FRENCH REGULATOR FINES BNP PARIBAS £10m FOR AML/CFT FAILURES

 French Banking regulator ACPR has levied a ten million Euro fine upon BNP Paribas, for anti-money laundering and countering the financing of terrorism shortcomings. The bank reportedly failed to file Suspicious Activity Reports, had inadequate compliance staff, and failed to implement improvements previously promised to regulators. The bank has a history with US regulators as well.

ATTENDANCE OF DOMINICA PM AT RUSSIAN FORUM CONFIRMS SUSPICIONS

The Prime Minister of Dominica, Roosevelt Skerrit, attended the St. Petersburg International Economic Forum, while declining to attend a number of forums and conferences sponsored by European organizations, indicating that he has continued to focus on relationships with non-democratic regimes, both financially, as well as politically, notwithstanding that he presides over a constitutional democracy. Unfortunately, Dominica, under Skerrit, continues to restrict individual rights, and is fast sliding into the classification of non-democratic, strongman dictatorship. Apparently, Skerrit now includes Russia as an ideological ally, in addition to China and Venezuela, both of whi he maintains close financial, as well as political, ties.

Is Russia financially supporting the Skerrit government ? We already are familiar with the expanding presence of what are described as Russian organized crime elements in Dominica. including links to  reputed money laundering activities. While there is no reliable information available on the number of Russian "businessmen" who own Dominica's offshore banks, history shows us that Russians have been there before, with the banks, and remain in ownership and control, at this time. though specifics of their beneficial ownership remain opaque.

How many of Dominica's illegally-issued diplomatic passports are held by Russian nationals ? Some observers believe that this is the specific reason that Dominica's Minister of Foreign Affairs refuses to release the list of passport holders, correctly fearing that the disclosure will abruptly bring down the Labour Party-dominated government.

Back in 2014, when Francine Baron was the High Commissioner in London, Omar Murtuzaliev, a known Russian oligarch, was the Dominican Trade Attaché. Murtuzaliev listed his nationality as "Dominican" on UK company filings.

Dominica PM Skerrit with Russian Foreign Minister Lavrov

Finally, are Russian intelligence agents operating in Dominica, with the approval and protection of the Skerrit administration ? If sufficient funds have been covertly provided to Dominica's leaders, they may have no choice but to accept Russian influence, and associated intelligence-gathering activities, which will be interpreted as a clear and present danger by America's law enforcement, as well as national security, agencies, with unforeseeable consequences. 

DUTY MAGISTRATES IN PANAMA DECLINE TO RULE ON PENDING HABEUS PETITIONS IN ODEBRECHT SCANDAL

Magistrate judges and their assignments

 The sitting Magistrate Judges of the Supreme Court of Justice yesterday failed to rule on the Habeus Corpus petitions pending since January, in the Odebrecht cases. Four of the conveniently missing magistrates sent substitutes (one did not, and was a no-show), but the en banc group still declined to rule.

This is not only a legal issue, but also a human rights matter; criminal defendants have an absolute right to have the legal sufficiency of the charges against them, in person, aided by counsel. The Panamanian magistrates were required to consider these matters, as an absolute priority. Why no decisions ? There is an abundance of evidence of payment of millions of dollars in bribes and kickbacks, by Odebrecht or its affiliates or associated companies.

Are the magistrates delaying justice because wealthy targets have paid them, directly or indirectly, to slow the cases down ? We cannot say, but if it eventually turns out that corruption was involved, perhaps Panama might want to make examples out of any magistrate who obstructs justice in the Odebrecht case, which is perhaps the most serious case, against Panamanian leaders, since Noriega.

DID PRESIDENT TRUMP'S SON-IN-LAW VIOLATE OFAC SANCTIONS AGAINST RUSSIAN BANK ?

While voters in the United States anxiously await Congressional testimony, regarding whether Russia unlawfully interfered with the 2016 Presidential Election, and whether Trump campaign staff were conspiring with a foreign power, hostile to America, to fix the election, in exchange for the removal of sanctions against Russia for the Ukraine, compliance officers are more interested in another aspect of the scandal.

