WITH ZARRAB NOW COOPERATING, WHO WILL NOW BE INDICTED IN THE IRAN OIL SANCTIONS EVASION CASE ?

 Reza Zarrab, the Iranian oil sanctions evader who was the principal defendant in the New York Federal criminal case, but is now cooperating with the authorities, is presently testifying, this week, against the remaining defendant in custody, Halkbank Deputy CEO, Mehmet Atilla. Zarrab will most likely be benefiting from his testimony at trial, through Government motion, when he is eventually sentenced.

Thereafter, his defense team, who are charged with assisting Zarrab navigate the complex Sentence Reduction minefield, will thereafter be seeking to have their client give evidence that will persuade the US Attorney to seek a reduction in the sentence that was pronounced, through testimony that will result in Grand Jury indictments of yet more defendants.

Some of the possible new defendants:

(1) Zarrab's two partners in the oil-for-gold Iran oil sanctions evasion scheme, Zanjani & Monfared, both of whom are known to be in custody in Iran, and facing the death penalty.

(2) Individuals, in Malaysia, specifically Labuan, the country's offshore financial center, who assisted Alireza Monfared, and Babak Zanjani, in the illegal sale of sanctioned Iranian oil.

(3) The other Turkish banks & bankers who participated in Zarrab's massive oil-for-gold scheme.

(4) Senior officials in Dominica, who were responsible for Monfared obtaining a Dominica diplomatic passport, as well as a CIP passport. Possibly also individuals who sought, or obtained, additional economic passports for Zarrab and/or his crew.

(5) Iranian nationals who were part of the Zarrab/Zanjani/Monfared organization.

Who will be next to be charged ? We cannot say, but we will be monitoring the case closely.

GRENADAS PRIME MINISTER TRIED TO HAVE OUR ARTICLE EXPOSING MILLION DOLLAR DIPLOMATIC PASSPORT FEE TAKEN DOWN

Prime Minister Keith Mitchell

 
Regular readers of this blog will recall our August 18, 2017 article, Applicant for Grenada Diplomatic Passport sent Million Dollars to Wells Fargo Account of Agent, which recounted the tale of a Ukrainian businessmen who was ordered to send $1m to a Singapore bank account, in order to obtain a diplomatic passport from Grenada. Newly-discovered information, obtained through an official source in Dominica, confirms that the scandal caused a panic in Grenada's government.  

Keith Mitchell, the Prime Minister of Grenada, openly fearful of probable fallout in his next election, asked his CBI Head, and personal advisor, Kaisha Ince, if she could have the article deleted from the Internet, by having a CBI consultancy handle it.

CBI head Kaisha Ince

What follows is a verbatim transcript of text messages, between these two parties. it occurred on August 19, 2017. Mitchell first texted Ince the article.

Mitchell: Kaisha, what is this article ?

Ince: PM, let me speak to them.

Mitchell: Where did he get this information ? Talk to Chris*, to take action on this. 
                 I cannot afford this kind of information to come out before the election.

Ince:  Yes, I spoke to them. They are already aware of it, and will put pressure on this
          blog writer to take the article down.

The article remains online today, and will continue to be published on this blog. Please note well that nowhere in the conversation was there a denial of the accuracy of the information appearing in the article, only a demand to know where the information came from. Further, the Ukrainian applicant later not only confirmed his story, he disclosed that another businessman from his country had also applied for a Grenada diplomatic passport.

We will be publishing two additional articles on official misconduct in Grenada, again supplying complete transcripts of text conversations, and as they are extremely disturbing, we shall post a warning regarding their content.
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* It is believed that this is a reference to a senior officer at Henley & Partners, Christian Kalin.

 
 

OFAC ISSUES FINDING OF VIOLATION OF IRAN SANCTIONS LAWS AGAINST DOMINICA

The US Treasury Office of Foreign Assets Control has issued a Finding of Violation against Dominica, specifically the government agency responsible for maritime affairs, the Maritime Registry, which is an international ship registry.

 The Commonwealth of Dominica Maritime Registry, Inc., (DMRI) violated the Iran Transactions and Sanctions Regulations (ITSR), by entering into what OFAC described as a "binding Memorandum of Understanding with The National Iranian Tanker Company, a Specially Designated National (SDN), which is owned by the Government of Iran, and is therefore sanctioned.                                                                          

                                                                                                                                                          OFAC noted in its Enforcement Information press release that DMRI failed to report the offense to regulators.The Finding requires it to create an OFAC compliance procedures program, as well as an employee training program, because senior DMRI staff simply ignored US sanctions law.

