Wednesday, August 31, 2016

US TREASURY AND THREE REGULATORY AGENCIES PUBLISH JOINT FACT SHEET



The Treasury Department, along with the OCC,. NCUA, FDIC,, and the FRS, have today published their Joint Fact Sheet on Foreign Correspondent Banking, Approach to BSA/AML and OFAC Sanctions Supervision and Enforcement. Readers are urged to read and retain a copy of this document, as it summarizes the official US Government position on a number of important subjects, including what the agencies expect of US depository institutions, on a number of topics.

You can access the complete text here.

Tuesday, August 30, 2016

CAYMAN GANG OF FOUR FRAUDSTERS LAMB AND BATEMAN UNABLE TO OPEN ACCOUNTS OVERSEAS


Sharon Lexa Lamb, Ryan Bateman, Derek Buntain

Financial investigators who are tracking the flow of millions of dollars stolen by the Cayman Gang of Four have reported that two Gang crew members, Ryan Bateman and Sharon Lexa Lamb, have been turned away, when they sought to open bank accounts in a number of countries. Apparently, the Gang is seeking to spread out their illicit fortune in several countries, including some of the principal offshore financial centers, to lessen the risk that their stash will be found, and seized, by the authorities. Their efforts, more often than not, have resulted in accounts declined.

Most compliance officers, when conducting even the most rudimentary due diligence searches of Bateman and Lamb, will find so many "red flags," or indicia of criminal activity, that accepting these two fraudsters as clients is simply too dangerous to onboard them.

One of the methods through which they are seeking to gain access to an account is to engage a local law firm, and have the firm, using a corporation that it forms on their behalf, but the new trend, for the banks to require all lawyers to disclose the name of the beneficial owner/client, has made this ploy no longer effective.



As for the other two Gang members, Derek Buntain, he is laying low in his native Canada, although he is reportedly under investigation by Canadian law enforcement; Fernando Mendez is still living in the Cayman Islands, seemingly confident in that fact that the principal local law enforcement agency, the Royal Cayman Islands Police Service, will not arrest him, reportedly to keep the negative press about the $450m Cayman Gang of Four scandal to a minimum.

Whether the newly-arrived police leadership will allow the agency's one year on-again-off-again investigation into the Cayman Gang of Four theft to quietly expire, or will move it forward, could affect how foreign investors treat the Cayman Islands in the future. Will the "financial pirates" that are the Cayman Gang of Four meet justice, or will they escape, scot-free ?

                                                  Financial Pirates of Cayman Islands

AMNESTY INTERNATIONAL IS AN "ANTI SEMITE" ORGANISATION

INACCURATE FACTUAL PRESENTATION, BY AMNESTY INTERNATIONAL, OF ARREST OF HAMAS MEMBER IN WORLD VISION CASE 


A fair reading of the statement released this week by Amnesty International, regarding the terrorism financing charges, brought in Israel, against World Vision Gaza manager, Mohammed Al-Halabi, shows a slanted, and factually inaccurate, picture of the case, and gives the reader grounds to examine Amnesty's other presentations, for accuracy.

I understand that the statement was prepared by Amnesty's Middle East branch, but what began as a critique of the Halabi arrest degenerated into a policy statement of matters not relevant to the case. The article, which appears on Amnesty's website, says:

(1) The trial will be "secret," while in truth and in fact, it will be closed to the public, as it will surely contain classified information about Hamas, a designated terrorist organization.

(2) It refers to Gaza as "occupied,; although Israel withdrew from Gaza several years ago.

(3) It states that Halabi did not have access to the amount of money that he is alleged to have diverted to members of Hamas, from the donations of World Vision, a Christian charity, but it does not supply the factual basis for that conclusion.

(4) it complains that Halabi's atttorney will not be able to publicly share information, but fails to consider that the evidence could have come from sources in Gaza who could be killed, if Hamas thereby learns their identity.

If this article, which verges on propaganda, and appears to seek to enrage the reader against Israel, rather than treat Halabi as a person who allegedly stole millions intended for the needy in Gaza, is typical of Amnesty's treatment of issues, then compliance officers may want to take all their other material with a grain of salt, and confirm any information they extract from Amnesty articles, through another source.

