Wednesday, May 31, 2017


As you may know, the exposure of cabinet-level PEPs in the Panama Papers unleashed a firestorm of controversy in Malta, especially when the guilty parties failed to explain precisely why they felt it necessary to use the dodgy Panamanian law firm of Mossack & Fonseca to form shell companies in Caribbean tax havens. Corruption in Malta, a member of the European Union, has been under the media microscope of late, as is tax avoidance/tax evasion through Malta.

Now, a group of concerned journalists, European Investigations Collaborations, have sought to focus further attention upon the Republic of Malta; it is called the Malta Files, and it consists of a large number of articles, in many languages, about how Malta's unusual tax system, which allows EU nationals to evade taxes in their own countries, is being abused, to the damage and detriment of tax revenue in the countries in the European Union . Malta reportedly rebates 6/7 of corporate taxes paid in, resulting in an effective tax rate of only five per cent.

Readers who wish to access the Malta Files can find the website here.


 Christina Kitterman, the attorney at Ponzi schemer extraordinaire Scott Rothstein's law firm, and who is serving sixty months in Federal Prison, for fraudulently posing as a Florida Bar official, has lost her  §2255 petition to adjust her sentence downward. Asserting that she had but a minor role in the massive Ponzi scheme, where investors were tricked in "investing" into phantom court, and out-of-court, settlements, for discrimination and sexual harrassment, Ms. Kitterman argued that her true sentence should have only been approximately one-half of the five-year sentenced pronounced by the Court. The maximum sentence possible is 20 years. though the Sentencing Guidelines for the amount of the loss was immense, and far exceeded the statutory maximum.

In a ten page opinion, a US Magistrate Judge held that the sentence was not improper, and noted the hedge fund she intentionally misled, in a telephone call, where the $1.4bn Ponzi scheme was seeking to avoid making a multi-million dollar payment, and enticing the victim to invest yet more millions, ultimately lost $63m, and that it found a miscarriage of justice did not occur, regarding her sentence.

The takeaway here is that, in any financial crime, even minor participants must take the weight of the entire criminal venture, not just their limited role in the enterprise. Ms. Kitterman who lost her appeal to the 11th Circuit, and was denied Certiorari, by the US Supreme Court, filed the §2255, Pro Se, immediately after being rebuffed by the High Court.


The presence of officials from the British Virgin Islands at a conference, seeking to insure that nationals from the British Overseas Territories do not have to secure a visa to visit the countries of the European Union, indicates that those tax havens do not want detailed records of such visits, which would include advising European taxpayers how to avoid or evade taxes in their jurisdictions.

The argument advanced by the BVI is that its attorneys and advisers need unfettered access to their European clients, but in truth and in fact, they do not want visa records, of approvals, entries and exits, to document their activities. The British Virgin Islands, Bermuda, and the Cayman Islands could all face EU visa requirements, for a valid reason: to prevent their nationals from remaining indefinitely in Europe, as illegal immigrants. While the attorneys and financial service professionals in Caribbean tax havens will hardly fit in that category, they obviously do not want to have to specify the reasons for their visits, and to have complete records of their European travel maintained.

In the post-Panama Papers environment, EU nations may wish to keep a watchful eye upon Caribbean tax haven interaction with their taxpayers, and requiring their nationals to obtain visas to enter the Schengen countries might assist in that quest.

Tuesday, May 30, 2017


Manuel Noriega, a Panamanian colonel who made himself a general officer, and later became the dictator of his country, until removed in an American military invasion, has died at the age of 83, following an operation to remove a brain tumor. Noriega, who was serving a lengthy sentence in Panama, for multiple crimes, including murder, was convicted of money laundering, in both the US and France, and was imprisoned in both countries.

Monday, May 29, 2017


María Mercedes Riaño, alleged to be the manager of the Panamanian law firms Mossack Fonseca's Brazil office, and who has confessed MFs involvement in the "Car Wash" (Lava Jato) money laundering & corruption scandal, has been granted bond, in the amount of $150,000 by a Circuit Judge, of the Seventeenth District. She is prohibited from leaving Panama. Riaño has reportedly given to prosecutors the complete details of the Brazil operation, though Mossack & Fonseca have allegedly disputed her claims.

Riaño, Jurgen Mossack, Ramón Fonseca Mora, and Edison Teano, all face money laundering charges, according to Panamanian prosecutors. The law firm has been alleged to be a criminal organization, engaged in money laundering, due to the massive evidence of their facilitation of the payment of bribes. No other present or former MF attorneys have been publicly named, interviewed or charged, according to reliable sources in Panama City.


 Joseph Asmar, an attorney from Lebanon involved in the laundering of drug profits, has entered a plea of guilty in US District Court in Brooklyn (EDNY), to Conspiracy to Commit Money Laundering. The defendant, who represented to undercover DEA agents posing as drug traffickers, that he moved dirty money in Europe, Africa and the US, and was affiliated with Hezbollah, was paid a commission for cleaning what was represented to him to be the proceeds of crime.

Asmar, who was arrested in Paris, and extradited to the Unite States, is part of a global money laundering network, operated by Hezbollah, which finances their terrorist operations, in large part, through criminal activities, illustrates the fact that any transaction involving Lebanese nationals, or entities, could be unwitting contact with the specially designated global terrorist organization. Therefore, for risk management purposes, the entire class of transactions with Lebanon represents elevated risk, often to the point where it exceeds prudent action.

Saturday, May 27, 2017


Attorney Anthony Astaphan

Most observers of the R Allen Stanford/Stanford International Bank Ponzi scheme case believe that the eight-year delaying action, brought on behalf of former Financial Services Regulatory Commission head, Leroy King, was to prevent him from ever being extradited to US District Court in Texas, where he faces what amounts to, in effect, a life sentence, for assisting Stanford in keeping US regulators at arms' length for years. His Guidelines sentence, after conviction, could be 30 years, due to the size of the Ponzi, and his use of his office to protect Stanford.

