WILL PANAMA NOW DEMAND THAT THE UNITED STATES EXTRADITE RICARDO MARTINELLI ?

Panama's former president, Ricardo Martinelli, failed to attend a mandatory appearance before a court in Panama City,where he is charged with conducting illegal electronic surveillance, and he has been held in contempt of court. On then-President Martinelli's orders, his National Security Council illegally intercepted email, telephone call, and other communications, where there was an expectation of privacy.

Martinelli, who faces a potential maximum sentence of twenty-one years of imprisonment, spied upon over 150 Panamanians, who were opposition leaders, journalists, and prominent members of Panamanian society and industry. He allegedly fears for his physical safety, should he return to Panama, and has claimed that he cannot get a fair trial at this time. The ex-president faces a dozen other cases in Panama, and there has been a growing movement, among Panamanians, for him to face justice for his corruption, human rights violations, and illegal surveillance program.

The Supreme Court of Justice can now file extradition papers in Washington, seeking Martinelli, who is now living comfortably in Miami, where many former dictators have retired to. The question is, will reformist President Varela demand that it take that step ? Or will Martinelli have the last laugh, at the expense of the people of the Republic of Panama ?   

GANG OF FOUR RINGLEADER RAN OUTLAW BANKING OPERATION AFTER TERMINATION BY DUNDEE BANK

Sharon Lexa Lamb, the leader of the Cayman Gang of Four, ran an illegal operation after she was terminated by Dundee Merchant Bank in 2013, deceiving investors in believing that she was still affiliated with the bank. Lamb took over the bank's telephone number, and, answering it as "Dundee," defrauded Canadian and American retirees, by facilitating the unauthorized transfer of their assets to B & C Capital Ltd., to fugitive trader Ryan Bateman. An estimated $450m cannot be found, and is feared lost.

In a court filing, in a case pending in the Grand Court of the Cayman Islands, Dundee Merchant Bank, through its attorneys, has stated that Lamb's employment, as Senior Vice President "terminated on December 31, 2013, and thereafter Ms. Lamb had no relationship with TDMB [the Dundee Merchant Bank], or any other company in the Dundee group." Lamb, who is a defendant in that case, is known to have represented herself as a bank representative, to individuals who called the bank's number, until the scandal broke, in the summer of 2015, falsely assuring investors that their money was in safe hands at a financial institution, B & C Capital, which was a shell company owned by a career criminal.

In truth and in fact, their money was being illegally traded by B & C Capital's Ryan Bateman, who had fled Canada after engaging in securities fraud there. It is not known what Bateman did with the missing money; he failed to return to the Cayman Islands to face a felony charge, and promptly disappeared. Some sources claim that he is living in the United States.

The import of the Dundee Merchant Bank filing is that Sharon Lexa Lamb held herself out as a bank officer, years after she was fired. She, and former bank president, Derek Buntain, were reportedly ordered to liquidate the bank, by Canadian regulators, after its parent was sold, but intentionally failed to do so,and ran an illicit operation, for their sole financial benefit, with millions in client money. Buntain has fled to Canada, and his current whereabouts are unknown; he is believed to be living in Prince Edward Island. Lamb has denied liability for the losses suffered by the victims, refused to turn over documents, and will not cooperate, unless and until she receives immunity from criminal prosecution.

CENTRAL BANK OF CYPRUS FINES FBME €1.2m FOR AML/CFT FAILURES

Lebanese-owned FBME Bank Ltd. (Cyprus), more commonly known by its former name, the Federal Bank of the Middle East, has been fined 1.2m Euros, by the Central Bank of Cyprus, for both money laundering, and terrorist financing, deficiencies. This action has been expected for some time, though the size of the fine was a surprise.

 The bank had previously been listed, by the United States, as a financial institution of Primary Money Laundering Concern, and denied access to the American financial structure. The US action contained findings of fact:

(1) The bank was involved in the financing of Hezbollah, a Specially Designated Global Terrorist entity.

(2) The bank did business with organized crime.

(3) The bank allowed known fraudsters to operate accounts there.

(4)  The bank was engaged in sanctions evasion activities involving Syria.

