Seizing el Chapo’s Money Likely Impossible

Posted on July 18, 2019July 18, 2019 by Denise Simon

Senator Ted Cruz and Sasse have co-sponsored legislation to seize the bank accounts of el Chapo Guzman to pay for the wall. While this is great in theory, some of that money should go to the victims as well.

el Chapo has been sentenced to live in prison plus 30 years and he is to forfeit his vast sums of money estimated to be as high as $12 billion. C’mon, this is likely not going to happen in total but there is a possibility to find perhaps some of it. Why?

Spain Is a Paradise (for the World's Most Powerful Drug ...

Guzman’s trial highlighted the methods Guzman Loera and his organization used to transport the cartel’s multi-ton shipments of narcotics into the United States, including fishing boats, submarines, carbon fiber airplanes, trains with secret compartments and transnational underground tunnels. Once the narcotics were in the United States, they were sold to wholesale distributors in New York, Miami, Atlanta, Chicago, Arizona, Los Angeles and elsewhere. Guzman Loera then used various methods to launder billions of dollars of drug proceeds, including bulk cash smuggling from the United States to Mexico, U.S.-based insurance companies, reloadable debit cards and numerous shell companies, including a juice company and a fish flour company.

Guzman built a global empire and that included hiring expert lawyers, accountants and investors. The Federal Court of New York in 2008 proved that HSBC, JP Morgan, Wells Fargo and Bank of America were directly related to money laundering. The same court found that HSBC had laundered at least $1.1 billion from Sinaloa.

Drug cartel leaders may be uneducated in the traditional sense, but as the agents pursuing them know all too well, they are wily strategists and extremely sophisticated business people. Because their business depends on identifying and exploiting loopholes in the world’s legal and financial systems, they hire the brightest talent they can find to help them achieve their goals, and pay them extraordinarily well. Of the many money-laundering methods utilized by drug cartels, “structuring” – depositing amounts smaller than $10,000 to avoid Bank Secrecy Act (BSA) reporting regulations – is the most popular, even though it’s also the easiest form of money laundering to detect. Structuring is the most common reason Suspicious Activity Reports (SARs) are filed by banks, but it’s also the most direct way to get money into a U.S. bank account. To push the odds in their favor, drug traffickers hire a veritable army of people to deposit small amounts of cash in banks all over the country, in cities large and small. Many get caught, but to the cartels, that’s simply the cost of doing business.

One area where law enforcement and finance can help each other in the future is in identifying and recognizing evolving trends. For example, Europe is a popular place for Mexican and Colombian drug traffickers to conduct business now because there is a lack of coordination and communication between countries in the European Union that criminals are exploiting.

Recently, federal officials received word that teenagers in a small country in Central Africa called Equatorial Guinea were suddenly driving Maseratis and other expensive cars down the country’s dirt roads. Further investigation revealed that both the Sinaloa drug cartel and Colombia’s Medellin cartel are now using this small country as a trafficking gateway to Europe.

Why? Because the predominant language in Equatorial Guinea isn’t French or Portuguese – it’s Spanish. More here.

Why are the Sinaloa Cartel the World's Most Powerful ...

Once illicit money gets into the U.S. financial system, it can go anywhere, internationally and such is the issue with the Iran nuclear deal where John Kerry allowed Iran access to the American banking system. What about the Patriot Act you ask? In some cases it was finessed due to payoffs. And how about corrupt governments? Yup that too.

Facebook Primed for Illicit Funds Use/Money Laundering

Posted on July 15, 2019July 15, 2019 by Denise Simon

America’s rivals are increasingly turning to bitcoin-style cryptocurrencies after their economies were brought to their knees thanks to crippling U.S. sanctions, experts have warned.

Iran, North Korea, Russia and Venezuela are all investing in the technology in an attempt to counter American economic might – and an expert says these nations are forming alliances through the technology.

