The following examples of money laundering investigations are excerpts from public record documents on file in the courts in the judicial district in which the cases were prosecuted. Criminal Investigation special agents participated in these multi-agency money laundering investigations by conducting the complete financial investigative aspects of the case.

Two Attorneys Sentenced on Money Laundering and Conspiracy Charges

On September 28, 2007, in Miami, Fla., Marc F. Desiderio and Loel H. Seitel, both attorneys, were sentenced for their roles in leasing houses for various periods of time on behalf of Jeffrey Tobin, a drug dealer. Desiderio was sentenced to 41 months in prison, to be followed by two years of supervised release, and ordered to pay a $75,000 fine. Seitel received five months in prison and five months home confinement, to be followed by two years of supervised release, and ordered to pay a $30,000 fine. In July 2007, Desiderio pleaded guilty to conspiracy to commit money laundering and Seitel pleaded guilty to conspiracy to obstruct justice.  According to court documents, beginning in about 1992, Jeffrey Tobin and Joseph Russo, Jr. were operating a substantial marijuana distribution organization.  In about 1994, Tobin met Desiderio and Seitel, attorneys practicing together in Englewood Cliffs, New Jersey, as well as in other states.  At that time, Tobin advised Desiderio and Seitel that he was operating a loan shark business and that he needed a stash house to store large amounts of cash needed in his business.  Tobin requested assistance in renting a residence in Englewood Cliffs on his behalf.  In all, over the course of approximately eight years, the defendants leased three stash houses for various periods of time on behalf of Tobin.  The leases for the houses were in the name of defendant Seitel.  They also purchased certain real estate on behalf of Tobin in the South Miami, Florida area.  They were provided with cash proceeds as reimbursement for the leased residences and $500,000 in cash proceeds as collateral for their purchase of the piece of real estate.  After learning of the investigation being conducted by the Internal Revenue Service and the Federal Bureau of Investigation, Desiderio, Seitel, Tobin, and others agreed to provide false and misleading information to the government concerning the nature of the relationship that the defendants had with Tobin.

Husband and Wife Sentenced for $200,000 Embezzlement, Money Laundering

On September 27, 2007, in Springfield, Mo., William F. Williams and Victoria L. Williams were each sentenced to 21 months in federal prison without parole for money laundering related to their embezzlement of nearly $200,000 from a Noel, Mo. car dealer.  The court also ordered the Williams to pay $196,361 in restitution to Hendren Chevrolet-Pontiac.  On May 15, 2007, the Williams each pleaded guilty to money laundering.  They admitted that they embezzled at least $196,361 from their employer, Hendren Chevrolet-Pontiac, between July 1997 and August 2001.  William Williams was employed as the dealership sales manager for Hendren Chevrolet-Pontiac from 1989 until 2001.  Victoria Williams was employed as the office manager and bookkeeper at Hendren Chevrolet-Pontiac during that time.  William and Victoria Williams intercepted checks made payable to Hendren and used the proceeds for their personal benefit.  The Williams admitted that they deposited checks made payable to Hendren into their personal bank account.  Victoria Williams also embezzled money from Hendren by writing checks payable to different vendors, then depositing those checks into her bank account.  The money fraudulently obtained by the Williams was transferred into their joint checking account, then transferred again to a GMAC demand account.  Following the discovery of the scheme by Hendren management, most of the money in the GMAC demand account was transferred into the Williams’ savings account.  The following day, those funds were transferred by wire transfer to another bank account, which is the basis of the money-laundering charge to which they pleaded guilty.

Tennessee Woman Sentenced on Money Laundering and Mail Fraud Charges

On September 21, 2007, in Nashville, TN, Bobbie G. Ward, of Murfreesboro, TN, was sentenced to 18 months in prison, to be followed by two years of supervised release, and ordered to pay $413,011 in restitution.  Ward pleaded guilty on July 13, 2007, to one count of mail fraud and one count of money laundering.  Testimony during Ward’s plea hearing revealed that from about October 1999 until around July 2002, Ward devised a scheme to obtain money or property by false pretenses, representations, and promises.  Specifically, Ward generated unauthorized purchase orders through her employer, Nortel Networks, Inc. (Nortel), for computers, computer accessories, and consumer electronics that were shipped to third parties as directed by Ward.  Nortel paid in excess of $900,000 to the supplier for the unauthorized purchases.  The third parties paid Ward in excess of $425,000 for the items received.  Ward admitted that Nortel’s payments for the unauthorized purchases were mailed to the vendor and that she conducted financial transactions in excess of $425,000 with the proceeds of the fraud scheme.  Ward then sold these items to various customers, either through direct contact or via eBay over the Internet.  Many of the purchasers paid Ward directly by checks or through a PayPal account established by Ward.

Minnesota Man Received 24 Month Sentence for Money Laundering

On September 17, 2007, in St. Paul, MN, John I. Priscella, of Crystal, MN, was sentenced to a 24 month prison term followed by two years of supervised release for money laundering.  Documents filed in this case indicate that in October 2004, Priscella arranged to wire funds he believed were from criminal activity to an off-shore account.  Specifically, Priscella met with an undercover law enforcement officer who told him he had $35,000 from the sale of stolen automobiles that had been transported across state lines.  Priscella then arranged the wire transmission of those funds to the account of Atlantis Trading at Provident Bank and Trust of Belize, Limited.  Priscella admitted that he knowingly and willingly conducted the transaction with the intent to conceal the true source of the money.

Union Bank Of California Enters into Deferred Prosecution Agreement and Forfeits $21.6 Million to Resolve Bank Secrecy Act Violations

On September 17, 2007, in San Diego, CA, Union Bank of California, N.A., a wholly-owned subsidiary of UnionBanCal Corporation, based in San Francisco, has entered into a deferred prosecution agreement on charges of failing to maintain an effective anti-money laundering program and agreed to forfeit $21.6 million to the U.S. government.  Union Bank of California (UBOC) waived indictment, agreed to the filing of an Information, and accepted and acknowledged responsibility for its conduct in a factual statement accompanying the Information.  In light of the bank’s significant remedial actions to date and its willingness to acknowledge responsibility for its actions, the government will recommend the dismissal with prejudice of the charge in 12 months, provided the bank fully implements significant anti-money laundering measures required by the agreement.  The charges and the deferred prosecution agreement arose out of transactions conducted between May 2003 and April 2004 by and through certain accounts at UBOC held by licensed Mexican casas de cambio (currency exchange houses). Several U.S. and international undercover operations documented the export of multi-ton quantities of cocaine out of Colombia to Mexico, for transshipment to the U.S. and Europe. Investigators then traced the flow of the resulting drug proceeds in the form of bulk shipments of U.S. dollars and euros to a few Mexican casas de cambio working in concert with one another, or to the direct deposit of drug proceeds to accounts held by the casas de cambio in Spain. In either case, once the drug proceeds were successfully placed with the Mexican casas de cambio, the proceeds were then either wire transferred or, after being converted to other negotiable instruments, directly shipped to UBOC for deposit to the casas de cambio bank accounts. UBOC failed to detect, identify and report the suspicious transactions in the accounts, as required by the Bank Secrecy Act, due to deficiencies in its anti-money laundering program.

Former Consultant for Vincentian Religious Order Sentenced on Fraud, Money Laundering and Tax Evasion Charges

On September 12, 2007, in St. Louis, MO, William Davidson was sentenced to 120 months for defrauding the Vincentian religious order, formally known as the Congregation of the Mission, Midwest Province.  According to court documents, Davidson was a consultant for the Vincentians, a religious order of the Catholic Church which serves Missouri, Colorado, Illinois, Kansas and the country of Kenya.  Beginning in about 1995, Davidson was involved in computer and other business consulting.  His contract provided for compensation of $150 per hour, with a minimum of 1,200 hours, for each year, the use of a car, office space and secretarial support.  Davidson admitted that while he was supposed to be assisting the Vincentians in the sale of property they owned in Perryville, MO, he entered into an agreement with a real estate broker to conceal an offer to purchase the property from the Vincentian order.  Part of the profit on the deal, $166,137, was paid to a company controlled by Davidson.  Davidson also received payments from subcontractors engaged in constructing the Lazarist Residence, a housing development for members of the Vincentian order.  Davidson was the project manager and obtained payments from contractors and subcontractors on the project while being paid by the Vincentians for the same work.  Davidson was ordered to make restitution to the Vincentians in the amount of over $700,000.  In addition, Davidson admitted that he deliberately did not file his 1998 tax return, and that he owes additional tax for that year.  He was ordered to make restitution to the Internal Revenue Service in the amount of $653,379.  Davidson also pleaded guilty to one count of money laundering involving a $200,000 investment he made with money he obtained from his fraudulent activities.

Defendant Sentenced for Conducting Multi-Million Dollar International Cable Piracy Business

On September 11, 2007, in Sacramento, CA, Carlo Ricardo Mireles, a current resident of Hawaii and a former resident of Las Vegas, NV, was sentenced to 16 months in prison, to be followed by three years of supervised release, for his participation in a nationwide and international cable piracy scheme.  He sold and distributed over 100,000 cable descramblers designed to illicitly obtain cable programming that resulted in gross sales of over $12 million.  In addition to prison time, Mireles was ordered to forfeit to the government the cash value of a series of real properties, bank accounts, and vehicles totaling in excess of $250,000.  Mireles pleaded guilty in February 2004 to seven charges including conspiracy to commit money laundering, mail fraud, and assisting in the unlawful interception and reception of communications services offered over a cable system.  Darryl Scott Poll, a co-defendant, was sentenced in June 2007 to 60 months in prison and ordered to pay a $350,000 fine.  According to court documents, between approximately June 1998 and December 2003, Mireles and Poll, doing business as Wholesale Electronics and Red Rock Group, Ltd., operated a business which manufactured and sold cable television descramblers allowing illicit access to cable programming.  The defendants advertised the descramblers extensively through a series of web sites on the Internet and also through national magazines.  The devices were specifically modified and/or designed to allow consumers to receive premium and pay-per-view cable television programming without the knowledge or authorization of cable operators.  As a result, consumers across the United States and in various foreign countries were able to use the descramblers to receive unlimited cable programming for free, depriving cable operators of subscription fees for the pirated programming.  The estimated loss of programming revenue was over $7 million.  The case is the product of an extensive investigation jointly conducted by the Sacramento Valley Hi Tech Crimes Task Force.

Defendant Sentenced for Conspiracy to Smuggle Illegal Aliens, Money Laundering, and Filing False Return

On September 10, 2007, in San Diego, CA, Luisa Gonzalez-Pizarro pleaded guilty to charges of money laundering and filing a false tax return.  Following her guilty pleas, Gonzalez-Pizarro was sentenced to 21 months in federal prison, to be followed by three years of supervised release.  Ricardo Gonzalez-Camacena, her husband, previously entered guilty pleas on August 30, 2007, to conspiracy to transport illegal aliens and to filing a false tax return.  He is scheduled for sentencing in November 2007.  Gonzalez-Pizarro entered her pleas based on her participation in an alien smuggling group led by her husband.  According to court records, Gonzalez-Pizarro admitted that she used $27,600 from alien smuggling proceeds to make a down payment on a home her husband purchased in Oceanside. Gonzalez-Pizarro also agreed she and her husband made money by arranging for the transportation of at least 89 recently smuggled illegal aliens to their ultimate destinations in Southern California.  Additionally, she acknowledged that she filed false income tax returns resulting in a $75,000 loss to the Internal Revenue Service. In her plea agreement, Gonzalez-Pizarro agreed to forfeit the Oceanside home along with an additional $350,000 in cash seized from multiple bank accounts, as well as two additional residences.

Mortgage Broker Sentenced to 18 Months in Prison for Money Laundering

On August 28, 2007, in Seattle, WA, Todd Love was sentenced to 18 months in prison and three years of supervised release.  Love pleaded guilty in August 2006 to conspiracy to engage in money laundering.  According to Love’s plea agreement, he assisted convicted drug dealer Robert Kesling with the purchase of a $722,869 house in Woodinville, WA.  Love acted as Kesling’s mortgage broker.  He accepted the $190,000 cash down payment from Kesling and gave it to Attorney Joel Manalang who placed it in his escrow account.  Love knew the cash was proceeds from drug trafficking.  However, Love created a false letter from Kesling’s father claiming the cash had been a gift.  He also created a letter from a local CPA firm claiming Kesling was in the property management business and had employed the CPA firm to do his taxes.  In fact, Kesling was never a client of the firm.  In a second transaction in the summer 2005, Love falsified documents to facilitate another real estate purchase by Bernard Casey, a different drug dealer.  Love arranged for Manalang to again move money through his escrow account for the sale.   Additionally, a third drug dealer, Joshua Macke, gave Love several hundred thousand dollars to invest in real estate.  Again, Love passed the money on to Manalang to deposit in his escrow account.  Joel Manalang was sentenced to 18 months in prison in November 2006.  Robert Kesling was sentenced December 9, 2005, to 17 years in prison.  Joshua Macke was sentenced July 13, 2007 to six years in prison.  Bernard Casey is awaiting sentencing.