FBME, a subsidiary of a Lebanese bank, operated in Cyprus, though it has gone through a number of jurisdictional relocations, including a period where it was domiciled in the Cayman Islands. Its current base is in Tanzania, though 90% of its business was through its Cyprus branch. 

Readers who wish to review the complete text of the Central Bank statement oh the imposition of the fine can access it here.

GUILTY EX-CIFA HEAD JEFFREY WEBB NAMES PANAMANIAN CORPORATIONS IN FIFA CORRUPTION SCANDAL

Jeffrey Webb:Guilty

Jeffrey Webb, the former head of the Cayman Islands Football, and who had pled guilty to his involvement in the massive FIFA corruption probe, has been cooperating with US law enforcement authorities in their investigation into the payment of millions in bribes and kickbacks. His assistance has reportedly been a major factor in the recent indictment of additional FIFA executives.

Webb was the Business Development Manager at the local Western Union money service business, which was closed without warning in July; Webb was arrested in May. The MSB was a subsidiary of Fidelity Bank (Cayman) Limited, whose parent, Fidelity Bank International, Limited, is located in Nassau. Bahamas.

WUs abrupt closing: due to Webb's arrest ?

Fidelity was one of the financial institutions named in the superseding indictment, for having moved a portion of the bribe money paid to him. Webb reportedly has named more than one dozen Panamanian corporations as entities through which bribe payments were facilitated to those individual indicted.

RAISE COUNTRY RISK ON BELIZE

A recent increase in money laundering activity in Belize will only be stimulated further by the new nonstop service from Panama to Belize that was initiated this week by Copa Airlines. Money laundering Panamanian attorneys have increasingly turned to Belize, to conduct their illicit operations, and there does not appear to have been any meaningful local law enforcement response by Belizean law enforcement agencies or regulators.

There have been multiple cases involving a Belize nexus in 2015. Toronto authorities announced this week two arrests in the $93m pyramid scheme known as Banner Brokers, where the schemers used accounts in Belize to launder the proceeds of crime, employing a bogus Internet advertising company. The United States has accused the Government of Syria of purchasing oil from ISIS, in violation of international sanctions, and a Belize company has been sanctioned for being a major participant. We have seen several other new cases this year, involving Belize banks, and American and Canadian fraudsters and securities traders.

In the past, the country's financial institutions have banked Convicted Colombian billionaire Ponzi schemer David Murcia Guzmán, the insider trading Panamanian government officials in the Financial Pacific-Petaquilla Mining scandal, and the admitted Panama City money launderer, attorney Ismael Gerli.

Given the country's small economy, and lack of significant trade with North America, the chances that any financial transaction between Belize financial institutions, or corporations, involves only criminal activity has increased in recent years, as its popularity for illicit activity has soared. Now, due to increasing the ease of access, for those in Panama's legal profession who regularly engage in the laundering of the proceeds of corruption, and narcotics trafficking, one can only expect it to continue to rise.

For these reasons, compliance officers should increase Country Risk for Belize at this time, after making their own due diligence and inquiry.

MONEY LAUNDERING LAWYER IN GRAND CAYMAN NOT CHARGED IN FIFA SCANDAL

The professional football world, already reeling from the fallout surrounding the indictment, and guilty plea, of former Cayman banker Jeffrey Webb, the CACACAF president, and FIFA vice president, on $10m corruption charges, the US Department of Justice brought in additional defendants, in a superseding indictment of other corrupt senior FIFA officials. Webb recently entered a plea of guilty, and is awaiting sentencing, while under house arrest in the United States. He will be disgorging millions of dollars of bribe money.

Buried in the new indictment are the circuitous methods through which Webb received bribes, and those methods are painfully detailed therein. One bribe payment went as follows:

(1) It originated at Multibank, in Panama. From there, it went to...
(2) The bank's correspondent account at Bank of America, in the United States...
(3) For further credit to a Citibank account in Florida.

Who controlled that account, you ask ? An attorney in Grand Cayman, who has close ties to local Cayman football organizations. He was, according to the indictment, called before a Federal Grand Jury, in the United States, to give testimony about the transaction. Remember, when you take the proceeds of crime, in this case a bribe, and move it through the global financial system, to disguise it illicit origin, or to deliver it to the recipient, you have committed money laundering. That is a 20-year felony in the United States.

