FOREIGN INVESTORS SHOULD STEER CLEAR OF BARBADOS, AS RAMPANT MONEY LAUNDERING AND FRAUD RAGES UNCHECKED

We have written extensively on this blog regarding the systemic corruption in the Republic of Barbados, whereby many of the island's senior attorneys routinely engage in probate fraud, real estate fraud and money laundering, to steal and acquire valuable land, which they then convey to third parties, including European and American companies involved in building resorts. The victims are usually uneducated Bajans who are unaware that their deceased relative owned extensive real estate at the time of their death, and these lawyers illegally transfer title, using co-conspirators, and receive huge fees as the result. It is a dirty business, in part created by the surplus of licensed attorneys which exceeds the amount of legal work available for them to perform, and what amounts to moral bankruptcy among them.

Most legal experts believe that their actions regarding transfer of illegal sale proceeds and fees constitute money laundering, and that some of those payments being in US Dollars, confers extraterritorial jurisdiction under the Money Laundering Control Act of 1986, and case law construing that Act.

When some of victims became aware of the fraud, their efforts to obtain justice have been repeatedly foiled by the local bar association, the corrupt judiciary, and uncooperative government officials. The cases of JERRY NURSE and JOHN SCANTLEBURY, both of whom were cheated out of their rightful inheritance, are typical of the scams perpetrated against Bajans by unscrupulous local lawyers. The Government of Barbados ignores their plight, because in truth and in fact many of these same senior government officials have previously themselves been engaged in this illegal activity, and after becoming wealthy in this illicit manner, ran for office to acquire still more power, as well as impunity against any enforcement activities that might be brought against them by their victims. The jurisdiction is a legal nightmare of any victim of this fraud who seeks legal redress in any quarter, for the majority of judges are themselves guilty of committing these crimes when in private practice, or their close relatives fleeced the uneducated public in this amoral manner.

Inasmuch as neither the embassies of the United States nor the United Kingdom have assisted the victims in recovering their rightful patrimony, and there is no indication that foreign actors will ever involve themselves in internal Bajan politics, continued exposure to truth to power may be the only avenue to obtain justice. Meanwhile, foreign investors should not acquire any real estate, whether improved or not, for the status of real estate title will most likely not be valid, as it was acquired through fraud committed by lawyers probating the estates of local property owners.  This also means do not acquire any businesses, as they may have also been secured through fraud; caveat emptor.  

WILL THE EFFECTIVE DATE OF THE NEW 30-DAY CBI RESIDENTIAL REQUIREMENT BE DELAYED UNTIL 2026?

All this press coverage, in the investment migration media, about the virtues of having economic citizenship holders spend thirty days, within a five year period, in their new jurisdiction, may look nice, and in response to the American complaint about non-residents, but don't expect it to be a requirement anytime soon. All five CBI & CIP states must sign before it become effective.

In fact, I would be surprised if it is ratified before 2026; remember, when the five Eastern Caribbean CBI states signed the Memorandum of Agreement, SAINT LUCIA delayed signing for several months, and hustled through a large number of citizenships during that period, its CIU, under the control of INVESTMENT MINISTER ERNEST HILAIRE, frantically working nights and weekends, to complete sales at illegally discounted rates. Which EC state, looking to evade the 30-day residency requirement for their clients, will drag its heels this time?

If you have any doubts, take a close look at the attached portion of the Draft Agreement ( which is still not yet in final form, nor have comments and objections published, a month after they were due) to see the loophole. If the discounted sales pricing fraud was any indication, it will be quite a while before the Parliaments of the five CBI states pass the proposed legislation.

HAS THE UNITED STATES NOW REVOKED MULTIPLE VISAS FOR CARIBBEAN LEADERS LINKED TO MONEY LAUNDERING, FRAUD AND RAMPANT CORRUPTION?

 

If you saw the recent news about the planned U.S. State Department review of all existing visas, you know that continued visa access to the United States in the future will be subject to review. That apparently includes leaders of the CBI Caribbean states. The attached item was published this week; we have not as yet been able to confirm whether it is in fact a legal notice sent to PHILIP J. PIERRE, the Prime Minister of Saint Lucia, who has been linked to massive corruption, in connection with the country's CIP program, involving the Chinese economic passport sales company, CARIBBEAN GALAXY GROUP, but we shall endeavor to determine whether other senior Caribbean leaders known to be accepting bribes and kickbacks to transfer tens of thousands of passport files to dodgy Chinese companies are also now receiving such notices.

