He called himself a serial entrepreneur. A Court found him to be a serial scammer. Aziz Com Mirza, a Canadian dropout from Montreal was convicted of fraud in a Dubai criminal court this week, sentenced to six months in jail and fined US$75,000. A few days earlier, he had been sentenced to a term of incarceration of six months for a second instance of fraud and fined US$140,000, for a total of 12 months in jail, not including time spent in remand. There is also a deportation order in place to remove him from Dubai at the conclusion of his sentences and return him to Canada. There are still several civil cases against him in Dubai.
Mirza was arrested in October 2019, after several people who invested into one or more of Mirza’s schemes filed complaints with authorities.
Com Mirza wearing HabibiCoin hat merch
Mirza ran a number of investment schemes including a digital currency launched as an initial coin offering (“ICO“) called HabibiCoin, touted as the Bitcoin of the Middle East. Each coin was alleged by Mirza to be backed by real estate in Dubai and because of that, the price could not decrease, Mirza alleged. Each coin was priced at US$0.05, and was alleged to have been created using the ERC20 standard. According to Mirza’s own representations online, he raised US$39 million in pre-sales of the ICO. Where that US$39 million is remains a mystery.
HabibiCoin was a fake digital currency that did not exist.
Mirza appears to have ran or led other investment and securities related projects including one called Leverage Program and a so-called entrepreneurial retreat program where he charged people money to take master classes on how to be a successful entrepreneur like him under various brand names such as the Dream Chasing Family and the Intentional Success Group.
We wrote about him earlier here – which is where you can see his US$1.2 million diamond watch, his horse, his luxury cars and his penthouse in Dubai.
Mirza says he got his business start in life allegedly selling lemonade at the age of seven, before becoming a multimillionaire and allegedly feeding 18 million starving people in Pakistan.
Mirza pumped HabibiCoin and some of the other schemes with the help of at least four other Canadians who are in the Bitcoin space, one who has a criminal record for defrauding millions of dollars from the elderly in the US, who is now in the cannabis space in Vancouver.
One of those four Canadians in Montreal posted numerous photos on social media of his piles of cash, and trips made to Panama and Dubai with Mirza, including a photo below of US$1 million in cash.
Approximately US$1 million cash in the custody of Montreal man who helped Mirza promote the fake HabibiCoin around the world
Another of the four Canadians who pumped HabibiCoin with Mirza recently spoke at something called Futurist in Toronto for Bitcoin people.
US$90,000 used to spell IVC, an alleged VC fund to help entrepreneurs that Mirza and a Montrealer launched.
The US Department of Justice has charged six former workers of eBay Inc. with cyberstalking and witness tampering over an online harassment campaign they are alleged to have launched against a woman blogger in Massachusetts. The federal crime of cyberbullying involves, among other things, harassing a person by means of a computer that causes emotional distress to that person.
According to an affidavit filed by the FBI in respect of two of the accused, the six employees appear to have been motivated to ensure that the woman’s reputation and business prospects were harmed. They are alleged to have established a plan to “take her down.” To operationalize that plan, they allegedly began sending anonymous negative messages and posting negative content directed at her on social media, calling her a “bitch”, among other things. They also allegedly threatened to show up at locations where they knew she would be located, and stalked her offline as well as online, for a number of weeks.
In a private social media channel, the eBay workers allegedly shared screenshots of her and of their activities so that they were kept up to speed on their harassment activities, and allegedly were proud of the damage their conduct was having on her. They then came up with a plan to embarrass her in her sphere of influence.
According to the FBI, the harassers became more aggressive and looked into the woman’s personal information, which they shared among each other in the private social media channel and then posted online. They allegedly created an anonymous twitter account with a picture of a skull as the account profile to use to send tweets to the victim, which the FBI says was done to intimidate her.
The harassers allegedly were aware that their online harassment was distressing the victim but they kept going anyway, and even sent her items in the mail.
They then are alleged to have created a file to report her to the police, having no evidence at all that she had committed a crime. The FBI affidavit states, in summary, that they worked on the creation of non-substantiated facts to create a report to falsely report her to the police, while they themselves were committing the cyberstalking crimes against her on Twitter and on other social media platforms as a way to harm her, and also so that if she reported the conduct to the police, they would have a fake justification for their actions.
The FBI says that when the six former employees learned that the victim had informed law enforcement of what was happening to her, they deleted their communications in the private social media channel, and wiped their phones to obstruct a federal investigation and obstruct justice.
The alleged stalking and online hate began in April 2019 and became a police matter shortly thereafter. According to the filings, a significant amount of IP investigations work was conducted to tie the online activity to the owners of the computers and devices used to send the anonymous online content, log in to the private social media channel and log in to social media platforms.
The defendants, James Baugh, David Harville, Stephanie Popp, Brian Gilbert, Stephanie Stockwell and Veronica Zea, if convicted, face a term of imprisonment of up to five years for the cyberstalking charges, twenty years for witness tampering, and an additional five years for conspiracy in respect of the harassing conduct and witness tampering.
eBay terminated the employees, but is likely to be held liable as a civil matter to the victim because the harassment occurred on company time, using the resources of eBay, including its email system, its Internet, company iPhones and company computers. By all accounts, the employer was not monitoring the activities of these employees, or trusted them too much. The employer is also likely to be held liable for economic damages for intentional interference with the woman’s business.
