FEARING EXPOSURE FOR TAXES, SPANISH INVESTORS FLEE POST-MOSSACK FONSECA PANAMA

Statistics from the Republic of Panama indicate a major capital flight, of assets owned by wealthy Spanish investors, has occurred since the Panama Papers disclosures surfaced in the global media. Holdings of Spanish nationals in Panama, previously appraised at $1.1bn, are now at $511m, a 54% decrease.

Some observers have learned that tax evasion investigations have been initiated in Spain, against a number of wealthy Spanish businessmen, who claimed tax advantages through Panama, and that is the
principal reason for the capital withdrawal, but others believe that the negative publicity generated by the Mossack Fonseca scandal, and the fact that so many investors had retained the Mossack law firm to handle their Panama business, is the principal case for the urgent capital movement.

Whether the reason is criminal tax evasion investigation, or negative publicity, the money is swiftly leaving Panama, reportedly for European tax havens. The impact of this capital drain upon the Panamanian economy, and therefore Country Risk, cannot yet be measured or ascertained.

CIVIL SUIT SAYS HAMAS IS NOT A SOVEREIGN ENTITY

If you watched the fictional cable television series Dig, in which an American FBI agent in Jerusalem, investigating a murder uncover a 2000-year old conspiracy, you saw a fascinating smystery, weaved around both the Old and New Testaments, and filmed on location in the Holy Land. You  may not have known that there was a legal battle, behind the scenes, which bared an issue, involving terrorism, that continues to plague legal scholars. Is a sanctioned terrorist organization a sovereign entity under the law ?

 NBC Universal, the cable operator, and producer of the program, was forced to move its production to the United States, when Hamas rockets threatened Jerusalem, during the scheduled filming period. The producing company incurred over $6.9m in additional expenses, and demanded payment from its insurer, Atlantic Specialty Insurance Co., which is reportedly owned by OneBeacon Insurance Corp., an entity located in Bermuda.

The insurance carrier for NBC Universal denied coverage, asserting that the event was not covered, due to the standard "War Exclusion " provision. NBC brought a suit in US District Court in Los Angeles, taking the position that Hamas, a specially designated global terrorist organization, is not a sovereign entity, and therefore the exclusion does not apply; the plaintiff has a covered loss.

The defendant has not yet responded to the amended complaint, but we shall be following the progress of the litigation, and report back to our readers on all significant developments. as they occur.

ORAL ARGUMENT SCHEDULED ON KEY MOTIONS IN ZARRAB IRAN SANCTIONS CASE

The trial judge in the Iran sanctions violation case against Reza Zarrab, the Turkish-Iranian businessman and trader who figured recently in a major corruption case, involving the sons of Turkey's elite, has scheduled the pending motion to dismiss for oral argument, before District Judge Richard Berman, on September 6, 2016. We have previously detailed the defense position, which makes a persuasive argument for the position that a participant in a strictly foreign transaction, with no US buyers, sellers or banks, on the mix, is not liable for violations of American sanctions laws against Iran. See, Attorneys for Iran Sanctions Evader Zarrab file Motion to Dismiss Indictment, (July 22, 2016). The Court has given the US Attorney's Office until July 20th to respond to the motion.

There is another pending motion, which will also be heard at that time; the defendant's motion to suppress statements, and evidence obtained, when he was detained, upon arrival in the United States, for a family vacation. He was reportedly forced to give up the security passcode on his smartphone, and financial information was then accessed from it.  This reportedly occurred when he was initially detained, but not yet under arrest, though it appears that he was not free to leave.

He was also ordered to disclose information about his income, assets, and businesses, before his actual arrest by the FBI. All these prior acts appear to have been conducted by US Customs and Border Protection (CBP), and the defense motion has attacked these methods, and stated that, since all the evidence obtained is tainted, that it, and his statements, be excluded, as an unconstitutional search and seizure, pursuant to the US Supreme Court ruling in Wong Sun vs. United States, in which the evidence, which was judged to be the "fruit of the poisonous tree," was excluded.

Did overzealous US law enforcement agents violate Zarrab's rights ? Remember, as a gold trader, Zarrab, was reportedly a principal facilitator in enabling Iran to sell it soil, an evade international sanctions, and the figure of $300m has been the estimated amount of the sales he participated in. When he, fortuitously, came into the jurisdiction of the United States, their enthusiasm at his detention may have affected  a decision to seek to interrogate him, upon arrival.

In any event, the disposition of both motions is critical to the movement of the case to trial, and we shall be reporting upon the Court's rulings in September.

FEDERAL APPEALS COURT AFFIRMS RICHARD CHICHAKLI'S CONVICTION

The Second Circuit Court of Appeals, in a Summary Order*, has  upheld the judgment of the District Court, in the controversial case of Richard Ammar Chichakli. Chichakli, reputed to be the partner and money launderer for convicted arms trafficker, Viktor Bout, was convicted in a nine count indictment that included money laundering conspiracy, wire fraud, and violation of IEEPA sanctions.

The Appellant asserted that there were a number of evidentiary errors committed by the trial judge. He claimed that the admission of the contents of the laptop computer, seized from Viktor Bout when he was arrested in Thailand, was error, due to an alleged break in the chain of custody. He also stated that the Court's decision, to deny him the right to call a DEA agent, violated Due Process, and that it was error for it to admit certain Powerpoint presentations, during the trial.