Did Jared Kushner, then President-elect Trump's senior advisor, in Decembe\r 2016, violate American sanctions in place against Vnesheconombank (VEB Bank), when he met with the bank's Chairman of the Board ? The bank has stated that they discussed business with Kushner's companies, but the White House has given a more political, non-business, version of the meeting.

OFAC Sectoral Sanctions were imposed upon the bank on July 16, 2014. Should the evidence prove that Kushner violated those sanctions, will a Civil Penalty be imposed, and a finding (name & shame) published by OFAC ? We await further investigation of this critical issue.

 

PANAMANIAN JUDGES DRAGGING THEIR HEELS IN ODEBRECHT BRIBERY CASES

According to most authorities, there are 36 individuals implicated in the Panamanian prosecution of bribe recipients, in the Odebrecht corruption scandal; 22 of them are Panamanians. Unfortunately, the cases appear to be proceeding at a snail's pace, giving rise to suspicions of corruption within the members of the judiciary that are handling the matters.

This week, it was reported that four of the Magistrate Judges of the Supreme Court of Justice, the country's highest court, are all out of the country; three are on vacation, and one in Brazil. There are several Habeus Corpus petitions pending, some since January, in the Odebrecht cases, all in limbo. If you are familiar with the rules of procedure, you know that such petitions must be handled by an court that receives them, at the highest priority. This is obviously an attempt to delay the criminal proceedings.

Why would the members of the judiciary act in this manner ? Many of the government officials, both in this current Varela administration, as well as the Martinelli regime, and prior governments in Panama, are suspected of, or known to, have accepted bribes from Odebrecht, to receive lucrative government construction contracts. How many Panamanian judges are protecting those who paid them bribes is not known, but the country's abysmally slow court system is governed by who pays what bribe to whom. Some observers of the Panama legal scene have predicted that no senior present (or former) government officials will be convicted in the Odebrecht scandal, notwithstanding the overwhelming evidence of guilt.

MONEY LAUNDERING ARREST IN DOMINICA CONFIRMS LACK OF CONTROL OF ITS BORDERS

Buried in local news in Dominica was the story of the arrest of two Colombian nationals, who have been charged with money laundering. They were reportedly found to be in possession of a significant amount of cash, both in US, and East Caribbean, Dollars, as well as some equipment considered to be illegal under Dominican law.

Here's the problem: the male who was arrested has a criminal record in his native Colombia, which is a country whose nationals must first obtain a visa to enter Dominica. His presence in Dominica confirms that the government is not enforcing its own laws, regarding visits by unsavory elements. Incidents like this serve to raise fears that persistent rumors of money laundering in Dominica must have a basis in fact, and are a cause for concern, given all the other internal problems the country continues to face, many of which have previously been reported on this blog.

The illegal diplomatic passport sales scheme, the lack of due diligence with applicants for the Citizenship by Investment program, the purchase of votes by the party in power, and the movement towards what can only be regarded as a police state, all add up to increased risk, and have contributed to making Dominica a jurisdiction to be avoided, by US banks, as well as foreign investors. Is Dominica the new Venezuela ?

WAS CENSORSHIP ACTION IN LEBANON DUE TO HEZBOLLAH ORDER ?

If you are considering lowering Country Risk on Lebanon this year, due to the fact that no significant terrorist financing cases have surfaced, remember that Hezbollah's stranglehold upon the country has increased exponentially, and no Lebanese banks have sufficient governmental backing to refuse to move funds for that specially designated global terrorist organization, if ordered to do so, notwithstanding all the public statements by Lebanese regulators, and bankers' associations.

As additional proof, I offer this week's news item from Beirut; government agencies have banned the new American action film, Wonder Woman,  because the star is an Israeli. 

PANAMA PAPERS, MAKE WAY FOR THE MALTA FILES

As you may know, the exposure of cabinet-level PEPs in the Panama Papers unleashed a firestorm of controversy in Malta, especially when the guilty parties failed to explain precisely why they felt it necessary to use the dodgy Panamanian law firm of Mossack & Fonseca to form shell companies in Caribbean tax havens. Corruption in Malta, a member of the European Union, has been under the media microscope of late, as is tax avoidance/tax evasion through Malta.

