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.


Wednesday, June 20, 2018


A new leak of internal documents at the now-closed law firm of Mossack and Fonseca has revealed that, in the aftermath of the chaos created by the release of the "Panama Papers,"the firm desperately sought to identify the beneficial owners behind the thousands of shell corporations it formed in several offshore tax havens.

The International Consortium of Investigative Journalists (ICIJ), which exposed the original Panama Papers, reports that the law firm tried to make up for years of neglect, in attempting to conduct the due diligence it had deliberately neglected when it formed all those dodgy shell companies. The ICIJ has acquired correspondence from the firm in the period after the release of the Panama Papers, until the firm closed.

Readers who wish to follow Panama Papers 2.0, should access the ICIJ website at


The House of Assembly,  Dominica's Parliament, is set to consider on June 25 an Anti-Terrorism Law that will effectively eliminate all politial dissent or opposition to the administration presently in power, by improperly classifying all types of opposition, including peaceful protest, as a terrorist act. The overly broad definition, as contained in the proposed law, will prevent Dominicans from exercising their Constitutional right to dissent and protest, against a corrupt, incompetent government.

Unilke anti-terrorism laws in other countries, the proposed Act does not contain any provision excluding acceptable forms of peaceful protest asnd dissent from the definition of a terrorist act.The impact of this legislation, if it becomes law, is to allow the govenment to charge dissenters and protesters, even if peaceful, as terrorists, and impose a prison sentence upon them, of up to twenty-five years. Dissent is being criminalized, under the guise of fighting terrorism.

The net effect of this new law will be to eliminate the Opposition, in all forms, and to turn Dominica permanently into a one-party state, as all dissent will be classified as a criminal terrorist act, and suppressed.  


We note that the Government of St. Kitts has reported that it has taken in 1200 applicants for its low-cost $150,000 Hurricane Relief CIU (CBI) Program. At the same time,  the Government of Cyprus has announced that it is limiting the total number of CBI passports issued annually this year to 700, and it will take up to six months to conduct enhanced due diligence upon the applicants. Does Cyprus know something the authorities in St Kitts don't ? Absolutely.

The short answer is that individuals conducting due diligence on CBI applicants (which should be enhanced due diligence, not merely due diligence-level compliance) must have sufficient time to thoroughly examine each applicant, wait for inquiries made abroad to return, and if necessary perform follow-up on the results. If they are under pressure to complete files, due to a large backlog of pending cases, true enhanced due diligence, which cannot be rushed, may suffer, and unsuitable applicants will be approved, only to subsequently get arrested, with their CBI passports in hand.

CBI jurisdictions must accept only quality applicants, which they cannot do if they are into quantity, for the sole reason of maximizing cash flow. Given St Kitts' past history of abject failures in its CIU program, unless it wants to see further compliance failures, with the attendant negative publicity it would do well to put a ceiling on passport issuance, and at the same time truly raise its level of inquiry to enhanced due diligence, which history tells us it does not conduct upon its applicants.  

Tuesday, June 19, 2018


St. Kitts & Nevis recently sent an official contingent to the capital of Canada, in a full court diplomatic press, intent on convincing senior leaders to again allow visa-free entry of its passport holders to Canada. The Kittitian diplomats who met with government officials, which included its Minister of Foreign Affairs, and the SKN High Comissioner to Canada, have long been seeking to abolish the Canadian visa requirement, without success, and sought to use family ties, and trade and investment connections, to pursuade Canada's officials to bend to their will. It appears that they failed.

The personal meetings, which included House of Commons leaders,  and Canada's Minister of Immigration, Refugees and Citizenship, had a serious business goal. St. Kitts' Citizenship by Investment, or CBI, program, allows its passport holders visa-free admission to all Commonwealth of Nations jurisdictions, unless otherwise restricted, which Canada does. Of all the visa-free countries CBI passport holders wish to have access to, Canada is at the top of the list. Unless Canada revokes it visa requirement, the SKN CBI passport is not as valuable as those of competing East Caribbean States with CBI programs. This means fewer lucrative CBI sales, hence the personal visit to Ottawa.

