This statement can be found in Vedral et al. 1997, eq. (1).
More precisely, given a bipartite state $\rho_{AB}$, they claim that any operation on $\rho_{AB}$ involving local operations plus classical communication can be written as $$\sum_k (A_k\otimes B_k)\rho_{AB}(A_k^\dagger\otimes B_k^\dagger)\tag A$$ for some operators $A_k, B_k$. This is a seminal result, used for example to prove the existence of bound entangled states.
I don't have any problem with the previous statement they make about general local operations being writable as $\Phi_{\mathrm{LGM}}(\rho)=\sum_{ij}(A_i\otimes B_j)\rho(A_i^\dagger \otimes B_j^\dagger)$, as any such $\Phi_{\mathrm{LGM}}$ should be by definition writable as composition/tensor product of two local operations: $\Phi_{\mathrm{LGM}}=\Phi_A\otimes\Phi_B$, and then if $A_i$ and $B_j$ are the Kraus operators of $\Phi_A$ and $\Phi_B$ we get the result.
However, when we allow classical communication it seems less obvious what a generic operation should look like. The Kraus decomposition of such a map $\Phi$ would a priori be written $\Phi(\rho_{AB})=\sum_k A_k \rho_{AB} A_k^\dagger$ where $A_k$ acts nonlocally on $AB$, but then I'm not sure how to translate the LOCC condition into a constraint for $\Phi$.