Kenneth Rijock

Kenneth Rijock

Sunday, July 15, 2018


Readers who have clients doing business in Pakistan should review the complete text of the Agreement between the Federal Reserve Bank of New York  and Karachi branches of United Bank Limited, regarding the remediation of serious BSA/AML deficiencies. You can access the Agreement here.

Saturday, July 14, 2018


The High Court in St Kitts & Nevis this week dismissed the civil suit, filed by a constituant against Opposition leader Dr. Denzel Douglas, in the Dominica diplomatic passport case. The Court, speaking through Justice Trevor Ward QC, ruled that the case constituted Abuse of Process. This means that it was improper to bring the action against Dr. Douglas.

The Court held that the action musrt be dismissed pursuant to the Common Law doctrine prohibiting Multiplicity of Actions, as the Attorney General had previously filed an identical action action "relying upon the same grounds and facts." Costs may be taxed later against the plaintiff, Cuthbert Mills. Whether the attorney's failure to adequately research the law prior to filing the suit, which should never have been filed, is professional negligence, also known as malpractice, is an issue that should be addressed in the appropriate forum.

The matter became an issue of great public interest in St Kitts, when reliable sources within the government alleged that a private agreement between senior Kittitian officials, and the Canadian attorney retained to bring the action, E. Anthony Ross, required Ross to secretly kick back a substantial portion of his reputed multi-million dollar attorneys' fees, to them. Official corruption has been a major topic of conversation in St Kitts of late, especially after the Asot Michael scandal broke in Antigua, which included allegations of illegal payments sought by St Kitts officials.

Canadian law in the Province of Ontario, where attorney Ross maintains his law office, prohibits attorneys from paying any portion of their professional fees to non-lawyers. The Law Society of Upper Canada, which regulates the conduct of the legal profession in that province, should open an investigation, and inquire into the circumstances surrounding any payments of fees received by Ross in the St Kitts case to third parties.

Friday, July 13, 2018


The principal of a major CBI consultancy in the United Arab Emirates (UAE) has noted, in a recent interview, that the country which represents the largest number of their CBI applicants is Pakistan. The executive also named the other nations whose nationals have been his firm's CBI clients.

Here is the list that was published in the article:

(1) Syria
(2) Lebanon
(3) Egypt
(4) Palestinian Arabs
(5) Jordan
(6) Iran
(7) Iraq
(8) UAE

The consultancy stated that it matches up applicants with the two CBI jurisadictions in Europe (Malta and Cyprus), and the three located in the East Caribbean (St Kitts & Nevis, Dominica and St Lucia). These are principally countries that are not democracies, and which have Specially Designated Global Terrorist organizations operating within their borders. Assuming that the CBI applicants from these countries present clean and authentic alias identification, sanctions violators, terrorist financiers or foreign intelligence agents, such as Pakistan's ISI, could obtain CBI passports, allowing them to enter the Schengen Zone, visa-free, seriously raising risk-levels.

It is issues like this that keep counter-terrorist agencies up at night. CBI passports allow both criminal, as well as terrorist, elements, to successfully enter, and operate, inside Western democracies. That is why jurisdictions that sell economic passports become high-risk targets for foreign law enforcement and intelligence agencies, and anyone that holds a passport from such jurisdictions are regarded as suspects. This is the unintended consequence of all that CBI cashflow.


If you want to read the Indictment, filed today in US District Court in DC against a dozen Russian intelligence officers from the GRU, the complete text may be accessed here. The Style of the case is United States vs. Viktor Borisovich Netyksho, et al. 


You've gotta love those people at FINRA, the regulator for the securities industry. When a number of executives at Credit Suisse Securities had their secretaries do their required compliance training for them,  FINRA ruled that they had to give back a portion of their bonuses, as a penalty.  As we always say, let the punishment fit the crime. Imposing a financial penalty, individually, for failure to participate in compliance training, is just that.

Readers who wish to review the complete text of the FINRA Letter of Acceptqnce, Waiver and Consent may access it here.

Thursday, July 12, 2018


Low Taek Jho, also known as Jho Low, a Malaysian financier alleged to have siphoned off billions of dollars from 1MDB, the Malaysian development fund, is a fugitive from justice, whose Malaysian passport was cancelled. How is he still at large, you ask ? Simple, he has a CBI (Citizenship by Investment) passport from St Kitts & Nevis, one of a long list of accused criminals who possess SKN CBI passports, and use them to evade justice elsewhere.

Low is alleged to have stolen $700m from the 1MDB, which he had access to;  he is on the run, and has reportedly been seen in Mainland China, Thailand, Taiwan, Hong Kong and Macau. Malaysian authorities believe he will eventually end up in St Kitts, as have a number of major white-collar criminals, who have sought refuge there. All you need is deep pockets and that prized CBI passport. If the government of St Kitts was wondering why visa restrictions, imposed by the US & Canada are not being lifted, this case should serve as a reminder.


 The Republic of Moldova, a country where widespread money laundering scandals and billion dollar frauds are rampant and uncontrolled, has announced that it is creating the Moldovan Citizenship by Investment Program (MCBI). While neither a member of the EU or the Schengen Zone, Moldovan nationals have visa-free access to Europe through a treaty, making a Moldovan passport attractive for citizens from high-risk or sanctioned jursidictions.

Unfortunately, the visa-free privileges come at a high personal cost, as Moldova's image as a center for organized crime more or less paints a red bull's eye on the back of any foreign national who presents a Moldovan passport at an international port of entry. CBI consultancies generally never inform their clients about the specific negative aspects of acquiring the passports of certain CBI countries, including whether you will draw unwanted international law enforcement attention with your new passport. Though the Schengen Zone access is tempting, any foreign investor who chooses to purchase a Moldovan passport is probably asking for more trouble than they bargained for. Nobody wants their banks accounts checked out by law enforcement, just because their passport states where they come from, but it is the logical outcome. Do you really want to be under a legal microscope ?

Lengthy interrogation by customs officers, strip searches, and extensive bags and baggage inspection most likely lay ahead for the Moldovan CBI passpot holders. Some might even call it guilt by association. while the  CBI programs of Cyprus and Malta are more expensive, they will come with a lower level of risk. As always, before making any important decision, prospective applicants for CBI passports are advised to seek the advice of a qualified attorney., but in my humble opinion, rule out Moldova for the reasons listed above.