The Court, which was composed of a three-judge panel,  held "We have considered all of Chichakli's arguments, contained in both his counseled brief, and his supplemental pro se briefs, and conclude that they are without merit. We therefore AFFIRM the judgment of the District Court. " Supplemental Brief at 6.

A figure of great media interest in the past, due to his association with Viktor Bout, Richard Chichakli. a Syrian-American CPA, came from a powerful family in his native country. He had served in the US Military, and reportedly operated Viktor Bout's UAE Sharjah aviation enterprise, which often ran arms to both sides in Africa's numerous civil wars. Court observers anticipated that Chichakli would make use of his prior relationship with the American intelligence community, to embarrass the US Government, but none of that confidential (and classified) information came out at his trial. Chichakli was arrested in Australia, when he sought to obtain a law enforcement position, using an alias.

Richard Chichakli has a presumptive release date of June 11, 2017; he is incarcerated at the Federal Medical Center Devens, in Massachusetts. He has, pro se, sought a rehearing, or in the alternative, a rehearing en banc, of the Second Circuit decision, and that matter remains pending.
_______________________________________________________________
Case No.: 14-4255-cr (2nd Cir. 2016).

BENEFICIAL OWNER - THERE CAN BE ONLY ONE !

I am seeing discussions around whether to perform due diligence upon what the authors describe as the "Intermediate Beneficial Owner," and hasten to remind readers that any intermediary, post-transaction, is most likely a front man/woman whose purpose is to either hide the name of the Beneficial Owner, or perform some other illicit act, such as assist in tax evasion, money laundering, trade-based money laundering, or something else that is not-legitimate.

Please do not dignify such an individual as anything other than that which he or she really is, a manipulator. Remember,  frontmen or nominees routinely show up as owners of a corp at closing of the transaction, and then, immediately, quietly convey out to someone whom you would not otherwise deal with. There's no honor in being a intermediary, and it just confuses young compliance officers, to label someone an intermediary beneficial owner, when that is NOT what they are. Watch your terminology, please. Do not use Ultimate Beneficial Owner, for that connotes others in the mix, of equal dignity.

BASEL 2016 AML INDEX IS PUBLISHED

Compliance officers charged with assessing and updating Country Risk, as we have reached the mid-point in the year, should review the Basel 2016 AML Index, from the International Center for Asset Recovery, to assist them in making an accurate calculation. The Index can be viewed here.

PANAMA PAPERS EXPOSE RUNAWAY CORRUPTION IN AFRICA

We are all painfully aware of the widespread corruption occurring in the countries of Africa, but recent Panama Papers disclosures have blown open the extent of massive illegal activities in what was previously known as the Dark Continent. The illicit flows of literally billions of dollars, in bribes, kickbacks, diverted funds from national treasuries, transfer pricing, and other financial crimes, perpetrated against the very people that African PEPs were supposed to be representing, are staggering.

The Panama Papers media sources have advised that the amount of illicit funds actually exceeds the amount of foreign aid, and foreign direct investment, into African nations. This fact, alone demonstrates that official corruption in Africa is universal, and u checked. Almost every country in Africa showed up in the Panama Papers, with suspicious offshore corporations having been formed by prominent PEPs. Think about that the next time a bank client tell you to send a portion of a payment, for goods or services, to a payee other than the recipient named in the client's agreement with a sovereign nation.

Remember, it is up to you, as the bank's compliance officer, to avoid any Foreign Corrupt Practices Act exposure, because even if your client alone is charged, the potential negative publicity, naming the bank as a hapless or negligent facilitator, can never be underestimated.

US PROSECUTORS INITIATE CRIMINAL INVESTIGATION AGAINST MOSSACK FONSECA LAWYERS AND STAFF

According to reliable US sources, Federal prosecutors are now conducting criminal investigations into whether Mossack Fonseca attorneys and staff committed money laundering, or tax evasion offenses, on behalf of their clients. If the MF lawyers & staff are not already radioactive, due to the Panama Papers disclosures, this new development will make current, or even former, employees, extremely high risk as new hires.

MF standard operating practice was to form bearer-share BVI companies for clients; it is virtually impossible to identify the beneficial owners  of such corporations, and there is evidence of the creation of bank accounts, and to even make investments for MF clients. Whether MF lawyers and staff acted for their clients, with the intent to assist the clients in evading taxes, or laundering their money, will be the central issue, but proof sufficient to convict could come if the clients themselves testify against the Mossack lawyers and staff members; That may happen more often than not.The real question is whether the name partners will themselves be indicted in the United States.

ARE CAYMAN GANG OF FOUR CONDUCTING A FRAUD UPON THE COURT WITH B & C CAPITAL LIQUIDATION ?

B & C Capital, Ltd., a Cayman Islands company controlled by the island's mega-fraudsters,  Derek Buntain, Ryan Bateman, Sharon Lexa Lamb, and Fernando Mendes, members of the Cayman Gang of Four, appear to be orchestrating the court liquidation of the corporation, and truth has been the first casualty. Did Derek Buntain perjure himself, when he executed a worn statement, in connection with the proceeding ? How is he possibly qualified, under the law for any purpose, in this case ?