To avoid that outcome, and draw a shorter sentence, King would be required to cooperate with prosecutors, and such cooperation, Antigua correctly fears, could implicate one or more members of the prominent Bird family, in the acceptance of illegal compensation from Stanford, specifically bribes. That is the presumed reason for the dilatory tactics, engaged in not only by King's atttorneys, but by several members of Antigua's judiciary as well, to significantly delay the case.

There are others who fear the consequences of King's testimony, including some of the attorneys who advised the Bird family, during the time that Allen Stanford was filling the pockets of Antiguan officials, while he fleeced his victims. One of the prominent members of the East Caribbean bar who provided legal advice to the Bird family during that period was Dominican attorney Anthony Waddy Astaphan, SC. Astaphan's role in the Bird's connection to the Stanford International Bank scandal remains  a mystery, but, if facing a long prison term, Leroy King may just choose to disclose those details to the Department of Justice.

Leroy King & Allen Stanford

 Could a RICO (Racketeer Influenced Corrupt Organization) charge be lodged against Bird family attorneys ? We cannot say, but we will be closely monitoring the King extradition proceeding, and will advise on all developments, as they occur.


Readers who wish to review the complete text of the Non-Prosecution Agreement, entered into between the Department of Justice, Banamex USA, and Citigroup, which resulted in a civil fine of $97.44m, for Bank Secrecy Act violations, may access it here. The fine was based upon profits of $92.8m.

Citigroup stipulated that it willfully failed to maintain an anti-money laundering program, and willfully failed to file Suspicious Activity Reports.


 As we have repeatedly demonstrated, the out-of-control Citizenship by Investment Program, operated by the Commonwealth of Dominica, has experienced multiple unintended consequences. Money received has been diverted to a number of illegal actions, all designed to maintain indefinite political power of a party whose leaders line their pocket with the proceeds of the CBI program, and utterly fail to achieve economic progress for the people of Dominica. It is not fulfilling its mandate.

At this point, the only way to save the program is to literally take it away from it greedy governmental operators, and assign it to an outside, nonprofit organization, who can funnel all the money back to its intended recipients.

What are some of the issues that warrant the removal of the CBI program:

(1) This week's dismal statistic: the amount of money spent for marketing Dominica's Citizenship by Investment (CBI) program is twice that devoted to due diligence on applicants, during the same period. What's wrong with this picture ? It means that the acquisition of clients, and the compensation of agents, who are mainly not professionals, but commission-oriented salesmen, is deemed far more imnportant than vetting the clients.

(2) The CBI program is used as cover for an illegal, parallel diplomatic passport program, which has resulted in a half-dozen "diplomats," being arrested overseas, on a variety of criminal charges.

(3) CBI money is used to literally buy votes at election time, charter airliners, to bring into Dominica expats, who will vote to keep the Dominica Labour Party in power, and pay the party's supporters and officials.

(4) The lure of CBI money, in a country with a failed agricultural economy, is simply too strong, meaning that the recipients, instead of having new jobs, created as the result of proper application of those funds, are totally dependent upon this "free money," and are now unable to resist its attraction.

The Dominica CBI program needs to be assigned to a responsible, uncorruptible, international NGO, who can administer it, and use the proceeds to actually advance the economy of Dominica, not pay off corrupt leaders, and their willing associates.

Friday, May 26, 2017


A high-ranking American government official, and a representative of the United States Marshals Service,  who were in Antigua this week, to take custody of former Antiguan banking regulator, Leroy King, met with the country's Attorney General, Steadroy Benjamin. The US has sought King's extradition since 2009; he is charged with multiple counts, including money laundering, for his role in facilitating the  billion dollar Stanford international Bank Ponzi scheme, and the final legal impediments to his extradition were removed recently.

 Unfortunately,  the Americans learned that neither the Court of Appeal, nor the High Court, has ever chosen to rule upon two bogus appeals, neither of which is supported by the law, as his appellate remedies were long ago exhausted. His attorneys filed those cases anyway, in a  patently transparent effort to delay justice.  Antigua's reputation, as a jurisdiction whose courts follow the rule of law, was severely diminished, as the result of the King case. Its courts have even played a game of "musical chairs" with the King case, sending it from one member of the judiciary to another, in what can only be interpreted as a purely dilatory procedure. Such tactics often directly result in an increase in Country Risk.

Most observers of the Caribbean political scene are well aware that King has information regarding corruption, at the highest level of government in Antigua, and that, to avoid a life sentence, he could potentially testify against certain powerful officials, as well as certain prominent local attorneys, who represented those officials during the period that Stanford International Bank operated its massive Ponzi scheme. Whether he will ever pay for his crimes remains to be seen, given the history of the past nine years.

Thursday, May 25, 2017


Reliable sources in Panama have confirmed that the country's former president, the fugitive, Ricardo Martinelli, has recently made several trips to the Dominican Republic, that he has purchased a lavish estate there, and he intends to permanently relocate, most likely eliminating the possibility that he will ever see the inside of a Panamanian courtroom or prison. Martinelli's ownership of two private jet aircraft allows him to quietly engage in international travel, outside of media scrutiny. Remember his original arrival in Miami, where he has resided since leaving office, was never reported, raising questions of official American assistance in concealing his presence here.As the most corrupt president in the history of Panama, many Americans are offended at the favored treatment he has enjoyed, since he was allowed to enter, notwithstanding that corrupt foreign leaders are barred, pursuant to US law.

The Dom Rep is a well-known place of refuge for individuals who are wanted in Panama, notwithstanding the fact that the two countries executed an extradition treaty in 2015. Corruption in the DR remains a major impediment to the recovery of fugitives who have fled there.

Many Panamanians are upset that the United States has failed to honor the extradition warrant presented to the State Department last September. Some observers believe that the US does not want to get involved in the ongoing internal Panamanian political dispute, between Martinelli supporters, and those of the Varela administration, much of which centers upon charges, and counter-charges, of corruption. Unfortunately, there is more than enough corruption, in both camps, to go around. 


