Illinois is Broke, Don’t Bother with a Lottery Ticket

Posted on June 20, 2017June 20, 2017 by Denise Simon

No wonder the Obama’s chose not to move back….seems that community organizing resulted in a financial collapse…Rahm? You have a call holding on line 3.

Illinois careens into financial meltdown – and not even the lottery is safe

Illinois is grappling with a full-fledged financial crisis and not even the lottery is safe – with Republican Gov. Bruce Rauner warning the state is entering “banana republic” territory.

Facing billions in unpaid bills and pension obligations, the state is hitting a cash crunch that is rare even by Illinois standards.

A top financial official just warned 100 percent of the state’s monthly revenue will be eaten up by court-ordered payments. Rauner is calling a special session of the Democrat-led General Assembly in a bid to pass what he hopes will be the first full budget package in almost three years.

And Illinois will – literally – lose the lottery if the budget fails.

The state lotto requires a payment from the legislature each year. The current appropriation expires June 30, meaning no authority to pay prizes. In anticipation of a budget deadlock, the state already is planning to halt Powerball and Mega Millions sales.

“It is disappointing that the legislature’s inability to pass a budget has led to this development and will result in Illinois lottery players being denied the opportunity to play these popular games,” Illinois Lottery Acting Director Greg Smith told Fox News.

“We’re like a banana republic,” Rauner said earlier this month, after the General Assembly failed, yet again, to pass a budget package by the regular session deadline. “We can’t manage our money.”

The governor has called for a special session starting Wednesday. The state so far is operating on a series of stopgap spending packages.

But the problems are years in the making, caused in large in part by the state’s poorly funded pension system— which led Moody’s Investors Services to downgrade the credit rating to the lowest of any state. The state currently has $130 billion in unfunded pension obligations, and a backlog of unpaid bills worth $13 billion.

Reports have suggested the state could be the first to attempt to declare Chapter 9 bankruptcy — but under the law, that’s impossible unless Congress gets involved.

“Nobody here in Illinois is considering bankruptcy—first of all, it’s not allowed,” said Steve Brown, press secretary for Illinois House Speaker Michael Madigan. “Second of all, it would damage the reputation of the state and it’s just not necessary.”

U.S. Sens. Dick Durbin and Tammy Duckworth, both Democrats from Illinois, declined to respond to Fox News’ request for comment on whether they would consider getting involved in introducing a measure allowing state bankruptcy.

“Illinois is the fiscal model of what not to do,” Rep. Peter Roskam, R-Ill., told Fox News, while not commenting on the bankruptcy question. “This avoidance in behavior toward dealing with our challenges is what leads to the devastating impacts we are seeing today.”

Just last week, the Illinois comptroller, who is responsible for paying the state’s bills, warned the office would be paying out 100 percent of Illinois’ monthly revenue, leaving negative funds for “discretionary spending. ”

But Rauner claims the Republicans have a new plan that could remedy the state’s crippling financial situation.

“Republicans in the General Assembly have laid out a compromise budget that I can sign,” Rauner said, calling it a “true compromise.”

The plan incorporates reforms like property tax relief, term limits, and spending caps, which have caused an “ongoing confrontation” between Madigan and the governor, one Republican leader told Fox News, adding that the two have been in a “stalemate” since Rauner took office two years ago.

“Gov. Rauner inherited this financial mess when he took office, and his proposals have been met by resentment from the speaker,” Deputy House Republican Leader Dan Brady said.

Brady added, “we are asking that the speaker allow for a date and a vote before June 30.”

But Brown told Fox News the governor isn’t making enough concessions.

“He’s not walking many back—the financial issues are serious enough, and he’s forcing things that have nothing to do with state government,” Brown said. “The biggest problem here is that the governor keeps associating a lot of things that do not have anything to do with the budget.”

Rauner has pushed for structural reforms, government consolidation and pension reform—some components that were able to pass on the Senate side.

“The people and businesses of Illinois deserve stability, not this ongoing chaos,” Senate President John J. Cullerton, a Democrat, told Fox News. The Illinois State Senate approved a balanced budget before the initial May 31 deadline that “matches” the governor’s spending proposal.

If the General Assembly fails to pass a budget package, they do have an option to pass another stopgap package, which lawmakers say is an option, but “not a good one.”

“We have a very real deadline looming,” Senate Republican Leader Christine Radogno told Fox News. “The alternative to not finding a compromise will be devastating to Illinois.”

The Associated Press contributed to this report.

The Slow Death of Britain and Europe

Posted on June 20, 2017June 20, 2017 by Denise Simon

There have been a number of terror attacks in recent weeks in Britain and across Europe. No one is willing to discuss the causes for fear of retribution by migrant groups, religious organizations and government leaders.

The most recent attack occurred when Darren Osbourne, originally from Whales rented a van and ran into several people outside the Finsbury Park mosque killing one and injuring several others. He is being charged with terror activities. Islamists have been waiting for this reckoning and the powder keg continues to smolder.

The Finsbury Park mosque has a nasty history.

*** Moving on to yet another secret in Britain…

Why Did British Police Ignore Pakistani Gangs Abusing 1,400 Rotherham Children? Political Correctness

A story of rampant child abuse—ignored and abetted by the police—is emerging out of the British town of Rotherham. Until now, its scale and scope would have been inconceivable in a civilized country. Its origins, however, lie in something quite ordinary: what one Labour MP called “not wanting to rock the multicultural community boat.”