Individuals acting for some of the Canadian victims of the multi-million dollar fraud, whereby the Gang stole  from accounts at Dundee Merchant Bank, and laundered their booty through B & C Capital,  then another controlled shell, Bateman and Company Ltd., and then DMS Bank & trust Ltd., en route overseas, have been seeking details of the liquidation proceedings. Though  B & C has been defunct for some time, and was insolvent when victims sought their money from its agent, Sharon Lexa Lamb, they still maintain an interest in the case.

 Imagine their surprise when they learned that Derek Buntain, the cashiered ex-president of Dundee Merchant Bank, and the number one suspect, with regard to looting the bank's accounts, with Lamb, another senior bank officer, has executed the required affidavit of creditor or debtor. Inasmuch as Buntain, who is currently hiding out in rural Canada, and unavailable, signed a sworn document, this is not only a clear conflict of interest, and the liquidation itself is a fraud upon the Cayman Court.

Unfortunately, Cayman Islands courts do not have the same degree of transparency as we see in North America. Buntain's bogus affidavit is not available to the public, although truth and justice seems to require openness in any English Common Law court, wherever it sits. Is the entire liquidation a fraud as well ? The court should make that document available to the public, unless it wants to perpetuate the cycle of fraud, where Cayman government agencies, including law enforcement and regulators, routinely and deliberately ignore the victims, and sweep it all under their Caribbean rug.

COMPLETE TEXT OF FLORIDA ORDER DISMISSING MONEY LAUNDERING CHARGE FOR BITCOIN TRANSACTION

I am making the 8-page Order Granting Defendant's Motion to Dismiss the Information, the Miami-Dade County Circuit Court, Criminal Division decision that held that Bitcoins do not meet requirements of monetary instruments, and therefore, transactions involving Bitcoins are not financial transactions, available, as I have not seen it online.

The Court, speaking through Circuit Judge Teresa Pooler, ruled that a defendant, who engaged in two Bitcoin transactions, was neither an unauthorized money transmitter, under Florida Law, nor engaged in a transaction involving the proceeds of a specified unlawful activity, for the purposes of the money laundering statutes.

You can expect the State Attorney Office, in Miami, Florida, to file an appeal to the third District Court of Appeal, as this is a question of great public interest.

VICTIMS OF CAYMAN GANG OF FOUR CLAIM BAHAMIAN DRILLING LICENSES BELONG TO THEM

According to investigators, who traced money stolen from Canadian pensioners' accounts by the notorious Cayman Gang of Four, fugitive trader Ryan Bateman used Cayman-laundered criminal proceeds to purchase oil & gas exploratory drilling licenses from the Government of the Bahamas, and therefore the victims are claiming that they have equitable title to those licenses. This development may have political consequences in the Bahamas, where Opposition leaders have questioned the sale of the leases to a known financial and domestic criminal, and whether there was any impropriety, or corrupt activity, involved.

Reportedly, the leases, which both Bateman, as well as Atlantic Petroleum Limited, and Bahamas Exploration Limited, claim as theirs, were paid for with funds Bateman illegally transferred to the Bahamas, through a Cayman financial institution, that has itself come under scrutiny, due to a reputed Ponzi scheme that was routed through the bank.

Ryan "Kim"  Bateman

In any event, the former leadership of the Bahamas has been presented with some tough questions. Whether an anticipated court battle, in Nassau, or Grand Cayman, over the drill licenses, will answer them, is another matter. Will a court of competent jurisdiction award the licenses to the victims of the Cayman Gang of Four ? Stay tuned, and watch the fur fly in Nassau, when former government officials  fail to address the many questions that remain unanswered.

BENEFICIAL OWNER DISCLOSURE IN CASH SALES EXPANDED IN NY, EXTENDED TO CALIF & TX

Readers who want to read the complete text of the expanded FinCEN Geographic Targeting Order, which now includes all of NYC, Fort Lauderdale, Boca Raton & Palm Beach, and part of California & Texas, meaning that cash buyers, using shell companies, will be required to be identified, can read it here.

DYSFUNCTIONAL SCREENING SOFTWARE RESULTS IN VIOLATION FOR BANKING KINGPIN ORGANIZATION MEMBERS

The function of bank  sanctions screening software is, among other things, to screen for individuals named or designated by OFAC. If that software cannot do that, you have not only wasted a lot of money, you run the risk of being named & shamed by Treasury, in a very public way, on the Civil Penalties webpage, through a Finding of Violation.

Compass Bank, of Laredo, Texas, which does business as BBVA Compass Bank, had a bank client who was designated by OFAC, due to her Guadalajara, Mexico-based family's involvement in money laundering operations on behalf of Rafael Cara Quintero, an OFAC-designated Drug Kingpin.

The bank failed to identify the customer as a sanctioned individual, notwithstanding numerous negative news reports about the matter. Amazingly, the bank's sanctions screening software totally failed to hit on her account, due to what the bank blamed on a "misconfiguration" in the screening software. The software was not checking dormant or inactive accounts for new OFAC hits. We call this compliance malpractice.

Who at the bank was responsible for seeing that screening software was  working properly ? Who was checking, monitoring, and auditing its operation periodically ? Where was the annual outside audit of the bank's compliance program.

