HERE IS PETITIONERS' BRIEF IN ARAB BANK CASE

 Readers who are following the Alien Tort Statute litigation, filed by terrorist victims, against the Arab Bank, may wish to read the Petition for a Writ of Certiorari, which was recently granted by the United States Supreme Court. You may review the complete text of the Petition here.

WILL EU BRING CRIMINAL CHARGES AGAINST MOSSACK AND FONSECA PARTNERS ?

 Eurojust, the European Union legal agency, is in Panama City this week, to confer with Kenia Porcell, Panama's Attorney General, and to collect additional evidence in the Panama Papers scandal. There is an unconfirmed report, said to have come directly from Eurojust staff, that the EU intends to indict Jurgen Mossack and Ramón Fonseca on criminal charges, arising out of their alleged tax evasion facilitation, laundering and banking of the proceeds of corruption, and hiding the identities of senior European PEPs, who were all Mossack clients.

While the two name partners remain in custody in Panama, due to a judicial finding that they are at risk of not only flight, to avoid prosecution, but due to their destruction of evidence, Panama observers, who know that they could, if they choose to testify, implicate senior members of the present government, and that they might evade justice in Panama, for that reason.

We welcome a European prosecution of, not only the letterhead partners, but other attorneys at that firm, who actually performed the ongoing tactical money laundering operations for Mossack Fonseca clients.

FIRE SALE: DOMINICA OFFSHORE BANK FOR SALE, CHEAP

 The Internet is always buzzing with offers, generally from brokers, to sell offshore business organizations, through which fraudsters may fleece legitimate investors, launder narcotics profits and the proceeds of corruption, and in general commit mayhem in the financial world. I note that one such vehicle is being advertised to the public of late: a Dominican offshore bank.

Claimed to be a turnkey operation on offer, the bank for sale is going for USD$1.5m, plus the purchaser must contribute $500,000 into recapitalizing the bank, as the seller intends to remove all hispurported $1m capital, prior to the sale. The bank, which is not named, but is believed to be one of the dozen or so on the government financial regulator's list (though some banks may be unlisted, or intentionally listed very belatedly), and, if you believe the broker, received $1m from the owner over the past year, who also spent another million, obtaining approvals, SWIFT codes, furniture, banking software, and engaging three staff members.

Therefore, if the outlay to date is $3m, why sell out so cheaply ? And why is the required recapitalization so small ? considering that the offshore bank, for sale, may be one of the two reportedly beneficially owned by Venezuelan nationals, or certain Russian organized crime figures, who are said to possess Dominican passports, it may not be such a bargain after all, as there may be baggage that a purchaser would be required to assume, such as a money laundering history. One wonders precisely how these dodgy characters were able to obtain a banking license in the first place.

Nevertheless, in the world of free enterprise, it is galling to see such a vehicle for financial crime, openly offered in the marketplace.  

US SUPREME COURT TO HEAR ARAB BANK CASE

The United States Supreme Court has agreed to accept the Certiorari petition filed in one of the Arab Bank cases. Originally, a US District Court in New York held that the Arab Bank, a Jordan-based financial institution, violated the Alien Tort statute, by providing material financial support to Palestinian terrorists, who killed and wounded individuals in the Middle East, between 1995 and 2005. The bank paid the next of kin of terrorists who died during attacks upon unarmed civilians, which has encouraged subsequent terrorist acts in Israel, including the wounding and killing of Americans who were in Israel, or in the West Bank (Judea & Samaria).

The bank's conduct, during the decade-long litigation, was dilatory and abysmal. The landmark decision appeared to open the door to litigation, in US courts, by victims of terrorism, against banks who assisted terrorist organizations.

The Second Circuit Court of Appeals reversed the trial court ruling, holding that the statute was only applicable to individuals, not corporations, but its decision appears to be in conflict with those of other Federal Appellate Circuits. The fact that the US Supreme Court has agreed to hear the case means that at least some of the justices believe that they need to consider the issue, to resolve whether there is corporate liability, for terrorism, under the Alien Tort statute.  

