Thursday, April 30, 2015


Some of our readers have expressed dismay at the unethical, and often, illegal, methods that criminal defense attorneys in the Republic of Panama engage in, to delay and deny justice to foreign nationals who are victims of white-collar crime, at the hands of Panamanian fraudsters. Believe me, they are true, and there are even worse things that occur daily, in Panama's courts. It is high time to let them see the light of day.

These are the tricks that result in dismissal of criminal charges, or the functional equivalent of an acquittal at trial:

(1) At what Panamanian lawyers describe as a preliminary hearing, defense counsel, through illicit collusion with the judge and the prosecutor, has the court bar the victims from testifying. The results are obvious: dismissal. The cost to the defendant: $.

(2) At either the preliminary hearing or the trial, the court excludes all the victims' critical and essential evidence, without cause or any legal grounds to do so. Again, dismissal or acquittal occurs.

(3) The defense, through payment of even more bribes, secures the repeated and indefinite postponement of the trial date, effectively placing the case in legal limbo; it will go nowhere.

These dirty tricks prevent foreign investors, and expats living in Panama, from obtaining criminal convictions of Panamanian nationals. It is a fatal flaw in the court system, and the new reform administration is doing absolutely nothing to abolish it.

How do I know about these methods ? By speaking with some of the victims of Gary James Lundgren's frauds. His attorney, Alcides Bartolo Peña, has been committing these illegal acts for years, and by doing so, he has managed to keep his client out of prison, though he allegedly stole millions from foreign nationals, some of who have brought criminal actions, which went nowhere, due to Sr. Peña's unethical and corrupt conduct.

Unfortunately, Peña is but one of many corrupt lawyers in Panama City. So long as his ilk are allowed to game the court system, Panama's courts will provide no justice for victims.

In our next Panama article, we shall detail the relationship between Gary James Lundgren, and the convicted Colombian Pyramid/Ponzi schemer, David Eduardo Helmut Murcia Guzmán.   


An Israeli security agency has asserted that Palestinian students, studying in local universities, are being given military training in Malaysia. This is the second time that the subject has come up it was previously alleged in 2014. The students are affiliated with Hamas, a Specially Designated Global Terrorist (SDGT) organization, and are said to intend to return to the West Bank, as covert Hamas agents. The Government of Malaysia, a Muslim-majority country, has denied the allegations. 

Wednesday, April 29, 2015


For those readers who are wondering why I am so critical of the Panamanian court system, besides the rampant corruption, where justice is bought and sold every day, by the judiciary, prosecutors and attorneys, the sordid way in which obstruction of justice occurs is the secondary reason. When you see how it perverts the ability of victims to obtain justice, you will understand my concern.

Here is why it is justice denied; Panamanian nationals that are the subject of a Denuncia, due to fraud or some other variety of white-collar crime, often choose to bribe one or more of the court officers in the case, especially the sitting judge, and/or the prosecutor. Do they get their money's worth ?

Bribed players frustrate the proceeding by the following tactics, which are employed by sleazy Panama City lawyers against foreign victims:

(1) Translator/interpreters are conveniently not available for court hearings.
(2) Ex Parte hearings, where the victim's attorney never receives notice, and a ruling adverse to his case is handed down.
(3) The testimony of the victims, which is indispensable to moving the case to trial, is postponed, over and over again, and never taken.
(4) A significant portion of the court file mysteriously disappears, while it is in the custody of the judge. Sometimes, the entire court file is "mislaid" and not found again. Pleading in Panama's court system are not scanned in, and once documents are gone, reestablishing them, through the introduction of copies in the possession of the victim's attorney, is rarely, if ever, allowed.
(5) The judge sits on the file indefinitely, refraining from entering any rulings whatsoever.
(6) The prosecutor abruptly asks the judge to dismiss the case, without any basis in law or procedure.

As you can see, the corrupt Panamanian court system is not only dysfunctional, it is broken. By way of illustration, there are several major cases pending against American businessman, Gary James Lundgren, none of which have ever gone to trial, due to the behind-the-scenes maneuvering of his lawyer, Alcides Bartolo Peña, who has bragged of his ability to control court cases, due to his friends in the court system, and is a known "fixer" of court rulings and decisions. Lundgren is reportedly the subject of investigations by both US law enforcement agencies, and securities regulators. as are three companies that he controls, Global Valores Inversiones SA, Global Finance & Investments SA, and Interpacific Investors Services, Inc. His attorney has been delaying  cases brought against him in Panama, by victims of his reported frauds, for many years. Justice delayed indefinitely becomes justice denied.

 One case against Lundgren, pending for four years, without the victim being allowed to even give his statement, was mysteriously dismissed by the prosecutor. Based upon Lundgren's successes in tying up Panama's criminal justice system, which unfortunately is typical, one can only conclude that it is pure folly to invest in Panama, for, if you later have a legal dispute, the courts are the last place where you will be able to obtain relief.

Tuesday, April 28, 2015


A Vietnamese blog*  entitled "Portraits of Power"(Chan dung Quyen luc) identifies corrupt Vietnamese Politically Exposed Persons (PEPs), as well as their criminal acts, and the properties or assets involved. If you are a compliance officer at an international bank in Asia or the Pacific, and you bank wealthy Vietnamese businessmen or PEPs, it is suggested that you access this information, and check for the names of your existing customers. English speakers will find Google's translation feature more than adequate for that purpose.


When Mutual Benefits Corp. Ponzi schemer Joel Steinger filed a Notice of Appeal from his Federal sentence & conviction,  I thought he had committed a major procedural error. Steinger had pled out, receiving a 20-year sentence, and in the standard plea agreement, expressly waived his right to appeal. So what was going on ? Steiner spent 26 months in hospital, taking the strongest pain killers for his disabled back. He contends that rendered him incompetent to plead out.