If you were wondering how OFAC has jurisdiction over a foreign government, Dominica employs a Delaware Corporation, registered to conduct business in the State of Massachusetts, and which is reported to be operated by American citizens, from its office in Fairhaven, Mass.

 

We see that the DMRI uses only the abbreviated name of Dominica Maritime Registry Inc., which appears to the public to be a US corporation for profit, rather than an official government agency. I leave it to our readers to decide whether this is deceptive.

 

JUDGE REFUSES TO POSTPONE ZARRAB TRIAL

 The trial judge in the Reza Zarrab case has declined to grant co-defendant Mehmet Atilla's motion to adjourn the trial for two weeks. The Court noted that defense counsel for Atilla had repeatedly opposed earlier rescheduling of the trial date, and observed that there were a sufficient number of attorneys to review the massive discovery furnished, though it also ordered the Government to act diligently with respect to the Discovery.

The Court also all but declared that co-defendant Reza Zarrab was to be the "mystery witness" at Atilla's trial. Zarrab's letter to a Middle Eastern regulator, containing the term "economic Jihad," has already been admitted by the Court, notwithstanding its likely prejudicial effect at trial.

We shall be following the trial, on a daily basis, to update our readers.


 

ZARRAB CO-DEFENDANT REQUESTS DELAY IN TRIAL, ALLEGING MULTIPLE ISSUES

Counsel for Mehmet Atilla, the Deputy Halkbank CEO, has asked for a two-week delay, on the eve of trial, and they have asserted several major issues in support of their request.

To summarize the grounds alleged:

(1) There are Brady and Jencks Act violations, including exculpatory evidence, specifically public testimony of a Treasury Undersecretary, which were not produced as required by law.

(2) The massive last-minute document production, by the Government, requires a trial continuance.

(3) There was a belated production of the specific trial exhibits.

(4) There was an enormous amount of 3500 material produced.

(5) There was a "facially unwarranted redaction of 3500 material."

(6) There were logistical delays arising from the Protective Order, and the defendant's incarceration.

Counsel wants a delay, until December 11, 2017.

PANAMA'S FUGITIVE BANKING SUPERINTENDENT, ALBERT DIAMOND, CHARGED IN EL SALVADOR

Alberto Diamond Rodriguez

It appears that Alberto Diamond Rodriguez, the fugitive former Superintendent of Banking in Panama, is facing criminal charges in another country, El Salvador, where it is believed he fled to, after Ricardo Martinelli left office. Diamond is a relative if the former Panamanian President, and he was named for the superintendency, notwithstanding that he was totally unqualified for the job.

Panamanians will recall that he never filed one money laundering charge against any local bank while in office, and boasted that he brought in $17bn in cash, from Venezuela, to fill the coffers of Panamanian banks. He  is reportedly a target of the anti-corruption prosecutors in Panama City.

Diamond has been charged with Aggravated Fraud, and we are attaching a copy of a portion of a Salvadoran court document, for the benefit of our readers. If you are not familiar with this corrupt fugitive, kindly access our previous articles, detailing his corruption, conflict of interest, and criminal activities, some of which were allegedly conducted with his son, the banker Alberto Diamond Martinelli, who remains in Panama City, with substantial unexplained wealth.

Alberto Diamond Martinelli

Diamond actually had a local Panama attorney threaten me for my coverage of his client, who richly deserves a decade in one of Panama's notorious prisons, for all his sins. We trust that the Salvadoran authorities will see that justice is done.

Update: A hearing has been scheduled in the case for December 18, 2017.

WILL VISITNG IRANIAN WARSHIPS BE DROPPING OFF CBI PASSPORT HOLDERS IN ROSEAU AND BASSETERRE ?

If you do not closely follow developments in the Middle East, you may not not know that the Real Admiral who commands the Islamic republic of Iran Naval Forces, in a recent public appearance, stated that due to the ongoing presence of the US Navy in the Persian Gulf, the Iranian Navy will be moving a significant number of its warships into the Caribbean, and the Gulf of Mexico, and that they will be making port calls in the region. The amount of global media that these Iranian ships will attract, together with the expected political, diplomatic and military response from the United States, will place the region under increased attention, which may result in a hard look at the risks presented by the economic and diplomatic passport programs being operated in the East Caribbean.

For several years, a reportedly large number of Iranian nationals have acquired Citizenship by Investment (CBI) status, or diplomatic passports, in the East Caribbean, among the half dozen countries that offer them, predominantly the Commonwealth of Dominica and St Kitts & Nevis, though there has been a small number off passports issued in the other four nations.  Will any of these Iranian nationals, with dual citizenship acquired in the East Caribbean, come ashore, which they have the legal right to do, and perhaps establish residence, or even a diplomatic presence at America's backdoor ?  