DOMINICA'S DARKER SIDE; ITS OFFSHORE BANKS HAVE DECEPTIVELY SIMILAR NAMES

Take a good look at the names of the offshore financial institutions licensed in the Commonwealth of Dominica, and you notice a disturbing fact: a number of the names are deceptively similar, or could be easily confused with the names of major banks in other countries, or well-established business entities. This is a tactic employed by financial criminals, who intentionally seek to mislead the targets of their fraud, or other illegal acts, by giving the victims false confidence in what is, in truth and in fact, a shell entity, with little or no assets or history. These names are not accidents, believe me.

Given that all names of applicants must be cleared by the Dominican government, prior to the granting of approval, I wonder why such deceptively similar names would ever be approved by any responsible official. Some of these banks are obviously set up for the purpose of financial crime. Were bribes paid to Dominican Financial Service Unit, to secure these names, or to other senior government officials ? Frankly, I cannot see any other means through which  these irregularities were accomplished.

If you want to see the names, and judge for yourself how obvious the scheme is, you may access the Financial Services Unit list of licensed offshore banks here.

DID PANAMA'S PRESIDENT THREATEN TO SCALE BACK US FACILITIES IN PANAMA, IF RICARDO MARTINELLI IS EXTRADITED FROM MIAMI ?

A reliable source within the office of Panamanian President Juan Carlos Varela has confirmed that Varela has reportedly notified the US Government that Panama no longer wants it to extradite its fugitive former president Ricardo Martinelli. Furthermore, Varela allegedly threatened the US with punitive action, that Panama will close a number of American facilities located in Panama City, should the extradition ensue. It was Panama that asked for Martinelli's extradition in September, 2016.

Many Panama watchers believe that Martinelli, if tried in a Panama courtroom, for the dozen offenses that he is accused of, will implicate Varela, in the Odebrecht bribery scandal, the laundering of David Murcia Guzmán's criminal proceeds, and several other criminal acts that Varela allegedly participated in, and received illicit compensation from.  Many of Panama's most corrupt government officials are worried about what Martinelli will disclose, if he is forced to defend himself in court; he definitely knows where all the financial corruption secrets are buried.



 

TRANSPARENCY INTERNATIONAL SAYS US STATE DEPARTMENT NONRESPONSIVE ON MARTINELLI EXTRADITION DELAY

The president of Transparency International has publicly noted that the United States State Department has failed to provide an acceptable response to three inquiries as to why Ricardo Martinelli, the fugitive former president of the Republic of Panama, has not been extradited, to face justice in his native country. Panama delivered an extradition request to the US in September, 2016.

Precisely how Martinelli, then accused of massive corruption, while in office, was even allowed into the United States, where laws prohibit entry of corrupt foreign leaders, remains an open question. Some observers believe that he has an arrangement with either a law enforcement agency, or an intelligence agency, which is interfering with a moral extradition, due to his prior delivery of information, on criminal activities in Panama.

The problem is that Martinelli's current high-profile lifestyle in Miami, while he stands accused in a dozen criminal cases, totally over $5bn in the proceeds of corruption, reinforces the global perception that some wealthy ex-leaders can enjoy their "retirement" in the United States, free of the rule of law in their own nations, and that some US government agencies are to blame.

BESIDES VLADIMIR ANTONOV, HOW MANY RUSSIAN ORGANIZED CRIME FIGURES HAVE DOMINICAN DIPLOMATIC PASSPORTS ?

Vladimir Antonov, Dominican diplomatic passport holder and offshore banker

The current estimate is that 200-300 Russian nationals hold Dominican passports, reportedly obtained through the Citizenship by Investment (CBI) program, but given that Vladimir Antonov, the offshore bank owner and fraudster had a Dominican diplomatic passport, we must ask the question; how many Russian organized crime figures hold those prized diplomatic passports from Dominica ?