It’s possible that more charges may flow. If they made a statement to the police about the victim, filed a police report or aided or abetted someone else to file an unsubstantiated false police report, they may be subject to imprisonment on conviction of making a false statement to a federal investigator. The employer, eBay, is also likely to take action for the use of its corporate resources to commit the alleged crimes.
Everything I know about the Eighth Amendment and death penalty jurisprudence, I learned from former US Supreme Court Justice Anthony Kennedy, from whom I had the privilege of studying law during a course on international human rights and constitutional law.
US Supreme Court Justice Kennedy, as he was then, was not my law professor but he educated our American law school class on death penalty jurisprudence. I mention Justice Kennedy because what emerged from his class was the foreseeability that the day would come when a foreign country may cease to provide intelligence or evidence to US government agencies because of the Eighth Amendment of the US Constitution and the death penalty.
With then US Supreme Court Justice Anthony Kennedy
It seems that day has arrived.
UK pausing handing over MLAT evidence because of Court ruling
A few days ago, British authorities, according to media reports, informed the US Department of Justice that it has suspended providing evidence to the US government in connection with investigations because of the death penalty in the US (and by implication, its interpretation of the Eighth Amendment).
Relying upon the decision in the UK Supreme Court in Elgizouli v. Secretary of State for the Home Department [2020] UKSC 10, on appeal from [2019] EWHC 60 (“Elgizouli“), the UK government has apparently declined to provide assistance under a mutual legal assistance treaty (“MLAT“) to the US in connection with a Visa fraud case. All things considered, Visa fraud is not considered in all countries to be a major criminal offence.
The UK is said to have informed its US counterparts that it has paused the provision of evidence to all countries with the death penalty on the books, not just the US, because of the Elgizouli decision. But the Elgizouli decision is about more than the death penalty.
So, what happened in the Elgizouli case that altered the legal landscape and paused international MLAT cooperation for law enforcement investigations, even low grade ones, among the US and the UK?
ISIS terrorist activities against humanity
Elgizouli is a case that has to do with the prosecution of members of a terrorist organization who engaged in terrorist activities.
During the time in which the Sunni terrorist organization called the Islamic State (“ISIS“) controlled territory in Iraq and Syria and set up a pseudo state, it commenced a campaign of kidnapping foreign nationals, beheading them, filming the beheadings and publishing the filming of the murders on Twitter and other social media channels.
Among those captured and beheaded were James Foley, Steven Sotloff, Peter Kassig, David Haines and Alan Henning. In one case, a Jordanian member of the military was set on fire in a cage and his death was filmed and posted on Twitter. Thousands of Yazidi children and teenage girls were kidnapped, trafficked, sold and forced into sexual slavery by ISIS.
With the collapse of ISIS, their members fled to refugee camps, fled to Turkey, fled to houses to pretend to be non-ISIS and others were captured by Iraq, Syrian or Kurdish law enforcement agencies.
27 beheadings of US citizens and others
Two ISIS men implicated in the ISIS social media beheadings and killings of 27 foreigners, el Shafee el Sheikh and Alexanda Kotey, were captured by the Kurds in January 2018. el Sheikh lived in ar Raqqah during the time of ISIS.
el Shafee el Sheikh and Alexanda Kotey
It turns out that both are British foreign nationals. Because they originated from the UK and are implicated in the murder of US citizens in Syria, and are members of a terrorist organization which was responsible for the commission of heinous crimes against humanity, US law enforcement seeks their presence on US soil to prosecute them to provide justice for the families and for the global population harmed by ISIS.
The UK Supreme Court called the acts in which they are implicated as “the worst of the worst” and noted that their prosecution is an aim “shared by all right-thinking members of our society.”
MLAT request from US for criminal investigation
The US Department of Justice, pursuant to a 1994 MLAT with the UK for criminal matters, made a request of the UK government for files, data, personal records and such in connection with both of the ISIS men. The UK government made a decision to provide to the US government, the personal and other information in respect of the two ISIS men and in its correspondence to the US government sought assurances that the death penalty would not be sought.
When making the decision to hand over personal information and evidence, the UK government did not consider the relevant UK privacy legislation, the Data Protection Act 2018 (the “Data Act“). In all, the UK government collected, processed and formulated over 600 separate documents of el Sheikh. It is clear that the UK government provided the information verbally to the US government in respect of el Sheikh but not clear whether it handed over any physical files comprising the 600 documents.
Sometime after July 2019, el Sheikh and Kotey were handed over to the US government in Syria by the Kurds. Their whereabouts are unknown. el Sheikh has since been stripped of UK citizenship in connection with his terrorist activities.
MLATs are treaties among countries for the provision of evidence and personal information restricted to criminal matters, even if the criminal matter is at the investigation stage, as was the case here. However, there is anecdotal evidence that MLATs are used (abused) for investigations and to collect foreign evidence for matters that are not criminal, such as for civil or regulatory matters under non-criminal statutes.
