Sunday, February 28, 2016


The Iranian Ambassador to Lebanon has announced that his country will pay $7000 to each Palestinian terrorist who attacks anyone in Israel, or their next of kin, if they were killed during that attack, and $30,000, to any family of a terrorist, whose home is destroyed by Israel.  Don't the banks involved know the meaning of the term Terrorist Financing?

Any financial institution, that maintains facilities, including correspondent relationships, in Judea or Samaria (commonly but inaccurately called the West Bank, from the period when it was a province of Jordan 1949-1967) runs the serious risk of global sanctions, should it participate, even tangentially, in sending Iranian cash (US Dollars, or course) to Palestinians who launch terrorist attacks in Israel.

I see where the Palestinian Authority (PA) has asked that the money be funneled through its agencies, but it has not objected to the program. It  probably want to take "processing fees" from that money.

Any bank foolish enough to move money to Palestinian terrorists, may want to read the Arab Bank  case, before proceeding, for it may find that the West, and the United States in particular, will not only charge it with Providing Material Support to Terrorism, it may also deny the bank access to the American financial structure, which is a death sentence for any bank that desires to serve its clients in international transactions.


To illustrate how desperate the Government of Panama is to cover its massive budgetary shortfall, a businessman, who was neither an officer nor director of a company, was arrested in Colombia, and summarily shipped off to Panama, where he faces charges that he is personally responsible for the non-payment of salaries to employees and corporate contribute contribution to Social Security taxes, of a company he is affiliated with.

An INTERPOL Red Notice was reportedly issued against the defendant, in a related fraud action, and he was flown to Panama, without any formal extradition proceedings, with the first violation of Panama law. Second, he cannot be held personally liable for corporate obligations, including taxes, as he was neither an officer, nor a director. This case should serve as a warning to any businessman operating a company in the Republic of Panama; the government will bend, or even break, the law when it comes to collecting revenue; Please govern yourselves accordingly.

If the increase of capital flight from Panama, and a steep decline in the number of new North American expats taking residence, were both not signs that Panama has fallen out of favor with foreign nationals, these new efforts to illegally wring money from businessmen will certainly serve as an abject warning to businessmen to stay out of Panama, lest they also be arrested without legal justification. Look for additional governmental efforts to collect revenue, through any means available.

Friday, February 26, 2016


In case you do not have these companies, all have now been blacklisted by the Kingdom of Saudi Arabia for ties to Hezbollah:


Thursday, February 25, 2016


Dundee Merchant Bank, a subsidiary of Canada's Dundee corporation, has been closed for more than a year, and it may have been quietly shuttered for a longer period. Though media announcements have stated that the was "in Liquidation, " such an action has neither been advertised, as required by law, nor has any court-ordered liquidation ever been filed or taken. This has been verified by independent  investigations, conducted in Grand Cayman. Any such claims about liquidation are totally bogus.

Though some individuals affiliated with the bank, when queried, have given some vague story about Dundee Corp. handling this mysterious liquidation, it has never occurred in the Cayman Islands, where it must occur. So why did a financial institution deceive the investing public ? Was it insolvent, and unable to refund client money to its depositors ?

In that case, why not take whatever money is left, and leave everyone believing that the $450m, which was supposed to be in the bank, was all transferred out, when in truth and in fact, a large portion of its deposits had already ben stolen by the Cayman Gang of Four*. After all, Dundee Bank President, Derek Buntain, and Senior Vice President, Sharon Lexa Lamb, were the ranking officers. Let the public think that the $450m thought to be properly on deposit had all been taken, when the truth may have been that much of it was already missing.

Perhaps the Ontario Provincial Police could look up Derek Buntain and ask him; he is living, not in his Prince Edward Island home, but in Ontario, at the home of one of his sons. Forget about asking Sharon Lexa Lamb, for she is locked up tight in a house, somewhere in Grand Cayman, worrying about when she will get the proverbial knock on the door, with an arrest warrant. Or should we ask Dundee Corporation, which has been busy, in recent years, selling off its assets and subsidiaries.

Our last question: where, o where, is the Cayman Islands Monetary Authority CIMA, in all this; Isn't it supposed to be supervising financial institutions with Cayman licenses.  Should not a licensed bank be open to the public, at the very least to give its depositors access to their accounts, e wonder.  Are there any financial gatekeepers worthy of the name on duty in the Caymans ?

* the other two Gang members are Ryan Bateman and Fernando Motto Mendes.


Compliance officers are aware that American's Visa Waiver program (ESTA) excludes dual nationals, and individuals who have visited Iran, Iraq, Syria & Sudan. Most compliance officers now routinely initiate enhanced due diligence on potential clients who have ties to these high-risk countries, due to their risk-based perspective.

Now, the Director of Homeland Security United States has added Libya, Somalia & Yemen to the list of countries of concern. You would do well to follow that move by requiring increased compliance measures upon any nationals of those countries, or other nationals who have traveled there, or do business there.

Remember, though the aim of DHS is to identify possible radical Islamists who may have participated in military action in those countries, and are returning to the US, your goal is to rule out potential terrorist financing of new bank customers. The last thing you need, in today's enforcement climate, is a visit, two years later, by law enforcement, and your bank's name on the OFAC "name and shame" monthly of sanctions violators, especially after you learn that your client moved money for an SDGT right under your nose.    

