Thursday, January 31, 2013


I have reviewed the Brief of Appellant just filed by the attorney for Viktor Bout, and hasten to detail the points that he has presented. For the sake of the many laymen reading this, I have sought to eliminate the legalese, in favour of a short and plain statement of the issues:

(1) The US Government's conduct, beginning with the "vindictive" targeting of his client, through the investigation and sting operation, and culminating with the extradition, was outrageous, and denied Mr. Bout Due Process. He also appears to be saying that there was Entrapment, a luring of his client into a criminal conspiracy. That may present a problem, due to Bout's prior history as an arms smuggler. Also, outrageous governmental misconduct is often alleged, rarely accepted, by a court, and rarely results in a reversal of a jury verdict.

(2) The US Government accomplished his Extradition from Thailand through exerting intensive and coercive political pressure upon the Thai Government. Most of the existing case law that I have read basically states that the Court will generally no question how a defendant is brought before it; barring extreme misconduct, it assumes jurisdiction over his person.

(3) His extradition violated the Doctrine of Specialty, which forbids a defendant being tried for anything other than that which he were extradited. In this case, Mr. Dayan argues that the US misled the Thai court into thinking that Bout had actually conspired with the FARC, when, in truth and in fact, he had conspired with a Confidential Informant, and undercover Federal law enforcement agents. I have the same reservations with this issue as I did with number 2, above.

(4) The jury instructions, as given by the Court, resulted in Bout being convicted of a non-existent crime , Conspiracy to Commit Reckless Murder; a non-existent crime. This is purely a procedural issue; is he right ?

(5) The two counts upon which he was tried and convicted were fatally flawed, and failed to state those offences. Again, a procedural defect is claimed.

(6) The Court did not have jurisdiction to try Bout on those charges in the United States. A complex issue which I look forward to hearing from the Government on, as Dayan's argument is persuasive.

Readers who require the complete text, and who have a subscription to the PACER database, can access it there. Here is the case number*.

Could any of these issues, if accepted by the Second Circuit Court of Appeals, result in a reversal of Bout's conviction ? That is certainly a possibility, and we anxiously anticipate the brief of the United States Attorney. As soon as it is filed, we shall discuss it, and the case law presented, in a future article on this blog; stay tuned.

We will report back to our readers on the brief of the United States Attorney as soon as it is filed.
*Viktor Bout, et al vs. United States of America, Case No.: 12-1487 (2nd Cir).


If you are a compliance officer in Central and South America, you are duly advised to take a look at the picture above, of John Flavio Dominguez, a Panamanian national currently facing various criminal charges in the Republic of Panama, as well as civil suits there. Mr. Dominguez, who has had a long and "colourful" history of employment in the financial services industry of Panama, is reportedly involved in the wholesale distribution of prepaid stored value cards, which never contain the name of the user. Whilst he is prohibited, by court order, from leaving Panama, he could be offering these illegal cards for sale anywhere in the region.

So-called anonymous cards, which were distributed through an unlicensed financial entity in the Republic of Panama, until closed down by the Superintendent of Banking, after eighteen months of operation, are sold without any Know Your Customer and Source of Funds enquiries. These cards thus allow massive amounts of criminal proceeds to be uploaded in one jurisdiction, and then hand-carried to the world's banking centres, without leaving a paper trail, to be redeemed at banks and non-bank financial institutions.

In addition to the bulk cash smuggling pipeline, whereby private jet aircraft bring in millions of US Dollars from Venezuela, Colombia and Mexico, narcotics traffickers and terrorist funding organisations are utilising these anonymous stored value cards to transport funds safely, and with little chance of law enforcement interception en route. Never download funds from any prepaid/stored value card that has not been issued by a reputable entity known to you, and which bears the embossed name of the holder and the issuance or expiration date, and the issuer's unique logo.

Anonymous prepaid cards represent the latest, and most serious threat to effective money laundering suppression, in the Western Hemisphere,  and it is one that few law enforcement agencies, and fewer regulators, have been able to cope with. Avoid Mr. Dominguez, and stored value cards, please.



Notwithstanding that his client obviously did not have an opportunity to proofread the Appellate Brief, Albert Dayan, who is handling Viktor Bout's appeal of his District Court conviction, did make the deadline set by the Second Circuit Court of Appeals. Yesterday, on the final day, he filed the Brief and Appendix.

