MONEYVAL TO EVALUATE GIBRALTAR

The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, more commonly known as MONEYVAL, has adopted a resolution to the effect that the British overseas Territory of Gibraltar be evaluated by it, and be subject to follow-up procedures. The UK Crown Dependencies, the Isle of Man, Jersey & Guernsey, were approved for evaluation in 2012.

Readers who wish to review the complete text of the Resolution of the Committee of Ministers of the Council of Europe, CM/Res(2015)26, can access it here*; click on the hyperlink Resolution in the paragraph.

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* Resolution CM/Res(2015)26

RAISE COUNTRY RISK ON THE REPUBLIC OF SOUTH AFRICA

The official welcome, given this week to the leader of Hamas, Khaled Mashaal, by Jacob Zuma, the President of South Africa, should set off alarms among compliance officers who are responsible for assessing Country Risk. The pro-Hamas, anti-Israel press releases issuing from the Government of South Africa are only the outward manifestation of what appears to be a blossoming relationship.

This spells trouble for compliance officers who watch for new terrorist financing pipelines, where Hamas is concerned, for South Africans donors are well known to be supporters of Israel, and imaginative money launderers could exploit the low risk nature of transactions from the country, to move funds to Hamas, through circuitous methods not previously attempted.

Additionally, statements in support of Hamas, by pro-Muslim organizations in South Africa, and by Asian-Middle East NGOs, indicate that advocates for this internationally designated terrorist organization are active in the country, and could facilitate the flow of funds, weapons, or explosives to Hamas. This has become a real possibility, and compliance officers, and their staff should thoroughly vet al non-profits, NGO, associations, fraternal groups, or other entities whose funds, or shipments, are destined for the Gaza Strip. Funds could be transferred in by way of Turkey, where Hamas maintains a field headquarters, who object is to attack Israeli civilian targets.

Hamas operatives captured by Israel were reported to have large amounts of money in their possession; is South Africa one of the new conduits ?  In any event, the new love affair between Hamas and the ANC is a cause for concern, especially for compliance officers. Raise Country Risk on South Africa.

FRAUDSTER GARY LUNDGREN IS THE BILL COSBY OF PANAMA

My observations of financial criminals, over the past four decades, up close and personal, have led me to observe that many are also arrogantly involved in other illegal acts, including Crimes against the Person. Some are serial sexual predators; we have extensively covered the activities of career criminal Gary Lundgren, a fraudster masquerading as a financial adviser, wealth management professional, and real estate agent. He is one of those white-collar criminals who preys on vulnerable single, and married, females in Panama City. I call him the Bill Cosby of Panama; if the shoe fits, etc.

Lundgren has a prior history of sexual harassment in the State of Washington, and we believe that is why he relocated to Panama. His sexual predator activities are detailed in Steele vs. Lundgren, 982 P.2d 617 (Wash. Ct. App. 1999), which readers who do not have access to the Pacific Reporter can read here*. He reportedly was engaged in the same course of conduct with a number of victims in Washington.

Gary Lundgren a/k/a Gary James Lundgren

In the Republic of Panama, I have personal knowledge of several victims of his predatory activity, including one who reported him for rape to the local police. Unfortunately, in Panama's macho environment, cases cannot be brought unless there is a witness, which  means most sexual battery complaints never become criminal charges. Also, a law enforcement reluctance to charge anyone with rape, unless it was accompanied by violence, further decreases any possibility that offenders will face justice for their crimes.

Gary Lundgren's method of operation: he hires away an attractive assistant, at higher wages than she earns at her current job, and makes her his personal assistant. he then intimidates her into a sexual relationship, and, fearing loss of her job, she fails to report him to the authorities. After a time, he tires of her company, and fires her, making sure she cannot get work elsewhere, and goes on to a new victim. He has paid off the most vocal victims, insuring that he will not be charged with sexual battery in Panama.

