Thursday, January 31, 2013

VIKTOR BOUT'S ATTORNEY FILES LAST-MINUTE MOTION TO SAVE HIS CLIENT'S APPEAL


Albert Dayan, the attorney for convicted arms trafficker Viktor Bout, is facing a deadline tomorrow; the Initial Brief of Appellant is due tomorrow, and the Second Circuit Court of Appeals*, having already once given him additional time to prepare & file the brief, has declined to grant him another extension. Failure to file a brief could cause Bout's appeal of his conviction, and 25-year sentence, to be dismissed on purely procedural grounds, without it ever being considered upon the merits.

Nevertheless, Mr. Dayan has filed one last motion, respectfully requesting :
"(1) Permission to file an oversized brief of about 17,000 words."
"(2) permission for an extension of time of two weeks to file Brief. The defendant, Viktor Bout is held in a Communication Monitoring Unit at the US Penitentiary, Marion, Illinois. because of defendant's location, Mr. Bout did not get a chance to proofread his brief. Even if the Brief is mailed to him overnight, it takes a few days for Mr. Bout to receive same."
"The Government does not oppose got an Extension of time of two weeks, subject to them getting the same amount of time to respond."
Will the Court grant his motion, given its prior rulings, or will the appeal end up dismissed ? We will know soon.

~Contributed & Written by Kenneth Rijock ~

CAUTION | TO GOOD TO BE TRUE! |


WATCH FOR ADVANCE FEE SCHEME INVOLVING WORTHLESS BONDS

In this distressed economy, raising capital is next to impossible for start-ups without collateral. in desperation,  business owners are combing the Internet for funding sources, and often getting burned in the process. Advance fee schemes, which promise to secure funds from some "well-established" source, are proliferating, and often taking the businessman's last bit of capital through fraud.
Regular readers of this column are familiar with the series of articles I have written in recent months, detailing the trials and tribulations of the victims of Atlantic Rim Funding Corp., which promised the sun, moon and stars, and is now defunct, insolvent, and with an unsatisfied multi-million dollar judgment of record against it. 
Another one that I had experience investigating recently had no assets nor was it an ongoing, operating financial service business. It was located on the second floor of a family contracting company, and claimed to issue bonds, for millions of dollars, which would them be transferred to another company, which company would sell the (worthless) bonds overseas. If pigs could fly, then the business needing capital would magically become funded through this process. In truth and fact, it has all the bells and whistles of an advance fee scheme, which steals your deposit, and gives you nothing but a recurring nightmare in return.
I found the "venture capital" company was worthless, but such a scheme, if real, raises other, serious issues:
 (1) What about the Securities Act of 1933 ? Through what stretch of the imagination are these exempt securities ? Is there an Opinion of Counsel, issued by a reputable national law firm, available to review BEFORE your pay the advance fee ? 
(2) How could one perform Enhanced Due Diligence on the investment funds coming from "offshore investors" ? Is this bona fide hedge fund money, or narcotics proceeds ?
 (3) Since, in essence, the bonds are not backed by anything, is the borrower now a co-conspirator with the fraudsters, assuming that the money is actually invested ?
 Frankly, most of these issues are purely academic, because the funding generally ( 99% of the cases) never arrives, and the contract that the advance fee schemer has with the borrower has language which excuses the return of the "mandatory" deposit put up by the borrower. he is not totally without any capital at all, since he risked what little he had to get the funding, which was never going to happen.
 When a bank client comes in, to draw out a large sum, and tells you that he is secured funding from a venture capital source, show him this article.