You will recall that Mr. Dayan asked for additional extension on the Brief, but the Court failed to rule. Apparently he went ahead and filed on the last day. At least we will now be able to review the issues, and the appeal will not be dismissed for procedural reasons.

We shall be analysing the issues raised in a future article.

Wednesday, January 30, 2013


Reported Israeli aircraft overflights at Lebanese frontier
Reliable reports from multiple sources have confirmed that the Israeli Air Force has bombed a munitions convoy, reportedly on the Syrian side of the Lebanese frontier, that was transporting surface-to-air missiles,  believed to be Russian SA-17s, on delivery from the Syrian Government, to Hezbollah. The reports say that several flights of IAF F-16 aircraft were involved, and Israel has stated that it will not allow such weapons to fall into Hezbollah control.

Syria whilst denying that such an attack took place, is accusing Israel of destroying a military installation in Jamraya, near Damascus. This may have been an air defence headquarters; Syria is claiming that it was a "military research centre," and that the complex was destroyed, with fatalities and injuries.

Additionally, numerous Israeli aircraft were reported by Lebanon to have violated its airspace for an extended period of time, near the frontier. Iran has warned that it will consider an Israeli attack on Syria as an attack upon itself. Israel recently moved elements of its Iron Dome missile defence system to the north of the country.

It is suggested, that if your clients have ongoing trade transactions in the region, or if your bank has any significant financial exposure, that you watch unfolding developments carefully.


You are a compliance officer vetting a prospective bank customer, or an attorney checking out a factory your client wants to purchase, or a financial services professional examining an investment in a developing country. You need to conduct a Due Diligence investigation. The problem is, in certain countries , the truth is not only hard to find, you may actually encounter disinformation, resulting a disaster for you or your client.

Reporters Sans Frontieres (Reporters without Borders)* has recently published a paper, which includes a map that colour-codes the countries of the world, showing the amount of press freedom encountered there, or the lack thereof. Frankly, discount the accuracy of much of the media information that you collect, regarding the countries that appear in red or black, for corruption, special interest groups, dictators, utter disregard for the rule of law, and many, many other issues result in the failure to publish accurate information, or even result in disinformation, in government-owned or controlled mass media.
Unless you want to bank a corrupt Politically Exposed Person (PEP) who is stealing his national treasury blind, or purchase a factory for your client that is riddled with pollutants, or desire to have your most favoured customer buy a worthless bond issue, you should seek out competent professionals who can ferret out non-public sources in those countries where truth has taken a holiday. Use experienced investigators, with a global reach, lest you recommend somebody to a client, who turns out to be a nightmare.


If you were closely watching the questions and answers in convicted Ponzi schemer/lawyer Scott Rothstein, you saw something very troubling: Government attorneys would not let him get into specifics about his association with organised crime, though he indicated that such individuals were depositing cash with him. That was a hint that those who Ponzi schemers choose to work with might not be exactly country club material.

There were a number of deaths of individuals closely linked to Rothstein, and the question remains: were any of the suicides staged, and what about the homicide of the lawyer ? If there was ever a need for you to identify a bank client's Ponzi scheme operation early on, it is this; if some of his associates, partners or suppliers are from organised crime, you may be unwittingly banking them, and their front companies, believing that they are part of a major client's business, or are his customers.
Rothstein and Florida Governor 
One final note, should you tumble to a possible Ponzi scheme operating out of your bank, you must ensure that such information not become general knowledge amongst your staff, because the Ponzi schemer may have planted a junior staff member inside your bank, and if you are the principal witness, one of those organised crime associates may see fit to terminate you, with extreme prejudice.

This is just one reason why you must remain vigilant to potential Ponzi schemes.

Tuesday, January 29, 2013


Albert Dayan, the attorney for convicted arms trafficker Viktor Bout, is facing a deadline tomorrow; the Initial Brief of Appellant is due tomorrow, and the Second Circuit Court of Appeals*, having already once given him additional time to prepare & file the brief, has declined to grant him another extension. Failure to file a brief could cause Bout's appeal of his conviction, and 25-year sentence, to be dismissed on purely procedural grounds, without it ever being considered upon the merits.

Nevertheless, Mr. Dayan has filed one last motion, respectfully requesting :

"(1) Permission to file an oversized brief of about 17,000 words."