Tuesday, February 23, 2016


Rumors are running rampant in Panama, to the effect that the true reason the Financial Action Task Force (FATF) removed the Republic from its Grey List of uncooperative jurisdictions recently was not due to reforms in legislation, nor implementation of effective AML/CFT measures. The truth is that Panamanian diplomats contacted their opposite numbers in certain European countries, and made a direct threat, which would affect the commerce of those nations.

The threats, which appear to lie somewhere between extortion and blackmail, were a promise to delay, and even detain, shipping of those European countries entering the Panama Canal, whose delegates voted against Panama going off the Grey List, during the recent FATF Plenary in Paris. Given that diplomats are notoriously tight-lipped, one doubts whether any of them will actually, on the record, confirm the information.

Could this story be factually correct ? Remember what happened to that North Korean freighter seized and held by the Panamanian Government ? Panamanian nationalism is on the rise of late; let us just take the story with a grain of salt, but note that, in truth and in fact, Panama's AML/CFT is no better than it was when FATF originally placed Panama on its Grey List. It actually is worse, if the truth be known.

Therefore, let us consign the story to the dustbin of history, and see whether the Nicaraguan canal project suddenly obtains new financing from European financiers.


Fernando Moto Mendes, the current Managing Director of fugitive Ryan Bateman's group of companies*, has taken the position that he was only a minor player in the Cayman Gang of Four scandal, which involved the organized theft and diversion of over $400m in capital of Canadian retirees and pensioners. In truth and in fact, the documents uncovered thus far, controvert Mendes' public statements.

The receipts, for millions illegally diverted from Dundee Bank accounts, located in Butterfield Bank, in its Grand Cayman subsidiary, were all signed for by Mendes, in his capacity of Managing Director. Furthermore, Mendes' allegation that he was only the "office manager." have no basis in fact, and the evidence to date nowhere lists him as anything but MD. Funds of victims were delivered to him by Gang members Sharon Lexa Lamb and Derek Buntain, who were former Dundee officers.

Bateman, Lamb & Buntain
Mendes, whose "colorful" ( translation: fraudulent) past disqualifies him for any managing director position or title, has been allowed to remain at the Bateman Group, for several months, and the Cayman Islands Monetary Authority (CIMA), has failed to take any steps to remove him, or close up the Bateman Group, notwithstanding that CIMA has known about the massive fraud since August, 2015.

Some Caymanians are referring to CIMA's lack of response as regulatory malpractice, and wonder why  CIMA leadership has not been replaced by the government. At the very least, an internal investigation should be launched, to determine why CIMA has failed to respond to several fraud scandals that have roiled the Cayman Islands in recent years. In most cases, foreign investors never recovered their funds, and fraudsters, based in the Cayman Islands, were never prosecuted for either fraud or money laundering.
* Bateman & Company Ltd.
   B & C Capital Ltd.
   Bateman Financial, Ltd.
   Note: Bateman formed companies, with the same exact name, save the suffix, in Panama, the Cayman Islands, and the UK, to facilitate illegal transfers of victim funds, to other jurisdictions.    


It is getting difficult to keep up with all the jurisdictions offering an economic passport, or citizenship through investment, but you do need to be current. Please note that Hungary also offers such a program, known officially as the Hungarian Immigration Investment Program.

Interested Asian & African investors are required to deposit  €300m, which will be returned after 5 years, without any interest accrued. While most compliance officers regard Hungary as low risk for both money laundering, as well as terrorist financing, I note that the Government of Hungary appears to be targeting wealthy Chinese nationals, so we must assume that there will be corruption issues. Please conduct your compliance accordingly.

Word to the wise: check the place of birth on the passports of ANY new bank client, at account opening. Was he or she actually born in their country of nationality ? If not, why not ? You may have stumbled upon someone who bought their passport. needless to say, that means enhanced due diligence is in order, if you are operating a risk-based compliance program.

Monday, February 22, 2016


Leonardo Paul Aparicio, attorney for Ricardo Martinelli

Former Panamanian President, Ricardo Martinelli, who fled his native country when details of his criminal conduct became public knowledge, and obtained an illegal appointment to the Central American Parliament (PARLACEN) in January, 2015, has failed to attend any of the five meetings of that body, and is considered to be in beach of his obligations, and subject to expulsion, by the membership.

Of course, inasmuch as Martinelli was not properly elected, nor appointed, as an alternative member, his status is questionable at best, but his arrogance in failing to show up for a single meeting of the organization, since he claimed to be a member, is additional evidence that the sole reason for his PARLACEN affiliation was to hide behind the immunity conferred upon delegates.

One wonder why his principal attorney, Leonardo Paul Aparicio, failed to insure that his client attended at least some of the scheduled meetings, to avoid the appearance of impropriety that has resulted from his breach of duty. Attorney Paul, who as a former prosecutor, was certainly aware of his client's obligations as a PARLACEN member, and his regular visits to Martinelli in Miami gave him ample opportunity to insure that he was aware of those duties.

It is not known whether his lack of attendance at mandatory organization meetings was a factor in the decision of the Supreme Court of Justice ruling dismissing Paul's Constitutional argument against extraditing his client from the United States, to stand trial on a dozen major criminal charges.

Sunday, February 21, 2016


The Constitutional defense interposed by Ricardo Martinelli's attorney, Leonardo Paul Aparicio, representing another client, was rejected by a magistrate sitting in Panama's Supreme Court of Justice, who declined to refer the matter to the full Court for consideration, and Martinelli's case has now moved much closer to the entry of an order requesting the United States to extradite the former president.

