SLC PRIME MINISTER PIERRE , DEPUTY PM ERNEST HILAIRE, LAWYER THADDEUS ANTOINE, AND THE ENTIRE SAINT LUCIA CITIZENSHIP BY INVESTMENT PROGRAM ARE IN BUSINESS WITH EASTERN EUROPEAN MAFIA

Customs agents seizing Bemax smuggled contraband in Europe

The arrest of a prominent Eastern European businessman, together with five police officers, all of whom have been accused of multiple criminal offenses which were part of a major organized crime crew, have drawn attention to a construction corporation that is now a major player in Saint Lucia's Citizenship by Investment (CIP) program. ALEKSANDER MIJAJLOVIC, the principal of BEMAX, whose Saint Lucia activities are represented by embattled local attorney THADDEUS ANTOINE,  who is known to be a close associate of both Prime Minister PHILIP PIERRE, and his Deputy, ERNEST HILAIRE. Mijajlovic is reportedly the leader of a multi-billion Euro criminal organization involved in smuggling of contraband throughout Europe. 

A Special Prosecutor has been appointed in Montenegro, where the seizures and arrests took place, to bring charges against what European media refer to as the Grand Smuggling Group, including money laundering, and Creating a Criminal Organization. Mijajlovic posted bail and was released on April 24, 2024. EUROPOL is involved in the ongoing investigation, and more arrests are expected.

Mijajlovic; released. Posted €1.2m bond

BEMAX CARIBBEAN, INC., and BEMAX LLC, which are involved in a major CIP real estate project in Saint Lucia, in which Deputy Prime Minister ERNEST HILAIRE has a keen interest, is owned by Mijajlovic, who transferred ten million Euros of his assets after his recent arrest in Montenegro. The Saint Lucia law firm of attorney Antoine, who has been handling all BEMAX legal matters in Saint Lucia, formed the company, applied for and obtained CIP approval and is overseeing all aspects of its operations in Saint Lucia.

 The Bemax project at ROCK HALL HOUSING DEVELOPMENT, is an approved infrastructure project, and is licensed by the Citizenship by Investment Unit. The project is is located in PM Pierre's constituency. DPM Hilaire is said to have been closely involved in the approval process of Bemax, which was approved by the Board of the Citizenship by Investment Unit (CIP).

Apart from the mystery as to how one becomes an approved Infrastructure project developer, as I have published before, that no regulations or guidelines exist to indicate how one goes about doing that, is the glaring question as to how the Board of the CIU could approve a developer who is currently facing serious criminal charges.

      

Remember, that it was only on 12th September, 2024 that the Government of Saint Lucia proceeded to Gazette the approval of two independent Infrastructure projects, namely Galaxy and Bemax Rock Hall Housing Development Project. Bemax was Gazetted after the arrest and charge of Mijajlovic, a fact which was publicly known.

Even more concerning is the fact that the CIU's inept attempt to "clarify" the curious Gazette publication, stated that applications have been received under both Galaxy's and Bemax's Infrastructure projects, meaning that passports have been sold by Bemax even while its owner is under serious fraud, money laundering and criminal enterprise charges. The cliche' "birds of a feather flock together" comes to mind. 

One wonders how on earth it was that the Bank of Saint Lucia was able to clear funds from Mijajlovac's criminal enterprise or him, given Hilaire's and CIU's assertion that the Infrastructure developers must up front the money. Given the ongoing RICO lawsuit wherein Mr. Martinez has sounded the warning that the Bank is soon to be named as a defendant, it is unimaginable that the bank would run that risk, unless all is lost at the board level and compliance is nothing but an empty buzzword at the bank.

Reliable sources have advised that diplomats from the United States and the United Kingdom have been briefed on the situation and the fact that the Eastern European Mafia is now operating openly in Saint Lucia, after being approved by the CIP. Given the clear and present danger, INTERPOL now urgently needs to launch an investigation, as we have no confidence that the courts in Saint Lucia, which are either controlled or under threat by the government, will take any action. Additionally, the reported personal involvement of DPM Hilaire means that no internal investigation will be undertaken, notwithstanding the threat to Saint Lucia's national security, as Hilaire has the portfolio for CIP.  How can such a gangster as Mijajlovic be approved by the CIP of Saint Lucia? The fact that such a criminal organization as Bemax is now a CIP-approved developer shows that CIP in Saint Lucia is now officially out of control. One wonders what Minister Frederick's thoughts are on the matter, given that his portfolio is that of Housing. By his own utterances on political platforms, he is indeed very familiar with, and approves. Again, birds of a feather.