Even without the OFAC designation, those local newspaper articles, naming the bank client, should have been required daily reading for Compass Bank Compliance officers. Who fails to read local news about money laundering and drug trafficking in their area ? I believe the bank needs a new compliance division, for the current one abjectly failed.

Readers who wish to read the complete text of the Violation can access it here.

ARE WE NOW TO DISTRUST ALL CHINESE MEDIA FOR COMPLIANCE PURPOSES ?

The disclosure that the most well-respected Hong Kong newspaper, the South China Morning Post, ran a story that was clearly planted by the Government-controlled press in Mainland China, has probably dealt a fatal blow to the credibility of the paper, and cast doubt on its future ability to carry stories that are critical of Beijing.

 The Hong Kong-based daily was purchased by a Mainland China business magnate, and it appears that promises of integrity and objectivity in content will not be kept. Whether this "arrangement" is being practiced, unofficially, at other Hong Kong media is not known. How much new management goes on in Hong Kong ?

Add this to the fact that three Mainland China Internet news sites, which have carried negative news in the past, have been shut down, and one wonders whether it is prudent to rely upon ANY Chinese news sources, when conducting due diligence investigations, in the future. 

NEWLY APPOINED DIRECTORS AT DEFUNCT B & C CAPITAL LTD. RESIGN

They were just appointed last month, but Michael Pearson and Andrew Childe, who were the sole surviving directors of B & C Capital Ltd., the Cayman company accused of laundering millions of dollars looted, by the Cayman Gang of Four from Dundee Merchant Bank, have reportedly resigned, according to a reliable source in Grand Cayman. They were appointed after the Cayman Islands Monetary Authority cancelled the director registration of the fugitive stock trader, Ryan Bateman.

We have previously reported upon the two directors' appointment, and the potential liability that they may have incurred by accepting their posts. Readers can find that article, Company that Laundered Money for Cayman Gang of Four Appoints two Accountants as Directors, on this blog. Liquidation of the company has been ordered, although it is known to be insolvent, without assets, and with substantial debt. There are unconfirmed rumors that accounts located are virtually empty.

PALESTINIAN AUTHORITY ASSERTS IT WILL SUE UNITED KINGDOM

Lord Balfour's letter to Lord Rothschild

The Palestinian Authority has publicly stated that it will bring a civil suit against the United Kingdom, for damages, because of the Balfour Declaration of 1917, which favored a National Homeland for the Jewish [Hebrew] People. The PA has announced that the Declaration was responsible for the establishment of the State of Israel, upon land that the PA claims  belongs to Arabs.

Obviously, nobody in Ramallah was paying attention in law school; otherwise, they would know that Sovereign Immunity, also known as Crown Immunity, prohibits civil suits, with only extremely rare exceptions. They should also know that the Balfour Declaration, which was codified in the San Remo Conference, by the League of Nations, and later the United Nations, was adopted by that global community of states and nations. The Jewish claim to the region is continuous, and over 3000 years old. The PA only came into being in the 1960s, and its people only moved into what is now Israel in the early 1900s.

One additional point, in 1947, the UN presented a partition plan for the then-British Mandate, but it was rejected by all the Arab states. Therefore, the Balfour Declaration, and its progeny, are still valid international law. 77% of the British Mandate was spun off, as an Arab state; it is called Jordan.

I bring up what is obviously a political ploy, with no basis in either law or fact, because if a civil suit is filed against the UK, it may prompt British regulatory agencies to take a fresh look at high-value accounts held by Palestinians in UK banks, to insure that the account holders are not corrupt PEPs, or are members of Hamas, or Palestinian Islamic Jihad, terrorist organizations. UK compliance officers would do well to, early on check out their affluent Palestinian clients, lest they be embarrassed later on, when regulators find
AML/CFT deficiencies.

IN A MONEY LAUNDERING CASE, MIAMI-DADE JUDGE HOLDS THAT BITCOIN IS NOT MONEY

A Circuit Judge in Miami-Dade County, Florida, has ruled that Bitcoin does not constitute money, for the purposes of the state's money laundering statutes. You can expect the State Attorney to appeal that decision, so do not rush out and purchase the crypto-currency immediately, please.

Being that this is a trial court decision, and one of the state's appellate courts, Florida state court judges are not required to follow it, but some may choose to do so. 

GANG OF FOUR RINGLEADER FLEES GRAND CAYMAN

Cayman Gang of Four ringleader, Sharon Lexa Lamb has fled Grand Cayman; efforts to locate her anywhere in the Cayman Islands have proven fruitless. While she may have quietly made passage to the Republic of Cuba, where she obtained residency last year, through a marriage of convenience, her exact whereabouts are unknown.

Miss Lamb may have fled ahead of the release of damaging disclosures, in the liquidation proceedings involving the defunct shell company, B & C Capital, Ltd., to the effect that B & C was insolvent. at the time that Lamb, and Dundee Bank President, Derek Hedley Longworth Buntain, illegally transferred millions of dollars of client money to the company.

 As the Senior Vice President of Dundee Bank, at that time, Lamb breached her fiduciary duties, when she processed the transfers, and she is a defendant in a civil suit presently pending before the Grand Court. She is also a person of interest in other civil suits, pending elsewhere, and the subject of a criminal investigation.

