Kenneth Rijock

Kenneth Rijock

Thursday, August 17, 2017

SOCIAL MEDIA RESOURCES INSURE SUCCESS IN INSIDER TRADING INVESTIGATIONS


Let's assume the following: that I am one of thirty partners in a New York City law firm involved in representing Fortune 500 corporate clients in mergers and acquisitions. All of us are privy to confidential information that will affect the market prices of our clients' stocks. The SEC and FINRA have seen serious profits taken multiple times, all in advance of major events. If one of us supplying inside information to a conspirator, who is illegally trading and profiting from it,who is he, and who am I ? 

Criminal investigators seeking to determine if investors engaged in illegal insider trading of publicly traded securities often have difficulties linking individuals who possess non-public information, with confederates who have traded upon that information. Even armed with the identities of investors who made extraordinary profits based upon the subsequent release of positive business news, investigators often cannot uncover the necessary connections. The result is that many "Tippees" who have profited from their crimes are never charged. It was impossible to track them back to the source who divulged the inside information.

Enter into the equation a research tool that enables the investigator to diagram, and inspect not only indirect relationships, but relationships separated by more than one degree, connections that are so remote that conventional inquiries will never link them up. This is accomplished through the use of computer algorithms that scan all available social media sources, a feat that would literally take years to accomplish manually.

Therefore, returning to our initial fact pattern, graphs and charts, created by those algorithms, result in uncovering two indirect connections, which I employed to effectively deny investigators access to my conspirators.They are now identified, as a former co-worker from my first lawyer job,as an assistant district attorney, and that friend's onetime university roommate, twenty years ago.These individuals who would most likely never be found through conventional means, would be identified, and linked to me, due solely to an asset that represents the application of technology to social media information.







IS GOOGLE NEWS NOW TOOTHLESS FOR COMPLIANCE RESEARCHERS ?


Google News, which has recently undergone a major facelift, has cut back on so many of its valuable features that I deem it unsuitable for anyone looking for negative news in a due diligence investigation. It now reportedly limits, to 30 days, any articles it returns for a search query. Many researchers valued the Google news feature that went back several years, but regretfully that is now totally in the past.

In its current form, Google News (1) limits the  number of returns you receive from a search query, (2) has zero hyperlinks, a departure from its prior format, and (3) appears to value quality over quantity, meaning that you won't see the results that do not have high confidence. Now, when you perform a search, you often get no results at all; this is not acceptable to me.

Do any of your existing data services include CheckForRisk, by Nomino Data ? That's the only resource for negative news that I recommend you use (no, I am not affiliated with them in any way) , if you want total coverage; Check it out.


THE POWER OF SOCIAL MEDIA CONFIRMED BY CHARLOTTESVILLE VIGIL PRECAUTIONS


Yesterday's peaceful candlelight vigil, held at the University of Virginia and attended by U Va students and members of the local community, was a clear demonstration of the power of social media. Organizers instructed the students and local residents who intended to invite friends to the vigil to use telephone and text only to pass the word along, and to completely avoid any and all social media resources when contacting others to attend.

The reason for this unusual request: should the white supremacists have learned of the event, via their known monitoring of social media, they could have attended, and there were well-founded fears that additional violence might occur. This was a valid concern of organizers, and it substantiates the influence that social media, due to its virtually universal adoption, has over society. Those who ignore it do so at their own peril.

Social media, together with negative news searches, and cloud-based information searches, has become a mandatory component of any effective query, whether it be for anti-money laundering compliance purposes, due diligence checks, or any other business or law enforcement purpose. It provides data that cannot be accessed through any other method, and is fast becoming one of the most important search tools. 

Wednesday, August 16, 2017

FEDERAL JUDGE DECLINES TO TRANSFER RICARDO MARTINELLI TO MIAMI FCI



The Federal Judge assigned to Ricardo Martinelli's extradition has reversed himself, and vacated his prior order that transferred him from the downtown FDC facility, which primarily houses pre-trial inmates, to the Miami FCI, where convicted inmates serve out their sentences.

The US Attorney objected to the transfer order, and asked that it be set aside. The key filing, however was the final filing by Martinelli's attorneys, where they state that, if he will not be allowed to mix and mingle with the general prison population, they prefer that he stay at the FDC. It looks now like he just wanted to socialize with others. The Government did make the point that he would have better visiting accommodations with his attorneys at FDC, so his transfer request appeared to be a ploy.  