His Interpol notice

Forgetting for a minute the bogus procedural tactics of his Panama attorneys, which include his immunity claims, due to a defective ( and belated) appointment to the Central American Parliament, Parlacen,is there some legitimate procedural reason why the United States has failed to extradite Ricardo Martinelli since September, 2016 ?

Many sources in the Republic of Panama have their own theories:

(1) Panama's President Varela fears that Martinelli, on the stand, will reveal massive corruption committed by Varela, when he was Vice President, and for that reason, intentionally flawed extradition documents were forwarded to the US State Department.

(2) Varela's expended relationships with Russian organized crime operations in Panama, which are known to Martinelli, caused him to deliberately slow down the extradition process.

(3) The 9-month delay in securing an INTERPOL Red Card on Martinelli is additional evidence that Panama's government does not want Martinelli testifying in court.

Whatever the reason, we may never see Panama's most corrupt president sitting in the dock, paying for his sins and transgressions.  

Tuesday, May 23, 2017


Hello from Sunny Miami !

 Multiple reports from the Republic of Panama, including case numbers, confirm that a Red Notice has been issued for the fugitive, former President of Panama, Ricardo Martinelli Berrocal, who faces at least a dozen criminal charges, including the operation of an illegal electronic surveillance program, where he spied upon prominent Panamanians. Thius means that he is subject to arrest, and removal, to Panama.

The Red Card was issued, notwithstanding that Martinelli has been the subject of an outstanding extradition request since September, 2016, and has been living openly in Miami. For some unknown reason, the US State Department has ignored Panamanian demands, raising questions about whether he is cooperating with US law enforcement or intelligence agencies, and if those agencies have interfered with Martinelli's extradition petition, which was filed at State.

Rumors continue to fly around his native country; will he actually run for Vice President, or Mayor of Panama City, while facing serious criminal charges  ? 


Monday, May 22, 2017


 The give-and-take, regarding the dispute over whether Rudolph Guliani and Michael Mukasey's efforts to obtain a "diplomatic solution" for indicted Iran sanctions evader Reza Zarrab, continues to unfold. Is the fact that these "negotiators' were also representing the Republic of Turkey sufficient grounds for the Court to find a conflict of interest ?

In a letter to the Court this week, the US Attorney's office has taken the position that details of the efforts of Guliani and Mukasey, to avoid a trial, and the probable consequences thereof, by talking to Turkish, and American, officials are unprotected. It has been argued that neither the attorney-client privilege, nor the attorney work product doctrine, exist, since their efforts are unconnected to the criminal case, nor is any legal advice being given to the client, nor were the negotiations in furtherance of formulating any litigation strategy. It is also argued that, in the absence of an attorney-client relationship, there can ber no attorney-client privilege.

If there is no privilege, then the facts of all  Guliani's and Mukasey's meetings, with both Turkish as well as American, officials, can be disclosed; That cannot be helpful to Zarrab's defense, and may be an important factor in the Court's ultimate decision regarding whether either attorney can continue to represent Zarrab, for any purpose.

Sunday, May 21, 2017


Domestic tranquility in St Kitts & Nevis is under siege, as Opposition leaders have charged the current government with preventing an alleged financial criminal from being extradited to China, where he is wanted in connection with $100m fraud. Ren Biao, a Chinese national who holds a St Kitts passport, is being sought by the PRC, on multiple counts, all revolving around obtaining large loans, from financial institutions, through fraud.

A closer look, however, reveals that the case may be political in nature, due to the close relationships that Ren had with a number of prominent businessmen, and government figures, who were involved, directly or indirectly, in corruption, and some of whom have been arrested, by Chinese authorities.  The country's complex anti-corruption campaign has resulted in serious criminal charges filed against wealthy businessmen whose only crime was their alliance with governmental figures who have fallen from political favor, or who accepted bribes or kickbacks. Ren may, to be honest, be a minor offender, but was his criminal stature inflated, to give China a legal sword, to attack St Kitts with ?

There is also another issue; if Ren is a casualty of China's political infighting, he may have been made into a useful tool, through which the PRC intimidates SKN sufficiently to attain recognition, in the place of the Republic of China - Taiwan. Given China's expansionist policies, towards obtaining recognition throughout the East Caribbean, it is logical that the fact that Ren has a St Kitts passport, and was living there, after fleeing China, made him a prime subject for Chinese manipulation.

One more item: Kittitians are further inflamed by the news, curiously reported by China, that Ren asked for $190,000, from a third party, to allow him to continue to maintain refuge in St Kitts ? Was this an untrue statement, meant to further pressure St Kitts ? We cannot says, but the case requires a full, and fair, investigation, to determine what the truth really is.



To understand why there is so much controversy, regarding the issuance of diplomatic passports, by officials in the Commonwealth of Dominica, to known criminals, take a quick look at the above illustration. Note the fact that all of those pictured are arrested, save the Prime Minister. Given that one diplomatic passport has the serial number 000425, there may literally be hundreds of dodgy foreign nationals running around with those illegally-issued documents, which generally are respected at ports of entry, by customs and immigration officers, allowing the holders to bring in contraband, of all types, with impunity.

How would you like if a career criminal brought one of these items into your country:
(1) A vial containing the Bubonic Plague.
(2) Stolen plans for the Cruise Missile.
(3) Millions of dollars in US Bearer Bonds, or uncut conflict diamonds.
(4) The disassembled components of a man-portable nuclear weapon.

Unless the holder can prove that he or she is a native-born Dominican, and an actual, functioning diplomat, the presenters of ALL Dominican diplomatic passports should be refused entry at Immigration, for all purposes, and their applications to open bank accounts, anywhere, declined by compliance.

