TEST THE EFFECTIVENESS OF MONEY LAUNDERING TRADECRAFT INSTRUCTION THROUGH NON-NONSENSE EVALUATION

We trust that you have already read our recent article detailing the absolute necessity of teaching advanced money laundering tradecraft to frontline compliance officers, and of employing a technique designed to effectively imprint this important knowledge upon them. See What's the Best Method to Teach Compliance Officers Money Laundering Techniques (June 25, 2023). That is step one in the process; to insure that you have successfully imparted the money laundering techniques to your attendees, it is critical that you complete the program with a unique form of testing.

I was once tasked, by a former senior member of the American law enforcement community with finding out whether the senior officers of a foreign financial institution could, on demand, and in a real-time pressure environment that simulated realistic conditions, correctly identify specific financial crime/money laundering activity, such as they might expect to experience in their bank. Add to the mix the fact that the bank was located in a high-risk country that was both a transit center for narcotics smuggling, as well as for money laundering, often complicated by corruption.

My method was definitely a baptism of fire for the officers; they were given a number of case studies which had specific solutions hidden in the fact patterns, and assigned only a few precious minutes in which to not only identify the technique in progress in the bank, but create a real-time response and solution to protect it. They were bombarded with one after another in sequence; no sooner had they solved one problem, another was offered up forthwith, and the clock started on the next set of facts.

The officers were allowed to work as a team, and to verbally brainstorm about potential typologies, and then challenged to come up with a recommendation, literally on the fly. Yes, in this case, the group came through with flying colors, because they had been thoroughly trained in the past, under the supervision of the individual who brought me in to test their mettle. 

After you have trained your people, hopefully using both the casebook/case study technique & delivering the content through the Socratic Method, it is time to test their retention, as wella s your own effectiveness. Put them through a post-lecture tradecraft identification endurance contest, preferably on a day after they have absorbed your material, to confirm that they not only absorbed the content, they will instantly recognize it, even under trying conditions. Any errors in their conclusions are to be corrected, and the techniques they missed covered once more; show them where they missed the mark, and use positive reinforcement to make the training a positive experience.

It is hoped that, through this method, you can improve the knowledge base of your frontline staff, and stimulate them to look at every group of transactions that they are monitoring in a new light, from an analytical perspective, and not just pass over something that they should catch. 

JULY MONEY LAUNDERING TRIAL OF FORMER BVI PREMIER ANDREW FAHIE RESET FOR JANUARY

The money laundering, drug trafficking and racketeering trial of former British Virgin Islands premier ANDREW FAHIE, which was scheduled for July 17, has been moved to January 8, 2024, at the request of the defendant's counsel, who cited several Discovery reasons why additional preparation was needed. She continues to seek the identity of a Confidential Informant in the case, and wishes to file, and have heard, additional pretrial motions.

Fahie's two co-defendants, Oleanvine Maynard, the former head of the BVI Ports Authority, and her son Kadeem, have already pleaded guilty, and face a sentencing date of August 21. All of the charges against them but one have been dismissed in a plea Agreement, and they have promised to cooperate in the continued case against Fahie, which was already strong, as it includes video and audio surveillance recordings. The two co-defendants will most likely be seeking a Rule 35 Sentence Reduction after testifying against Fahie in January. Whether they will receive a minimum mandatory sentence next month is not known.

Given previous rumours that he planned early on to cooperate, and name other corrupt officials from both East Caribbean independent states and British Overseas Possessions in the region, this additional delay in conducting the trial is puzzling. Fahie risks an extremely long sentence on all counts should he go to trial and be convicted on evidence that appears to be overwhelming, taking only what has been publicly disclosed in the case. We shall continue to report on all developments as they occur.

MALTA INTENTIONALLY DRAGS ITS HEELS ON YET ANOTHER SHUTTERED MONEY LAUNDERING BANK

    If you thought that AML has improved in the Republic of Malta since European regulators took it off the Greylist, think again. The country's method of covering up rampant money laundering, delaying any action against money laundering banks for many years, until voters' concerns about the bank have literally passed into history and/or been defeated by the Statute of Limitations, continues to be the rule.  It insures that any guilty parties, money laundering facilitators amongst Malta's offshore financial services elite, never are charged for their role in massive money laundering activities at the bank, in this case, Bulgarian-owned SATABANK, although the case reminds us that officers at PILATUS BANK, alleged to be another major laundromat for the proceeds of crime, have never been held accountable for their crimes.

The current trick is to delay liquidation proceedings due to a years late move by the country's tax authorities, who have cleverly brought the disbursement of accounts to a halt. It doesn't appear that there is any tax liability, but in Malta, roadblocks are regularly thrown up by the authorities, which have the effect of indefinitely delaying matters until justice does a natural death through Old Man Time.

 Meanwhile, the bank's money laundering was uncovered back in 2018. However, Its license was not pulled until 2020, and no officers or directors have been charged with any financial crime, even though rampant money laundering of many millions of Euros reportedly went on throughout the bank's existence. A scathing report by the island nation's Financial Intelligence Analysis Unit (FIAU) never resulted in any indictments or arrests.

 Compliance officers at banks in the European Union have long learned to closely examine any major transaction originating in a Maltese bank, lest they find out years later, from a law enforcement agency of their own that the funds were illicit deporits artfully laundered in Valletta. Caveat Compliance Officer, please. 

 

READ THE SCATHING TEXT OF THE COURT DECISION SLAMMING THE LAWYERS WHO USED CHAT GPT FOR UNVERIFIED LEGAL RESEARCH

 

A $5000 fine and eternal professional shame was grossly insufficient, in my personal opinion. Read the facts about the malpractice involved, in the decision text, and judge for yourself whether the Federal Judge let them off easy. Who quotes from case law WITHOUT reading the decision?

CONDUCT ADVANCED AML/CFT TRAINING AT ALL LEVELS IN YOUR UNIT, TO ELIMINATE COMPLIANCE RASHOMON

 

Train Everyone, Please

Inasmuch as we have been talking about the necessity of teaching advanced and obscure money laundering strategies and methods to your frontline compliance officers, there is an important point that must not be overlooked: the need to train at all levels in the compliance department, including senior executives and managers who do not conduct investigation (CDD/EDD) of files for client onboarding, as well as transaction monitoring.

What we are seeking to avoid is what I like to call the Compliance Officer's Nightmare: he or she identifies a suspicious transaction or chain of events that, from experience,  constitutes a serious risk that money laundering or some other financial crime is in progress, and the bank is likely to be damaged. This conclusion is based upon some prior exposure to a similar event, most likely through training, and not through a previous encounter. The officer brings this quickly and directly to the attention of a superior, who dismisses its validity, for no other reason than the senior officer has never been exposed to such a fact pattern, and for that reason, hesitates to  investigate further, let alone confront a lucrative existing client about it. Call it ignorance and politics trumping compliance. We've all been there, my friends.

It is is known as the Rashomon Effect, but with a twist: Different compliance officers seeing the same set of facts, and coming to different conclusions. The reason this occurs is simple: the senior compliance executive (Director of Compliance perhaps?) has never had the advanced training undergone by his frontline staff. It seems he, or the board, thought such training should be confined to those individuals who review new client files, or transactions, all day, and not executives, who are supposed to manage them. That results in failure if professional ignorance results in malpractice.

