Kenneth Rijock

Kenneth Rijock

Thursday, July 19, 2018

MALAYSIAN FRAUDSTER'S ST KITTS CBI PASSPORT DOES NOT SAVE HIM FROM ARREST IN CHINA


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

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

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

UNITED STATES OPPOSES RICHARD CHICHAKLI'S MOTION FOR EARLY TERMINATION OF SUPERVISED RELEASE



Viktor Bout's former partner, Richard Chichakli, has filed a Pro Se motion for early termination of his two year Supervised Release obligation, which was a part of his sentence. The US Attorney in New York has opposed it, stating that his conduct is not exceptional, and therefore early termination is not justified. Chichakli paid all the costs assessed against him, including the $70,000 restitution, and he has lived and worked without incident since his release in 2017.

What's wrong with this picture ? The purpose of Supervised Release is to monitor the post-incarceration conduct of a criminal defendant, to kep close tabs on him, and to prevent him from re-offending, as recidivism is a major problem in our criminal justice system. Chichakli, like most white-collar defendants, has served more than half of his Supervised Release, and as is customary, when the defendant is clean, the courts often terminate it early.

In this case, the interests of justice are not the motivation. It appears that the Department of Justice, not able to charge him with serious crimes, has made every aspect of his sanctions case as difficult as it could, from giving him "diesel therapy," where he was shipped all over the US, for no valid reason, to obviously interfering with his ability to prepare for trial, the ends of justice are not served. These were punitive actions, from any objective viewpoint.

Since he is a United States citizen, he cannot be deported; I am sure that the US Attorney's office in New York City would have loved to have kicked him out of his adopted country, but alas, they could not. So now, they must be satisfied with a cheap shot. Let us hope that the Court is objective regarding his motion.

Wednesday, July 18, 2018

EGYPT SEEKS TO GET ON THE CBI CASH COW BANDWAGON



A draft law pending in the Parliament of Egypt will, if it becomes law, allow foreign nationals to obtain Egyptian citizenship, in a move reported to have been made due to the country's large sovereign debt. An applicant, who will pay the equivalent of approximately $400,000, and resides in the country for five years, will receive citizenship, while his deposit goes into the country's national treasury. This legislation, which faces some opposition in the country, is also intended to invite foreign investment, which left when the Arab Spring began, to return, as it allows foreign investors the opportunity to reside there whole overseeing their holdings.

Inasmuch as Egyptian passports require visas to visit Europe, North America, and even the Middle East, they are not deemed to be desireable in the traditional CBI sense, but visa-free travel to the East Caribbean states who also sell CBI is strangely available, probably as an incentive to Egyptians to travel there and pick up a second passport.

If the bill becomes law, we shall report back with further details.

ST KITTS SOLD CBI PASSPORT TO BUYER FROM MALAYSIA, WHICH PROHIBITS DUAL CITIZENSHIP


East Asia media, which is extensively covering the billion dollar Malaysian 1MDB corruption scandal, continues to focus upon a major player in that case, Low Taek Jho a/k/a Jho Low, who remains a fugitive from justice, thanks in large part to his St Kitts CBI passport, which he reportedly relies upon, given that his Malaysian passport was cancelled by the authorities.

Jho is a Malaysian citizen, and Malaysian law, as the Immigration Director-General Datuk Seri Mustafar Ali has publicly stated, not only does not allow dual citizenship, it is an offense for a Malaysian nationals to have two passports. He further explained that, in Malaysia, dual citizenship is strictly prohibited.

As we have repeatedly explained, the international CBI consultancies that vend economic passports generally fail to cover any of the negative aspects of CBI passports; they rarely, if ever, dicsuss tax liability, and other legal restrictions that specific clients may find themselves in violation of, should they purchase those CBI passport the consultancies are selling. Their sales staff are not international lawyers, any in-house lawyers they have call themselves "legal experts" not attorneys, and are definitely not in any way qualified to give advice on the applicants' local legal issues, for they are not admitted to practice law there. Mainly, the CBI consultancies tell the clients only the favorable information.

Here, obviously, whichever CBI consultancy sold Jho his St Kitts CBI passport failed to research Malaysian law, to ascertain whether there are any legal impediments to Malaysian nationals buying CBI products. Therefore, his St Kitts passport is void, not voidable, under Malaysian law, and could subject Jho to arrest by any customs and immigration, ending his flight to escape justice.

It makes you wonder why intelligent, affluent applicants always fail to retain independent counsel to advise them on all the legal aspects of a potential CBI passport purchase. They are later very unhappy when they run afoul of the law and the CBI issuer revokes their passport. Perhaps if they had secured competent legal advice, the result might ahve been different.




Tuesday, July 17, 2018

MARYLAND DISBARS PROMINENT CRIMINAL DEFENSE LAWYER FOR MONEY LAUNDERING

The Court of Appeals of Maryland, the state's highest caurt, has disbarred* prominent  College Park attorney Walter Lloyd Blair, who served a lengthy sentence for money laundering, witness tampering, and ten other charges, which were affirmed on appeal. Blair filed an unsuccesful action against then-US Attorney Rod Rosenstein, whom he accused of being prejudiced against him, due to his Jamaican origin.


Blair on right, civil rights case co-counsel Johnnie Cochran on left.

 Blair, who was suspended in 2010 after his conviction, applied to be readmitted after his release in 2017. The high court denied his Petition for Reinstatement.
_________________________________________________________________________
*In the Matter of the Petition of Walter Lloyd Blair to the Bar of Maryland

IRAN SUES USA IN WORLD COURT TO REMOVE SANCTIONS


The Islamic Republic of Iran has filed an action in the International Court of Justice, against the United States, asking that sanctions and other restrictive measures, that the US will now reimpose on Iran, after withdrawing from the Joint Comprehensive Plan of Action (JCPOA), are a treaty violation, and must be withdrawn, and Iran compensated.

Iran's action is based upon a 1955 treaty with the United States, though there are issues regarding whether Iran itself violated that treaty many times, including the seizure of the US Embassy in Tehran in 1979, and the taking of American diplomats as hostages.

