IRANIANS WITH COUNTERFEIT ISRAELI PASSPORTS CAUGHT IN INDIA

Indian media have reported that two Iranian nationals, detained in India with counterfeit Israeli passports, which were manufactured in India, intended to use them to enter the United States. The articles do not specify whether the Iranians were using bogus pre-2003 non-machine readable versions of the Israeli passport.

In 2014, Kenya sentenced two men to 2 years in prison for attempting entry with counterfeit Iaraeli passports.

ALERT FOR COMPANIES FROM MICROSTATE BY PANAMANIAN LAWYER

                                             

The Principality of Hutt-River,  a self-declared micro state composed of a wheat farm in Western Australia, has never been recognized by anyone as a sovereign state. Its founders rely upon their interpretation of a historical oddity: that Great Britain allegedly never specifically declared the area as its territory. It reportedly has been ignored by the Government of Australia, and is basically a tourist destination, a curiosity.

Nevertheless, where even a bogus jurisdiction exists, in the mind of its founders, sleazy lawyers working the offshore scheme usually jump on it, and seek to vend companies claimed to be in tax-free states. The fact that Hutt-River is a part of Australia seems to be forgotten by these attorneys.

Jay Mac Rust, Esq.

I bring this up because one of the more slippery Panamanian lawyers that we have been covering of late, Ismael Gerli Champsaur, represents that he is the Honorary Counsel of Hutt-River Principality. He first made such statements, reportedly calling himself a diplomat, in connection with claims he made, on behalf of a company that sought to corner the market on a kitchen appliance in Eastern Europe, by asserting that his client had the exclusive trademark of a common term. That makes him what we generally refer to as a "trademark troll," and if you are familiar with the antics of the dodgy Texas Lawyer,  Jay Mac Rust, called a Patent Troll by both victims, the State of New Hampshire, and the FTC, you know that Gerli's actions constitute fraud.

Totally bogus and illegal

Gerli, who is a defendant in a criminal fraud case in the Republic of Panama, a wanted man on money laundering charges, in another Central American jurisdiction, and believed to have stolen millions of Euros in a fraud committed in Spain, has not been seen around Panama City of late. Additionally, the Spanish authorities want to see him on charges of giving false witness in a criminal money laundering investigation.

Gerli

One must also assume that, given Gerli advertises the availability of global tax-haven services, he has sold eager client Hutt-River corporations, as fast as he can pocket clearly excessive fees. Should you come across any Hutt-River entities, or trusts, be advised that they are a legal nullity, due to the non-existence of the micro state purporting to authorize them, the Hutt-River "corporation statutes"notwithstanding. Dual citizenship with Hutt-River is also bogus.

 Holder of those entities may also have unwittingly conferred jurisdiction of the Australian tax laws upon themselves. Please steer clear of any Hutt-River companies that are presented to you, for it will only end badly for any banker who accepts such bogus entities; You should also avoid Sr. Gerli as well.

Gerli

OCC FAILS TO RELEASE AGREEMENT WITH BANK OF CHINA

One of the major issues that I have with US government agencies that enforce financial institutions' compliance with BSA/AML laws and regulations is the fact that the public release of some documents mysteriously get held up for weeks, or even months, before compliance en officers can learn about Cease & Desist Orders, or stipulated agreements to fix major AML/CFT deficiencies. This policy may keep the financial media from publishing negative news about a specific bank, which helps the bank's reputation damage restoration staff, but it puts the compliance world at a distinct disadvantage: we do not know who the offending bank is, and conduct ourselves accordingly.

  Last week, a major news service got its hands on an agreement, between the Bank of China Ltd., and the Office of the Comptroller of the Currency (OCC), and detailed how the bank has been named, for failure to file suspicious reports, and other BSA sins and transgressions. I cannot find one on the OCC website anywhere, because its release has been intentionally delayed.

 The back story, or course is serious: the bank finally complied, under duress, in disclosing the names of account holders suspected of conducting massive global counterfeit goods operations. A US District Judge, in New York, had fined it $50,000 per day until it obeyed a court order. The bank's shortcomings obviously needed to be made public, yet the OCC has delayed the public release of its agreement with the bank; That is just plain dangerous to the financial community.