Imagine the following case. A fourteen-year old girl is taken into care by the social services unit of the town where she lives, because her parents are drug-addicted, and she has been neglected and is not turning up in school. She is one of many, for that is the way in Britain today. And local government entities—Councils—can be ordered by the courts to stand in for parents of neglected children. The Council places the girl in a home, where she is kept with others under supervision from the social services department. The home is regularly visited by young men who try to entice the girls into their cars, so as to give them drugs and alcohol, and then coerce them into sex.

***

The girl, who is lonely and uncared for, meets a man outside the home, who promises a trip to the cinema and a party with children of her age. She falls into the trap. After she has been raped by a group of five men she is told that, if she says a word to anyone, she will be taken from the home and beaten. When, after the episode is repeated, she threatens to go to the police, she is taken into the countryside, doused in petrol, and told that she is going to be set alight, unless she promises to tell no one of the ordeal.

Social workers tell girls they cannot help them

Meanwhile she must accept weekly abuse, in return for drugs and alcohol. Soon she finds herself being taken to other towns in the area, and hired out for sexual purposes to other men. She is distraught and depressed, and at the point when she can stand it no longer, she goes to the police. She can only stutter a few words, and cannot bring herself to accuse anyone in particular. Her complaint is dismissed on the grounds that any sex involved must have been consensual. The social worker in charge of her case listens to her complaint, but tells her that she cannot act unless the girl identifies her abusers. But when the girl describes them the social worker switches off with a shrug and says that she can do nothing. Her father, his drug habit notwithstanding, has tried to keep contact with his daughter and suspects what is happening. But when he goes to the police, he is arrested for obstruction and charged with wasting police time.

Over the two years of her ordeal the girl makes several attempts on her own life, and eventually ends up abandoned and homeless, without an education and with no prospect of a normal life.

Impossible, you will say, that such a thing could happen in Britain. In fact it is only one of over 1,400 cases, all arising during the course of the last fifteen years in the South Yorkshire town of Rotherham, all involving vulnerable girls either in Council care or inadequately protected by their families from gangs of sexual predators. Almost no arrests have been made, no social workers or police officers have been reprimanded, and until recently the matter was dismissed by all those responsible as a matter of no real significance. Increasing public awareness of the problem, however, led to complaints, triggering a series of official reports. The latest report, from Professor Alexis Jay, former chief inspector of social work in Scotland, gives the truth for the first time, in 153 disturbing pages. One fact stands out above all the horrors detailed in the document, which is that the girl victims were white, and their abusers Pakistani.

***

Sociologists convinced government that the police are racist

Fifteen years ago, when these crimes were just beginning, the Stephen Lawrence Inquiry into the conduct of the British police was made by Sir William Macpherson a High Court judge. The immediate occasion had been a murder in which the victim was black, the perpetrators white, and the behaviour of the investigating police lax and possibly prejudiced. The report accused the police – not just those involved in the case, but the entire police force of the country – of ‘institutionalised racism’. This piece of sociological newspeak was, at the time, very popular with leftist sociologists. For it made an accusation which could not be refuted by anyone who had the misfortune to be accused of it.

However well you behaved, however scrupulously you treated people of different races and without regard to their ethnic identity or the colour of their skin, you would be guilty of ‘institutionalised racism’, simply on account of the institution to which you belonged and on behalf of which you were acting. Not surprisingly, sociologists and social workers, the vast majority of whom are professionally disposed to believe that middle class society is incurably racist, latched on to the expression. MacPherson too climbed onto the bandwagon since, at the time, it was the easiest and safest way to wash your hands in public, to say that I, at least, am not guilty of the only crime that is universally recognised and everywhere in evidence.

Police more concerned with political correctness than crime

The result of this has been that police forces lean over backwards to avoid the accusation of racism, while social workers will hesitate to intervene in any case in which they could be accused of discriminating against ethnic minorities. Matters are made worse by the rise of militant Islam, which has added to the old crime of racism the new crime of ‘Islamophobia’. No social worker today will risk being accused of this crime. In Rotherham a social worker would be mad, and a police officer barely less so, to set out to investigate cases of suspected sexual abuse, when the perpetrators are Asian Muslims and the victims ethnically English. Best to sweep it under the carpet, find ways of accusing the victims or their parents or the surrounding culture of institutionalised racism, and attending to more urgent matters such as the housing needs of recent immigrants, or the traffic offences committed by those racist middle classes.

Americans too are familiar with this syndrome. Political correctness among sociologists comes from socialist convictions and the tired old theories that produce them. But among ordinary people it comes from fear. The people of Rotherham know that it is unsafe for a girl to take a taxi-ride from someone with Asian features; they know that Pakistani Muslims often do not treat white girls with the respect that they treat girls from their own community. They know, and have known over fifteen years, that there are gangs of predators on the look-out for vulnerable girls, and that the gangs are for the most part Asian young men who see English society not as the community to which they belong, but as a sexual hunting ground. But they dare not express this knowledge, in either words or deed. Still less do they dare to do so if their job is that of social worker or police officer. Let slip the mere hint that Pakistani Muslims are more likely than indigenous Englishmen to commit sexual crimes and you will be branded as a racist and an Islamophobe, to be ostracised in the workplace and put henceforth under observation.