Texas Man Sentenced for Money Laundering

On August 28, 2007, in Tyler, TX, Carl Green Morgan was sentenced to 60 months in prison and ordered to pay $990,443 in restitution for money laundering.  According to court evidence, from July 2005 to February 2006, Morgan was employed by Republic Industries, a cabinet manufacturer, as its transportation manager.  While serving in this capacity, Morgan devised multiple schemes to defraud Republic.  Morgan committed multiple wire fraud violations that resulted in his receipt of significant criminal proceeds, some of which he used to purchase a Harley Davidson motorcycle, thus engaging in a money laundering violation.

Oregon Man Sentenced to Prison in Multi-Million Dollar Investment Fraud Scheme

On August 21, 2007, in Portland, OR, James Ray Mast was sentenced to 51 months in prison, to be followed by three years of supervised release, and ordered to pay more than $4 million in restitution to victims.  Mast pleaded guilty in April 2007 to mail fraud and money laundering.  The charges stemmed from Mast’s role in promoting a fraudulent investment scheme in the name of GlobalTech Partners, Limited Partnership, an entity he created for the purpose of stealing people’s money.  According to the indictment, beginning in 2001 and continuing through 2005, Mast solicited investments for Enhanced Financial Services, Inc., GlobalTech Trading Group, Inc., and GlobalTech Partners, Limited Partnership, for the purpose of day trading in financial markets.  Mast either owned or controlled each of these three entities.  The scheme involved Mast falsely representing to investors, many of whom he had met through youth basketball programs, that he had been successfully day trading for a significant period of time.  In fact, Mast’s trading activity consistently resulted in financial losses.  He would tell investors he never had a losing quarter and that they would receive double-digit returns if they invested with his companies.  Mast mailed quarterly statements to investors that falsely depicted his trading scheme was generating large profits.  In total, Mast collected in excess of $4 million from investors, a portion of which he laundered through a casino in Las Vegas.  Bank and financial records subsequently showed that very little of the money was ever invested in day trading or any other legitimate investment activity.

Virginia Man Sentenced for His Role in Marijuana Distribution Ring

On August 17, 2007 in Alexandria, VA, Morey Wright was sentenced to 135 months in prison, followed by five years of supervised release for conspiracy to distribute 1,000 kilograms or more of marijuana and money laundering.  According to the indictment, Wright and his co-conspirators brought marijuana from Texas, California and Arizona to Virginia, Maryland, Pennsylvania and New York.  They recruited and hired couriers, long-haul truck drivers and shippers to transport the money and marijuana.  Wright deposited the proceeds of the illegal activity into bank accounts and placed the proceeds in the names of other individuals and entities to hide the unlawful activity and the nature, location, source, ownership and control of those funds.  He used the drug trafficking proceeds to pay for living expenses and to buy real estate in Florida, Jamaica and elsewhere.

Fugitive Sentenced to Over 6 Years in Prison for Money Laundering and Drug Charges

On August 16, 2007, in San Francisco, CA, Mario Azcarate was sentenced to 78 months in prison for money laundering and possession with intent to distribute cocaine.  Azcarate pleaded guilty on April 26, 2007.  According to court documents, in 1991, at his home in San Anselmo, California, Azcarate knowingly possessed more that 500 grams of cocaine with the intent to deliver it to other people.  He also used the proceeds from the sale of cocaine to make a mortgage payment on his home.  In August 1992, Azcarate fled the United States to avoid cocaine possession charges filed against him by the state of California.  In 2003, he was arrested and charged with money laundering in the United Kingdom.  He later was convicted on that charge.  In 2006 he was extradited to the United States.

Michigan Man Sentenced to 90 Months in Prison; Ordered to Pay Over $1 Million in Restitution

On August 16, 2007, in Detroit, MI, Michail Aronov was sentenced to 90 months in prison and ordered to pay over $1 million in restitution for his role as one of the ringleaders in a conspiracy to force Eastern European women to work as exotic dancers in Detroit area strip clubs.  Aronov was convicted for conspiring to violate the civil rights of the dancers through involuntary servitude, as well as immigration and money laundering conspiracies.  According to court papers, Aronov and his business partners operated a human trafficking ring and used the guise of a legitimate business, Beauty Search Inc., to cover their criminal conduct.  Aronov is the last of nine convicted defendants to be sentenced for crimes associated with this conspiracy.   Aronov’s co-defendant Maksimenko received a sentence of 14 years incarceration earlier this summer.

Five Members of a Human Smuggling Organization Sentenced

On August 9, 2007, in Laredo, TX, Marilina Pacheco Mendoza, Jesus Zendejas, Samir Fares Cury, Antonio Hernandez and Alfonso Garza-Lopez were sentenced for their involvement in a human smuggling organization.  Mendoza, the leader of the smuggling group, was also sentenced for money laundering and will serve 71 months in federal prison and pay a $15,000 fine.  All five defendants pleaded guilty in February 2007.  Through an undercover operation, federal agents learned that Samir Fares Cury oversaw the transportation of the undocumented aliens from Mexico City to the U.S. border.  Antonio Hernandez participated with Pacheco Mendoza in the transportation of 11 undocumented aliens from Laredo to San Antonio on February 11, 2003.  Jesus Zendejas, who operated the Transportes Mi Tierra Bus Company located in Dallas, received six aliens on April 14, 2003, and 21 aliens on May 21, 2003.  Ten undocumented aliens were received by Garza-Lopez in Dallas on February 26, 2004. 

Texas Man Sentenced to 11 Years for Selling Drugs

On July 25, 2007, in Waco, TX, LeJohn Martin, of DeSoto, was sentenced to 135 months in prison followed by 60 months of supervised release for money laundering and possession and distribution of marijuana.  Martin, also known as “Big John,” pleaded guilty to the charges on April 17, 2007.  Martin used his profits from the sale of marijuana to buy vehicles and real estate.  To hide the true ownership of the assets, he placed the property in nominee names.  He also started a trucking business known as “Above and Beyond Trucking.”  Martin has forfeited $275,000 in cash, as well as personal and real property involved in his drug trade.

Defendant Sentenced to Six Years in Prison for Drug Trafficking and Money Laundering

On July 13, 2007, in Seattle, WA, Joshua Macke was sentenced to 60 months in prison to be followed by three years of supervised release for conspiracy to engage in money laundering and conspiracy to distribute marijuana.  As part of his plea agreement on March 24, 2007, Macke agreed to forfeit to the government three late model vehicles, nearly $1 million in currency and investments, and his home.  According to court documents, Macke distributed pound quantities of B.C. Bud marijuana which was being transported into Washington State from Canada.  Macke laundered the proceeds of his drug activity by using cash to invest in real estate and in one instance, a fledgling business.  Specifically, between June 2003 and February 2005, Macke invested more than $100,000 in cash in a flat screen TV company called Flat TV USA.  However, no records of the investment were ever created.  Later he delivered more than $500,000 to a mortgage broker for real estate investments.  Some of that money was transferred to real estate lawyer Joel Manalang, who was sentence in November 2006 to 18 months in prison on money laundering charges. 

Missouri Man Sentenced to Prison for Large Drug Trafficking Conspiracy – Forfeits Real Estate, Luxury Vehicles, Expensive Jewelry and Nearly $400,000 in Cash

On July 3, 2007, in St. Louis, MO, Boyd Houston, III, was sentenced to 144 months in prison on conspiracy and money laundering charges in connection with the distribution of cocaine and marijuana.  Houston also forfeited $600,000 in property, including $400,000 cash.  Houston received marijuana and cocaine from Texas and Arizona which he then distributed in the St. Louis area.  Houston shipped cash to an associate in Texas, using FedEx and other delivery services.  The cocaine was delivered by couriers from Texas to the St. Louis area.  Houston deposited proceeds of his drug trafficking in various financial institutions for the purpose of concealing the true nature of the source of the deposits and used the proceeds to purchase many luxury items, as well as real estate.

Newport Beach Man Sentenced for Orchestrating Mortgage Fraud Scheme that Cost Lenders $9 Million

On July 2, 2007, in Los Angeles, CA, Kenneth Christopher Ketner was sentenced to 57 months in prison, to be followed by three years of supervised release, and ordered to pay $9,274,246 in restitution.  Ketner who ran Mortgage Capital Resource Corporation (MCR) pleaded guilty in August 2006 to wire fraud and money laundering charges related to a scheme that cost lenders more than $9 million.  According to court documents, Ketner and MCR used lines of credit from commercial lenders for the purported purpose of funding home loans for borrowers throughout the country.  Rather than using the commercial lenders' money to fund mortgages as promised, Ketner diverted the money for his own use.  To conceal that he had misappropriated the money, Ketner caused MCR to obtain new loans that lenders would agree to fund.  Ketner then caused the money earmarked for these new loans to pay off the original borrowers whose funds he had misappropriated, thereby keeping the scheme alive.

Two Sentenced on Charges of Visa Fraud and Money Laundering in Scheme to Smuggle Illegal Chinese Nationals into United States

On June 29, 2007, in Houston, TX, Horacio H. Golfarini and Norman Chapa were sentenced to prison for their involvement in an intricate scheme to smuggle Chinese nationals into the United States.  Golfarini was sentenced to18 months in prison and ordered to pay a $5,000 fine.  Chapa was sentenced to 12 months and one day in prison and fined $3,000.  Golfarini and Chapa, along with Kenneth L. Rothey, a local immigration attorney of Houston, were indicted and charged with conspiracy, visa fraud, encouraging Chinese nationals to unlawfully enter the United States, and money laundering.  Rothey is a fugitive and believed to be in China.  According to the indictment, at least eight U.S. businesses were used by the defendants to act as petitioners on behalf of ten Chinese clients willing to pay to obtain permanent residence status through employment-based visas.  The defendants created an illusory relationship between Chinese companies and U.S. companies in exchange for an initial fee.  Once each of the U.S. companies was shown on paper as a subsidiary of a Chinese company, the defendants would prepare and present fraudulent petitions and supporting documents on behalf of their clients with the Immigration and Naturalization Service.  Golfarini owned and operated Capitol Services Group, a brokerage firm, and admitted that between January 1999 and December 2002, while he worked at Rothey’s law offices, he concealed the source of the money obtained from Chinese clients willing to pay as much as $100,000 a piece for immigrant visas and work authorization.  Golfarini also used the Capitol Services Group to promote the visa fraud scheme by paying recruiters who located Houston-based businesses willing to enter into contracts of sale with Chinese-based businesses; and to pay representatives of the Houston-based businesses down payments between $20,000 and $30,000 toward the purported sale.  Chapa pleaded guilty in June 2005 to conspiracy to commit visa fraud and to encourage unlawful immigration.  He admitted that he and the others created two shell companies in the United States which also had an illusory relationship with a Chinese company so that Chinese nationals could obtain immigration benefits.  Paperwork filed by the Rothey law firm with the government falsely representing that various Chinese clients were seeking positions with the U.S. companies as multinational executives or managers.

Fraudulent Investment Scheme Nets 60 Months in Prison for Defrauding Investors Out of $430,000

On June 25, 2007, Birmingham, AL, Bruce Wayne Moore was sentenced to 60 months in prison and ordered to pay full restitution to his victims in the amount of $430,000.  Moore pleaded guilty in January 2007 to charges of wire fraud and money laundering.  According to court documents, between June 2002 and March 2004, Moore carried out a scheme to defraud individuals by claiming that he could secure funding for large commercial loans in addition to offering what he claimed to be high yield investment opportunities.  In fact, Moore misappropriated investor’s money for his own benefit, including purchasing luxury cars and repaying some investors who he believed might alert authorities to his fraudulent conduct. 

Michigan Man Sentenced to 14 Years in Prison and $1.5 Million in Restitution for Forcing Eastern European Women to Work at Detroit Area Strip Clubs

On June 25, 2007, in Detroit, MI, Aleksandr Maksimenko was sentenced to 168 months in prison and ordered to pay $1.5 million in restitution for his role as a ring-leader in a conspiracy to force Eastern European women to work as exotic dancers in Detroit area strip clubs.  Maksimenko had been convicted earlier on charges of involuntary servitude, immigration and money laundering conspiracies.  Maksimenko and his partners smuggled women into the United States and threatened and coerced them to work as dancers in strip clubs.  The court required Maksimenko to reimburse the dancers a total of $1,570,450 in earnings that he unlawfully took from them.  The court ordered that $537,043 in cash seized by government agents from Maksimenko’s home and safety deposit boxes, as well as about $30,000 worth of jewelry, be used to satisfy a portion of the court’s restitution award.

