Saturday, June 30, 2012


The Second Circuit Court of Appeals has affirmed the 120 month sentence of New York attorney Lynne Stewart, who was convicted of rendering material assistance to a terrorist organisation. Stewart, who was a member of the legal team representing convicted terrorist Sheikh Omas Ahmad Ali Abdukl Rahman, passed messages back and forth to the Sheikh's terrorist organisation, notwithstanding her obligation to refrain from assisting in the operation of his terrorist organisation during her contact visits.

Attorneys representing defendants accused of providing material support to terrorism, or other terrorist acts would be well advised to review the decision.
* To view the 51-page decision, for to the 2nd Circuit website here ;
then, go to decisions rendered during the last 7 days.
United States vs. Lynne Stewart,  Case No.:10-3185 (2nd Cir. 2012).


If you are following my coverage of the extensive litigation against Atlantic Rim Funding Corp., Steven Dean Kennedy, and their Texas lawyer, Jay Mac Rust, because you failed to receive your escrow deposit back, after the promised loan was not funded, it is because you failed to conduct a due diligence investigation of these fraudsters before parting with your money.

Three years ago, Steven Dean Kennedy, a/k/a Stephen Dean Kennedy, a/k/a Dean Kennedy, borrowed $650,000 from two New Jersey investors, ostensibly for his Nevada corporation, West Coast Holdings Group, Inc. he personally guaranteed the loans, which was for a 30 day term, at 17%. After 30 days, it was to earn interest at 22%. It was to be collateralised by a "Lloyds of London insurance policy."

Of course, the collateral never materialised, Attorney Rust disbursed from "escrow" without authorisation, first  paying himself an $8,000 attorneys fee from the money. of course, the money was not repaid, and the defendants' lawyers are dragging out the lawsuit ad nauseum. Rust's lawyer filed 27 Affirmative Defenses; his client broke escrow, a breach of his fiduciary responsibility, and he denies it. What's wrong with this picture ?

For three years, the case* has been embroiled in litigation, in US District Court in New Jersey. If you, or your professional advisers, had checked out Kennedy BEFORE you gave him any money, you would not be in this dire situation now. Never, never go into business, borrow money, sign a contract, or engage in any substantial business transaction without first completing Due Diligence, or Enhanced Due Diligence, on all interested parties; Check before you invest.
* Anita Hyman and Jay Hyman vs. Steven Dean Kennedy, West Coast Holdings Group, Inc, and Jay Mac Rust,  case NO.: 10-cv-06237 (D NJ).

Friday, June 29, 2012


This article is not intended as a bad joke. Money laundering of illicit profits, and bribes & kickbacks obtained by Chinese PEPs, and money moving overseas to evade taxes, is out of control. The recent scandal, where a senior Chinese official, slated to become a member of the council that rules China, was exposed for corrupt activities, after his attorney wife reportedly poisoned a british businessman to death, when he refused to move illicit cash, is but the tip of the iceberg. What is China doing in response ?
Some executions are still carried out using firearms

The widespread use, by money launderers working for Chinese PEPs, of British Virgin Islands companies to hide funds from China, facilitates successful laundering of illicit funds outside China. The utter failure of China to reign in its money launderers could result in the maximum punishment for those it does catch. Does it ?

I know, from personal experience, that if I knew that the maximum punishment for money laundering was the death penalty, I'd probably get out of the business. I am betting that the execution of a few individuals who are caught moving millions of dollars of illicit client wealth offshore might just intimidate the vast majority of money launderers working for Chinese PEPs.

China currently executes its officials for corruption; is not money laundering, which facilitates the placement of the proceeds of crime, just as important to them ? Are money launderers being charged with multiple offences and then executed ?

Chinese mobile lethal injection van


If you were one of those Panamanians who wondered where Panamanian President Ricardo Martinelli went, when he disappeared for several days whilst on a purported "tourism development" trip to Greece, you need wonder no longer. Martinelli, and his entourage, apparently made a beeline the Republic of Azerbaijan, and they didn't exactly travel there for the scenery.

