Tuesday, March 19, 2024

DON'T LOOK TO THE UNITED STATES TO SOLVE EUROPE'S BLOODY CITIZENSHIP BY INVESTMENT PASSPORT MONEY LAUNDERING NIGHTMARE: EU, TAKE ACTION FORTHWITH



I happen to know more than a little about both money laundering and the employment of of Citizenship by Investment (CBI) passports to facilitate it. I was a career money launderer in the "Tax Havens" (read: the money laundering republics) of the East Caribbean states, five of which sell CBI passports, for a decade, and I worked closely with the man many call the father of St. Kitts' groundbreaking passport program, the late William Herbert, Jr., former Foreign Minister of St. Kitts & Nevis, until his untimely demise, reportedly over the alleged loss of funds belonging to the IRA.

The news that the Members of the European Union, having had more than enough with the use and abuse of CBI passports, to engage in money laundering, terrorist financing, and financial crime, is contemplating terminating all visa-free access by the holders of those prized identity documents, is music to me ears. The reason this pleases me is that, since the United States has deliberately, as a matter of national policy, ignored the severe money laundering threats posed by CBI passports for decades, someone has finally stepped up to deal with this tool of crime.

For decades, yours truly has loudly blown the whistle in the US, to both its law enforcement agencies, as well as its secretive intelligence community, about the clear & present danger of CBI passposts, but due to what is certainly a State Department policy of not appearing to be an overbearing superpower, America has kept its hands off what are basically Caribbean jurisdictions whose corrupt and greedy leadership has thrived on dirty money spent on CBI passports, both in the purchase thereof, and their subsequent use to facilitate global money laundering. The US has even gone so far as to decline to pursue the systemic CBI-enabled money laundering operation, by American citizens, in the Republic of Malta, Europe's sole holdout in the dirty business of CBI sales to criminals.

We welcome Europe's belated, but necessary,, efforts to shut down this important loophole, through which money launderers drive a truck full of the proceeds of crime in, and through, that region's financial institutions, and hope that the EU's actions will result in delivering a fatal blow to East Caribbean state (and Maltese) CBI-facilitated financial crime for once and for all. Frankly, I am tired of watching the laundrymen use those passports to clean the proceeds of crime in the European financial structure.

Sunday, March 17, 2024

IS IT NOW TIME TO FINALLY END VISA-FREE TRAVEL TO THE EU FOR HOLDERS OF CITIZENSHIP BY INVESTMENT PASSPORTS, DUE TO SYSTEMIC AND INTENTIONAL DUE DILIGENCE FAILURES TO SCREEN APPLICANTS?

                                 


When I told St. Kitts then-Foreign Minister, WILLIAM HERBERT, JR.,* that my Medellin Cartel-linked cocaine trafficking clients could no longer qualify for his newly-independent nation's groundbreaking Citizenship by Investment (CBI) passport program, due to their indictment in the United States. Dr. Herbert advised me to simply find a cooperating law enforcement agency somewhere, and obtain Certificates of Good Standing for the required SKN due diligence. His actual knowledge that my clients were completely unacceptable as applicants, but that he still wanted to sell them passports, was only my first encounter with what was to be an industry that regards the lucrative cash flow it brings into a developing country, and its vendors, as more important than being a proper gatekeeper to bar career criminals, corrupt PEPs, terrorist financiers, and the Usual Suspects, all of who are seeking entry into the EU, and elsewhere, without visa scrutiny of their background, hidden agenda, and dark goals.

Due diligence, at Customer Identification, for applicants at the five East Caribbean states that have CBI passport programs, and at the Republic of Malta, the last EU Member to still sell such passports, is an utter failure, and a continuing insult perpetrated upon the European Union, which accept them for entry visa-free. Whether they be Russian organized crime members, citizens of countries designated as State Sponsors of Terrorism, corrupt foreign officials from states that are known kleptocracies, or just garden-variety international fraudsters, the wrong people seem to get approved, time after time, by the dysfunctional CIP programs the CBI vendor nations operate.