A form of digital money, cryptocurrency uses encryption to secure transactions and control the creation of new units. It uses cryptography, a form of secret coding originating from the Second World War, to process transactions securely. Its major appeal is it is untraceable.

U.S. sanctions work by placing bans on dealings and transactions with persons, nations and companies.

When ransomware is planted on state or local government systems and theft of data occurs, cities are forced to pay ransom to regain ownership and control.

Florida has paid more than $1.1 million in bitcoin to cybercriminals to recover encrypted files from two separate ransomware attacks—one against Riviera Beach and the other against Lake City.

Lake City, a city in northern Florida, agreed on Monday to pay hackers 42 Bitcoin (equivalent to $573,300 at the current value) to unlock phone and email systems following a ransomware attack that crippled its computer systems for two weeks.

For years, ransomware has been a particularly annoying cybersecurity threat. And despite reports that cybercriminals are shifting their efforts away from encrypting malware to cryptomining malware, ransomware infections continue at an alarming rate.

In one week in March 2018 alone, government-run targets in two of the biggest cities in America — Atlanta and Baltimore — were hit by ransomware. These attacks, which disrupted important city services, are far from isolated; similar ransomware attacks have targeted U.S. municipalities for years.

Stories about smaller cities falling victim to ransomware often go unreported by the national news … or anywhere at all. Nevertheless, municipalities and cities in all corners of the U.S. have seen ransomware infect their networks.

So, here comes the U.S. Treasury Secretary, Steve Mnuchin with a major concern and warning for Facebook. What about this new Libra currency that has been launched?

(Reuters) – U.S. Treasury Secretary Steve Mnuchin said on Monday that the Treasury department has serious concerns that Facebook Inc’s proposed LIBRA cryptocurrency could be misused for money laundering, adding to the growing regulatory skepticism of the company’s digital asset plans.

Secretary Mnuchin also said that the agency has warned Facebook that it must enact proper safeguards against illicit use such as money laundering.

“Treasury has been very clear to Facebook…and other providers of digital financial services that they must implement the same anti-money laundering safeguards in countering the financing of terrorism as traditional financial institutions,” Mnuchin said.

Meanwhile:

Activists and Democratic lawmakers blasted the Federal Trade Commission’s $5 billion fine against Facebook as “chump change” and lambasted the agency’s settlement as toothless.

The settlement, which was reportedly voted along party lines, gaining support from the FTC’s three Republicans while being rejected by its two Democrats, is the beginning of the end for the agency’s probe of Facebook’s alleged mishandling of more than 87 million users’ private data during the Cambridge Analytica scandal.

Although the fine sets a record in terms of the agency’s actions against Big Tech, a chorus of Democratic lawmakers, technologists and activists excoriated the FTC for not doing enough and not imposing a larger penalty.

“The sad reality is that this does not go nearly far enough. For a company that last year alone generated revenue nearly 11 times greater than the reported fine, the Federal Trade Commission should send a clear signal to Facebook and so many other tech companies that privacy is their ultimate responsibility,” Rep. Jan Schakowsky, D-Ill., who is chairwoman of the consumer protection and commerce subcommittee in the House, said in a statement. “If these reports are true, then they failed.”

Will Facebook pay the fine using Libra? Well, when it comes to the Facebook blockchain debate, Facebook declares the Swiss government will regulate it all. Really? There is a Congressional hearing in the Senate by the Banking, Housing and Urban Affairs Committee where Libra is to be explained. Frankly, isn’t PayPal a form of cryptocurrency too? Anyway, this testimony found here is regarding Facebook’s Libra Project.

Read it here.

The Other Items Complicating a China Trade Deal

Posted on July 11, 2019July 11, 2019 by Denise Simon

Beyond the traditional trade talks between the U.S. Trade Representative and envoy with Beijing, there are complicating factors that enter into the debates and it is generally dealing with military aggression and espionage. So consider the following items:

New Delhi: China has recently leased vast tracts of land along the coast of the Koh Kong province of Cambodia to turn into a seaside resort. An area of 45,000 hectares — 20 per cent of the coastline — has been leased for 40 years for a paltry annual rent of US $1 million.
A Chinese private company called Union Development Group (UDG) is undertaking the project, named the Dara Sakor Seashore Resort Long Term Project.