~Contributed & Written by Kenneth Rijock ~

DEAR HAMAS, WAR IS NOT THE ANSWER


HAMAS PLANS FOR WAR, AGAIN

Immediately thereafter the cessation of hostilities between Gaza and Israel,Hamas announced that it was forming a Ministry of War. Note that it is not being called the Ministry of Defense. Rhetoric aside, such an action obviously announces Hamas' intention to plan for, and initiate, yet another military action. If Western investors, and major financial institutions, do not take this as a clear sign to stay out of Gaza, they will reduce their exposure to a point where it is so small that they can walk away from it at any time, and absorb what will only be an insignificant loss. There's nothing like war, and rumours of war, to scare off investment capital, brick-and-mortar bank offices, and loans to the area soon to come under fire.
More recently, it held a press conference, with a large number of children present, where for the first time it disclosed plans to open a military academy in Gaza, which would award degrees in military affairs to graduates.  The programme, which is designed for youths 12-14 years, is intended to create a new generation of children who think that they are soldiers, but are in reality terrorists, and the Hamas leadership haas called upon them to conquer the land "from the [Mediterranean] Sea to the River [Jordan].

If you haven't already classified the Palestinian Territory of Gaza as representing an unacceptable level of risk for Country Risk purposes, you have not been paying attention. There is no upside to any financial exposure in a jurisdiction that has become a failed state, before it even became a state.



With the new Israeli capability in missile defence, when Hamas draws first blood again, and precipitates yet another conflict, the counterattacks could destroy what little brights spots in the Gazan economy and infrastructure still exist, creating yet more poverty, and the endless cycle of violence. The Hamas leadership is pushing the population of Gaza headfirst off a cliff.

~Contributed & Written by Kenneth Rijock ~

Friday, January 25, 2013

TRANSACTIONS WITH SINGAPORE AND MYANMAR


AFTER NORTH KOREA'S THREATS, WATCH TRANSACTIONS WITH SINGAPORE AND MYANMAR

You can assume that the direct and blunt threats made by North Korea, against the United States, has further hardened American attitudes towards the DPRK. When a rogue state boasts that it will take military action against America, as it is a sworn enemy, you can assume that investigations, and enforcement action, against anyone caught dealing with the offending state, will increase over at Treasury.

For that reason, it is humbly suggested that you increase Country Risk as to both Singapore and Myanmar. Both countries have a history of dealing with North Korea, including covert transactions. If you are a compliance officer at a financial institution whose clients regularly trade with companies in either country, you should ensure, as much as possible, that goods shipped by your bank clients will end up where you understand they are destined. Does Due Diligence require that you obtain a notarised affidavit from your clients as to end users ? Use your good judgment.

Does your customer ship anything that might be dual-purpose goods, which North Korea could use in its WMD or ballistic missile programmes ? If the answer is positive, you will want to conduct an Enhanced Due Diligence investigation, and document your results, so that you are not embarrassed two years later, when you get a visit from law enforcement, enquiring about funds transfers, shell companies, and transshipment of goods to North Korea. Make sure that your bank is not the poster child for compliance malpractise involving the DPRK.



~Contributed & Written by Kenneth Rijock ~

Thursday, January 24, 2013

VENEZUELA'S URANIUM MINING FOR IRAN


A reader sent in a query, requesting details on what is known about the Venezuelan Uranium mining activities, which has been shipping processed uranium ore to feed Iran's expanding illegal Weapons of Mass Destruction (WMD) programme. Delivery of Uranium ore to Iran, through its agents, violates international sanctions.

To summarise the information:

(1) Venezuela has estimated Uranium reserves that exceed 50,000 tonnes. This is based upon  independent investigations conducted by competent foreign entities in the industry.

(2) The principal location of the ore is in eastern Venezuela, on the frontier with Guyana. The specific area is known as the Roraima Basin.


(3) The Uranium ore deposits are also present on the Guyanese side of the border.

(4) the cover for the Uranium mining facility is a gold mine. There is also an aluminum mine believed to be involved, and a Iranian tractor factory. Security at these installations, which often involves Venezuelan National Guard units, is unusually strong. Aircraft overflights are prohibited, and there is a notice that offenders will be shot down forthwith, if airspace is violated.


(5) A cement plant, built by an Iranian company, and located in Monagas State, is believed to be the processing facility for the mined ore; No cement is produced there.
Monagas State.
(6) A number of the government officials, contractors, and other leaders involved, who are believed to be "Venezuelans" of Iranian Descent, are conducting the operations.