GANGS USE SOCIAL MEDIA TO RECRUIT MEMBERS IN TEXAS



While we are familiar with the widespread use of social media as an intelligence source for law enforcement investigators seeking information on criminal gang membership, the most powerful gangsters in Texas' Rio Grande Valley are reportedly using it extensively for recruitment purposes.These organizations are actively trolling for new members. Law enforcement has identified them as the Latin Kings, Texas Mexican Mafia, Tango Blast & associated cliques, and MS-13.

Local Sheriff's Departments and the Texas Department of Public Safety (DPS) have been publicly warning parents to closely monitor not just their childrens' friends and their outside activities, but also to examine their social media walls. They are advising them to look on Facebook pages for gang signs & colors, and tattoos appearing on any photographs posted, whether in their friends' sites, or any other indications that there is gang influence intruding into the user's Facebook page or other social media.

DPS warns that gang members now advertise and glamorize their lifestyles, through their postings, and seek to attract new members to the so-called benefits. Many law enforcement agencies now routinely troll through social media sites of known gang members, especially those of suspected leaders, to identify all possible direct and apprentice members and associates.


In-depth analysis of gang members' social media sites can reveal indirect relationships that cannot be gleaned from routine and one-dimensional searches and that information thus obtained can then be directed towards still more data, which is either relevant or will lead to relevant information. It is possible to compile a complete order of battle of a criminal organization, using the appropriate effective social media search tools. Such details are rarely found using traditional investigative techniques and methods, but they can be accessed through the appropriate social media search device.    

  


DOMINICAN DIPLOMAT DENIED SHE STOLE $153m FROM NIGERIA


 Diezani Allison-Madueke, facing corruption, money laundering, and forfeiture charges in several countries, has arrogantly denied she stole any of the missing $90bn, including a $153.3m forfeiture to Nigeria. She further denied that she has been served with the order, or evidence supporting it. Property allegedly purchased in the United States is subject to a major Federal forfeiture action in the State of Texas. 

Madeuke, while known to have been engaged in the theft of massive amounts of petroleum funds that were the property of the people of Nigeria, amazingly received a diplomatic passport from Dominica's Prime Minister, Roosevelt Skerrit, by hand delivery in the United Kingdom. She is not a citizen or national of Dominica, and tendered an illegal cash payment to Skerrit.

The matter was arranged through Dominica's Baroness Patricia Scotland, who knew or should have known, as the Secretary-General of the Commonwealth, that Madueke was totally unacceptable to receive diplomatic rank, for any purpose. Questions about the legitimacy of the transfer of the diplomatic passport to Madueke raise questions about Scotland's fitness to be Secretary-General.







 

BASEL COUNTRY RISK INDEX FOR 2017 IS PUBLISHED


Readers who use the Basel AML Index, to estimate Country Risk, are advised that the 2017 Report has been published. You may access it here. 

PALESTINIAN CONTACTS WITH NORTH KOREA COULD INDICATE A FINANCIAL CONNECTION



Notwithstanding the totally erratic, and dangerous, recent actions, of North Korea (DPRK), and the increased sanctions, the Palestinian Authority (PA) recently accepted the credentials of the DPRK ambassador to the PA, and issued congratulations to North Korea, on the anniversary of its independence day. The DPRK ambassador reportedly resides in Cairo. The apparent political affinity between the two parties could also be a covert financial one.

Given the strict financial sanctions currently in place, and the ample funding that the PA enjoys, from the West, there are potential opportunities for the PA to front for North Korea, by diverting cash flow. There is no evidence to support it at this time, but given the very recent anti-American posture of the PA, towards the US, it is something compliance officers should be aware of.

 North Korea desperately needs US Dollars, to make those European luxury goods purchases its leaders are famous for. Other players could acquire them, fronting for the DPRK, as well as purchasing other needed goods and services, especially those countries who are known to have relationships with it. North Korea will now be seeking alternative supply channels, and compliance officers at international banks should be alert to the possibility that its friends are assisting it.

