Kenneth Rijock

Kenneth Rijock

Wednesday, May 23, 2018

ANTIGUA'S BOI BANK REFUSING TO GIVE CUSTOMERS THEIR MONEY



Customers of BOI Bank are reporting that they have been unable to retrieve finds from their accounts, and that the situation is dire. Some customers allege that they have has problems withdrawing money for the last eighteen months. The bank asserts that it cannot secure the necessary intermediary bank and correspondent bank, to transfer funds to clients, but we are unable to determine whether there is a factual basis for this statement.

BOI Bank Corporation, trading as BOI Bank, is an Antiguan bank, reportedly managed and operated  completely from Caracas. Its record owner is Venezuela's BOD Financial Group, which also owns Banco Occidental de Descuento. Victor Vargas is the president and chairman.

Tuesday, May 22, 2018

KEEP CBI HONEST ON TWITTER


Oversight of CBI contractors & developers, as well as clearly excessive charges of consultancies are the subject of a new Twitter account,  #keepcbihonest  . If you are interested in an exchange of views between Citizenship by Investment (CBI) consultants, East Caribbeans who favor one program over another, and those who are complaining about the conduct of developers, you should visit.  Sam Bayat, an attorney known for advising clients about CBI programs, is the moderator.

LOOK WHO ALSO USED THE OFFICE OF OFFSHORE ZUMA BANK IN DOMINICA



Due to the large amount of interest in yesterday's article on Dominica's Zuma Bank, we are making additional information available, in our efforts to determine the bank's lines of business, customer base, and goals.
Vladimir Antonov

 The bank's office, 42 (Unit 2) Kennedy Avenue, in Roseau, the capital of Dominica, was formerly the office of Banco Transatlantico, the failed Dominica offshore bank owned and operated by Vladimir Antonov, the London-based Russian banker. Antonov later fled to avoid extradition to Lithuania, where he faced charges of fraud and money laundering for asset-stripping ($1.4bn) at Snoras Bank, which was nationalized. together with its Latvian subsidiary, to save both from total collapse due to his criminal acts. Antonov's Dominica attorney was Alick C Lawrence.


 Antonov is currently known to be living in St. Petersburg, Russia. Banco Transatlantico Ltd., which also maintained offices in the Republic of Panama, collapsed shortly after Antonov was arrested in the United Kingdom. It was the subject of compulsory liquidation in Dominica's High Court of Justice.  In April, 2018, Antonov was arrested in Moscow, and charged with embezzlement at Sovetsky Bank, which was placed under government financial supervision.



The other former tenants at that office were two offshore banks, ASA Bank and Trust.and FGC Bank and Trust, both of whose licenses were revoked in 2016. Both banks were owned by Alex Nain Saab MorĂ¡n, a Colombian national with close ties to the Maduro government in Venezuela, and whose name shows up as a holder of a diplomatic passport from Antigua & Barbuda.


The Zuma Bank Mastercard we pictured in our last article about Zuma comes back to a Venezuelan bank, most likely one that has branches in Panama. The credit card firm that is processing the cards is believed to be located in Panama, and the website has the earmarks of Panamanian webmasters. Our  investigation into Zuma continues.




Monday, May 21, 2018

MYSTERIOUS ARRIVAL OF PRIVATE BANKER IN DOMINICA IS NOTICED



Last night, Gabriel Sanz Gonzalez, the CEO of the low-profile offshore private financial institution, Zuma Bank, incorporated in the Commonwealth of Dominica, arrived in-country, on board the Venezuelan business jet YV-2961, which is a Learjet Type 55. The aircraft reportedly came in directly from the British Virgin Islands, the corporate formation jurisdiction of choice for anyone who wants to obtain a corporation with beneficial ownership information that is be totally and permanently opaque.


Sanz' biz jet at Douglas-Charles (ex-Melville Hall) Airport
Sr. Sanz came to Roseau to see Claudius Lestrade, the director of Dominica's Financial Services Unit, which is part of the Ministry of Finance. We are not aware of the subject of his visit. Since its Dominica incorporation in 2012 according to Zuma (though the FSU states it was in 2015), there has been no significant information in the media, detailing Zuma Bank's operations or clientele.

 Zuma Bank has no footprint in the global financial industry, though it holds itself out to be a private bank. Many of the Internet websites are in the Russian language, and it is therefore assumed that the bank's marketing is directed towards wealthy Russian nationals. What is in Zuma Bank's book of business and who are its clients ?




The arrival of Sanz is not the only recent arrrival of private aircraft that has puzzled Dominicans; on another recent evening, Melville Hall Airport staff were dismissed at the end of the day's aviation operations, notwithstanding information about a late arrival. One member of the airport staff, having seen all the runway and airport lighting extinguished for the night, was driving by the field later that evening when he saw, to his amazement, that all the lights were back on, meaning that a significant arrival was in progress.

What's with all this frenzied activity involving Venezuela of late ?  We note that the so-called Bolivarian Republic is now funding hurricane reconstruction, specifically single-family home construction, but given Venezuela's failing economy, is there another reason for this totally  unexpected financing ?  Remember also that the US has recently sanctioned Venezuelan officials, which might expose local contractors and vendors in Dominica to OFAC violations.



