Sunday, September 30, 2012


Add captionSheriff and the seized notes

Nigerian authorities have arrested Abubakar Tijani Sheriff, a/k/a Abdul, at Murtala Mohammed International Airport ,* after he was found to be carrying $7,049.444, the equivalent of one billion Naira, which had not been declared. The arrest was announced by Nigeria's Economic and Financial Crimes Commission, the EFCC, who stated that Sheriff's travel records indicated that he was a regular international traveler, though he is only 24 years old; he is suspected of being a bulk cash smuggler.

Nigerian law apparently does permit cash movement, but does require that Source of Funds, and the reason for export, be declared. Sheriff was traveling from Lagos to Dubai, UAE. He reportedly admitted that he was carrying cash for twenty unidentified clients. The EEFC issued a statement for the benefit of the business community, to the effect that, should they wish to move capital out of the country, to use the banking system to accomplish that goal.

* More commonly known as MMIA. IATA code for this airport is LOS; ICAO designation is DNMM.

Saturday, September 29, 2012


The upcoming peace talks, between the Republic of Colombia and the Revolutionary Armed Forces of Colombia, generally known as the FARC, may be over before they begin, and Country Risk for Colombia could increase, due to the FARCs continuing attacks on mining and energy companies on the eve of the beginning of talks. Does the FARC have a hidden agenda, perhaps;  It has a history of deception.

What's the FARCs excuse this time ? It wants one of its senior leaders to attend: His name is Ricardo Palmera, but he is better known by his nom de guerre, Simon Trinidad. There's just one little problem: he's doing sixty years in a US prison for kidnapping and conspiracy. He is also known for placing explosives within the body of murdered child, and sending it back to his family; That is hardcore terrorism. No wonder he is serving his sentence in ADX Florence, the so-called "supermax" Federal prison.

American authorities do not seem interested in releasing him, even temporarily, for fear that the FARC will find a way to give Trinidad his freedom, permanently, and return him to his leadership role, in the FARCs jungle lair. Apparently, the assistance of the International Criminal Court, and the Inter-American Court on Human Rights has been sought, but it is doubtful that the US will agree.

The FARC request for a cease-fire was turned down flat by the President of Colombia. Whether the peace talks are doomed before they start, if your bank has major investments or exposure in Colombia, it is suggested you might want to watch unfolding developments this month in both Oslo, and on the battlefields of Colombia.


Iranian Major General Qasem Soleimani, the commander of the Qods Force*, paid an official visit to Erbil, the capital of the Kurdish Regional Government of Iraq, last week. Soleimani met with Prime Minister Nechirvan Barzani, and other senior officials.

Soleimani was sanctioned by OFAC last year, due to his involvement in the failed attempt of the Qods Force to assassinate Adel Al-Jubeir, the Saudi Ambassador to the United States. The US holds him directly responsible for a number of terrorist acts, and attempted terrorist acts, carried out the Qods Force; a retired CIA agent, testifying before the US Congress, advised that he should be specially targeted, to be killed or captured. He is believed by many observers to be the most powerful man in Iran, and there is speculation that he will be a candidate for president in Iran, in 2013. He has been sanctioned by the European Union, due to his supervision of Qods Force in-country support for the Assad regime in Syria.

He oversees all Qods Force operations outside of Iran, and Iraqi Kurdistan is a special area of interest to his organisation. It is believed that this is the first time that Soleimani has been in Erbil.; He arrived from a visit to Sulaymaniyah, where he had met with officials from the Patriotic Union of Kurdistan (PUK).

Qods Force troops
What are the political implications of the general's visit to the KRG, and how does the answer affect Country Risk for Iraq ? We cannot say, but we will be watching.


Qods Force
* The Qods Force ("Jerusalem Force") is the international arm of the Army of the Guardians of the Islamic Revolution, more commonly known as the IRGC, or the Revolutionary Guard.


His mother has been convicted of murder, a capital crime in China; his father has been summarily thrown out of the Communist Party, and faces criminal charges. Bo Guagua, whose expensive UK and US education far exceeded his father's official income, remains hidden in America. If he goes home to China, corruption charges will probably follow, so he stays in the United States.

But what about the millions of Pounds of illicit wealth, obtained by his parents, and certainly moved out of China ? Remember well that Neil Heywood was allegedly murdered over his demand for a fee from a real estate transaction. Don't you think that the money he claimed was to come from overseas holdings ?