 It is critical that compliance officers know about regulatory actions, when imposed, in real-time, so that they can notify their staff to take precautions. Otherwise, bank clients who are financial criminals can easily move their operations, from the sanctioned bank, to other banks, who are not privy to the regulatory sanctions.

ALLEN STANFORD LOSES LAST CHANCE AT FIFTH CIRCUIT COURT OF APPEALS

The Ponzi schemer, Allen Stanford, whose appeal to the Fifth Circuit, of his criminal conviction and sentence, was unsuccessful, has lost his final bid to have that Court hear his case. His Petition for a Rehearing En Banc, meaning by all the judges of the Court, was denied.

The Court treated his application as a Petition for Panel Hearing, and ruled that, since no member of the panel, or a judge in regular active service of the Court, had requested that the Court be polled, on the Rehearing En Banc, his petition was therefore denied.

Stanford has now exhausted his appeals as a matter of right; the only option left to him now is filing a petition for a Writ of Certiorari, to the United States Supreme Court, where the chances that the Court will hear his case are statistically very remote.  

SECRET AGREEMENT BETWEEN SWITZERLAND AND PALESTINIAN TERRORISTS REVEALED

                                             

Swiss media has exposed details of a secret 1970 agreement, between the Government of Switzerland, and the Palestinian Liberation Organization (PLO), which was, at that time, engaged in committing violent terrorist acts throughout Europe, and was regarded as a terrorist organization. Switzerland concealed the agreement from the European Union, and the United States, which, had they known of its existence, might have severely affected diplomatic relations, for the Swiss provided assistance to the PLO, in exchange for a moratorium on terrorist acts within its territory.

Though all the details of the covert agreement are not known, as they reportedly are classified until 2020, Switzerland provided extensive diplomatic assistance to the PLO. Cash payments, which the West certainly regards as providing material support to terrorism, are believed to be one of the benefits included. One other is allowing terrorists to maintain bank accounts, and conduct their business, which gives rise to a number of terrorist financing issues.

                                               

 Some compliance officers may regard this latest black eye on Switzerland, following as it does the tax evasion scandal involving US taxpayers, as sufficient evidence to raise Country Risk. The issue of whether the Swiss have also cut deals with Specially Designated Global Terrorist (SDGT) groups has come up. Should US corporations conduct business with Swiss entities which are fronts for terrorists, not knowing their true beneficial owners, or illegal aims and goals, due to Swiss facilitation and cooperation, risk levels must rise.

Americans, many of who family members served in the Second World War, and still are disturbed when more details emerge about Swiss financial cooperation with Nazi Germany, will not be happy to learn that the Swiss Government chose to cooperate, facilitate, and finance, terrorists, fifty years ago, and such cooperation is most likely ongoing. Swiss bank accounts for terrorists does not go over well, even fourteen years after the events of 9/11.

THE BRAINS OF THE CAYMAN GANG OF FOUR MOVES BACK TO PANAMA

Ryan Bateman

Ryan Bateman, the fugitive Canadian stock trader who walked off with at least $450m of investor accounts, and who is wanted in the Cayman Islands, has returned to one of his favorite haunts, the Republic of Panama. Bateman and his brother Cody own an unlicensed wealth management company that has run afoul of Panama's law in the past.

Cody Bateman

Bateman made millions of dollars of unauthorized trades, in the United States, with money stolen from North American investors who thought their money was safe in Butterfield's Bank, in Grand Cayman. He is a member of the Cayman gang of Four, who other crew are Sharon Lexa Lamb, Fernando Moto Mendes, and Derek Buntain, all of whom were connected to B & C Capital, Ltd., Bateman's"exempt" shell company that illegally moved the victims' investment capital.


He had been keeping a low profile in Fort Lauderdale, Florida, trying to maintain his interests in oil exploration contracts he claimed to won in the Bahamas, but Opposition leaders in Nassau exposed his checkered past, and arrest warrant, which he disputed, though he remained in Florida, and did not personally appear in the Bahamian capital, to assert his disputed claim.