In truth and in fact, if EVERYONE doesn't have the benefit of upper-level training, then what some junior person sees may be discounted by the people above him, with a potentially damaging outcome down the road, when law enforcement arrests the client, and his uninterrupted criminal operation in your bank. Insure that all compliance department staff, even those never directly involved with checking clients and transactions, get the same practical education as the workers. That way, you never have to endure what I call ignorance from above; train everyone, please, in Tradecraft. This includes the lawyers who are running your unit.

 

WHAT'S THE BEST METHOD TO TEACH COMPLIANCE OFFICERS MONEY LAUNDERING TECHNIQUES?

Assuming that you have secured an competent instructor, with at least a decade of frontline financial crime experience coming from one side of the law or the other, your next question is to decide what method will he or she employ to effectively teach money laundering tradecraft. The method is just as important as the content, because the goal is to imprint the specific techniques firmly into the attendees' minds, so that they can recognize each and every one in an instant, under the everyday pressures of completing their assignments on schedule.

The traditional structured lecture method, which is frankly dry, boring and causes the recipients to not only lose interest, but to begin to drift off into sleep, I cannot endorse. unfortunately, this is the typical lecture style used in compliance industry seminars and conferences. Even the narrative technique, which verges on story-telling, fails to adequately imprint the techniques to the extent where the compliance officer that we hope absorbed the material will quickly spot it under all circumstances and conditions.

My personal choice, and one which I know from experience is eminently effective, is the case study method, used since time immemorial to train lawyers, and reportedly pioneered at Harvard law School. where the professor works from casebooks, which contain notable cases. This technique has several unique features:

(1) Rather than give the student the answers, it forces them to perform an analysis, and to extract the issues from superfluous facts, so that they understand their significance. They learn what we call Issue Perception, which is a skill lawyers acquire by repeatedly reviewing cases,  exploring the fact patterns, and finding the answers within. Compliance officers need this skillset.

(2) The teacher generally does not supply any hints, but instead tries to draw out the solutions from the students themselves, employing the style of the Socratic method, but focusing upon challenging the students to extract the central issue. At the end of the sesion, the professor comments upon the student's conclusions, and adds in his wisdom, so that there is an understanding of the principle which he has been seeking to instill. 

(3) As a first-year law student in my youth, I was privileged to attend a Contracts class given by the law professor who was the model for Professor Kingsfield in the classic film The Paper Chase.  I know from personal experience how effective this sometimes strenuous, but stimulating, method is. That's how lawyers are made.

It is suggested that your lecturer prepare fact patterns in which all the typical, as well as advanced and obscure, money laundering techniques are hidden, so that the attendees can be challenged to extract them from each one, under time constraints, as they encounter in real life. Creating such a lesson requires extensive preparation, and which will not be possible unless the individual has a thorough understanding of the content. Choose your instructor candidate wisely, from his work history, and you will have an effective class.

For further information, you can reach me at: miamicompliance@gmail.com .

MASSIVE REAL ESTATE THEFT AND FRAUD CONTINUES UNABATED AND UNCHECKED IN BARBADOS

The diversion and rampant misappropriation of large tracts of prime real estate by a large number of corrupt attorneys, acting in concert, has deprived a substantial number of Bajans (Barbadians) of their family heritage. Overpopulation  of attorneys in the large island nation, and their knowledge that neither the bar association nor the corrupt courts system will rein in their illegal activities, has resulted in huge pieces of real estate being stolen from its rightful owners, during estate proceedings, through fraud and forgery, and through a number of illegal procedures through which the attorneys exploit and cheat generally uneducated local citizens out properties their ancestors acquired centuries ago.

The extent of the systematic fraud is so large that it cannot be ascertained; it reaches to the highest levels of the country's Supreme Court, and even to the Office of the Prime Minister. Many government officials, formerly attorneys in private practice themselves, engaged in such illegal conduct on their way up the political ladder, and therefore, not only are the corrupt attorneys guilty, but several senior government officials as well. Local media in Barbados, under the influence of powerful lawyers and businessmen, are afraid to expose these crimes, due to well-placed fear of being murdered for the truth. We have covered this subject in depth in recent years, and are now returning to it to educate any hotel or commercial enterprise considering purchasing real estate there, so that they are aware of fatal title problems that rule out any acquisition as unacceptable risk. 

Fortunately, the situation appears to have reached the point where activists amongst the many victims are gathering up others who are similarly situated, and who have lost real property through attorney  and/or corrupt government misconduct, to take action in jurisdictions where corruption is trumped by the Rule of Law; stay tuned.

THE UNSEEN HAND OF THE FATHER OF MALTA'S PRIME MINISTER SHOWS ITS DARK INFLUENCE

Fatherly advice or demands? Look at the nonverbals.

Political strife within the Republic of Malta, which is further destabilizing an already weakened government, seeking to sweep stubborn corruption scandals under the proverbial carpet, has been further increased by the hidden hand of GEORGE ABELA, the controlling father of Prime Minister ROBERT ABELA. The senior Abela, described by Labour Party insiders as the man guiding and taking important decisions on behalf of his son, continues to clash with the leadership around former Malta PM Joseph Muscat. Known to be a very revengeful and spiteful man, the father's shortcomings appear to have been traits picked up by his son, who is definitely under his undue influence. The outcome is uncertain, according to seasoned observers that we have heard from of late.

The father, formerly his country's president, who reportedly insists on taking on his political enemies in the Labour Party, all of which date back to his short-lived presidential tenure as a member of government, lasting only a couple of years, due to George's issues with the then-Prime Minister, Alfred Sant, now an MEP.  Sant has been described as JM's Godfather, hence the continued enmity, and continuing anger against Joseph Muscat. The present PM, known privately within PL circles as "Daddy's Boy," has implemented a number of his father's wishes, all of which contributes to internal problems, while the government is busy attempting to fight off reformers, Opposition leaders and voters, all of who are demanding action on the major unresolved corruption scandals, and even a change in leadership.

Whether Robert Abela's whispers in his son's ear result in action against Joseph Muscat, who is responsible for much of Malta's current corruption misery and scandal,  both as a way to divert attention from the present troubled administration, and to please his father, we cannot say, but Malta is watching for the outcome.   

COURT FINE IN CASE INVOLVING THE USE OF UNVERIFIED CHAT GPT RESEARCH SHOULD BE NOTED BY COMPLIANCE OFFICERS

The five thousand dollar (USD$5000) fine, levied this past week, against a law firm and the two attorneys who filed unverified legal research (which turned out to be ficticious) obtained through the use of Chat GPT, should be an abject lesson for compliance officers who choose to adopt AI-derived research on new bank clients, without independently confirming its accuracy. While attorneys are required to insure that their research of legal authorities (case law) remains good law, meaning it has been followed in the courts, and not overruled, compliance officers should follow their lead an check out the truth and accuracy of ALL data and information obtained solely from AI-powered AML/CFT platforms seeking facts not otherwise available on prospective banks clients, or on possibly suspicious transactions.