Thursday, May 18, 2017


Big Brother ?
  Rayburn Blackmoor, the Minister of Justice and National Security in the Commonwealth of Dominica, in a public interview this week, stated that he wants laws enacted that would impose criminal penalties upon the exercise of free speech, on social media. Using the loaded terms, like "malicious intent," and "to create social mischief, " words which sound like DoubleSpeak from George Orwell's classic 1984, Minister Blackmoor intends to see legislation passed that would effectively bar the Opposition parties from spreading the uncensored news of Dominica among their members.

Given the obvious influence of Dominica's Chinese advisors, in both police and internal security matters, one can only assume that the PRG policy on suppressing lawful dissent, and peaceful protest, as well as its harsh treatment of democratic postings made by social media users, is now to be the official policy in Dominica. When peaceful assembly of a couple of vocal citizens, or statements they make on social media, become unlawful, democracy wilts and dies.

One final note: remember our earlier article, detailing that fact that the Government of Dominica, as soon as the political situation began to deteriorate, brought in not only electronic surveillance cameras, but email and telephone eavesdropping capability; Big Brother is indeed watching you.  

Welcome to  Dominica, which is either the Western hemisphere's newest kleptocracy, or the new Cuba; you decide which label is appropriate. 


If you have been reading the details of the upcoming Beneficial Ownership Platform that the Cayman Islands Ministry of Financial Services plans to implement shortly, you may have seen that there is a flaw, built into the program, which money launderers, and other financial criminals, can literally drive a truck through, defeating the purpose for which the platform was intended, and all to the loss of law enforcement.

The financial services providers, who are to deliver the ownership records, of corporations they form, to the regulator, are only required to do do once a month. This leaves a window, of up to 30 days, during which financial criminals can take their newly formed Cayman corporation, use it to commit money laundering, or some other offense, and collapse their illicit venture, all before the details of ownership are ever made available to the regulator, and thus, to any inquiring law enforcement agency.

I would have thought that someone would have seen this as a potentially fatal flaw; daily input of beneficial ownership data must be uploaded to the regulator, of the new program is to be effective, and nothing less will be sufficient. Bank compliance officers in Europe, and North America, consider yourself duly warned.

Of course, considering that many Cayman Islands financial service providers give their clients a sandwich, consisting of a BVI, not Cayman, company, which is totally opaque,  and also owned by a Belize or other trust, the Cayman program is much ado about nothing. Inventive corporate formation firms will always be several steps ahead of any regulatory program that does not take into account international, and multiple, steps and actions, regarding corporate services.

Wednesday, May 17, 2017


Every time elections approach, in the Commonwealth of Dominica, corruption rears its angry head. back in 2009, the incumbent Dominican Labour Party chartered a Boeing 737, and an Airbus, to fly in expats, from all over the United States, before national elections. The cost was approximately USD$400,000, and where the party got the money to pay for those airliners was never disclosed, but it is suspected that it was diverted from income from the Citizenship by Investment program.

Now, in 2017, with another election on the horizon, the ruling party, which controls the national Parliament, the House of Assembly, is said to be relying upon an amendment to the Elections Law, specifically Section 57B, which specifically provides that transporting Dominicans into the country, for the purposes of an election "does not constitute an offence." It appears that the next election will be business as usual, but now election bribery is legal in Dominica.


The Peoples' Republic of China (PRC), as part of its expanding global reach program, is seeking to convince the Government of St Kitts & Nevis to withdraw its present diplomatic recognition of the Republic of China (Taiwan), so that the PRC can then itself be recognized by St Kitts. This step would allow the PRC to open an embassy in Basseterre, the Kittitian capital, and gain another important foothold in the East Caribbean.

Given that there is presently virtually no tourism between the two nations, nor any international trade of note, a new Chinese Embassy in St Kitts could serve as a center for the gathering of intelligence; a listening post in the northern section of the East Caribbean, close to United States territories, and military & naval facilities in the region. China already has built a large embassy in Roseau, the capital of the Commonwealth of Dominica, another country with which it has virtually no financial intercourse, and which is believed to serve as an electronic listening post, and station for human intelligence agents, strategically located in the central portion of the East Caribbean.  The Chinese Embassy in Grenada most likely completes China's electronic monitoring coverage of the southernmost section of the region.

China appears to be serious about influencing St Kitts. Reports from Europe indicate that a private British firm, whose staff has experience in the field of intelligence, is allegedly seeking to obtain a contract with the PRC, for the purpose of persuading St Kitts officials that recognition of the PRC is in their best interests.

If you are wondering which way St Kitts is tilting, regarding recognition of China, note that it sent representatives to the PRC recently, to attend a conference on economic citizenship, and market the country's Citizenship by Investment (CBI) program, to wealthy Chinese investors.



There has been a lot of attention paid of late to a whitepaper, published last year, entitled Making it Harder for the Bad Guys: The case for Eliminating High Denomination Notes, by the Mossavar-Rahmani Center, at the Harvard Kennedy School. In my personal experience, eliminating large bills from circulation will only result in money launderers accessing alternative means of successfully moving the proceeds of crime, but I recommend that you review the article, before making your own decision on the subject.

The article can be found here.

Tuesday, May 16, 2017


As if the Odebrecht scandal wasn't bad enough for the Republic of Panama, details of the hidden back story tell us that the country's former president, Ricardo Martinelli, was engaged in an organized money laundering scheme, to move and clean the huge amounts of construction bribe money flowing through Panama, and that he delegated major portions of the illicit operation to his two grown sons.

We have previously covered Martinelli's prior failed efforts to obtain a 50% interest, in a Panama money service business that had the capacity to issue anonymous prepaid credit cards. New information confirms that the Martinelli brothers also sought to control a second MSB, which also was one of the few financial entities allowed to issue those prized prepaid cards, which allow the user to convert illicit cash into a pocket-sided financial product, capable of global use.