However, there has also been increased military cooperation between Beijing and Phnom Penh, and the US has raised concerns, with Vice-President Mike Pence writing to Cambodian PM Hun Sen that these facilities could be put to military use.

Paul Chambers, professor of international affairs at the Naresuan University in Thailand, has claimed that senior Cambodian officials privately admitted that Hun Sen was considering approving a Chinese naval base at Kiri Sakor.

Hun Sen has claimed there are no foreign troops on Cambodian soil, but China has been accused of using debt traps to get its way. And according to satellite imagery accessed by ThePrint, there is a real possibility of the resort project currently under construction turning into a Chinese military base.
BRUSSELS (Reuters) – China’s ZTE opened a cybersecurity lab in Brussels on Wednesday, aiming to boost transparency four months after bigger telecoms equipment rival Huawei [HWT.UL] did the same to allay concerns about spying.Chinese vendors of network gear are being scrutinized by the United States and some of its allies who believe the equipment could be used by Beijing to spy on customers if deployed in 5G networks, which are beginning to be built around the world.
Huawei, the world’s biggest maker of telecoms network gear, has been blacklisted by the U.S. government, meaning that U.S. companies need special approval – which they are unlikely to get – to export products to the Chinese company.
The Chinese military has deployed military personnel and armored medical vehicles to Germany for joint drills, a first for the Chinese People’s Liberation Army as it attempts to forge closer ties with Europe.

The joint exercise — Combined Aid 2019 — is focused on preparing troops with the medical service units of the Chinese and German armed forces to respond to humanitarian crises, such as mass casualty incidents and serious disease outbreaks, China’s Xinhua News Agency reported.

The exercise follows a cooperative military medical training exercise in 2016 in Chongqing, where the PLA and the German Bundeswehr practiced responding to an imaginary earthquake scenario.
Over one million Uyghurs and Muslims from other ethnic minority groups have been detained by the Chinese government and sent to “re-education” internment camps. Sources indicate that detainees are psychologically and physically abused. Uyghurs outside the camps in Xinjiang are also not free, as they are kept under constant surveillance, often using advanced technology. The Chinese government is increasingly testing this technology in Xinjiang and exporting it nationally and globally, with concerning implications for democracy and human rights.
(UPI) — China is condemning a recent U.S. decision to sell $2.2 billion worth of weapons to Taiwan, saying the “reckless” policy tampers with Chinese sovereignty.

Beijing’s foreign ministry spokesman Geng Shuang said Tuesday at a regular press briefing China opposes U.S. weapons sales to Taiwan, a country China recognizes as a breakaway province.

“The United States has recklessly interfered in Chinese domestic affairs,” Geng said. “It has undermined China’s sovereignty and security interests.”

The U.S. State Department on Monday approved two potential arms sales to Taiwan, worth $2.2 billion.

The weapons to be sold to Taiwan include 108 Abrams tanks, 250 Stinger missiles and related equipment.

On Tuesday Geng reminded reporters Beijing does not recognize Taiwanese sovereignty.

“Taiwan is an inseparable part of Chinese territory,” the foreign ministry spokesman said. “Do not underestimate the Chinese government and the people’s will to defend national sovereignty and territory.”

Geng added the United States was in “severe violation” of Beijing’s “One-China” policy.

Tensions have grown between Taiwan and China since President Tsai Ing-wen assumed office in 2016.

Tsai’s recent decision to stay in the United States for four nights during a “layover” has angered China. Beijing, under its law, bans the Taiwanese leader from making contact with U.S. politicians.

Possible Details on Iran for Trump Briefings

Posted on July 2, 2019July 2, 2019 by Denise Simon

Image result for un arms embargo iran photo/details

For context, here is the background on the UN Arms Embargo on Iran.