Rotherham Town Hall, Wikipedia

No One Will Be Fired

This would matter less if fear had no consequences. Unfortunately political correctness causes people not merely to disguise their beliefs but to refuse to act on them, to accuse others who confess to them, and in general to go along with policies that have been forced on the British people by minority groups of activists. The intention of the activists is to disrupt and dismantle the old forms of social order. They believe that our society is not just racist, but far too comfortable, far too unequal, far too bound up with fuddy-duddy old ways that are experienced by people at the bottom of society – the working classes, the immigrants, the homeless, the illegals – as oppressive and demeaning. They enthusiastically propagate the doctrines of political correctness as a way of taking revenge on a social order from which they feel alienated.

Ordinary people are so intimidated by this that they repeat the doctrines, like religious mantras which they hope will keep them safe in hostile territory. Hence people in Britain have accepted without resistance the huge transformations that have been inflicted on them over the last thirty years, largely by activists working through the Labour Party. They have accepted immigration policies that have filled our cities with disaffected Muslims, many of whom have now gone to fight against us in Syria and Iraq. They have accepted the growth of Islamic schools in which children are taught to prepare themselves for jihad against the surrounding social order. They have accepted the constant denigration of their country, its institutions and its inherited religion, for the simple reason that these things are theirs and therefore tainted with forbidden loyalties.

And when the truth is expressed at last, nobody is fired, no arrests are made, and the elected Police and Communities Commissioner for Rotherham, although forced to resign from the Labour Party, refuses to resign from his job. After a few weeks all will have been swept under the carpet, and the work of destruction can resume.

The Strange Death of Europe is a highly personal account of a continent and culture caught in the act of suicide. Declining birth-rates, mass immigration and cultivated self-distrust and self-hatred have come together to make Europeans unable to argue for themselves and incapable of resisting their own comprehensive change as a society. This book is not only an analysis of demographic and political realities, but also an eyewitness account of a continent in self-destruct mode. It includes reporting from across the entire continent, from the places where migrants land to the places they end up, from the people who appear to welcome them in to the places which cannot accept them. Told from this first-hand perspective, and backed with impressive research and evidence, the book addresses the disappointing failure of multiculturalism, Angela Merkel’s U-turn on migration, the lack of repatriation and the Western fixation on guilt. Murray travels to Berlin, Paris, Scandinavia, Lampedusa and Greece to uncover the malaise at the very heart of the European culture, and to hear the stories of those who have arrived in Europe from far away. In each chapter he also takes a step back to look at the bigger issues which lie behind a continent’s death-wish, answering the question of why anyone, let alone an entire civilisation, would do this to themselves? He ends with two visions of Europe – one hopeful, one pessimistic – which paint a picture of Europe in crisis and offer a choice as to what, if anything, we can do next. – See more at: http://www.bloomsbury.com/uk/the-strange-death-of-europe-9781472942241/#sthash.LFXH2Clt.dpuf

Per Obama: ‘You Cant Have the Documents for 5 Years’

Posted on June 19, 2017June 19, 2017 by Denise Simon

Sheesh, was there a grand opening in Chicago of the Obama Presidential Library that went unreported or something? Is there some extraordinary authority that select government documents became Obama’s exclusive property by some weird executive order perhaps? Was there some tractor-trailer that pulled up to the White House in the last days of the Obama administration that boxes of government property were stolen and smuggled to parts unknown?
As of a month ago, ground was not yet broken:

Judicial Watch: Obama NSC Advisor Susan Rice’s Unmasking Material is at Obama Library

Records Sought by Judicial Watch May Remain Closed to the Public for Five Years

(Washington, DC) – Judicial Watch today announced that the National Security Council (NSC) on May 23, 2017, informed it by letter that the materials regarding the unmasking by Obama National Security Advisor Susan Rice of “the identities of any U.S. citizens associated with the Trump presidential campaign or transition team” have been removed to the Obama Library.

The NSC will not fulfill an April 4 Judicial Watch request for records regarding information relating to people “who were identified pursuant to intelligence collection activities.”

The agency also informed Judicial Watch that it would not turn over communications with any Intelligence Community member or agency concerning the alleged Russian involvement in the 2016 presidential election; the hacking of DNC computers; or the suspected communications between Russia and Trump campaign/transition officials. Specifically, the NSC told Judicial Watch:

Documents from the Obama administration have been transferred to the Barack Obama Presidential Library. You may send your request to the Obama Library. However, you should be aware that under the Presidential Records Act, Presidential records remain closed to the public for five years after an administration has left office.

Judicial Watch’s Freedom of Information Act (FOIA) April 4 request sought:

1.) Any and all requests for information, analyses, summaries, assessments, transcripts, or similar records submitted to any Intelligence Community member agency or any official, employee, or representative thereof by former National Security Advisor Susan Rice regarding, concerning, or related to the following:

Any actual or suspected effort by the Russian government or any individual acting on behalf of the Russian government to influence or otherwise interfere with the 2016 presidential election.

The alleged hacking of computer systems utilized by the Democratic National Committee and/or the Clinton presidential campaign.

Any actual or suspected communication between any member of the Trump presidential campaign or transition team and any official or employee of the Russian government or any individual acting on behalf of the Russian government.

The identities of U.S. citizens associated with the Trump presidential campaign or transition team who were identified pursuant to intelligence collection activities.

2.) Any and all records or responses received by former National Security Advisor Susan Rice and/or any member, employee, staff member, or representative of the National Security Council in response to any request described in part 1 of this request.