Sources in the Isle of Man, Lamb's country of origin, have not seen her recently on the island. One source in Grand Cayman says she has now returned to the islands, but is in hiding.

WILL 2017 OPENING OF BANK OF PALESTINE IN CHILE BE AN OPPORTUNITY FOR TERRORIST FINANCING ?

           

The announcement, by the Bank of Palestine, that it intends to open a branch in Santiago de Chile in 2017, may raise Country Risk issues for the Republic of Chile. Chile, which has a large population of descendants of Palestinian immigrants, has heretofore not been the subject of concern for terrorist financing, by Hamas & Hezbollah.

The opening of a facility of a financial institution, which was formed in Gaza, but now has its headquarters in Ramallah, with offices and branches in both territories, could provide a new funds pipeline for terrorist financiers who are funding Hamas and Hezbollah, to move criminal proceeds, earned in Latin America, into the Middle East. Such acts could result in the Bank being excluded from the US banking structure, which could be fatal to its business.

Though the bank has had a good reputation for avoiding Hamas-controlled charitable organizations, and Islamic associations, and refrains from accepting them as clients, the use of third party corporate entities, in Chile, not known to either internal  compliance, or Israeli regulators, or American regulators, could result in quietly but efficiently funneling drug profits of Hamas into Gaza, or Hezbollah money into the West Bank (Judea & Samaria). Country Risk for Chile may be affected; the prudent move is to watch the Bank's activities closely, and initiate enhanced due diligence on any and all international funds transfers, for the first six months of operation.

Bank of Palestine headquarters, Ramallah.

PANAMA'S APOLOGISTS MISS THE POINT COMPLETELY

Since the "Panama Papers" scandal dominated the news in Panama City, the country's professionals, as well as politicians, have sought to distract attention from their money laundering banks. Many go so far as to challenge American journalists to actually attempt to open a bank account, and many have difficulty doing so, as they must produce a large number of documents, to achieve success.

This tactic, while appearing to be convincing, is misleading for two important reasons:

(1) US citizens, and legal residents, pose a bookkeeping nightmare for foreign banks, due to FATCA reporting requirements. Panama banks, frankly, do not want the problems, and will make it difficult for any US national to open an account with them. Besides, Americans are generally not promising to deposit substantial sums; it's small business for the banks.

(2) Panamanians, especially lawyers, have no trouble opening accounts, for they employ bearer-share corporations, as the account holders, and in most cases promise top make lucrative, large deposits, which the banks desire. Of course, bribes are often offered to facilitate the transaction. In many cases, the bank owners are even related to the lawyers seeking new accounts, or both the bank and the attorneys are members of the same organized crime group, usually the one I refer to as the Syrian Organized Crime Syndicate, the largest group in the country.

As you can see, it's only outsiders who have problems opening accounts; the money launderers, their lawyers, and criminal elements are welcomed with open arms, because of the large deposits, which will soon be entered the bank. The fact that Source of Funds, and Beneficial Owner, never come up, illustrates the ongoing nature of Panama's serious banking deficiencies.   

A SOUTH AMERICAN PASSPORT WITH SCHENGEN-LIKE PRIVILEGES ; ARE THEY BLOODY CRAZY ?

UNASUR, the Union of South American Nations, has once again brought up with the concept of a uniform South American passport, allowing free transit throughout the region, Schengen Zone style, basically abolishing the visa requirements that exist among Latin American nations. The idea is to emulate the European Union model of borderless travel and opportunity.

The issue is, given the universal problem the region has with corruption, acquiring a passport, which would allow free access, from Mexico to Chile, would only facilitate, and empower, existing narcotics trafficking, money laundering, human trafficking, arms trafficking, and consumer goods smuggling networks, already in operation. One cannot trust underpaid government servants in the region to follow strict compliance procedures, when issuing such passports, where bribes and kickbacks are commonplace. It would expand criminal opportunities tenfold.

In the absence of any effective compliance gatekeepers in Latin America, we respectfully state that the region is NOT ready, anytime in the near future, to adopt regional passports.  

DUNDEE BANK KNEW THAT B & C WAS INSOLVENT WHEN IT TRANSFERRED MILLIONS IN CLIENT MONEY

Grand Cayman's Dundee Merchant Bank, which held tens, or maybe even hundreds, of millions of dollars*, in accounts of Canadian pensioners, breached its fiduciary responsibility to its clients, when its senior officers transferred large sums to B & C Capital, Ltd., although the shell company, ostensibly a trader in securities, was insolvent at the time millions was shipped out to B & C Capital. Evidence confirming these facts appeared recently, in the Liquidation of B & C.

The transfers were approved by, and physically transferred on the orders of, President & Director, Derek Buntain, and Senior Vice President & Director, Sharon Lexa Lamb. They were the most senior officers at the bank during the relevant time the transfers were effectuated. Both Buntain and Lamb are members of the notorious Cayman financial crime crew, the Cayman Gang of Four. They deceived the clients, by falsely stating, in writing, that B & C  Capital was "a bank."

Derek Buntain

Accepting the funds at the literally penniless B & C Capital were the fugitive trader and fraudster, Director Ryan Bateman, and his partner in crime, Fernando Motto Mendes, who claimed to be the Managing Director, notwithstanding he was ineligible to hold such a position, due to his checkered past.