Finally, is Zuma Bank owned by Venezuelan or Russian interests, and who are its clients ? We cannot say, but our inquiry into the bank's operations shall continue.


FFIEC UPDATES ITS MANUAL ON CUSTOMER DUE DILIGENCE AND BENEFICIAL OWNERSHIP



The Federal Financial Institutions Examination Council (FFIEC) has updated its manual on Customer Due Diligence and Beneficial Ownership Requirementss for Legal Entity Customers.  Readers who wish to review the complete text of these sections may access them at the bottom of this Press Release here.

Sunday, May 20, 2018

SHOULD THE UNITED NATIONS EXPEL DOMINICA FOR THE DIPLOMATIC PASSPORTS IT SELLS TO CRIMINALS ?




If you live in the Caribbean, you know that the Commonwealth of Dominica has been stripped of its voting rights in the United Nations General Assembly, for failure to pay dues for a period of two years. Considering that the country's government is taking in millions each year, from its Citizenship by Investment, or economic passport, program, it makes you wonder into whose pockets all that money is going.

More importantly, the United Nations should eject Dominica from its membership, not for that reason, but for one much more serious; its outlaw diplomatic passport program, which freely sells passports that do not comply with international law, to career criminals, international sanctions evaders, corrupt government officials, organized crime members, and just about any other type of lowlife who would benefit from a tool that facilitates crime or terrorism. Do you have two or three million dolars in criminal proceeds on hand ? Then you can become an instant diplomat.

The officials in power in Dominica have sold, for US Dollars, passports that violate the Vienna Convention on Diplomatic Relations, to which all UN members, as signatories, are bound. They really do not give a damn about international law, believing that national sovereignty protects their criminal enterprise. In the meanwhile, over five hundred Dominica diplomatic passports have been issued by a government that is engaged in racketeering for profit.

The most effective remedy available to solve this problem is for the UN to remove Dominica from membership and to declare all diplomatic passports issued by it null and void. The United States, Canada and the UK are considering how to impose sanctions, but it is also up to the United Nations to act; Throw the bums out.

WHEN CARIBBEAN BANKS REJECT KYCC, THEY REAP THE CONSEQUENCES OF DE-RISKING


The complaints about what is called "de-risking" continue to roll in, especially from the financial institutions in the Caribbean. Those banks bitterly relate tales of abrupt cancellation of long-term correspondent relationships with American financial institutions, and their often desperate quest to find alternatives, only to learn that the increased costs will probably have to be passed along to the class of client who can least afford it, expats sending remittances, and the recipients of those payments, which they do not want.

It is not a conundrum; the affected banks all have access to programs that create the Know Your Customers' Customers, or KYCC, that American banks now demand. if I am a compliance officer in a New York bank, I want to have immediate acccess to the Caribbean bank's customers, his transactions, personal information, account history, and lines of business. Basically  it isall those things that are part of his client story, so that I may reduce my risk of being involved in his US transactions.

Compliance officers know, or should know, that KYCC programs can be installed that give the USA bank a window into the Caribbean banks' customers, their recoreds, and their transactions, on a real-time basis. Unfortunately, due to cost concerns, fears about losing clients to local competitors, and pressure from clients to maintain confidentiality, most Caribbean banks fail to engage in KYCC programs, and their eventual loss of correspondent relationships, due to increasingly intrusive regulatory actions against US banks and bankers, is only a matter of time.

My advice to compliance officers at Caribbean financial institutions, adopt a program that affords onshore US banks KYCC access to your clients' information, before you get the final notice of impending closure of your prized correspondent accounts in New York. Loss of access to the US banking structure, even temporarily, can result in massive client flight, and eventual insolvency. Pay attention, and solve this problem, before your bank becomes a fatality of de-risking.

RAISE COUNTRY RISK ON LEBANON




The perfect storm for armed conflict in Lebanon, due to Hezbollah's new monopoly on political power, in the wake of recent elections there, and other factors, could result in a total disruption of the Beirut banking industry, the country's remaining significant asset.

The additional reasons for concern:

(1) The Trump Administration has just sanctioned the senior Hezbollah leadership, and America's total support of Israel has angered that specially designated global terrorist organization. Bellicose statements from the newly-sanctioned Nasrallah, against the US Embassy opening in Jerusalem, as well as Isreal, has increased.

(2) With the winding down of the anti-ISIS war in Syria, Hezbollah has combat-experienced fighters available to it, and they hold strategic positions close to the northern Israeli border.

(3) Israel's military has increased its readiness in its north, especially in the Golan Heights region. Hezbollah feels its is invincible, due to its Iranian missile inventory.

(4) A leading Israeli politician has bluntly warned that, should Hezbollah initiate hostilities, has country will formally declare war on Lebanon, and not limit its response to the area under Hezbollah control, south of the Litani River. If the missiles fall on Israeli population centers, count on a massive aerial response, and since Israel can maintain air superiority, Beirut could end up looking like Berlin in 1945.
If the Beirut banking center is attacked, even if alternate security arrangement have been carriec out in advance, Middle East money will think twice before continuing to patronize the city's banks, and massive capital flight is a distinct possibility.

This is probably a good time to reduce your risks regarding Lebanon, whether it be financial exposure, outstanding receivables, or pending matters. for war is not just possible, it is fast becoming probable.

