Wednesday, November 30, 2011


The Lebanese Government, speaking through its Foreign Minister, has stated that Lebanon will not enforce Arab League sanctions against Syria. This means that any transactions that your bank clients engage in with Lebanese financial institutions, non-bank financial institutions, and that country's private sector could be sanctions evasions for the Syrian Government. Do you really want that exposure ?

Add Arab League sanctions to this the existing EU and US sanctions in place against Syria, and you have a potential perfect storm for violations; your financial institution could be unwittingly facilitating international trade for Syria when it sends payment for goods and services to Lebanese banks, not knowing that they are fronting for Syrian Government interests, the true end user.

You could also run afoul of those Arab League sanctions, and have penalties imposed upon your Middle East branches when it is learnt that you facilitated Syrian sanctions evasion through Lebanon.

Bank officers charged with country risk assessment should evaluate the situation,and make an educated decision on whether to adjust their country risk rating for Lebanon, but, in my humble opinion, any transactions with Lebanese banks are now problematic. You do not know who is in the shadows.


The Office of of Foreign Assets Control has, very publicly, named & shamed a major German bank for violations of the Cuban Assets Control Regulations. The violation, which appeared in the OFAC Enforcement Information for 29 November, 2011, was given to the bank's New York branch. The statement of facts advises that the bank was the advising and confirming bank for a letter of credit, in connection with trade documents that contained the names of a Cuban Specially Designated National (SDN). 

The Miami branch of an unnamed foreign bank issued the L/C in favour of a Canadian Bank. The amount of the transaction was $ 884,157, and the fine levied by Treasury was $ 175,000 .

When regulators find the name of a sanctioned entity in trade documents, you can be sure that they are looking very carefully at international trade documents for violators of Cuban sanctions. 

Tuesday, November 29, 2011


A well-respected source in Venezuela has published an extensive account of officially-sponsored financial crimes occurring in that country. Whilst we certainly want to see proof, evidence to support these sordid allegations, one jumps out at me, almost begging to be exposed. Since the purpose of the blog is, amongst other things, to expand its readers' perspective on money laundering tradecraft, we will summarise it here.

The reputed money laundering route for illegally diverted public funds coming from Caracas is:

(1) large amounts (totaling billions) of US dollars are shipped, via official Venezuelan Government aircraft to Panama, where it is delivered to Chinese diplomats, who deposit it into private accounts, controlled by the Chinese Government.

(2) The funds eventually are transferred to bank accounts in Hong Kong, and on into banks in Mainland China.

Is this scenario feasible ? If I was a money launderer working for senior Venezuelan PEPs who are engaged in stealing dollars from government accounts, I would want my money placed in the one jurisdiction where the United States has absolutely no influence; that country is the People's Republic of China.

Fact or fiction ? Let's see how this drama unfolds; the truth will undoubtedly be exposed by the next truly democratic government in Venezuela, as they will want to repatriate that stolen money. We will follow up on this story when additional information surfaces.


Monday, November 28, 2011


There was a bit of a flap earlier this year when it was revealed that the child of a very senior Chinese government official was studying at an Ivy League university in the United States under an assumed name. In the compliance world, we call that an alias, and it creates a number of potential problems when deciding whether to classify a wire transfer, or other payment, as a reportable suspicious transaction.

Yes, we know that the privileged children of PEPs often attend university in the UK and the US, but what is disturbing is the fact that a number of them are studying under aliases. Why, do you ask, is this a common occurrence ? Since some of the countries where their fathers are senior government officials, general officers, or the managing directors of government-owned companies are dictatorships, or have abysmal human rights records, the schools' management fear, correctly, that they will be targeted for protests, ostracised, identified, or otherwise made uncomfortable for their fathers' sins.

Since PEPs in a number of countries illegally control lucrative private businesses, and might even enjoy a monopoly in a particular industry, at the expense of abused and underpaid workers, or even slave or convict labour, their wealth becomes a compliance issue. They may also be collecting bribes and kickbacks, in violation of the Foreign Corrupt Practices Act or the UK Anti-Bribery Act.

Thus, should the PEPs child receive a substantial amount of money, ostensibly for his or her schooling, but in reality to launder and invest locally, performing due diligence on the student as a bank client becomes problematic when you have a passport carrying an assumed name, not linked to the PEP parent. It is also a compliance issue for a university that accepts payments from a parent whose published annual earnings are less than the cost of tuition and fees.

What we are concerned with, of course, is the receipt, by a foreign student at your local university or college, of a substantial amount of money, which is far more than is necessary for an education.  Factor in these issues, when deciding whether to file a SAR, or take other action:

(1) The amount received. Is it substantial ?
(2) The account history. have there been prior payments ?
(3) The home country of the student. Is it known for corruption ?
(4) The jurisdiction where the funds originated. An offshore financial centre perhaps ?
(5) The student's other known account relationships. Does he have accounts at other local banks ?
(6) The declared home address of the student in their own country. Is it in a known neighborhood where senior officials reside ? Is it merely an accommodation address ?

After looking at these potential red flags, you will be in a better position to make an informed decision.  


When democratic regimes come to power in the Middle East, expect them to seek to recover the fortunes of corrupt PEPs in the former regimes, in addition to bringing criminal charges when possible. These individuals have, for the most part, secreted their illicit cash in offshore financial centres. Why is this of concern to compliance officers at international banks, whether located in the Middle East, or elsewhere ?

There is abundant evidence to suggest that many corrupt Middle East PEPs, including Syrians, have deposited illicit fortunes in financial institutions located in the Gulf. Good money launderers never let "flight capital" repose indefinitely in any jurisdiction where its existence there becomes general knowledge. They move the funds, whether to places like Lebanon or Cyprus, or further afield, to Asian destinations, such as Hong Kong and Singapore.

When the dust settles in newly-democratic Middle East Nations, expect extensive investigations following the money to its final destination, followed by the very public filing of civil suits to recover it, with a major amount of reputation damage sustained by those banks found to be, literally, holding the bag.

Therefore, should you see fresh wire transfers, of extensive wealth, from banks in the Middle East, with an unusual amount of opacity regarding beneficial ownership, decline the funds until and unless EDD rules out PEP status; Watch yourself here.

Sunday, November 27, 2011


The recently released Consent Order* filed by the OCC against Saddle River Valley Bank, of New Jersey, affords compliance officers valuable insight into what some regulators deem important in BSA/AML compliance.

(1) The bank may not initiate any international wire transfers until it has an "automated system for the processing of wires that will enable the bank to identify potentially suspicious activities, and monitor and aggregate transactions by originator and beneficiary."