This may be the true reason that the Commonwealth of Dominica flat out refuses to identify its diplomatic passport holders. the Minister for Foreign Affairs excuse for non-disclosure, that diplomacy must be conducted in secret, has no factual basis, because the foreign "diplomats" do no engage in ANY diplomacy, but a lot of international business, which they facilitate through their diplomatic position, which is yet another violation of the 1961 Vienna Convention on diplomacy.

If Dominica was to disclose the identities of its dodgy Russian diplomatic passport holders,  we might get a glimpse into their money laundering activities in the East Caribbean, including, of course, in Dominica's opaque offshore banks. Russian money laundering in the region, in a year when illegal Russian activities, designed to impact the United States and Europe, in national elections, will receive special attention from law enforcement agencies. Does Dominica really want to become the new center of American law enforcement attention in 2017 ? If it does, look for indictments of Russians, and their Dominican enablers, the seizure of bank accounts, and the resulting total avoidance, by North American tourists, of a country seen to be a nest of vipers. 

 

POLITICIANS' EFFORTS TO OBTAIN FAVORABLE SETTLEMENT FOR REZA ZARRAB APEARS TO HAVE FAILED

Rudolph Giuliani; unable to outflank the US Attorney

Efforts, by two senior American political figures, working for Reza Zarrab, to fashion a favorable result for him, by seeking to arrange a deal, between the US & Turkey, appear to have completely failed, and most likely antagonized the US Attorney prosecuting the Iran sanctions evasion case, in the process. This information, which was gleaned by reviewing correspondence, between the prosecutors, the defense attorneys, and the Court, reveals a back-channel meeting, between the President of Turkey, and Rudolph Giuliani and Michael Mulkasey, which attempted an end run around the US Attorney for the Southern District of New York; it appears to have been unsuccessful.

Both Giuliani, the former Federal prosecutor and NY Mayor and Mulcasey, a former Federal Judge, and US Attorney General, were also reportedly meeting with certain American officials, obviously in the executive branch, and trying to craft some sort of international deal, which would meet the approval of Turkish President Recep Erdogen, and favor Zarrab in a big way.

Not only did their attempt fail, to date, but it excluded the US Attorney's Office in New York, who probably sees this effort as a back door attempt to minimize, Zarrab's sentence, and probable required cooperation, in the indictment of additional individuals, who aided and abetted him in evading global sanctions on Iranian oil, and in laundering the proceeds of their criminal enterprise. A settlement, between the US & Turkey, could result in Zarrab's transfer to Turkey, and zero assistance to US law enforcement. It is believed that prosecutors intend to seek a long sentence for Zarrab, which he can only reduce through rendering Substantial Assistance, in the indictment of others, or actions which would result in the US recovering major criminally-derived assets and wealth. Will there be additional indictments ? Obviously yes, if the US Attorney has anything to say about it.

A smoky, backroom deal, that would allow Zarrab to go free, is not in the best interests of the United States, and how two of America's most respected lawyers could get involved in orchestrating it, representing a major sanctions evader and money launderer, is hard to understand, and you can bet that the Federal prosecutors handling the case are unhappy about their circuitous attempts to accomplish it, and even more determined to prevail at trial.

CONCERNS ABOUT EU MOVES ON SPAIN'S NEW DESIGNS ON GIBRALTAR IN TRADE NEGOTIATIONS

Brexit trade negotiations, between the United Kingdom and the European Union, have given rise to fears that the EU, due to strong Spanish claims, will demand that the UK give in to its demands for joint sovereignty with Spain, regarding Gibraltar. Although two referendums have demonstrated that 99% of the island's people wish to continue to be ruled by Great Britain, Spain is said to have asked that joint sovereignty be made a condition for further trade negotiations. Britain has long opposed any Spanish claims, relying upon the Treaty of Utrecht, which gave Gibraltar to the UK, in a global settlement of the claims of both countries, in 1713.