(7) The processed ore is shipped, via river transport, to the Caribbean, and loaded upon oceangoing Iranian vessels for delivery.

I hope this helps your understanding of the situation.

~Contributed & Written by Kenneth Rijock ~

FACING EXTRADITION TO US, VIKTOR BOUT'S MONEY LAUNDERER SEEKS BOND IN AUSTRALIA


The Melbourne, Australia attorneys for fugitive Richard Ammar Chichakli, the Syrian-American CPA who was convicted arms trafficker Viktor Bout's CFO/money launderer, have stated that they intend to seek bond at his upcoming extradition hearing, which will take place on 5 February. Chichakli, who fled the United States in 2005, is wanted on several Federal charges, including money laundering, in connection with unlawful efforts to purchase aircraft, in violation of sanctions.


Chichakli, who was reportedly arrested under the name Jehad Al-Mustafa,  has also been known to use the alias Robert Cunning. He was identified when he applied for employment as a Protective Service Officer (PSO) in Australia. A PSO functions as an armed police officer, and handles security duties.

Chichakli's lawyers have disclosed that their client suffers from Gulf War Syndrome, and should be released on bond, which is a rare occurrence when the defendant has been a fugitive from justice, though it can be granted for bona fide medical reasons. Chichalki served in the US Army, but he has never divulged that he has Gulf War Syndrome, a mysterious disease contracted by soldiers who served in the First Gulf War in the early 1990s. Symptoms include fatigue, memory loss, headaches, and a peeling red skin condition; The cause has never been determined.

He has never publicly complained of Gulf War Syndrome, and functioned in the State of Texas as a certified Public Accountant, claiming that he had over 500 clients, over a period of several years. He also worked in the the Middle East with Bout. How could he function in the 40° C. temperatures of the UAE ? Unless he has documented his disease in the past with the Veterans Administration, his claim sounds fabricated.

Viktor Bout, who is his co-defendant in the case, cannot be tried, because he was not extradited from Thailand for this case. The case is pending in the US District Court for the Southern District of New York, in Manhattan, and Extradition* is deemed likely.
___________________________________________________________________________

*Perhaps Mr. Chichakli can shed some light upon Viktor Bout's long affiliation with the Central Intelligence Agency, occurring at the same time he was shipping arms and ammunition to conflict zones in Africa. It has been claimed that the real reason he is imprisoned with hardcore Muslim terrorists, in a maximum security, communications-free penitentiary, is to prevent him from going public with his story.

WHY ARE ALL THOSE IRANIAN VESSELS ARRIVING IN IRAQ ?



If you paid attention in geography class, you know that Iraq and Iran share a long common frontier. Therefore, why are twelve of the twenty arriving vessels tied up in Iraqi ports listed as Iranian ships ? They certainly do not need this kind of maritime commerce and the two countries enjoy extensive connecting motorways. The answer will probably be of interest to you, because it does involve risk of sanctions violations on your part.
It is suggested that, if you are funding shipments to Iraq, whether your clients are selling goods there, or you are financing exports to Iraq, that you obtain notarised End User Certificates, attesting to the identity of the actual recipient of the products. To do otherwise may be later interpreted by regulators to mean that your compliance with Iran sanctions regulations was less than adequate. Avoid the fines & penalties by keeping your clients honest; are the goods actually ending up in Iraq, or elsewhere ?



~Contributed & Written by Kenneth Rijock ~


ARE BEARER SHARES IN PANAMA NOW AN ENDANGERED SPECIES ?




Reports indicate that the Government of the Republic of Panama, unhappy with the large amount of pubilicity given to financial fraud cases found to be linked to the abuse of bearer shares, will soon pass legislation that will require that the names of Beneficial Owners of shares of corporate stock be registered with a regulatory agency. In essence, true bearer shares, where the (unregistered) physical owner of the shares is the owner of all company assets, will cease to exist. This will, of course, require legislative action.

