Category Archives: trade

Upset About A Controversial Narco Deal, Mexico Reaffirms It Will Not Extradite Drug Kingpin El Chapo Guzmán To The U.S.

After a top Sinaloa Cartel “narco junior” secretly pleaded guilty in a U.S. federal court and is now cooperating with U.S. authorities, Mexico’s Attorney General Jesús Murillo Karam reaffirmed that Mexico has “no intention” of extraditing drug lord Joaquín “El Chapo” Guzmán to the U.S., where he faces multiple criminal charges in several states.

According to the Mexican press, Murillo Karam said he disapproves of U.S. prosecutors “reaching deals with criminals,” as they secretly did last year with Jesús Vicente “El Vicentillo” Zambada Niebla. Vicentillo is the 39-year old son of Ismael “El Mayo” Zambada, long considered No. 2 in the Sinaloa Cartel and now believed to be the new King after Guzmán’s arrest in February.

In a surprising plea bargain, reached a year ago and unsealed by a U.S. District Court in Chicago on April 4, Vicentillo admitted that he coordinated shipments of tons of cocaine and heroin as a top associate of El Chapo and a “trusted lieutenant for his father.” Under the deal, which was signed by five defense attorneys, he faces at least 10 years behind bars, and a fine of up to $4 million. If he provides “full and truthful cooperation” against El Chapo and his father, the government will try to spare him from a life sentence.

Vicentillo also agreed to forfeit assets amounting to $1.37 billion to the U.S. government, a figure he did not challenge – indicating that not only top leaders of the world’s most powerful cartels can amass billions, but possibly their children as well. El Chapo was  included in Forbes World’s  Billionaires list until 2012.

U.S. prosecutors consider Vicentillo their top witness against El Chapo if Mexico ever agrees to extradite him. There are unconfirmed reports that the U.S. government is strongly considering asking the Mexican government for the drug lord’s extradition now that they have Vicentillo on their side.

Murillo Karam said that the U.S. government has made no formal request to bring El Chapo to the U.S. But, he added, even if there were a formal request, “the fact is that we have no intention to send him” to be tried in U.S. courts. Furthermore, Murrillo Karam said that the U.S.-Mexico extradition treaty calls for criminals to be extradited only after they have served their full sentence in their native country. Guzmán faces eight active criminal cases in Mexico.

In addition to Murillo’s legal arguments, there is also a  political factor. “On the issue of extradition, there have always been sensitivities between Mexico and the U.S. because Mexico has to cede sovereignty,” Sergio Aguayo, an expert on Mexican national security and current visiting professor at Harvard University, told me. Up until the Calderón Administration, Mexico believed that nationals should not be extradited to the U.S. because letting U.S. courts try them meant an implicit recognition of Mexico’s judicial failure. Now with the PRI back in power some of those sensitivities have returned. Extraditing him before he serves his full term in Mexico will be politically very sensitive.

Chicago’s prosecutors are convinced they have the strongest case against El Chapo if he ever crosses the border. Vicentillo is one of four codefendants charged alongside El Chapo in Chicago who is currently in U.S. custody. Edgar Manuel Valencia, an  alleged Guzman henchman, was arrested in Las Vegas in January and secretly brought to Chicago, The Chicago Sun Timesreported. The U.S. government says the Sinaloa Cartel controls the drug distribution in the midwest. In 2013, Chicago declared El Chapo “Public Enemy Number One.”

Vicentillo was arrested in 2009 and extradited to the U.S. the following year. His attorneys said their client could not be prosecuted because he was a DEA informant and that DEA had granted him immunity in return for information. U.S. court documents published by the Mexican daily El Universal earlier this year seem to confirm that Vincentillo was an informant.  But DEA has denied granting immunity to Vicentillo in return for intelligence on rival cartels.  This made the plea bargain with Vicentillo even more controversial.

Advertisements

Hack attacks force wider Bitcoin halts

Bitcoins bitcoinHacking attacks have forced two of the leading Bitcoin exchanges to halt withdrawals, in a development that will further damage the prospects of the virtual currency winning mainstream acceptance.

Bitstamp, an exchange based in Slovenia, said it had suspended withdrawals after a denial of service attack – when hackers disable a website by flooding it with information requests.

BTC-e, based in Bulgaria, warned of a similar attack that could lead to delays in crediting users with transactions.

The problems emerged only a day after Mt Gox, one of the earliest companies to offer Bitcoin trading, also suspended withdrawals, because of a software bug that it said could affect “all transactions where Bitcoins are being sent to a third party”.