The initial brief, filed by his counsel. Steinger raises these two points on appeal:

(1) The appeal waiver is neither valid nor enforceable, due to the fact that appellant' competency evaluation was given ten months prior to this sentencing, and when he executed the agreement, his severe, debilitating pain caused his self-assessment skills, and ability to reason to be impaired.

(2) The appellant's severe, unbearable pain, and extremely strong pain medications taken, rendered him unable to understand the proceedings, assist counsel in his defense, and to change his please and enter a guilty plea in open court.

In his prayer for relief, his counsel is asking the Eleventh Circuit to determine:

(A) That the appeal waiver in the plea agreement is invalid and unenforceable.
(B) If the appeal waiver is found to be invalid, then the plea agreement is invalid, for the same reasons.
(C) That the guilty plea and sentence should be vacated.
(D At the minimum, Appellant asks that the Court remand the case for a competency evaluation, based upon the significant changes that occurred in Mr. Steinger's condition, between the May 2013 evaluation, and his March 2014 guilty plea and appeal waiver.

Steinger has requested that Oral Argument be had in this case.


The lawyers representing the fugitive former President of Panama, Ricardo Martinelli, have sunk to a new low, in their desperate search to confer immunity from criminal prosecution upon their beleaguered   client. The Electoral Tribunal (TE) has previously suspended the immunity Martinelli tenuously held, as a brand-new member of the Central American Parliament.

This week, Martinelli Attorney Sydney Sitton requested a court date to discuss the issue of immunity for Martinelli, pursuant to a Panamanian law that extends immunity for candidates for senior office in a political party. Martinelli was previously the president of Cambio Democratico (CD),  Democratic Change Party, and there are rumors that he will run again for that office.

Martinelli, who has remained hidden since he left office, and faces multiple criminal charges. What appears to be yet another cheap trick may delay his criminal prosecution, but the groundswell of public opinion, which wants to see Martinelli face justice for his crimes, has dominated the Panamanian domestic political scene since January; Panamanians want his head. Will the Court even consider attorney Sitton's brazen request ? We cannot say, but if it holds that he has immunity, the Panamanian street may violently object; Bear that in mind.


Remember the article I wrote a while back, about a Russian organized crime member, whose case was sealed by a Federal Judge, solely because he had assisted an American intelligence agency, in its attempt to buy missiles ? The individual, having no negative information publicly available on his misdeeds, went on to defraud investors out of millions in Fort Lauderdale. That is why I oppose sweetheart deals for cooperating individuals who are career criminals, because they will continue to offend, and have the advantage because the public does not know about their sins.

Today's example has his picture in the newspaper recently. Formerly a prominent lawyer in a Latin American country, he is now an affluent businessman in the US, buying up,and building, commercial enterprises. Trouble is, he's a former money launderer who moved large sums of illicit capital through an American bank. Neither he, nor anyone at the bank were ever charged with a crime; the bank drew a huge civil penalty, which is how most money laundering offenses seem to be treated these days.

We can only assume that he rendered full cooperation to US law enforcement and regulatory authorities, and received immunity against prosecution. That means no criminal indictment, and no relevant information publicly accessible to individuals who might be contemplating business relationships with the lawyer. They are in the dark about his true nature.

There's more; when a South American banker was framed, by no other than convicted Ponzi schemer Allen Stanford (now serving 150 years in a Federal Prison), it was the lawyer who offered to "fix" his case in court, for the payment of a very large sum. Would you ever do business with a person of this caliber ?

When persons of questionable character quietly receive a free pass for their criminal conduct, that information, which might embarrass the government agencies involved if disclosed, is not available for due diligence purposes, and, being in the dark about that's individual's background and character, legitimate businessmen may make a bad choice, to do business with that criminal, and suffer the consequences.

Monday, April 27, 2015


Gary James Lundgren
The American expatriate businessmen, Gary James Lundgren, who has been the subject of several articles on this blog, about white-collar crimes that he allegedly committed in the Republic of Panama, has sought an injunction, from a Panama court, against further publication of his activities. Lundgren asserts that his action is based upon upon Panama's libel laws.

Unfortunately for Mr. Lundgren, to prevail, he would have to prove malice aforethought, which is a requirement under the laws of Panama, and which is clearly not the case. We have reported upon several matters, including (1) Lundgren's involvement in the Petaquilla Mining Ltd./Financial Pacific insider trading scandal, (2) Civil and criminal lawsuits pending against Lundgren for fraud, theft, forgery of client signatures, and notarial fraud, (3) reputed money laundering of narcotics profits from Colombia, through real estate purchases and sales and (4) laundering Ponzi king David Murcia Guzmán's illicit cash. In all articles, the information was based upon reliable sources, official records, sworn testimony, and victim statements.

Mr. Lundgren, who is reportedly under criminal investigation in the United States, by a number of American law enforcement agencies, as well as regulatory agencies, has been a close associate of former Panamanian President Ricardo Martinelli, and is alleged to have conspired with Martinelli, in a number of matters that are presently being investigated by Panama's Anti-Corruption prosecutors. That makes Gary James Lundgren a Public Figure; perhaps his attorneys might want to advise him about how that affects his position under the laws of libel and slander.

Finally, since Lundgren has failed to obtain personal service against either the Financial Crime Blog, or your writer, the court in Panama has no jurisdiction whatsoever. We shall continue to cover Gary Lundgren's activities, as we feel that they are of great relevant interest to the business community, both in Panama, and in the United States. The public has a right to know.