Unfortunately, since the St; Kitts CBI program has still not upgraded its CBI applicant vetting procedures, to the level of Enhanced Due Diligence, both Canada and the United States will contiue to regard the holders of SKN passports as high-risk, punishing legitimate native-born Kittitians, as they troll for dodgy CBI passport holders. Someone should tell that to the SKN Minister of Foreign Affairs.

Monday, June 18, 2018


Ali Sadr Hashemi Nejad
A number of curious filings thus week in the Ali Sadr Hashemi Nejad case, in US District Court in New York, raises a number of questions. Look at these docket entries and see if you can make heads or tails out of it:

(1) the last six documents in the case were all filed under seal. Why so many sealed filings so early on in the case ? These could be sealed indictments of additional defendants who are outside the United States, and not in custody. They could be also sealed due to national security reasons involving Iran.

(2) The court has rescheduled the Status Conference for mid-July, a delay of thirty days, "in the Interests of Justice," a phrase which is often used to grant additional time to cooperating defendants, so that their cooperation can further be exploited.

It is important to remember that he is charged with funneling more than $115m, paid under a Venezuelan construction contract, through the US financial system, for the benefit of Iranian individuals and entities. It is a major sanctions evasions case, and Nejad certainly has first-hand information about the pipelines through which Iran has, for years, moved billions of dollars through the US financial system, details of corruption at the highest levels, in Malta, where he effortlessly obtained a banking license, notwithstanding his and his family's background in sanctioned entities.

The other question is whether the Substantial Assistance being rendered by the kingpin of Iran sanctions evaders, Reza Zarrab, was instrumental in obtaining the indictment against Nejad. Do these cases intersect, and if so, who is next to be charged ?


I recently published, as exhibits to my article on the widespread use by Asian organized crime syndicates, counterfeit and altered HSBC bank documents, used to commit massive bank fraud in the region, especially in South Korea. The criminal element uses the bogus document to falsely claim assets, which to uses as references to take out loans, which are, of course, never repaid. The HSBC documents, of which there are hundreds, are reportedly being used in the Republic of Korea, Taiwan, Hong Kong, and in the Peoples' Republic, to borrow money.

While I noticed that a number of HSBC bankers have accessed my article, there has not been one official inquiry, or requested  information. don't they want to know how I acquired al those bogus HSBC documents, including account statements, HSBC officer passports, negotiable paper, and other financial instruments ? Don't they want to know who the individual members of the Asian organized crime syndicates are ?

Perhaps they simply charge off the losses, and ignore the criminals fleecing the bank, in an effort to avoid the negative publicity, which can drive away customers who fear becoming victims. Whatever the reason, they are failing to interdict financial crime, which only makes it grow stronger.  



I have been reading a number of articles of late, in the Caribbean media, bitterly complaining abut rampant de-risking at North American banks, and making all sorts of arguments for continued access to US & Canadian financial structures, through correspondent accounts. Whle some of the arguments certainly have merit, the de-risking situation in North America, where compliance officers at international banks are under increased pressure, and even fear the imposition of personal liability, for perceived ineffectiveness in their AML/CFT compliance programs, is only going to get worse.

North American banks will only retain their correspondent acounts at Caribbean banks if they are afforded a window into the local accounts of the offshore banks, which means Know your Customers' Customer, or KYCC. This means having softeare installed in each Caribbean bank, that will allow the bank in New York or Toronto to examine their correspondent bank's local accounts in depth, with the same access as the local bank has. It is as simple as that.

There's no great mystery about how this is accomplished; the Csribbean bank, and its Northern correspondent both download commercially-available software. There's even one created locally*, by IT techs in the Cayman Islands, for that express purpose. The problem is, in the Caribbean, with rare exceptions, no banks are willing to do it,  notwithstanding that the cost to the banks are minimal.