Wednesday, July 11, 2018


In any offshore financial center, there are always a couple of rotten apples; professionals who walk on the dark side, which means money laundering of bribes and kickbacks, covering up tax evasion, and washing criminal proceeds. The Panama Papers and the Paradise Papers are but two examples of law firms who have passed from the grey area, into criminal facilitation, and what damage they inflict as the result.

One of Gibraltar's law firms is currently representing a gang of master cybercriminals, who have left a trail of victims in three continents. On this side of the Pond, over in Trinidad, the losses reportedly exceed $100m; the SEC and US law enforcement agencies are actively investigating them. Obviously, they will leave European victims in their wake, and the law firm will profess its innocence, and go right back to doing the same thing again: facilitate financial crime.

So how did this prominent law firm fail to conduct the most rudimentary due diligence upon their new clients, before undertaking to reprsent them ? Even a cursory Google search would have exposed their sins and transgressions. Don't attorneys in Gib engage in Know Your Client ?

We hope that some cencerned citizens in Gibraltar unmask this law firm, hopefully by exposing their sordid activities. Let a Gibraltarian post the passport pictures here, and the story of this gang's cybercrimes.


A Dominica expat, visiting the country on vacation, was denied access to any use of VISA ATM or credit cards wille there, which were cards issued by a major American bank. Given that this individual had just recently used those cards in other adjacent East Caribbean states, an inquiry was made. Here is the information that was received from bank representatives and managers:

"Due to security and fraud concerns, blacklists, OFAC sanctions and FATF lists, [deleted] Bank does not allow any transactions in Dominica". Our bank has decided not to process any transactions in Dominica, as it is a blocked country."

" This country [Dominica] may be subject to international sanctions, and [deleted] Bank is committed to compliance with those sanctions. While we work worldwide, and your card can be used everywhere VISA cards are accepted at this time, we do not allow our products and services to be used in blocked countries, which means ATM & credit card transactions are not permitted. You can resume use of your debit/credit card when you are outside the Commonwealth of Dominica."

"In accordance with the international sanctions and mutual rules of corresponding banks, we are sorry but the country you are currendly in is a blocked country. For compliance and the protection of the bank, [deleted] Bank is unable to have their customers use their VISA Debit/credit cards while traveling to blocked countries like Dominica."

"I am sorry for the inconvenience but our bank/VISA have blocked ATM/debit activity in the Commonwealth of Dominica."

It appears that Dominica is now regarded as so high-risk that the use of VISA debit and credit cards of one of the largest US banks there has been completely blocked.



Although the Western press has primarily focused blame upon the remnants of ISIS for attacks upon the sizeable population of Coptic Christians is Egypt, in truth and in fact, it is the Muslim Brotherhood that has engaged in systematic destruction of the last major Christian community in the Middle East. The Coptics, who number close to ten per cent of the Egyptian people, are being  murdered, their assets plundered, and their churches ad schools set on fire.

Sources inside Egypt have stated that the Brotherhood has specifically targeted the most affluent of Egypt's Coptics, for the purpose of stealing their significant assets after their deaths. Given that the Copts have existed in Egypt for two milennia, these holdings are substantial. Many Coptics have chosen to emigrate abroad, to Western countries where freedom of religion is assured. 

International banks in Europe, particularly those who have branches or correspondent relationships, in Egypt, should be alert for large new and unexplained deposits, from Egyptian nationals, as they may represent assets taken from Coptics who were killed. The holders may wish to remove these funds from their country, to escape their possible seizure, at a later date.  As they represent the proceeds of crime, any such deposits constitute money laundeing offenses. Check the prior lines of business, and account history, for those who are making substantial new deposits, and obtain Source of Funds verification, from an independent entity, before accepting any large and unexplained amounts, lest you later are identified for cleaning stolen money, and sending it abroad.


 The problem that compliance officers face, when dealing with new foreign customers who declare that they are merely successful businessmen in their home country, is ruling them out as Politically Exposed Persons, or PEPs. Individuals fronting for corrupt government officials will go to extreme lengths to create a false profile, consistent with the trade or industry that they claim to be engaged in, all to cover up the fact that they are seeking to move the proceeds of either corruption, or other criminal activity, into your bank.

 The best method of identifying them as PEPs is to utilize social media resources. This does not mean you go on Facebook, or some other media website, searching for their presence. it means that you utiilize  a social media souce that searches all potential social media sites, for both direct, as well, as indirect, confirmation that your target is indeed a PEP.

While a well-prepared hidden PEP will most likely have no direct connection to the government officials that he is moving or laundering money for, these platforms search for indirect, aged, and even irrelevant material, on spcial sites which will lead you to conclude whether or not he has PEP status. These platforms search for not just friends & family, but for old school connections, fraternal associations, prior business associations, or some which can show your target present at media, charitable sports or social events, which may confirm his relationship with individuals who have known access to either government assets, and/or are suspected of corrupt activities.

When your prospective client is photographed sitting next to someone at a New Years' party, wedding, social club annual dinner, or charitable function, a rebuttable presumption arises that he is not with that individual by accident. When he gives an award, at a dinner, to someone who you would not have as a bank client, alarms should ring in your head. When your target shows up at a function, at a private club, look at the members sitting at his table; you can do that only through social media images, collected for you by your platform.

Social media search platforms use artificial intelligence to find your target when he is off duty, and when he thinks nobody is watching, but eager social media posters just may have taken his picture, having drinks with some bad people, and your search found him there in a posting. He may be artfully concealing his PEP status, but you now know better. 

Tuesday, July 10, 2018


 Mauritius has announced that it will be offering citizenships for USD$1m, and passports alone for $500,000, though many citizens of that nation, the sole democracy existing in Africa, have objected, saying that their nationality is not a commodity to be bought and sold. They also fear that Mauritius' growing reputation as a tax haven and money laundering center will be further tarnished by criminal elements purchasing their passports, which offer visa-free entry in most of the Middle East.