Many American and Canadian expats, living in Panama, have been the victims of fraudsters who covertly transfer ownership of corporations to themselves, thereby acquiring ownership of real estate held in corporate names. 

Whilst there are a number of technical issues to be dealt with, we welcome Panama's new efforts to close the door on one of its major corporate loopholes, provided that effective and universal registration is implemented.
Compliance officers should be aware that, when the appropriate legislation is close to passage, you may see large-scale "capital flight" of illicit funds, where clients who do not want their names to appear in any government records will move their liquid assets out of the banks. The reason: the identities of Beneficial Owners would probably be shared with US law enforcement agencies, as well as regulatory bodies.





~ Contributed & Written By Kenneth Rijock ~

Tuesday, January 22, 2013

SYRIAN ORGANISED CRIME DOMINATES PANAMANIAN FINANCE




I am often asked why there are few money laundering prosecutions in the Republic of Panama. In truth and in fact, criminal investigations are periodically opened, examining suspected money laundering at Panama's banks, but those cases are generally closed, with a finding of no criminal conduct or regulatory violation, even when the evidence overwhelmingly indicates otherwise. Do you want to know why ?

The reason is the powerful influence of deeply-entrenched Syrian organised crime elements in Panama. A number of Syrian families who emigrated to Panama decades ago are now firmly in control of several financial institutions, and other businesses. Their family members can be found embedded in all the government ministries, including the regulatory and financial agencies, where they can frustrate investigations, and otherwise influence government operations, should they choose. Relationships amongst the various families, both business and personal, have resulted in the joinder of these groups, in a form of economic interdependence that has allowed some of them to profit from crime and corruption in Panama. This criminal element has become so powerful that they can, through a combination of influence, corruption and connections, manipulate the civil and criminal justice system, to achieve their organisation's financial ends.

These connections have allowed Syrian-controlled financial institutions in Panama to accept criminal profits, without fear that regulatory or law enforcement action will be taken against them by the government. Sometimes known as the Syrian Mafia, with affiliated families working together, they have been freely laundering criminal proceeds in Panama, through their local banks, and are reportedly in the process of purchasing a major Panama City bank that is up for sale.

These groups have no fear of local law enforcement, for obvious reasons; it is their banks that launder Hezbollah narco-profits, and move them to Beirut, it is their controlled banks that facilitate client transactions with Iran. There have actually been cases where they welcome an investigation, knowing that it will be resolved in their favour, and banks that were targets did then point to the dismissal of the investigation as evidence of a clean bank, when the opposite was indeed true.

 If the United States is serious of assisting Panama to clean itself up, it needs to start with the Syrian-owned financial institutions involved in money laundering and other financial crimes.

If you are a compliance officer at an international bank located in the Western Hemisphere,  it is humbly suggested that you learn:

(1) The names of all the Panamanian banks, that are directly or indirectly owned and controlled by Syrian organised crime groups; There are quite a few.
(2) The most common (and the most unusual) Syrian surnames. Can you tell if the Panamanian client, regulator or law enforcement official you deal with is of Syrian extraction, with the potential to have a hidden agenda of his own ? This is neither profiling nor racism, just effective enhanced due diligence. The given names are also often a clue as to Syrian background.
(3) The names of the big companies engaged in the construction trade in Panama that are owned or controlled by Syrian organised crime elements.

This is a global crime problem; North America, Europe and Asia are all locations for affiliated Syrian organised crime groups, many of whom deal with the Panama contingent. Perhaps the United States might want to step up to the plate, and put these money-laundering banks in Panama out of business, by denying their banks access to the American correspondent banking system, and charging the officers and directors with money laundering, and seeking their extradition.