3.) Any and all records of communication between any official, employee, or representative of the Department of any Intelligence Community member agency and former National Security Advisor Susan Rice and/or any member, employee, staff member, or representative of the National Security Council regarding, concerning, or related to any request described in Part 1 of this request.

The time frame for this request was January 1, 2016, to the April 4, 2017.

While acknowledging in its FOIA request that “we are cognizant of the finding by the Court of Appeals … that [the NSC] “does not exercise sufficiently independent authority to be an ‘agency’ for purposes of the Freedom of Information Act,” Judicial Watch argued:

The records sought in this request pertain to actions by the former National Security Advisor that demonstrate a much higher degree of independent authority than was contemplated by the court; specifically, the issuance of directives to the Intelligence Community related to the handling of classified national security information…

The recent revelations of the role of Susan Rice in the unmasking the names of U.S. citizens identified in the course of intelligence collection activities and the potential that her actions contributed to the unauthorized disclosure of classified national security information are matters of great public interest.

Judicial Watch has filed six FOIA lawsuits related to the surveillance, unmasking, and illegal leaking targeting President Trump and his associates (see here, here, here, here, here and here).

“Prosecutors, Congress, and the public will want to know when the National Security Council shipped off the records about potential intelligence abuses by the Susan Rice and others in the Obama White House to the memory hole of the Obama Presidential Library,” said Judicial Watch President Tom Fitton. “We are considering our legal options but we hope that the Special Counsel and Congress also consider their options and get these records.”

Russia Denied CW Report in Syria, Not so Fast

Posted on June 18, 2017June 18, 2017 by Denise Simon

When U.S. Secretary of State Rex Tillerson met with Lavrov and Putin a few weeks ago, evidence was presented of chemical weapons use by the Assad regime. As was expected, the Kremlin denied the evidence, they always deny. Further, the Russians demanded their own investigation, which of course wont happen. What is interesting, the report Tillerson presented was not performed by American officials.

But let us go deeper. It is important to introduce the Cyprus branch of Tanzania’s FBME Bank Ltd. and Balec Ventures Limited.

The Cyprus branch of Tanzania’s FBME Bank Ltd may have assisted the Syrian regime in financing and developing its chemical weapons programme by facilitating transactions between a number of shell companies worth hundreds of million dollars which should have raised red flags, a report suggests.

Balec Ventures Limited, a company registered in the British Virgin Islands (BVI) and its owner Issa al-Zeydi, a Syrian national, appear to have played a central role in by-passing US sanctions against Syria, according to a report produced by the London-based accounting firm Ernst & Young (EY) and obtained by the Cyprus Business Mail. EY identified Balec’s link to the Syrian Scientific Studies Research Centre (SSRC), responsible for the development of chemical weapons for Bashar al-Assad’s regime, after the US placed al-Zeydi on its sanctions list.

Balec, registered at P.O. Box 3321, Drake Chambers, Road Town, Tortola, shared the same BVI address with five other companies with mainly Russian or Belorussian ultimate beneficial owners (UBO), and Tredwell Marketing Ltd, the EY report said. The Central Bank of Cyprus (CBC) appears to have suspected Tredwell -which was transacting with Balec and the other five companies- of being linked to SSRC, according to the EY report.

EY did not immediately respond to a request to confirm the authenticity of the report. The Central Bank of Cyprus was not immediately available for comment. The anti-money laundering squad Mokas said that it was unaware of the existence of the report.

The other companies, EY identified for sharing the same address with Balec and Tredwell, were Maribo Group Ltd, Paramia Ltd, GloBalance Group, Osborn Holdings Inc (all operating from Russia with Russian UBOs) and Sunhouse Consulting (operating from Belarus with a Byelorussian UBO).

According to the US Federal Financial Institutions Examination Council directives, uniform standards for federal examinations of financial institutions in the US, “transacting businesses (that) share the same address, or have other address inconsistencies,” are reason for raising a “red flag” for compliance officers in banking.

“Issa Al-Zeydi is the sole ultimate beneficiary of the account, holds a Russian passport, was born in Syria and maintains a Russian address,” EY said in their report. A review revealed that Al-Zeydi’s passport listed Moscow, as his address. Balec’s operating address was Office 31, House 14, Gubkina Street, Moscow, Russia, according to the EY report.

Law firm Hogan Lovells US LLP commissioned the EY report on behalf of FBME. EY looked into 11 notices of finding by the Finance Crime Enforcement Network (FinCEN), a branch of the US Treasury which in July 2014 described FBME as a financial institution of primary laundering concern. FinCEN barred US banks from opening and maintaining correspondent accounts with FBME. The “confidential” EY report is dated December 5, 2014.

FBME challenged at US courts FinCEN’s findings and decision by imposing the fifth measure under the US Patriot Act, to shut it out from the US financial system.

In October 2014, the US included al-Zeydi, together with Ioannis Ioannou, a Cypriot national, and two Cyprus-based companies, Piruseti Enterprises Ltd and Frumineti Investments Ltd, in the list of specially designated nationals of the US Department of Treasury, citing support, including “financial, material, or technological” to the Assad regime on behalf of which they acted. Piruseti and Frumineti were not FBME customers.

“FBME facilitates U.S. sanctions evasion through its extensive customer base of shell companies,” said FinCEN in July 2014 in its notice of finding in relation to the Syrian regime’s SSRC. “For example, at least one FBME customer is a front company for a U.S.-sanctioned Syrian entity, the SSRC, which has been designated as a proliferator of weapons of mass destruction. The SSRC front company used its FBME account to process transactions through the U.S. financial system”.