The Republic of Mauritius, it appears, has also failed to learn the bitter lessons that have been experienced by the five Citizenship by Investment (CBI/CIP) East Caribbean States. They also chose to sell economic passports, to fund their countries' recurring budgetary expenses. When the budgets blossomed, as expected, but an insufficient number of legitimate applicants came calling, the EC states obviously lowered their due diligence standards, with unfortunate results, when CBI passport holders were arrested, in the act of committing financial crime.

Perhaps the good people of Mauritius can nip their CBI problems in the bud, before their government's CBI agency, under major pressure to deliver cash for the nation's swollen  budget, allows unsuitable, and yes even dangerous, applicants to receive their Mauritius passports, by ignoring due diligence requirements.


There appears to be a difference of opinion among compliance officers conducting enhanced due diligence investigations: do you run the target's image through your facial recognition program at the very beginning of your EDD, or do you access it when your work is complete, to validate your findings ?

One school of thought states that, in a world where bogus identities, through passports that can be easilty obtained under clean aliases, including second passport programs, one must check first, before wasting valuable time, in any investigation of a target and his identity. Check the primary official documents of identity, including passport, drivers' license, identity card, and whatever additional items that the client presents first, to rule out any inconsistency between images that are known to be of the client, and that which have been presented to you as genuine at account opening.

The second group believes that the entire due diligence program should be completed, and then the facial recognition program should be run, to insure that your findings are correct. If you were totally deceived by a target's false identity, after the facial recog is completed, then you must reexamine the strength of your compliance program, as that means identity documents presented to you by supposedly trusted sources were faulty from the start. How is it that they passed the initial sereening?

Whether you choose to initiate facial recognition inquiries at the beginning or at the end, it is an indispensable component of your EDD program. It is your positive verification of identity, using multiple resoures, including official, unofficial, social, media, and other image sources. Rely upon it for a result more accurate than any other platform.     

Monday, July 9, 2018


Affluent foreign investors, who have been seeking economic passports through the Citizenship by Investment (CBI) Programs being operated in five East Caribbean States, are making application there in far lesser numbers this year, when compared to the two previous years, and are reportedly looking at programs in other regions, especially in Europe.

The reasons for the step decline in applications appear to be:

(1) Rampant negative news coverage of rampant official corruption in those countries.
(2) The continued failure of each nation's CBI agency to institute Enhanced Due Diligence investigations upon all applicants, resulting in career criminals, terrorist financiers, and the usual suspects being approved, but later are arrested by the authorities for criminal conduct.
(3) The collapse of Petrocaribe, which delivered Venezuelan (and some say Iranian) oil to the East Caribbean under extremely favorable terms. The failure of Venezuela to ship any petroleum products  has spawned riots this week in Haiti, and vocal public discontent in Antigua & Barbuda.
(4) the foreign misperception that the last hurricane seriously damaged all the island republics.

Both St Kitts & Nevis, and the Commonwealth of Dominica, have published obviously grossly inflated figures of the number of their applicants, whereas the true 2018 figures are extremely small. Will the standards for new applicants be lowered even more, to increase revenue, which was never meant to meet local recurring budgetary expenses ? If so, expect even more career criminals to come calling, and be eagerly accepted.

Whether the high net worth applicants will continue to divert their interests to Malta, Cyprus, and other more stable countries depends upon whether the East Caribbean States suppress corruption, upgrade their CBI EDD, and develop their economies. We hope they get the message.

Sunday, July 8, 2018


 Rampant violence in Port-Au-Prince, and other cities in Haiti, due to the government's decision to remove subsidies on gasoline, diesel and kerosene, which will cause prices to rise as much as 51%, could bring down the current government. The combination of Venezuela's Petrocaribe's recent failure to distribute to the Caribbean countries, and US sanctions, which interfere with payments to Venezuela, has left Haitian consumers with prices that they simply cannot pay, resulting in popular revolt. Revolutions have begun for lesser reasons. The government's announcement, that it was reversing itself on the subsidies, had no effect upon the rioting.

Note well that corrupt Haitian leaders, and the Politically Exposed Persons (PEPs) who front for them in North American and European banks, may fear regime change, which reports from Haiti could occur within the next two weeks, and move their illicit holdings, to avoid subsequent exposures and seizure by a new government in Haiti. Unusual funds transfers, both into and out of international banks in the West, as well as unexplained cash movement within the US and Canada, should be closely examined, especially if the sender is a Haitian "businessman," who claims his wealth was earned in his native country.

 If you are not familiar with the state of the economy in Haiti, legitimate commerce is dwarfed by the underground movement of drug profits, and the proceeds of systemic corruption whicb drains the country dry, and discourages significant foreign investment, when prospective investors are solicited by powerful PEPs to pay bribes and kickbacks, just to do business in Haiti. The corruption has essentially turned Haiti into a failed state.

Therefore, examine in depth any major funds transfers, or attempts to transfer wealth, on the part of affluent Haitian nationals, or professionals acting on their behalf.

Saturday, July 7, 2018



 The identification of Politically Exposed Persons, more commonly known as PEPs, remains one of the most difficult challenges facing compliance officers at international banks, especially when the individuals come from countries in the developing world where freedom of the press, and of information in general, is restricted, monitored, controlled, or censored.

Your applicant who is seeking to open a new account, and who is a close associate of a senior government official, military officer, government-controlled or owned corporation executive, or senior charitable entity or NGO official, may choose not to disclose that relationship to you, due to the fact that his deposits will be the proceeds of bribes, kickbacks, or other income received due to corruption. Your job is to insure that you have identified him as a PEP, and to put in place the safeguards and account monitoring that such a status requires.

While the joint use of facial recognition software and social media platforms is well known as an effective tool for law enforcement use, as we have previously noted on this blog*, teaming up these two effective search resources can establish a PEP relationship where no other asset in your toolbox can. Many PEPs have relationships that establish their status outside normal channels, and the images you find in social media may be the only evidence that exists to confirm he is a PEP. The importance of this technique, which couples two valuable compliance tools, cannot be underestimated.