How is this relevant in a blog that reports on white-collar crime ? Financial criminals often pose physical dangers to the public, and the extent of their sins and transgressions need to see the light of day, we need to warn potential victims of the threats they pose to the community. Consider known white-collar criminals, who may also be sexual predators, as public enemies, and steer clear of them. If any readers have been victims of Gary Lundgren, whether it be his financial frauds, or his sexual offenses, feel free to contact the writer, in confidence, and you will be referred to the appropriate government agencies for assistance. My email address appears on the upper right-hand corner of this page.


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*http://caselaw.findlaw.com/wa-court-of-appeals/1135519.html

WILL APPEARANCE OF CUBAN SPECIAL FORCES TROOPS IN SYRIA BLOCK CUBAN-AMERICAN NORMALIZATION ?

An unnamed US Government official has stated that Cuban Special Forces* and paramilitary troops have arrived in Syria, and will support the Assad regime in military operations. They may have arrived on board the Russian military transports that recently delivered Russian ground forces to Western Syria.

What effect these soldiers will have on the progression of normalization of Cuban-American diplomatic and commercial relations, and the lifting of sanctions, in unknown, but some members of the US Congress could move to freeze any further ties, and delay the lifting of the universal economic sanctions that are currently in place.

Though the United States has no regular ground troops in Syria, special operations troops, such as Navy Seals, Army Special Forces, and Delta, are believed to be working inside Syria. The potential consequence of any military action, between US forces and Cuban troops, cannot be ignored, particularly if there are casualties, and would probably deal a major setback to any ongoing efforts to normalize the Cuban-American relationship.

 Insignia of Cuban special operations units

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* Known as the Black Wasps. Their presence in Venezuela has been detailed previously on this blog.

PANAMA'S FINANCIAL CRIME VULTURES CIRCLE AROUND VLADIMIR KOKOREV

For those readers who have been following the pending extradition case, in the Republic of Panama, involving Vladimir Kokorev, facing money laundering charges in Spain, let me kindly update you on the most recent developments. The case is obviously of great public interest, but there are a number of aspects to the proceedings that deserve attention; Watch out for the vultures overhead.

(1) According to reliable sources close to the defendant, he has denied guilt. Unless there is clear & convincing admissible evidence, he may not be convicted. Some previous complex Spanish corruption cases have suffered from a deficiency in the level of proof offered by prosecutors. Do they have enough to get a conviction ? That remains to be seen.

(2) Mr. Kokorev, who is in poor health, which further deteriorated, when he was abruptly exposed to Panama's brutal, sub-standard prison conditions, is in no condition to be extradited at this time.

(3) The defendant may not ever leave his prison cell alive, for a similar high-profile extradition case, involving the Canadian Arthur Porter, resulted in an extraordinary delay in the proceedings, after which Porter died, while still in Panamanian custody, of terminal cancer. He did not receive adequate medical treatment, and the lack of medical care appeared to be intentional. Will procedural delays block his extradition indefinitely ? Porter's bank accounts were reportedly emptied after his preventable death.

(4) Kokorev is known to have substantial bank accounts in Panama's banks,  and those bankers have allegedly told those in command to delay, delay, and delay his extradition. Are they coveting his bank accounts also ? That is unfortunately how business is done in Panama, and since the court system is hopelessly corrupt, claimants may never go to trial on their efforts to collect their money.

(5) One of the businessmen that Kokorev dealt with was the American expat, Gary James Lundgren a/k/a Gary Lundgren. It is Lindgren's method of fraud to purchase real estate for his clients, using a bearer-share Panamanian corporation, and later tricking the client into assigning over all his right, title and interest to the realty. Lundgren's attorney,  Alcides Bartolo Peña Villar, pays corrupt notaries to attest to forgeries, and fraudulent documents, and Lundgren takes off with his now former client's property and assets. Will Lundgren steal Kokorev's real estate investments ? He may have already done so.