Now, a group of concerned journalists, European Investigations Collaborations, have sought to focus further attention upon the Republic of Malta; it is called the Malta Files, and it consists of a large number of articles, in many languages, about how Malta's unusual tax system, which allows EU nationals to evade taxes in their own countries, is being abused, to the damage and detriment of tax revenue in the countries in the European Union . Malta reportedly rebates 6/7 of corporate taxes paid in, resulting in an effective tax rate of only five per cent.

Readers who wish to access the Malta Files can find the website here.

COURT DENIES LAWYER AT ROTHSTEIN PONZI FIRM SENTENCE REDUCTION

 Christina Kitterman, the attorney at Ponzi schemer extraordinaire Scott Rothstein's law firm, and who is serving sixty months in Federal Prison, for fraudulently posing as a Florida Bar official, has lost her  §2255 petition to adjust her sentence downward. Asserting that she had but a minor role in the massive Ponzi scheme, where investors were tricked in "investing" into phantom court, and out-of-court, settlements, for discrimination and sexual harrassment, Ms. Kitterman argued that her true sentence should have only been approximately one-half of the five-year sentenced pronounced by the Court. The maximum sentence possible is 20 years. though the Sentencing Guidelines for the amount of the loss was immense, and far exceeded the statutory maximum.

In a ten page opinion, a US Magistrate Judge held that the sentence was not improper, and noted the hedge fund she intentionally misled, in a telephone call, where the $1.4bn Ponzi scheme was seeking to avoid making a multi-million dollar payment, and enticing the victim to invest yet more millions, ultimately lost $63m, and that it found a miscarriage of justice did not occur, regarding her sentence.

The takeaway here is that, in any financial crime, even minor participants must take the weight of the entire criminal venture, not just their limited role in the enterprise. Ms. Kitterman who lost her appeal to the 11th Circuit, and was denied Certiorari, by the US Supreme Court, filed the §2255, Pro Se, immediately after being rebuffed by the High Court.

BRITISH CARIBBEAN TAX HAVENS FEAR POST-BREXIT VISA REQUIREMENTS

The presence of officials from the British Virgin Islands at a conference, seeking to insure that nationals from the British Overseas Territories do not have to secure a visa to visit the countries of the European Union, indicates that those tax havens do not want detailed records of such visits, which would include advising European taxpayers how to avoid or evade taxes in their jurisdictions.

The argument advanced by the BVI is that its attorneys and advisers need unfettered access to their European clients, but in truth and in fact, they do not want visa records, of approvals, entries and exits, to document their activities. The British Virgin Islands, Bermuda, and the Cayman Islands could all face EU visa requirements, for a valid reason: to prevent their nationals from remaining indefinitely in Europe, as illegal immigrants. While the attorneys and financial service professionals in Caribbean tax havens will hardly fit in that category, they obviously do not want to have to specify the reasons for their visits, and to have complete records of their European travel maintained.

In the post-Panama Papers environment, EU nations may wish to keep a watchful eye upon Caribbean tax haven interaction with their taxpayers, and requiring their nationals to obtain visas to enter the Schengen countries might assist in that quest.

"GENERAL" MANUEL NORIEGA PASSES AWAY AT 83 WHILE IN CUSTODY

Manuel Noriega, a Panamanian colonel who made himself a general officer, and later became the dictator of his country, until removed in an American military invasion, has died at the age of 83, following an operation to remove a brain tumor. Noriega, who was serving a lengthy sentence in Panama, for multiple crimes, including murder, was convicted of money laundering, in both the US and France, and was imprisoned in both countries.