One wonders exactly how Mr. Guagua is living these days; what about that Ferrari he denies owning ? UK and US bankers should take note: Chinese students living abroad, who are the sons and daughters of senior government and military officials, should be presumed to be involved, with their family, in secreting, placing, or even laundering bribes and kickbacks, untaxed profits, and other forms of illicit income that must remain hidden. To do anything less poses a potential danger to your bank.


It has been reported that the Republic of Moldova has deregistered a dozen Iranian vessels, due to sanctions restrictions. Mongolia has also been mentioned, in connection with the use of flags of convenience by the Islamic Republic of Iran Shipping Lines. Please note that, if the IRISL has seen fit to take advantage of the shipping registries of these two nations, Iranian financial advisers looking for new theatres of operation for sanctions evasion, and for money laundering, may also have penetrated their financial structures. Have you perhaps seen any incoming wires from Moldova lately ?


I see in today's FT that a 1974 version of this painting is offered by Dreweatts Bloomsbury. It is titled Mao Entering New York Harbour. Those who think China's actions in the South China Sea dispute does not betray further territorial ambitions,  kindly note that the original of this work was completed in 1932, by the Icelandic artist, Erró. 

Friday, September 28, 2012


The Department of the Treasury website* today reported that the US has removed the MEK, including all of its 53 known aliases, from its list of sanctioned terrorist organisations. The action was taken on the last business day before the deadline imposed, by a Federal Court in Washington, upon Secretary of State Hillary Clinton, to either remove the MEK, or re-designate it as a terrorist organisation.

Iranian media has reported that the Government of Iran has requested the extradition of the MEK leadership, to face criminal charges there. The American action, which was preceded by  extensive lobbying, conducted by former high-ranking US government officials, and retired military, has been opposed on several grounds.

Those who favoured continuation of MEK terrorist status have pointed out that the MEK, which is not a democratically-oriented organisation, is led under conditions that some call a cult of personality similar to that of North Korea. Other issues include the fact that the MEK fought on the side of Iraq in the 1980 Iran-Iraq War, and that the people of Iran do not support the MEK.

Was the decision wrong, and was it facilitated through the actions of several highly-paid prominent ex-government figures ? Only time will tell, but I frankly do not see the benefits involved, especially since there have been reliable reports of MEK activities, including fundraising, in Latin America, and other regions. The MEK will only reduce the chances of any future democracy occurring in Iran.



With the Colombia-FARC peace conference coming up soon in Norway, it is prudent to expect that the designated global terrorist organisation will be moving the funds in the European bank accounts that it maintains to staff and support its "offices." Remember that the FARCs sources of income are criminal:

(1) Narcotics trafficking
(2) Kidnapping 
(3) Protection money payments

Therefore, all the capital in those accounts is laundered money. If the anticipated demobilisation of the FARC should occur, those offices will be shuttered permanently. Just as KGB operatives diverted money during the fall of the Soviet Union, expect that some FARC "diplomats" will elect to convert money to their own use.

The FARC is known to maintain offices and/or agents in these countries:

(A) Germany
(B) Italy
(C) United Kingdom
(D) Sweden
(E) Belgium
(F) Turkey
(G) Norway
(H) Australia

Should you see favourable developments in the peace process, whether in Norway, or later in Havana, there could be substantial money movement from FARC accounts (some of which are probably shell companies that appear to be international trading companies); Watch for it.


The satellite television provider, DIRECTV, which has had previous problems involving deceptive and unfair sales practices*, is now engaging in illegal activities that affect the bank accounts of its customers. Its actions violate the Federal Fair Credit and Collection Act, as well as state criminal law.

Its collection procedures include accessing, without customer consent or approval, bank accounts, and making unauthorized attempts at Automated Clearing House payment processing. Customers who have never agreed to have funds removed from their accounts, via ACH, have reported that DIRECTV collection staff have improperly attempted to remove money from their accounts. This means that the creditor has retained the bank account information of customers who pay via check, or debit card, and
subsequently using that information in an illegal manner.

Some DIRECTV customers have reported that their banks unilaterally froze, or even closed, their accounts, concerned that there was fraud, or identity theft, involved, after multiple, repeated attempts, by DIRECTV, to access accounts, occurred. This would result in non-payment of outstanding checks of the customer.

Whether this practice results in action against DIRECTV, by Attorneys General in those states where complaints are received, is not known,  but you should be aware of this practice. The DIRECTV customers who choose to file a civil suit should recover substantial money damages.