Tuesday, August 15, 2017

RICARDO MARTINELLI ASKS FOR DELAY TO ALLOW HIS EXPERT TO TESTIFY


Defense counsel for Ricardo Martinelli, awaiting the August 22nd final hearing on the pending extradition request of the Republic of Panama, has asked for a one day delay, to allow Dr. Roberto Moreno, whom Martinelli has designated an expert, to appear, due to a conflict. Martinelli has asserted that there are procedural flaws on the extradition proceedings in Panama, and Moreno is likely to be his expert on Panamanian law.



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.

Monday, August 14, 2017

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.

Sunday, August 13, 2017

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.


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.




Saturday, August 12, 2017

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.




Friday, August 11, 2017

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.

Thursday, August 10, 2017

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." 

Wednesday, August 9, 2017

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 ?


Tuesday, August 8, 2017

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.

CHECK YOUR FACTS ON ARTICLES PUBLISHED BY NGOs



Compliance officers, in their daily quest to obtain information, for due diligence, and enhanced due diligence investigations, often come across articles, published by non-governmental organizations (NGO) that may be of use to them. You are cautioned that many NGOs have a hidden agenda, whether it be political, social or on behalf of an undisclosed third party interest, that results in the article being factually incorrect, intentionally incomplete, or otherwise inaccurate.

Ask yourself this: does the NGO actually act in the public interest ? If you cannot, unqualifiedly answer in the affirmative, then take the facts presented in the article with a huge grain of salt, or dismiss it entirely. Someone may have a hidden agenda, and wants a seemingly disinterested, purportedly objective, third party to advance it online. 

For example, I see that Soros' Open Society Foundation, which claims to speak for the public good, has an article on its website, crucifying Vladimir Kokorev, the Spanish-Russian businessmen, and former diplomat, regarding what the article alleges is money laundering, and facilitating corruption in Equatorial Guinea. The article goes on to say that he, and his family, are in custody, facing criminal charges.

In truth and fact, the Kokorevs, who were arrested solely upon a Material Witness warrant, have been illegally held, by Spain, for two years, without ANY criminal money laundering charges ever being filed. The article, which dates for 2015, and was never updated (intentionally, perhaps?) leads the reader to think they are defendants in a criminal case. This is totally untrue, and their case is clearly a political vendetta against them, pending due to the influence of powerful business interests in Spain, who desire that Mr. Kokorev implicate his client, the elected president of Equatorial Guinea, whom they want removed from office, so that they may again access EGs raw materials. Spain will neither release, nor charge, them. They are in legal limbo, and efforts to free them have failed.

So why does a "benevolent" NGO support a major human rights violation  ? This is merely an illustration of how powerful NGOs can skew the facts, tp support hidden interests. My advice: unless you know and trust them, disregard NGO information, until & unless you can independently verify it.

GOVERNMENT DISPUTES TURKISH BANKER'S VERSION OF THE FACTS IN ZARRAB OIL SANCTIONS EVASION CASE

Atilla was recently in NYC, seeking to sell Turkish bonds.
 Regarding the recent filings, made by lawyers for Mehmet Atilla, the Turkish banker accused of working with Reza Zarrab to illegally move petrodollars to Iran,The US Attorney's Office has contested their statement of facts, their client's role, and his most likely sentence. In a 25-page memorandum of law, all the points made by defense counsel were rebutted. This matter is being debated, in the context of Atilla's bond application; he is being held in pretrial confinement at this time, and his attorneys a pushing for his release.

The response can be summarized thus:

(1) Atilla, by misrepresenting that payments to Iran were for humanitarian goods, such as food, which were permitted, had a major role in Zarrab's scheme to sell Iranian oil, on the world market, in defiance of international, and American, sanctions, thereby defrauding USA banks.

(2) Due to the charges filed against him, Atilla is not facing a mere five years, for IEEPA violations, but a Guidelines sentence of from 21 to 24 years, and a potential 30 years.  

(3) Due to the seriousness of the offense, the weight of the evidence against him, and the history of this defendant, he cannot be characterized as a minor player, whose case should even be considered for bond. he has every reason to flee, if released. Additionally, he misrepresented his income and assets, minimizing his ability to live in Turkey, if he flees the US.

(4) There is simply no combination of factors, in the defendant's bail package, which would guarantee that he will be present for trial.

Given what appear to be the objective facts in the case, Atilla's release on bond appears doubtful, and he may have lost some credibility with the Court, due to his statement of facts, versus the truth.