Why the hesitation ? I am afraid the most likely excuses are also the reasons that the North American banks want to close those correspondent accounts in the first place. The Caribbean banks say that they do not want to expose the privacy of their customers. In plain English, they do not want these types of customers/clients exposed:

(1) Accounts of corrupt government officials,and their political allies. An examination of such accounts could show deposits far in excess of an official's known salary and minimal assets.

(2) Accounts of dodgy tax evaders, drug traffickers, or individuals engaged in illegal activities.

(3) Accounts of individuals from sanctioned countries, deposited without any verification of Source of Funds, and who may be internediaries, or terrorist financiers.

(4) Accounts that hold income from Citizenship by Investment (CBI) applicants. Knowing how many deposits, and their country of origin, could provide clues to foreign law ernforcement aencies as to the volume of CBI passports issued, and what countries they ase coming from.

Unfortunately, unless true KYCC capability is granted to the onshore banks, you can expect increased de-risking, forcing the losing banks to funnel US Dollars through third parties, at increased cost, and with additional delays for clients. If KYCC does not come to the Caribbean, you can count on an eventual deterioration in local economies, and the reinforcement of the perception that bank secrecy exists there only to keep illicit clients out of the sunlight. The banks must choose KYCC to survive.
*Readers who are not familiar with the software I am describing may email me for details. As this is a non-commercial blog, we do not promote specific goods and

Sunday, June 17, 2018


Donald Trump, Andrey Bogdanov, Ivan Kazan, Phil Shloesenberg

  There has been zero coverage, by any media, of the curious fact that both former Panamanian president Ricardo Martinelli's District Court extradition case, as well as his subsequent Eleventh Circuit appeal, were effectively sealed, and remain unavailable to the public and press. Nobody has questioned why the courts have denied access to the pleadings in the files; indeed, we have not even seen any ruling or order that has closed these files to inspection. Why was the appeal also restricted, which is an extremely rare occurrence ?

While national security is a valid reason to restrict Federal Court files, there has never been a whisper out there that this is the reason. To the contrary, reliable sources abroad, as we have previously reported, confirm that it is common knowledge in the Republic of Panama that Donald Trump, and one of his sons, engaged in conduct in Panama City that would be extremely embarrassing if disclosed in the media. There appears to be a news blackout in place.

Longtime Panama watchers know that one of the charges that Martinelli has been exrtradited for include widespread illegal video and audio surveillance of powerful people, caught in private and intimate moments. Martinelli used tapes and videos to blackmail his victims, and the word is that two Trumps are allegedly on the tapes. Is that really why the Martinelli court files were restricted ?

Given the wide-ranging Russian election influence investigation conducted by the Office of Special Counsel, and the Russians involved in both sales, as well as purchasers, of the Trump Ocean Club in Panana City, we wonder whether its investigators have read those files.


Back in October, 2017 the principal defendant in the Federal Iran oil-for-gold sanctions evasion case, Reza Zarrab, waived the filing of an Indictment in his case, and a Superseding Information was filed against him. This is an indication to the Court that the defendant is rendering Substantial Assistance to US law enforcement; in truth and in fact, he did testify against his former Turkish banker, Mehmet Atilla.

Eight months later, Zarrab has not only not been sentenced, his sentencing date has not even been set. His cooperation, which could include Grand Jury testimony against others in his sanctions evasion organization, making incriminating documents available, and placing recorded telephone calls to targets, must be extraordinary. Does he have so much critical evidence, or is the US Attorney waiting for the next trial, where he will again testify, before setting his sentencing date, so that he can get sufficient credit for his cooperation ? I believe this is so.

 Several of his associates, including Babak Zanjani and Alireza Monfared, both of whom are in Iranian custody, and who assisted him in selling sanctioned Iranian oil and laundering the proceeds of this criminal conduct, may already have sealed indictments on file against them, An examination of the court docket of late shows only that numerous sealed pleadings have filed.

How many individuals have been indicted already, but inasmuch as they are not yet in Federal custody, are unaware that they are defendants in America's largest Iran sanctions case ?