CARIBBEAN GALAXY PRESIDENT ZHANG KUAN RELOCATES FROM HONG KONG TO DUBAI; FLEEING POTENTIAL AND EXISTING LITIGATION

ZHANG KUAN , the President of the CARIBBEAN GALAXY GROUP, which is a primary defendant in the MSN Media RICO Federal lawsuit in the United States, has moved his personal headquarters from the corporate base in Hong Kong, to Dubai, UAE. The RICO action, which seeks to recover damages of $150 million, alleges that Galaxy illegally sold thousands of Citizenship by Investment (CBI/CIP) passports, issued by Saint Kitts & Nevis and by Saint Lucia, names Galaxy as a party defendant. The RICO lawsuit, which allow the recovery of treble damages, and is presently pending in the Middle District of Florida, alleges fraud, money laundering and corruption of government officials. Additionally, the SKN Government has announced that there is a pending criminal investigation in Saint Kitts & Nevis, under the leadership of the Director of Public Prosecutions (DPP), into irregularities in the CBI program. 

Given that a number of national leaders throughout the five East Caribbean states have publicly affirmed that all illegally-discounted CBI/CIP passports will be summarily cancelled, unless immediate full payment is made by the holders to the countries that were defrauded, it is believed that Kuan relocated ahead of the large amount of litigation that Galaxy, and possibly him individually, will face from unhappy passport clients, as well as a threatened Class Action by citizens of the two issuing countries, which has been widely reported in the media. 

Zhang Kuan, President Galaxy Group

Pictured above is the reception area of  Kuan's new executive offices, which prominently feature several national flags of Saint Lucia. It is known that illegal discounted sales of Saint Lucia passports is continuing, through Galaxy's agents and representatives, some of whom are operating in the United Arab Emirates, notwithstanding official orders from the Saint Lucia CIU to cease and desist further discounted sales.  

CHINESE-OWNED HENG SHENG, THE CARIBBEAN GALAXY OF GRENADA; SELLING THOUSANDS OF ILLEGALLY -DISCOUNTED PASSPORTS, BUT WHERE'S THE HOTEL THEY PROMISED, FIVE YEARS ON?

 

If you thought that CARIBBEAN GALAXY REAL ESTATE LIMITED, the Citizenship by Investment (CBI/CIP) stakeholder that sold thousands of Saint Kitts passports, collecting USD$1bn, while failing to construct the Prison Project in a massive fraud, you haven't met HENG SHENG, another Chinese company, engaged in Grenada's National Hotel project. All the slick and glossy pre-construction photos, form 2019, depict a futuristic hotel structure, anchoring a five-star resort. Heng Sheng promised a two billion dollar modern marvel. It's a bloody pipedream; Read why.

It's a damn shame that the reality is light years from the sad truth. Take a close look at the"resort" here in real-time September 2024; Heng Sheng (HS) has barely completed the first floor, and if you look closely, construction appears to have completely halted some time ago. Sure, the website update from July promises a completed and operational hotel complex, opening in 2027, but the reality is all we see a neglected worksite that's going nowhere. 

This what fraud looks like, Chinese-style. Like many other corrupt and crooked CBI developers before it, the company has sought to excuse the obscene delays by blaming government red tape and plans approval delays. This old trope has been employed time and again, all over Grenada, resulting in rusting carcasses of unfinished CBI construction that the government never calls the developers on, because they always get their portion, and certain government officials, and their supporters, grow fat on undisclosed, illicit payments and "contracts." The losers are the people of Grenada, the same sad story as one sees all over the East Caribbean CBI/CIP industry; Chinese fraudsters, with the help and assistance of local (but corrupt) leaders who are feathering their own nests through repeated bribes and kickbacks, fleecing the programs they are supposed to serve. 