Monday, August 7, 2017

DOMINICA'S APPLICATION FOR A DIPLOMATIC PASSPORT: AN INSULT TO INTERNATIONAL DIPLOMACY



What you see above is the most current Commonwealth of Dominica Application for Diplomatic Passport. The one-page form is a sick joke played upon the international diplomatic establishment. Frankly, they ask for more information when you check into a hotel in many Countries. Note that the required recommendation signature is not the Minister of Foreign Affairs, but the Permanent Secretary.

The form has no place to enter:
(1) Work history.
(2) Countries where the applicant holds, or has held, official office.
(3) An affirmation that the applicant is of good character, and that he has not been convicted of any crimes that involved moral turpitude.
(4) An affirmation that the applicant is not presently under any pending criminal charges, ant INTERPOL warrant or want, or a fugitive from justice, in any country.
(5) An affirmation that the applicant has never been known under any other name
(6) Other nationalities or passports held by the applicant.

I could go on and on, but you get the picture, the motto at the Dominica Ministry of Foreign Affairs must be "Don't ask, Don't tell. " Considering that the scheme, through which dodgy foreign nationals obtain Dominica diplomatic passports, is not authorized anywhere in the country's laws, and is in clear violation of the Vienna Convention on Diplomacy, to which Dominica is a signatory, by virtue of its UN membership, I am not surprised that the application itself is a bad joke, played upon the international corps of diplomats and consular officers.

When will the next Dominica "diplomat' run afoul of the law, I wonder, and attempt to escape justice, using his bogus diplomatic passport ?

Sunday, August 6, 2017

DOMINICA REISSUED NEW CBI PASSPORT FOR MONFARED'S SON AFTER CANCELLING HIS DIPLOMATIC ONE



According to public statements. made in the press by Skerrit lawyer Anthony Astaphan, who apparently also represents Dominica's CBI program, on January 20, 2016, Dominica cancelled and revoked Arireza Monfared's diplomatic passport, when it reportedly "discovered" his global criminal activities. A copy of the cancelled passport was widely distributed; it appears above.

Old passport; note expiration date

Reissued passport, AFTER the scandal broke in Dominica
 
So why on earth did Dominica, on January 26, 2016, reissue a Dominica CBI passport for Ziba Monfared, Alireza's son ? The scandal, over Monfared's INTERPOL Red Notice, wanted for stealing billions of dollars from Iran's oil sales, with his partners, Babak Zanjani and Reza Zarrab, was already published old news. There was not that any due diligence search would approve the reissue of the passport.

One additional note: Ziba's original Dominica passport did not expire until the year 2024, so why obtain an unnecessary extension ? Obviously, Alireza Monfared knew, or should have known that he might not be returning to Dominica. The reissue of the passport exposes the unmitigated avarice of those who operate the CBI program, and the illegal diplomatic passport scheme.

Abuses like these may soon make every passport, issued by Dominica, a reason to be suspicious, when presented at customs and immigration desks, both in North America,and in Europe.

MIAMI'S MAYOR SEEKS TO HELP MARTINELLI OBTAIN BOND IN EXTRADITION CASE


 Panama's fugitive former president, Ricardo Martinelli Berrocal, still seeking to bond out, while his extradition case is pending, has apparently called in a political favor in Miami, where he has been living since he fled Panama, reportedly just ahead of multiple criminal charges. Tomás Regulado, the Mayor of Miami, filed a letter with the Court, seeking Martinelli's release on bond, asserting that he needed to be home, for health reasons. It is unclear why this letter was written; Martinelli has had an active social life in Miami, since his arrival two years ago, and there have been no reports of health issues.

Now you know why protest groups are known to throw bananas at the front door of Miami's City Hall; are you familiar with the term banana republic ? 
 

CARIBBEAN COURT ALLOWS YET ANOTHER BOGUS APPEAL BY ANTIGUA'S EX-FSC CHIEF, LEROY KING


 Nearly ten years after the United States requested that Antigua & Barbuda extradite the country's former banking regulator, Leroy King, to face criminal charges, in the massive Stanford International Bank billion dollar Ponzi scheme. Antiguan, and Eastern Caribbean, courts have since allowed bogus filings and appeals, and have intentionally ignored the rule of law, by playing musical chairs with the assigned judges, ignoring the case for months at a time, and in general played football with a case that could ultimately see a convicted King incriminate Antigua's most powerful family.