 Paul had argued that, due to his status as an eleventh-hour appointment as a member of the Central American Parliament (Parlacen), he was immune from any legal proceeding, but the magistrate  Judge hearing the case found that Martinelli's position was legally flawed. The fact that his Parlacen appointment appeared to be improper, and probably defective, most likely was a contributing factor.

The specific case, one of a dozen pending against Martinelli, and others involved the illegal diversion of delinquent taxes, collected from Panamanians, but never paid into the National Treasury. Martinelli reportedly was one of the recipients of the stolen tax money; the charge is Crimes Against Public Administration.

Martinelli's attorney has sought to combat the numerous cases pending against him, through what most legal observers see as strictly dilatory tactics, throwing up procedural, rather than substantive, defenses. The mass of clear and convincing evidence against Martinelli most likely has caused his attorney to scrupulously avoid any mention of the merits of the cases, for any such discussion claiming a lack of factual basis for the charges would open the door to the public introduction of extremely damaging information, which might further infuriate an already angry Panamanian public.

Leonardo Paul Aparicio

Will the Panamanian street get their wish, and will the individual now considered to be the absolutely most corrupt president Panama has ever had, sit in Panama City courtroom, to face his accusers ? We cannot say, but the world is watching.

Saturday, February 20, 2016


Just when you thought the economy in Venezuela could not get any worse, it did. The Government has devalued the national currency, the Bolivar, and, for the first time in decades, raised the subsidized price on gasoline. These moves will further damage international trade, as well as cause Venezolanos to fork out, for the first time, a substantial amount of cash for petrol, each time they fill up the tank.

If you are not already advising clients who look to you for Country Risk assessments to avoid any financial exposure in Venezuela, these two events should convince you to red line the country, for all purposes. The risks of default, or nonpayment of debt, are simply too elevated to justify any investment, extension of credit, or even government contracts. Take a close look at the established unofficial market rate for the Bolivar vs. one US Dollar, which appears at the beginning of this article, should you require further proof.


You may want to visit the website* of the Financial Action Task Force, for at its February Plenary, the FATF advised that it has removed the Republic of Panama,  the Peoples' Democratic Republic if Algeria, and the Republic of Angola from its "Grey List."Details of the actions taken by those jurisdictions, which resulted in the FATF decision, appear on the website.



Compliance officers know that the toughest Customer Identification Program challenge is proving that affluent new Chinese bank clients are PEPs. Individuals claiming to be wealthy businessmen, with large amounts of cash could very well be military officers, government officials, or officers at government-controlled companies, all hiding their status as Politically Exposed Persons, as they masquerade as private citizens of the Peoples' Republic.

Most compliance officers rely upon Western news sources, or commercial off-the-shelf databases to determine whether a prospective client is a PEP, aware of Chinese internal censorship rules. Unfortunately, even the use of Western sources is about to become a potential problem, with the full truth hidden, and deleted.

China's State Administration of Press, Publication, radio,Film and Television has announced new regulations that require even joint ventures of Chinese and Western media outlets to submit all material intended to be published online in China, to meet Government censorship & approval. This means that the footnotes and references that you are reading, in a your commercial database, containing Western news articles and resources, may have been censored by the joint venture, for domestic Chinese consumption.

You are trusting its accuracy, for being a Western source, but in truth and in fact, it has been censored, and since the resource will not take the time and trouble to run two versions of its news stories, you get the redacted version, with the information you need to prove an individual is a PEP, deleted. Not good for either the Western compliance officer, nor his bank, which has now accepted the PEP as a non-PEP, and allowed him to move freely move money, without the special monitoring that PEPs require.

It is hard enough now to identify Chinese PEPs; with these new Chinese rules, it has just become a lot more difficult to make a Chinese PEP.


In an order that makes absolutely no sense, José Ayú Prado, the President of the Supreme Court of Justice, in the Republic of Panama, has forbidden interested parties from reviewing the contents of court files, by prohibiting them from visiting the Court. Additionally, due to some nonsense about court overload, the order, which appears here, suspends the ongoing investigations into "supposed acts of corruption" at the Second Anti-Corruption Tribunal.

Notwithstanding that there are a number of pending cases against him, Ayú Prado, was recently reelected the leader of the highest court in Panama, which gives you an idea of the extent of the universal corruption of the members of the Court, whose members were appointed by the former, and currently indicted, president of Panama, Ricardo Martinelli. Some of the 150 victims of the Martinelli's illegal surveillance program have been extremely vocal about the slow pace of the investigation, which ultimately rests in the hands of Magistrate Judge Ayú Prado, which targeted Opposition leaders, including a former candidate for president.

With the people of Panama calling for removal of the entire bench of the Supreme Court of Justice, and most attorneys outside of Panama telling their clients that filing civil suits there is not only a waste of time, due to the rampant corruption, but exposes them to the risk that bogus criminal cases will be filed against them, as well as the illegal seizure, without due process, of any assets they have in the Republic, new foreign investment has seriously declined, and Country Risk will need to be reevaluated.

Friday, February 19, 2016


The Financial Action Task Force, or FATF, has removed the Republic of Panama from its so-called "Grey List" of uncooperative jurisdictions. The FATF action, which took place at a Plenary Meeting in Paris, occurred after the organization concluded that needed reforms had been enacted.