Saturday, May 19, 2018

THE FOLLY OF THE EAST CARIBBEAN CBI STATES: ALLOWING APPLICANTS TO MAKE PAYMENT IN US DOLLARS


Use of US Dollars can confer extraterritorial jurisdiction of US Courts
The issues that compliance officers at North American banks, and US & Canadian immigration officers, have with holders of Citizenship by Investment (CBI) passports have been reported in the financial press of late, but there is a more serious problem that the five East Cabibbesn CBI states are facing: the threat of criminal prosecution, by the US Department of Justice, for violations of money laundering laws by government leaders, notwithstanding that they operate these probems outside the Unted States.

The problems the EC states have is that US money laundering laws confer what is known as extraterritorial jurisdiction upon foreign nationals, and this is occurring because the Caribbean attorneys who created CBI legislation committed what some legal experts regard as a fatal error: they adopted provisions in their CBI laws that allowed CBI program managers to accept US Dollars (USD$) as payment for their economic citizenships. That has has been judged to be a major error.

Why is this now actually considered legal malpractice ? Any attorney drafting legislation in his country should be aware of the possbility that the laws he is creating might increase specific risks in other jurisdictions, and carefully weigh the potential consequences with his client before recommending that they be enacted into law.

In this case, most attorneys in the Caribbean are aware of the Money Laundering Control Act of 1986 (18 USC §§1956-1957), which imposes a maximum penalty of twenty years for violations, plus a mega-fine. The lawyers drafting CBI legislation ibn the East Caribbean failed to research that statute in depth, for if they had they would have learned that it has extraterritorial jurisdiction.

This means that a foreign national could be charged if the US Dollars they accept, for any purpose, are the proceeds of what are referred to Specified Unlawful Activities, and any portion of the transaction has a connection (nexus) with the United States, such as being deposited in a US bank, or transiting the American financial system. The MLCA, which was strengthened by the USA PATRIOT Act of 2001, will reach out and touch foreign nationals (e.g Reza Zarrab), for acts that they committed totally outside the USA.

Therefore, any dodgy applicant, using criminal proceeds for his cash to purchase that CBI passport, which is later deposited in a dollar account, and ends up passing into, or through, a US financial institution, has implicated not only himself, but the CBI program, and the country's leadership, as well, under US law.

We doubt that the Caribbean attorneys tasked with drafting their local CBI laws even bothered to look at the possible negative consequences of accepting US currency. They probably used the pioneering St Kitts & Nevis CBI program as a template. Unfortunately, that program became law back in 1984, two years before money laundering became a federal crime. Why didn't someone realize that using US Dollars might have consequences ?

Should the CBI program directors, and their attorneys, have chosen the Pound Sterling, instead of the US Dollar ?  Probably so, given the extraterritoriality issue, as well as the fact that the USA has very broad conspiracy laws, unlike the UK, which adds to the undesireability of accepting US Dollars, unless you are completely sure of the Source of Funds, and of your applicant's bona fides.

We understand that the leaders of a number of the East Caribbean CBI states are feeling anxious of late; are they feeling a cold chill, perhaps coming from the possibility that the US Department of Justice might be investigating them ?  




Friday, May 18, 2018

FAILING TO REFORM YOUR CBI PROGRAM CAN BE HAZARDOUS TO YOUR PRECIOUS US VISA


There has been much talk, in the five East Caribbean states operating a Citiznenship by Investment (CBI) program, about reform, especially regarding the need to perform Enhanced Due Diligence upon all applicants, and lookbacks upon all existing CBI passport holders. For those prime ministers in those countries, you only need look back to see what could happen to your own coveted US visa, shouls you fail to implement  those reforms forthwith.

When the elected leaders of St Kitts & Nevis failed to clean up the many flaws in their CBI program, after a number of official complaints were lodged by the American Secretary of State, John Kerry, the US cancelled the US visa of the then St Kitts Prime Minister, Denzil Douglas. Additionally, FinCEN issued its now notorious Advisory, warning the financial world about US concerns regarding all St Kitts CBI passports. The lesson; there are consequences if you ignore your international compliance responsibilities, after you are duly warned by Uncle Sam. Your prime minister might lose the right to shop in Miami or New York, and your voters will quickly tire of their long trips to the US Embassy in Barbados, while applying for visas, and of you as their elected leader.

Even after Mr. Douglas left office, in 2015, the United States has declined to reisue or reinstate his visa to enter the country, though we know that Douglas has requested his visa, as a private citizen. Also, Canada imposed visa entry requirements for all St Kitts passport holders.

For those CBI jurisdictions who keep repeating that the United States does not impose any sanctions for their continued failure to implement significant reforms, ask Denzil Douglas, who has not been in America for seveal years, and ask those Kittitian businessmen who must buy goods and equipment in repeated buying trips to the US, and now need submit to the tedious visa application process. We trust this has been instructive to the five sitting prime ministers in the EC CBI states.

WANT TO HEAR AUDIO FILE OF MY ONE HOUR INTERVIEW ON DOMINICA ISSUES ?



My one hour interview on current Dominica and Antigua issues, which was heard this week on TDN Radio Caribbean, is now available as an audio file free to any reader who wishes to hear it. Kindly email me at : miamicompliance@gmail.com  and I will be happy to send it off to your email address.