Monday, August 29, 2016

US BORDER PATROL SEIZES $3m+ FROM SOUTHBOUND BULK CASH SMUGGLERS IN SAN DIEGO


The money seized
The United States Border Patrol reports that it detained two individuals, in the San Diego area, traveling together southbound, in two vehicles. Seized was a total of $3,033,880 . It is the largest cash seizure, of record, in the area. In August, $2.3m was seized from a home in Anaheim, California.

Bulk cash smugglers, seeking to repatriate drug profits to Mexico and Colombia, had $382m seized, by US law enforcement, in 2014; the money was taken in over 4000 bulk cash seizures. Not all the dollars are destined for Mexico. however.

Some of the funds are destined for the Los Angeles area, where they are exchanged for gold or diamonds, which are then smuggled into Mexico, and exchanged for Pesos, and delivered to the Cartels. Through this technique, the Cartels avoid having to exchange the US Dollars for Pesos.

CAYMAN ISLANDS MONETARY AUTHORITY (CIMA) REFUSE TO REPORT ON FINANCIAL CRIMES - "WARNING ALERT"

CIMA INCREASES INTERNAL SECURITY TO PREVENT LEAKS TO MEDIA


The Cayman Islands Monetary Authority, more commonly known as CIMA, has reportedly increased internal security measures within the agency, allegedly to prevent the disclosure of confidential information to the press, and the public at large. It is thought that these new procedures were implemented as the result of the currently pending billion dollar civil suit, involving Middle Eastern parties, where massive fraud has been alleged, but this is unconfirmed;  That action is now on trial.

What we are hearing is that sources within CIMA are no longer freely sharing information with trusted confidantes, and that media access has been reduced. A close look at Cayman media stories, where CIMA is named or involved, shows that coverage appears to have diminished of late. Friends of CIMA officers also report hearing less small talk about Cayman Islands financial matters from their contacts.

Investors, and businessmen, not residing in the Cayman Islands, depend upon the domestic Cayman press for information related to risk, and coverage of financial crime, regulatory violations, and criminal cases involving Cayman entities, is vital for this purpose. When a government agency deliberately seeks to become even more opaque, and succeeds in suppressing the free flow of information to the media, and the public, risk levels cannot be accurately accessed, and losses may more easily occur. 

Sunday, August 28, 2016

MONEY TRANSFERS TO HAITI WILL BE CUT OFF BY USA

US TELLS HAITI IT WILL CUT OFF MONEY TRANSFERS IN NOVEMBER, IF NO REFORMS TAKEN



It is completely missing from mention in the American press, but the Republic of Haiti has hit the panic button, after a reported warning, from the Obama Administration, that it will end all money transfers from the US to Haiti, in November, 2016, unless certain unspecified "corrective measures" are taken.

 Many Haitians have, for decades, been largely supported by remittances sent by expats, working in America, to their needy families in Haiti, but that route is also used to repatriate the proceeds of narcotics crime, and apparently the United States has lost patience with the Haitian financial industry's non-existent AML/CFT efforts. Most North American compliance officers are  ill-informed about the thriving Venezuela-to-Haiti-to USA drug trafficking route, believing Haiti to be an extremely poor country, and not understanding its key role in drug smuggling and money laundering operations.

The level of corruption in Haiti is considered by many experts to be the highest in the Western Hemisphere, and the participants have a vested interest in keeping their financial structure deaf, dumb and blind, regarding protection from financial crime, so unless the United States backs off, Haitians living in America could lose a large part of the resources that they depend upon to sustain their unemployed relatives at home. Will the American threat work ? We shall see on November first.


Chronicles of Monte Friesner

Saturday, August 27, 2016

MOSSACK FONSECA OPERATING "UNDERGROUND OFFICES" & DEFYING AUTHORITIES

HAS MOSSACK FONSECA GONE UNDERGROUND OVERSEAS ?


