After a month, the hunt for fugitive Turkish foreign national who ran Bitcoin exchange that saw US$2B evaporate, may be over

By Christine Duhaime | May 23rd, 2021

The hunt for Faruk Fatih Özer’in, aka Özer, a Turkish foreign national, may be over. Özer ran a large digital currency exchange in Turkey called Thodex. He fled Turkey in April and US$2 billion of money from its customers is apparently missing, or inaccessible. In the CCTV footage below, he is seen arriving at the Istanbul Airport and going through customs on the day he fled. Where is the US$2 billion? Perhaps on a Trezor in his bag.

Özer turned up in Albania and appeared on CCTV footage checking into a hotel after fleeing Istanbul. From Albania, he issued a statement alleging that the allegations against him were baseless and that he was in Albania on business and would return to Istanbul in a few days. That was over a month ago, and he is not likely coming back to Turkey voluntarily.

Then on May 15, 2021, the Turkish police announced that they were authorized to enter Albania and capture him. Özer was on an Interpol Red Notice list but he has since been removed from that list, which may mean that Turkey has captured him.

Faruk Fatih Özer

Turkey arrested 62 employees of the exchange in respect of whom they believed played a part in facilitating the loss of the US$2 billion. Özer and Thodex denied any money was missing on Twitter, and Özer did the same on his Instagram account. He deleted all the content from his Insta except the message below and the photo of him in a Ferrari.

Özer’s brothers and sister, Güven Özer, Zuhal Özer and Serap Özer, who appear to have run the exchange with him, were arrested in Turkey, as well as the exchange’s accountant who allegedly cooked the books, and the software developers who worked on the exchange and created allegedly false UIs for customers so that they would believe that the balances they were seeing online were legitimate, when in fact according to the police, there was no money in crypto or fiat behind the balances reflective on the UI customers saw online.

It’s not the first time that software developers and accountants in connection with digital currency exchanges have been arrested or prosecuted. Accountants usually control access to banking and ultimately make the decisions to move customer money – for good or for bad purposes. They perform a financial gatekeeping function for digital currency exchanges in respect of customers funds.

According to Turkish news, the Turkish government asked Albania to prosecute any Albanians who assisted Özer after the collapse of the exchange.

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A British Columbia issuer pivots from mining to gold to silica to MSBs to silica to cannabis to mining to FinTech to cannabis

By Christine Duhaime | May 22nd, 2021

Once upon a time there was an issuer in British Columbia that went through so many pivots, one’s head spins reading their Sedar filings. Its name is StillCanna. We went through its Sedar filings for the sole purpose of documenting how some issuers pivot.

The issuer started out as Symbio Capital Corp., as a CPC hunting for a QT, founded, inter alia, by a self-described promoter named Richard Haslinger, and Ron Miles and David Franklin, a lawyer in Ontario.

In 2012, Symbio announced its IPO, selling securities offshore and raising $600,000.

All was quiet until 2014, when it announced it had entered into an option agreement in respect of mineral claims. An option agreement in the British Columbia mining ecosystem is an option to exercise an option for a right to acquire a mineral right.

Back in the day, issuers paid certain parties, often the same set of parties across Vancouver, exorbitant amounts of consideration for options to exercise an option to acquire a mineral right. For example, Symbio was on the hook to pay consideration of $100,000 plus 1 million shares for its option to acquire an option. The fact that its 43-101 said there were no mineral reserves or mineral resources on the mining property, and that no testing for one mineral was done on the site, appears to have been immaterial.

In 1998, Vancouver Sun reporter David Bains, wrote about a Vancouver issuer named Auromar Development Corp., that he said pumped out “steroid- enhanced news releases” in which the issuer alleged to investors that it would produce $10 million in diamonds per year. The stock flew up to $7. Not one diamond ever emerged from the site.

According to a Forbes Magazine article, Auromar’s lawyer in Vancouver recommended that Auromar merge with a company called Casmyn Corp. to remove it from Canadian jurisdiction to avoid a potential criminal investigation. Casmyn faced similar allegations of having promoted a stock based on alleged misrepresentations. In the end, it was the professional insurers of the gatekeepers – the lawyers and the auditors – who appear to have paid out shareholders who sued for losses – but not in Canada – in the US. Deloitte, in its capacity as auditor of the issuer, paid US$2.3 million and the insurer for the lawyer of the issuer paid US$900,000.