Please note that it is 22Mb, and your email program must be able to accept a file of that size.

Thursday, May 17, 2018

REPORT SAYS NORTH KOREAN COLONEL DEFECTED WITH SUPERNOTE PRINTING PLATES

                                                                             



Citing South Korean newspaper articles, a story in a security publication noted that a senior North Korean colonel, assigned to a special unit, has defected while in China, and that he allegedly took with him the printing plates for the "Supernote," the most recent version of the North Korean counterfeit USD $100 note. One example of the Supernote, the US Series 2006, was found late last year by a teller at KEB Bank in Seoul, and it took a team of experts to deduce that it was indeed a counterfeit.

This version of the Supernote has not, to date, been seen in global circulation, though massive amounts of the bills are known to exist in cold storage, and have been so stored since they were manufactured by the DPRK, more than a decade ago. There is a report from Singapore, where quantities of the Supernote was offered for sale by criminal elements, at the astounding price of 50 cents on a dollar of face value. This asking price is far in excess of the typical market price counterfeits realize, which is probably a testament to the quality of  these latest Supernotes. The current holders of the stored notes are said to be Korea's largest organized crime syndicate, which operates in South Korea, but has ties to the DPRK, as is alleged to have created the printing plates, and transferred them to North Korea.

Are the printing plates in the hands of the Peoples' Republic of China, which reportedly already has a large quantity of the notes on hand ? We cannot say, but the mystery surrounding the elusive 2006 Supernote continues to grow.

Wednesday, May 16, 2018

TURKISH BANKER WHO FACILITATED IRAN OIL-FOR-GOLD BILLION DOLLAR SANCTIONS RECEIVES SHORT SENTENCE


Mehmet Atilla, the number two at Turkey's state-run Halkbank, who aided Reza Zarrab's organization in moving $4bn in illegal iranian oil profits,was sentenced today to only thirty-two (32) months of incarceration by a US District Judge in New York. Federal prosecutors had recommended 15 ro 20 years, as Atilla was a major player in the massive oil-for-gold sanctions evasion scheme.

Atilla was convicted of:
(1) Conspiracy to Defraud the United States.
(2) Conspiracy to vuolate the IEEPA.
(3) Bank Fraud.
(4) Conspiracy to Commit Bank Fraud.
(5) Conspiracy to commit Money Laundering.

Whether the sentence is insufficient as a means of punishment, and not an effective deterrent to others is not an easy question to answer. There may have been, or will be, Substantial Assistance, rendered by the defendant, that will materially aid the investigation, and subsequent indictment of other conspirators in the reportedly $13bn sanctions evasion scheme. As it stands now, with his pretrial detention time, he will complete his short sentence in 2019. Why the preferential treatment ?

Will Atilla implicate Babak Zanjani, Alireza Monfared, and the other leaders of the global Iran sanctions evasion cartel ? Does Atilla also have a diplomatic passport issued by the Commonwealth of Dominica ? We hope that there is a second phase to this case, so that we may be able to get some answers.

LISTEN TO KEN RIJOCK DISCUSS THE CARIBBEAN CULTURE OF CORRUPTION LIVE THIS MORNING ONLINE



 I have been invited to discuss matters important to all West Indians this morning on TDN Radio Caribbean, during the 11 AM hour; you are invited to listen in online at tdnradio.net  .  The host of the program is Mr. Sam George.


Tuesday, May 15, 2018

ANTIGUAN MINISTER ASOT MICHAEL, HIS CORRUPT ACTIONS EXPOSED, RESIGNS

Asot Michael, now dishonored.

Antigua MP and minister Asot Michael, whose corrupt conduct was exposed when German law enforcement disclosed recorded conversations of the participants in a VAT fraud scandal, resigned today, after a firestorm of public disgust over his actions roiled over Antigua, and the impact will certainly be felt in a number of other East Caribbean states whose leaders readily accept million dollar bribes and kickbacks. It is believed that his resignation was ordered by the Prime Minister.

Michael, who had arrogently denied any involvement in the criminal activity the recorded telephone convesations confirmed, may have already been charged with violations of the UK Bribery Act, for the Prime Minister had previously stated that such an act would result in his dismissal. When, earlier this week, the fact that Michael was detained by the UK National Crime Authority for one day during his interrogation became known, and that he concealed that information from the people of Antigua, demonstrates that he cannot be trusted to tell the truth, and that he is not worthy of public service.

Maurice Merchant, Antigua's Prince of Deception

The  "Spin Master* of Antigua," Maurice Merchant, a government mouthpiece who repeatedly vouched for Michael's innocence before the media, should be dismissed as well, for he is no friend of the truth, and therefore no friend of Antigua. He sought to employ unethical "Shoot the Messenger" tactics, towards all the whstleblowers who unmasked Michael's corrupt life. So long as he is there to distort the truth, Antigua remains in the dark world of corruption. ignoring true reform.
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* A Spin Master is one who puts a spin upon a political media story so as to give it a favorable or advantageous appearance.