1. The rapidly expiring “sunset provisions” – which will lift existing restrictions on Iran’s military, missiles and nuclear programs – were a key factor in President Trump’s decision to withdraw from the flawed Joint Comprehensive Plan of Action (JCPOA) in May last year. The first of the sunset provisions, the arms embargo under U.N. Security Council Resolution (UNSCR) 2231, will expire by October 18, 2020.

In its report, JCPOA Sunset Alert, United Against Nuclear Iran (UANI) details the hazards once UNSCR 2231’s arms transfers provisions expire. Guns, howitzers, mortars, battle tanks, armored combat vehicles, combat aircraft, attack helicopters, warships and missiles or missile systems will proliferate throughout the region.

2. The European Union is skirting the Iran sanction architecture by launching INSTEX. Based in Paris, it is managed by Per Fischer a German banker and the UK is heading the supervisory board.

The channel, set up by Germany, France and the UK, is called INSTEX — short for “Instrument in Support of Trade Exchanges.”

“We’re making clear that we didn’t just talk about keeping the nuclear deal with Iran alive, but now we’re creating a possibility to conduct business transactions,” German Foreign Minister Heiko Maas told reporters Thursday after a meeting with European counterparts in Bucharest, Romania.

“This is a precondition for us to meet the obligations we entered into in order to demand from Iran that it doesn’t begin military uranium enrichment,” Maas said.

3. Zarif, Iran’s Foreign Minister has confirmed violations of stockpile limitations as well as uranium enrichment of 300kg. for low-enriched uranium. These two items are violations of the JCPOA and Europe considers this just a distraction.

4. The U.S. has sent an estimated 12 F-22 Raptor stealth fighters to Qatar, based at al Udeid Air Base to bolster defenses Iran threats. There is a B-52 bomber task force in the region. The U.S. has dispatched several army batteries that operate the Patriot Missile launchers. Much of this is due to and in preparation for the asymmetric warfare tactics in use by Iran.

5. Iran is aware they cannot match the United States militarily, so there are two other possibilities and they include attacking Israel and major cyber interruptions.

Speaking at a political conference of ultra-conservatives in Iran’s north, Mashaei said, “If the Zionist regime attacks Iran, the Zionists will have no longer than a week to live.” The semi-official Fars news agency quoted him as saying that the Islamic Republic would destroy Israel “in less than 10 days”. On the cyber front, Iran has the abilities to disrupt networks associated with power systems in the region as well as those connected to oil production and shipping. U.S. Cybercom has the authorization, by way of the NDAA to conduct what is known as TMA, traditional military activities where cyber operations are included. Last month, the NYT’s reported the U.S. did carry out cyberattacks on Iran.

6. Iran has established terror cells in Western allied countries including the United States as noted by this case reported by the FBI just last month. Additionally, Qassem Suleimani has set up terror sites in Africa prepared to strike oil fields, military installations and embassies. These operations are managed by a specialized department of the Quds Force known as Unit 400.

More Executive Action Against Iran

Posted on June 24, 2019June 24, 2019 by Denise Simon

Due to timing, it is assumed rather than a U.S. military strike campaign against designated targets as a result of Iran shooting down a U.S. drone, Cyber Command initiated a cyber operation. The Iranian Revolutionary Guard maintains control of the rocket and missile systems and they have been disabled as the U.S. response. Iran has confirmed the cyber-attack but also says it failed. Iran expected a response by the United States and in advance shut down several radar sites.

The United States has been inside several cyber operations in Iran for a very long time and was ready for a go order. Meanwhile, The US Cybersecurity and Infrastructure Security Agency (CISA) is warning that Iran has been advancing their own cyber operations against select US targets. It is unclear what those targets are.

President Trump spent the weekend at Camp David while Secretary of State Mike Pompeo traveled to Saudi Arabia and to Abu Dhabi while NSC John Bolton is in Israel. Bolton has on his calendar meetings with the Israeli national security and atomic energy officials as the introduction of the coming peace plan proposal dealing with the Palestinians will be introduced in Bahrain.