Unfortunately, widespread money laundering, as well as terrorist financing, continues to exist in Panama City. There are neither money laundering prosecutions, nor suppression of the banking center's constant movement of funds to sanctioned global terrorist organizations, including most of those operating the Middle East.

Banks located in the United States have not responded to the FATF announcement. Currently, twenty-one major American financial institutions refuse to allow any Panamanian bank to open a correspondent relationship, and others will only allow small wire transfers into Panamanian banks.

The so-called Reform Movement, initiated by President Juan Carlos Varela, has succeeded in passing sufficient legislation to convince the FATF that Panama had changed, but, in truth and in fact, the country's powerful criminal syndicate remains in full operation, laundering drug profits, for both the Cartels, and Middle Eastern terrorist organizations. Nothing has changed, but the removal of Panama from the Grey List makes a superb photo opportunity for President Varela, and his supporters.

Thursday, February 18, 2016


Ricardo Martinelli
Members of the political party of Panama's ex-president, Ricardo Martinelli, have advised that he has been transported to a hospital in Miami, where he has been living since leaving office, after experiencing breathing problems. Panamanian media is reporting that he had a coronary blockage, and was operated on at the University of Miami Hospital complex.

 Anti-corruption prosecutors are seeking an immediate extradition to his native Panama, where he faces at least a dozen charges, including conducting illegal electronic surveillance of Opposition members, the power elite, and their spouses and paramours. Many of the victims have been extremely vocal in their demands that Martinelli face justice in a panama City courtroom.

Martinelli reportedly has attributed his condition to stress, due to the pressures imposed upon him by what he refers to as "political cases" brought against him in Panama, which have no basis in fact. He has had regular visits in Miami, from his attorney, Leonardo Paul, a former government prosecutor now in private practice. Paul leads a team seeking to avoid extradition at all costs, but a number of the dilatory ploys that he and his defense team have interposed have met with defeat to date.

Lic. Leonardo Paul

Precisely which US Government law enforcement agency sponsored Martinelli's admission to the United States, and continued presence is unknown; it may even have been an intelligence agency; Panama's former President, General Manuel Noriega, was a valued asset of the Central Intelligence Agency for years, before his regime became rabidly anti-American. Will Martinelli continue to enjoy protection from Uncle Sam, or will he be extradited to Panama, to face the music ? We cannot say, but we will be watching.


The Cayman Islands Monetary Agency, more commonly known as CIMA, has literally sat on its hands, regarding the theft of more than $450m, from Canadian retirees and pensioners, perpetrated by financial criminals known as the Cayman Gang of Four*. Eight months after it received documentary evidence of the massive fraud and theft of investor funds, CIMA has yet to interview any of the plotters, let alone refer the case to the authorities, for criminal prosecution.

After a few tentative steps, such as seeking forensic and compliance audits, from the Bateman Group. CIMA abruptly shit down any further inquiries. In truth and in fact, it has even declined to meet with victims, who were on Grand Cayman, seeking regulatory action on their plight. What could possibly have been the reason for this position ?

Reliable sources in the Cayman Islands know the answer; reportedly, the "ringleader" of the Cayman Gang of Four, Sharon Lexa Lamb, the cashiered Senior Vice President of Dundee Merchant Bank, has a close relationship with a certain CIMA officer, and Lamb prevailed upon that individual to quash the inquiry, permanently. Since this matter is under investigation, it may be inappropriate to name & shame that individual, but the time may come when circumstances demand that it be made public, especially if that individual decides to enter the private sector.

Ryan Bateman, Sharon Lexa Lamb, Derek Buntain
Whether the officer's action constitutes a crime, under the Laws of the Cayman Islands, I will leave to attorneys qualified in that jurisdiction to render an opinion, but it is certainly grounds for dismissal, with prejudice. The intentional failure, of a government official, to take action, for another, is just as much an example of corruption as accepting bribes and kickbacks.

Readers who have been wondering why CIMA seems to be little more than a "toothless tiger" in the face of major violations in the Cayman Islands, may now have their answer, regarding its consistent pattern of inaction.
*The Cayman Gang of For are: Sharon Lexa Lamb, Fernando Moto Mendes, Derek Buntain,
and Ryan Bateman.


The arrest in Panama of a Lebanese national, believed to be part of a team of money launderers working for Hezbollah, puts a spotlight on recent US Government sanctions against Western Hemisphere operations of the Specially Designated Global Terrorist (SDGT) organization, thought to be sending hundreds of millions of dollars annually, to help fund its Middle Eastern activities. The money comes from narcotics trafficking, and other illicit activities.

Reliable sources in Colombia have indicated that the former Panamanian Minister of Tourism Salomón Shamah, a Colombian who is a naturalized Panamanian citizen, and a longtime reputed money launderer in Panama, is linked to the Hezbollah network. Shamah has lived in exile in Colombia since the entire Martinelli Cabinet was implicated in the Financial Pacific/Petaquilla Gold Mine insider trading scandal.

Salomón Shamah: was the money going to him ?
It is noteworthy that the suspect, identified as A. Khalifeh,who was in possession of $500,000, in cash, held a passport from Ghana. Money launderers frequently use identity documents from countries not known to be either tax havens, or countries known to be narcotics producers, or transit zones, to reduce the risk that they will be scrutinized. They often do not even speak the official language of the country they claim to be nationals of, which the weakness you can exploit as a compliance officer. Why does he hold a passport from a country he has no ties to ?