The fact that Mossack Fonseca & Co. (New Zealand) was voluntarily reregistered last month, but its resident director is continuing to provide service to MF clients, means that one can expect that similar underground tactics are being employed by the law firm in other foreign jurisdictions. Obviously, the Mossack Fonseca brand itself has become poison, so the firm is using other, more low-profile, and possibly unknown, vehicles to give its dodgy clients, seeking to evade taxes, the zero-tax domicile they frequently demand.

Some helpful hints:
(1) Has an individual that you are looking at ever been employed by a Mossack company, or known affiliate ? Do you know the names of former MF staff in your country ?
(2) Did MF also operate parallel companies, such as to create trusts, at the same time it used its named MF subsidiary, to sell companies to clients in your country ?
(3) Who are the clients named in the Panama Papers using now, in your country, for corporate work ?

Keep these successor companies, or ex-Mossack Fonseca staff, as far away from you as possible, please, for your own safety.


ALAN KOSLAW - FLORIDA ATTORNEY PLEADS GUILTY TO MONEY LAUNDERING CONSPIRACY

PROMINENT SOUTH FLORIDA ATTORNEY PLEADS GUILTY TO MONEY LAUNDERING



Alan Koslow, a well-known Florida attorney and lobbyist, has entered a guilty plea to money laundering conspiracy, in US District court. Koslow was accused of accepting money that he understood was the proceeds of drug crime, and laundering it for individuals who were undercover law enforcement agents.

A prominent lawyer in Broward County, Florida, and a former City Attorney in Hollywood, Koslow represent gambling interests, and developers, whom he frequently appeared for, in local government meetings, where approval was often obtained, through his efforts as counsel.

One report stated that he tested positive for cocaine three times, and was subsequently committed to a residential drug rehabilitation facility, after which the Court declined to release him, indicating that he may have had a serious addiction problem.

 The three-year delay in charges being filed, which consisted of a Criminal Information, indicating cooperation or a plea agreement, could mean that he was assisting law enforcement, or that the Government did not want to publicly expose a particular informant. Sentencing has been scheduled for November 10. The maximum penalty is five years, though a shorter sentence could be imposed, with or without a fine.

RUSSIAN HACKER CAUGHT & CONVICTED IN THE STATE OF WASHINGTON

ROMAN SELEZNEV, MASTER RUSSIAN HACKER, CONVICTED IN DISTRICT COURT IN SEATTLE


Roman Valerevich Seleznev, the Russian hacker who disrupted businesses in the State of Washington, by stealing credit-card information en masse, has been convicted by a jury. Facing 34 years in Federal Prison, given the amount of damage he caused, and quantity of information stole, the issue of how he ended up in a Federal courtroom in Seattle will surely be a front and center issue on his certain appeal.

The defendant was seized in the Maldives, and flown to Guam, which is US territory, for his First Appearance, and thereafter transported to SeaTac. He claims the circumstances of his arrest and removal violated international, and local, laws. Most Federal decisions have not inquired into the precise circumstances through which a defendant is secured from abroad, except under the most extreme conditions, which do not appear to be in the instant case.

The Verdict recites the jury's findings on these charges:
(1) Wire Fraud
(2) Intentional Damage to a Computer
(3) Obtaining Information from a Computer without Authorization
(4) Access Device Fraud

Seleznev, whose father is a prominent elected official in the Russian Federation Parliament, and who suspected of involvement in a plan to spring his son from Federal custody, while he was awaiting trial, claimed, during trial, that his computer was tampered with by US law enforcement agents, after his initial arrest. He was represented by a large group of attorneys, including the lawyer who defended Ted Bundy, the serial killer executed in Florida.

Some Russian media have claimed that his case was politically motivated, due to his father's close association with the Russian leader, Vladimir Putin, and there were rumors that the US sought to make a deal with Russia, to exchange him for Edward Snowden, though this was denied. Sentencing has been sent for December 2, 2016.

Friday, August 26, 2016

MOSSACK FONSECA ON THE "HOT SEAT IN AFRICA" FOR CREATING TAX FRAUD

AFRICAN TAX REFORMERS AND OFFICIALS EXPRESS THEIR ANGER AT MOSSACK AND FONSECA


We have previously covered the fact that PEPs from most of the countries reportedly have accounts in offshore tax havens, and a large number of them used the Panamanian law firm of Mossack Fonseca to form companies in the most opaque and obscure tax havens, to hide their criminal proceeds from public view.