The ICIJ has published a summary of the proceedings, including the prayer for relief, which may be viewed here. The Court site advises that the complete text will be available shortly.

Monday, July 16, 2018

WITH RUSSIAN INTERFERENCE UNDER THE AMERICAN MAGNIFYING GLASS, THE CBI EAST CARIBBEAN COULD BE TARGETED

If you have been following the American outrage, over the repeated confirmation of Russian penetration of US institutions, we can expect to see its law enforcement and intelligence agencies continue in taking a closer look at Russian operations in the Caribbean, especially the user-friendly East Caribbean CBI states.

In the East Caribbean, where revenue-hungry politicians court obviously dirty Russian money for CBI and diplomatic passports, offshore banking licenses, and investment capital, with the attendant bribes and kickbacks, the United States is painfully aware of what is occurring. Its intelligence agencies are in the field, reporting back on the Russian footprint, and not much gets past them.

Take Dominica, who sends a CBI consultant from North America to Moscow, as its resident ambassador. Obviously, his posting there is to sell CBI passports to Russians, and given the dysfunctional level of due diligence Dominica performs upon applicants, those applicants may be GRU intelligence officers, working undercover, or sowing disinformation or misinformation, or moving money in support of Russian foreign policy.

Sooner or later, the welcome mat that the CBI states have put out for soiled Russian greenbacks will draw the wrong kind of attention from the US, if it hasn't done so already. In an effort to bar Russian influence seeping into the US from the Caribbean, expect strict measures, including sanctions, more de-risking, money laundering investigations, other financial crime cases filed in US courts,  and visa restrictions. All this may be painful to already depressed Caribbean economies.

Therefore, inasmuch as the CBI republics will always seek to maximize cash flow, expect that there will be a price to pay, so long as the officials there turn a blind eye to Russian capital, and those who use it to move against United States' interests.

EUROPEAN BANKING AUTHORITY HITS MALTA FOR PILATUS BANK SCANDAL



The European Banking Authority has issued a lengthy Recommendation, directed to the Financial Intelligence Analysis Unit of Malta, involving its major AML/CFT failures regarding Pilatus Bank. The Recommendation outlines the extensive work that the FIAU must undertake, to remedy its shortcomings and to comply with the European AML Directive.

Readerds who wish to review the complete text of the Recommendation to the Maltese Financial Intelligence Analysis Unit (FIAU) on action necessary to comply with the Anti-Money Laundering and Countering Terrorism Financing Directive can access it here.

 

IS THIS HOW RUSSIANS ARE PAYING FOR THEIR DOMINICA DIPLOMATIC AND CBI PASSPORTS ?



Meet Dmitrijus Apockinas, a Lithuanian banker, educated in Moscow. He is so close to Dominica's Prime Minister, Roosevelt Skerrit, that the PM named his son after him; Skerrit's first-born legitimate son is named Dimitri. Apockinas, who has a fistful of Dominica passports, currently lives and works in London.

It was not always so; longtime Caribbean observers may recall that he was the owner of Griffon Bank, Ltd., an offshore Dominican bank then located in the Government finance Centre, on Kennedy Avenue, precisely where Skerrit maintained his offices. Griffon was later sold to his Russian partner in crime, Vladimir Antonov, who needs no introduction. Antonov is currently in custody in Russia for bank fraud, among other charges. He allegedly was involved in criminal activity, including money laundering, in both the Baltic countries (Bank Snoras), and in Russia, which has been previously reported on this blog.

 Both Antonov and Apockinas own the West Indies Power Company (WIPO), which was rumored to have paid a substantial bribe to secure a government license from Dominica, to engage in geothermal drilling on the island nation.

 The bank was renamed Banco Transatlantico, and a branch was organized in the Republic of Panama as Banco Transatlantico SA. Antonov was the Vice President, and Apockinas was Secretary; the president was Jorge Jelinsky. Transatlantico subsequently went into liquidation in Dominica, and bank customers lost all their deposits.

After the bank's failure, Apockinas holds a number of positions, including at Net Element, Inc., a payments processing company on South Florida. His LinkedIn page claims that he was the CFO there. He relocated to London, currently residing in Penbroke Gardens.

Last year, he sets up a tele-pay company in the United Kingdom, PayAlly Limited. His partners are:

(1) Rafal Andzejevski, a Lithuanian engaged in trading with Russia, primarily petroleum products.
(2) Maxim Ivanchenko, a Russian national, and IT specialist, and the founder of Advapay OU, which is registered in Estonia.



Though PayAlly has a London base, it also maintains a customer support facility, for Russian-speaking clients, located in Warsaw, according to the published telephone number.

The question remains:  is Apockinas facilitating payments, by wealthy Russian nationals, for Dominica diplomatic and CBI passports, through Payally, and its affiliates ?

Sunday, July 15, 2018

PAKISTAN'S UNITED BANK LIMITED SIGNS AGREEMENT WITH NEW YORK FED ON BSA/AML DEFICIENCIES


 
Readers who have clients doing business in Pakistan should review the complete text of the Agreement between the Federal Reserve Bank of New York  and Karachi branches of United Bank Limited, regarding the remediation of serious BSA/AML deficiencies. You can access the Agreement here.

Saturday, July 14, 2018

WILL THE LAW SOCIETY OF UPPER CANADA NOW INVESTIGATE LAWYER FOR ST KITTS CORRUPTION ALLEGATIONS ?

The High Court in St Kitts & Nevis this week dismissed the civil suit, filed by a constituant against Opposition leader Dr. Denzel Douglas, in the Dominica diplomatic passport case. The Court, speaking through Justice Trevor Ward QC, ruled that the case constituted Abuse of Process. This means that it was improper to bring the action against Dr. Douglas.

The Court held that the action musrt be dismissed pursuant to the Common Law doctrine prohibiting Multiplicity of Actions, as the Attorney General had previously filed an identical action action "relying upon the same grounds and facts." Costs may be taxed later against the plaintiff, Cuthbert Mills. Whether the attorney's failure to adequately research the law prior to filing the suit, which should never have been filed, is professional negligence, also known as malpractice, is an issue that should be addressed in the appropriate forum.