Back to the issuer; new natural persons entered into the picture with the acquisition of the option to exercise an option, including Jason Leikam, Nick Ayling, Faisal Manji, George Nicholson and a Richard Simpson. Ayling was, perhaps still is, a securities lawyer, according to the issuer’s disclosure.

In 2014, the issuer changed its name to Blackeagle Development Corp. And in 2016, it announced plans to get into the silica sand business and to change its name to EVI Global Developments Corp. with a view to expanding into China with two new people, Chun Kwok Cheung and Timo Strattner.

We don’t know if it ever extracted silica or expanded into China.

In 2016, it later announced it was now getting into gold.

By mid-2017, the issuer announced it was onto new things and it was now entering the money services business by acquiring an online MSB, in essence a foreign exchange and payment processor.

Days later, it announced it was back in the silica business too.

The summer announcements weren’t over. Two months later, it announced a third line of business into cannabis, acquiring shares from Matthew Kyska. A Chris Yu-Kai Hung then joined the board.

Material contracts were not filed on Sedar in respect of many of these deals.

A mere six months later, the issuer was back into mining – in Peru this time.

A month later, it was back into FinTech, specifically back into payment processing and announced it was acquiring a global payments processing processor called CashTeleport Inc. that operated as an online money transmitter (an MSB) for consideration of $5 million. The issuer said it hoped to be able to cash teleport. We can find no trace of an MSB or payment processor that operated globally, even locally, called CashTeleport Inc.

A week later, Brendan Purdy, from the Vancouver issuer Global Blockchain Technologies Corp., another securities lawyer in the microcap space, joined the issuer.

The issuer then completed a plan of arrangement and Jason Dussault joined the issuer, followed by an executive from a home gutter cleaning service named Denis Semenov.

By September 2018, it was back into cannabis, acquiring a company in the EU.

In 2019, the issuer announced a name change to StillCanna Inc. and a series of cannabis deals in Eastern Europe and the listing of its shares in the US and Germany.

A few weeks later, it announced another microcap securities lawyer by the name of William Macdonald was joining the issuer to replace the executive from the home gutter cleaner, as a director.

But not just that, the issuer announced that the lawyer was going to be acting as both a director of the issuer and legal counsel, providing advice in respect of the issuer’s legal obligations.

Since the days of lawyer Michael Seifert (coincidentally who was a finder, twice collecting a finder’s fee in convertible units with the same now-cease-traded issuer Global Blockchain Technologies Corp. as Brendan Purdy, mentioned above), it used to be that it was not permitted for a lawyer to act qua director of an issuer and as legal counsel but that rule appears not to have been enforced in a while and in fact, a review of many British Columbia issuers shows that lawyers are acting as both at the same time, being remunerated in both capacities.

It is possible, but doubtful, that the rules changed allowing lawyers to act as a director of an issuer for compensation, as well as to accept shares and options for free from the issuer, and then to put on a third hat and act as legal counsel for compensation. How such a lawyer attends an AGM, or writes the Information Circular in respect thereof for that matter, keeping those three different hats on his head is a kind of a neat hat trick.

Back to the issuer; several more natural persons then joined the issuer, including a Polish national named Kazimierz Malik. Around the same time, a Vancouver person named Marc Crimeni, appeared in a Sedar filing of the issuer as a material shareholder and director.

Crimeni was banned from being a director of an issuer in British Columbia for a short period of time over a failure to disclose that he was facing a criminal charge over improperly storing a gun.

Later, the issuer announced that Crimeni was its “founder” and that he relocated to the EU.

Wait – its founder?

Not according to the securities law disclosure record. According to that, the founders were the promoter Haslinger, Ron Miles, Paul Fong, Alex Kim and David Franklin, and copies of their share subscriptions for founder shares are filed on Sedar.

So what was Cremeni’s role and how long he was with the issuer is unknown.

The issuer then changed its name once more to Sativa Wellness Group Inc. and then Covid hit the world, and then a lawsuit hit the issuer.

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银行对电信网络诈骗的反洗钱重点

By Christine Duhaime | April 20th, 2021

China is reporting that in 2020, 64% of cybercrime involved financial fraud, including online illegal gambling, online illegal loans and illegal securities sold online on various platforms, such as WeChat and QQ.

Many of the fraud cases involved Bitcoin and other digital currencies.

In December 2020, the public security agency of China intercepted a transnational criminal organization operating a fraudulent digital currency lending service between the city of Quezon and the Philippines, arresting 342 Chinese foreign nationals and seizing 7,329 mobile phones and nearly 1,000 computers.

