Sunday, October 16, 2011


The current government in the Republic of Haiti now contains several high-ranking members, including the Prime Minister, who are the children of senior officials from the notorious dictatorship of Jean-Claude Duvalier, more commonly known as Baby Doc. Some believe that the installation of these individuals is connected to the political power still wielded by Duvalier, who recently returned to Haiti from a twenty-five year exile. It is extremely disturbing that he has not been charged with any of the corruption, murders, and human rights violations, that his administration committed whilst in office. He is still a powerful force in Haitian politics.

Why is this important to compliance officers ?

(1) Haiti is the most corrupt nation in the Western Hemisphere, after Venezuela, and before 1999, it was at the top of my personal list, having experienced it firsthand whilst consulting in both banking and governmental matters there. Frankly, I felt more uneasy in Port-au-Prince than I did in Vietnam during the height of the war.

(2) Many Haitian PEPs bank in the United States, and hide money stolen from Haiti's public funds, bribe & kickback money, diverted charitable contributions, foreign aid, and payments from NGOs. South Florida banks are the primary recipients of these funds.

(3) Many Haitian PEPs have second homes in the United States, multiple mistresses that they support, and businesses that they employ to obtain lucrative contracts with their own government, keeping their beneficial ownership a closely-guarded secret; FCPA issues abound here.

(3) These second-generation PEPs may be holding illicit funds secured by their parents, which means probable OFAC issues, as the regime of the older generation was ousted in what is generally regarded as a popular revolt.

(4)  Haiti remains a key transit point both for Colombian cocaine en route the United States, and the proceeds of crime being repatriated from North America. It is prudent to expect that at least some of these new members of the government have learnt their craft from their fathers; A sad reality, but true.

Therefore, it is humbly suggested that you ensure that any substantial prospective depositor, of both Haitian nationality or origin, receive enhanced due diligence to guarantee that he or she is not an undisclosed Haitian PEP, and/or a declared Florida resident who is, in reality, a resident of Haiti,
who is hiding that fact from your bank.

Watch yourself here, especially if you are at a South Florida bank; these individuals can be adept at creating a fictional non-PEP identity.

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