Kenneth Rijock

Kenneth Rijock

Monday, January 16, 2017

COMPLAINTS FROM VICTIMS OF PANAMA WALL STREET SCAM CONTINUE TO COME IN


We continue to hear from investors who sent in money to the broker-dealer, Panama Wall Street, SA, shuttered by order of the Superintendency of Securities (SMV). The victims have been told that the Government of Panama has frozen all the assets of the firm, in the Intervention, though the truth appears to be that the company was a Ponzi scheme, and no significant assets were seized. Securities fraud has been alleged.

Panama Wall Street's principal, Joachim Bernard Buse, a citizen of the Netherlands, who previously operated a fictional "High Yield Investment Program (HYIP)," is known to have spent huge sums of investor funds on jewelry, for his Peruvian paramour, and to have made other purchases of expensive personal items.


Persons or entities unknown to this blog have attempted to hack into, corrupt, and otherwise interfere with, previous articles about the fraud committed at Panama Wall Street, but all such efforts have been unsuccessful. Readers who wish to review the Intervention Order against Panama Wall Street SA can find it on previous articles published by this blog.

PANAMA PLACES FURTHER RESTRICTIONS ON FOREIGN NATIONALS

Visa for Panama
The Government of Panama has announced that it will no longer accept visa-free entry of individuals who hold multiple-entry visas from the European Union; they will be required to obtain Panamanian visas prior to their visit. The holders of visas from the UK, the USA and Australia, valid for at least one year, are still allowed visa-free entry. The change is claimed to be an effort to improve immigration controls.

Whether this is an effort to exclude individuals from the developing world, who engage in transporting financial instruments into Panamanian banks, for tax evasion or money laundering purposes, is not known. Add this to the recent refusal of Panamanian banks to open new accounts for foreign nationals, which some observers see as a possible response to the Panama Papers scandal, and it could represent a trend, towards the suppression of money laundering activity in the Republic. Some are pointing to the fine assessed, against Odebrecht, as an example of a sea change in Panama's policies.

 Of course, to be truly effective, Panama will have to actually arrest, try and imprison offenders for money laundering offenses, which is not currently the case in Panama City, where bankers move dirty money with total impunity, working with both foreign money launderers, principally from Venezuela, and Panama's powerful Syrian organized crime syndicate. 

Sunday, January 15, 2017

STOLEN VALOR AND A COMPLIANCE FRAUDSTER FOILED


If you have ever served in the US military in a combat zone, you know what stolen valor is: claiming to have been awarded some of our country's highest awards and decorations, for service in a combat role, when you have not been so designated, with the intent to receive monetary or other tangible benefits as the result. The Stolen Valor Act makes such conduct a Federal crime, and there is nothing more despicable than an individual claiming to have received such an award, when such is untrue, and using that lie for material gain.

Unfortunately, this law is limited to military awards for exemplary service; it does not extend to efforts to cash in on purported civilian government service, or affiliation with those who might have distinguished themselves, while engaged in such service. Now, on to our story.

Recently, a company in the compliance industry was contacted by a firm that wanted to take advantage of the other firm's banking clients, to obtain assistance in finding a bank sponsor, among the firm's clients, who were financial institutions. Apparently, it was because the inquiring firm was unable to secure a sponsor on its own. Members of this firm openly boasted about their close connections with governmental clients, and entities, especially in the intelligence field.

Now, let's take a close look at the firm seeking a bank to sponsor its cards; while their purported qualifications of senior staff are detailed on the company's website, the names of the officers do not appear, making verification of specific work experience impossible. We do know who the CEO is, because he is the one who approached the compliance firm.

A check of this individual's work history shows service at several Florida banks over the years, but also shows his role in a high profile while-collar criminal case against a union president, where the individual, who worked at this union's offices, appears to have received immunity from prosecution, and acted as a confidential informant.

When this person's father relocated to South Florida decades ago, with his family, he Anglicized his family name, from the original Southern European one. This new last name happened to be the exact same as one of America's most prominent, and successful, leaders in the Federal intelligence community. Now, we see the son, since grown up, claiming to be the grandson, or nephew, of this famous intelligence officer, and using that purported relationship to insinuate himself into the confidence of potential clients, including financial institutions.

This is not my conclusion; investigative journalists have made inquiries in the family's genealogy, supplemented it with interviews, and concluded that there is absolutely no family connection, between the famous government official, and the individual claiming to be his grandson; the entire story is fabricated, and a fraud.

Thereafter, we see this individual offering his services, together with his " government connections," to financial institutions suffering under regulatory sanctions, with him promising to obtain a release of such sanctions. He presented documents purporting to show his association with law enforcement agencies, and government regulators, but there was no factual basis for the documents, and they appear to have been altered to include his name.

You know where this is going, I am sure: notwithstanding the payments of six figure upfront fees, none of the banks obtains the promised relief, and his now former embarrassed bank clients lick their wounds in private. Even an American law enforcement agency was conned into advancing license fees for a prepaid credit card project that never materialized, and as a result, a Federal agent was forced to take early retirement, in disgrace.

Yes, the compliance firm declined to work with the fraudster. Since the USA PATRIOT Act of 2001, we have seen a proliferation of companies in the AML/CFT compliance field, and some are indeed posers, totally unqualified to render services to the financial community, but when we see fraudsters, who take improper advantage of banks that are seeking to recover from sanctions and civil penalties, it is time to speak up.




