Thursday, March 31, 2016


Gary James Lundgren
Gary James Lundgren, who has been permanently banned from associating with any securities firm by FINRA, has chosen to defy the law, as handed down in the ruling of the National Adjudicatory Council. He has placed his two grown sons, James Lundgren, and ZacGary Lundgren, into unlicensed Panamanian shell companies, and through them, intends to trade securities in the United States. They are fronting for their father, who gives the orders.

According to sources with personal knowledge, Lundgren has given his sons rudimentary instruction in  securities trading, and is now engaged in passing all his own trades through the two of them, irrespective of the fact that neither son has a securities license, of any sort, either in the United States, or the Republic of Panama, which triggers another criminal offense. The Panamanian shell companies are not licensed to sell securities by the country's regulatory authorities. It is assumed that the sons, like their father before them, use the facilities of third parties, in the Continental United States, to effectuate trades.
ZacGary Lundgren
Inasmuch as trading in securities without a valid license, is a Federal felony, James Lundgren and ZacGary Lundgren, now join their father in the crime of acting as an unlicensed broker-dealer. The profits, which are criminal, when transferred through the global banking system, further implicates all three in money laundering, and conspiracy to commit money laundering, and securities fraud.

James Lundgren
The names of the new Panamanian shell companies engaged in illegal securities trading are not yet known, but we are searching  Panama's corporate records for that information. We shall endeavor to locate those names, and will publish them as soon as we have them in hand. We trust that JP Morgan, where Mr. Lundgren had most of his business and personal accounts, which he refused to show to FINRA, is reading this article, as well as those American regulatory and law enforcement agencies who have an interest in these three unlicensed individuals,


The fact that the Government of Russia is considering the imposition of sanctions upon the United Kingdom, because many Russian businessmen are deftly evading their tax obligations, by using a British Virgin Islands company, and a Cayman Islands bank account, should be no surprise to anyone. The United States has targeted, and fined, Cayman Islands banks, and financial services companies, and sees the situation as a systemic problem, with no solution. Americans & Russians who are tax cheats, continue to hide their money there.

The only US President who actually tried to shut down those Caribbean tax havens that are located in the British Overseas Territories, Ronald Reagan, sent high-level representatives to the United Kingdom, in the 1980s, but a former US Senate investigator has publicly revealed that Prime Minister Margaret Thatcher herself called Reagan up, declaring that, to shut down the business of the Caribbean tax havens, "would ruin the economies of the islands," requiring massive UK financial contributions, which the British budget could ill afford at the time.

British efforts to insure that agents of companies incorporated in the British Virgin Islands maintain records of the identities of beneficial owners have failed, due to a BVI regulation that allows that information to be held by a third-party company, provided that it has an anti-money laundering and customer identification program. Unfortunately, there are no guidelines as to what constitutes a properly qualified third-party, nor where it is located.

A financial services firm, working from a tiny atoll in the Pacific Ocean, impossible to reach, through court action, easily defeats any attempts to learn who owns a BVI company; The deck is stacked against obtaining accurate information. When you have a corporation formed in a tax haven jurisdiction, with no ascertainable owners, owning bank accounts in a second tax haven, with directors who reside in a third tax haven, and with other assets in the fourth tax haven, the system is broken, and only radical steps will fix it.

I say, let Russia do what no country has been able to accomplish since the 1970s; put the British Government to work, to reform their tax haven territories, and yes, even their Crown Dependencies. If it takes sanctions, let it be done; nothing else has worked to solve the problem.

Wednesday, March 30, 2016


Erste Group Bank AG, a major financial institution in Austria, with ties to Eastern Europe, has declined to close accounts that it maintains for an organization that seeks a global ban on imports of goods from territories within the State of  Israel. This could prove a problem for the bank's New York branch, for pending legislation in the State of New York forbids it from having any business with any entity that seeks to ban goods from  Judea & Samaria, which Israel recovered in 1967 from Jordan.

US banks whose clients do business in Austria & Central and Eastern Europe will do well to monitor the progress of the legislation, and to reduce any financial exposure they, or their clients have to Erste at this time. While there is no guarantee that the legislation will cause the bank branch to close, do not underestimate the power of public opinion; New Yorkers believe in free speech, but they also support taking action against Anti-semitism, in any form.