Concerns over cruel and unusual punishment
In response to the UK government, US authorities informed it that the death penalty under its federal law was an option and that if it sought the death penalty as against el Sheikh, it would not use evidence obtained from the UK under the MLAT for that purpose.
In the meantime, prosecutors in the UK determined that they did not have sufficient evidence to prosecute el Sheikh in the UK, meaning that if he returned to the UK, he would be free. The UK government then formed the belief, after consulting with US prosecutors, that the prosecution of el Sheikh would only be viable if the US relied upon the evidence obtained pursuant to the MLAT by UK authorities. In other words, it became a “but for” proposition according to the UK.
Judicial review of UK government decision to provide evidence to the US
A few years later, the mother of el Sheikh, Ms. Elgizouli, became aware from a newspaper article that personal information and evidence of her child had been provided (at least verbally) to the US government and that a decision had been made to physically provide it to the US government pursuant to an MLAT. She filed a judicial review for a review of the decision of the UK government employee(s) and official(s) who made the decision to hand over evidence to a foreign country.
Her solicitor sought a judicial review on two grounds: (a) at common law, it was unlawful for the UK government to provide information under an MLAT or otherwise, to a foreign state that may be used in furtherance of a prosecution in that state where, upon conviction, sentencing may involve the death penalty; and (b) irrespective of (a) above, the provision of personal information of a person by the UK government was unlawful under the Data Act (similar to Canada’s PIPEDA).
UK Supreme Court decisions
In January 2019, Elgizouli’s judicial review application was dismissed by a UK Court, which held that the provision of information to the US government was lawful on both grounds – as a matter of the MLAT and under the Data Act.
Elgizouli then successfully appealed the lower court decision to the UK Supreme Court.
Ground one – constitutional violation
Lord Kerr, writing for the majority, held that the decision of the UK government to provide evidence to the US government in such circumstances was unlawful on both grounds – the MLAT and as a matter of privacy legislation.
On ground one – the MLAT – relying upon the Bill of Rights, 1688 (which is the law in Canada as well), the constitutional instrument, the Court held that cruel and unusual punishment is prohibited, and that the death penalty ( and its average 12 year incarceration waiting time), constitutes cruel and unusual punishment. The material parts of the UK decision hold that a state agency cannot use its powers in furtherance of punishment that may be inhumane (an Eighth Amendment consideration). The cruel and unusual punishment is determined in reference to UK law (e.g., the law of the MLAT provider not the MLAT requester).
The Court held that it was fundamentally illogical to refuse to extradite persons to death penalty countries yet to proceed to provide those same countries with evidence pursuant to an MLAT for prosecution where the outcome may be the same, without obtaining written undertakings as a condition precedent that the person will be treated to punishment consistent with the MLAT providing country (e.g., no death penalty).
The Court held that it was against the common law for the UK to facilitate a death penalty country in its prosecution of any person where that person’s life and liberty is in peril and they may be executed, irrespective of if the exercise of power to provide MLAT evidence is an exercise of the prerogative powers – a key point because a prerogative power is a residual power held by the Queen and her delegatees in places like Canada. Prerogative powers when exercised, are not subject to review in the same way, and hence the Court made the point of holding that the decision applied to the exercise of the prerogative power in MLAT matters.
Ground two – privacy law violation
On ground two – privacy legislation – the Court held that the decision to provide evidence of el Sheikh to the US government was unlawful as it was a violation of the Data Act. The UK government argued that in these circumstances, it was entitled to rely upon a provision of the Data Act that authorizes the disclosure of a person’s personal information, despite the violation of privacy, when a controller or competent authority provides the information for a law enforcement purpose upon request.
The UK Supreme Court said absolutely not.
It held that the collection and processing of evidence of el Sheikh was not lawful and that the law enforcement purpose for which it was sought was not legitimate. The purpose cannot be legitimate if it is inconsistent with UK law and it is inconsistent with UK law because of the risk in this case, however remote, of the defendant being subject to cruel and unusual punishment by virtue of the death penalty being on the table.
In addition, the fact that the UK government made a decision in respect of the sharing of personal data of a citizen to a foreign state for law enforcement purposes without appropriate safeguards in place to protect its citizen made it unlawful. The Court held that the only circumstance in which personal information or intel may be provided in such circumstances as arose here, is in an emergency situation in order to save lives or to protect the security of a nation.
What about MLATs sent to Canada?
UK law is applicable in Canada, especially the Bill of Rights, which is a constitutional instrument in Canada that is part of constitutional law, considered to be an always-speaking statute.
As a result of the Elgizouli decision, one can imagine that eventually a number of defence lawyers in Canada may challenge evidence provided to US regulatory agencies and law enforcement under MLATs on the dual grounds of an Eighth Amendment (Bill of Rights) argument and on the PIPEDA argument, even irrespective of the death penalty. That’s because what is considered cruel and unusual is in reference to the requestee, not the requestor, state, and the jurisprudence in that regard has dealt primarily with the the lengthy terms of incarceration while appeals progress and such, leading up to the termination of a convicted prisoner. The position against cruel and unusual punishment is a fundamental principal of justice in Canada (and per the Burns case, implicates the right to life, liberty and security).
