Kenneth Rijock

Kenneth Rijock

Sunday, February 19, 2017

CANADIAN CASE SHOWS THE LENGTHS TO WHICH THE MOSSACK FIRM WENT TO FOR CLIENTS


A classic tax fraud case, the object of which was to evade taxes, by making it appear that the profits of a Canadian company, generated abroad, had been sent to Canada, when it was an elaborate fiction, demonstrates that there was nothing that the law firm of Mossack and Fonseca would engage in, when it came to facilitating client criminal activity.

Tax treaties, between certain countries in South America, and Canada, provide that companies do not pay taxes upon their income, if taxes on those sums was being paid in Canada. A corrupt "tax consultant." created dummy contracts and false invoices, and even bogus records of wire transfers, ostensibly to Canada, but in truth and in fact, the money was wired to Mossack Fonseca, who followed client instructions, and sent the funds to Swiss accounts.

The only question I have is, why did it take the Government of Panama so long to finally arrest the Mossack partners ?

COMPLIANCE OFFICERS SHOULD CAREFULLY CHECK PASSPORTS FROM COUNTRIES WHO SELL ECONOMIC CITIZENSHIP


Notwithstanding the attention being paid to major problems, regarding unqualified foreign nationals receiving passports, and even diplomatic passports, through the Citizenship by Investment programs being operated in several Caribbean jurisdictions, the offshore industry has scheduled a boatload of events in 2017, to showcase these programs for interested, and therefore affluent, purchasers.

The proliferation of CBI programs means that compliance officers should be alert for new clients, offering these documents, as proof of identity. Remember well these procedures:

(1) If the client, seeking to open an account, or commence a new relationship, offers you a passport from one of the countries listed below(all of whom are advertising some sort of program or other), check their place of birth. if it is NOT in the country where the passport is from, initiate enhanced due diligence immediately, for you may have one of the CBI passports.

(2) Is the passport brand new, and without the usual visas and entry/exit stamps affluent client are likely to have ? This is another red flag of a possible CBI passport.

(3) Does the passport holder fluently speak the official language of that country ?

(4) Does the passport holder appear to be of an ethnic or racial background other than those normally found in that country ? This is not profiling, but seeking to rule out any prospective client that is too high risk for you to accept at account opening.

While this list is probably not complete, all these countries are scheduled to make CBI presentations this year:
MALTA
PORTUGAL
CANADA
SPAIN
ST KITTS
GREECE
CYPRUS
TURKEY
ANTIGUA & BARBUDA
MONTENEGRO
SERBIA
DOMINICA
GRENADA
AUSTRALIA & NEW ZEALAND
GEORGIA
PANAMA
IRELAND/UK
SWITZERLAND
BULGARIA
USA

Whether you wish to examine, in detail, clients with US and UK passports, is optional, due to the
fact that strict vetting is conducted in this jurisdictions.

The days when compliance officers can accept a passport at face value are, sadly, gone forever, due to the expansion of CBI programs, and their uneven, and often, unacceptable levels of due diligence.

Saturday, February 18, 2017

LAWYERS FOR IMPRISONED MOSSACK AND FONSECA TRY TO KILL INVESTIGATION THROUGH BOGUS APPEAL


Attorneys for Jurgen Mossack and Ramón Fonseca Mora, the arrested senior partners of the law firm that bears their name, named in a serious money laundering case, are trying any procedural trick possible, in what will probably be a futile effort to cheat Panamanian justice. The attorneys filed an appeal from the intermediate appellate court order, which extended indefinitely the trial court ruling on the investigation being conducted by the Office of the Prosecutor against Organized Crime.

The case now goes to the Supreme Court of Justice, Panama's highest court. Mossfon SA, the Mossack partners' corporate entity, also filed the appeal, which any objective legal observer would consider totally without any merit at law, and designed solely to delay the criminal case further.


FEDERAL JUDGE IN REZA ZARRAB IRAN SANCTIONS CASE DENIES GOVERNMENT MOTION TO DISQUALIFY DEFENSE COUNSEL

 


In what appears to be the first favorable ruling handed down in the case, the US District Judge presiding over the Reza Zarrab Iran sanctions violations case has denied the motion, filed by the US Attorney in New York to disqualify key members of the defense team. In an eleven page opinion, the Court held that there was no conflict of interest.

The Court, after extensive consideration, a Curcio hearing, and extensive briefing of the law by both sides, in a well-reasoned and detailed opinion containing profuse citations, found:

(1) That the defendant accepted counsel, notwithstanding there there were potential conflicts and limitations, regarding the attorneys' defense of him; He waived the conflict.
(2) Based upon the information furnished to the Court, by the parties, the conflicts to not appear, at this time, to disqualify the attorneys from representing Zarrab.
(3) The Court advised the parties that, should there be a change in circumstances, they are to advise the Court.