The Bitcoin Foundation, which promotes the virtual currency, played down the issue at the time, saying that although the bug should be eliminated, the problem lay primarily with Mt Gox’s own procedures and customised software.

On Tuesday, however, it admitted that the same issue – known as “transaction malleability” – was also plaguing Mt Gox’s peers, effectively shutting down much of the infrastructure for trading Bitcoin.

The design flaw, known for some time in the Bitcoin community, makes it possible for a user to change some of the details used to identify a Bitcoin transaction. This could simply lead to unintentional book keeping accidents, but it could also allow people to defraud an exchange by claiming a transaction had not gone through.

Danny Bradbury, writing on the website CoinDesk, explains that it is also possible to “cause wider problems for the Bitcoin network by deliberately launching transaction malleability attacks on multiple exchanges at once” – in a “concerted attack” of the kind that appears to have happened this week.

Supporters of Bitcoin maintain that this is not a fundamental problem with the currency, but simply an issue that exchanges will have to manage by adapting their processes for confirming transactions.

Gavin Andresen, chief scientist for the Bitcoin Foundation, said core developers were working with the exchanges to find ways around the problem.

Bitstamp underlined that “no funds have been lost and no funds are at risk”, even though many users will be unable to withdraw their money temporarily.

However, the shutdown will further damage perceptions of Bitcoin, coming as regulators around the world step up their scrutiny.

Even those critical of bitcoin’s potential to replace fiat currencies have acknowledged its technical virtuosity, but the latest incident shows the fragility of the infrastructure surrounding it.

“The choice of a reliable exchange remains the largest obstacle for bitcoin buyers,” wrote analysts at Commerzbank.

Bitcoin enthusiasts are ready to fill the gap. SecondMarket, a New York based trading platform that made its name offering a private market for Facebook shares, took the opportunity of Mt Gox’s shutdown to announce a pilot in bitcoin market-making.

But as John Normand, currency strategist at JPMorgan, points out, “many market participants would prefer the accountability of known but fallible entities to one based on a mathematical code. He adds: “Query: who does one call when there is a problem with bitcoin?”

Vladimir Putin ‘wants to regain Finland’ for Russia, adviser says

After annexing Crimea and with troops massed on the border of Ukraine, Vladimir Putin will not stop trying to expand Russia until he has “conquered” Belarus, the Baltic states and Finland, one of his closest former advisers has said.

According to Andrej Illarionov, the President’s chief economic adviser from 2000 to 2005, Mr Putin seeks to create “historical justice” with a return to the days of the last Tsar, Nicholas II, and the Soviet Union under Stalin.

Speaking to the Swedish newspaper Svenska Dagbladet, Mr Illarionov warned that Russia will argue that the granting of independence to Finland in 1917 was an act of “treason against national interests”.

“Putin’s view is that he protects what belongs to him and his predecessors,” Mr Illarionov said.

“Parts of Georgia, Ukraine, Belarus, the Baltic States and Finland are states where Putin claims to have ownership.

He added: “The West’s leaders seem, from what they say, entirely to have forgotten that there are some leaders in the world who want to conquer other countries.”

Mr Illarionov has helped draft a host of Russia’s economic policies in recent years, and served as Mr Putin’s personal representative at a number of G8 conferences. He is now a senior fellow at the Cato institute’s Center for Global Liberty and Prosperity in Washington.

Finland is not a Nato member, meaning a Russian invasion would not be considered an attack against the alliance. The commander of the Finnish air force has said it has increased surveillance operations over the Baltic Sea in recent weeks.

MTI/AP/Vadim Ghirda

The Scandinavian nation was part of the Russian empire for 108 years as an autonomous Grand Duchy. Asked if Mr Putin posed an immediate threat to what is now a stalwart of the EU, Mr Illarionov said: “It is not on Putin’s agenda today or tomorrow.

“But if Putin is not stopped, the issue will be brought sooner or later. Putin has said several times that the Bolsheviks and Communists made big mistakes. He could well say that the Bolsheviks in 1917 committed treason against Russian national interests by granting Finland’s independence.”

On the subject of what can be done to stop the progress of Russian expansion, Mr Illarionov said sanctions had helped rather than hindered Mr Putin because they “confirm his view of the world” – and that of “the Kremlin’s propaganda”.

“We must offer resistance by all means available,” he said. “I’m not a bloodthirsty person, but there is sometimes no other way than military power to stop an opponent. The only answer to pure aggression is demonstrating willingness to offer a collective defence.”