Now, a whole new group of Africans has a bond to pick with the Mossack firm; it seems that many of the continent's major tourism companies, especially the East African safari trade, purchased corporations domiciled in the British Virgin Islands, Mauritius, and the Seychelles,  which are known low- or zero-tax jurisdictions, and thereby evaded paying taxes in the countries of Africa where they actually operated. Some of these tourism companies actually booked their African safaris through the tax havens, creating an additional layer of protection, and insuring that they would never pay their African host countries a penny in taxes, losing valuable tourism revenue

Mossack also insured that these tourism companies were able to open accounts in such places as Liechtenstein, Luxembourg, the isle of Man, and Switzerland, so that payment for their services never even touched African banks; only the small costs of actual operation made it into the host countries. The local economies did not really benefits from these offshore businesses, notwithstanding that they were working totally within the host countries.

These tourism company operators, with the able assistance of Mossack Fonseca, skillfully ( and legally) avoid paying taxes in countries that sorely need them. What's wrong with their picture ?



'

WILLIAM G. TYNKALUK EXPOSED HIS LACK OF HONESTY & INTEGRITY

LEON FRAZER DIRECTOR GAVE INSIDE INFORMATION TO CLIENTS ABOUT IMPENDING JOVIAN PURCHASE, AND SOLICITED DODGY RUSSIAN MONEY 



William Tynkaluk, then a Director of Leon Frazer & Associates, Inc., the Canadian wealth management firm, gave his clients inside information, about the confidential negotiations, by Jovian Capital Corporation, to purchase all the remaining and outstanding shares of Leon Frazer. Tynkaluk, who was a financial advisor to a number of  wealthy retired Canadian businessmen, actively solicited them to trade in Jovian stock, based upon the confidential, non-public information that he acquired and possessed, by virtue of his position at Leon Frazer.

Tynkaluk touted the Jovian stock, saying that its value would greatly increase, when news of the company's purchase of all the Leon Frazer shares became public knowledge. It is not known how many of Tynkaluk's clients made such purchases, based upon his illegal insider disclosures, but the transaction records, for the period prior to the public announcement, should be examined to identify them. The profits those individuals illegally earned must be disgorged, and those original Jovian shareholders, who did not have any inside knowledge of the impending purchase, were denied the profits they would have earned, had they held their shares, until after the purchase.

Additionally, Mr. Tynkaluk asked a Canadian businessman, in the presence of a client of Tynkaluk, whether he could bring Russian purchasers to him, so that he could sell them on buying a large quantity of Jovian shares, and that he was not particular about the Source of Funds of the Russians' investment capital. He stated that dodgy or suspicious buyers would be acceptable, so long as they made large purchases of Jovian stock.

It is known that Mr. Tynkaluk was called in, several times, to answer questions about this matter, before the Ontario Securities Commission (OSC), but it is not known whether a fine, or other sanctions, were imposed against him, or Leon Frazer and Associates, Inc., as this information is treated as confidential, by the OSC, and not available to the public. We ask that it now be disclosed, as a public service, and that the matter be turned over to the appropriate law enforcement agency, for investigation, and further action. Jurisdiction appears to be vested in the Royal Canadian Mounted Police (RCMP).

We are also wondering whether details of these illegal trades, all made prior to public release of information regarding the pending Jovian acquisition, were fully disclosed, during the subsequent acquisition of Jovian, by Industrial Alliance Insurance & Financial Services, Inc.








Thursday, August 25, 2016

"FARC" HAS MADE HUNDREDS OF MILLIONS IN THE DRUG PROFITS

WHAT WILL BECOME OF THE FARC'S LAUNDERED DRUG PROFITS IN TAX HAVEN BANKS, AND EUROPEAN INVESTMENTS ?


The news from Colombia this week is that the government and its principal insurgent adversary, the Revolutionary Armed Forces of Colombia, more commonly known as the FARC, have reached an agreement on ending the 50-year conflict between them. the FARC, formed as the military arm of the Colombian Communist Party, has reportedly agreed to demobilize, and enter domestic politics.