EAST CARIBBEAN STATES MUST PERFORM LOOKBACKS ON ALL CBI PASSPORT HOLDERS TO REGAIN CREDIBILITY


The five East Caribbean States, St Kitts. Antigua, Dominica, St Lucia & Grenada, are all suspect in the eyes of the global compliance community, due to the uneven, and sometimes even absent, amount of due diligence that they performed in the past, upon their CBI applicants. The result was a nightmare, when the programs readily accepted Russian organized crime members, international fraudsters, corrupt Politically Exposed Persons (PEPs), global sanctions evaders, terrorist financiers, and various and sundry other dangerous individuals who should never have been awarded CBI passports.

To restore confidence, the CBI states must now conduct historic lookbacks, which are reexaminations of all individuals who hold, or were issued, CBI passports, this time applying Enhanced Due Diligence measures during the new investigations, as all must be considered high risk, and treated accordingly. Those individuals who fail must have not only their passports cancelled, but their names and original nationalities published, so that banks, as well as the legitimate business community, are not exploited, or become victims, by the continued illegal use of revoked passports by bad actors.

This may sound like a difficult task, but modern Second Generation AML/CFT resources, which employ facial recognition software, social media resoures, and global inquiry capability, will quickly and efficiently separate the legitimate individuals from the criminals and corrupt PEPs. Unless the CBI states proceed, now, to clean up their past mistakes, the global banking community will continue to look upon their CBI programs as suspect and high risk, and may eventually target all of their native-born nationals who seek to open acounts as presenting unacceptable threats, as potential CBI passport holders, or their criminal associates, and treat them accordingly.

Also, customs and immigration officers at international airports, who have already be subjecting some Caribbean arrivals to further search and inquiry, could further extend this secondary processing to all individuals from CBI states. Unless credibility is restored m through lookbacks, you can expect these difficulties to increase, to the damage and detriment of all Caribbean nationals from the five CBI states.  

Monday, May 14, 2018

ST KITTS MINISTERS UPSET OVER LACK OF TRANSPARENCY OF CBI RECEIPTS



A number of the ministers in the cabinet of St Kitts & Nevis have been overheard expressing their serious concerns for transparency, regarding the lack of disclosure of the precise amount of funding received from the CIU [CBI] program. A number of the CBI programs operated in the East Caribbean States have admitted that only a small percentage of the funds paid by applicants actually end up in government treasury accounts, and therefore the Kittitian ministers are now asking hard questions about precisely how much money is being received, in light of the fact that there are funds missing in other CBI jurisdictions.

The matter is further complicated by the fact that there is reportedly an illicit romantic relationship between two of the participants, which could interfere with disclosure of misconduct or diversion of funds. Whether there has been misfeasance, malfeasance or nonfeasance, by government officials or CIU staff members, remains an open question, requiring an outside forensic audit for confirmation. 

 

WHO IS THE CORRUPT ST KITTS POLITICIAN WHO DEMANDED $2m FROM BRITISH REAL ESTATE MAGNATE ?

The old SKNA flag.


If you have been following our coverage of the Asot Michael/Peter Singh Virdee bribery scandal, and have read the complete text of the British Royal Court order, you know that a certain St Kitts government official demanded $2m from Virdee. Though not specifically identified, and referred to by Michael as "our friend," he is believed to be one of the most senior officials in office in that country, and his probable identity has been made known by Antiguan insiders who are familiar with MP Michael's circle of friends.

Neither the St Kitts press, which is generally regarded as favoring the government presently in power, nor the government spokesman, who had previously dismissed any allegations of  misconduct regarding Asot Michael, have commented on the story about the mystery official who wanted to receive the $2m from Mr. Virdee. We would, however, prefer that the whole truth about the St Kitts segment of this major UK bribery scandal become public knowledge, and we shall continue to investigate the matter, and report back to our readers forthwith.

Sunday, May 13, 2018

NATIONAL CRIME AGENCY HELD ANTIGUA MINISTER IN CUSTODY FOR ONE DAY IN BRIBERY INVESTIGATION


 The release of a Royal Court of Justice Order in a suit involving accused VAT fraudster Peter Singh Virdee revealed that Antigua Minister Asot Michael was detained by the National Crime Agency for a day, while being interrogated over allegations of violations of the Bribery Act, after Michael was implicated. Michael, who is also reportedly linked to missing two hundred blank Antigua & Barbuda passports, which are the subject of ongoing criminal investigations in Antigua and St Vincent, has denied any involvement, and disparaged Virdee, after first stating that he would not comment. Michael has previously been linked to suspicious payments, but was not charged with a crime.

Virdee secretly recorded many telephone conversations with Caribbean leaders, and transcripts of some were included in the court order. Other conversations have appeared in the media which implicate senior government officials in both Antigua and St Kitts, and whether the damage those disclosures inflict on their careers will be serious, and permanent, depends upon the voters of those countries.

The absolute arrogance displayed by the government officials that allegedly solicited bribes, kickbacks and gifts is not only vile and disgusting, it is evidence of a culture of corruption that takes advantage of the trust those who elected them into office placed upon them. Some individuals in the Government of Antigua obviously knew about Michael's misconduct, yet remained silent. This speaks volumes about the culture of corruption in Antigua.  

BRITISH REAL ESTATE MAGNATE RECORDED CALLS TO CORRUPT ANTIGUA AND ST KITTS POLITICIANS DETAILING BRIBES AND GIFTS



Peter Singh Virdee, the British Mayfair property tycoon accused of multi-million Pound VAT fraud, secretly recorded telephone calls he made to government officials in Antigua and Barbuda, and St Kitts and Nevis, according to a scandal that appeared in major London media this week. The individuals so implicated are at the ministerial, and even premiership, level.