Last year in China, 141,870 people were prosecuted for cybercrimes, an increase of 47.9%, according to data from the Supreme People’s Procuratorate. This flowed from 361,000 arrests. In 2020, China took down 1.6 million fraudulent websites and dismantled 11,000 gangs involved in bank fraud using credit cards online.

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Story of Canadian killer and money launderer, the focus of Netflix true crime series

By Christine Duhaime | April 4th, 2021

Netflix’s “The Serpent“, is bringing the story of Canadian Marie-Andrée Leclerc back into the spotlight. Leclerc, together with her partner Hatchand Bhaonani Gurumukh Charles Sobhraj, aka Charles Sobhraj, were serial killers who, in the late 1970s and early 1980s, murdered several back-packers in Asia, stole their money and lived off the proceeds of crime. She was prosecuted for two of the murders.

Leclerc was from Levis, Quebec.

In 1975, Leclerc met Sobhraj, a Vietnamese foreign national, in India and fell in love with him. She returned to Canada, packed up her things and moved with Sobhraj to Thailand in 1975.

Their strategy involved befriending young tourists, drugging them, often killing them and taking their passports, cash and travellers cheques. They needed the passports to cash the travellers cheques but also used them to travel across Asia. They invented fake names – she was ‘Monique’ and he was ‘Alain Gautier’.

One of the first victims was a tourist from Seattle named Teresa Knowlton. She was drowned in the gulf of Thailand near Pattaya. Some of Ms. Knowlton’s belongings were found in the apartment of Leclerc and Sobhraj. It was not Sobhraj’s first victim, though. He had left a trail of criminality across several countries before meeting Leclerc.

The next victim of the pair in Thailand was a Turkish national named Vitali Hakim. His body was found near the same town of Pattaya, as Ms. Knowlton. He had been badly burned. He had spent several days with Leclerc and Sobhraj before his death. Sobhraj used Hakim’s passport to travel.

Two other victims, Heink Bintanja and Cornelia Hemker, were found dead and burned in Bangkok, and they too had spent time with Sobhraj and Leclerc before their deaths. Another victim, Ann Mary Parry, was murdered while she was searching for Vitali Hakim.

One of their victims who lived, Dominique Renelleau, who was poisoned over a three month period, later testified that Leclerc acted as the poisoner for the duo.

Another person who met Sobhraj but refused to engage with him further, as well as Nadine Gires, who lived in the same apartment complex as Leclerc and Sobhraj in Thailand, met many of the victims and describes her experiences below.

In December 1975, Leclerc and Sobhraj used the passports of Heink Bintanja and Cornelia Hemker to leave Thailand for Nepal. A few days after arriving, they murdered a Canadian, Laurent Armand Carriere, and an American named Connie Bronzich. After those murders, they traveled to India, where they killed an Israeli named Avoni Jacob. They then returned to Thailand.

Shortly after returning to Thailand, Sobhraj became aware that there was an investigation into the deaths of Heink Bintanja and Cornelia Hemker, among others, and that he was a suspect.

He and Leclerc fled to Delhi, where they hooked up with two women, Mary Ellen Eather and Barbara Smith – those four were then accused of poisoning and robbing a man named Jean-Luc Solomon, who was subsequently murdered.

Several months later, in New Delhi, they decided to drug a group of French tourists who reported it to the police. The four were arrested. Eventually, Sobhraj revealed his identity in prison.

In 1980, Leclerc was found guilty of the murder of Avoni Jacob. In 1983, she was diagnosed with cancer in prison and was allowed to return to Canada for one year under compassionate grounds to receive treatment. She appears in this video here, arriving back in Canada like a celebrity.

For unknown reasons, Canada never prosecuted Leclerc for the murder of fellow Canadian, Laurent Armand Carriere, when she returned to the country. Or for offences in connection with the possession and use of his passport by her and Sobhraj. Leclerc, together with Sobhraj, is believed to be connected to at least 20 murders, making her one of Canada’s worst serial killers.

Leclerc died of cancer in 1984, after writing and publishing a number of memoires of her life in which she portrayed herself as an innocent victim of Sobhraj, and denied any complicity in the murders.

Leclerc’s book cover (Source: Amazon)

None of the victim’s families have sought to disgorge from Leclerc’s estate, the revenues from her books, or to sue Leclerc’s estate for wrongful death in the civil sense.

