Kenneth Rijock

Kenneth Rijock

Tuesday, August 30, 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.

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 ?





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.


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

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.





Saturday, August 27, 2016

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.