Examples of Money Laundering Investigations - Fiscal Year 2012
The following examples of money laundering investigations are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted.
Former Federal Employee Sentenced for Embezzlement and Money Laundering
On September 21, 2012, in Denver, Colo., Lydia L. White, of Hooper, Colorado, was sentenced to 33 months in prison, three years of supervised release and ordered to pay $738,471 in restitution to the National Parks Service. On May 4, 2012, White pleaded guilty to one count of theft of government property and one count of money laundering. According to the plea agreement, White was a National Park Service budget technician at the Great Sand Dunes National Park and Preserve (GSDNPP) in Alamosa County, Colorado. She was responsible for paying Park expenses and had access to GSDNPP's third party draft checks. From January 2007 through January 2011, White had written over 870 checks totaling $731,009 to her husband, Richard White, on the GSDNPP bank account and deposited them into her own personal checking account. Throughout the duration of her employment and the thefts, White's salary was, on average, $450 per week, and her thefts averaged over approximately $3,500 per week. In addition, White made a number of unauthorized purchases using her GSDNPP issued credit card. These charges totaled $7,461 and included purchases for wood flooring, women's clothing, fencing and a stay at the Pagosa Springs Resort.
Kentucky Woman Sentenced for Embezzlement and Money Laundering
On September 4, 2012, in Louisville, Ky., Mary K. Montfort, of Jefferson County, Kentucky, was sentenced to 27 months in prison, three years of supervised release and ordered to pay $364,136 in restitution for embezzling funds from a national charity. Montfort pleaded guilty on April 2, 2012, to charges of making and possessing counterfeit securities and money laundering. According to the plea agreement, from May 2008 through November 2011, Montfort stole approximately $364,135 from the charity. In court, Montfort admitted that while working as bookkeeper for the Louisville chapter of the national charity, she fraudulently issued checks payable to herself and then forged the signatures of the authorized employees. During the scheme to defraud the charity, Montfort knowingly engaged in multiple monetary transactions exceeding $10,000, including eight checks ranging in amounts from $12,632 to $29,465. Montfort stated she used the money to pay her bills, travel, pay her daughter’s rent, purchase a 2010 Ford Fusion, and a 2008 Mercury Grand Marquis.
California Real Estate Agent Sentenced for Helping Drug Traffickers Purchase Property
On August 27, 2012, in San Diego, Calif., Marco Manuel Luis, a San Diego real estate agent, was sentenced to 48 months in prison and ordered to pay more than $500,000 in restitution to banks. Luis pleaded guilty to two counts of conspiracy to launder money related to the purchase of a Rancho Santa Fe residence exceeding $2,000,000, and to conspiracy to launder money related to the purchase of the Palomar Mountain property and residence. As part of his guilty plea, Luis admitted that he was the real estate agent for convicted drug trafficker Joshua Hester. Luis admitted that he submitted and facilitated the false loan applications in the name of nominee purchasers, verification documents, and financial documents for Hester. Luis also admitted that from December 2006 to September 30, 2009, he intentionally assisted co-conspirators in completing the loan application for the Rancho Santa Fe property, knowing that Hester was the true owner of the property. Luis also admitted that he intentionally falsified the loan application, in the name of Kelsey Wiedenhoefer, including her alleged annual income, her employment history and the source of down payments for the Rancho Santa Fe property, to secure the loan. Luis knew that the monthly mortgage payments were made with criminally derived proceeds. Luis admitted that he prepared a fraudulent loan application for the Palomar Mountain property and residence in the name of Jay Hansen for convicted drug trafficker Joshua Hester. Luis misrepresented Hansen's income as $150,000, his employment history, and arranged for a false verification of rent form.
Delaware Man Sentenced for Drug Dealing and Money Laundering
On August 22, 2012, in Philadelphia, Pa., Marvin Neal, of Bear, Del., was sentenced to 240 months in prison for his role in a drug distribution conspiracy in Philadelphia and money laundering. According to court documents, on September 12, 2008, Neal’s co-defendants gave $53,000 in cash to a person, who was cooperating with the FBI, to secure 25 kilograms of cocaine. Once the cash had changed hands, Neal arrived to take possession of the 25 kilograms of cocaine. Neal and his co-defendants believed the FBI informant was a large-scale distributor of cocaine from Mexico who could provide them cocaine at the Mexican wholesale price. Neal was arrested when he showed up to take delivery of the cocaine. While the FBI was conducting its undercover operation, IRS agents in Delaware were investigating Neal for money laundering. The IRS analyzed Neal’s household finances for 2003 through 2007 and found that the Neals’ expenditures exceeded their legitimate sources of income by more than $700,000. Neal himself did not report any wages or salaries during this time. Moreover, during a November 2007 search at Neal’s home, IRS and DEA agents found and seized expensive watches and jewelry. Agents also discovered a safety deposit box in the name of Neal’s wife, in which they found $50,000 in cash and various other pieces of jewelry.
Two Mexican Nationals Sentenced for Roles in Money Laundering Conspiracy
On August 22, 2012, in Phoenix, Ariz., Oscar Rafael Zamudio-Duran, of Culiacan, Sinaloa, Mexico, and Jose Fernando Zamudio-Cervantes, of Tijuana, Baja California, Mexico, were sentenced for their roles in a Phoenix area money laundering conspiracy. Zamudio-Duran was sentenced to 108 months in prison and Zamudio-Cervantes was sentenced to 60 months in prison. Both men pleaded guilty to conspiracy to commit money laundering. According to the plea agreements, both men lived and worked at a stash house in Phoenix that was used by a controlled substances smuggling organization. Ledgers that tracked the amount of money taken in and shipped out were kept at the stash house. At one point, a cooler that contained over $219,000 in U.S. currency, which represented proceeds of controlled substances trafficking, was buried in the backyard of the stash house. An additional $9,931 in U.S. currency was located inside the house. All of the currency was intended to be used by the drug trafficking organization to promote the continued carrying on of the distribution and sale of controlled substances.
Courier for Illegal Drug Organization Sentenced for Money Laundering
On August 10, 2012 in New York, N.Y., Alquidania Vargas was sentenced to 24 months in prison and three years of supervised release after pleading guilty to conspiracy to commit money laundering. According to court documents, from about May through June 2011, Vargas, a Black Market Peso Exchange courier, attempted to launder $300,170 in narcotics proceeds on behalf of a South American money broker. The Black Market Peso Exchange is a system by which drug cartels in South America that sell their drugs in the United States get their drug proceeds back to South America, and change the money from dollars into their domestic currency. The defendant delivered money to an undercover agent who was posing as a money broker's worker.
Massachusetts Man Sentenced for Structuring Cash Transactions
On August 1, 2012, in Boston, Mass., Richard C. Souza, Jr, of South Dartmouth, was sentenced to 51 months in prison and three years of supervised following his conviction for structuring cash transactions. According to court documents, Souza befriended an elderly widower, whose mental health was declining, and persuaded him to use approximately a quarter of his retirement savings to purchase a property in Maine and take out a loan of over $85,000 using the property as collateral. Souza then took the loan proceeds for himself and in less than two hours, he withdrew the majority of the proceeds of the Maine property loan in six separate cash withdrawals of $9,000 each from five different Sovereign Bank branches in the New Bedford area. The withdrawals were structured to conceal his possession of the loan proceeds and to avoid currency reporting rules that require banks to report cash transactions of over $10,000 to the United States Treasury. At the sentencing hearing, the government also presented evidence that from 2004 to 2008, Souza caused the widower’s net worth to decline from over $750,000 to virtually nothing, while also causing the widower to incur liabilities of over $140,000 during the same period. The evidence also showed that Souza pawned the widower’s watch and other valuables after the widower had been placed into an assisted living facility.
Former Mortgage Brokerage Firm Owner Sentenced for Failure to File Tax Form
On July 16, 2012, in Boston, Mass., Michael Hansen, of Dover, was sentenced 12 months and one day in prison, one year of supervised release and fined $4,000. In addition, Hansen was ordered to forfeit an additional $200,000. Hansen, owner of a mortgage brokerage firm, pleaded guilty to two counts of causing or attempting to cause failure to file Form 8300. According to court documents, Hansen received a total of $200,000 from an individual who wanted to exchange his cash for checks. Hansen wrote two checks payable to the individual’s company for $80,000 each, totaling $160,000. Hansen kept a total of $40,000 and later paid another individual $20,000 as a fee for putting the Hansen in touch with the individual who wanted to exchange cash for checks. Since, Hansen received $10,000 or more in cash, he was required to fill out a form 8300.
Eighth Defendant Sentenced in Money Laundering Scheme
On July 12, 2012, in Anchorage, Alaska, Christopher Bickell, was sentenced to 30 months in prison and three years of supervised release. Bickell was the final defendant of eight indicted on June 21, 2011 for conspiracy to launder the proceeds of oxycodone distribution. All eight defendants were charged with conspiracy to launder proceeds of the unlawful distribution of controlled substances, along with one or more counts of money laundering. According to the indictment between December 2009 and August 4, 2010, the defendants conspired to launder the proceeds of the sales of oxycodone. The money laundering charges alleged 18 financial transactions affecting interstate commerce between Alaska and California, totaling over $90,000. The other seven sentences handed down recently in this case include:
- Jordan Young – 60 months of probation, including 9 months of home confinement;
- Yale Gene Jordan – 50 months in prison and 36 months of supervised release;
- Mystri Simmons – 30 months in prison and 36 months of supervised release;
- Gary Zaremba – 30 months in prison and 36 months of supervised release;
- Jaqueline Gattenby,– 60 months of probation, including 6 months of home detention;
- Jonathen Gattenby – 60 months of probation, including 9 months of home detention.
- Clent Baumann – 48 months in prison and 36 months of supervised release.
Two New Jersey Men Sentenced in $1 Million Wire Fraud and Money Laundering Scheme
On July 11, 2011, in Newark, N.J., Abiatu Umah and Emmanuel Awa, both of South Orange, N.J., were sentenced to 48 months and 38 months in prison, respectively. In addition to the prison term, they were sentenced to serve three years of supervised release and ordered to pay $1,016,440 in restitution. The defendants pleaded guilty to Informations charging them each with one count of wire fraud and one count of money laundering. According to court documents and statements made in court, from February 2009 to August 2010, both defendants participated in a scheme to enrich themselves by opening business checking accounts at various banks and using the accounts to receive funds. The funds were transferred without authorization within and outside the United States by wire and other methods from several accounts. In opening the recipient accounts, Awa and Umah used the aliases “Emanuel Albert Smith” and “Edwin John Nicholas,” respectively. Each defendant presented a fictitious passport purportedly issued by the United Kingdom in the name of his alias. Awa and Umah opened more than 14 recipient accounts and received approximately $1 million in proceeds derived from the compromised accounts. They then used the proceeds for their personal benefit.
Brooklyn Rabbi Sentenced for Money Laundering Conspiracy
On July 3, 2012, in Trenton, N.J., Mordchai Fish, the principal rabbi of Congregation Sheves Achim in Brooklyn, N.Y., was sentenced to 46 months in prison, three years of supervised release and ordered to forfeit $90,000. Fish pleaded guilty to an Information charging him with money laundering conspiracy. According to documents filed in this case and statements made in court: Fish admitted that beginning in early 2008, he met with Solomon Dwek. For a fee of approximately 10 percent, Fish agreed to launder and conceal Dwek’s funds through a series of purported charities, also known as “gemachs,” which Fish controlled or to which he had access. Fish admitted that prior to laundering Dwek’s funds, Dwek repeatedly told him the money was the proceeds of illegal activity – including bank fraud, trafficking in counterfeit goods, and bankruptcy fraud. To hide the source of the money, Fish directed Dwek to make the checks payable to several gemachs that were purportedly dedicated to providing charitable donations to needy individuals. Once Dwek gave him the checks, Fish passed them to a co-conspirator who deposited them into bank accounts held in the names of the charities. Fish would then arrange to make cash available through an underground money transfer network. Fish admitted that he engaged in approximately 15 money laundering transactions; converting approximately $900,000 in checks into more than $800,000 in cash, keeping a cut.