Former Department of Defense Contractor Sentenced in Case Involving Bribery, Fraud and Money Laundering Scheme in Al-Hillah, Iraq

On June 25, 2007, in Washington, DC, Bruce Hopfengardner, a former United States Army Reserves Lieutenant Colonel, was sentenced to 21 months in prison for his role in a conspiracy and money laundering scheme involving contracts in the reconstruction of Iraq.  Hopfengardner, of Fredericksburg, VA, was also ordered to forfeit $144,500 and serve three years of supervised release.  Hopfengardner pleaded guilty on August 25, 2006, admitting to participating in a complex fraud and money laundering scheme while on active duty with the U.S. Army, Coalition Provisional Authority – South Central Region (CPA-SC).  From December 2003 through December 2005, Philip H. Bloom, a U.S. citizen who owned and operated several companies in Iraq and Romania, Robert Stein, a former soldier with the U.S. Army assigned to the CPA-SC as a Department of Defense contract employee, and numerous public officials, including several high-ranking U.S. Army officers, conspired to rig the bids on contracts being awarded by the CPA-SC so that all of the contracts were awarded to Bloom.  In return, Bloom provided the public officials with over $1 million in cash, automobiles, jewelry, computers, business class airline tickets, and other items of value, as well as future employment with Bloom.  In addition, Bloom laundered over $2 million in currency that Stein and his co-conspirators stole from the CPA-SC that had been slated to be used for the reconstruction of Iraq.  Bloom then used his foreign bank accounts in Iraq, Romania and Switzerland to send the stolen money to Hopfengardner and other public officials in return for the awarded contracts.  In total, Bloom received more than $8.6 million in rigged contracts.  On February 16, 2007, co-conspirator Bloom was sentenced to 46 months in prison for related charges of conspiracy, bribery and money laundering for his role in the same scheme.  Bloom was also ordered to forfeit $3.6 million for his role in the bribery and money laundering scheme.

Defendant Sentenced for Role in Financial Fraud Scheme

On June 14, 2007, in Chattanooga, TN, Derek Henry was sentenced to 13 months in prison, to be followed by three years of supervised release, and ordered to pay a $2,500 fine for his role in a financial fraud scheme.  Henry pleaded guilty in January 2007, to one count of causing a non-financial trade or business to file a false report with the government concerning a financial transaction and one count of mail fraud.  According to a Factual Basis filed for Henry’s plea hearing, on or about May 6, 2003, Henry, acting in concert with co-defendant Cheryl Kyles, completed a mortgage loan application to obtain a mortgage loan under false pretenses from Decision One Mortgage.  Additionally, the Factual Basis states that Henry caused his non-financial business, Goldmine Software Systems, to file a report required under Title 31, USC, Section 5331, which contained false material statement of facts as to the identity and occupation of the transactor, as well as the amount of cash received.

Minnesota Insurance and Investment Salesman Sentenced to Federal Prison for Investment Fraud

On June 12, 2007, in Minneapolis, MN, Dale Eugene Schlichting, an insurance and investment salesman, was sentenced to 97 months in prison and ordered to pay $2.98 million in restitution to 92 victims of his investment fraud.  In December 2006, the DSI Agency operator pleaded guilty to mail fraud and money laundering.  Schlichting admitted to knowingly defrauding his customers.  He sold insurance and investment products even though his securities license had been terminated by the National Association of Securities Dealers in 1998 and his insurance license had been permanently revoked by Minnesota in 2003.  Schlichting’s scheme involved having customers write investment checks payable to one of two entities he had created.  He failed to inform the customers that the entities were shell companies and he failed to invest the money he received from his customers as promised.  Instead, he used the funds to pay off other investors and for his own personal use.

Defendant Sentenced to 37 Months in Prison on Money Laundering Charges

On June 11, 2007, in Tyler, TX, Odell Roberts, Jr., of Pittsburgh, PA, was sentenced to 37 months in prison for money laundering.  According to information presented in court, on January 19, 2006, Roberts was stopped for speeding by a Texas Department of Public Safety trooper while traveling in a rental car on U.S. Highway 59 South near Carthage, TX.  During the traffic stop, the trooper called for a narcotics detection dog.  A subsequent search of the rental vehicle trunk revealed three bags of money containing $70,925 that Roberts was provided to transport to Houston for the purpose of purchasing marijuana. 

Former Check Cashing Business Owner Sentenced to Prison

On June 13, 2007, in Dallas, TX, Yong Kyu Kim, owner of Lucky Grocery, was sentenced to 12 months and one day in prison.  Kim pleaded guilty in December 2006 to operating an “unlicensed money transmitting business.”   According to documents filed in court, in January 2001, Kim purchased a pre-established Food Mark business and renamed the business to Lucky Grocery.  Despite its name, Lucky Grocery offered only a few snack items for sale, not a line of groceries.  Instead, Lucky Grocery operated as a “financial institution” since the business was an issuer, redeemer and cashier of checks and money orders.  In 2001, the Internal Revenue Service (IRS) conducted a routine visit to advise new financial institutions about their record keeping and reporting obligations under the Bank Secrecy Act (BSA).  During this visit, the IRS informed Kim that, pursuant to the money transmitting business registration requirements of 31 U.S.C. § 5330, he was required to register Lucky Grocery as a money services business with the secretary of the Department of Treasury.  The IRS also informed Kim that Lucky Grocery was required to file a Currency Transaction Report (CTR) for each currency transaction exceeding $10,000 and for each money order sale in the amount of $3,000 or more.  In 2003, the IRS returned to Lucky Grocery to conduct a Title 31 compliance examination.  During the examination, the IRS advised Kim that there was no record of Lucky Grocery’s registration with the secretary of the Department of Treasury.  Kim produced a Registration of Money Services Business that he had completed and signed on behalf of Lucky Grocery on March 26, 2003, but had not yet filed.  Kim operated Lucky Grocery without a license for more than a year.  During this same compliance examination, the IRS discovered that Lucky Grocery had not been complying with BSA record keeping and reporting requirements.  Specifically, Lucky Grocery had not filed any CTRs for cash transactions exceeding $10,000 or money order sales in amounts of $3,000 or more.  Despite the 2003 compliance visit, Lucky Grocery continued to cash checks in amounts exceeding $10,000 and sell money orders in amounts of $3,000 and more without filing CTRs.  The IRS subsequently referred the case to its Criminal Investigation division.  At sentencing, the government presented evidence that Kim cashed checks and sold money orders without filing the requisite CTRs in an amount in excess of $1 million.  The evidence also showed that some of the money orders were cashed in the Middle East.  The government also called witnesses who testified that they used Lucky Grocery to facilitate the commission of federal crimes, including tax evasion and willful failure to collect or pay over tax.  Kim will be deported after the completion of his sentence.

Couple Sentenced to Over 19 Years in Prison for Laundering Millions in Drug Money

On June 8, 2007, in Atlanta, GA, Hoang Nguyen and Terri Nguyen were sentenced for laundering in excess of $15 million in drug money.  Specifically, Hoang was sentenced to 235 months in prison, to be followed by two years of supervised release; Terri Nguyen was sentenced 41 months in prison, to be followed by two years of supervised release.  According to court documents, the investigation established the existence of an extensive money laundering operation, both in Atlanta and in Canada that used domestic and international financial institutions to try to legitimize the illicit funds.  Information presented in court stated that in early 2002, as part of an ecstasy investigation in Toronto, Canada, Canadian officials intercepted calls to a group of people who laundered money for numerous drug organizations in Canada and the United States.  Through the money laundering investigation, Canadian authorities determined that drug money was being laundered through an extensive network of business entities, couriers and money remitters within Canada and the United States.  The extensive money laundering organization centered in Atlanta used businesses in the Asian community to transfer large sums of illicit cash out of the United States.  The organization was broken down into what Hoang Nguyen referred to as “the drug side” and the “money side.”  The “money side” was composed of older individuals who had established business contacts in the Asian community so that the vast amount of money Hoang and Terri Nguyen delivered to them to be laundered could be explained and would be less likely to attract the attention of law enforcement.  They, in turn, were responsible for the movement of drug proceeds to places such as Vietnam, Cambodia, Dubai, Panama, Switzerland, Israel, Canada, Japan, Mexico, Singapore, Latvia and the United States.  When federal agents arrested Hoang and Terri Nguyen in March 2004, agents seized approximately $2.5 million in cash, real estate and vehicles, all of which have been forfeited to the United States.  The evidence showed a total of approximately $15 million dollars in laundered drug proceeds were attributed to Hoang and Terri Nguyen between January 2003 and March 2004.

Former IRS Agent Sentenced to 30 Months in Prison for Embezzlement and Money Laundering

On June 8, 2007, in Oklahoma City, OK, former IRS Special Agent Richard Joseph Whitburn was sentenced to 30 months in prison and ordered to pay $684,015 in restitution for embezzling more than $900,000 from an automobile financing company and then laundering the proceeds of his crime.  From October 18, 2002 to December 26, 2005, Whitburn used his authority as an employee and partial owner of Century Financial Group LLC, ("CFG") to electronically transfer, without the company’s knowledge, $889,155 from a company financial account to his personal financial accounts.  Whitburn made the unauthorized transfers on 66 separate occasions.  Whitburn violated federal money laundering laws when he bought a $27,629 cashier’s check with embezzled funds on December 22, 2005.  He pleaded guilty in February 2007.

Meat Market Owners Sentenced to Prison for Selling Cocaine and Money Laundering

On May 31, 2007, in Corpus Christi, TX, Alfredo Garcia and Rosalinda Perez, owners of the Country Meat Market, were sentenced for laundering more than $120,000 generated from Garcia’s drug dealing.  Garcia was sentenced to 150 months in prison and Perez was sentenced to 57 months imprisonment.  In February 2007, Garcia admitted that he distributed cocaine from his store and residence.  Perez admitted to laundering the drug proceeds generated from the illegal drug sales by depositing them into her personal credit union account to conceal the true source of the funds.   An examination of bank records by IRS agents proved that Perez used her credit union account to deposit money generated from Garcia’s cocaine sales.  A search of the couple’s home resulted in the discovery and seizure of four firearms, two with silencers, $11,000 in cash and three grams of cocaine.

Two Sentenced in $1.4 Million Virgin Islands Bribery Scandal

On May 16, 2007, in the U.S. Virgin Islands, Earl E. Brewley and Esmond J. Modeste were sentenced for their roles in an elaborate bribery and kickback scheme to defraud the U.S. Virgin Islands government of approximately $1.4 million in federal and local funds.  Brewley, a former U.S. Virgin Islands fireman and self-employed taxi driver, was sentenced to 21 months in prison and Modeste, an Atlanta businessman, was sentenced to 30 months in prison.  Both defendants were ordered to pay more than one million in restitution and sentenced to three years of supervised release.  Brewley and Modeste pleaded guilty on July 12, 2006, to engaging in a five-year conspiracy to commit bribery concerning programs receiving federal funds, honest services mail fraud, and structuring currency transactions.  As part of their pleas, they admitted that in early 2000, they and others formed a fictitious company named Technical Services Elite (Elite) and then used it and other companies to seek and be awarded at least seven government contracts valued at approximately $1.4 million, although little or no actual work was performed on the contracts.  Once the contract proceeds were paid to Elite and the other companies, Brewley, Modeste and others paid bribes and kickbacks totaling between $300,000 and $350,000 to at least four territorial government officials.  Also, Brewley, Modeste, and others made a series of $9,900 cash withdrawals—totaling over $350,000—after depositing certain contract proceeds into FirstBank, Wachovia, and Banco Popular. These cash withdrawals were made in increments under $10,000 in order to avoid the bank's requirements to file Currency Transaction Reports (CTRs).

Genovese Crime Family Member Sentenced to 168 Months in Prison on Racketeering Charges

On May 14, 2007, in Ft. Lauderdale, FL, Renaldi (Ray) Ruggiero was sentenced to 168 months in prison and two years of supervised release.  Ruggiero was also ordered to pay a $25,000 fine and to forfeit $10,000 previously seized by the government.  In February 2007, Ruggiero pleaded guilty to conspiracy to violate the Racketeer Influence Corrupt Organization (RICO) statute.  At the time of his plea, Ruggiero admitted that he was a soldier and then a captain in the Genovese Crime Family and was in charge of its operations in South Florida. Ruggiero admitted that he supervised and directed the activities of members and associates committing criminal acts in the Southern District of Florida, and was employed by the Genovese Crime Family of La Cosa Nostra. He further admitted that he conspired to engage in a pattern of racketeering activity, including extortion, money laundering, travel in aid of racketeering, possession of stolen property, and bank fraud.  This is the sixth defendant to have been sentenced in this case.  Previously, co-defendants Colasacco, Steinberg, Weissman, Santoro and O’Donnell received sentences ranging from 41 months to 97 months after pleading guilty to one count of RICO conspiracy.