Sharon Lexa Lamb

Some sources have alleged that Bateman is looking for damaging information, to employ against the whistleblowers who have investigated his activities, and as many of his victims as he can gather dirt upon, to smear them and "shoot the messenger," when he is cornered. His crimes in Grand Cayman have drawn the attention of many Canadians, particularly those in Alberta, where he fled from a securities fraud scheme, and relocated his sleazy stock trading scheme in the Caymans.

It is also noteworthy to remember that the Panamanian attorney, Ismael Gerli, who is suspected of multiple links to the Gang of Four, and may have worked with a B & C Capital staff member, to move some of the stolen money, works and resides in Panama. Gerli has not been seen in Panama City of late; he is a defendant in at least four civil suits, and two criminal cases filed against him, by Russian businessman, Vladimir Kokorev, and his Panama attorneys.

Ismael Gerli

 Is Bateman in Panama City to spawn a new massive fraud, or merely hiding out from process servers, or law enforcement agents, seeking to detain him for extradition ? we cannot say, but we will continue to update our readers, as we remain on the trail of the elusive bandits, the Cayman Gang of Four.

Bateman, lamb and Derek Buntain

HSBC AND DOJ OBJECT TO TRANSPARENCY IN HSBC'S AML/CFT REPORT

                                   

Remember HSBCs billion dollar sanctions case ? The court-appointed Monitor released his First Annual Follow-up Review Report, which details HSBCs progress in creating and maintaining an effective AML/CFT program, but you will not be allowed to see it.

When a private citizen requested that it be unsealed, both the Department of Justice, and HSBC attorneys, weighed in with multiple objections. He asserts that the report will validate his claims that HSBC is in direct violation of multiple sections of prior consent decrees.

 Here's what they alleged:

(1) HSBC: If the details of our AML improvements are made public, then money launderers, and other financial criminals, will be better able to penetrate our defenses; Hogwash. Experienced money launderers utilize techniques that you have not yet discovered, let alone developed defenses to.

(2) DOJ: If we open the details to public scrutiny, those foreign jurisdictions ( read this as: tax havens) who have cooperated with us in the past, regarding HSBC, may choose to cease their cooperation. So what ?

First, by the way, the DOJ asserted that the Report was not a "judicial document," and therefore, it did not have to be disclosed in the court file. Does this sound like splitting hairs, for the sole purpose of denying transparency ? You be the judge, but I am personally disgusted that DOJ succeeded. The trial judge reserved ruling, meaning that he may never make a decision on the issue.

Experienced compliance officers know that HSBCs AML violations, in many jurisdictions, and over decades, are legion. For it to hide behind a sealed document, means that it is business as usual; opacity remains the order of the day.

MARTINELLI AND HIS MINISTERS WILL NOT BE CHARGED IN FINANCIAL PACIFIC SCANDAL

The traders who illegally used inside information to take massive profits in the Petequilla Mines scandal will not be charged, according to a reliable source in the Republic of Panama. Using the Financial Pacific brokerage house to acquire, and later sell, their holdings, the fraudsters who participated will not now be subject to criminal prosecution in Panama City.

The individuals who made the illegal profits include:
(1) Former President of Panama, Ricardo Martinelli.
(2) Most of Martinelli's ministers and cabinet members, and his sons.
(3) The Alaskan expat & fraudster, Gary Lundgren a/k/a Gary James Lundgren.
(4) The vast majority of the leaders of Panama's Middle Eastern organized crime syndicate.

The victims, who were mainly Canadian and American investors, who purchased the gold mining stock at grossly inflated prices, after information regarding favorable mine discoveries was made public, lost everything, when the stock tanked, upon the subsequent release of negative, more realistic news. The fraudster had previously made major purchases of the stock, based upon their access to non-public information, reportedly made available to them by then-President Martinelli.

It is believed that the reason for the "hands-off" policy on criminal prosecution is the fact that members of the present, so-called reform Varela government, also took illegal profits, and their role would be exposed in any serious criminal prosecution.