Please note that we have published no less than four previous articles, detailing the nightmare that these sloppy lawyers are presently undergoing, after one utterly failed to verify the legal research he obtained from Chat GPT, attempting a research shortcut that came back to bite him in Federal Court. Why he did not have the wisdom to access primary legal source materials directly, in a case involving a claim against a major airline, we cannot say, but his professional reputation is now suffering due to what some are calling professional negligence, also known as malpractice. As a compliance officer caught with his professional pants down, in this manner, you could be not just out of a job, but out of the industry as well, on a permanent basis. 

Compliance officers, please learn from this sad story. While AI-powered tools can, and do, return results that you simply cannot get elsewhere, if there is any chance that a program invented information or data to please you, trust but verify, everything. Lesson learned, we trust.

WHO MIGHT BE THE ONES QUALIFIED TO TEACH YOUR COMPLIANCE OFFICERS MONEY LAUNDERING TRADECRAFT?

 

Now that we have established that most frontline compliance officers do not recognize advanced money laundering methods and techniques, because they have never been effectively instructed in what to look for, it may be time to figure out who is qualified to teach them. Obviously, the AML/CFT industry, which presents pricey seminars and conferences that generally don't scratch the surface about tradecraft, is unqualified regarding this critical topic, and the certificate programs out there, as well as those that offer a university degree in compliance, are also failing in this regard.

So where does a compliance director who is serious about closing the knowledge gap regarding his or her staff's understanding of advanced and esoteric money laundering methods and strategies? I regret that I can offer very few effective choices:

(1) Former Assistant United States Attorneys, but only those who acquired relevant experience in prosecuting a large number of money laundering and financial crime cases, during their careers. You will have to screen them carefully, to find those few individuals who really know the subject. The problem is, they are now light-paid criminal defense lawyers, and since many bank executives, sick and tired over wat they feel are excessive compliance budgets, will probably balk at paying these former AUSAs their going rate, you may not be allowed to hire them.

(2) Retired Federal law enforcement agents: Provided you can find one who has serious relevant experience, this could be your best choice. Some will claim to be competent, but you will need to determine whether they focused on money laundering cases to confirm their knowledge base. They are out there, you just need to find them. Many work in law consulting and investigative firms, and may not be receptive to teaching, but others will be interested.

(3) Former money launderers; Unfortunately, you can count us on the fingers of one hand; only two qualified in North America, because once convicted, sentenced and completing their incarceration, they  generally want to get as far away from the field as possible. Some fear retribution from clients,against whom they testified, or who were never charged, and are concerned about being identified. Nevertheless, those few of us who are out there are available, though many banks don't choose to hire us. They prefer to send their staff to meaningless seminars.

(4) Law school instructors and professors: many of these individuals have prosecutorial experience, state as well as federal, in bringing money laundering cases, and choose to teach, which makes them good candidates for imparting the knowledge your compliance officers require to be effective. You might want to explore this group especially on a virtual classroom basis.

As you can see, the number of qualified individuals is extremely short, you may not be able to convince your superiors to engage them, and they not be interested in the job, which can be tedious at times, and not what they are used to doing, at this point in their professional lives. Nevertheless, if you continue to fail to train your staff in money laundering tradecraft, they will continue to fail to identify laundrymen using advanced or unusual techniques in your bank, which is your loss as supervisor and leader.   

"THERE ARE PLENTY OF ANTI-MONEY LAUNDERING EXPERTS, BUT NO REAL MONEY LAUNDERING EXPERTS"

The quote appearing in the title of this article, which was received as a response to our pending series, Tradecraft 101, is a rare acknowledgement that compliance officers, by and large, are woefully ignorant of the advanced methods and techniques in current use by professional money launderers in the countries of the European Union, and in North America. Feedback that I am receiving confirms that so-called anti-money laundering experts know how to check the box, and employ anti-money laundering software for Customer Identification, and for Transaction Monitoring, yet still do not recognize sophisticated tradecraft when they find it. is that the real reason why most money laundering and financial crime operations conducted through financial institutions are not interdicted on a real-time basis?

If we don't start to see actual master classes on technique, conducted in-house by people who actually know what they are doing, and less certificate collecting by AML "experts," we will continue to see only the belated exposure of money laundering at the world's biggest banks and non-bank financial institutions, by law enforcement agencies after the fact, long after dirty money has been placed, washed and invested, skewing the legitimate economy, and after delivering economic power to criminal elements on a global basis. Do they own the hotel where you held that pricey AML conference?

There needs to be, at least semi-annually, internal training of compliance officers, as money laundering is constantly evolving, repeatedly infecting new types of legitimate industries and businesses, by updating frontline staff with regular infusions of newly-found methods as they appear. Those outdated compliance conferences and seminars simply aren't doing the job, as the people who know the material aren't giving the lectures, only posers without hands-on experience, appending multiple professional AML/CFT qualification initials after their names, but not explaining specifically how money launderers operate, and what tricks they employ to consistently beat the banks every day of the week. 

TRADECRAFT 101 PART SIXTEEN: MONEY LAUNDERING THROUGH THE ABUSE OF DIPLOMATIC PASSPORTS BY NON-DIPLOMATS

Although most of our readers are quite familiar with the current battle, in the Federal Court system, over whether ALEX NAIN SAAB MORAN, the Colombian money launderer to Venezuela's elite, is a diplomat or not, which will directly impact whether he goes to trial in District Court in Miami for money laundering, or is granted immunity from prosecution, transnational criminals have been exploiting their covert purchases of diplomatic passports from the five East Caribbean states that also sell CBI passports, for decades. We only need remember the case of the convicted Iranian fraudster, ALI REZA MONFARED, who is presently serving twenty years in a Persian prison for stealing several billion dollars from the Islamic Republic of Iran. He used his Dominica diplomatic passport to defraud in Malaysia, and elsewhere.

(note the drawing to fool facial recognition software)

Our blog has covered literally dozens of transnational criminals who bought diplomatic passports, for cash in US Dollars, in the Caribbean, and artfully used them to move money and assets around the globe at will, taking advantage of the lack of sophistication of third world customs and immigration officers, as well as greedy bankers who didn't care who their client was, so long as the color of his money was green. Fraudsters and laundrymen use diplomatic passports to evade customs searches, as most diplomats' bags and baggage are not searched, lest they violate international rules. This allows one to move bearer financial instruments efficiently to tax haven financial institutions, as well as to conceal the end user of the proceeds of crime, which often end up in another part of the world where compliance is dodgy or ignored in the name of wealth and greed. The move cash, precious gems, bearer bonds, and anything else that will fit in their bogus "diplomatic pouch." It is a license to clean dirty assets abroad.

Also, understand that these "diplomats" do not satisfy any of the requirements of the Vienna Convention on Diplomatic Relations. They are not posted to a specific mission, they do not have any duties, they are not certified by a receiving jurisdiction, and they rarely meet the citizenship test. Therefore, they are merely sham diplomats, and cannot use diplomatic immunity to evade arrest, though they often try to do so.

The varieties of money laundering that are facilitated by a prized diplomatic passport are almost infinite, and far too extensive to be detailed here, but compliance officers are urged to independently confirm the legal status of anyone who comes into the banks flashing such a proof of identity. Check the place of birth and nationality; does it match the country of the passport? Is he or she listed online at the country named? is the passport newly issued, or without much in the way of travel stamps? if so, you must institute enhanced due diligence before account opening.