The FinCEN report prompted the Central Bank of Cyprus to place the FBME Cyprus branch under administration and subsequently resolution. In 2015, the CBC fined FBME €1.2m for failing to adhere to the provisions of anti-money laundering legislation and revoked its licence.

According to FinCEN, the SSRC front company -which in July 2014 it did not name-, “also shared a Tortola, British Virgin Islands address with at least 111 other shell companies, including at least one other additional FBME customer that is subject to international sanctions”.

The EY report was shared with FinCEN, the US Department of Justice, the Bank of Tanzania, which supervised FBME Bank Ltd, the Central Bank of Cyprus, supervisor of FBME Bank (Cyprus) Ltd, the European Central Bank, the International Monetary Fund (IMF) and the European Commission. The last three bodies were overseeing Cyprus’s bailout programme at the time, which included provisions for tougher measures against money laundering.

As a result of the stricter anti-money laundering rules put in place, Cyprus scored best among a list of 12 analysed countries -including the US, UK, Germany and Australia- in a February 2017 report prepared by the anti-corruption watchdog Transparency International.

“The Bank (FBME) identified Tredwell from a list of 9 FBME customers for which the CBC requested past files from FBME on 08/07/2014 (August 7, 2014),” EY said in their report. “FBME noted that on the list received from the CBC, the comment “SSRC?” was written next to Tredwell”.

On March 19, 2014, five months before the central bank inquired about Tredwell at FBME, Tredwell closed its account and transferred its funds to Armas Marketing Ltd. The UBO of Armas was Ruben Nadra, a Syrian with a Russian Passport, who happened to be Tredwell’s former UBO, while its address was in Seychelles.

On April 10, 2014, the FBME compliance department closed Maribo’s account. It also froze Balec’s account on October 17, and did the same with that of Osborn on May 29, 2014. GloBalance closed its account on May 10, 2011, while by the time of the completion of the report, the Paramia and Sunhouse accounts were open when the report was completed.

The US and other western countries blamed Assad, an ally of Russia’s President Vladimir Putin, for the August 2013 attacks with chemical weapons in Ghouta, an area east of Damascus, in which hundreds of civilians lost their lives. The Russian government disputed that Assad, involved for more than six years in a civil war that killed hundreds of thousands and displaced millions, was responsible for the attack.

“The business operates in the dealings of securities and shares and has reflected an expected turnover on the account of approximately $10m annually since account inception,” EY said in reference to Balec which included in its business profile other activities such as the wholesale sale of textiles, steel, construction equipment supplies and other goods.

After Balec opened an account at FBME on December 4, 2006, it carried out from that date until July 18, 2014 transactions with other 50 FBME customers, entities and individuals, worth $255.4m (€232.5m), the report said. The firm also carried out additional transactions with other 342 non-FBME customers in the same period totalling $252.6m. The sum of all transactions carried out through FBME totalled $508m.

*** Now enter Michael Weiss with his summary published by CNN.

Money stolen by Russian mob linked to man sanctioned for supporting Syria’s chemical weapons program

An investment group that U.S. authorities say is run by Russian mobsters and linked to the Russian government sent at least $900,000 to a company owned by a businessman tied to Syria’s chemical weapons program, according to financial documents obtained by CNN.

According to a contract and bank records from late 2007 and early 2008, a company tied to a state-backed Russian mafia group, according to U.S. officials, agreed to pay more than $3 million to a company called Balec Trading Ventures, Ltd — supposedly for high-end “furniture.”

Wire transaction records seen by CNN confirm that at least $900,000 was transferred.

Both businesses are registered in the British Virgin Islands.

The company allegedly tied to Russian mafia was called Quartell Trading Ltd., and the U.S. Department of Justice claims it is one of the many vehicles into which millions of dollars of stolen Russian taxpayer money was laundered a decade ago in connection with the so-called “Magnitsky affair,” perhaps the most notorious corruption case in Vladimir Putin’s Russia.

Balec Ventures is owned by Issa al-Zeydi, a Russian whom the U.S. Treasury Department sanctioned in 2014 for his connection to the Scientific Studies and Research Center, the hub of Syria’s nonconventional weapons program, including its manufacture of Sarin and VX nerve agents and mustard gas.

The $230 million tax fraud

According to U.S. Congress and the U.S. Department of Justice, a band of Russian mafia called the Klyuev Group consists of past and present officials in the Russian Interior Ministry, two Moscow tax bureaus and the Federal Security Service, or FSB, the domestic intelligence service and successor body to the Soviet KGB.

In 2007, authorities say, the Klyuev Group, colluded to fraudulently seize the ownership of three subsidiary companies connected to a Moscow-based Hermitage Capital Management, then the largest hedge fund in Russia.

The Klyuev Group then fabricated hundreds of millions of dollars in losses for these companies that they had taken over. That enabled them to apply for a tax refund of $230 million.

The entire amount was processed in a single day, Christmas Eve 2007, by Russian tax officials on the Klyuev payroll.

Sergei Magnitsky, the lawyer hired by Hermitage Capital to investigate the theft, uncovered this vast criminal conspiracy and the players behind it. He was arrested in 2008, denied urgent medical care for over a year in pretrial detention and physically tortured before his death in Moscow prison in 2009 at age 37.

In 2012, Congress passed the Sergei Magnitsky Rule of Law Accountability Act, under which some three dozen Russian officials have been sanctioned.