The matter became an issue of great public interest in St Kitts, when reliable sources within the government alleged that a private agreement between senior Kittitian officials, and the Canadian attorney retained to bring the action, E. Anthony Ross, required Ross to secretly kick back a substantial portion of his reputed multi-million dollar attorneys' fees, to them. Official corruption has been a major topic of conversation in St Kitts of late, especially after the Asot Michael scandal broke in Antigua, which included allegations of illegal payments sought by St Kitts officials.

Canadian law in the Province of Ontario, where attorney Ross maintains his law office, prohibits attorneys from paying any portion of their professional fees to non-lawyers. The Law Society of Upper Canada, which regulates the conduct of the legal profession in that province, should open an investigation, and inquire into the circumstances surrounding any payments of fees received by Ross in the St Kitts case to third parties.

Friday, July 13, 2018

CONSULTANCY: CBI APPLICANTS ARE MOSTLY FROM HIGH-RISK COUNTRIES


The principal of a major CBI consultancy in the United Arab Emirates (UAE) has noted, in a recent interview, that the country which represents the largest number of their CBI applicants is Pakistan. The executive also named the other nations whose nationals have been his firm's CBI clients.

Here is the list that was published in the article:

(1) Syria
(2) Lebanon
(3) Egypt
(4) Palestinian Arabs
(5) Jordan
(6) Iran
(7) Iraq
(8) UAE

The consultancy stated that it matches up applicants with the two CBI jurisadictions in Europe (Malta and Cyprus), and the three located in the East Caribbean (St Kitts & Nevis, Dominica and St Lucia). These are principally countries that are not democracies, and which have Specially Designated Global Terrorist organizations operating within their borders. Assuming that the CBI applicants from these countries present clean and authentic alias identification, sanctions violators, terrorist financiers or foreign intelligence agents, such as Pakistan's ISI, could obtain CBI passports, allowing them to enter the Schengen Zone, visa-free, seriously raising risk-levels.

It is issues like this that keep counter-terrorist agencies up at night. CBI passports allow both criminal, as well as terrorist, elements, to successfully enter, and operate, inside Western democracies. That is why jurisdictions that sell economic passports become high-risk targets for foreign law enforcement and intelligence agencies, and anyone that holds a passport from such jurisdictions are regarded as suspects. This is the unintended consequence of all that CBI cashflow.

READ THE INDICTMENT AGAINST THE 12 RUSSIAN INTELLIGENCE OFFICERS FOR CYBERCRIME




If you want to read the Indictment, filed today in US District Court in DC against a dozen Russian intelligence officers from the GRU, the complete text may be accessed here. The Style of the case is United States vs. Viktor Borisovich Netyksho, et al. 

EXECUTIVES WHO HAD THEIR SECRETARIES DO THEIR COMPLIANCE TRAINING IN THEIR PLACE RECEIVE A PROPER PUNISHMENT



You've gotta love those people at FINRA, the regulator for the securities industry. When a number of executives at Credit Suisse Securities had their secretaries do their required compliance training for them,  FINRA ruled that they had to give back a portion of their bonuses, as a penalty.  As we always say, let the punishment fit the crime. Imposing a financial penalty, individually, for failure to participate in compliance training, is just that.

Readers who wish to review the complete text of the FINRA Letter of Acceptqnce, Waiver and Consent may access it here.

Thursday, July 12, 2018

FUGITIVE MASTER MALAYSIAN FRAUDSTER FLEES USING HIS ST KITTS CBI PASSPORT



Low Taek Jho, also known as Jho Low, a Malaysian financier alleged to have siphoned off billions of dollars from 1MDB, the Malaysian development fund, is a fugitive from justice, whose Malaysian passport was cancelled. How is he still at large, you ask ? Simple, he has a CBI (Citizenship by Investment) passport from St Kitts & Nevis, one of a long list of accused criminals who possess SKN CBI passports, and use them to evade justice elsewhere.

Low is alleged to have stolen $700m from the 1MDB, which he had access to;  he is on the run, and has reportedly been seen in Mainland China, Thailand, Taiwan, Hong Kong and Macau. Malaysian authorities believe he will eventually end up in St Kitts, as have a number of major white-collar criminals, who have sought refuge there. All you need is deep pockets and that prized CBI passport. If the government of St Kitts was wondering why visa restrictions, imposed by the US & Canada are not being lifted, this case should serve as a reminder.


THE MOST HIGH-RISK COUNTRY IN EUROPE INITIATES A CBI PROGRAM


 The Republic of Moldova, a country where widespread money laundering scandals and billion dollar frauds are rampant and uncontrolled, has announced that it is creating the Moldovan Citizenship by Investment Program (MCBI). While neither a member of the EU or the Schengen Zone, Moldovan nationals have visa-free access to Europe through a treaty, making a Moldovan passport attractive for citizens from high-risk or sanctioned jursidictions.

Unfortunately, the visa-free privileges come at a high personal cost, as Moldova's image as a center for organized crime more or less paints a red bull's eye on the back of any foreign national who presents a Moldovan passport at an international port of entry. CBI consultancies generally never inform their clients about the specific negative aspects of acquiring the passports of certain CBI countries, including whether you will draw unwanted international law enforcement attention with your new passport. Though the Schengen Zone access is tempting, any foreign investor who chooses to purchase a Moldovan passport is probably asking for more trouble than they bargained for. Nobody wants their banks accounts checked out by law enforcement, just because their passport states where they come from, but it is the logical outcome. Do you really want to be under a legal microscope ?

Lengthy interrogation by customs officers, strip searches, and extensive bags and baggage inspection most likely lay ahead for the Moldovan CBI passpot holders. Some might even call it guilt by association. while the  CBI programs of Cyprus and Malta are more expensive, they will come with a lower level of risk. As always, before making any important decision, prospective applicants for CBI passports are advised to seek the advice of a qualified attorney., but in my humble opinion, rule out Moldova for the reasons listed above.