Organized Crime Member Sentenced on Federal Racketeering and Tax Conspiracy Convictions

On May 9, 2007, in New Haven, CT, Matthew Ianniello was sentenced to 24 months in prison, followed by two years of supervised release following an earlier guilty plea to one count of conspiring to violate the federal Racketeer Influenced and Corrupt Organizations Act (RICO) and one count of conspiring to defraud the Internal Revenue Service.  Ianniello was also ordered to pay a $6,000 fine and $277,970 in restitution.  He had previously forfeited $130,680 in cash that was seized during a search of his residence in July 2005.   According to the indictment, since the 1960s, in the New York metropolitan area, including Connecticut, garbage haulers, also known as carters, affiliated with certain organized crime groups have asserted without legal justification that they have a permanent “property right” to every “stop” that they collect.  Under this property rights system, these “stops” remain with the controlling carter for as long as that carter is in business, regardless of whether the particular customer sells to a successor entity.  The property rights system has been enforced by Organized Crime Families of La Cosa Nostra, which the government alleges Ianniello is a high ranking member, whose members back certain carters and, in exchange, receive “tribute” payments, also known as a “mob tax,” which represents a portion of the participating carters’ profits.  According to documents filed with the court and statements made in court, Ianniello admitted that, for several years, he collected “tribute” payments from a member of Connecticut’s carting industry in exchange for his backing, and that he failed to declare these payments as income on his tax returns in 2001 and 2002, and failed to file tax returns in 2003 and 2004.

Defendant Sentenced for Structuring Currency Transactions

On May 4, 2007, in Fort Smith, AR, Christopher Drosopoulos was sentenced to 60 months in prison to be followed by three years of supervised release on the charge of structuring financial transactions for the purpose of evading the federal currency reporting requirements.  The sentence is to run concurrent with his sentence of 87 months in prison and five years of supervised release on the charge of sexual exploitation of children.  In addition, Drosopoulos was ordered to pay a $20,000 fine.  According to the Information, Drosopoulos purchased cashiers checks in July 2005 at two different local banks to divide a single transaction of $18,200 into amounts less than $10,000 each to avoid federal reporting requirements.

Drug Trafficking, Money Laundering Conspiracy Nets Life Sentence

On May 1, 2007, in Kansas City, KS, Dheadry Lloyd Powell, of Parsons, Kansas, was sentenced to life in federal prison on drug trafficking and money laundering charges.  In August 2005, Powell pleaded guilty to conspiracy to distribute or possess with intent to distribute more than 50 grams of crack cocaine and conspiracy to commit money laundering.  As Powell obtained cash from the sale of crack cocaine, he exchanged the smaller bills for $100 bills.  He convinced family members and others to conduct the exchanges for him at various financial institutions.  He also provided money to family members to buy vehicles that were titled in their names to hide the fact he was the owner.  Investigators estimate he laundered $99,673 in drug trafficking proceeds.  Powell forfeited to the government all proceeds from the crime, including a $150,000 judgment, cash, vehicles and other goods.

Bronx Woman Sentenced in Drug and Money Laundering Case

On April 27, 2007, in New York, NY, Nancy Pena was sentenced to 10 years in prison and ordered to forfeit $125,000 for money laundering.  Pena owns Valoy Express Multiservice, Inc., a Bronx, New York money remitting business.  Pena pleaded guilty in October 2006 to using her business to transfer the proceeds of narcotics transactions in order to launder the money.  On two occasions in 2005, Pena met with an undercover law enforcement agent and accepted $125,000 in narcotics proceeds to transfer to a bank account purported to be under the control of a narcotics trafficking organization.  Pena was also part of a conspiracy with others to distribute cocaine.

Former Nursing Home Operator Sentenced on Health Care Fraud and Money Laundering Charges

On April 26, 2007, in Austin, TX, Rocky L. Lemon of Stillwater, OK, was sentenced to 42 months in prison and ordered to pay $4 million in restitution following his guilty pleas to health care fraud and money laundering.  Lemon owned and/or operated over 50 nursing homes in Texas and other states through TLC Healthcare, Inc.  Lemon admitted that from 1998 until April 2001, he defrauded the Medicare Program and the Texas Medicaid Program by unlawfully diverting Medicare and Medicaid monies to his own personal use.  As part of his scheme, Lemon used Medicare and Medicaid monies to finance his purchase of nursing homes.  Shortly thereafter, he sold some of the nursing homes and funneled a substantial portion of the net proceeds into his personal bank and brokerage accounts.  He also used Medicare and Medicaid funds to engage in other transactions unrelated to fulfilling his obligations to Medicare and Medicaid beneficiaries.  In 2001, Lemon abandoned all of his Texas nursing care facilities, forcing Texas authorities to assume control and management of a number of Lemon’s nursing homes. The estimated combined loss to Medicare and Medicaid as a result of Lemon’s criminal scheme was approximately $4.2 million.

Sacramento Man Sentenced to 40 Years in Prison for Money Laundering

On April 23, 2007, in Sacramento, CA, Huy Chi Luong, aka Jimmy Luong, was sentenced to 40 years in prison for his role in a string of take-over robberies.  On October 4, 2006, Jimmy Luong and his brother, Danny Hung Leung, were convicted by a jury of money laundering and conspiracy to commit money laundering.  According to evidence introduced at trial, between 1994 and 1996, Jimmy Luong and his associates were responsible for violent take-over robberies of approximately 31 computer component and memory chip businesses throughout California, including the April 20, 1995, take-over of Zenon, a computer store which was robbed of memory chips valued at $1.18 million and the May 16, 1995, take-over of Centon, a computer chip manufacturing outlet, robbed of memory chips valued at $10 million.  At trial, the evidence showed that Jimmy Luong and Danny Hung Leung used the proceeds from the robberies to purchase assets, including: numerous luxury vehicles; a 26 foot Bayliner boat; two homes; and various electronics.  Jimmy Luong used Danny Leung as a "straw buyer" to purchase one Lexus automobile and other family members were used as "straw buyers" for other purchases.  Danny Leung is scheduled to be sentenced in September 2007.

$8.3 Million Ponzi Investment Scheme Operator Sentenced for Mail Fraud and Money Laundering

On April 12, 2007, in Richmond, VA, James E. Brown, Jr. was sentenced to 151 months in prison for mail fraud and money laundering.  According to court documents, as president and sole owner of Brown Investment Services (BIS), Brown solicited and guaranteed investors that he would double their money in the Foreign Currency Exchange Market (FOREX) in 30 days.  After the initial 30 business day investment period, investors were given the option of reinvesting their proceeds with BIS and receiving a new written guarantee that BIS and Brown would again double the investment.  More than 350 investors, including individuals, small businesses and churches invested more than $8.3 million in BIS.  Instead of investing in the FOREX as he promised, Brown used most of the money from investors for personal expenditures, including numerous luxury automobiles.  He also misappropriated some of the money from new investors to pay existing investors the monetary returns that he had guaranteed them.  Brown actually invested only $484,000 of the $8.3 million he obtained from investors. Despite his claims of being an expert in FOREX trading, he lost approximately $61,000 of this money.  Due to Brown’s misappropriations and poor investments, only approximately $700,000 remained in the BIS bank account.

Four Defendants Sentenced in One of New England’s Largest Counterfeit Goods Conspiracies

On April 9, 2007, in Boston, MA, Minh Vu, Katherine Luong, Camphung Luong, and Kim Luong were sentenced for money laundering and trafficking and conspiring to traffic more than $1 million of counterfeit luxury handbags and wallets.  The four Massachusetts residents were sentenced to the following prison terms:  Vu, 30 months;  Katherine Luong, 36 months;  Camphung Luong, 24 months; and Kim Luong, 30 months.  The defendants paid $48,000 in restitution to the victim companies and did not contest the forfeiture of five bank accounts, over $41,000 in cash, two vehicles, and the counterfeit merchandise.  Vu and the Luongs admitted that they had rented 13 self-storage units at a facility in Revere, MA as their counterfeiting operation's home base.  The storage units held approximately 12,230 counterfeit handbags; 7,650 counterfeit wallets; more than 17,000 generic handbags and wallets; and enough counterfeit labels and medallions to turn more than 50,000 generic handbags and wallets into counterfeits.  The counterfeit and generic handbags and wallets were estimated to be worth more than $1 million at average counterfeit prices (typically $35 for wallets and $40 for handbags).

Former Radio Talk Show Host Sentenced to Four Years in Prison for Laundering Drug Money

On March 30, 2007, in Reno, NV, Walter Edward Floyd, aka Eddie Floyd, a former radio talk show host, was sentenced to 48 months in prison and three years of supervised release for laundering drug monies.  Floyd, owner of several Reno-area companies, including U.S. Realty, Nevada Matters, and CADCO, Inc. and the former host of “Nevada and America Matters” on KBDB-AM, pleaded guilty in December 2006 to money laundering and aiding and abetting.  He admitted that he assisted his son and another man launder the proceeds of their marijuana trafficking activities in northern California.  From about April 19, 2002 to March 24, 2004, Eddie Floyd and his son, Joshua Floyd, provided real property located in California to Daren Mabunda for the purpose of growing marijuana.  Eddie Floyd drafted a fictitious lease for the real property in the name of “Earnest Green” to cover lease payments by Mabunda to use the property for the marijuana growing operation.  Between April 22, 2002 and August 18, 2003, Eddie Floyd received 11 monthly lease payments from Mabunda totaling $37,500, which he deposited into his U.S. Realty Wells Fargo bank accounts.  On two occasions in 2003 and 2004, Floyd also provided Daren Mabunda with shares of Nevada Matters stock in exchange for drug proceeds.  The total amount of funds laundered by Floyd was $175,000.  Floyd knew the funds were proceeds from Mabunda’s drug trafficking activities.  He accepted the lease payments and provided the Nevada Matters stock in an attempt to conceal the proceeds and disguise the ownership and control of the proceeds while conducting the financial transactions.

Trucking Company Owner Sentenced to Prison

On March 29, 2007, in Chicago, IL, trucking company owner, Frank Butera was sentenced to seven years and three months in prison for mail fraud and money laundering.  Butera’s scheme began by paying kickbacks in cash to ZIM-American Israeli Shipping Co. employee Frank Babriele, III in order to have his invoices paid faster.  Later, Butera along with his employee, Marianne Fabiano, started submitting false invoices to ZIM-American.  Butera then paid Babriele a percentage of the false invoice totals.  According to the plea agreement, thousands of invoices were submitted and 156 checks were issued totaling about $4.6 million in payments.  In attempts to disguise the funds, Butera arranged to get cash and money orders and he also deposited money into financial accounts controlled by Marianne Fabiano.  Butera used the money to buy real property in Chicago and Rockford, IL.  Co-defendant Frank Gabriele was sentenced to 41 months in prison for mail fraud and filing false tax returns.  Marianne Fabiano received a 24 year prison sentence.  The three were also ordered to pay $3.4 million in restitution.

Husband and Wife Sentenced in Money Laundering Conspiracy

On March 29, 2006, in Chattanooga, TN, Lincoln A. Simmons and his wife, Crystal Charmaine Simmons, were sentenced to 44 months and 41 months in prison, respectively, followed by five years of supervised release and ordered to pay $2,265,542 in restitution to AmSouth Bank.  The Simmonses pleaded guilty in December 2006 to one count of money laundering conspiracy and one count of wire fraud.  According to court documents, Lincoln Simmons was the chairman of the board of directors and the chief financial officer of Environmental Services & Technologies, Inc. (ESTI), a business engaged in environmental consulting.  Crystal Simmons served as an office manager.  The defendants used the services of Alpha Financial Services, which was engaged in the business of obtaining money for companies in need of short-term financing, and had a line of credit with AmSouth Bank.  In order to obtain money, ESTI submitted to Alpha invoices for work allegedly performed.  Alpha then summarized the total dollar value of those invoices from ESTI and faxed a summary sheet to AmSouth.  AmSouth wired funds totaling 80 percent of the invoices directly to ESTI, who was obligated to repay the funds.  The Simmonses prepared and submitted false and fraudulent invoices to Alpha and AmSouth Bank for the purpose of obtaining funds under false pretenses.

Delaware Car Dealer Sentenced to 42 Month Prison Term for Money Laundering

On March 20, 2007, in Wilmington, DE, Jimmy Jan Chan was sentenced to 42 months in prison following his guilty plea to money laundering and obstruction of justice. Chan’s co-conspirator, Christopher Malatesta was sentenced in February 2007 to 36 months in prison.  Chan and Malatesta sold automobiles through a car dealership named 1800 Motorcars.  An undercover law enforcement officer paid $44,500 in cash to buy two luxury automobiles from the men.  The officer told the two men that the money used to buy the cars was from a drug dealer.  Chan and Malatesta created false paperwork to hide the actual amount of cash paid for the cars and to conceal the purchaser’s identity. 

Two Sentenced in Connection with Million Dollar Illegal Money Remitter Business and Structuring Violations

On March 16, 2007, in Sacramento, CA, Serey Van and Thanh Tan Van, aka Thomas Van, were sentenced to 31 months and 18 months in prison, respectively, in connection with a large-scale illegal money remitter business and structuring of cash deposits.  According to court documents, Serey Van pleaded guilty on December 22, 2006, to conducting an illegal money transmitting business while her boyfriend, Thomas Van, pleaded guilty to misprision of structuring financial transactions at a financial institution.  Between April 2004 and January 2005, the Vans operated money transmitting businesses known as March Lane Pure Water and Best Money Express in Stockton, California, which transmitted customer funds from Stockton to Cambodia.  Neither business had an appropriate money transmitting license in California nor had they registered with the federal government in compliance with federal money transmitting business registration requirements.  During the noted period, defendants Serey Van and Thomas Van transmitted over $1 million by wire for customers from the United States to Cambodia.  Also according to court records, between April 2004 and January 2005, Serey Van and another individual structured over $1 million dollars of deposits into bank accounts by repeatedly making deposits just slightly under $10,000, all for the purpose of evading the currency transaction reporting (CTR) requirement.   As part of their sentence, the defendants were ordered to forfeit over $230,000 seized in connection with these crimes.  In addition, Serey Van was placed on two years of supervised release following her term of incarceration and Thomas Van was placed on one year of supervised release.