(2) There cannot be any further Remote Deposit Captures**until the "bank has implemented risk management systems, written policies and procedures, and a BSA/AML programme ... that will result in due diligence on the bank's customers, their lines of business the parties to whom their customers are providing services through the bank, and those customers' lines of business, and the effective monitoring, detection, and reporting of suspicious accounts, in the processing of RDC transactions."

(3)A Look-Back Report, which appears to focus on previous international correspondent banking relationships.
*Consent Order
** The bank customer scans in an electronic image of cheques which he or she wishes to deposit, and then transmits them to the bank.


Whenever you are performing due diligence on a potential client, and you run their name on a commercial off-the-shelf database of high risk individuals, prior, or pending, criminal charges sometimes appear. Whilst a felony record, especially if financial crime is involved, usually disqualifies the person, that is not always the case.

Before you dismiss the individual, out of hand, as an unacceptable risk, ask yourself these questions:

(1) Could the charges possibly be politically motivated, rather than a valid criminal case ? Remember, countries like China, Russia and Venezuela often bring criminal charges against members of the opposition, or individuals that these government perceive as threats, whether commercially, or politically. Look carefully at the country that brought the charges.

(2) Is this something that was brought years ago, never went to trial, but which was never dismissed, due to the nature of that country's criminal justice system ? Notwithstanding the total absence of a factual basis for the charge, it may linger in some systems indefinitely, through corruption, neglect, poor case management, or political influence.

(3) Was a conviction reported by local media, even though a conviction never occurred ? bribes paid to journalists, on behalf of persons with interests adverse to the individual you are investigating, can result in totally fabricated stories.

(4) Did the individual leave the jurisdiction where the criminal charges were filed, not to avoid prosecution, but to escape a corrupt criminal justice system, where either bribes, or government influence, trumps the rule of law.

Therefore,  in criminal cases brought in jurisdictions where justice does not generally prevail, things as seldom what they seem.

Saturday, November 26, 2011


The South African Parliament has passed the Protection of Information Act*, which severely restricts the publication of any information that is deemed to be classified. With criminal penalties ranging from 5 to 25 years, this new law will seriously discourage not only whistle-blowers and reformers, but it will seriously handicap all efforts to conduct effective due diligence on South African companies, and individuals.

Information deemed to be a state secret may not be published for 20 years. This new law, once it becomes effective, will especially interfere with the activities of compliance officers looking to vet PEPs who may (or may not) have accepted bribes or kickbacks, in connection with their official duties. Investigative journalism and whistle-blowing by media will be dealt a fatal blow.

As a former compliance officer, I know that frank and candid business intelligence is necessary for any enhanced Due Diligence investigation; negative information will simply not be available and accessible, even when it is a known and documented fact, in internal South African journalistic circles.

This new law essentially makes it impossible to rule out corrupt activities of South African Politically Exposed Persons (PEPs), with the result being that country risk will increase for  the Republic of South Africa.

Friday, November 25, 2011


Venezuela has seen its share of cleverly forged instruments sting foreign investors; bogus bonds, promissory notes and other purportedly legitimate negotiable instruments, so forgive me if I ask that someone verify that the $2bn Sovereign Guarantee, allegedly issued by the Central Bank of Venezuela, in favour of a new Isle of Man company, is valid and has value.

The story, as it appears on the blogs, is that the money was destined for charitable purposes, the first one being the construction of a hospital in St. Kitts. A letter, ostensibly written by a US law firm, has strangely appeared, as well as a number of additional "Red Flags" that should cause a compliance officer performing due diligence to avoid the transaction entirely. Some, but not all, of the participants have declined to talk to the press.

Whilst the truth is often elusive in the world of financial crime, let me point out two constants:

(1) If the documents are real, a charitable activity in the billion dollar range, but vague in scope, on the part of a national bank of a country known to be riddled with corruption, screams corrupt diversion of government funds and/or money laundering.

(2) If this is a bogus transaction, it is well-documented fraud, intended to fool third parties, expertly prepared, with inside information on the workings of Venezuela's central bank. If so, who or what is the intended target ?

Venezuela's economy is reeling; the president of its central bank could not prudently authorise this level of charitable gift when his own country has needy citizens. is this simply a sophisticated means of moving government funds offshore, before President Chavez dies, and his utterly corrupt regime collapses ? we cannot say, but if you see any sort of "unusual" transaction originating from Venezuela, think long and hard before agreeing to participate; you may get badly burned.

Thursday, November 24, 2011


Readers of Compliance Alert, which serves Lebanon, the Middle East and North Africa, can now access this blog directly from the Compliance Alert webpage ( Click on my caricature on the right-hand side of the home page to go to Kenneth Rijock's Financial Crime Blog.

Our thanks to Compliance Alert for providing the link.


Though it has not yet appeared on the official court docket, the attorney for convicted arms dealer, Viktor Anatolievich Bout, has reportedly written to the trial judge, Shira Sheindlin, advising that the jury was prejudiced by the Nicolas Cage film Lord of War,  which purports to be Bout's life story. Attorney Albert Dayan is said to have based his position on a post-verdict interview of the jury foreperson, who  stated that she had seen the film.

Dayan has asked for a new trial, or, in the alternative, an evidentiary hearing, to determine whether members of the jury were prejudiced against Bout, prior to the trial, due to the motion picture.

Bout, who is scheduled to be sentenced on 8 February, 2012, faces 25 years in Federal Prison*.

The controversial role of the Confidential Informant in the case continues to trouble court observers. the CI, whose identity was revealed at trial, is said to have earned $9m over the last fifteen years, for his assistance to US law enforcement. Whether he engaged in entrapment in the Bout case remains an issue.
*United States vs. Viktor Bout, Case No.: 08-cr-00365-SAS (SDNY).


Reports from France confirm that former General Manuel Antonio Noriega, who is presently serving a seven year sentence in that country for money laundering, can be extradited to his native Panama. Noriega, who has been convicted in absentia of murder, embezzlement and corruption, will be headed to Panama as soon as the French prime Minister executes a decree, authorising his extradition.

Noriega, who reportedly had a stroke, and suffered from prostate cancer, whilst he was serving a long sentence in the United States, is believed to be eligible for house arrest in Panama, due to his advanced age. Whether he will become a destabilising force in Panamanian politics, due to his support base, is unknown, and Panama watchers will be closely observing the statements of the current government, and the media, after he arrives in country.

Wednesday, November 23, 2011


US law enforcement interdiction, at the border, of southbound smuggled bulk cash, continues to be ineffective. Mexican law enforcement authorities have reportedly now seized just under $15.4m in narcotics profits in the border town of Tijuana. The funds were linked to a major cartel. Just how does a shipment of this size elude detection at the US-Mexican border ?

Remember, since it is basically impossible to place US Dollars into the Mexican financial structure, due to new and effective legislation that bans anything other than token dollar deposits, that money, if it was not seized en route, was probably bound for Guatemala, Honduras or Panama.  Are you accepting large wire transfers from those countries for the first time ? Where did the funds come from ?