Richard Fifer Carles, in custody in the Republic of Panama, and allegedly personally liable for unpaid corporate taxes and fees, has accused the country's former president, Ricardo Martinelli, of illegally taking control of Fifer's business, the Petaquilla Gold mine, looting it and running it into the ground. This criminal conduct of Martinelli was heretofore not publicly known, but Fifer, a former governer of Coclé, has been denied bond, and he is obviously choosing to tell all about governmental corruption.

Fifer asserts that, when Martinelli's "thugs" ( as he refers to them) seized control of Petaquilla, the company was earning $18m a year, on gross revenues of $60m. Within only a couple of years, all the assets and earnings were gone, and the company, fiscally ruined, was facing bankruptcy. Fifer says he intended Petaquilla to take Panama from its current status as a banana republic, to becoming a golden republic, but Martinelli and his minions destroyed it.

 How much money was stolen by Martinelli's agents has not yet been established, but one may assume it will be added to the fugitive ex-president's dozen pending criminal cases. The government has yet to formally seek his extradition from the United States, and some observers believe that, due to his political allies, large war chest to engage attorneys, and possession of incriminating evidence against President Varela, he will never face justice in Panama.

Regular followers of news from Panama will recall that Martinelli already has criminal charges pending against him, for insider trading, in the Petaquilla Gold Mine/Financial Pacific scandal. This new evidence appears to show that he also stole the company's liquid assets, using associates and cabinet members. Will criminal charges be filed against the participants ?


If you live in the United States & Canada, and you are not a regular viewer of the Showtime cable series "Billions," you should take the time to catch up on the prior episodes, and become a regular. Why ? In these times of strict enforcement, there is a distinct possibility that, as a bank compliance officer, you may, one day soon, see someone your work with, or know personally, run afoul of Federal Law, and have to deal with the consequences.

The program, though at times overly dramatic, offers a view of the dark side of the criminal justice system, where serious white collar crime is involved. If you are not aware of how law enforcement agents, and US Attorneys, deal harshly with targets that they have turned into confidential informants, it is a wake-up call for anyone who has not witnessed the behind-the-scenes maneuvering, raw confrontations, and moment of truth, when informants must betray the trust of someone they know well, this program serves as a primer on the sordid side of justice.

Is it Scared Straight for potential white collar criminals, for deterrence purposes ? Absolutely. Let us hope that, after watching several episodes, any banker who ever considered willful blindness will be cured of those thoughts; that they see what happens to an individual who gets caught up in the nasty world of criminal law. I have a very thick skin, from serving in Vietnam, as well as  ten years I spent in a dirty profession, and it was a shock to me; imagine how it would affect you.

Watch this show; it will not bore you, and it will teach you some things they don't talk about in graduate school.

Tuesday, March 29, 2016


The maximum sentence for Money Laundering, under Federal law, is twenty years, but most District Judges don't hand out such a sentence, which is, I believe,  a mistake, for without laundrymen, narcotics traffickers would be unable to operate effectively. There's a judge in Texas, through, who is not afraid to drop the hammer on money launderers. He recently sentenced a Veracruz businessman, Francisco Colorado Cessa, to 17 years for money laundering, and 3 years for attempting to bribe a Federal Judge.

Colorado moved money for the Zetas, the ruthless drug trafficking organization created by former members of Mexico's commando unit who had deserted, snd become career criminals. He spent over $25m in the United States, buying & selling horses, and in the process laundering narco-profits. As for the long sentence, let the punishment fit the crime.

Monday, March 28, 2016


The Financial Industry Regulatory Authority has, in an 11-page ruling, permanently barred Gary James Lundgren, the Alaskan native living in the Republic of Panama, "from acting as a broker or otherwise associating with firms that sell securities to the public." Lundgren repeatedly failed to provide any information, documents, or bank account records, notwithstanding five requests from FINRA, over a period of several months, in violation of his obligations to provide the same to regulators upon demand.

During a FINRA investigation, initiated after this blog, and Wanted SA, published a number of articles detailing his criminal activities, Lundgren, and his Panamanian attorney, Alcides Peña, conducted a dilatory campaign, designed solely to delay the proceedings. Those articles spawned death threats against the authors and publishers, as well as bogus civil & criminal proceedings, which have lingered for years in Panamanian courts, due to reputed bribes, paid by Attorney Peña, to members of the judiciary, government attorneys, and court staff.