Three months ago, a definitive ruling was entered against King, and the United States sent representatives, to confer with Antiguan legal officials, but the Eastern Caribbean Supreme Court then, and without any established legal authority, allowed King's "dream team" of attorneys to file an appeal, on the same Constitutional grounds that have long ago been dismissed.

This appeal, during which repeated extensions of time, and delays, committed by the Court and the appellant, will take approximately two years, just to get to the point where it is ripe for a decision, which will then mean even more delays, demonstrates that, in the English-speaking East Caribbean, politics trumps the Rule of Law. Leroy King, the only major defendant who has not seen his case go to trial in US District Court in Texas, may never see an American courtroom.



Attorneys for North American and European investors should consider this case, when advising their clients as to the potential risks involved in making significant investments in Antigua, for any legal dispute that arises, between their clients, and Antiguan authorities, or even its citizens, might not be settled, pursuant to the law, but for purely political considerations.    

Saturday, August 5, 2017

PANAMA PAPERS LAW FIRM CLOSES MOST OVERSEAS OFFICES


 The Panama law firm of Mossack & Fonseca, exposed by the Panama Papers for its global money laundering activities, and with its name partners under criminal investigation, announced this week that will not be closing its principal office, which is located in Panama City's business district. Partner Jurgen Mossack stated publicly that he would be keeping the office open for business, although the damning evidence, which appeared in the Panama papers, proved that the firm's primary role was to hide assets, and conceal the identities of their clients, many of whom were corrupt PEPs, or tax evaders.

Mossack's 45 overseas offices, which have now been reduced to only six, often operated under misleading or cover names, and the firm may have been guilty of systemic tax evasion in the nations where it first quietly solicited clients, then delivering services to them in Panama.  

Many in Panama are starting to wonder whether the Mossack partners, who performed services for clients specifically designed to conceal assets, and the names of the beneficial owners of corporations, will ever go to trial, because they also formed companies, and opened bank accounts, for many prominent Panamanian businessmen.  

WILL FRAUDSTER PEDRO FORT BE DOMINICA'S ALLEN STANFORD ?




The Spanish fraudster and accomplished Ponzi schemer, Pedro Fort Berbel, whose bogus companies have reportedly left over 40,000 victims in his wake, poorer by €20m, cheerfully operates  his dodgy companies from his Dominica hideaway, immune from the long arm of America and European law enforcement agencies. He prizes his CBI Passport from Dominica, whose present government shields him, and other career criminals, from international justice. We have previously detailed how his acquisition of Dominica citizenship confirmed that greed trumps due diligence, in its CBI program.




Fort reminds us of R Allen Stanford, also a Ponzi schemer. Stanford's fall from grace damaged the stellar reputation of Antigua & Barbuda for years, not to mention the havoc Stanford wreaked upon the country's economy. Whether the publicity surrounding Fort's eventual arrest and trial will focus negative attention upon Dominica, sufficient to affect its trade, international relations, and possible designation as a tax haven, FATF Non-cooperative jurisdiction, OFAC sanctions of individuals or entities, or major de-risking of all its financial institutions, or other financial nightmares is a strong possibility. 

Unless Dominica rids itself of the gangsters who use it as a sanctuary, to evade punishment, and to gleefully commit financial crimes, with the knowing assistance of the present government, a number of dirty local lawyers, and their golden Dominica passport, Dominica may end up with Fort, and others of his ilk, imprisoned, and the country left with a reputation of a jurisdiction to be avoided, not visited.  

    

FINGER POINTING IN DEATH OF CORRUPT CANADIAN DOCTOR IN PANAMA

Dr. Porter in custody in Panama
 
While the Republic of Panama is drowning in a number of major corruption and white-collar scandals, a major human rights violation, which proved fatal, is not receiving the attention it deserves. A Canadian, Dr. Arthur Thomas Porter IV, a hospital administrator accused by anti-corruption prosecutors in Quebec of accepting $22.5m bribe, to facilitate a billion dollar hospital construction contract, died of lung cancer in a small, dirty Panamanian prison cell, when the Government of Panama deliberately denied him life-saving medication and treatment, after which a large portion of his $11m in criminal assets disappeared from his Panamanian corporation bank accounts. Porter had been arrested, due to a pending Canadian extradition request. 