I believe that the reason that Lundgren is taking this desperate action is my pending investigation into attorney and prosecutorial misconduct in a fraud case where he is a defendant. There are allegations that Lundgren's attorney, Alcides Bartolo Peña, paid a bribe or other illegal gratuity to the government prosecutor, Maria Lourdes Estrada Villar, to improperly dismiss the case, which has been stalled, without legal cause or grounds, for four years. He does not want the truth to come out.


This is probably the most well-known photograph of the end of the Vietnam War. On April 30, 1975, atop what was then the Pittman Apartments, said to be the residence of the CIA Deputy Chief of Station, an Air America Huey extracted civilians who had assisted the United States in its war effort. Most captions incorrectly show this as the American Embassy, but in truth and fact, it was at what was then known as 22 Gia Long. 


The production of child pornography has exploded in the Republic of Panama over the past five years. Currently, there are over 100 cases under active investigation, according to the Public Ministry, working from information supplied by Panama's Sex Crimes agency.

Under Panamanian law, individuals convicted of child pornography can be sentenced to 5-10 years in prison. The local production of child pornography has grown so large that INTERPOL has brought the matter to the attention of Panamanian authorities, and assisted in investigations. Some of the cases reportedly involve networks of individuals engaged in that illegal activity, either as customers or producers .

Bankers in the United States and Canada should be aware that Panamanian child pornographers, who deal with clients on a worldwide basis,  and therefore need access to the global banking system, receive payment in US dollars, and therefore pose a direct threat to banks who unwittingly serve their financial needs. The reputation damage that could occur, if a major American or Canadian newspaper or website exposed the bank's role, as a facilitator of child pornography, may result in existing bank customers exiting long-standing, and profitable, relationships with the bank.

Perhaps it is time to audit, and conduct enhanced due diligence upon existing high-volume Panamanian clients, to rule them out as child pornographers, to reduce potential risk. Does the client actually have a legitimate business operating openly in Panama, to justify its account volume ? Have you checked out the senior management, to ascertain whether there are any officers with prior involvement in pornography ?

 You do not want to wait until a US law enforcement agent comes into your bank with a subpoena; check your Panamanian corporate clients now.

Sunday, April 26, 2015


Repeated reports, originating in the Middle East, state that Hamas and Iran have patched up their differences, and that Iran has sent Hamas "tens of millions of dollars," so that it can reestablish its tunnel system, and rearm for another attack on Israel. Where did they get all those greenbacks ?

If the sanctions in place against Iran are working, it should be extremely difficult for Iran to lay its hands on $10,000,000 in cash, yet there has not been any serious effort, on the part of the United States, to shut down the two most accessible local sources for US Dollars:

(1) The banks and MSBs operating in the area controlled by the Kurdish Regional Government.
(2) Baghdad banks and non-bank financial institutions.

Both of the above jurisdictions, which are nominal allies of the United States, in the war against ISIS, and terrorism in general, appear to have been given a free pass when it comes to American interference in the lucrative illicit trade of dollars going to Iran. Obviously, international politics trumps sanctions compliance. I understand that, but the net result is that now Hamas is fully funded, and much more likely to start up yet another armed conflict with Israel.

Is there anyone in the Department of the Treasury who can initiate some program, in the field, to suppress the sea of US Dollars flowing into Iran ? Otherwise, Iran will continue to fund non-state actors who will continue to initiate more attacks, which will draw armed response, and we do again down the slippery slope to war. Is the US so afraid of offending its Kurdish allies ( who are also working with israel in several matters, by the way) that it neglects this critical issue ?  


Ricardo Martinelli, live via video conference.
You have to love Panama's former President, Ricardo Martinelli; a fugitive from justice, and facing massive corruption charges totaling literally several billions of dollars. His political party, Cambio Democratico [Democratic Change], got to see him up close and personal this week, but only via video conference.

Martinelli, who continues to insist that he is presently living in the United States, where he is reportedly writing his memoirs (one in a long series of falsehoods), is in hiding, somewhere in Latin America. Apparently he has purchased an estate in Paraguay, a jurisdiction from which he cannot be extradited, to either Panama or the United States, where he may have a sealed pending criminal indictment waiting for his arrival.

So, he appears before his followers virtually, like Hezbollah leader Hassan Nasrallah, who also rightfully fears retribution for his sins and transgressions. Señor Martinelli, you have an appointment with the long arm of justice; you can run but you cannot hide. Martinelli, who came into office on an anti-corruption platform, ended up being the most corrupt president the Republic of Panama ever had. 

Saturday, April 25, 2015


Arrest warrant signed by Panamanian judge
The Dutch national, Okke Ornstein a/k/a Okke Van Oijen, Panama's most prolific fraudster, has finally run out of excuses and delays. A Panamanian judge has issued a warrant for his arrest and imprisonment, so that he can commence serving sentences handed down in 2013, in two cases, that total twenty months in a Panama prison, after all his efforts to evade justice failed. Ornstein, who has several civil judgments, including money judgments, of record against him, is a career criminal suspected in two unsolved murders in Panama, and operates a facility that produces child pornography for a global audience of deviants, whom he sell to via his secure websites. He has a number of other pending civil and criminal cases in the Republic of Panama, and he is also believed to have stolen aid money intended for Palestinian refugees in Syria.

We have previously covered his relationship, as general manager, in the Marc Harris organization, which was a massive Ponzi scheme, and as sole owner of the fraudulent Tulip Fund. You may access that material by using the search box on this blog.

Ornstein, who European sources say came to Panama after Dutch authorities opened an investigation into a large child pornography ring he reportedly managed, has been the subject of many articles on the Internet in Panama, detailing his fraudulent business activities. Only when he is incarcerated will he cease and desist from exploiting Panama's citizens and residents, and stop dealing child pornography from Panama. he deserves a life sentence for the murders, but right now, we will settle for the twenty months in a dark Panamanian prison cell.