Wednesday, July 11, 2018

WHO WILL UNLOCK THE GIBRALTAR PAPERS ?


In any offshore financial center, there are always a couple of rotten apples; professionals who walk on the dark side, which means money laundering of bribes and kickbacks, covering up tax evasion, and washing criminal proceeds. The Panama Papers and the Paradise Papers are but two examples of law firms who have passed from the grey area, into criminal facilitation, and what damage they inflict as the result.

One of Gibraltar's law firms is currently representing a gang of master cybercriminals, who have left a trail of victims in three continents. On this side of the Pond, over in Trinidad, the losses reportedly exceed $100m; the SEC and US law enforcement agencies are actively investigating them. Obviously, they will leave European victims in their wake, and the law firm will profess its innocence, and go right back to doing the same thing again: facilitate financial crime.

So how did this prominent law firm fail to conduct the most rudimentary due diligence upon their new clients, before undertaking to reprsent them ? Even a cursory Google search would have exposed their sins and transgressions. Don't attorneys in Gib engage in Know Your Client ?

We hope that some cencerned citizens in Gibraltar unmask this law firm, hopefully by exposing their sordid activities. Let a Gibraltarian post the passport pictures here, and the story of this gang's cybercrimes.





AMERICAN BANK BLOCKS ALL ATM & CREDIT CARD TRANSACTIONS IN DOMINICA



A Dominica expat, visiting the country on vacation, was denied access to any use of VISA ATM or credit cards wille there, which were cards issued by a major American bank. Given that this individual had just recently used those cards in other adjacent East Caribbean states, an inquiry was made. Here is the information that was received from bank representatives and managers:

"Due to security and fraud concerns, blacklists, OFAC sanctions and FATF lists, [deleted] Bank does not allow any transactions in Dominica". Our bank has decided not to process any transactions in Dominica, as it is a blocked country."

" This country [Dominica] may be subject to international sanctions, and [deleted] Bank is committed to compliance with those sanctions. While we work worldwide, and your card can be used everywhere VISA cards are accepted at this time, we do not allow our products and services to be used in blocked countries, which means ATM & credit card transactions are not permitted. You can resume use of your debit/credit card when you are outside the Commonwealth of Dominica."

"In accordance with the international sanctions and mutual rules of corresponding banks, we are sorry but the country you are currendly in is a blocked country. For compliance and the protection of the bank, [deleted] Bank is unable to have their customers use their VISA Debit/credit cards while traveling to blocked countries like Dominica."

"I am sorry for the inconvenience but our bank/VISA have blocked ATM/debit activity in the Commonwealth of Dominica."

It appears that Dominica is now regarded as so high-risk that the use of VISA debit and credit cards of one of the largest US banks there has been completely blocked.







 

WHERE IS THE MUSLIM BROTHERHOOD HIDING ASSETS STOLEN FROM EGYPT'S COPTIC CHRISTIANS ?



Although the Western press has primarily focused blame upon the remnants of ISIS for attacks upon the sizeable population of Coptic Christians is Egypt, in truth and in fact, it is the Muslim Brotherhood that has engaged in systematic destruction of the last major Christian community in the Middle East. The Coptics, who number close to ten per cent of the Egyptian people, are being  murdered, their assets plundered, and their churches ad schools set on fire.

Sources inside Egypt have stated that the Brotherhood has specifically targeted the most affluent of Egypt's Coptics, for the purpose of stealing their significant assets after their deaths. Given that the Copts have existed in Egypt for two milennia, these holdings are substantial. Many Coptics have chosen to emigrate abroad, to Western countries where freedom of religion is assured. 

International banks in Europe, particularly those who have branches or correspondent relationships, in Egypt, should be alert for large new and unexplained deposits, from Egyptian nationals, as they may represent assets taken from Coptics who were killed. The holders may wish to remove these funds from their country, to escape their possible seizure, at a later date.  As they represent the proceeds of crime, any such deposits constitute money laundeing offenses. Check the prior lines of business, and account history, for those who are making substantial new deposits, and obtain Source of Funds verification, from an independent entity, before accepting any large and unexplained amounts, lest you later are identified for cleaning stolen money, and sending it abroad.

SOCIAL MEDIA RESOURCES IDENTIFY HIDDEN PEPS


 The problem that compliance officers face, when dealing with new foreign customers who declare that they are merely successful businessmen in their home country, is ruling them out as Politically Exposed Persons, or PEPs. Individuals fronting for corrupt government officials will go to extreme lengths to create a false profile, consistent with the trade or industry that they claim to be engaged in, all to cover up the fact that they are seeking to move the proceeds of either corruption, or other criminal activity, into your bank.

 The best method of identifying them as PEPs is to utilize social media resources. This does not mean you go on Facebook, or some other media website, searching for their presence. it means that you utiilize  a social media souce that searches all potential social media sites, for both direct, as well, as indirect, confirmation that your target is indeed a PEP.

While a well-prepared hidden PEP will most likely have no direct connection to the government officials that he is moving or laundering money for, these platforms search for indirect, aged, and even irrelevant material, on spcial sites which will lead you to conclude whether or not he has PEP status. These platforms search for not just friends & family, but for old school connections, fraternal associations, prior business associations, or some which can show your target present at media, charitable sports or social events, which may confirm his relationship with individuals who have known access to either government assets, and/or are suspected of corrupt activities.

When your prospective client is photographed sitting next to someone at a New Years' party, wedding, social club annual dinner, or charitable function, a rebuttable presumption arises that he is not with that individual by accident. When he gives an award, at a dinner, to someone who you would not have as a bank client, alarms should ring in your head. When your target shows up at a function, at a private club, look at the members sitting at his table; you can do that only through social media images, collected for you by your platform.

Social media search platforms use artificial intelligence to find your target when he is off duty, and when he thinks nobody is watching, but eager social media posters just may have taken his picture, having drinks with some bad people, and your search found him there in a posting. He may be artfully concealing his PEP status, but you now know better. 

