it remains opposed to the idea of divulging detailed information on all appointees in a forum that is essentially public in nature, and to which the entire world has access."

The statement is complete hogwash. Governments that are democracies operate best in the sunshine; to withhold the names (only the names, not the personal information) smacks of information management, which means dictatorship*. In the international arena, the names of accredited diplomats are NOT classified or restricted; to the contrary, most are freely available through open-source research. Go search through the the Internet. Diplomats do not hide their occupational status; they list them on LinkedIn, for example. Only criminals work in the shadows.

In truth and in fact, many of the so-called diplomats are Russian organized crime members, Iranians engaged in sanctions evasion, Chinese PEPs hiding stolen wealth, North Korean agents, and other career criminals, all of whom bought their Dominica diplomatic passports for cash, and are legally unqualified to be diplomats, due to their failure to meet these UN requirements:

(1) They are not Dominica citizens.
(2) They have not been posted to specific jurisdiction or international agency.
(3) They never presented their credentials to any specific government abroad.
(4) They never had a job title, and specific work assignment.
(5)  They do not live at a diplomatic facility or compound.
(6) They are not assigned to a mission or consulate or embassy.
(See the 1961 Vienna Convention on Diplomatic Relations)

One final note, the serial numbers on the Dominica diplomatic passports, from those that I have seen, is presently up to over 500. Given that there are only a handful of Dominica diplomatic facilities or posts abroad, there must be at least 200-250 bogus "diplomats" running around with these passports, which can be used to facilitate money laundering, evade customs search at airports, open bank accounts, and to commit any number of white-collar crimes.
* Given that in every national election in Dominica, the incumbent party engages in massive illicit payments to voters, gives others temporary jobs, and import expats from abroad, all expenses paid, to keep them in power, the objective conclusion is that Dominica is no longer a state with free and fair elections. These are Human Rights violations that should be brought to the attention of the United Nations.   


As the People's Republic of China continues to forcefully protest what they referred to as the unlawful detention of Huawei Technologies Ltd.'s CFO, Cathy Meng a/k/a Meng Wanzhou, more details have emerged regarding the efforts of the corporation to conceal its command and control over what was represented as Hong-Kong-based Skycom Telecommunications Ltd., but what was really a Tehran-based, Huawei-owned importer who sought prohibited US technology of HP, an American company. Conspiracy to commit bank fraud has been listed as the probable pending criminal charge, though the files will remain sealed until Meng is safely in the hands of American law enforcement, and has had a First Appearance before a US Magistrate Judge.

Allegedly, Meng stated to two UK banks, HSBC and Standard Chartered, that Huawei had divested itself of any ownership position of Skycom, when its still controlled the corporation. Meng's trip from Hong Kong to Mexico was made via Vancouver,  where she was detained at the request of the United States. A hearing on whether bond will be granted in the extradition case is reportedly scheduled for later today. Her attorneys have offered to have her wear a device on her person that tracks her every move, and alerts Canada should she venture away from a limited area. 

There are allegations that Huawei, while ostensibly a privately-owned corporation, is in truth and in fact a government-controlled entity, and that Meng, who is said to be an agent of Chinese intelligence, was acting upon the direct orders of the Chinese Government when she attempted to acquire, and ship, HP equipment to Iran, in violation of US sanctions. Chinese companies have long been engaged in industrial espionage, the theft of prohibited technology and research, and in the establishment of listening posts, within embassies located in the Caribbean, such as the one in Dominica, where electronic surveillance of North American military and government facilities is ongoing.    

Sunday, December 9, 2018


 The Federal Republic of Nigeria has issued an arrest warrant against Diezani Alison-Madueke, the country's former oil minister, upon corruption and money laundering charges, arising out her time in government service. It is not known precisely how many billions of dollars in stolen and diverted government oil profits, bribes & kickbacks for awarding sweetheart government contracts, and many other criminal acts she committed, she and her associates accumulated, but she has become the most regularly cited example as the quintessential Nigerian corruption figure.

As Alison-Madueke is presently living in the United Kingdom, where she has been under money laundering investigation for the past three years. She is also the defendant in a suit in the United States to recover what the Government has characterized as millions of dollars in assets stolen from the Treasury of Nigeria.

In the Western Hemisphere, the sleazy circumstances surrounding her cash purchase, in the United Kingdom, of a Commonwealth of Dominica diplomatic passport, hand delivered to her on demand, by Dominica Prime Minister Roosevelt Skerrit, have made her the poster girl for the East Caribbean states' amoral and unauthorized sales of diplomatic passports. More than any other recent case, the Madueke scandal has drawn the global attention, and ire, of compliance officers who were repelled by the overt play-for-pay, million dollar sale of legitimate diplomatic passports to career criminals.  She is no more an accredited diplomat from Dominica than I am. 