Photo: Alex Brandon AP

Trump has signed yet another addition to the sanctions architecture on Iran. There is talk of sanctions relief if Iran is willing to negotiate on key topics including escalating uranium enrichment. So far, Iran has said they will not meet with the United States and will shoot down other aircraft if they impede Iran airspace. The FAA has ordered all U.S. commercial aircraft to reroute outside of the existing Iran airspace buffer zone.

There are now heavy decisions for Europe to make in their economic trade with Iran versus that of the United States and remaining in the JCPOA, the Obama nuclear deal with Iran.

The Executive Order signed by President Trump goes right to the top of the regime yet does not yet include Mohammad Javad Zarif, the top Iran diplomat, however it is said that could come later in the week.

The new round of sanctions is all about existing monies controlled by the IRGC and the Iran Supreme leader and his associates. This includes access to revenues from oil exports and freezes the financial assets of key officials where the Iran Central Bank is listed.

***

Additional Executive Order sanctions details:

Today’s action targets commanders of the IRGC’s Navy, Aerospace, and Ground Forces, in addition to the commanders of the IRGC Navy’s (IRGCN) five naval districts. These include the naval district commanders who are responsible for the IRGCN’s activities off the coast of the southern provinces of Khuzestan, Bushehr, and Hormozgan, which lie adjacent to the Persian Gulf and the Strait of Hormuz.

OFAC is designating IRGCN Commander Ali Reza Tangsiri pursuant to E.O. 13224 for acting for or on behalf of the IRGC. As recently as February 2019, Tangsiri threatened that the Iranian regime’s forces would close the Strait of Hormuz, an international waterway, if U.S. sanctions stopped Iran’s oil exports, and that the Iranian regime is prepared to target U.S. interests in the region. As the commander of the IRGCN, Tangsiri sits atop a structure—including those regional IRGCN commanders sanctioned today—that is responsible for the sabotage of vessels in the international waters.

Also designated today pursuant to E.O. 13224 for acting for or on behalf of the IRGC is Amirali Hajizadeh, commander of the IRGC Aerospace Force, whose bureaucracy was responsible for downing the U.S. unmanned aircraft on June 20, 2019. Hajizadeh oversees Iran’s provocative ballistic missile program.

OFAC is also designating pursuant to E.O. 13224 Mohammad Pakpour, commander of the IRGC’s Ground Forces, for acting for or on behalf of the IRGC. Under Pakpour’s command, the IRGC Ground Forces have deployed to fight in Syria in support of the IRGC-Qods Force (IRGC-QF) and the brutal Assad regime. In 2017, Pakpour said that the IRGC Ground Forces were in Syria to help the IRGC-QF.

OFAC is also designating the commanders of the IRGCN’s five naval districts pursuant to E.O. 13224 for acting for or on behalf of the IRGC. The IRGC is responsible for the Regime’s destabilizing and provocative naval actions in and around the Strait of Hormuz.
IRGCN commanders of five naval districts designated today are:

IRGCN 1st Naval District Commander Abbas Gholamshahi
IRGCN 2nd Naval District Commander Ramezan Zirahi
IRGCN 3rd Naval District Commander Yadollah Badin
IRGCN 4th Naval District Commander Mansur Ravankar
IRGCN 5th Naval District Commander Ali Ozma’i

The IRGC was designated pursuant to E.O. 13224 by OFAC on October 13, 2017 and it was designated as a Foreign Terrorist Organization by the Secretary of State on April 15, 2019.

Sanctions Implications

As a result of today’s action, all property and interests in property of these individuals that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.

In addition, persons that engage in certain transactions with the persons designated today may themselves be exposed to designation. Furthermore, any foreign financial institution that knowingly facilitates a significant transaction or provides significant financial services for any of the individuals designated today could be subject to U.S. correspondent account or payable-through sanctions.