Saturday, June 16, 2018


Maria Efimova
An appellate court in Greece has affirmed a lower court decision declining a request from Malta to extradite the Russian whistleblower Maria Efimova, the former bank employee who helped the assassinated journalist Daphne Caruana Galizia expose financial crime and Iran senctions evasion at now-shuttered Pilatus Bank. The Maltese government's petition for extradition was held by the lower Greek court to be vague and irregular, and found that she would neither get a fair trial in Malta, nor be protected while in custody.

The arrest warrant from Malta, which alleged that Efimova provided false evidence, false accusations, and theft, allegedly was politically motivated, and have no factual basis. Powerful politicians in Malta, some of whom have been exposed in the Panana Papers, and thereafter scalded by the media for reputed corruption, are believed to be behind the government's action.

The court system in Malta, whicb is regarded by many observers as corrupt, with two recent court cases involving judges accused of bribery, may have been a factor in the Greek court's ruling as were allegations of governmental corruption in Malta, irrespective of the law. The corruption, when paired with a citizenship by investment (CBI) program where effectiveness of the due diligence investigations of applicants has been questioned, has increased Country Risk for Malta among compliance officers in the EU, for valid reasons. Investigations by the EU, into both the CBI programs, and money laundering allegations, are pending.

Friday, June 15, 2018


For those who predicted that the former president of Panama, Ricardo Martinelli, would never be extradited to face prosecution for the $13m embezzlement and massive illegal surveillance charges, here he is behind bars, where he will remain until trial.  


Flag of the Governor of Anguilla
  Readers who have read my autobiography, The Laundry Man (Penguin/Random House UK) know that the British Overseas Territory of Anguilla was a hotbed of money laundering in the 1980s, until reforms in the next decade more or less removed it as a jurisdiction favored as a destination for illicit wealth. Most of the overt money laundering has moved to independent East Caribbean States, where corrupt politicians have allowed it to flourish, in exchange for bribes and kickbacks. Financial crime had disappeared from Anguilla, or so I thought.

So why, in a white paper recently released on Dubai money laundering into real estate investments, do we see that several Anguilla corporations* have been employed to violate international sanctions on Syria ? The companies were employed to own several commercial vessels that smuggled oil ftom Russia, the Ukraine and Croatia, into Syria.

Anguilla companies named are:
(1) Metal Shipping Ltd.
(2)  Maestro Shipping Ltd.
(3) Splinter Shipping Ltd.
(4)  Milano Shipping Ltd.

The Anguilla companies appear below marked with a yellow border.

While there is little the Crown can do when Commonwealth states, which are independent sovereign nations, violate international (UN & US) sanctions, the Governor or the Foreign Office can certainly step in here in Anguilla, and reign in the lawyers who are forming these companies and sending them off to Syrian clients. The question is, will they do so ?
* We see in the illustration above that St Kitts is also a jurisdiction where companies violating Syria sanctions were employed. Before St Christopher & Nevis became independent, it was linked to Anguilla, so I suspect the attorneys or corporate formation specialists who performed the legal services are the same.

Thursday, June 14, 2018


The Washington-based Center for Advanced Defense Studies, using leaked real estate data from Dubai, UAE, has published a major white paper, documenting the extensive ownership of pricey Dubai real estate, by criminal elements, including sanctioned individuals and entities. It is well documented and is recommended reading for anyone who wants to lift the veil on Dubai, and reveal exactly who is buying those million dollar properties. There are extensive charts & pictographs.

Readers who wish to review the complete text of the thirty page C4ADS document, which is in pdf format, may access it  here.


 While we have previously written several articles on this blog, detailing how important the utility of social media resources in routine inquiries made by bank compiance officers, prior to account opening, as well as its usefulness in successful law enforcement investigations, social media searches have also become an integral part of all Enhanced Due Diligence procedures. The widespread use of Internet reputation management companies, and the artful placement of so-called "fake news" articles in the media, has eliminated the ability to rely upon much that is posted to the world wide web, even if it sems to come from authoritative sources.