Leader of "The Corporation" Sentenced to 188 Months; Ordered to Forfeit $642 Million

On March 16, 2007, in Miami, FL, Jose Miguel Battle, Jr., a leader in “The Corporation," a large organized crime syndicate, was sentenced to 188 months in prison and ordered to forfeit $642 million, following his conviction on various racketeering charges.  The evidence at trial established that the Corporation conducted extensive illegal gambling operations through the use of violence and intimidation, including the commission of multiple murders.  These murders were authorized and committed by members of the Corporation in furtherance of their racketeering conspiracy.  Battle oversaw sophisticated money laundering schemes in various domestic and foreign locations, including Peru, Spain, Panama, Switzerland, the Cayman Islands, Curaçoa, the Dominican Republic and the British Virgin Islands.

Pain Management Clinic Owner and Doctor Sentenced on Federal Charges

On March 15, 2007, in New Orleans, LA, Cherlyn "Cookie" R. Armstrong-Prejean, the owner and operator of three pain management clinics and two pharmacies in the New Orleans area, and Dr. Suzette Cullins were sentenced for their roles in a conspiracy to illegally dispense Schedule III and IV controlled substances and conspiracy to commit money laundering.  Armstrong-Prejean was sentenced to 70 months in prison, followed by three years of supervised release and ordered to pay a $20,000 fine.  She was convicted in July 2006 for conspiracy to illegally distribute controlled substances, 23 counts of illegally dispensing controlled substances and one count of conspiracy to commit money laundering.  Cullins was sentenced to 60 months in prison for her conviction of conspiracy to illegally distribute controlled substances and five counts of illegally dispensing controlled substances.  In addition, the jury returned a special forfeiture verdict against Armstrong and her corporations finding properties traceable to the drug conspiracy and money laundering conspiracy violations.  The forfeiture money judgment was for $10,617,331 and the forfeiture of 10 pieces of real property, 19 bank accounts totaling about $4.2 million, two vehicles and approximately $1.3 million in cash seized from her residence.  According to the indictment, Armstrong, Cullins and others engaged in a sham operation whereby individuals, obtained, by paying cash, highly addictive drugs under the guise of “pain management” without regard for medical necessity.  Additionally, in the indictment, Armstrong, Cullins and another defendant are alleged to have allowed the same individual patients to receive overlapping prescriptions from three clinics.

Accountant Sentenced to 90 Months in Prison

On March 12, 2007, in Statesville, NC, William James Markham, an accountant, was sentenced to 90 months in prison, to be followed by three years of supervised released and ordered to pay $3.2 million to his victim.  Markham pleaded guilty to one count of money laundering and one count of filing a false tax return in June 2006.  According to the indictment, Markham allegedly provided accounting and business consulting services to Failure Free Reading, Inc., a company based in Concord, North Carolina, that seeks to teach reading skills to the lowest 20 percent of the reading population, including at-risk and special education students.  The Indictment alleged that from at least 1999 through 2004, Markham embezzled approximately $3.2 million from Failure Free Reading.  Markham then laundered the funds through his personal checking account and the checking account of his accounting firm and used the funds to purchase large homes, luxury boats, exotic pets, and other personal expenses.

Springfield, Missouri Business CEO Sentenced in Meth-Related Conspiracy

On March 8, 2007, in Kansas City, MO, Roy James Hudspeth, of Springfield, MO, was sentenced to 20 years in prison for money laundering.  Hudspeth was the vice president and CEO of Handi-Rak, a convenience store product distributor.  The case was a result of Operation Ice Palace, a long-term investigation into the illegal sale of large quantities of over-the-counter cold medications to methamphetamine manufacturers in southwest Missouri.  Operation Ice Palace resulted in a series of indictments against 53 defendants.  Co-defendants in the case included a Handi-Rak sales manager and four sales agents of the wholesale company, as well as the owners and employees of several convenience stores.  A jury found Hudspeth guilty for his part in distributing pseudoephedrine, knowing that it would be used to manufacture methamphetamine. 

Three Men Sentenced for Running an Illegal Sports Bookmaking Operation in Baltimore and Washington, DC

On March 5, 2007, in Greenbelt, MD, Herbert David Meyers was sentenced to 12 months and one day in prison and agreed to forfeit $170,000 for money laundering and conspiracy to conduct an illegal gambling business.  In addition, Robert Levine and his son, Steven Levine, both of Montgomery Village, MD were sentenced to 36 months probation, with six months of that served as home detention, for conspiracy to conduct an illegal gambling business.  Robert Levine also pleaded guilty to money laundering and agreed to forfeit $53,520 seized from his home and bank account.  Steven Levine pleaded guilty to conducting an illegal gambling business.  All of the defendants operated Sports International 2000, a gambling business which later became part of World Wide Wagering.  Meyers, Robert Levine, and others solicited prospective bettors to bet on sporting events.  Prospective bettors were given a code number, a password, a toll-free telephone number for an offshore wire room located in the Caribbean island nation of Dominica and an internet address.  More than 50,000 phone calls were received from September 2002 to March 2003 on two of the toll-free telephone numbers set up by the defendants to handle the bookmaking business.  Robert Levine collected payments from losing bettors and made payments for winning wagers on Thursdays and Fridays at various locations throughout the Baltimore and Washington, DC metropolitan areas.  In an attempt to conceal the source of his money, Meyers deposited more than $50,000 of gambling proceeds into his girlfriend’s bank account.

Michigan Businessman Goes To Jail for Hiding Drug Traffickers’ Profits

On February 28, 2007, in Detroit, MI, Phillip Michaels was sentenced to 46 months in prison and ordered to pay $500,000 as a result of his guilty plea to money laundering. According to court records, Michaels helped drug traffickers launder $500,000 in drug proceeds through his business, Team Automobile Sales.  Michaels sold at least 12 vehicles in cash and hid of the true ownership of those vehicles.  Michaels also structured currency into bank accounts, sent wire transfers and helped to transport substantial sums of cash from Detroit to Mexico, Texas, and elsewhere, in order to hide ownership of the drug proceeds.

Mortgage Fraud Scheme Nets Indiana Man Prison Term

On February 23, 2007, in Indianapolis, IN, Frankie Lamont Howard was sentenced to 24 months in prison and ordered to pay $1.46 million in restitution for operating a mortgage fraud scheme.  This follows Howard’s guilty plea to conspiracy to commit mail fraud and money laundering.  He was involved in at least 31 separate fraudulent mortgage loan transactions, obtaining $1.7 million in loans on properties which were only worth about $439,300.  The lender, First Bank, lost approximately $1.2 million. Howard bought Indianapolis area properties at fair market value and sold the properties a short time later for greatly inflated prices to buyers whom he had recruited.  Howard arranged for buyers to get financing for the properties through a mortgage broker who submitted fraudulent loan applications and supporting documents to the lender.  Howard assisted in creating false documentation for those loan applications.  Falsely inflated property appraisals were also prepared and submitted to the lender to support the loan application.  The lender relied upon the false appraisals, false loan applications, and false supporting documents in the loan packages to approve and disburse the loans for the properties.  Howard also “fronted” the down payment on all of the properties to the buyers by obtaining cashier’s checks showing the buyer as the remitter and submitting those cashier’s checks for the closing on the property to make it appear that the buyers were actually making a down payment on the property.  Howard was then reimbursed the down payment money from the illegal funds which he obtained as the seller of the properties at closing.  Howard and other co-conspirators shared these fraudulently obtained funds, with Howard keeping most of the fraudulently obtained money as the seller of the properties. Before closing, Howard paid a “kickback” to the buyers of the properties, amounting to $5,000 for each of the properties which the buyers purchased.  All of the 31 fraudulent loans went into foreclosure.

Texas Man Sentenced in Million Dollar Investment Fraud Scheme

On February 28, 2007, in San Antonio, TX, Henry Clasen was sentenced to 108 months in prison for defrauding more than 50 people of approximately $1.7 million. Clasen pleaded guilty to conspiracy to commit securities, mail and wire fraud and conspiracy to commit money laundering.  Clasen admitted that he ran a Ponzi scheme that fraudulently persuaded people to invest their money in various companies and/or business opportunities with strong potential for growth and profit.  Investors were promised rates of return which he knew were unachievable.  He claimed that he invested their money, but instead, he converted it to his own personal use.  When it was time for a dividend or profit to be paid, Clasen used funds from new investors to pay the dividend or profit owed to prior investors.  The misled investors, pleased with their “earnings,” invested additional money in the fraudulent scheme.

Former General Manager of Medicor Sentenced for his Role in Telemarketing Scheme

On February 26, 2007, in Los Angeles, CA, Andrew Rubin, former general manager of Medicor LLC, was sentenced to 36 months in prison, followed by a term of 3 years of supervised release.  Rubin pleaded guilty in September 2006  to engaging in monetary transactions in property derived from specified unlawful activity and other charges related to the scheme.  In his plea agreement, Rubin admitted that he knew that Medicor’s telemarketers would mislead customers by telling them that they would receive a list of doctors who needed medical billing services and that the customer did not have to do any work to obtain doctors for whom they could perform billing services.  Further, Medicor’s telemarketers told customers that they could make $5 to $7 per claim processed, which translated into an immediate earnings of $20 to $45 per hour and they told customers that Medicor made its money from receiving a portion of a processing fee for each medical claim submitted.  However, Rubin admitted that Medicor made its profits from the sale of the medical billing software to customers and not from the processing of medical claims.  From July 1999 to March 2001, Medicor sold over 30,000 Kwic-Claim Medical Billing Software packages for approximately $400 each.  When Rubin and his brother, Matthew, learned that their business was under investigation, Rubin funneled a portion of his Medicor profits, totaling $299,786, to a bank account held in the name of S & M Trust, an account that listed Matthew Rubin as the beneficiary.

Manager of Texas Supermarket Sentenced To Prison

On February 22, 2007, in Brownsville, TX, Jaime Miguel Lopez was sentenced to 24 months in prison and ordered to pay $599,191 in restitution for laundering stolen checks through his grocery store.  Lopez managed the family-owned M. A. Lopez supermarket in Brownsville.  He pleaded guilty to engaging in property derived from specified unlawful activity in June 2004.  At the plea hearing, Lopez admitted that he acquired stolen U.S. Treasury Checks from another person in Mexico and imported the checks into the United States.  Lopez fraudulently endorsed the stolen checks, co-mingled the proceeds with the legitimate receipts from the supermarket, periodically made deposits into the supermarket’s account at the Brownsville branch of the Texas State Bank and then withdrew cash from the account and divided the proceeds with the individual in Mexico.  The bank lost $1.2 million dollars as a result of the scheme. Lopez’s scheme was discovered when the intended recipients of the U.S. Treasury checks, who live in Mexico, filed claims for non-receipt of their checks from government agencies.

Ohio Man Sentenced for his Role in Mortgage Fraud Scheme

On February 21, 2007, in Cincinnati, OH, Troy S. Clements was sentenced to 24 months in prison, three years of supervised release and fined $10,000 for his role in a $2.3 million mortgage fraud scheme.  Clements pleaded guilty to money laundering and conspiracy to commit mail, bank and wire fraud.  Clements and others recruited homebuyers by advertising that they could finance 100 percent of a house with no money down.  When clients found a property that they wanted to buy, Clements reviewed the house for potential value and then bought it, if he determined that it could be refinanced for the final buyer.  After buying the property, Clements would resell the property to the client borrower and have the client sign a note and mortgage due to a company that he owned called American Funding.  The note and mortgage included an additional amount over what he paid for the property, referred to an “investor fee.”  To pay off the note and mortgage, Clements directed employees of his mortgage company to arrange for refinancing loans to be obtained by the borrower from legitimate mortgage lenders.  In order to obtain these loans, false documents were created and false information was supplied to lenders on loan applications.  Clements laundered money by using the money acquired through illegally obtained mortgages and bought other properties with the money, which allowed him to continue the scheme.

Drug Ring Leader Sentenced to more than 11 Years for Cocaine Distribution and Money Laundering

On February 21, 2007 in Greenbelt, MD, Steven Andre Fenwick, of Upper Marlboro, MD, was sentenced to 140 months in prison followed by five years of supervised release for conspiracy to distribute cocaine and crack cocaine and conspiracy to commit money laundering.  Fenwick was also ordered to forfeit several vehicles and $16,971 seized from one of his homes.  According to his guilty plea, Fenwick coordinated the distribution of large quantities of drugs to customers.  Investigators intercepted hundreds of conversations from Fenwick’s cellular phone in which he directed his co-conspirators where to meet him to conduct drug transactions.  Fenwick used drug proceeds to buy and refinance several homes in Forestville, Oxon Hill and Fairmont Heights, Maryland, through submission of false loan applications and supporting documents.  He bought homes and refinanced the mortgages several times for larger amounts, each time submitting falsified loan documents.  Fenwick took the cash obtained through refinancing the mortgages and invested it in other homes.  The amount of laundered funds exceeded $400,000. 