First of all, with the Greek economy in the toilet, there weren't going to be many of that country's citizens visiting anywhere abroad this year or next. The trip, according to inside sources, had two goals not on the menu:

(1) Give Martinelli's Presidential Minister a brief visit to the country where his family came from.

(2) Serve as a cover for a banking side-trip to Azerbaijan, where it is reported local banks were visited, and large deposits made.

The question remains: whose money was it ? Martinelli, and his sons, reportedly have become extremely wealthy since he took office a couple of years ago. His Global Bank empire, with its many affiliates and subsidiaries, appears to have been very successful.

 Additionally, he is engaged in a number of businesses, across the entire spectrum of finance and real estate, with his long-time partner, Gary Lundgren, but many of those joint businesses have been accused of fraud, grand theft, conversion and sundry other white-collar offenses.

Remember, Martinelli is dealing with major issues; he is the primary target of an Italian criminal investigation into corruption. He is also a target of United States law enforcement agencies, due to his extensive ties to convicted Colombian Ponzi schemer David Helmut Murcia Guzmán, also closely linked to Lundgren.

Readers who doubt the truth of this information may want to consult with aviation experts, who can access industry information sources, and confirm the presidential aircraft's routes of flight, overnight stops, and onward travel to Switzerland.

Whether Martinelli's administration can survive Opposition efforts to unseat him is unknown, but what is known is that Panama's president is funneling money into Azerbaijan, in what is obviously a desperate move. Whose money was he moving ?

Thursday, June 28, 2012


This government-supported extreme form of patriotism, what we call jingoism, is clearly behind China's aggressive actions in the South China Sea. Now, multinational oil companies have been offered blocks of territory inside Vietnam's Continental Shelf, by China. This could embroil the region in a major conflict.

Do the Chinese really believe they can intimidate all the nations who also border that strategic waterway into submission ? Given that the shipping routes through the region are key avenues for oil and goods passing to and from Northeast Asia, the West, especially the United States, will ensure that these lanes remain open.

The territorial dispute, which has never been resolved, will only continue to raise tensions in the area, so long as China continues to be unreasonable. Someone in Beijing needs to reread their history books; it was an expansive Imperial Japan that came to a bad end when it awakened the sleeping tiger.

American influence in the Western Pacific is not on the wane; to the contrary, it seeks to re-establiash old ties with the Philippines, and partner up with a former adversary, Vietnam. Shall we now listen to some wise Vietnamese commentators, and refer to it now as the Southeast Asia Sea ? Why not ?

Wednesday, June 27, 2012


F-16 Falcon

Arrests were made made this week in Miami of Venezuelan nationals, working for the local Venezuelan Military Acquisitions Office, who have been charged with purchasing fighter jet and helicopter parts, and shipping them to Venezuela, in violation of the existing US arms embargo regarding Venezuela.

Those arrested*, including a former Venezuelan Air Force fighter pilot, face sentences of up to ten years in Federal Prison, and a $1m fine, per count. F-16 parts were included in the illegal shipments, some of which were diverted from their purported end user, Spain.

If that bothers you, read this. The most disturbing news from Venezuela this week is the disclosure that, in 2006, its government disassembled F-16 fighters that it had received from the United States, and shipped the parts covertly to Iran, for reassembly and inspection. Given that both the US and Israel, Iran's adversaries in any future conflict, have the F-16 in their air forces, this could give Iran an advantage in adjusting its air defences. Venezuelan pilots reportedly assisted in demonstrating the aircraft's capabilities. Connect the dots regarding the parts, and you know where they went.

Iranian leader in Caracas last week

 Other sources say that Venezuela shipped F-16s to other countries whose governments oppose the United States. At least a dozen F-16s delivered by the United States are missing. The Government of Venezuela maintains a close relationship with Cuba, North Korea, Syria and China. Exactly where are those aircraftr. Sr. Chavez ?

If you are a banker whose clients are shipping dual-purpose goods to Venezuela, goods that could be transshipped to Iran, and support that country's illegal WMD and ballistic missile programmes,  then  I suggest that you obtain sufficient written assurances that Venezuela is the end user. Prepare an affidavit for the client to execute before a Notary Public; If the client will not sign, exit the client.