The sellers of these diplomatic passports are certain senior leaders in the East Caribbean states, who pocket millions of dollars in "commissions" for issuing such passports, to individuals that you would not like to encounter on a dark street.  Considering that diplomatic passports are only to be used for official business, at account opening, is improper; ask the customer for his country's ordinary passport, please, and if he does not have it, find out why.


Reports from Canada state that Cathy Meng, the Chief Financial Officer of Huawei Technologies has been charged, in the United States, with Conspiracy to Commit Bank Fraud, though this information has not been confirmed. Meng was detailed by Canadian authorities in Vancouver, at the request of the US. Her request for bond pending the resolution of the matter has been taken under advisement by the Canadian judge.

The allegation revolve around a Hong Kong company, Skycom Telecommunications Co., Ltd, which attempted to sell US-made Hewlett-Packard computer equipment to an Iranian mobile telephone company. The sale of such equipment violates American sanctions on Iran, and HP prohibits the sale of its products to Iran. The fact the Skycom was controlled by Huawei was reportedly concealed from the public. Meng was a senior officer of the parent that owned and controlled Skycom, ans served on the Skycom board of directors. The sale was arranged in Skycom's Tehran office.


The government agency known as ICE has appealed the $1m bond for each, set by US Immigration Judge Adam Opaciuch, in the deportation case of Luis and Ricardo Martinelli, the sons of former Panamanian President Ricardo Martinelli, who now awaits an imminent trial in Panama City. The sons are alleged to have received over $47m as bribes and kickbacks, on behalf of their father.

The case has drawn the attention of legal observers due to a number of unusual factors:

(1) The Martinelli sons both have pending asylum petitions, but were taken into custody. Why hasn't the US ruled on those petitions, one way or the other ?
(2) The sons have lived in Miami for more than a year since their US visas were cancelled,
without incident or arrest. Why now ?
(3) It is significant that their father's trial is next week.
(4) Ricardo and Luis Martinelli are accused of accepting $47m for their father, but where is the actual evidence that they received the bribe payments, as alleged by anti-corruption prosecutors in Panama ?

The next immigration hearing has been scheduled for December 27, 2018, also at the Krome Detention Center, the facility where the sons are being held. 

Saturday, December 8, 2018


Readers who wish to review the transcript of yesterday's testimony of former FBI Director James Comey before the House of Representatives Committee on the Judiciary, may access the 235-page document here.


The reason money launderers, financial criminals, corrupt government officials, assorted PEPs, tax evaders, and all other applicants for Citizenship by Investment (CBI-CIP) products sold by the five East Caribbean states is, of course, that prized passport, which gives the holder visa-free entry into the Schengen Zone, and elsewhere. Except for eluding extradition, the citizenship part of the deal is not judges to be nearly as valuable as that passport.

If the dodgy applicants actually knew that the passport sale was not by any means final, they might change their minds about investing, including those millions of dollars in cash paid to assure approval of known career criminals.

Just another career criminal with a Dominica CBI passport
Read this Note, which appears as number 8, in the back of passports issued by the Commonwealth of Dominica:

"This passport remains the property of the Government of Dominica and may be withdrawn at any time. It is a valuable document, and should not be tampered with or altered in any way, or allowed to pass into the possession of an unauthorized person. If lost or destroyed, the facts or circumstances should be immediately reported to the Passport Office, Roseau, Dominica or the nearest Dominica Mission or Consulate or authorized representative, or to the local police. New passports can only ue issued in such cases, after exhaustive inquiries."

Applicants for CBI passports issued by the Dominica CIU, please note that the phrase "Let the Criminal beware," strictly applies. Dominica can yank back that passport, and revoke it, at will, and CBI passport holders have no recourse. Read the fine print, people, before you drop that all illicit cash in the hands of a slippery, corrupt government official in Roseau. Your passport is revocable.


Friday, December 7, 2018


 Compliance officers often troll Internet news sites for information, when conducting enhanced due diligence investigations,  but when it comes to East Caribbean news websites, the stories you see are often less than objective, and you should not, under any circumstances, rely upon them as being truthful.