A reporter from La Presse, Madeleine Poulin, travelled to India after the arrest of Leclerc and met with her. She says in this video (here), that her impression of Sobhraj was that he was a psychopath. With respect to Leclerc, she says that Leclerc tried to sell herself as a powerless person who herself was locked up by Sobhraj in the apartment in Thailand who had had no role in the murders.

Poulin, however, in her investigations in Thailand, visited the apartment in which victims were effectively incarcerated while they were poisoned to death and she notes that it would be impossible to be in that apartment and not see and hear the victims.

She also reported that people in the apartment complex who knew Sobhraj and Leclerc in Thailand told her that Leclerc was not locked-up and they saw her coming and going as she pleased.

Poulin also met Australian victims who survived and she said that the Australians told her that they were poisoned by Leclerc.

Poulin also says that the family of Leclerc in Quebec were very angry with her because her reporting detailed her findings in respect of Leclerc, as opposed to the story the family wanted told about her. Leclerc never expressed any remorse to any of the families of the victims and her family never expressed any compassion to those families either, in respect of the harm Leclerc caused.

In Nepal, Sobhraj was eventually convicted of killing Connie Bronzich. His lawyer alleged that the presiding judge accepted bribes in connection with his trial.

Sobhraj is still alive. He is believed to have committed major crimes in Thailand, Nepal, India, Iran and Afghanistan. Crime + Investigation here summarizes his crime spree.

Dutch diplomat, Herman Knippenberg, and his wife Angela Knippenberg, (who were not investigators or in law enforcement), worked for years to collect evidence and piece the case together in Thailand. They were investigating what happened to Bintanja and Hemker. 

Eventually, the Knippenbergs identified Alain Gautier (Sobhraj) as the likely killer and connected their murders to several others which had occurred across Thailand. This article (here) describes their journey to bring Sobhraj and Leclerc to justice.

It was the RCMP in Canada who actually cracked the case because it was their investigation that made the key connection and determined that the person named Alain Gautier was actually Charles Sobhraj.

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Queen of the North: the forgotten story of how a woman more dangerous than Lucky Luciano, ran the first Mexican drug cartel for 50 years

By Christine Duhaime | January 7th, 2021

More dangerous than Lucky Luciano

Before she packed her bags for the last time and fled her home in Juárez, Mexico in 1973, with the federal police hot on her trail, Ignacia “La Nacha” Jasso had been one of the most powerful and feared gangsters in Mexico for decades, described by American officials as more dangerous than notorious American crime boss Lucky Luciano.

La Nacha ran 1st drug cartel

La Nacha created the first drug cartel and operated what the US government called the largest international drug operation in Mexico and she led it for fifty years, longer than any other drug cartel leader. She was famous for using violence to expand drug trafficking territory and eliminate rivals who stood in her way, once ordering the execution of eleven drug traffickers one night when they would not cede their drug trade to her. In Mexico, she established the first major drug supply and distribution routes to the US, which decades later were used by the Guadalajara, Juárez and Sinaloa Cartels which helped them scale their drug empires when she was gone. These underworld achievements made her a pioneer mobster in the annals of drug trafficking in both the US and Mexico.

But because of it, La Nacha dodged trouble most of her adult life. She started early in life trafficking drugs, and although it was not easy for a woman to lead an international drug trafficking organization in Mexico, she learned to align herself with corrupt Mexican law enforcement officials, especially the Mexican Policía Judicial Federal to avoid serious time in prison and thrive as a drug trafficker, eventually becoming the first Mexican drug trafficker to control drug operations at the Mexican-US border.

She also appears to have been the first Mexican drug kingpin wanted by the US government for extradition.

While La Nacha has been mostly forgotten and minimized in the history of drug kingpins, the Queen of the North paved the way for the emergence in Mexico of the powerful drug cartel phenomena.

La Nacha’s early life

La Nacha was born in the mid 1890s in Juárez, Mexico, a town that borders El Paso, Texas.

During prohibition the population exploded, particularly as American distillers moved operations to Juárez.

Scotch-making in Juárez, 1921

In 1921, the population of Juárez was 19,451. By 1930, it more than doubled to 39,669. It became one of America’s favourite towns for vices of all sorts, receiving over 400,000 pleasure-seeking tourists a year.

Americans who crossed the border to Juárez came for the brothels, casinos, cabarets, opium and morphine dens and alcohol. It was the final destination for those looking to park 1920s morality at the US border.

Juárez was a town you went to because everything that was prohibited in Texas was permitted there.