Alabama Man Sentenced for Structuring Currency Transactions
On June 22, 2012, in Birmingham, Ala., Jerry Dwayne Lang, of Somerville, Ala., was sentenced to 36 months in prison, three years of supervised release and ordered to forfeit $75,000. Lang was a scrap metal dealer who ran C&J Recycling in Somerville, Alabama. Lang was convicted in December 2011 on 70 counts of structuring cash transactions with two separate banks between April 2008 and October 2008. Lang’s transactions were designed to avoid the legal requirement for banks to report currency transactions in excess of $10,000 to the federal government. According to evidence at trial, he structured his transactions as follows: Lang bought wrecked vehicles at auction and hired American Recycling to crush the vehicles for scrap metal. American Recycling issued multiple checks made out to Lang, not to C&J Recycling, of less than $10,000, instead of one check of more than $10,000. Lang would cash the checks at different times.
Texas Man Sentenced for Drug Trafficking and Money Laundering
On June 21, 2012, in Corpus Christi, Texas, Jose Angel Yanez III, was sentenced to 135 months in prison and five years of supervised release for conspiring to distribute cocaine and concealing the proceeds by purchasing and renovating homes and reselling them. Yanez pleaded guilty March 23, 2012. As a part of his plea agreement, Yanez forfeited his interest in four residential properties in the Corpus Christi area, more than $250,000 and three vehicles. According to court documents, Yanez became a cocaine distributor beginning on or about June 1, 2008. Investigating agents determined that Yanez used the proceeds from the drug sales to buy and renovate these houses and that Yanez believed these financial transactions enabled him to legitimize his lifestyle. Over the course of approximately two years, Yanez bought and sold 10 houses.
Former Jersey City Construction Project Superintendent Sentenced for Social Security Disability Scam
On June 6, 2012, in Newark, N.J., Pasquale Zinna, of Hackettstown, N.J., the former project superintendent on a Jersey City, N.J., high-rise construction project, was sentenced to six months in prison and six months of home confinement for a scheme in which he hid his employment so he could continue to receive Social Security disability payments. Zinna pleaded guilty to Social Security disability fraud and structuring financial transactions. His wife, Janeen Zinna, was sentenced to two years probation with the special condition of 100 hours of community service. She pleaded guilty to a Superseding Information charging her with misprision of her husband’s Social Security fraud. According to court records, in 1999 Zinna filed an application for disability insurance benefits with the Social Security Administration (SSA), claiming that, as of March 15, 1996, he was disabled and unable to work due to a back injury. By filing the application, he agreed to notify the SSA if there was any improvement in his medical condition or if he regained the ability to work. Beginning in September 2005, Zinna was the project superintendent for a sub-contractor at a high-rise construction project in Jersey City. He failed to report his return to work to the SSA and concealed his employment by having his paychecks issued in the names of other individuals, including his wife. Pasquale Zinna also admitted to making a series of cash withdrawals from his joint checking account with his wife to avoid the bank’s reporting requirement for financial transactions in excess of $10,000. In addition to the prison term, Pasquale Zinna was sentenced to three years of supervised release and ordered to pay $101,753 in restitution to the SSA and forfeit $98,000 involved in the illegal financial transactions. Janeen Zinna was also held responsible for the restitution. The defendants paid these obligations in full at sentencing.
South Carolina Man Sentenced for Marijuana and Cocaine Conspiracy and Money Laundering
On June 5, 2012, in Columbia, S.C., Juan Martinez, Jr., aka “El Indio” and “Indio,” was sentenced to 168 months in prison, five years of supervised release and ordered to pay a $200 special assessment. According to the superseding indictment, beginning in at least mid-2005, Martinez participated in a conspiracy to possess with intent to distribute marijuana and cocaine. In December 2010, Martinez used $13,334 in cash from the proceeds of drug sales to purchase a 2003 Cadillac Escalade.
Three South Florida Defendants Sentenced for Kickback Scheme in Hurricane Wilma FEMA Fraud
On June 4, 2012, in Miami, Fla., Jeffrey Wayne Aunspaugh, a Port St. Lucie electrical contractor, his wife, Angela Aunspaugh, and Christopher Hale, his brother-in-law, were sentenced for their roles a kickback scheme involving Hurricane Wilma disaster relief FEMA payments. Jeffrey and Angela Aunspaugh were each sentenced to 63 months in prison and two years supervised release. Hale was sentenced to 30 months in prison and two years supervised release. In March 2012, the Aunspaughs were convicted of conspiracies to commit honest services mail fraud, money laundering and structuring financial transactions to evade currency reporting requirements. Hale pleaded guilty to receiving kickbacks. According to evidence presented at trial, Jeffrey and Angela Aunspaugh, owners of Ener-Phase Electric, Inc., obtained more than $1 million from subcontracts with Glades Utilities Services, Inc. for storm-related repairs following Hurricane Wilma in 2005. The Aunspaughs paid more than $200,000 in cash kickbacks to their brother-in-law, Christopher Hale, who was the general manager of Glades Utilities Services, Inc., to obtain the contracts.
Lawyer Gets Record Prison Sentence in Insider Trading Scheme
On June 4, 2012, in Newark, N.J., Matthew Kluger, of Oakton, Va., was sentenced to 144 months in prison, and stock trader Garrett D. Bauer, of New York, was sentenced to 108 months in prison. Both had pleaded guilty to Informations charging them with conspiracy to commit securities fraud, securities fraud, conspiracy to commit money laundering and obstruction of justice. Additionally, Kluger and Bauer were both sentenced to three years supervised release and Bauer agreed to forfeit the contents of numerous trading and bank accounts he used to facilitate the scheme, as well as homes that he purchased with the proceeds. Bauer must forfeit $21 million in property. Kluger agreed to forfeit $415,000. According to court documents and statements made in court, Bauer and two co-conspirators, Kluger and Kenneth Robinson, of Long Beach, N.Y. engaged in an insider-trading scheme that began in 1994 and relied on Kluger, a lawyer, to steal information from his employers and their clients. Bauer admitted that as part of the scheme he traded ahead of more than 30 different corporate transactions based on inside information Kluger provided. Over time, Kluger worked at four of the nation’s premier mergers and acquisitions law firms. While at the firms, Kluger regularly stole and disclosed to Robinson material, nonpublic information regarding anticipated corporate mergers and acquisitions on which his firms were working. Once Kluger provided the inside information to Robinson, Robinson passed it to Bauer, who then purchased shares for himself, Kluger, and Robinson in Bauer’s trading accounts. He sold the shares once the relevant deal was publicly announced and the stock price rose. Bauer gave Robinson and Kluger their shares of the illicit profits in cash, often tens or hundreds of thousands of dollars, that Bauer withdrew in multiple transactions from ATMs. Bauer spent more than $7 million of his share of the proceeds to purchase two properties, approximately $6.65 million for an Upper East Side condominium in New York and approximately $875,000 for a home in Boca Raton, Fla. Co-conspirator Kenneth Robinson was sentenced to 27 months in prison and three years supervised release.
Alaska Woman Sentenced in Money Laundering Conspiracy
On May 29, 2012, in Anchorage, Alaska, Synda L. Collins, of Fairbanks, was sentenced to 12 months and one day in prison for her role in a money laundering conspiracy that involved proceeds from the unlawful distribution of prescription painkilling medication. According to court documents, Collins was part of a ring which unlawfully transported Oxycontin, a powerful and addictive prescription painkiller, from Las Vegas, Nevada, to Fairbanks in late 2008 and early 2009. Between February and April 2009, Collins wire transferred or deposited approximately $14,000 that consisted of proceeds from the unlawful distribution of Oxycontin pills in the Fairbanks area. Approximately $140,000 was laundered during the conspiracy. Other participants of the conspiracy who have been sentenced include:
• Damien M. Mingarelli - 80 months in prison
• Justin Michael Standefer - 18 months in prison
• Lucas Allen Deweese - 12 months and a day in prison
Former Florida Bank Manager Sentenced for Structuring Financial Transactions
On May 25, 2012, in Miami, Fla., Carey Robinson, a former bank branch manager in West Palm Beach, was sentenced to 57 months in prison and two years of supervised release. Robinson pleaded guilty to one count of structuring financial transactions and causing the bank to fail to file required currency transaction reports. According to court documents, Robinson was employed as a bank manager from 2008 through May 2011. Beginning in approximately May 2009, Robinson started exchanging small bills for large bills for a bank customer. In a span of two years, Robinson exchanged almost $1 million for this customer. Most exchanges involved between $30,000 and $40,000. Although a bank is required to file currency transaction reports with the Department of Treasury for all cash transactions involving more than $10,000, Robinson ensured that the bank never filed a single currency transaction report for any of these exchanges.
Defendant Sentenced in International Conspiracy
On May 23, 2012, in Detroit, Mich., Veniamin Gonikman, a naturalized U.S. citizen originally from Ukraine, was sentenced to 36 months in prison and three years of supervised release. Gonikman became a fugitive in 2005 following the arrests of his co-conspirators, Aleksandr Maksimenko and Michael Aronov. He was apprehended in Ukraine in January 2011 and pleaded guilty to money laundering on September 13, 2011. According to court documents, between September 2001 and February 2005, Gonikman, together with Maksimenko and Aronov, operated Beauty Search Inc., a business that brokered and managed Eastern European women who performed in exotic dance clubs in the Detroit area. The men recruited some of the women in Ukraine, facilitated their illegal entry into the United States and then harbored them for commercial advantage and private financial gain. Gonikman received a share of the proceeds the women earned and transferred the money to Ukraine to promote and carry on the Beauty Search business. The lead defendants in this case, Maksimenko and Aronov, pleaded guilty in 2006 to forced labor, immigration, and money laundering charges. Maksimenko was sentenced to 168 months in prison and ordered to pay $1,570,450 in restitution to the victims. Aronov was sentenced to 90 months in prison and ordered to pay $1 million in restitution.
Former Haitian Government Official Sentenced for Role in Scheme to Launder Bribes
On May 21, 2012, in Miami, Fla., Jean Rene Duperval, of Miramar, Fla., was sentenced to 108 months in prison for his role in a scheme to launder bribes paid to him by two Miami-based telecommunications companies. Duperval was also ordered to forfeit $497,331. Duperval was the director of international relations for Telecommunications D’Haiti S.A.M. (Haiti Teleco) a Haitian state-owned telecommunications company. Haiti Teleco is the sole provider of land-line telephone service in Haiti. According to the evidence presented at trial, two Miami-based telecommunications companies had a series of contracts with Haiti Teleco that allowed the companies’ customers to place telephone calls to Haiti. The telecommunications companies collectively paid approximately $500,000 to two shell companies to funnel the bribes to Duperval.
Wisconsin Man Sentenced for Money Laundering
On May 18, 2012, in Madison, Wis., Jeff Frost, of Brookfield, Wis., was sentenced to 54 months in prison for money laundering. Frost pleaded guilty on February 21, 2012. According to the indictment, Frost was President of Mid America Payphones (MAP) of Waukesha, Wisconsin. From 2004 to 2007, Frost conspired with August Schober, Vice President of MAP, and Colin Nordstrom, Vice President of Sales for MAP, to fraudulently collect dial around compensation fees by programming payphones to autodial toll-free telephone numbers. Under FCC regulations, payphone owners are paid $.494 for every toll-free call placed from their payphones. Frost's payphones were programmed to place toll-free calls and to choose the appropriate options in the automated messaging system to stay connected long enough to ensure the payphone would collect the dial around compensation fee. The phone would then automatically hang up. The scheme generated over $1 million in fraudulent dial around compensation fees. Colin Nordstrom was sentenced to three months in prison and August Schober to 12 months in prison.
North Carolina Man Sentenced on Money Laundering Conspiracy Charges
On May 17, 2012, in Wilmington, N.C., George Bell, Jr. was sentenced to 36 months in prison and three years of supervised release. Bell pleaded guilty on September 6, 2011, to conspiring to launder monetary instruments. According to court documents, Bell, an employee and the son of the owner of an auto dealership, sold vehicles to three individuals but put different names on the vehicle titles. The vehicles were purchased with illegal funds. Bell allowed falsified information to be presented to the financial institutions to secure the loans for the vehicles. The investigation also revealed that Bell sold automobiles to Donald Shealey, the leader of a violent drug organization, Face Mob Family, who was responsible for distributing powder and crack cocaine and heroin throughout the southeast United States. Shealey was convicted and sentenced to life imprisonment in 2009 for the drug conspiracy.