"(2) permission for an extension of time of two weeks to file Brief. The defendant, Viktor Bout is held in a Communication Monitoring Unit at the US Penitentiary, Marion, Illinois. because of defendant's location, Mr. Bout did not get a chance to proofread his brief. Even if the Brief is mailed to him overnight, it takes a few days for Mr. Bout to receive same."

"The Government does not oppose got an Extension of time of two weeks, subject to them getting the same amount of time to respond."

Will the Court grant his motion, given its prior rulings, or will the appeal end up dismissed ? We will know soon.
*Bout vs. United States, Case No.: 12-1487 (2nd Cir).


TCF Bank*, an American financial institutions, with 430 branches located in Minnesota, Illinois, Minnesota Michigan, Indiana, Arizona, and South Dakota, has agreed with the OCC, to a $10m fine, for BSA deficiencies, primarily for SAR violations. The bank, which had a prior Cease & Desist in July 2010,  had late-filed over 2300 SARS, with a total value of $70m.

The OCC agreement specifically noted the following deficiencies:

(1) Cash transactions indicative of Structuring.

(2) Wire transfers, where both the Source of Funds, and the purpose of the transactions, were unknown.

(3) Thirteen SARs improperly filed, where there were questions of terrorist financing.

(4) Transactions that appeared to represent unusual activity.

Readers who wish to review the entire text can find it on the OCC website here.


The Yassine brothers
A US District Judge in Austin, Texas, sentenced Hussein Ali "Mike" Yassine to 155 months in Federal prison this week, for money laundering and money laundering conspiracy*. His brother, Hadi Yassine, received 60 months on  money laundering charges. After serving their sentences, they are scheduled to be deported, as they are not US citizens.

The brothers, and other defendants, operated nine bars in downtown Austin, and were engaged in laundering drug profits through those businesses; some of the defendants have narcotics charges filed against them.

Two interesting points from the case:

(1) The defendants' uncle, who according to US law enforcement, lives in Lebanon and is linked to Hezbollah, a designated global terrorist organisation, received regular payments from them.

(2) the principal Confidential Informant (CI) in the case, who was a relative of the defendants, reportedly received $344,000 for his services in the case.

 US District Court at sentencing
The length of the sentence, thirteen years, meted out to the principal defendant,  reflects the seriousness of his offences. This is one judge who is not afraid to hand down a fit and proper sentence for a major money launderer.
* United States vs. Hussein Ali Yassine, et al,  Case No.: 12-cr-00105-SS (WD TX).

Monday, January 28, 2013


The Florida Bar has opened a Preliminary Investigation into whether Nevin Shapiro's attorney violated ethical rules when she used her ability to take depositions, in her Ponzi schemer client's corporate bankruptcy proceeding, to assist a third party, who might thereafter assist her in obtaining a reduced sentence for her client. If you are not familiar with this case, you should review our earlier article Watch Lawyers for Ponzi Schemers before Sentencing.

Attorneys who are looking for that elusive USSG 5K1.1 Downward Departure from the Sentencing Guidelines, or a Rule 35(b) Motion, by the Government, a year after sentencing, engage in a number of tactics, most of which are permissible under the rules of professional ethics. Some are admittedly distasteful  but they do get the job done, for example:

(1) having the client wear a concealed recoding device, and obtain incriminating information for an individual, which leads to criminal charges being files.

(2) Assisting law enforcement in gathering assets of a criminal enterprise, whether in the Continental United States, or overseas.

(3) Locating a fugitive from justice, who is then apprehended by law enforcement.

(4) Conducting criminal activity, under the direct supervision of law enforcement, with the objective of engaging others in the illicit venture.

(5) Engaging private detectives to gather information of use to law enforcement in pending criminal investigations.


However, when one crosses the line, whether ethically or criminally, to gain advantage for one's client at sentencing, there should be consequences. We shall see whether this occurred in the Shapiro case. Was it a conflict of interest to work with the NCAA, who could not subpoena the witnesses, to gain a power ally, who might be of assistance in sentencing ?


In this distressed economy, raising capital is next to impossible for start-ups without collateral. in desperation,  business owners are combing the Internet for funding sources, and often getting burned in the process. Advance fee schemes, which promise to secure funds from some "well-established" source, are proliferating, and often taking the businessman's last bit of capital through fraud.