Recollect that the UK is said to have refused an MLAT request of the US for an alleged Visa fraud case, where no death penalty is implicated.
MLAT may become a prosecution by proxy
One needs to recollect as well, vis à vis Canada as a country in which the death penalty has been abolished, that the law is that there is an obligation not to expose an accused to the real risks of its application, and not to provide the crucial link in the causal chain that would make such possible, a principle that is considered to have a wider application than in extradition. While merely persuasive, the special rapporteur for the United Nations on human rights took the position that the above obligations of death penalty abolitionist countries “extends to intelligence and incriminating evidence.” A prosecution by proxy is the concern and here the “but for” analysis arises, mentioned above. If Canada undertakes a “but for” action against one of its citizens (but for Canada providing evidence under an MLAT or otherwise that leads to the imposition of cruel and unusual punishment of one of its people in a foreign country, which would not have happened but for Canada’s help), it is prosecuting by proxy.
The Elgizouli case suggests that MLATs must be strictly complied with as to their terms and that undertakings as to punishment consistent with the law of the requestee, may have to be given by the requestor as a condition precedent of evidence being provided, and must be given in cases where the criminal investigation could lead to charges where the death penalty is available upon a conviction. Pursuant to Elgizouli, any disclosure of person information must be consistent with federal privacy legislation and have attendant safeguards attached to the disclosure thereof. Otherwise, the provision of evidence may be challenged years later when a person learns that they were secretly the subject of an MLAT. The cause of action to challenge a secret MLAT under judicial review, based on this case, arises when the MLAT becomes known to the person.
ISIS Beatle
The ISIS Beatle is not exactly a likeable character irrespective of the crimes he is alleged to have committed. Its notable that the UK Court, as it should, considered the law and not the character of the parties in the judicial review. The flippant and condescending personality of el Shafee el Sheikh is evident in this interview, below. Among other things, he refuses to look at the woman reporter (because she’s a woman), calls the FBI the least respectable among investigators with whom he encountered since his captivity by the Kurds, and refuses to denounce slavery.
Sources:
(1) Carol Steiker and Jordan Steiker, Justice Kennedy: He swung left on the death penalty but declined to swing for the fences, SCOTUSblog, July 2, 2018.
(2) Elgizouli v. Secretary of State for the Home Department [2020] UKSC 10, The Supreme Court, March 25, 2020.
(3) Britain briefly suspends sending evidence to US law enforcement, in move some see as a sign of fraying relationship, Washington Post, June 10, 2020.
(4) MEMRI TV YouTube Channel, British ISIS ‘Beatle’ El Shafee El Sheikh in Interview from Captivity: I Don’t Denounce Slavery, April 11, 2018.
The government of Nigeria obtained an asset seizure order in a Quebec Court to restrain a jet made by Bombardier, a Canadian airplane manufacturer that makes luxury jets for the elite of the world.
The application in furtherance of the asset seizure was for a politically exposed person (“PEP“) from Nigeria, a former government official named Daniel Etete, who allegedly bought a Bombardier jet for US$57 million. The jet showed up in Montreal on May 29, 2020, and on May 30, 2020, the Quebec Superior Court granted a restraint order.
Etete was the Minister of Petroleum in Nigeria. He is a convicted money launderer in France and there is an outstanding arrest warrant for him in connection with a US$1.3 billion oil deal in Nigeria in which it is alleged that bribes were paid, and not only that, it is alleged that a huge portion of the US$1.3 billion from the oil deal went to a company controlled beneficially by Etete. His conviction for money laundering involved his misappropriation of money belonging to the people of Nigeria to buy a chateau in France and other luxuries. At one point, he had five tons in US cash in France.
Despite a quite low salary, Etete was allegedly able to fund the purchase of a jet from Bombardier and to finance its operations and pilots. He is implicated in a corruption trial in Milan, Italy and is facing charges there. He allegedly paid US$57 million towards the jet and at the same time, bought some luxury vehicles.
Nigeria claims that Etete used his position to remove state assets from the country. Etete denies any wrongdoing.
To make things interesting, the jet appears to be registered to a company formed in the AML-lax jurisdiction of BVI, whose nominee is a former Bombardier employee, a Canadian named Giuseppina Russa.
To make things even more interesting, Etete appears to own a mansion in the same complex in Dubai, Emirates Hills, where another PEP from South Africa lives who also bought a luxury jet from Bombardier without impediment and with financing from an agency called the Export Development Canada.
Mexico’s financial intelligence unit, working with the DEA, yesterday announced that it had frozen the bank accounts of 1,770 men and women and 167 companies believed to be tied to, or working for, the Cartel Jalisco Nueva Generacion (“CJNG“), believed to have been used to launder approximately US$1.1 billion in proceeds of crime from the drug trafficking activities of the CJNG.
The head of Mexico’s FIU, Santiago Nieto, tweeted the freezing of the CJNG bank accounts.