Perhaps the increased attention of late, on money laundering in material support of terrorism will cause compliance officers to remember that Panama is home to most of the organized Hezbollah money laundering in the region; the suspect was transiting through there, bound for Colombia. The fact that the Government of Panama allows Hezbollah to operate there, and to maintain an office, says a lot about the issue ; there is both Panamanian complicity in  infacilitating terrorist financing, and the passivity of US law enforcement agencies, who merely monitor it, without forcing Panama to shut it down.

Monday, February 15, 2016


Questions persist about whether the $720,000, paid to the Government of the Bahamas, to begin the application process for oil exploration licenses, by a corporate entity controlled by the fugitive financier Ryan Bateman, of the Cayman Gang of Four, were the proceeds of criminal activities of Mr. Bateman, whose dodgy career reaches back several years, to his first venture in his native Alberta.

The Opposition in Nassau has posed some tough questions to government, about Bateman and his background, and unfortunately received no satisfactory answers. Given that Bateman absconded from a case in the Cayman Islands, where his bond was estreated, and that he is one of the primary suspects in the theft of $450m,  brazenly taken from the accounts of Canadian & American retirees, one wonders whether the money blinded government officials in Nassau to the need to conduct a due diligence investigation of Ryan Bateman.

Some sources, with knowledge of Bateman's "colorful" record of fraudulent ventures, have asserted that all his liquid assets were criminal proceeds, and can be traced back to victims who relied upon his integrity, with their investment capital. Whether the Bahamian oil exploration lease  agreements, or application fees, can be seized, or attached, by victims, or their attorneys, or by foreign prosecutors or attorneys general, is a distinct possibility; such actions could have a serious effect upon how the Bahamas conducts foreign investment in the future.

Sunday, February 14, 2016


Martinelli attorneys: Leonardo Paul, Rogelio Cruz, and Sydney Sittón
Just as OJ Simpson created a "Dream Team" of criminal defense lawyers, to represent him in his murder case, the fugitive former president of the Republic of Panama, Ricardo Martinelli, has assembled a trio of seasoned attorneys, to try to keep the criminal justice system of Panama from achieving his extradition, on more than a dozen serious charges. Thus far, however, their track record has been spotty; two attempts to interpose habeas corpus, relying upon his (illegal) appointment to the Central American Parliament, have now reportedly failed.

It appears now that the backup strategy is to petition the Inter-American Court of Human Rights, on their client's behalf, alleging that the rush to extradite him is a violation of his basic human rights, asserting that neither due process, nor the rule of law, has been followed in the Martinelli cases. The lawyers in the forefront of Martinelli's defense are Sidney Sittón, Rogelio Cruz, and Leonardo Paul.

While even the most despised criminal defendant is entitled to the best attorney that he can secure, the repeated use of purely procedural, and extremely dilatory, tactics, does not endear these three prominent lawyers to the Panamanian public. Some of Martinelli's dirt will surely rub off on these esteemed lawyers, whose role in hindering prosecution of perhaps the most corrupt president Panama has even had (yes, he eclipses Noriega) will not be easily forgotten, for justice delayed indefinitely is justice denied.


Multiple reports, verifying that a small army of cash couriers, seen transporting the maximum amount allowed by law ($50,000 or equivalent), out of China, should be a wake up call for Western compliance officers, for a large amount of this "flight capital" is believed to be owned by Politically Exposed Persons, (PEPs) and you can assume that it came from bribes, kickbacks, or unlawful compensation. The blame has been laid upon the fear that China's declining economy will deteriorate further, causing a fall in the value of the national currency. Much of the money being moved out of China is dollars, or another hard currency.

Some affluent Chinese are engaging (hiring) relatives or associates to each bring out the max, and some have been caught engaging in bulk cash smuggling, in prohibited amounts. The danger, for North American and EU banks, is that there is little trustworthy information available on exactly who is, and who is not, a mid-level PEP, in China. Therefore, one banks an individual who appears to be a small business owner, and it later turns out that he is the head of a government-owned company, or a general or flag rank officer in the military, or the managing director of a non-profit, or a charity.

This is just one more indicator to Western compliance officers that literally ALL new Chinese clients must be subject to enhanced due diligence, lest their PEP status is discovered too late to stop transfers of dirty money, laundered cash, or untaxed profits owed to the Government of China. Remember, China has a long list of those of it nationals that it wants returned to the Peoples' Republic, for crimes of one type or another.

Saturday, February 13, 2016


Two news websites have received what purport to be copyright  notices, claiming that sites carrying news of fugitive fraudster Cayman Gang of Four Ryan Bateman, which include his photograph, violate Bateman's copyright. It appears to be an effort to intimidate anyone who is publishing news about Bateman, to keep his photograph off the Internet.

 The language of the demands, sent by a defamation specialist at the Cincinnati law firm of Vorys, Sater, Seymour and Pease LLP. was precisely the same in both letters. It warned the recipients that Bateman was the copyright owner of the photo, and that use of the photo was neither authorized by him, or pursuant to law, and demanded that it be removed.

Readers familiar with the term "Fair Use" know that the use of copyrighted information, in news articles, of an image, is specifically allowed, under US statutory and case law. We also note that nowhere, in Bateman's own posting of his photo, is there indication or embedding, indicating that the image is copyright-protected. Furthermore, Bateman has failed to timely object, when the image was published, in over 70 news articles, on the Internet, during the past two years.

