Kenneth Rijock

Kenneth Rijock

Thursday, March 23, 2017

MMM PONZI SCHEME IS BACK, THIS TIME IN CANADA



A young lady who says her name is Alinka Karpova has, on her Facebook page, published a solicitation for a new version of the old "MMM" ponzi scheme, which you may recall started in Russia in the 1980s, and spread all over the investor world. Evewryone lost their shirts, but, like Colombia's DMG, it is back with new clothes on. MMM, now calling itself "Myanmar MMM," is advertising up to 100% per month returns !

Some things never change. Reports from Toronto say the new Ponzi scheme is already drawing in victims. I guess nobody is remembering to initiate due diligence on the name, for if they do, the whole sordid story is easy to find.


IS THERE A NEW INDICTMENT IN THE REZA ZARRAB CASE ?



Since the District Judge in the Reza Zarrab Iran sanctions evasion case, pending in New York City, denied the Government's motion to disqualify some of the defense counsel, for conflict of interest, filings in that case have been minimal. Outside of a request to authorize payment, for an affiliated attorney who has expended a couple of hours, which was granted by the Court, there have been no filings of pleadings, but a new one has received my attention.

A sealed filing of a document in the case occurred yesterday. Give the total lack of record activity of late, there are a number of interesting possibilities, regarding that filing, which is not electronic, but appears as a hard copy, and is placed in the court's vault for safekeeping. Only a very limited number of court staff have access to sealed documents.

What is in the document ? Here are a number of the most likely possibilities:

(1) A new sealed indictment has been issued. Grand Jury Indictments remain sealed, until the defendant is in custody, which means, if he or she is outside the United States, it will remain so, until arrest and/or detention for extradition. A number of individuals in Dominica, including government officials, agency staff, and professional advisors, could be named as well as targets located in the Middle East.


(2) A plea agreement may have been filed; it is possible that Zarrab have entered into a negotiated plea with the US Attorney's Office, and that agreement has been reduced to writing. Some Turkish media are claiming that this is now a real possibility, since the existing US Attorney has been terminated.

(3) National Security documents may have been filed; there is a chance that documents, regarding Iran, which affect the national security of the United States, or are classified for any reason, were filed.

(4) A new defendant/target has cooperated, and his Information is sealed to prevent others from fleeing to avid prosecution, to protect the cooperator's family, or to in some other way endanger law enforcement, or cooperating individuals overseas.

Whatever in in that sealed document, we shall continue to monitor all developments in this case, as they occur, as well as commentary upon the matter, from the Middle East and the Caribbean region.  

Tuesday, March 21, 2017

COMPUTERS AND PERSONAL ELECTRONICS TO BE BANNED FROM FLIGHTS ORIGINATING IN THE MIDDLE EAST

From Royal Jordanian Airlines notice

According to multiple reports, passengers on flights from several Middle Eastern countries, to the United States, with be prohibited from bringing on board laptop computers, and any other electronic gear, other than cellular telephones. This new rule is to go into effect in 96 hours, according to some reports that have not been confirmed. The prohibited items can be brought in checked baggage.

Additionally, There are rumors of new security alerts, believed to go into effect today.

Monday, March 20, 2017

WILL REZA ZARRAB PLEAD OUT, AND NAME OTHER CONSPIRATORS ?


Media in Turkey, where the Iranian-Turkish gold trader Reza Zarrab moved massive quantities of sanctioned Iranian oil, have expressed glee at the news of the firing of Preet Bharara, the United States Attorney for the Southern District of New York, the head prosecutor in the Zarrab case, for they believe that Bharara was intent upon taking the case to trial, which could result in a conviction, and a Draconian sentence for the defendant.

Turkish journalists now opine that, with a successor, appointed by the new American President, a plea agreement is a more likely outcome, which would hopefully result in a far shorter sentence than 75 years, which is the current estimated maximum that Zarrab could receive. He is reportedly held in high esteem by the Turkish public.