The second order


Hezbollah flag on left, HESN flag on right.
Reports that a minor Hezbollah affiliate, Harakat as-Sabeern Natzran Le-Palestin, ("The Patient Ones' Movement for the Liberation of Palestine:") which is operating in the Gaza Strip, has strengthened, and may soon pose a direct threat to Hamas. The Patient Ones, also known as HESN (fortification) is directly supported by Iran.

You will note that its flag is a close copy of the Hezbollah banner, though a map of "Greater Palestine" has been added. This organization, which opposes peace in any form, could reignite armed conflict with Israel. Its principal influence is in the northern section of Gaza.

HESN needs financial support, and given that it is coming from Iran, you want to make your compliance staff aware of its existence, including its various names and identifiers. Funds transfers, and bulk cash shipments, possibly disguised as payments to charities, that might end up in Gaza, should be carefully screened.


Stanford's booking photograph.
Clients purchasing investment products are generally driven by the prospects of a handsome return, but in their eagerness to get on board an enticing investment, they forget to practice KYB: Know Your Bank(and) Banker. While bank compliance officers perform due diligence on new clients, how many clients/investors do the same on the bank, and the bankers involved ? In truth and in fact; very few.

Bank clients contemplating any type of substantial investment where a bank is involved, even indirectly, would do well to have due diligence performed upon it.Why ?

(1) Most regulatory fines and penalties are not always the subject of newspaper and Internet article, and since most banks would prefer not to alert their customers to the fact that they have problems, it never appears in bank press releases; so much for full disclosure. Do you know where to find such material on the websites of various Federal regulatory agencies ?

(2) What about civil litigation; do you have access to PACER, Public Access to Court Electronic Records, the Federal Government's site for Federal civil, criminal, appellate and bankruptcy cases. A suggestion: it is always necessary to check out any bank with which you intend to conduct major business on PACER.

(3) The senior bank staff, as well as the ownership, also deserve a check, before you disburse to them.. case in Point: Allen Stanford, the owner of Stanford International Bank (SIB), had a prior bankruptcy in Texas, and owned a bank in Montserrat, Guardian International Bank Limited, whose license was revoked, amid allegations that it was taking in millions of dollars in Colombian narcotics profits. Stanford was assisting the Central Intelligence Agency, as an informant, and the CIA was banking at Guardian.*  Would any of the investors in SIBs certificate of Deposit, have done business with him if they knew about his sleazy background ? Most clients didn't even know that his first name was Robert.

(4) The accuracy of representations and warranties, given to you to induce a large investment, also needs to be verified. Case in Point: A TD Bank officer confirmed that billion dollar Ponzi schemer  had substantial "locked" funds on deposit at the bank. This was a complete fabrication; had any of the investors sought to confirm this information, they would have learned that no such account existed. Rothstein had withdrawn all the funds for his own use. The investors never would have placed their money with Rothstein had they known that the collateral did not exist.

Investors, who routinely perform due diligence on counter-parties and prospective partners, seem to neglect to check out banks; is it because they have a misplaced faith in the Bank's government license ? We cannot say, but it is good business to practice due diligence on all banks, and the bankers therein, if you want to reduce risk.
*Stanford's long-term relationship with the CIA, when he was in Montserrat, was verified by source The Dragon, from first-hand knowledge. He worked with Reeve John Whitson, of the Quarry, an Agency unit. If you remember that the original SEC investigation was terminated prematurely, upon the order of an unnamed Federal agency, you should ask yourself: Did the CIA protect Stanford from Federal regulators, and thereby allow him to perpetuate his Ponzi scheme for an additional decade ? The SEC started looking into Stanford as far back as 1997, but no action was taken until 2006; all prior investigations were discouraged by SEC leadership.

Friday, April 24, 2015


Aerial photographs of a new, operational UAV airfield, constructed by Hezbollah, in Eastern Lebanon, could result in attacks upon Israel, which could result in massive counterattacks that would damage Lebanon's critical infrastructure. Israeli bombardment could effectively disable Beirut's international banking center for an extended period, and create economic chaos.

The new Hezbollah Airfield, which is 10km. south of Hermel, appears to be providing aerial surveillance for Hezbollah's support of the Syrian regime's attacks upon opposition forces engaged in a civil war in Syria. The active runway is far too short* to handle transport aircraft, and the equipment seen suggests a drone facility. The problem is that the latest Iranian armed drone technology boasts a large, armed drone, with a range capable of attacking targets throughout Israel. Given Hezbollah's latest muscle-flexing actions, an unprovoked drone attack upon Israel becomes a distinct possibility in 2015.

Additionally, Iran has reportedly developed "kamikazi" or suicide drones, for the IRGC, and such aircraft could easily be deployed against Israel, with no warning, drawing a major attack upon sites throughout Lebanon, disabling airports, bridges, major roadways, and ground transportation systems, with disastrous results. Senior Israeli military officers have repeatedly stated that, should Lebanon fail to control Hezbollah military adventures against their country, that they will level the buildings in the south of Lebanon, and destroy infrastructure.

Under the circumstances, and given the present unstable situation in the Middle East, and with Hezbollah losing favor, and supporters, in the Arab countries, due to its support of Assad, yet another war, between Hezbollah and the State of Israel, could erupt this year. Compliance officers at banks that have financial exposure in Lebanon should consider raising Country Risk for Lebanon, as well as seeking to reduce their holdings there, forthwith.

* The runway is estimated to be 2198 ft. (670m). Small STOL aircraft might be able to operate there, but conditions generally do not favor anything but drone flights.