Do NOT blindly accept any diplomatic passport holder without serious inquiry and verification of the bona fides of the holder's status as an accredited diplomat. Otherwise, you will be a victim.

CBI PASSPORTS DECEIVE COMPLIANCE OFFICERS WHO WOULD OTHERWISE INSTITUTE ENHANCED DUE DILIGENCE IN A HEARTBEAT

 

If you closely read today's news about the Titanic submersible that is missing, and possibly stranded on the floor of the North Atlantic, in a potential personal tragedy that reminds us about the dangers of experience tourism, you know that there is a Pakistani billionaire on that craft. What is being cleverly kept out of the stories is the fact that Shahzada Dawood, alive or dead, holds a Citizenship by Investment (CBI) passport issued by the dodgy Republic of Malta. Not one of the world's mainstream media has disclosed that interesting fact.in what sounds suspiciously like new management.

 In truth and in fact, his entire extended family have purchased those passports. Who cares about such details you say? Well, Dawood is actually listed, on the Companies House website as a Maltese, therefore an EU national Such a listing means that any compliance officer performing a due diligence check on this individual would then typically assign low risk to his profile, and decline to ramp up to enhanced due diligence, where Source of Funds and Source of Wealth become facts of interest in assigning a level of risk, when operating a risk-based compliance program.

While I have no reason to be concerned about Mr. Dawood's background, as he is indeed a legitimate businessman, with a long and admirable history of charitable work, the fact that he is listed on a UK Government website under his low-risk Maltese nationality, which was reportedly purchased at great expense, shows that CBI passports favorably skew risk, and do deceive compliance officers responsible for assessing whether EDD is necessary to be applied. 

Readers following the PILATUS BANK scandal in Malta know that ALI SADR HASHEMI NEJAD, the Iranian owner of the money laundering bank shut down by EU regulators, reportedly used his St. Kitts & Nevis passport in Switzerland, when moving illicit capital diverted from Venezuela, as personal identification, to reduce his level of risk, and I have lost count of number of transnational criminals who proffered their East Caribbean CBI passports from Antigua, Dominica, St. Lucia and Grenada to bankers, immigration officers, customs agents and law enforcement officials, when seeking an advantage that low-risk nationality confers.

If this isn't a reason to call for the abolition of CBI passport programs worldwide, I don't know what is, and you are reminded that the the European Union wants all such programs terminated among its Members, especially the last surviving offender, Malta. Wake up, compliance officers; you are being hustled.  

 

THREE YEARS AFTER MONEY LAUNDERING CHARGES BROUGHT IN MALTA, CASE IS MYSTERIOUSLY ON HOLD PENDING FOREIGN EVIDENCE

 

If you wanted to know why accused money launderers never go to prison in the (so-called) Republic of Malta, this case, which surfaced recently in connection with another news story, will tell you all you want to know about corruption in Malta's court system, where the "Compilation of Evidence" feature of court proceedings, operas, with government approval, to delay cases ad infinitum.

The auction house owner*, PIERRE GRECH CUMBO PILLOW, who was a shareholder in PGP TRADING LIMITED, was charged with money laundering in 2020. He allegedly cleaned millions of Euros for foreign clients between 2016 and 2020. Pillow, who reportedly moved the proceeds of crime through the Bulgarian-owned SATABANK, who was shut down in 2018 for massive money laundering activity, has been linked to two of Malta's best known corrupt former Labour officials and government leaders, KEITH SCHEMBRI and KONRAD MIZZI, both of whom ran roughshod over Maltese lawlessness during the administration of resigned ex-PM JOSEPH MUSCAT.

The case has been "postponed indefinitely," due to a wait for the ostensible arrival of evidence from abroad. In truth and in fact, that evidence will never arrive in court, and if it did in fact arrive, it would find itself misfiled, thrown out, burned, or returned from whence it came. There will be not be a trial against Pillow, as he is part of the country's rampant money laundering machine, which is the primary reason why "flight capital" of unknown origin and provenance is attracted to Malta's laundrymen from far and wide in the European Union. 

Eventually, after the passage of additional years somebody at the Attorney General's office will call the case up for hearing, at which point a judge or magistrate will dismiss it, with prejudice, for the Government's failure to conduct a speedy trial, and for the harm which the pending case has done to the defendant's reputation, or for some other legal excuse. There's no justice in Malta, when it come to money laundering and financial crime.

 _____________________________________________

*OBELISK AUCTIONS LIMITED * HAMMER PROPERTY AUCTIONS LIMITED

 

RUSSIAN ORGANIZED CRIME USES MALTA CBI PASSPORTS TO ENTER THE EU, WHILE ABUSING THE LAW OF RETURN TO RESIDE IN ISRAEL

While the NSO scandal over the fact that sellers of predatory surveillance software used Malta CBI passports to enter the Members of the European Union to sell their amoral products, purchased in Valletta notwithstanding they were already implicated in human rights violations. There's another class of Malta CBI passport holders that is infinitely worse: career criminals affiliated with Russian organized crime groups, who illegally obtained Israeli citizenship.

Israel's 1950 Law of Return, which grants asylum and citizenship to anyone who has one Jewish grandparent, a response to Nazi Germany-era draconian and punitive laws that targeted the country's Jewish population for discrimination, and ultimately, death, has been repeatedly abused by non-Jewish career criminals from Russia, who fabricated Jewish heritage to relocate to Israel, both before and after the fall of the Soviet Union in 1991. These same criminal elements have, notwithstanding that they utterly fail even the most rudimentary due diligence inquiry, secured Citizenship by Investment (IIM/CBI) passports from corrupt officials in the Republic of Malta, which they employ to commit money laundering and financial crime in the European Union, using visa-free Schengen Zone access. 

Israel, as a matter of public policy, generally refuses to extradite its nationals who commit transnational crimes, allowing the Israel-based Russian criminals to commit offense in the EU with impunity. Compliance officers at financial institutions within the European Union should therefore carefully examine ALL Maltese applicants for bank accounts for Russian Place of Birth, and act accordingly with enhanced due diligence on any and all found to be positive, to rule out organized crime members, as gatekeepers.

We express no opinion as to whether the purveyors of predatory surveillance software are engaged in criminal activities, and are involved in organized crime, but note that there are pending money laundering charges pending against some of them in the State of Israel, where they reportedly no longer reside.   

HUNGARIAN FRAUDSTERS WITH BONDS STOLEN FROM MURDERED HOLOCAUST VICTIMS SEEK TO REDEEM THEM THROUGH BOGUS " ROYAL" CLAIMANTS IN INDONESIA AND CHINA

Corrupt government leaders in Budapest, working with attorneys closely linked to far-right political groups, are seeking to redeem century-old German External Loan Bonds looted from the assets of Hungarian Holocaust victims. The circumstances of the theft of the equivalent of millions of dollars of Jewish-owned property, which we detailed in our recent story entitled 80 Years after the holocaust, the Descendants of Hungarians who Committed Atrocities try to Cash in German Bonds of the Victims (May 31, 2023), are attributed to the pro-Nazi Hungarian Iron Cross, whose members were guilty of Crimes against Humanity. 