The fictional pipedream; never built

In the meanwhile, as we have previously (and painfully) detailed, illegally-discounted applications are pushed through by HS consultancies, vendors and sub-agents in the Middle East and elsewhere, just like we have seen in Saint Kitts, and in Saint Lucia with Galaxy. HS has sold thousands of Grenada citizenships, complete with passports, at bargain basement prices that are illegal under the Grenada laws that authorize economic citizenship sales. You may want to read our prior article. Heng Sheng Does not Deny that it Sold Illegally-discounted economic Citizenships of Grenada. Can you say license to steal?

Where is all this fraud, money laundering and corruption going to end, we ask. When there are more Chinese CBi passports holders than native-born Grenadian citizens? When HS abruptly pulls out of Grenada, with billions of dollars illegally acquired, flicking its finger at all those greedy Grenada politicians, left holding the bag, and facing criminal prosecution abroad? We cannot say, but unless there is systemic reform in Grenada's CBI program, expect the worst.

FORMER BRITISH VIRGIN ISLANDS PREMIER ANDREW FAHIE HAS A RELEASE DATE FROM FEDERAL PRISON; IT'S IN 2033.

Given the hubris that has been displayed recently by senior elected officials in a number of East Caribbean states, as allegations of fraud, money laundering and corruption fly around the region, perhaps those arrogant individuals might want to look at how that attitude served their former colleague, ANDREW FAHIE. Fahie, who refused to admit guilt, and put the US Government through the expense of a trial when the evidence was overwhelming, now will more than a decade to ponder his corruption. We trust that certain leaders in the Caribbean are paying attention.

MORE DETAILS EMERGE FROM THE SHELL COMPANY PHASE OF THE HEZBOLLAH PAGER EXPLOSION OPERATION

As investigative journalists continue to probe the Hezbollah exploding pager story, seeking more details for their readers, there's a point to be made for compliance officers; is there anything that you can take from any financial crime story, which will aid you in your work? Personally, I am always looking for those minute details that might provide valuable insight into tradecraft, so that one will be on alert for that same technique, either when someone attempts to use it on you in the future, or for you to use against your criminal adversaries.

Now, on to that little bit of information previously not appearing in the Hezbollah pager story: we already know that there were three front companies set up to shield the operators of the scheme from discovery: one in Hungary, one in Bulgaria, and possibly one in the Czech Republic (last one not verified), but there's something else not previously reported: the operators then had to find a way into Hezbollah's covert purchasing agent network.

To do that, they then had to identify the terrorist organization's own front and shell companies, which they used to make anonymous commercial purchases. Apparently this was facilitated by the operators selling legitimate products to other buyers in the marketplace, where they became visible to Hezbollah purchasing agents, and the rest is history. Of course, the operators had to identify which of the front companies seeking the pagers were Hezbollah; I assume the locations, in predominantly Shiite areas of Lebanon gave them away, but we do not know that yet.

Takeaway; Compliance officers should understand that sometimes, entities with a hidden agenda ( e.g. money laundering or fraud) may actually operate legitimate business enterprises, for the purposes of attracting targets, which they can exploit, because a level of familiarity and trust was created by the legitimate business that they engaged in. Bankers do not conduct a personal visit to the client's factory or office anymore; they rely upon the Internet to confirm that an active business exists at the principal address, but here again, temporarily running a real business makes it appear legitimate.

Good compliance officers look for a track record of operation, going back a while, and don't rely upon a new, seemingly active, business. They know what a shelf company is, and will make a "lookback" historical check to insure that they have something that is real, when finding a suspicious activity that might be money laundering.

IRAN WILL BE USING PREPAID MASTERCARDS TO PAY HEZBOLLAH, WITH A MAXIMUM VALUE OF USD$25,000 ON EACH CARD. WHAT'S WRONG WITH THIS PICTURE?

Yes, I am aware that there are no international credit card networks connecting Iran with the rest of the world, due to US sanctions regarding the Dollar, and the reluctance of European banks that do business with the United States to engage with Iran, but Iran has found a way around the lack of a payment network. It is using a third party, a country in Asia, to issue the cards.