Bar scene in downtown Juárez, 1929 (Source: FilmImages YouTube Channel)

Street of the Devil

Juárez experienced a golden age and an economic boom during prohibition. As the cabarets, casinos, drug dens and brothels sprouted up along Calle Diablo – the Street of the Devil – organized crime was not far behind.

Tourists at a bar in Juárez, 1924 (Source: Ciudad Juarez décadas de 1920-1940 on YouTube)
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Russian national who provided money laundering as a service, pleads guilty in US

By Christine Duhaime | December 18th, 2020

A Russian national, Maksim Boiko, who was accused of operating a money laundering as a service (“MLaaS“) business, pleaded guilty in Pittsburg today, to one count of conspiracy to launder money. In this case, the MLaaS involved opening personal and company bank accounts to receive and then move money for criminals and opening Bitcoin accounts at various digital currency exchanges for the same purpose.

The MLaaS fee was between 40% to 50% – slightly higher than commissions charged by MLaaS operators in Hong Kong and China.

Briefcase of cash (Source: FBI affidavit)

Cybercriminals hired Boiko to launder money

Boiko was among 20 eastern Europeans accused of being part of QQAAZZ, an organized criminal group that laundered proceeds of crime for cybercriminals around the world. He was arrested in Miami on January 20, 2020, attempting to enter the US.

Cash from China (Source: Instagram of Boiko)

The members of QQAAZZ are alleged to have moved tens of millions of dollars since 2016 to be laundered.

Boiko posted numerous photos on Instagram of an accumulation of cash from the US, Hong Kong and China, and of expensive sports cars. In an affidavit, the FBI deposed that Boiko also had photos of his accumulation of wealth on his Apple iCloud account.

Digital currency exchanges

Boiko held an account at the now-defunct BTC-e digital currency exchange and received 136 Bitcoin to his wallet address. Members of QQAAZZ held Bitcoin accounts at Binance, Coinbase, Bitstamp and Revolut that were used for money laundering.

Washing at a bank (Source: Instagram of Boiko)

The FBI deposed that Boiko used bank accounts in China, among other jurisdictions, to launder funds and communicated on an instant messaging platform called Jabber, used almost exclusively by criminals.

In order to provide the money laundering service, Boiko and other members of QQAAZZ, caused to be incorporated several private companies (shells) that had no purpose other than to be used to obtain a bank account in a lax AML jurisdiction. The MLaaS was advertised in Russia on Mazafaka as “a global, complicit bank drop service.”

Life of luxury

The Yacht experience (Source: Instagram of Boiko)
The Rolls experience (Source: Instagram of Boiko)
The Cadillac experience (Source: Instagram of Boiko)

Other Insta posting of wads of cash from Canada

Interestingly, the wads of cash that Boiko posted on his Instagram account seem to pale in comparison to photos (such as the one below) posted by one or more Canadians on their Instagram account(s) who promoted an ICO run by Canadians called HabibiCoin.

US$770,000 cash shown on Instagram account of a
Montreal promoter of the ICO HabibiCoin (Source: Instagram)
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How Canada was used during a global Covid-19 disinformation campaign against NATO

By Christine Duhaime | December 7th, 2020

Canadian troops

According to a report by NATO on countering disinformation, foreign state actors and others, launched a series of disinformation campaigns in Europe in connection with Covid-19 in April, 2020, one of which involved disseminating false information that Canadian troops were responsible for infecting Latvia with the Covid-19 virus.

Latvia

The disinformation campaign involved an elaborate scheme that manufactured a fake journalist’s interview in Latvia, fake documents published on social media and a statement alleged to be from Latvia’s Minister of Defence that was fabricated and sent from a fake email address. Presumably, the disinformation campaign was to elicit unrest.

Poland and Lithuania

At the same time, NATO says that two other similar disinformation campaigns were launched in Poland and Lithuania. In Poland, a forged letter from a Polish military leader was released purporting to criticize US troops. In Lithuania, a forged letter from NATO’s Secretary General was published alleging that NATO was withdrawing its troops from Lithuania.

False narratives were disseminated on social media accounts, including a fake social media account of a well-known journalist. The disinformation campaign went so far as to publish on YouTube, an edited speech given by NATO on an unrelated topic, repurposed to appear as if it was in respect of Covid-19, when it was not.

Laundering disinformation

All of the pieces of disinformation were laundered through multiple news outlets and on social media – some wittingly and some unwittingly. The report by NATO highlights the fact that it is not simply the creation of false narratives that impacts international security that is of global concern, but the laundering of false information through trusted platforms.