This unnamed lawyer, whose identity is common knowledge in the financial community of the Cayman Islands, was not charged in the indictment, nor can I find him charged anywhere. Did he receive immunity from prosecution for his cooperation ? Unless there is a sufficient deterrent, when individuals, especially attorneys, who possess special skills, and can artfully hide their dirty clients behind the attorney-client privilege, commit money laundering, others will be tempted to break the law, as they do not fear the consequences.

THE UNITED STATES IS PROTECTING PANAMA'S BIGGEST FINANCIAL CRIMINAL

Who am I referring to here ?

(1) He is living openly in Miami, notwithstanding that a dozen pending cases, some criminal, have been filed against him in his native Panama, but American media have strangely refrained from reporting this fact.

(2) He was singlehandedly responsible for literally bankrupting the budget of the Republic of Panama, through massive corruption, kickbacks and payoffs.

(3) He, and his cabinet ministers, business partners, and other associates, illegally made many millions of dollars, through insider trading of securities, in the Petaquilla Gold Mine scandal.

(4) He laundered millions of  dollars, much of which was Colombian narcotics profits, for convicted Ponzi schemer, David Murcia Guzmán.

(5) His illegal surveillance program invaded the privacy of over one hundred Panamanian judges, opposition politicians, and prominent businessman, and their wives, and he forced their wives and girlfriends to engage in sexual relations with him, through blackmail. and threats of exposure.

(6)  He ordered Panama's regulators to ignore rampant money laundering in the country's banks and money service businesses, and insured that any civil suit brought by his opponents went nowhere, through bribes, intimidation, and the granting of favors to the judiciary, including many members of the Supreme Court of Justice.

(7) While in office, he associated with many prominent members of Panama's organized crime syndicate, which includes many players of Middle Eastern (e.g. Syrian) origin.

The individual who committed all these acts is the former Panamanian President, Ricardo Martinelli, who apparently has been a Confidential Informant for A US law enforcement agency for an unknown period of time, and is now enjoying the benefits of residing in Miami, with all his ill-gotten billions of dollars, so long as he continues to give up information on Panamanians engaged in criminal activity, including corruption. Indeed, Martinelli may have played a major role in supplying the evidence used to convict several major Panamanian government officials of late.

Martinelli has the proverbial "Get out of Jail" card in the United States, and Panama's new reform government is the loser. You could say that crime pays, when you have high-level friends in an agency of the US law enforcement community, that has little or no accountability to the US Congress, or the American public, for its conduct. Is the war on drugs that important that we continue to give the worst career criminals a pass, so long as they assist us ?

CAYMAN REGULATOR REPEATEDLY FAILS TO ASSIST VICTIMS OF FRAUD

The Cayman Islands Monetary Authority, known as CIMA, has repeatedly failed to stop financial fraud occurring within its jurisdiction, and has not assisted victims to recover assets that have been stolen from them by Cayman-based financial fraudsters. Complaints of losses, due to fraud in the Caymans, have flooded into the Securities & Exchange Commission (SEC) in the US, and the Ontario Securities Commission (OSC) in Canada.

Cayman financial professionals advise that there are at least a dozen open and pending investigations, into major frauds, at CIMA, and not one has reportedly resulted in a criminal referral to the Royal Cayman Islands Police Service. Some of these investigations have been open for a number of years A search of recent Cayman news articles has failed to turn up a single case of money laundering, prosecuted in Grand Cayman; the only convictions I found, of several Cayman fraudsters, were obtained in United States courts, by American Federal prosecutors. All the others have never been charged, and many still pose a clear and present danger to the investing public, due to what can only be described as regulatory malpractice.

More recently, CIMA was informed six months ago, of the massive $450m trading scheme at B & C Capital, Ltd., a Cayman shell company that illegally held itself out, in writing, to be a financial institution, yet the agency has never shut down the company, or even called in its officers and agents for interviews. It has totally ignored the most prominent Cayman financial fraud to hit the island in many years, eliminating all hope that the sixty Canadian & American retirees, whose money is missing, will ever be able to achieve a recovery of even a small portion of their life savings. The fraudsters, known as the Cayman Gang of Four, appear to have evaded justice, and many victims are demanding answers from CIMA.