It is too soon to calculate whether Country Risk levels in the East Caribbean will increase, as the direct result of Iranian actions in the region, but American compliance officers charged with following OFAC sanctions would do well to monitor the situation as it unfolds, lest they later find their bank named & shamed by a civil fine or other penalty.

TRIAL IN ZARRAB IRAN OIL-FOR-GOLD SANCTIONS CASE DELAYED FOR ONE WEEK UNDER MYSTERIOUS CIRCUMSTANCES

What's going on in the Reza Zarrab oil-for-gold Iran sanctions case ? Trial was scheduled to begin next Monday, November 27, but the Court has postponed the start for one week. Moreover, a recent two-hour pretrial conference was reportedly not only closed to the public, with the doors locked, but the live video feed was turned off. Plea negotiation, perhaps ?

One observer noted that orders in this matter, originating from the bench, now show the style of the case as US vs. Mehmet Atilla, rather than US vs. Rezas Zarrab et al. What has become of Zarrab ?

A final note, which deepens the mystery: An additional defense attorney has now appeared, literally at the last minute, on behalf of Atilla, who is not apparently the only defendant, in custody, that is going to trail. This lawyer has extensive experience, including time as a state and Federal prosecutor. Was he brought in to craft a plea agreement ? We cannot say, but wait for next Monday, it may reveal itself as both defendants enter pleas.

PARADISE PAPERS DISCLOSURES REQUIRE INCREASE IN COUNTRY RISK FOR MALTA, FOR ITS NORTH KOREAN CONNECTIONS

The new ICIJ project, commonly known as the Paradise Papers, has revealed that North Korean nationals, closely linked to the universally sanctioned DPRK regime, have formed offshore entities, operating in Malta. One of those entities is reportedly a joint venture with a Maltese businessman. Is nobody in compliance, banking, government regulators or private business, watching who is allowed to do business in Malta ? Apparently not; greed trumps effective compliance in Malta.

If Malta is covertly allowing North Korea, the most heavily sanctioned country on earth, to do business through its financial and legal system, then we wonder what else is going on in the only EU member to openly hawk its economic passport program. It is appropriate to raise Country Risk for Malta at this time, and to exercise extreme caution in all future dealings with Malta-based, or incorporated, entities or individuals.

ARTICLES FAIL TO NAME THE REAL POWER AT THE TRUMP OCEAN CLUB

Gary James Lundgren

 
He is a businessman known to lie, cheat and even steal, and a known sexual predator*, but the true power broker at the Trump Ocean Club (TOC) in Panama is not the Trump whom you think he is. He is the American expat, Gary James Lundgren, whom neither NBC nor Reuters, nor Global Witness identified in their recent expose' about rampant criminal activity at the TOC, and the quintessential Ugly American.

Lundgren, who left a sexual assault charge in the State of Washington years ago, and relocated to Panama City, where he resides, and where he is apparently safe from the grasp of  US law enforcement agencies, engages in fleecing unsuspecting foreign investors, and laundering Cartel narco-profits. The American securities broker regulator, FINRA, stripped him, for life, of all his US licenses to sell stock, when he refused to open his books of account to it. He has been identified several times, by victims of sexual assaults he allegedly committed in Panama, and is known there as the "Bill Cosby of Panama, " due in part to his manipulation of the criminal justice system, when charged with sex crimes.

Lundgren owns, through a number of shell companies, at least fifteen condominium units in the TOC complex, and fifteen per cent (15%) of the outstanding bonds owned by the TOC developers. His wife, a Colombian national whose family is linked to the Medellin Cartel, convinced the Association to transfer the maintenance contract to her control. The Trump companies filed a $75m damage claim against her company, before a tribunal of the international Chamber of Commerce.

As we have previously reported, Lundgren is known to operate an enterprise that provides prostitutes to guests at the TOC Hotel; some Panamanians have derisively referred to him as "The Pimp at the Trump." No story about the Trump Ocean Club is complete without understanding that Gary Lundgren is a central player who assisted members of organized crime syndicates, from several countries, including Russia, in money laundering, through purchases at the Trump Ocean Club. 
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* Steele vs. Lundgren, 982 P.2d 617 (Wash. Ct. App. 1999)

RANKING OF CARIBBEAN COUNTRIES THAT OFFER ECONOMIC CITIZENSHIP IS FLAWED

The ongoing controversy, and rivalry, among the half dozen nations in the East Caribbean that offer economic citizenship, totally ignores important negative aspects of these programs, which cannot be ignored, should an accurate calculation about which country's passports are superior to that of another, be made. Applicants should not rank one over the over, simply because of the number of visa-free nations that may be visited; that is hogwash, and misleading.