 First, they alleged that there were far too many documents to produce; then, they asserted that they did not possess the documents. later, they asserted third-party privilege barred production. Finally, they claimed that the US Constitution, and Panamanian law, protected Lindgren's right not to disclose the material. All these defenses were found by FINRA to be without a legal or factual basis. Lundgren, in a final, desperate act, claimed that FINRA staff, in its Florida office, conspired with the journalists, in a vendetta against him. FINRA dismissed the defenses, on the merits, and ruled that the failure to provide information warranted suspension, and ultimately, a total bar upon any securities activity for Lundgren.

Many Panamanians revile Gary Lundgren, both for perpetrating bearer share fraud upon Canadian & American expats who settled in Panama, and for laundering Ponzi scheme and narcotics profits of the convicted Colombian fraudster, David Murcia Guzmán. Lundgren has repeatedly claimed to be partners with the fugitive former president of Panama, Ricardo Martinelli. He is currently being sued for damages, by Donald Trump, in connection with his mismanagement of the association responsible for the Trump Resort in Panama. He is believed to be under investigation by two US law enforcement agencies.

Readers who wish to review the complete text of the FINRA decision can email me at , and I will send you the decision, in pdf format.

 Lundgren's complete record is available at the FINRA website, through Broker Check here*. Type in his name to access the records. he has a prior disciplinary history with NASD, FINRA's predecessor, and felony arrests for violent crimes.

Sunday, March 27, 2016


Bateman, Lamb, Buntain
The Cayman Gang of Four*, using known aliases, have made repeated death threats to the most vocal victims of their $450m theft, as well as their immediate relatives, and to journalists whose articles have exposed the details of how they stole hundreds of millions from Canadian Pensioners. These threats have been reported to law enforcement authorities in Canada, and criminal complaints filed there.

 Though the Gang started out, by sending slanderous emails to North American (including Cayman) banks, in an attempt to convince them to deny the victims who have spoken out about the massive fraud access to accounts, they soon were sending libel to law enforcement agencies, government officials, universities, and anywhere else where the gang thought they could hurt the victims and journalists. The use of new bank account information, known only to Sharon Lexa Lamb, confirmed who the true author of these dirty emails was. Her central role in Internet crime has been duly reported.

The use of multiple, repeated slanderous emails, directed against the journalists who have been covering the story, through what is known as "Shoot the Messenger, " an attempt to characterize the author of the news as not credible, untruthful, or even deliberately publishing libel.

Some of the email threats claim that the victims and the journalists will be killed, if they travel to the Cayman Islands, This is a futile effort to keep them from testifying about the criminal conduct of the Cayman Gang of Four,  in a civil proceeding pending in the Grand Court. One investigator believes that those death threats have been issued as the direct result of the stories published that point out the failure of the Cayman Islands Monetary Authority, CIMA, to take any action against the Gang of Four. CIMA has been soundly criticized for  refusing to open an investigation into the $450m trading scandal, but the precise origin of the threats received by the victims and journalists is has not yet been established by computer experts assigned to the investigation in Canada.

*Sharon Lexa Lamb, Ryan Bateman, Derek Buntain, Fernando Moto Mendes.

Saturday, March 26, 2016


No less a person than the Finance Minister of Lebanon, Ali Hasan Khalil, is lobbying the United States to delay enforcement of the Hezbollah International Financing Prevention Act. This legislation, which was signed into law by President Obama in December, prescribes severe, and possibly fatal, economic consequences for Lebanese financial institutions that are assisting Hezbollah, in any way, when discovered.

Compliance officers should immediately recognize this news as confirmation that many Lebanese financial institutions are presently providing material support to Hezbollah, a Specially Designated Global Terrorist organization, to the point where that country's government fears serious disruption of its banking structure, when US law enforcement agencies begin blocking their banks' access to the US financial structure. Lebanese banks who are shut out of the United States cannot compete, and will eventually fail, due to their inability to consummate international trade transactions.

In short, notwithstanding the many claims, by Beirut's bankers, that they do not do business with Hezbollah, this action by the Minister of Finance, means that they most certainly do facilitate Hezbollah's most powerful terrorist group. Any Lebanese bank that your clients choose to do business with could now, without notice, be blocked, and substantial financial losses could occur, both for your bank clients, and for your bank itself.

Given the situation, any new financial exposure, with any Lebanese bank, NBFI, or commercial entity, could result in unexpected, and total, loss of funds, if the relevant entity is found to be in bed with Hezbollah. Existing relationships with Lebanese banks, and unpaid debt, could be placed in jeopardy at any time. The smart compliance move here is to advise immediate disengagement from Lebanese banks, lest you, or your clients, get burned. 