Regular readers of this column are familiar with the series of articles I have written in recent months, detailing the trials and tribulations of the victims of Atlantic Rim Funding Corp., which promised the sun, moon and stars, and is now defunct, insolvent, and with an unsatisfied multi-million dollar judgment of record against it.

Another one that I had experience investigating recently had no assets nor was it an ongoing, operating financial service business. It was located on the second floor of a family contracting company, and claimed to issue bonds, for millions of dollars, which would them be transferred to another company, which company would sell the (worthless) bonds overseas. If pigs could fly, then the business needing capital would magically become funded through this process. In truth and fact, it has all the bells and whistles of an advance fee scheme, which steals your deposit, and gives you nothing but a recurring nightmare in return.

I found the "venture capital" company was worthless, but such a scheme, if real, raises other, serious issues:

(1) What about the Securities Act of 1933 ? Through what stretch of the imagination are these exempt securities ? Is there an Opinion of Counsel, issued by a reputable national law firm, available to review BEFORE your pay the advance fee ?

(2) How could one perform Enhanced Due Diligence on the investment funds coming from "offshore investors" ? Is this bona fide hedge fund money, or narcotics proceeds ?

(3) Since, in essence, the bonds are not backed by anything, is the borrower now a co-conspirator with the fraudsters, assuming that the money is actually invested ?

Frankly, most of these issues are purely academic, because the funding generally ( 99% of the cases) never arrives, and the contract that the advance fee schemer has with the borrower has language which excuses the return of the "mandatory" deposit put up by the borrower. he is not totally without any capital at all, since he risked what little he had to get the funding, which was never going to happen.

When a bank client comes in, to draw out a large sum, and tells you that he is secured funding from a venture capital source, show him this article.


Immediately thereafter the cessation of hostilities between Gaza and Israel, Hamas announced that it was forming a Ministry of War. Note that it is not being called the Ministry of Defence. Rhetoric aside, such an action obviously announces Hamas' intention to plan for, and initiate, yet another military action. If Western investors, and major financial institutions, do not take this as a clear sign to stay out of Gaza, they will reduce their exposure to a point where it is so small that they can walk away from it at any time, and absorb what will only be an insignificant loss. There's nothing like war, and rumours of war, to scare off investment capital, brick-and-mortar bank offices, and loans to the area soon to come under fire.

More recently, it held a press conference, with a large number of children present, where for the first time it disclosed plans to open a military academy in Gaza, which would award degrees in military affairs to graduates.  The programme, which is designed for youths 12-14 years, is intended to create a new generation of children who think that they are soldiers, but are in reality terrorists, and the Hamas leadership haas called upon them to conquer the land "from the [Mediterranean] Sea to the River [Jordan].

If you haven't already classified the Palestinian Territory of Gaza as representing an unacceptable level of risk for Country Risk purposes, you have not been paying attention. There is no upside to any financial exposure in a jurisdiction that has become a failed state, before it even became a state.

With the new Israeli capability in missile defence, when Hamas draws first blood again, and precipitates yet another conflict, the counterattacks could destroy what little brights spots in the Gazan economy and infrastructure still exist, creating yet more poverty, and the endless cycle of violence. The Hamas leadership is pushing the population of Gaza headfirst off a cliff.


Saturday, January 26, 2013


Iran has repeatedly threatened global action, should either Israel or the United States initiate an attack upon its illegal nuclear facilities. Its proxies, Hezbollah in Lebanon, and Hamas in Gaza, have in the past resorted to taking hostages, in an effort to achieve their goals. The latest development, which has not been seen since Nazi Germany's dreaded Gestapo dominated a conquered Europe, is extremely disturbing, and may give us a glimpse into a new brand of state-sponsored terrorism.

Multiple reports from Venezuela indicate that its internal security police, the Bolivarian National Intelligence Service, or SEBIN*, has been conducted extensive surveillance of the leaders of Venezuela's Jewish community. Formerly known as DISIP, this police agency has a long and sordid history of human rights violations, with little or no regard for the rule of law, or the constitutional rights of Venezuelans it chooses to confine without trial.

