EAST CARIBBEAN STATES MUST PERFORM LOOKBACKS ON ALL CBI PASSPORT HOLDERS TO REGAIN CREDIBILITY

The five East Caribbean States, St Kitts. Antigua, Dominica, St Lucia & Grenada, are all suspect in the eyes of the global compliance community, due to the uneven, and sometimes even absent, amount of due diligence that they performed in the past, upon their CBI applicants. The result was a nightmare, when the programs readily accepted Russian organized crime members, international fraudsters, corrupt Politically Exposed Persons (PEPs), global sanctions evaders, terrorist financiers, and various and sundry other dangerous individuals who should never have been awarded CBI passports.

To restore confidence, the CBI states must now conduct historic lookbacks, which are reexaminations of all individuals who hold, or were issued, CBI passports, this time applying Enhanced Due Diligence measures during the new investigations, as all must be considered high risk, and treated accordingly. Those individuals who fail must have not only their passports cancelled, but their names and original nationalities published, so that banks, as well as the legitimate business community, are not exploited, or become victims, by the continued illegal use of revoked passports by bad actors.

This may sound like a difficult task, but modern Second Generation AML/CFT resources, which employ facial recognition software, social media resoures, and global inquiry capability, will quickly and efficiently separate the legitimate individuals from the criminals and corrupt PEPs. Unless the CBI states proceed, now, to clean up their past mistakes, the global banking community will continue to look upon their CBI programs as suspect and high risk, and may eventually target all of their native-born nationals who seek to open acounts as presenting unacceptable threats, as potential CBI passport holders, or their criminal associates, and treat them accordingly.

Also, customs and immigration officers at international airports, who have already be subjecting some Caribbean arrivals to further search and inquiry, could further extend this secondary processing to all individuals from CBI states. Unless credibility is restored m through lookbacks, you can expect these difficulties to increase, to the damage and detriment of all Caribbean nationals from the five CBI states.  

ST KITTS MINISTERS UPSET OVER LACK OF TRANSPARENCY OF CBI RECEIPTS

A number of the ministers in the cabinet of St Kitts & Nevis have been overheard expressing their serious concerns for transparency, regarding the lack of disclosure of the precise amount of funding received from the CIU [CBI] program. A number of the CBI programs operated in the East Caribbean States have admitted that only a small percentage of the funds paid by applicants actually end up in government treasury accounts, and therefore the Kittitian ministers are now asking hard questions about precisely how much money is being received, in light of the fact that there are funds missing in other CBI jurisdictions.

The matter is further complicated by the fact that there is reportedly an illicit romantic relationship between two of the participants, which could interfere with disclosure of misconduct or diversion of funds. Whether there has been misfeasance, malfeasance or nonfeasance, by government officials or CIU staff members, remains an open question, requiring an outside forensic audit for confirmation. 

 

WHO IS THE CORRUPT ST KITTS POLITICIAN WHO DEMANDED $2m FROM BRITISH REAL ESTATE MAGNATE ?

The old SKNA flag.

If you have been following our coverage of the Asot Michael/Peter Singh Virdee bribery scandal, and have read the complete text of the British Royal Court order, you know that a certain St Kitts government official demanded $2m from Virdee. Though not specifically identified, and referred to by Michael as "our friend," he is believed to be one of the most senior officials in office in that country, and his probable identity has been made known by Antiguan insiders who are familiar with MP Michael's circle of friends.

Neither the St Kitts press, which is generally regarded as favoring the government presently in power, nor the government spokesman, who had previously dismissed any allegations of  misconduct regarding Asot Michael, have commented on the story about the mystery official who wanted to receive the $2m from Mr. Virdee. We would, however, prefer that the whole truth about the St Kitts segment of this major UK bribery scandal become public knowledge, and we shall continue to investigate the matter, and report back to our readers forthwith.

NATIONAL CRIME AGENCY HELD ANTIGUA MINISTER IN CUSTODY FOR ONE DAY IN BRIBERY INVESTIGATION

 The release of a Royal Court of Justice Order in a suit involving accused VAT fraudster Peter Singh Virdee revealed that Antigua Minister Asot Michael was detained by the National Crime Agency for a day, while being interrogated over allegations of violations of the Bribery Act, after Michael was implicated. Michael, who is also reportedly linked to missing two hundred blank Antigua & Barbuda passports, which are the subject of ongoing criminal investigations in Antigua and St Vincent, has denied any involvement, and disparaged Virdee, after first stating that he would not comment. Michael has previously been linked to suspicious payments, but was not charged with a crime.