When a regulatory agency, located in the British Overseas Territories, fails to properly discharge its obligations and duties, with the result being widespread damage and loss, the UK Foreign & Commonwealth Office, which has jurisdiction and oversight, can enter, and take over administration of the agency, to properly carry out the mission of the agency. We saw the UK take over in the Turks & Caicos, when corruption required strong action, and in the case of CIMA, many who have observed its chronic, dysfunctional operation, are calling for it to hereafter managed by the United Kingdom.

Ms. Cindy Scotland, Managing Director, CIMA

DID CAYMAN GANG OF FOUR MOVE $450m OF VICTIMS' MONEY TO CUBA ?

Lamb and Santana

The first civil suit has been filed by one of the victims, against one of the Cayman Gang of Four, Sharon Lexa Lamb, and Dundee Merchant Bank, where Lamb was the Senior Vice President & Director, but where is the estimated $450m-500m in stolen client money ? One source, who is familiar with Caribbean fraud, has stated that most of the money was probably moved to Cuba, and that it was deposited in several of the government-controlled banks there.

What is the reasoning behind such a statement, in the absence of evidence to support such an allegation ? It is based up these known facts:

(1) The Gang of Four's maritime courier, the Cuban national, José Fernandez Santana, has the ability to travel freely in and out of Cuban ports, to Grand Cayman, the Turks & Caicos, and a number of other Caribbean financial centers. Unimpeded international travel by Cubans, especially in a multi-million dollar yacht, can only occur if the individual has governmental approval. Is Señor Fernandez Santana an agent of the Cuban intelligence community ? Otherwise, his yacht would certainly be seized, and he arrested and imprisoned.

(2) Sharon Lexa Lamb, the obvious ringleader of the Gang of Four, and who married Santana, through a purely business arrangement that gives her Cuban residency as well as the right to purchase real property there, is frequent visitor to Cuba. As we have previously reported, Lamb fled to Cuba twice; first, when the trading scandal first broke, and later, when a civil suit was filed, and she was being sought for service of process.

Lamb in Cuba

(3) Other members of the Gang of Four are known to have visited Cuba, for the purpose of conducting business transactions. Were they setting up accounts, so that wire transfers from the Cayman Islands could be set up, or bulk cash shipments, orchestrated by Santana, or payments from other offshore tax havens, could be accomplished ?

(4) Rumors have abounded about certain Cuban government agencies, in need of hard currency for activities that they wish to conduct, who actively participate in financial crimes in the tax havens , the object of which is to fund subsequent covert operations. Was this one of those ?

(5) Admissions, made by Sharon Lexa Lamb, to witnesses who spoke to this blogger, to the effect that the victims would never recover their money, unless they granted her total immunity from prosecution, leaves one with the conclusion that the money is being held in a jurisdiction where it cannot be accessed or frozen. Cuba is one of the very few places that fits the description.

on his yacht

Are the retirement accounts of the sixty Canadian & American investors gone forever, and sitting in accounts in the Republic of Cuba, controlled by the Gang of Four ? Perhaps the multiple pending investigations will provide the answer; stay tuned.

RAISE COUNTRY RISK ON TURKEY TO UNACCEPTABLE LEVELS

Turkey may be about to experience a perfect storm in its economy, mainly through the missteps committed by its government of late. While any one of these issues might not, in and of itself, be sufficient grounds to raise Country Risk, rest assured that the combination will most certainly result in a large amount of economic damage, and the country's national policies could spell financial disaster.

Here is what we are concerned about:

Russia's minimal incursion into Turkish  airspace

(1) Turkey's shoot-down of a Russian warplane, that appears to have intruded into its airspace for no more than 10-15 seconds, in the extreme southernmost frontier area, has resulted in what could be crippling economic sanction imposed upon it by an angry Russia. It will especially affect Turkey's tourism industry, its need for natural gas, and its exports to Russia.

(2) The disclosure that Turkey continues to allow ISIS/ISIL to sell its bootleg oil through Turkey ( mentioned on this blog more than one year ago), and that senior government officials ( e.g. President & Prime Minister) are known to be personally profiting from it, means that Western sanctions may not be far behind.