Whilst there have been instances of Anti-Semitism in Venezuela, on the part of the Chavez regime, whose officials include a number of individuals of Middle Eastern descent, this is the first time that Jews have been targeted as a part of any organised campaign. Some Jews have left Venezuela in recent years, after some incidents they regarded at actions directed at them from the government.
Cooperation between Venezuela and Iran, which has been repeatedly reported on this blog, continues to increase on many fronts, as well as Venezuelan assistance to those same terrorist organisations subsidised and sponsored by Iran.

Given that most observers believe that Spring 2013 could very well result in Israel, and/or the United States, conducting a bombing campaign directed at Iranian's sanctioned nuclear facilities, it is reasonable to assume that Iran has made contingency plans to strike at vulnerable civilian targets that are unable to defend themselves.

Neither the United States, nor Israel, would be able to assist Venezuelans detained, and held hostage, in remote locations under Iranian orders. What if they are later transported to Iran, and placed within that country's nuclear facilities, and human shields ? Hezbollah Venezuela has 93 known trained agents operating within Venezuela, to facilitate any Iranian programme.

It is not known which of the two dominant, and competing, factions within the Government of Venezuela, is responsible for this surveillance, the pro-Cuba group, or the military/Venezuelan nationalist faction, but whoever is responsible has clearly crossed a red line. When the Government of Venezuela starts acting like Nazi Germany, it is clearly time for a regime change.
*Servicio Bolivariano de Inteligencia Nacional

Friday, January 25, 2013


Are the long sentences meted out to major Ponzi schemers in the United States confirmed by the Federal appellate courts ? After recently discussing* a  20-year sentence, handed down to Miami Ponzi schemer Nevin Schapiro by a New Jersey District Judge, I have taken a look at the subsequent history of that case.

Shapiro's counsel appealed, claiming that the the sentence was "substantively unreasonable." The Third Circuit Court of Appeals, speaking through Judge Rendell, surveyed the damage the defendant had caused:

"Shapiro executed a Ponzi-type scheme between 2005 and 2009, in which he raised over $93m from investors throughout the United States. As a result, over 60 investors lost more than $83m in investments. Shapiro, a compulsive gambler, spent lavishly during this time and racked up more than $9m in gambling debts. To fund life as a high-roller, Shapiro stole more than $35m from the investments he solicited.**"
Shapiro made illegal payments to University of Miami athletes
The defendant , though charged with six counts, pled guilty to one count of money laundering, and one count of securities fraud. Though his Offence Level, and Guidelines range, was computed at 168 to 210 months' imprisonment. the Court explained that there were aggravating factors, due to:

(1) Shapiro's leadership role in the scheme.
(2) The duration of the scheme.
(3) The magnitude of the loss.
(4) The number of the victims.
(5) "Shapiro's continued willingness to blame others and soil their reputations."

The Court then upgraded his Offence Level, and the corresponding guidelines range became 210 to 262 months. It pronounced an above-the-guidelines sentence of 240 months, and ordered Restitution of $82.6m. The Third Circuit, after concluding that the sentence was substantively reasonable, affirmed the ruling of the trial court.

Shapiro is only 5'5'' tall
Will Ponzi schemers continued get hammered at sentencing ? We certainly hope so, as they the destroy the lives of their victims, expose the banks that unwittingly serve them to lawsuits, and cause reputation damage.
Watch Lawyers for Ponzi Schemers before Sentencing
**Nevin Shapiro vs. United States, Case No.: 11-2628 (3rd Cir. 2012), affirming US vs. Shapiro, 2-10-cr-00471-SDW (D NJ). OpinIon of the Court, at 2.


The late attorney Magnitsky
Compliance officers hearing about the so-called "Guantanamo List" should not increase risk levels on any of the sixty Americans who reportedly appear on that list. It was prepared by the Government of Russia, after the United States advised that the Russian officials implicated in the Magnitsky case, involving horrific human rights violations perpetrated upon an attorney/whistleblower, would be barred from entering the United States.

Though not yet released publicly, it reportedly contains the names of Federal Judges, investigators, Department of Justice officials, and law enforcement agents, who worked on the indictment, extradition, trial, and conviction of arms dealer Viktor Bout, whom Russian officials believe was charged in a purely political case, with no evidence of criminal wrongdoing. Bout was the subject of a US law enforcement sting, wherein he agreed to supply missiles and other arms to the FARC, for the primary purpose of killing US citizens.

The Guantanamo List, rather than a list of criminals, is a list of those in the US Government who convicted Viktor Bout. Disregard any references to it that you may see in the future, on any commercial-off-the-shelf database of high-risk individuals.  