What about those negative, but not mentioned, aspects of these Citizenship by Investment (CBI) programs:

(1) Was the country ever, or presently, a known tax haven a/k/a offshore financial center ? If so, nationals from those countries may still be under law enforcement scrutiny, by US and EU law enforcement agencies, especially regarding money laundering, and other financial crimes.

(2) Have any high-profile economic passport holders from the country been arrested abroad, for serious financial crimes ? That fact that economic citizenship holders from a country have major felony convictions attracts even more unwanted law enforcement attention elsewhere. Do applicants really want guilt by association issues ?

(3) Is the Rule of Law not observed in the country's court system ? If so, applicants should fear that they are destined to lose any commercial dispute that arises there, as aggrieved parties, against locals or the government, even though the law is on their side.

(4) Does the government have a history of cancelling an economic citizenship, when the holder gets in trouble abroad ? If so, what is to stop it from taking that same step, for political or economic reasons, against innocent CBI citizens ?

Given the long and sordid history, of criminals abusing economic citizenship for illicit financial gain, applicants should NOT rely upon industry calculations, but seek out competent legal advice, regarding accurate assessment of risk, when seeking a second passport. To do any less invites a subsequent shock, when the new passport holder realizes that he or she has merely bought into a problem, not a solution.

WHO ARE THE BUYERS OF THE TRUMP OCEAN CLUB INTERNATIONAL HOTEL ?

Panamanians are reportedly concerned about the fact that they cannot identify the ultimate owners of the iconic Trump Ocean Club International Hotel, which was sold earlier this year for $24.5m. Financing was arranged through Canal Bank. The purchaser was reported to be Ithaca Capital Partners and/or Ithaca Capital Investments, but information on those entities is minimal, and raises more questions than it answers.

Ithaca Capital Investments Ltd., SA is a Panamanian corporation. Ithaca Capital Partners Ltd., is a corporation organized and existing pursuant to the laws of the United Kingdom.

Ithaca Capital Partners website lists as its sole US address a residential condominium apartment in downtown Miami, but real estate records indicate that it was sold last month. A social media page states that the company is located in Cyprus, but only lists the US address, though it has not qualified to conduct business in the State of Florida.

 Partners' US-based director, Orestes Fintiklis, who is also affiliated with Dolphin Capital, a Greek-based firm with major interests in Cyprus, is a lawyer who previously worked in the UK. He is not admitted to the practice of law in Florida. There is no information regarding the company's business activities, if any, within the Continental United States, and why it maintains an office in Miami.

Ithaca Capital Partners Director Orestes Fintiklis

The owners of Ithaca Capital, according to its press release, are a number of "family offices" located on several continents. A family office is a group of legal and financial professionals who manage the investments of high net-worth individuals. As these professionals are most likely employing shell companies to make their investments in Ithaca, there is no accurate way to determine who their clients, the beneficial owners of the Trump Ocean Club Hotel, are.

The fact that both companies are closely connected to Cyprus, which is a known offshore financial center for wealthy Russian nationals, may be the reason for the Panamanians' concern about who the new owners of the Trump Ocean Club may be. 

TRIAL JUDGE RULES ON PENDING MOTIONS IN ADVANCE OF TRIAL OF REZA ZARRAB'S TURKISH BANKER

After hearing oral argument from attorneys from Halkbank deputy CEO Mehmet Atilla, the Court, in the Reza Zarrab oil-for-gold Iran sanctions evasion case, denied the defendant's motion to dismiss. the trial is scheduled for November 27, and Atilla appears to be the only defendant who will actually go to trial, as the principal defendant, Reza Zarrab, is either cooperating with the authorities, or other arrangements have been made, which could mean a prisoner exchange with Iran.

Atilla's counsel also argued his Motion in Limine, which sought to exclude the introduction of what was alleged to be highly prejudicial evidence; the Court ruled upon that motion, but since the order entered was oral, only through reference to the transcript of the proceedings can one learn details of the decision, and that document is not yet available.

Jury selection has been set for November 20, and a Pretrial Conference has been scheduled for the 21st. Whether Mr. Atilla will change his plea to guilty prior to trial, given the strength of the Government's case against him, remains a question, as is the whereabouts of Reza Zarrab, who allegedly knows where Iran's missing billions of dollars in illicit oi profits is located, and which he may personally control.