Gibraltar, which is one of the most stable offshore financial centers in Europe, could be subject to Spanish taxation, should Spain acquire any degree of sovereignty over the British Overseas Territory, which would directly threaten the island's existence as a financial center. UK politicians, as well as senior elected officials in Gibraltar, have strenuously expressed their opposition to any change of status of the longtime British rule over the Rock, as it is known.  

VENEZUELA DISSOLVES ITS CONGRESS, RAISING COUNTRY RISK TO THE HIGHEST LEVEL

The Supreme Court of Venezuela has dissolved the National Assembly, the last elected branch of government that contained any elements of the opposition. The Court ruled that it, and President Maduro, will now assume the duties of the Assembly, which the Secretary-General of the Organization of American States (OAS) has said is a step on the road to dictatorship.

With this step, Venezuela has clearly placed itself in the category of unsuitable, when it comes to Country Risk. Any financial exposure, from parties outside the country, now carried extreme levels of risk, and since recovery, through the government-controlled court system discriminates against foreign companies and nationals, any new financial intercourse should be avoided, lest total loss occur at maturity, as legal remedies in the event of default will not be available.

WILL PANAMA'S PRESIDENT PARDON MARTINELLI ASSOCIATES IN ODEBRECHT SCANDAL ?

Persistent rumors have been flying around Panama City this week, saying that Panamanian President Juan Carlos Varela intends to pardon a number of former President Ricardo Martinelli's close associates, ex-cabinet members, and possibly even family members, from any criminal charges filed against them, in the massive Norberto Odebrecht SA construction bribery scandal. Varela is often himself listed as a recipient of bribe money, so pardons of suspects in the Odebrecht case may be issued by the president for his own protection.

Martinelli's two grown sons, who were the alleged recipients of millions of dollars which was frozen in their Swiss banks accounts, may evade prosecution, if they are granted pardons. Whether the Panamanian people object to these actions is not known, but most are sick of the widespread corruption, which results in increased costs of everything, as bribe payments are added to the final cost of construction projects.

Is is doubtful that the former president will himself be pardoned;  he faces at least a dozen other criminal cases, pending against him in the capital. The US State Department has studiously ignored Panama's extradition request against Martinelli for months, leading many to believe that he is, or has been, a confidential informant for American law enforcement, or its intelligence services, like his predecessor, General Manuel Noriega.

LAWYER FOR MOSSACK FONSECA SAYS BRIBE MONEY IN MOSSACK ACCOUNTS WERE ADMINISTRATIVE FEES

In a statement that will certainly be regarded as shameful, the attorney represented the imprisoned law partners of Mossack and Fonseca has asserted that funds found in MF accounts that were bribe money in the "Cash Wash" scandal of Odebrecht, were "administrative fees." How millions of dollars, where were obviously bribe payments, meant to insure that the Brazilian constructions company obtained huge governmental contracts in Panama, are fees is an insult to the intelligence of  Panamanians.

The court continues to refuse to release Mossack, Fonseca, and MF partner Edison Teano, on bail, finding that they are flights risks, and pose a danger of destroying additional evidence, as they have done in the past. Money laundering charges are filed and pending, but the investigation is continuing.

REZA ZARRAB BRINGS IN THE BIG GUNS, FOR POSSIBLE PLEA NEGOTIATIONS

Correspondence from both sides, in the Reza Zarrab Iran sanctions evasion case, indicating that the Government believes two additional new attorneys, coming in to assist, may present still more Conflict of Interest issues, due to the fact that their firms have represented, or still represent, financial institutions the Government asserts are victims of Zarrab's illegal sale of Iranian oil for gold scheme. Wait until you hear who those two attorneys are.

First, the Government disclosed to the Court that Rudolph Giuliani, the former US Attorney, and ex-Mayor of the City of New York, and Michael Mulcasey, the Attorney General of the United States in the Bush Administration, and himself a former Federal judge, were representing Zarrab, and thus there were Conflict of Interest issues that the Court needed to adjudicate. These are two noteworthy additions to the defense team.