Depending upon its content, disinformation falls within the category of a national security threat or an international security issue because it sows discord and undermines confidence and trust in our democratic intuitions. When there is distrust of democratic institutions, they are at risk of remaining resilient. Disinformation can pose immediate threats when it causes people to question information from government sources and make decisions that affect national well-being. A prime example is a population’s response to government directions during a pandemic.

Inventor of disinformation

It is sometimes believed that the KGB invented and/or mastered disinformation but that is not accurate or supported by intelligence research.

The modern inventor of disinformation campaigns and fake news to manipulate foreign governments and the public and to elicit military action was a Canadian named William Stephenson. He faked his name (his real name was William Stanger), his background, his past and his education and used it to land a top-level job working for MI6 during WWII. Stanger was close to James Bond creator Ian Fleming and many of the 007 characteristics we all know (such as a Vodka Martini shaken, not stirred) are based on William Stanger.

Although Canadian, Stanger engaged in deep disinformation tactics in the US (against the American people in favour of the British) to incentivize Americans and the US government to financially support the UK during WWII, and join the war. Because his conduct was in furtherance of efforts to defeat Hitler, history has been kind to Stanger and he was knighted at the request of Churchill.

In today’s world, neither Stanger nor his techniques would be publicly lauded, like they were back then. Political disinformation of the breath, reach and manipulative effect that Stanger practiced as a foreign agent to manipulate a country that was an ally, was on another level altogether. It is now accepted in the intelligence community that deep disinformation poses significant threats to the rule of law and erodes trust in government institutions.

Shaken, not stirred (Source: YouTube)
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Malta businessman allegedly laundered €500 billion for ‘Ndrangheta and other Mafia; was preparing to launder €136 billion more

By Christine Duhaime | November 30th, 2020

According to prosecutors in Italy, a businessman in Malta and alleged IT specialist, Roberto Recordare, is under investigation for allegedly having laundered €500 billion in proceeds of crime for the ‘Ndrangheta, Cosa Nostra and Camorra Mafia groups and for planning to launder €136 billion more. Approximately €36 billion of the amount laundered was allegedly in cash. By sheer amount, Recordare may be the biggest money launderer of all time.

Roberto Recordare

Italian prosecutors said that they learned of Recordare’s activities in Malta through telephone interceptions. Allegedly, he laundered funds through Dubai, Afghanistan and other countries that he thought were removed from the visibility of the US Treasury.

Recordare is allegedly aligned with the ‘Ndrangheta and is from the ‘Ndrangheta region of Calabria. It is believed that the ‘Ndrangheta offered money laundering as a service to other Mafia organizations for a commission with Recordare as the laundering kingpin.

Planned to kill Italian prosecutor

During the intercepted telephone communications, the police say that Recordare discussed killing an Italian prosecutor with a bomb, triggering a common law duty to warn from law enforcement in respect of the prosecutor. During those calls, Recordare allegedly discussed his use of private companies in Malta to front laundering activities. Two private companies tied to him in Malta are  Golem Malta Limited and Recordare Holding Limited.

According to this report, Recordare also planned to launder money using fake securities and fake humanitarian aid projects with funds routed through a lawyer. In 2017, he moved his documents to a cloud-based service based in Aruba, believing that the documents would be safe from law enforcement.

Recordare allegedly laughed about bombing death of Malta journalist

During the intercepted telephone communications, Recordare is alleged to have laughed about the assassination of Malta journalist Daphne Caruana Galizia, who died as a result of a car bomb and was recorded as saying that they were still picking up pieces of her in Malta. Ms. Galizia wrote a blog in which she covered financial crime and corruption in Malta.

Recordare’s two companies show up in the Paradise Papers database.

Recordare’s Malta companies in Paradise Papers

Malta is know for very lax anti-money laundering compliance. In 2017 through to 2018, it embarked on a tour of several countries, including Canada, to recruit Bitcoin and Blockchain companies to move their business there with the promise of light to no financial crime oversight, which is why today, there are still quite a number of Bitcoin digital currency exchanges and other digital currency enterprises physically or on paper, domiciled in Malta.

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Murder, violence and bombs – how the Mafia extorts a whole city

By Christine Duhaime | November 29th, 2020

Controlling a whole city

It can sometimes be hard to grasp the extent to which the Mafia operates its extortion racket against businesses, and the extent to which it controls so many businesses with threats of bombs, violence and death.