Connecticut Woman Sentenced for Structuring Cash Transactions
On May 14, 2012, in Hartford, Conn., Della Lien, of Cheshire, was sentenced to 24 months of in prison, three years of supervised release, fined $30,000 and ordered to forfeit $125,010 for structuring more than $400,000 in currency transactions to evade reporting requirements. According to court documents and statements made in court, from March 2007 through June 2009, Lien made 14 cash deposits in increments ranging from $8,000 to $9,750, and totaling $125,010, into various accounts she held. At the time, Lien knew that the bank was required to issue a report for a currency transaction in excess of $10,000, and that by conducting her financial transactions in amounts less than $10,001, she intended to evade the transaction reporting requirements. In addition, between April 2006 and October 2009, Lien structured an additional $281,763 in cash deposits at banks in New York.
Alaskan Sentenced on Money Laundering Charges
On May 1, 2012, in Anchorage, Alaska, Yale Gene Jordan was sentenced to 50 months in prison and three years of supervised release. Jordan and others were indicted in June 2011 for conspiracy to commit money laundering. According to the indictment, between December 2009 and August 4, 2010, Jordan and others conspired to posses, with the intent to distribute, oxycodone and to launder the proceeds of the sales of oxycodone. The money laundering charges alleged 18 financial transactions affecting interstate commerce between Alaska and California, totaling over $90,000.
Montana Woman Sentenced for Wire Fraud and Money Laundering
On April 27, 2012, in Missoula, Mont., Elizabeth P. Johnson, of Bozeman, was sentenced to 34 months in prison, three years of supervised release, and ordered to pay $1,457,770 in restitution. Johnson pleaded guilty in January 2012 to wire fraud and money laundering. According to court documents, in 2006 Johnson purchased 20 acres in the Star Valley of Wyoming for $265,000 for a development project. The former owner of the property and another individual financed the purchase. The second individual's investment was short term and as months passed, he was anxious for Johnson to refund his "bridge funds." On January 4, 2007, Johnson contacted another individual and sent him a buy/sell agreement which purported to show that a company had put $100,000 earnest money down on the 20 acres with an offer to buy it for $5.4 million. After Johnson gave this individual the buy/sell agreement, she sought an investment from him in the form of a $1.2 million loan. Per their agreement, all the funds were supposed to be used for developing the project. However, only a portion of the funds were used to clear title to the land. The earlier investors were paid off and Johnson paid her “promoters” to continue marketing the project. In addition, Johnson used over $400,000 for her own personal use and to pay other personal debt. In the end, Johnson confessed that the buy/sell was fabricated and she forged the realtor’s signature.
Leader of Marijuana Distribution Ring Sentenced
On April 26, 2012, in Charlotte, N.C., Eric Mark Giles was sentenced to 196 months in prison and four years of supervised release for drug, money laundering and firearm charges. According to evidence presented at trial, court documents and court proceedings, Giles, a student at the University of North Carolina (UNC) led a large marijuana distribution organization which generated drug proceeds in excess of $1 million in a two and a half year time period. Trial evidence established that Giles was primarily responsible for the shipment of high-grade marijuana from Santa Cruz, California, to distributors based in the UNC Charlotte area. Trial evidence showed that the group used bank accounts to launder their drug proceeds by making large cash deposits in branches in North Carolina and corresponding cash withdrawals in California. The co-conspirators kept their individual transactions under $10,000 in an effort to avoid Federal Currency Transaction Reporting requirements. Other members of the drug and money laundering conspiracy already sentenced including Keith Kraszewski, of Ft. Lauderdale, Fla., sentenced in April 2011 to 41 months in prison and four years of supervised release and William Skach, of Asheville, N.C., sentenced in May 2011 to 27 months in prison and four years of supervised release.
Man Sentenced for Oxycodone Distribution and Money Laundering Charges
On April 16, 2012, in Knoxville Tenn., Peter Mayo, of Tampa, Fla., was sentenced to 162 months in prison and three years of supervised release. Mayo pleaded guilty in October 2011 to conspiracy to distribute and possession with intent to distribute oxycodone and conspiracy to commit money laundering. According to his plea agreement, between January 2009 and September 2011, Mayo directed numerous “pill shoppers” to obtain multiple prescriptions for oxycodone. Mayo would then ship the pills to co-conspirators in Knoxville, Tenn. During the course of the conspiracy, Mayo shipped multiple packages per week to Tennessee. Once the pills were distributed by his co-conspirators, Mayo directed the deposit of the drug proceeds into his personal bank accounts. Mayo then used funds to promote continued drug trafficking and purchase many high-value assets, including luxury vehicles, motorcycles, jet-skis, a martial arts training facility, jewelry, and travel.
Florida Man Sentenced for Money Laundering and Drug Conspiracy
On April 17, 2012, in Miami, Fla., Roberto Caro, of Miami-Dade, was sentenced to 48 months in prison and three years of supervised release. Caro was charged with one count of money laundering in connection with a mortgage fraud scheme and one count of conspiracy to manufacture and possess with intent to distribute marijuana. Caro also was sentenced on a related charge of bond jumping, arising from his failure to appear in court in January 2011 on the original charges. According to court documents and statements made in court, law enforcement discovered marijuana grow house operations in numerous homes in Port St. Lucie. During the investigation, many of those homes were linked to co-defendant Manuel Caro, father of Roberto Caro. Manuel Caro was charged in 2006 for his participation in the marijuana grow house operation, but fled after being released on bond and remains a fugitive. Additional marijuana grow houses were discovery in St. Lucie, Palm Beach, and Miami-Dade Counties. According to a second superseding indictment, most of the homes were bought with funds obtained through mortgage fraud committed by Roberto Caro and a co-defendant Hugo Oliva who was a mortgage broker dba MBA Mortgage Services, Inc. The defendants in the mortgage fraud scheme were charged with various counts of conspiracy, mail fraud, drug charges, and laundering drug-related money through the purchase of the homes. In March 2011, Hugo Oliva was sentenced to 87 months in prison and ordered to pay $886,418 in restitution.
Wisconsin Man Sentenced for Distributing Cocaine and Money Laundering
On April 12, 2012, in Madison, Wis., Joseph P. Loomis, of Holmen, was sentenced to 240 months in prison. Loomis pleaded guilty to conspiring to possess and distribute cocaine and money laundering on February 2, 2012. According to court documents, Loomis was the leader of a drug organization that distributed between 15 and 50 kilograms of cocaine in the La Crosse, Wis., area from approximately April 2006 to September 2008. He also distributed large quantities of marijuana from 2006 through the spring of 2011. Loomis maintained stash houses and used other individuals to pick up, package, store and distribute drugs. He also used another individual to collect drug debts. Loomis laundered drug proceeds by using a Netspend stored value card. He deposited large sums of cash onto the card and then used the card to purchase items.
Convenience Store Owners Sentenced in Food Stamp Trafficking Scheme
On April 9, 2012, in Boston, Mass., Jorge Martinez, of Springfield, Mass., and Kathleen Lamson, of Enfield, Conn., were sentenced for their roles in a three-year scheme to commit food stamp benefit trafficking. Both were sentenced to 12 months and one day in prison, three years of supervised release and ordered to pay $1.1 million in restitution. On May 18, 2011, Martinez and Lamson pleaded guilty to conspiracy; multiple counts of food stamp fraud; engaging in monetary transactions; and multiple counts of wire fraud. According to government evidence, had the case proceeded to trial it would have been proven that Martinez and Lamson unlawfully purchased, at a discounted cash value, food stamp benefits from food stamp recipients, resulting in the full value of the benefits being electronically transferred into a Connecticut bank account in both of their names. To provide customers with cash for the food stamp benefits, Martinez and Lamson would withdraw large amounts of cash from this bank account. They also used funds from that account to purchase two vehicles.
Former Investment Advisor Sentenced to Prison
On April 6, 2012, in Buffalo, N.Y., Timothy Geidel, of Hamburg, was sentenced to 42 months in prison and ordered to pay $1.3 million in restitution. Geidel pleaded guilty to wire fraud and structuring for defrauding more than 40 investors out of $1.3 million. According to court documents, while working as an investment adviser with Georgetown Capital Group, Inc., Geidel diverted investor funds to his own use. Between 1990 and 2010, Geidel gave victims the impression that he would be investing their money in high yield stocks, bonds, mutual funds and certificates of deposit. Instead of investing funds as he indicated to his victims, the defendant diverted some of the funds to his own use by depositing the money into his personal bank accounts. The defendant also used some of the funds to pay off earlier investors to perpetuate the scheme.
Former Leader of the Arellano-Felix Organization Sentenced for Racketeering and Money Laundering Offenses
On April 2, 2012, in San Diego, Calif., Benjamin Arellano-Felix, the former leader of the Tijuana Cartel/Arellano-Felix Organization (AFO), was sentenced to 300 months in prison and ordered to forfeit $100 million in criminal proceeds. According to court records and the defendant’s admissions, Arellano-Felix was the leader of the AFO from approximately 1986 to until his arrest on March 9, 2002. Arellano-Felix and other AFO members conspired to import and distribute within the United States hundreds of tons of cocaine and marijuana, for which the AFO obtained hundreds of millions in U.S. dollars in profits. Arellano-Felix conspired with other members of the AFO to launder proceeds the drug trafficking activities by directing other members to transport, transmit, and transfer hundreds of millions in U.S. dollars from the United States to Mexico.
Texas Drug Trafficker Sentenced on Money Laundering Charges
On March 26, 2012, in Fort Worth, Texas, Margarita Monrreal was sentenced to 18 months in prison and one year supervised release for money laundering. According to court documents, Monrreal was part of a drug distribution conspiracy and used funds derived from drug proceeds to purchase real property. Monrreal and another defendant made 13 cash payments for a home and arranged for the home to be listed in the name of a dummy corporation with no real business purpose. All the payments exceeded her reported income at the time.
Former Caretaker of Elderly Millionaire Sentenced for Stealing $3.2 Million and Valuable Artwork
On March 29, 2012, in Manhattan, N.Y., James Stephen Biear, of Ossining, N.Y., was sentenced to 120 months in prison and four years of supervised release. In addition, Biear was ordered to forfeit $3.5 million and ordered to pay a $1,000 special assessment fee. Biear was found guilty on November 22, 2010, of ten counts of interstate transportation of stolen property, wire, mail, bank and credit card fraud, and money laundering. According to the evidence introduced at trial, other proceedings in this case, and court documents, from 2005 through 2007, Biear worked as a driver and personal assistant to a wealthy individual. Over the span of those two years, Biear gained access to the victim’s bank account information, credit cards, checks, and extensive art collection. In July 2006, Biear transferred approximately $3.2 million from the victim’s bank account in Australia into the victim’s bank account in Vermont, and then to his own bank account in California. Biear also stole other money, artwork, and personal property from the victim, including the Warhol Heinz 57 box; a playing card on paper by Marcel Duchamp; an ink drawing by Francis Picabia; a watercolor by Joe Brainard; a charcoal drawing by Alex Katz; and the victim’s antique silverware. After stealing the Warhol Heinz 57 box, Biear sold it to an art collector in New York City for $220,000 by fraudulently asserting that the box had been given to him as a gift and creating a phony letter of provenance. Biear also forged a check for over $52,000 from the victim’s bank account and used his credit cards without authorization to pay for luxury items such as European vacations, expensive dinners, Tiffany silverware, jewelry, and ski equipment. Biear also laundered the money he stole from the victim through the all-cash purchase of: a house in Ossining, New York, antique furniture, Oriental rugs, and various other artworks. In August 2009, Biear falsely reported that one of the paintings had been stolen from his home in Ossining and then filed a fraudulent insurance claim. In October 2009, law enforcement recovered the painting from Biear’s attic while executing a search warrant.
Mortgage Broker Sentenced for Massive Fraud Scheme
On March 26, 2012, in Pittsburgh, Pa., Michael Staaf, of New Brighton, Pa., was sentenced to 120 months in prison and five years of supervised release on his conviction of conspiracy to commit bank fraud, mail fraud and wire fraud and money laundering conspiracy. According to information presented to the court, Staaf operated Beaver Financial Services, a mortgage broker business, and several other companies that owned and managed real estate. Staaf and several other individuals engaged in a large-scale mortgage fraud and money laundering scheme involving tens of millions of dollars and dozens of mainly commercial properties. One aspect of the scheme involved the purchase of properties owned by entities that Staaf controlled through an employee. The purchases were financed through loans. In connection with the loan applications, Staaf and others submitted fraudulent information related to the financial position of the borrower/purchaser, fraudulent appraisals that overstated the value of the collateral, and other documents that contained other material misrepresentations. There were also second loans associated with some of the properties in which Staaf and others refinanced the earlier purchases. Again, in connection with the refinancings, Staaf and others submitted fraudulent loan applications and other fraudulent documents, including appraisals, to the lenders. The investigation further revealed that, particularly in connection with commercial properties, Staaf engaged in a scheme in which he would "sell" commercial property owned by an entity he controlled to another entity that he controlled at highly elevated prices. The purchases were financed through fraudulent loan applications and through the submission of fraudulent documents, such as tax returns, rent rolls, leases, financial statements and appraisals. Staaf directed the closing agents at U.S. Settlement Services to misdirect funds directed to pay off existing liens on properties to Staaf and in turn Staaf deposited those funds into various entities' bank accounts which he controlled. He used nominee accounts, shell corporations, and other schemes to conceal his ownership of the proceeds of the fraud and to make it more difficult to track the proceeds of the fraud.