Unless and until the CBI states move to external, onshore due diligence, by reputable compliance organizations, that will be completely free of corrupt influence, it is high time to revoke the visa-free EU entry status that these passports freely come with. All the other nonsense, about the virtues that these passports convey to their holders, will fall by the wayside, as unfettered EU access is the single most important that CBI passports possess, and without it, their attractiveness to purchasers will disappear, like the cool breeze early on a Caribbean morning.
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*Dr. Herbert would later meet a reported violent end, allegedly at the orders of a terrorist client who wrongly suspected him of stealing money earmarked for weapons purchases, but actually confiscated by an agency of His Majesty's Government.

Saturday, March 16, 2024

FEDERAL COURTS NOW REQUIRE THAT JUDICIAL ASSIGNMENTS BE RANDOMLY ASSIGNED DISTRICT-WIDE, AND NOT TO JUDGES IN DIVISIONS WHERE FILED THAT CONTAIN ONLY ONE DISTRICT JUDGE



To: Judges, United States District Courts District Court Executives Clerks, United States District Courts From: Judge Chair, Gregory Vanon Tatenhove Court Administration 5 and Case Management RE (GUIDANCE FOR CIVIL CASE ASSIGNMENT IN THE DISTRICT COURTS At its March 2024 session, the Judicial Conference, upon recommendation of the Committee on Court Administration and Case Management (CACM), approved the following policy regarding case assignment practices: District courts should apply district-wide assignment to: a. civil actions seeking to bar or mandate statewide enforcement of a state aw, including arule, regulation, policy, or order of the executive branch ora state agency, whether by declaratory judgment and/or any form of injunctive relief; and b. civil actions seeking to bar or mandate nationwide enforcement of a federal law, including a rule, regulation, policy, or order of the executive branch or a federal agency. whether by declaratory judgment and/or any form of injunctive relict. On behalf of the CACM Committee, I write to share the attached Guidance for Civil Case Assignment in District Courts. The guidance supports implementation of the above policy, which is applicable in instances when the remedy sought has implications beyond the partes before the court and the local community, and the importance of having a case heard by a judge with ties to COMMITTEE ON COURT ADMINISTRATION AND CASE MANAGEMENT OF THE JUDICIAL CONFERENCE OF THE UNITED STATES Gregory F. Van Tatenhove, Chair Robin S. Rosenbaum Joseph F. Bianco Brendan L. Shannon Nora Barry Fischer Leo Sorokin John Z. Lee Kathryn H. Vratil Trevor N. McFadden Brian C. Wimes Susie Morgan B. Lynn Winmill Michael J. Roemer Melissa Aubin, Clerk Representative David A. Levine, Staff March 15, 2024 MEMORANDUM To: Judges, United States District Courts District Court Executives Clerks, United States District Courts From: Judge Gregory Van Tatenhove Chair, Committee on Court Administration and Case Management RE: GUIDANCE FOR CIVIL CASE ASSIGNMENT IN THE DISTRICT COURTS At its March 2024 session, the Judicial Conference, upon recommendation of the Committee on Court Administration and Case Management (CACM), approved the following policy regarding case assignment practices: District courts should apply district-wide assignment to: a. civil actions seeking to bar or mandate statewide enforcement of a state law, including a rule, regulation, policy, or order of the executive branch or a state agency, whether by declaratory judgment and/or any form of injunctive relief; and b. civil actions seeking to bar or mandate nationwide enforcement of a federal law, including a rule, regulation, policy, or order of the executive branch or a federal agency, whether by declaratory judgment and/or any form of injunctive relief. On behalf of the CACM Committee, I write to share the attached Guidance for Civil Case Assignment in District Courts. The guidance supports implementation of the above policy, which is applicable in instances when the remedy sought has implications beyond the parties before the court and the local community, and the importance of having a case heard by a judge with ties to Guidance for Civil Case Assignment in the District Courts Page 2 the local community is not a compelling factor. And it provides general guidance in civil case assignment practices. ‘The guidance is predicated on the Judicial Conferences long standing policies supporting the random assignment of cases and ensuring that district judges remain generalists. The most crucial tool in achieving these policy goals is the case assignment practices or methods employed in dividing the business of the court. Case assignment practices or methods that do not reflect the longstanding Judicial Conference policy of random case assignment tend to undermine the independence of the branch and the trust of the public in the judiciary. “These policies and the accompanying guidance inform the district courts” statutory authority and discretion to divide the business of the court pursuant to 28 US.C. § 137. They should not be viewed as impairing a court’s authority or discretion. Instead, they set out various ways for courts to align their case assignment practices with the longstanding Judicial Conference policy of random case assignment. Simply put, these policies should serve the purpose of securing a “just, speedy, and inexpensive determination of every action and proceeding.” Fed. R. Civ.P.1