Mafia-Style Romanian Gang Trafficked Female Sex Slaves into Italy

Romanian sex slave trade

Europol and UK police have dismantled a mafia-style Romanian prostitution ring in Italy

A mafia-style Romanian gang used violence and intimidation to repress trafficked sex slaves in Italy. The gang also employed mafia-style tactics to control their criminal empire spanning Belgium, Romania and Italy.

Police forces from the UK joined other European forces as well as European Union crime agency Europol to swoop on the gang, arresting 13 suspects in Italy, nine in Romania and two in Belgium.

They were accused of trafficking young Romanian women to Italy to exploit them through forced prostitution, but the investigation also seized luxury cars, mobile phones, tablets and false identity documents.

The probe started in January 2012 following the detection of two rival gangs operating in the Italian central region of Marche, who were sexually exploiting Romanian prostitutes as well as committing a wide variety of crimes.

The investigation found that criminal groups used mafioso methods to control their prostitution business in some cities of the Marche region.

They also fought turf wars to control their territory using violence, assault and arson, affecting Romanian and Albanian communities.

The female prostitution victims were recruited in Romania and then transferred to Italy to be exploited in the sex industry.

Prostitution was practised on the streets, in houses and hotels, and advertised through dedicated websites and newspapers, with rates and places of work dictated by the organisation’s leaders.

CEO Of Liechtenstein Bank Frick Murdered In Broad Daylight

The logo of the Liechtenstein Bank (LLB) in Zurich

Over the weekend the world was gripped by the drama surrounding the mysterious murder-homicide of the former CEO of Dutch bank ABN Amro and members of his family, and whether there is more foul play than meets the eye. However, that is nothing compared to what just happened in the tiny, and all too quiet Principality of Lichtenstein, where moments ago the CEO of local financial institution Bank Frick & Co. AG, Juergen Frick, was shot dead in the underground garage of the bank located in the city of Balzers.

Based on preliminary reports, the murder is the result of a disgruntled fund manager, Juergen Germann, who had previously been embroiled in a “bitter dispute” with the government and the bank. Bloomberg has more:

A 48-year-old man was shot dead in the underground garage of a financial institution in Balzers at 7:30 a.m. local time, the principality’s police said on its website. The suspect, Juergen Hermann, fled the scene in a Smart car with Liechtenstein number plates, according to police. Neither the victim nor the institution were identified in the statement.

The deceased was Juergen Frick, CEO of Bank Frick & Co. AG, Switzerland’s Radio 1 said in an e-mailed statement, citing employees of the bank. Calls to Bank Frick were answered by a voice-mail message saying the company is closed because of “a death.” It gave no further details.

Hermann is a fund manager who has been embroiled in a dispute with the Liechtenstein government and Bank Frick for many years, Switzerland’s Radio 1 said.

The Liechtenstein government and the country’s Financial Market Authority “illegally destroyed my investment company Hermann Finance and its funds, depriving me of my livelihood,” according to a website registered under the name Juergen Hermann of Hermann Finance AG.

He has filed lawsuits seeking recovery of 200 million Swiss francs ($225 million) from the government and 33 million francs from Bank Frick, according to the website. The lender “illegally enriched itself,” among other alleged crimes, it said.

A representative of Hermann’s lawyer declined to comment when reached by telephone. A call to Hermann Finance’s office was answered by an employee of a law firm who said his company isn’t related to Hermann Finance.

The narrative against the “publicly hostile” alleged shooter has already been flushed out.

Hermann has been “publicly hostile” to the country’s Financial Market Authority and some of its employees, forcing it to take security measures in consultation with the police, FMA spokesman Beat Krieger said in an e-mail today.

The escape vehicle was later found in the village of Ruggell, 25 kilometers (16 miles) north of Balzers, police said.

“The area is being searched by police with dogs and helicopters,” the 120-member police force said. Zurich police are helping to document the crime scene, spokesman Mario Cortesi said.

Here is the update form the local police station:

On Monday morning, it came in Balzers a homicide, the suspect is currently volatile.

Against 07.30 clock in an underground garage of a financial institution is a homicide in which a 48-year-old man was shot occurred. When volatile suspects are Jürgen Hermann from the Moors. He is armed and dangerous, according to police reports, the investigation of the National Police is in full swing.

Notes on a possible whereabouts of the suspects are requested immediately to the police landing +423 / 236 71 11. Upon encountering the suspect, it is important to exercise extreme caution.