Tuesday, November 22, 2011


The decision, taken by the US Treasury, to designate Iran as a jurisdiction of "Primary Money Laundering Concern" is a wake-up call for any financial institution whose clients are trading with Iran, whether directly or indirectly. It doesn't matter where your bank is located, there is increased risk:

(1) If a US financial institution, you risk fines & penalties in the highest multi-million dollar range, plus possible indictment for providing material support to a terrorist organisation, for assisting that country's WMD and ballistic missile programmes.

(2) If a non-US entity, you risk not only Draconian fines, but the distinct possibility of being shut out of the US financial structure, a situation certain to result in eventual bank failure, due to your inability to service your international clients' needs.

(3) All your clients' trade transactions involving the Middle East, especially Dubai and the rest of the UAE, must now receive special attention, lest you fail to identify shipments of goods that end up being transshipped to Iran.

(4) All the newly-sanctioned Iranian companies*, government agencies and shell entities should be closely examined, to ascertain whether any of your bank clients had historical dealings with them. You do not want any surprises later regarding OFAC violations.

(5) Those countries that are known to trade with Iran have a greater chance of facilitating sanctions evasion; are they purchasing dual-purpose goods that Iran is especially interested in ?

Remember how the global banking community abandoned contact with North Korea when it was similarly designated, to minimise the risk of incurring the wrath of US regulators and law enforcement ? My considered opinion is to advise your bank client to exit all Iran business forthwith, and if that does not happen, terminate the client.

Monday, November 21, 2011


The deposition of an important witness, taken this week in a Miami civil suit pending between a Brazilian cattle export company and an employee accused of embezzling funds and thereafter wiring them to accounts she had access to in Panama, has confirmed that the fraudster used part of the money to pay off what appears to be a debt in Panama, and then had the balance remitted to the personal account of her husband, Didimo Alberto Navarro, reportedly adding her on as a signatory.          

 The case, involving the former clerical employee, Lourdes Cajale, which was detailed here recently in an article entitled When While-Collar Crime becomes Money Laundering*, is a classic illustration of the fact that, when the proceeds of most crimes (known as predicate acts) are deposited into the global financial system, or even when such deposits as attempted, unsuccessfully, the crime of money laundering, with its maximum 20-year penalty under US law, generally occurs.

Since the last article, further discovery in the case has indicated that Ms. Cajale, who left a number of unhappy creditors behind in her native Colombia, including one who holds an unsatisfied final judgment, moved some of the stolen funds from the US, into Panama, and back into the United States. The extended family of the owner of the company has recently received a number of kidnapping threats, telephoned to relatives in Barranquilla, in an attempt to discourage them from seeking justice in the United States. That is an indication of the true character of the individual who embezzled from her employer.

Thus, even a minor white-collar crime will frequently morph into a money laundering event. In addition, prosecutors often also charge individuals having relatively minor roles with money laundering conspiracy. The significant penalties that these charges bring often convince defendants to enter guilty pleas to lesser counts, rather than risk a potential long sentence upon conviction after trial, for laundering. The next time that a client asks you to do a favour for him or her, and facilitate a financial transaction that is unusual, think twice, if you want to keep your freedom and your job.

Will the evidence produced in the civil case** result in a Federal criminal money laundering indictment against the fraudster in Miami, and others who facilitated the financial transfers in Panama ? We cannot say, but we will continue to follow all developments in this case, as they occur.
*The article first appeared on 18 October, 2011.
**Case No.: 09-64119 CA (15) Eleventh Judicial Circuit, in and for Miami-Dade County, Florida .


A Texas-based bulk cash & narcotics smuggler who was carrying $462,000, concealed in his truck, has entered a guilty plea to conspiracy to launder drug profits. Aldo Montalvo, who pled in US District Court in Waco,* admitted that he was transporting the cash to a Texas border town, Eagle Pass, and was to return with a load of cocaine, will be sentenced on 18 January, 2012. The money was discovered during a traffic stop. Montalvo was previously convicted of transporting marijuana, which was seized. He was sentenced to probation for the marijuana.

The money seized is the subject of a forfeiture. Obviously, bulk cash smuggling into Mexico is still alive & well, notwithstanding new strict Mexican law regarding deposits of US Dollars into Mexican financial institutions. 

Sunday, November 20, 2011


On a recent visit to Iran, the Iraqi Army Chief of Staff, Lt. General Babaker Al-Zaibari, met with Mohammed Ali Jafari, a senior leader in the Iran Revolutionary Guard Corps (IRGC). He also held meetings with commanders of the Iranian Air Force and Army.

Press releases regarding his trip, which were full of positive statements attributed to Zaibari, are extremely disturbing, for the US plans on having all its combat troops out of Iraq by 31 December, leaving behind only sufficient security to protect American diplomats and contractors.

If there is going to be close cooperation between the two countries' military in 2012, some of the goods destined for the Iraqi armed forces could end ultimately up in the hands of the IRGC, a sanctioned terrorist organisation. You need to do all that you possibly can to ensure that your bank does not facilitate this. I suggest:

(1) It is suggested that compliance officers at US and EU banks whose clients  are trading with Iranian governmental and military entities ask their legal counsel to prepare an End User Certificate, attesting that Iraq is the final destination for use of the products exported. I suggest that it be prepared in Arabic, with a certified English translation, by an approved translator, and notarised, with an Apostille affixed by the US Embassy or Consulate.

(2) You also should guard against unusually routed payments for goods being shipped to Iraq, for the Iraqi military may not wish to pay for items they will covertly transship to Iran. Watch for atypical source of payment, especially from jurisdictions known to trade with Iran, or assist it in any way in sanctions evasion.

Whilst I am certainly not accusing the Iraqi military of facilitating Iranian sanctions evasion at this time, you need to take precautions, in the event that some elements in Iraq commence cooperative efforts with the IRGC, whether with official approval, or on their own.    


The next of kin of a number of Colombian political activists murdered by the AUC*, the right-wing paramilitary organisation linked to senior officials in former Colombian president Alvaro Uribe's government, have brought a civil suit in US District Court **in Miami. The defendant is imprisoned AUC  leader Carlos Mario Jimenez Naranjo, a/k/a Macaco, currently serving a thirty-three year sentence on narcotics trafficking and terrorism charges.

The action, which was brought under the Alien Tort Claims Act, alleges that Jimenez is guilty of:

(1) Extra-judicial Killing
(2) Torture
(3) War Crimes
(4) Crimes against Humanity

The pleadings explain the AUCs efforts to dominate coca production in Colombia, for material gain, which the deceased were opposing. Graphic details of their torture and murders include chain-saw amputations and dismemberment. Some of the parties are listed as John Doe and Jane Doe, to protect their identifies from reprisals inside Colombia.