Sharon Lamb

Dundee Merchant Bank is therefore strictly liable to the customers, not just for actionable negligence, and breach of fiduciary duty, but the conduct of its officers, Buntain & Lamb, was willful, wanton & reckless, and in total disregard of their customers' rights. Whether punitive damages lie for its wrongful acts is a question for the courts, but the level of misconduct appears to reach such heights where it is appropriate and proper. Dundee Bank is a wholly-owned subsidiary of Canada's Dundee Corporation, which will be held strictly liable, as the parent.

Also, both Derek Buntain and Sharon Lexa Lamb are personally liable for their actions, and they both should receive a lifetime ban on working in any financial or fiduciary capacity.

Ryan Bateman

______________________________________________________________________

* Investigators do not know precisely how much was stolen by Lamb, Buntain & Bateman, because the thieves, and their attorneys, have been hiding behind the Cayman Islands' secrecy laws, since the losses were discovered.

Note to Readers: All Anonymous comments, posted by the Cayman Gang of Four, especially Sharon Lamb, are being automatically deleted. These so-called comments are being posted solely to confuse the issues, and ignore the evidence, much of which has been turned over to law enforcement agencies in a number of countries.

AVOID CHINESE COPIES OF iPHONE OR OTHER APPLE PRODUCTS AT ALL COSTS

Bogus Apple store in Mainland China.

Remember those photos of the completely bogus Apple store in Mainland China,. that were making the rounds last year ? Chinese consumers thought that they were getting the real thing, but they were being fed counterfeit iPhones, iPads, and even laptops, some who which actually used the Windows operating system.

A word to the wise about these counterfeits:

(1) NEVER purchase any Apple products, anywhere, unless you obtain them at an authorized Apple reseller or retailer. With all the knockoffs of iPhones, you simply cannot take any shortcuts with these items; reduced prices are probably your first clue, but avoid all other sales outlets.

(2) DO NOT buy any Apple products in China for one cannot verify that you are in a real store that sells Macs.

Counterfeits.

(3) Remember that the Chinese Government wants total surveillance upon its nationals, and any counterfeit Apple iPhone, iWatch, or computer or tablet, may have spyware embedded in it, from the factory, which is probably cooperating with the authorities. What if you had proprietary information stolen from your laptop, by the Chinese Government, and then given to a government-controlled Chinese company, who engineered, built and marketed your products, or sold your trade secrets ?

Do not attempt to save a dollar by shopping online, or in a dodgy clearance store, for a computer or telephone ; you may get more than you bargained for.

Bogus screen on left.

ATTORNEYS FOR IRAN SANCTIONS EVADER ZARRAB FILE MOTION TO DISMISS INDICTMENT

The defendant's booking photograph

Reza Zarrab, whose arrest on Iran sanctions evasion charges, when he arrived in Florida with his family, for a vacation at Walt Disney World, is seeking to have his indictment dismissed. His case, which generated a large amount of public attention, when his attorneys offered a lavish house arrest package to the Court, so that he would no remain in pretrial confinement, had had a substantial amount of media attention.

The issue presented by the indictment: Whether a foreign national, using solely transfers between foreign banks, and foreign entities, is liable, under US Iran sanctions, solely because the US Dollars involved were ultimately cleared through American banks ?

Zarrab has assembled a "dream team" of attorneys, from some of America's best law firms, as well as the US office of the UK firm Clifford Chance, and Viet Dinh, the former Associate Attorney General under the Bush Administration. They have, jointly, filed a profusely cited 55-page memorandum of law, in support of the motion, asking that the Indictment be dismissed, due to it being fatally flawed.

The defendant's arguments, simplified, are:
(1) The IEPPA does not apply.
(2) There is no extraterritoriality.
(3) The processing of dollars, for foreign banks, is irrelevant.
(4) The Indictment fails, with respect to each count, as the allegations are insufficient.
(5)  The Indictment fails on both statutory and constitutional grounds.

Readers who need to review the complete text of the Memorandum of Law in Support of Defendant Reza Zarrab's Motion to Dismiss the Superseding Indictment  can access it on PACER, or through a hyperlink on the New York Times website. If you are unable to do so, kindly email me and I will send you a pdf file containing the Memorandum.. Email me at:  miamicompliance@gmail.com

Unless it is continued, the trial will commence in January, 2017.

  

AMERICAN BULK CASH COURIER ARRESTED UPON ARRIVAL IN JAMAICA

It appears that Jamaican marijuana traffickers, blocked from repatriating dug profits through the USA banking structure, continue to employ bulk cash smuggling, when they need to ship their cash home. Coline Brown, reportedly an American citizen, residing in New Jersey, was detained and arrested, upon arrival at Norman Manley International Airport in Kingston.

Miss Brown had concealed  USD$76,180 inside her luggage, and failed to account for it, when questioned by the Financial Investigation Division of the Jamaica Constabulary Force. She was subsequently charged with:

(1) Possession of Criminal Property
(2) Concealment of Criminal Property
(3) Failure to Declare
(4) Bringing Criminal Property into Jamaica. 