In an effort to cash in the 1924 reconstruction obligations, which the Government of Germany solicited to rebuild World War One damage, and which now were given a three-year window to compensate the heirs of Holocaust victims, fraudsters who appear to be related to the perpetrators of the 1944 and 1945 massacres, have now brought out the original stolen certificates from hiding. Germany previously, to date, has paid out billions on those obligations, but only to legitimate owners and their heirs. 

Inasmuch as the German Government is requiring documentary confirmation of the bona fides of any putative heirs, as direct descendants of the murdered victims, many of whom were killed and thrown into the Danube, the fraudsters have created a fictional scenario where the claimants' associates claim to be pretenders to the former royal thrones of Indonesia and pre-revolutionary China. They are alleging that their forebears purchased the bonds during the nineteen twenties. 

The bogus claims, which cannot be proved, as they are totally fabricated, are reportedly being advocated by Budapest attorneys, whom we intend to specifically identify in a future article. together with the names of other unqualified applicants who are seeking to use stolen bonds, taken from safekeeping in Jewish-owned banks that were vandalized and destroyed, and obtain payment, using forged and counterfeit instruments. Fortunately, we understand that those proffered to date have not been accepted for payment by Germany.  

Our previous article, which has been republished on the Internet, has resulted in the issuance of death threats, but we shall be continuing to cover this scandal in detail. Stay tuned.

TRADECRAFT 101 PART FIFTEEN; MONEY LAUNDERING THROUGH THE HOARDING OF PRECIOUS METALS AND VALUABLE STAMPS AND COINS

Even the most skillful career money launderers know that there is an ever-present risk that their clients' cash on deposit in the global financial system is always at risk of seizure and forfeiture, even when artfully cleaned. They therefore often recommend to their clients that they, like smart businessmen everywhere, diversify their risk by holding a significant percentage of their illicit wealth outside the financial system, preferably in liquid forms that could be redeemed rapidly, should the need (like arrest, for instance) arise. Even criminals are inclined to engage in risk management. 

Inasmuch as criminal defense attorneys have found themselves in serious professionals, as well as legal, trouble by accepting funds, for the express purpose of being prepared for their clients' potential future arrests, the clients are often instructed by their laundrymen on specific methods to accomplish the "diversification" of their holdings, outside of their attorney's knowledge. Also, if the lawyer has any personal exposure to criminal charges, if he or she knows where the clients are keeping their "rainy day" assets,  there might be a seizure and forfeiture if he becomes a Cooperating Individual (CI), in exchange for immunity from prosecution. 

Whatever the medium chosen, gold, silver, precious gems, valuable coins or even rare collectible postage stamps, it must (1) be portable, (2) be traded in an industry where cash is king, and records scant, for tax evasion reasons, and (3) where provenance (origin) of the items is not an issue. In Europe, the unique and very private storage facilities often set up to warehouse fine art and antiques can be utilized, so long as proper shell companies as putative owners is set up in a favorable jurisdiction. 

I once had a client who, having once been shot and left for dead, got out of the drug business, and who owned a business that sold extremely valuable coins to the public. He learned that one of the area's biggest cocaine traffickers, who was a regular client, was secreting his purchases by literally burying them in the rural backyards of his many girlfriends, in the dead of night, sometimes without their knowledge and consent. Unfortunately, he at one point had a falling out with one of them, and she knew about his stash out back. She gave that information to law enforcement, and received a six figure sum for her assistance.

Some clients use their portable assets as "working capital," transferring it to other criminals in payment for illicit purchases as there is absolutely no connection to the financial world, but most of them hold on tight to these assets, in the event that things go south at a later date. They do represent a vulnerability to the client if seized, for there is not way that they can account for Source of Wealth, and they generally end up forfeited. 

Inasmuch as such assets are intentionally kept outside the banking system, the only time that compliance officers encounter them is when the buyer of the goods from the trafficker, often a legitimate commercial dealer in that type of goods, cleans the sale proceeds, and delivers a check to the seller, who may claim that he acquired the items through family, or that they appreciated due to demand, such as rare coins or stamps. Should you see such a large check in the account of a bank client who previously did not maintain such an impressive balance, institute enhanced due diligence forthwith. Cleaned proceeds of crime often do not survive intense compliance scrutiny. 

 

MALTA SELLS CBI PASSPORTS TO HUMAN RIGHTS VIOLATORS, GIVING THEM EU ACCESS

As if Malta's IIM (CBI) passport sales program, which has a long and sordid history of selling Citizenship passports to Russian, Iranian, and Syrian purchasers, as well as career transnational criminals, wasn't bad enough, the latest CBI scandal reveals that passports were sold to individuals who hawk spyware used to identify and persecute Opposition figures, investigative journalists, and any other individuals who pose a threat to authoritarian jurisdictions, and to forces in democratic states that seek to limit political freedom and Freedom of Speech. 

The valued Maltese CBI passport, which gives visa-free access to the EU member states, appears to have been used to market amoral spyware into prospective purchasers from outside the EU who are on purchasing campaigns within Western Europe. A number of these purveyors of surveillance platforms, which have been universally condemned for their ability to identify and target democratic proponents, have received Maltese CBI passports, notwithstanding that they were known tombe selling them to autocratic leaders in Asia, Africa and Latin America.

Investigative reporters within Malta have long alleged that the country's ruling Labour Party (PL) employs these surveillance programs, which illegally intrude into the personal lives of Opposition leaders, whistleblowers, and individuals who make public corrupt activities of senior members of Malta's Cabinet, and their connection to the Maltese Mafia, a criminal organization linked to decades of political violence aimed at quelling democratic reform in the small island nation. Malta's weak judicial system, whose judges owe their positions to the government leaders who appointed them, are unable or unwilling to rein in these rampant violations of human rights.

Actions by the EU and EC, designed to legally terminate Malta's IIM program, has thus far been ineffective, as the processes necessary to accomplish this are lengthy and tied down by rules of procedure, but it is hoped that, eventually, the threats posed by the existence of Europe's sole remaining "anything goes" CBI passport scheme will be terminated with prejudice. 

TRADECRAFT 101 PART FOURTEEN: MONEY LAUNDERING THROUGH LOTTTERIES AND OTHER CASH PRIZE GAMES

Money launderers, the good ones that is, stay up nights and weekends just to beat compliance officers. I know that because I did the same thing for ten years. It was a mental challenge to keep coming up with different ways to reinvent the wheel, meaning new money laundering typologies that mask your illicit goals, while submerging your illegal activities within the legitimate business world, always moving into new territory. It's all about tradecraft, keeping ahead of both law enforcement agents dedicated to taking me down, asn well as sharp compliance officers who I did not want to spot my activities.

Sometimes, I found, the most effective method is the easiest. Two of my career criminal clients, whose associates were always coming to them for laundering ideas, set up a clever network that monitored all the major government-run lottery operations. Whenever the prize to be awarded to the winner was significant, they got the word out on the street that they would not only buy the winning ticket for the lucky holder, they would pay a premium for it, as well as the seller's silence. As these were cash purchases, made in crowded convenience stores, with large payday buyers , on long lines, investigating the bona fides of anyone who claimed to be the winner, would prove fruitless.