The fugitives: Ricardo Martinelli & sons

Why the focus upon those two money service businesses, you ask ? These entities issued high-value prepaid cards, through which the Martinellis could drop an estimated $2.5m, per week, of dirty Odebrecht bribe proceeds. The recipients would then be free to spend that cash, through the use of the cards,without any fear that such acts would come back to incriminate them. After using the cards, they would, of course, be destroyed, eliminating any paper trail, or even evidence that such a method was used to transfer the Odebrecht bribe proceeds. Purchaser records, at a Martinelli-controlled MSB would, conveniently, not contain the name of the actual user.

One of the money service businesses was a credit union, the other a financiera. The front man that Martinelli employed was John Flavio Dominguez, a former banker, with a long history of corrupt activities in Panama City banks. Dominguez has long been associated with anonymous prepaid card money laundering operations, and was first identified on this blog back in 2013.

John Flavio Dominguez

The location of Martinelli's two sons remains a mystery, and they remain badly wanted by Panama's anti-corruption prosecutors.

Monday, May 15, 2017


The Florida Legislature has passed a bill that adds virtual currency to the definition of "monetary instruments," for the purpose of the state's Money Laundering Act. Both the Senate and the House passed the law, and it has gone to the Governor for his signature, which is expected.

Florida prosecutors have had Bitcoin cases dismissed, as that medium is not backed by any government authority. The new law, when passed, will add any medium of exchange, or digital format, that is not a coin or currency of the United States, or any other country.

Sunday, May 14, 2017


If you have been following the campaign, waged of late by Palestinian groups seeking an apology ( and money) from the United Kingdom, for the 1917 Balfour Declaration which, through the League of Nations actions, and the San Remo Treaty, established a national home for the Jewish People in Israel, their conduct became grossly insulting this week. Arabs, who have referred to themselves as Palestinians only since 1960, and who emigrated to the region from Arabia, Egypt and Syria, object to the continuous 3000-year history of Jews in Israel, notwithstanding its factual basis.

In the Palestinian Territory of Gaza, currently occupied by Hamas, a specially designated terrorist organization, residents literally trampled upon the United Kingdom, by stomping upon a carpet on which the text of the Balfour Declaration was inscribed. Such disrespect for an internationally-approved treaty should be long remembered as yet another act of terrorism. 

Lord Balfour and his Declaration


 While attorneys often differ, when offering legal opinions on important issues, the consensus, at least from the vantage of the United States, is that those government officials, and associated Politically Exposed Persons (PEPs), who are operating Dominica's diplomatic passport scheme, have committed money laundering, under US law, in the Reza Zarrab case, and may also be culpable in general, due to the fact that the scheme has no basis in law, for their other passport sales to dodgy foreigners.

The awarding of diplomatic passports, pursuant to the 1961 Vienna Convention on Diplomatic Relations, which was adopted by Dominica, as well as the United Nations, does in no way authorize any nation to sell such important instruments, which confer diplomatic immunity, to anyone. Additionally, designated diplomats must accept duties and missions, to specific countries, The failure  of scheme operators to fulfill both of these requirements, makes the documents they issue void, not voidable.

Therefore, inasmuch as the issuance of these suspect passports constitutes a crime, and is a Predicate Act, whosoever who receives, controls, accepts, or otherwise has any contact with the illegal US Dollars paid out for them, some of which thereafter has entered the American financial structure, has committed the crime of money laundering. See the Money Laundering Control Act of 1986, 18 USC Section 1956 et seq.

Subsequent Federal Court decisions have established Extraterritorial Jurisdiction; in plan English, this means that any Dominican who has participated in a money laundering conspiracy, actionable under the Act, can be indicted, even though he or she has never come into the United States.

In the Reza Zarrab case, now pending in US District Court, Alireza Monfared, a known participant in Zarrab's Iran sanctions evasion operation, illegally purchased a Dominican diplomatic passport. Both the sales "fee," and any commission paid out, in connection with that transaction, are Predicate Acts. The document itself, which was used by Monfared to evade arrest, is part of the broad conspiracy to evade US and international sanctions. Everyone involved, from the most senior government officials in Dominica, to the Dominican attorneys who advised them, and received fees from that money, to the administrative staff who created the passport, are all now part of the Zarrab case, whether they like it, or not.

Given that the new US Attorney General has instructed the Department of Justice to bring the maximum criminal charges possible, against offenders, and seek the longest sentences available, under the US Sentencing Guidelines, there are a number of Dominicans who now face the imminent threat of indictment, in the United States, for their role in illegally selling a diplomatic passport, to an Iranian national, known to be a player in the world's largest Iran sanctions evasion syndicate.  

Saturday, May 13, 2017


The parents of David Boim, who was murdered by Hamas agents in 1996, and who hold a $156m judgment, entered against terrorist financier entities of Hamas, have filed a civil suit, in US District Court in Illinois, alleging that certain radical Islamist organizations, are successors to, and front for, the Holy Land Foundation for Relief and Justice, and related judgment debtors, and demands judgment against those additional entities.

The value of the suit to compliance officers, at financial institutions located in North America, is that it identifies certain individuals, and organizations, that allegedly constitute a clear and present danger of prior, or potential, involvement in terrorist financing, and should therefore be further investigated, to determine whether they are classified as unacceptable as clients, in a risk-based AML/CFT compliance program. I am identifying them here for that specific purpose only. The case was filed on May 12, 2107, under Case No.: 17-cv-03591 (ND IL); There has been no adjudication of the merits of the action.

The defendants are:
(1) American Muslims for Palestine.
(2) Americans for Justice in Palestine Educational Foundation.
(3)  Rafeeq Jaber.
(4)  Abdelbasset Hamayel.
(5)  Osama Abu Irshaid.

Also named in the Complaint, as linked to, affiliated with, the defendants, or the judgment debtors in the original case:

(A) The Mosque Foundation.
(B)  Hatem Bazian.
(C)  Salah Sarsour.
(D)  Hussein al-Khatib.
(E)  Kifah Mustapha.
(F)  Sufian Nabhan.

