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).