HUNT IS ON FOR DAVID MURCIA GUZMAN 200 BEARER SHARE COMPANIES & MILLIONS OF US DOLLARS

Written By:                      Kenneth Rijock - International Financial Crime Consultant
Contributed By:              Vladimir Feldman - Financial Crime Analyst 
Posted By:                       Andrei Slavenkov - Financial Crime Analyst

ATTORNEY: DAVID MURCIA GUZMAN CREATED 200 CORPORATIONS TO HIDE MONEY

David Murcia on US$100 note

The universal publicity surrounding  the sketchy companies created by the outlaw law firm of Mossack and Fonseca, and appearing in the Panama Papers, may have spawned new interest in recovering the missing money from the massive DMG scandal.

A lawyer involved in the long-running efforts to recover funds for victims of the DMG pyramid scheme, operated by David Helmut Eduardo Murcia Guzmán, has stated that Murcia created over 200 additional corporations, located in Panama, to hide the proceeds of crime. Reliable sources have alleged that the Panama City law firm of Garrido and Garrido formed many of the corporations for Murcia. 

Several months after the fraudster's deportation, an unsuccessful assassination attempt was carried out against one of the Garrido partners, and Murcia's associates are believed to have been involved.

The DMG fraud, which started in Colombia, soon expanded to Panama, where there are reportedly over 1500 victims, who lost an estimated $15m. Two of the Panamanian DMG companies have been identified:

(1)  Grupo DMG Inversiones Inteligentes SA.
(2)  Grupo DMG Intelligent Cards Corp.

DMG is alleged to have earned $28m, between 2006 and 2008; he is also believed to have hidden billions of dollars of Cartel narcotics profits within DMG receipts, and moved them into Panama, for the purposes of money laundering. 

Much of that money was said to be laundered by the fugitive former President of Panama, Ricardo Martinelli, through his Super 99 Market chain, and by Gary James Lundgren, the barred American securities trader, who purchased vast amounts of real estate with Murcia cash, and both later stole the fraudster's assets, both cash and real estate, when he was swiftly deported to Colombia, to face justice.

Gary Lundgren

We shall be monitoring the renewed investigation into locating the missing DMG assets.

Ricardo Martinelli

PANAMA IS AND ALWAYS WILL BE A MONEY LAUNDERING "BANANA REPUBLIC" COMPLETE WITH VIOLENT CRIME

Written By:                      Kenneth Rijock - International Financial Crime Consultant
Contributing:                   Andrei Slavenkov - Financial Crime Analyst
Posted By:                       Monte Friesner - Financial Intelligence Analyst

WAKED CASE PROVES THAT MONEY LAUNDERING THRIVES IN PANAMA 

The Waked Money Laundering Organization. which, conservatively, moved over a billion dollars of drug profits into Panama, has demonstrated, again, that the country's banking industry has no existing anti-money laundering system. The US Drug Enforcement Administration (DEA) disclosed this week that it first began to investigate Waked in 2006, after a large seizure of cash, inbound from Mexico, was interdicted upon arrival in Panama.

DEA statements, that the Wakeds laundered $2m in dirty cash, each week, in the Republic of Panama, confirms that drug profits are not only welcomed in Panama City, it is the lifeblood of the banking industry. Waked's operation was an open secret for several years, yet the Government practices its own version of Willful Blindness. You cannot tell me that it did not know the truth about Waked's immense cash flow.

Apparently the only people in Panama who are upset about the Waked scandal are those who blame the US for the potential loss of 5000 Waked front company jobs, and who say that the case is an attack upon the Panamanian financial system; it is all a poor attempt at spin control.

Given that Panama refuses to implement effective reforms, should we now listen to those who believe that Panama's dollarized economy, which facilitates its massive money laundering industry, should now be forced, by the United States, to totally abandon its use of US currency, and issue the Balboa ? That would, some say, fatally contract its banks' ability to clean narco-profits. It would also shut down Panama as the prime offshore financial center of Central America, but given the rampant financial crime,  it is a comparatively small price to pay. 

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Remember, former Superintendent of Banking, Alberto Diamond R, openly bragged that more than $15bn in "flight capital" entered his country's banking system from Venezuela.