New York Woman Sentenced on Money Laundering Charge
On March 22, 2012, in New York, N.Y., Maribel Lopez was sentenced to 18 months in prison and three years of supervised release for her role in a cocaine distribution conspiracy. In September 2011, Lopez pleaded guilty to one count of structuring. According to court documents, Lopez assisted a narcotics distribution organization by transporting and concealing narcotics proceeds. From October 2006 through June 2009, she made over 80 cash deposits in amounts under $10,000, totaling $155,120.
Indiana Investor Sentenced for Wire Fraud, Money Laundering
On March 14, 2012, in Indianapolis, Ind., Brian Eads was sentenced to 30 months in prison, three years of supervised release and ordered to pay $863,095 in restitution for wire fraud and money laundering. According to court documents, Eads and a related defendant, John Richards, worked together in 2005 and 2006 to sell houses to real estate investors. Richards, a mortgage broker, falsified numbers on loan applications, and Eads enticed investors by assuring them there would be no risk to invest in properties he had for sale. Eads paid down payments and paid money outside of closing, asking investors to falsify invoices for work that was never done. As a result, Wells Fargo loaned money on the 26 properties, suffering an approximate $380,104 loss. Additionally, the investors’ credit histories were negatively impacted. In a separate scheme in 2009, Eads suggested that a longtime acquaintance join with him in purchasing investment properties with funds provided by the acquaintance. The first several transactions were positive, with the acquaintance and Eads both receiving small profits upon the sales. Then, Eads sold numerous properties to his acquaintance and provided titles of properties that he did not own. This acquaintance lost approximately $295,791. In yet another scheme, Eads partnered with an investor from Utah in 2010. This investor and Eads discussed purchasing 38 properties in Indianapolis, Muncie, and Anderson. Eads provided details of the properties like pictures and the sales prices. The Utah investor wired money to Eads to purchase the properties. However, the investor never received deeds, and an inspection of records revealed that Eads did not own several of the properties in question. Although Eads eventually substituted some of the titles, the Utah investor lost approximately $187,200.
Arizona Man Sentenced for Scheme to Defraud Investors
On March 14, 2012, in Tucson, Ariz., Philip Mark Cain, of Corona de Tucson, was sentenced to 51 months in prison, five years supervised release and was ordered to pay $1,272,943 in restitution. In December 2011, Cain pleaded guilty to one count of mail fraud, one count of engaging in an illegal monetary transaction greater than $10,000 and one count of structuring a transaction to avoid a currency reporting requirement. According to the indictment, Cain solicited funds from his clients to be invested in structured notes from Deutsche Bank. Cain deposited over $1.4 million of client funds into his bank accounts at JPMorgan Chase and did not invest the funds with Deutsche Bank. Between June 2008 and May 2010, Cain withdrew $596,000 of client funds from his JPMorgan Chase accounts in the form of checks or cashier’s checks payable to himself or his family members. Additionally, from June 2008 to June 2010, Cain withdrew over $400,000 in currency from the same accounts with most withdrawals being less than $10,000, which is the currency transaction reporting limit. During the same time period, approximately 62 vehicles were registered to Cain with the Arizona Motor Vehicle Division and Cain paid by cash or cashier’s check for the repair of vehicles at various times. Cain then sold vehicles through classic car auctioneer Barrett-Jackson, receiving approximately $978,000 in wires from Barrett-Jackson between October 2010 through February 2011.
Texas Resident Sentenced for Structuring Financial Transactions
On February 29, 2012, in Amarillo, Texas, Amy Fernandez was sentenced to 12 months in prison and ordered to pay a money judgment of $99,950 for structuring financial transactions to avoid the reporting requirements. According to court documents, Fernandez admitted that she purchased cashier’s checks from four separate financial institutions each day during the week of February 22, 2010 through February 26, 2010. In order to avoid federal reporting requirements, Fernandez purchased these cashier’s checks in either $3,000 or $2,950 amounts, for a combined total of $59,550. Fernandez tendered cash that she removed from large, gallon-sized plastic bags that she carried in her purse. During one transaction, Fernandez stated that she had to make certain that she stayed under the $3,000 threshold.
Massachusetts Man Sentenced to Prison for Fraud and Money Laundering
On February 24, 2012, in Boston, Mass., Glen Dias, of Mendon, was sentenced to 18 months in prison, 12 months home confinement, three years of supervised release and ordered to pay a money judgment and forfeiture $1 million. Dias pleaded guilty to a 40 count indictment charging him with conspiracy, mail fraud, wire fraud and money laundering on July 27, 2011. According to court documents, Dias worked for Waters Corporation in Milford from 1981 until 2007. Waters is an international company that makes and services laboratory analytical equipment. From in or about 1998 through 2007, Dias knowingly and intentionally defrauded Waters by taking new, used and scrap equipment from the Waters plant and selling it to buyers across the United States for his own personal gain. Dias used the proceeds of his unlawful activities to purchase, among other things, a boat, a trailer and an addition to his home on Cape Cod.
Massachusetts Pharmacist Sentenced for Illegal Distribution of Drugs via the Internet
On February 17, 2012, in Boston, Mass., Baldwin Ihenacho, of Stoughton, was sentenced to 60 months in prison and two years of supervised release. Ihenacho pleaded guilty in August 2011 to conspiracy to distribute and dispense schedule III and IV controlled substances; dispensing of controlled substances; conspiracy to misbrand drugs while held for sale in interstate commerce; misbranding while held for sale in interstate commerce; international money laundering; and aiding and abetting. According to court documents, from September 2006 through on or about November 2008, Ihenacho, a registered pharmacist and owner of Meetinghouse Community Pharmacy, conspired with others to distribute, dispense, and to possess with intent to distribute and dispense, schedule III and IV controlled substances, as well as non-controlled substances, without valid prescriptions. Meetinghouse Community Pharmacy was the primary fulfillment pharmacy for two Internet pharmacy operations, Global Access and Golden Island, both of which were located in the Dominican Republic. The customers were not asked to supply medical records and may or may not have been asked to answer a brief medical questionnaire. The operators of the website approved the orders and asked the patient to pay for the drugs requested using a credit card. The website operators would then send a request to someone, in some instances a doctor and in some instances a lay person, to “authorize” the order. Ihenacho and his employees at Meetinghouse received these “approved” orders by computer, dispensing the drugs into vials with an insert provided by the website operator. The pharmacy then mailed the drugs to the customer using pre-designed order forms supplied by the operator of the website. The doctors and Meetinghouse were paid by the Internet pharmacy operator for writing and/or authorizing the drug orders and filling them. Ihenacho knew that the doctors did not have a valid doctor/patient relationship with the Internet customers. Additionally, Ihenacho received specific warnings from the DEA and various state agencies that his dispensing conduct was unlawful, yet continued his unlawful conduct. During the course of the charged conspiracies, Ihenacho dispensed over one million pills, all without the required valid prescriptions, and received approximately $3 million in payment from the two Internet pharmacy operations. These funds were transferred to Ihenacho’s accounts in the United States from accounts located in the Dominican Republic.
North Carolina Man Sentenced for a Major Cocaine Trafficking Conspiracy
On February 8, 2012, in Raleigh, N.C., Thomas Grandville Alston was sentenced to 324 months in prison and five years of supervised release. Alston pleaded guilty in April 2011 to charges of conspiring to distribute five kilograms or more of cocaine and money laundering. The evidence presented in court revealed that Alston was a major cocaine trafficker in North Carolina. From at least 2006 through January 25, 2011, Alston and others distributed multiple kilograms of cocaine and generated hundreds of thousands of dollars in drug proceeds. The evidence further revealed that Alston laundered a significant portion of the proceeds through the purchases of luxury automobiles.
California Man Sentenced on Conspiracy, Bank and Mail Fraud, and Money Laundering Charges
On February 6, 2012, in Fresno, Calif., Ronald John Salado, of Modesto, was sentenced to 136 months in prison, five years of supervised release, and ordered to pay $2,025,134 in restitution to victims and to pay nearly $2.5 million in forfeiture to the United States. Salado was convicted in November 2011 by a federal jury of conspiring to commit mail fraud and bank fraud, mail fraud, bank fraud, and money laundering. The evidence at trial showed that, from August 2000 to October 2007, Salado, along with others, conspired to steal almonds from nut growers and businesses in the nut industry, and sold the almonds under fictitious and nominee names for the benefit of Salado and the other conspirators. At times, the conspirators caused a nut processor to enter into fictitious purchases of “ghost loads” of nuts that did not actually exist. Salado and the other conspirators received payments in the fictitious and nominee names for these nut sales, negotiated many of the checks through banks using forged endorsements, and distributed the proceeds among themselves. During the scheme, Salado was the almond buyer at a nut processor in Turlock and abused his position of trust.
Four Sentenced in Unemployment Benefits Fraud Scheme
On February 3, 2012, in Las Vegas, Nev., Francisco Garcia was sentenced to 37 months in prison for his guilty plea to conspiracy to commit mail fraud, money laundering, and false representation of a social security number. On February 2, 2012, Nabor Garcia was sentenced to 24 months in prison for his guilty plea to conspiracy to commit mail fraud and money laundering. On February 1, 2012, Elroy Garcia was sentenced to 15 months in prison for his guilty plea to conspiracy to commit mail fraud, money laundering, and making a false declaration in relation to a bankruptcy proceeding. Also on February 1, 2012, Efrain Garcia was sentenced on 24 months in prison for his guilty plea to conspiracy to commit mail fraud and money laundering. In addition, all four men will serve three years of supervised release and ordered to pay $4.4 million in restitution and to forfeit the real properties purchased with the fraudulently-obtained monies. According to court documents, from about November 2007 to September 2009, the defendants fraudulently submitted at least 591 unemployment claims to the State of Nevada, causing it to pay unemployment insurance benefits, emergency unemployment compensation benefits, federal additional compensation benefits, and state extended benefits. The defendants recruited undocumented persons to apply for unemployment benefits, even though they were not entitled to the benefits because they were illegally in the United States. The defendants obtained personal identifying information and work history from the undocumented persons, and submitted the fraudulent claims for unemployment benefits through the State’s unemployment benefit telephone hotline and website. When the unemployment claims were accepted, the State provided the benefits through debit cards or checks mailed to addresses that the defendants controlled.
Ohio Man Sentenced for Laundering Drug Proceeds
On February 2, 2012, in Cleveland, Ohio, Jimmie Goodgame was sentenced to 70 months in prison for laundering more than $1.5 million in drug proceeds. Goodgame was one of eight people indicted last year for their roles in a large-scale heroin trafficking ring that brought drugs into Northeast Ohio. Goodgame deposited more than $1.5 million in cash into accounts he controlled between 20008 and 2010. Goodgame and his wife, Stacey, had more than 50 automobiles titled to their three companies in 2010 which were actually driven and controlled by drug dealers. Goodgame established several businesses, including J&G Enterprises I, LLC and Washington Industries, Inc. to purchase and title vehicles for Goodgame’s drug trafficking clients. Stacy Goodgame allowed her husband to use her company, Goodgame Heavenly Cleaning, and her personal name, to title vehicles for his drug trafficking clients. She also allowed her husband to use her business bank account to conduct financial transactions, including cash deposits, checking and electronic withdrawals, for vehicle down payments and financing. Jimmie Goodgame made false representations to car dealerships and salespeople to obtain vehicles for his drug trafficking clients, and in turn, charged those drug trafficking clients a fee or tax for obtaining the vehicles. Goodgame also used multiple bank accounts to disguise the nature and amounts of money he received from his drug trafficking clients, and used wire transfers to engage in financial activities. Goodgame made cash deposits of more than $1.5 million between January 2008 and October 2010 in four bank accounts he controlled. Over the same time period, he made withdrawals of more than $1 million for vehicle down payments and financing.