TURKEY INSTITUTES A TRAVEL BAN FOR ACADEMICS

The Government of Turkey has issued a blanket travel ban, prohibiting all members of the country's academic sector from travel outside the country. Though stated to be only a temporary measure, it is not known how long such restrictions will remain in place. This act has potentially serious ramifications for Country Risk.

Many of Turkey's academics are secular, and maintain pro-democracy sentiments. The government has charged that many were supporters of the failed coup, and they cannot be allowed to depart, for they may have to face justice for their role in the abortive military attempt to unseat the increasingly Islamic government. Academics are perhaps the last source of truth about Turkey's internal society, including corruption, and local participation in sanctions evasion activities regarding Iran.

Additionally, academics presently outside the country have been ordered home, upon pain of
nonspecific retribution, should they fail to promptly return. The effect of these restrictions upon freedom of speech has already been seen, and without objective and accurate information about Turkey, it will be impossible to accurately assess Country Risk. The result will most likely be a major increase in Country Risk levels, due to what amount to an effective information blackout on negative news, as reported by the academic community.

OPPOSITION THREATENS A "TURKEY PAPERS" DATA LEAK

In the bloody aftermath of the failed coup in Turkey, the Opposition, or what is left of it, after thousands of arrests and detentions, has reportedly stated that it intends to go public with a form of "Turkeyleaks" massive dump of sensitive and classified government documents. Do not minimize the consequences of such an act, should it take place.

Two major pending issues could be further exposed by such disclosures:

(1) Damaging details regarding Turkey as the continuing safe harbor for Hamas, which is using the country as a foreign operating base against Israel. Hamas Money Laundering, and terrorist financing evidence, regarding Turkish banks, if made public, could hurt Turkey in the West.

(2) The Pending Iran sanctions case, against Reza Zarrab, in Federal Court in New York, whereby gold was used to circumvent Iran sanctions, through Turkey. Should evidence that suggests Turkey allowed such a massive evasion program to operate surface, it could prove extremely damaging for Turkey.

The Government of Turkey is apparently taking the threat seriously; it has blocked access, within Turkey, to the Wikileaks website. The company, in response, has advised that it may still be accessed, through proxy servers, or through other means. Whether this is merely an empty threat, or that documents will appear, and severely incriminate the government, is not known, but it should be taken into account, for Country Risk purposes. Opposition elements remain a force to be reckoned with, which includes not just the military, but moderate, secular elements of the population, that fear Turkey is sliding down the hole, into an Islamic state.

CAYMAN ISLANDS GANGSTER HAS SIGNIFICANT UNDERWORLD PARTNERS

Wanted

The fugitive securities trader, the Canadian Ryan Bateman, who has a long and sordid history of stock price manipulation and securities fraud, does business with a number of "businessmen" whom you would not like to meet in a dark alley, in addition to his membership in the Grand Cayman crew, the Cayman Gang of Four.* These connections have a long reach, and have left a trail of victims in their wake.

These are but a few of the known activities that Ryan Bateman has engaged in:

(1) Trading securities, to manipulate markets, with a known Montreal organized crime syndicate. The trades were conducted through a company controlled by the Canadian mobsters.

(2) Purchasing 78% of the stock of a small software company (EYGY), that trades on the Over-the-Counter market, rebranding it as an energy company, and then manipulating the market to such an extent that the Securities & Exchange Commission abruptly, and swiftly, suspended trading in the company's stock. The original names was Somo, Inc., which was immediately renamed Enterprise Energy, Inc.

Here is what the SEC Release [ No.34-78059] stated:

" The commission temporarily suspended trading in the securities of EYGY, because of
   recent unusual and unexplained market activity, and potentially manipulative transactions,
   in the company's stock...
 
   The SEC appreciates the assistance of the Financial Industry Regulatory Authority
   (FINRA)." [ June 14, 2016]

The company's CEO is Shane Manning, and attorneys connected to the company are reportedly Scott Doney and William Scott Lawler.

(3) Bateman's prominent role in a number of oil & gas investment ventures, some of which involved obtaining offshore drilling rights, none of which appear to have ever become operational, and profitable, including a Cayman Islands-domiciled venture, a Bahamian venture, an Atlentic Ocean venture, and a reported venture involving the Republic of Cuba. Most observers have concluded that all involved acts of fraud, committed by Ryan Bateman, and others.

There are a number of domestic ( US and Canada) investment schemes, which we will cover in a subsequent article, but the above list most certainly qualifies Mr. Bateman as a prolific career criminal.

It makes you wonder why Cayman Islands authorities never charged him with any securities crimes, or even common law fraud, especially the most recent scandal, involving the theft of tens of millions of dollars in investment funds, by the Cayman Gang of Four. Is he a Confidential Informant for a law enforcement agency, and does he have the proverbial  "Get-out-of-Jail-Free card," like the American  mobster, James 'Whitey' Bulger, Jr. ? We cannot say, but there must be some reason why Bateman has evaded justice thus far.
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* The Cayman Gang of Four are Ryan Bateman, Sharon Lexa Lamb, Derek Buntain, and Bateman's straw man,  Fernando Moto Mendes. Some commentators add William Tynkaluk as a member of the Gang.