SEC FINES WELLS FARGO'S BROKER-DEALER DIVISION $3.5m FOR AML FAILURES

 The Securities & Exchange Commission (SEC) has levied a $3.5m civil penalty upon Wells Fargo Advisors LLC, the bank's broker-dealer subsidiary, for failure to timely file Suspicious Activity Reports, and other AML issues. Readers who wish to review the complete text of the Cease & Desist Order may access it here.

DC COURT SETS ORAL ARGUMENT IN WAKED OFAC APPEAL

The Court of Appeals for the District of Columbia has, sua sponte,* set Oral Argument in the Waked civil appeal of the District Court's adverse decision, regarding their OFAC designations. The case has generated a lot of interest, irrespective of the procedural & substantive issues, due in part to the criminal indictment, and recent change of plea to guilty, of one of the leaders of what the Government refers to as the Waked Money Laundering Organization, a group of legitimate Panamanian companies allegedly engaged in laundering narco-profits of Colombian & Mexican cartels.

Many observers were surprised when the District Court case was filed, wondering of the level of arrogance these known money launderers had, believing that they could prevail in seeking to have OFAC SDN sanctions removed, when classified, incriminating evidence against them would certainly be redacted from any response to a request for information. Moreover, case law definitely favors the Government position.

 Oral Argument has been scheduled for January 29, 2018 at 9:30 AM.   







________________________________________________________________________
* On the Court's own authority, and without a motion or request from the parties.

ALERT ON ANY WEALTHY ZIMBABWEANS MOVING "FLIGHT CAPITAL"

Though the news cycle is barely covering it, due to other more relevant stories, the military has apparently initiated a coup in Zimbabwe, in response to the country's president, Robert Mugabe,  attempt to place his unqualified wife, Grace in the line of succession. Dubbed "Gucci Grace," due to her luxury spending habits, she is a former typist from the secretarial pool, and unfit for office.

Given that Zimbabwe has been wallowing in rampant corruption for decades of Mugabe rule, be alert for any Zimbabwe PEPs seeking to move large amounts of US Dollars (the country's unofficial currency), lest it be eventually seized by the next government. Grace has been seen previously at a number of international financial centers, so you may assume that her supporters, and party loyalists, are already there, moving dirty money. We note that the military in Zimbabwe has sought to control charter flights, but some of the PEPs surely got out in time.

Note that these corrupt players may have second and even third, passports (St Kitts & Dominica), so check the place of birth, to determine true nationality, please. Zimbabwe, with over 90% reported unemployment among adults, needs that stolen cash, and decline to transfer any suspicious funds, referring the matter to your bank counsel, unless you want the negative publicity which exposure of your bank's role will generate.

WHERE IN THE WORLD IS REZA ZARRAB ?

 His trial is scheduled for November 27, but Reza Zarrab, the principal defendant in the pending Federal Iran "Oil-for-Gold" sanctions evasion trial in New York, is missing in action. He has been dropped from the Bureau of Prisons database, showing "released" to inquiries, though the US Attorney's Office has reportedly affirmed that he is still in custody. His attorneys have failed to file the usual pre-trial pleadings. Has he made a deal, and will eventually plead out ? Or will he be quietly sent to the Islamic Republic of Iran, to face the probable death penalty, for stealing billions, in some sort of diplomatic exchange ?

Right now, it is impossible to determine whether Zarrab is in WitSec, the witness protection program, so we must reserve judgment on the wisdom of his legal defense team, in suspending their pre-trial actions. Given the probable strength of the Government's case, pleading out would seem to the best avenue, to avoid a Draconian sentence after conviction, but we are puzzled at this point.

The most important issue is whether others will be indicted, based upon his cooperation, if it is now ongoing, and we imagine a number of potential defendants who are Iranians, Malaysians, and Dominicans share that thought as well.

DEATH THREATS AGAINST PANAMA'S ATTORNEY GENERAL AND ANTI-CORRUPTION PROSECUTORS

The wide reach of the Odebrecht bribery investigation, underway in the Republic of Panama, has resulted in the issuance of multiple death threats, against both Kenia Porcell, the Atttorney General of Panama, as well as several of the Anti-Corruption Prosecutors, who have brought the various cases. These threats confirm the strength of the Government's cases, which includes the sons of Panama's fugitive former leader, Ricardo Martinelli, who both richly deserve a long term of imprisonment for their roles in the bribe scandal.

While the identities of the guilty parties are not known, there are a large number of bribe recipients whose names have been revealed by prosecutors.

 

PARADISE PAPERS REMINDS US AGAIN OF DANGERS POSED BY CAYMAN ISLANDS

The global attention that has focused upon the Cayman Islands, due to the disclosures appearing in the Paradise Papers scandal, is not the first time we have taken a close look at the situation in that Caribbean tax haven, and voiced our concerns. Our previous articles have detailed the risks involved when foreign investors place their assets in the Cayman Islands.