Unfortunately, these Middle Eastern media sources overlook the sad reality that a plea agreement would obligate Zarrab to identify other participants in Iran's billion dollar oil sanctions evasion program, and probably testify against them at their trials. while the other conspirators, such as Babak Zanjani, and Alireza Monfared, are likely to be indicted, based upon any cooperation rendered by Zarrab, there are others not known to the public, who might be named.

In addition to the other Iranian nationals who assisted Zarrab, Zanjani & Monfared, any serious prosecution might name West Indians who facilitated the Iran sanctions evasion operation, by granting Monfared a Dominican diplomatic passport, and assisting him in his global oil sales, and money laundering, scheme. Could Dominica's Prime Minister, Roosevelt Skerrit, and his two principal attorneys, be indicted for their roles in assisting Monfared to acquire a Dominican passport, and to move criminal proceeds ? Its is indeed possible.  If such individuals are indicted, that information will remain sealed, until they enter the jurisdiction of the United States, or are extradited, and we therefore may not know that information until arrests are actually made. Will Dominicans be brought to justice for their participation with Monfared in sanctions evasion money laundering ? We cannot say at this point, but we will be watching.

If Zarrab decides to cooperate, the first sign will be a change of plea hearing; after conviction, his sentence may get reduced, with no publicity or fanfare, a year or more after his very public sentencing. We will continue to monitor the case as it unfolds. 

Sunday, March 19, 2017

ATTORNEY FOR MOSSACK AND FONSECA FILES HABEUS CORPUS, SEEKING THEIR RELEASE FROM CUSTODY

Abogada Macdonald


The attorney for Jurgen Mossack, Ramón Fonseca Mora, and Edison Teano, three senior partners of the disgraced law firm of Mossack & Fonseca, has reportedly filed for a Writ of Habeus Corpus, in a new attempt to obtain the pretrial release of her clients, whose alleged money laundering and tax evasion activities, on behalf of a multitude of clients, were brutally exposed in the Panama Papers. 

Guillermina Macdonald, a former prosecutor herself, who represents the incarcerated MF lawyers, will now have her clients brought before a judge, who will determine whether they are being illegally held. The Court previously ruled that they must be detained, upon these grounds:

(1) The three lawyers are a flight risk; they are wealthy, and face criminal charges which could subject them to long prison terms.
(2) The Court fears, correctly, that they may, if released, destroy evidence. Panamanian law enforcement has previously found, in an obscure apartment controlled by MF, huge amounts of shredded and discarded legal files.

It is doubtful that any court will allow their release on bond, given prior rulings, the evidence thus far, and the high profile nature of the Brazilian case, which is popularly known as Car Wash," by the Brazilian media. Of course, given the rampant corruption present in the Panamanian court system, and Fonseca's close ties to Panamanian President Varela, the MF lawyers may never be convicted.

Should they be extradited to Brazil, however, their conviction and incarceration is much more likely; the Government of Brazil has already taken down many powerful defendants, linked to the widespread bribery, by Norberto Odebrecht SA, and I am sure it will want some more trophies.

 

DOMINICAN "DIPLOMAT" WAS KIDNAPPED BY IRANIAN AGENTS, NOT PROPERLY EXTRADITED

Alireza Monfared and Dominica PM Roosevelt Skerrit

Alireza Monfared, the Iranian oil sanctions evader, whose Dominican diplomatic passport ignited a firestorm of controversy in that country, over the latest in a series of questionable issuance of diplomatic credentials to international financial criminals, was not, according to new information supplied by reliable sources, legally extradited from the Dominican Republic. The oil trader was actually kidnapped, and not by "INTERPOL agents," as previously reported in the media, but by Iranian intelligence agents.The two countries have no existing extradition treaty in force.

Monfared has been previously identified as an agent of Iranian intelligence, a fact that he did not disclose, when he filed an application for Dominican citizenship, pursuant to the Citizenship by Investment Program, before securing a second document, that illicit diplomatic passport, delivered to him, in Malaysia, by Prime Minister Roosevelt Skerrit, under circumstances that suggest corrupt activity.