ARE YOU ATTENDING NEORAMA'S APRIL 2 SEMINAR ON TRADE-BASED MONEY LAUNDERING ? I WILL BE A FEATURED SPEAKER ON TBML



DISTURBING DEVELOPMENT; HOUTHI LEADERS MEET WITH HAMAS, PIJ AND PFLP, TO COORDINATE OPERATIONS

                        


Media linked to official Palestinian sources is reporting that the Houthi leadership has conducted a joint strategy meeting with representatives of HAMAS, PALESTINIAN ISLAMIC JIHAD, and the POPULAR FRONT FOR THE LIBERATION OF PALESTINE. These are all designated terrorist organizations. The subject matter of the meeting was said to be coordination of attacks upon Israel, although Houthi missiles and drones have not been discriminating in the group's efforts to destroy merchant shipping bound for Europe with Asian consumer goods; Shipping not destined for Israel has been repeatedly hit with lethal force.

Whether this is an indication that these Palestinian organizations will join the Houthis in attacking shipping in the region is not known, but the fact that such a meeting took place raises the chances that Hama and the PIJ, who posses missile technology, will bring them to bear on shipping transiting the region. Risk managers will now be factoring this new development into their estimates of threat levels facing shipping.

Of course, you can expect that insurance costs for coverage will now skyrocket, that some shippers will now even redline the Suez route altogether, and that the insurance marketplace will now see the entry of new, opportunistic players in the industry, seeking to impose unusually high rates, for financial gain.

Add to all this the latest information, that container shipping pricing is widely fluctuating, due to the resulting chaos, all of which is good news for TBML laundrymen, as compliance officers conducting transaction monitoring simply cannot keep up with rapidly unfolding shipping industry developments, and dirty money is most certainly moving within payments undetected.

Friday, March 15, 2024

NEW HOUTHI ACTIONS POTENTIALLY FURTHER ENDANGER SAFETY OF CREW MEMBERS OF SHIPPING IN REGION



Two new, even more ominous, events, involving the Houthi terrorists that have been attacking merchant shipping in the Red Sea/Gulf of Aden/Indian Ocean region, significantly raise risk levels for crew members on board those vessels.

First, a senior Houthi leader, in a major press conference held inside the Houthi-occupied sector of Yemen has promised that any Israeli-bound shipping will be attacked, even if it takes the circuitous Cape of Good Hope route around Africa to avoid missiles and drones. This threat broadens the risk area that shipping originating in East Asia now encounters. Also, given that Houthi attacks on EU-bound shipping not destined for Israel, though erroneously claimed by the terrorist group to be in that category, means that it considers all shipping to be a target. The safety of the Cape route is no longer assured.

Second, an even more disturbing, is the news that the captain and crew of a seized vessel have been delivered to Hamas. Although details of this act are not available, this adds a new and frightening dimension to the situation. How are shipping owners to recover their crew members with an degree o certainty, even if ransom is paid to release their vessels? Shipping companies having to deal with Hamas is frightening.

All these new factors, which will take the risk factors of shipping consumer goods, and energy, through the region, to a new and dangerous level, will only set off alarms at maritime insurance firms, as well as at the general headquarters of companies that ship goods through the area. Expect these new developments to further aid individuals engaged in trade-based money laundering (TBML), as they serve to increase uncertainty in pricing, insurance, and cost estimates.