Società Foggiana detonates a bomb at a store that wouldn’t pay extortion (Source: YouTube)

An Italian investigating Judge, Francesco Agnino, came across Mafia extortion activities that were so pervasive, the whole city of Foggia, was under the control of the fifth Mafia, the Società Foggiana. In order to provide visibility over the problem, he decided to publish the names of the businesses being extorted by the Società Foggiana with the amounts extorted, as part of an investigation that was revealed by law enforcement last week.

Monthly extortion payments

In Foggia, extortion payments by the Società Foggiana are called an insurance premium.

Among the extortions found by law enforcement were:

  • Buononato SNC, a funereal home forced to pay €3,000 per month;
  • Fabbri SRL, an excavation company forced to pay €1,200 per month; and
  • Alessandro Carniola, a promoter forced to pay €1,500 per month.

Forced hires of Mafia family and friends

Some businesses were forced to hire employees who were members or friends of the Società Foggiana. For example, Daunia Spedizioni SRL, a transportation company, was forced to pay an undisclosed amount in extortion and hire three people aligned with the Mafia.

Rigging horse races

A horse jockey was forced to rig a standardbred horse race so that bets placed on a less favoured horse where the odds were higher, would pay out when the horse placed. Only the horse didn’t place and the Mafia threatened to kill the jockey and his son if he did not pay the Mafia back the money they would have made.

Two other jockeys who raced horses with best ranking finish times, were forced to rig standardbred horse races at the Ippodromo Del Sauri to make sure that their horses did not place so that the highest odds were paid out to the Mafia. Standardbred horse races tend to be favoured by Mafia for rigging because there is less oversight compared to thoroughbred horse racing. Different groups of Mafia have rigged horse races in the past. In 2017, the Palermo racetrack was suspended after law enforcement found evidence that the Cosa Nostra Mafia was rigging races and bets.

In Sicily, they also engage in illegal horse racing in the streets for money, a practice that involves drugging horses and forcing them to run for many miles, chasing them with scooters to terrorize them into continuing to run to exhaustion.

An illegal horse race in Italy (Source: YouTube)

Every sector was paying extortion

The tentacles of the Mafia in Foggia were felt in the food services sector – at the local farmer’s market, a merchant from Cerignola was forced to pay €3,000 a month to the Mafia. Tamma, a pasta factory, was forced to pay the Mafia €3,000 per month and forced to hire associates of the Società Foggiana in the factory.

Bars, restaurants, cafes and funeral homes were all forced to pay extortion fees to the Mafia.

Despite Covid-19, the Società Foggiana has continued its extortion, robbery, murder, gambling and fraud activities. A report (here) by Le Iene, covers their Covid-19 activities. In April, they bombed an old age home because its owner would not pay an extortion fee.

According to the investigation, the different families of the Società Foggiana met to go over lists of businesses that were paying extortion fees, with a view to identifying any that were not part of the payment scheme so that they could be “attacked.”

A Christmas bonus for the Mafia

The investigators said that they learned that extortion is calculated per month but is collected only every three months and then once more for Christmas, as a Christmas bonus for the Mafia.

The investigation led to the arrests of several members of the Società Foggiana this month for extortion, violence, attempted murder and membership in the Mafia.

Operation against the Società Foggiana (Source: YouTube)

In a new accelerated criminal trial process, 25 members of the Società Foggiana were convicted and sentenced to terms of incarceration ranging from four months to 18 years.

The Società Foggiana is called the fifth Mafia because they are considered the fifth Mafia organized group to form. They are the most violent at this time and the least interested in being opaque.

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Well-known leaders of organized crime welcomed at Montréal area casinos

By Christine Duhaime | November 26th, 2020

According to an investigation by a number of journalists with the Journal de Montréal (here), two casinos managed by Loto-Québec, a government agency, laid out the red carpet to well-known organized crime figures associated with the Cosa Nostra Mafia and Hell’s Angels.

Stefano Sollecito was VIP gambler

Their investigation found that Stefano Sollecito, said to be a well-known member of the Montréal Mafia and the son of Rocco Sollecito, gambled $2.5 million over the course of 2 to 3 years at the Casino de Montréal. Moreover, Sollecito was treated as a casino VIP client, and with deference by registered casino employees during phone calls obtained by the Journal de Montréal.

In 2019, Sollecito was one of the top ten gamblers at the Casino de Montréal a few months after being released from incarceration for gangsterism and cocaine trafficking charges. According to the investigation, although a well-known Mafia figure, Sollecito had bank accounts at the TD Bank and the National Bank, which he used to deposit cheques from gambling winnings.

