POLITICALLY EXPOSED PEOPLE (PEP) ARE DANGEROUS

FROM THE - JOURNALS of Monte Friesner – Criminal & Intelligence Analyst and Consulaire for WANTED SA ~ Contributed & Written by Kenneth Rijock

WHY I FOCUS ON CORRUPT PEPS FROM THE DEVELOPING WORLD
 

A reader commented this week about my extensive coverage of Politically Exposed Persons, or PEPs, from the developing world, wondering aloud why I am not exposing PEPs in the United States, who are involved in corruption, or other criminal activities. That is a valid compliance question.

 

I do not normally analyze corrupt PEPs from the US because information about their activities, whether they are arrested or not, is generally available to compliance officers in America media, particularly the financial press, and in local and state news.

 

It is hoped that everyone is reviewing their local news on a daily basis, to keep up with arrests of financial criminals and corrupt politicians, and their associates.

 

I do know that you cannot readily have access to foreign media, nor would it be efficient for you to troll through several online newspapers each day, so I complete that task, and extract anything that I feel is important, and relevant to compliance officers at international banks, who may come into contact with the corrupt PEPs who are named. I also access non-public sources for additional information.

 

In the developing world, corruption is often swept under the carpet, or is not made public in the media, due to the power of the PEP, his political party, or due to fear on the part of journalists to their safety, should they expose him. Such lack of coverage generally does not exist in the US or Europe.

 

In short, your daily American newspapers should alert you to local and national PEP corruption, but since foreign media generally does not, and since you do not have the time to look anyway, I ensure that you are alert to PEP issues overseas; Hope this helps.

 

 

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£525,000 IS THE AMOUNT THAT GUARANTY TRUST BANK MUST PAY FOR MONEY LAUNDERING.

FROM THE - JOURNALS of Monte Friesner – Criminal & Intelligence Analyst and Consulaire for WANTED SA ~ Contributed & Written by Kenneth Rijock

FCA FINES GUARANTY TRUST BANK £525,000 FOR MONEY LAUNDERING VIOLATIONS

The UK Fiscal Conduct Authority (FCA) has levied a fine, in the amount of £525,000, upon Guaranty Trust Bank Ltd., a subsidiary of Nigerian Guaranty Trust Bank PLC, for multiple money laundering violations.

Apparently, there was a 30% discount given, due to bank cooperation.

The violations found include:

(1) Failure in the bank's AML controls.

(2) Non-existent AML systems.

(3) A failure to check customers against sanctions lists, and to inquire as to their possible PEP status.

(4) There was no check on Source of Funds.

Readers who wish to review the complete text of the 33-page document can find it here*. _____________________________________________________________________ *FCA Final Notice 2013: Guaranty Trust Bank

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THE CORRUPTION IN CHINA HAS NO LIMITS

FROM THE - JOURNALS of Monte Friesner – Criminal & Intelligence Analyst and Consulaire for WANTED SA ~ Contributed & Written by Kenneth Rijock

WILL UPCOMING BO XILAI CORRUPTION TRIAL FURTHER FOCUS ATTENTION ON PRINCELINGS ? 

On Thursday, the corruption trial of fallen Chinese leader, Bo Xilai, is scheduled to begin. While it may reveal more details of the dark art of corruption of one senior Chinese PEP, more important to Western compliance officers is the clear and present danger posed by the so-called princelings, the offspring of China's senior leadership, who have been busy accumulating obscene amounts of wealth, through bribes and kickbacks.

I have previously warned readers of this blog of the hazards of banking dirty PEP money from China.

Whether you are bound by the Foreign Corrupt Practices Act, the Anti-Bribery Act, or another similar law, it is clear that PEP wealth, if the owner is a Chinese national, is often illegally obtained, and as a compliance officer in a Western bank, you must act as the gatekeeper, and keep it out of your institution, for both business, and reputation damage, reasons.

Enhanced Due Diligence should be required on all high net-worth Chinese banking overseas, for you do not know whether the client is a disguised PEP, or a front man (or woman) for a corrupt PEP; There's more.

If I was a money launderer for a wealthy, corrupt Chinese PEP, I would find a source for a passport, from Singapore, Malaysia, Taiwan, or some other jurisdiction where Overseas Chinese reside, and have my client proffer that to an EU or US bank, to lessen suspicion that he was indeed a PEP.

I would also form a front company in a jurisdiction, outside the Peoples' Republic, to further bolster my client's fictional profile as a businessman.

As US government regulatory, and law enforcement, agencies, delve deeper into potential crimes that may have been committed, by US companies, with Chinese PEPs, princelings, or their associates, it is in your best interests to identify, interdict, and exit such potentially damaging banking relationships, before their names appear in the New York Times.

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MAJOR GOVERNMENTAL CORRUPTION SCANDAL IN VENEZUELA.

