HOW MANY COMPLIANCE OFFICERS WILL BE INDICTED IN THE MALTA MONEY LAUNDERING SCANDAL ?

 

As one knowledgeable individual recently reminded me, there are a number of major money laundering scandals running around the Republic of Malta, including Pilatus Bank, which moved hundreds of millions of dollars stolen from the Venezuelan government; Satabank, suspected of concealing illegal Libya oil smuggling payments, and other local entities remitting payment to Iran in violation of international oil sanctions. Also, don't forget the bribes and kickbacks accepted by senior government leasers, and laundered, with the intentional ignorance of compliance, through local banks, through a local culture that shouts "Don't ask, Don't tell."

I count three or four compliance officers, directors of compliance, and Money Laundering Reporting Officers (MLRO) who stand a very good change of being indicted, along with the senior officers of their banks or non-bank financial institutions. We wonder whether those compliance officers, formerly employed as gatekeepers, an obligation which they completely ignored, now at their peril, even considered that the long arm of American criminal law would reach out and touch them from across the Pond.

 We call it Extraterritorial Jurisdiction; even if the Malta-based compliance officer has never been to the United States, when he or she moved US Dollars through the global financial system, they transited the New York banking center, and jurisdiction attached. US Courts have uniformly validated this principle of law. A non-US citizen can be found liable if any part of a transaction occurs in the United States. Any Dollar transaction which is processed and cleared passes through NY

Add to this Willful Blindness; also variously known as contrived ignorance, or intentional ignorance, it occurs when a person seeks to avoid liability by intentionally keeping oneself unaware of the facts that would render him or her liable or implicated in a wrongful act.  Having tunnel blindness whilst money laundering is going on around all around you will get you indicted, and given the special responsibilities of compliance officers, regarding Suspicious Activity Reports, and enhanced Due Diligence, they are required to report such issues, and commit professional malpractice on a civil level when they fail to do so, in addition to the crimes they will be charged with.

Therefore, we caution the four compliance officers to quickly engage the services of a competent American criminal defense attorney or law firm; hire the best lawyers that you can afford, because you are going to need them, especially if you are named in more than one case, in more than one District, which is a logistical nightmare for any defendant, let alone extremely expensive.