The case demonstrates that the government system in place in Panama will protect its fraudsters, and ignore victims who are foreign nationals. Thus should be taken into consideration, when considering making any financial investment, or any sort, in the Republic of Panama, opening any business enterprise there, extending credit of any type, or deciding whether to advise a client to reside or retire there.

FEDERAL JUDGE AFFIRMS PERSONAL LIABILITY OF COMPLIANCE OFFICER FOR AML FAILURES ON HIS WATCH

Remember MoneyGram International, inc., and its $100m fine for failing to create, maintain and operate, an effective AML program, and for other BSA deficiencies ? Its Chief Compliance Officer, Thomas Haider, drew a $1m fine, for willful conduct,  and an injunction against working in a financial institution again.

I am a firm believer in allowing aggrieved parties unfettered access to our court system, but, when Treasury sought to reduce the fine to a judgment*, Haider, in what must be the height of arrogance, and in the face of competent evidence of his compliance malpractice, or negligence (you decide), his counsel moved to dismiss the Federal lawsuit against him. His lawyer interposed Procedural Due Process and Grand Jury issues, as well as asserting that there was no personal liability for the BSA violations.

The District Judge, in a 13-page ruling, held that the unambiguous language of the law showed that Congress had intended that there be personal liability for violations of the Bank Secrecy Act, or its regulations. The Court declined to rule on the issue of the injunction at this stage in the case, and failed to agree with Haider's counsel's minor arguments, or postponed entering a ruling. The case will now proceed to trial; the pretrial conference has already been set for February 9, 2016. You probably have a pretty good idea of the likely outcome.

Therefore, the next time that senior management attempts to strong-arm you into fatally weakening any major component of your AML/CFT program, remember what happened to Thomas Haider and Harold Crawford. You remember Mr. Crawford's case, I trust.
____________________________________________________________________
*US Department of the Treasury vs. Thomas E Haider, Case No.: 15-cv-01518-DSD-HB (D Minn).

RAISE COUNTRY RISK UPON THE CAYMAN ISLANDS

Last August, when the news broke about the $450m financial theft in the Cayman Islands, where the individuals now known as the Cayman Gang of Four stole the accounts of Canadian & American retirees and pensioners,  we then asked this question: Should we raise Country Risk for the Cayman Islands ?

Six months later, having seen a total lack of governmental response to one of the largest scandals in Cayman Islands history, we are forced to answer in the affirmative. Here are just some of the reasons for this assessment:

(1) The hands-off policy of the Cayman islands Monetary Authority, CIMA, has been utterly disgraceful. CIMA has not only improperly alleged that it has no jurisdiction, it has obstructed and impeded the investigation of the case by foreign regulatory agencies. The fact that a B Class bank, and an exempt corporation (without the required licensed professional) masqueraded, in writing, as a bank, are involved in criminal activity, and CIMA has ignored its statutory responsibilities, greatly contributes to our decision to elevate Country Risk to high levels. 

(2) A careful review of prior financial scandals reveals that neither CIMA, nor government prosecutors, caused felony criminal charges to be filed upon Cayman residents who guilt was obvious, beyond a reasonable doubt. The primary goal in the Cayman Islands appears to be the protection of the status quo, to the damage and detriment of victims, who just happen to be foreigners, for they will lose.

(3) Corruption is also a factor. there have been a number of messy cases, involving official governmental corruption, or corruption at non-profits, or non-governmental organizations.  Apparently, there is little or no fear, on the part of Caymanians, of arrest and prosecution for corruption. The local players in the disgusting FIFA scandal have opened the eyes of the global financial community to NGO corruption, and it was surprised to find some of the biggest offenders were from Grand Cayman. 

Whether the raising of Country Risk will subsequently deter foreign investors, cause some of the 600+ hedge funds to relocate, or attract unwanted attention from the Financial Action Task Force (FATF), is not known at this time, but it will certainly cause some to take a hard look at whether the risks warrant looking elsewhere for an offshore financial center.