The operation, dubbed Operation Blue Agave, named after the drink of Jalisco, went after CJNG cartel leaders, politically exposed persons in Mexico, CJNG lawyers and family members of the CJNG who are believed to have participated in, or benefited from, the alleged money laundering activities of the CJNG.
On Friday night, Francisco Navarette Serna, an alleged local leader of the CJNG was killed on stage singing during a live concern in Tierra Blanca, Mexico.
The CJNG is based in Guadalajara. Operation Blue Agave also targeted the Sinaloa cartel. The Sinaloa is known to be in charge of heroin and fentanyl trafficking in the US.
The CJNG is fighting for territory from the Sinaloa to control the lucrative fentanyl and counterfeit pill trafficking business into the US and Canada. The CJNG is the most powerful cartel in Mexico today as well as the richest. In some states, there are five cartels fighting to control the business of making and exporting fentanyl to the US, and onwards to Canada.
The leader of the CJNG is a former police officer named El Mencho. The cartel operates in at least 35 US states and in Puerto Rico.
In February, El Mencho’s son was extradited from Mexico to the US to face drug trafficking charges in Washington, DC. He is known as “El Menchito,” or “Lil’ Mencho,” and was No. 2 within the CJNG, which has an army of 5,000 soldiers.
His sister known as “La Negra” traveled from Mexico to Washington for his Court appearance but was arrested upon entering the courthouse.
And in May one of El Mencho’s brothers-in-law, was extradited from Uruguay to the US on charges of conspiracy to import cocaine and methamphetamine into the US.
The CJNG is a designated drug kingpin, as are many of its leaders.
The head of Mexico’s FIU subsequently tweeted that Mexico is going to continue to confront organized crime and exchange information with the DEA.
The proceeds of crime from a massive US$550 million Ponzi scheme perpetrated by two convicted fraudsters in the US – Kevin Merrill and Jay Ledford – are being auctioned at an online auction house starting next week, in part because of Covid-19.
Diamonds, sports memorabilia, art, gold coins, comic book from securities fraud being sold online
The auction house is selling the assets from one of the largest forfeitures from a Ponzi scheme in the US. Items up for auction include gold coins, a collection of Spider Man comic books, art, autographed sports memorabilia, diamonds, luxury watches, rare wines and other items seized by and forfeited to the US government, as part of its investigation of Merrill and Ledford for wire fraud, securities fraud and money laundering in 2018 in Maryland.
Covid-19 impacting forfeiture sales
Because of Covid-19, the sale of several mansions bought by Merrill and Ledford have fallen through, as buyers have backed away from buying. The sale of an interest in a Gulfstream G200 private jet and many exotic cars have had to be placed on hold due to Covid-19.
The online auction takes place on this site here, starting on June 3, 2020.
Indicted in 2018 for massive fraud
Merrill and Ledford (an accountant), raised more than US$550 million from investors selling fictitious securities in debt collection portfolios. They were the subject of a complaint by the Securities and Exchange Commission (“SEC“) for securities violations arising from their operation of the Ponzi scheme and were indicted and charged with money laundering, wire fraud, conspiracy and identity theft.
Fabricated wire confirmations
Merrill and Ledford sold securities through several layers of corporate entities to obfuscate their activities. They fabricated the value of the debt assets of the company to lure in investors and re-sold the same securities to newer investors, sometimes seven times over. They also sold what are called phantom securities or assets, which are assets that do not exist.
They then engaged in fraud related to banking, fabricating bank documents, including paperwork to show wire transfers took place when they hadn’t, and paperwork of purported wire confirmations from banks to prove that funds had been wired when they hadn’t. They also fabricated accounting records.
Investors’ money spent on cars, mansions, private jets, casinos
Merrill spent a large portion of investor funds on himself, including as follows:
an art collection;
a luxury watch collection;
US$500,000 interest in a private jet;
prepaid life insurance policies;
diamonds and jewellery;
a comic book collection valued at US$200,000;
12 mansions;
25 exotic cars including two Rolls Royces, two Lamborghinis, a Ferrari and a Bugatti worth over US$10 million;
sports memorabilia;
fine wine collection;
gold coins;
Bitcoin; and
shares in tech companies.
Merrill also rented exotic cars and took numerous private jet trips. He and Ledford spent US$25 million of investor money at various casinos. The accountant Ledford, also used investor funds and bought diamonds, cars and mansions.
Lies to investigators to obstruct justice
Before being indicted, Merrill was questioned by investigators for the SEC. He lied to the investigating agents and gave them fabricated documents, presumably to divert their attention away from him.
“Out and out fabricating”
US Attorney Robert Hur, who prosecuted the criminal case against Merrill, Ledford and a third man, said that the defendants told lies to prospective investors about almost every conceivable aspect of the scheme and took extraordinary steps, including identity theft, to fool investors and engaged in “out and out fabricating” of documents, including wire transfer confirmations.
He described the case to reporters as one that involved wading through layers of lies and deception. The identity theft involved using the names of employees without their consent on corporate documents. Some sophisticated investors did due diligence on the investments but were given fake bank, asset and trading records by Merrill and Ledford and relied upon them and were duped, without suspecting Merrill and Ledford had created falsified documentation.