Social media searches are valuable source of negative information that your target may have worked very hard to keep from the Internet, but which artful and focused inquiries on social media will reveal. For example, a photograph documenting the presence of what you thought was a successful businessman-client at birthdays, holiday observances, charitable events, or simple gatherings, will often show close links to his more disreputable (i.e. organized crime) associations. Individuals may reveal interesting aspects of their lives when they as off-duty, or they think they are participating in private moments.

Another example is information ,which can often be gleaned only from social media sites, about your target's close friends' relationship with criminal elements. Is he the covert intermediary between your target and individuals who will disqualify him from any serious consideration for a directorship, large commercial loan, or investment in a joint venture ?  Often you can find evidence of such a relationship hiding in plain sight in a social media source.

When conducting an effective Enhanced Due Diligence investigation, Social media resources have become as important as your reliance upon facial recognition software, and of Second Generation, cloud-based information. Do not neglect to make it a mandatory element of all your EDD inquiries, lest you miss an important discovery which could affect your recommendations about the target's suitability, or lack thereof.

Wednesday, June 13, 2018


 Long before 9/11, I was actively supporting significant anti-money laundering legislation pending before the US Congress, and actually testified three times, before committees of Congress, in 1999 and 2000. Unfortunately, powerful bank lobbying forces opposed to the additional expenses that effective AML compliance programs must cost, defeated all nine of those bills, and they never became law. It might be important to note that convicted fraudster R Allen Stanford was one of the major supporters of those lobby efforts.

On December 29, 2000, I wrote a letter to the New York Times, Stop Money Laundering. pointing out how none of the critical bills were passed, and the fact checker at the Times verified that my statements were sadly true and correct. Readers who wish to read that letter can access it here.

Now Republicans in the House of Representatives are at it again, obviously putting their campaign contributors ahead of the war on money laundering. The provision, placed in the Counter-Terrorism and Illicit Finance Act, which mandates complete disclosure of beneficial ownership of corporation, was cleverly deleted from the final draft, which can be viewed here.  The vote on the bill, with the beneficial ownership requirement removed, is due for a vote tomorrow (June 14th). No wonder many experts believe we are losing the war on money laundering.


 I recommend that you review the latest Advisory of the Financial Crime Enforcement Network (FinCEN-2018-A003), entitled Advisory on Human Rights Abuses enabled by Corrupt Senior Foreign Political Figures and their Financial Facilitators. The fifteen page white paper includes case studies, Red Flags to watch for, and contains extensive and helpful footnotes for further research.

Readers who wish to review the complete text of the Advisory can access it here. Go to the webpage, then click on the blue hyperlink to access the pdf file.


Ali Sadr Hashemi Nejad

His name is Ali Sadr Hashemi Nejad, an Iranian national currently in Federal custody in New York,and charged with multiple violations of US sanctions on Iran, by concealing the role of Iran in US Dollar payments through the American banking system. The charges are:
(1) Money Laundering.
(2) Conspiracy to defraud the United States.
(3) Conspiracy to violate IEEPA*.
(4) Bank Fraud.
(5) Conspiracy to Commit Bank Fraud.
(6) Conspiracy to Commit Money Laundeing.

The senior executive, and owner, of Malta-based and incorporated Pilatus Bank, Nejad faces a maximum of 125 years in Federal Prison for his crimes. So why is he the subject of a CBI passport article ?

It appears that Mr. Nejad acquired four (4) CBI passports from St Kitts & Nevis, according to reliable reports. The fact that the CBI passport agency in SKN issued him so many identity documents speaks volumes about the ineffectiveness of the CBI program's operation.

(A) His attorney, on spin control, has attempted to diffuse the situation by claiming that two of the passports had all their visa pages filled in, and one, not completely full, contained some sort of "authorization" (Visa ??) for the United Kingdom, This is a flagrant lie, as St Kitts passports holders, as nationals of a Commonwealth state, enjoy visa-feee access to the UK.

(B) This nonsence about two passports being completely full is another falsehood. Anyone can have extra pages appended to an existing passport, and many jurisdictions do not even stamp your passport any more.