Of major interest to the financial world is the status of the billions of dollars in FARC narco-profits, which resides in tax haven banks, and has been invested overseas, including in the countries of the European Union. What will become of those illicit profits, and will the banks that knowingly accepted large deposits of the FARCs dirty money be sanctioned as a result ? Will FARC "diplomats" abroad help themselves to this money, as Russians did after the breakup of the Soviet Union ?

Unfortunately, the details of the agreement have not been released, but if the ultimate disposition of the obscene FARC wealth is not that it will be repatriated, and used to compensate victims of the civil war, it is feared that greedy FARC leaders, no longer committed socialists, but now merely career criminals, will seek to enrich themselves. In short, they will take the money and run.

We hope and trust that the Colombian Government has had the foresight to ascertain the locations of the FARCs dirty money stash, as well as investments, and will recover those assets for the people of Colombia. Otherwise, it will serve to fund a new group of transnational criminals.

LEBANESE CANADIAN LAUNDERED MONEY FOR "HEZBOLLAH"

SECOND CIRCUIT AFFIRMS DISMISSAL IN ALIEN TORT CASE AGAINST LEBANESE CANADIAN BANK


The Second Circuit Court of Appeals has affirmed the District Court decision, in the case of Licci vs. Lebanese Canadian Bank SAL, in which an action against the bank*, for facilitating financing of Hezbollah, through US banks, pursuant to the Alien Tort Statute, was dismissed, holding that customary international law does not recognize liability for the bank, a corporation, relying upon the ruling in Kiobel vs. Dutch Petroleum Co.,  a 2013 US Supreme Court decision.

Readers who wish to review the complete text of the opinion can access it on the Second Circuit website http://www.ca2.uscourts.gov/decisions.html .The case number is 15-580, and the decision was handed down on August 24, 2016.
___________________________________________________________________________
*On the regulatory side, the bank previously paid a $102m fine, for providing financial support to Hezbollah, a Specially Designated Global Terrorist (SDGT) organization.

FINCEN PROPOSES NEW RULES & REGULATIONS

HERE'S TOMORROW'S FEDERAL REGISTER PROPOSED FINCEN REGULATIONS ON CIP



If you are working late tonight, or simply want to get a head start on tomorrow, here is a link to the FinCEN Notice of Proposed Rulemaking, that is scheduled for publication in tomorrow's (8/25) Federal Register. Entitled Customer Identification Programs, Anti-Money Laundering Programs, and Beneficial Ownership Requirements for Banks lacking a Federal Functional Regulator, it extends CIP and beneficial owner requirements to banks not previously subject to such requirements.

You can review the complete text here. 

Wednesday, August 24, 2016

CHINA MONEY LAUNDERERS PURCHASED REAL ESTATE IN BRITISH COLUMBIA

WATCH FOR MOVEMENT OF FLIGHT CAPITAL OUT OF BRITISH COLUMBIA

Coat of Arms of British Columbia

The extraordinary flurry of interest, in British Columbia real estate circles, regarding the massive arrests, in China, of over 450 individuals, accused of money laundering through underground banks, means that some of the readers definitely have something to hide. China severely limits the amounts that its citizens can legally transfer out of the country, and there is a large, and growing, illicit industry, whose sole aim to to move  wealth, including, but not limited to, the proceeds of corruption, profits upon which taxes have been evaded, legitimate profits, and income from crime, out of China, by any means necessary.

Given that the huge increase in real estate prices, in British Columbia, a favorite destination for Chinese investors, both legal and illicit, has now raised the profile of high-value purchases (remember the new tax), you can expect money launderers, working for Chinese clients, to see the handwriting on the wall, and start, immediately, moving client wealth out of the province, to "invest" in more low-key areas of Canada.

 In the United States, China is running a vigorous campaign to locate some its the more prominent expats, especially those who appear to be wealthy, corrupt, former PEPs. That must also make some BC Canadians nervous.

Therefore, it is prudent for compliance officers, real estate attorneys, realtors, and title insurance companies in Canada, to take a close look at new clients, coming from Vancouver, especially if they are looking for properties to invest in. They may be comfortable paying top dollar for their purchases, be in a bit of a hurry to close, and use corporations or trusts as the vehicle through which the investment is made. They may not be of Chinese origin, as good money launderers can always find frontmen to place forward in such cases.