“Wading through layers of lies and deception” US Attorney Robert Hur (Source: WJZ YouTube Channel)
Mental health and gambling addiction
Shortly after their arrests, Merrill and Ledford negotiated guilty pleas on the condition that it be recommended to the Courts that they be housed in minimum security prisons.
Merrill sought, as part of his plea, special treatment to address mental health issues during incarceration, suggesting that he may have had mental health issues that may have impaired his judgment.
“Obscenely greedy con artist”
At sentencing, the government called Merrill a “con artist” who was “obscenely greedy.” He was sentenced to 22 years in jail.
Ledford sought, as part of his plea, special treatment to address a gambling addiction problem, as well as the ability to enter a drug detox and rehab program, and to avail himself of mental health treatment programs in prison. He was sentenced to 14 years in prison.
But that wasn’t the end of it.
Violating Court order restraining assets
In violation of a Court order temporarily restraining all the identified and unidentified personal accounts and assets of Merrill and of the corporate entities, Merrill and his wife, Amanda Merrill, proceeded to deal with and dispose of some of those assets, including an account in Merrill’s name that the government had not discovered (but was part of the temporary asset restraint order).
When Merrill was arrested, the FBI had seized a number of assets and property including US$520,000 in cash in his Maryland home, his cars, jewellery and watches. Merrill was subsequently incarcerated and held in remand because the Court held that he posed a flight risk and a risk of the obstruction of justice. The lies to investors and investigators, as well as the fabrication of bank wires and the possibility of the dissipation of assets to defeat the asset restraint order, gave rise to a heightened risk of obstruction of justice and mandated remand, particularly since authorities were still investigating the extent of the fraud and attempting to locate victims. Merrill’s fraudulent conduct demonstrated that he would not likely respect any Court order, including in respect of the order over assets.
“Drink the good wine and replace it with s**t”
Concerns that Merrill was unlikely to abide by a Court order turned out to be valid.
While in remand, Merrill expressed his resentment to his wife that his accounts were frozen, and also realized that the government had failed to identify all his accounts and assets, and he was determined to use those unidentified assets.
He told her that the government had “taken enough” and instructed her to go to Florida and take cash that he had stashed there and hide it from authorities and to drink all the good wine in the house and replace it with “shit” wine.
“Fuck them” he wrote in a jail house note for her. Prison guards found the note in one of Merrill’s socks.
Ignoring the restraining order in respect of assets, Amanda Merrill dealt with an account in Merrill’s name without disclosing it to authorities and traveled to the mansion in Naples, Florida, where she removed bulk cash in suitcases. She instructed her lawyer to inform the US government that she had traveled to Florida for baby clothes. The FBI then executed search warrants at the Maryland and Florida houses and found US$23,000 in cash.
Amanda Merrill was charged with violating a Court order, obstruction of justice and conspiracy to remove property.
Merrill’s wife guilty of illegally dealing with assets
She pled guilty in a deal to one count of obstruction of justice. At sentencing, the Court was told that Merrill had conned and lied to her, as well as everyone else. Her lawyer said that she suffered a break down and should be given some accommodation. The Court disagreed and held that a message needed to be sent to deter violations of Court orders in respect of asset restraint in such cases and obstruction of justice. She was sentenced to house arrest and six weekends of jail time.
Merrill is incarcerated at Allenwood, Pennsylvania, until June 17, 2037, and Ledford is incarcerated at Safford, Arizona, until August 23, 2030.
This case wins first prize as the most unusual financial crime case of 2019. It’s about Dawn J. Bennett, a former stock broker from Maryland, who first worked with Western International Securities. In addition to selling securities, Bennett was a financial expert on a radio show where she dispensed investment advice and believed that she could use witchcraft to control lawyers at the SEC and cause them to end a financial crime investigation.
Things didn’t go so well for Bennett at any of the companies she worked at or started, including at Western International Securities.
In 2015, she was allowed to resign from Western International Securities in the midst of concerns that arose from the organization as to her handling of some of the firm’s accounts.
Radio show expert
Having been essentially asked to depart, she then set up her own company called DJB Holdings, LLC, and commenced to sell securities to the investing public using, inter alia, her appearances as an expert on the radio show. It was called Financial Myth Busting.
On the radio show, social media and in material provided to prospective investors, Bennett made numerous misrepresentations in connection with her company, particularly about the amount of assets under management, exaggerating the size of her company and number of customers, to lure in money. The misrepresentations were repeated. It seems that every time she hit the radio waves, she lied or exaggerated in one way or another to drive business or to give the illusion that her company could, would and did safeguard investments and could, would and did provide remarkable returns to investors.
Initial SEC investigation
Her misrepresentations on the radio show and on social media attracted the attention of the Securities and Exchange Commission (“SEC“), who investigated whether they were true and substantiated or were untrue and misrepresentations made to lure investors.
When the SEC came calling, Bennett decided that they had no jurisdiction over her and refused to participate in an SEC process. She did not appear for a hearing. As a result, she was barred from the industry and fined.