Your target need not actually be a user of social media to be found using this technique. The fact is you can confirm that he or she is a PEP through remote and indirect relationships that would most likely never be uncovered using conventional investigative techniques. This is know as Shadow Profiling, and we have previously detailed its effectiveness.**

PEPs can go to great lengths to conceal the existence of relationships that make them PEPs; you need to avail yourself of all the possible resources available to you to find those relationships.
*Facial Recognition Software is highly effective when paired with Social Media Platform
**Using Social Media to create Shadow Profiles in Investigations

Friday, July 6, 2018


Those West Indian politicians who earlier this year cast doubt upon whether the US, Canada & the EU would ever impose restrictions upon them, as the direct and proximate result of their failure to conduct effective due diligence upon their CBI applicants, are starting to eat their words. The issue is how many painful and restrictive policies must be visited upon them before their constituants remove them from office.

First, citizens from East Caribbean states learned that certain of their kind, arriving in the United States, had been subject to extensive questioning, the obvious object of which was to learn whether the vistor was holding a CBI passport. If this was the conclusion, a more extensive interview was the next step, together with an intense inspection of his bags and baggage.

Second, the Government of Canada, after having earlier restricted visa-free visitors from some jurisdictions in the region, imposes a blanket biometric information requirement upon most East Caribbean states. Both the Canadian Prime Minister as well as the Foreign Minister have pointed to the deficiencies in the various CBI programs as the central reason, though various spin masters have attempted to conceal that fact, including some linked to the CBI consultancies that touted a visa-free Canada.

Now, while the citizens of the East Caribbean remain upset that their plans to visit Canada will be curtailed, or even cancelled, due to the time, expense and trouble of a personal visit to the Canadian High Commissioner in Trinidad, the third shoe is about to drop. Agencies of the European Union, after extensive consultations, which this blog has repeatedly warned were underway, appear now to be on the verge of their own version of sanctions, also due to the CBI due diligence scandal.

The question is, if there are visa restrictions imposed by EU agencies, and the result interferes with CBI passport holders' access to Europe, those CBI passports will lose much of their value, as applicants will choose Malta, Cyprus, or one of the other CBI jurisdictions. If that happens, the very same East Caribbean leaders who rely upon CBI funds to pay recurring expenses may find themselves out in the cold.



There has been much made of late about the international scandal surrounding the purchase, by Iran, of economic citizenships, pursuant to a number of Citizenship by Investment Programs being operated by five East Caribbean states, and the negative publcity has caused the Government of Iran to look elsewhere; it is reportedly purchasing passports from corrupt officials in Africa.

For those who question the wisdom of  an Iranian sanctions evader, or terrorist financier, holding a passport from an African nation, allow me to explain:

(1) Inasmuch as an Iranian passport generally requires that a visa be issued, to allow the holder to enter a Western country, an Iranian agent needs a safe passport, with visa-free privileges, such as has been exhaustively advertised by the East Caribbean CBI states, as a marketing tool.

(2) Africa contains a large number of Commonwealth of Nations (British Commonwealth) members, which were previously colonial possessions of the Crown, and who as the result hold visa-free access to the United Kingdom. Iranians, holding themselves out as Commonwealth citizens from Africa, can gain acces to the financial capital of the UK, the City. If the agent speaks English, an adequate cover identity can be built, which will acclow him UK entry. West Africa in particular has a number of Lebanese traders living and working there, and that might be the chosen profession creatd by Iranian intelligence officers, who are fleshing out the bogus identities of their agents.

(3) Many bankers do not know this, but certain former French, and Portuguese colonies like Cameroon and Mozanbique, now independent, have also become Commonwealth members, allowing Iranian agent fluent in either language, but not English, to convincingly pose as African nationals.

Once the Iranians have entered the UK, free movement within the Schengen Zone of the EU is generally assured, as they are coming from Britain.

Now that you understand why Iran is atracted to African passports, compliance officers should distribute alerts to their frontline staff:

(1) For Caucasian passport holders from African Commonwealth-member countries, 
(2) Whose language skills demonstrate the presence of a pronounced accent not native to their professed country of origin; and
(3) Whose physical appearance does not suggest that they live in a tropical country. 

 Is their passport newly-issued, and without visa stamps ? If so, dig deep, my friends. You just may score an Iranian sanctions evader or money launderer underneath that African facade.


Thursday, July 5, 2018


The shape of things to come may be compliance officers going after their own bank, when executives ignore their valid compliance warnings and concerns. The latest case involves a private banker, at a respected UK international financial institution, and it may represent the remedy compliance has needed for a long time, especially since the latest regulatory tactic is to hold the compliance officer personally liable when his bank fail to implement necessary actions.

Apparently, the banker twice advised his employer that there were serious issues: first, when a $100m transaction was linked to an associate of a Russian Politically Exposed Person (PEP), and second, when the client's father was linked to Russian President Vladimir Putin, which makes the client also a PEP. These are textbook issues, requiring Enhanced Due Diligence, which reportedly was not performed.

While I understand the bank, in its defense, says the whistleblower-employee did not raise them until after his position was made redundant, and he was terminated, somehow I doubt that the facts, when finally examined, will favor the bank.

Given that compliance officers, at least since 9/11, have repeatedly voiced their anger over employers who ignore their valid warnings, and later make them the guilty party, rather than the bank executives who valued client revenue over regulatory requirements, perhaps the proactive appriach, suing your employer when things go south, will become the appropriate remedy. If the bank's board of directors have a well-founded fear that the bank might become a very public defendant, they might think twice about dismissing valid compliance concerns.

This whole problem, where executives ignore their own director of compliance, should not even exist; his or her advice, when valid, should be acted upon, swiftly, and without argument, for its sole purpose is to protect the bank from laundering client criminal proceeds.

Tuesday, July 3, 2018


When I first started exposing corruption among government officials in the Commonwealth of Dominica, I was immediately confronted by a chorus of people accusing me of being a paid agent, publishing false information in the service of some unnamed entity, and seeking to effect regime change, by any means. Inasmuch as I do not practice checkbook journalism,  I assumed that the naysayers were seeking to impeach my credibility, but I was wrong. The truth is much more disturbing.