The Kremlin rejects the U.S. version of events. Moscow insists that the lawyer died of “heart failure” and that he was the real tax cheat. A Russian court even put him on trial posthumously and found him guilty in 2013. It marked the first time in Russian history that a corpse was successfully prosecuted.

Follow the money — and dead bodies

Much of the $230 million from the Klyuev Group heist has since been located and frozen in jurisdictions all over the world. “Magnitsky stumbled into more than he realized, and more than we realized even after the passage of the Magnitsky Act,” Daniel Fried, the former U.S. Coordinator for Sanctions Policy, told CNN.

The U.S. Attorney in New York charged Prevezon Holdings, a Cyprus-registered company owned by the son of an influential Russian official, with having purchased Manhattan real estate and opened U.S. bank accounts using some of the pilfered funds. That case was settled in May. In the settlement, Prevezon did not acknowledge any wrongdoing and the U.S. government agreed not to pursue the company in any further litigation tied to this case.

Another related asset forfeiture case is still ongoing in Switzerland where authorities have relied on evidence turned over by Alexander Perepilichny, a Russian expatriate who confessed to having been the principal money launderer for the Klyuev Group before he broke ties with it.

The evidence showed Credit Suisse bank accounts in Switzerland where some of the stolen money had been deposited. One of those Swiss accounts belonged to Quartell Trading, which is Perepilichny’s company — or was before he dropped dead suddenly while jogging near his home in Surrey in November 2012.

At only 44 years-old and not known to have been in ill health, Perepilichny’s death was initially declared “unexplained” by British police until traces of gelsemium, a poisonous flower, were discovered in his stomach.

A state coroner’s inquest into the case began in Britain on June 5 and was upended when BuzzFeed reported a week later that the U.S. Office of the Director of National Intelligence, the body that oversees all U.S. spy agencies, concluded with “high confidence” that Perepilichnyy was killed on orders by Vladimir Putin.

Citing more than a dozen past and present intelligence officials in the U.S., UK and France, BuzzFeed alleged that the British government was suppressing crucial evidence. BuzzFeed said that the British government refused to comment on the report.

More recently, in late March 2016, a lawyer for Magnitsky’s family nearly died when he fell from the fourth floor of his apartment building, a day before he was due to submit new evidence to a Moscow court.

A dubious transaction

A signed contract dated December 18, 2007 — just days before the Klyuev Group’s fraudulent $230 million refund was processed — show that Perepilichny’s Quartell Trading agreed to buy $3,172,000 worth of high-end “furniture” from Balec Ventures, Issa al-Zeydi’s company.

A copy of a SWIFT transaction also obtained by CNN show that $900,000 of that amount was wired from Quartell Trading to Balec a few weeks later, on January 25, 2008.

It is unclear whether any of the vaguely described items was ever delivered to the listed address, a warehouse in Kharkiv, Ukraine.

Balec’s bank, the Federal Bank of the Middle East (FBME), approved the transaction for filing five days later, on January 30, 2008. Notably, the bank also stamped the document “checked for money laundering purposes.”

Less than a month later, according to the U.S. Justice Department, Quartell received nearly 2 million euro from a Latvian bank account that had received some of the stolen $230 million.

FBME, which was based in Tanzania, could not be reached for comment for this story. In May, the institution was shut down by Tanzania’s central bank because of U.S. accusations that it was “used by its customers to facilitate money laundering, terrorist financing, transnational organized crime, fraud, sanctions evasions and other illicit activity internationally and through the US financial system,” according to the US Treasury Department’s Financial Crimes Enforcement Network.

There are oddities to Quartell-Balec transaction, according to financial analysts consulted by CNN who have examined the contract and supporting documents.

For one thing, Balec is described by FBME as being commercially engaged in the “buying/selling [of] promissory notes” and the import and export of building materials such as ceramic and marble tiles, timber, steel coils and “furnitures” [sic].

But it has no public profile or corporate website on which to showcase its inventory.

Ties to Assad’s WMD?

The Syria-born Issa al-Zeydi does not have a conspicuous public profile in Russia, apart from a largely inactive social media page on VKontake, the Russian version of Facebook, which CNN has confirmed belongs to the man who owns Balec Ventures.

He graduated in 1964 from Bauman Moscow State Technical University, where he studied engineering.

According to corporate registration records in Russia, al-Zeydi is also the owner and/or CEO of several small companies with next to no capital.

One of these, Aldzhamal Interneshal, claims to work in “non-specialized wholesale trade,” “the production of petroleum products” and the “manufacture of industrial gases.”

He was also the director of Enterprises Ltd. and Fruminenti Investments Ltd., two companies that the U.S. sanctioned in 2014 for their connection to the Scientific Studies and Research Center, Syria’s government agency responsible for developing and producing non-conventional weapons and ballistic missiles,” according to the US Treasury’s Office of Foreign Assets Control (OFAC).

It is unclear if any of the $900,000 that Quartell wired to Balec went to support the Center.

Following the sarin attack in Syria in April, which prompted President Donald Trump to authorize US airstrikes against a Syrian airbase, the Treasury Department further sanctioned 271 employees of the Scientific Studies and Research Center, describing it as “one of the largest sanctions actions in its history.”

Repeated attempts to contact Issa al-Zeydi in Moscow for this story, using the registered addresses of his Russian-based companies and phone numbers, proved unsuccessful.