At that point, the SEC was only alleging that she exaggerated and misrepresented information to attract investments, but Bennett then proceeded to mount a public campaign to defend herself, alleging that she had not engaged in any wrongdoing and was being targeted on groundless allegations.
Bennett protested too much
For whatever reason, perhaps because of the “[thou] doth protest too much” syndrome, the government decided to continue with a deeper look into Bennett.
What they discovered was not pretty.
Ponzi scheme discovered
It turns out Bennett was indeed protesting too much to try to divert the SEC away from her because she was operating a Ponzi scheme, taking money from new investors to pay out old ones, all the while living a lavish lifestyle. She was still on the radio show, pumping her experience and expertise to drive money to the firm from people who trusted her and believed that their money would be safe.
Fabricated financial records
Two complaints were then filed – one from the SEC and the other from the DOJ, both in Maryland, alleging, in essence that Bennett sold US$20 million in fake securities to investors, some of whom were elderly, and that she spent investors’ money on jewellery, cosmetic surgery procedures for Botox, luxury items and to start a new business that she intended to use as an exit strategy. She appears to have never used investor money to buy anything for investors; rather she just straight spent it and gave investors fake statements so they had the illusion that they held investment products.
The SEC complaint stated that Bennett made false statements, lied and fabricated documents to SEC investigators as part of their investigation, and created falsified documents attached to a financial institution to obtain more money; in essence committing bank fraud to keep the Ponzi scheme going because it was out of money.
It got wonky
And here is where is gets wonky.
Before the filed complaints, Bennett was aware of the 2nd SEC investigation. Among other things, they were asking for documents and taking statements from her staff.
Bennett paid US$720,000 for online spiritual rituals to deal with the SEC investigation
During the investigation, Bennett sought help from unusual sources.
She located a website that sells spiritual yagya ceremonies, which is a ritual that takes place over a sacred fire (allegedly in India except that it was in Washington State) that sends out a curse or a blessing, and proceeded to spend US$720,000 on those yagyas. She emailed the yagya provider to say that she needed help with her “enemies”, and hired five of their people to do yagyas for 29 days straight.
Bennett cut up beef tongues and froze them with voodoo spells against SEC lawyers
When yagyas had no effect, she then consulted witch doctors, possibly also online, to place a voodoo spell over three SEC lawyers involved in her case. To activate the voodoo spells, Bennett bought beef tongues, split them in two and stated “I cross and cover you, come under my command. I command you to hold your tongue” over the tongues and then stored them in mason jars and put them in freezers. She believed that she had magical power to cast spells using voodoo that would cause three SEC lawyers to stop the investigations. She cast so many voodoo spells over the SEC lawyers, that the tongues filled two freezers at her home.
She ran out of freezer space and when the FBI showed up, she was out of magic and out of time.
Fake a breakdown
Bennett also paid the legal fees of her employees and prepped them to meet with the SEC and went so far as to prepare scripts for them. One employee was coached to claim that they suffered some sort of a temporary mental illness.
Bennett was charged with wire fraud, securities fraud and making false statements to obtain credit from a bank and customers.
Personal debt disappeared
At her trial, her lawyers alleged that she believed that the business was legitimate, and worked hard to make it successful, and alleged that she put her own money into the business to keep it afloat.
But according to the trial, that wasn’t true – she had no money of her own to begin with. She simply put back in customer money she had previously taken from investors. The evidence showed that before starting her last company, she owed significant debt and was being sued for collection and that she used money from the new company (from investors) to pay off that personal debt and keep debt collectors at bay.
She was convicted and sentenced to 20 years in jail. She is currently incarcerated at a minimum security facility in West Virginia until November 15, 2034.
Two High Court judges in Brunei convicted of money laundering and breach of trust for looting a Court trust account, will not be punished under Brunei’s new sharia law, which involves the hudud punishment of having their right hands amputated. Instead, they are going to jail.
In July 2018, the two judges, Haji Nabil Daraina bin Pehin Udana Khatib Dato Paduka Seri Setia Ustaz Haji Awang Badaruddin (“Badaruddin“) and Ramzidah binti Pehin Datu Kesuma Diraja Haji Abdul Rahman (“Ramzidah“), were arrested for embezzlement and money laundering for allegedly taking $15 million from the trust account of the High Court held for bankruptcy proceedings. Originally, they were charged with 157 charges, which were reduced to 40.
Ramzidah was convicted on January 15, 2020, of 14 counts of criminal breach of trust and 10 counts of money laundering.
Ramzidah was the Court receiver for bankruptcy cases and in such capacity, she oversaw payments into the Court’s trust account for creditors. She removed funds from 255 judgment debtors’ sub-accounts that were to be paid out from the Court’s account. In most countries, certain garnished or seized sums are paid to a Court receiver in a pooled trust account until the resolution of cases. It was the pooled trust account that she used to withdraw funds.
Badaruddin, who was a former prosecutor before becoming a judge, was convicted of six counts of money laundering. They were both charged with possession of unexplained wealth but those charges were stayed.
The couple had bought several luxury cars worth over $3 million, a few expensive watches worth $150,000, and funded private school tuition fees. Over $6 million was sent offshore to the UK and disappeared.