While only a small sample of the transcripts of the calls that Virdee had with specific corrupt Caribbean politicians have appeared in the British press, the content of those expletive-laden conversations is both blunt, and brutal. One politician demanded a £2m bribe, and a car for his mother. Another wanted Virdee to pay a large portion of the cost of a contract that was to be awarded to Virdee's company. One wanted Virdee to cover the entire cost of a dinner for the prime minister's large entourage, while another demanded an expensive timepiece for himself.

There are often allegations of corruption, when it comes to politicians from the East Caribbean states but recorded conversations, that direct implicate the guilty parties, are damning, and could result in forced resignations, or a catastrophic loss at reelection time, for those government officials named, or to be named later. One must assume that Virdee made a large number of recordings, and that the list of individuals who are on those tapes is a long one. Will these tapes ultimately bring down a government ? 








Saturday, May 12, 2018

WILL FINCEN NOW ISSUE AN ALERT AGAINST DOMINICA FOR ITS ILLEGAL DIPLOMATIC PASSPORT SALES PROGRAM ?



With the proliferation of arrests of foreign nationals holding unauthorized diplomatic passports issued by the Commonwealth of Dominica, it is time for the Financial Crimes Enforcement Network (FinCEN) to issue an Advisory. The purpose of such an Advisory would be to alert US financial institutions that certain foreign individuals are abusing the diplomatic passports issued by Dominica, and engaging in illicit financial acitivities.

Dominica sells diplomatic passports to foreign nationals, which are attractive because its procedures, as administered, do not include due diligence, or enhanced due diligence, resulting in lax controls over who will be granted a diplomatic passport. Illicit actors, including individuals who intend to use their diplomatic passport to evade sanctions, conduct illegal smuggling of financial instruments, evade arrest, can obtain a Dominica diplomatic passport with relative ease, upon payment of exhorbitant sums of cash.

Furthermore, The Vienna Convention on Diplomatic Relations, a treaty which Dominica is bound to as a member of the United Nations, has specific requirements for member countries. The passport holder must be assigned to a specific job, in a specific jurisdiction; he must present his credentials to the receiving country or agency, and he must be accepted by it. None of those requirements are being met by the unqualified foreign nationals who are buying what they believe is bona fide dipomatic status, but they are unaccredited.

Financial institutions, as well as US Customs & Border Protection (CBP), upon encountering a Dominica diplomatic passport, should immediately check to see whether the holder is a diplomat  accredited to either the United States, or United Nations. If not, then the diplomatic passport  should be examined to view the place of birth of the holder, in order to ascertain his primary nationality.

The Dominica diplomatic passport should not be accepted as proof of either identity or nationality, and the holder should be required to produce valid proof of identity. Financial institutions should file a Suspicious Activity Report (SAR); border officers encountering such documents should conduct a search of baggage, and the holder, to rule out smuggling of cash and financial instruments.



We trust that FinCEN will soon issue an Advisory on Dominica similar to that it previously issued against St Kitts & Nevis in 2014, regarding its CBI program, and which is still in effect.





  

ALERT FOR LARGE GULF PURCHASES OF DOLLARS, IN AFTERMATH OF RIAL CRASH IN IRAN



This week's sanctions actions by the United States, as pictured above, may have compounded the financial woes in Iran; the Rial is in free fall, notwithstanding major efforts by the government in Tehran to rein in the purchases of US Dollars and Euros. The US withdrawal from the Iran WMD treaty may have also contributed to the drastic drop in the value of Iran's currency in foreign exchange.


Rial symbol

Statistics from the region confirm a 30%-40% fall in the value of the Rial, and a high demand for gold. If you are a compliance officer at an international bank that has correspondents in the Persian Gulf, be alert for a demand for a large amount of US currency, in large denominations, especially from the United Arab Emirates, which has a large Iranian expat community. There may be a concerted effort to bulk cash smuggle large amounts of dollars into Iran, due to the increase in demand, and the lure of easy money for the traders lucky enough to hold dollars.

20,000 Rial note
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NOTE: as of May 12, 2018  $1USD = 42,105 IRR.

CHINESE BILLIONAIRE REAL ESTATE DEVELOPER, SENTENCED TO FOUR YEARS FOR UN BRIBERY SCANDAL, HAS A DOMINICA DIPLOMATIC PASSPORT

Ng during his 2017 trial.
 
Ng Lap Seng, also known as David Ng, the Chinese owner of a Macau real estate development company, was sentenced this week in US District Court in New York, to four years in prison, fined $1m, and forfeited $1.5m, in a bribery scandal that reached into the highest levels of the United Nations. Ng, in order to convince diplomats to designate a UN conference center in Macau, to be built by Ng, bribed two senior ambassadors from the Caribbean, including the former president of the United Nations General Assembly.

The defendant was convicted, after a trial,  of:
(1) Violations of the Foreign Corrupt Practices Act (FCPA) - two counts.
(2) Payment of Bribes and Gratuities - one count.
(3) Money Laundering - pne count.
(4) Conspiracy. - two counts.