The Second Circuit Court of Appeals has affirmed the thirteen year (156 month) sentence imposed upon the Venezuelan Ponzi schemer, Francisco Illarramendi, by the District Court in Connecticut. The appellant had sought to reduce the sentence handed down after he pled guilty to managing a hedge fund that became a $723m Ponzi scheme, after it sustained major losses. He claimed that the calculation of losses was incorrect and inaccurate.

Illarramendi disputed the amount of the loss sustained by the victims, which included the pension fund of PdVSA, the Venezuelan Government oil company. The Court, in a Summary Order recited:

(1) The District Court found that the losses sustained exceeded $200m, according to the SEC.
(2) The Court-appointed Receiver calculated the loss at $380m.
(3) The appellant himself stated that the losses exceeded $300m.

The Court found that the trial judge set the losses at an amount most favorable to the appellant, which justified the sentence pronounced.

The case was replete with attempts by the appellant to game the court system; he changed attorneys frequently, and sought additional time after each change of counsel; he frequently complained that the conditions of his incarceration did not permit him to assist his lawyers. His pre-trial release was eventually revoked for misconduct by the Court. He repeatedly sought an evidentiary hearing on losses. All his tactics delayed the proceedings for many years, but this latest decision ends his appeals as a matter of right, and provides a degree of finality to the case; Any additional actions he brings will be completely discretionary with the Court, and have little, if any, chance of success. His release date is in 2024.
United States of America vs. Illarramendi, Case No: 15-526 (2nd Cir. 2016)


Reliable sources in the Moscow financial community have advised that the Government of Russia is seriously considering imposing economic sanctions upon the United Kingdom, upon the grounds that the UK is facilitating tax evasion by Russian nationals. Apparently, many affluent Russian taxpayers are artfully evading income tax upon their earnings, and Russia intends to hold the UK responsible, as the scheme involves two British Overseas Territories, the British Virgin Islands, and the Cayman Islands.

According to individuals who are privy to the investigation, Russian nationals are purchasing BVI companies, and using the total anonymity associated with a BVI company, and its bearer shares, opening corporate accounts in the Cayman islands. The next result is that cash is transferred into, and held by, an entity, whose beneficial ownership cannot be determined, under any circumstances.

A financial services firm in Road Town, Tortola, is known to refer all its "corporate" clients to its office in Grand Cayman, where a bank account is arranged through a local financial services provider. Hundreds of millions of dollars have been hidden from view in this manner, and Russian law enforcement, and regulatory agencies, cannot ascertain beneficial ownership, even when they have the name of the corporation.

Russia is blaming the United Kingdom for failing to terminate local legislation that allows companies with bearer shares to exist in the British Virgin Islands, and to allow Non-UK nationals to form such entities. Additionally, the Cayman laws on banking & corporation secrecy and confidentiality, and for allowing foreign entities to hold accounts there, are blamed as well. Though both the BVI and the Cayman islands enjoy local autonomy, Russian considers the UK to be ultimate responsible, as both territories are British possessions, and under British sovereignty.  The extent of sanctions, and when they will be imposed upon the UK, is not known.

Friday, March 25, 2016


CIMA headquarters, Grand Cayman
While attention is focused upon the fact that eight members of the Opposition of the Cayman Islands Legislative Assembly have called for a Vote of No Confidence over the management of the Royal Cayman Islands Police Service (RCIPS), perhaps these honorable members should also publicly raise the issue about rumors of corruption at the Cayman Islands Monetary Authority, or CIMA. While it may be controversial to air public corruption allegations in Grand Cayman, an investigation is warranted.

Longtime Cayman residents know that several CIMA staff members, whose government salaries and benefits are nominal, have residences valued at more than one million US Dollars. Others, with access to confidential information, by virtue of their positions in the financial services industry, are aware that some of these same CIMA staffers hold and maintain local bank accounts with unusually large balances, for government employees.

These questions deserve straight answers:

(1) What was the Source of Funds for the purchases of these pricey homes, owned by CIMA ?
(2) Where did the money come from for these large personal bank accounts hold by CIMA staff members ?

I can find no information about their receipt of any large inheritances, nor lawsuit recoveries, or other windfalls, which might explain their wealth. Will the Opposition kindly now abandon the "don't ask, don't tell"policy of the Cayman Islands, and demand an investigation ? The results might just explain why CIMA has ignored repeated pleas to take action against major financial criminals; Let the truth come out, gentlemen.