Word that someone was paying cash for winning tickets, no questions asked, spread like wildfire wherever the clients sought those precious shortcuts to laundering the proceeds of crime,  and they were often successful in securing them. After acquiring the winning document they would arrange to sell it to those of their associates who was most desperate to launder his drug profits that month, at you guessed it, an even larger premium. The associate would claim the prize, take the one-time ( and not annual) payout, upon which taxes had already been withheld, and thereby clean a serious amount of drug profits. 

In theory, one might be able to launder millions of drug dollars in that manner, publicly retire from whatever job one had as a public front, and invest the now cleaned assets, all the while keeping as low a profile as possible. Letting the Statute of Limitations run out, years later, your drug profits cleaned, you run for public office as a local boy who made good. Is that a frightening prospect, drug trafficker-turned politician?

 

DE-RISKING MAY BE YOUR ONLY RELIABLE CHOICE IN A RISK-BASED COMPLIANCE PROGRAM

While government agencies in the United States, as well as American foreign policy in general, advocate American banks keeping their correspondent accounts of Caribbean banks, the lack of reform among those financial institutions has forced widespread de-risking, as a matter of sound risk management. In a perfect world, Caribbean businesses and individuals that must have direct access to the American financial structure, to buy goods and services, to invest here, and to conduct necessary transactions, should have access, but it is not well advised, given the many issues with banks abroad, especially those in the Caribbean, due to the high-risk reality that exists today.

Caribbean banks, focusing upon those that (1) have a long history of facilitating money laundering, (2) Sell Citizenship by Investment (CBI) passports to buyers from high-risk, sanctioned, and even jurisdictions designated as State supporters of Terrorism, and (3) centers of rampant, systemic official corruption, are simply far too high-risk to be business partners through correspondent banking.

To add to the problem, these five East Caribbean states selling CBI passports, all of whom are former British territories, and members of the Commonwealth, insist upon selling passports for US Dollars, rather than Sterling. This wrinkle not only gives the United States potential jurisdiction over any financial crime, as US courts have given extraterritorial territorial jurisdiction to money laundering crimes involving USD, but those funds will end up clearing through the American financial structure, exposing US banks and bankers.

Given the flat out refusal of Caribbean banks to clean up their anti-money laundering compliance, keep ut transnational financial criminals, accept the proceeds of corruption, and fail to reform their CBI programs, American financial institutions, acting within a risk-based environment that is becoming stricter each year, have no choice but to eliminate the threat; the correspondent accounts. While the United States Government asks the banks to keep those dangerous Caribbean banks, it will not force sufficient reforms there, due to national sovereignty concerns. Close those accounts, or suffer the consequences, ladies & gentlemen.    

THE OTHER DEFENDANTS HAVE PLED, AND WILL TESTIFY AGAINST FORMER BVI ANDREW FAHIE IN U.S. CRIMINAL TRIAL NEXT MONTH

The OLEANVINE PICKERING-MAYNARD and KADEEM MAYNARD, the former BVI Ports Director and her son ,have both entered guilty pleas in US District Court in Florida, after entering into plea agreements that saw their money laundering charges, and in the case of Ms. Pickering-Maynard, her Racketeering charge. This leaves the former BVI Premier, ANDREW FAHIE, to face a July 17 trial on his won.

Reportedly, these two defendants are now obligated by their plea agreements to render full cooperation in the case, which generally means that they will be testifying against Fahie at trial, making his defense problematic at best. There is a confidential informant connected to American law enforcement who is also expected to testify, and audio and video recordings that directly implicate Fahie in money laundering and drug trafficking also exist and are expected to be admitted into evidence. 

Why Fahie has not seen fit to mitigate his exposure by cooperating with the US Attorney's Office is perplexing, given the initial rumours that he has first-hand information that incriminates other Caribbean leaders, and intended to employ it in the case to obtain a reduced sentence. These rumours have reportedly caused sleepless nights in a number of East Caribbean capitals, in addition to Road Town.

Additionally, we wonder whether Fahie has considered the potential impact upon the jury of evidence that he has previously been involved in criminal conduct, regarding his facilitation of drug smuggling into the Continental United States, which now-cooperating co-defendant, Kadeem Maynard, may testify to at trial. He has some serious exposure here;  is he too arrogant to appreciate it? There have been more than a dozen sealed court filings in the case in recent months. Most likely, that is powerful evidence against him for trial. 

He has an extremely competent attorney, a former Assistant United States Attorney. We assume he has been advised of the possibility that he will receive a long sentence, should he put the Government to the cost of a trial, which will of course be on all counts. He could very likely spend the rest of his life in Federal Prison, in what may be an abject lesson to corrupt Caribbean leaders from Antigua to Grenada. This will not end well for Andrew Fahie.

TRADECRAFT 101 PART THIRTEEN; HOW MONEY LAUNDERERS EMPLOY ADVANCED TECHNOLOGY TO OUTWIT COMPLIANCE OFFICERS

 

Ladies and gentlemen in compliance, know your enemy; under no circumstances are you to underestimate him or her, if you want to catch laundrymen in the act, in real-time, to protect your bank from regulatory fines and penalties, as well as the negative press that comes from details about how your bank failed to catch the narcotics trafficking money laundering of a newly-indicted kingpin. 

Laundrymen, like their criminal clients, usually have bottomless budgets to devote to emerging technology. Back in the old "Miami Vice" period of the 1980s and 1990s, by clients used email before most of the public even knew what it was. Money launderers, many of whom are attorneys, are completely familiar with the ability of Federal law enforcement agencies to obtain court permission to tap telephones, and obtain the records of targets, regarding whom they communicate with, and when.

Please note that Charles Intriago, back when his conferences, sponsored by Money Laundering Alert, were the most popular annual AML event, had to screen applicants for his events, as some appeared to be individuals and companies possibly bent upon using information designed to assist compliance officers for a much darker purpose. 

My clients also went totally paperless, acquiring the earliest personal computers from electronic stores, storing their incriminating data, rather than leaving notes about financial transactions to be found by law enforcement during searches of residences, offices, warehouses and storage facilities.

When I served time in a Federal prison, in the very early 1990s, for a RICO conviction, one of the most popular inmate courses, at the minimum security institution populated by white-collar defendants and those convicted of drug offenses, was the class that taught computer literacy. what do you think these defendants, most of whom had short sentences, planned to do with that knowledge? Many of them would be later returning to prison for crimes committed after their release from their first case. Those laundrymen who were not rearrested now have two decades plus of experience. How much do your compliance officers possess? I assume much less. 

You must assume, given the history, that the money launderers:

(1) Know exactly what AML/CFT platforms you are running in your compliance department; most vendors openly publishdetals about new clients that have acquired their products, or list the names of major banks that have their software, as a marketing strategy to get new business. Do the  money launderers who target your bank also have those assets, having secured the through conspirators abroad? You bet.

(2) Given that money launderers usually anticipate their opponents, assume that they road-test their tradecraft intentions by their version of your transaction monitoring operations, and adjusting accordingly, when their own software indicates that they will be detected, and possibly intercepted, if conducting specific methods and techniques.

(3) Be painfully aware that they know the extend of training and experience of your compliance department, when your senior people are away at conferences, or on vacation or holiday, and short on staff, and act accordingly, when it comes to executing advanced tradecraft. They may even be looking for your personal weaknesses, with an eye to corrupting a vulnerable staff member, to get even further into your tech secrets, or to breaching what you believe to be secure compliance communications.