* The 2010 $13.25m Settlement for Deceptive and Unfair Sales Practices; Restitution to consumers, by agreement with Attorneys Reneral of all 50 states.


Troopers of the Texas Department of Public Safety (DPS) conducted a traffic stop, on a Toyota Camry, on Interstate 40 near Amarillo, Texas, for a moving violation. The vehicle, which was traveling from Kentucky to Nogales, Arizona*, was driven by Maria Vega-Montano, of Tucson.

After receiving a consent to search, officers found 23 bundles of currency, totally $287,500, concealed underneath the vehicle, in what was described as an "aftermarket compartment," meaning that it was a custom-made addition, designed to carry contraband, without detection.

I-40 is a frequent route of bulk cash couriers

Ms. Vega-Montano was arrested and charged with money laundering. I wonder if she, or her employer, knew that this segment of I-40 is Texas' portion of the National Purple Heart Trail, which is dedicated to those American soldiers, alive or dead, who have been wounded in battle, in the service of their country, and received the Purple Heart. I would imagine that law enforcement pays particular attention to vehicles traveling along this route. Obviously, the money launderer in charge of this operation did not do his homework.

* Nogales is on the frontier with Mexico.

Thursday, September 27, 2012


The assertion, by both US and Lebanese officials, that the designated global terrorist organisation Hezbollah is increasing its support to the Government of Syria, equals double trouble for compliance officers at international banks whose clients trade with Lebanese businesses.

It is already high risk to facilitate international trade with Lebanon, in those instances where it is likely that the goods or services your bank clients is providing to Lebanese companies is destined to Hezbollah, as the end user. Now, one must factor in the additional danger that Hezbollah is itself shipping those goods directly to the beleaguered Assad regime, whose access is severely limited, due to international sanctions in place against Syria, due to the war crimes being inflicted upon the civilian population by the military, security forces, and militia.

Therefore, it is prudent that you demand, and receive, written assurances that the end users of your clients' goods and services be specifically named, preferably in a sworn affidavit, and that the document state that the sales are not for resale or shipment to any sanctioned entity or individual. This may not go over too well with long term clients engaged in international trade, but the alternative is major exposure to possible sanctions, fines, penalties, and reputation damage.


Wednesday, September 26, 2012


OFAC has published* the photographs of the primary operatives, and associates of the Joaquín Guzmán Loera's criminal organisation, which is more commonly known as the Sinaloa Cartel. Since these individuals are apt to use well-documented aliases, if your bank or broker-dealer regularly deals with high net-worth Mexican clients, you may want to examine their faces for future reference, or to see whether you are banking any of these career criminals.

 Joaquín"Chapo" Guzmán Loera Sinaloa Cartel Operatives


Julius Malema, the ousted head of the African National Conference Youth Wing, has been charged with money laundering. Malema, who was removed from his position, and the ANC, for a number of issues, including the support of an anti-white independence song called "Kill the Boer," and refusal to follow ANC guidelines, has been under investigation for corruption and fraud.

The prosecutor has charged that he was involved in the awarding of a massive government contract to a company partly owned by his family trust. He allegedly received R4.2m (£317,000) in the matter.


The Lebanese Minister of Industry, Vrej Sabonjian, recently stated that there will be a fourteen-fold increase in trade between Lebanon and Iran, and that Iran will be building industrial estates in Lebanon. He also is pushing for a Free Trade Zone for Iranian goods entering Lebanon.

Minister Sabonjian

Iranian Ambassador Ghanzanfar Roknabadi has also made public remarks on the expansion of bilateral trade. For the EU- or US-based compliance officer anxious to avoid violations of Iran sanctions, the existence of Iranian industrial parks in Lebanon raises the possibility that bank client purchases from Lebanon of goods made there could be viewed as of Iranian origin, particularly if they are constructed from raw materials from Iran, by sanctioned Iranian companies with Lebanese factories.

Ambassador Roknabadi

Should any of these Iranian industrial estates be completed, ironclad identification of the manufacturer of all finished goods originating from Lebanon will become the order of the day, in my humble opinion, and financing, or paying for, any goods from such named locations, or coming from a Free Trade Zone exclusive to Iran, will become unwise. Risk levels for Lebanon could also rise further. 


Mr. Burnbaum leaving NY District Court

Regular readers of this blog know well the story of disgraced former Miami criminal defence attorney, Michael Burnbaum. A former Assistant US Attorney, he was convicted of participation in a cocaine trafficking conspiracy. After serving a sentence in Federal Prison, and losing his license to practise law in Florida, he concealed the fact from the state of Massachusetts regarding his conviction, and later used his bar status there to represent a criminal defendant in a New York Federal case. The Supreme Judicial Court of Massachusetts has scheduled a disciplinary hearing for October, where he will most likely be disbarred, due to his conviction of a serious felony.