Most important are the allegations that the Colombian military and police failed to protect them, actually ignored the threats to their lives, and cooperated with the AUC. Will this suit expose previously unknown connections between the Uribe administration and the Paramilitaries ? Stay tuned.
* Also commonly known as the United Self-Defence Forces of Colombia, or the Autodefensas,  The AUC is a Specially Designated Global Terrorist (SDGT) organisation, and a Foreign Narcotics Kingpin.
**Jesus Cabrera, as the Personal Representative of the estate of Alama Riosa Jaramillo, et al, vs. Carlos Mario Jimenez Naranjo, case No.: 10-cv-21951-EGT (SD FL).


A court in Portugal last week declined to extradite the American fugitive, George Wright, to the United States, where he has been wanted since hijacking a Delta Airlines aircraft to Algeria in 1972. Wright, who was serving 30 years  for an armed robbery of a petrol station, where the proprietor was killed, had escaped from prison in 1970.

Wright, disguised as a priest, commandeered a flight from Detroit to Miami, with some armed associates, and forced the crew to ultimately fly him to Algeria, collecting $1m before departing Miami. He lived in France, and later in Africa, settling in Portugal in 1993, living under an alias.

The Portuguese appellate court ruled that Wright, now a citizen of that country, could not be extradited. It also found that the Statute of Limitations for his crimes had expired, though that reasoning is flawed, in my humble opinion, since the statute is tolled when the offender is outside the jurisdiction.

The United States is clearly disturbed by the court's ruling, since the violent crimes Wright pled guilty to are "within the terms of our bilateral extradition treaty with Portugal," according* to the US State Department, and Wright was a member of the Black Panther Party, a violent extremist group involved in anti-American terrorist acts in the 1960s and 1970s.

Since 9/11, the decision, by any state, to refuse to extradite any fugitive who is known to have been a member of a terrorist organisation, has been condemned by the European Union, of which Portugal is a member. What impact this case will have in the future is unknown.

*Portugal: Decision to Deny US Extradition Request for George Wright ( US State Department)

Saturday, November 19, 2011


An Idaho Falls automobile salesman was sentenced top forty months in Federal Prison for Conspiracy to Commit Money Laundering this week. He placed bogus purchaser names on sales documents, and failed to submit the required cash sales reports, for individuals whom he believed paid him with criminal proceeds. Joseph Monte Johnson also received three years of Supervised Release,  the successor to parole, and was fined $6000.

US law enforcement agents, who targeted Johnson, and other individuals who will be going to trial in their cases,  advised the defendants that they were career criminals who wanted to launder their money through automobile purchases. Was the 40 month sentence appropriate ? What do you think ?


Recent political developments in Myanmar, more commonly known as Burma, whether bona fide or merely the regime's clever PR campaign to simulate reform, could suffer from the Law of Unintended Consequences. Even the remote possibility of democracy in some far-off Burmese future may be perceived as a threat to its corrupt PEPs, and its narcotics kingpins, and they may choose to vote with their feet.

Most observers agree that financial institutions in Singapore have been the recipients of the illicit wealth of senior Burmese PEPs, most of whom are general officers in the military. Additionally, narcotics traffickers who enjoy a symbiotic relationship with the government also are believed to hold much of their criminal profits in Singapore. These funds, which are presently safe and secure, and maintained anonymously, may not remain so, should anti-corruption reformers come to power in Burma.

if I am a money launderer for Burma's generals and/or its narcotics kingpins, I am watching the unfolding developments with alarm, for I do not know whether true reform will arrive arrive in their country, whether peacefully, or after a violent struggle. In either event, I do not want to lose my clients' illicitly-acquired wealth.

I will therefore take the appropriate precautions. Personally speaking, since the Hong Kong financial centre appears to be the closest, and safest, place to keep my "flight capital," I would move much of it there. Let some future, democratic, Burmese government try to seize it; I doubt whether it would have any success.

The point of this article is to alert compliance officers to be on the lookout for large wire transfers exiting Singapore, as the Burmese reform stories increase in the media, and heading for jurisdictions that would be immune from Western influence, or the international laws of Comity. Whilst I have selected Hong Kong, for illustrative purposes, there will certainly be other financial centres targeted. Please try not to accept funds that turn out to be Burmese heroin profits, whether held by PEPs, or narcotraffickers.


In the midst of calls for the President of the United States to impose sanctions upon the Central Bank of Iran, following the ominous disclosures last week by the IAEA*, regarding Iran's illegal nuclear programme, a US Senator has introduced an amendment to a pending bill that would do just that.

Mark Kirk, a Republican Senator from Illinois, on Thursday filed a Senate Amendment to the Fiscal Year 2012 National Defence Authorisation Act**. Amendment 1084 would require the President to impose sanctions on foreign financial institutions that conduct transactions with the Central Bank of Iran (CBI). The proposal would have a six-month delay on the effective date for petroleum transactions, so as not to destabilise the world oil price structure.

When it becomes law, as is generally expected, either by Executive Order, or this legislation, you can expect the use Iranian sanctions evasion techniques to expand exponentially, and become far more complex. Countries that currently conduct trade with Iran, such as China and North Korea (DPRK), would probably employ even more opaque and indirect methods of payment than occurs at present.

This represents a danger to those financial institutions that fail to identify, on a real-time basis,  a CBI hand in the transactions, and interdict them in progress. The imposition of large fines and penalties by US regulators, or even charges of Providing Material Support to Terrorist Organisations, is a distinct possibility.

Thus, complex international transactions will require more scrutiny by Compliance after passage of this bill, or presidential action. We notify our readers forthwith, should this occur.
*International Atomic Energy Agency
**Senate Bill (S.) 1867

Thursday, November 17, 2011


Reports have been received today that a Hamas court in the Palestinian Territory of Gaza has levied multi-million dollar taxes upon the Bank of Palestine and the Palestine Islamic bank. Apparently, these West Bank-based financial institutions have been paying taxes solely to the Palestinian Authority, and not Hamas in Gaza.

Whilst we would not consider such actions are relevant to compliance officers, it might be prudent to raise your level of awareness for any unusual funds transfers from the Middle East, which could possibly represent a portion of these taxes upon these, collected but diverted for either corrupt purposes, or being moved to a more secure (and stable) environment.

Alternatively, there could also be a knee-jerk reaction from either bank, moving funds ahead of Hamas' confiscation orders.

In either case, remember well the Western sanctions existing against Hamas, and the problems which might arise with charges of Providing Financial Support to Terrorism.  