Thursday, March 14, 2024

COMMUNITY BANKS AT INCREASED RISK FROM MONEY LAUNDERERS DUE TO INCREASED AML/CFT AT LARGE, REGIONAL FINANCIAL INSTITUTIONS




As a money launderer for more than a decade, I always followed what we call the Path of Least Resistance, when it came to targeting financial institutions.That means, whenever AML compliance became more efficient in one sector of the financial world, I moved on to areas where there still existed major gaps. Given that large American banks have now spent a considerable amount of time, and their budgets, in crafting compliance programs that are not only effective, but are continually upgrading their systems, you can expect that local and community banks are in the laundrymens' sights, as vulnerable targets.

Where's why:
1. Budgets in community banks are typically small on training, with a major portion being conducted in-house to save money. Advanced money laundering techniques and methods, especially tradecraft that has become known to be in use of late, are not taught, and therefore frontline compliance officers are unaware of obscure and esoteric methods, and ignore their indicia when seeing them during Transaction Monitoring.

2. The typical salaries of compliance officers at local and community banks are rarely at the level that they are at major financial institutions. Therefore, the best, and most capable & experienced, talent goes elsewhere. Until and unless this changes, community banks will not attract those compliance officers who can identify & interdict, in real-time, advanced money laundering operations passing fund through the bank.

3. The latest, and most effective, software platforms and programs available in the industry, are often not adopted for a extended period of time, due to a lack of funds in the current annual compliance budget. There must be a contingency fund available, should new technology appear, so that it is purchased the same year it becomes available.

It is humbly suggested that leadership at local and community banks set aside sufficient budgets to teach their staff advanced AML/CFT techniques, with external training, and pay them a competitive salary. Failing that, expect to see further penetration by money launderers who know a golden opportunity when they see it. You also must keep completely current on emerging software tools, as they appear. Expand your budget to meet these challenges, even if it means to reduce distribution of profits to shareholders. Otherwise, expect to get hit by money launderers, with the resultant negative publicity, regulatory fines and penalties, and impact upon your customer base.

Monday, March 11, 2024

ALERT: COUNTERFEIT VENEZUELAN GOVERNMENT BONDS ARE BACK IN EUROPE


An email this morning from a reader in Poland reminded me that the counterfeit Venezuelan government bond scam is alive and well in the European Union. The originals of those bonds were cashed in years ago, and these color copies are being hawked to unsuspecting marks. Do Not trust ANY Venezuelan bonds, or purported official financial instruments, that assert that they are valid obligations of the Bolivarian Republic of Venezuela. You are strongly urged to read my article entitled " Avoid all Venezuelan government Bonds and Instruments, as Most are Bogus," https://rijock.blogspot.com/2014/04/avoid-all-venezuelan-government-bonds.html
(April 27, 2014)

Saturday, March 9, 2024

HONG KONG'S IMPENDING ENACTMENT OF ITS DOMESTIC SECURITY LAW MEANS FOREIGN COMPLIANCE OFFICERS HAD BEST REFRAIN FROM TRAVEL THERE FOR ENHANCED DUE DILIGENCE INQUIRIES



In case you aren't paying attention to news from China, Hong Kong's draconian Domestic Security Law, which provides for Life Sentences for those convicted of a number of offenses, is about to become law. Given that China takes the efforts of compliance officers to do a deep dive into Chinese companies as a breach of national security in many instances, any Western compliance officers who choose to travel there, to pursue enhanced due diligence inquiries, had best rethink such a trip.

There is a real possibility that you might step on the toes of some Chinese company with powerful friends in government, or which needs to cover up systemic corruption, resulting in your arrest, summary trial, and imprisonment. It's not worth the personal risk, believe me, and do not buy into the PR statements that other countries have the same laws; China does NOT allow either a fair trial or Due Process in what it regards as political cases. Delegate your workload to HK residents, and do not go in person.