Burnbaum, or someone acting on his behalf, has polluted the Internet with literally hundreds of websites, of all types and styles, so as to move all the negative information about his life to the rear pages of a search engine query. Since most searchers know that the results are keyed to relevance, they never plow through all those good entries that have literally diluted the results, finding the truth about him at the end of the line. Thus, any searcher fails to find his felony conviction, and loss of the privilege to practise law in Florida.

That has now changed, for reasons unknown. Apparently, someone must have taken offence to his underhanded method of hiding the truth, for they have polluted the Internet with negative websites, and other entries, repeating ad nauseum the criminal conviction, in may, many places. The YouTube entries, which appear on the first page of any web search, are particularly effective.

They have even perpetrated what I can only describe as negative disinformation, most of which is obviously untrue, adding to his list of crimes:

(1) An arrest for prostitution.
(2) An arrest for use of crack cocaine.
(3) An arrest for Conspiracy to Commit Perjury.
(4) A charge of illegally bringing a handgun into a movie theatre.

The hacker inserted Mr. Burnbaum's name into the headings of videos of other individuals being charged with these crimes, making it appear that he is a multiple offender.  Untrue, of course, but highly effective when searchers troll the headings, looking for his name.

So, Internet IT types who are now making a good living packing the world wide web with garbage, to distract searchers from the sordid truth, and their clients, had better watch out, for they may just become the victims of Internet pollution, rather than the perpetrators. Turnabout is fair play, my friends, especially when it is the criminal who is now being forced to take his own medicine.

Tuesday, September 25, 2012


The increase in tension, between Japan and China, over a small chain of uninhabited islands lying in the East China Sea, has already led to anti-Japan disturbances in China, and could ultimately affect commercial relations between the two nations. This will impact Country Risk for Japan.

The problem is simple: neither China nor Japan has a better claim than the third party, Taiwan a/k/a the Republic of China, over the Senkaku/Diaoyu islands. These islands are NOT part of the Ryukyu Island chain; they are closer to Taiwan than to China. Remember, the Sino-Japanese War of 1894-95 resulted in Japan taking possession of Taiwan, as well as adjacent islands in the region. All such territorial claims were renounced in post-World War Two peace treaties. Jap[an has no legal claim. Also, the islands are outside both Chinese and Japanese EEZ.

Unfortunately, during the post-war period , the US, as occupier, gave the islands to Japan, an ally, rather than return them to Taiwan. There's the root of the problem.

Perhaps some international body can set things right, for right now, the two claimants fighting over the islands are increasing, not reducing regional risk. I am uncomfortable with photos of Japanese soldiers training with US Marines in Guam. Right now, the international community is having enough trouble with the South China Sea issue; this additional problem only destabilises East Asia further, when it comes to County Risk.

East China Sea

Monday, September 24, 2012


The Family Office, full-time tax and investment advisors who administer the business and personal finances of wealthy families, is not immune from compliance risk. The delivery of financial services, that would otherwise be delivered by an investment bank, must always include compliance, including AML/CFT.

How could advisors within family offices expose their clients to risk ?

(1) Investments in the developing world; counter-parties, partners, companies that are the subject of the investment must be checked against multiple official sanctions lists, as well as commercial-off-the-shelf high risk databases.

(2) Vendors, suppliers, customers of a new, or ongoing, business, should always be the subject of extensive compliance checks, lest you find you are doing business with a sanctioned entity, or designated terrorist entity.

(3) Charities must always be checked, and not just against government lists; leadership, senior staff members, the beneficiaries of donations, may have a "colourful" past, or be operating front for terrorist financing.

(4) Are there any FCPA or Anti-Bribery Act issues with the investments ?

(5) Is the office contemplating a transaction with a Politically Exposed Person (PEP), an individual in bankruptcy, a convicted felon with a white-collar crime record, or other parties who status is not readily apparent.

(6) Vetting new investments under consideration, through Due Diligence, or Enhanced Due Diligence investigations, is a must.

The Family Office may not always have the reporting requirements of commercial banks, or broker-dealers, but it needs a dedicated compliance professional, to reduce risk, recognise clear and present dangers, and steer the office's professionals through the minefield of regulatory compliance.