F-16 Cockpit

*United States vs. Alberto Pichardo, Case No.: 12-cr-20478/20479-WPD (SD FL).


The Socialist Republic of Vietnam has lodged objections to China's announcement that it will auction off oil exploration rights to 64,000 miles of South China Sea territory that lies within Vietnam's Exclusive Economic Zone. China has improperly opened bidding upon nine offshore blocks, because they are wholly within Vietnam's EEZ, pursuant to international law.

Top add insult to injury, China announced that four of its China Marine Surveillance Ships, also known as CMS, have put to sea from the Chinese port of Sanya, and have commenced patrol operations throughout the South China Sea. China claims the entire region as its sovereign territory, Notwithstanding claims to portions of the area by Vietnam, the Phillipines, Malaysia, Indonesia and Brunei. This constant Chinese presence could trigger additional incidents with China's neighbors, and thus raise the risk of conflict in the region.

Should one or more of the world's oil conglomerates purchase these rights from China, and attempt to commence exploration within Vietnamese waters, there will be trouble in the South China Sea.

 China sees the region as a Chinese lake

Tuesday, June 26, 2012


Gary Lundgren

Though the political fate of Panamanian President Ricardo Martinelli remains unknown, should he relinquish power, voluntarily or otherwise, or be exiled, what will happen to his business partner, Gary Lundgren ? Lundgren, who is the president and shareholder of several Martinelli companies, including Global Finance and Investments SA, and Global Valores Inversionista, SA, has criminal charges of fraud pending against him in Panama. Will he now face justice ?

Both Lundgren and Martinelli had extensive business dealings with convicted Colombian Ponzi schemer David Eduardo Helmut Murcia Guzmán, who is now cooperating with American authorities investigating the $200m Murcia moved into Panama when he was perpetrating his massive fraud. Both of them are believed to be holding extensive Murcia assets, which were converted when the Ponzi schemer was arrested, and quickly extradited to Colombia, to stand trial.

Murcia Guzmán

 Who now controls a sizable portion of the Murcia bank accounts and who has possession of the real estate, owned by corporations with bearer shares ? We have previously covered bearer share fraud*, and it is high time those fraudsters pay the price for their crimes.

When your protector loses his power, you usually lose your immunity from prosecution. It will be interesting to see what happens next in Panama.

*Bearer Shares Fraudsters fleece Fraudsters in Panama


For those who wonder just how widespread bulk cash smuggling is in the Caribbean, Jamaica's Assets Recovery Agency has taken legal action to seize $1bn in real estate, and motor vehicles, from Jamaican businesswoman Carol Lawrence-Austin, charged and alleged by the authorities to be a major money launderer for narcotics trafficking organisations. Eight properties have been named, and several motor vehicles.

You may recall Ms. Lawrence-Austin's sister, Jean Therese Brown, who was convicted*, in Baltimore, Maryland, of being the ringleader of a posse of bulk cash couriers who smuggled cash out of the US, and into Jamaica. Ms. Brown is presently serving a 37-month sentence for Bulk Cash Smuggling. Two of her couriers, who have not been named, are believed to be cooperating with authorities.

Relatives of Ms. Lawrence-Austin and Ms. Brown, also charged are:

(1) Mavis Grant
(2) Patrice Christie
(3) Gentles Mott
(4) Paula Barrett
(5) Eustan Gillespie

Dun's River Falls
*United States vs. Brown,  Case No.: 10-cr-00420-WDQ (D MD).

Monday, June 25, 2012


The latest statistics published in the Republic of Panama show that Foreign Investment declined 15.3% during the first three months of 2012. How much of this can be attributed to President Martinelli's obvious efforts to move Panama towards a Noriega- or Chavez-style dictatorship ? It is hard to say, but if foreign investors are looking elsewhere, Panamanians should sit up and taker notice..

Remember, Panama's virtual 100% employment is due, in large part, to the construction boom the country, especially Panama City, has enjoyed in recent years. Should foreign money decide that risk levels are increasing, a large part of it may not only invest elsewhere, but foreign wealth could exit Panamanian banks, en masse, if conditions do not improve. This would then contract the previously expanding economy, cause the loss of jobs, both white- and blue-collar, and thereby raise Country Risk, something nobody wants to see.