We trust that the nation foolish enough to provide such material support to a global terrorist organization will find itself subject to sanctions for its role in funding Hezbollah. As soon as details are available, we shall update this story. We trust that Mastercard with revoke the issuer's privileges, or at least find a way to insure that the card does not work in Lebanon, Syria, Turkey or any other Middle Eastern country where Hezbollah maintains "offices."

WILL FINCEN AND OFAC TEAM UP TO STOP CHINA IN THE CARIBBEAN AND SAVE CORRESPONDENT BANKING IN THE REGION IN THE PROCESS?

While America Sleeps, China uses five countries' Citizenship by Investment passport programs to increase its influence in the Caribbean. Its tools; CARIBBEAN GALAXY REAL ESTATE LIMITED in Saint Kitts & Nevis and Saint Lucia; in Grenada, CHINA HENG SHENG (Singapore) DEVELOPMENT PTE., LIMITED; In the Commonwealth of Dominica, and Antigua & Barbuda, a number of entities, all designed to vastly strengthen the PRC's clout in a region where foreign interference has been strictly prohibited by the Monroe Doctrine since 1823. China apparently chooses to ignore this established foreign policy of the United States, while engaging in money laundering that affects American National Security interests, due to financial crime impacting our banks. 

As the direct result of Chinese actions that have resulted in the various CBI programs conducting illegal passports sales, the payments then deposited constitute money laundering for the US banks that maintain correspondent accounts for the Caribbean financial institutions that have CIU accounts. The situation now threatens the future of those accounts, the loss of which would surely plunge the East Caribbean into serious financial difficulty, given that the United States is the region's largest trading partner.

In order to insure that every East Caribbean state maintains the essential access to the American financial structure that is necessary for international trade, remittances from abroad, and the development of tourism, those correspondent accounts must continue to exist. Therefore, it is suggested that the Financial Crimes Enforcement Network, (FinCEN), and Treasury's Office of Foreign Assets Control (OFAC), issue such Advisories and Sanctions as are necessary and proper to block all the deposits of Chinese-owned and controlled entities of the payments for the illegal sale of discounted Economic Citizenships into any US bank accounts. 

One American financial institution with correspondent accounts for several Caribbean banks, Bank of America, has already started to block all CBI transactions, after discovering that such illegal payments were being deposited by Dominica. OFAC Sanctioning the companies known to be involved, and all payments being made by and through them, will assist US banks to meet their AML/CFT obligations, and with FinCEN publishing relevant Advisories, the response will preserve the correspondent relationships that are a lifeline for the Caribbean. We hope that FinCEN and OFAC staff will accept this timely advice, to assist in the solution of an emerging problem that can no longer be ignored by US regulatory agencies.

SAINT KITTS OPENS CRIMINAL INVESTIGATION INTO CITIZENSHIP BY INVESTMENT ILLEGAL SALES SCANDAL

Ex-PM Timothy Harris

The Government of Saint Kitts and Nevis, through its Prime Minister, TERRANCE DREW, has announced that it has opened a criminal investigation into the ongoing scandal involving the widespread illegally-discounted sale of Citizenship by Investment (CBI) passports. It will be conducted under the auspices of the country's Department of Public Prosecution (DPP), which investigates violations of the criminal laws, as the sale of illegally-discounted passports in Saint Kitts is a criminal offense. The Prime Minister's Office, in an announcement on September 20, detailed the recent CBI reforms enacted by the Government, but noted that there were what he referred to as 'irregularities" prior to the passing of those reforms, which the DPP was now charged to investigate.

Not mentioned in the PMs statement, but vitally important to its success, are the details of how it will be conducted. The investigation will be led by a Special Prosecutor, to be brought in from "a foreign jurisdiction," meaning outside Saint Kitts, most likely because many of the probable targets are present and former members of the government, together with other politicians and businessmen known to be closely linked to them. It is not known whether he will be from one of the other four EC states that offer CBI/CIP. He will be assisted by individuals described in local media as "a team of outside investigators," which generally means law enforcement agents who are experienced detectives. In a nod to local concerns about foreign investigators, one of the investigators will be a Kittitian, "to insure collaboration and local oversight."That individual, and what Saint Kitts government agency he will be drawn from, has not yet been made public.