Compliance officers who believe that any of the above are former, or present, bank customers, should make that information known to senior bank management, as well as bank counsel, forthwith, for further investigation and inquiry. 

Friday, May 12, 2017


The new US Attorney General, Jeff Sessions, in a memorandum for all Federal prosecutors, has initiated a policy on increased charging and sentencing that could further push accused Iran sanctions evader, Reza Zarrab, into deciding to take a plea in his case, rather than risk a very long sentence, should he be convicted at trial.

AG Sessions, in a departure from the previous position of the Department of Justice, is frankly demanding that prosecutors seek to secure the maximum sentences from the Courts, including mandatory minimum sentences, where applicable. Readers who wish to review the complete text of Sessions' memorandum, can access it here.

Regarding Reza Zarrab, his defense team should now fully expect to receive a sentence, if convicted, that may now exceed the 75 years which most observers have calculated is possible. Remember, prosecutors can dump over $400m, in oil sales profits, as well as the value of the gold that Zarrab allegedly utilized to barter for the oil, to initially evade the US Dollar issue, on sanctioned transactions with Iran, into their sentencing computation, causing it to literally go through the roof of the advisory Sentencing Guidelines.

 Could he conceivably receive a Life Sentence, which under the Sentencing Reform Act means life, without the possibility of parole or release ? It is entirely possible, or he could receive sentences like the 110 years, meted out to R Allen Stanford, America's most prolific Ponzi schemer. A sentence like that would certainly send a message to would-be sanctions violators.

Remember, if Zarrab enters a plea, he will be required to implicate his conspirators and confederates, who will then be indicted, and themselves be looking a long prison sentences, which means they would also flip on their associates. Eventually, the entire Zarrab-Zanjani-Monfared network could be dismantled.


If you are a keen observer of the progress of the Panamanian Government's investigation of Mossack and Fonseca, you know that, outside of the name partners themselves, only one other partner, Edison Teano, and one law firm associate (its Brazil manager) face criminal charges. This is unfortunate, because it was the line attorneys & paralegals* who actually did all the dirty work for clients, including the opening of bank accounts, acting as front men for corrupt PEPs, and formation of layered corporate entities, designed solely to deter the identification of the dodgy MF customers.

As I have previously named most of them in articles, they are not faceless unknowns; many have transitioned into other Panama City law firms. It is feared that some took MF clients with them, and are right back at their dark craft, somewhere else. Foreign attorneys who are seeking local Panama counsel for their clients would do well to choose only lawyers whose activities, during the past decade can be readily ascertained, by their CVs, and can be verified, lest you engage a Mossack alumnus or alumna, and later learn that you local counsel has been indicted, somewhere, for money laundering, or worse, terrorist financing.
* Paralegal professionals at Mossack Fonseca are known to have been engaged in the delivery of legal and tax advice, in the course of their duties, which we must assume was on the instructions of the firm, but it is doubtful that any will be brought to justice for the unauthorized practice of law. Many held titles which inferred professional legal status, but they were not so qualified.

Thursday, May 11, 2017


A word to the wise; there is no longer any true electronic communications privacy in the Cayman Islands. A local media quest, to obtain information about the now-admissible warrantless electronic searches, of telephone, email, and text messages, has highlighted this dark practice.

 Cayman law enforcement agencies may conduct electronic searches, without a warrant, but with the approval of the governor, and the law has been changed to render such evidence admissible. We wonder what effect this news will have on attorneys who journey to Grand Cayman, to form secure, and anonymous, corporate entities for clients. All their direct communications with clients, made during their time in the Caymans, may not be as private as they wish them to be, and what about their calls to financial institutions abroad ?

Add this new uncertainty to the internal requirement, issued by the Chief Justice, restricting the ability to photocopy court filings, and we are seeing the emergence of a less user-friendly offshore financial center. Is all this a reaction to Panama Papers scandal, I wonder ?


Sometimes, the most interesting aspects of a investigation are buried in the details, and must be extracted to be appeciated.The US Senate Intelligence Committee investigation into the possible influence of Russia upon the 2016 Presidential Campaign has requested that the FinCEN supply information related to the Trump organization, and its holdings. A Trump-owned casino was cited twice for violations of the anti-money laundering laws and regulations.

Of special note, regarding those FinCEN actions against the trump casino is a finding that there were massive failures to file Suspicious Activity Reports, more commonly known as SARs. Casinos are traditionally at elevated levels of risk for the laundering of criminal proceeds, and whether Russian funds, of dubious origin, were laundered through an American casino, appears to be the focus of this information request.


If you have not already increased your assessment of Country Risk on Venezuela to the maximum level, the Secretary General of the Organization of American States (OAS) has stated that the nation's practice of trying civilians before military courts means that the rule of law in Venezuela is essentially dead. Accordingly, all risk-based compliance programs should now regard any transactions with Venezuelan entities, for any purpose, as potential total losses, due to lack of access to a fair and impartial court system.

Wednesday, May 10, 2017


This morning, there is a conference scheduled to open in Panama City. It has been described as a national forum on money laundering and counting the financing of terrorism. Are they kidding ?

Any public relations efforts to portray the country, in the post- Panama Papers anti-tax haven environment, as a jurisdiction seeking to improve its AML/CFT, is nothing more than an insult to nations who sincerely are working against money laundering.

Let's look at the facts about Panama and money laundering:

(1) Money laundering arrests, forget actual convictions, of individuals, are as rare as hen's teeth. The same 55 money launderers who were moving dirty money there five years ago, are still on the job.
(2) Panamanian banks do not get charged with money laundering, except when there is a purely political reason to do so. Most are free to operate a laundromat for the proceeds of crime, and that of corruption.
(3) Bulk cash smuggling, from Venezuela and Colombia, continues, into Panama's private aviation airfields, unabated.
(4) The country's organized crime syndicate, run by Panamanians of Middle Eastern extraction, and which is a major participant in the local money laundering industry, is immune from criminal prosecution. It has inserted itself in the government, as well as owning major interests in several banks.
(5) The corrupt court system, where bribes are the order of the day, even at the Supreme Court of Justice, can be accessed, and manipulated, by any defendant's attorney who has sufficient funds to delay, or dismiss, criminal charges.