The reason: many websites, posing as strictly East Caribbean news resources for the public at large, are, in truth and in fact, shills for powerful international Citizenship by Investment (CBI/CIP) consultancies, whose primary interest in journalism is less than honest:

Those suspect East Caribbean "news" sites have a hidden agenda, and it is not the search for truth. They are paid well by CBI consultancies who:

(1) Denigrate those CBI jurisdictions where the CBI consultancy does NOT have a license to sell, which therefore indirectly builds up the suitability and favorability of those countries where the consultancy has an established sales position, with government approval.

(2) Write puff pieces on the CBI jurisdictions where the consultancy has licensed sales facilities.

(3) Attack any and all individuals who have dared to expose corruption, drug trafficking, and other financial crimes, within the CBI programs in countries that compete for tourist dollars, and foreign investment, and which are not part of the small group that is hitting local banks.

(4) Act as mere mouthpieces for the political party in power in their country, either as an act of survival, due to the power of the elected officials who stay in power through vote buying and election fraud, or are financially controlled by, and politically sympathetic to, the senior officials in what are actually semi-democratic states.

We call it "checkbook journalism," because the corrupt websites all accept bribes to publish stories favorable to a certain interest groups. Whatever you call it, ignore all Caribbean news sites, as the vast majority of the news material is either planted there, or so doctored up as to totally change its true meaning. Do not rely upon its slanted point-of-view.

Do not accept any information appearing on those slanted East Caribbean "news" websites, lest you buy into their rose-colored stories of how superior their country is to its competitors, or how great one of their foreign investors is, or some other lies, causing you to green light an application to open an account that you should not do.


Readers who have been following the Sonali Bank UK matter, and who wish to review the complete text of the Financial Conduct Authority (FCA) Decision Notice against its former CEO,  Mohammed Ataur Rahman Prodhan, wherein a civil penalty of £76,400 was levied against him, for money laundering deficiencies, may access the complete text of the 50-page document here.


Kassim Tajideen, a Beirut money launderer working in Africa and Lebanon, and who was funding Hezbollah, pled guilty yesterday in US District Court in DC to Conspiracy to Launder Monetary Instruments. He and his co-conspirators allegedly moved over $1bn through the American financial system, and he apparently has a long history of providing financial support to Hezbollah. he was named a Specially Designated Global Terrorist in 2009.

Tajideen has agreed to a 5 year sentence, and must may a $50m criminal forfeiture in advance of sentencing. He has been identified as one of Hezbollah's key money men. Above and below are flow charts constructed from Tajideen's network of shell and front companies.


Silvio Berlusconi and underage prostitute

Italian media sources have stated that former Italian Prime Minister Silvio Berlusconi used accounts at Antigua Commercial Bank Ltd. to make a €5m payoff to an underage prostitute, in the middle of a criminal case then pending against Berlusconi, involving his illicit relationship with her. Berlusconi, who was convicted of tax offenses, and is banned from elective office, had funds transferred from Antigua to accounts in Mexico.

Banking best practices require that Politically Exposed Persons, especially those with criminal or dodgy histories, can only be allowed to maintain accounts under strict supervision and monitoring, and this extremely large transaction, which sent funds to a bank in a jurisdiction poisoned with corruption, should never have been allowed to be completed. Candidly, maintaining an account controlled by a convicted former prime minister is, on its face, evidence that Antigua Commercial Bank does not an effective compliance program.

This appears to be a textbook example of compliance negligence.  Caribbean leaders who are focused on the issues their countries face with the consequences of De-Risking should understand that banks in North America and Europe that are closing correspondent accounts look at cases like this and increase their efforts to cut ties with overseas banks that intentionally allow known PEPs to operate without supervision in their banks.

Thursday, December 6, 2018


 A Virginia electronics manufacturer was assessed a civil penalty of $87,507 by OFAC, for shipping electronics to a Russian company majority owned by an OFAC-blocked corporation, after the manufacturer's screening software failed to identify and flag the transactions.

Apparently the software failed to detect the name of the blocked entity, after performing an exact match search, although the user had set the search criteria to detect partial matches. The company relied upon the automated screening, without conducting any additional, supplementary procedures.

The software's failure was costly to the electronics manufacturer, but the company must share some of the blame, for failing to have additional resources, to check and validate the results of the automated search. Good compliance officers never rely upon a single resource, but maintain alternative systems, so that they receive the compliance equivalent of a "second opinion." Never rely upon a single source, which may return false positives, or fail the user altogether, when its shortcomings are exposed through unsatisfactory performance. Apply Enhanced Due Diligence always; do not rely upon one resource.

Readers who wish to read the Enforcement Information on the case may access it here.