Will Martinelli resign, or be cashiered ? Many Panama watchers believe that he will simply lose direct power, which will be held by others in the government in a non-transparent way, but save face by keeping his presidency until the next election.  Which outcome do you prefer ?

Sunday, June 24, 2012


The Daily Mail Sunday edition has published a portion of my new book, The Laundry Man, in its magazine section, Live. You can access the article here. The Laundry Man - Limos, Learjets and Bundles of Cash.The book is available at a number of online resources, in either electronic or print versions. It goes on sale at booksellers on 5 July throughout the United Kingdom .

Thank you for your interest in The Laundry Man.  If you need additional information, kindly email me at:
Photograph by Miami photographer Angel Valentin.


Vietnam's Exclusive Economic Zone

The Republic of China (Taiwan) has objected to Vietnam's legislation including the Paracel and Spratley Island groups into its national territory. Taiwan's claims add an unwanted dimension to the international controversy, for they do not appear to have any merit in either history, geography or international law, and they only serve to increase regional risk of conflict.

The Taiwanese Ministry of Foreign Affairs, reacting to Vietnam's passage of a maritime law that formalises the inclusion of these islands into its territory, claimed that they are inherent parts of the territory of the Republic of China. The Taiwanese statement alleged sovereignty over the Paracel and Spratley Islands .

Geography clearly validates Vietnam's claims to both island groups, which lie east of the Socialist Republic, and adjacent to, or within, Vietnam's Exclusive Economic Zone, and far from both China and Taiwan. Reference to any map of the South China Sea confirms that Vietnam's proximity to both disputed groups.

The Taiwanese claim appears to be totally without merit at international law. The Republic of China occupied portions of these island groups only after the Second World War, after Japan vacated them and renounced its existing claims, but Taiwan abandoned them soon thereafter. Claims based solely upon an old (circa 1947) Chinese map, without actual possession before 1945, cannot be sustained.

China claims the entire South China Sea

China's claims also fall short, due to the inclusion of both island groups in Vietnam, from the seventeenth century, and the administration of the islands, as a part of French Indochina, in the twentieth century. It seems clear that, between Vietnam on the one hand, and China and Taiwan on the other hand, Vietnam has the primary right to sovereignty.



Accused master laundryman Oscar Lázaro Sánchez has entered a plea of not guilty to money laundering charges, in US District Court in Miami. He is accused of moving $63m in healthcare funds, obtained by his clients in a massive a massive fraud, into bank accounts in the Republic of Cuba. It is not known where else the criminal proceeds ended up, but as the case progresses, we may learn more.

Sanchez operated a low-key cheque cashing enterprise in an obscure strip mall in Naples. Florida, known as Estates Business Centre. He also owned a medical billing company, called "All About Billing," but it is not known whether he used that entity to defraud the United States Government out of Medicare funds, or to facilitate payments.

Republic Bank, the Trinidad & Tobago financial institution that Sánchez cleverly used to funnel illicit funds from Royal Bank of Canada accounts he controlled in Montreal, through Republic's Havana branch, and into Cuban banks, has issued a statement denying that he was a client, though not identifying Sánchez by name. The bank  noted that it maintained an exemplary anti-money laundering programme, but otherwise declined to comment on the case.

Sánchez reportedly used accounts of fifteen shell companies, through which he transferred the funds. How an individual, over a period of four years, could have moved such a large amount of money through the Royal Bank of Canada's Montreal branch, in the absence of a large legitimate company, with established lines of business, is a question that Canadian regulators, particularly FINTRAC, should be asking senior bank leadership. To call this Compliance Malpractice is an understatement. Was someone in the bank paid to ignore the red flags of money laundering ? We cannot say, but we hope that the RCMP is investigating.

Cuban authorities have denied that they had any part in the money laundering operation, but since even a small amount of cash cannot be deposited into the government-controlled banking system without approval, bribes were certainly solicited by Politically Exposed Persons in Cuba, and large payments to the Cuban Government itself, certainly made, or the accounts would have never been permitted. AML compliance as we know it does not exist in Cuba, provided that you have enough capital to grease your way into, and out of, the system.