Without massive reform in Panama, which the local power structure will certainly fight to the death, there will never be effective AML. Holding a conference there, purporting to establish a national policy on the subject, is nothing more than spin control. 

Tuesday, May 9, 2017


The so-called "de-risking" crisis, where an estimated 25% of the correspondent relationships, between foreign financial institutions, and US banks, have been terminated, due to increased attention to AML/CFT risk, by those American banks, has spawned a number of what are being described as solutions. The problem is, save one, all these attempts for a quick fix, allowing the retention of correspondent banking relationships, will fail.

All the proposals, including reducing SAR reporting policies, delegating due diligence to some international body, and pooling compliance resources, ignore the obvious, and only effective, solution: create an effective Know Your Customer's Customer, or KYCC, program, and implement it, without exception. Anything else misses the mark; here's why.

If a financial institution is located in a region where money laundering has historically existed, at a high level, where corruption interferes with the rule of law or where banking best practices do not measure up to North American standards, then the only way it can be now deemed acceptable for correspondent purposes is to have a KYCC program that gives the US bank a window into the foreign bank's customers, has automatic reporting on change of circumstances, and on suspicious transactions, and is assessing the risk levels of that bank's clients, on an ongoing basis. Anything less is simply not KYCC; It is the only risk reduction solution that works.

The challenges facing foreign banks today, who must be able to access the American financial structure, or lose their clients, can be resolved favorably, but only if they allow the respondent banks in New York to have a clear view of their clients and their business, on a real-time basis. Today, a bank can re-risk its client base, to survive, but only through KYCC.

Monday, May 8, 2017


In a surprising turn of events, defense counsel for indicted Iran sanctions evader, Reza Zarrab, has cancelled a hearing, previously scheduled for this coming week. The matter to be considered was the defense's motion suppress emails obtained by the US Attorney, through a subpoena, whose premise the defense had called into question. Why abandon this position now ?

Given the take-no-prisoners approach displayed, thus far in the case, by the criminal defense team who represents Zarrab, the question arises: is he in the process of entering in a plea agreement, to settle his case ? After all, he could, if convicted, receive a sentence of decades in Federal Prison, as well as fines and restitution in the hundreds of millions of dollars, given the immense value of the illicit oil-for-gold program he, and his alleged partners, Babak Zanjani and Alireza Monfared, operated, out of Turkey.

Any plea agreement would generally involve providing assistance to the government prosecutors, in making cases against additional, new, defendants, which is why the case has received so much attention, both in the Middle East, as well as in the Western Hemisphere. The addition of a major Turkish banker in the case confirms that it is an ongoing investigation; we shall continue to monitor all developments, and report back when additional information is available.

Sunday, May 7, 2017


A Kleptocracy is refined as a country where those in power exploit national resources, and steal them, for their own personal gain, thus depriving the people of their own country of their country's assets. While we generally think of jurisdictions like Russia or Panama, when we use that term, the situation in the Commonwealth of Dominica also fits that definition; Dominica has become a den of thieves, and most of the bad actors are members of the current government, or ruling political party.

Since the country's dominant agriculture industry was essentially destroyed, due to a natural disaster, the sole substantial source of cash flow into the local economy has been the Citizenship by Investment, or CBI, program, which results in a major inflow of capital. Unfortunately, greedy and amoral government officials, at the highest level, have diverted much of the income received from the CBI program as follows:

(1) The ruling political party has used some of the CBI proceeds to, frankly, buy elections on voting day, perpetuating its stranglehold on power, for close to two decades.

(2) Senior officials have helped themselves to large portions of CBI receipts, laundering and subsequently investing their ill-gotten gains abroad.

(3) Associates of the ruling party have obtained lucrative positions, as agents, to sell the CBI program, receiving obscenely excessive commissions and fees, most of which should rightly have gone into the national treasury of Dominica.

(4) Construction projects, funded by the CBI program, have been intentionally awarded, in no-bid contracts, to entities friendly to the current government, where pricing of these projects was adjusted upward, and approved, by government. Bribes and kickbacks were subsequently paid to the same Dominican government officials that awarded the contracts, and also to very senior government officers.

(5) In the most egregious offense, prized diplomatic passports were illegally sold to foreign nationals, of ill repute, and all those funds covertly diverted into the pockets of government and party officials. No accounting of these funds has ever been released, and no list of diplomatic passport holders ever made public. It is a national disgrace.

(6) CBI funds have been illegally distributed throughout Dominica, to influence locals, and to convince them to support the existing regime, with the promise of future payoffs, to sustain their loyalty.

Bank compliance officers, think about these details, when you are called upon to open an account for someone who says he is a high net-worth businessman from Dominica. He could be a corrupt Politically Exposed Person (PEP),  a wealthy member of the Dominica Labour Party, or a commission agent of the CBI program, all of whom are unsuitable as bank customers, for any purpose. You do not want the negative publicity that their eventual arrest, on money laundering, or corruption, charges will bring to your bank. 



 A report from the Republic of Panama claims that the law firm of Mossack and Fonseca is said to have sabotaged their internal database, but that the Attorney General of Panama has been unable to find sufficient proof of that act. A large portion of the Mossack firm's documents, popularly known as the Panama Papers, were released globally by journalists last year, but the the status of law firm's complete database has never been publicly revealed. Some hard copies of files were shredded,  and later found, by law enforcement, in a building controlled by the law firm.

The Attorney General, according to reliable sources, has stated that she has sufficient proof to proceed against the name partners, Jurgen Mossack and Ramón Fonseca Mora, who recently bonded out, after having each paid a $500,000 bond. It is thought that the Panama Papers documents are more than sufficient to obtain a conviction for money laundering.