Their judge’s salaries were each only US$3,500 annually, inconsistent with their ability to have spent in the manner they did.
Ramzidah’s lawyer argued that the funds came from relatives and not from the Court’s pooled trust account, and then for Badaruddin, the lawyer argued, inconsistently, that Badaruddin was unaware that his wife was taking funds from the Court’s trust account and did not realize the cars, watches, lifestyle and funds chilling in their joint bank account were not legitimately earned. The lawyer informed the Court that Ramzidah suffered a severe mental collapse and both had mental health issues.
Both were sentenced to jail – 10 years for Ramzidah and 5 years for Badaruddin. However, on April 3, 2019, sharia law was implemented in Brunei and under its penal code, technically, the punishment was amputation of their right hands. After Brunei implemented sharia law, there was a backlash globally with calls to boycott hotels of its ruler, sultan Hassanal Bolkiah, primarily over the death penalty by stoning for homosexuality and adultery. For now, Brunei says it is practicing a dual legal system of its former English common law and sharia law.
As judges, Badaruddin and Ramzidah are politically exposed persons under anti-money laundering law, and as such, are more at risk statistically, to engage in corruption and launder proceeds of crime.
The sultan’s hotels include The Beverly Hills Hotel, Hotel Bel-Air, Hotel Principe di Savoia, Hotel Eden, Hotel Plaza Athenee, Le Meurice, The Dorchester, and 45 Park Lane. Most US banks prohibit their employees and executives from staying or booking events at, any hotel owned by the sultan.
The British Columbia Securities Commission (“BCSC“) and Securities and Exchange Commission (“SEC“) have jointly issued temporary cease trade orders in respect of a Vancouver company called Micron Waste Technologies Inc. (“Micron“). The BCSC cease trade order is here; the SEC cease trade order is here. It has been a number of years since a joint cease trade order has been issued by both.
The SEC suspension was issued after Micron hired a number of promotional-type companies on short-term contracts, one for $350,000. It then presumably caused to be promoted, or acquiesced in respect thereof, its stock on representations that it had the ability to rapidly make PPE to meet the needs of the global medical community during Covid-19. On the regulatory side, questions arose regarding the accuracy and adequacy of information in the marketplace about those representations.
According to its website, Micron makes cannabis waste technology solutions, which it states on its website, is a booming industry.
Despite the boom, it appears to be also pivoting into Covid-19 solutions and says that it has acquired a licence to manufacture PPE, which it states will protect against bio hazards, pathogens, and superbugs. This article here describes what bio-hazard protective gear is, and this article here also describes the levels of PPE, including level 4 for bio-hazards which is what Micron suggests it is manufacturing in a week. And this company here, describes PPE for law enforcement safety, dealing with bio-hazard threats in theatre.
In a news release, it states that it bought raw materials from China to make its own PPE and bought machinery from China to make its PPE, and that both are en route to Vancouver. It may not be known to Micron, but the chances of obtaining usable PPE raw materials and usable PPE manufacturing machinery from a government licensed company in China are slim. Literally, the whole world is seeking such things from China and the PPE fraud from China is astronomical at the moment.
According to its corporate filings, Micron is managed by a former RCMP officer who was in drug enforcement.
There is not yet filed on SEDAR, a material change report, or a copy of the material contracts in respect of its change to pivot into the PPE business through a new acquisition and loan arrangement, and in respect of its new licence to manufacture PPE for bio-hazards. Investors will also be able to know more when they can read the material contracts with China for PPE.
According to its financial statements on SEDAR, Micron has $2.5 million in the bank.
It paid $1.5 million to consultants in the past year, and made several payments to companies it says are controlled by its insiders.
The non-arms length consulting contracts have not yet been filed on SEDAR. The contracts for short-term investor relations and promotional services, including the one for $350,000, have not yet been filed on SEDAR either. Its short-term IR and promotional services contracts expire at the end of July 2020. Presumably there is a material event planned between now and the end of July 2020, such that $426,000 had to be paid for IR and promotional services, but what that event is remains unknown.
On the good news side, Micron represented in its SEDAR filings in May 2020, that its new PPE business will be self-funding. Thus it will not need to raise any more money from investors for a very long time.
According to an article from Iran, summarized in CoinDesk, it seems that the Central Bank of Iran may have agreed to a policy of working with digital currency exchanges in Iran to provide the connective banking relationships to facilitate international transactions of the movement of digital currencies and money in and out of Iran. One of the exchanges is this one.
Typically, the government of Iran works 24/7 to find ways to exit billions of dollars from Iran for its politically exposed persons and to buy goods and services, often through sanctions avoidance methods. The concern is that any use by Iran of digital currencies, especially mining activities, will help it move funds out anonymously anywhere in the world.
Concerns are heightened by the fact that digital currency exchanges have historically not applied or implemented sanctions laws to prevent transactions from Iran. For example, here is an article of a politically exposed person on a sanctions list who created a digital currency which a Canadian digital currency exchange is facilitating the sale of.
Older articles on Iran and digital currencies are here and here.
