Sunday, July 21, 2024

IN DUE DILIGENCE CHECKS, BEWARE CARIBBEAN MEDIA; MOST OF IT IS GOVERNMENT-CONTROLLED OR GOVERNMENT-INFLUENCED AND DISPLAYS THE TRUTH THROUGH A ROSE-COLORED PERSPECTIVE

 

When I wrote my most recent articles exposing money laundering and corruption on the St. Kitts Economic citizenship passport sales scandal, the local SKN media rushed no less than thirteen articles out in two days, all of which extolled the virtues of the Kittitian CBI program; how its due diligence was exemplary, how the program was improving the future of all the residents of the two-island nation, and how everyone should be eternally grateful that it existed.

There is not an iota of factual accuracy in any of it, and the articles, every one of them, totally ignored the unfolding scandal, which threatens to bring down the current government in power, and probably cause American banks to terminate all correspondent relationship with indigenous banks, plunging the country's already fragile economy into chaos and confusion. Their masters desperately want to cling to political power, and stay in office, and to do that they must deceive their constituents, hence the propaganda machine spewing out drivel and pro-administration material, most of it false.

Compliance officers must always remember that these Caribbean media outlets operate in only partial democracies, where government advertising often keeps the newspaper alive financially, and where the party in power can use cooperating courts to shut down any media it deems histole to its interests. Yes, there are a precious few who do deal in truth, and if you are fortunate enough to encounter them, their content is to be prized and retained, but as a general rule, and with those few trustworthy exceptions, Caribbean online and brick-and-mortar newspapers are going to give you skewed, and therefore inaccurate information. Please go elsewhere when performing due diligence.

Saturday, July 20, 2024

ON THE FIFTIETH ANNIVERSARY OF THE TURKISH INVASION OF CYPRUS, COMPLIANCE OFFICERS SHOULD ALWAYS REMEMBER WHAT GOES ON IN THE OCCUPIED TERRITORY; CAN YOU SAY CLEAR AND PRESENT DANGER?


If you have ever been to the Republic of Cyprus, you have most likely seen the Green Line, the fortified, and closed, frontier between that EU Member state and the thirty per cent of the country that remains, fifty years later, in the hands of Turkish Army. The anniversary of that invasion should serve as a reminder of what financial crimes are going in behind that border, in an artificial territory not recognized by any country save Turkey; money laundering, fraud and every type of financial crime that one can think of.

I have been to that border in Nicosia, and I wouldn't cross it for any reason; it brought back bad memories of the wartime frontier between Vietnam and Cambodia. You just knew there was evil on the other side, and danger.

Northern Cyprus is also a place where white collar criminals, especially those who are fugitives from justice in Europe, can obtain safe harbor, because Tirkey chooses not to extradite anyone from there. As a compliance officer, your position should always be to consider any financial activity located in, or originating from the so-called "Turkish Republic of Northern Cyprus" as most likely criminal in nature. Why else would anyone from outside Turkey want to operate from there?

Friday, July 19, 2024

TREASURY WARNS FLORIDA COMPLIANCE OFFICERS THAT OBEYING THEIR STATE'S NEW ANTI-ESG LAW COULD HURT THEIR AML/CFT, AND ENDANGER NATIONAL SECURITY

Last year, Florida enacted a law, more commonly described as an anti-ESG measure, meaning it is in opposition to the consideration of Environmental, Social Consciousness, and Corporate Governance factors in banking, thereby limiting the scope of inquiries to strictly pecuniary matters. This means compliance, as well as lending, officers cannot consider non-financial factors regarding clients or prospective clients. To do otherwise, the new law states, constitutes "Unsafe and Unsound Banking Practices." I am sure you know what that means.

If you, as a compliance officer, cannot use non-financial information in onboarding a client, the Department of the Treasury is warning that you may be facilitating money laundering, or worse, even terrorist financing, and Treasury is especially concerned that restricting your inquiries actually "may inhibit National Security efforts."