New York Man Sentenced to 10 Years in Prison in Multi-State Drug Trafficking Scheme

On February 21, 2007, in Greenbelt, MD, Edward Barber, of the Bronx, NY, was sentenced 10 years in prison, ordered to pay a $35,000 fine, followed by five years of supervised release for conspiracy to distribute at least five kilograms of cocaine. Barber and Luis Mangual, Jr. were involved in a large drug trafficking enterprise operating in Maryland, the District of Columbia, New York and elsewhere. Barber used couriers to deliver cocaine to Mangual in Maryland and Washington, D.C. On May 8, 2004, Barber attempted to transport $43,000 in drug proceeds from Maryland to New York. Agents seized the funds from Barber's vehicle while it was parked in a Baltimore parking garage. Barber was one of 30 defendants convicted in this multistate drug trafficking scheme. According to evidence presented during the trials and guilty pleas of the other 29 defendants, the conspiracy lasted from January 1997 to June 2004. Luis Mangual, Jr., of Washington, D.C., was previously sentenced to life in prison.

Multiple Defendants Sentenced in Mortgage Fraud Scheme

On February 20, 2007, in Hattiesburg, MS, Richard B. Lucas, Kimberly A. Castle, Kenneth Stalnaker, Loretta Joy Champ, Jacquelyne B. Mosley, Kenneth Fairley, Jr., and Michael T. Cox were sentenced for their involvement in a mortgage fraud conspiracy involving wire fraud in violation of federal law.  In addition, Richard B. Lucas and Kimberly A. Castle were sentenced for conspiracy to commit money laundering. Lucas, the ringleader of the conspiracy, was sentenced to 168 months in prison, to be followed by five years of supervised release, and ordered to pay $1,326,727 in restitution to Countrywide Home Loans, Inc.  Castle, who served as Lucas’s lawyer in handling all of the loan closings involved in the scheme, was sentenced to 48 months in prison, followed by three years of supervised release, and ordered to pay $1,390,250 in restitution.  Stalnaker, a real estate appraiser who was charged with preparing inflated appraisals, was sentenced to 28 months in prison, followed by five years of supervised release, and ordered to pay $938,767 in restitution.  Champ, who also prepared inflated real estate appraisals, was sentenced to nine months in prison, followed by three years of supervised release, and ordered to pay $152,089 in restitution.  Mosley, another real estate appraiser, was sentenced to three years of probation with six months of house arrest.  She was ordered to pay $120,000 in restitution.  Fairley, who served as a straw buyer of properties for Lucas, was sentenced to five years of probation with six months of home confinement.  He was ordered to pay $97,055 in restitution.  Cox, who prepared bogus financial documents for Lucas, was sentenced to three years of probation with nine months of house arrest. He was ordered to pay $91,774 in restitution. 

The five other defendants, Phillip N. Weary, William Vaston Fairley, Jafus Jones II, Kristy N. Packer, and Marcy Irby, pleaded guilty to federal charges and were sentenced on February 1, 2007.  Weary, who was the nominal purchaser of all of the properties acquired as part of the scheme, was sentenced to 19 months in prison, followed by three years of supervised release and ordered to pay $925,540 in restitution.  Fairley, who helped recruit investors, was sentenced to seven months in prison, followed by seven months in a halfway house and three years of supervised release and ordered to pay $355,475 in restitution.  Jones, who also served as a recruiter for Lucas, received three years of probation with nine months of home confinement and was ordered to pay $128,120 in restitution. Packer, a straw buyer for Lucas, received five years of probation with six months of home confinement and was ordered to pay $191,888 in restitution.  Irby, a straw buyer who testified about the scheme at trial, received 48 months of probation and was ordered to pay $101,673 in restitution.

Lucas arranged for Clark and Jones to recruit persons to serve as borrowers on mortgage loans for the properties with the understanding that the borrowers would put no money down and would often receive cash payments for use of their names and credit ratings.  Where the borrowers’ credit histories did not support the mortgage loans, Lucas arranged for Cox to prepare false income statements and bank account information to be submitted to the lenders.  In addition, Lucas arranged for Fairley, Packer, and Irby to acquire properties in their names.

Texas Man Receives Over 12 Year Sentence for Drug Trafficking, Money Laundering

On February 17, 2007, in Beaumont, TX, Kenneth Earl McBryde was sentenced to 150 months in prison for drug trafficking and money laundering. A multi-state investigation into the distribution of cocaine and "ice"-style methamphetamine resulted in tracing McBryde's narcotics trafficking activities from Southeast Texas to sources in California. In June 2006, a federal grand jury returned a 12 count indictment charging McBryde and five co-defendants with federal drug trafficking charges. McBryde pleaded guilty to charges of distribution of cocaine and money laundering.  Because he used businesses financial accounts to hide $123,150 in drug trafficking proceeds, McBryde was ordered to forfeit the money to the government.

Judge Sentences Family Members who Defrauded Churches, Ministries and Religious Organizations of Approximately $62 Million

On January 31, 2007, in Dallas, TX, Gregory Earl Setser was sentenced to 40 years in prison and ordered to pay $62 million in restitution for conspiracy, securities fraud and money laundering.  Setser was the president, CEO and chairman of International Product (IPIC), a Canton, Texas, import/export company.  As a self-proclaimed former minister, Setser exploited connections to highly visible members of the evangelical Christian community to find investors, legitimize IPIC’s operations, and sell IPIC securities, ultimately defrauding investors in an elaborate Ponzi scheme.  Gregory Setser’s sister, Deborah Setser, of Rancho Cucamonga, CA, who was convicted along with Setser was sentenced to 15 years in prison.  Deborah Setser was an IPIC officer and was involved in the offer and sale of investments in programs with IPIC and Home Recovery Network (HRN), a companion fraudulent scheme run by the defendants.  Cynthia Faye Setser, Gregory Setser’s wife, did not appear for her sentencing date and remains a fugitive.  Setser’s son, Joshua, was sentenced to 24 months in prison.  The government contended that IPIC and HRN had no legitimate operations and that its fraudulent operation funded the family’s lavish lifestyle and helped maintain the companies’ facade.  Evidence showed that the Setsers used their ill-gotten gains to buy a $2.3 million yacht, a helicopter, family residences, two small airplanes and several luxury vehicles.  As part of their scheme, they established a website to solicit investors.  They falsely promised investors that their money was at minimal risk and that they would earn a 25 to 50 percent return on their investment in a three to six-month period.  Joshua Setser testified that his father admitted to him that IPIC’s ventures were a sham and that the representations both he and his father made to investors were false.

Car Leasing Owner Sentenced on Money Laundering Charges

On January 29, 2007, in Orlando, FL, Mark Eric Whaley was sentenced to 30 months in prison, two years of supervised release, and ordered to perform 100 hours of community service and to pay a $100 assessment.  Whaley pleaded guilty in October 2006 to conspiracy to commit money laundering.  As part of his plea agreement, Whaley will forfeit $50,000 in currency, several vehicles, and his interest in real properties.  According to court documents, Whaley owned and operated Orlando Exotic Car Rental and Leasing, Inc.  The documents further state that Whaley began leasing cars to people he knew were in a group called the Black Mafia Family (BMF).  The BMF is known for distributing drugs throughout the United States.  Whaley would lease cars to BMF members, but the title of the leases would remain in Whaley's name.  Leases were paid in cash shipments sent to Whaley and he or his employees would take the money, convert it into money orders or structure deposits into Whaley's various bank accounts.  The money was structured to avoid law enforcement detection.  In total, Whaley and people he worked with were responsible for laundering more than $1 million in drug proceeds via bulk money shipments.

Oklahoma Woman Sentenced to Prison for Bilking Investors of $3.3 Million

On January 29, 2007, in Oklahoma City, OK, Bobbie Stacy Andrews was sentenced to 46 months in prison and ordered to pay restitution of $2.6 million for defrauding investors of $3.3 million and laundering the scheme’s illegal proceeds.  Andrews convinced investors that their $3.3 million would be used to buy mortgages for investment purposes; however, she actually used the money for her personal benefit and for business expenses.  Andrews also admitted to engaging in a money laundering transaction over $10,000 with funds acquired through the wire fraud scheme.  Andrews forfeited money seized from two bank accounts and forfeited a Harley Davidson motorcycle acquired with funds from the fraud.

Two Sentenced on Money Laundering and RICO Charges

On January 29, 2007, in Ft. Lauderdale, FL, Bernard Roemmele and Steve Hein were sentenced on charges of Racketeer Influenced and Corrupt Organizations (RICO) conspiracy and conspiracy to commit money laundering, as well as conspiracy to commit mail and wire fraud.  Roemmele was also convicted of one count of securities violation.  Roemmele was sentenced to 144 months in prison, to be followed by three years of supervised release and ordered to pay $14,672,185 in restitution.  Hein was sentenced to 48 months in prison, to be followed by three years of supervised release and ordered to pay $14,804,785 in restitution.  After a six-month trial, Roemmele and Hein were convicted in August 2006 in one of the largest internet fraud cases to be prosecuted in the Southern District of Florida.  At trial, the evidence established that Roemmele led the criminal enterprise in committing wide-spread fraud against more than 46,000 victims.  These victims were defrauded through the internet and a corporation known as CITX, a former an internet service provider and alleged computer technology company. The defendants used the internet to offer the public a non-existent e-commerce opportunity for a fee of $295 per person.  Specifically, the offering promised customers an electronic website “store” that allegedly would provide customers with an opportunity to engage in e-commerce by electronically retailing goods and services on a pornography-free “internet mall.”  Customers were promised that they would earn commissions not only from their personal sales, but also from the sales generated by the website purchasers. In addition, the defendants used the internet, false press releases, and other communications media to disseminate false and fraudulent information to induce individuals to purchase stock in CITX.  Throughout the course of the fraudulent schemes, the defendants generated more than $15 million in criminal proceeds.

Attorney Sentenced on Money Laundering Charges; Used Cash from Drug Dealer to Purchase Laundromat

On January 26, 2007, in Seattle, WA, Stephen J. Plowman, an attorney, was sentenced to 18 months in prison to be followed by three years of supervised release and ordered to pay a $4,000 fine.  Plowman pleaded guilty on October 12, 2006, admitting his failure to file the currency transaction report was part of a pattern of unlawful conduct, occurring on more than one occasion, during a 12-month period. According to the plea agreement, Plowman admitted that he received more than $100,000 in cash from a client to purchase a laundromat in the Queen Anne neighborhood in Seattle during 2005.  Plowman did not document his receipt of this currency in any way.  Further, he willfully failed to file a Report of Cash Payments Over $10,000 Received in a Trade of Business, IRS Form 8300, with the Internal Revenue Service, as required by law, documenting his receipt of this currency from his client, Carlos Ford. Ford.  Ford, who was sentenced to ten years in prison for conspiracy to distribute cocaine, wanted the laundromat as a means to launder drug proceeds.  Plowman is the fourth attorney in the past year to be sentenced for financial crimes in connection to drug trafficking.  James L. White and Joel S. Manalang were both sentenced to 18 months in prison and, in a related case, A. Mark Vanderveen was sentenced to three months in prison and six months of home confinement.

Florida Labor Camp Owner Sentenced on Federal Charges

On January 26, 2007, in Jacksonville, FL, Ronald Robert Evans, Sr., was sentenced to 30 years in prison on numerous federal charges including 50 counts of structuring cash transactions to avoid financial reporting requirements; running a criminal enterprise that distributed crack cocaine; conspiracy to distribute crack cocaine; trafficking in untaxed contraband cigarettes; violating the Clean Water Act, violating the Migrant and Seasonal Farm Worker Protection Act; and witness tampering.  Evans and his wife, Jequita Dumbar Evans, were convicted by a trial jury on August 26, 2006.  Evidence presented at trial showed that Evans, Sr. owned and, with his co-defendants, operated two labor camps for migrant and seasonal agricultural workers.  The defendants charged the laborers $50 per week for room and board, and put them to work in the fields for wages at or near minimum wage.  At the end of every weekday, after dinner, the defendants gave the workers the opportunity to purchase on credit and at inflated prices, crack cocaine and untaxed generic-quality beer and cigarettes at a "company store" operating at the camp.  Records were kept of the laborers’ "purchases," and the defendants deducted the purchases from the laborers’ weekly pay envelopes. "Advances" of crack cocaine were also available on payday in the workers' pay envelopes.  The evidence at trial showed that after making the deductions for the crack, beer, and cigarettes, the Evanses were paying the workers on average about 30 cents on the dollar.  The defendants obtained the money by cashing checks written by their farmer clients.  Because federal law requires large cash transactions to be reported by financial institutions, the defendants instructed the farmers to structure the payments in amounts less than $10,000 to evade the reporting requirements.  After Evans, Sr. was indicted, he obstructed justice by persuading one farmer to lie on his behalf to investigating IRS agents and to deny that the structuring took place.  Jequita Evans was found guilty on charges of conspiracy to distribute crack cocaine and 48 counts of structuring cash transactions to avoid financial reporting requirements.  Her sentencing is scheduled for February 2007.