We have covered those issues in depth, but to summarize them:

(1) Cayman insiders have named at least a dozen cases, in which groups of investors have been defrauded or tricked, losing their entire investment, yet Cayman regulators and law enforcement agencies, while investigating those matters, ultimately failed to either arrest the perpetrators, or assist in the recovery of stolen funds. The negligence appears to be even more pronounced when the fraudsters are Cayman Islands residents. Apparently, the fear of a major scandal causes government there to fail to act, to the damage and detriment of the victims. If you do not believe this, try searching Cayman media for stories of local money laundering arrests; I doubt that you will be successful.

(2) While Cayman spin masters have been busy, since the Paradise Papers story broke, with damage control, discussing the virtues of local regulatory agencies, regarding Cayman corporations, many Cayman financial services professionals acquire BVI corporations for their clients, knowing that identification of the beneficial owners of such entities is ritually impossible. Their publicists tout the transparency of the jurisdiction, while their corporate formation specialists use the BVI or Belize to better hide client identities.

The fact that the Paradise Papers showed that, at least for the documents uncovered, compliance is ineffective or nonexistent in the Cayman Islands, is therefore no surprise.

  

WHAT IS THERE IN MARTINELLI'S HABEUS PETITION THAT IS RESTRICTED ?

 The pleadings in former Panamanian President Ricardo Martinelli's Habeus Corpus petition are not available to the public, and we are wondering under what authority the Court has sealed the file. Even the Government's responses are restricted. What could be in the petition that makes it unsuitable for general viewing ?

(1)Does it contain details of Martinelli's prior Confidential Informant status, with a US law enforcement agency ? Is that the reason he was allowed to enter the US, when as a known corrupt former government official, he should have been barred ?

(2) Was Martinelli an asset of an American intelligence service, as was General Manuel Noriega ?

(3) Did the totally amoral Martinelli, his back literally to the wall, expose embarrassing secrets he acquired from his illegal surveillance program, about the US Embassy, or US law enforcement activity in Panama ? No wonder all the pleadings are restricted; even the Government response is blocked, which might mean that its filings also disclose details that are deemed sensitive by those who hold security clearances.

Panamanians are tiring of the Martinelli Miami extradition treadmill; is an agency of the United States Government deliberately delaying the actual extradition ? 

COUNTRY RISK REMAINS ELEVATED FOR SPAIN

Compliance officers who are considering reducing Country Risk on Spain, due to a relative lack of violence, regarding the efforts of one of its autonomous provinces, Catalonia, to break away, should not forget the human rights violations, and physical ordeal being suffered by the unlawfully imprisoned businessman, Vladimir Kokorev. Held without being charged with any crime, as a Material Witness in purported money laundering action where there are no defendants named, the case illustrates the massive flaws in Spain's criminal justice system.

So long as Mr. Kokorev remains in a Spanish Gulag, keep Country Risk elevated for Spain. Its court system needs reform, and some of those judges, who fail to follow their own rules of procedure, should replace Kokorev in that prison cell.

TRIAL JUDGE APPROVED LAST-MINUTE DEPOSITIONS IN TURKEY IN THE ZARRAB IRAN SANCTIONS CASE

 Defendant Mehmet Atilla's eleventh hour request to take four depositions in Turkey, in a case scheduled for trial on November 27, has been granted. Atilla is the Halkbank executive charged with facilitating Reza Zarrab's billion dollar Iran oil-for-gold sanctions evasion case. The Court declined to again postpone the trial. The names of the individuals who are to be deposed have been redacted from the pleadings; the Court expressly stated that it has not ruled on the admissibility of the testimony.

Jury selection will begin on November 20. There was one loose end exposed by defense counsel this week: a sealed filing, by the Government, designated classified, and therefore not available to the defense, but reportedly involving criminal conduct of another party, not Atilla. If the defense had not asked for it to be made available, we would not have even known about it. Query: are there to be others indicted ?

WHEN REGULATORS HIDE FINES & PENALTIES, WE ALL LOSE

Perhaps the most alarming disclosure appearing this week in the new "Paradise Papers" is news that the Bermuda Monetary Authority (BMA) fined Appleby $500,000 for compliance failures, and hid that event from the public. When regulators conceal their disciplinary actions, investors are denied information they need for risk management purposes, and often incur more risk than they intended to take on. Prospective clients are also harmed, because many would engage another law firm if the one they had in mind was publicly scolded and fined for violations.