It is all about the overpowering influence of a number of international Citizens by Investment (CBI/CIP) consultancies, multi-national sales organizations engaged in reaping obscenely high commissions for placing high net worth individuals, moral as well as amoral, into CBI programs, which give applicants from dodgy countries a "safe" passport, removing the stigma of the high risk national origin from their travel documents. It is an unregulated industry, notwithstanding the very public efforts of its members to cosmetically enhance their image through controlled NGOs whose output sounds suspiciously like propaganda.

Behind the scenes, CBI consultancy power is regularly applied:

(1)  To win favorable arrangements with local Caribbean CBI governments eager to share in the lucrative fees, as well as inflated costs, so as to collect not only their listed commissions, but sales overrides that are never disclosed to the investing public.

(2)  To change the game in specific jurisdictions, through direct and indirect financial support to Opposition parties, including dirtying up incombents, through scandal exposure, including false information, a nd buying or fixing elections. Once in power, the newly-installed Opposition gives the CBI consultancy a sweet exclusive deal, and throws out its competition.

(3) To deliver diplomatic passport applicants from high risk jurisdictions, who are attracted to the possibility of evading Customs and Immigration inspection, and net the consultancy, and corrupt local politicians, millions in advance fees, kept and not passed along to government treasuries.

(4)  To provide payments and perks for the members of CBI units, their ministerial overseers and their extended families, to reinforce their privileged contractual arrangements.

Who is in control in specific East Caribbean states, The prime minister and majority party, or the CBI consultancy ? The artful use of bribes and kickbacks, and the delivery of clients, has made these states dependent upon the lucrative CBI receipts, and use the money for budgets, not sponsoring needed jobs creation.

The undue influence of the CBI consultancies over the East Caribbean states, is interfering with democracy, and is leading several countries down the road to Cuban-style and Venezuelan type of socialist dictatorship. Let us hope that the East Caribbean learns to control their CBI consultancies, before the countries slide into one-party, autocratic states.


The United States Supreme Court's decision on President Donald Trump's Travel Bank on predominently Muslim countries not only puts all those nations at the top of the hit parede, when it comes to Country Risk, it also increases that chances that the next CBI passport a compliance officer will encounter, when opening a new bank account at his North American bank, will be a citizen from one of those Trump-banned countries. If you are an Iranian or Syrian national, try getting visa-free entry most anywhere; that's why the mad dash is on to the CBI jurisdictions.

Of course, if the CBI passport is from St Kitts & Nevis, or Dominica, among certain other East Caribbean states, it may conveniently show that the holder actually was born in that nation, as the CBI units in those states tend to play fast & loose with the truth, especially if  a certain amount of money changes hands, unofficially of course

Compliance officers, do not fret; there is a time-tested method of determining, painlessly, that your passport holder was NOT born there. Listen to him. Each country's native-born citizens speak their official language fluently, and with the accents and slang (or even patois) specific to their place of origin. If you do not have expats from the Caribbean on your New Accounts staff, hire some, for they and they alone will tell you, in a New York second, if your client is a native speaker.

Encourage your New Accounts staff to draw out the prospective client into conversation, for it is them that they will be able to alert you to his lack of accent, hestiation wihen discussing his hometown or place of birth, and relatives who supposedly still live there, and rely upon their conclusions.

 If you are unable or unwilling to follow this advice, then the only alternative is to immediately classify all nationals from these CBI jurisdictions as potentially high-risk, and apply Enhanced Due Diligence before accepting their deposits. The jurisdictions that you will most likely encounter are:

St Kitts & Nevis
Antigua & Barbuda
St Lucia


Does your prospective bank client's passport information match up with known photographs of the subject ? Or is the passport simply an alias ?

The proliferation of Citizenship by Investment passports, whether purchased in the East Caribbean, Malta, Cyprus, or elsewhere, has greatly increased compliance risk levels, for CBI passport holders could have established a completely bogus identity, through documents obtained through corrupt government agencies or sources, and then obtained that prized CBI passport, with a totally sanitized identity. In other jurisdictions where counterfeit birth certificates, drivers' licenses, government identity cards and even utility receipts are actually advertised, in conjunction with yacht registrations or diplomatic passports, creating a ficticious identity is easier than brushing your teeth.

This means that any Enhanced Due Diligence (EDD) inquiry, and forget about ordinary due diligence for it is no longer sufficient for Customer Identification Procedures (CIP), is not complete without part two of your investigation: namely, through the use of an effective Facial Recognition program. Only after you have photographic confirmation that your target is the one and the same individual that he or she claims to be can you be certain who your client really is.

Unless you can connect up the face with the identity, all you have is a prospective client with squeaky clean, albeit totally bogus documents, all the while hiding his OFAC-sanctioned true name and criminal or terrorist background. Facial recognition programs, which include millions upon millions of official, social media, mass media, video, commercial, as well as lifestyle, images, all of which have been examined and validated, using a facial recog algorithm.

Although facial recognition platforms are only now being recognized as a critical last step in any EDD investigation, their inclusion, as part of any AML/CFT compliance program, which includes a second generation, mainly cloud-based data source, plus negative news sources, has not yer been adopted as part of banking best practices. Given the widespread use of CBI passports, multiple passports, and bogus diplomatic passports, compliance officers at international banks whose clients come from the four corners of the globe, should adopt an effective facial rcognition program without further delay, to add this final step to their enhanced due diligence programs. To ignore that final step is not only compliance malpractice, it could subject those who fail to do so to permanent exile from  employment in the financial world by regulators, or even criminal prosecution.

Monday, July 2, 2018


A 35-page class action civil suit, filed in US District Court in Florida, Heinert vs. Bank of America, NA , alleges that Ponzi schemers offering bogus investment oportunities to the public were allowed to rapidly and repeatedly move large amounts of victim payments, among one hundred accounts, most of which originally held only small amounts, into accounts controlled by the fraudsters. The suit asserts that all the red flags of money laundering were present, but the bank failed to take any steps to shut down the rampant criminal activities, which exceeded $100m.

The plaintiff claims that the bank should have identified the suspicious nature of the rapid and significent number of transfers in and out of corporate B of A accounts, which effectively comingled investors funds, and ultimately resulted in total misappropriation of those funds through personal B of A accounts belonging to the individual fraudsters. Additionally, there were transfers inconsistent with the account holder's business, loans that lacked a legitimate business purpose, and transacting businesses sharing the same address.