Defendant Sentenced to 24 Months on Money Laundering Charges

On January 19, 2007, in Knoxville, TN, Bernadette Trent West was sentenced to 24 months in prison to be followed by two years of supervised release.  Bernadette West, her husband, Ronald Scott West, and others were indicted on July 17, 2006, on charges of money laundering and conspiracy to distribute drugs.  In September 2006, Bernadette West pleaded guilty to one count of money laundering.  According to court documents, Bernadette West and Ronald Scott West arranged to invest drug proceeds from James Michael West into certain properties in Market Square, Knoxville, TN.  The initial investment by James Michael West was approximately $800,000, and eventually grew to at least $1.2 million. 

Leader of Shotgun Crips Sentenced to Nine Years for Money Laundering

On January 18, 2207, in Minneapolis, MN, Lemarc John Harrell, a leader of a violent street gang, was sentenced to 108 months after pleading guilty to money laundering charges.  According to court documents, between 2000 and 2006, Harrell conspired with others and conducted financial transactions involving money from cocaine sales. Harrell admitted that he and others bought real estate to help hide those proceeds. Harrell’s property has been forfeited to the United States, as well as $11,405 in cash and other big ticket items, including: a 2005 Land Rover, diamond earrings, a diamond tennis necklace, a diamond pendant, a 14 karat gold chain, a Jacob & Co. watch, a Corum watch, and a Duby & Schalden watch.  The jewelry was worth about $250,000.  Harrell admitted the property was subject to forfeiture because it was involved in, traceable to, or purchased with drug money.

Defendant Sentenced for Structuring Bank Deposits to Evade Reporting Requirements

On December 19, 2006, in Camden, NJ, Kamal S. Elhomsi was sentenced to 37 months in prison and three years of supervised release.  Elhomsi pleaded guilty on August 3, 2006, to one count of structuring transactions to evade reporting requirements and one count of credit card fraud.  According to the indictment, between January 9, 2001, and July 15, 2002, the defendant made 64 structured financial transactions worth a total of more than $600,000 in an attempt to evade currency reporting requirements placed on banking institutions to report transactions in amounts of $10,000 or greater.  Nearly all of Elhomsi’s bank deposits were made in amounts of either $9,500 or $9,900.  Additionally, from March 2002 to November 2002, Elhomsi obtained more than $275,000 in cash advances and merchandise through unauthorized use of credit cards, according to the indictment.

Gecko Communications Owners and Managers Sentenced in $15.6 Million Telemarketing Fraud

On December 18-19, 2006, in Kansas City, MO, Gecko Communications, Inc. co-owners and office managers were sentenced in a $15.6 million telemarketing scheme that defrauded an estimated 83,000 victims nationwide. Co-owner Zachery T. Whitehill was sentenced to 135 months in prison; Managers Bradley L. Lovstad and Monty E. Wanless were each sentenced to 97 month prison terms; Jaime E. Cook was sentenced to 60 months; Christopher L. Carlson and Jason R. Spencer were each sentenced to 24 months; and Steven T. Rice was sentenced to 35 months. The court also ordered each defendant to pay $6,048 in restitution. Carlson, Spencer and Rice pleaded guilty in March 2006 to aiding and abetting telemarketing wire fraud. The other defendants were convicted of a number of charges, which included: conspiracy, wire and telemarketing fraud and aiding and abetting money laundering. Whitehill was also found guilty of aiding and abetting another by depositing $50,000 derived from the unlawful wire fraud into an account at a Kansas City financial institution. Gecko bought lists of credit-challenged persons from brokers. Company employees called people on the lists and falsely offered them pre-approved credit cards if they agreed to pay up to $229.95. Most of the victims only received credit card applications. In a separate but related case, Christopher J. Ekeland, another Gecko Communications co-owner, was sentenced to 48 months in prison and ordered to forfeit $10.6 million and pay $6,048 in restitution for telemarketing wire fraud and money laundering. 

Ohio Drug Dealer Sentenced to 22 Year Prison Term

On December 18, 2006, in Dayton, OH, Earl Marshall was sentenced to 264 months in prison, followed by three years of supervised release and fined $100,000 for his role in a major narcotics distribution ring.  Marshall was sentenced on charges of conspiracy to commit money laundering, money laundering, conspiracy to distribute cocaine and marijuana, conspiracy to commit wire fraud and operating a continuing criminal enterprise (CCE).  Marshall used money from his drug operation to buy real property, including a motor coach home.  The indictment alleged that he and others bought and sold businesses, residences and vehicles to launder the drug money.  In making the purchases, he recruited “straw purchasers” in efforts to disguise that money used to acquire the assets was obtained from drug trafficking.

Company Controller Embezzled Over $1.4 Million

On December 14, 2006, in Columbus, GA, Jane Wood Brooks was sentenced to 46 months in prison and ordered to pay $1,358,662 in restitution.  Brooks pleaded guilty in August 2006 to mail fraud and money laundering charges.  According to court documents, Brooks served in the position as controller for BACHO North American, a division of Snap-On Tools.  Among her other responsibilities, Brooks had the authority to request and issue checks for payments to vendors and for other services related to the business.  Brooks devised a scheme to defraud BACHO of money whereas she issued a series of forty BACHO checks made payable to "MBN" in amounts from $9,000 to $33,987.  After receiving the checks, Brooks mailed them, or caused them to be mailed, to a credit card company called MBNA in Wilmington, Delaware, where Brooks maintained an account.   The MBNA checks were credited to her account.  Any money in excess of credit card charges was transferred to Brooks' personal checking account.  Brooks then used that money to purchase real property and consumer items.  The total loss to BACHO was documented at approximately $1,462,797. 

Woman Receives 51 Month Prison Sentence in Scheme to Defraud Elderly Man

On December 14, 2006, in Missoula, MT, Tracy Cancellare was sentenced to 51 months in prison followed by 36 months of supervised release and order to pay $125,001 in restitution for her involvement in a wire fraud and money laundering scheme.  In 2002, Cancellare told “Ken,” an 80-year old acquaintance, that she inherited two “plots” of land near Dallas, TX.  Later, she told “Ken” that Owens-Corning wanted to buy the land for $500,000 and she needed $6,200 to help her “close the deal.” She assured “Ken” that he would receive a substantial profit from the land sale and that after the closing, she would send him $350,000, in $9,000 increments. Cancellare made additional requests for money and “Ken” wired her more than $120,000. When he requested documentation to validate the legitimacy of the land deal, Cancellare sent him fictitious court documents.

Former Lawyer Sentenced to Prison for Money Laundering Related to International Fraud Scheme

On December 7, 2006, in Eugene, OR, Thomas E. Knapp was sentenced to 12 months and a day in prison for laundering funds derived from an international fraud scheme.  In addition, Knapp was ordered to pay more than $300,000 in restitution and to forfeit a 2002 Mercedes Benz automobile and his interest in a building located in Salem, Oregon, which he used to operate his former law practice.  According to the Indictment, between September 2000 and February 2005, Knapp, Antonio Abirached, and an unnamed associate met with individuals seeking financing and, through a series of misrepresentations and lies, assured them they could secure financing to fund their business plans.  Knapp and his co-conspirators told these individuals that, to obtain funding, they first had to pay advance fees.  Relying on false promises and assurances, these individuals sent over $1.3 million in advance fees to Knapp, Abirached, and their associate, who took and squandered the advance fees and never obtained financing for the individuals.  Also in the Indictment, in September 2000, a similar scheme transpired where individuals transferred $800,000 to a trust account controlled by Knapp, who spent some of the money on the purchase of an automobile as well as pay off the building he used for his law practice.  The individuals seeking the loan were told there were problems with the loan and that they needed to provide additional advance fees to obtain financing.  The individuals sent a total of $1.2 million in advance fees to Knapp and Abirached who never funded the loans or returned any of the advance fees.  In September 2006, Knapp pleaded guilty to one count of money laundering based on his receipt and expenditure of more than $300,000 of the funds sent by victims through the advance fee scheme.  Abirached has not appeared in court and is current considered a fugitive. 

Ad Executives, Attorney Sentenced To Prison for Defrauding Clients Out Of Over $40 Million

On December 7, 2006, in Los Angeles, CA, two former executives of an advertising placement agency were sentenced to federal prison for stealing tens of millions of dollars from corporate clients such as Sears, Roebuck & Co. and Universal Studios, who paid their firm to place ads with broadcast media, including ABC, NBC and Warner Brothers.  Thomas Edward Rubin, the former chairman and CEO of Focus Media, Inc., was sentenced to 5 ½ years in prison following his conviction earlier this year of conspiracy, mail fraud, wire fraud, bankruptcy fraud and money laundering. Focus Media's chief financial officer, Thomas Patrick Sullivan, was sentenced to 3 ½ years in prison after being found guilty by the same jury that convicted Rubin of 27 felony counts.  A third defendant in the case, Attorney Geoffrey C. Mousseau, was also sentenced to 21 months in prison.  Mousseau was found guilty at trial of conspiring with Rubin and Sullivan to commit bankruptcy fraud, concealing $500,000 in assets in a bankruptcy proceeding, perjury and other bankruptcy fraud charges. Restitution will be determined at a later date for all of the defendants. During a one-year period that began in November 1999, Rubin and Sullivan conspired to defraud Focus Media's remaining corporate clients – Sears and Universal – as well as the media outlets from which the firm ordered advertising. The fraud consisted of simply taking the money paid by its advertising clients to pay the media outlets and using it for their own private purposes.  Rubin and Sullivan collected funds to pay for advertising for the last quarter of 1999, misappropriated that money and never paid the media outlets who ran the ads.  Even after Sears and Universal obtained court orders prohibiting Rubin and Sullivan from misappropriating their funds, the defendants continued to do so, paying themselves, their lawyers and Focus Media employees. During the course of the year-long scheme, Focus Media received more than $50 million from clients, but no more than $10 million was paid to media outlets. Approximately $12 million out of the missing $40 million was used to pay Rubin's personal liabilities.

Boston Man Sentenced On Federal Drug Charges

On November 30, 2006, in Boston, MA, Jeffrey McCreary was sentenced to 40 months in prison, followed by 3 years of supervised release following his guilty plea on September 6, 2006 to one count of conspiracy to distribute marijuana and two counts of money laundering.  Had the case proceeded to trial, the government's evidence would have shown that the charges arose out of a DEA investigation in which agents used a cooperating witness to recover payments of nearly $500,000 from McCreary for past shipments of hundreds of pounds of marijuana in 2005. The investigation revealed a connection to the source of supply in Mexico who is facing charges in Arizona.  The shipments of marijuana delivered to McCreary were shipped in tractor trailer trucks that were loaded in Arizona.  A search of McCreary’s residence revealed marijuana, $66,000 in cash, and financial records. McCreary admitted to agents that he sold marijuana for 12 years and used the drug proceeds to purchase the residence and a vacation property in Maine.  The drug proceeds used to purchase the properties, consisting of $111,000 was forfeited to the government as a part of the sentence. 

Defendant Sold $20 Million in Counterfeit Software; Sentenced to 60 Months in Prison

On November 29, 2006, in Tacoma, WA, Scott Laney was sentenced to 60 months in prison, three years of supervised release, and ordered to pay $9.4 million in restitution for conspiracy to traffic in counterfeit labels and computer program documentation, and conspiracy to engage in money laundering.  According to documents filed in the case, Laney and co-conspirator, Tobias Grace, entered into a conspiracy involving the sale of Microsoft software with fraudulent licenses. Some of the software was originally labeled “Academic Edition–Not for Resale,” and others were labeled “Original Equipment Manufacture (OEM).”  The software was obtained by Laney and Grace at well below wholesale or retail prices, the labels and/or licenses were then altered to make the software appear to be a full retail product, and then resold at prices approaching retail value.  In other instances, software licenses for expensive server software products were altered to authorize a larger number of users than originally provided for and resold at significantly higher prices.  In his plea agreement, Laney admitted that he and his co-conspirators sold as much as $20 million worth of counterfeit labeled software or software licenses.  Laney and Grace set up a web of companies to re-label and sell the software.  An analysis of their bank accounts show as much as $35 million passed through in connection with this scheme.  At the warehouses raided in connection with the case, agents found as much as $65 million in software.  The scheme victimized people in two ways.  First, those who purchased this software thought they were getting a product with full support from the manufacturer only to discover it was not a legitimate product when they called the manufacturer’s customer support for assistance.  As a result, the software often became essentially worthless.  Second, the activity harmed the manufacturer, because each sale of the counterfeit labeled software by Laney and his co-conspirators represented a lost sale to the manufacturer.