Panama's corruption authority has advised that it is unable to proceed with an investigation of Magistrate Judge Victor Benavides, of the Supreme Court of Justice. Benavides' former chief of security disclosed this week that he deposited large sums of cash, at Benavides' direction, into the judges' accounts, and that he had personal knowledge that the money came from bribes paid by litigants who had cases before the high court.

There were also powerful allegations that Benavides had spent much of this bribe money entertaining very young men, and that he was deeply involved in Pedophilia. The news shocked many in Panama, and there have been calls for an immediate investigation, especially of the corruption charges.

Following the release of the incriminating information, Judge Benavides made multiple telephone calls, to the remaining judges on the Supreme Court, and to certain prominent members of the National Assembly, threatening to expose their corruption, if criminal charges are filed against him. Immediately after that, the corruption prosecutors announced that they would be delaying the initiation of an investigation into Judge Benavides' misconduct.

While there are, admittedly, major ongoing corruption investigations pending in both the PAN and Martinelli cases, observers of Panamanian politics are wondering aloud whether Benavides' threats have caused powerful forces in government to order prosecutors to call off any investigation of Judge Benavides. If so, Panama's new reform movement may be doomed, especially if sitting politicians fear their dark pasts will be exposed. Does reform have a chance in Panama ?


When I see news, like yesterday's announcement, that a bank president in Kansas charged with money laundering, was among those indicted in a Federal criminal case, I am again reminded about the utter failure of current government policies regarding the war on money laundering. The case involved a Mexican cartel; why is it we only see one of these a year ?

When regulators levy civil fines & penalties upon a bank that was engaged in money laundering, and law enforcement fails to indict those greedy bankers who actually committed the crime, or who were guilt of willful blindness, they fail to deter other bankers from engaging in those offenses. Deterrence only works when individuals who might be considering criminal activity fear the consequences of those possible actions, and they are not afraid, because bank fines are the worst thing that will happen to them.

Considering that most of the world's biggest banks have been guilty of repeated money laundering, and only suffered civil fines and penalties, it is clear that their directors are not afraid of individual accountability for their sins; they do not fear prison, because nobody in the bank will be arrested and charged. It is time to change that; otherwise the United States will never be able to sufficiently suppress the rampant money laundering that poisons the financial system, and makes criminals rich.  

Wednesday, April 22, 2015


The former Panamanian president, Ricardo Martinelli, appears to have intentionally avoided entering, or even transiting, America, since leaving office last year. Are the rumors true, is he under indictment, for money laundering, in the United States ? Criminal charges against former heads of state are rare in the the US, but are not unknown, as we know, especially when Panama is involved.

Here is why there is a strong chance this is true:

(1) Martinelli pointedly sent his private jet into, and through, the US, while his supporters were advising the media that he was in America, yet he was not on board, nor did he arrive in Miami, on that plane, which continued on to Europe. He has engaged in a campaign of disinformation regarding his whereabouts. Is he afraid of arrest and extradition to the US ?

(2) When the target is not in US jurisdiction, the indictment remains sealed, and not available to the public, so that the target can be apprehended upon arrival, not suspecting that charges exist.

(3) David Murcia Guzmán, the Colombian pyramid fraudster, padded his Ponzi profits with narcotics profits, to the tune of $3bn, and much of that money was laundered through Martinelli's Super 99 market chain. Murcia, who is not longer in the Federal Prison system, and thought to be in Witsec (the Federal Witness Security[protection] program). Murcia is said to be cooperating with US law enforcement, and his testimony alone is thought to be more than sufficient to convict Martinelli of drug money laundering.

(4) Millions of dollars in bribes and kickbacks, paid to Martinelli by a publicly-owned corporation in Italy, to secure lucrative contracts in Panama, was reportedly transferred to a number of overseas accounts. The dollar transactions were transferred through New York; the acceptance of bribes and kickbacks were predicate acts.

(5) There are credible rumors of a large cash reward for information leading to his capture, being circulated by law enforcement.

Will the United States, to set an example, arrange to capture Martinelli, in South America, and bring him to the United States for trial ? We cannot say, but many in the US are hoping that they will have the opportunity to see their corrupt former president, in District Court in Miami, facing American justice.  


The Fifth Circuit Court of Appeals has once more scolded Allen Stanford, lecturing him on both Federal law, and civil procedure. After having reprinted the District Court gag order currently still in full force and effect, in the 5th Circuit court file, apparently Mr. Stanford, and the individual who is ghost-writing his appellate filings for him, failed to get the message.

The Court has now entered this order, which was filed on April 16, 2015:

"Appellant moves to vacate the District Court's gag order, and to be granted permission to speak with the media, concerning the status of his appeal. We currently lack jurisdiction, under the Collateral Order Doctrine*, to decide appellant's motion; appellant's earlier motion to vacate the gag order was denied by the District Court without prejudice, and Appellant has not re-filed his motion in the District Court.[citation omitted]

     IT IS ORDERED that Appellant's motion, requesting that the District Court's gag order be vacated, is dismissed, without prejudice to Appellant moving to vacate the gag order in the District Court in the first instance".

Perhaps Mr; Stanford, and his paralegal assistants, whoever they may be, should actually research the law, as well as both the rules of civil and appellate procedure, before filing any more motions before the Fifth Circuit. Prison law libraries are there for that reason; use them.

* Stanford filed a motion to vacate the District Court's gag order, which appeared to be an underhanded attempt to file an appeal of that order, but which is barred because it is neither a final judgment, nor in the class of rulings that conclusively decide an issue separate from the merits of the case, and which would be effectively unreviewable after the entry of a final judgment. That is why the Court cited the Collateral Order Doctrine.


This is the Atlantis Condominium, located in Miami's pricey Brickell Avenue waterfront residential area, immediately south of the city's international banking district. Contrary to what has been published, it is NOT the current residence of the fugitive former president of the Republic of Panama, Ricardo Martinelli. The purported interview of Martinelli in Miami is a total fiction. Most observers have him, and a large number of his entourage, hiding out on an estate that he purchased in Paraguay. Anything else you read is merely disinformation. 