Ying Jim and Les Khan

The primary targets of the investigation will most certainly include former Prime Minister TIMOTHY HARRIS, who remains a member of the country's Parliament, the National Assembly, the former head of the country's Citizenship by Investment Unit (CIU), LESLIE "LES" KHAN, and the CEO of CARIBBEAN GALAXY REAL ESTATE LIMITED, YING JIN. All three of those individuals are named party defendants in the RICO lawsuit, which has been brought in Federal Court in the United States, alleging massive and rampant illegal pricing discounting by Galaxy in passport sales, and which specifically implicates Harris, Khan and Jin, among others, as bad actors in the scandal.

There will also be, most likely, other targets of the investigation, including but not limited to, passport sales consultancies and other vendors, sub-agents, financial institutions in Saint Kitts and abroad, due diligence firms and other entities and individuals. It is also expected that they will also include a number of sitting senior government officials of Saint Kitts and Nevis, and politicians from the Peoples' Labour Party (PLP).

Whether the investigation will be conducted without delay, and without deference to some of the powerful Kittitian political figures who will most certainly be interviewed, and who will be called upon to produce personal financial records, are questions outside observers in the United States and the United Kingdom will be asking. The stature and independence of the outside Special Prosecutor to be appointed is also an important factor; will there simply be a long, drawn-out process, amounting to a coverup, or will criminal charges ultimately be filed, in a scandal where everyone appears to be implicated? We cannot say, but we will be watching.

POLARIS AND OTHER AGENTS SUBMITTED 11,372 APPLICATIONS TO THE SAINT LUCIA CITIZENSHIP BY INVESTMENT PROGRAM

POLARIS CITIZENSHIP & INVESTMENT SERVICES LIMITED, a company in the Caribbean island of Saint Lucia, owned and controlled by the law firm of local attorneys GEOFFREY DUBOULAY, DIANA THOMAS and BRENDA FLOISSAC-FLEMING, engaged in the processing of illegally-discounted Citizenship by Investment passports, together with other agencies, submitted 11,372 applications during hurried processing by their offices, as the scandal surrounding the illicit sales unfolded in the media, with Polaris and the others earning inflated processing fees for each, all for a lower price than legally permitted. Given that each file could generate passports for four family members, there may be as many as 45,000 passports involved.

The clearly excessive amount of money Polaris received for the simple processing of application forms is part of a broad conspiracy that returned obscene profits to all the participants in an illicit enterprise designed to extract maximum amounts of fees, while delivering economic citizenship passports that were not properly and fully paid for, putting them at a real risk of cancellation. Furthermore, the fact that the payments were part of an illegal activity means that transfer of the funds into, and through, bank accounts in America constitutes money laundering under US law, which we have previously detailed in several articles appearing here. Correspondent accounts in the US, being recipients, are thus in danger of imminent closure, another serious problem that we have discussed. 

Polaris sold citizenships for Saint Lucia's Infrastructure Program, through the Chinese company CARIBBEAN GALAXY REAL ESTATE LIMITED, which is a named defendant in the one hundred and fifty million dollar RICO case presently pending in the United States, and which alleges that Galaxy ran an operation that allowed its partners, such as Polaris, to sell thousands of citizenships as reduced, and thereby illegal, rates, and to divert the payments received to China, instead of to Saint Lucia government accounts. Several individuals who have received passports through Galaxy have been arrested around the world for financial crime activities.

Passports sold at an illegally-discounted rate, through the five East Caribbean states that offer them, stand to be cancelled by the issuing countries for failure to make proper payment; One country, Dominica, has already begin officially cancelling such passports, and another, Saint Kitts & Nevis, has announced that it will begin such cancellations as well.

We have taken the liberty of attaching a small portion of the Polaris records, identifying the names of the applicants, all of whom apparently were obtained through sub-agents located in the Middle East. You can see the names of the sub-agent companies throughout the Polaris lists that appear in this article, which were taken directly from the companies' correspondence to the Saint Lucia Citizenship by Investment Unit (CIU).