Minnesota Man Sentenced in Mortgage Fraud Scheme
On January 31, 2012, in Minneapolis, Minn., Gerald Greenfield was sentenced to 50 months in prison, ordered to pay a $10,000 fine and to forfeit hundreds of thousands of dollars in assets. According to court documents, Greenfield admitted that beginning in September 2006, he conspired with others to launder the proceeds of a $2.5 million mortgage fraud scheme. One of the co-conspirators, Brett Thielen, sold condos during a market downturn by recruiting financially unqualified buyers and fraudulently inducing mortgage lenders to lend those buyers money. To further the scheme, the condo prices were artificially inflated, creating substantial profits that Thielen needed to hide. Greenfield admitted helping hide those profits, even while knowing they were derived from unlawful activity. Greenfield wired the illegal profits to an unindicted Australian attorney through whom he had previously laundered money. Then, at Thielen’s direction, Greenfield instructed that attorney to wire portions of those profits to other places to make it appear as if they came from legitimate sources.
New Jersey Woman Sentenced for Role in Structuring and Bank Fraud
On January 23, 2012, in Newark, N.J., Kim S. Morris, of Belleville, N.J., was sentenced to 33 months in prison, three years of supervised release and ordered to forfeit $708,855 for participating in a mortgage fraud scheme and structuring money orders to evade transaction reporting and identification requirements. Morris, a part-time court clerk at the Essex County Courthouse, pleaded guilty to an Information charging her with one count of bank fraud and one count of structuring. According to the court documents and statements made in court, Morris admitted that she applied for a mortgage loan from Wells Fargo Bank in January 2008 by completing a fraudulent Uniform Residential Loan Application to procure approximately $624,000 for a home loan. The loan application contained material misrepresentations, including inflating Morris’ personal income and falsifying the name of her employer. These fraudulent misrepresentations caused Wells Fargo to extend a home loan to Morris. Morris also admitted that from March 2008 through late June 2009, she structured approximately 110 money orders, totaling $84,855, for the purpose of evading the reporting and identification requirements.
Rhode Island Used-Car Dealer Sentenced on Money Laundering Charges
On January 23, 2012, in Providence, R.I., Domingo A. Lopez was sentenced to 18 months in prison for money laundering in connection with the cash sale of used vehicles.. According to information presented to the court, between April and November 2010, Lopez sold two vehicles for cash and took cash deposits on two others from a person who represented himself to be a drug dealer and who stated that the vehicles were to be used for drug trafficking. Lopez listed each vehicle’s purchase price as being under $10,000 so as to avoid reporting requirements, when in fact more than $10,000 in cash was paid for each vehicle. Lopez also disguised or concealed the true identity of the buyer on paperwork associated with the sale of each vehicle. Lopez, a Dominican national, faces deportation proceedings following completion of his prison term.
Maryland Man Sentenced in Multi-Million Dollar Heroin and Money Laundering Conspiracy
On January 20, 2012, in Baltimore, Md., Steven Blackwell, of Elkton, Md., was sentenced to 240 months in prison and five years of supervised release for his part in a conspiracy to distribute and possess with intent to distribute heroin, conspiracy to launder money and conspiracy to defraud the U.S. government relating to the collection of income taxes. Blackwell was also ordered to forfeit money, property, and assets traced to the illegal activity, including at least eight pieces of property. According to his plea agreement, Blackwell was the leader of a conspiracy to distribute heroin in Maryland, New York and the Dominican Republic since December 2003, managing five or more participants. Blackwell made millions of dollars and distributed more than 30 kilograms of heroin. In his plea agreement, Blackwell admitted that he and Joy Edison conspired to launder the millions of dollars in proceeds from Blackwell’s heroin sales through the purchase of multiple properties, cars and other expensive items. In addition, in an effort to conceal the nature and the extent of the illegal income from the Internal Revenue Service (IRS), Blackwell and Edison engaged in financial transactions designed to prevent the IRS from properly assessing taxes due. At the same time, the income reported by Blackwell and his conspirators was a small fraction of the actual income derived from the sale of heroin. On August 26, 2011, Joy Edison, of Elkton, Md., was sentenced to 70 months in prison for conspiring to launder over $400,000 in drug proceeds. Edison was also ordered to forfeit her interest in eight properties purchased with drug proceeds, and any other property purchased with drug trafficking proceeds.
Businessman Sentenced for Laundering Millions of Dollars for a Mexican Narcotics Trafficking Organization
On January 20, 2012, in Manhattan, N.Y., Vikram Datta, the owner of multiple retail perfume stores located on the United States-Mexico border, was sentenced to 235 months in prison. In September 2011, he was found guilty of conspiracy charges to launder millions of dollars for a Mexican narcotics organization. According to the trial evidence and court documents, from June 2009 until January 2011, Datta operated a business that sold significant amounts of perfume to Mexican purchasers. As payment, he accepted millions of dollars in cash that had been generated from drug sales in the United States. After the drugs were sold in the U.S., the proceeds were smuggled to Mexico, where they were aggregated and stored. Mexican money exchange businesses then purchased the drug proceeds in exchange for Mexican pesos at a steep discount from the prevailing inter-bank exchange rate. The exchange businesses later transported the drug proceeds back into the United States and used them to purchase perfume at businesses, including Datta’s, located in Laredo, Texas, that would then ship the perfume to purchasers in Mexico. Datta admitted, among other things, that he was receiving “a lot of cash” from his customers, the Sinaloa Cartel, and that his business was “just washing the whole money.” Analysis of financial records revealed that, from January 2009 through January 2011, more than $25 million in United States currency was deposited in bank accounts controlled by Datta and his co-conspirators and also determined that Datta frequently failed to file financial reports concerning cash transactions that are required by the Bank Secrecy Act.
Georgia Man Sentenced in International Insurance Fraud Scheme
On January 20, 2012, in Tampa, Fla., Richard Solomon, of Stone Mountain, Ga., was sentenced to 66 months in prison, three years of supervised release and ordered to pay $35,963,378 in restitution for insurance fraud and money laundering. According to court documents, Solomon and several other defendants used a series of sham offshore companies, rented assets, and falsely-inflated financial statements to issue worthless insurance policies, reinsurance, and financial guarantee bonds across the globe. In the Caribbean island nation of St. Christopher and Nevis, the defendants formed shell “insurance” companies that were never licensed to engage in the business of insurance. In Costa Rica, the defendants formed additional shell companies as wholly-owned subsidiaries of the St. Christopher and Nevis “insurance” shells. And in Panama and elsewhere, the defendants located assets – usually bogus certificates of deposit – for which they arranged to pay “rental fees” so they could display those assets on the “insurance” companies’ financial statements. The defendants then generated fraudulent financial statements and unqualified audit opinions, based in part on the “rented” assets, which created the illusion that the “insurance” companies had the capitalization necessary to issue insurance and pay claims. The defendants’ bogus “insurance” companies issued worthless insurance policies, reinsurance, and financial guarantee bonds to victims all over the world through promissory note programs known as Premier Holidays International, Inc. and World Vision Entertainment, Inc. Victims who invested in the promissory notes were told that the notes were backed by insurance in the form of financial guarantee bonds. Because those bonds were fraudulent, however, the victims ended up losing more than $50 million.
Former Hells Angels President Sentenced in Multi-Million Dollar Mortgage Fraud, Money Laundering Scheme
On January 17, 2012, in San Francisco, Calif., Raymond Foakes, of Rohnert Park, California, was sentenced to 70 months in prison and ordered to pay $1,085,000 in restitution for his role in a multi-million dollar mortgage fraud scheme. Foakes, the former President of the Hells Angels Sonoma Chapter, pleaded guilty on October 25, 2011, to conspiracy to commit bank and wire fraud, wire fraud and money laundering. According to the plea agreement, Foakes admitted that from 2006 until early 2007, he was involved in a scheme to fraudulently obtain mortgage loans for parcels of real property located in Northern California. As part of this conspiracy, Foakes submitted a series of false statements on mortgage loan applications and altered bank statements. Rather than occupy the property as a primary residence, as he stated on his applications, he allowed the property to be used as a marijuana grow house. Further, Foakes laundered the criminally-derived.
Attorney and Businessmen Sentenced on Money Laundering Charges
On January 13, 2012, in Syracuse, N.Y., Benjamin Viloski, of Pittsburgh, Pa., was sentenced to 60 month in prison and three years of supervised release. Viloski was convicted on July 29, 2011 on charges of conspiracy to commit mail and wire fraud, conspiracy to commit money laundering of criminally derived property, money laundering, and making a false statement to a federal law enforcement officer. In addition, Viloski was ordered to pay a $900 special assessment and restitution to the victims of the scheme, including $25,000 to Classic Real Estate and $50,000 to COR Development, as well as forfeit $1,273,285. On January 17, 2012, co-defendant Joseph Queri, of Syracuse, N.Y., was sentenced to 41 months in prison, three years of supervised release, and ordered to pay restitution a $300 special assessment and restitution of $50,000 to COR Development, $250,000 to the Hampshire Companies, and $25,000 to Classic Real Estate. Queri’s restitution obligations to victims COR Development and Classic Real Estate were made joint with those of Viloski. Queri was also issued an order to forfeit $1,453,813. Queri pleaded guilty to conspiracy to commit mail and wire fraud, and conspiracy to commit money laundering in criminally derived property in February 2011. According to court documents, Queri used his position as the Senior Vice President of Real Estate for Dick’s Sporting Goods to funnel to himself illegal kickback payments on store development deals through bank accounts maintained by his co-conspirators. Viloski, an attorney representing Dick’s in the store development deals, helped Queri collect approximately $2 million in unlawful kickback payments. Co-defendant Gary Gosson of Syracuse was sentenced to 24 months in prison and three years of supervised release on January 18, 2012. Gosson pleaded guilty to conspiracy to commit mail and wire fraud, conspiracy to commit money laundering and conspiracy to commit securities fraud through insider trading. Gosson was also ordered to pay a $300 special assessment and restitution in the amount of $50,000 to COR Development and $250,000 to the Hampshire Companies. In addition, Gosson to pay ordered to forfeit $90,928.
Rochester Man Sentenced on Drug and Money Laundering Charges
On January 12, 2012, in Rochester, N.Y., Ormond "Rallo" Larkin, of Rochester, N.Y., was sentenced to 120 months in prison and five years of supervised release after being convicted of conspiring to distribute cocaine and laundering drug proceeds. In addition, Larkin will forfeit cash, jewelry and two vehicles. According to court records, Larkin was involved in a conspiracy to distribute significant quantities of cocaine in the Rochester area for nearly a decade. Larkin admitted that over the course of his drug trafficking, he sold and laundered between $120,000 and $200,000 in drug proceeds, mostly through the purchase of high end vehicles. Larkin was arrested in April 2010 along with three others, Jerome Wilson, Chad Lewis and Curtis Monroe. All four defendants have now been convicted and sentenced. Monroe was sentenced to 84 months in prison; Lewis and Wilson were sentenced to 120 months.
Arizona Man Sentenced in Money Laundering and Tax Scheme
On January 6, 2012, in Phoenix, Ariz., Wayne A. Mounts, of Mesa, was sentenced to 63 months in prison for his role in conspiracies to commit money laundering and to defraud the Internal Revenue Service (IRS). In addition, Mounts was ordered to pay $686,841 in restitution to victims and $80,787 in restitution to the IRS. The Judge further entered a forfeiture order against Mounts for a money judgment of $722,841. According to the evidence presented at trial, Mounts and co-defendant Gino Carlucci stole large sums of money from Joseph Flickinger and Flickinger’s clients and associates. Flickinger was a tax return preparer who had himself been sentenced in 2007 to 70 months in prison following a guilty plea in a tax fraud conspiracy. Mounts and Carlucci used the money for their own personal benefit. Mounts withdrew more than $250,000 in cash from a bank account over a two-month period, withdrawing the money in amounts just under $10,000 to avoid having the bank report his withdrawals to authorities. Mounts and Carlucci spent an additional $150,000 of the funds to buy a 43-foot luxury boat which Carlucci concealed from the government for over two years. Gino Carlucci awaits sentencing.