Unfortunately, it is not only the Tax Havens of the Caribbean that fail to disclose offenses timely; I have written several articles about the opaque nature of Canada's Ontario Securities Commission (OSC), which quietly levies fines, without any publicity, leaving investors there totally in the dark. We published news of one, also for $500,000, not made public. Is this fair to everyone engaged in the sale of securities ?

American regulators often delay publishing news of fines for months, which is a disservice to compliance officers who are unaware of the illegal conduct, and would have steered clear of the offending bank, had they only known of the civil fines & penalties. We hear about fines, but when we go to the regulator's websites, we see that the offenses have not yet been made public.

Who regulates the regulators ?







 

FATF ISSUES GUIDANCE ON AML/CFT ISSUES WITH FINANCIAL INCLUSION

The Financial Action Task Force (FATF) has issued a Guidance on Anti-Money Laundering and Terrorist Financing Measures, and Financial Inclusion. If you have concerns about serving the so-called "unbanked," and your exposure to potential money laundering or terrorist financing, I suggest you review it. The complete can be found here.

VENEZUELA GIVES NOTICE IT INTENDS TO DEFAULT UPON ITS OBLIGATIONS

The Bolivarian Republic of Venezuela has advised that, though it paid its most recent billion dollar debt shortly after it was due, it will not be able to honor future indebtedness, and will seek restructuring of its massive debt. When taken with the fact that one Bolivar* has now sunk to 1/10 of one US Cent in value, and is essentially worthless as an international currency, compliance officers that have not yet red-lined the nation for Country Risk purposes, are well advised to do so, for prudent risk management reasons.
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* 44,347 Bolivars to $1USD.

FOOD FOR THOUGHT; INTERESTING FLOW CHART

NOW IT'S THE PARADISE PAPERS

Readers who see this term in the media, please be advised that it is the tagline the International Consortium of Investigative Journalists (ICIJ) is using to describe the documents it is publishing, in its investigation into the Bermuda & Caribbean offshore law firm, Appleby. It has already released some information, which will probably give some associates of President Donald Trump indigestion, including at the Cabinet level.

WAKED ORGANIZATION FILES ITS REPLY BRIEF IN OFAC APPEAL

Abdul Mohammed Waked Fares, whose attorneys are appealing the sweeping OFAC designation of his family's Panama business empire, has filed his Reply Brief of Appellant. It does not appear to raise any new issues, or present any new arguments.

The issues presented:

(1) OFACs limited disclosure, in response to a request, violates Due Process, as it is devoid of any evidence. (All the Law Enforcement Sensitive material was redacted). Only a summary of the facts was included in the OFAC request for information.

(2) The OFAC response violates Due Process, as it is too vague for a meaningful rebuttal. The information was insufficient to allow Appellant to challenge the factual basis for the designation.

(3) Pursuant to the Kingpin Act, OFAC is allowed to withhold evidence which is classified, but it can them rely upon such undisclosed information, to defend a merits challenge of the designation in court. The result is an absurdity.

These issues were previously raised in the Appellant's Initial Brief; it appears that the vast majority of appellate challenges to adverse rulings of OFAC designations have not been successful.

Reputed Waked Money Laundering organization partner, Nidal Waked, recently changed his plea to guilty, in a criminal case in the Southern District of Florida. This matter is unconnected to the civil appeal of the OFAC designation, but his subsequent cooperation could result in additional indictments of Waked principals, their controlled corporations, and other participants in the alleged conspiracy.

READ PART TWO OF MY INTERVIEW BY TURKISH MEDIA

Readers who wish to review the second part of my question-and-answer session with Turkish media, concerning the Zarrab case, may access the complete text here.

ALL THE SIGNS POINT TO REZA ZARRAB ENTERING A PLEA BEFORE TRIAL

His trial is scheduled for November 27, but Reza Zarrab's attorneys have not made any of the usual pre-trial filings, either required or expected, giving further credence to the theory that he will eventually plead guilty, in an arrangement which will spare him the full force of the indictment for massive Iran oil sanctions evasion, where payments went through New York banks.

His co-defendant's attorney has stated that Zarrab counsel has ceased to cooperate with them, proposed jury instructions have not been prepared and sent, and anticipated motions were also not  filed. This leaves the Halkbank senior executive, Mehmet Atilla, in a precarious position. Will he also plead out at the last minute ?

More importantly, Iranians, Turkish bankers, Malaysian offshore financial service providers, and Dominica leaders, are all wondering whether they will be charged, after Zarrab enters into an agreement to cooperate, and testifies before the Grand Jury. Who will be next to be indicted ? We cannot say, but stay tuned.