As a former bank attorney and compliance officer, I note that 99% of the purchasers appear to be from high-risk countries in the Middle East. The purchasers' names, which were transliterated from their native Arabic language and script into the universally used Latin (Roman) alphabet, pose a serious danger for the purposes of Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT), as there are dozens of academically accepted equivalents from the original Arabic. This means that the results may not precisely correspond with the original, increasing risk of an alteration. Individuals on global sanctions lists, financial criminals and terrorist financiers may therefore not be identified. Banks, immigration officials, and law enforcement agencies will most likely not be able to determine if any of these individuals are among such criminal elements, which multiplies the risk that they will remain unidentified when presenting their new passports, showing them to be Saint Lucia citizens. We cannot underestimate the threat that these passports represent.

Therefore, not only has Polaris facilitated the issuance of passports obtained without properly paying for them, but it has allowed individuals who may be unsuitable and unqualified to receive them, while increasing the risk that it created aliases for criminal elements in the process, securing new clean identities that will not show up on government lists. It has been reported that Polaris, as well as its three senior partners, will be added as an additional defendant in the RICO case, and that there is reportedly a major criminal investigation pending in the United States.

THREE SHELL COMPANIES WERE USED TO DISTANCE INTELLIGENCE OFFICERS FROM DISCOVERY IN EXPLOSIVE PAGER ATTACKS UPON HEZBOLLAH

Further to our recent three articles explaining how timeworn, but effective, money laundering tradecraft was employed in the successful efforts to deliver pagers containing small amount of high explosive, our deduction early on that a shell company was being utilized to conceal the origin of the covertly exploding devices apparently was only part of the story.

According to an analysis conducted by three unnamed intelligence officers, and appearing in the New York Times, no less than three shell companies were employed in the operation. While the article is silent on details, if the operators of the pager delivery scheme followed traditional laundering methods, the additional two companies were used to further shield their true identities from discovery, by placing them, in series, to insure that beneficial ownership was totally opaque. That means shell company A is owned by shell company B, which itself is listed in public records as owned by company C. No due diligence checks, if they were made at all, could reach out three degrees to ascertain ownership and control.

One other item provided further confirmation that whoever was in command of the operation was drawing extensively from the laundryman's toolkit; the company, which used the same name as the original Taiwanese manufacturer, actually sold legitimate products wholesale in the marketplace, to further establish their cover, and dispel any concerns from its intended target, a designated global terrorist organization. The attention to detail in the pager scheme makes one wonder about the background of the individual that created it.

WHAT WILL BECOME OF ALL THOSE ILLEGALLY-ISSUED CITIZENSHIP BY INVESTMENT PASSPORTS?

 

The legal status of the thousands of CBI/CIP passports, issued by Saint Kitts & Nevis, and by Saint Lucia, and which were processed and issued by them, notwithstanding that only a portion of the legally-required fees and charges were paid by the applicants, remains unresolved. The balance of the fees and cost must be paid to validate the transactions, and the passports issued and outstanding. Otherwise, the passports will have to be cancelled and voided.

Saint Kitts Prime Minister Drew, who has gone on record, declaring that, unless the full price is paid, the citizenship and passports will be cancelled, has not since taken any action to do so, even though he had been presented in court with clear and convincing evidence that illegal discounts were paid and accepted. Saint Kitts Attorney General Wilkin has taken no action in the matter, although there is incriminating evidence made public against him in pending litigation. Over in Saint Lucia, the Prime Minister and his Cabinet are in total denial, even though in nearby Dominica, cancellations of passports by the PM there have already begun. In Saint Lucia, the government has attempted to shift the blame to the purchasers, asserting that they should have consulted the CIU website, and not made application if it was for an illegal, reduced fee.

A solution is needed; Who is going to pay those outstanding costs, the sales agents, who sold at a discount, or the purchasers themselves?   We believe the sales agents, many of who are located on remote parts of the world, far from the Caribbean, will simply shut down their businesses, and move on to some other business enterprise. The purchasers, who will probably claim fraud or misrepresentation, most likely will not pay the balance either, as many have admitted that it was the low price offered to them which induced them to apply. When it comes to the issue of who has the most culpability for the end result, there appears to be more than enough to go around, especially when it comes to the elected leadership, who supervised CIU officers and staff.