(6) The power structure in Panama has recently warned local journalists not to print any new articles about Kokorev, or there will be consequences. Clearly, its fraudsters intend to relieve Mr. Kokorev of his wealth.

The deck appears to have already been stacked against Vladimir Kokorev, and his assets appear to be the target of the Panama City vultures who prey upon vulnerable expats. Will he survive ?

HAMAS FUNDING TERROR ATTACKS IN ISRAEL THROUGH ITS FIELD HEADQUARTERS IN TURKEY

It may not be politically correct to discuss, due to the fact that Turkey is a NATO member, and an ally in the war against ISIS, but the payments for the teenage terrorists who are stabbing and shooting Israeli citizens, in daily attacks in Jerusalem and elsewhere, are coming from Hamas' foreign field headquarters, located in Turkey. Perhaps the fact that Turkey has refused to close down the Hamas operations center, after being asked, is so embarrassing to the US and the UK, that it has clamped down on any discussion of its terrorist payment pipeline in mainstream Western media. How can the Western democracies allow Turkey to subsidize a designated terrorist organization so openly ?

On this side of the Pond, there's another embarrassing aspect to the story: the money used, to pay off the families of these teenage terrorists, some of whom as are young as 13, originally came from banks in Panama. Money from Hamas' terrorist financing operations in the Western Hemisphere flow through Panama City banks, who practice willful blindness when it come to terrorist organizations repatriating drug profits and the proceeds of other crimes. How law enforcement agencies in the United States & Canada can allow Panama to openly move terrorist funds to the Middle East is beyond me; monitoring the traffic, with no arrests being made, is no way to run a counter-terrorism operation.  

ALERT: ST. LUCIA CITIZENSHIP BY INVESTMENT ECONOMIC PASSPORT PROGRAM BEGINS 1/1/2016

If compliance officers at international banks don't have enough problems conducting enhanced due diligence investigations on all new customers who hold St. Kitts & Nevis and St. Vincent & the Grenadines passports, due to the problem economic passport programs operated by those island nations, now the Prime Minister of St. Lucia has announced that his nation will begin accepting applications for its own new Citizenship by Investment program. While official statements indicate that the St. Lucia program will be conducted with all due care, in screening the applicants, to insure that no "unqualified" individuals are accepted, the other programs operated by Caribbean countries have approved known criminals, individuals from sanctioned countries, and other high-risk applicants who should not qualify under any circumstances.

While it may seem inappropriate, prior to the actual opening of the St. Lucia Citizenship by Investment program, to regard it as a problem, the deficiencies in customer identification, as well as what can only be described as willful ignorance by program officers, and compliance staff, leave us no choice in any risk-based compliance program. We are all aware of the scandals of the recent past.

You can be assured that career criminals, as well as they money laundering advisers, are well aware of the upcoming St. Lucia program, and will seek to crash it, using well-documented front men, to obtain that prized passport from a Commonwealth of Nations jurisdiction. After December 31, you should regard any and all individuals presenting passports from St. Lucia as candidates for enhanced due diligence investigation. This includes diplomatic & official passports as well, for we must not forget the case of the individual who showed up in Canada, with a purchased St. Kitts passport, demanding to see the Prime Minister.

MURCIA TO PANAMA: RETURN TO ME MY DEPOSITS AND INVESTMENTS

David Eduardo Helmut Murcia Guzmán, the Colombian businessman who brought billions of dollars from his pyramid business to Panama, and invested much of it locally, has reportedly, through legal counsel, made a firm demand for the return of his assets. Murcia is believed to be a cooperating individual with US law enforcement agencies, and is no longer in Federal custody. Whether he is receiving assistance and support, in his quest to recover assets, from those agencies, is not known.

With respect to Panama, it is important to point out that Murcia was acquitted of all criminal charges filed against him in the Republic, meaning that he is not otherwise barred from seeking return of his funds and other assets. Also, while most Panamanians believe that he was extradited to Colombia, in truth and in fact, he was summarily, and without legal process, taken into custody, and flown to Colombia. In essence, he was expelled from Panama.