The fugitive Malaysian financier Low Taek Jho a/k/a Jho Low, whose attorneys have stated that the criminal charges brought against him in his native country, for the 1MDB thefts, are purely political, preventing any chance of a fair trial, has had his CBI passport abruptly cancelled and revoked by the Government of St Kitts & Nevis. We do not see that Due Process was afforded to Mr. Low. Considering the presumption of innocence that exists under British Common law, is St Kitts inviting a massive civil suit, which could bring down its Citizenship by Investment program, when other SKN CBI passport holders who have had their passport cancelled, also bring suit ?

Frankly, cancelling the passport, which citizens are entitled to as a matter of right, seems to be a cancellation of his Kittitian citizenship, and since he did not commit Treason, or any other act fatal to his citizenship status, did St Kitts not violate its own Constitution, not to mention a major hunan rights violation  ? Obviously, they are not going to refund his application fees; therefore, St Kitts is guilty of Unjust Enrichment, and money damages may also apply. 

We wonder whether St Kitts CBI program finally bit off more than it can chew. One does not invite the wrath of a client who stole $1.4bn by breaking the law; he surely has access to sufficient funds to contest his passport cancellation, and he appears to have have grounds.


 A judge in the Republic of Panama has set the trial of the criminal case pending against the country's former president, Ricardo Martinelli, for December 11, 2018. Martinelli is charged with conducting illegal video and audio surveillance to spy upon more than one hundred and fifty of Panama's elite, using the staff of his National Security Council. The targets included political enemies, judges, journalists, business competitors, and even his own mistress. He reportedly used the videos to blackmail some of the individuals caught on tape in their most personal (and illegal) activities. His actions have been labeled political espionage.  According to local media, he faces twenty-one years in prison if convicted.

Panama is rife with rumors that among the individuals captured on film, and engaged in controversial activities, include Donald Trump, and one of his sons, when they came to Panama City for opening of the Trump Ocean Club International Hotel & Tower Panama. Trump was a private businessman at the time. This report has not been confirmed.

Donald Trump, Andrey Bogdanov, Ivan Kazan and Phil Sloesenberg

Martinelli is also charged with embezzlement, for authorizing the purchase of expensive surveillance equipment. His brother-in-law, Aaron Mizrachi, has been linked to the project; Martinelli failed to obtain the required approval from the National Assembly for the purchase.
End User Certificate on surveillance equipment purchase

It is not clear whether the detention, and deportation proceedings against, the two sons of Ricardo Martinelli are linked to the trial, but the sons had their US visas revoked last year, and have asylum requests pending, and were never subject to any immigration action until last week.


The recent arrest, in Canada, of a senior executive of a Chinese telecommunications giant, often referred to as the "Apple" of China, should remind us that Canada has chosen to assist the United States in stopping the flow of prohibited high-tech goods to Iran, through Canada. The arrest, which was carried out at the request of the US, was for the purposes of extraditing the executive to America.

The company where the executive is CFO allegedly shipped American-made electronics to Canada, from where they were transshipped to Turkey, and ultimately to Iran. Turkey and the UAE are the favored destinations for Iranian agents who evade US sanctions by shipping to a third country, such as Canada, and then on to Turkey, or another country where transfer to Iran is not difficult to accomplish.

Canada may be continuing to provide valuable assistance to the United States, as it attempts to shut down existing pipelines into Iran that transit Canada.


 The UK Home Office ruling, suspending the Tier 1 Investor Visa program, takes effect today. It allowed foreign investors who pay up to £10m to obtain a visa, with the right to apply for permanent residence in as little as two years. There are well-founded concerns that the program has been subject to abuse by dodgy oligarchs from Russia, who have used it for money laundering and organized crime activity. Chinese investors have also entered the program, and there are issues about their Source of Funds and whether corrupt payments funded their applications.

Citizenship by Investment programs in the EU have come under fire of late, as promoting money laundering. The European Commission has recommended that EU Member  states that have such programs phase them out, and Transparency International has long warned that CBI, RBI, or similar programs promote corruption, and give criminal elements entry into the countries of the European Union. Five of the East Caribbean states with CBI programs have recently been blacklisted by the OECD.

Wednesday, December 5, 2018


Canadian authorities have taken into custody Sabrina Meng Wanzhou, the CFO of the Chinese Telecom company Huawei, on behalf of the United States. Though no charges have been publicly released, media reports claim Huawei shipped American products to Iran, violating Iran sanctions violations. The US has previously warned Canada against acquiring Huawei wireless products, asserting that the corporation's equipment allows China to spy on other governments.