This leaves the two governments in the position where they must cancel the passports, as they have not been fully paid for. What litigation will then ensure on behalf of the buyers, and against which individuals and legal entities, and in what court in what country, are issues that will shortly be dealt with by attorneys and law firms representing the purchasers, most of whom are affluent, and therefore not deterred by the costs that they will incur. What the CBI programs will look like after being battered by massive litigation, adverse publicity, and potentially, judgments for money damages, we cannot say, but the end result may be that the Citizenship by Investment programs in St. Kitts and in St. Lucia will not survive. 

Can all this be avoided? is there a fair and equitable solution to the problem, that protects the purchasers, but results in the additional revenue that the law requires? None has yet emerged from the scandal, but one is desperately needed to avoid scarring the CBI industry beyond repair.

MORE MONEY LAUNDERING TRADECRAFT EMERGES FROM THE HEZBOLLAH PAGER & WALKIE-TALKIE EXPLOSIONS

If you read our previous article, "DID YOU CATCH THE ARTFUL USE OF A SHELL COMPANY IN THE HEZBOLLAH PAGER ATTACK IN LEBANON?" where we pointed out the likely use of traditional shell company laundryman tradecraft, your intellectual curiosity as a compliance officer should have been aroused. Yesterday, with a second round of lethal explosions, this time of handheld short distance communication devices, commonly referred to as walkie-talkies, several more clues have emerged.

While the CEO of the mysterious Hungarian company implicated in the distribution of the pagers denied responsibility, there are a number of other facts that again lead us to the methods and tactics often used by money launderers, but also by the opaque intelligence services if the world. The company, BAC, is said to have been administratively dissolved in 2022, but a successor company, with the same exact name, was subsequently created. The use of deceptively similar company names is an old school money laundering tactic, which is generally successful in deceiving victims regarding the legitimacy of whom they are dealing with. I repeatedly used it myself back in the day. That's one more indicator.

Additionally, the type and model of handheld device that exploded yesterday, ostensibly manufactured in Japan is, according to the company, an item that has not been made for a decade, and it issued a public warning regarding counterfeits. The most recent incident may not have been a supply chain interdiction, where explosives were inserted, but the covert manufacture of a counterfeit product, advertising it at a bargain price to the target, and delivering it as the real thing. Money launderers love to deceive their targeted banks by using companies with zero legitimate business activity, even creating bogus advertising, phantom sales operations, and receipt of "payments" to simulate legitimate commerce, all the while moving and cleaning dirty money.

The more we take a hard look at limited amount of facts and details surrounding the explosions, the more things we see. Sales staff in legitimate companies often hawk "deals" to their customers, to move merchandise that is stale or sitting in warehouses unsold for an extended period of time. Were these sales of handheld devices to Hezbollah purchasing agents, who thought they were getting authentic products, bargain basement sales? Intelligence agents are trained to use legacy money laundering tactics, because they usually work very well. In this case, they were eminently successful.

DID YOU CATCH THE ARTFUL USE OF A SHELL COMPANY IN THE HEZBOLLAH PAGER ATTACK IN LEBANON?

While we are constantly hammering home the abuse of shell companies, shelf companies, bogus virtual charities, paper foundations and other entities that only exist for the use and benefit of the laundrymen who employ them successfully, time & time again, to deceive compliance officers, today's news about the simultaneous explosion of thousands of pagers in the hand of Hezbollah terrorists contained a reference that compliance officers should have immediately picked up on.

The Hungarian company that had the license from the Taiwanese pager manufacturer was located at an accommodation address, when media sought to find it. The company, BAC, also curiously had no profile for manufacturing, which is strange, because it was supposed to the maker of the pagers that we now know contained very small amounts of powerful explosives. Can you say shell company loud enough?

When I was a money launderer, obtaining shell companies in the British Territory of Anguilla, and in the British Virgin Islands, I could not help but noticing that the intelligence services of the world were also clients of the lawyers and accountants vending them to me. Compliance officers should be aware that there may come a time when you identify a transaction as part of a money laundering scheme, but can neither connect a well-funded operation to any individuals that are operating it, nor finding a criminal purpose for the activity.