Does America really need another terrorist attack, which succeeded because a Florida compliance officer was hamstrung in his due diligence, and allowed a terrorist operation to be funded, and to ultimately succeed? Compliance officers, who could end up with administrative, civil or even criminal charges, for obeying an idiotic Florida law, passed for purely political reasons, had better choose to follow Banking Best practices, and ignore this legal obscenity, to protect both themselves and their bank. To do otherwise invites disaster.

SEE ME TALK ABOUT DECODING FINANCIAL CRIME IN CAPE TOWN 29 & 30 AUGUST



I will be presenting, virtually, at DECODING FINANCIAL CRIME; THE ANTI-CONFERENCE ON FINCRIME, in Cape Town on 29 & 30 August, 2024, watch this space for more details, or go to:

https://www.decodingfincrime.com/

The Anti-Conference Experience

This is not your standard exchange of pleasantries and passive listening. Expect dynamic engagements, intense brainstorms, and raw, hard-hitting insights. Sessions will be centred on understanding the psychology of financial crime, its expansive reach, and the collective measures necessary to halt its grasp. We’ve crafted a platform for candid discussions with:

  • An audience with a convicted money launderer – An interactive session that ditches the script and welcomes the unexpected.
  • Inside the mind of a FinCrime detective – a former detective unveils how he spent his career tracking and prosecuting financial criminals.
  • Closed roundtables with regulators and law enforcement, cutting through red tape to unearth real-world solutions.
  • Live Hacking Demonstration – prepare to have your mind blown by what’s possible. Live on stage.
  • How to craft money laundering and fraud scams (yes, you read that correctly)

Thursday, July 18, 2024

DOMINICA'S FEALTY TO POWERFUL CBI VENDORS IS CONFIRMED BY THE FOCUS OF ITS PRIME MINISTER, WHO NOW BLAMES THE VICTIMS IN THE ILLEGALLY-DISCOUNTED PASSPORT SCANDAL


If you didn't see or hear the most recent press conference held by the Commonwealth of Dominica's Prime Minister, ROOSEVELT SKERRIT, you missed his government's strange position on enforcing the law on Citizenship by Investment (CBI/CIP) sales consultancies, which prohibits them from discounting the price of citizenship & passport programs. Skerrit, when asked directly by local media about allegations that the UAE-based and incorporated (and inappropriately named) MONTREAL MANAGEMENT CONSULTANTS LLC, has repeatedly sold Dominica CBI for sums far less than the mandatory sales price, completely ignored that vendor's alleged known violations of Dominican law. This came up after Skerrit publicly declared that his government would cancel any and all CBI passports found to be sold at a discounted price.

He went further, and incredibly blamed the applicants, saying that they had an obligation to learn the minimum legal price appearing on the CIU agency's webpages, and then must decline to proceed to pay any less. This convoluted, twisted reasoning, which is akin to blaming the victim of a crime, is because Skerrit, and other members of his Cabinet are alleged to have received millions of dollars (USD$) in bribes and kickbacks for turning a blind eye to illegally-discounted sales, and processing them despite their violation of the CBI laws existing in Dominica. Meanwhile, the people of Dominica have been deprived of the full measure of CBI payments, which was designed to benefit their country, and not a corrupt elite, paid covertly by a vendor allegedly making millions through price-cutting tactics, as crime pays well in Dubai.

Therefore, if you were wondering why the American banks which have correspondent accounts for the banks in Dominica that service CBI payments have now started blocking wire transfers of deposits identified as incoming CBI fees, you should understand that they fear the serious consequences of engaging in predicate acts of money laundering that exist under Federal law in the United States. So, contractors engaged in construction projects inside Dominica are not getting paid for their labors, and Dominica's treasury is being cheated of its lawful revenue, They should blame Skerrit for their bleak situation; we certainly do.