 Sabrina is the daughter of the company's founder. A bail hearing is reportedly scheduled for Friday, December 7, 2018. The government of the Peoples' Republic of China has expressed objections to her detention, and demanded her release. Canada has imposed a news blackout on the case, reportedly at the request of Sabrina.


The Office of the Comptroller of the Currency (OCC) has filed its Fall 2018 "Semiannual Risk Perspective," which reports that Compliance Risk remains elevated, and recites the reason for that conclusion. readers who wish to review the entire 33-page document may access the complete text here.


 The fugitive Malaysian financial advisor, Low Taek Jho, more commonly known in the West as Jho Low, has five additional money laundering offenses filed against him, under Malaysia's Anti-Money Laundering and Anti-Terrorism Act. Jho, who was charged in absentia, is accused of diverting over a billion dollars from 1MDB, the Malaysian Development Berhad. He was previously charged with eight counts of money laundering.

The Jho case is of great public interest in the United States, due to the fraudster's high-profile, high flying lifestyle, and his association with celebrities and motion picture stars. The circumstances surrounding precisely how he qualified for, and obtained, a CBI passport from St Kitts & Nevis continues to be a subject of concern for compliance officers, and who have pointed to the Jho passport as yet another reason to regard St. Kitts CIP Unit's due diligence program as fatally flawed and its passport holders as untrustworthy as potential clients, due to the large number of CBI passport holders who are allegedly white-collar criminals, and therefore too high risk on onboard as customers.

Flow Chart showing movement of funds out of 1MDB

Jho has been rumored for some time to be traveling through China, with an ultimate goal of reaching St Kitts, where his CBI citizenship will preclude his extradition under most circumstances.  


The recent indictment, in US District Court in New York, of a former Mossack and Fonseca attorney, reminds us that there are a large number of former MF staff attorneys, all of whom formed shell corporations and sham foundations, for the purpose of assisting their clientele to evade taxes in their home countries, launder the proceeds of corruption, and clean narcotics profits.

After MF was shuttered, they dispersed throughout the Republic of Panama, and abroad. Most cleverly deleted any mention of their employment at Mossack from their LinkedIn pages and resumés. Several arrogantly began to advertise their ability to form opaque corporate entities, forming their own firms, so that they could cover up their dark role at MF.

Although this blog cautioned readers, noting that these MF alumni pose a clear and present danger to legitimate commerce, there was no evidence that our warnings were heeded. Therefore, we are posting listing below the two original articles that named the attorney members on the Mossack staff. You may access them by typing the article titles into either of the two search boxes .

September 8, 2016
What about all the Other Lawyers at Mossack Fonseca ?

September 17, 2016
Lawyers at Mossack Fonseca, Abandon Ship, Hide their Past on their Resumés. 


Panamanian sources report that Ricardo Alberto and Luis Enrique Martinelli, the sons of former Panamanian president Ricardo Martinelli, who are both subject to deportation proceedings, have been given bond in the amount of one million dollars each. The immigration judge at yesterday's hearing, which was closed to the press at the request of one of the parties, failed to reach a decision on deportation, and set the matter for further hearing on December 27, 2018 also at the remote Krome Detention Center, where the brothers are being held.

The granting of bond will certainly generate controversy, as Miami news services have reported that the brothers' yacht, which was docked on a canal behind the luxury residence where they are staying, was found fully stocked for a fast getaway.


Readers who wish to review the original document Government's Memorandum in Aid of Sentencing, in United States vs, Michael T. Flynn, case No, 17-232 (EGS) (SDNY) can find the complete text here.

Tuesday, December 4, 2018


An indictment filed in the Southern District of New York names a Mossack Fonseca attorney and a financial advisor, for cresting sham foundations and shell corporations for Mossack clients in New York, and repatriating their untaxed wealth back into the United States. The investigation arose out of the documents exposed in the "Panama Papers.

Named are:
(1) Ramses Owens Saad, an attorney with Mossack Fonseca.
(2) Dirk Brauer, a financial advisor at Mossack subsidiary Mossfon Asset Management, SA.
(3) Richard Gaffey, a partner in a US-based accounting firm.
(4) Harald Joachim Von Der Goltz, a Mossack Fonseca client.

The charges:
(A) Money Laundering Conspiracy.
(B) Wire Fraud.
(C) Conspiracy to commit Tax Evasion.
(D) Conspiracy to Defraud the United States.
(E) Conspiracy to commit Wire Fraud.
(F) Willful Failure to file FBAR.

 Readers who wish to review the 67-page Indictment may access the complete text here. The style of the case is United States vs. Ramses Owens, et al Case No.: 18-Crim-0693 (SDNY).