The investigation found that Vito Rizzuto’s son, Leonardo Rizzuto, also gambled at casinos in Québec.

Members of Rizzuto organization (Source: RCMP Project Colisée Powerpoint, 2012)

Journalist Eric Thibault, who participated in the investigation, said during a TV interview that organized crime at Québec casinos was not new. He said that the RCMP learned during Operation Colisée, a project to dismantle the Rizzuto criminal organization, that Francesco Del Balso, said to be a well-known member of the Rizzuto organized crime family, had spent $7 million gambling with Loto-Québec in three years and that Loto-Québec had issued him cheques totalling $2.5 million.

Hell’s Angels also at casinos

Members of the Hell’s Angels also were permitted to gamble at government casinos in Québec, including David Lefebvre and Gregory Woolley.

Hell’s Angels member Gregory Woolley was seen by the Sûreté du Québec meeting Ziad Ziade, a Lebanese organized crime figure, at a restaurant at the Casino de Montréal.

Sollecito was not simply allowed to gamble, he was also comped freebies at two Montréal area casinos as a VIP gambler including a free dinner for four, free golfing, free hotel rooms and free concert tickets.

The investigation by the Journal de Montréal reported that 18 organized criminal groups were found to have laundered money at casinos in Québec.

Mr. Thibault said that Loto-Québec’s response to the investigation was that it followed all the laws applicable to it operating a registered casino as a government agency.

Did Loto-Québec know?

You may be wondering – did the Loto-Québec employees know these were organized crime figures? In one segment (here) as part of the published story, Richard Martineau interviewed one of the journalists who broke the story, Félix Séguin, and asks that very question directly. Here’s how the conversation loosely went, translated from French:

Martineau: That’s what I wanted to ask you, as a question – did they know?

Séguin: Well, of course…let me tell you a little story. At one point, the security of the Montréal Casino observed Mafia figures coming in to gamble in the millions per year and they filed reports with the lottery corporation. The lottery corporation informed FINTRAC that it believed that the Mafia was frequenting the Montréal Casino to launder money. FINTRAC responded “Yes, the Mafia is using you to launder money.” With one hand, Loto-Québec was reporting the Mafia to FINTRAC; with the other hand they were giving them gifts so that they would continue to spend money there. Do you see a problem of ethics and governance?

Martineau: But this is a problem of money has no smell – come gamble at casinos because we have a mission to bring in the most amount of money possible for the coffers of the state. We’ll pinch our nose; we’ll close our eyes, and that’s it – incredible.

Séguin: What you just said there has a certain validity. In some countries and in provinces, we have nationalized gambling and regulate it, partly to make sure to keep Mafia out. In some places like Switzerland and Monaco, with regulated casinos what they do is super interesting – where they suspect a person is gambling with proceeds of crime, they charge a surtax on the funds to the Mafia gambler. And you know what? The Mafia figures actually pay the surtax to launder money! In Canada, we have nationalized gambling (government conducts and manages all gambling).

Martineau: A few years ago, I spoke to Revenue Québec and asked them that, if I was the Mafia, if I had to pay sales taxes. They said yes, the Mafia has to pay those taxes by filling out a form and disclosing what the source is from, let’s say, drug trafficking. I asked if Revenue Québec would report me to the police and they said no, that Revenue Québec is not “stouleur” (means a rat or a tattle-tale) and Revenue Québec will not stouleur you to the police because there is a wall between us and law enforcement.

Séguin: I’m less sure that is accurate.

Martineau: No, he told me that. I asked if I could deduct my trips to Colombia to buy drugs and equipment I bought to weigh drugs and he said “yes” those are your expenses. It was surreal.

Martineau: Look, Loto-Québec is like Hydro-Québec, a state agency within a state agency and they are opaque and its hard to get information because they protect it. You did a sacré job with this investigation (a “sacré job” with an investigation means a hell of an investigation).

Séguin: One of the issues we discussed in editorial meetings was if a Mafia passes a test of identity with Loto-Québec and the test is faulty and they did not catch that it was the Mafia, what sort of standards do you have? In British Columbia, they have a commission looking at casino money laundering called the Cullen Commission and it deals with the same type of strategy as happened in British Columbia, and when we showed the Commission the Loto-Québec documents they said it was “troubling and shocking.” Meanwhile, Loto-Québec said they practiced the highest standards.

You can read the original series of stories from the Journal de Montréal website here. The journalists’ investigation and their writing of the stories that flowed from it really is a sacré job.

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