Why is China Protecting North Korea? Reasons Abound

Posted on June 16, 2017June 16, 2017 by Denise Simon

Primer:

The United States Computer Emergency Readiness Team (US-CERT) issued a technical alert about the activity of the North Korea’s ‘Hidden Cobra’ APT group.
The joint Technical Alert (TA) report is the result of the efforts between of the Department of Homeland Security (DHS) and the Federal Bureau of Investigation (FBI).

The US Government has tracked the hacker group as Hidden Cobra, but the APT is most popular as the Lazarus APT Group.

The activity of the Lazarus Group surged in 2014 and 2015, its members used mostly custom-tailored malware in their attacks and experts that investigated on the crew consider it highly sophisticated.

This threat actor has been active since at least 2009, possibly as early as 2007, and it was involved in both cyber espionage campaigns and sabotage activities aimed to destroy data and disrupt systems. Security researchers discovered that North Korean Lazarus APT group was behind recent attacks on banks, including the Bangladesh cyber heist.

According to security experts, the group was behind, other large-scale cyber espionage campaigns against targets worldwide, including the Troy Operation, the DarkSeoul Operation, and the Sony Picture hack.

The joint alert from the FBI and the DHS further details on the group, including indicators of compromise (IoC) for its DeltaCharlie botnet involved in the “Operation Blockbuster” to power DDoS attacks. More here.

*** Most of North Korea’s cyber operations are located in China hosted on Chinese communications internet/communications platforms. It is espionage of an epic standard. But let us go deeper.

(Remember, Obama removed Cuba in 2015 from the terror list as a means to establish the process to normalize relations)

*** Image result for north korea minerals

Few think of North Korea as being a prosperous nation. But it is rich in one regard: mineral resources.

Currently North Korea is alarming neighbors with its frequent missile tests, and the US with its attempts to field long-range nuclear missiles that can hit American cities. A sixth nuclear test could be imminent. An attack on the US or its allies would be suicidal, so Pyongyang probably aims to extract “aid” from the international community in exchange for dismantling some of its weaponry—rewind about 10 years to see the last time it pulled off the old “nuclear blackmail” trick.

AP

But however much North Korea could extract from other nations that way, the result would pale in comparison to the value of its largely untapped underground resources.

Below the nation’s mostly mountainous surface are vast mineral reserves, including iron, gold, magnesite, zinc, copper, limestone, molybdenum, graphite, and more—all told about 200 kinds of minerals. Also present are large amounts of rare earth metals, which factories in nearby countries need to make smartphones and other high-tech products.

NKNews

Estimates as to the value of the nation’s mineral resources have varied greatly over the years, made difficult by secrecy and lack of access. North Korea itself has made what are likely exaggerated claims about them. According to one estimate from a South Korean state-owned mining company, they’re worth over $6 trillion. Another from a South Korean research institute puts the amount closer to $10 trillion.

State of neglect

North Korea has prioritized its mining sector since the 1970s (pdf, p. 31). But while mining production increased until about 1990—iron ore production peaked in 1985—after that it started to decline. A count in 2012 put the number of mines in the country at about 700 (pdf, p. 2). Many, though, have been poorly run and are in a state of neglect. The nation lacks the equipment, expertise, and even basic infrastructure to properly tap into the jackpot that waits in the ground.

In April, Lloyd R. Vasey, a senior adviser at the Center for Strategic and International Studies, noted that:

North Korean mining production has decreased significantly since the early 1990s. It is likely that the average operational rate of existing mine facilities is below 30 per cent of capacity. There is a shortage of mining equipment and North Korea is unable to purchase new equipment due to its dire economic situation, the energy shortage and the age and generally poor condition of the power grid.

It doesn’t help that private mining is illegal in communist North Korea, as are private enterprises in general (at least technically). Or that the ruling regime, now led by third-generation dictator Kim Jong-un, has been known to, seemingly on a whim, kick out foreign mining companies it’s allowed in, or suddenly change the terms of agreements.

Despite all this, the nation is so blessed with underground resources that mining makes up roughly 14% of the economy.

A “cash cow”

China is the sector’s main customer. Last September, South Korea’s state-run Korea Development Institute said that the mineral trade between North Korea and China remains a “cash cow” for Pyongyang despite UN sanctions, and that it accounted for 54% (paywall) of the North’s total trade volume to China in the first half of 2016. In 2015 China imported $73 million in iron ore from North Korea, and $680,000 worth of zincin the first quarter of this year.

North Korea has been particularly active in coal mining in recent years. In 2015 China imported about $1 billion worth of coal from North Korea. Coal is especially appealing because it can be mined with relatively simple equipment. Large deposits of the stuff are located near major ports and the border with China, making the nation’s bad transportation infrastructure less of an issue.

For years Chinese buyers have purchased coal from North Korea at far below the market rate. As of last summer, coal shipments to China accounted for about 40% (paywall) of all North Korean exports. But global demand for coal is declining as alternatives like natural gas and renewables gain momentum, and earlier this year Beijing, in line with UN sanctions, began restricting coal imports from its neighbor.

The sanctions game

After North Korea conducted its first nuclear test in 2006, the UN began imposing ever stronger sanctions against it. Last year the nation’s underground resources became a focus. In November 2016, the UN passed a resolution capping North Korea’s coal exports and banning shipments of nickel, copper, zinc, and silver. That followed a resolution in March 2016 banning the export (pdf) of gold, vanadium, titanium, and rare earth metals.

