REPORT DETAILS HOW RADICAL GROUPS EMPLOY CLEVER TECHNIQUES TO FOIL SOCIAL MEDIA INQUIRIES

A report was released detailing how radical groups in America employed counter-surveillance techniques to prevent investigators using social media to identify their membership, during their anti-Semitic and anti-journalist attacks in 2016. This was in the middle of the Presidential campaign and contained an interesting observation. These groups intentionally hid their dark message in coded terms, whose true meaning was known to their peers, as well as typographical symbols with hidden meaning, to foil keyword, or keyword combination, searches of social media.

According to the report, entitled Anti-Semitic Targeting of Journalists during the 2016 Presidential Campaign*, which located 2.6 million objectionable Tweets, during the data gathering and analysis phase:

(1) Specific racial, religious or ethnic slurs were assigned tech-oriented code words, to mask their true meaning from readers outside the radical organization. The word skype was mentioned, to replace a commonly used (but profane) Jewish religious slur. Other terms known to be used include: google, yahoo, bing, skittle, butterfly, fishbucket, car salesman, reagans and leppo.

(2) Certain typographical symbols such as double or triple parenthesis were also used by radicals, to identify individuals being singled out for their religious beliefs.

Investigators, reacting to these techniques should follow these steps:

(A) Access the social media of a known member or associate of the radical organization, and extract any unusual, non-conforming, or suspicious terms or phrases, appearing there, using those keywords to identify others using those terms or symbols, and examining the content.

(B) Upon seeing such strange or unusual terms, which appear to be code words in postings of others, immediately institute a search for all direct or indirect relationships among the users, their families, friends and close contacts.

Criminal investigators, conducting gang-related or organized crime queries have known for years to recognize this type of slang, or internal jargon of the group they are probing.  Due diligence investigators, and other analysts, on the civil side, should adopt these techniques, to counter the efforts shown above, which are  being employed to confuse and foil their inquiries.

GOVERNMENT RESPONDS TO TURKISH BANKER'S DEFENSIVE MOTIONS

Counsel for Mehmet Atilla, the Turkish banker charged with assisting the Iranian oil sanctions evader, Reza Zarrab, has filed a number of defensive motions, and the US Attorney's Office in New York has responded with an extensive memorandum of law, replete with numerous legal citations.

To summarize:

(1) The Motion to Dismiss should be denied; the indictment properly alleges IEEPA and bank fraud allegations. It also provides counsel more than adequate notice of the elements of the offense, and the overt acts, and does not deny the defendant Due process, due to the extraterritorial application of a criminal statute. The Court has subject matter jurisdiction over the defendant.

(2) The defendant's Motion for Severance should be denied, as he was charged with participating in  the same conspiracy as defendant Reza Zarrab, that they shared a common purpose, and that none of the cases cited by the defense support their position.

(3) The defendant's motion to inspect Grand Jury minutes should be denied, upon the grounds that there is no "compelling necessity" (e.g. prosecutorial misconduct) shown "with particularity." An alleged erroneous translation, into English, of transcribed telephone calls, does not rise to the level which must be shown to pierce Grand Jury Secrecy.

The case is set for trial this Fall. Whether Atilla will eventually enter a guilty plea remains an open question; he does face some serious prison time, if convicted. Should he plead out, you can most likely expect further indictments, in the "oil-for-gold" case.

SOCIAL MEDIA RESOURCES IMMEDIATELY ACCESSED AFTER CHARLOTTESVILLE DOMESTIC TERRORIST ATTACK

Almost as soon as the smoke cleared from an intentional fatal automobile attack during last weekend's Charlottesville radical white supremacists demonstration, both law enforcement, and the media, were accessing the various social media resources. Their aim was to learn details of the accused vehicle driver, who faces charges of murder, and civil rights violations.

Even though press reports stated that someone took the alleged offenders entries down an hour after the attack, many media announced, and displayed, detailed information about the attacker, showing that he was linked to a radical organization, published photographs detailing his background, his associates, and posted actual photographs of him at the demonstration, carrying a shield bearing the logo of the radical group, Vanguard America.