Magistrate Judge Victor Benavides, under criminal investigation after his former security chief stated, in a video and sworn statement, that his ex-boss took bribe money to fix Supreme Court cases, and also engaged in pedophilia, has responded, by threatening exposure of Panama's widespread corruption.

Benavides telephoned all the other members of the Supreme Court of Justice, as well as several prominent members of the National Assembly, Panama's Parliament. He bluntly threatened to expose:

(1) Rampant corruption among the Supreme Court Justices.
(2) The identities of judges and Assembly members who kept mistresses, and their names.
(3) the names of government officials who engaged in acts of sexual depravity and deviance.
(4) Who received bribes and kickbacks in Panamanian government agencies, and the courts.

Clearly, Judge Benavides is desperate; whether his threats will have an effect upon his criminal prosecution is not known, but Panamanians are sick of the corrupt system that operates government and the courts in Panama, and they may demand that this information be aired.


Apparently, Hamas is operating its program in illicit finance in countries in the Middle East that oppose its policies. An Egyptian media source has now reported that Saudi officials had arrested Maher Salah, identified as the senior Hamas treasury financier. He has been charged with money laundering for terrorist entities, and bulk cash smuggling. He was taken into custody some time ago, but the information just became public this week. Salah is known to have been living in Jeddah.

This indicates that Hamas is moving cash into, and through, countries not allied with it, so as to conceal their ultimate destination. Money sent from Saudi Arabia could be cleverly characterized as humanitarian, post-conflict reconstruction aid, when, in truth and fact, it would be going into Hamas' war chest for weapons and tunnel construction. Maher, whose position is said to be the financial chairman of the designated terrorist organization, has reportedly already been succeeded by Mohammed Nazzal. Compliance officers should note that Hamas is using this tactic, to launder and transport funds. Iran has been contributing millions of dollars to Hamas since last year's conflict with Israel, for the purpose of rebuilding its lost military capability.

Tuesday, April 21, 2015


The Financial Crimes Enforcement Network (FinCEN) has issued as Geographic Targeting Order, directed against the estimated seven hundred commercial exporters whose offices are in the area surrounding Miami International Airport (MIA).The purpose of the order is to identify trade-based money laundering activities in the Miami area. The identifier for these reports is DORALGTO1. Doral is the name of the area just west of MIA; it is also a municipality with a large Venezuelan population. Do the math, and you will understand who the targets are, and why.

The immediate impact of the Order, which takes effect on April 28, and remains active for 180 days:

(1) The $10,000 regulation, on filing Form 8300 on cash transactions, drops to only $3,000.
(2) Cash transactions include cashier's checks, money orders, and traveler's checks.
(3) Valid, government-issued photographic identification must be obtained from the customer.
(4)  The name, address and telephone number of the individual receiving the goods.
(5) There are civil & criminal penalties for failure to comply with this Order.

If you wanted to know whether any of your bank clients are included in the Order, it constitutes all businesses located in the ZIP codes: 33172, 33178, 33166, 33122 and 33126. The affected areas include those on the map, in beige, in the western part of Miami-Dade County(left-hand side of image).

Miami ZIP Codes
Trade-based money laundering is one of the preferred methods through which money launderers for narcotics trafficking organizations repatriate drug profits to Latin America. Until now, most US law enforcement efforts in this area have not been effective, due in part to the vast number of exporters operating in the Continental United States.

Readers who may have clients affected by this GTO are advised to review the complete text, which can be accessed here*. Clients should be notified, and urged to comply, lest their companies be assessed large civil penalties; the individuals in charge who fail to follow the GTO could be charged with a crime in Federal Court. Compliance officers should be especially alert for foreign nationals with an urgent need to open a new account, for checks from regular business accounts are not included in the definition of "Currency" requiring the filing of 8300s. Such clients would also have to "smurf" small amounts of cash, repeatedly, into those new accounts.

The last GTO, which targeted Los Angeles-area businesses, turned out to be to be an extemely successful operation; given that Miami is the epicenter of exports to Latin America and the Caribbean, one should expect that there will be a large number of civil and criminal charges filed.  
*Miami Geographic Targeting Order


The fact that Britain's Financial Conduct Authority (FCA) levied a multi-million Pound fine on the Bank of Beirut's UK subsidiary, Bank of Beirut (UK) Ltd., and also fined the bank's compliance officer, and its internal auditor, does not seem to have been heard in North America. I have failed to find any significant coverage in the compliance press, which is disturbing, because the Bank, which had been ordered years ago to clean up its act, nor only dragged its feet, but misled the regulators, time and time again, about the status of its mitigation of the problems. It "failed to be open and cooperative" with the regulator, and notes in the report indicated that pressure from senior management weighed heavily upon the two bank officers fined, but it did not excuse their actions.

I recommend that US & Canadian compliance officers review the Final Notice, the complete text of which can be accessed here*. The bank failed to implement and conduct an adequate compliance monitoring program, failed to meet deadlines, and gave false assurances that the work have been completed, all exposing the bank to financial crime.

The bank has been ordered not to accept any new clients from high-risk jurisdictions, as the same are defined by Transparency International's guidelines.

Lastly, the fine assessed was really £3m, but the FCA gave a 30% discount for settlement purposes.

*Final Notice 2015:Bank of Beirut (UK) Ltd.

Monday, April 20, 2015


George Levin (l), with Scott Rothstein (c).