ALERT ON BEIRUT-TO-CARACAS-TO-PANAMA CITY MOVEMENT OF LEBANESE NATIONALS

Coat of Arms of Panama City

Businessmen in the Republic of Panama are reporting a large and suspicious movement of Lebanese nationals, arriving into their county via a circuitous route. The precise intent of these individuals is unknown, but given the relationship between Venezuela's radical leftist Maduro government, and the internationally-sanctioned terrorist organization known as Hezbollah, which has long enjoyed safe harbor in Venezuela, it must be assumed that these new arrivals are in Panama City to use its financial center for illicit purposes.

The sources have noted that the Lebanese arrive in Caracas, where they illegally acquire legitimate Venezuelan and Panamanian passports (see our recent article on the subject), and then board commercial flights into Panama. Given the recent American anti-Hezbollah legislation, which severely penalizes any Beirut bank found to be conducting transactions with the terrorist organization, it is quite possible that Hezbollah money managers (read: money launderers) are switching to Panama's notoriously "willfully blind" banks, to move their funds on a global scale, especially criminally-derived income.

Therefore, any prudent compliance officer, at a financial institution located in North America, or Europe, would do well to pay particular attention to increased traffic from Panamanian banks, especially wire transfers whose ultimate destination is elsewhere, or which are forthwith transferred out, upon receipt at your bank. The last thing that any Western compliance officer wants is for his or her bank to run afoul of the Hezbollah International Financing Prevention Act.   

BVI BARS FOREIGN JOURNALISTS SEEKING THE TRUTH ABOUT THE TAX HAVEN'S DODGY CORPORATIONS

The fallout from the Panama Paper scandal, in which Mossack Fonseca records indicate that it formed the majority of its offshore corporations, mainly used by clients for illicit purposes, in the British Virgin Islands, has included prohibiting foreign journalists from not only conducting interviews there, but even entering the Island nation. Several journalists, including one with a confirmed appointment with the governor, have been detained upon arrival, and declared persona non grata, and promptly put on thew next plane out, without any legal proceedings.

 Eyewitness reports indicate that BVI nationals, and their government, has regarded any news about the BVI dodgy corporate formation industry, as a direct threat to their economy. Those corporations, formed to evade taxes, launder criminal proceeds, and hide bribe and kickback money, bring in an estimated $200m a year, for the local government in Tortola. What's wrong with this picture ?

Considering that the UK Foreign and Commonwealth Office has taken only token action to bring transparency to the BVI, it is humbly suggested that compliance officers, when they see that a bank client intends to use a BVI company, for any purpose, decline to assist. This means that the bank should refuse to open an account for any BVI company, for any purpose, as there are very, very few legitimate users of these tax evading corporate entities. Refuse the business, please, lest you later receive a visit from law enforcement, asking tough questions about Willful Blindness.   

AUTHENTIC PANAMANIAN PASSPORTS FOR SALE FOR CASH

Reports from Panama have confirmed that legitimate, blank Panamanian passports are being sold online. This is the first confirmed news, regarding the availability of authentic Panamanian passports.

Bogus Panamanian travel documents have long been available; just recently the authorities shut down a network that we vending fake passports for $705. Cuban nationals have been the targeted consumers, although the quality of the bogus passports has been poor, and generally insufficient to pass US and EU arrival scrutiny at Immigration. This new availability of the real thing is disturbing, for it is a game-changer regarding how much due diligence compliance officers will now have to perform on new Panamanian clients.

It is suggested that bankers detail a Panamanian employee, where available, to speak to the new client, in order to validate that the individual is truly a Panamanian, and using slang words, as well as cultural terms specific to Panama. Otherwise, a bank may unwittingly accept an OFAC-sanctioned individual, narcotics trafficker, or money launderer. 

WHICH MEMBER OF THE CAYMAN GANG OF FOUR IS UNDER INVESTIGATION FOR STOCK MANIPULATION ?

The question of the week for our readers: which member of the notorious Cayman Gang of Four* is being investigated, in the United States, for the crime of stock manipulation in 2015 and 2016 ? Remember, previous crimes committed by these gangsters do not count.

Whom do you have to choose from ? here are the players:

(1) the Canadian securities trader, Ryan Bateman, presently living in Fort Lauderdale, Florida.

(2) the Isle of Man native, ex-banker, Sharon Lexa Lamb,  keeping a low profile in the Cayman Islands.

(3) The Portuguese fraudster, Fernando Moto Mendes, also hanging out in Grand Cayman.

(4) The disgraced Canadian ex-banker, Derek Buntain, hiding out somewhere in Canada.

We will disclose all the details, on this blog, later this week. Stay tuned.
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* Hint: it is NOT the Canadian securities trader, William Tynkaluk, though his insider trading and securities fraud is legendary in the Canadian province of Ontario. Bill Tynkaluk, who has been called in for interviews, several times, by the Ontario Securities Commission, will never be indicted, as the influential Canadian securities industry maintains an iron grip upon the local regulator, the Ontario Securities Commission, so as to avoid any negative publicity about securities crime.

Tynkaluk is, however, a close personal friend of the mystery man we are discussing today. Some people are saying that Bill T is the Fifth Gangster, and the term is so richly deserved, for his crimes and transgressions, committed in support and facilitation of the Gang of Four, surely qualify him as the fifth member of this cabal. Ask all the Canadian pensioners that have been swindled.