If you are wondering why, after his acquittal, he was removed from the country, you need only look at what happened to his investments, to know who was behind his expulsion: the banks where he had huge deposits, and the financial consultants who placed his money into real estate, luxury yachts, and other investments. These fraudsters quickly assumed control over his assets; many were held in bearer share Panamanian corporations, where the individuals in whom Mercia had placed his trust held the certificates of shares of stock. Quiet transfer was accomplished in private.

Now you know why Murcia is so angry; to illustrate just one of the cases, Murcia engaged the expat American businessman, Gary Lundgren, to purchase dozens of luxury condominiums, in both the residential and office categories. Lundgren converted these properties to his own use and benefit, after Murcia was abruptly removed from Panama.

 He employed his principal attorney, Alcides Bartolo Peña Villar, known in Panama as the Fixer*, to effectuate the transfers of title to Lundgren's control. This was grand theft, through fraud, plain and simple. Lundgren reportedly used the cash he held for Murcia to participate in the Financial Pacific/ Petaquilla Mine insider trading securities purchases, on behalf of many of the members of Ricardo Martinelli's cabinet. Murcia cash became seed capital for Panama's biggest securities fraud case in history.

Most Panama analysts believe Lundgren was one of the prominent businessman who prevailed upon then-President Torrijos to expel Murcia, and that much of Torrijos present holdings, in the Dominican Republic, were purchased with Murcia's cash. I leave it to you to connect the dots. Many of the banks where Murcia had accounts took his deposits, and his yachts and luxury cars were also stolen.

These are but a sampling of the details of the widespread theft of Murcia's Panama holdings. Will Murcia recover his money ? We cannot say, but it will be interesting to see Panama's elite fraudsters, like Lundgren, squirm, thinking of the nasty litigation certain to come.
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Peña is known to pay bribes to judges and prosecutors, to secure favorable rulings, or delays, in court proceedings, on behalf of his clients. He also is known to threaten physical harm to opponents of his clients, including Lundgren. Unfortunately, Panama has no system of discipline for attorneys, some of whom actually return to the practice of law after serving prison terms. In any other country, Alcides Bartolo Peña would be disbarred, and serving a long sentence in prison.

HONDURAS CLOSES, AND FORCES LIQUIDATION, OF SANCTIONED BANCO CONTINENTAL

The Government of Honduras has announced that Banco Continental, closed since it was listed as a Drug Kingpin, by the US Treasury Department, for engaging in drug money laundering, will undergo forced liquidation. When the United States froze the bank's US-based assets, its solvency dropped below the legal minimum, requiring that it be liquidated.

Account holders will be able to draw funds, up to the equivalent of USD$9000, by the country's banking regulator, the National Banking & Insurance Commission. Any bank client who had more than that on deposit reportedly will also be compensated at a later date.

The case has drawn international attention, due to the fact that it represents the first time that a financial institution was designated a SDNTK, or Specially Designated Narcotics Trafficking Kingpin, for engaging in drug money laundering. The denial of access to the US banking system, for any financial institution, is fatal, for the bank's clients are unable to have access to American banks, or its companies, or individuals. Naming a bank as a Drug Kingpin is public notice that the United States has evidence that the bank has a major role in the laundering of the proceeds of crime, specifically narcotics. 

PANAMA'S FUGITIVE EX-PRESIDENT ORDERED OUT OF PARAGUAY

Ricardo Martinelli, facing eleven different criminal charges in his native Panama, including human rights violations, insider trading, and massive corruption allegations, has been ordered by the Government of Paraguay to lave the country immediately. The former President of Panama has been living in an estate in Paraguay, that he covertly purchased while in office, since major corruption scandals broke in Panama. The fact that he was living in Paraguay, and not in Miami, as his supporters have long claimed, was well known in Panama City.

