Monday, March 3, 2008

US slams Venezuela on money laundering

US slams Venezuela on money laundering
1 March 2008

The US Department of State, in its just-released 2008 International Narcotics Control Strategy Report has, in uncharacteristically direct language, pointed out both Venezuela's central drug trafficking role, and its utter failure to rein in rampant and systemic money laundering and corruption. The recent wave of abrupt closures of bank accounts of Venezuelans by prudent bankers in North America and in Western Europe will most certainly increase when they read the salient portions of this report, which clearly places the country, and its nationals, in the category of constituting an unacceptable risk for any financial institution wishing to keep its banking license. We excerpt some of the more important sections of the document for the benefit of our readers.
Please note that these are all direct quotes; they have not been edited in any way:
Venezuela is one of the principal drug-transit countries in the Western Hemisphere, with an estimated 250 metric tons of cocaine passing through the nation annually.
Venezuela's proximity to drug producing countries, weaknesses in its anti-money laundering regime, refusal to cooperate with the United States on counter-narcotics activities, and rampant corruption throughout the law enforcement, judicial, banking and banking regulatory sectors continue to make Venezuela vulnerable to money laundering.
The main sources of money laundering are from proceeds, generated by cocaine and heroin trafficking organizations and the embezzlement of dollars from the petroleum industry.
In spite of the advances made with the passage of the Organic Law against Organised Crime in 2005, major gaps remain. Two years after promulgation, not a single case has been tried under the new law.
Widespread corruption within the judicial and law enforcement sectors also undermines the effectiveness of the law as a tool to combat the growing problem of money laundering.
Terrorist financing is not a crime in Venezuela.
There have been only three money laundering convictions in Venezuela since 1993, and all of them were narcotics-related.
There were no prosecutions or convictions for money laundering in 2007, and this is unlikely to change in 2008.
If the Government of Venezuela does not criminalise the financing of terrorism, the Unidad Nacional de Inteligencia Financiera [Venezuela's Financial Intelligence Unit] faces suspension from the Egmont Group in June 2008.I suggest that this list should be posted on the wall outside every bank in Venezuela, so that the customers will read it, promptly close all their accounts, and refuse to do business with a banking sector that allows such a situatuion to exist.

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Tuesday, February 26, 2008

US to go after billions in laundered Venezuelan money

Financial Crime Consultant, for World-Check
US to go after billions in laundered Venezuelan money
Kenneth Rijock‏
February 26, 2008


Reliable Washington sources report that the Treasury Department of the United States, and other government agencies, whilst searching for assets held in financial institutions in connection with the ongoing Global War on Terrorism, have identified billions of dollars of laundered funds worldwide, all secreted by key senior Venezuelan government officials, a few military officers, and a large number of Politically Exposed Persons (PEPs), for their own corrupt use and benefit, and for that of designated global terrorist organisations, on the express orders of President Hugo Chavez.

The US now reportedly intends to officially name Venezuela as a State Sponsor of Terrorism, and seize all the hidden overseas accounts it has located. Miami banks alone hold several billion dollars of illicit money, and accounts have also been identified in places like China, Andorra, and Panama, and most of the major offshore financial centres. The funds rightfully belong to the people of Venezuela, as they were looted from government accounts, taken as bribes and kickbacks, and earned from narcotics trafficking activities aided and abetted through illegal governmental involvement. The other individuals targeted in this investigation are members of the Bolivarian Elite, a group of businessmen close to Venezuelan President Hugo Chavez Frias, and his family, and whose aim is to keep his corrupt regime in power.

These Bolivarians have earned obscene amounts of money through corrupt government contracts, outright theft of government assets, and favoured transactions that have resulted in their acquisition of major assets that rightfully belonged to the Republic of Venezuela. The individuals involved will most likely face money laundering charges in the United States , which carry a 20-year sentence of imprisonment, terrorist financing charges,even potential Racketeering (RICO) counts, though this entire scenario, which has effectively destroyed the Venezuelan economy, was ordered, planned and engineered by President Chavez, as a part of his misguided Socialist economic agenda. Will he be indicted, as other heads of state of countries that border the Caribbean have. Only time will tell.


The United States has found active financial and political links between the Venezuelan government and the following designated global terrorist organisations, all of which operate within Venezuelan territory, with the explicit permission and support of the Chavez government:

Hizballah
Hamas
Al-Qaeda
FARC
ELN
ETA
Iranian Revolutionary Guard Corps

Moreover, the illegal fund-raising activities these groups engage in, whether they be narcotics trafficking, arms smuggling, extortion, human smuggling, or other types of crime, are allowed to flourish, even though some of the acts take place in, or through, Venezuelan territory. Frankly, we welcome any action by the United States against these terrorist groups, which have been operating freely in Venezuela for years. the FARC, for example, has well-established base-camps on the Colombian border, so that its leadership can evade the Colombian Ejercito, that country's powerful army. Do you not remember this writer's recent piece on the placement, by Venezuela, of missiles on the Colombian border? Those weapons are in direct support of the FARC.

Several of the senior Venezuelan money launderers must have been made aware recently that there is a major pending investigation, because they are rapidly retaining senior criminal defence attorneys for all criminal prosecutions and civil proceedings which are soon to come. May we tactfully suggest that they refrain from wasting their money in this way, because:

These experienced attorneys are well known for defending drug defendants, a fact that will not escape a prosecutor, judge or jury. It does not help their case one bit to be associated with known drug lawyers, and it could hurt you in a variety of ways.

They may get better deals by negotiating directly, early on, and not making an adversarial matter out of it, which causes the parties to become polarised, and may preclude any subsequent settlement. Remember that many great lawyers who have strict rules against clients cooperating with the US Attorney's office. Those lawyers do not have to do your time when a sentence of incarceration is handed down.

International bankers would do well to upgrade country risk for Venezuela to high-risk, to review all high net-worth Venezuelan accounts to rule out PEP status, and to close those that are identified as PEPs forthwith. All identification documents should be reviewed, to ensure that compliance policy has been scrupulously observed, for you will be getting a visit from law enforcement and/or regulators, or be served with a subpoena if you have a Venezuelan client base. We have been advised that many high volume Venezuelan accounts have been closed within the last 15 days. Latest accounts from inside Venezuela indicate that the country's gold reserves have disappeared. Do you need any additional red flags to raise the risk level to maximum?

We congratulate President Chavez, for destroying the economy of his once-flourishing country. Only Fidel Castro has done a better job of national ruination. Perhaps when Venezuela implodes from the shock of being placed in the same terrorist category as Iran and North Korea, its citizens blocked from visiting or trading with the US, and all Venezuelans globally stigmatized on account of one man, their elected president-for-life.

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