Having obtained a summary judgment on some of the counts, and a jury verdict upon the rest of the civil charges pending against hedge fund owner George Levin, the Securities & Exchange Commission has now moved for entry of a final judgment, in an amount totaling over $181.4m, against the defendant. Levin was also barred from participating in any future securities transactions. The promissory notes he was selling, secured by the bogus court settlements Rothstein sold to his hedge fund, were not registered with the SEC, and Levin was also guilty of securities fraud.

The details:

(1) Disgorgement of profits, in the amount of $57m, together with prejudgment interest of $11.2m,  plus a Civil Penalty of $5.7m, for violations of §5 of the Securities Act.

(2)  Disgorgement of $49m, together with interest in the amount of $9.5m, plus a Civil Penalty of $49m, for violations of §17(a) of the Securities Act, and §10(b), and Rule 10b-5 of the Exchange Act.

Levin's hedge fund placed all its investors' money with Rothstein's purportedly secured investments in non-existent whistle blower, employee discrimination, and sexual harassment settlements; he certified to his investors that there were funds on deposit, when he had not seen documentary proof that they existed.


Sunday, April 19, 2015


Magistrate Judge Benavides
Just when you thought you heard everything about corruption in the court system of Panama, it gets worse.Victor Leonel Benavides Pinilla, a Magistrate Judge at the Supreme Court of Justice of Panama, has been accused of taking money, and of pedophilia. His accuser is his former chief of security, Vicente Zamorano, who is currently imprisoned on kidnapping charges. A videotaped statement, made by Zamorano, has been released to the media in Panama City.

Zamorano alleges that he routinely made large cash deposits on the judge's behalf, which came from interested parties with pending matters at the Supreme Court of Justice. He also states that a large portion of that illicit cash was ultimately spent on homosexual affairs with minors under the age of 15 years. The names of those minors were included in the letter, which Zamorano read during the videotaped statement.

Rumors that sexual favors, of all kinds, were demanded by judges who were asked to fix cases pending before them, have been flying around Panama for years. This was in addition to the payment of large bribes, for the purpose of dismissing, or delaying, cases where the defendants' attorneys wanted justice to be delayed or denied. Any bank accounts, of members of Panama's judiciary, located in the United States or Canada should receive close scrutiny, including historical searches, by bank compliance officers. Frankly, North American banks should consider exiting existing relationships, particularly when the account balances exceed the salaries of the judges maintaining accounts.

Foreign investors, who have been victims of civil cases abruptly dismissed or indefinitely delayed in Panama's court system, should consult with their legal counsel, in the countries where they reside, to determine whether there are any avenues through which they can seek relief, due to damages they suffered at the hands of a broken judicial system.

Saturday, April 18, 2015


Public statements, made by senior Hamas officials, appear to show that it is moving towards establishing a sovereign, independent Palestinian state in the Gaza Strip. Given that sanctions in effect against the designated terrorist group are not global, compliance officers at international banks in those countries where sanctions are in place will be presented with a difficult situation.

The purported national reconciliation program, which was allegedly in effect between Hamas and West Bank-based Fatah, has been an utter failure, due largely to Hamas' refusal to give up any power in Gaza to its longtime rival. The possibility of unity has reportedly been abandoned by Hamas.; Fatah leaders are said to be opposed to any departure from the traditional two-state solution.

Reports are stating that Hamas is setting up a committee, which will include the smaller Islamist factions, with a goal of creating an independent state, solely in Gaza. Since Israel voluntarily withdrew from Gaza several years ago, in theory, Hamas could declare Gaza independent. Of course, the restrictions that both Israel and Egypt have in force against Gaza's borders still make international commerce, and travel, a major problem, but international recognition, especially from those countries in the developing world that oppose US foreign policy, would be swift.

Compliance officers in the United States and Canada could face a dilemma: are goods being sold to those countries, especially those in Europe or the Middle East, merely in transit for Hamas, and how do US & Canadian banks protect themselves against potential criminal charges for unwittingly providing material support, namely payments for good sold, to a Specially Designated Global Terrorist organization. Banks will have to consider signed end user certificates from their client's customers, when the goods are delivered at a country that trades with Gaza; this could pose a problem with preserving existing business relationships.

 Hamas leaders have also bluntly stated that, notwithstanding the creation of a new state in Gaza, it will not cease its terrorist activities against Israel, so do not believe that this new state will solve the Arab-Israeli problem, which was been pending since 1948.

What if the EU releases Hamas completely from sanctions designation ? Will that render compliance against shipments to Hamas ineffective ? An independent Gaza will be a compliance officer's nightmare, if that officer worked at a banks whose customers were largely engaged in international trade.


If you read my recent article, Are you employing Enhanced Due Diligence on Special Interest Aliens from Latin America ? and you wanted to know from which Latin American countries do Special Purpose Aliens hold passports, here is what I know. The ones that my sources are aware of  possess valid passports from Panama, Argentina and Venezuela. Corrupt officials in those countries, for the right sum, in cash of course, are happy to document newly-arriving "applicants," from the Middle East, as local nationals.

Panama is by far the most popular jurisdiction for one reason: it is far easier to obtain a US visa in Panama than the other two choices. American Embassy services in Panama City are quite efficient, and one can expect a successful outcome in a far shorter time than in most other Latin American countries. This is one instance where American effectiveness results in increased potential danger to the US homeland.

Thus, does one now raise risk levels on individuals arriving from the above countries, ensuring that any such new clients are subject to a sufficient amount of enhanced due diligence that will serve to rule them out as Special Purpose Aliens ? I believe, in my humble opinion, that such action must be considered mandatory*. Otherwise, you may end up banking a member of a SDGT.

* This caution is specifically directed to compliance officers at US banks who typically serve affluent clients from Latin America, as the prospect of a new and potentially lucrative client can blind a banker to the need for additional Customer Identification Procedures.


