Sunday, December 18, 2016


His name is Alberto Chang-Rajii, a Chilean "venture capitalist" who is residing in Malta, and opposing extradition to Santiago, where he faces massive charges that he has operated a Ponzi scheme for years. Why, you ask, is he in Malta ? Because he has a residency card, acquired from the country's Individual Investor Program, Malta's economic passport scheme.

He apparently passed the program's due diligence investigation, and was in line to eventually acquire a Maltese passport. if you don't think this is a good thing, please remember that Malta is part of the European Union, and a passport from that nation entitles the holder to entry into, and through, the Schengen Zone, which includes most of Europe's major countries.

The residency permit, granted by Identity Malta, was only supposed to be issued after the applicant had passed an extensive due diligence investigation, which was conducted by Henley & Partners, but it failed to expose the fact that the applicant's two major claims, that he owned a 1% interest in Google, and that he had an MBA from Stanford university, where he allegedly met Google's founders, were a total fabrication. Both Google and Stanford have publicly stated that his statements are false.

Also, Chang-Rajii was offering investors a 20% return on this funds; this should have been investigated, to rule out pyramid or Ponzi schemes. In the present economy, giving investors something that appears to be too good to be true, usually is. Some are calling Chang-Rajii the Chilean "Bernard Madoff."Representations that are inconsistent with the norms in any trade or industry require enhanced due diligence, but it obviously was not performed in this case.

Even the most inexperienced compliance officer knows how to validate claims of ownership of securities in a publicly-traded company, and of an advanced degree from a major American university. Is Henley and Partners guilty of compliance malpractice ? You decide, but if we have found one instance of an unsatisfactory applicant being approved in Malta, all the others must now be subject to enhanced due diligence, to rule out the presence of others who are unqualified, due to history of, or even ongoing, criminal conduct.

The global economic passport industry has had a black eye for years, due to the issuance of passports to dodgy individuals; is the commission-driven outside management of compliance programs to blame, or is the money so attractive, that governments in the developing world only see the income, and close their eyes to the shortcomings of their applicants ? We cannot say, but compliance officers will certainly now be taking a hard look at Maltese passports, where the holder was not born there, and the passport was relatively issued.

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