(4) Take it as a given that they have their own IT people, who are much better paid than your junior staff who handle those responsibilities. Those individuals are often light-years ahead of your own IT, acquiring versions as yet unreleased technology to invade your systems, or to defeat your AML capability.

To summarize, assume the worst when it comes to the ability of money launderers, and their clients, to adapt cutting edge advances in technology, including but not limited to compliance tools, specifically to match, and even defeat, your anti-money countermeasures, especially at the transaction monitoring stage. Appreciate that, somewhere, there is an opponent working against the goals of your compliance department, and they have a better toolbox than you have, to beat you, every day; govern yourself accordingly.

   

IN COMPLIANCE, USE AI-DRIVEN AND VETTED PLATFORMS DESIGNED FOR AML/CFT, NOT CHAT RESOURCES, AND STILL CONFIRM YOUR RESULTS IRRESPECTIVE OF YOUR CHOICE

The nightmare* experienced by the lawyer who employed Chat GPT to find relevant legal authorities, and then, without checking, filed bogus, non-existent cases in US District Court, should concern compliance officers engaged in enhanced due diligence. Ladies and gentlemen, do NOT blindly use some sort of chat program to find information, lest you  locate and then use information that is not only ficticious, but which will cause you to make a decision on client onboarding or transaction monitoring that is dead wrong, with a high risk of a bad outcome.

Use only a research platform that was actually created for  AML/CFT purposes, which will assure you that it has been extensively bench tested, using real-life problems. No generic chat programs, please, lest you fall into a legal hole that you cannot climb out of.

Next, it must be provided by a well-known company with a track record in the field. Do not take some experimental AI program sent to you by a friend you met at a conference, and who has touted its effectiveness, and use it to find data on an EDD target. Only accept systems offered by reputable vendors that you know from others who use their products , or from appearances and demonstrations that you have seen at conferences, to have useful software being employed by other compliant officers.                            (e.g. SymphonyAI Sensa-NetReveal).

Remember that someone may have already used a generic chat program to create what appear to be authentic newspaper or magazine article that are simply a product of a query, and neither real nor accurate. You must, in an EDD query, through any commercial-off-the-shelf platform, verify your results in the present AI-driven world, lest you use your AML program and find something that's not real, though it looks to be so. Be careful out there. Use a program designed for compliance, please.

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*Warning: Lawyer using Chat GPT Unwittingly cited non-existent cases to Judge in Federal Court  (May 27, 2023). Why the *** Didn't the Lawyer  Using Chat GPT for Legal Research Shepardize the Cases it Produced? (May 28, 2023).

TRADECRAFT 101 PART TWELVE: MONEY LAUNDERING THROUGH CORRESPONDENT BANKING

We are all painfully aware that what is known as Derisking, the abrupt shedding of correspondent banking relationships by onshore banks of financial institutions located in the developing world, increases daily. if we are to be blunt about it, the reason is that American banks do not want to be subject to civil penalties and naming & shaming by regulators for money laundering through their accounts due to correspondent banking. it's just that simple.

Any objective examination of banks overseas that desperately want to maintain their correspondent banking relationships with the major New York financial institutions finds: (1) Effective and comprehensive onboarding of new clients does not exist; (2) Ongoing and continuous transaction monitoring of accounts once opened is spotty if it occurs at all; (3) Accurate verification of beneficial ownership of corporate bank clients is a joke; and (4) Widespread corruption amongst underpaid & unethical offshore bank staff is itself grounds for universal application of Derisking, especially in those jurisdictions where the local government, to cover its bloated, employee-heavy budget, engages in dodgy Citizenship by Investment (CBI) passport sales programs that sell to high-risk individuals from sanctioned jurisdictions and transnational criminals.

As an active career money launderer in the past, I found that, by forming shell companies offshore, with bearer shares, and armed with frontmen, I could obtain the equivalent of cashier's checks, with both the names of the offshore as well as us bank printed thereon, signed by a senior officer of the overseas bank, and drawn on the New York correspondent account, with impunity. It allowed me to move cleaned clients narcoprofits back onshore, to make purchases, without any fear that the beneficial owner/clients would even be named or disclosed abroad to American law enforcement agencies. More complex techniques, which I correctly decline to detail in a public forum ( but which I have available to compliance on demand) make identification of correspondent banking money laundering next to impossible. Those compliance officers who are thinking about BVI companies when reading this article might have scratched the surface of what I am referring to.

I understand the public policy behind discouraging Derisking, to give access to the US financial system to foreign businesses that must have it to succeed, but if ANY significant correspondent banking is allowed by your bank's executives, you must institute certain protocols, notwithstanding public pressure from government regulators or politicians, without fail. I am sure that you know what they are; do not end up a victim because your compliance officers don't properly protect the bank from advanced correspondent banking money laundering techniques.

 

TRADECRAFT 101 PART ELEVEN: MONEY LAUNDERING THROUGH SHELL AND SHELF CORPORATIONS

The purpose this series is to take compliance officers inside the perspective of the practising money launderer, how he operates and what tradecraft he customarily employs to succeed in his illicit operations. Laundrymen take full advantage of what I have often referred to as a "Window of Opportunity," meaning the period between the date you obtain a corporation,and the date in which you must make some sort of filing. That gap period is when you shine; you use & abuse the company, working your laundering skills, and then abruptly abandon the company before you must report any names and addresses of officers and directors to the local Secretary of State, or whatever authority has jurisdiction. Remember, when you fail to report, the company is generally summarily dismissed, which is your goal after the fact.

When it came to registering vessels that clients used for the purposes of smuggling narcotics into the continental United States,  generally registered them in the UK, but through the obscure method of using British Dependent (Overseas) Territories abroad, as it generally took weeks for those documents to travel laboriously from Anguilla to Cardiff. In the meanwhile, of course the clients used the boat to move marijuana and cocaine,  and occasionally hashish oil into CONUS. That meant any inspection by the US Coast Guard on the high seas ( international waters) would require British notification and consent, and some of these trip had ONLY French-speaking crew on boards, intentionally, to further make communication difficult with monolingual English-speaking American law enforcement searchers on board any USCG or USN ship that stopped them. Confusion to the enemy, gentlemen.

But of course, some clients had erroneously previously registered their vessels in the State of Florida. For those cases, I would contact any one of a number of corporate formation firms in Delaware, have them form a corporation, and do my magic. That meant flying into Philadelphia, and taking a taxi just barely across the border to a tiny bait-and-tackle shop in Delaware, to register my client's vessel, using the new corporate name, and a Bill of Sale with a ficticious name as owner/operator on the document. I obtained new DL numbers and state certificates for the clients to affix, to complete the transformation.

Later that days, I would fly back to MIA, where my client would take possession of the ship registration, and taking the vessel offshore, would jettison the Florida vessel document, and affix the Delaware certificate thereon. I understand that sometimes the name appearing aft would be changed and/or the appearance also altered to give the appearance of another vessel. Some clients would hold onto the documents, and not change their boat until after a smuggling venture, literally carrying them on board as a sort of "back pocket" measure, to be completed far from prying eyes in the US, at a tie of their choosing.