FIRST CONVICTION IN MOSSACK FONSECA SCANDAL

Panama's Second Office anti-corruption prosecutors have announced that they have obtained the first conviction in the massive investigation into the law firm of Mossack and Fonseca. An unidentified Panama City banker has, in essence, agreed to plead guilty, and a five year (60 month) sentence imposed, which was validated by a Court.

According to reports in Panama, the banker has identified the signatories, and final beneficiaries of the different bank accounts used to transfer and receive illicit money, from acts of corruption of public servants abroad. The case involved is part of the Petroecuador corruption scandal. Petroecuador is a state-owned oil company. Mossack name partner, Jurgen Mossack, has denied that his law firm has any connection to the Petroecuador case.

Unfortunately, neither the identity of the banker, nor the name of his bank, have yet been identified, which is disturbing. We trust that disclosure of this information will be forthcoming in the immediate future.

GOVERNMENTS' RESPONSE IN MARTINELLI HABEUS CORPUS IS RESTRICTED

The reply, filed by counsel for the US Government defendants in Ricardo Martinelli's pending Federal Habeus Corpus petition, has been restricted, and unavailable for public viewing, as is the petition. It is the former Panamanian President's last hope, before the Secretary of State has the Marshals pick him up for transport to Panama City.

So, what is not deemed suitable for public release in this case ? Martinelli's act as a Confidential Informant for US law enforcement while in office ? Is he wearing a wireless listening device in Miami, and attempting to obtain incriminating testimony from a target of the Department of Justice ? We cannot say, but we surely would like to know what all the secrecy is about.

EVERYTHING YOU WANTED TO KNOW ABOUT DOMINICA'S POWER LAWYER ANTHONY ASTAPHAN (BUT WERE AFRAID TO ASK)

I often receive questions about Dominica's attorney-kingmaker, Anthony Astaphan, said to be the power behind the throne, the country's Mad Monk Rasputin, always pulling the strings behind the scenes in government.

The most popular query I receive: Why is he not serving in Dominica's House of Assembly, (what the country calls its Parliament) and why is he not a minister in Prime Minister Skerrit's Cabinet ?

To answer that, we must first review a bit of the Astaphan family history. Tony's father, Waddy (d. 2016), arrived in Dominica from Surinam, as a Dutch citizen, as that country was still a colony of the Netherlands. Tony's sister, Genevieve M. Astaphan, is the holder of a Dutch passport, as Waddy's daughter, and has admitted as such to a number of Dominican friends and acquaintances. We must assume that Tony, who was also so entitled by Dutch law, has one as well, as they allow the holder visa-free travel to the United States.

Does he also have Dominican citizenship, and what problems does that create ?

Dutch law prohibits dual citizenship, and individuals in that situation forfeit their Dutch status, and the benefits that it brings, and should Tony actually be holding that Dominican passport that he repeatedly refuses to confirm, without disclosing it to the Dutch authorities, he would be in violation of a number of laws of the Netherlands, which I understand is considered a serious matter.

You may recall that Tony Astaphan was, while he resided in Dominica, the Honorary Consul for the Netherlands, which position was taken by his sister, Genevieve, when he moved to Florida.

While an individual may serve as a Member of Dominica's House of Assembly with dual nationality, such nationality must be held in another British Commonwealth nation, or he or she cannot stand as a member. Tony's Dutch citizenship precludes his service in the Assembly, which provides us with the answer to that nagging question about why he, or any sibling, is not in government in Dominica.

No wonder Tony* refuses to answer when anyone from Dominica asks him if he holds a diplomatic passport issued by Dominica. We know he has one identifying him as Dutch Consul General, which further connects him to his Dutch passport and nationality. He produced it at the US Embassy in Barbados, and it reportedly created a problem for him.  There is no Dutch Consulate in Roseau.
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* In our next article, we shall detail the facts surrounding Tony Astaphan's profitable, and arguably illegal under Dutch law, active role in the Dominica CBI program.

READ MY FRANK TAKE ON REZA ZARRAB PLEA IN TURKISH MEDIA

Ahval News

 Readers who have been wondering when, or even if, Reza Zarrab will enter a guilty plea in his Iran Oil-for-Gold sanctions evasion case in Federal Court in New York, and what may happen if he does, may want to read my blunt comments on the subject, which appeared on the website of Ahval, Turkish media. You may access the article here.

Many other potential defendants in the case, living in Iran, Turkey, Malaysia and Dominica, are openly wondering whether they will be next to experience the proverbial "Knock on the door," and be arrested for conspiring to assist Zarrab, Babak Zanjani & Alireza Monfared in a global sanctions evasion scheme that brought literally billions in oil profits to Iran, notwithstanding UN sanctions.