Wednesday, July 17, 2024

IF YOU MISSED ME ON FRAUD FIGHTERS TALKING ABOUT CYBER MONEY LAUNDERING, HERE'S THE LINK FOR ON DEMAND




https://www.unit21.ai/fraud-fighters?utm_campaign=FraudFighters2024&utm_source=linkedin&utm_medium=social&utm_term=employees&utm_content=employees#agenda

AMERICAN BANKS START REJECTING CBI PAYMENTS FOR DOMINICA, SETTING OFF FEARS OF THE LOSS OF CORRESPONDENT ACCOUNT RELATIONSHIPS, WHICH COULD CRIPPLE CARIBBEAN ECONOMIES



The economic situation in the Commonwealth of Dominica is dire, after Bank of America, which maintains the primary correspondent relationship with the country's principal financial institution, reportedly rejected transactions that involved payments in the country's Citizenship by Investment (CBI/CIP) economic citizenship passport sales program. Government application fees, and associated payments to local contractors building CBI-funded projects, are deemed essential to economic survival of the island nation, and to the funding of its government. Hurricanes and tropical storms in recent years have had a major impact upon Dominica, which has become dependent upon CBI to survive. Bankers and government officials in Dominica now openly fear for their nation's fiscal survival.


The problems currently facing American banks maintaining correspondent accounts with East Caribbean states that offer CBI products are serious:

PM Roosevelt Skerrit



(1) Passport sales vendors abroad have been discounting the official minimum prices of economic citizenships of a number of EC countries, including Dominica, which is a violation of the laws that created these programs, exposing the US banks that accept and forward payments of what are illegal transactions, through their correspondent accounts to civil, administrative and even criminal penalties under American law.

(2) Due diligence that is required to be performed upon the Source of Funds and Source of Wealth of many foreign applicants from high-risk countries has been far below the standard of Banking best Practices, further endangering US that accept what could later be determined to be the Proceeds of Crime to money laundering charges.

(3) Should the rejection of CBI payments by American banks spread to St. Kitts and St. Lucia, which presently have their own problems with the illicit sale of CBI passports, and which are under fire due to a pending RICO lawsuit in the United States, their economies could also what amounts to a fatal blow, as they also are heavily dependent upon CBI revenue, aa well as necessary ties to the American financial structure.

Coat of Arms of Dominica



If American banks, to protect themselves, sever account relationships with banks in Dominica, St. Kitts and St. Lucia, the economic outlook for those counties would be extremely bleak especially where essential imports and international trade is involved. Denials by government leaders, themselves implicated in CBI-related corruption, is not solving this existential problem. Whether the economies of these tiny nations can survive this crisis has become the paramount issue in the region. Is there a solution?

Tuesday, July 16, 2024

DOMINICA CONTINUES TO SELL CBI PASSPORTS AT AN ILLEGAL DISCOUNTED RATE, IN VIOLATION OF THE MEMORANDUM OF AGREEMENT IT SIGNED LAST YEAR


If you were one of the people in the Immigration Migration sector, as consultancies that sell Citizenship by Investment (CBI/CIP) passports like to refer to their industry, you may have seen that Roosevelt Skerrit, the Prime Minister of the Commonwealth of Dominica, made a public statement at the beginning of the St. Kitts & St. Lucia CBI scandal to the effect that Dominica would also cancel any passports that were found to have been sold at an illegal discount. Considering that Dominica does not appear to be connected to Caribbean Galaxy, the Chinese company alleged to have been involved in the SKN/SLC illicit sales, what was the necessity for that announcement, they wondered aloud.

The fact is, there were illegal passport sales in the past, and it seems that since Dominica agreed, in March 2023, to abide by the M of A that it signed, there continue to be illegal sales. Our sources have stated that this fact is not only well known, one of the principal vendors of Dominica economic citizenships is known to have been the seller.