This gap, between January 1, and the date ( September?) when corporate registration in a routine information filing was required was the period in which the smuggling would occur. Delaware corporation formation firms conveniently supply convenience officers and directors names', from their staff, initially, and that serves your purpose if you intend illicit use of the company on strictly a temporary basis. Whether newly-purchased and created shell company or old existing shelf company acquired, that gap exists for laundrymen to exploit.

So long as Secretaries of State do not require the formers of new corporations to actually designate the true owners, with addresses, verifiable telephone numbers and email, up front, financial criminals will continue to abuse the system on a short-term basis, so long as they are able to exploit this Window of Opportunity.

MALTA ROCKED BY SCHISM DIVIDING THE RULING LABOUR PARTY

Readers who wondered whether our detailed articles, covering the allegations of alleged corruption in Malta attributed to Deputy Prime Minister CHRIS FEARNE are accurate, be advised that our Palazzo story is not only true, it was independently confirmed. Our information is valid, unlike the disinformation and only partly true stories being thrown around by the country's cashiered ex-Prime Minister, JOSEPH MUSCAT, for the express purpose of discrediting Fearne, who upon becoming PM himself, intended to have Muscat arrested as a career criminal involved in corruption, money laundering, and multiple other financial crimes. Whether Fearne will ultimately become Malta's Prime Minister is Muscat's personal nightmare come to life.

Muscat, through third parties, is conspiring to throw dirt upon Fearne, and his former mistress. Fearne, according to our sources, was summoned to court in the Malta hospitals enquiry, where he personally testified against JM. It is believed that this testimony is sufficient to convict JM and result in a very long sentence. Muscat allegedly attempted to Bribe CF, for his approval of the hospitals scheme but he refused.  The dire situation has reportedly placed JM under severe stress; he and his wife a currently taking strong anti-depressants, according to Pl sources.

Former senior Maltese official KONRAD MIZZI, who was part of Muscat's government, has now fled the country, fearful of arrest, and has been literally hiding out in Dubai, UAE. He has been seen at the Palm Juneirah there. Malta's remains in a political state close to chaos, with a division of loyalties amongst the Labour Party, while government business remains on hold, pending resolution of the political split.

TRADECRAFT 101 PART TEN; MONEY LAUNDERING AND SANCTIONS EVASION THROUGH CITIZENSHIP BY INVESTMENT (CBI) PASSPORTS

In the early 1980s, I was contacted by the late William (Billy) Herbert, then the Foreign Minister in St. Kitts, among several other diplomatic titles and positions. Dr. Herbert, who has since  disappeared due to allegedly incorrect assumptions made by a client about missing funds in a money laundering matter*, handled shell offshore companies and the registry of smuggling vessels for some of my narcotrafficking clients. 

He brought news of a newly-created passport program that we now call Citizenship by Investment, or more commonly CBI, which allowed my criminal clients to assume St. Kitts nationality, and obtain an SKN passport in the process. Since then, four other East Caribbean states have embarked upon such a program, Antigua & Barbuda, Dominica, St.Lucia and Grenada. Malta, alone among EU member countries, also currently has such an active program.

Speaking solely from the viewpoint of money laundering tradecraft, CBI passports area godsend. They allow the holders to assume an anonymous alias, complete with a listed Place of Birth that matches the country of their passport. Altering Date of Birth is also possible, given the rampant corruption associated with the CBI programs being operated at this time. In short, a completely new identity is created for the benefit of the holder. Add to this the availability of a local driver's license, and a residence purchased in conjunction with the program, giving one the usual required proof of payment of a utility bill, and the identification required in most countries to open a bank account is satisfied. Since affluent new clients are much to be desired in the developing world, if they have the identity documents, they are generally accepted. 

Armed with a CBI passport, a money launderer is free to visit a financial institution in a country in the developing world, stash his real passport, and present his new, clean identity, thereby artfully deceiving the local compliance officer, who is totally in the dark about his new identity, especially since effective facial recognition software is most likely not in use there. Since typical checks of commercially-available  databases of high-risk and sanctioned individuals will not result in a positive finding, the laundryman after waiting a short period, to appear to be a legitimate routine bank customer, is free to employ advanced and complex money laundering schemes at will. he then closes the account and disappears from that jurisdiction, his goals accomplished, and anyone later attempting to follow his trail will find that it has gone cold. Terrorist financing and sanctions evasion is also facilitated.

Many financial criminals hold multiple CBI passports, with variations on the name, and in several countries, to throw off any routine checks. Some only use a specific CBI passport briefly, and then use it on the other side of the world, knowing that in the developing world, access to information about "clean" passports from obscure island nations is nearly impossible to find, even for local law enforcement agencies in Latin America, Africa and the Far East.

Until and unless the CBI passport become a thing of the past, laundrymen will be free to abuse them at will, and since they represent significant revenue for third world jurisdictions who need cash flow to cover their budgetary needs, due to an excess of government employees and departments, it is in their best interests to continue to operate CBI passport sales programs. These passports will continue to be sold, hence the problem will continue.

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* A Caribbean Money Launderer casta a Shadow Long After his Death (October 9, 2014).

  

WILL MONEY LAUNDERERS AND TERRORISTS EXPLOIT CANADA'S CAN+ VISA-FREE ENTRY FROM CARIBBEAN TAX HAVENS?

Canada has followed the lead of a number of jurisdictions in creating its own version of an electronic travel authorization (ETA) which des away with the requirement to secure a visa through normal channels, provided that the visitor held a Canadian visa at anytime in the past ten years.

The country recently expanded the scope regarding nationals of several of the East Caribbean offshore financial centers, which includes several with dodgy histories as destinations for money laundering of narcotics profits. We are concerned that career money launderers will be able to utilize the ETA system to enter Canada, without the usual visa scrutiny, and that this new arrangement will facilitate money laundering into, and through, Canada.  They might also smurfs or employees with Canadian travel history to act on their behalf. Those with no criminal records will be admitted, hence the potential problem.  

The United States will also be far easier for financial criminals intent upon illicit financial activities, for covert entry into the US is not that difficult, given the long open border between the two countries.

Additionally, individuals intent upon committing terrorist acts within America, could enter Canada in this manner, especially by selecting those of their members who had previous tourist or visitor travel of late in to Canada. 

We hope the Government of Canada will reconsider allowing nationals from the East Caribbean states to freely enter, without due examination, solely to facilitate tourism. We fear that there will be consequences regarding money laundering and terrorist operations on North America. 

Read the official Canadian Government announcement:

The Honourable Sean Fraser, Minister of Immigration, Refugees and Citizenship, announced the addition of 13 countries to the electronic travel authorization (eTA) program. Travellers from these countries who have either held a Canadian visa in the last 10 years or who currently hold a valid United States non-immigrant visa can now apply for an eTA instead of a visa when travelling to Canada by air. Effective today, eligible travellers from these countries can benefit from the program:

• Antigua and Barbuda
• Argentina
• Costa Rica
• Morocco
• Panama
• Philippines
• St. Kitts and Nevis
• St. Lucia
• St. Vincent and the Grenadines
• Seychelles
• Thailand
• Trinidad and Tobago
• Uruguay
• ( taken verbatim from website)