In summary, if China's crackdown on illegal export of capital, of all types, has drawn the attention of certain people in British Columbia, and their advisors, expect at least some movement of wealth to quieter provinces; watch for it.

RICHARD CHICHAKLI BEING RELEASED IN ONE YEAR

SECOND CIRCUIT DENIES RICHARD CHICHAKLI REHEARING OR EN BANC OF HIS APPEAL


Readers who have been following Rchard Chichakli's sanctions case know that he took his SDNY convictions for International Emergency Economic Powers Act sanctions violations, money laundering conspiracy, and several counts of wire fraud to the Second Circuit Court of Appeals. The lower court judgment and sentence were affirmed by the appeals court; we reported on the details in this blog earlier this year.

His final act was to petition for a panel hearing, or an en banc rehearing. here is the text of the Court's Order*, which was entered on August 5, 2016:

"Appellant, Richard Ammar Chichakli, filed a petition for panel rehearing, or, in the alternative, for rehearing en banc. the panel that determined the appeal has considered the request for panel rehearing, and the active members of the Court  have considered the request for rehearing en banc."

"IT IS HEREBY ORDERED THAT THE PETITION IS DENIED."

The defendant/appellant has now exhausted all his appellate remedies as a matter of right. Whether he will now file a Section 2255 Petition, to attack his conviction, is not known, but his Presumptive Release Date is June 11, 2017.

Whether justice was served, in Richard Chichakli's case, is a matter of opinion. Should he be serving a long sentence, for money laundering, due to his association with Viktor Bout's African and Asian arms trafficking operations, or should his covert assistance, rendered, with Bout, to the intelligence services of the United States, in a number of classified missions, mitigate any punishment that he receives ? Should he have gotten a free pass, or a much longer sentence ? You be the judge.

Was his silence during the trial, when he could have gone public with details of American operations overseas that certain government agencies would prefer remain hidden, honorable, or did he just opt to remain silent ?  Whatever you think of him, Richard Chichakli's sentence of incarceration ends next year, and, as a US citizen, he will be released. I wonder what his plans are ?
___________________________________________________________
United States vs. Viktor Bout, et al, Case No,: 14-4255 (2nd Cir.).





Sunday, August 21, 2016

Finanzas y Créditos del Hogar SA. Is In Bankruptcy With Criminal Charges Pending

PANAMANIAN MSB GOES UNDER, WITH $22m IN DEBT




Financiera Generosa*, a Panamanian money service business, owing more than $22m in bonds and commercial paper, has gone into bankruptcy, and creditors fear that their security, where it actually exists, was grossly overvalued by company officers, giving rise to criminal liability of a number of officers and directors.

Generosa, which was heavily involved in the finance of commercial buildings, especially hotel construction, was unable to meet its debt service as it came due, particularly its bond issues, and has been forced into bankruptcy. MSBs in Panama are typically involved in finance, unlike those in other countries. Its president, Jose Luís Ford Hernandez, has been confined to his home, and prohibited from leaving the country; criminal charges have been filed against him.

Multiple litigation against the company has been pending for the last four years. Panama's securities regulator, the SMV, posted a notice of the bankruptcy on its website at the end of last week. Institutional creditors, many of whom are holding Generosa obligations in the millions of dollars, are in danger of losing their entire investment. This scandal, the biggest to hit Panama since the Petaquilla Mining insider trading case, will further reduce the confidence that investors have in Panama's economy, and the ability of its
commercial ventures to meet their obligations.



___________________________________________________________________
* Financiera Generosa is the company's trade name; its legal name is Finanzas y Créditos del Hogar SA.

INVESTORS IN REAL ESTATE FROM TURKEY CAUSE PROBLEM FOR US COMPLIANCE

INCREASE IN HIGH-END TURKISH INVESTMENT IN US REALTY POSES A PROBLEM FOR COMPLIANCE


The recent increase purchase of luxury condominiums, in South Florida, by affluent Turkish nationals, could represent a compliance problem for local financial institutions, real estate lawyers, realtors, and title insurance companies. The ability of compliance officers to identify Turkish PEPs, and other high-risk potential Turkish clients, seeking to purchase real estate in the area, is questionable, even when the transactions are no the cash sales specified in the Geographic Targeting Order.