Below is the profile of the murdered CEO, still on the bank’s website:

As CEO Jürgen Frick is closely involved in all business activities of the bank with a special focus lying on client advisory, financing and financial product development. As well he supervises all real estate development projects of the Bank.

Jürgen is also Chairman of the Board at Crystal Fund Management AG, a subsidiary of Bank Frick & Co.

Bank Frick is active in modern wealth management and provides a range of advisory services. As well it specializes in fund development and fund administration.

Our Bank entertains close ties to an efficient network of fiduciaries, insurers, tax experts, investment funds and law firms around the world.

We are completely independent. Our advice and our services cater exclusively to the individual needs and requirements of our clients.

Combinvest Establishment serves as holding for all bank shares. Family Frick is the majority stake holder.

After a successful career in international banking and fiduciary services, Kuno Frick senior founded in December 1998 Bank Frick & Co. AG. Due to his wide experience and excellent connections, Bank Frick proved an immediate success.

Since then, the bank’s assets under management have risen steadily. New business segments are continuously being added to the bank’s service portfolio, while existing ones are constantly being refined.

In autumn 2011, Bank Frick’s international presence was significantly enhanced with the opening of Bank Frick UK Branch in Mayfair, London.

Up until now it was mostly banker suicides. With the first open bank CEO murder, one wonders if there will be a change in the pattern.

Ukraine raises fears of gas price war with Russia

A pressure gauge is seen at an underground gas storage facility in the village of Mryn

Ukraine has warned that it may be on the verge of its third natural gas price stand-off with Gazprom in eight years, raising the possibility that Russian supplies to European markets could once again be disrupted.

Addressing his cabinet on Saturday afternoon amid lingering fears that Russia could launch further military incursions after last month’s annexation of Crimea, Ukraine’s prime minister said “Russia has not managed to grab Ukraine through military aggression, so now they are pursuing a plan to pressure and grab Ukraine through gas and economic aggression.”

Arseniy Yatseniuk said Ukraine did not accept the price of $500 per 1,000 cubic metres that Russia this week set for its Ukraine-bound gas.

“This price level is of the highest in Europe . . . it’s political, not economic. Ukraine is ready to continue buying natural gas at the price from last year . . . that is $268. This is an acceptable and market price,” he said.

Russia in 2009 completely halted gas transit through Ukraine amid a price dispute causing serious disruptions in eastern European gas markets. During the first price dispute in 2006, Ukraine allegedly siphoned EU bound gas for domestic needs after Russia sharply reduced transit flow.

Fears of supply disruptions after Russia took control of Crimea saw the price of UK natural gas, the benchmark European futures contract, leap to 61.7p a therm last month. However, the price has been in retreat ever since. The price of natural gas in Europe is at its lowest level since 2010 as warm weather and high storage levels curb demand for the fuel, but Russia supplies about 30 per cent of Europe’s natural gas, with almost half of it piped through Ukraine.

Warning that the next step of Russia could be to restrict natural gas supplies, Mr Yatseniuk urged his government and Western officials to prepare. He called upon the EU to pressure Slovakia’s gas transit pipeline operator into sanctioning so-called reverse gas transit flow schemes, allowing Ukraine which relies heavily on Russian fuel imports to diversify by importing European market gas.

Russia has not managed to grab Ukraine through military aggression, so now they are pursuing a plan to pressure and grab Ukraine through gas and economic aggression– Arseniy Yatseniuk

Mr Yatseniuk spoke minutes after the chairman of Gazprom piled further pressure upon his cash-strapped country by announcing that the Russian energy giant would seek $11.4bn in reimbursement from Kiev for gas price discounts from prior years that were unilaterally cancelled this week.

Alexei Miller spoke after the Russian government’s decision this week to annul a 2010 agreement through which Kiev got a gas price reduction in return for prolonging Russia’s right to use a Crimean port as base for its Black Sea naval fleet.

“Russia was paying an advance . . . therefore, the $11.4 billion is a debt that Ukraine has accrued to Russia,” Mr Miller said.

Kiev is trying to make a $2.2bn outstanding payment to Gazprom.

Mr Yatseniuk said Ukraine would “make all payments for previous gas supplies,” but “political pressure will not pass.”

Mr Yatseniuk said Ukraine could seek to defend its interests through arbitration if gas price talks with Russia failed. “If we don’t agree, there is a procedure foreseen in the agreements,” he said, “appealing to the Stockholm arbitrage.”