The General Secretariat of the Revolutionary Armed Forces of Colombia, more commonly known as the FARC, has named Rodrigo Londoño, also known as Timoleón Jiménez, also known as Timochenko, the Supreme Commander of the designated global terrorist organisation. Jiménez, a trained medical doctor, is known to be a Communist hardliner, and is reportedly opposed to any negotiated settlement with the Government of Colombia.

He is wanted in Colombia on charges of kidnapping, murder, rebellion and terrorism, and has a $5m price on his head in the United States. Reports say that he is presently living in Venezuela, evading arrest by the Colombian Army, and that his wife and children reside permanently in Venezuela. Most of the FARC  senior leadership is also known to hide inside Venezuela, from where they direct their rapidly declining rank & file to engage in drug trafficking, kidnapping, extortion, and other organised crime activities, to support their guerrilla war in Colombia, and for profit and gain.

Compliance officers in North America and the European Union should always be aware that funds originating in Venezuela could be FARC criminal profits, and ensure, through mandatory Enhanced Due Diligence, and where necessary, verification in the field, that you are not banking FARC funds; be careful.

Wednesday, November 16, 2011


The Solicitor General of Venezuela, Carlos Escarrá, has publicly stated that the current murder & terrorism trial, in France, of Ilich Ramírez Sánchez, a/k/a Carlos the Jackal, is improper and illegal, and that the results have been determined aforehand. Escarrá argues that, since his arrest in Somalia, by French agents, was illegal, both his prior life sentence, and the present case, which could also result in another life sentence, are improper.

The "Jackal," arguably the most prominent global terrorist of the 1980s, is on trial this week, charged with masterminding four terrorist bombings in France that resulted in eleven deaths, and one one hundred injured. Venezuelan president Hugo Chávez Frías has also declared his support for the Jackal, who is a Venezuelan national.

If you were looking for an additional reason why many Congressmen in the United States have called for Venezuela to be designated a State Sponsor of Terrorism, look no further. The Jackal is one of most reviled individuals in Europe, for committing multiple terrorist acts that resulted in creating chaos, including the OPEC Meeting incident, and the attack on the 1972 Munich Olympics. That Venezuela supports him speaks for itself.


Aaron Castro, a Denver trafficker of methedrine, sentenced this week to serve forty five years for his crimes, had a somewhat unique way of laundering his narcoprofits. He bought extremely rare comic books, such as the first issues of Superman and Batman, with his money. Whilst you may think this in and of itself is comical, let me explain.

What's the test of a satisfactory subject for a money launderer ?  Any item that:

(1)  Has value.
(2)  Is marketable.
(3)  Changes hands mainly for cash,
(4)  Whose dealers and collectors rarely keep records.
(5)  Is easily concealable and transportable.
(6)  Whose value cannot be easily ascertained by non-experts.
(7)  Hopefully appreciates in value.

Now you may understand why antiques and fine art make great investments for laundrymen, and why I have always directed US law enforcement to attend the annual Latin American Art auctions, in New York, at Christie's and Sotheby's. One can roll up a multi-million dollar canvas, toss it in the boot of your automobile, and take it anywhere in the world. Who, when looking at it, will understand its value, save art dealers and experts ?

For the record, the value of the small amount of rare comic book editions seized when Mr. Castro was arrested: $500,000. I wonder where the other copies were.

Tuesday, November 15, 2011


The United States continues to seek to bring to justice foreign PEPs who use American financial institutions to launder their ill-gotten gains. The extradition, to the United States, of Alfonso Antonio Portillo Cabrera, the former president of Guatemala, has been approved by the country's Constitutional Court, and its current leader, president Álvaro Colom. Portillo, who faces money laundering charges* in US District Court in New York City, is accused of laundering $70m through US banks.

Portillo allegedly embezzled state funds, and diverted (and laundered) funds from a children's charity. The Indictment also mentions funds received from Taiwan. The Guatemalan Government has stated that he stole $15m from the Guatemalan Ministry of National Defence. There are also reports that more than $1bn was illegally transferred abroad during his presidency.
*United States vs. Alfonso Portillo,  Case No.: 09-cr-01142-RPP (SDNY).


Expatriate Lebanese Shia, who are sending funds to Hezbollah from overseas, represent a potential problem for compliance officers at Western Hemisphere banks. The United States, Mexico, Venezuela, Argentina, Brazil, Paraguay, and Colombia all have a number of ethnic Lebanese, some of who are Shiite Muslims who contribute financially to Hezbollah.

There have been a number of arrests in the United States, as well as in Latin America, of Hezbollah operatives and financiers, but there is also the danger that legitimate Lebanese businessmen, who are supporters of Hezbollah, are using your bank to fund a specially designated global terrorist organisation. We are talking about a possible criminal charge of Providing Financial Support to a Terrorist Organisation.

Thus, whilst you should not profile all Lebanese bank clients as potential terrorist financiers, you may want to consider the following measures:

(1) Search your records for all your Lebanese bank clients who regularly send funds to Beirut.

(2) Eliminate all purely commercial ongoing matters, where value is actually exchanged in international trade. There may be some that can only be ruled out through Enhanced Due Diligence.

(3) Eliminate small remittances that appear to be to family members.

(4) Regarding the remaining clients, do any of the wire transfers go to banks known to be owned or controlled by Hezbollah ? Do you now need to file suspicious Activity Reports (SARS) ?

Take your results, and after performing Enhanced Due Diligence enquiries, have your board of directors make a command decision on closing some, or all, of the accounts. You may want to seek the advice of outside bank counsel at this point.

Saturday, November 12, 2011


PEPs involved in corruption often find themselves the target of US or UK sanctions, particularly efforts to deny them entry into Western countries, regardless of the official purpose of their visits.

United States Senators Benjamin Cardin and Roger Wicker have asked the State Department to bar two Russian generals from visiting America. Generals Tatiana Gerasimova and Nikolai Shelepanov are  believed to have been involved in the torture, death, and subsequent cover up, in the case of Russian anti-corruption attorney Sergei Magnitsky. Regular readers of this column are aware of the scandal, and fallout in the US, surrounding the whistle blower lawyer's death in custody*, in the Hermitage Capital Management fraud.

The two generals are coming to the United States to discuss the Russian government's lack of enforcement of intellectual property rights. There is a bill pending in the US Senate to ban visas, and to freeze the assets, of the sixty Russian officials linked to the case.
*US implements Visa Ban on 60 Russian PEPs for Corruption and Death of Lawyer,  World-Check 27 July, 2011.


Country Risk evaluators who were nervously awaiting the ruling of the African National Congress disciplinary committee have now heard the news. The ANC has suspended its Youth League leader, Julius Malema, for a period of five years, after finding him guilty of;

(1)  Reckless behaviour
(2)  Lack of discipline
(3) Bring the ANC into disrepute
(4) Creating factions within the ANC

A major ratings agency downgraded South Africa earlier this week, citing increased political risk. Malema has been an advocate of nationalising the country's major industries, and has been accused of playing the race card for purely political gain. His influence amongst South Africa's unemployed youth is strong, and his attorneys have stated that they intend to file an appeal of the ruling.