You can also expect that Federal and state law enforcement agencies investigating the crime also viewed all relevant social media resources, as some of the information from those websites appeared to be known to law enforcement, given public statements made to the press.

Additionally, organizations opposed to White Supremacists, White Power, Ku Klux Klan, and Neo-Nazi movements have been accessing social media sites, to identify the participants from these organizations, which were present at the Charlottesville demonstration, from photographs taken at that time. They have already named & shamed a number of those radicals, and listed their hometowns, with the result that there are reports of termination by their employers. such as James Alex Fields, the vehicle driver, who is from Ohio, and Cole White, from California. 

Social media resources are now recognized as a powerful tool to be used in criminal investigations, due diligence searches, risk management procedures, and vendor and supplier vetting, as well as government investigations into possible terrorist cells. Several second-generation AML/CFT products now feature social media access.

Some commercial search products originally used social media to give access to clients who needed access to information about unbanked customers, to determine risk levels for their money service businesses. They soon discovered that social media assisted in profiling other customers as well.

Many criminal investigators now utilize social media as a critical component of their search process, and searchers on the civil side are fast discovering that it reveals information that cannot be obtained anywhere else, including present, prior, indirect, as well as hidden, relationships.  




 

FOUR MONTHS FOR MONEY LAUNDRING IS NO DETERRENT

A Massachusetts man, charged with Money Laundering Conspiracy, Douglas Mercier, was sentenced last Friday to four months' imprisonment by a Federal judge, in a case where the punishment clearly did not fit the crime. He also must serve three years of Supervised Release; the file indicates that his vehicle was seized, as was proceeds of crime.

Mercier, who was engaged in marijuana sales, to reportedly raise money for his children's college expenses, made fifteen cash deposits, in amounts just under $10,000, to evade reporting requirements, in what is more commonly known as Structuring. We wonder how anyone could think that such multiple deposits, right on the edge of a reporting requirement, would not be examined ? 

While sentencing must take in account many factors, when a sentence is pronounced which is clearly inadequate, given the seriousness of the offense, there is little deterrent effect upon the public. This means that others who may be tempted to engage in similar conduct, do not fear the consequences of an arrest, because they have seen that the punishment meted out for the same crime is minimal at best, and may amount to little more than a slap on the wrist.

ARE YOUR BANK CLIENTS' "MADE IN CHINA" REALLY MADE IN NORTH KOREA ?

Given the zero tolerance attitude that the United States is now taking towards North Korean sanctions, compliance officers at North American banks whose clients import clothing from Chinese factories would do well to take their due diligence a bit further. If your bank clients are bringing in what the labels say are goods of Chinese origin, obtain some additional assurance, of an affirmative nature. lest you find a Federal law enforcement agent in your office, in two years, asking tough questions, and carrying a subpoena for bank records.

Recent studies indicate that North Korea's state-owned apparel factories can save overseas importers as much as 75% on labor costs, compared with the costs of manufacturing the same items of clothing in Chinese factories. That has stimulated massive cheating: most of those DPRK-made items are mislabeled "Made in China," and transshipped, through north China, to the West.

It is humbly suggested that bankers who clients are engaged in importing clothing items from China be required to execute a sworn affidavit, prepared by your counsel, affirmatively stating that they have performed adequate due diligence on origin of the goods that they are purchasing, and that they are indeed of Chinese origin, made at a specific factory, with the address, that your client will periodically review the situation, and will send a representative to the factory site, to verify the information.
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Keeping your clients honest, by adding additional protection, protects your bank from subsequent Willful Blindness exposure.

READ 2017 FCA ANTI-MONEY LAUNDERING REPORT

If you want to review the latest annual AML report of the Financial Conduct Authority (FCA),  you may access the complete text here.