 The Government of Canada also has its share of the blame, in the Porter case, after it reportedly backed off its extradition efforts, thereby failing to have him transferred to Canada, where he could have received adequate medical treatment, but might have blown the whistle on a number of Canada's dark and dirty secrets.

Dr. Porter died in 2015, after two years of confinement in Panama's notorious La Joya Prison. His wife, Pamela, entered a guilty plea in a Proceeds of Crime case in 2014.for her role in the bribery scandal. Some Panama observers have stated that their government deliberately slowed the process of the extradition case, to a halt, by failing to hold hearings, for sole the purpose of stealing the millions in his accounts.

Canadian commentators have asserted that, since Dr. Porter, between 2008 and 2011, the chairman of a government agency that was charged with oversight of Canadian intelligence, the Security Intelligence Review Committee, his personal knowledge of some of his country's most embarrassing  intelligence failures made him a liability, should he decide to expose those secrets at his trial. Porter did drop hints on that subject, during a jailhouse interview that he gave to a journalist.

They also believe that the negative publicity from any Canadian trial, on the corruption charges, would send the wrong message to foreign investors, and therefore not be in Canada's best interests, and for that reason, the senior government leaders were not anxious to see Dr. Porter in the dock.

Therefore, we have Panama's government denying him the medical treatment that he needed to stay alive, and officials from his own country, and Canada, delaying his extradition, allegedly to keep him from making disclosures of classified information damaging to the government. Both governments appear to be at fault in Doctor Porter's unnecessary death, with Panama bearing the greater amount of guilt. I doubt that he was concerned, when changing planes in Panama, about dying in a dingy prison cell, but both countries grossly violated his human rights.I wonder which Panamanians got all of Porter's dirty money ?

WILL TURKISH BANKER AT CENTER OF ZARRAB IRAN OIL SANCTIONS EVASION CASE TAKE A PLEA ?

Mehmet Atilla, in Federal courtroom
 
This week, we noted on this blog that attorneys for a major figure in the Turkish financial world, defendant and deputy Halkbank CEO, Mehmet Hakan Atilla, file defensive motions, including efforts to sever him from the others in the oil sanctions evasion case. Were these motions filed, solely as a negotiating tool, with the ultimate aim being to secure a favorable result, in a plea bargain, and is there another agenda here ?

Reliable Turkish sources claim that Atilla has incurred the wrath of senior officials in the Government of Turkey, and he fears that his life will be in danger, should he ever return to his native country. If he agrees to cooperate with American prosecutors, and provide what is known as Substantial Assistance, meaning he will testify against others, and/or assists the US in securing criminal proceeds, he could secure a charge which will insure a short sentence, with additional provisions, which might further solve his personal safety problem

Once he begins to serve that sentence, his sentence could be quietly reduced further, through a Rule 35 motion; such sentence reductions are rarely, if ever, covered by the media. Finally, the plea agreement could provide for him to be deported to a third country, and not Turkey, where he faces a fatal reception.

This means that, should Atilla enter into a Plea Agreement, that there may be others charged in the Zarrab case; Atilla would also be required to testify against Zarrab, and the other, minor defendants in that case, which could cause them to enter a guilty plea, and thereafter implicate still additional defendants. Do you think certain individuals, in Iran and Turkey, and in the offshore financial centers a/k/a tax havens of the world, are paying attention ?

Friday, August 4, 2017

FUGITIVE SPANISH FRAUDSTER/PONZI SCHEMER PEDRO FORT OPERATES FROM DOMINICA WITH IMPUNITY


Pedro Fort Berbel, a career pyramid/Ponzi schemer, who is reportedly wanted in both Spain and the United States, is cleverly evading justice, while operating his latest crop of fraudulent schemes from the Commonwealth of Dominica. Conveniently shielded by his Dominican CBI passport, and assisted by a local attorney, who efficiently collects Fort's funds from his victims, Ford appears to be invincible. Fort has been leaving his victims in the dust for more than a decade; so why was he issued a CBI passport from Dominica ? Anyone with access to the Internet can see that in two minutes.