  

BNP PARIBAS BANKS CLOSES ALL BRANCHES IN CAYMAN ISLANDS FOR FEAR OF CORRUPTION IN CAYMAN

Written By:                   Kenneth Rijock - International Financial Crime Consultant
Contributed By:           Vladimir Feldman - Financial Crime Analyst
Chronicles Of:              Monte Friesner - Financial Intelligence Analyst & Consulaire (Wanted SA)

IN NOD TO PANAMA PAPERS BLOWBACK, BNP PARIBAS TO CLOSE ITS CAYMAN ISLANDS BRANCHES

The furor over the information disclosed in the Panama Papers has translated in the launching of major governmental investigations over tax haven company formation. Yesterday, BNP Paribas advised that it is closing all its Cayman Islands branch facilities. This announcement came in the aftermath of some very public statements, made by the Government of France, regarding its inquiries into the abuse of tax haven corporations, by French citizens.

BNP Paribas has been the subject of multiple law enforcement and regulatory inquiries in the past,  especially concerning suspected money laundering, in a number of countries, including the United States, where there are still unresolved questions about the bank's business with certain of its Venezuelan clients, transactions involving Iran, and Nigerian PEPs.

We have previously covered a number of its compliance deficiencies, and other relevant issues in prior articles, which readers may be accessed through the search box at the top of the page. Some observers have questioned the adequacy of its compliance culture, and opined that, in many instances, the demands of officers in the bank's most profitable divisions appear to have trumped valid AML compliance concerns.

FREDERICK LANGFORD SHARP OF BRITISH COLUMBIA WAS MOSSACK & FONSECA PRINCIPAL PLAYER IN CANADA

Written By:                   Kenneth Rijock - International Financial Crime Consultant
Contributed By:            Andrei Slavenkov - Financial Crime Analyst (Netherlands - Canada)
Chronicles Of:              Monte Friesner - Financial Intelligence Analyst & Consular Wanted SA

CANADIAN LAWYER WHO WAS MOSSACK'S AGENT FOLLOWED TRADITIONAL MONEY LAUNDERING TECHNIQUES

The former British Colombian lawyer, Frederick Langford Sharp, who was Mossack Fonseca's principal player in Canada, employed the techniques and strategies of career money launderers, frankly, because he was one. Sharp's company, Corporate House (now reportedly known as Lake House Group), registered over one thousand companies through the Mossack law firm.

His tradecraft was simple:

(1) He used an offshore entity, Bond & Co. in Belize, but employed Companies House, an onshore company, as an intermediary; no references were ever made to Bond and Co. with clients.

(2) He ordered that no annual invoices, or statements of account were ever to be sent to the clients, via email, fax, or post.

(3) Printed statements of account and annual invoices were to be destroyed.

(4) He had a computer server set up in Panama, which was outside the reach of Canadian law enforcement subpoenas and warrants.

(5)  His staff were never to include a reference, or anything else in the attention line or heading, on correspondence and transmittals.

(6)  he offered to set up representative offices for clients, and to structure business, so that no taxable income resulted from the arrangement.

(7) He used an international courier service for all documents, and instructed staff to neither bill the clients for the courier, nor to place any name in the reference.

(8) Many of the Canadian clients had companies formed for them in Hong Kong, making document retrieval, and information access, problematic, for any regulator or law enforcement agency not located in Asia.

These are not the methods of a financial services professional; they are the acts and deeds of a financial criminal,  specifically a money launderer. Unfortunately, it took several years for the Law Society of British Colombia, to suspend attorney Sharp from the practice of law. Once he was no longer subject to its jurisdiction, he simply failed to ask for reinstatement, after his suspension term had expired.

As more details emerge, in the Panama Papers, we shall analyze them, and report back to our readers, on their significance and meaning.

BANK OF PALESTINE OPENS IN "UAE" - DUBAI

Written By:                  Kenneth Rijock
Contributed By:           Vladimir Feldman

WILL NEW OVERSEAS BRANCHES OF BANK OF PALESTINE FACILITATE TERRORIST FINANCING ?

The Bank of Palestine, the Territories' largest local financial institution, has opened an agency in Dubai, United Arab Emirates. The new office, located in the Dubai International Financial Center (DIFC), is the bank's first foreign facility, and its stated purpose is to service the estimated 250,000 Palestinians who live and work in the UAE. The bank has also announced that plans are underway to open an additional agency in Santiago de Chile; Chile reportedly has more than 500,000 Palestinians.