 If there was indeed spoliation of evidence, and it can be proved, the partners could face additional charges, as well as potential loss of their licenses to engage in the practice of law, as attorneys, officers of the court, are held to a high standard, regarding the preservation of evidence, though Panama is notorious for failing to discipline attorneys who engage in financial crime.

Saturday, May 6, 2017


 This week's CBI scandal, involving a case where the Government of St Kitts & Nevis not only knowingly sheltered a $100m Chinese fraudster, but reportedly gave him a new identity, and an exist to parts unknown, when he was exposed, could represent the last straw, the ultimate loss of integrity and legitimacy in the Citizenship by Investment (CBI), for the nations of the East Caribbean that offer economic passports. Frustrating the legitimate law enforcement goals of China, hiding a criminal, and seeing that he evades justice, by using its CBI program, was an unpardonable act by the leadership of St Kitts, whose dodgy program was just now beginning to emerge from its dark past.

Now add to this disgrace, Dominica's Monfared scandal, which also involved a known criminal, given refuge, protected, and covertly shuttled off to another Caribbean nation, to hide a fugitive from the strong arm of justice. This was just the latest in a long list of criminals who have received citizenship in the Commonwealth of Dominica.

Take the two cases together, and we see not only an utter failure of a national moral compass, due to pure avarice, but a course of conduct that poses a clear and present danger of money laundering, and terrorist financing, to the global financial structure.

Under these circumstances, the only course of conduct is to raise Country Risk, upon all nations that are engaged in their personal, greed- and corruption-laden, Citizenship by Investment programs. We cannot trust either the forms of identity, where a country sells its patrimony out  for money,  or the national leadership. CBI has now lost all credibility, outside the Caribbean.

Would the Office of Foreign Assets Control (OFAC) kindly step in here, please, because the organizers of these CBI programs will only be deterred by sanctions, alerts, and designation of these programs, and their foreign participants. Sanction these programs, please, before they enable mega-money laundering activities, or major terrorist acts, against targets in North America, or Europe, or even cause a change in a national government, from a democracy, to a dictatorship.

Friday, May 5, 2017


In light of the fact that a number of foreign nationals, all with criminal backgrounds, have obtained diplomatic passports from the Commonwealth of Dominica, often without ever visiting the country, or being interviewed by government officials, the question is often asked : why are they so interested in securing those prized diplomatic documents ?

The answer, I believe, can be found in Article 40 of the 1961 Vienna Convention on Diplomatic Relations, which states:

"If a diplomatic agent passes through or is in the territory of a third State... while proceeding to take up, or to return to his post, or when returning to his own country, the third State shall accord him inviolability, and such other immunities as may be required to ensure his transit or return".

This means that diplomatic passport holders, who can always affirm that they are in transit, when found to be in any country or state, retain their diplomatic immunity, which includes the complete and total privacy of their personal goods. Customs and immigration officers, in all countries exercise deference to all individual who present diplomatic credentials, when traveling, as do law enforcement agencies, who encounter individuals who present diplomatic passports, as a matter of protocol, pursuant to the Vienna Convention.

This protected status, which prohibits their bags and baggage from inspection at ports of entry. affords career criminals ample smuggling opportunities, whether the contraband consists of financial instruments, cash or cash equivalent, classified documents, or stolen property. Its power to facilitate transnational crime should not be minimized, for it is the primary reason that dodgy characters are so intent upon purchasing a Dominican diplomatic passport.

Unless an accurate, and complete, list of all holders, past and present, of diplomatic passports issued by Dominica, is published by the Ministry of Foreign Affairs, we are unable to identify all the career criminals who have such documents issued to them, and their crimes and transgressions will continue, ad infinitum, until the international community steps in, and terminates this clear and present danger to the continued integrity of the nation.   



In a case which has been a nervous topic of conversation, among America's senior compliance officers, since it was filed, the former MoneyGram CCO, Thomas Haider, has now agreed to settle the Treasury Department litigation pending against him. Haider will pay a civil penalty of $250,000, and agree to be barred from any compliance position at a money service business (MSB), for a period of three years.

The allegations against Haider, which included charges that he presided over an ineffective AML program, and that he failed to terminate MoneyGram outlets with massive consumer fraud issues, caught the attention of compliance officers, whose fears of expanded personal liability, for compliance deficiencies in their workplace, now appear to on the way to becoming the rule, rather than the exception.

Whether there will be more cases like Haider remains to be seen, but direct and personal exposure, for AML/CFT deficiencies, has become a matter for concern for all who labor in the compliance field, especially given reported concerns that MoneyGram Sales staff interfered with Haider's ability to discharge his compliance responsibilities, but due to the settlement, evidence related to this allegation may never be made public. 

Readers who wish to review the complete text of the Stipulation and Order of Settlement may wish to access it here.

Thursday, May 4, 2017


 The opening, this week, of the newly-completed West Bridge, over the Roseau River, has again caused Dominicans to ask some tough questions about the project. Was some of the construction funding, which came from the country's Citizen by Investment (CBI) economic passport program, illegally diverted, through illicit bribes and kickbacks, and paid to government officials or agents ?

Ever since the construction contract was awarded to a company from Barbados, bypassing and avoiding all the local Dominican engineering firms, which are more than competent to perform the work, there have been rampant rumors. Is there a factual basis for those whispered accusations ?

Of course, these facts stand out, regarding the bridge project:

(1) There was no public bidding for the project.
(2) The selection of the contractor directly contradicted Dominican laws on procurement.

Was the final price excessive, and were bribes and kickbacks paid from construction funds ? Whenever we see a no-bid project, questions must be asked. Was the price padded, to include corrupt payments, made to government officials that approved the deal ? We cannot say, but we call upon the public to demand an independent board of inquiry, composed of non-Dominicans, to seek out the truth. Witnesses, and those with evidence, should come forward.