UPDATE: We now have breaking news to the effect that Pierre's visa has been revoked. Again, we stress that this information has not been confirmed through official sources. If true, what other senior leaders in the Caribbean have lost access to the US?

DOES THE SIMPLE POSSESSION OF A CBI PASSPORT FROM A CARIBBEAN TAX HAVEN EXPOSE THE HOLDER TO INCREASED RISK?

                                                                       Blackfridge Chief Executive Officer Zhijun Sun

I have long explained to my readers that the five economic passport issuing states in the Eastern Caribbean ( St. Kitts & Nevis, Antigua, Dominica, St. Lucia & Grenada) all have a long and sordid history as dodgy offshore tax havens, where international financial criminals and money launderers have long placed the proceeds of crime, and when investors purchase CBI passports, they run increased risk of drawing unwanted attention from the world's law enforcement agencies. This little detail has been pointedly ignored by the investment migration industry, but I believe that they are obligated to point it out, as part of full disclosure to consumers. Unfortunately, sellers of Caribbean CBI passports generally fail to disclose the specific risks attendant to their possession and use.

Perhaps now I will be taken seriously. Media in the Isle of Man is reporting that a number of Chinese nationals, all holding IOM residential visas, have had their visa revoked, meaning that they are now required to leave the jurisdiction forthwith, and are prohibited from reentry, upon pain of arrest. Their wives and children, (who attend local schools), have also had their residency rights cancelled. None of them can now enter both the Isle of Man as well as the UK. One of their companies, the fintech BLACKFRIDGE, has had its financial services license suspended.

The government has stated that the reason for this action is Confidential, which is allowed in cases involving National Security. It is noted that some of the individuals hold CBI and CIP passports from Saint Kitts & Nevis and Saint Lucia; one of the individuals was physically in Saint Lucia, when the IOM government took these actions. The presence of these individuals was said to be "not conducive to the Public Good."

We will be watching future developments, involving any similar governmental actions against holders of Caribbean CBI passports, and advise our readers accordingly. We thank our readers in compliance sector in the Isle of Man for bringing it to our attention.

HOW FAR WILL THE UNITED STATES GO IN CLEANING UP CARIBBEAN MONEY LAUNDERING THROUGH CBI?

PM Philip J. Pierre

The five East Caribbean states that sell Citizenship by Investment (CBI) passports continue to oppose efforts by the current American administration to truly reform their programs, fatally infected with corruption, fraud and money laundering. The lure of easy money from CBI, without effective safeguards to prevent corruption, has resulted in the same opportunistic moral bankruptcy in the Eastern Caribbean that plagued the region during the previous period when these newly-independent states openly laundered billions of dollars in narcotics profits earned in North America.

It is easy to see that reform of these CBI programs will not come from within. You have only to see the comments posted by voters in Saint Lucia, when details of massive CBI corruption, led by the country's Prime Minister, PHILIP J. PIERRE, are exposed; they choose to vilify the state's Opposition, rather than pay proper attention to solving what has now become an international nightmare for the island nation. They also pointedly ignore the billions of dollars in CBI revenue the country's Investment Minister, DPM ERNEST HILAIRE, has allowed to be transferred to Hong Kong by the Chinese-controlled CARIBBEAN GALAXY GROUP, while Hilaire has become the personification of abject corruption in the region. All five countries have similar problems.

DPM Hilaire

West Indians in the CBI states have all drunk the cash cow cool aid offered by their corrupt leaders; we cannot expect to see any significant reform during our lifetimes. Given that what amounts to government-sponsored racketeering is adversely affecting the United States, posing not only money laundering but even national security threats, we are staring to see American pushback, which will not only be economically painful for these countries, who are utterly dependent upon CBI funding for their bloated government budgets, but will have real-life consequences for their native-born citizens.

Twenty five years ago, in the aftermath of 9/11, when the United States last paid serious attention to Caribbean money laundering, I proposed what amount to radical measures to suppress the problem. While the concern then was drug money laundering and potential terrorist financing, and today it's money laundering and corruption due to CBI, the same radical steps are both necessary and appropriate. Shut down the correspondent accounts with U.S. banks, until the CBI programs are either effectively reformed, with outside supervision and control, or are terminated. Nothing short of that will suffice.

WHAT WILL US BANKS AND REGULATORS DO TO THE CARIBBEAN BANKS THAT TRY AN END RUN AROUND AML COMPLIANCE?