Virdee secretly recorded many telephone conversations with Caribbean leaders, and transcripts of some were included in the court order. Other conversations have appeared in the media which implicate senior government officials in both Antigua and St Kitts, and whether the damage those disclosures inflict on their careers will be serious, and permanent, depends upon the voters of those countries.

The absolute arrogance displayed by the government officials that allegedly solicited bribes, kickbacks and gifts is not only vile and disgusting, it is evidence of a culture of corruption that takes advantage of the trust those who elected them into office placed upon them. Some individuals in the Government of Antigua obviously knew about Michael's misconduct, yet remained silent. This speaks volumes about the culture of corruption in Antigua.  

BRITISH REAL ESTATE MAGNATE RECORDED CALLS TO CORRUPT ANTIGUA AND ST KITTS POLITICIANS DETAILING BRIBES AND GIFTS

Peter Singh Virdee, the British Mayfair property tycoon accused of multi-million Pound VAT fraud, secretly recorded telephone calls he made to government officials in Antigua and Barbuda, and St Kitts and Nevis, according to a scandal that appeared in major London media this week. The individuals so implicated are at the ministerial, and even premiership, level.

While only a small sample of the transcripts of the calls that Virdee had with specific corrupt Caribbean politicians have appeared in the British press, the content of those expletive-laden conversations is both blunt, and brutal. One politician demanded a £2m bribe, and a car for his mother. Another wanted Virdee to pay a large portion of the cost of a contract that was to be awarded to Virdee's company. One wanted Virdee to cover the entire cost of a dinner for the prime minister's large entourage, while another demanded an expensive timepiece for himself.

There are often allegations of corruption, when it comes to politicians from the East Caribbean states but recorded conversations, that direct implicate the guilty parties, are damning, and could result in forced resignations, or a catastrophic loss at reelection time, for those government officials named, or to be named later. One must assume that Virdee made a large number of recordings, and that the list of individuals who are on those tapes is a long one. Will these tapes ultimately bring down a government ? 

WILL FINCEN NOW ISSUE AN ALERT AGAINST DOMINICA FOR ITS ILLEGAL DIPLOMATIC PASSPORT SALES PROGRAM ?

With the proliferation of arrests of foreign nationals holding unauthorized diplomatic passports issued by the Commonwealth of Dominica, it is time for the Financial Crimes Enforcement Network (FinCEN) to issue an Advisory. The purpose of such an Advisory would be to alert US financial institutions that certain foreign individuals are abusing the diplomatic passports issued by Dominica, and engaging in illicit financial acitivities.

Dominica sells diplomatic passports to foreign nationals, which are attractive because its procedures, as administered, do not include due diligence, or enhanced due diligence, resulting in lax controls over who will be granted a diplomatic passport. Illicit actors, including individuals who intend to use their diplomatic passport to evade sanctions, conduct illegal smuggling of financial instruments, evade arrest, can obtain a Dominica diplomatic passport with relative ease, upon payment of exhorbitant sums of cash.

Furthermore, The Vienna Convention on Diplomatic Relations, a treaty which Dominica is bound to as a member of the United Nations, has specific requirements for member countries. The passport holder must be assigned to a specific job, in a specific jurisdiction; he must present his credentials to the receiving country or agency, and he must be accepted by it. None of those requirements are being met by the unqualified foreign nationals who are buying what they believe is bona fide dipomatic status, but they are unaccredited.

Financial institutions, as well as US Customs & Border Protection (CBP), upon encountering a Dominica diplomatic passport, should immediately check to see whether the holder is a diplomat  accredited to either the United States, or United Nations. If not, then the diplomatic passport  should be examined to view the place of birth of the holder, in order to ascertain his primary nationality.

The Dominica diplomatic passport should not be accepted as proof of either identity or nationality, and the holder should be required to produce valid proof of identity. Financial institutions should file a Suspicious Activity Report (SAR); border officers encountering such documents should conduct a search of baggage, and the holder, to rule out smuggling of cash and financial instruments.

We trust that FinCEN will soon issue an Advisory on Dominica similar to that it previously issued against St Kitts & Nevis in 2014, regarding its CBI program, and which is still in effect.