David Murcia Guzmán

The Supreme Court of Justice of Colombia has reduced the 30-year sentence, handed down by the Superior Court in 2012, to 22 years, 10 months, against the Colombian Ponzi/Pyramid schemer, David Eduardo Helmut Murcia Guzmán The Court apparently took this action to correct an error in the trial court's original sentencing calculation. Whether the United States will ever return Murcia to Colombia, to commence serving his sentence there, is not known.


Robert Allen Stanford

The Ponzi king, R Allen Stanford, who is preparing to file a Petition for a Writ of Certiorari to the United States Supreme Court, may be wasting his time. The high court recently refused to hear cert petitions filed on behalf of two of Stanford's senior executives, Mark Kuhrt, and Gilbert Lopez, Jr. Both men had received twenty year sentences after being convicted on multiple counts of wire fraud, and wire fraud conspiracy, and the Fifth Circuit Court of Appeals had affirmed their convictions.

The Supreme Court apparently did not buy into the two defendants' arguments, to the effect that there was a conflict in the decisions of the various circuits, regarding errors in jury instructions, and considered that any errors which occurred during their trial were harmless, given the evidence admitted.

Stanford, who reportedly is also seeking to have his conviction & sentence heard, pursuant to conflict certiorari, has an uphill battle to even get in the door. Only a small fraction of cert petitions are ever granted by the Supreme Court, and it is doubtful that he will be successful. Furthermore, his post-trial filings have all be Pro Se,  filed without the benefit of an attorney. As the saying goes, a person who represents himself has a fool for a client. was he planning on arguing the case himself, before the Supreme Court ?

Thursday, March 24, 2016


Both the Comptroller of the Currency, and the US Treasury Under Secretary for International Affairs have gone out of their way to caution American financial institutions about closing correspondent accounts of entities located in high-risk countries, which is increasing as "de-risking," or reducing risk programs, pick up steam. Claiming that such actions will disrupt "long-standing business relationships," and cut off foreign NBFIs from the regulated financial system altogether, these government officials as asking the banks to back off.

While there was talk of going over the heads of bankers who make those decisions, in an effort to curtail such actions, law enforcement agencies of the United States Government, which hold its financial institutions to strict liability for money laundering, and terrorist financing violations, will not refrain from prosecuting them, when they retain a high-risk correspondent, whose clients manage to move dirty money through the American bank. Regulators will be nowhere to be found when law enforcement drops the hammer for money laundering violations.

The high-risk jurisdictions have had over 30 years to improve their anti-money laundering compliance programs, and they have utterly failed. Please, do not force US banks to continue to take their business, which includes dodgy clients, and then punish them, when violations are found. Money service businesses, and certain banks, in high-risk countries should be red-lined, due to the clear and present danger that they present to the US banking structure, and American officials should not respond to foreign diplomatic pressure, to lean on US banks to keep accepting their suspect business. With all due respect, take your politics elsewhere, OCC and US Treasury; this is a law enforcement, not a diplomatic, issue.

Wednesday, March 23, 2016


The Cayman Islands Monetary Authority (CIMA) has reportedly issued a written order, addressed to all financial institutions on Grand Cayman, and throughout the jurisdiction, instructing them to decline to open any bank accounts for the Canadian victim of the Cayman Gang of Four, who filed a complaint with CIMA. The victim, a retired Canadian attorney, and Queen's Counsel, had asked that CIMA take action against the Cayman Gang of Four eight months ago, but to date there has been no regulatory or criminal action filed against the fraudsters,* who allegedly stole over $400m, from Canadian pensioners, who had placed their assets with a wealth adviser, who illegally, and without authorization, turned over control to the Cayman Gang of Four.

Cayman insiders insist the reason that CIMA has taken no action, is an illegal, and unethical, conflict of interest. CIMA Managing Director, Cindy Scotland, and her husband Mark, a Cayman Football executive, is closely linked to Gang ringleader Sharon Lexa Lamb, due to common recreational interests. So long as Ms. Scotland is MD at CIMA, there will not be any action taken against the Cayman Gang of Four, irrespective of any sworn duty to investigate, and prosecute, financial crime in the Cayman Islands.