The funds, which were received from investors, were used to fund the fraudsters' excessive personal lifestyles. Eventually, action taken by the Securities & Exchange Commission brought down the obvious Ponzi scheme.

Readers who wish to access the complete text can do so on PACER: Case No: 18-cv-00324-PGB-PRL (MD FL). 


When Euro currency was on the threshhold of introduction, and this blogger noted that the €500 note would be a boon to professional European money launderers, only the Guardian thought my comments were worthy of publication, back in 2001. Years later, after the criminal syndicates have adoped the five hundred Euro note as their medium of exchange, and most Europeans note that they rarely, if ever, see one in circulation, the European Central Bank (ECB) announced that it will no longer be produced. Why the delay ?

Considering that the ECB published a report back in 2015, concluding that the five hundred Euro denomination facilitated transnational crime, its May 2016 decision was long overdue. There's a reason why the US has not had larger demoninations for decades; in Canada, existing large notes, no longer produced, survive as a currency of exchange in criminal circles. Indeed, most of the €500 notes are believed to be held in Spain by organized crime syndicates.

We welcome any efforts to reduce untraceable medium of exchange, and the loss of the five hundred Euro notre has hit professional money launderers where it hurts. 

Sunday, July 1, 2018


If you thought that the large number of passports, sold by the Comoro Islands to Iranian nationals engaged in sanctions evasions was disturbing, Iran is now conducting its passport purchases elsewhere on a grand scale. Reliable reports from inside Iran have confirmed that the government is accquiring foreign passports from a number of nations in Africa and other regions, in a desperate move to allow it to collect funds, and evade Western sanctions and controls, using aliases with clean identities.

While we have previously detailed the circumstances of Iranians flocking to the East Caribbean states, to purchase passports through the five Citizenship by Investment (CIP/CBI) programs administered there, including the Alireza Monfared scandal in Dominica, and Iranian moves in St Kitts & Nevis, and Antigua & Barbuda, this additional passport buying frenzy is indicative of actions that have been forced, due to recent law enforcement activities, such as against Pilatus Bank in Malta, and its owner, in the United States. Additionally, Iran must still collect huge sums for unpaid covert oil sales, particularly in Latin America.

Whether Iranian agents are using specific financial pipelines that flow through the United States or Western Europe is not known, but assumed, given that the covert transactions are in US Dollars and Euros. Compiance officers at international banks should be on the alert to an increase in transfers whose ultimate destinations are in the Middle East, from where funds movement into Iran is the traditional evasive route taken, to avoid discovery by US agencies.

The key, of course, is the fact that the passport holders:
(1) Will not be native-born nationals of the countries where they hold passports. Check place of birth.
(2) Will have brand new passports, with little or no arrival or visa stanps.
(3) Will most likely not speak the official langaunge(s) of the nation in which they hold paassaports.
(4)  Will probably not be ethnically or racially the same as indigeneous nationals of their "country."
(5) If they do actually speak the official language of their passport country, it will not be with the same accent, neither will they be using slang, nor will they exhibit the linguistic characteristics of speakers from that country. If you have native speakers on your staff, they will instantly confirm the non-native speaker status of these new clients. Ask them to conduct the collection of personal information on those prospective clients.

Your bank compliance staff should be briefed on this new information, and be advised to be alert for any of the above "red flags" that indicate that specific passport holders may not be exactly what they appear to be, and require Enhnced Due Diligence, to rule them out as Iranians violating international laws and sanctions.

Saturday, June 30, 2018


Each sovereign nation has the absolute right to conduct its foreign affairs as it sees fit, but when domestic financial motives cause countries to support money laundering dictatorships, compliance officers at international banks in North America and the European Union stand up and pay attention. This means, in plain English, considering whether an increase in Country Risk is appropriate, and applying increased scrutiny to large transactions possibly originating in a sanctioned jurisdiction.

The political support given by certain East Caribbean states, especially Antigua & Barbuda and Dominica, to the Bolivarian Republic of Venezuela, including during its issues with the OAS, has not gone unnoticed by the global compliance community. Venezuela, with its issues of rampant money laundering and terrorist financing, is considered a pariah by the United States, as reflected in OFAC sanctions, and in other official American actions.

When left of center governmenrt leaders in the East Caribbean, who are receiving financial compensation from Venezuela, directlty or indirectly, express their political solidarity with that country, with its disastrous human rights record, its status as a drug smuggling transit point, and its love affair with sanctioned Middle Eastern terrorist organizations, it is duly noted by compliance officers, who correctly fear the misuse of the financial facilities ( read that as locally-organized offshore banks) by Venezuela, to move dirty money, or mask criminal activities, in support of Iran, or other rogue states.

When East Caribbean leaders blow kisses at Venezuelan President Niciolas Maduro, the effect is felt at international banks, whose risk-based compliance programs then recognize an increased threat. if you were wondering if it even affects De-Risking, I think you now have your answer. Western banks do not have an appetite for risk for the financial institutions from Caribbean countries whose prime ministers openly court realtionships with high-risk dictatorships. 

Wednesday, June 27, 2018


The official response to yesterday's Canadian announcement, that a personal interview in Trinidad, and detailed information, will be necessary if Antiguans want to secure a visa for Canada, is a big disappointment, though not totally unexpected. Instead of reform of its CBI program, to include an upgrade to Enhanced Due Diligence, and a historic look-back at all existing CBI passport holders, Antigua will attempt to twist Canada's arm, to modify or weaken its announced policies. 

The Antiguan High Commissioner to Canada, Ronald Sanders, has informed local Antigua media that he intends to travel to Ottawa next week, to talk to senior government officials there, with the goal of having them delete the personal visit requirement from the new visa process. His position has been that the Government of Antigua opposes the personal interview on economic reasons; that the expense of travel to Trinidad is an excessive and unnecessary requirement; This is not an apprpriate response to what is being considered a national emergency. Fix the problem, mister ambassador, don't shed tears over it.