  

ALERT FOR LARGE GULF PURCHASES OF DOLLARS, IN AFTERMATH OF RIAL CRASH IN IRAN

This week's sanctions actions by the United States, as pictured above, may have compounded the financial woes in Iran; the Rial is in free fall, notwithstanding major efforts by the government in Tehran to rein in the purchases of US Dollars and Euros. The US withdrawal from the Iran WMD treaty may have also contributed to the drastic drop in the value of Iran's currency in foreign exchange.

Rial symbol

Statistics from the region confirm a 30%-40% fall in the value of the Rial, and a high demand for gold. If you are a compliance officer at an international bank that has correspondents in the Persian Gulf, be alert for a demand for a large amount of US currency, in large denominations, especially from the United Arab Emirates, which has a large Iranian expat community. There may be a concerted effort to bulk cash smuggle large amounts of dollars into Iran, due to the increase in demand, and the lure of easy money for the traders lucky enough to hold dollars.

20,000 Rial note

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NOTE: as of May 12, 2018  $1USD = 42,105 IRR.

CHINESE BILLIONAIRE REAL ESTATE DEVELOPER, SENTENCED TO FOUR YEARS FOR UN BRIBERY SCANDAL, HAS A DOMINICA DIPLOMATIC PASSPORT

Ng during his 2017 trial.

 
Ng Lap Seng, also known as David Ng, the Chinese owner of a Macau real estate development company, was sentenced this week in US District Court in New York, to four years in prison, fined $1m, and forfeited $1.5m, in a bribery scandal that reached into the highest levels of the United Nations. Ng, in order to convince diplomats to designate a UN conference center in Macau, to be built by Ng, bribed two senior ambassadors from the Caribbean, including the former president of the United Nations General Assembly.

The defendant was convicted, after a trial,  of:
(1) Violations of the Foreign Corrupt Practices Act (FCPA) - two counts.
(2) Payment of Bribes and Gratuities - one count.
(3) Money Laundering - pne count.
(4) Conspiracy. - two counts.

Additionally, John Ashe, the former UNGA president, died prior to trial, alone and under mysterious circumstances that have never been explained, but who many now believe was murdered to keep him from testifying about the bribes that he received, as well as his knowledge of how Ng acquired his Dominica diplomatic passport.

UN General Assembly Presiden John Ashe and Ng.

 
Ng holds a diplomatic passport issued by the Commonwealth of Dominica, although he holds no diplomatic post of any kind, and reportedly paid a large sum in cash for the document, which violates the UN Vienna Convention on Diplomatic Relations in several ways. He is one of a reportedly five hundred dodgy individuals who have bought their "diplomatic status" in Dominica, through an illicit program that benefits only that country's corrupt and amoral senior leadership. At least fifty foreign nationals holdiong Dominica diplomatic passports have been arrested, are fugitives from justice, or have otherwise run afoul of the law, abroad. Some have unsucessfuly sought to cheat justice by claiming global diplomatic immunity, which does not exist under international law.

The United Nations has repeatedly ignored the fact that a number of its Caribbean members have pocketed millions of dollars by selling bogus diplomatic passports, none of which confer diplomatic immunity, or privileges of any kind, to career criminals, international sanctions violators, corruot government officials, and terrorist financiers. Some experts claim that the practice is so widespread that to expose all the UN members who are so engaged would seriously damage the image of the United Nations in the eyes of the public.

WHY ARE THERE SO MANY FRAUDULENT HSBC FINANCIAL INSTRUMENTS ?

When you are one of the biggest financial institutions in the world, you have to expect you will be the target of fraudsters of every type and class, but there are so many obviously counterfeit HSBC financial instruments out there, particularly in East Asia, that one must ask the question : Who is drafting all these bogus documents ?

Either there are some HSBC alumni who left their employ with copies of a boatload of documents, or possibly some Asian oganized crime syndicates have placed their members inside the bank, to covertly and illegally remove samples.

Fraudsters seek out private investors and lenders, and use their bogus evidence of assets at HSBC to borrow funds, which are never repaid. There are reports that some East Asian banks have actually granted loans on such counterfeit documents, without confirming balances with HSBC. We hope the bank is collecting these bogus documents, so that it can respond to inquiries. I have seen hundreds and suspect that the true number of counterfeits being used is in the thousands.

NOTE TO CAYMAN ISLANDS AND BVI: ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM ARE MORE IMPORTANT THAN INDIVIDUAL RIGHTS TO PRIVACY

 The anti-transparency attitudes, displayed by industry groups in the Cayman Islands and the British Virgin Islands, who correctly fear a major loss in corporate formation business should they create public registries of beneficial owners, are now seizing upon an individual's right to privacy, as their last ploy. They are trying to hold onto the ability to sell a commodity that is of critical importance to money launderers, tax evaders, corrupt government officials, and financiers of terrorist operations.