If you are also interested in the subject of Opaque Ownership, you may want to review this new paper:

Secret Structures, Hidden Crimes; Urgent Steps to address Hidden Ownership, Money Laundering and Tax Evasion from Developing Countries.

The document was published by The European Network on Debt and Development [Eurodad]*. it can be accessed here.

* An organisation consisting of 50 NGOs from 19 European countries.

Thursday, January 24, 2013


You can assume that the direct and blunt threats made by North Korea, against the United States, has further hardened American attitudes towards the DPRK. When a rogue state boasts that it will take military action against America, as it is a sworn enemy, you can assume that investigations, and enforcement action, against anyone caught dealing with the offending state, will increase over at Treasury.

For that reason, it is humbly suggested that you increase Country Risk as to both Singapore and Myanmar. Both countries have a history of dealing with North Korea, including covert transactions. If you are a compliance officer at a financial institution whose clients regularly trade with companies in either country, you should ensure, as much as possible, that goods shipped by your bank clients will end up where you understand they are destined. Does Due Diligence require that you obtain a notarised affidavit from your clients as to end users ? Use your good judgment.

Does your customer ship anything that might be dual-purpose goods, which North Korea could use in its WMD or ballistic missile programmes ? If the answer is positive, you will want to conduct an Enhanced Due Diligence investigation, and document your results, so that you are not embarrassed two years later, when you get a visit from law enforcement, enquiring about funds transfers, shell companies, and transshipment of goods to North Korea. Make sure that your bank is not the poster child for compliance malpractise involving the DPRK.


A reader sent in a query, requesting details on what is known about the Venezuelan Uranium mining activities, which has been shipping processed uranium ore to feed Iran's expanding illegal Weapons of Mass Destruction (WMD) programme. Delivery of Uranium ore to Iran, through its agents, violates international sanctions.

To summarise the information:

(1) Venezuela has estimated Uranium reserves that exceed 50,000 tonnes. This is based upon  independent investigations conducted by competent foreign entities in the industry.

(2) The principal location of the ore is in eastern Venezuela, on the frontier with Guyana. The specific area is known as the Roraima Basin.

(3) The Uranium ore deposits are also present on the Guyanese side of the border.

(4) the cover for the Uranium mining facility is a gold mine. There is also an aluminum mine believed to be involved, and a Iranian tractor factory. Security at these installations, which often involves Venezuelan National Guard units, is unusually strong. Aircraft overflights are prohibited, and there is a notice that offenders will be shot down forthwith, if airspace is violated.

(5) A cement plant, built by an Iranian company, and located in Monagas State, is believed to be the processing facility for the mined ore; No cement is produced there.
Monagas State.
(6) A number of the government officials, contractors, and other leaders involved, who are believed to be "Venezuelans" of Iranian Descent, are conducting the operations.

(7) The processed ore is shipped, via river transport, to the Caribbean, and loaded upon oceangoing Iranian vessels for delivery.

I hope this helps your understanding of the situation.
For further reading: More on Venezuela's Export of Uranium to Iran


Nevin Shapiro
Actions taken by a criminal defence lawyer for one of Miami's more flamboyant Ponzi schemers serve as a reminder that, in their zealous efforts to obtain a lower sentence for their clients, one way or the other, these attorneys may step on toes, including yours. Whilst certain activities may be strictly legal, and ethical, or in the grey area, third parties could be adversely affected. You need to be alert to such potential issues.

The client was Nevin Shapiro, whose $900m Ponzi scheme resulted in a twenty-year sentence imposed in Federal Court. His attorney reportedly used the ability to take discovery in the bankruptcy of the failed investment company to obtain testimony that was shared with a non-governmental regulatory body who had other targets, but could not subpoena them. When the circumstances of the scheme to obtain answers to non-financial questions, by employing the bankruptcy, surfaced, the regulatory agency announced that it would decline to use the information obtained, asserting that the method was inappropriate.

Note well that criminal defence lawyers who are seeking a §5k1.1 departure at sentencing, to allow the Court to go below the Guidelines, or a subsequent Rule 35(b) Sentence Reduction, for their clients, have been known to locate fugitives, find missing funds, have their clients wear concealed wire recorders to obtain incriminating evidence, hire private investigators, and many other proactive activities, solely to gain a reduced sentence. Anything goes ? Not quite, but close.