In truth and in fact, the three major commercial off-the-shelf databases, of high-risk individuals and entities, are not known to have a comprehensive list of Turkish PEPs, due to a number of factors; the language issue, previous AML/CFT assessments that Turkey is only a low- to medium-risk jurisdiction, the lack of objective and comprehensive articles about its citizens, due to governmental  influence over the media there, and the focus, of those databases, on higher risk jurisdictions.

Turkish Airlines now flies into Miami daily; a new Turkish Consulate has opened there; local realtor statistics assert that five per cent of luxury condominium sales are to Turkish nationals; some Turkish financial experts are confidentially opining that the United Kingdom and France are no longer the primary locations for Turkish nationals to purchase second or third homes. All these factors have contributed to a rapid increase in Turkish investment in South Florida; one source estimates that there are as many as 10,000 part-time Turkish residents in South Florida. A prominent Turkish real estate firm has now opened an office in Miami.

These clients require more than your garden variety due diligence investigation, because there are a number of factors that raise risk levels, when Turkey is involved;

(1) Turkey serves as the global overseas headquarters of Hamas, which is a Specially Designated Global Terrorist Organization. Hamas is known to use Turkey as a base, from which to finance terrorist operations, in the Middle East, and in the EU.

(2) Turkey has, for years, served as the transit point for illicit petroleum sales of ISIS/ISIL, another terrorist organization. It also was used to evade international sanctions on Iranian oil sales, which is of great interest to the US: see the Reza Zarrab case, now pending in New York.

(3) Corruption, including at the highest levels of government, has been the subject of major news stories, especially where Iran sanctions evasion operations are involved.

(4) Human smuggling into the European Union, from Turkey, is another major illegal activity that reportedly creates illicit wealth, which must be laundered.

All these issues mean that compliance officers in Florida, and in the United States in general, must carefully examine all affluent Turkish purchasers of American real estate; enhanced due diligence is the order of the day, and the traditional database searches are clearly insufficient for that purpose. One need to conduct an independent investigation, and the use of Artificial Intelligence, in your queries, is highly recommended. Passive databases will not adequately return a sufficiently details profile on most Turkish nationals; Make sure that your search accesses external sources.


Saturday, August 20, 2016

PANAMA JUDGE SENTENCE TO PABLO RAYO MONTANO IS A LAUGHING JOKE

PANAMA VERY BELATEDLY SENTENCES KINGPIN FOR MONEY LAUNDERING AND TRAFFICKING


The Republic of Panama, which rarely arrests, let alone convicts, individuals, or banks, of money laundering offenses, has now sentenced a Colombian kingpin to nine years imprisonment, on money laundering and drug trafficking charges. Not only is it an extremely light sentence, given the amount of money and drugs the defendant was involved with, he's going to be released now, for he has already served ten years, awaiting the outcome of his case, in Panama's notoriously dysfunctional court system.

How can someone be held, in custody for ten years, before his sentence is handed down ? Worse, Pablo Rayo Montaño, who was a drug kingpin that moved 70 tons of cocaine out of Colombia, gets preferred treatment from the Court. He has been compared to the late Pablo Escobar, yet his relatively short sentence, which should have been more like 30 years to life, given his history, will allow him to now return to Colombia, most likely to renew his trafficking and money laundering activities. Kingpins deserve to be imprisoned until they are too old to further offend, in my humble opinion, yet Panama's judiciary, notoriously corrupt, gives him a pass.

It is obvious that the Government of Panama, under serious pressure, in the wake of the Panama Papers scandal, wanted to show that it is tough on crime, but this sentence is little more than a cruel joke. When Panama's money laundering bankers, and large crew of Venezuelan money launderers operating in  Panama City, are arrested and imprisoned, we will begin to pay attention, but meanwhile, Panama shall remain what it is, a haven for money launderers, and their clients.