(C) Our Iranian sources have stated that these passports contain different  names, and/or diferent dates and places of birth. Money launderers, which Mr. Nejad is alleged to be in the indictment, frequently alter the spellings of their names, and birthdate information, slightly, to defeat government computer searches at Customs.

(D) Is one these passports a diplomatic passport ? That might explain why Nejad has more than one. Of course, he's no diplomat, not accredited or posted anywhere, a violation of UN treaty laws.

The case is a classic illustration of the shortcomings of the current St Kitts CBI program; that program must be the subject of a major upgrade, if it is to survive, and prosper. Otherwise, CBI passport holders may find themselves detained an international customs kiosks, interviewed at length, and even detained, all because St Kitts has failed to raise its program to an acceptable level.  
Nejad is alleged to have placed obscenely high processing charges upon Iran, in some cases as high as forty per cent (40%) on transactions.  

Tuesday, June 12, 2018


Veneuela's oil industry* has declined to the point where even exports to the country's wholly-owned US oil company, Citgo Petroleum Corporation, have ceased, forcing that firm to itself buy oil on international markets. Accordingly, Petrocaribe, Venezuela's preferential sales program to the states of the Caribbean, is unable to ship to the recipients of that program. That fact is haunting the region's governments this week.

The response of the East Caribbean states has been discomfort, at times even bordering upon panic, for they will now be forced to buy fuel on the world market, which will not only be pricey, but will be required to pay for it, rathen than the generous deferred terms that Petrocaribe offered. Many of those countries do not have sufficient liquidity in their treasuries to meet the higher 2018 prices in today's marketplace.

Countries of Petrocaribe

Add to the mix the depressed post-hurricane tourism estimates, and the decline in foreign investment due to perceived storm damage, and you have a perfect storm of desperate financial need, which increases the risk that dirty money from abroad may find willing recipients, most likely in more than one country.

Compliance officers at international banks should be aware of the names of the countries that were Petrocaribe recipients, and take that into account in the future, for risk assessment purposes:

Antigua & Barbuda
Dominican Republic
St Lucia
St Vincent & the Grenadines
St Kitts & Nevis

* To complicate hemispheric oil issues further, Iran, with Venezuelan assistance, illegally sold massive amounts of oil in Latin America, notwithstanding United Nations and United States sanctions. It is not known whether any oil vended through Petrocaribe was of Iranian origin. Iranian sources insist that there are still billions of dollars still due, owing and unpaid from those sales.


The recent commencement of criminal investigations, against a number of minor employees at the defunct Panama city law firm of Mossack & Fonseca may signal a change in focus, from the name partners, to low-level participants in the international money laundering and tax evasion program exposed in the Panama Papers.

The timeline shows that the clock has been ticking on the abysmally slow progress of the case:

(1) Panama Papers released to global media; April 2016.
(2) Mossack & Fonseca partners arrested; February, 2017.
(3) Partners bond out of jail; April, 2017.
(4) Law firm closes down; April, 2018.

Given that sufficient evidence to convict the partners many times over has been in the public domain for more than two years, the fact that investigations are continuing is suspicious at best. Will Jurgen Mossack and Ramón Fonseca, the founding partners of the law firm, ever go to trial ? It is beginning to appear more and more unlikely to experienced Panama watchers, who are familiar with the corrupt status of the country's court system, where illegal gratuities often change hands, and influential lawyers can delay justice indefinitely through bribes and favors.

While the Panama Papers have focused the financial world's attention on the sordid and opaque offshore corporate formation industry, and caused global awareness, the M & F partners may never see the inside of a Panamanian prison.

Monday, June 11, 2018


PM Harris, ex-PM Douglas
 In a meeting last month, the current Prime Minister of St Kitts & Nevis disclosed some critical historical information about official correspondence on file in his office, regarding the United States' conclusions about the previous SKN government's lack of effectiveness, in properly administering the due diligence portion of its CBI program. 

The Prime Minister, Timothy Harris, stated that there were several letters from officials in the United States, critical of the deficiencies of the St Kitts CBI program. One specific letter, from then-Secretary of State John Kerry, to then-Prime Minister Denzil Douglas, flat out told Douglas to cease and desist issuing any additional CBI passports, due to the manner in which the program was being operated.