In their zeal to obtain something that will benefits their clients at sentencing, or to get a reduction within a year thereafter (the Rule 35 time frame), third parties are often targeted. I had the dubious experience once of having a cocaine trafficker, who had been arrested and was working with DEA, call me up, and ask for money that I was holding for an absentee client. He then disappeared for an extended period, and I returned the funds to the client. When he contacted me weeks later, I could no longer disburse to him. I learnt all this years later, when I heard the tape-recorded conversations, including the DEA agent's coaching. Had I distributed the money to him, I probably would have been arrested for

Let me suggest that, whenever a bank client is charged with a Federal crime, or an individual who has been doing business with a bank client is arrested, that you be extremely careful in your dealings with all such individuals, or those who work for them. If any lucrative opportunities, or untoward suggestions, are made to you, decline forcefully and in the presence of witnesses, to establish that you wanted no part of it, and that you did not acquiesce to any offer to participate in criminal conduct; be careful out there. Seek the advice of a competent criminal defence attorney; he may suggest that you disclose the details of the meeting to law enforcement.

There are also other dangers: there were statements to the effect that Shapiro was laundering drug money for the PKK, the designated Kurdish terrorist group. Ponzi schemers sometimes take money from people that you would not want to be in the same room with, and who would not be permitted to open accounts at your bank. That's one more reason to avoid anyone whose financial activities could possibly be a Ponzi scheme.

Sentence reduction activities for clients rarely see the light of day; you do not want to be the unwitting solution to some convicted felon's sentencing problem, which will be at your expense.



If you paid attention in geography class, you know that Iraq and Iran share a long common frontier. Therefore, why are twelve of the twenty arriving vessels tied up in Iraqi ports listed as Iranian ships ? They certainly do not need this kind of maritime commerce and the two countries enjoy extensive connecting motorways. The answer will probably be of interest to you, because it does involve risk of sanctions violations on your part.

These ships, or most of them, according to Iraqi authorities, are carrying seaborne containers, automobiles, pipes, and a variety of cargo that is obviously destined for Iran, but evading international sanctions by being delivered to Iraq, and thereafter transported to Iran. That makes the Iraqi Government complicit in sanctions evasion, don't you think ? Do they care what we think ? I seriously doubt it.

It is suggested that, if you are funding shipments to Iraq, whether your clients are selling goods there, or you are financing exports to Iraq, that you obtain notarised End User Certificates, attesting to the identity of the actual recipient of the products. To do otherwise may be later interpreted by regulators to mean that your compliance with Iran sanctions regulations was less than adequate. Avoid the fines & penalties by keeping your clients honest; are the goods actually ending up in Iraq, or elsewhere ?

Wednesday, January 23, 2013


Federal Courthouse, Miami, Florida
The Chief Judge of US District Court in Miami has entered a order denying an unusual motion, filed by a billion dollar Ponzi schemer, to recuse all of the Federal Judges sitting in South Florida, and thus prevent then from trying his criminal case*. To quote the order, "After carefully considering the statutory standards, the Court concludes that the motion for judicial disqualification and recusal should be denied."
Allan Mendelsohn
 Joel Steinger, accused of orchestrating a $1.25bn life settlement company, but which was in reality a sophisticated Ponzi scheme, alleged that all the judges should be disqualified because ophthalmologist Alan Mendelsohn, who was involved illegal political fundraising, solicited significant campaign contributions from Steinger, in order to fix a pending Florida criminal investigation against him. Mendelsohn told Steinger that the son of a sitting Federal Judge, and the former US Attorney from Miami, were both involved in a corrupt conspiracy to obstruct justice. Mendelsohn was a Republican fundraiser, lobbyist, and adviser to former Florida Governor Charlie Crist. He claimed to be acting on behalf of powerful individuals in government.

The Order Denying Motion for Recusal stated that the participation of both the judge's son, and the former United States Attorney, were fabricated, as Mendelsohn, the other party to the meeting, later admitted that his statements were false.  Mendelsohn was later convicted of conspiracy, in connection with campaign contribution violations, and sentenced to four years in Federal Prison.
* United States vs. Joel Steinger et al, Case No.: 08-21158-CR-SCOLA  (SDFL).
Southern District of Florida