Should you increase Country Risk on South Africa at this time ? Review the facts, ascertain what level of exposure your bank has, and govern yourself accordingly.



Candid details about the systemic corruption inside China will now be much harder to access in Chinese media. The General Administration of Press and Publication, a government agency, has announced the implementation of regulations that effectively bar the reporting of news that cannot be verified from two independent sources. The new rules also require personal interviews, when information is collected, prior to its publication.

Though disguised as "fact checking," the effect of the regulations will be to force the print media to ignore allegations of governmental corruption and official abuse of authority, because this information frequently originates on China's blogs, and cannot be verified, under the new guidelines. Violation of these new regulations can result in suspension of revocation of media licenses. Information on corruption will now be harder to find.

Compliance officers searching for data on individuals, or PEPs, for due diligence purposes, will now find it harder to find truthful information on corruption, as the direct result of these new regulations. It may actually cause some compliance officers to raise country risk on China.



Friday, November 11, 2011


I have a Rendezvous with Death
at some disputed barricade,
When Spring comes back with rustling shade
and apple blossoms fill the air
I have a Rendezvous with Death
When Spring brings back blue days and fair.

It may be that he shall take my hand
And lead me into his dark land
And close my eyes and quench my breath
It may be I shall pass him still.
I have a Rendezvous with Death
on some scarred slope of battered hill,
When Spring comes round this year
And the first meadow flowers appear.

God know 'twere better to be deep
Pillowed in silk and scented down,
here Love throbs out to blissful sleep,
Pulse nigh to pulse, and breath to breath
Where hushed awakenings are dear ...
But I've a rendezvous with Death
and midnight in some flaming town,
When Spring trips north this year,
And I to my pledged word am true,
I shall not fail that rendezvous.

Alan Seeger  (1888-1916)


Let me suggest to you that it is dangerous to continue to provide banking services to any Politically Exposed Persons who, for one reason or another, have either been barred from entering the United States, or have had their visas cancelled. These individuals are generally the worst of the worst: corrupt PEPs who are taking bribes and kickbacks, looting government treasuries, violating human rights, or engaging in illegal activities, and there is sufficient evidence to bar them from coming into the US, spending their dirty money, and enjoying all that America has to offer.

 I am particularly offended at those Haitian PEPs who maintain multiple mistresses in Miami, ladies who freely and lavishly spend their paramours' money, which is often stolen from the poorest country in the Western Hemisphere. Why those individuals still have multiple entry visas astounds me.

In many cases, when a corrupt PEP has his or her visa taken away, it means that an OFAC sanction, or criminal indictment is not far behind. Do not get caught with an open account for this individual when the shoe drops. Many commercial off-the-shelf high risk databases list this persona non grata status when it is known, and rumours of such pariah status also surface on the Internet, particularly on opposition websites.

Do not let the lure of a well-heeled new foreign client trump your compliance prudence. Is the client sending in funds from overseas ? Does he no longer come into the US in person ? Why not ? Find out why he sends emissaries to make his large deposits.

Thursday, November 10, 2011


Yesterday, another earthquake struck in Eastern Turkey, reportedly measuring 5.7 on the Richter Scale. The disaster was in the same general area as the 7.2 quake that occurred last month, and resulting in over 600 deaths. Though initial reports are incomplete, there has been substantial property damage, and emergency efforts are underway to rescue people from the rubble of collapsed buildings.

Coming so soon after the October quake, expect global relief and recovery efforts to ramp up again, and for aid and assistance to flood in from other countries, especially financial help. Whilst desperately needed, such activities often allow money launderers and other financial criminals a window of opportunity to provide material assistance to terrorist organisations, masked as aid relief.

As we warned you after the first earthquake*, it is highly possible that PKK** financiers will seize upon this natural disaster to send funds to their organisation, which is also located in the area. Remember to carefully examine any charitable organisation, NGO, fund, or other entity,  not well known to you, who seeks to avail itself of your bank, and send funds.

Recent PKK attacks inside Turkey were especially violent, causing the Government of Turkey to conduct a major cross-border raid, into northern Iraq, in response. given that the PKK is a specially designated global terrorist organisation, do not expect any leniency from regulators,  should your compliance department negligently assist in funding this terrorist group. Expect the US, in particular, to be severe with the imposition of fines and penalties, should you send funds to the PKK, to further cement the Turkish-American relationship. Do not let your bank be a casualty of the war on terror, due to 2011 Middle East politics.

*Earthquake in Turkey = Possible Terrorist Financing Opportunity
** Kurdistan Workers' Party.

Wednesday, November 9, 2011


The President of France, Nicolas Sarkozy, has named eleven jurisdictions he labeled tax havens for their lack of transparency, and failure to maintain effective information exchange with other countries on tax evasion matters. In a speech delivered at the G20 Summit, he called upon all nations to ostracise these countries. He named the following:

(1)   Antigua
(2)   Barbados
(3)   Botswana
(4)   Brunei
(5)   Panama
(6)   The Seychelles
(7)   Trinidad & Tobago
(8)    Uruguay
(9)    Vanuatu
(10)  Switzerland
(11)  Uruguay

Compliance officers charged with the assessment of country risk at their financial institutions please note that all the remaining G20 countries have now ratified the Convention on Mutual Administrative Assistance in Tax Matters*. The failure of the jurisdictions listed above to qualify may directly affect their country risk levels.


Note well that Daniel Glaser*, the Assistant Secretary for Terrorist Financing & Financial Crimes, who will shortly be visiting Beirut, to warn about Syrian evasion of international financial sanctions through Lebanon, is also stopping off in Amman. Jordan is apparently another important target of the US Treasury for Syrian evaders.

If the US is briefing the authorities in Amman, they must already have evidence of Syrian sanctions evaders working through Jordanian financial sector. If your clients include companies that trade with Jordanian firms, have investments or businesses there, or Jordanian expats who receive money from home, you should ensure that they are not fronting, or unwittingly facilitating, Syrian transactions.
*Assistant Secretary Glaser to visit Russia, Lebanon, Jordan

Tuesday, November 8, 2011


The Department of the the Treasury continues its "take no prisoners" programme regarding companies that have done business, directly or indirectly, with Iran.The Office of Foreign Assets Control has released the 8 November edition of its Enforcement Information*, naming & shaming two US companies for violations of Iranian Transactions Regulations.

(1) Wilson Tool International Inc. : A Minnesota company paid a $15,000 penalty for exporting tooling equipment to Iran without an OFAC license.