Obviously, Douglas never complied with Secretary Kerry's request; subseqently his US visa was revoked by Kerry, and it has never been reinstated, notwithstanding repeated requests.

A reform element in St Kitts is seeking to elevate its existing CBI program, which is still poorly regarded by the United States, which has never rescinded the 2014 FinCEN Advisory, through an upgrade to Enhanced Due Diligence investigation of all applicants. Employing EDD could also ease the relationship with Canada, which also imposed visa requirements on SKN nationals, reportedly based upon the flaws in the CBI program vetting procedure.


Martinelli coming home
Sources in the Republic of Panama have advised that the country's fugitive former president, Ricardo Martinelli, said to have been the most corrupt leader the country has even known, is being extradited from the United States, arriving in Panama City sometime later today. He faces charges of embezzlement, and of conducting an illegal surveillance program upon prominent Panamanians.

Martinelli has been held in Federal custody, in a facility in Miami, while his appeal of an adverse ruling regarding his extradition was pending, but he recently abandoned that appeal, allowing the Secretary of State to order his extradition.

Sunday, June 10, 2018


The exposure of a "sponsored news story" about the purported arrest in China, of a senior officer of a prominent CBI real estate developer, as a total fabrication, once more confirms that there are powerful, albeit hidden, forces in the East Caribbean, devoted to the pursuit of a hidden financial agenda .That agenda is to divert potential affluent foreign investors from certain CBI programs, and toward others where the hidden forces have a large financial stake in increased sales.

What happened recently in the news has been traced back to a  dodgy businessman, formerly from one of the East Caribbean states but now living in the United States, who allegedly sought to place "fake news" in several Caribbean media. One online website published the information, without confirming the story, leading others to blindly follow, assuming, incorrectly and negligently, that it was true and correct; Big mistake.

This is but one example of how news management forces in the Caribbean seek to mold public opinion against one or more CBI jurisdictions, while cleverly leaving out the ones it can most benefit from, so that CBI applicants are being steered and directed to the "clean" alternatives championed by certain parties.

How are CBI applicants subtly pushed in one direction, meaning one jurisdiction, over others ? Let us cite some obivous ploys:

(1) financially supporting what appear to be objective online news services, when in truth and in fact, they are heavily weighted with pro-articles, concerning one jursidiction, and negative news about their competition.

(2) Placing what are referred to as Opinion pieces, or Commentary, of content slanted against certain CBI jurisdictions, on news sites.

(3) The placement of "sponsored" content, often paying well for the privilege. Warning: that content may not be labeled as such. These are often puff pieces, extolling the virtues of one country; This may occur on strictly local media sites,where advertising revenues can influence the content,  as well regional, commercial news and information services.

(4) The use of surveys,  forums, and non-profit industry groups that are little more than shills, and other so-called objective yardticks, showing one CBI jurisdiction as head and shoulders above another. All negative information, concerning the one which is being the subject of the advocacy, is suppressed or glossed over.

So, who is doing all this, spending a lot of money to fill any search engine results with one entry after another, faithfully pushing an agenda designed solely to hawk one jurisdiction as the best choice ? We cannot say, as the evidence is not sufficient to prove who is behind it, in as court of law. Our best guess:

(A) An international CBI consultancy, who wishes to direct market shares from CBI jurisdictions where it does not have a favorable position, to one where it enjoys a major share of profits, in its commission structure, or

(B) Certain financially flush senior government officials, at a specific state where they themselves have a lucrative, although probably covert, means of "profit sharing," and who simply want much more of the same.

Frankly, it could even be a joint venture between (A) and (B); whoever it is, the news management efforts have made any accurate assessment of the truth of information on Caribbean news websites problematic at best, and to be avoided for any compliance enhanced due diligence, as well as risk management purposes. Consider the "news" from these resources to be either deliberately disinformation, or sugar-coated, either of which renders them unsatisfactory as news sources.