PANAMA'S LAWYERS ASK UNITED NATIONS TO INTERVENE IN DYSFUNCTIONAL COURT SYSTEM

The Colegio Nacional de Abogados de Panamá, the country's national bar association, has asked that the United Nations intervene in the court system, to remove the corrupt members of the Supreme Court of Justice, and reform the system from the top down. In a public plea, the attorneys' association has requested that the UN Special Rapporteur on Judicial Independence step in, and fix the broken justice system, as Panama's internal government system is unable, or unwilling, to do so.

Legal observers have been complaining for years that the Supreme Court justices can be bought, either to delay a case indefinitely, or to obtain a favorable court decision that it contrary to the rule of law. The public, having noted that the justices, most of whom were appointed by former Panamanian President Ricardo Martinelli, are interfering with his prosecution on multiple corruption and domestic spying charges, have called for the removal of all nine justices.

 Panama has no effective control over its judiciary, who sell justice, intentionally shelve and lose files, and do the bidding of the lawyer paying the largest bribe. The Chief Judge himself, facing multiple charges, remains on the bench, with no effective means of removing him, or his corrupt brethren.

The powerful influence of Panama's powerful organized crime group, whose bribes and kickbacks are a major influence on judicial decisions, or the lack of them, is so pervasive that claimants simply cannot obtain justice in the court system, unless they participate in the payment of massive bribes and gifts. That the bar association is seeking United Nations assistance shows the level of desperation attorneys have reached, as their clients, particularly foreign investors and expats, are being effectively denied access to the court system, to redress their grievances, whether they be civil or criminal in nature.

LENDER ABUSE IS WORSE FOR COMMERCIAL BORROWERS

We have all heard the horror stories; lenders who sell their consumer mortgage loans immediately after funding them,  yet engage in all sorts of illegal acts. Forging documents, backdating assignments, bringing foreclosure actions when they no longer own and hold the underlying mortgage, and sundry other crimes and transgressions. Borrowers, frequently with no access to legal counsel, are victimized, foreclosed, and shown the door, often

When we get to the commercial loan sphere however, the misconduct is often multiplied by two additional factors: the disposition of any escrow funds , set aside to insure that the lender does not sustain a loss, and backdoor sweetheart deals with third parties, where favored purchasers often benefit from two purchase prices. the public one and the real one.

In this series, I am going to analyze one such commercial case, where a lender bank, whose perspective on ethical treatment of a borrower, and illicit benefits bestowed on the entity that ultimately purchases the foreclosed property, make an objective observer want to run directly to a law enforcement agency with the file; Be prepared to wonder who at the bank actually authorized its actions,  and whether they should be imprisoned for it. 

CIMA ALLOWS UNDERGROUND CAYMAN BANK TO OPERATE, DECEIVING AND DEFRAUDING CLIENTS

Take a minute and call this New York City telephone number: (646) 202-9301. You will be connected to "consultants" operating Dundee Merchant Bank,  a closed bank in the Cayman Islands. If you are a client, a smooth-talking agent will assure you that everything is fine with your investments, but there may be delays in accessing your money, whether for "compliance reasons, " or some other excuse.

Dundee Merchant Bank, which also operates as Dundee Bank, appears in most lists of Cayman Islands-based financial institutions, as "In Liquidation," through it seems to be alive and well. Dundee is a Class B bank, meaning that its license is only valid, so long as it is a subsidiary of full-service international bank. The problem is, the bank's Canadian parent was sold off years ago, and Canadian regulators then reportedly ordered its liquidation forthwith.

A review of government and court records in the Cayman Islands fails to show that Dundee Bank was ever placed into liquidation proceedings, and the regulatory authority, the Cayman Islands Monetary Authority (CIMA) took no action, then or since, This allowed the bank's officers, President Derek Buntain, and Senior vice President & Director, Sharon Lexa Lamb, to perpetrate the fiction, to their customers, that this brass-plate offshore bank was still in operation.