WHEN DOMINICA'S CORRUPT PRIME MINISTER SOLD OUT ITS PETROLEUM PATRIMONY

What you see below, courtesy of WikiLeaks, is a declassified US State Department cable, detailing the events surrounding the sellout of Dominica's rights to Bird Island, to Hugo Chavez and Venezuela. Before 2006, Dominica maintained that it had territorial rights to Bird, which is technically a reef, awash at high tide, and not an island. It is therefore part of Dominica's 200 mile, internationally recognized, Exclusive Economic Zone, and therefore not subject to any other nation's bogus territorial claim. The area is too far from Venezuela, to support any similar claim.

Venezuela's assertion, that it was awarded the "island" by Spain, has no legal basis; one cannot transfer or acquire the EEZ of another country; It is inviolate under the Law. Note well that the International Tribunal for the Law of the Sea, and the International Court of Justice, have rejected China's bogus claims to reefs and submerged land, in the South China Sea.

According to reliable sources, and if you read the cable below, Dominica's Prime Minister, Roosevelt Skerrit, abruptly, and without the authority of his nation's elected legislature, abandoned Dominica's longstanding claim to Bird Island. He reportedly personally received a bribe to take that action; the official version, that Venezuela agreed to fund construction in Dominica, is not the complete story.

Many experts believe that the region to the west of Dominica, which includes Bird Island, has a high probability that there will be deposits of petroleum, and natural gas, available to extract. This makes it, potentially, Dominica's most valuable natural resource.

How much did the corrupt PM take, to roll over and state that his country had no claim ? Is that part of the millions of dollars of bribe money that insiders say Skerrit has stashed away in Swiss banks ? We cannot say, but Dominica needs to reestablish its legal claim, to Bird Island, and recover it for the future of the country.

SPAIN REFUSES TO PUNISH JUDGE PREJUDICED AGAINST FOREIGNERS, AND WHO VIOLATES HUMAN RIGHTS

The Spanish magistrate judge notorious for violating the human rights of the Kokorev family, whom he has ordered held, on a bogus material witness warrant for one month short of two years, escaped punishment, by his country's judicial supervision regulator, notwithstanding his recorded comments, who demonstrated his xenophobic, and definitely non-judicial, attitude toward all foreigners. No wonder Spanish judges know that they can violate the Rule of Law, with impunity.

The magistrate, Carlos Vielba, escaped discipline, from the Consejo del Poder Judicial, notwithstanding his recorded scathing comments, such as "all Russians are criminals, " and "all Romanian women are prostitutes." He has also been known to routinely label all Italians as Mafiosi. These recorded comments were met with outrage in Europe, when news of their existence was publicly disclosed. Vielba has never apologized for them, only suggested he was joking when he made them. That Spain accepted this transparent excuse speaks volumes about its endorsement of court actions that target innocent foreign nationals, bringing unsubstantiated criminal charges, for the sole purpose of taking their assets.

Several attorneys have complained to the European Union about the unlawful detention of Vladimir Kokorev, his wife and son, but Spanish authorities have consistently refused to release them, even though there has never been a criminal charge filed in the case, after an investigation of several years, for alleged money laundering events from fifteen years ago.

WAS MONFARED LAUNDERING MALAYSIAN DRUG PROFITS THROUGH OFAC-SANCTIONED CORPORATION IN DOMINICA ?

What you are looking at above is an OFAC chart, published by the US Treasury, of the Karner drug trafficking network. Note that one of the entities involved in the money laundering of narcoprofits, and therefore sanctioned by the Office of Foreign Assets Control, is Panacea International, an offshore corporation in the Commonwealth of Dominica. For those readers who were not aware that Dominica harbors companies on the OFAC list, this is one of them which was pointed out to me recently.

Panacea International Ltd.  is registered as an offshore company by Offshore Companies House Ltd., whose services are, in reality, provided by CCP, of Copthall,  which is reportedly under Russian ownership. In truth and in fact, the individuals answering the OCH number admit that it is connected to CCP. Who says Dominica is not a dodgy tax haven, providing a safe harbor for the usual suspects ?