In the aftermath of the Panama Papers and the Paradise Papers, and their exposure to the sordid business of Caribbean corporation secrecy, the legitimate financial world pushed back. The passage of the Sanctions and Anti-Money Laundering Bill in Parliament, which is intended to be the death knell for opacity in the British Overseas Territories, may cause a huge segment of the dodgy clients to give a wide berth to corporate formation in the Cayman Islands and the BVI.

Simply put, crime suppression and counter-terrorism are far more important than some nebulous concept of the privacy of criminals and criminal organizations. Since the BVI and Cayman are not self-policing, as that would eliminate most of their clients, the UK has decreed that corporate transparency will hereafter be the solution, even if the territories are unhappy with it.

Those elements who choose to oppose the end of Caribbean corporate opacity through bogus arguments may not only find themselves on the wrong side of history, if their actions on behalf of clients are found to be in support of terrorists, and money launderers, might later be free to argue their issues from a cell in Federal Prison. It is high time for the practitioners of dark corporate secrecy to come out into the light, even if it costs them.

HOW MUCH TIME WILL TURKISH BANKER IN IRAN OIL-FOR-GOLD SANCTIONS EVASION CASE RECEIVE ?

FCI Danbury

On May 16, 2018, Mehmet Atilla, the Turkish banker (Halkbank) who assisted Reza Zarrab and his criminal syndicate covertly sell sanctioned Iranian oil, will be sentenced. His attorneys have suggested four or five years. The US Attorney's Office wants more than the 15 1/2 years the guidelines suggest; it wants something around twenty years, due to the severity of the defendant's crime, and the fact that he facilitated billions of dollars in payments to Iran, in violation of international sanctions. He is the first foreign banker sentenced for Iran sanctions violations.

Additionally, defense counsel filed an affidavit, executed by an expert in Bureau of Prisons (BOP) procedures, who suggests designation to a Federal Correctional Institution in Danbury, Connecticut, due to the defendant's need to have easy access to Turkish diplomats, and to assist in his anticipated Second Circuit appeal. As a non-national, he does not qualify to be sent to a minimum-security camp, hence the FCI request.

Will Atilla get serious time, to deter others from assisting sanctions evaders?  Atilla's working relationship with Zarrab's partners, Babak Zanjani, Alireza Monfared, and Mohammad Reza Rajaie'h has not been made public by Federal prosecutors, leading to the assumption that some of those individuals may have sealed indictments awaiting them in New York.

CAYMAN ISLANDS WANTS TO LITIGATE UK CORPORATE TRANSPARENCY ORDER, RATHER THAN COMPLY

The Premier of the Cayman Islands, Alden McLaughlin, has stated that he intends to seek relief through the courts, on constitutional grounds, rather than comply with the recent UK legislation mandating the creation of a public register of beneficial ownership of corporations of British Overseas Territories. He asserts that the United Kingdom is bound by Caymanian local autonomy, which presently exist by constitutional fiat.

The Prime Minister also indicated that he believes the Cayman Islands is not yet ready for independence, which could be an option if corporate secrecy is deemed to be a feature of Cayman companies that should not be abolished, though that same local autonomy that he prizes has resulted in a local governmental structure which appears to be more than capable of operating an an independent state. Many East Caribbean states do not have anywhere near the infrastructure that the Cayman Islands has, but are conducting adequate government business as free and independent nations. Perhaps Caymanians might want to seriously think about the benefits of casting off the last vestiges of British colonialism, if they wish to maintain their policy of corporate confidentiality.

It is troubling that the premier noted that his government is planning a "sustained" legal campaign, for that might be perceived as a purely dilatory action, and not one with legal merit, and which action could have negative consequences, in the international financial community, as well among those British Overseas Territories that comply with the law, and issue public registers of their beneficial owners.

North American financial professionals and attorneys might also choose to steer clear of recommending, or employing, Cayman corporations when serving their clientele, and bank compliance officers may increase risk levels, or decline to accept Cayman companies altogether. We canot say whether there will be unintended consequences, but it is important that Cayman financial service companies should be aware that they could occur.

We are, without qualification, in favor of total and complete, universal, corporate transparancy of ownership, for all jurisdictions, and trust it will eventually become reality.

AFTER US REIMPOSES IRAN SANCTIONS, HOW MANY NEW MONFAREDS WILL BE EXPOSED ?