Not only that, but some of the application payments sent in for illegally discounted passports have been blocked from being deposited in American correspondent accounts by one of the very same US banks that we have identified as having accepted, and transmitted, illicit payments in the St. Kitts/St Lucia scandal, which confirms that American banks had actual knowledge that some of the five East Caribbean CBI states were accepting illegal applications at seriously discounted rates.

This fact undermines any defense that US financial institutions may assert that they were unaware of conduct which is illegal under the local laws which govern CBI sales, and increases the probability that some American banks may end up as party defendants in CBI litigation. This will give bank counsel who represent those financial institutions, who most likely are nervously monitoring the unfolding developments, both down in the East Caribbean as well as in two U.S. District Courts in Florida, some food for thought.

IT'S TIME TO START SELECTING YOUR RISK ASSESSMENT TEAM


By now you have probably read my article detailing the proposed new FinCEN rule on AML, which added the requirement of a continuous process of Risk Assessment to your already bulging plate of mandatory components of an effective AML./CFT risk-based compliance program. Although it will be several months before official adoption, it is best if you start assembling a team from your staff, to discharge that new obligation, and document that action for regulators and auditors will most certainly be looking for their presence down the road.

You should also create a written SOP for your people, so that not only are they literally "checking the boxes" and confirming low-risk status after their inquiries, but they know what to look for. In that vein, it is humbly suggested that you rely upon your more experienced staff to draft it, which means those individuals who have decades on the job, and fully understand what risks exist in your specific environment, and can enumerate what to look for. Should you may have already retired those old timers, it is recommended that you bring them back as consultants, as their post-9/11 experience, as well as threats observed over the years will best equip them to build a comprehensive checklist. Alternatively, you might have to outsource it.

It might be best to insert the Risk Assessments into regularly scheduled dates, so that no busy compliance staff members will take the time to examine existing clients, and discharge the continuous obligation now imposed on you. It is humbly suggested that you do this over the Summer, when you have more time to dedicate to it.

Monday, July 15, 2024

TBML CONDITIONS IN 2024 REQUIRE THAT COMPLIANCE OFFICERS HAVE AN EFFECTIVE KNOWLEDGE OF ADVANCED AND ESOTERIC TECHNIQUES TO SURVIVE


Global conflict in 2024 has made the identification of Trade-Based Money Laundering a nightmare for compliance officers. The increasing attacks on maritime commerce by the Houthi terrorists, acting on orders of Iran, residual traffic issues at the Panama Canal, Chinese saber-rattling in the South China Sea, and other emerging threats have turned traditional TBML identification upside down. The old Red Flags simply don't work anymore, my friends at international banks who clients are engaged in international trade tell me every day.

To make matters worse, Trade-Based laundrymen have now reportedly turned to moving international trade transactions which are infected with dirty money through banks that normally only have a very few trade clients, and they are using advanced and obscure techniques which are not known to the compliance officers at those banks, as they rarely encounter trade payments.

Therefore, it is humbly suggested that all compliance directors hold internal classes on Advanced TBML forthwith, and diagram for their frontline Transaction Monitoring staff the methods and techniques not found in AML manuals or classes, as compliance officers unfamiliar with them will otherwise pass them off as legitimate responses to the geopolitical trade problems we are experiencing. If you aren't current on them, find a competent professional who is, and have a virtual class immediately. Only then can you meaningfully reduce the risk that your people are missing everything they see.

Sunday, July 14, 2024

WHAT IF YOU ARE A COMPLIANCE OFFICER CHARGED WITH MONEY LAUNDERING, BUT YOU ARE INNOCENT; WILL THE PROSECUTOR VIOLATE BRADY vs. MARYLAND AND HIDE EVIDENCE OF YOUR INNOCENCE?

Two completely different, yet related, items in this week's news have served to remind me that, for compliance officers responsible for AML/CFT, they stand exposed to a criminal justice system that just might not be playing by the rules in 2024.