Used Car Dealer Sentenced in Money Laundering Scheme
On January 6, 2012, in Plano, Texas, Steve Ham was sentenced to 16 months in prison and three years of supervised release for money laundering. According to court documents, Ham was part of a scheme with Richard Arledge, owner and operator of Richard Arledge Suzuki and the director and president of Expressway Financial, Inc. Arledge and Ham intentionally sold high-end luxury cars to individuals who derived their income from the illegal distribution of controlled substances, the promotion of prostitution, and mail and wire fraud. These criminal customers usually paid for their luxury cars in cash and provided tens of thousands of dollars in cash to the dealership in pillowcases, shrink-wrapped plastic packages, backpacks, and even fast food paper bags. During these financial transactions, Arledge, Ham and other dealership employees promised the criminal customers that the dealership would not report the financial transactions to federal authorities, despite federal reporting regulations requiring that all cash received in excess of $10,000 be reported to the Internal Revenue Service. Ham and others also concealed the fact that the criminal customers were purchasing the cars by titling the transactions in the names of third parties and labeling the car purchases as “leases” to permit the dealership to re-acquire the luxury cars if ever seized by law enforcement during the course of a federal investigation. Arledge was sentenced to 188 months. Fourteen others were convicted or pleaded guilty in connection with the money laundering scheme.
Operator of Kauai Investment Fraud Program Sentenced in Ponzi Scheme
On January 5, 2012, in Honolulu, Hawaii, David E. Ruskjer was sentenced to 120 months in prison on mail fraud, wire fraud, currency structuring, and money laundering relating to charges that he defrauded approximately 140 clients who had invested more than $16 million. Ruskjer was also ordered to pay $11,586,334 in restitution to the victims of the fraud. According to evidence presented during the trial, Ruskjer operated an investment program in Hawaii and elsewhere, known as "Ruskjer & Associates," and/or "Dave's Investment/Loan Program," from approximately September 22, 2004, until December 11, 2008. Ruskjer held himself out to clients as a successful investor in options trading, and stated in promissory notes he gave in return for the monies his clients advanced that his options program could pay them four to five percent per month interest as a return on their money. The earliest investors were promised ten percent per month and one investor who paid Ruskjer $7.5 million was promised 50 percent per year. Ruskjer ostensibly collected monies to be used in trading covered and uncovered options, but in fact, was paying earlier clients with monies he obtained from later clients since there was never sufficient money to support the interest rates he guaranteed his clients. Ruskjer only invested about $8 million he collected and by the time the government seized the account and other bank accounts, with a combined balance of approximately $4.1 million, on December 11, 2008, Ruskjer owed his clients approximately $19 million in principal and additional interest. Ruskjer actually lost over $2.5 million in options trading and spent significant sums of client money enriching himself and developing an unrelated business that never got off the ground.
Two New Jersey Men Sentenced in Money Laundering Scheme
On January 4, 2012, in Trenton, N.J., Rabbi Eliahu Ben Haim and Akiva Aryeh Weiss were sentenced for their roles in a money laundering scheme in which Weiss operated an illegal money transmitting business. Ben Haim, of the Elberon section of Long Branch, N.J., was sentenced to 60 months in prison and three years of supervised release. Akiva Aryeh Weiss, aka Arye Weiss, of Brooklyn, N.Y., was sentenced to five years probation with the special condition that he reside in a mental health facility. Weiss previously plead guilty to an Information charging him with operating an unlicensed money transmitting business, or “cash house”. According to court documents and statements made in court, Haim admitted that beginning in October 2006, he met with a cooperating witness, Solomon Dwek, and for a fee of approximately 10 percent, agreed to launder and conceal Dwek’s funds through an already-existing underground money transfer network. Haim admitted that prior to laundering Dwek’s funds, Dwek repeatedly told him the funds were the proceeds of Dwek’s illegal businesses and schemes, including bank fraud, trafficking in counterfeit goods, and bankruptcy fraud. To conceal and disguise the nature and source of the funds, Haim directed Dwek to make the checks payable to several organizations that Haim operated. Once he received the checks from Dwek, Haim deposited them into bank accounts held in the names of the organizations and then wired the proceeds of those checks to a co-conspirator in Israel, or to bank accounts held by other individuals and corporations in various foreign countries, including Israel, Turkey, China, Switzerland and Argentina. The co-conspirator in Israel would then make cash available through an underground money transfer network, including at the cash houses operated by Schmuel Cohen, aka Schmulik Cohen; Yeshaye Ehrental, aka Yeshayahu Ehrental and Yishay Ehrental, and Weiss. Weiss admitted that from June 2007 to July 2009 he operated an unlicensed money transmitting business with individuals residing in Israel. In conducting his business from a location in Brooklyn, Weiss admitted he transferred between $200,000 and $400,000 in cash to Haim and Dwek. Ehrental and Cohen, both of Brooklyn, pleaded guilty to operating an illegal money transmitting businesses and were each sentenced to 18 months in prison on September 9, 2011, and August 24, 2011, respectively.
New York Woman Sentenced for Structuring Millions in Currency Transactions
On January 4, 2012, in Syracuse, N.Y., Rosalie Jacobs, of Hogansburg, N.Y., was sentenced to five years probation, 12 months of home confinement, and ordered to forfeit $2,634,189 to the United States. As part of her plea, Jacobs admitted that she conspired with others to structure a series of cash deposits of U.S. currency in less than $10,000 increments to avoid federal reporting requirements. During the relevant 13 month period, Jacobs ran a business named Jacobs Tobacco on the Akwesasne Indian Reserve and received payments for tobacco products in U.S. currency. Jacobs was aware that any cash deposit into a domestic financial institution in excess of $10,000 caused the financial institution to generate a Currency Transaction Report. In an effort to avoid such reporting requirements, Jacobs caused $2,634,189 to be deposited in accounts held at two financial institutions with each deposit being intentionally in an amount less than $10,000. For each transaction, Jacobs or one of her employees packaged the cash in separate bags at Jacobs Tobacco and then gave it to a person, who was instructed to make the deposits.
Oklahoma Man Sentenced on Money Laundering Charge Related to Failed Condominium Project
On December 27, 2011, in Oklahoma City, Okla., Derek Christopher Swann, of Norman, was sentenced to serve 40 months in prison, three years of supervised release, and ordered to pay $4,334,900 in restitution to more than two dozen investor victims. Swann pleaded guilty to one count of money laundering related to a failed commercial and residential development called “The Falls.” Earlier this year, Giovanni Bryan Stinson, of Edmond, pleaded guilty to conspiracy to commit securities fraud. According to court documents, Swann and Stinson decided in 2005 to try to build The Falls project in Edmond. The next year, Swann, Stinson and others began soliciting private investors for money to develop The Falls. Swann and Stinson acquired investor proceeds for The Falls based on false information and then used those proceeds for personal expenses and repayment of earlier investors. Individuals invested more than $5 million into The Falls based on promises that the monies would be spent for engineering, architectural, or infrastructure costs. The Falls project was never completed. Sentencing for Stinson has not been set.
Montana Man Sentenced on Drug and Money Laundering Charges
On December 20, 2011, in Missoula, Mont., Ryan Gifford Blindheim, of Whitefish, was sentenced to 18 months in prison, four years of supervised release, and ordered to forfeit $86,850. Blindheim pleaded guilty in August 2011 to conspiracy to manufacture marijuana and money laundering. According to court documents, in approximately October 2010, and continuing through March 14, 2011, Blindheim and other individuals started and continued a marijuana grow operation in Olney. Blindheim purchased the location and assisted in transforming the building into a proper marijuana plant growing facility. Blindheim and a co-conspirator deposited large amounts of cash into their personal savings accounts at Whitefish Credit Union. Cash deposits ranging from approximately $3,000 to $9,000 were routinely made in November 2010, totaling $86,850 in one month.
Illinois Man Sentenced for Investment Fraud
On December 13, 2011, in Springfield, Ill., Edward Moskop was sentenced to 240 months in prison, three years of supervised release and ordered to pay $1.49 million in restitution for mail fraud and money laundering. According to court documents, Moskop, operating as Financial Services Moskop and Associates, Inc., during the late 1980's, acted as a securities broker for several customers making mutual fund and other investments. In 1990, after a complaint by the National Association of Securities Dealers (NASD) for misusing funds, Moskop was barred from association with any member of the NASD and was no longer registered to act as a broker in the securities industry. From 1991 through 2010, Moskop persuaded friends, family and neighbors to become his customers and provide him with funds for investment. Instead of making the investment, he kept the funds for his own use. Moskop created and mailed to his customers fraudulent receipts for investments identified with fraudulent account numbers. Moskop created periodic investment statements showing false interest and gains in the investments. From 1991 to 2010, Moskop obtained by fraud approximately $2,424,000 from 26 victims, including his own relatives, persons referred by trusted friends and attorneys, as well as longtime customers of his insurance business.
Former Fry’s Executive Sentenced for Role in Million Dollar Kickback Scheme
On December 8, 2011, in San Jose, Calif., Ausaf Umar Siddiqui was sentenced to 72 months in prison and ordered to pay $65,584,864 in restitution for his role in a kickback scheme to defraud Fry’s Electronics, Inc. In addition, the court ordered the forfeiture of $16,578 found in a PC International bank account, $38,329 from a personal bank account, a 2006 Mercedes Benz CLS 55, a 2002 Ferrari 360, items found in his briefcase including $30,100 in cash, £3,100 (British Pounds), €240 (Euros), ten Wells Fargo debit cards and three SmartOne Visa debit cards. Siddiqui pleaded guilty to wire fraud and money laundering charges. According to his plea agreement, Siddiqui worked for Fry’s from 1998 through December 2008. In 2003, Fry’s named him its vice president of merchandising and operations. In that position, he was responsible for procuring inventory for Fry’s stores. Beginning in 2004 and continuing through November 2008, Siddiqui devised a scheme to defraud Fry’s. To induce Fry’s vendors to pay money to him and not Fry’s, he created and controlled two sham companies, PC International, LLC and International Marketing Resources, LLC (IMR), which conducted no business other than to receive fraudulently induced payments from Fry’s vendors. Siddiqui represented to Fry’s that he would obtain merchandise from Fry’s vendors at a lower price if Fry’s authorized him, as vice president of merchandising and operations, to enter sale contracts on Fry’s behalf with Fry’s vendors directly instead of buying merchandise through sales representatives to whom the vendors would be obligated to pay sales commissions for arranging such purchases by Fry’s. Siddiqui failed to disclose to Fry’s that he made secret deals with vendors for them to make payments to PC International and IMR based on the amount of merchandise purchased by Fry’s. The vendors had secret agreements with Siddiqui to pay, him via PC International or IMR, kickbacks to do business with Fry’s. On numerous occasions, the vendors advanced kickback payments to him before Fry’s actually paid the vendors for the merchandise. The vendors also made “loans” amounting to millions of dollars to him through PC International and/or IMR.
Former Criminal Defense Attorney Sentenced for Money Laundering and Structuring Charges
On December 6, 2011, in Hammond, Ind., Jerry Jarrett was sentenced to 37 months in prison, two years of supervised release and ordered to forfeit $92,000 for money laundering and structuring. According to court documents, Jarrett had a scheme to clean up $67,000 of “dirty money” from a drug dealer. Jarrett, in order to evade currency transaction reports, deposited the money in a series of small transactions into the bank account of a small business he controlled. Jarrett then prepared a backdated stock purchase agreement representing that the drug dealer had invested in Jarrett’s company. Jarrett issued a series of checks to the dealer as a return on his investment. Jarrett executed a similar series of transactions with a cocaine dealer in September 1999, laundering approximately $18,000. Jarrett kept part of the proceeds as compensation for his services.
Seven St. Croix Men Sentenced for Money Laundering and Drug Trafficking
On December 2, 2011, in St. Croix, V.I., seven defendants were sentenced for money laundering and drug trafficking. In March 2011, Lionel Fawkes, Christopher Alfred, Shango Allick, David Clouden, Marcelino Garcia, Jamaal Maragh and Jamal Young were found guilty of numerous counts of money laundering. Additionally, all of these defendants, except Maragh, were convicted of conspiracy to commit money laundering, and Fawkes only, of conspiracy to distribute cocaine. The evidence at trial disclosed a drug trafficking organization operating in Fairbanks, Alaska, that was supplied with narcotics from the U.S. Virgin Islands. Cocaine and crack cocaine were sent, usually via Express Mail parcels, from St. Croix to Fairbanks. Members of the organization in Alaska then distributed the narcotics in Alaska for significant financial profit. Some of the illegal drug proceeds were then sent back to St. Croix, via Western Union wire transfers and money orders. Documentation uncovered showed at least 167 wire transfers and money orders were sent between St. Croix and Fairbanks, totaling approximately $307,849. The defendants were sentenced as follows:
- Lionel Fawkes - 200 months in prison and four years of supervised release.