If you have seen the Comment posted in response to yesterday's article, NEW PILOT ALTERNATIVE PAYMENT AND SETTLEMENT SYSTEM OF FOUR CARIBBEAN CENTRAL BANKS ANNOUNCED, AVOIDING THE ROUTING OF CBI MONEY THROUGH THE U.S. BANKING SYSTEM, here is the relevant section:

"Thanks for posting Kenneth Rijock . As we see this will not just assist CBI programs but also avoid or circumvent regularly checks... The question is what the corresponding banks and the regulators will do to these banks."

The three banks involved in the proposed program, in Barbados, the Bahamas and a yet-unnamed third Caribbean state located outside the ECCB, could lose all their US correspondent banking relationships, in response to what is an obvious effort to evade American banking best practices compliance programs. Perhaps American regulators, such as FinCEN and OFAC, now under new leadership, might choose to mete out sanctions, and even civil penalties.

Add to the mix what responses we might see from the global financial services industry to what can only be regarded as new and emerging threats due to what will become a regional Caribbean payments sector not prepared to meet the challenges of cross-border operations, and in dire need of professional assistance to function efficiently. Finally, linking this Caribbean structure to the African payments system, could expose it to AML/CFT threats that sector is still grappling with.

Will this create a financial hornets' next which is initially unmanageable, requiring external intervention or even abrupt termination? We cannot say, but we will be watching.

NEW PILOT ALTERNATIVE PAYMENT AND SETTLEMENT SYSTEM OF FOUR CARIBBEAN CENTRAL BANKS ANNOUNCED, AVOIDING THE ROUTING OF CBI MONEY THROUGH THE U.S. BANKING SYSTEM

TIMOTHY ANTOINE, the Governor of the EASTERN CARIBBEAN CENTRAL BANK, has announced the formation of a pilot program whereby the central banks of three Caribbean countries, and the ECCB, will form a cross-border payments and settlement system, based upon the model of the existing Pan-African Payments & Settlement system, to handle cross-border payments in local currencies. Antoine bluntly stated that the purpose of the new payments system is to avoid the use of U.S. correspondent banks and what he referred to as "foreign currencies," meaning the U.S. Dollar. The new system has been designated the CARICOM PAYMENT AND SETTLEMENT SYSTEM (CAPSS).

The proposed system, which was announced at the recent Africaribbean Trade and Investment Forum in Grenada, and which Antoine contemplates being eventually being linked to the African payments system, with central banks making settlements directly with each other, in USD, could result in payments for economic citizenships through Citizenship by Investment (CBI/CIP) programs, outside of the American financial structure. This means evading AML/CFT compliance at U.S. Correspondent banks, which adhere to Banking Best Practices policies and procedures; Payments would therefore not be traceable through the American banking system.

Given the long history of fraud, money laundering and corruption that has pervaded the CBI programs of the five EC states, St. Kitts & Nevis, Antigua, Dominica, St. Lucia and Grenada, whose compliance programs are known to be affected by local political actors, and other forces, rendering them intentionally ineffective, it is feared that this new political system will serve as an end run around the American financial structure for illicit funds being laundered through CBI investments.

We further fear multiple problems, coming from the region's primitive payments and payments processing sector, which is a complex ecosystem involving various players like banks, payment processors, fintech companies, and digital wallet providers, all required to be working together to enable seamless transactions. This industry is rapidly evolving with technological advancements, changing consumer expectations, and increasing regulatory scrutiny. The Caribbean's Payments industry, to properly discharge a cross-border function, will require major upgrades, professional advice, and extensive training of staff.

Whether it is the intent of Governor Antoine, and the other organizers, to evade American regulators, remember that serious financial crimes in the U.S. through CBI transactions have already occurred, and the offenders will have to account for those criminal violations, as this proposed plan won't immunize them, such a program will demand compliance at a seriously increased level to become successful.

AMERICAN CUSTOMS AUTHORITIES ARE ONCE AGAIN LOOKING CLOSELY AT CARIBBEAN SCOUNDRELS, SCALAWAGS AND SCRAPPERS

Back in the period some call the Golden Age of Money Laundering, when the owners of offshore tax haven financial institutions grew wealthy banking illicit cocaine profits earned in North America, and smuggled into the Caribbean, American Customs officers payed particular attention to citizens of the West Indies entering the United States. Many of those arriving "businessmen and tourists" were but a small cog in a huge international money laundering operation. that depended upon such fringe players to quietly bring financial instruments into American banks, make investments with cleaned drug capital, and facilitate what was a well-oiled machine, operated at the behest of traffickers for whom narcotics was simply a business featuring a high return on investment.