Newly available sources have confirmed:

(1) Monfared escaped arrest, in Malaysia, by virtue of his Dominican Diplomatic passport.
(2) Iran again sought to take him into custody in Dominica, where he resided next but the Skerrit government protected him, and refused to hand him over; he brought a mistress, not his wife, with him, to Dominica.
(3)Dominica did facilitate his trip to the Dominican Republic, a popular location for wealthy Iranian expats.
(4) Extradition formalities were not followed in the Dom rep; he was forcibly taken, and transferred to Havana, where he was put on a nonstop flight to Moscow, bypassing the United States.
(5) the extent of the role of Israeli and American intelligence agents in the Dom Rep, in this case, remains murky; were they also seeking to kidnap Monfared ? Was that why he was repatriated, using the old "Cold War" transit route, which avoids US airspace and airports ?

When he arrived in Tehran, Monfared  reportedly asserted his status as a diplomat, but his claims were ignored by Iranian authorities, who promptly placed in a maximum security prison, but have not charged with criminal activity, in the $3bn theft of government oil profits. There has been no mention of Monfared, in government-controlled Iranian media, since he was taken into custody. His knowledge of classified information may preclude a public trial.  

Saturday, March 18, 2017

LOCAL REMEDIES PROPOSED TO SOLVE CARIBBEAN CORRESPONDENT BANKING PROBLEM IGNORE THE PIVOTAL ISSUE


Several Caribbean commentators have weighed in on a possible fix to the urgent Caribbean correspondent banking situation. We present their theories here, in an effort to compare and contrast them to the only effective solution we can recommend, which is total KYCC*.

These concepts have been advanced in the financial media:

(1) To consolidate or merge the local financial institutions, in each country, into a sole entity, which will then field one large, seemingly effective, well funded, compliance department, which will handle Customer Identification Procedures, AM/CFT, Suspicious Activity reporting, training and all other issues, for all the what are then branches. It is thought that such a strong compliance unit will instill confidence on the part of the US banks, and allow retention of existing correspondent relationships.

This approach, which appears sound, does not really afford a New York bank either a better glimpse into the bank's customers, nor does it offer anything more than that which the individual compliance officers gave, when the banks were not merged. If anything, a master national compliance unit will be remote from the actual branches, and dependent solely upon material sent in, by New Accounts staff. It could also result in additional processing delays, which is not helpful when new accounts are opened, while CIP is in process, because money laundering on a one-shot basis could occur, while waiting for the unified compliance office to return results. 

There may also be business considerations, which would interfere with universal implementation. Local bank shareholders might fear a loss of control, loss of their brand, an inability to attract new customers to their now-anonymous "branch," and diminished profits at the end of each year, due to increased expenses, both in compliance, as well as administration. Will unprofitable or low-profit banks be dissolved ? It could result in administrative issues not foreseen by the proponents of this potential solution.

(2) To create a truly regional central bank, including all the nations, overseas territories and possessions in the Caribbean, using the eight-member ECCB as a model. This new central bank would process all transactions first, and raise the level of AML/CFT compliance to an acceptable plateau. In essence, transactions, and parties, would be subject to further examination at the central bank's facility.

I fear that this is even more remote than choice (1), because the central bank has no role in initial Customer Identification Procedure, at the bank sending funds through it, and unless it has an exceptional large, and efficient, staff, which can quickly conduct the enhanced due diligence investigations that it is bound to encounter, it will only result in major delays, which the banks' customers will find objectionable and unsatisfactory. Also, assuming that such a central bank's inexperienced compliance division will not be operating at peak efficiency for an extended period of time, US banks may find that its initial compliance failures painful, damaging, and exposing them to sanctions and penalties by US regulatory agencies.

I return, therefore, to my original solution, which is Know Your Customer's Customer, or KYCC. Caribbean banks must give onshore correspondents a total and complete window into their own clients' profiles an backgrounds, if they are to be true to a risk-based compliance program, that meets best banking practices. Anything short of that will not give American bankers the confidence that they need to retain all their Caribbean correspondents. Readers are invited to use the two available search boxes on this blog,  to access my previous articles on KYCC.
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 *If US banks add to that KYCC formula, an increase in the efficiency of their in-house KYC, with their own customers, and upgrade their AML/CFT abilities, they will reduce risk to an absolute minimum.