~ Contributed & Written By Kenneth Rijock ~

NEW US LAW TARGETS IRAN SANCTIONS EVADERS AND TERRORIST ORGANISATIONS IN LATIN AMERICA


On 28 December, the President of the United States signed into law the Countering Iran in the Western Hemisphere Act of 2012which directs that a comprehensive study, and report, on the activities of Iran, and its terrorist proxies, be submitted to the US Congress within six months. The underlying purpose was stated thus:
" It shall be the policy of the United States to use a comprehensive government-wide strategy to counter Iran's growing hostile presence and activity in the Western Hemisphere by working together with United States allies and partners in the region to mutually deter threats to United States interests by the Government of Iran, the Iranian Islamic Revolutionary Guard Corps (IRGC), the IRGCs Qods Force, and Hezbollah."*

Actions to be taken shall include:
(1) One of the immediate results of the policies being implemented by the Act will be an increase in intelligence-gathering, and US law enforcement, in Latin America, involving " A plan to address any efforts by foreign persons, entities and governments in the region to assist Iran in evading United States and international sanctions,"  and

(2)  "To support United States efforts to designate persons and entities in the Western hemisphere for proliferation activities and terrorist activities relating to Iran, including affiliates of the IRGC, its Qods Force, and Hezbollah, under applicable law, including the International Emergency Economic Powers Act. **"

The practical effect: You can expect that Iran sanctions evasion activities in the Western Hemisphere, especially Latin America, but also the Caribbean and Canada, will be targeted by American law enforcement agencies, and intelligence services. Clients of your bank that are engaged in sanctions evasion, facilitation of terrorist financing, and providing material support to either Iran or its terrorist proxies, will have a greater chance of identification, and interdiction through arrest.


This means that risk levels have now increased for any of your Western Hemisphere clients who:

(A) Trade with entities located in the Middle East and Asia, when the destination country is a known transshipment point to Iran, or a known jurisdiction for Iran sanctions evasion.

(B) Are Venezuelan nationals, using Panamanian corporations, and engaged in international trade transactions. Panamanian government officials have thus far identified over seven hundred of such companies suspected of trading illegally with Iran.

(C) Are Iranian expats engaged in high-volume international trade.

It may be prudent to exit such high-risk clients, lest their illegal operations be exposed, and you incur not just fines & penalties, but major adverse publicity in the media, as a result. We call that reputation damage, and it is to avoided at all costs, lest you experience major client flight.


~ Contributed & Written By Kenneth Rijock ~

Saturday, January 19, 2013

BE ALERT FOR UNDERGROUND BRANCHES OF INTERNATIONAL BANKS


I see that a Swiss private bank is having problems this week with a "colourful" customer of questionable background. That brings to mind the fact that this bank has been operating what I can only describe an a "underground" branch, meaning a covert facility, in a country where it has neither properly registered, nor pays taxes. An underground branch very quietly accepts deposits, and finds a way to spirit them into one of the bank's legitimate branches, or its headquarters, either through local banks, and also through some bulk cash smuggling. Its existence is a closely guarded secret.

The way that I personally verified its operation, after a number of senior Venezuelan military officers were seen repeatedly carrying briefcases into the company, an import-export firm, and taking nothing out, was to engage the services of a old friend. I supplied him with  the name of a prominent narcotics trafficker as a "reference", and he called up the company. The general manager at first was uncooperative, but once the caller dropped the name I had given to him, the gentleman's tone changed, and he offered to meet the caller at the bank's Geneva headquarters to discuss a relationship of mutual benefit.

We had a big case here in Miami a few years back, where one of our local financial institutions was caught accepting cash at a covert Bogotá branch that was unknown to either regulators, or the public at large. Suspected narcotics profits were accepted there, and couriered to the United States for deposit.

Since, by their very nature, such operations are illegal, it is generally difficult to ascertain their location, but a few helpful hints might assist you in identifying one banking with you:

(1) Does the customer, who obviously runs a cash-intensive business, now have a greatly increased volume of deposits, inconsistent with its historical background of deposits ?

(2) Are there new staff members making the deposits ?

(3) When you visit the client at its principal place of business, are there a large number of new staff
members not known to you ?