FROM THE - JOURNALS of Monte Friesner – Criminal & Intelligence Analyst and Consulaire for WANTED SA ~ Contributed & Written by Kenneth Rijock

FORMER US DIPLOMAT SUES VENEZUELAN PEPS FOR RICO, ALLEGING MASSIVE FCPA VIOLATIONS

Ambassador Otto Reich, the retired US diplomat, and former Assistant Secretary of State for Western Hemisphere Affairs, has filed a suit in US District Court in New York, alleging civil RICO violations, and for several other counts, in what is said to be a major governmental corruption scandal in Venezuela. The defendants, who all appear to be Venezuelan nationals, working in New York's financial district are:                    

(1) Leopoldo Alejandro Betancourt Lopez  

(2) Pedro José Trebbau Lopez  

(3) Francisco D'Agostino Casado

Leopoldo Alejandro Betancourt Lopez The thrust of the complaint is that the defendants allegedly regularly pay huge amounts of bribe money to governmental officials in Venezuela, in order to obtain lucrative contracts in that country's energy sector, for the construction of  power plants. Can you say Foreign Corrupt Practices Act ? This case will further expose the rampant, runaway official corruption that exists in Venezuela, and which is one of the reasons that its Country Risk assessment is sky-high.                                                                                     

It is further charged that the defendants' company, Derwick Associates, which does not have the capability to complete these projects, sub-contracts the work out to others. The defendants, in essence, earn obscene profits, strictly for their connection to corrupt government officials, making them Politically Exposed Persons (PEPs), by even the most strict definition of that term.

Pedro Jose Trebbau Lopez  One wonders whether any of the New York banks that serve these PEPs handled the bribe payments, and what they must be thinking since this suit was filed. The payment of bribes to Venezuelan government officials, to obtain favorable contracts, is unfortunately a nearly universal event in the hemisphere's most corrupt country, and regular enhanced due diligence on such clients, and their lines of business, would be banking best practices, at a minimum.

Additionally, it is charged that the defendants libeled and defamed Ambassador Reich, and in doing so tortiously interfered with his business relationships with clients and prospective clients.

The precise counts are:

(A) Civil RICO.                                                             

(B) Tortious Interference with Prospective Economic Advantage            

(C) Trade Libel and Defamation.  

(D) Civil Conspiracy.

 The plaintiff is seeking $2m in damages, punitive damages, and attorneys' fees.  _______________________________________________________________ 

Case No.: 13-cv-5307 (SDNY).

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CHILDREN OF CHINESE PEPS, MANAGE DADDY'S DIRTY MONEY.

FROM THE - JOURNALS of Monte Friesner – Criminal & Intelligence Analyst and Consulaire for WANTED SA ~ Contributed & Written by Kenneth Rijock.

WHERE IN THE US IS BO GUAGUA AND DOES HE HAVE HIS PARENTS' DIRTY MONEY ?

Now that Gu Kailai, the rising Chinese politician, has finally be charged with corruption, the question remains: does his son, Bo Gua Gua, have his illicit wealth, and is it being banked in the Boston area ? Bo was reportedly a participant in the Boston Marathon, and he did attend Harvard.

There's no news from China on the seizure of Gu's millions, and his attorney wife probably was able to move much of it out of China, so which American bank has it ?

The compliance problem is that Bo Gua Gua probably has a number of valid passports, all with aliases, and his bankers may not even know who he is.

Many children of Chinese PEPs attend university in the United States under well-established aliases, so that their classmates, and the media, do not know who they are.

Their fellow students might not take kindly to the presence of the child of a major human rights violator, or multi-millionaire "public servant." Many universities actually cooperate with this charade.

Additionally, the tuition is often far more than their family legally earns, so you can easily figure out their involvement in corruption in China. Bo Gia Gua, a well known playboy in both the UK and the US, was notorious for his night life, the cost of which was substantial.

So, here is his photo; who is the banker who is attending to his every need, even though his attorney mother was convicted of murdering a British businessman, and his father stands accused of corruption ? And why is this person, having now completed his education in the US, and probably holding a substantial amount of dirty money, allow to live in America indefinitely ?

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POLITICALLY EXPOSED PERSONS (PEPS) MUST BE BANNED FROM OFFSHORE BANKS.

FROM THE - JOURNALS of Monte Friesner – Criminal & Intelligence Analyst and Consulaire for WANTED SA   ~Contributed & Written by Kenneth Rijock ~

SHOULD COUNTRIES BAN PEPS FROM HOLDING OVERSEAS ACCOUNTS ?

That new Russian law, rammed through by its leader, Vladimir Putin, has prohibited government officials from holding any overseas bank account ,is crazy; or it is ? Perhaps Putin is on to something.

Those of us that are frankly sick and tired of watching corrupt foreign PEPs parade around the premier shopping malls of the United States, buying the best luxury goods that money can buy, and living the high life, notwithstanding their small salaries, welcome such a law in the developing world.

I, for one, would be happy if Miami was no longer periodically inundated by wealthy PEPs from Latin America, including the hemisphere's poorest country, the Republic of Haiti, with their multiple mistresses, posh US homes, and fat bank accounts, while their nation drowns in post-disaster poverty.

Multiple-entry visas for such PEP-playboys who divert donations, rape development money, take bribes and kickbacks, and steal international aid, needs to come to an end.

Why not make the closure of overseas bank accounts a requirement for accepting government employment in the countries of the developing world, ? For these are jurisdictions where corrupt PEPs are seldom charged, due mainly to corruption in the courts, and the power and influence that these PEPs wield in government. Thank you, Mr. Putin; great idea.

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