Tuesday, July 10, 2018

MAURITIUS CHOOSES TO FALL DOWN THE SLIPPERY SLOPE OF CITIZENSHIP BY INVESTMENT


 Mauritius has announced that it will be offering citizenships for USD$1m, and passports alone for $500,000, though many citizens of that nation, the sole democracy existing in Africa, have objected, saying that their nationality is not a commodity to be bought and sold. They also fear that Mauritius' growing reputation as a tax haven and money laundering center will be further tarnished by criminal elements purchasing their passports, which offer visa-free entry in most of the Middle East.

The Republic of Mauritius, it appears, has also failed to learn the bitter lessons that have been experienced by the five Citizenship by Investment (CBI/CIP) East Caribbean States. They also chose to sell economic passports, to fund their countries' recurring budgetary expenses. When the budgets blossomed, as expected, but an insufficient number of legitimate applicants came calling, the EC states obviously lowered their due diligence standards, with unfortunate results, when CBI passport holders were arrested, in the act of committing financial crime.


Perhaps the good people of Mauritius can nip their CBI problems in the bud, before their government's CBI agency, under major pressure to deliver cash for the nation's swollen  budget, allows unsuitable, and yes even dangerous, applicants to receive their Mauritius passports, by ignoring due diligence requirements.

DOES ONE RUN FACIAL RECOGNITION FIRST OR LAST IN EDD INVESTIGATIONS ?


There appears to be a difference of opinion among compliance officers conducting enhanced due diligence investigations: do you run the target's image through your facial recognition program at the very beginning of your EDD, or do you access it when your work is complete, to validate your findings ?

One school of thought states that, in a world where bogus identities, through passports that can be easilty obtained under clean aliases, including second passport programs, one must check first, before wasting valuable time, in any investigation of a target and his identity. Check the primary official documents of identity, including passport, drivers' license, identity card, and whatever additional items that the client presents first, to rule out any inconsistency between images that are known to be of the client, and that which have been presented to you as genuine at account opening.

The second group believes that the entire due diligence program should be completed, and then the facial recognition program should be run, to insure that your findings are correct. If you were totally deceived by a target's false identity, after the facial recog is completed, then you must reexamine the strength of your compliance program, as that means identity documents presented to you by supposedly trusted sources were faulty from the start. How is it that they passed the initial sereening?

Whether you choose to initiate facial recognition inquiries at the beginning or at the end, it is an indispensable component of your EDD program. It is your positive verification of identity, using multiple resoures, including official, unofficial, social, media, and other image sources. Rely upon it for a result more accurate than any other platform.     




Monday, July 9, 2018

NEW CBI APPLICATIONS SHARPLY DECLINE IN THE EAST CARIBBEAN STATES



Affluent foreign investors, who have been seeking economic passports through the Citizenship by Investment (CBI) Programs being operated in five East Caribbean States, are making application there in far lesser numbers this year, when compared to the two previous years, and are reportedly looking at programs in other regions, especially in Europe.

The reasons for the step decline in applications appear to be:

(1) Rampant negative news coverage of rampant official corruption in those countries.
(2) The continued failure of each nation's CBI agency to institute Enhanced Due Diligence investigations upon all applicants, resulting in career criminals, terrorist financiers, and the usual suspects being approved, but later are arrested by the authorities for criminal conduct.
(3) The collapse of Petrocaribe, which delivered Venezuelan (and some say Iranian) oil to the East Caribbean under extremely favorable terms. The failure of Venezuela to ship any petroleum products  has spawned riots this week in Haiti, and vocal public discontent in Antigua & Barbuda.
(4) the foreign misperception that the last hurricane seriously damaged all the island republics.

Both St Kitts & Nevis, and the Commonwealth of Dominica, have published obviously grossly inflated figures of the number of their applicants, whereas the true 2018 figures are extremely small. Will the standards for new applicants be lowered even more, to increase revenue, which was never meant to meet local recurring budgetary expenses ? If so, expect even more career criminals to come calling, and be eagerly accepted.

Whether the high net worth applicants will continue to divert their interests to Malta, Cyprus, and other more stable countries depends upon whether the East Caribbean States suppress corruption, upgrade their CBI EDD, and develop their economies. We hope they get the message.

Sunday, July 8, 2018

WATCH FOR PROCEEDS OF CORRUPTION FLEEING HAITI THIS WEEK


 Rampant violence in Port-Au-Prince, and other cities in Haiti, due to the government's decision to remove subsidies on gasoline, diesel and kerosene, which will cause prices to rise as much as 51%, could bring down the current government. The combination of Venezuela's Petrocaribe's recent failure to distribute to the Caribbean countries, and US sanctions, which interfere with payments to Venezuela, has left Haitian consumers with prices that they simply cannot pay, resulting in popular revolt. Revolutions have begun for lesser reasons. The government's announcement, that it was reversing itself on the subsidies, had no effect upon the rioting.

Note well that corrupt Haitian leaders, and the Politically Exposed Persons (PEPs) who front for them in North American and European banks, may fear regime change, which reports from Haiti could occur within the next two weeks, and move their illicit holdings, to avoid subsequent exposures and seizure by a new government in Haiti. Unusual funds transfers, both into and out of international banks in the West, as well as unexplained cash movement within the US and Canada, should be closely examined, especially if the sender is a Haitian "businessman," who claims his wealth was earned in his native country.


 If you are not familiar with the state of the economy in Haiti, legitimate commerce is dwarfed by the underground movement of drug profits, and the proceeds of systemic corruption whicb drains the country dry, and discourages significant foreign investment, when prospective investors are solicited by powerful PEPs to pay bribes and kickbacks, just to do business in Haiti. The corruption has essentially turned Haiti into a failed state.

Therefore, examine in depth any major funds transfers, or attempts to transfer wealth, on the part of affluent Haitian nationals, or professionals acting on their behalf.

Saturday, July 7, 2018

THE USE OF FACIAL RECOGNITION SOFTWARE, IN CONJUNCTION WITH A SOCIAL MEDIA PLATFORM, FOR PEP IDENTIFICATION

 






 The identification of Politically Exposed Persons, more commonly known as PEPs, remains one of the most difficult challenges facing compliance officers at international banks, especially when the individuals come from countries in the developing world where freedom of the press, and of information in general, is restricted, monitored, controlled, or censored.