Friday, April 17, 2015


The Securities & Exchange Commission, in a motion filed in its case* against George Levin and Frank Preve, who operated a hedge fund which placed investor money with Scott Rothstein's billion dollar Ponzi scheme, have requested that Preve disgorge the profits he earned from his participation in the fraud perpetrated upon the investors. The amount requested, for the entry of a final judgment, is $985,000, his income from the fraud, plus interest, for a total of $1,054,544.72 .

Preve had previously consent to a permanent injunction, disgorgement, plus prejudgment interest. The promissory notes that Levin & Preve sold to their victims were never the subject of a Registration Statement with its regulators, and no exemption from registration existed.
*Securities & Exchange Commission vs. George G. Levin and Frank Preve, Case No.: 12-cv-21917-UU (SD FL).

Thursday, April 16, 2015


We have discussed this specific type of high-risk bank client in earlier articles, but now that the American intelligence community has given them a name, we shall return to the subject again. A Special Interest Alien is not E.T., but an alien, coming from Latin America, whose country of origin is not one that is south of the Rio Grande, but from a country regarded as high-risk by compliance.

Aliens whose birthplace is in the Middle East, but who holds a valid passport from a Latin American or Caribbean country, are generally given the highest risk levels, though nationals from certain countries in Asia and Africa have also been seen regularly, and deserve mention here. These individuals have a greater risk of being agents of a Specially Designated Global Terrorist organization (SDGT), or members of an organized crime syndicate, and should be considered potential threats.

Given the ease by which they can obtain legitimate travel documents, showing them to be nationals of a specific Latin American or Caribbean nation, you are left to use your compliance skills to identify, and decline, Special Interest Aliens, because they are seldom whom they appear to be. One certainly does not need to have one's bank suffer the reputation damage that comes with Providing Material Support to Terrorism allegations, or rumors that your bank is working with organized crime.

Remember the techniques:

(1) Check the place of birth, and if it is outside the region, require an additional government-issued photo ID that also lists the POB.

(2) Have a member of your staff who is familiar with the slang, vernacular, and accent of nationals of the country that your account applicant claims to be from, listen to his or her speech. Is Spanish or Portuguese not their native language ?

(3) have you run a quick search engine inquiry on the account applicant, in his native language ? Was there sufficient mention of him to indicate country residence for an extended period ?

(4) When was the passport issued ? Does it have a number of visa stamps confirming international travel to Europe, Asia, etc., that you would expect of such an individual ?

(5) Is the client accompanied by others who might also be Special Interest Aliens, and do they defer to him, indicating that is could be the ranking officer in the group ?

Reports state that just under 500 Special Interest Aliens were intercepted at the US border last year, seeking illegal entry.  One wonders just how many more were successful, and whether you may be currently banking them.

Not this guy

Wednesday, April 15, 2015


As we are fond of repeating, everyone who was involved, even on the fringes, in the Scott Rothstein Ponzi scheme, ends up paying the price. Christina Kitterman, an RRA lawyer who pretended to be a Florida Bar staff attorney, in order to mislead hedge fund officers about bogus Bar complaints, is currently serving a five-year sentence for her crimes. She has taken an appeal to the Eleventh Circuit, essentially from the sentence imposed, which her attorney has characterized as "the product of procedural error in determining loss, and is substantively unreasonable."

Does she have a point ? The hedge fund officer that she spoke to on the telephone did not invest any additional sums, and the fund was already under a contractual obligation. While there was no actual loss, the Court assigned an intended loss of $120,000, which resulted in the 60-month sentence. Kitterman asserts that the District Court's intended loss was speculative, and not supported by the evidence.

The Appellant is also asserting that there was Rule 404(b) evidence of other crimes improperly admitted, involving her alcohol and drug abuse, illegal campaign contributions made on behalf of Rothstein, and alleged association with Mafia figures.  Kitterman claims that she was ignorant of the Ponzi scheme, and was as much a victim as the investors.

Oral argument was recently heard; we shall update you on the decision when it is handed down.
United States vs. Kitterman, Case No.: 14-12387 (11th Cir.).

Tuesday, April 14, 2015


I do not like it*, but it appears that it will soon become a reality, and therefore, a commercial solution must be created. I am referring to the serious compliance problem that will soon be encountered by American companies that will soon be arriving, en masse, in Cuba, after the lifting of the American designation of the Republic of Cuba as a State Sponsor of Terrorism.

As I have previously stated, notwithstanding the required Cuban guarantees, about its termination of support for SDGTs, they will still be in residence, and in transit into and through Cuba. As such, American companies might just have some goods or services that certain terrorist organizations need, and thus the clear and present danger that a US corporation will, unwittingly, do business with a sanctioned organization, through its officers and agents, should be taken very seriously.

Therefore, since there is no commercial-off-the shelf database of known members of ETA, FARC, ELN, Hamas, Hezbollah, and the other terrorist groups who have been known to have agents living, working, or doing business in, Cuba, and the US Government will not tip its hand by revealing that it knows most of their names, it is time for the commercial sector to step up, and create such a database, for sale to compliance officers serving American companies who wish to trade with the new Cuba, as well as their bankers, suppliers, vendors, and other related entities who will potentially be exposed to doing business with terrorists.

Demand drives the commercial database market; remember, when American regulators ruled that businesses were required to obtain information about a sanctioned Iran that was "knowable," and World-Check created, and made available, a database that contained the necessary information. We need a company in the field to build an accurate database of the names of members of terrorist organizations, whose agents are known to be operating in the Western Hemisphere, and make it available to the compliance community. Otherwise, some US companies are liable to get badly burned, with providing material support to terrorism charges.
*Removing Cuba from list of State Sponsors of Terrorism exposes American Businessmen