The intelligence services of the world often use the same tradecraft as i used as a money launderer to disguise the origin of funding that they are distributing to recipients, in furtherance of a country's national policy; they must obscure the origins of that funding, to achieve plausible deniability. So if you find a transaction that simply doesn't make sense, it may very well not be conventional money laundering at all, but something else entirely. Think about that, next time you have questions but no answers.

CALLS FOR THE RESIGNATION OF THE GOVERNOR OF THE EASTERN CARIBBEAN CENTRAL BANK FOR WILLFUL BLINDNESS TO MONEY LAUNDERING IN CITIZENSHIP BY INVESTMENT INCREASE

Public pressure upon TIMOTHY ANTOINE, the Governor of the ECCB, to tender his resignation, after an interview during which he repeatedly evaded answering direct questions about illegal activities of the financial institutions at member banks which constitute money laundering, and could result in major loss of correspondent banking access in the region, has now spread to Saint Kitts & Nevis, where the regulatory agency has its headquarters. A media report just released brutally excoriated Antoine for professing ignorance of what has become a desperate situation where essential correspondent banking is literally hanging by a thread, and the ECCB is pointedly ignoring the problems, which threaten the economies of the EC states that offer CBI/CIP. Antoine has become the face of the problem.

Many observers believe that Governor Antoine is following strict orders of the members of the Board of Directors of the ECCB, all of whom are closely linked to their respective countries' prime ministers, who are themselves alleged to be recipients of illegal compensation from companies engaged in CBI sales, and that this widespread corruption is the root cause of the problem. Antoine's recent interview demonstrated his intentional avoidance of the rampant money laundering problem, which could result in the loss of the three principal US banks which currently offer most of the correspondent banking access to EC banks. He claimed not to be aware that Bank of America had terminated acceptance of CBI money originating in Dominica, and that real threats of the loss of correspondent banking elsewhere, from ECCB Member banks was a real possibility, thereby losing public confidence in his leadership ability.

We call upon Governor Antoine to tender his resignation with immediate effect, and for the immediate appointment of a qualified administrator, from outside the region, so that the problems can be addressed forthwith, before the economies of the countries in the region are severely damaged by the loss of access to the American financial structure, as US banks choose to De-Risk, rather than face major possible fines and penalties from regulatory agencies for failure to rein in massive money laundering from the Caribbean.

REMEMBER, THE US STATE DEPARTMENT TRAVEL ADVISORY ON MAINLAND CHINA NOW ALSO CAUTIONS YOU ABOUT HONG KONG AND MACAU

If you are a compliance officer conducting due diligence in the field regarding Chinese companies, please use local assets instead of in-country visits. You may unwittingly uncover information deemed by China to be a STATE SECRET, and be detained, and it's all downhill from there. Stay out of China, for your own safety. No job is worth a stint in a Chinese prison.

ALERT ON COMPANIES LINKED TO JOHN HANAFIN, OFAC-SANCTIONED DUE TO RUSSIA VIOLATIONS, AND A SELLER OF ILLEGALLY-DISCOUNTED CITIZENSHIP BY INVESTMENT FOR CARIBBEAN GALAXY

Due to JOHN HANAFIN'S OFAC status, for violating international Russian sanctions,
we are listing all companies that are known to be linked to him, or owned by him, for the benefit of American citizens and companies that might come into contact with them, as such as prohibited by law.

HANAFIN has six current positions, including Founder and CEO at Knightsbridge Legal Consultants, Founding Partner at Maine Investment AG, and Ambassador at Soneva. Additionally, John D. Hanafin has had one past position as the Non Executive Director and Consultant at Saffery Champness.

Knightsbridge Legal Consultants, UAE
Founder and CEO
Mar 2022

Maine Investment AG
Founding Partner
Jun 2021

Soneva
Ambassador
Jun 2021

Vanuatu Trade Mission UAE
Director - Foreign Direct Investment
Jun 2020

The Ritz-Carlton, Vienna
Head Of International Sales
Oct 2019

Huriya Private, UAE (Closed)
Founder and CEO
Oct 2021