Unfortunately, nowhere in yesterday's news is there any indication that Antigua will reform its dysfinctional CBI program, by elevating investigation of its applicants to the Enhanced Due Diligence level, nor by rechecking all the prior passport holders. Last year, when the Prime Minister of Canada announced that visas would thereafter be required of Antiguan nationals, he specifically noted that this reason was the country's ineffective screening of its CBI applicants. Apparently, Antigua did not take his advice to heart, and the government's failure to act has spawned consequences that affect all Antiguans seeking to travel abroad.

Will other countries now institute these strict visa application requirements, in jurisdictions where Antigua presently enjoys visa-free entry ? If so, the country's much-advertised CBI advantages could take a serious hit, and global CBI consultants may advise their clients to steer clear of any serious consideration of the country for application. We have not yet heard calls from the people to terminate the CBI program in Antigua, but the true impact of Canada's announcement has not yet been felt. When it does affect the acverage Antiguan, he will demand reform of the program, or its closure.

Monday, June 25, 2018


Beginning on December 1, 2018, all individuals from CARICOM countries who wish to visit Canada, will be required to have a personal interview at the High Commission of Canada to Trinidad & Tobago, in Port of Spain. Photographs and fingerprints will be taken of all visa applicants, according to a trusted Canadian Government source. Only the Bahamas and Barbados have been exempted from the application of these new regulations.

While many in the East Caribbean states may consider these new policies both expensive and time-consuming, it is important to remember that we warned everyone last year that stricter visa policies would shortly be implemented, unless the jurisdictions with Citizenship by Investment (CBI or CIP) Programs swiftly upgraded their compliance procedures to the level of Enhanced Due Diligence. Unfortunately, governments in the region not only chose to ignore our warnings, they scoffed at the idea that North American jurisdictions would ever tighten their entry regulations.   Canada's actions are simply the direct and proximate result of the failure of the CBI states to institute those effective compliance programs.

One of the major selling points of any of the region's CBI programs is easy entry to Canada; now CBI passport holders, wherever they be situated in the world, will have to travel to Trinidad, to process for that prized Canadian visa. We wonder how many prospective applicants will choose a CBI jurisdiction outside of the East Caribbean, such as Malta, when this negative news is picked up by the major  CBI consultancies.

It is important to note that interview schedules of applicants may be limited, due to the size and availability of the diplomats at the High Commission, that passports may be required to be left with the High Commission for processing, and that there could be additional delays, due to the mandatory checking of fingerprints through law enforcement databases.

A final note; if Enhanced Due Diligence procedures are not now instituted,  Canada may impose additional protective measures. We trust that the necessary, and much overdue, EDD is put in place, before visa restrictions get even more severe.

Sunday, June 24, 2018


Francisco Illarramendi
If you were wondering whatever happened to convicted Ponzi schemer Francisco Illarramendi's §2255 Motion to Vacate or Correct Illegal Sentence, which was filed back in 2016, it appears to have have been abandoned. Back in January of this year, the Court allowed the petitioner to secure the assistance of an attorney to represent him, but he has not done so, and the passage of six months seems to indicate that he has lost interest, or realized that his case has no merit at law.

Alternatively, Illarramendi was a difficult client during his Federal criminal case, and he went through a number of attorneys. He may be having a very difficult time obtaining counsel, as word may have gotten around among the Connecticut Federal criminal defense bar.


Persona non Grata in Antigua & Barbuda
 Our recent article, identifying deportation as the appropriate legal remedy for individuals in Antigua who commit crimes, and are non-nationals, such as the disgraced Asot Michael, is based upon the official policy statements made last year by the country's Prime Minister, Gaston Browne. Will Antigua follow its own law ?

On October 10, 2017, in an article appearing in the Antigua Observer, entitled "PM Says Deportation for Non-National Criminals," Browne was extensively quoted, regarding the Government's position on the issue. It is to declare the non-national criminal as Persona non Grata, meaning unacceptable and unwelcome, and subject to immediate deportation.

This is the PMs most relevant statement, taken verbatim from that article:

 " The fact we just deported one of them yesterday, and we have in custody four individuals
    who we are making persona non grata ...     what we are sending to this population is a
    strong signal that this government has no tolerance for crime..."

Therefore, as it is the expressed national policy of Antigua & Barbuda to deport those who commit crimes, as the lawful remedy, unless the Asot Michael scandal is either dealt with through the filing of criminal charges, or speedy deportation, then lawyers in North America, and in the European Union will continue to regard Antigua as a high-risk jurisdiction that does not follow the Rule of Law, and recommend against any foreign investment there, whether in the traditional mode, or through the Citizenship by Investment Program.

The Asot Michael t-shirt, available online


Although there have been scores of articles covering the recent adoption of the 5th Anti-Money Laundering Directive, it is always important to consult the original source, when seeking to both understand, as well as comply, with its provisions, as it is relevant to your individual situation. Therefore, reader are urged to review the complete text, which they may access here.

Saturday, June 23, 2018


Supernotes inside warehouse in ROK
It appears that there is another player in the mystery surrounding the Series 2006 US one hundred dollar "Supernote," the literally undetectable counterfeit North Korean-manufactured American currency that has strangely remained stored, in controlled environments, in East Asia, since its production. An exemplar of that note was examined, in a laboratory, by a US law enforcement agency, which concluded that it was of Chinese, and not North Korean, origin.Why would it make that mistake ?

Sources in South Korea state that the Supernotes, huge quantities of which remain in obscurity in cold storage in seven military and government facilities there, though of North Korean manufacture, were shipped through the Peoples' Republic, and that there are also warehouses inside China that contain pallets of Supernotes, as well as of counterfeit currency of Asian countries.

One additional note; though we tend to regard the organized crime syndicate that is known to control the Supernotes in the ROK as ethnically South Korean, it has major branches in Taiwan ( ROC), Hong Kong, and the PRC. It is therefore more international than South Korean.

If China has virtual command and control over the Supernote sites, through its affiliation with organized crime, and thus the ability, on order, to distribute in quantity, it may be in charge here, and not the DPRK. In any event, the truth, of known to US intelligence services, is nonpublic, classified information, and we will continue to be completely in the dark about the Supernote's latest, and apparently the most authentic version, and what will eventually become of the vast amounts of this most dangerous counterfeit. 