(2) ASF, Inc. : An Alabama corporation agreed to pay $5400 for sending goods to a third country that ended up in Iran. The press release pointedly noted that the company had no OFAC compliance programme.

See the original document* for more details.



Knowledgeable sources in the Middle East have estimated that $1bn-3bn has been bulk cash smuggled out of Syria since the opposition protest movement began. The currency,  generally converted to US Dollars on the black market, is smuggled into Lebanon. The problem is, where does it go from there ?

Lebanese restrictions on both cash deposits and conversion to other currencies makes placement of this "flight capital" difficult at best. Therefore, look for it to travel elsewhere, without being declared. Have you opened accounts recently for Syrian expats, or Lebanese businessmen who could be fronting for others ?

Fallout from the Arab Spring includes the transfer of illicit wealth, as well as genuine refugee businessmen presenting themselves at your bank. Let we warn you that even Enhanced Due Diligence may be insufficient to separate those with dirty money from the legitimate. Source of Funds information may be outright impossible to obtain; references bought, and PEP status cleverly concealed; Watch yourself with Syrian money, knowing that most successful businessmen were somehow connected to the regime.

Monday, November 7, 2011


If you read Money Laundering Bulletin*, you can access this column directly from the MLB home page. Look for the hyperlink on the right-hand side of the page.



Reports from Venezuela indicates that the surviving senior leadership of the FARC, having fled Colombia after the death of their supreme commander during a battle with the Colombian Army, are now in hiding in Costa Rica. Apparently they fear a direct confrontation with an armed opponent, and have chosen to quit the field of battle. Why were they not arrested when they arrived in Costa Rica ?

It seems that the former Venezuelan Minister of the Interior, himself on the OFAC list for providing material support to the FARC, was responsible for transporting the fleeing terrorists from Venezuela to Costa Rica, according to reliable sources.  Emails between the ex-minister and the FARC were found amongst the files inside the computers seized by Colombia during the daring cross-border raid into Ecuador a few years ago.

For those law enforcement officials who may be interested, they are believed to be at the CVG Alunasa factory, in Puntarenas Province, which is owned by a Venezuelan company. The FARC is still a Specially Designated Global Terrorist Organisation (SDGT).



The Tunisian Republic has reportedly issued an international arrest warrant for Suha Daoud Arafat, the widow of PLO Chairman Yasser Arafat, on corruption charges. The warrant was issued by the Tunisian Court of First Instance. Mrs. Arafat, who had resided in Tunisia for a number of years, was engaged in a joint venture with the wife of ousted Tunisian President Zine El-Abidine Ben Ali, who with her husband was convicted, in absentia, of embezzlement and misuse of public funds, and sentenced to 35 years in prison.

Mrsa. Arafat's Tunisian citizenship was previously revoked, and she is believed to be presently living in Malta. Whilst Yasser Arafat was alive, she reportedly received $100,000 per month, from the Palestinian Authority, from donor funds allegedly diverted by her husband, to support her opulent lifestyle in a five-star Paris hotel. She reputedly had an entire floor at the Hotel Bristol, where such accommodations cost $19,000 per month at that time.

 She was investigated by French authorities, in connection with multi-million dollar transfers into her accounts from Swiss banks. Yasser Arafat was suspected of having a personal fortune of $1bn-3bn, held in accounts in banks located outside the Palestinian Territories.


Sunday, November 6, 2011


A Texas automobile dealer who laundered the proceeds of crime for narcotics traffickers, operators of prostitution rings, and mail & wire fraudsters was sentenced* last week to serve more than fifteen years in Federal Prison. Richard Alan Arledge, who was charged with money laundering, money laundering conspiracy, and conspiracy to launder monetary instruments, sold luxury care, including Bentleys, Aston Martins and Maseratis, to individuals for cash, delivered in paper bags and pillowcases, all of which was not declared to regulators.

Arledge set up the transactions thus:

(1) He accepted the cash payments for sales, but booked the transactions as leases, so that his company could seek to reacquire any automobiles later seized by law enforcement.

(2) He titled the "leases" in the name of third parties, to hide the identities of the true owners.

Given the circumstances, does the sentence handed down, 188 months, taken into account the seriousness of the crime ? I believe so; the defendant willfully violated the reporting requirements on cash payments of over $10,000, hid the details of ownership, and laundered the illicit profits of his clients.
*United States vs. Arledge, Case No.: 09-cr-00089-RAS-DDB (SD TX).

Saturday, November 5, 2011


Remember Swiss lawyer Hans Bodmer ? He pled guilty* in the United States to Money Laundering in 2004. Why has he never served a day in prison, you ask; he has never even been sentenced yet. He was the star witness in the 2009 corruption trial of American handbag manufacturer, Frederic Bourke, and the US Government let him return to Switzerland, to resume the practice of law.

My readers may remember that I wrote about Bodmer a while ago. He was reappointed to the board of directors at Hyposwiss Private Ltd. The bank's press release at the time stated that he was an experienced private banker, and it was stated that he had not been violated Swiss law. It appears that the bank did not consider that his American conviction, for money laundering, disqualified him for the board appointment. What were they thinking ?

Apparently, their faith in him was misplaced. Bodmer has reportedly been accused of participating in a new money laundering scheme. His conduct has been reported to the Swiss regulator, FINMA. His immediate resignation has been announced by the bank.

Bourke is now appealing his conviction, alleging that Bodmer committed perjury at the trial. Perhaps someone at the US Attorneys' office might now want to bring Mr. Bodmer back from Switzerland, and finally sentence him, in a case filed in 2003. Why on earth did they not sentence him after his 2009 testimony was completed, and they got their conviction of Bourke ?

Having been a career money launderer myself, I can testify, from experience, that the only
way to stop someone from  going right back to this kind of conduct is to incarcerate him. Whoever the agents were who had the bright idea to send him back to his Swiss law office, they do not understand how money launderers operate. You incapacitate money launderers, through incarceration, to take them out of circulation; you do not coddle them.
United States vs., Bodmer,  Case No: 03-cr-00947-SAS (SDNY).


The possibility that Greece might exit the Euro-zone has, I am sure, not escaped the attention of Europe's more enterprising money launderers. As compliance officers should be fully aware, the fiscal chaos which  occurs during currency changes, presents a golden target of opportunity for laundrymen who are seeking to clean the proceeds of crime, especially since much of it is held in Euros and US Dollars.

There are two ways that financial criminals, and their advisers, could benefit in a major way from the return to the Drachma:

(1) Euros earned from criminal activity (mainly, but not exclusively, drug trafficking) could be wired into  Greek financial institutions, to be converted to local currency. We know, from similar events, that neither law enforcement nor regulators have the manpower, or political will, to vet each and every individual or entity changing money. This moves illicit funds one step further along the wash-dry-fold cycle of laundering.