We are at a loss to understand why such an experienced Internet attorney, from a large law firm, disregarded the law, in sending the demand letter to media. His firm has been monitoring all the articles about their client's Cayman Islands mega-fraud, his fugitive status, from a felony charge, and his sordid past, in the securities field, for several weeks, and his photo has shown up on this blog, many times in the part six months.

The photo, as it appeared in the Curacao Chronicle
If Bateman should choose to file a civil suit, upon any grounds, against any media source, contesting the truth and accuracy of the reports, he would subsequently be required to present himself for deposition; at that time, any law enforcement agency with a charge against him, could take him into custody; we look forward to seeing him sue those who write about his crimes. The defense to libel is truth.

 If prospective investors do not see Bateman's image, then they may fall victim to any frauds he perpetrates in the future. We want his photo to be widely distributed, as he allegedly was a major player in the theft of $450m, from accounts of Canadian & American retirees and pensioner, in the Cayman Gang of four scandal, which has been widely reported in the media for the past eight months. The Cayman Gang of Four are the trader Ryan Bateman, ex-Dundee Banker Sharon Lexa Lamb (the ringleader), former Dundee Bank President Derek Buntain, and B & C Capital/Bateman Capital Managing Director, Fernando Motto Mendes.



All the news on
corrupt Chinese PEPs is important to compliance officers, but it also sells big in Hong Kong, where mainland censorship does not exist. China's kidnapping of five publishing house executives, from companies that regularly publish details of Chinese corruption at the highest level, reinforces the fact that China simply does not want you to know about the extent of corruption, among its power elite, many of whom have socked away millions obtained illegally, all in overseas accounts and investments.

One of those kidnapped was a UK citizen, taken in Hong Kong, which is a serious breach of the British-Chinese agreement on the former Crown colony. Another, a Swedish citizen, was kidnapped in Thailand. No wonder the public in Hong Kong is angry and frightened.

If China can go to such lengths, to intimidate individuals who publish the truth about its leaders, then all EU and North American compliance officers should adopt the position that ALL affluent Chinese nationals seeking to open accounts, or business relationships require Enhanced Due Diligence investigations, because the truth of their PEP status could be well hidden, and not reported in the media.

I would now consider that there is a rebuttable presumption that your new wealthy Chinese client is a PEP, until you eliminate him as such. This may sound overbearing, but since China is going to such lengths to be opaque about its leaders, one must assume the worst, until you rule it out.  

Friday, February 12, 2016


Salomón Shamah, the former Panamanian Minister of Tourism, under the former government of Ricardo Martinelli, is reportedly directing the operation who goal is the resignation of the Varela administration, or failing that, initiating a coup d'etat in Panama. While Shamah has avoid entering Panama of late, his wife is said to be serving as his emissary to factions within the country, seeking support among the power elite. He is one of the leaders of the movement to unseat Varela, and replace him with Martinelli.

The people of the Republic of Panama, sick of official corruption, and seeing that the much-anticipated reform movement of Varela has failed to make any significant progress, since taking office, are being bombarded with calls for his resignation. This movement is reportedly led by Panama's powerful Syrian Organized Crime Syndicate (whose less politically correct description is the Sephardic Group), who wish to dismantle the current leadership, under the guise of replacing a failed administration. In truth and in fact,  the plotters wish to enthrone a Martinelli-led coalition, which will unfortunately, place Panama back into a system featuring massive, systemic corruption.  

Shamah, a Colombian national who holds Panamanian citizenship, whose prior involvement in drug smuggling and arms trafficking, let alone ties to David Murcia/DMG, caused his US visa to be revoked, is rumored to have been engaged in money laundering of narcotics profits, of close ties to Ricardo Martinelli, and of engaging in official corruption while in office. He is known to be commanding the extralegal efforts to remove President Varela.

Thursday, February 11, 2016


The Supreme Court of Justice approved a fine, of $500,000 and two of $300,000, levied by Panama's securities regulator against three executive of broker/dealer Financial Pacific, for auditing failures. $12m was diverted from the FP accounts, to Politically Exposed Persons, only to be mysteriously replaced, when questions arose about the transaction. A former vice president of Panama allegedly received $7m of the money.

Fines were levied against former FP executives West Valdés  Iván Clare and Oscar Rodríguez. Former President Ricardo Martinelli, and most of the ministers in his Cabinet allegedly made millions in illegal profits, through insider trading of securities of Petaquilla Gold Mine stock. The case was widely covered, when a whistle blower's civil and human rights were violated, when she was kept incommunicado in a Panamanian prison, and denied access to her attorneys and media. 

Tuesday, February 9, 2016


When a client retains an attorney, anywhere in the world, he explicitly trusts that lawyer to: (1) know the laws of his country, whether they be statutory or case law,  (2) to be able to navigate through the various court systems, by understanding their rules of procedure, and (3) to be a zealous advocate for his or her client. Unfortunately, in the Republic of Panama this is not always the case. Do you know why ?

Panama's legal system suffers from several major problems, the most pressing one being that many members of the judiciary rules in favor of the party paying the largest bribe, and this includes the members of the Supreme Court of Justice, including its president, who is the functional equivalent of the chief justice, who was just reelected to that post, notwithstanding the dozen criminal charges pending against him.