(3) The sale of arms and supplies to ISIS, reportedly by the Turkish intelligence services, could mean that foreign trading companies might be implicated, in terrorist financing sanctions violations. Trade with Turkey just became a clear and present danger.

(4) The fact that Turkey allowed thousands of wannabe jihadists to enter Syria's civil war through its territory has not been lost upon Western leaders. Can a NATO member be sanctioned by its fellow members ?

(5) Turkish official statements, directed at Israel, a former de facto ally, including threats to conquer the holy sites in Jerusalem, coupled with Turkey's grant of safe haven to Hamas, thereby allowing it to operate in the West Bank, could result in an Israeli response, plunging the country into a wartime situation, just when things with Russia were grave.

Will the Turkish economy falter ? Even if it does not, it could be fatally weakened by any one of the above, and drop into a recession, or worse. You are advised to recalibrate Country Risk for Turkey to the highest level, meaning no extension of credit, no bank client shipments on credit, and no investment in-country, until & unless all of the issues presented here are resolved. 

PANAMANIAN LAWYER SOUGHT TO EXTORT $300,000 FROM CLIENT

When Vladimir Kokorev notified Panama City attorney Ismael Gerli that he no longer required his services, Gerli demanded $300,000, claiming that it was some sort of termination fee. When Kokorev refused to comply, Gerli flew to Spain, and gave perjured testimony to a Spanish prosecutor, alleging that Kokorev had been a money launderer from the family of the President of Equatorial Guinea.

Gerli then told the Kokorev family that, unless they paid the $300,000, he would not recant his perjured testimony. That constitutes extortion, by any definition of the term. The law also threatened Kokorev's life, and made anti-Semitic remarks, both violations of the laws of the Republic of Panama.

Attorney Gerli, who reliable Panamanian sources say literally bought his law degree from a corrupt school administrator, and never attended law school, nor took any bar exam, belongs is prison, not in a law office. Unfortunately, Panama does not discipline its attorneys, leaving them free to steal client assets, and to bribe their way out of any civil or criminal case filed against them as a result. Investors should take this into account when considering to undergo any financial exposure in Panama, where aggrieved foreign parties rarely, if ever, obtain justice through the country's court system. 

NEW YORK FINANCIAL REGULATOR PROPOSES MASSIVE UPGRADE IN REQUIRED CERTIFIED COMPLIANCE PROGRAM, AND PERSONAL LIABILITY FOR CHIEF COMPLIANCE OFFICER

The State of New York Department of Financial Services, an agency that is not shy about going after financial institutions that are deficient in their AMLCFT programs, has proposed a massive set of new requirements for banks and MSBs, including what amounts to personal liability of their chief compliance officers, who will be certifying that their programs meet the new guidelines.

It is strongly suggested that you review the details of this proposed Part 504, Banking Division Transaction Monitoring and Filtering Program Requirements and Certifications, because, when enacted, it will radically change what constitutes best practices in the field of the AML/CFT, since all financial institutions conducting business in New York would be forced to upgrade accordingly.

You can review the complete text here. 

WHO IS THE COOPERATING INDIVIDUAL IN THE CRIMINAL INVESTIGATION OF THE GANG OF FOUR ?

There have been persistent rumors, to the effect that one of the individuals involved in the Cayman Gang of Four $450m trading scandal is cooperating with a North American law enforcement agency.  This would explain the fact that questions have been posed, to some of the more than sixty reported Canadian & American victims, which indicate that investigators, located outside Grand Cayman, have intimate knowledge of the evidence against the Gang of Four. Who is assisting them, perhaps in exchange for immunity from prosecution ?

The only member of the Gang of Four, who has not fled the Cayman islands, is B& C Capital's present Managing Director, Fernando Mota Mendes.  You may recall that Mendes is extremely sensitive to having his name appear in print; he brought bogus criminal charges against a local news blogger, who reported on his role in the Gang of Four case. Is he the Cooperating Individual ?