Your applicant who is seeking to open a new account, and who is a close associate of a senior government official, military officer, government-controlled or owned corporation executive, or senior charitable entity or NGO official, may choose not to disclose that relationship to you, due to the fact that his deposits will be the proceeds of bribes, kickbacks, or other income received due to corruption. Your job is to insure that you have identified him as a PEP, and to put in place the safeguards and account monitoring that such a status requires.

While the joint use of facial recognition software and social media platforms is well known as an effective tool for law enforcement use, as we have previously noted on this blog*, teaming up these two effective search resources can establish a PEP relationship where no other asset in your toolbox can. Many PEPs have relationships that establish their status outside normal channels, and the images you find in social media may be the only evidence that exists to confirm he is a PEP. The importance of this technique, which couples two valuable compliance tools, cannot be underestimated.

Your target need not actually be a user of social media to be found using this technique. The fact is you can confirm that he or she is a PEP through remote and indirect relationships that would most likely never be uncovered using conventional investigative techniques. This is know as Shadow Profiling, and we have previously detailed its effectiveness.**

PEPs can go to great lengths to conceal the existence of relationships that make them PEPs; you need to avail yourself of all the possible resources available to you to find those relationships.
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*Facial Recognition Software is highly effective when paired with Social Media Platform
**Using Social Media to create Shadow Profiles in Investigations

Friday, July 6, 2018

THE THIRD SHOE IS ABOUT TO DROP ON THE EAST CARIBBEAN STATES


Those West Indian politicians who earlier this year cast doubt upon whether the US, Canada & the EU would ever impose restrictions upon them, as the direct and proximate result of their failure to conduct effective due diligence upon their CBI applicants, are starting to eat their words. The issue is how many painful and restrictive policies must be visited upon them before their constituants remove them from office.

First, citizens from East Caribbean states learned that certain of their kind, arriving in the United States, had been subject to extensive questioning, the obvious object of which was to learn whether the vistor was holding a CBI passport. If this was the conclusion, a more extensive interview was the next step, together with an intense inspection of his bags and baggage.

Second, the Government of Canada, after having earlier restricted visa-free visitors from some jurisdictions in the region, imposes a blanket biometric information requirement upon most East Caribbean states. Both the Canadian Prime Minister as well as the Foreign Minister have pointed to the deficiencies in the various CBI programs as the central reason, though various spin masters have attempted to conceal that fact, including some linked to the CBI consultancies that touted a visa-free Canada.



Now, while the citizens of the East Caribbean remain upset that their plans to visit Canada will be curtailed, or even cancelled, due to the time, expense and trouble of a personal visit to the Canadian High Commissioner in Trinidad, the third shoe is about to drop. Agencies of the European Union, after extensive consultations, which this blog has repeatedly warned were underway, appear now to be on the verge of their own version of sanctions, also due to the CBI due diligence scandal.

The question is, if there are visa restrictions imposed by EU agencies, and the result interferes with CBI passport holders' access to Europe, those CBI passports will lose much of their value, as applicants will choose Malta, Cyprus, or one of the other CBI jurisdictions. If that happens, the very same East Caribbean leaders who rely upon CBI funds to pay recurring expenses may find themselves out in the cold.





 

WHY IRAN IS BUYING PASSPORTS FOR ITS AGENTS IN AFRICA TO EVADE SANCTIONS





There has been much made of late about the international scandal surrounding the purchase, by Iran, of economic citizenships, pursuant to a number of Citizenship by Investment Programs being operated by five East Caribbean states, and the negative publcity has caused the Government of Iran to look elsewhere; it is reportedly purchasing passports from corrupt officials in Africa.

For those who question the wisdom of  an Iranian sanctions evader, or terrorist financier, holding a passport from an African nation, allow me to explain:

(1) Inasmuch as an Iranian passport generally requires that a visa be issued, to allow the holder to enter a Western country, an Iranian agent needs a safe passport, with visa-free privileges, such as has been exhaustively advertised by the East Caribbean CBI states, as a marketing tool.

(2) Africa contains a large number of Commonwealth of Nations (British Commonwealth) members, which were previously colonial possessions of the Crown, and who as the result hold visa-free access to the United Kingdom. Iranians, holding themselves out as Commonwealth citizens from Africa, can gain acces to the financial capital of the UK, the City. If the agent speaks English, an adequate cover identity can be built, which will acclow him UK entry. West Africa in particular has a number of Lebanese traders living and working there, and that might be the chosen profession creatd by Iranian intelligence officers, who are fleshing out the bogus identities of their agents.

(3) Many bankers do not know this, but certain former French, and Portuguese colonies like Cameroon and Mozanbique, now independent, have also become Commonwealth members, allowing Iranian agent fluent in either language, but not English, to convincingly pose as African nationals.



Once the Iranians have entered the UK, free movement within the Schengen Zone of the EU is generally assured, as they are coming from Britain.

Now that you understand why Iran is atracted to African passports, compliance officers should distribute alerts to their frontline staff:

(1) For Caucasian passport holders from African Commonwealth-member countries, 
(2) Whose language skills demonstrate the presence of a pronounced accent not native to their professed country of origin; and
(3) Whose physical appearance does not suggest that they live in a tropical country. 
 


 Is their passport newly-issued, and without visa stamps ? If so, dig deep, my friends. You just may score an Iranian sanctions evader or money launderer underneath that African facade.





 

Thursday, July 5, 2018

PRIVATE BANKER SUES EMPLOYER WHO DISREGARDS HIS COMPLIANCE CONCERNS, AND FIRES HIM



The shape of things to come may be compliance officers going after their own bank, when executives ignore their valid compliance warnings and concerns. The latest case involves a private banker, at a respected UK international financial institution, and it may represent the remedy compliance has needed for a long time, especially since the latest regulatory tactic is to hold the compliance officer personally liable when his bank fail to implement necessary actions.