Former IRS Revenue Agent Sentenced for Conspiracy and Causing the Failure to File Currency Transaction Reports

On November 28, 2006, in Oakland, CA, Clarence Walker, a former revenue agent for the Internal Revenue Service (IRS), was sentenced to 40 months in prison on charges of conspiracy and causing the failure to file Currency Transaction Reports (CTRs).  In addition to prison time, Walker was sentenced to 12 months of home confinement, three years of supervised release and fined $30,000.  Walker, who worked as a revenue agent for the IRS, was responsible for educating businesses that cashed checks, such as liquor and grocery stores, about the requirement to file CTRs. He then monitored the stores’ compliance.  CTRs must be filed for all cash transactions over $10,000.  At trial, the jury heard evidence that despite Walker’s obligation to educate businesses about, and ensure their compliance with, the CTR laws and regulations, Walker entered into a conspiracy with others to hide cash transactions in order to help fund a company selling illegitimate computer software. During the conspiracy, Walker cashed over $400,000 in checks at businesses he monitored, while instructing the check-cashers not to file the required CTRs in order to disguise the cash transactions from law enforcement.

Defendant Sentenced to 30 Months in Prison on Currency Structuring and Drug Violations

On November 22, 2006, in Orlando, FL, Jimmy Darrell Owens was sentenced to 30 months in prison to be followed by three years of supervised release. Also, Owens agreed to forfeit over $47,000, vehicles, and his interest in real estate properties. On August 7, 2006, Owens pleaded guilty to one count of structuring financial transactions with the intent to evade the filing of a currency transaction report and one count of conspiracy to possess with intent to distribute cocaine hydrochloride. According to his plea agreement, in January 2004, Owens deposited over $32,000 in five separate deposits under $10,000 to avoid the filing of currency transaction reports by the bank.

International Money Manager Pleads Guilty to Laundering Narcotics Proceeds in Government Sting

On November 20, 2006, in Manhattan, NY, Martin Tremblay pleaded guilty to violating United States money laundering laws by agreeing to launder hundreds of thousands of dollars worth of narcotics proceeds as part of a federal sting operation. According to the Indictment, Tremblay, a Canadian national, was the former president and managing director of the Bahamas-based investment firm Dominion Investments.  Dominion Investments was an investment services provider and financial advisor incorporated in the Commonwealth of the Bahamas, licensed by the Securities Commission of the Bahamas, and a member of the Bahamas Financial Services Board.  During his plea hearing, Tremblay admitted that he met with undercover IRS agents in March 2005 in Manhattan, who requested his assistance to launder what were represented to be the proceeds of narcotics trafficking.  Further, Tremblay admitted that in May 2005, he received a wire transfer from a business the undercover agents said they used to launder the narcotics trafficking proceeds.  Approximately $220,000 was eventually wire transferred by federal agents to Dominion Investments-related accounts.  This investigation is part of a New York Organized Crime Drug Enforcement Strike Force which is comprised of agents and officers from several federal and state law enforcement agencies. 

Defendant Sentenced on Federal Money Laundering Charges

On November 13, 2006, in Phoenix, AZ, Jeanette B. Wilcher was sentenced to 92 months in prison and ordered to pay $2.5 million in restitution. Wilcher was conviction by a federal jury on April 14, 2006, of wire fraud and six counts of money laundering. The evidence at trial showed that from December 1998 through October 1999, Wilcher, operating as Life Foundation Trust (LFT), enlisted a third party organization to seek investors for LFT’s high-yield investment “trading program.”  In January 1999, an elderly victim entered a contract and provided $3.3 million in cash to the third party organization for an investment in a trading program.  The investment contract represented that the third party organization could generate an extraordinarily high rate of return on the investment, that the investment would be fully secured, and that the principal would be returned at the end of the trading period.  During the next several months, Wilcher made a few payments to the third party organization, which in turn forwarded “investment payments” to the victim.  The “investment payments” were, in fact, comprised of the victim’s principal investment.  An IRS trace of the $3.3 million demonstrated that Wilcher failed to invest any of the victim’s money.  Instead, she moved the funds among several bank accounts, then used $700,000 to purchase her house out of foreclosure, expended an additional $1.4 million on personal items, and made payments to third parties as commissions on the investment.  The victim received only $792,000 in payments.

Wife of Alleged Member of Arellano-Felix Drug Cartel Sentenced on Currency Structuring Charges

On November 13, 2006, in San Diego, CA, Patricia Palacios, the wife of a Mexican national alleged to be a member of the Arellano-Felix drug cartel, was sentenced to 24 months in prison to be followed by three years of supervised release.  Palacios pleaded guilty in May to conspiracy to structure more than $800,000 in financial transactions, and agreed to the criminal forfeiture of cash and several assets.  In her plea agreement, Palacios admitted that she conspired with her husband and co-defendant, Gilberto Camacho, to structure deposits of large sums of cash in a manner to avoid the banks’ currency reporting requirements.  Specifically, Palacios admitted that on various dates between 2001 and 2004, she and Camacho deposited a total of at least $822,000 in cash, in increments of less than $10,000, into multiple bank accounts they controlled at Wells Fargo Bank and Bank of America.  Palacios also admitted that she believed that the cash, which was given to her on a regular basis by Camacho, was the proceeds of drug trafficking.  Pursuant to the plea agreement, the Government seized and forfeited several assets named in the indictment, including Palacios’s home in Chula Vista, four bank accounts containing more than $146,000, and four vehicles.  The Government also seized and forfeited an additional $40,000 in cash, several designer watches and pieces of expensive jewelry valued at more than $50,000, and a pair of jet skis, all of which were found at the time of Palacios’s arrest on December 9, 2005.

Real Estate Attorney Sentenced for Laundering Drug Money

On November 3, 2006, in Seattle, WA, Joel Manalang was sentenced to 18 months in prison, two years of supervised release and ordered to pay a $6,000 fine for money laundering.  Manalang, who was a real estate attorney, operated an escrow business. Court papers allege that during 2003 and 2005, Manalang received large quantities of cash from clients under circumstances indicating to Manalang that the money was derived from drug trafficking.  Manalang received the money in shoe boxes and duffle bags and assisted drug traffickers in the acquisition of real estate.  On August 1, 2006, Manalang pleaded guilty and acknowledged that he knew the funds were derived from criminal activity.  Additionally, he admitted that his actions were intended to conceal the true nature of the funds and from whom they were obtained.  He also admitted to evading currency reporting requirements imposed by law.  Manalang is one of four attorneys in the past year to plead guilty to financial crimes in connection to drug trafficking.  James L. White, an attorney and Municipal Court Judge, was sentenced in December 2005, to 18 months in prison for money laundering.  In a related case, A. Mark Vanderveen, an attorney, was sentenced to three months in prison and three months of home confinement for failing to file a currency transaction report as required by Federal law.  Stephen J. Plowman pleaded guilty last month to failing to report cash transactions in excess of $10,000. 

Guns and Drugs Net Little Rock Man 21 Years in Prison without Parole

October 31, 2006, in Little Rock, AR, Barry Allen Weatherford was sentenced to a total term of 252 months in prison without parole for conspiracy to launder drug proceeds, conspiracy to distribute more than 1000 kilograms of marijuana, conspiracy to distribute more than 5 kilograms of cocaine hydrochloride and discharging a firearm during a drug trafficking crime. During the sentencing proceedings, Weatherford was assessed responsibility as a leader of an extensive criminal enterprise which resulted in an enhanced sentence. In addition to prison time, Weatherford was ordered to forfeit his interest in Art’s Liquor in Little Rock, the site of a drug debt kidnapping involving co-defendants Jose Enrique Mendiola, Chris Alexander, and Marcos Antonio Ponce. Co-defendants Mendiola, Alexander, Ponce, Daniel Jiminez, and Mark Fouts have already been sentenced for their roles in this case.  Six remaining defendants charged in this case are scheduled to go on trial in March 2007. Weatherford also agreed to forfeit his interest in a Pulaski County, Arkansas property used to facilitate the drug trafficking activities in this case.

Federal Inmates Sentenced for Running Money Laundering Scam while Serving Federal Prison Sentences

On October 15, 2006, in Dallas, TX, Billy Frank Long was sentenced to 24 months in prison for money laundering.  Long’s co-defendant, Frank Lee Harris, who pleaded guilty to the same charge, was sentenced in September 2006 to 40 months in prison.  While in prison, the two men ran a money laundering scheme that claimed to create offshore corporations and trusts for investors.  After his release from federal prison, Long accepted $15,000 from an undercover agent posing as a drug dealer who wanted to “clean” his money.  Instead of creating the offshore corporations, Long kept the money. 

Three Brothers Sentenced For Money Laundering and Doing Business with Hamas

Between October 11 -13, in Dallas, TX, Bayan Elashi, Ghassan Elashi and Basman Elashi were sentenced to prison terms of 84 months, 80 months and 80 months respectively for money laundering and conspiracy to deal in the property of a Specially Designated Terrorist.  The three defendants, along with their brothers, Hazim and Ihsan “Sammy” Elashi, operated Infocom, a now defunct family-run business that sold computers and Internet services mostly to customers in the Middle East.  The brothers were each found guilty in April 2005 of conspiracy to commit money laundering.  The jury found that Bayan, Ghassan and Basman Elashi and Infocom Corporation conspired to send money to co-defendant Mousa Abu Marzook, an Infocom investor and a self-admitted Islamic Resistance Movement (Hamas) leader.  In 1995, the Department of Treasury, Office of Foreign Assets Control, designated Hamas as a Specially Designated Terrorist Organization, making it illegal for any United States person or entity to conduct any business with Hamas or its representatives.

Car Dealer Sentenced to Two Years in Federal Prison for Money Laundering

On October 11, 2006, in Hartford, CT, Mark L. Kowalski, the owner of Mark Motors, was sentenced to 24 months in prison, followed by three years of supervised release and ordered to pay a $5,000 fine, and to forfeit the sum of $100,000.  Kowalski waived indictment on April 11, 2006 and pleaded guilty to one count of money laundering, one count of filing a false currency transaction report and one count of failing to report a currency transaction of more than $10,000.  According to court records, an undercover operation was conducted in the summer of 2003 during which a law enforcement officer, posing as a drug trafficker, purchased an automobile from Mark Motors, a used-car dealership, for $29,051 in cash.  During the negotiations for the vehicle, the undercover officer told Kowalski that the money was from drug proceeds and that he did not want his name on any of the paperwork.  Kowalski agreed to sell the vehicle to the undercover agent, but placed all of the paperwork in the name of the girlfriend of the undercover agent, who was also an undercover agent.  During court proceedings, it was established that, prior to the undercover operation, Kowalski had engaged in similar unlawful transactions with individuals he knew to be area drug dealers.  The law requires that all trades and businesses, including car dealerships, file a Form 8300 with the IRS when it receives more than $10,000 in cash in a single transaction or related transactions during a 12-month period.  Kowalski was convicted of filing the IRS Form 8300, but falsely identifying the undercover agent’s girlfriend as the purchaser of the vehicle and was also convicted of failing to file an IRS Form 8300 in relation to several unrelated cash transactions exceeding $10,000 that other customers used to purchase vehicles.

Former CFO Sentenced to 25 Years Imprisonment for Embezzlement

On October 10, 2006, in Lubbock, TX, Jonathan D. Nelson was sentenced to 25 years in prison, ordered to pay $77.8 million in restitution and fined $200,000 for money laundering and wire fraud.  Nelson pleaded guilty in April 2006, admitting to embezzling more than $77 million from Patterson-UTI Energy, Inc., the nation’s second-largest onshore oil drilling provider.  As the company’s chief financial officer (CFO), vice president, secretary and treasurer, Nelson was able to forge approximately 38 checks, worth $4.6 million by making the checks made payable to himself or to “Chisum Capital,” an entity that he created and controlled.  He also arranged for 49 wire transfers worth $69.4 million to be made from the company to XIT Land and Energy, Inc., another company Nelson owned.  In another scheme, Nelson defrauded Patterson-UTI of approximately $2.1 million by using company funds to buy an executive aircraft for his own personal use.  Nelson also created a bogus $1.6 million invoice for Patterson-UTI purchases of equipment and vehicles, forged the chief operating officer’s name and used the money from that scheme to buy stock in a Texas construction company.

Defendant Sentenced to 51 Months in Prison for Stealing Half a Million Dollars from Relative

On October 10, 2006, in Birmingham, AL, Barry Keith Drenner was sentenced to 51 months in prison, followed by three years of supervised release, and ordered to pay $580,000 in restitution.  Drenner was indicted in March 2006 and pleaded guilty in June to eight counts of money laundering, mail fraud, and wire fraud.  In carrying out a scheme to steal approximately $500,000 from his mother-in-law’s retirement accounts, Drenner obtained the necessary signatures on documents and checks by falsely representing to his mother-in-law that he would invest the money at a higher interest rate than it was earning.  Drenner made several large financial transactions with the money he stole in attempts to hide the theft.

Fiscal Year 2008 - Examples of Money Laundering Investigations

Fiscal Year 2009 - Examples of Money Laundering Investigations

Table of Contents - Money Laundering Investigations

Criminal Investigation (CI) home page