Here are the specific reasons why you cannot trust some Panama City lawyers to represent you in court, or in office practice:

(1) A number of wealthy Panamanians actually purchased their law degree for cold cash; they never attended one hour of instruction in law school, where one learns issue perception, the process by which attorneys identify issues, through a study of decisions designed to teach them how to extract them.

(2) Panama has no required bar examination; it has the diploma privilege, meaning that all graduates of Panama's law schools are automatically admitted to the practice of law. The are not tested on their knowledge of the major subjects, procedure, ethics, or any other subject lawyers must master, and be tested upon, in Western democracies.

So, follow me here: a son of an affluent ( whether legitimately wealthy, or affluent through criminal activity) Panamanian buys his law school diploma, get admitted to the bar, by virtue of his degree, and puts up his shingle in Panama City. This is a nightmare waiting to happen.

Some of these non-lawyer lawyers hire competent, trained and educated, lawyers to work in their offices, but they often jump in on actual cases, with disastrous results, When a layman masquerades as a lawyer, the client is denied the services of a legal mind, working on his behalf. I do not have to tell you what the usual outcome is. Of course, if the fake lawyer bribes the judge, as often occurs, the playing field is often leveled. Yes, it is that kind of justice system; you are best served by staying out of it.

Unless your lawyer is from a top Panama city law firm, where the attorneys often hold advanced law degrees (LL.M. or rarely S.J.D./J.S.D.) from North American or European law schools,  you have no guarantee that the lawyer you select to help you is only a poser, not the real mccoy.

A final note: the above-mention head of the Supreme Court of Justice of Panama, is himself on lawyer; yes, José Ayú Prado, himself, is not a lawyer. Watch yourself in Panama, please, lest you get burned.


José Ayú Prado, the head of the Supreme Court of Justice in the Republic of Panama, has inexplicably been named the Goodwill Ambassador of Panama, to the Organization of American States. This judge has been charged in no less than thirteen cases, and faces removal, prison time for accepting bribes and other unlawful compensation, and probably eventual money laundering, for seeking to hide his ill-gotten gain in real estate purchases.

Ayú Prado personifies all that is evil in the totally corrupt Panamanian justice system. If he didn't have incriminating information on the sitting Panamanian president, Juan Carlos Varela, he would be in a prison cell. Unfortunately, the universal corruption that pervades Panama prevents true reform, because the reformers are themselves dirty.

Panama is unable to clean itself up; no wonder its citizens have begged the United Nations to step in. it will remain blacklisted for foreign investors, North American retirees and pensioners, and any businessman who wants to operate in a country where the rule of law is respected.  

Monday, February 8, 2016


Two Panamanian immigration lawyers, Katherine Ulloa Castillo, and Mariaelena Jurado Dominguez, have expressed a well-founded fear that they will soon be charged with criminal Libel and Slander in the Republic of Panama, for their failure to submit any competent evidence in another criminal case, in which they claimed that they were slandered, due to false information submitted to media by the defendant,who will now probably be the complaining party against them in a new criminal case.

Ms. Ulloa and Ms. Jurado brought a criminal case against Ismael Gerli, alleging that he has libeled them, by making statements that he knew were untrue to media, resulting in the posting of Internet articles accusing them of unprofessional, unethical, and illegal acts and deeds, in their joint representation of a foreign national who was fighting extradition in a Panamanian court.

Though the prosecutor of the criminal case demanded that the attorneys, who were the complaining parties, introduce sufficient evidence to prove that there was a factual basis for the charges, the lawyers have failed to comply. The case will most likely be dismissed shortly; when that occurs, the defendant, Gerli will most likely immediately bring his own criminal charges, for slander, and for defamation of character, as the case against Gerli was reported in all the major Panama papers, as well as overseas, meaning that it will damage his professional reputation. The result could be a very large judgment for damages against the two lawyers.

Additionally, there are a reported five civil cases pending in Panama, against Gerli, where Ulloa and Jurado are attorneys of record, and they may be asked to resign, due to conflict of interest ethics rules. Last week, which was Carnival in Panama, there was no action taken in the existing case, but with the reopening of court business this week, action against the two attorneys is expected.


Reliable sources in the Bahamas reported yesterday that a Government agency there has frozen corporate bank accounts controlled by Cayman Gang of Four securities trader, Ryan Bateman. The companies named are Bahamas Exploration Limited, and Atlantic Petroleum Limited. Bateman's criminal past has recently been the topic of heated discussion in Nassau, in the Assembly; Opposition leaders have repeatedly questioned the advisability of the government working with an individual accused of being a known fugitive and fraudster,  who made a large payment for oil exploration rights, and received a license, under what are alleged to be suspicious circumstances, involving possible official corruption.

The stolen money, which was tracked by investigators, was transferred from the Cayman Islands corporation, Bateman & Company Limited, to the Bahamas. The amount frozen is not known; Cayman sources assert that more than $450m was taken, from the accounts of retired North American investors, Accused of the massive fraud are the Cayman Gang of Four, who are Sharon Lexa Lamb, Ryan Bateman, Derek Buntain, and Fernando Moto Mendes, all of who are known to have fled Grand Cayman.
Ryan Bateman
The Cayman Islands Monetary Authority, more commonly known as CIMA, has taken no action to investigate this scandal, believed to be one of the largest in the Cayman Islands in recent years. Some critics have accused it of gross negligence, and official malfeasance; others have speculated that the true reason for the agency's inaction is rooted in corruption.