 Fort, like the then-fugitive Iranian oil sanctions evader, Alireza Monfared, was also provided with a secure residence in Dominica; it is rumored that he travels quietly in the region, only on private jets, facilitated by a diplomatic passport from Dominica. He even owns an offshore bank, licensed in Dominica, Fort Bank Inc., which advertises bank secrecy and confidentiality for its online clients.


How many career criminals, armed with CBI passports, are operating in Dominica ?         

VIEW AMICUS BRIEF OF FINANCIAL REGULATION SCHOLARS IN ARAB BANK CASE



Readers who have been following the Jesner vs.Arab Bank case into the US Supreme Court, which will decide whether the Alien Tort Act (ATA) can be applied to corporations, in this case financial institutions engaged in terrorist financing, may access the recently filed Amicus Curiae brief, of a group that has designated themselves  as "Financial Regulation Scholars and Former Government Officials. " acting in support of the petitioners-claimants, who assert there should be liability, upon public policy grounds.

The text of the thirty three page brief can be accessed, without charge, here.

Thursday, August 3, 2017

ANOTHER MEMBER OF MOSSACK FONSECA LAW FIRM CHARGED IN ECUADORIAN MONEY LAUNDERING CASE


 It is important that you know the names of all of the attorneys at Mossack and Fonseca who engaged in money laundering; a new case has surfaced, involving the laundering of "commisions" by a senior official in Ecuador's  governmental petroleum agency. the Mossack attorney charged with money laundering in a new criminal case has been identified as Mirzilla Inés Tuñón. I did not include her in any prior lists of Mossack lawyers and staff, but compliance officers may want to insure that she is not a signatory of any corporate clients.

FEDERAL JUDGE SETS A FINAL HEARING ON RICARDO MARTINELLI'S EXTRADITION CASE



The US Magistrate Judge in Miami assigned to the Ricardo Martinelli extradition case heard additional testimony today. The Court indicated that it would hold an additional hearing on August  22nd, and then render its final decision. The US Supreme Court denied his emergency petition for Habeus Corpus, which sought his release on bail, earlier this week.

 The former Panamanian president, who has been in custody since he was detained in June, has contested the Panamanian Government's extradition efforts, asserting that there is no factual basis for the charges filed against him in Panama, and that there are a number of procedural ans substantive defenses which the court must examine, before handing down a ruling. They also include immunity, and an allegation, made by counsel, that the extradition documents are defective, and fatally flawed. 




TODAY'S PIRATES OF THE SPANISH MAIN NOW OPERATE OUT OF DOMINICA






There are regular Learjet flights, between Colombia, Venezuela, and the Commonwealth of Dominica, where the local government pointedly ignores, and probably facilitates,  criminal activities conducted by the business jet's operator. Precisely what is carried on those private jet flights cannot be confirmed, but the previous operator of the aircraft, David Tokoph, had a long and distinguished "career," as an international arms trafficker, and gunrunner, with numerous links to the Central Intelligence Agency, including participating in the Iran-Contra arms scandal. The reason he is no longer flying that aircraft is because he was killed in a crash in 2015. Tokoph is known to have substantial aviation experience in delivering arms and aircraft to Africa, and was a close associate of Viktor Bout, once the world's most prolific arms trafficker.


The present operator of the aircraft, N96GS, a Learjet 35, is alleged to be Samuel Boland, who is a property owner in Dominica, but not a Dominican; he has been linked to an offshore bank. The legal title to the Aircraft is held by Wings Service, a Limited Partnership domiciled in the State of Delaware. Dominicans assert that they know the aircraft cannot enter the United States; as it is US-registered, it may be subject to seizure there. By law, foreign nationals may not own N-registered aircraft.



Eyewitnesses in Dominica report that the Learjet, which has repeatedly overnighted there, is generally unloaded, after dark, using special lighting, as the airfield is not equipped for night operation. Security prevented our sources from a close examination of the aircraft.

Is this aircraft flying in bulk cash, or financial instruments ? I cannot say, but the circumstances surrounding the offloading procedures suggest that contraband is being repeatedly smuggled into Dominica. The two source countries, Colombia & Venezuela, which have zero legitimate commerce with Dominica, are known source countries for drug trafficking, corruption of senior government officials, and money laundering.What is on that plane, when it arrives in Dominica ?