It is reported that the reason CIMA has taken such extraordinary action, barring the victim from any further account relationship in the Cayman Islands, is to encourage the victim to abandon his claims, including the civil suit he is presently maintaining, against Lamb, as well as Dundee Merchant Bank, for breach of fiduciary duty, in Grand Court. Whether any legal or disciplinary action, against CIMA, and its leadership, resulting from the agency's failure to discharge its legal obligations to the victim, and others, either from the UK Foreign & Commonwealth Office or elsewhere in the UK, is not known.
Sharon Lexa Lamb
* The Cayman Gang of Four are:
   (1) Ryan Bateman; a Canadian securities trader, he is a fugitive from justice in Grand Cayman.
   (2) Sharon Lexa Lamb; former Senior Vice President at Dundee Merchant Bank.
   (3) Derek Buntain; a Canadian national, formerly  the president of Dundee Merchant Bank.
   (4) Fernando Moto Mendes, a Portuguese national, the Managing Director of B & C Capital Ltd.


Senior officials in the Government of Panama have, according to sources within the country's major newspapers, ordered the press to stop publishing negative articles about events in Panama. Though the distribution of this order was restricted, journalists in Panama have leaked the details to foreign press.

This means, in plain English, that news of Panama's ongoing efforts to charge dozens of its citizens, and former officials, with corruption, will no longer be available. The failure of the Varela administration to charge members of the Supreme Court of Justice with accepting bribes and kickbacks, to fix pending cases, will also no longer be reported. These two topics are of critical interest to the global financial community, and directly affect Country Risk, which has been increasing exponentially for Panama, since January. Financial crime reporting is critical to decision makers outside the country.

 A news blackout poses a serious problem for anyone seeking to decide whether to invest in Panama, conduct business there, or engage in any transactions where there is a major risk component, either for financial gain or loss, or even for the placement of staff in the country. With no access to objective information, the only conclusion is to avoid Panama altogether.

Readers who are wondering why the government would censor news should be aware that are major negative news stories being reported in 2016, including:

(1) A major concern about the financial status of certain Panama City banks, some of which have had losses, directly related to corruption, and others, known facilitators of money launderers employed by Colombian narcotics traffickers, could be sanctioned by the United States, or even indicted.

(2) The cruise ship industry has vastly reduced visits of its luxury liners to Panama, and the country's hotel industry, faced with a major diminution in business, has laid off a large segment of its staff.

(3) Allegations, from the United Nations, of misconduct, human rights violations and even torture, in  Panama's prisons, has not been responded to by the government. Attorneys for a prominent Canadian businessman, Arthur Porter, have asserted that he was murdered in prison, and his bank accounts, containing millions of dollars, were later looted by the very financial institutions that held his funds. One whistleblower has produced actual film, taken by a hidden camera, or mistreatment within Panama's notorious prisons.

(4) Former President Ricardo Martinelli, and the majority of his former cabinet, have not been arrested since they left office, notwithstanding clear and convincing evidence of corruption, insider trading, drug trafficking, and a host of other offenses. Some guilty members of the present administration have not been charged, and it appears that they will evade prosecution for their crimes.

All of the above stories will no longer be available, leaving foreign businesses, and banks, totally in the dark about the current situation. The only response will most likely be to avoid Panama altogether.

Tuesday, March 22, 2016


Sharon Lexa Lamb
The criminal case against the Cayman Gang of Four, Sharon Lexa Lamb, Derek Buntain, Ryan Bateman and Fernando Moto Mendes, is moving to Canada*. Neither the Cayman Islands Monetary Authority (CIMA), nor the Cayman Islands Royal Police Force (RCIPS) has taken any action against the four fraudsters, notwithstanding that clear and convincing evidence has been presented against them, in Grand Cayman.

Most observers know that staff members at both CIMA, and the RCIPS, have a close personal relationship with the Gang's ringleader, Sharon Lamb, raising the presumptions of conflict of interest, and of corruption, The police detective assigned to investigate the charges is the brother of Miss Lamb's paramour. Additionally, given the unsatisfactory track record of the RCIPS, in conducting successful financial crime investigations, law enforcement action against the Cayman Gang of Four is not expected. Neither agency ever presented a case to government prosecutors, confirming the belief that, when it comes to fraud in the Caymans, local perpetrators are rarely, if ever, charged, when accused by foreign investors. The matter is simply allowed to remain under investigation indefinitely, and the Statute of Limitations eventually runs out.