Additionally, John Ashe, the former UNGA president, died prior to trial, alone and under mysterious circumstances that have never been explained, but who many now believe was murdered to keep him from testifying about the bribes that he received, as well as his knowledge of how Ng acquired his Dominica diplomatic passport.

UN General Assembly Presiden John Ashe and Ng.
 
Ng holds a diplomatic passport issued by the Commonwealth of Dominica, although he holds no diplomatic post of any kind, and reportedly paid a large sum in cash for the document, which violates the UN Vienna Convention on Diplomatic Relations in several ways. He is one of a reportedly five hundred dodgy individuals who have bought their "diplomatic status" in Dominica, through an illicit program that benefits only that country's corrupt and amoral senior leadership. At least fifty foreign nationals holdiong Dominica diplomatic passports have been arrested, are fugitives from justice, or have otherwise run afoul of the law, abroad. Some have unsucessfuly sought to cheat justice by claiming global diplomatic immunity, which does not exist under international law.



The United Nations has repeatedly ignored the fact that a number of its Caribbean members have pocketed millions of dollars by selling bogus diplomatic passports, none of which confer diplomatic immunity, or privileges of any kind, to career criminals, international sanctions violators, corruot government officials, and terrorist financiers. Some experts claim that the practice is so widespread that to expose all the UN members who are so engaged would seriously damage the image of the United Nations in the eyes of the public.



Thursday, May 10, 2018

WHY ARE THERE SO MANY FRAUDULENT HSBC FINANCIAL INSTRUMENTS ?



When you are one of the biggest financial institutions in the world, you have to expect you will be the target of fraudsters of every type and class, but there are so many obviously counterfeit HSBC financial instruments out there, particularly in East Asia, that one must ask the question : Who is drafting all these bogus documents ?



Either there are some HSBC alumni who left their employ with copies of a boatload of documents, or possibly some Asian oganized crime syndicates have placed their members inside the bank, to covertly and illegally remove samples.


Fraudsters seek out private investors and lenders, and use their bogus evidence of assets at HSBC to borrow funds, which are never repaid. There are reports that some East Asian banks have actually granted loans on such counterfeit documents, without confirming balances with HSBC. We hope the bank is collecting these bogus documents, so that it can respond to inquiries. I have seen hundreds and suspect that the true number of counterfeits being used is in the thousands.


Wednesday, May 9, 2018

NOTE TO CAYMAN ISLANDS AND BVI: ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM ARE MORE IMPORTANT THAN INDIVIDUAL RIGHTS TO PRIVACY


 The anti-transparency attitudes, displayed by industry groups in the Cayman Islands and the British Virgin Islands, who correctly fear a major loss in corporate formation business should they create public registries of beneficial owners, are now seizing upon an individual's right to privacy, as their last ploy. They are trying to hold onto the ability to sell a commodity that is of critical importance to money launderers, tax evaders, corrupt government officials, and financiers of terrorist operations.

In the aftermath of the Panama Papers and the Paradise Papers, and their exposure to the sordid business of Caribbean corporation secrecy, the legitimate financial world pushed back. The passage of the Sanctions and Anti-Money Laundering Bill in Parliament, which is intended to be the death knell for opacity in the British Overseas Territories, may cause a huge segment of the dodgy clients to give a wide berth to corporate formation in the Cayman Islands and the BVI.

Simply put, crime suppression and counter-terrorism are far more important than some nebulous concept of the privacy of criminals and criminal organizations. Since the BVI and Cayman are not self-policing, as that would eliminate most of their clients, the UK has decreed that corporate transparency will hereafter be the solution, even if the territories are unhappy with it.

Those elements who choose to oppose the end of Caribbean corporate opacity through bogus arguments may not only find themselves on the wrong side of history, if their actions on behalf of clients are found to be in support of terrorists, and money launderers, might later be free to argue their issues from a cell in Federal Prison. It is high time for the practitioners of dark corporate secrecy to come out into the light, even if it costs them.







HOW MUCH TIME WILL TURKISH BANKER IN IRAN OIL-FOR-GOLD SANCTIONS EVASION CASE RECEIVE ?

FCI Danbury


On May 16, 2018, Mehmet Atilla, the Turkish banker (Halkbank) who assisted Reza Zarrab and his criminal syndicate covertly sell sanctioned Iranian oil, will be sentenced. His attorneys have suggested four or five years. The US Attorney's Office wants more than the 15 1/2 years the guidelines suggest; it wants something around twenty years, due to the severity of the defendant's crime, and the fact that he facilitated billions of dollars in payments to Iran, in violation of international sanctions. He is the first foreign banker sentenced for Iran sanctions violations.

Additionally, defense counsel filed an affidavit, executed by an expert in Bureau of Prisons (BOP) procedures, who suggests designation to a Federal Correctional Institution in Danbury, Connecticut, due to the defendant's need to have easy access to Turkish diplomats, and to assist in his anticipated Second Circuit appeal. As a non-national, he does not qualify to be sent to a minimum-security camp, hence the FCI request.

Will Atilla get serious time, to deter others from assisting sanctions evaders?  Atilla's working relationship with Zarrab's partners, Babak Zanjani, Alireza Monfared, and Mohammad Reza Rajaie'h has not been made public by Federal prosecutors, leading to the assumption that some of those individuals may have sealed indictments awaiting them in New York.