Then defense counsel, in a follow-up letter, denied any conflict, and indicated that the new counsel would not be participating in trial preparation, or trial itself. It also appears that they may not even be filing appearances for the defendant. So what are they coming in for ?

The answer can be found in the Government's second letter to the Court;

  "In this case, the Government has been expressly advised that Mr. Giuliani and Mr. Mulkasey have been retained by the defendant, and have been involved in, efforts to explore a potential disposition of the criminal charges in the matter."March 27, 2017 Letter from US Attorney's Office to the Court, at Page 2.

We recently wondered, in this blog, whether the lack of record activity in the case indicated a possible move to seek to settle the matter, through a plea negotiation; Apparently, this is now more than pure speculation on my part. A plea agreement generally involves cooperation with law enforcement, and may rise to the level of Substantial Assistance in the indictment of additional defendants, and/or the seizure of assets that are the proceeds of crime. Whether there will be many individuals charged is the question in the minds of most observers; we shall see whether it comes to pass.  One Turkish banker, linked to Zarrab's illegal operation, was arrested in New York this week. Did Zarrab supply information ? Was an indictment of the banker the sealed file posted on the court docket this week ?

Meanwhile, the Court has set another schedule of submissions, to determine if there truly is a Conflict of Interest, regarding these two new attorneys.

DOMINICA SEEKS TO LEGITIMIZE ITS ILLEGAL DIPLOMATIC PASSPORT PROGRAM

Readers of my articles will recall that I have repeatedly pointed out that Dominica's diplomatic passport program, which presents a clear and present danger of facilitating financial crime on a global scale, is not based upon any local laws or regulations. Last night, when I was a panelist on a talk program from the East Caribbean, discussing both CBI and diplomatic passport issues, a prominent Dominican developer, (Sam) when pressed by yours truly on the diplomatic passport program, brought out a newly-issued set of governmental guidelines, which he asserted now give the program a regulatory framework. I beg to differ, but I don't buy it.

Dominicans who have read and analyzed this 5-page document, which was reportedly drafted by a consultant, state that its content is on a elementary level, has no enforcement provisions, and is merely a set of good practices guidelines. In essence, it is a feeble attempt to legitimize an illegal program, which is in direct conflict with the requirements of the 1961 Vienna Convention on Diplomatic Relations, including:

(1) The use of non-Dominicans as "diplomats." This may only be done in extreme circumstances.
(2)  The failure to give these foreign diplomatic passport holders actual duties and missions.
(3) The failure of Dominica to accredit each "diplomat" to the country where he will be allegedly practicing diplomacy.
(4) The failure of these bogus diplomats to be presented & received at the country where they will be acting, and the acceptance of their credentials by the receiving country.

Sam, I also do not buy your argument, that Dominica is a poor country, which does not have the budget and resources to cover the globe with its diplomats, and therefore, it must rely upon foreign nationals to get out the word about Dominica, at their own expense. Dominica does not need a diplomatic mission in every distant and obscure country, and to argue otherwise betrays an alliance with powerful forces in Dominica that are only in the diplomatic passport issuance game for the money they can glean from it.

If Dominica cannot free itself of its illegal diplomatic passport program, then expect the bank compliance officers of the developed world to look very hard at any and all Dominican passports, presented at account opening, or for transactional work, as the word spreads of the misuse, by financial criminals, dodgy fraudsters, and the usual suspects, of passports from that country. If you haven't yet seen the rogues' gallery of Dominican diplomatic passport holders, known to have passports, read the article on the subject that came out a while back, in the Sun Dominica.

 Does Dominica really want to be named & shamed, like St Kitts was, for illegal passport fraud schemes, which is what play-for-pay passports are regarded as, by compliance, as well as immigration, officers ?