The first article dealt with the trial judge dismissing Manslaughter charges against a famous Hollywood actor, for violations of BRADY vs. MARYLAND, that verged in Prosecutorial Misconduct, a topic often alleged, but rarely proven. Prosecutors intentionally withheld what may have been exculpatory information, meaning evidence that might tend to exonerate the defendant, and an angry judge dismissed the case with prejudice, meaning it cannot be refiled.

The second article involved a report of rampant and systemic Brady violations that pervaded the State Attorney's Office in my own Miami-Dade County. It seems that a "Take no Prisoners" attitude among prosecutors there had led to huge and repeated violations of Brady.

Many of us in the AML space are still upset that the US Attorney in Manhattan was forced to dismiss serious money laundering charges against the Iranian ALI SADR HASHEMI NEJAD, infamous as the owner of Malta's defunct and money laundering PILATUS BANK, when certain material collected by the FBI was not timely given to defense counsel. Sadr notoriously had four different St. Kitts CBI passports, and used five different names, which of course reminds me of the recent RICO litigation, and my concerns about an infinite number of SKN passports in circulation among transnational criminals.

Therefore, you as a compliance officer had better keep excellent records, in duplicate, lest you somehow be wrongly charged with Willful Blindness, or some other money laundering crime, when you are innocent, because an ambitious prosecutor might just conceal evidence that clears you. All these Brady violations cases frankly scare the *** out of me. Keep good records, including of telephone conversations and internal matters that you might not otherwise reduce to writing, lest you regret it later.

WHY IS EVERYONE SO SURPRISED THAT SIX FAMILY OFFICES WERE USED TO LAUNDER TWO BILLION IN SINGAPORE?



Money launderers alway seek out entities and industries that are known to be low-risk, because they know that busy compliance officers generally ignore them. Laundrymen are always brainstorming when not actually moving & cleaning the proceeds of crime, seeking out what we call Targets of Opportunity. Did those six Family Offices in Singapore that were used to move illegal Chinese gambling profits even have full-time, trained & experienced compliance officers? I seriously doubt it, and allowing obviously Mainland Chinese, using CBI passports from St. Kitts and Cambodia as identification, to move cash through the Family Offices' accounts? Give me a break; that's compliance malpractice ! Obviously, the FO compliance officers don't read global media, or they would have known about dodgy St. Kitts CBI passports. It's not just the laundrymen who should have drawn prison sentences, and deportation, but the FO officers as well; Blooming greedy idiots.

A good compliance officer is always trolling through the low-risk client base, looking for any and all transactions that are inconsistent with the client's trade or business. He or she should recognize such unusual activity at once, and initiate enhanced due diligence forthwith. And look, these FOs actually got big tax breaks, to encourage them to move their business into Singapore's financial structure. See the results, a full-blown money laundering nightmare. Pay attention, people.

Saturday, July 13, 2024

WHERE DO ALL THOSE BLOODY GREENBACKS IN THE HANDS OF TERRORIST LEADERS COMING FROM?




This is MOHAMMED DEIF, the leader of Hamas' terrorist army; he is holding a US dollar note in his hands, which is in and of itself a financial obscenity. where is this money coming from? I have a very good idea; the United Nations agency UNRWA pays its Palestinian staff in USD, even though the currency in use, though the Palestinian Territories, which issues no money of its own, uses the New Israeli Shekel or NIS.

The UN employees receiving Greenbacks must then go to a Hamas-controlled money service business to change their funds, thereby giving Hamas US dollars. By the way, Hamas money changers charge a 25% fee, which I find to be obscene, given the inadequate salaries which the UN doles out.

This photograph of Deif, who is believed to have been injured or killed this week in an Israeli Army attack on a compound where he was reportedly hiding, inside a Safe Zone for civilians inside Khan Younis, demonstrates that the source of terrorist financing came come from places where you might least expect it to originate. No wonder Israel has stopped issuing visas for UN staff normally resident inside Israel; they are no longer welcome there.