The resolutions targeting the mining sector could hurt the Kim regime. Before they were issued, a 2014 report on the country’s mining sector by the United States Geological Survey noted that (pdf, p. 3), “The mining sector in North Korea is not directly subject to international economic sanctions and is, therefore, the only legal, lucrative source of investment trade available to the country.”

That is no longer the case.

Of course, Pyongyang has grown adept at evading such sanctions, especially through shipping. Glimpses of its covert activities come from occasional interceptions of vessels. Last August Egyptian authorities boarded a ship laden with 2,300 tons (2,087 metric tons) of iron ore heading from North Korea to the Suez Canal (they also found 30,000 rocket-propelled grenades below the ore).

Earlier this year a group of UN experts concluded that North Korea, despite sanctions, continues to export banned minerals. They determined, as well, that North Korea uses another mineral—gold—along with cash to “entirely circumvent the formal financial sector.”

Interested neighbors

Meanwhile China’s overall trade with North Korea actually increased 37.4% (paywall) in the first quarter compared to the same period last year. Its imports of iron ore from North Korea shot up 270% in January and February from a year ago. Coal dropped 51.6%.

North Korea’s neighbors have long had their eyes on its bonanza of mineral wealth. About five years ago China spent some $10 billion on an infrastructure project near the border with North Korea, primarily to give it easier access to the mineral resources. Conveniently North Korea’s largest iron ore deposits, in Musan County, are right by the border. An analysis of satellite images published last October by 38 North, a website affiliated with Johns Hopkins University, showed mining activity was alive and well in the area.

China particularly covets North Korea’s rare earth minerals. Pyongyang knows this. It punished Beijing in March by suspending exports of the metals to China in retaliation for the coal trade restrictions.

Meanwhile Russia, which also shares a (smaller) border with North Korea, in 2014 developed plans to overhaul North Korea’s rail network in exchange for access to the country’s mineral resources. That particular plan lost steam (pdf, p. 8), but the general sentiment is still alive.

But South Korea has its own plans for the mineral resources. It sees them as a way to help pay for reunification (should it finally come to pass), which is expected to take decades and cost hundreds of billions or even trillions of dollars. (Germany knows a few things about that.) Overhauling the North’s decrepit infrastructure, including the aging railway line, will be part of the enormous bill.

In May, South Korea’s Ministry of Land, Infrastructure and Transport invited companies to submit bids on possible infrastructure projects in North Korea, especially ones regarding the mining sector. It argued that (paywall) the underground resources could “cover the expense of repairing the North’s poor infrastructure.”

It was, of course, jumping the gun a bit. For now South Korea—and the world—is stuck with a bully in the mineral-blessed North.

***

China is undergoing a major military build up around the world and has even included collaboration with Pakistan.

The new assessment focuses instead on the buildup on Spratly Islands, noting that previous year the Mischief, Subi and Fiery Cross Reefs, three of the largest outposts, saw the construction of 24 administration buildings, barracks, fixed weapons positions, communication facilities and fighter-sized hangars by China, each of them with runways 8,800 feet long.

While the report notes that China has not undertaken any new land reclamation projects on disputed features in the South China Sea during 2016, it did accuse China of further militarizing the contested Spratly Islands via the construction of 24 hangars capable of housing fighter aircraft, fixed weapons positions, barracks and communication facilities.

Beijing has opposed the deployment of a U.S. missile shield in South Korea to defend against attacks from North Korea, in part because it says it could be used to counter China’s capabilities.

Meanwhile Pakistan itself has not made any comments about this statement.

Published Tuesday, the Pentagon report estimated that China spent US$180 billion previous year on its military – the world’s largest – a figure well over the country’s official US$140 billion defence budget.

The report made “irresponsible remarks on China’s national defense development and reasonable actions in defending our territorial sovereignty and security interests in disregard of the facts“, foreign ministry spokeswoman Hua Chunying told reporters yesterday.

“China likely will seek to establish additional military bases in countries with which it has longstanding, friendly relationships“, the report predicts.

China has cited anti-piracy patrolling as one of the reasons for developing what it calls a naval logistics center in Djibouti.

“China’s expanding global economic interests are increasing demands for the [Chinese Navy] to operate in more distant maritime environments to protect Chinese citizens, investments, and critical sea lines of communication”, the report reads.

The defence ministry in a statement refuted the U.S. assessment, saying “China is not doing any military expansion and does not seek a sphere of influence”. Pakistan has also emerged as the biggest market for Chinese arms exports, a focus area in Beijing’s expansion plans, the report titled “Military and Security Developments Involving the People’s Republic of China 2017″, said. He harshly criticized China’s construction in the South China Sea and became the first member of President Donald Trump’s cabinet to lay out a comprehensive strategy on Asia. That region accounted for almost half of China’s over $20 billion in arms exports from 2011 to 2015.

Countries including Pakistan and Afghanistan welcome it as a path out of poverty. “To support this modernisation, China uses a variety of methods to acquire foreign military and dual-use technologies, including cyber theft, targeted foreign direct investment and exploitation of the access of private Chinese nationals to such technologies”, the report said.

Regarding the Senkaku Islands, a group of East China Sea islets controlled by Japan but claimed by the mainland and Taiwan, the Pentagon said that previous year Beijing continued to use law-enforcement ships and aircraft to “patrol” near the islands in an attempt to undermine Japan’s administration of them.

China has also always been a strong military, economic, and diplomatic supporter of Pakistan and is considered Islamabad’s largest trade and defense partner.