CORRUPTION IS ABOUND IN DEVELOPING COUNTRIES >

CORRUPTION IS ABOUND IN DEVELOPING COUNTRIES  >  

FROM THE -
JOURNALS of Monte Friesner ~ Tuesday December 07, 2010 >

Financial Crime Consultant for WANTED SA >

Watch Out for Undisclosed PEPs seeking to Open Accounts

It's a favourite tactic of corrupt PEPs: a colonel or general officer from a developing country has accumulated illicit wealth, through bribes, kickbacks or outright theft of government funds. He then takes a "holiday" trip to your jurisdiction, in the EU or North America, and presents himself, cleverly dressed in mufti*, to open an account. He does not identify himself as a PEP, but as the CEO of a major company, located in his country. What he fails to disclose is that the company is government-controlled, and that his executive status is titular only, to allow him to front as a civilian unconnected with his government. He utilises his position to support his ostensibly legitimate affluence. Just how do you uncover his true nature in customer due diligence ?  

Here are the techniques you should always employ when performing due diligence on any new high net-worth businessman from a country known for corruption, to rule them out as a possible PEP, meaning military officer, senior government official, or public sector leader:

• First, check out the company that they purport to hold a senior leadership position in: determining whether it is a government-controlled entity, if it is not publicly known, may be ascertained from internal media coverage, particularly if local media is state-controlled. Articles extolling the virtues of the company, particularly ones that look strangely like they were taken from press releases, may provide a clue. Also, who is quoted on behalf of the company ? Other individuals who could be themselves PEPs.    
• Second, does the company seem to have an extraordinary number of government contracts ? Does its website appear to be severe, and limited in scope, or does it have the bells and whistles of a marketing touch ? Government-owned entities with sweetheart contracts do not need to advertise, or to have a glossy website.
• Third, what does the Internet say about the new client ?  As you know, wealthy businessmen often are big supporters of charities, NGOs, shorts clubs, non-profits, business and fraternal associations, and other outlets for their wealth and energy. Does he own a yacht, stable of racing horses, or other symbols of conspicuous consumption ? If not, why not ?
• Finally, what's his track record ? Did he work at other companies on his way up ? If not, he may just be a PEP masquerading as a successful businessman solely for the purposes of opening an account with you. Be careful.

Should you decline the business of a PEP posing as a civilian ? If he or she is deliberately deceiving you as to their occupation, then you must also immediately question any representation as to Source of Funds; Watch yourself.

* Civilian clothes, for those readers without military experience. It is an old British military term, said to have originated with officers who, when off-duty in the Islamic areas of the former British Empire, wore local dress approximating that of local scholars. 

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WANTED SA Thanks Mr. Kenneth Rijock of World Check and all the Parties, Law Enforcement and Securities forces who have contributed to this article and their sincere opinions and statements.

WANTED SA states that the facts and opinions stated in this article are those of the author and not those of WANTED SA. We do not warrant the accuracy of any of the facts and opinions stated in this article nor do we endorse them or accept any form of responsibility for the articles.