(2) Bulk cash smuggling Euros, as well as stronger currencies, such as the Swiss Franc, The Pound, and the Dollar, for exchange on the "unofficial" market, in a period when the population has lost faith in the government's ability to support a local currency, could yield Drachmas for the laundryman.

Even though it appears that the chances that Greece will leave the Euro-zone have diminished, rest assured that some money launderers have already moved criminal proceeds, just in case. Laundrymen read the financial pages, too. Have you seen any strange, large transfers to Greece, from clients who have no prior history of operating there ?


Alfonso Cano, the supreme commander of the designated global terrorist organisation known as the FARC, the Revolutionary Armed Forces of Colombia, was killed this week in Cauca Province, in a gun battle with the Colombian Army, along with a number of other FARC operatives. There reportedly was a $3.7m reward for his capture. The death of Cano, whose real name was Guillermo León Sáenz, is the latest in a number of successful operations conducted against the FARC recently, which have reportedly greatly weakened it.

Note well that six laptop computers, together with 39 memory sticks, were seized after the battle, which could assist the Government of Colombia in following the trail of FARC money launderers, who are responsible for cleaning the organisation's illicit profits from narcotics trafficking, kidnapping and extortion. The information gleaned could also identify FARC members and associates in the financial services industry, both inside Colombia, and outside the country, especially in Venezuela and Panama.

Money launderers working for the FARC may now fear that they, and funds entrusted to them, are at risk, and might seek to move both to a new, and therefore safe, jurisdiction. I would, therefore, look closely at any large transfer of US Dollars, from traditional offshore financial centres in Central America and the Caribbean, to countries further afield, especially in Asia. Frightened money launderers may betray themselves by their insistence that wire transfers are urgent; Watch for them.


Thursday, November 3, 2011


The Royal Canadian Mounted Police Border Integrity Unit arrested Jeffrey Melchior, as he attempted to bulk cash smuggle US$2.6m into the United States from British Colombia, aboard an inflatable boat. Melchior, who reportedly dumped the plastic-wrapped cash into the water when he saw he was about to be intercepted, is from Lake Cowichan, Vancouver Island.

Melchior has been charged with:
(1) Laundering the proceeds of Crime.
(2) Possession of Property Obtained by Crime.

Canadian marijuana traffickers who sell their "BC Bud" frequently receive US Dollars from their American buyers, and they cannot readily convert those notes into Canadian currency. Therefore, bulk cash smuggling is the most common solution. Canadian media reports that his first court date is 21 November in Victoria, presumably in Provincial Court.

Compliance officers at US banks anywhere near the Canadian frontier are cautioned to never accept US currency from Canadian nationals without first satisfying themselves that the cash is from lawful business
activity, and that this can be documented for your files.


Wednesday, November 2, 2011


Viktor Bout, the accused arms trafficker known to the media as the Merchant of Death and Lord of War, was convicted in US District Court* in New York Court today, on all four counts. He faces a possible maximum sentence of life in Federal prison for his crimes.

Bout was convicted of:
(1)  Conspiracy to Murder American citizens.
(2)  Conspiracy to Kill Officers and Employees of the United States.
(3)  Conspiracy to Acquire & use Anti-Aircraft Missiles.
(4)  Conspiracy to Provide Material Support to a Foreign Terrorist Organisation.

His sentencing has been reportedly scheduled for February.
*United States vs. Viktor Bout,  Case No.: 1:08-cr-0365-SAS (SDNY).


His name is Mustafa Setmariam Nasar*, and he is the member of Al-Qaeda who is believed to have been the intellectual author of the Madrid Train Bombings,** after which he used his Spanish passport*** to flee to Venezuela. Upon arrival, he was met by an official escort, who served as his bodyguards during the approximate year that he spent openly living in the country. The question is: since the US knew he was there, why did it not apprehend him, using special operations forces ?

Nasar, a prominent jihadist ideologue and author, who lived for a time in the United Kingdom, was in 2004 named to the FBI Most Wanted List, with a $5m reward for his capture. Whilst he was living in Venezuela, he visited the Caracas mosque regularly, and spent time on Venezuela's Isla Margarita, home to a large contingent of Venezuelans of Arab descent, and the preferred venue of agents of a number of designated global terrorist organisations, both of the Middle East, and Colombia.

This individual, who was clearly the most important terrorist target in the Western Hemisphere in 2004 and 2005, was known to US law enforcement, and his activities monitored, but never taken into custody whilst in Venezuela. Why was he ignored ? I doubt that there were reservations about violating Venezuelan territorial sovereignty, in light of the Global War on Terrorism.

The opportunity passed when he returned to the Middle East. In 2005, there was an single report that he had later been captured in Pakistan, by local forces, and thereafter turned over to the United States. No official confirmation was ever issued by the US, but his $5m reward was quietly deleted on government websites.

It is rumoured that he spent a number of years in custody at the American military base in Diego Garcia, that part of the British Indian Ocean Territory which is leased from the UK. The trail goes cold after that. Dead or alive, or still in custody ? We cannot say, but the Spanish Government officially enquired, to the US, about his whereabouts, in 2009. He has never been brought to justice for a terrorist act that claimed almost 200 Spanish citizens.

The question: why was he not captured when he was in America's backyard ? ______________________________________________________________________
*He is also known as Abu Musab Al-Suri.
** 11 March, 2004.
*** Nasar is a Syrian; he obtained Spanish nationality through marriage to a Spanish citizen and having lived in Spain for a number of years.

Tuesday, November 1, 2011


In an effort to stem both tax evasion as well as capital flight, presently estimated at $3bn a month, the Government of Argentina this week instituted a particularly effective regulation. Argentine nationals seeking to convert their Argentinian Pesos to US Dollars, or any other foreign currency, must first pass muster with AFIP, the national tax agency.

This means that a person's national identification number, and tax number, must be fed into the AFIP database* for approval; the amount requested to be exchanged for foreign currency must match his or her declared income and wealth. otherwise, approval is declined. In a country where rampant tax evasion is the national sport, most enquiries will not be approved.

What is a problem for legitimate traders and international businessmen unfortunately has an easy solution; money launderers for narcotics trafficking organisations have large amounts of dollars, which they want to quietly convert to pesos, as a necessary precondition to investing the money in the legitimate Argentine economy. The dollars, which are earned in the US, have been bulk cash smuggled into South America. Match up the businessmen with the laundrymen, and you have the perfect storm for the money launderer.

Remember well that, in the dark profession of  money laundering, you are only limited by your imagination. What the Argentine Government has implemented as a tax evasion/capital flight solution presents itself as a target of opportunity for the money launderer working for narcotics kingpins interesting in making large placement of laundered funds in Argentina. Let's hope Argentine law enforcement can catch them in the act.