The Karner network moves drugs into, and through, Malaysia, and it requires the services of a number of offshore financial centers to aid and assist in laundering its profits. Alireza Monfared, who resided in Malaysia, where he was illegally selling sanctioned Iranian oil, as well as committing a number of other financial crimes there, was probably the only "Malaysian" with a Dominican diplomatic passport, which allowed him inspection-free transit, through international airports. Remember, when he relocated to Dominica, he arrived with massive amounts of baggage; cash or monetary instruments, most likely.

Monfared has become my primary suspect, as a facilitator of the movement of Malaysian drug cash, into Dominica. He spent a lot of time in Labuan, Malaysia's offshore financial center, where the high balances that he banked, in connection with the illicit Iranian oil sales, probably gave him the ability to move the proceeds of drug crime abroad.

Alireza Monfared and the Prime Minister of Dominica, Roosevelt Skerrit

With Monfared extradited, and facing the death penalty in Iran, we may never know the full extent of his involvement in money laundering, but perhaps some patriotic citizen in Dominica might want to fill in the blanks, in public.

WILL OFAC SANCTION CHINESE BANKS THAT FACILITATE NORTH KOREA ?

If you are a compliance officer, at an international bank whose clients trade with customers who use those banks in north China known to move funds for companies in North Korea (DPRK), statements from Washington indicate the US Government would certainly like to name & shame those banks, via OFAC, but political considerations have prevented such action. What if sanctions are indeed placed, are you prepared ?

Letters of Credit aside, you may have clients who are regularly exposed, as they receive payments for goods sold and delivered, from or through those banks. You do not want to unwittingly violate any new North Korean sanctions, that might be placed, because you neglected to check daily for new OFAC actions, and conducted a transfer that was very recently prohibited.

What if a client brought pressure to bear, with a pending transaction, notwithstanding a new sanction announcement, because it did not want to sustain a loss ? Make sure this does not happen, because some executive caved in to client pressure.

This is not to say that OFAC will indeed sanction the Chinese banks, but given the fast-moving political situation,  it could happen; put alerts on your computer, so that any relevant announcement is immediately available to you.

UN AMBASSADOR FROM DOMINICA ADMITS FATAL FLAW IN ALISON-MADUEKE DIPLOMATIC PASSPORT

If you read my recent article entitled  Dominica's Application for a Diplomatic Passport: an Insult to International Diplomacy, and reviewed the attached application form, you know that all applicants must specify precisely how, and when, and upon what grounds, that they acquired Dominican citizenship. It is a Condition Precedent to obtaining that prized diplomatic passport, meaning that it must be achieved first.

The trouble with Diezani Alison-Madueke, the former Nigerian Petroleum Minister, is that she did NOT have Dominican citizenship, when she bought her diplomatic document from Prime Minister Roosevelt Skerrit, which makes here ineligible to serve in any diplomatic capacity, or even to be issued such a document.

Dominica's Ambassador to the United Nations, Vince Henderson*, admitted Diezani's non-citizen status
            " When asked if Diezani is still a citizen of the island, Henderson replied,
               ' Alison-Madueke was never a Dominican citizen in the first place. Diplomatic
               passports do not come with citizenship'."

Since pre-existing citizenship is listed as a requirement for application, the diplomatic passport issued to Alison-Madueke is void ab initio, from the beginning, and Ambassador Henderson has publicly admitted to being a party to an organized fraud, perpetrated both upon the people of Dominica, and the international diplomatic community. He should be dismissed as UN Ambassador, and sent home in disgrace.
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* Since he received a degree, reportedly earned through full-time study, while he was supposed to be on duty at his post in the the United Nations, Henderson is now insisting that Dominicans address him as "Doctor Henderson." 

RICARDO MARTINELLI TO BE TRANSFERRED TO FCI MIAMI

Federal Correctional Institution, Miami

  It is being widely reported in Panama that its fugitive ex-president Ricardo Martinelli, now in custody at Miami's downtown Federal Detention Center, will be transferred to FCI Miami, a low security suburban institution, located south of metropolitan Miami. The Magistrate Judge presiding over the pending extradition case, reportedly has ordered the Bureau of Prisons to move him as soon as possible.