Bateman, who claims a fifteen-year background in oil exploration, is a Cayman-based Canadian securities trader with a history of fraud in his native Alberta. He is believed to be in hiding in the Republic of Panama, where he and his brother own and operate an unlicensed wealth management company. He claims to have foreclosed on certain corporate exploration rights, which position is hotly contested by American investors, who assert his actions have no legal basis.

Bahamas Exploration Limited, which is incorporated in the Isle of Man, where Sharon Lexa Lamb comes from, was formerly known as Falkland Gold & Minerals, Limited, and appears to have had no successes, in the Falkland Islands, and Cuba, notwithstanding receiving a larger amount of investment capital. There are also reports that audits were not conducted or filed by the company.

Sharon Lamb
Bateman, and Lamb, appear to be in the center of a scheme to divert stolen investor money into a massive Caribbean oil exploration and drilling operation, including a joint venture with the Republic of Cuba, which has long sought to find productive oil wells in the region. Both Bateman and Lamb have a close relationship with Cuban officials, alleged to be from the intelligence services, and involved in the use of financial crime to raise capital for expensive oil drilling projects.

Sunday, February 7, 2016


Given the comprehensive sanctions that the United States has in place, against the "Democratic Peoples' Republic of Korea, know to most of us as North Korea, banks whose customers engage in international trade  do not want to be on the receiving end of a huge fine, for facilitating trade with that outlaw dictatorship. Any such trade, made by your clients, and which payment therefor flows through your bank, could result in major reputation damage.

Luxury goods, manufactured in the West, are in high demand in North Korea, among the elite, whose conspicuous consumption includes designer goods from Paris & Rome, German high-end automobiles, and gourmet food, while the vast majority of the rural population periodically starves to death.

The premium consumer goods flow first to China, where they are transshipped to North Korea. Banks who customers include luxury goods manufacturers or distributors, whose client base includes Chinese companies, are well advised to:

(1) Require your clients to obtain, in advance, a End User certificate from their Chinese clients, certifying that the ultimate customers for your clients' goods are located within the Chinese Peoples' Republic, and Special Administrative Regions of Hong Kong, and Macau.

(2) Obtain a written statement from your clients, before you accept payments from Chinese sources, that they have an effective compliance program, which includes sanctions lists, and advance due diligence on all customers, before they sell to them.

The declining economy in China, in 2016, may force some wholesalers of Luxury goods to ship them into North Korea, in greater numbers, if they do not find buyers in China. This will further increase your risk that the customer's goods end up in North Korea.

If you have done all that is possible, to avoid the inadvertent diversion of your cutomers' goods to a sanctioned jurisdiction, you have minimized your risk, as well as the potential OFAC fallout, should an unforeseen transfer of the goods to North Korea, occur.


The reappearance of a number of powerful Panamanians*, who are known supporters of disgraced (and indicted) former President Ricardo Martinelli, and the recurring rumors, to the effect that they intend to remove the current reform president, Juan Carlos Varela Rodriguez, through a coup, has spread unease throughput Panama City. Martinelli, presently living in Miami, by virtue some non-public back-room arrangement. with an unnamed American law enforcement agency, has made no bones about his desire to return to power, through any means necessary. The reform process in Panama has frightened the country's powerful organized crime syndicate, whose best patron has always been Martinelli; they are supporting Varela's departure.

The upshot of this is a growing reluctance, on the part of foreign investors, to bring their capital into Panama at this time. The perceived risk levels, already greatly increased due to the massive corruption cases pending in Panama, since Martinelli's departure, are now so high that new money is looking elsewhere in the Caribbean for placement.

As the economy contracts in Panama, capital flight is inevitable, notwithstanding the government's efforts to tax, control, and curtail, it. This new uncertainty is sure to raise Country Risk levels even higher than they are at this time. Whether Panama should be completely redlined for all banking, and investment purposes, is a matter for individual assessment, but there is a well-founded fear that the situation will further deteriorate.
*The coup d'etat plot is being led by former Minister for Tourism, Salomón Shamah, whose US visa was reportedly revoked years ago for his involvement in Colombian drug trafficking.

   Minister Salomón Shamah


Ali Fayad (r.)

Stop me if you have seen this fact pattern before. The Justice Minister of the Czech Republic has declined to extradite, to the United States, Lebanese arms trafficker Ali Fayad, a/k/a Ali Amin, on charges that he, and some associates, planned to ship missiles to undercover DEA agents, posing as the FARC. The case seems to have been lifted right out of the playbook DEA used to indict the Russian arms trafficker, Viktor Bout.

The Cezch Government promised not to extradite Fayad, who is a known associate of Lebanese intelligence services, in exchange for the release of five Czechs kidnapped in eastern Lebanon, by an armed group that is believed to be Hezbollah. Inasmuch as the kidnapped Czechs, who included Fayad's attorney, were seized after the extradition order was issued, it would appear that they were taken to barter for Fayad.

The troubling part of this case is the similarity between the Viktor Bout case, and this case. Bout has claimed that there was entrapment, and governmental misconduct, in his case, as did Fayad, when he was arrested. This type of law enforcement conduct is expressly prohibited in the Czech Republic, and this may have contributed to the end result.

Will Viktor Bout's attorneys seize upon this case, and seek a retrial for their client ? More importantly, are there other instances, where Drug Enforcement Administration agents posed as the FARC, and sought to purchase missiles from targeted individuals, irrespective of whether they have the ability to complete such sales ?

Viktor Bout