During that period, US Customs more than one photocopied my entire American passport upon my arrival in CONUS , outright interrogated me, and x-rayed my carry-on briefcase, looking for incriminating evidence. Now, thirty years later, we have reports that individuals arriving from the states of the West Indies are receiving a similar level of attention, which of course disturbs them, and which treatment they have been reporting to their government leaders, in such jurisdictions as Saint Kitts & Nevis, Saint Lucia and Dominica. Did those leaders not consider that the new American administration, which is slowly implementing a new policy regarding those CBI states, due to their systemic corruption, fraud and money laundering, would also detail its law enforcement agencies to increase surveillance of individuals who are potentially engaged in violations of American criminal law? Will those visits result in the arrest and prosecution of the Caribbean couriers?

We understand that, while publicly putting on an external facade, dismissing the possibility that major U.S. action will affect all their constituents, the leaders privately worry about whether the proverbial knock on the door of their palatial residences will come, sooner rather than later. It is fast approaching the point where all their CBI sins and transgressions will have serious international consequences; Let the Games begin.

CYBER INTRUDERS MAY HAVE ACCESSED SEALED FEDERAL INDICTMENTS AND INFORMATION ABOUT CONFIDENTIAL INFORMANTS

There are multiple reports that foreign hackers have penetrated the Federal electronic case access system known to most legal professionals as PACER, for Public Access to Court Electronic Records, as well as the case management and filing system known as CM/ECF. this means that extremely sensitive court filings, which include sealed indictments of Federal fugitives, information that identifies Confidential Informants, and arrest and search warrants, could have been extracted by criminal elements.

Sealed Indictments of Federal fugitives, who are not in US custody, and many of whom are outside the United States, are non-public for a reason: to keep the targets from learning about pending charges, which information may cause them to flee to avoid apprehension. seeking to move to a non-extraditable jurisdiction. That information may also cause them to suspect Confidential Informants of being the source of incriminating information, and place them in grave physical danger. Other sealed filings could supply important clues to targets about the progress of pending investigations which they could act upon, to cheat justice. Foreign criminal organizations with access could modify their activities, assassinate witnesses, destroy evidence, and foil effective international investigations with this material.

The Federal filing system, which is said to be outdated and in sore need of replacement, has been the subject of repeated requests that it be replaced. Apparently, there have been multiple breaches, which have been disclosed to the Federal judiciary, but not acknowledged to the public. Individuals who have been Confidential Informants in Federal criminal cases should govern themselves accordingly.

MORE CRIME STATISTICS ( HOMICIDE) FROM THE EASTERN CARIBBEAN, TO ANSWER THE DOUBTERS WHO DON'T HAVE THE FACTS.

I have been receiving brutal pushback from my articles about the increasing violent crime in four of the Eastern Caribbean states that will be requiring that their CBI purchasers spend a stated amount of time in actual residence. While I am not saying that you are in imminent danger on the streets of Saint Lucia, Saint Kitts and Dominica every day you are shopping in the market, you should be aware of the increasing threats posed by narcotics trafficking gangs.

MOST CARIBBEAN CBI PASSPORT HOLDERS FROM ASIA AND THE MIDDLE EAST WILL NOT QUALIFY FOR A VISA TO ENTER THE UNITED STATES, UNDER TRADITIONAL ADMISSION POLICIES

You are a High Net Worth individual who has spent a hefty sum to acquire an economic citizenship from Antigua, Saint Kitts & Nevis, Dominica or Saint Lucia, and you apply for a visa at the US Embassy in Barbados, fully expecting that it be granted. Surprise, surprise; it is rejected.

A Consular Officer at the embassy, applying the legacy guidelines on visas, has ruled that you do not meet the traditional qualifications for visa approval. While you of course know that an applicant's lack of actual residency is a major factor, there are a number of other issues, which are guidelines the Department of State uses to specifically prevent overstays, and a CBI passport holder, although wealthy, will be disqualified because they will not be able to create satisfactory answers to most questions, as they involve long-term situations.

Besides "How Long have you resided in Your Country," questions about local (lengthy?) employment history, home ownership, family members whom you must support financially, and other ties to the nation you are now a citizen of, all show you have no close connections there. Consular officers, who fear you would therefore overstay, and remain in the US indefinitely, must apply these rules to CBI passport holders, as they would native-born citizens.

We trust that Investment Migration consultancies in the Middle East and Asia are not filling the heads of their CBI applicants with notions of visiting New York or Disney World anytime soon. Of source, enterprising attorneys will most likely be attempting to create positive answers to those questions for their CBI clients, but building such a long-term history may prove difficult. Thus, in addition to the new issues regarding Due Diligence, identity changing and national security threats, it is likely that most CBI passport holders will be unable to secure a visa to enter the United States.