Broker-dealers in New York who were unable to attend my presentation on this topic on Monday can see an outline of some of the techniques discussed here. I hope to present this lecture again in New York later this year, to afford you the opportunity to see the complete material live and in person. Please direct any questions or comments to me.* 

It is the moment of truth: when you reach the decision that, for a number of reasons, the compliance programme where you work is ineffective, and management has no desire to correct the deficiencies. At that point, you are seriously considering sending in a letter of resignation, and getting out of there before the roof falls in. What are the red flags of an untenable compliance job ? Whilst I am certainly no expert in employer-employee relations, I believe that, if you have these issues, you need to get out of that company or bank, and now.

The section on the Republic of Panama in the 2010 US State Department International Narcotics Control Strategy Report* [INCSR] was highly critical of that country's AML/CFT enforcement programme, and I have to admit that I agree with its conclusions. We did not see the Government of Panama arrest any of the major money launderers who are known to ply their dark trade in that country's financial system, during the past year. Official government statistics, obtained by the US, show that only 9 money laundering investigations were opened in 2009**. I will summarise the important provisions of the INCSR with regard to Panama below. Should you adjust country risk for Panama ? Read on, and see why, in my opinion, compliance officers tasked with assessing country risk must now raise it for the Republic of Panama.

A Member of the United States Congress from Arizona, Gabrielle Giffords, has introduced  HR 4966, which appears to be an attempt to plug the present loophole that exists with stored value cards. They may, at present, be freely carried across international borders, with an infinite amount of money stored within, and no reporting of the event is required by law. Many commentators have opined that this easy bulk cash smuggling method must be regulated, as stored value cards are increasingly showing up in bulk in international trade transactions.   

The National Drug Intelligence Centre* [NDIC] was published its annual National Drug Threat Assessment. Whlist much of this report is off-topic for most of our readers, the Illicit Finance chapter is recommended reading. It can be accessed below.

The US Treasury has sanctioned* 54 "narcotics traffickers, assassins, money launderers and enforcers" of Mexico's Gulf Cartel and Los Zetas as Specially Designated Narcotics Traffickers [SDNT]. The Gulf Cartel and Los Zetas have been previously designated as Kingpins. Since most of them operate under various false identities, it is suggested that you circulate the photographs amongst your teller staff, if your US bank has a substantial number of Mexican expats. Photographs of the sanctioned individuals can be found on the OFAC page.**

We have already discussed the threat posed by an undiscovered Ponzi scheme that had its principal accounts at your bank. Recent litigation teaches us that many of the Ponzi victims (those that were defrauded) are now seeking damages from those financial institutions who unwittingly facilitated the fraud by banking the fraudsters. Whilst this is serious, there's something even more sinister; read on for the unexpected sting.

The State Minister of the Kingdom of Bahrain is reportedly amongst those under investigation for a number of major crimes, including money laundering, protecting money launderers, and illegally obtaining funds. He is also alleged to have made a delivery of images of sensitive Bahraini military installations to the Iranian security services. Reports from local media say that the minister, who has been dismissed from his post, was involved in laundering narcotics proceeds originating in Colombia, Azerbaijan and China, which were ultimately received by the Iranian Revolutionary Guard. The minister was originally detained by the authorities after an investigation by the Anti-Money Laundering Directorate, but was later released for what were described as "health reasons." He has asserted his innocence in public statements. The maximum punishment for money laundering in Bahrain appears to be five years imprisonment, plus a fine.

The United States Supreme Court yesterday denied* Panamanian General and former dictator Manuel Antonio Noriega Moreno a rehearing upon his Petition for a Writ of Certiorari, which clears the way for his extradition to France, to face money laundering charges there. The high court had already denied his petition for Cert.** His attorneys had argued unsuccessfully that his recognised status as a Prisoner of War required his repatriation to his native Panama, following the completion of his sentence in the United States. Noriega was already sentenced in absentia for money laundering in France, but the French Government has indicated that it will try the case again upon his extradition.

The Law Society of England and Wales* has recently published a warning to those members who are engaged in litigation, stating that money launderers may seek to accomplish their illicit goals through the lawyers' bank accounts. The scheme involves a new client who engages the attorney for the purpose of collecting a purported debt. The "debtor," very early on in the litigation, or possibly even before suit is filed, makes arrangements with the "creditor's" attorney for payment. This money (which is really the proceeds of criminal activity) is received and cleared througn the lawyer's account, and paid out to the client by the attorney's cheque, effectively entering the financial system.