Given that the bank has branches and an alternate headquarters in Gaza, the expansion raises a significant issue: will terrorist financing of Hamas, a designated terrorist organization, be facilitated ? while wire transfers leave a public paper trail, will internal bank transfers, which can often be artfully accomplished without any external record, could give Hamas a quiet new route through which to bring in profits it has earned through criminal activities overseas, especially from Latin America.

We recognize that the bank has long been thought of as the future central bank, in an eventual Palestinian state, but Hamas, and indeed any sanctioned Palestinian terrorist group, could exploit the bank, with the participation of only a small number of cooperating bank staff. Until we can verify that the new Dubai agency is not engaging in some activities that support Hamas, the prudent action is to engage in enhanced due diligence, in any matters involving the new Dubai facility.

  

BSI BANK LIQUIDATED FOR "MONEY LAUNDERING"

Written By:                  Kenneth Rijock - International Financial Crime Consultant
Contributed By:          Maxwell Swartz - Financial Crime Analyst
Chronicles Of:            Monte Friesner - Financial Intelligence Analyst & Consular for Wanted SA

RICARDO MARTINELLI WAS A CLIENT OF MONEY LAUNDERING SWISS BANK BEING LIQUIDATED

Several years ago, this blog* covered then-President Ricardo Martinelli's trip to Italy, which included a quiet side trip to Lugano, not covered in the official itinerary. The Swiss destination was Martinelli's bank, Banca della Svizzera Italiana, known to most as BSI, which is in the news today, due to its liquidation, by Swiss authorities and FINMA, because of its role in $4bn of funds movement, reportedly misappropriated from state-owned companies in Malaysia, where the bank maintains a branch. There are multiple criminal proceedings in process against the bank, and a reported $13.3m civil penalty in Malaysia; Money laundering allegations abound.

What was Ricardo Martinelli's plane doing that day in Lugano, you ask ? Those who know say he was depositing a portion of the $3bn that the Colombian fraudster, David Murcia Guzmán, entrusted to him to invest, and which he allegedly laster appropriated to his own use, after he arranged Murcia's hasty deportation, into the waiting arms of Colombian law enforcement.

Additionally, he was banking some of the cash he collected, as bribes and kickbacks, during his term as Panama's most glutinous president. Martinelli had awarded lucrative government contracts, and taken more than his share of illicit compensation.

Ricardo Martinelli " Did they find my cash?"

With BSI now in involuntary liquidation, and another Swiss financial institution now taking over its deposits, we wonder whether, in light of the dozen criminal charges pending against him in Panama City,  whether a government agency or two will seek to seize those dirty millions. After all, it is obvious that Panama will never extradite Martinelli from Miami; perhaps Panama will go after his illicit wealth instead.
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* Are Panamanian PEPs Moving their Swiss cash ? 

USA READY TO SEND HELP TO EVACUATE VENEZUELA

Written By:                       Kenneth Rijock
Contributed By:                Monte Friesner

VENEZUELA: A FAILED STATE ? 

Caracas, Fall 2016 ?

Things have gone from bad to worse in the "Bolivarian Republic" of Venezuela, which can no longer feed its people. Now, not only did the brewer of the country's famous Polar Beer stop producing, due to its inability to obtain the necessary ingredients, the Coca-Cola distributor has shut down production, as it  can no longer get sufficient sugar to turn out its soft drinks.

Given the dire economic situation, any extension of credit by foreign banks, and even a single instance of financial exposure, is  fraught with a high risk of default. Many foreign creditors cannot recover their funds, due to the inability of local businesses to obtain dollars. The Bolivar is well on its way to becoming virtually worthless against the dollar.

The Venezuelan military will not intervene, to remove the failed socialist government of Nicolas Maduro, because its leaders are making millions from drug trafficking. Many Venezuelans have voted with their feet, and are now living in Miami's city of Doral.  For Country Risk purposes,  the prudent move is to avoid any and all transactions with Venezuelan businesses, for you will either be stiffed, or you may later learn that your wealthy bank client is really a corrupt government official, or a narcotics trafficker.

What is next, US Army helicopters rescuing Venezuelans from Caracas rooftops, while a bloody civil war rages below ? Many observers actually fear that this is coming, and soon.