The United States Department of Justice can neither touch the Cuban nationals who fled home after conducting their Medicare fraud, nor the money on deposit there, as the financial system has been totally divorced from the American financial structure for decades. All it can do is imprison Señor Sánchez. How does 20 years sound ? Sánchez is believed to have arrived on the 1980 Mariel Boatlift, as a teenager. I wonder if the money will still be around when he gets out.


Sources in Panama continue to paint a disturbing picture of events. Here is the latest we have:

(1) President Ricardo Martinelli has reportedly backed down, and will drop the new suit he has filed against the Electoral Judiciary. He had sought to charge them with Abuse of Power and Abuse of Authority, in an effort to remove them, as a means of obtaining a way around the laws regarding Presidential Succession. It is rumoured that he agreed to cease and desist in the suit after receiving a call from a senior representative of the United State Government.

(2) Martinelli, alone amongst Latin American leaders, has endorsed and recognised the abrupt, (and extralegal) removal and replacement of the President of the Republic of Paraguay.

(3) Panamanian students have been in the streets again, calling for Martinelli's resignation. Readers in Panama City who questioned my use, yesterday, of riot photos, may want to look outside their windows today.

We shall continue to report on events in Panama as they unfold.

Saturday, June 23, 2012


The Shape of Things to Come ?

One of Panama's major newspapers is warning foreign nationals and visitors to be on the alert for violent protest actions, by the political opposition, who are seeking the immediate resignation of President Martinelli. Whilst US and UK authorities may eventually issues similar warnings, it is prudent to expect that one or more of the following will occur this coming week:

(1) Blocking of major roadways in Panama City, which happened this week.
(2) Violent demonstrations, of the sort that occurred this week.
(3) Labor strikes.
(4) Food shortages in stores. This has been seen in several neighborhoods, as residents stockpile food, fearing a breakdown in normal supply channels.
(5) Electric and other utility outages; Expect blackouts to occur.
(6) Widespread police arrest and detention of Opposition members, demonstrators, student protestors, and bystanders as organised protests. You are advised to immediately leave the scene of any demonstration, lest you be tear gassed, injured, or even arrested.
(7) A coup d'etat. This could involve extensive loss of life.

Will Panama return to this ?

This is NOT a good week to travel to Panama, even if your business requires it. Financial institutions, law firms, major companies, government offices, and administrative offices may be closed, damaged by demonstrators, by fire, or ordered shut by government. If the airport is later closed, or major airlines temporarily terminate service, you may not be able to leave, other than by surface transport to another capital in Central America, which involve an arduous journey.

Is Panama burning ?

Please take this warning seriously. If the language looks similar to that used by the US State Department, it is because much of it was  taken from a confidential memorandum sent to US nationals from the American Embassy.


Opposition leaders have long maintained that Panama's President Ricardo Martinelli is seeking to change existing Panamanian law, or to manipulate the system, to allow him to serve an additional term as Panama's leader. Presently he cannot run again, due to presidential term limits.

Reliable sources report that they have seen a copy of a suit, filed by him in the Supreme Court of Panama, against the sitting judges of the Electoral Tribunal (Court), and their alternates. named in the suit are the following magistrates:

(1) Magistrate Gerardo Solís.
(2) Magistrate Erasmo Pinilla.
(3) Magistrate Eduardo Valdés Escoffery.

The allegations are Abuse of Office and Abuse of Authority. If successful, Martinelli could pack the tribunal with supporters, who will find a way to allow him to run again for the presidency, the rule of law notwithstanding. Can a dictatorship, similar to that which President Hugo Chavez Frias conducts in Venezuela, be far behind ?

You can expect that the Opposition will send its people into the streets again, in protest, and the chaos will predictably spill over into the business district, and result in an unsettled Panama. If Martinelli's actions result in a widespread backlash, this would directly affect Panama's status as a stable, safe, pro-business jurisdiction. Country risk levels would rise to unacceptable levels, and the economy, and the safety of assets and investments would decline.

We shall be monitoring all developments in Panama as they occur.