(4) Does the client now wire funds to known offshore financial centres, when that was not the case in the past, and are these payments inconsistent with the client's core business ?

Of course, these guidelines also could apply to any business conducting money laundering operations, as I am sure you must know.


~ Contributed & Written By Kenneth Rijock ~

Thursday, January 17, 2013

THE FARC REARMS DURING PEACE TALKS

If you were hoping that the Revolutionary Armed Forces of Colombia, the FARC, were going to make peace with the Government of Colombia, in the peace talks currently in progress, it is not looking good. A senior general in the Ecuadorian Army has reported that he has seized large quantities of arms and ammunition from the FARC, which it has acquired during its so-called unilateral cease-fire. Ecuador also seized  1200 units of what was described as bars of explosive, which probably means C-4. Is this the act of an organisation that is seeking to make peace ?
Of course, a senior FARC leader has denied the seized evidence displayed by Ecuador. Please note that the cease-fire expires on 20 January, and the FARC has bluntly said that it reserves the right of self-defence. Of course, its definition of self-defence might not be the same as yours and mine.



~ Contributed & Written By Kenneth Rijock ~

Wednesday, January 16, 2013

KARMA SPOKE TO OKKE ORNSTEIN : "IT'S TIME TO PAY !" SE BUSCA !


 ALERT FOR CONVICTED FRAUDSTER NOW FUGITIVE ON

 MURDER CONSPIRACY CHARGE


Convicted Dutch fraudster Okke Ornstein, failed to surrender to Panamanian authorities, to begin serving a 20-month sentence, and has been declared a fugitive from justice.


SE BUSCA
 Ornstein, who has several other criminal cases pending against him, is believed to have left the Republic of Panama. Bankers in Central America, especially Costa Rica, where he has operated before, are cautioned to retain the photographs that accompany this article, for circulation amongst your staff. He may also be in the Caribbean.

SE BUSCA

Ornstein is scheduled to go to trial, also in Panama, in February, 2013, on charges of Conspiracy to Commit Murder. He has threatened a number of his victims with bodily harm, and should be considered armed and dangerous. Should you see this individual, you are urged to contact your local police immediately.



WHO WILL STOP HEZBOLLAH LATIN AMERICA ?

The rapid growth of Hezbollah's Latin America contingent is extremely disturbing. With agents known to be operating in Venezuela, Nicaragua, Ecuador, and Bolivia, with the support of leftist regimes in power in those countries, Hezbollah is free to pursue whatever illegal activities it chooses, to provide financial support to its leadership in Lebanon.

A candid statement, by an American general officer, at a conference open to the public, indicated that the United States detained four Hezbollah agents at America's frontier with Mexico, all carrying valid Venezuelan passports, but none of whom spoke Spanish. They were all attempting to enter the United States, for an unknown purpose. The fact that this information never appeared in the media shows that the depth of the threat to America is not being disclosed.

The use of the offshore financial centre in the Republic of Panama is the most troubling; neither the Panamanian Government, nor US law enforcement agencies based there, seem to have either the desire, nor the manpower in the field, to shut down the Panama-to-Beirut cash pipeline. That is the principal avenue through which Hezbollah narcotics trafficking profits flows the the Middle East, with the able assistance of its government partners in Venezuela, who allow the narco-dollars to ride along with their ow illicit profits, into Panama's banks.

I fully understand that no country wants to get involved in a confrontation with the approximately one hundred Hezbollah cadre working in Latin America, all of whom are based in countries where foreign intervention, whether by military action, or using intelligence officers, would have huge consequences. The complaints against Colombia, when it conducted a cross-border raid against a FARC base-camp in Ecuador, are a painful reminder of the diplomatic row that ensued.

Something does need to be done, however. It is suggested that one must follow the money; choke off the financial pipeline through Panama, arrest the Hezbollah money launderers, and their Venezuelan allies, and deny the local branches of this designated global terrorist organisation the ability to fund their Lebanese base, before they expand into the Continental United States, and Canada.


Contributed & Written by Kenneth Rijock ~