It appears, wth the US dropping out of the Western agreement with Iran on WMD and ballistic missile production projects, blanket sanctions will be reimposed. That will drive more Iranian nationals, and their sanctions evaders and money launderers, back to the East Caribbean CBI States for economic passports. Will they be served this time, or will the East Caribbean States, with new gatekeepers, turn away their potentially lucrative ( but dangerous and illegal) business ? You can expect a new crop of Iranian applicants visiting the CBI consultancies in Dubai, but under no circumstances should they be allows to submit applications.

Hopefully, the Alireza Monfared scandal was enough to deter Dominica the next time, as well as CBI administrators in St Kitts & Nevis, Antigua & Barbuda, St Lucia and Grenada. To again give in to avarice would expose the guilty jurisdictions to still more "de-risking" of their local banks' correspondent accounts in North America, as well sanctions violations, and US money laundering charges.  

We trust that the Monfared case has sufficiently deterred the other CBI states from accepting more Iranian nationals, whose subsequent arrests could generate extremely damaging negative news, resulting in a major drop in future CBI applications for that jurisdiction. This includes Iranian expats, who may be partners in the massive Iran sanctions evasion scheme.

Will the CBI jurisdictions try to reduce risk by redlining Iranian nationals ? We cannot say, but we hope they have learned from their previous (and costly) mistakes.   

PALESTINIAN AUTHORITY SEEKING PASSPORTS IN VENEZUELA FOR ALL GOVERNMENT EMPLOYEES

The Government of the Hashemite Kingdom of Jordan recently notified the Palestinian Authority that it will be cancelling all Jordanian passports held by West Bank Palestinian government employees. Since their so-called "State of Palestine" passports are only recognized as a travel and identification document, and are not generally valid for travel, outside of very few countries that will accept it, they have no document for international travel.

During his recent official visit to the Bolivarian Republic of Venezuela, PA President Mahmoud Abbas met privately with Venezuela's President Nicolas Maduro, and requested that his entire class of government employees and officials be granted Venezuelan passports. According to publicly available statistics, there are approximately 140,000 government employees working for the Palestinian Authority. Abbas wants them to all have usable passports.

While some may feel that the issuance of Venezuelan passports to Palestinians is not high risk, because the US & Canada require visas, anyone who acquires a Venezuelan passport has visa-free access to the countries of the European Union, and to all of South America. Translated to terms we can all understand, it means that individuals who are affiliated with Hamas and the Palestinian Islamic Jihad, with the proper alias on their Venezuelan passport, could easily gain entry, and thereafter conduct terrorist operations in Europe. This represents a clear and present danger.

Countries where Venezuelan passport holders have visa-free access

If someone shows up at customs and immigration, in France, Germany or Italy, upon arrival on a flight from Jordan, with Venezuelan passport, but he speaks no Spanish, notwithstanding a Latin surname,  we hope that the officer detains that individual for further questioning, examines his baggage and inquires into the purpose of his visit.

Palestinians are currently actively seeking Citizenship by Investment passports in the East Caribbean States of St Kitts & Nevis, Antigua & Barbuda, Dominica, Grenada and St Lucia. We trust that, once their place of birth is confirmed, they receive the same high-risk queries, to rule them out as possible terrorists.

WHY DOES CHINA TRAIN ITS BANK TELLERS WITH THE 2006 SERIES US$100 BILL ?

Chinese training version of US one hunded dollar bill

This is the sample US one hundred dollar note that Chinese banks use to train their tellers with,  overprinted with language to confirm that it is not genuine. It has been employed to make them more familiar with US currency, which is, like it or not, the gold standard around the world, when one wants to hold a safe and stable form of wealth. So why did China choose to use the old Series 2006 one hundred dollar note, which was issued a dozen years ago, rather than the more recent updates, which are much more widely circulated ?

Example of most recently issued versions of $100 bill.

The question presented is whether China chose to make its bankers eminently familiar wth the Series 2006 note to avoid their unwitting acceptance of the North Korean "Supernote," the most accurate counterfeit US $100 bill known to exist, and whose latest version is the 2006 Series. Are Chinese authorities aware that the latest iteration of the Supernote exists, and that is under the control of an organization affiliated with the Government of the DPRK ? If China has a hand in the Supernote, in its distribution, or underground sale, it could change the way Western bankers regard risk, regarding cash payments or deposits of US currency originating from China.

Reverse of China bank training note.