Kenneth Rijock

Kenneth Rijock

Thursday, November 16, 2017

SEC FINES WELLS FARGO'S BROKER-DEALER DIVISION $3.5m FOR AML FAILURES


 The Securities & Exchange Commission (SEC) has levied a $3.5m civil penalty upon Wells Fargo Advisors LLC, the bank's broker-dealer subsidiary, for failure to timely file Suspicious Activity Reports, and other AML issues. Readers who wish to review the complete text of the Cease & Desist Order may access it here.

Wednesday, November 15, 2017

DC COURT SETS ORAL ARGUMENT IN WAKED OFAC APPEAL



The Court of Appeals for the District of Columbia has, sua sponte,* set Oral Argument in the Waked civil appeal of the District Court's adverse decision, regarding their OFAC designations. The case has generated a lot of interest, irrespective of the procedural & substantive issues, due in part to the criminal indictment, and recent change of plea to guilty, of one of the leaders of what the Government refers to as the Waked Money Laundering Organization, a group of legitimate Panamanian companies allegedly engaged in laundering narco-profits of Colombian & Mexican cartels.

Many observers were surprised when the District Court case was filed, wondering of the level of arrogance these known money launderers had, believing that they could prevail in seeking to have OFAC SDN sanctions removed, when classified, incriminating evidence against them would certainly be redacted from any response to a request for information. Moreover, case law definitely favors the Government position.

 Oral Argument has been scheduled for January 29, 2018 at 9:30 AM.   







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* On the Court's own authority, and without a motion or request from the parties.


ALERT ON ANY WEALTHY ZIMBABWEANS MOVING "FLIGHT CAPITAL"


Though the news cycle is barely covering it, due to other more relevant stories, the military has apparently initiated a coup in Zimbabwe, in response to the country's president, Robert Mugabe,  attempt to place his unqualified wife, Grace in the line of succession. Dubbed "Gucci Grace," due to her luxury spending habits, she is a former typist from the secretarial pool, and unfit for office.

Given that Zimbabwe has been wallowing in rampant corruption for decades of Mugabe rule, be alert for any Zimbabwe PEPs seeking to move large amounts of US Dollars (the country's unofficial currency), lest it be eventually seized by the next government. Grace has been seen previously at a number of international financial centers, so you may assume that her supporters, and party loyalists, are already there, moving dirty money. We note that the military in Zimbabwe has sought to control charter flights, but some of the PEPs surely got out in time.

Note that these corrupt players may have second and even third, passports (St Kitts & Dominica), so check the place of birth, to determine true nationality, please. Zimbabwe, with over 90% reported unemployment among adults, needs that stolen cash, and decline to transfer any suspicious funds, referring the matter to your bank counsel, unless you want the negative publicity which exposure of your bank's role will generate.

WHERE IN THE WORLD IS REZA ZARRAB ?


 His trial is scheduled for November 27, but Reza Zarrab, the principal defendant in the pending Federal Iran "Oil-for-Gold" sanctions evasion trial in New York, is missing in action. He has been dropped from the Bureau of Prisons database, showing "released" to inquiries, though the US Attorney's Office has reportedly affirmed that he is still in custody. His attorneys have failed to file the usual pre-trial pleadings. Has he made a deal, and will eventually plead out ? Or will he be quietly sent to the Islamic Republic of Iran, to face the probable death penalty, for stealing billions, in some sort of diplomatic exchange ?

Right now, it is impossible to determine whether Zarrab is in WitSec, the witness protection program, so we must reserve judgment on the wisdom of his legal defense team, in suspending their pre-trial actions. Given the probable strength of the Government's case, pleading out would seem to the best avenue, to avoid a Draconian sentence after conviction, but we are puzzled at this point.

The most important issue is whether others will be indicted, based upon his cooperation, if it is now ongoing, and we imagine a number of potential defendants who are Iranians, Malaysians, and Dominicans share that thought as well.

Monday, November 13, 2017

DEATH THREATS AGAINST PANAMA'S ATTORNEY GENERAL AND ANTI-CORRUPTION PROSECUTORS



The wide reach of the Odebrecht bribery investigation, underway in the Republic of Panama, has resulted in the issuance of multiple death threats, against both Kenia Porcell, the Atttorney General of Panama, as well as several of the Anti-Corruption Prosecutors, who have brought the various cases. These threats confirm the strength of the Government's cases, which includes the sons of Panama's fugitive former leader, Ricardo Martinelli, who both richly deserve a long term of imprisonment for their roles in the bribe scandal.

While the identities of the guilty parties are not known, there are a large number of bribe recipients whose names have been revealed by prosecutors.

 

PARADISE PAPERS REMINDS US AGAIN OF DANGERS POSED BY CAYMAN ISLANDS



The global attention that has focused upon the Cayman Islands, due to the disclosures appearing in the Paradise Papers scandal, is not the first time we have taken a close look at the situation in that Caribbean tax haven, and voiced our concerns. Our previous articles have detailed the risks involved when foreign investors place their assets in the Cayman Islands.

We have covered those issues in depth, but to summarize them:

(1) Cayman insiders have named at least a dozen cases, in which groups of investors have been defrauded or tricked, losing their entire investment, yet Cayman regulators and law enforcement agencies, while investigating those matters, ultimately failed to either arrest the perpetrators, or assist in the recovery of stolen funds. The negligence appears to be even more pronounced when the fraudsters are Cayman Islands residents. Apparently, the fear of a major scandal causes government there to fail to act, to the damage and detriment of the victims. If you do not believe this, try searching Cayman media for stories of local money laundering arrests; I doubt that you will be successful.

(2) While Cayman spin masters have been busy, since the Paradise Papers story broke, with damage control, discussing the virtues of local regulatory agencies, regarding Cayman corporations, many Cayman financial services professionals acquire BVI corporations for their clients, knowing that identification of the beneficial owners of such entities is ritually impossible. Their publicists tout the transparency of the jurisdiction, while their corporate formation specialists use the BVI or Belize to better hide client identities.

The fact that the Paradise Papers showed that, at least for the documents uncovered, compliance is ineffective or nonexistent in the Cayman Islands, is therefore no surprise.

  

Friday, November 10, 2017

WHAT IS THERE IN MARTINELLI'S HABEUS PETITION THAT IS RESTRICTED ?


 The pleadings in former Panamanian President Ricardo Martinelli's Habeus Corpus petition are not available to the public, and we are wondering under what authority the Court has sealed the file. Even the Government's responses are restricted. What could be in the petition that makes it unsuitable for general viewing ?

(1)Does it contain details of Martinelli's prior Confidential Informant status, with a US law enforcement agency ? Is that the reason he was allowed to enter the US, when as a known corrupt former government official, he should have been barred ?

(2) Was Martinelli an asset of an American intelligence service, as was General Manuel Noriega ?

(3) Did the totally amoral Martinelli, his back literally to the wall, expose embarrassing secrets he acquired from his illegal surveillance program, about the US Embassy, or US law enforcement activity in Panama ? No wonder all the pleadings are restricted; even the Government response is blocked, which might mean that its filings also disclose details that are deemed sensitive by those who hold security clearances.

Panamanians are tiring of the Martinelli Miami extradition treadmill; is an agency of the United States Government deliberately delaying the actual extradition ?