Lamb took possession of  the bank's telephone numbers, and answered all queries as if the bank was still in operation. She and two other individuals, Ryan Bateman and Fernando Moto Mendes, the other two members of the fraudsters who came to be known as the Cayman Gang of Four, transferred investors' funds out of accounts at Butterfield Bank, to Bateman-controlled accounts. Bateman thereafter, explicitly claiming that the money was that of his shell company, B & C Capital, Limited, traded securities in the United States with it, through State Street Bank, in Boston, and other American commercial banks. The estimated losses exceed USD$450m.

All this while, CIMA negligently ignores Dundee, even after victims have filed complaints about their missing money. It takes no action against either the bank, or its officers, notwithstanding that multiple reports assert a massive trading scheme, fraud, and breach of fiduciary relationship. CIMA, which has exclusive jurisdiction over Cayman banks, fails to discharge its legal, moral, and ethical, responsibilities under the law, and its owns regulations.

Now, even after a major civil suit against the bank, and Lamb, are filed in Grand Cayman, its officers and staff members sit idle; it has not released any information for the benefits of the investing public, nor sought any remedies against Dundee Bank, which many financial professionals believe constitutes gross negligence. On wonder how long its will be before the officers at CIMA find themselves to be defendants in civil litigation in Grand Court, or being interviewed by the Royal Cayman Islands Police Service, and being asked to explain why they should not be charged with a crime.

GOVERNMENT OF PANAMA TO JOURNALISTS: DON'T WRITE ABOUT OUR CORRUPTION AND ORGANIZED CRIME

Journalists in Panama City have reported that they are being pressured by senior officials in the Government of Panama to avoid writing stories about the massive corruption situation in the country. They have also been warned to to report on the powerful organized crime group that influences nearly every aspect of the country's financial structure, especially the fact that its members are of Middle Eastern, including, Syrian, origin. Editors have cautioned their working staff journalists accordingly.

Prospective investors in Panama, and bankers who are considering a financial participation in the constriction boom taking place in the country, are cautioned that local news reporting, which directly affects risk level assessment, may not reflect the true picture of the economy, crime, and the ability of government to function at acceptable levels.

Additionally, news of the corrupt and dysfunctional court system, including criminal cases, and civil litigation, may be minimized, and of no assistance in the proper performance of due diligence.   

CRIMINAL FRAUD CHARGES FILED AGAINST PANAMANIAN ATTORNEY WHO GAVE FALSE WITNESS IN MONEY LAUNDERING CASE IN SPAIN

Ismael Gerli

Criminal fraud charges were filed this week, in the Republic of Panama, against local Panama City attorney Ismael Gerli Champsaur, who allegedly stole approximately $2m in property of a former client. Gerli, who reportedly also sought to extort money from that client, who terminated his services, is also the individual who gave false witness in court against that client, Russian/Spanish businessman Vladimir Kokorev, in Las Palmas, the Canary Islands.

Gerli is accused in the Panama case of fraudulently taking possession of client real estate, by illegally acquiring ownership through bearer shares of Panamanian corporations that held title to the properties. He is known to have perfected the bearer share scheme, during the time he was the attorney for the American expat, Gary Lundgren, who is known to have employed the same fraudulent technique to steal real estate from Canadians and Americans, with Gerli's advice and counsel.  Gerli and Lundgren are defendants in a large number of civil suits in Panama.

Lundgren

According to Kokorev and his lawyers, Gerli traveled to Spain, and falsely accused Kokorev of participating in a money laundering scheme, conducted through Spanish banks, to launder the proceeds of corruption of the family of the president of Equatorial Guinea, Teodoro Obiang. Spanish prosecutors reportedly later learned that his testimony had no factual basis, that he violated the attorney-client privilege, and that his statements to prosecutors were made with the intent to falsely incriminate Kokorev and his immediate family.

Major financial entities in Spain are known to be behind the current efforts to charge, and ultimately convict, Vladimir Kokorev, of money laundering, and it is believed that the purpose of this bogus prosecution is to sanction, and ultimately remove, the Obiang government from office in Equatorial Guinea, for their direct financial gain. Did Gerli receive illegal compensation to bring perjured testimony against Kokorev ? We cannot say, but our investigation continues; Stay tuned.