ATTORNEY AT MOSSACK FONSECA WHO COOPERATED GRANTED BOND

María Mercedes Riaño, alleged to be the manager of the Panamanian law firms Mossack Fonseca's Brazil office, and who has confessed MFs involvement in the "Car Wash" (Lava Jato) money laundering & corruption scandal, has been granted bond, in the amount of $150,000 by a Circuit Judge, of the Seventeenth District. She is prohibited from leaving Panama. Riaño has reportedly given to prosecutors the complete details of the Brazil operation, though Mossack & Fonseca have allegedly disputed her claims.

Riaño, Jurgen Mossack, Ramón Fonseca Mora, and Edison Teano, all face money laundering charges, according to Panamanian prosecutors. The law firm has been alleged to be a criminal organization, engaged in money laundering, due to the massive evidence of their facilitation of the payment of bribes. No other present or former MF attorneys have been publicly named, interviewed or charged, according to reliable sources in Panama City.

LEBANESE ATTORNEY LINKED TO HEZBOLLAH PLEADS GUILTY TO MONEY LAUNDERING IN NEW YORK

 Joseph Asmar, an attorney from Lebanon involved in the laundering of drug profits, has entered a plea of guilty in US District Court in Brooklyn (EDNY), to Conspiracy to Commit Money Laundering. The defendant, who represented to undercover DEA agents posing as drug traffickers, that he moved dirty money in Europe, Africa and the US, and was affiliated with Hezbollah, was paid a commission for cleaning what was represented to him to be the proceeds of crime.

Asmar, who was arrested in Paris, and extradited to the Unite States, is part of a global money laundering network, operated by Hezbollah, which finances their terrorist operations, in large part, through criminal activities, illustrates the fact that any transaction involving Lebanese nationals, or entities, could be unwitting contact with the specially designated global terrorist organization. Therefore, for risk management purposes, the entire class of transactions with Lebanon represents elevated risk, often to the point where it exceeds prudent action.

IF EXTRADITED, WILL LEROY KING IMPLICATE ANTHONY ASTAPHAN IN STANFORD BANK CASE ?

Attorney Anthony Astaphan

Most observers of the R Allen Stanford/Stanford International Bank Ponzi scheme case believe that the eight-year delaying action, brought on behalf of former Financial Services Regulatory Commission head, Leroy King, was to prevent him from ever being extradited to US District Court in Texas, where he faces what amounts to, in effect, a life sentence, for assisting Stanford in keeping US regulators at arms' length for years. His Guidelines sentence, after conviction, could be 30 years, due to the size of the Ponzi, and his use of his office to protect Stanford.

To avoid that outcome, and draw a shorter sentence, King would be required to cooperate with prosecutors, and such cooperation, Antigua correctly fears, could implicate one or more members of the prominent Bird family, in the acceptance of illegal compensation from Stanford, specifically bribes. That is the presumed reason for the dilatory tactics, engaged in not only by King's atttorneys, but by several members of Antigua's judiciary as well, to significantly delay the case.


There are others who fear the consequences of King's testimony, including some of the attorneys who advised the Bird family, during the time that Allen Stanford was filling the pockets of Antiguan officials, while he fleeced his victims. One of the prominent members of the East Caribbean bar who provided legal advice to the Bird family during that period was Dominican attorney Anthony Waddy Astaphan, SC. Astaphan's role in the Bird's connection to the Stanford International Bank scandal remains  a mystery, but, if facing a long prison term, Leroy King may just choose to disclose those details to the Department of Justice.

Leroy King & Allen Stanford

 Could a RICO (Racketeer Influenced Corrupt Organization) charge be lodged against Bird family attorneys ? We cannot say, but we will be closely monitoring the King extradition proceeding, and will advise on all developments, as they occur.

CITIGROUP/BANAMEX BSA INVESTIGATION IS SETTLED BY A $97.44m FINE

Readers who wish to review the complete text of the Non-Prosecution Agreement, entered into between the Department of Justice, Banamex USA, and Citigroup, which resulted in a civil fine of $97.44m, for Bank Secrecy Act violations, may access it here. The fine was based upon profits of $92.8m.

Citigroup stipulated that it willfully failed to maintain an anti-money laundering program, and willfully failed to file Suspicious Activity Reports.