Friday, March 8, 2024

TRIAL JUDGE DECLINES TO SET ASIDE MONEY LAUNDERING JURY VERDICT FOR BVI PREMIER ANDREW FAHIE, CITING NO FACTUAL BASIS EXISTS. HE FACES A 10-YEARS-TO-LIFE SENTENCE IN MIAMI FEDERAL COURT


The overblown brouhaha concerning allegations that there was no unanimous jury verdict convicting British Virgin Islands Premier ANDREW FAHIE of several crimes , including money laundering and cocaine trafficking, appears to have been much ado about nothing. The sentencing judge interviewed one of the two jurors who purportedly claimed she did not find him guilty on all counts, and she testified otherwise; the other juror pointedly evaded appearing before the Court, and the District Judge ruled that the conviction, after a jury trial, would stand. Was this simply a last-ditch effort by a corrupt BVI government official who was finally caught in the act? The evidence adduced at trial was, from an objective viewpoint, overwhelming. Not "my first rodeo," he said, but it seems to be now his last foray into the world of facilitating narcotics crime.


Fahie now awaits the Court's final decision; he will receive anywhere from a decade in Federal Prison to a Life Sentence, joining such other senior officials as the leaders of Panama and the Turks & Caicos Islands, who were also convicted and have gone before him to serve Federal time. The case put a dark spotlight upon the British Virgin Islands, home to the opaque corporations that every compliance officer dreads seeing in a due diligence inquiry, as he or she can never be sure if the ultimate beneficial owner is on the OFAC list, a known white collar criminal, or a terrorist financier.

Whether Fahie now will choose to identify some of the other bad actors in BVI government, or elsewhere in the East Caribbean states, we cannot say, but if he doesn't qualify for a Rule 35 Sentence Reduction by doing just that, he may die in custody. Other corrupt Caribbean leaders are certainly not sleeping soundly tonight.

Thursday, March 7, 2024

ALERT ON WEALTHY HAMAS PEPS ESCAPING TO EGYPT; WHERE WILL THEY NOW SHOW UP OPENING BANK ACCOUNTS?



Middle East media is now reporting that a large number of powerful Hamas officials, and the immediate family members of other senior leaders have bribed their way out of Gazam at the Rafah Crossing, into Egypt to escape capture or death by the attacking Israel Defense Forces. Apparently they can afford the going rate, several thousand US Dollars. These terrorist leaders, as well as the Politically Exposed Persons who are the relatives of others, will be traveling abroad, most likely with Jordanian or Lebanese passports, and given that their wealth constitutes terrorist funds, exercise extreme care in approving ANY Arabs with Palestinian accents and using slang common in the Territories, lest your bank ends up catching a criminal charge in the United States of Providing Material Support to a Designated Terrorist Organization, due to the US currency, or ends up targeted by the State of Israel.

Media articles have warned that relatives of these Hamas members are known to have fled Gaza through Egypt:

Hamas supreme leader, YAHYA SINWAR
Hamas Police spokesman, AYMAN AL-BATANJI
Hamas Polit-bureau member, SAMEH ELSRAJ
Hamas senior official, AKIL ALHINDI

Wednesday, March 6, 2024

ATTACK ON PHILIPPINES RESUPPLY VESSEL, IN SOUTH CHINA SEA, MAY FURTHER RISE RISK LEVELS FOR EU-BOUND SHIPPING ALREADY DISRUPTED IN THE RED-SEA/GULF OF ADEN REGION, HELPING TBML



Already beset with multiple problems, due to the Suez/Red Sea situation, this week the Chinese Coast Guard attacked a Philippine resupply vessel enroute to that country's EEZ with dual water cannon, shattering the ship's windshield, and injuring crew members. Trillions of dollars of consumer goods transit this route every year, en route to European consumer markets, and if risk levels are judged to significantly increase, we may be looking at yet another trade disruption situation to add to existing problems in Suez, Panama, and the Black Sea.

The Philippines is a treaty ally of the United States, which has conducted extensive Freedom of navigation exercises in the South China Sea, and which may now choose to pursue an even more active role in confronting China's move to control the region, which it illegally claims is its sovereign territory, notwithstanding that there is no historical basis for the same, and which has interfered with lawful claims of many of its East Asian neighbors.

Will insurance rates rise, or routes to Europe from Asia be modified to avoid the region ? if this happens, you can bet that laundrymen running TBML programs will most certainly use this additional trade disruption to successfully move their clients' criminal proceeds within trade transactions.