- Christopher Alfred - 32 months in prison and three years of supervised release.
- Shango Allick - 30 months in prison and three years of supervised release.
- David Clouden - 18 months in prison and three years of supervised release.
- Marcelino Garcia - 24 months in prison and three years of supervised release.
- Jamaal Maragh - 29 months in prison and three years of supervised release.
- Jamal Young - 20 months in prison and three years of supervised release.
Montana Man Sentenced on Charges of Conspiracy to Launder Monetary Instruments
On December 1, 2011, in Missoula, Mont., Evan James Corum, of Whitefish, was sentenced to 12 months in prison, three years of supervised release, and ordered to forfeit $86,850. Corum pleaded guilty in August 2011 to conspiracy to launder monetary instruments. According to court documents, in approximately October 2010 and continuing through March 14, 2011, Corum and other individuals started and continued a marijuana grow operation in Olney. Law enforcement officials received information that Corum and Ryan Blindheim were depositing large amounts of cash into their personal savings accounts at a credit union. Cash deposits ranging from approximately $3,000 to $9,000 were routinely made in November 2010, totaling $86,850 in one month. Blindheim has pleaded guilty to federal charges and is awaiting sentencing.
Texas Man Sentenced for Structuring Violation
On November 29, 2011, in Tyler, Texas, Candido Patino was sentenced to 24 months in prison, two years of supervised release and ordered to pay a $10,000 fine for structuring. According to court documents, Patino operated a money transmitting business out of a restaurant he owned in Kilgore, Texas. People who wanted to transfer funds to Mexico typically paid cash to Patino for such services. Patino then deposited the currency into a bank account at a federally-insured credit union. Between July 2008 and October 2009, Patino, who was aware of the credit union's reporting obligation, made over 300 structured cash deposits in a manner intended to evade the Currency Transaction Report (CTR) requirement.
Idaho Man Sentenced for Money Laundering
On November 18, 2011, in Boise, Idaho, Joseph Monte Johnson, the former finance manager of West Coast Car Company, was sentenced to 40 months in prison, three years of supervised release, and ordered him to pay $6,000. Johnson, of Idaho Falls, pleaded guilty on August 25, 2011, to conspiracy to launder monetary instruments. According to the plea agreement, Johnson was employed at West Coast Car Company as the finance manager. Johnson admitted that in July 2008, while working for West Coast Car Company, he and others agreed to sell to two individuals, believed to be Miami drug dealers, a Jeep Cherokee and Mercedes for $55,000 in cash. The men agreed not to use the buyers' real names on any sales forms and to not file IRS Form 8300, a transaction report form for cash transactions in excess of $10,000. The IRS requires the trade or business to file the form within 15 days of the cash transaction and verify the buyer's identity. According to the plea agreement, the buyers returned to West Coast Car Company in January 2009 to do a second deal. Johnson assured the buyers they could do the deal the same way as before – West Coast Car Company would accept cash for the cars and would not use the buyers' true names on any forms or file the required IRS currency transaction report.
Tennessee Woman Sentenced for Check Fraud Scheme and International Money Laundering
On November 17, 2011, in Knoxville, Tenn., Carolyn Greer, a.k.a. Carolyn Keene, of Knoxville, Tenn., was sentenced to 21 months in prison, three years of supervised release and ordered to pay restitution of $62,562 for mail fraud and international money laundering. According to court documents, Greer admitted that she perpetrated a scheme to defraud numerous individuals by placing the names of individuals on fictitious checks, sending those fictitious checks to the individuals by commercial interstate carrier, creating the false pretense that the fictitious checks were in fact valid, and then receiving, by Western Union and MoneyGram, the proceeds of the fictitious check after the recipient of the fictitious check cashed the fictitious check at a financial institution. Greer further admitted that she wired a portion of the money she received to Nigeria to promote her scheme to defraud.
New Jersey Woman Sentenced for Defrauding Dozens of Immigrants by Posing as a Federal Official
On November 15, 2011, in Newark, N.J., Rosa Blake, aka “Mafalda,” aka ‘Rosa Vareiro, of Kearny, N.J., was sentenced to 87 months in prison, three years of supervised release and ordered to pay $773,800 in restitution for orchestrating a scheme to defraud dozens of immigrants out of hundreds of thousands of dollars by pretending she could help them become United States citizens. Blake pleaded guilty on June 28, 2011, to six counts of wire fraud, ten counts of impersonation of a government official, and seven counts of money laundering. According to documents and statements made in court, from at least May 2004 to April 2009, Blake falsely represented to her victims that she worked for federal immigration authorities and promised to provide or expedite approval of their immigration paperwork, including permanent residency documents, or “green cards,” and employment authorization documents. Blake would often instruct her victims to meet her at her home, where she would take their identification papers and payment for her “services.” Blake would never permit her victims to retain or make copies of any papers and told her victims that in a matter of several months, they would receive employment authorization documents in the mail, followed by green cards. Blake did not take any of the promised actions on behalf of her victims, and kept their money for her personal use. When contacted by the victims who had not received any documents from Blake, she threatened them with deportation.
Florida Man Sentenced on Federal Charges
On November 14, 2011, in Fort Myers, Fla., Brandon T. Albanito, of Cape Coral, was sentenced to 78 months in prison for unlawful production of false identification documents (false driver's licenses), unlawful transfer of false identification documents, using a fictitious name to conduct unlawful business by means of the Postal Service, engaging in monetary transactions in property derived from specified unlawful activity (money laundering), structuring currency transactions to evade reporting requirements, possession with intent to distribute Methylenedioxymethamphetamine (also known as MDMA or Ecstasy), possession with intent to distribute Psilocyn (hallucinogenic mushrooms), and possession of a firearm and ammunition by a convicted felon. Albanito was also ordered to forfeit to the United States $868,040 in United States currency, a 2010 Lexus, real property located at 801 West Cape Estates Circle in Cape Coral, jewelry, an iPhone, and numerous computers and software programs which were traceable proceeds of the offenses. According to court documents, since at least August 2008, Albanito produced and distributed high quality driver’s licenses to underage teenagers throughout the United States. Customers paid about $150 each for these false driver’s licenses, and their payments typically were remitted by mail to a post office box in Cape Coral. He utilized the cash proceeds of this operation to personally enrich himself. Funds obtained by Albanito through this illegal business were deposited into bank accounts with structured deposits and laundered by purchasing assets.
Arizona Man Sentenced for Role in Ponzi Scheme
On November 14, 2011, in Phoenix, Ariz., Miko Dion Wady was sentenced to 108 months in prison, 250 hours of community service, and ordered to pay over $30 million in restitution. In addition, Wady was ordered to forfeit numerous seized items and the proceeds from the sale of additional seized items, including a 41-foot Rinker Express Cruiser boat, a Ferrari, over $100,000 held in cash and accounts, jewelry, firearms and recreational equipment including a Weekend Warrior 5th wheel trailer. Wady previously pleaded guilty to five counts of wire fraud and five counts of transactional money laundering. In his plea agreement, Wady admitted that he operated and had an ownership interest in various business enterprises that purportedly were engaged in the business of promoting concerts or tours of well known entertainers and artists. The enterprises included Dezert Heat Entertainment, Inc.; Dezert Heat, Inc.; Dezert Heat Worldwide, LLC; NATO Enterprises, LLC; and NATO Entertainment, LLC. Through various entities and associates, Wady obtained victim investor funds to finance purported concerts and tours supposedly being promoted by Wady. From at least August 2004 through March 2007, Wady and associates entered into loan and event funding agreements, totaling approximately $50 million, with approximately 250 victim investors. The “investments” were purportedly to finance approximately 150 concerts or concert tours “promoted” by Wady. Because Wady had no association or contractual arrangement with any of the concerts or tours, the investor funds given to Wady by his associates were never actually used as represented to the victim investors. From January 2004 through March 2007, Wady used no less than $3 million of victim investor funds to pay for his lavish lifestyle. At the time of Wady’s sentencing, approximately 240 investors and groups of investors were known to have sustained losses totaling $30,040,197.
Texas Woman Sentenced for Defrauding Investors of Approximately $600,000
On November 10, 2011, in Amarillo, Texas, Janice Demmitt was sentenced to 70 months in prison and ordered to pay $600,000 in restitution for money laundering. Demmitt, was convicted on one count of conspiracy to commit money laundering, eight counts of wire fraud and eleven counts of money laundering. Her son, Timothy Fry, pleaded guilty to money laundering and is currently serving 87 months in prison. According to court documents, between 2006 and 2009, Demmitt and her son ran an insurance agency in Amarillo, and as part of their business, as registered agents of Allianz Life Insurance Company of North America, they sold annuities to investors. The majority of their clients were elderly investors. Fry and Demmitt represented to their clients that Allianz would match each investment they made, up to $100,000, and encouraged their investors to either cash-in or borrow against their existing Allianz annuities and use those proceeds to reinvest to take advantage of the “matching” funds. However, instead of reinvesting their funds as they told their clients they would do, Fry and Demmitt deposited the funds into their personal accounts. Approximately $600,000 in client funds was transferred into Fry’s and Demmitt’s personal accounts.
Nebraska Couple Sentenced for Structuring
On November 9, 2011, in Omaha, Neb., Rafael and Dania Hermosillo were sentenced for structuring. Dania Hermosillo was sentenced to five years probation and Rafael Hermosillo was sentenced to 60 months in prison. In addition, Rafael was also sentenced to 72 months for distribution of methamphetamine. His sentences are to run concurrently. In addition to his prison term, Hermosillo will serve five years of supervised release following his release from prison. From February 2006 to July 2009, the Hermosillos structured a series of currency deposits into their business accounts for their business, All Cars and Trucks, to cause banks to not file the required currency transaction reports. From 2006 through 2009, they structured amounts totaling $1,030,477. From January 20, 2006, to July 28, 2009, there were a total of 305 currency deposits into the business accounts. As part of the case the Hermosillos agreed to the forfeiture of the business known as All Cars and Trucks, including all its assets and all vehicles in the inventory, and the real property on which it is situated.
Iowa Man Sentenced for Prostitution Ring and Money Laundering
On November 7, 2011, in Omaha, Neb., Richard Costanzo was sentenced to 96 months in prison, three years supervised release and ordered o pay a $20,000 fine and surrendered his residence, and six vehicles for money laundering, interstate commerce and prostitution. According to court documents, Costanzo operated an “Escort” business for more than 10 years and knowingly caused a minor to engage in prostitution. He pleaded guilty to conspiracy to commit various prostitution offenses during 1997 to 2009; three counts of using a facility of interstate commerce to promote prostitution; one count of transportation with intent to promote prostitution; and two counts of money laundering.
Used Car Dealer Sentenced in Money Laundering Scheme
On November 4, 2011, in Plano Texas, Richard Arledge was sentenced to 188 months in prison for money laundering. According to court documents, Arledge was the owner and operator of Richard Arledge Suzuki and the director and president of Expressway Financial, Inc. Arledge intentionally sold high-end luxury cars – including Bentleys, Aston Martins, and Maseratis – to individuals who derived their income from the illegal distribution of controlled substances, the promotion of prostitution, and mail and wire fraud. These criminal customers usually paid for their luxury cars in cash and provided tens of thousands of dollars in cash to the dealership in pillowcases, shrink-wrapped plastic packages, backpacks, and even fast food paper bags. During these financial transactions, Arledge and other dealership employees promised the criminal customers that the dealership would not report the financial transactions to federal authorities, despite federal reporting regulations requiring that all cash received in excess of $10,000 be reported to the Internal Revenue Service. Arledge and others also concealed the fact that the criminal customers were purchasing the cars by titling the transactions in the names of third parties and labeled the car purchases as “leases” to permit the dealership to re-acquire the luxury cars if ever seized by law enforcement during the course of a federal investigation. Fourteen others were convicted or pleaded guilty in connection with the money laundering scheme.
Illinois Woman Sentenced on Mail Fraud and Money Laundering Charges
On October 31, 2011, in Springfield, Ill., Jacklyn Still, formerly Jacklyn Gebhardt, the owner of Gebhardt Trailer Sales, of Jacksonville, Ill., was sentenced to 108 months in prison and ordered to pay $4,549,610 in restitution to banks and customers she defrauded. According to court documents, Still, who had pleaded guilty to mail fraud and money laundering, was also determined to have obstructed justice while awaiting sentencing. Since entering her pleas of guilty on March 29, 2011, Still committed various acts, including additional criminal conduct. Still admitted that on multiple occasions, she knowingly ‘sold’ motor homes and trailers for which she either had no title or had obtained a title by fraud, failed to pay off liens on motor homes which were traded in to Gebhardt Trailer Sales, and fraudulently used motor homes for which she had no ownership as collateral to induce financial institutions to loan her money. In 2011, while Still was on bond, she sold a 2005 Chevrolet Kodiak C4500 truck for $31,000, falsified the paperwork for the sale, and purchased a boat which she titled in the name of her husband. In another transaction, on or about June 14, 2011, while still on bond and subject to the conditions that she make no transfers, Gebhardt sold a ‘modified race car’ to an individual for $8,250.