 Why the change ? Martinelli, and his attorneys, must now prepare for his August 22 final hearing, and the attorney visiting conditions at the FCI are larger, and probably more conveniently located for counsel, who can visit, without rush hour concerns afterwards.

The Panamanian street still believes that Martinelli sought to be released on bond, so that he could engage in flight to avoid extradition, and evade justice. FCI Miami does also have a minimum security camp on site, but we trust that the former president, now facing a probable life sentence, if convicted in a Panamanian courtroom, will be closely guarded.

 His illegal electronic surveillance, of over one hundred prominent Panamanians, including in their private moments, which is the principal charge against him, in the extradition proceeding, has resulted in his being crucified in the Panamanian press. Should he end up facing Panamanian justice, it will get ugly before it is over.    

DISPUTE OVER CHINA CLOSING BANK ACCOUNTS OF IRANIANS

Reports that major Chinese banks are closing personal accounts of Iranians appear to be in dispute. One source claims that it is due to tax evasion, when Iranians enter China, ostensibly for non-business reasons, transact business, and place their profits in their non-commercial accounts. A number of their accounts have been allegedly closed, and Iranian account holders' efforts to repatriate their funds  foiled. Another source asserts that it was as a result of American sanctions.

The Chinese banks accused of closing large Iranian non-business accounts are:
(1) Agricultural Bank of China.
(2) Commercial Bank of China.
(3) China Merchants Bank.

Additionally, there are reports that Iranian petrochemical exporters have been unable to repatriate their profits; Iranian merchants and traders have also reported issues with their accounts. Compliance officers at Western banks kindly note that a Chinese corporation, trading with their own bank clients, might have Iranians as hidden, but actually beneficial, owners. Do you really know who the shareholders are at that Chinese company who does business with your bank's clients ?

HMRC PUBLISHES ADVISORY ON JURISDICTIONS REQUIRING ENHANCED DUE DILIGENCE

Her Majesty's Revenue & Customs has issued an Advisory Notice on Money Laundering and Terrorist Financing controls in Overseas Jurisdictions. Readers in the UK, Crown Dependencies, and British Overseas Territories will please closely examine the list of jurisdictions where enhanced due diligence measures should be applied.

The Advisory can be accessed here.

WHAT SHOULD BE IN YOUR TOOLBOX FOR ENHANCED DUE DILIGENCE INVESTIGATIONS

If you are a compliance officer, many of what used to be routine due diligence inquiries have now, due to a number of emerging factors*, become enhanced due diligence investigations. Fortunately, several new and useful resources for AML/CFT investigations are now available, and all of them should be in your bag of compliance tricks atthis time. Your failure to have all the boutique the tools, which allow you to make in-depth queries, puts you are a severe disadvantage, as financial criminals, and terrorist financiers, have become quite adept at counter-surveillance and counter-forensic techniques. You need to defeat their strategies and tactics, using new sources and methods.

At a bare minimum, in my humble opinion. you should have access to these resources:

(A) A good Second Generation, cloud-based search product; it must be truly cloud-based, and not merely offering a small portion of the sites blocked by a paywall, Dark Web sites, and state and local government information databases, as well as all reported state & Federal decisions.   

(B) If your choice for (A) does not offer it, you need access to the US Government PACER system, Public Access to Court Electronic Records, which can be found at www.pacer.gov . Access is quite reasonable, and you only pay for what you request.

(C) A website offering complete access to global negative news.

(D) A system that can  locate, mine, search and analyze social media information.  

With these tools, you can conduct effective enhanced due diligence; happy hunting.

 Note to Readers: This is strictly a non-commercial blog; you will not find any ads or sponsored content here. If you are not familiar with the name of the specific products, or the companies offering any of the above, feel free to email me at: miamicompliance@gmail.com and I will be pleased to give you my personal recommendations.
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* (1) The proliferation of Internet and information management advisors.
   (2) The spread of false news, misdirection, and disinformation, commissioned by interested parties.
   (3)  The obsolescence of commercial off-the-shelf First Generation data sources.
   (4)  The explosion of social media, alternative media, and Deep Web resources.