Therefore, counsel for the victims has recently moved the investigation to Canada, where the courts have jurisdiction over the fraudsters, since the stolen money flowed through Canadian financial institutions, Canadian corporations were involved in a number of illegal acts, and two of the Four are Canadian nationals. Additionally, when Sharon Lexa Lamb, the defendant in a civil suit in Grand Cayman, filed a counterclaim against a plaintiff/victim, who is a Canadian citizen, she invoked the  jurisdiction of Canadian courts.
*On the civil side in Canada, expect to see additional parties named to the pending action shortly; it was filed against Defendant Leon Frazer & Associates, Inc.


In a press release filed recently, the Office of Foreign Assets Control (OFAC) has issued a Finding of Violation against MasterCard International, charging that the credit card giant, when faced with a 2007 Blocking Order on Iran, failed to properly block accounts of two major Iranian Banks, Bank Melli, and Bank Saderat. OFAC found that the company's compliance program lack sufficient internal controls to have prevented, or later identified, the violations.

Readers who wish to review the complete text of the Enforcement Information, can do so here.

The matter raises the issue: how many Western businesses were holding funds of sanctioned Iranian entities when sanctions were imposed, and how many neglected, or ignored, blocking regulations, continuing to hold the money their accounts ?


Sunday, March 20, 2016


The principal commercial-off-the-shelf anti-money laundering and counter terrorist financing databases in use since 9/11, by both financial institutions, as well as NBFIs, are not only ineffective in identifying, and well as interdicting, financial crime, on a real-time basis, they may now be considered obsolete. Bank AML compliance programs consistently fail to deny entry to unsuitable applicants, simply because the individuals do not appear in the databases the bank is using to separate the wheat from the chaff.

Some of reasons for these compliance failures:

(1) The resources the established database providers are relying upon are insufficient to identify all the high-risk individuals and entries. This is a fatal flaw in their approach. Many resources that are available would not only confirm information, it would provide additional data not available through conventional sources.

(2) The staff employed by the database providers is clearly insufficient to review, examine, analyze, and then enter, all the relevant information that is out there. Remember the infinite monkey theorem ? An infinite number of monkeys, typing, would eventually create all of the world's great works ? Given the diverse language requirements, the employee costs necessary, and the tedium involved on the part of that staff, no database provider will ever have a sufficient number of qualified researchers to cover all the financial crime, as it unfolds.

(3) The proliferation of so-called reputation restoration companies, who post disinformation, misinformation, bogus "facts,' and in general, pollute the Internet with virtual garbage, all of which must be viewed, and discarded by an able researcher, who possesses not only language skills, but cultural literacy, and a basic background in the needs of a compliance officer.

The bottom line; the databases generally fail to pick up, and enter, much information that is of critical relevancy, such as:

(A) The name of the El Paso money launderer who received immunity from prosecution, in a Federal criminal case in Texas. His name appeared, in passing in a reported court decision.
(B) The identity of a corrupt PEP in the Philippines; the article detailing his sins and transgressions was in Tagalog, the official language of the Philippines, so nobody read it, and the translation software was inadequate.
(C) The obscure report of an arrest of a trader, in Singapore, for securities fraud.
(D) A civil suit, alleging a massive Ponzi scheme, in the Cayman Islands. It only appeared on a local  online website not otherwise thought of as a reliable & established news source.
(E) A blog reporting on a possible instance of trade-based money laundering. It was not indexed by the search engines, and not known to the researcher responsible for covering that topic.

So long as the existing commercial databases of high-risk individuals and entities fail to snare all the relevant data, sift through it, and make it available to the users, financial criminals will remain omitted from the very data sources that banks rely upon to keep them safe.

Saturday, March 19, 2016


The Attorney General of Panama has released a calculation, made by her office, of the cost of corruption to the Republic of Panama; She estimates it at $670m. The number of individuals currently under criminal investigation, for official corruption, is 294. Consider these figures carefully, when it is again time to assess Country Risk for Panama.

Friday, March 18, 2016


Lawrence Heath, a retired Canadian attorney, and Queen's Counsel, has filed suit, in the Superior Court of Justice of Ontario, against Leon Frazer & Associates, Inc., the firm that provided wealth management services to the plaintiff. Several million dollars of Mr. Heath's investment capital is missing and unaccounted for, and the suit is an application, to the Court, to require the defendant corporation to turn over all the books and records relevant to his accounts at Leon Frazer, to the plaintiff, and for further relief, as the Court deems equitable and proper.