Apparently, the banker twice advised his employer that there were serious issues: first, when a $100m transaction was linked to an associate of a Russian Politically Exposed Person (PEP), and second, when the client's father was linked to Russian President Vladimir Putin, which makes the client also a PEP. These are textbook issues, requiring Enhanced Due Diligence, which reportedly was not performed.

While I understand the bank, in its defense, says the whistleblower-employee did not raise them until after his position was made redundant, and he was terminated, somehow I doubt that the facts, when finally examined, will favor the bank.

Given that compliance officers, at least since 9/11, have repeatedly voiced their anger over employers who ignore their valid warnings, and later make them the guilty party, rather than the bank executives who valued client revenue over regulatory requirements, perhaps the proactive appriach, suing your employer when things go south, will become the appropriate remedy. If the bank's board of directors have a well-founded fear that the bank might become a very public defendant, they might think twice about dismissing valid compliance concerns.

This whole problem, where executives ignore their own director of compliance, should not even exist; his or her advice, when valid, should be acted upon, swiftly, and without argument, for its sole purpose is to protect the bank from laundering client criminal proceeds.

Tuesday, July 3, 2018

POWERFUL CBI CONSULTANCIES CAST A DARK SHADOW UPON EAST CARIBBEAN STATES



When I first started exposing corruption among government officials in the Commonwealth of Dominica, I was immediately confronted by a chorus of people accusing me of being a paid agent, publishing false information in the service of some unnamed entity, and seeking to effect regime change, by any means. Inasmuch as I do not practice checkbook journalism,  I assumed that the naysayers were seeking to impeach my credibility, but I was wrong. The truth is much more disturbing.

It is all about the overpowering influence of a number of international Citizens by Investment (CBI/CIP) consultancies, multi-national sales organizations engaged in reaping obscenely high commissions for placing high net worth individuals, moral as well as amoral, into CBI programs, which give applicants from dodgy countries a "safe" passport, removing the stigma of the high risk national origin from their travel documents. It is an unregulated industry, notwithstanding the very public efforts of its members to cosmetically enhance their image through controlled NGOs whose output sounds suspiciously like propaganda.

Behind the scenes, CBI consultancy power is regularly applied:

(1)  To win favorable arrangements with local Caribbean CBI governments eager to share in the lucrative fees, as well as inflated costs, so as to collect not only their listed commissions, but sales overrides that are never disclosed to the investing public.

(2)  To change the game in specific jurisdictions, through direct and indirect financial support to Opposition parties, including dirtying up incombents, through scandal exposure, including false information, a nd buying or fixing elections. Once in power, the newly-installed Opposition gives the CBI consultancy a sweet exclusive deal, and throws out its competition.

(3) To deliver diplomatic passport applicants from high risk jurisdictions, who are attracted to the possibility of evading Customs and Immigration inspection, and net the consultancy, and corrupt local politicians, millions in advance fees, kept and not passed along to government treasuries.

(4)  To provide payments and perks for the members of CBI units, their ministerial overseers and their extended families, to reinforce their privileged contractual arrangements.

Who is in control in specific East Caribbean states, The prime minister and majority party, or the CBI consultancy ? The artful use of bribes and kickbacks, and the delivery of clients, has made these states dependent upon the lucrative CBI receipts, and use the money for budgets, not sponsoring needed jobs creation.

The undue influence of the CBI consultancies over the East Caribbean states, is interfering with democracy, and is leading several countries down the road to Cuban-style and Venezuelan type of socialist dictatorship. Let us hope that the East Caribbean learns to control their CBI consultancies, before the countries slide into one-party, autocratic states.




SUPREME COURT'S RULING ON TRUMP TRAVEL BAN JUST MEANS MORE DODGY CBI APPLICANTS



The United States Supreme Court's decision on President Donald Trump's Travel Bank on predominently Muslim countries not only puts all those nations at the top of the hit parede, when it comes to Country Risk, it also increases that chances that the next CBI passport a compliance officer will encounter, when opening a new bank account at his North American bank, will be a citizen from one of those Trump-banned countries. If you are an Iranian or Syrian national, try getting visa-free entry most anywhere; that's why the mad dash is on to the CBI jurisdictions.

Of course, if the CBI passport is from St Kitts & Nevis, or Dominica, among certain other East Caribbean states, it may conveniently show that the holder actually was born in that nation, as the CBI units in those states tend to play fast & loose with the truth, especially if  a certain amount of money changes hands, unofficially of course

Compliance officers, do not fret; there is a time-tested method of determining, painlessly, that your passport holder was NOT born there. Listen to him. Each country's native-born citizens speak their official language fluently, and with the accents and slang (or even patois) specific to their place of origin. If you do not have expats from the Caribbean on your New Accounts staff, hire some, for they and they alone will tell you, in a New York second, if your client is a native speaker.

Encourage your New Accounts staff to draw out the prospective client into conversation, for it is them that they will be able to alert you to his lack of accent, hestiation wihen discussing his hometown or place of birth, and relatives who supposedly still live there, and rely upon their conclusions.

 If you are unable or unwilling to follow this advice, then the only alternative is to immediately classify all nationals from these CBI jurisdictions as potentially high-risk, and apply Enhanced Due Diligence before accepting their deposits. The jurisdictions that you will most likely encounter are:

St Kitts & Nevis
Antigua & Barbuda
Dominica
St Lucia
Grenada
Malta
Cyprus




THE FINAL STEP IN ANY EDD INVESTIGATION MUST BE FACIAL RECOGNITION SOFTWARE




Does your prospective bank client's passport information match up with known photographs of the subject ? Or is the passport simply an alias ?

The proliferation of Citizenship by Investment passports, whether purchased in the East Caribbean, Malta, Cyprus, or elsewhere, has greatly increased compliance risk levels, for CBI passport holders could have established a completely bogus identity, through documents obtained through corrupt government agencies or sources, and then obtained that prized CBI passport, with a totally sanitized identity. In other jurisdictions where counterfeit birth certificates, drivers' licenses, government identity cards and even utility receipts are actually advertised, in conjunction with yacht registrations or diplomatic passports, creating a ficticious identity is easier than brushing your teeth.