Nevada Man Sentenced on Money Laundering Charges
On October 27, 2011, in Las Vegas, Nev., Samuel Davis was sentenced to 57 months in prison, three years of supervised release, and ordered to pay $95,782 in restitution. Davis pleaded guilty in March 2011 to conspiracy and money laundering charges. According to the court records, from about March 2008 to March 2009, Davis and co-defendant, Shawn Rice, of Seligman, Arizona, laundered approximately $1.3 million of monies for FBI undercover agents. Davis and Rice were told by the undercover agents that the monies were proceeds of a bank fraud scheme, specifically from the theft and forgery of stolen official bank checks. Davis and Rice laundered the monies through a nominee trust account controlled by Davis and through an account of a purported religious organization controlled by Rice. Davis and Rice took approximately $74,000 and $22,000, respectively, in fees for their money laundering services. Rice is currently a fugitive.
Texas Man Sentenced On Money Laundering Charges
On October 25, 2011, in Amarillo, Texas, Timothy Fry was sentenced to 87 months in prison and ordered to pay $582,784 in restitution following his guilty plea to one count of money laundering on July 28, 2011. Fry’s mother, Janice Edwina Demmitt, was convicted in August 2011 on a majority of the federal felony offenses charged in the 27-count indictment returned against her and her son in June 2011. Specifically, the jury convicted Demmitt on one count of conspiracy to commit money laundering, eight counts of wire fraud and 11 counts of money laundering. Her sentencing is pending. According to court documents, between 2006 and 2009, Fry and his mother ran an insurance agency in Amarillo, and as part of their business, as registered agents of Allianz Life Insurance Company of North America, they sold annuities to investors. The majority of their clients were elderly investors. Fry and Demmitt represented to their clients that Allianz would match each investment they made, up to $100,000, and encouraged their investors to either cash-in or borrow against their existing Allianz annuities and use those proceeds to reinvest to take advantage of the “matching” funds. However, instead of reinvesting their funds as they told their clients they would do, Fry and Demmitt deposited the funds into their personal accounts. In fact, evidence presented showed that they tricked their investors with the promise of the matching investment money so that the clients would liquidate their legitimate investment accounts. More than $600,000 in client funds was transferred into Fry’s and Demmitt’s personal accounts.
Executives Sentenced for Bribing Officials at State-Owned Telecommunications Company in Haiti
On October 25, 2011, in Miami, Fla., Joel Esquenazi, of Miami, Florida, and Carlos Rodriguez, of Davie, Florida, were sentenced for their roles in a scheme to pay bribes to Haitian government officials at Telecommunications D’Haiti S.A.M. (Haiti Teleco), a state-owned telecommunications company. Esquenazi, the former president of Terra Telecommunications Corp. was sentenced to 180 months in prison. Rodriguez, the former executive vice president of Terra was sentenced to 84 months in prison. Esquenazi and Rodriguez were also ordered to forfeit $3.09 million. Esquenazi and Rodriguez were convicted in August 2011 of one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and wire fraud; seven counts of FCPA violations; one count of money laundering conspiracy; and 12 counts of money laundering. According to the evidence presented at trial, Terra had a series of contracts with Teleco (the sole provider of land line telephone service in Haiti) that allowed the company’s customers to place telephone calls to Haiti. At trial, the evidence showed that Esquenazi and Rodriguez participated in a scheme to commit foreign bribery and money laundering from November 2001 through March 2005, during which time the telecommunications company paid more than $890,000 to shell companies to be used for bribes to Teleco officials.
California Attorney Sentenced for ‘Structuring’ Cash Transactions and Filing a False Tax Return
On October 24, 2011, in Los Angeles, Calif., Anthony Luna, a Montebello attorney, was sentenced to 12 months in prison, 6 months home detention, and 50 hours of community service. In addition, Luna was ordered to pay a $40,000 fine and pay back taxes totaling $188,826, as well as cooperate with Internal Revenue Service (IRS) in filing accurate tax returns. Luna, who previously served as a commissioner on the Los Angeles Superior Court, pleaded guilty on March 22, 2011, to one count of conspiracy to structure cash transactions and one count of subscribing to a false tax return. According to court documents, over the course of less than two years, Luna funneled more than $300,000 in cash through seven different bank accounts. Luna received the money in cash as payment for his legal services and rental payments on properties he owned. Luna and his co-conspirators deposited the money in transactions of less than $10,000 to evade federal reporting requirements. Luna also stashed cash in several safe deposit boxes until it could be inconspicuously deposited in the accounts. Luna admitted subscribing to a false tax return for 2008 where he reported gross receipts or sales of $104,225, when in fact he received $301,279 in gross receipts and sales. As part of his plea agreement, Luna agreed to forfeit approximately a quarter million dollars seized by authorities, including $130,000 in a U.S. bank account and $54,708 in cash that was found at his Montebello residence.
Gateway Hotel and Owner Sentenced for Smuggling and Harboring Undocumented Aliens, Money Laundering, and Income Tax Fraud
On October 21, 2011, in El Paso, Texas, Song Chon was sentenced to 180 months in prison, three years of supervised release and ordered to pay $481,812 in restitution for money laundering, tax fraud and conspiracy to smuggle, transport and/or harbor undocumented aliens. According to court documents, Chon was the President of YCL, Inc, and owner of the Gateway Hotel. YCL, Inc., dba The Gateway Hotel was also sentenced to five years probation and to ordered to pay a $5,000 fine. Beginning in June 2003 and continuing to May 2009, the defendants conspired and devised a plan to smuggle hundreds of undocumented aliens into the United States from the Republic of Mexico, Central America, South America, Eastern Europe and Southwest Asia, and harbor them in El Paso using the Gateway Hotel and other locations. The defendants supplied them with shelter, food and clothing until their family or “sponsor” paid a fee, approximately $2,000. Once the fee was paid, the defendants would then transport the undocumented aliens to their final destination in the United States. Chon laundered the proceeds of the alien smuggling conspiracy and concealed the nature, source and ownership of the proceeds by skimming and hiding between $300 and $400 per day from the gross receipts. In addition, Chon willfully made false statements on the corporate income tax records for the years 2005, 2006 and 2007 by understating the yearly gross receipts for the Gateway Hotel by an estimated $250,000-$300,000 per year. In all, 25 defendants were convicted and sentenced in connection with this scheme. Sentence terms ranged from five years probation to 15 years in prison.
Co-Founders of Associates for Learning Sentenced for Submitting Fraudulent Invoices to the Detroit Public Schools
On October 20, 2011, in Detroit, Mich., Sherry Washington was sentenced to 84 months in prison and ordered to pay $3.3 million in restitution for money laundering and conspiracy to commit federal program fraud. According to court documents, Sherry Washington, along with Gwendolyn Washington, Marilyn White and Sally Jo Bond were the founders of Associates for Learning Corporation (A4L). In September 2005, Stephen Hill, former Detroit Public Schools (DPS) Executive Director of Risk Management, accepted a proposal from A4L to implement a Health Improvement plan for DPS employees. Washington and her co-conspirators knowingly submitted fraudulently inflated A4L invoices to DPS and received over $3.3 million in payments which were authorized by Stephen Hill. In September 2011, Stephen Hill was sentenced to 60 months in prison and ordered to pay $3.32 million in restitution. Other defendants sentenced in this scheme were Marilyn White who received 21 months in prison and ordered to pay $3.32 million in restitution. Sally Jo Bond was sentenced to 18 months in prison and ordered to pay $3.32 million in restitution. Gwendolyn Washington is awaiting sentencing. In addition, Valerie Polk received 18 months in prison and ordered to pay $347,746 in restitution; Duane Polk was sentenced to 27 months in prison and ordered to pay $788,674 in restitution; and Thomas Taylor was sentenced to 12 months and one day in prison and ordered to pay $440,928 in restitution.
Texas Man Sentenced in Prostitution and Money Laundering Scheme
On October 17, 2011, in Sherman, Texas, Ricardo Guevara was sentenced to 46 months in prison and ordered to pay a $10,000 fine for conspiracy to launder money of a prostitution scheme. According to court documents, beginning in 2005 and continuing through June of 2010, Guevara and Chidiebere Onyinanya, of Plano, Texas, operated an escort service that provided prostitution services to individuals in exchange for payments, which would then be used to promote the escort service and additional prostitution activity. Guevara and Onyinanya recruited the prostitutes, advertised the services, leased apartments for the prostitution activity, and generated in excess of $440,000 in proceeds from the criminal enterprise.
Administrator/Trustee of Retirement Trust Sentenced for Embezzlement and Tax Evasion
On October 12, 2011, in Newark, N.J., Steven M. Zavidow was sentenced to 18 months in prison, three years of supervised release and ordered to pay $425,104 in restitution, for embezzling from a retirement plan he established to benefit his employees and tax evasion. According to court documents, Zavidow, of Hillsdale, N.J., owned and operated 11 Burger King restaurants in New York. In early 1984, Zavidow and his father, who is not named as a defendant, established the Zavco Industries Retirement Trust (the “Trust”) to provide retirement benefits to the employees of his Burger King Restaurants. Zavidow was the Trust’s administrator and a trustee; as such, he was a fiduciary to the Trust, required to act solely in the interest of the Trust’s participants and beneficiaries and prohibited from dealing with the Trust’s assets for his own personal purposes. The Trust maintained a bank account, to which Zavidow was a signatory. Zavidow admitted that in March 2006, contrary to his fiduciary duties, he embezzled at least $263,000 from the Trust by issuing six checks, drawn on the Trust’s bank account, to himself. Zavidow also pleaded guilty to tax evasion, admitting that he filed and caused to be filed with the Internal Revenue Service a false Form 1040 for tax year 2006 on behalf of himself. On this return, Zavidow declared his taxable income for 2006 was $0, and the amount of tax due and owing was $0. Zavidow admitted this return did not include $256,000 in additional taxable income he had received in 2006. With this income, an additional tax of $49,493 was due and owing to the United States.
Former Inchon Executive Sentenced for $4.2 Million Equipment Leasing, Financing Scheme
On October 5, 2011, in Newark, N.J., David Moro, former Chief Executive Officer of Inchon LLC, was sentenced to 126 months in prison, five years of supervised release and ordered to pay $3,589,350 in restitution. Moro, of Pomona, N.Y., was convicted in November 2011 on multiple charges including bank fraud, money laundering and making false statements in a matter within the jurisdiction of the FBI and IRS. According to court documents, Inchon was a business that ran the Russian Radio Network. From 2003 through 2005, Moro approached victim lenders, directly and through brokers, and induced the lenders to purchase a total of more than $4.2 million in purported high-end broadcasting equipment as part of lease-financing agreements with Inchon. As proof of his need for financing, Moro presented the lenders and brokers with fraudulent equipment invoices reflecting that Smart Function LLC, based in Parsippany, N.J., as well as other purported vendors, had provided Inchon with new high-end Digital Audio Servers, when in fact, Smart Function was acting as a front for Inchon, and was sending the vast majority of the money back to Inchon and Moro after receiving it from the lenders. Moro also submitted phony financial documents to the lenders to convince them that Inchon was a highly profitable company, when in reality it was relying largely on the proceeds of the fraud to continue its operations. Moro had false tax returns prepared for Inchon and for an individual he portrayed as the 100 percent owner of Inchon. In reality, these tax returns were never filed with the IRS and reflected income and profits for the business and the purported owner that neither ever received. In Ponzi-scheme fashion, Moro used funds received from the financial institutions through the fraud to make payments on earlier leases. After all of the lease financing agreements were executed and funded by the lenders, Inchon was due to pay more than $100,000 per month. Moro ceased making the required lease payments on behalf of Inchon, resulting in a loss to the lenders of over $3 million. The money laundering charges stem from the movement of funds from Smart Function and other entities to Inchon. Moro used the laundered funds to pay unrelated business expenses and personal expenses, including travel and gifts to family members.