Reliable sources in the Republic of Panama state that Martinelli has approached the governments of Spain, and the United States, seeking asylum, alleging that the current Panamanian government has targeted him for purely political reasons, and that he is innocent of all pending charges. To date, neither government has responded to his requests.

There are also unconfirmed rumors that there is a reward, or bounty, offered for his capture, but whether there is a factual basis for this information is unknown. Over 150 families in Panama, both citizens and resident expats, were victimized by Martinelli's illegal telephone and Internet surveillance program, and they are demanding justice. Will the former president, now reviled in Panama, ever see the inside of a courtroom, to answer for his many crimes ? We cannot say, but his banishment from Paraguay makes that day seem a bit closer to reality. When Martinelli leaves the safety of his Paraguayan refuge, he becomes easier to catch.

TORONTO DOMINION BANK REGIONAL VICE PRESIDENT PLEADS GUILTY IN $1bn ROTHSTEIN PONZI SCHEME

Frank Spinosa, the TD Bank Regional Vice President who authorities charge facilitated Scott Rothstein's massive Ponzi scheme, by writing bogus "Lock Letters," which falsely stated that investor profits were frozen, has entered a plea of guilty, and executed a plea agreement. Spinosa pled to a single count, meaning that his maximum sentence is five years in Federal Prison, and a $250,000 fine.

Was his signature on some of those letters forged by the individuals who worked with Rothstein, to perpetrate the Ponzi scheme, as the defendant claimed ? Inasmuch as the case will not now go to trial, that question will remain unanswered, as will any involvement of senior TD Bank executives in the fraud, if any. Did anyone at the executive level know that it was a Ponzi scheme, and when did they know it ?

The takeaway for compliance officers, from the Rothstein case: if you have a successful bank client, always check out whether he or she is really engaged in the business that is driving the financial success that the bank is profiting from. In this case, nobody apparently ever check to verify whether the Rothstein law firm had ever filed the hundreds of civil cases which gave rise to the sale of court settlements to the victims. The court dockets are a matter of public record, and anyone making inquiries would have seen immediately that the firm's caseload did not support the huge volume of money it was taking in.

OFAC SANCTIONS HONDURAS' BANCO CONTINENTAL UNDER KINGPIN ACT

Banco Continental SA, a major Honduran commercial bank, headquartered in San Pedro Sula, has been sanctioned under the Foreign Narcotics Kingpin Designation Act, in connection with a major money laundering case brought in Federal Court, in the Southern District of New York. Members of the Rosenthal family, a prominent force in the Honduran business community, have been charged with money laundering for drug traffickers, and their corporate entities were also designated by OFAC. The bank was listed as an SDNTK.

The Treasury announcement accompanying the sanctions and indictments, explains why the bank was named:

"Today's announcement marks the first time that OFAC has designated a bank, pursuant to the Kingpin Act. Banco Continental SA has served as an integral part of the Rosenthal money laundering operations, and facilitated the laundering of narcotics proceeds for multiple Central American drug trafficking organizations.*"

Many compliance officers have felt, for many years, that merely imposing fines upon foreign financial institutions, for drug money laundering activities, is an insufficient deterrent to others. The Kingpin Act designation, which will effectively bar Banco Continental from the US banking system, is a powerful remedy that, in my opinion, should be employed whenever there is conclusive evidence that a foreign financial institution is a major player in a drug money laundering operation.

Please note that there are a number of other financial institutions in Latin America, and the United States, with similar names, and compliance officers are urged to immediately acquaint their staff with the details of the other banks, lest confusion result in a non-sanctioned bank's transactions be frozen, or  a Banco Continental wire transfer be approved.
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*Treasury Sanctions Rosenthal Money Laundering Organization

IS ARGENTINA'S EX-SPYMASTER HIDING OUT IN MIAMI ?