CAYMAN ISLANDS WANTS TO LITIGATE UK CORPORATE TRANSPARENCY ORDER, RATHER THAN COMPLY


The Premier of the Cayman Islands, Alden McLaughlin, has stated that he intends to seek relief through the courts, on constitutional grounds, rather than comply with the recent UK legislation mandating the creation of a public register of beneficial ownership of corporations of British Overseas Territories. He asserts that the United Kingdom is bound by Caymanian local autonomy, which presently exist by constitutional fiat.

The Prime Minister also indicated that he believes the Cayman Islands is not yet ready for independence, which could be an option if corporate secrecy is deemed to be a feature of Cayman companies that should not be abolished, though that same local autonomy that he prizes has resulted in a local governmental structure which appears to be more than capable of operating an an independent state. Many East Caribbean states do not have anywhere near the infrastructure that the Cayman Islands has, but are conducting adequate government business as free and independent nations. Perhaps Caymanians might want to seriously think about the benefits of casting off the last vestiges of British colonialism, if they wish to maintain their policy of corporate confidentiality.

It is troubling that the premier noted that his government is planning a "sustained" legal campaign, for that might be perceived as a purely dilatory action, and not one with legal merit, and which action could have negative consequences, in the international financial community, as well among those British Overseas Territories that comply with the law, and issue public registers of their beneficial owners.

North American financial professionals and attorneys might also choose to steer clear of recommending, or employing, Cayman corporations when serving their clientele, and bank compliance officers may increase risk levels, or decline to accept Cayman companies altogether. We canot say whether there will be unintended consequences, but it is important that Cayman financial service companies should be aware that they could occur.

We are, without qualification, in favor of total and complete, universal, corporate transparancy of ownership, for all jurisdictions, and trust it will eventually become reality.

Tuesday, May 8, 2018

AFTER US REIMPOSES IRAN SANCTIONS, HOW MANY NEW MONFAREDS WILL BE EXPOSED ?



It appears, wth the US dropping out of the Western agreement with Iran on WMD and ballistic missile production projects, blanket sanctions will be reimposed. That will drive more Iranian nationals, and their sanctions evaders and money launderers, back to the East Caribbean CBI States for economic passports. Will they be served this time, or will the East Caribbean States, with new gatekeepers, turn away their potentially lucrative ( but dangerous and illegal) business ? You can expect a new crop of Iranian applicants visiting the CBI consultancies in Dubai, but under no circumstances should they be allows to submit applications.

Hopefully, the Alireza Monfared scandal was enough to deter Dominica the next time, as well as CBI administrators in St Kitts & Nevis, Antigua & Barbuda, St Lucia and Grenada. To again give in to avarice would expose the guilty jurisdictions to still more "de-risking" of their local banks' correspondent accounts in North America, as well sanctions violations, and US money laundering charges.  



We trust that the Monfared case has sufficiently deterred the other CBI states from accepting more Iranian nationals, whose subsequent arrests could generate extremely damaging negative news, resulting in a major drop in future CBI applications for that jurisdiction. This includes Iranian expats, who may be partners in the massive Iran sanctions evasion scheme.

Will the CBI jurisdictions try to reduce risk by redlining Iranian nationals ? We cannot say, but we hope they have learned from their previous (and costly) mistakes.   

PALESTINIAN AUTHORITY SEEKING PASSPORTS IN VENEZUELA FOR ALL GOVERNMENT EMPLOYEES




The Government of the Hashemite Kingdom of Jordan recently notified the Palestinian Authority that it will be cancelling all Jordanian passports held by West Bank Palestinian government employees. Since their so-called "State of Palestine" passports are only recognized as a travel and identification document, and are not generally valid for travel, outside of very few countries that will accept it, they have no document for international travel.

During his recent official visit to the Bolivarian Republic of Venezuela, PA President Mahmoud Abbas met privately with Venezuela's President Nicolas Maduro, and requested that his entire class of government employees and officials be granted Venezuelan passports. According to publicly available statistics, there are approximately 140,000 government employees working for the Palestinian Authority. Abbas wants them to all have usable passports.

While some may feel that the issuance of Venezuelan passports to Palestinians is not high risk, because the US & Canada require visas, anyone who acquires a Venezuelan passport has visa-free access to the countries of the European Union, and to all of South America. Translated to terms we can all understand, it means that individuals who are affiliated with Hamas and the Palestinian Islamic Jihad, with the proper alias on their Venezuelan passport, could easily gain entry, and thereafter conduct terrorist operations in Europe. This represents a clear and present danger.

Countries where Venezuelan passport holders have visa-free access
If someone shows up at customs and immigration, in France, Germany or Italy, upon arrival on a flight from Jordan, with Venezuelan passport, but he speaks no Spanish, notwithstanding a Latin surname,  we hope that the officer detains that individual for further questioning, examines his baggage and inquires into the purpose of his visit.



Palestinians are currently actively seeking Citizenship by Investment passports in the East Caribbean States of St Kitts & Nevis, Antigua & Barbuda, Dominica, Grenada and St Lucia. We trust that, once their place of birth is confirmed, they receive the same high-risk queries, to rule them out as possible terrorists.