The trial date has been set for August 21, 2017. The defendant's brother Mohammad, who was charged, but is not in Federal custody, may not be the only other individual indicted. It is known that there are several other co-conspirators, but any indictments that exist will be sealed, until such time as arrests are made, to avoid their flight to avoid prosecution. Some of the unknown defendants may not be Iranian or Turkish nationals, and given the importance which the Department of Justice is prosecuting Zarrab, due to the issues raised, it is probable that there are additional defendants.

 
     

IRAN'S ATTORNEY GENERAL; WE WILL NOT EXECUTE ZARRAB'S PARTNER UNTIL WE GET THE $3bn THEY OWE



The Attorney General of the Islamic Republic of Iran, Mohammad Jaafar Montazeri has announced that his government will not execute the convicted master embezzler of the country's oil profits, Babak Zanjani, until the entire $3bn, that Babak, Reza Zarrab, and Alireza Monfared,  allegedly stole from their own government. Zanjani's hanging was to be scheduled in March, but it will now be placed on hold.

Zarrab is defending himself in an Iran sanctions violations case in US District Court in New York City;  Monfared was recently extradited back to Iran, from the Dominican Republic. His possession of a diplomatic passport from Dominica has ignited a firestorm of public protest against the government of Prime Minister Roosevelt Skerrit, who is an associate of Monfared,  a known sanctions evader, and who allegedly facilitated the issuance of the passport to Skerrit, allegedly for a large sum of money, in a major corrupt scandal where his resignation has been demanded, by a large percentage of Dominicans

Curiously, it does not appear that Iran has withdrawn its previous offer, to cancel the death penalty, provided that the entire $3bn owed is returned. The present statement infers that Zanjani will ultimately meet the hangman, but only has been granted a temporary reprieve. Zarrab is believed to control a fortune estimated at $6bn.

Whether Monfared, who was apparently a close associate, will turn over control of his overseas assets, to avoid execution himself, is unknown. When he fled Malaysia, escaping an Iranian extradition request, and using his Dominican diplomatic passport to evade justice, he probably carried with him information about his accounts, as well as bearer financial instruments or gems, but it is not known if he deposited any of his assets in Dominica, or owns real property there, using front men or attorneys. It should be noted that Dominica refused an Iranian extradition request, while Monfared resided there, and it is unlikely that the government will cooperate with Iran, in any efforts to seize assets.


Friday, February 17, 2017

HOW CARIBBEAN BANKS CAN KEEP THEIR US CORRESPONDENTS BY UTILIZING KYCC TECHNOLOGY



The potential loss of correspondent banking accounts in the United States is dominating conversations among Caribbean bankers recently, especially since a number of American financial institutions have terminated many of those longtime relationships. It is perhaps the most pressing problem bankers in that region face. is there a viable solution ? Yes, there is.

The US banks, operating under risk-based compliance programs, are reducing risk wherever possible, and the Caribbean which, through the accident of geography is both a transit zone for narcotics, and a favored money laundering destination. unless the Caribbean financial institutions have a means of assuring the onshore US banks that their clients/customers are all legitimate, correspondent relationships, even those which have been maintained for decades, are at risk.

The American banks need to know who your customers are, in essence, Know Your Customer's Customer, or KYCC is the solution. Armed with this knowledge, the risk managers can ascertain whether any of the Caribbean bank's own customers pose a threat, and should be terminated. This procedure also helps the Caribbean bank reduce its own risk level, and therefore improve anti-money laundering, and countering the financing of terrorism programs.

New technological advances in compliance programs allow users to identify unsatisfactory, or high-risk customers, or good customers who later have issues which raises their risk levels, as well as all your low-risk clients who should be retained. Space on this blog does not permit an adequate and illustrated description of those programs, and why they are an acceptable means of restoring your correspondent's confidence in your client base, and AML/CFT program, but if any readers are not familiar with those programs, feel free to send me an email at:  miamicompliance@gmail.com  with your query, and I will respond to you in detail.

While it is the Caribbean banks that are reporting the most terminations of correspondent relationships, a recent report from other areas of the developing world also that similar situations were occurring in Latin America, Asia & Africa. We hope that those banks also choose an effective solution, before they also suffer what might be a catastrophic loss in correspondent relationships.

MOSSACK AND FONSECA CLOSES AN OFFICE IN LUXEMBOURG, BUT LEAVES ONE OPEN



The law firm of Mossack and Fonseca,  its name partners in custody, has closed one of its offices in Luxembourg. the problem is, it left the other one open, and they both have deceptively similar names. Therefore, any client who cannot get "service" at one, due to its being closed, can easily find the other.

The names are: MOSSACK FONSECA (LUXEMBOURG) S.A.R.L

                          MOSFON LUXEMBOURG S.A.R.L.

Why has the government in Luxembourg not yet closed it down, I wonder ?