Judging by the comments that they have posted online, Antiguans are totally disgusted with the Asot Michael bribery scandal. His constituants are flocking to Internet websites offering further information, and that is apparently not sitting well with the cashiered ex-Minister of Investment. His henchmen have set traps for the unwary, with the goal of denying them the sordid details of his greedy efforts to extort millions of dollars, a new automobile, and an expensive watch, from a European investor seeking to do business in Antigua and St. Kitts.

What Asot's co-conspirators have done is to create a large number of bogus websites, all of which promise that they will deliver additional details of the scandal. Some even convince visitors to enter, with short website summaries that appear in Google searches, promising that they are "posted by" this blogger.

Some of the names of these contrived websites, which are made to look like blogs to the uninitiated, are:

When the victims click on the site, they are confronted with a totally bogus "Windows Warning Alert," and a recording that orders them to call a toll-free number, and if they don't, they will be reported. Of course, since I am running a Mac, the warning is meaningless, and it is untrue anyway.

Readers who have encountered one of these nightmares would do well to force quit their browser, or shut down and restart their computer. Run your anti-virus program to be certain, but the whole thing appears to be a scam, to discourage you from accessing more of Asot's dirty laundry. He has a long history of hitting below the belt in Antigua.

This will give you some idea of the depths to which Asot Michael, and his support network, maaning the Antigua & Barbuda Labour Party, will sink, to protect the cash flow that results from systemic corruption at the highest level. The question is whether he, or any other Antigua politician, will ever be indicted for corruption.


The infiltration into governments of the majority of major Spanish municipalites by Podemos, a far-left political party, financially supported by both Venezuela and Iran, has resulted in a major political shift in Spain. The well-placed fear is that the two supporting countries, which are the subject of international as well as US sanctions, will use unsuspecting Spanish entities or individuals, to evade sanctions. bad actors could ally themselves with international organized crime groups that play their dark trade inside Spain, and could effectively front for Iranian interests, using Venezuelan proxies.

Given the recent US Federal criminal case, against the owner of Malta's Pilatus Bank, for funneling dollars from Venezuela, into Iran, in a huge sanctions evasions case, it is prudent to expect that there will now be clever efforts to use Spain for that purpose, and as such one should raise Country Risk for Spain at this time, if you are a compliance officer at a North American bank.

Friday, June 22, 2018


Inasmuch as reliable sources in the United Kingdom report that criminal charges for bribery against Asot Michael will be filed shortly, certain powerful politicians in Antigua face a dilemma; how to avoid extraditing Michael to the UK, without seriously damaging diplomatic relations with the Crown. While Antigua has easily prevented the extradition of its former financial regulator, Leroy King, to the US in the Allan Stanford billion dollar Ponzi scheme, the influence of the British Government in its former colonial possessions cannot be underestimated, and it could take action with long-term effects, like the termination of visa-free privileges for Antiguan nationals.

 Michael, who is known to have been a "fixer" for both the Bird and Browne governments, could decide to cooperate with the authorities, in exchange for a reduced sentence in Britain, and disclose information damaging to powerful Antiguan politicians, both past & present.

Headed for prison or deportation ?

The solution is to deport him, as Michael was not born in Antigua & Barbuda, but in Guadeloupe, the French Antilles. That way, they will not be taking heat from Britain, from refusing extradition, nor fearing exposure of the massive amount of official corruption that Michael can testify to, if he sits in the dock in a British court.

Antigua has an image problem of late, due to the international perception that official corruption is rampant, mainly due to the failure of the ruling Antigua & Barbuda Labour Party (ABLP) to rein in its leadership. Several local American corporations have left in recent years, and now the call center contracted to serve Amazon is closing, allegedly due to the negative publicity about Antigua. More than 300 Antiguans are losing their jobs at the call center.

The Asot Michael scandal is only making a bad situation worse; send him home to Guadeloupe, unless you want to risk either the ire of the UK Government, or the exposure of a massive amount of bribes and kickbacks.

Thursday, June 21, 2018


A father and son team, who laundered one hundred million dollars, coming to them from Venezuela, into and through the United States, were sentenced in US District Court in New York to only eight and four months' imprisonment, in a case which will definitely not serve as a deterrent to others tempted to engage in criminal activity. The defendants, Luis Diaz jr., and Luis Javier Diaz, who will also be subject to two years of Superviased Release, face substantial forfeiture proceedings, but no more prison time, although the US Probation Office suggested a five year sentence, and the US Sentencing Guidelines computation was 13 years or more.

The defendants used their Miami-based company, Miami Equipment & Export VO., to transfer funds from Venezuela, for a fee, as an unlicensed money transmitter, using fake invoices, which recited that they were for "consulting services," and deducting fees for those illicit services. Much of the wired funds went to a British Virgin Islands corporation controlled by their Venezuelan clients.

How can sentences of only a few months operate as a deterrent to others ? What is a fair sentence for money laundering large amounts of money ? We cannot point to a specific sentence that is sufficient to act as a deterrent to others, to promote respect for the law, and to establish accountability, but what we see here is definitely insufficient. Indeed, it might just be regarded as such a small slap on the wrist, as to encourage others to become money launderers.


The most lethal weapon that the DPRK has is not nuclear, it is financial. It is the Series 2006 Supernote, the latest counterfeit USD$100 bill, printed in North Koreas, on plates crafted by the North's organized crime syndicate in the ROK, and sitting, well-guarded, in seven secure warehouses in the south, awaiting orders for global distribution. Will Kim Jong Un make that call in 2018 ?

Only a few of these bogus notes have surfaced in recent years:
(1) A number were passed In North China in 2016.
(2) One was identified in Seoul, South Korea, in late 2017.
(3) Advertized for bulk sale in 2018, in Singapore.
(4) A large quantity was reportedly stolen by a defecting DPRK Colonel in China in early 2018.

Will Trump anger Kim to the point that he opens up all those pallets of Supernotes ? We cannot say, but  considering that the United States is in denial over their existence in quantity, as well as the relationship between the dominent South Korean organized crime syndicate and the DPRK, expect that it will later be written off as just another intelligence failure, when the Supernotes fly.