This means that any Enhanced Due Diligence (EDD) inquiry, and forget about ordinary due diligence for it is no longer sufficient for Customer Identification Procedures (CIP), is not complete without part two of your investigation: namely, through the use of an effective Facial Recognition program. Only after you have photographic confirmation that your target is the one and the same individual that he or she claims to be can you be certain who your client really is.

Unless you can connect up the face with the identity, all you have is a prospective client with squeaky clean, albeit totally bogus documents, all the while hiding his OFAC-sanctioned true name and criminal or terrorist background. Facial recognition programs, which include millions upon millions of official, social media, mass media, video, commercial, as well as lifestyle, images, all of which have been examined and validated, using a facial recog algorithm.

Although facial recognition platforms are only now being recognized as a critical last step in any EDD investigation, their inclusion, as part of any AML/CFT compliance program, which includes a second generation, mainly cloud-based data source, plus negative news sources, has not yer been adopted as part of banking best practices. Given the widespread use of CBI passports, multiple passports, and bogus diplomatic passports, compliance officers at international banks whose clients come from the four corners of the globe, should adopt an effective facial rcognition program without further delay, to add this final step to their enhanced due diligence programs. To ignore that final step is not only compliance malpractice, it could subject those who fail to do so to permanent exile from  employment in the financial world by regulators, or even criminal prosecution.
  

Monday, July 2, 2018

CLASS ACTION AGAINST BANK OF AMERICA ALLEGES IT FACILITATED $100m PONZI SCHEME



A 35-page class action civil suit, filed in US District Court in Florida, Heinert vs. Bank of America, NA , alleges that Ponzi schemers offering bogus investment oportunities to the public were allowed to rapidly and repeatedly move large amounts of victim payments, among one hundred accounts, most of which originally held only small amounts, into accounts controlled by the fraudsters. The suit asserts that all the red flags of money laundering were present, but the bank failed to take any steps to shut down the rampant criminal activities, which exceeded $100m.

The plaintiff claims that the bank should have identified the suspicious nature of the rapid and significent number of transfers in and out of corporate B of A accounts, which effectively comingled investors funds, and ultimately resulted in total misappropriation of those funds through personal B of A accounts belonging to the individual fraudsters. Additionally, there were transfers inconsistent with the account holder's business, loans that lacked a legitimate business purpose, and transacting businesses sharing the same address.

The funds, which were received from investors, were used to fund the fraudsters' excessive personal lifestyles. Eventually, action taken by the Securities & Exchange Commission brought down the obvious Ponzi scheme.

Readers who wish to access the complete text can do so on PACER: Case No: 18-cv-00324-PGB-PRL (MD FL). 



ECB DECISION TO DISCONTINUE €500 NOTE WAS LONG OVERDUE


When Euro currency was on the threshhold of introduction, and this blogger noted that the €500 note would be a boon to professional European money launderers, only the Guardian thought my comments were worthy of publication, back in 2001. Years later, after the criminal syndicates have adoped the five hundred Euro note as their medium of exchange, and most Europeans note that they rarely, if ever, see one in circulation, the European Central Bank (ECB) announced that it will no longer be produced. Why the delay ?

Considering that the ECB published a report back in 2015, concluding that the five hundred Euro denomination facilitated transnational crime, its May 2016 decision was long overdue. There's a reason why the US has not had larger demoninations for decades; in Canada, existing large notes, no longer produced, survive as a currency of exchange in criminal circles. Indeed, most of the €500 notes are believed to be held in Spain by organized crime syndicates.



We welcome any efforts to reduce untraceable medium of exchange, and the loss of the five hundred Euro notre has hit professional money launderers where it hurts. 

Sunday, July 1, 2018

IRAN COLLECTS MASSIVE NUMBER OF FOREIGN PASSPORTS TO EVADE SANCTIONS



If you thought that the large number of passports, sold by the Comoro Islands to Iranian nationals engaged in sanctions evasions was disturbing, Iran is now conducting its passport purchases elsewhere on a grand scale. Reliable reports from inside Iran have confirmed that the government is accquiring foreign passports from a number of nations in Africa and other regions, in a desperate move to allow it to collect funds, and evade Western sanctions and controls, using aliases with clean identities.

While we have previously detailed the circumstances of Iranians flocking to the East Caribbean states, to purchase passports through the five Citizenship by Investment (CIP/CBI) programs administered there, including the Alireza Monfared scandal in Dominica, and Iranian moves in St Kitts & Nevis, and Antigua & Barbuda, this additional passport buying frenzy is indicative of actions that have been forced, due to recent law enforcement activities, such as against Pilatus Bank in Malta, and its owner, in the United States. Additionally, Iran must still collect huge sums for unpaid covert oil sales, particularly in Latin America.

Whether Iranian agents are using specific financial pipelines that flow through the United States or Western Europe is not known, but assumed, given that the covert transactions are in US Dollars and Euros. Compiance officers at international banks should be on the alert to an increase in transfers whose ultimate destinations are in the Middle East, from where funds movement into Iran is the traditional evasive route taken, to avoid discovery by US agencies.

The key, of course, is the fact that the passport holders:
(1) Will not be native-born nationals of the countries where they hold passports. Check place of birth.
(2) Will have brand new passports, with little or no arrival or visa stanps.
(3) Will most likely not speak the official langaunge(s) of the nation in which they hold paassaports.
(4)  Will probably not be ethnically or racially the same as indigeneous nationals of their "country."
(5) If they do actually speak the official language of their passport country, it will not be with the same accent, neither will they be using slang, nor will they exhibit the linguistic characteristics of speakers from that country. If you have native speakers on your staff, they will instantly confirm the non-native speaker status of these new clients. Ask them to conduct the collection of personal information on those prospective clients.

Your bank compliance staff should be briefed on this new information, and be advised to be alert for any of the above "red flags" that indicate that specific passport holders may not be exactly what they appear to be, and require Enhnced Due Diligence, to rule them out as Iranians violating international laws and sanctions.