The other possible participant is an American who formerly worked in Ryan Bateman's office, and later was convicted of money laundering in the United States. Though sentenced to a term in Federal Prison, he has curiously been sent to a halfway house  instead, which allows him to work at an outside civilian job during the day, and only to be confined at night. This is an extraordinary benefit to him, and may indicate that he is rendering Substantial Assistance to law enforcement in the Gang of Four case. Is he the one who is filling in the blanks in the criminal investigation ?

We shall continue to inform our readers of all developments in this case, as they occur.

PANAMA'S MOST PROLIFIC FRAUDSTER SEEKS A DELAY IN SENTENCING ON HIS DUTCH CHILD PORNOGRAPHY CONVICTION

Okke Ornstein, the Dutch fraudster who was, for years, the Scourge of Panama, is seeking to delay his sentencing, in the Netherlands, on a child pornography conviction. Ornstein, who owes Panama more than three years of prison time, in two cases, plus has a five million dollar judgment lodged against him, is once again employing dilatory tactics, in a futile effort to delay justice.

The defendant was convicted in Absentia, in a Dutch court, for selling child pornography, and is awaiting sentencing. Now, he is alleging that he was never served in the case, in an attempt to delay the proceedings further. Of course, he will have to make a personal appearance, which will not happen, for Panamanian authorities want him, for the prison time he owes their court system. He also has several pending fraud cases in the Republic of Panama, and he is a Person of Interest in an unsolved murder there.

He has still one more major problem: if he shows up in court, his life will probably be in danger. He stole $36,000 from the designated terrorist organization, Hamas, taking charitable contributions that were intended for refugee Palestinians living in warn-torn Syria. He has taken to wearing a dress, and posing as a woman, to elude Hamas, according to eyewitnesses.

What will this career criminal do now ? He has been in hiding, in Europe, for some time, but you can trust the Dutch government to eventually catch him. When that happens, his liberty will be lost for an extended period of time. 

EXTORTION CHARGES FILED IN SPAIN AGAINST PANAMANIAN LAWYER WHO FRAMED KOKOREV FOR MONEY LAUNDERING

A Spanish prosecutor has filed criminal charges against the Panamanian attorney, Ismael Gerli, for Perjury, Making Threats, Disloyal Professional Conduct, Extortion, and Giving False Testimony Contrary to the Administration of Justice. Gerli, whose full name is Ismael Enrique Gerli Champsaur,  formerly represented the Russian businessman, Vladimir Kokorev, who has been charged with money laundering offenses in Spain, based solely upon Gerli's sworn statements, which are now considered to be false statements, made for material gain. The apparent intent of Gerli was to frame Kokorev, and his immediate family, for money laundering.

Spanish authorities, in the November 20, 2015 filing, state that Gerli threatened to  testify against Kokorev, before a Spanish court in the Canary Islands, unless he received money, and assignment of  title to real estate assets located in the Republic of Panama. Gerli also threatened the life of Kokorev, unless he received payment. Gerli sent multiple emails to the Kokorev family, and others, which the prosecutor attached to his filings, and which included Anti-Semitic slurs directed at Kokorev.

Gerli, who obviously violated the attorney-client privilege, by traveling to Spain, and giving testimony designed to implicate Kokorev, has a law license in Panama, but allegedly bought his law degree, without ever attending law school. Panama has the diploma privilege, meaning that no bar exam is required to become admitted to the bar, only a degree. Since opening his law office, Gerli has himself employed lawyers, to perform the office's legal work, because he has neither the education, nor experience, to do so.

Gerli's troubled history:

(1) A decade ago, he was implicated in a major money laundering case in Nicaragua, involving the most senior government officials; he is believed to have an outstanding warrant for his arrest in Nicaragua.

(2) Gerli has been closely connected to clients, or partners, who were involved with him in financial crime, in the Ukraine, and in Spain.

(3) Gerli is allegedly on the US Department of Justice No-Fly List, meaning that he cannot travel into, out of, through, or over, the United States.

(4) He is a defendant, in a civil case, in Panama, where it is alleged that he stole real estate from Kokorev, through fraud.

For the foregoing reasons, and others, Ismael Gerli's testimony at a trial in Spain, against Vladimir Kokorev, and members of his family, should be disallowed, and his former statements stricken from the record.