The exhibits to the suit detail multiple written requests, made by counsel for Heath, to the Leon Frazer firm, seeking access to his client records. According to the defendant's compliance officer,  Esida Selfo, there were more than a dozen boxes of records retrieved, but a subsequent compliance officer assigned to the matter, Alex Adeniyi*, later denied that there were any such documents, reportedly intentionally interfered with counsel's efforts to contact the original Leon Frazer compliance officer, and refused to render any significant cooperation further. A fair reading of the document production made by Leon Frazer indicates that it was incomplete, and non-responsive to the plaintiff's request for information. Whether the investigation of plaintiff's attorneys was deliberately obstructed is not known as this time.

Compliance officer Alex Adeniyi
Leon Frazer & Associates, Inc. has a fiduciary duty to maintain client records, and produce them upon reasonable request, and the suit constitutes a demand that they be produced. A hearing has been scheduled for April 11, 2016, on the Application. William Tykaluk was the responsible financial adviser on the plaintiff's account, and the plaintiff has accused him of multiple torts, as well as criminal conduct, and the matter has been referred to the Ontario Securities Commission for investigation.

The plaintiff has previously alleged that he did not authorize the transfer of millions of dollars out of his Leon Frazer account, into a shell Cayman Islands company, B & C Capital, Ltd., controlled by the fugitive Canadian trader, Ryan Bateman, Tynkaluk and Cayman resident Sharon Lexa Lamb. Tykaluk, Bateman and Lamb allegedly forged documents, made material misstatements of fact to Heath, and having unlawfully taken control of the plaintiff's assets, and thereafter engaged in money laundering, to secrete their criminal proceeds in a number of offshore jurisdictions.

William Tykaluk

We shall be closely following the proceedings, as well as any subsequently-filed administrative or criminal actions; The allegations of  misconduct are so serious that, if proven in court, could spell the end of Leon Frazer's 75-year history, as a licensed financial adviser.
* Mr. Adeniyi previously served, for several years, as a compliance officer at TD (Toronto Dominion) Bank, a financial institution that has had major compliance failures during the past decade, both in Canada, and the United States, notably its prominent role as the bankers to the massive Scott Rothstein Ponzi scheme. The scope and extent of his role in the reported TD Bank compliance failures, if any, is under investigation.


If you are a compliance officer, at an international bank in the EU or North America, seeking to vet a prosperous Turkish businessman at account opening, you have a difficult job. Turkish officials are making it extremely difficult to obtain truthful and accurate information on their nationals.

Here's what's happening lately, and why you should be concerned:

(1) The country's major opposition newspaper, upon which many relied upon, has been taken over by government, and is no longer to be trusted for accurate information.

(2) Two Turkish journalists have been unjustly imprisoned; these are just the latest in governmental targeting of the press.

(3) the country's leader flat out stated that he will not obey the country's supreme court. If the rule of law is to be cast aside, then no investigative journalist will dare publish articles about corruption, narcotics trafficking, terrorist financing, trade with ISIS, trade with sanctioned countries, and crimes committed by Politically Exposed Persons (PEPs).

We have previously alerted our readers to the issues involved with Turkey, but now the pace of governmental interference with what is left of the free press has accelerated, and one can no longer be assured that any negative news will make publication. Therefore, raise Country Risk on Turkey, to a higher level. 

Wednesday, March 16, 2016


Bateman, Lamb & Buntain
In August, 2015, when one of the victims of the Cayman Gang of Four approached Sharon Lexa Lamb, considered to be the Gang ringleader, she told him that, if he wanted to receive the money and stock in his account, he would have to sign what amounted to a general release. Additionally, he would have to see that retractions were published, regarding articles detailing the crimes committed by the Gang of Four. The retraction document appears below.

Here is the document that the victim was told, by Lamb, he must sign, as well as his adviser, who was the whistleblower publishing some of the articles, to get his assets back:

You may not recognize all of these articles, as some have been published on other website, under other titles. The document amounts to a retraction, and an apology. The victim, of course, had no role in any of the articles cited, nor did he contribute any information whatsoever to the journalists who wrote them. Thus, not only did the Cayman Gang of Four steal millions from accounts at Dundee Merchant Bank, but they want the news of their crimes retracted from the Internet, and a general release from the victims, prior to (possibly) disbursing back to them, some ( but not necessarily all) of their money.

The arrogance of the Gang of Four, who are Sharon Lexa Lamb, Ryan Bateman, Derek Buntain, and Fernando Moto Mendes, apparently know no bounds. It is now time for justice to be served.