The Government of Argentina is seeking the former head of the Intelligence Secretariat (SI), the country's hybrid intelligence service, Antonio Stiuso, a/k/a Jaime, and has reportedly sought the assistance of the Government of the United States in locating and apprehending him. Some sources claim that Stiuso is living anonymously in Miami.

The SI, which seems to discharge the functions of both an intelligence agency, like the CIA, and a signals intelligence agency, like the NSA or GCHQ, was involved in the ongoing investigation into the AMIA bombing, reportedly conducted by agents of the Government of Iran. Stiuso's personal involvement, with Alberto Nisman, the government investigator, with his finding of a link between Iran, who allegedly sponsored terrorist acts in Argentina, and the President of that country, may have resulted in bogus charges being filed against him, causing him to flee.

Is the Government of Argentina seeking to suppress the truth about its relationship with Iran, and where does Stiuso fit in ? We hope that he comes out of the shadows long enough to tell us, for it may be that the Government of Argentina is seeking to frame him for Nisman's murder, in the classic "Kill the messenger" style of dirty Latin American politics.

RICHARD CHICHAKLI, DESIGNATED BY OFAC, SERVES HIS TIME UNDER STRICT CONDITIONS

If you were wondering why Richard Chichakli, who is appealing his Federal conviction for OFAC violations, is serving his sentence at the Federal Detention Center (FDC) in Miami, you are not the only one. Chichakli's case was in the Southern District of New York, and his appeal is in progress at the Second Circuit Court of Appeals, which is also in New York. So why does the Bureau of Prisons have him housed in Miami ?

An FDC is where inmates subject to pre-trial confinement, due to their risk of flight, or danger to the community, are confined. Also, witnesses being held for trial testimony, inmates who are at personal risk, for a variety of reasons, or inmates close to being released in the Miami area. It is not designed for one to serve his entire sentence. Chichakli is within two years if his release date, and his US citizenship, and lack of history of violence, all should have resulted in his institutional placement closer to his appellate attorney in New York. So why is he here in Florida, instead of somewhere in the northeastern United States ?

I suspect that his multiple pre-trial complaints, to the effect that the conditions of his confinement in New York prevented him from properly preparing for trial, might have something to do with it. Remember also that he was subject to "diesel therapy," a deliberately circuitous route to his final correctional destination, which results in multiple overnight stays in a number of county jails with primitive accommodations for transients.

 His attorney obviously cannot easily meet with his client, due to the fact that he was abruptly shipped, after sentencing, to the Miami FDC, in a move that an objective observer might see as a punitive BOP response to his vocal complaints to the Court, and to the Bureau of Prisons staff. We wonder why he is not sitting in a Federal Prison Camp, given his profile and history, and the short time remaining upon his sentence. Is it because he, like his co-defendant and partner, Viktor Bout, fell out of favor with the American intelligence community ?

  

FORMER PANAMANIAN MINISTER OF TOURISM TO BE INVESTIGATED IN FINANCIAL PACIFIC INSIDER TRADING CASE

Panama's Superintendent of Securities has requested a criminal investigation to be opened, against the former Minister of Tourism in the Martinelli Administration, Salomón Shamah. The case is the massive insider trading scandal involving shares of stock of Petaquilla Mine, traded through the Financial Pacific brokerage house. Martinelli, as well as most of his then-ministers, have been implicated by the former Superintendent of Securities, as well as the whistle blower, Mayte Pellegrini.

Shamah reportedly had his US Visa revoked several years ago, due to his reputed involvement in arms trafficking into Colombia, as he was accused of supplying the FARC & ELN, two specially designated global terrorist organizations. Shamah, a Colombian national, was a naturalized citizen of Panama. He has been linked to a powerful sector of Panamanian organized crime, and is known to be a close confidant of Ricardo Martinelli, for whom he allegedly laundered drug money. His appointment as Minister of Tourism, when he was not qualified for that position, occurred due to their relationship, and he has long been rumored to have engaged in corrupt activities, during his tenure as minister.