Saturday, January 14, 2017

HAITIANS PROTEST OUTSIDE US EMBASSY, WHILE FORMER REBEL LEADER FACES MONEY LAUNDERING AND DRUG CHARGES IN MIAMI


Haitians marched outside the US Embassy in Port-au-Prince, to protest the arrest, and removal of the former rebel leader, and current Senator-elect, Guy Philippe, to US District Court in Miami. The Indictment, which was originally filed in 2005, was sealed, until the defendant was taken into custody.

 Philippe faces three counts:

(1) Money Laundering Conspiracy.
(2) Conspiracy to Import Cocaine into the United States.
(3) Engaging in Transactions derived from Unlawful Activity.

The defendant could receive as much as a Life Sentence, and since the Sentencing reform Act of 1986, there is no Gain Time in a life sentence, meaning that he would die in Federal Prison. He is being held in Pretrial Detention, considered a flight risk, and because the Magistrate Judge determined that no combination of bail conditions would guarantee his appearance at trial.

A number of Haitian media have noted that treaties in force, between the US and the Republic of Haiti, as well as Haitian law, prohibit the extradition of Haitian nationals, but Federal case law holds that the manner in which an individual is brought before the Court does not affect personal jurisdiction over the person. Trial has been set for the week of February 21, 2017.

SWITZERLAND FREEZES $22m OF PANAMANIANS IN ODEBRECHT SCANDAL


Swiss Authorities have advised that they have frozen $22m, in accounts owned or controlled by four Panamanian nationals in the bribe scandal involving Constructora Norberto Odebrecht SA. Though those individuals have not been named, they are believed to include former Panamanian President Ricardo Martinelli Linares, and his two sons, Ricardo Martinelli Linares, and Luis Enrique Martinelli Linares, whom the Swiss are seeking information upon, with Panama. It is not known whether Martinelli's daughter, Carolina Martinelli Linares, is the fourth account holder.

Longtime readers of this blog will recall that we detailed a special trip that Martinelli took, to Lugano, in the Italian-speaking region of Switzerland, where he allegedly has extensive banking relationships, towards the end of his tenancy as president of Panama.

The Attorney General of Panama has announced that Odebrecht has agreed to pay $59m, to settle corruption charges brought by the government, against it. This is the amount of bribes reportedly paid to Panamanians, to obtain lucrative construction contracts, granted by the Government of Panama. 

US ATTORNEY IN NYC TELLS COURT IT WILL TURN OVER RICHARD CHICHAKLI'S SEIZED MATERIALS


If you have been following convicted sanctions violator (and former Viktor Bout partner) Richard Ammar Chiahakli's pending civil suit* against the Manhattan US Attorney, and the assistant who prosecuted the criminal case, there have been new developments.

In a letter to the Court, dated January 12, 2017,  AUSA Anthony Sun, after detailing the background of the case, made two important points:

(1) The Court lacks subject matter jurisdiction over the action (sovereign immunity).
(2)  The plaintiff cannot obtain a default judgment against the defendants, as a timely-filed pre-motion letter, filed by the Defendants, automatically extended the time for them to respond to the Complaint.

Additionally, the defendants have represented that, since Chichakli's petition for a Writ of Certiorari to the US Supreme Court was denied on October 31, 2016, his criminal conviction is now final, and the US will now turn over all of the seized materials, to either Chichakli, or someone designated to receive them on his behalf. This effectively renders the civil suit moot, once the delivery is made. Chichakli, who will finish his sentence, and be released this year, is incarcerated at Federal Medical Center Devens, in Massachusetts; his medical condition is unknown.
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*Chichakli vs. Bharara, Case No.: 15-04583 (SDNY).

PANAMA REFUSES TO COOPERATE WITH MALTA IN UNLOCKING THE PANAMA PAPERS SCANDAL


Tax authorities, from Inland Revenue in the Republic of Malta, have announced that the Government of Panama has declined to assist it in their investigations into tax evasion, which were initiated due to information released by journalists in the Panama Papers scandal. Tax investigators form Malta have asked to see emails of the law firm of Mossack and Fonseca, who allegedly assisted Maltese nationals evade income taxes, and hide assets.

There are reportedly fifty five active investigations pending in Malta, as the result of data exposed in the Panama Papers. the names of two senior officers have appeared in the press, including Keith Schembri, the Chief of Staff of the Prime Minister, and Minister Within the Office of the Prime Minister, Konrad Mizzi. The disclosures have unleashed a political firestorm within Malta, and there have been calls for the resignation of both officers; one had to endure an internal vote on a No-Confidence Motion.

Apparently, the opaque scheme was extremely well constructed, with offshore corporations controlled by New Zealand trusts; both Maltese officials failed to notify their local tax authorities of these trusts, which is a violation of the law.



The appearance of the names of EU government officials in the Panama Papers has shaken the public's perception that its officers were free from corruption, as there exists a strong presumption that these non-transparent corporations were formed to secrete bribes and kickbacks. More importantly, the total and complete lack of cooperation, on the part of the Panamanian authorities, is a telling sign that Panama intends to keep its dirty little secrets close at hand, lest it lose out on the lucrative business in banking the criminal proceeds of corrupt PEPs.