THAT CUTE LITTLE 10% SHAREHOLDER REPORTING RULE IN HONG KONG: FAR TOO PREDICTABLE TO BE SUCCESSFUL

This week's news for SDNY, regarding the guilty plea of the British money launderer (USD$60million) RODERIC SAGE, reminds me that tradecraft is ineffective when repeated ad nauseum. When I was a compliance officer at a billion dollar investment firm,I used my experiences, gleaned from a decade as a career money launderer, to foil laundrymen seeking to hide beneficial ownership, when they engaged in tactics that I myself used successfully.

My rule as a compliance officer at that firm was that corporations placing investments had to identify all shareholders with more than ten (10%) of the outstanding shares of company stock. I noticed that some of the salesmen were obviously coaching their clients to state that any dodgy shareholders, whom they preferred not to name, owned precisely ten per cent. I immediately changed my position, to require any shareholder of nine (9%) percent or more be identified. Roderic Sage's laundrymen, knowing that ten per cent was the ceiling for Hong Kong KYC on corporate shareholders, formed a number of shell companies holding under that amount. US law enforcement investigators identified the scheme, and obtained indictments anyway; the ploy was, as I noticed when I observed it as a frontline compliance officer, overused and obvious. Sage is, if anything, simply guilty of a lack of imagination. Research Note: US vs. IVO BECHTIGER et al, Case No.: 1:20-cr-00497-GHW (SDNY).