Examples of Money Laundering Investigations - Fiscal Year 2014
The following examples of money laundering investigations are written from public record documents on file in the courts within the judicial district where the cases were prosecuted.
Defendant Sentenced for Structuring Monetary Transactions
On November 21, 2013, in Los Angeles, Calif., Theanna Khou, aka San Huy Khou, was sentenced to 12 months and one day in prison and three years of supervised release. Khou pleaded guilty in August 2013 to structuring monetary transactions to evade reporting requirements. According to court documents, Khou and a co-defendant owned and operated Huntington Pharmacy. Between approximately August 2009 and November 2009, Khou structured approximately $105,826 in cash deposits. The cash was proceeds from the sale of oxycontin that Huntington Pharmacy dispensed without medical necessity based on fraudulent prescription issued by a clinic. In addition, Khou entered into an agreement with others operating Manor Medical Imaging, Inc. to fill large volumes of prescriptions for anti-psychotic medications which were not medically needed. Khou, through Huntington Pharmacy, billed Medicare and Medi-Cal for the service of filling the prescriptions.
Illinois Accountant Sentenced for Defrauding Elderly Client
On November 15, 2013, in Benton, Ill., Kevin C. Williams, of Mt. Carmel, Ill., was sentenced to 120 months in prison, three years of supervised release and ordered to pay $1,719,444 to the victim of his fraud. In addition, Williams agreed to pay $106,438 in restitution to the IRS, to pay $38,547 to a former employer for embezzling and to pay $16,174 to the State of Illinois for fraudulently claiming unemployment benefits. On June 5, 2013, Williams, a tax accountant, pleaded guilty to misusing his trusted relationship with an elderly Illinois resident. According to court documents, Williams engaged in a lengthy scheme to defraud the victim, by stealing her money while she was alive and forging will and trust documents so that he would stand to inherit more of her money upon her passing. Williams defrauded the 96-year old victim of nearly $2 million dollars through a series of 476 identified financial transactions over the course of more than 20 years. Williams transferred the victim’s funds into his personal accounts and provided the victim with phony account statements. Williams committed money laundering by engaging in a series of financial transactions designed to deceive the victim into believing that she was receiving interest payments from investments when no such investments really existed. Williams misappropriated the victim’s money to buy cashier’s checks, but then later misrepresented those cashier’s checks to be the proceeds of her investments, when in truth and in fact no such investments existed.
Former Gang Leader “Whitey” Bulger Sentenced
On November 14, 2013, in Boston, Mass., James J. Bulger was sentenced to two consecutive life terms plus five years and ordered to pay $19.5 million in restitution. On August 12, 2013, Bulger was convicted of racketeering conspiracy and numerous racketeering acts of murder, extortion, narcotics distribution, money laundering and possession of firearms including machine guns. According to court documents, Bulger, the former leader of the Winter Hill Gang, ran a vast criminal network that emanated from South Boston and controlled much of the city and the surrounding areas during the 1970s and 1980s. In order to generate money and maintain dominance among other criminal enterprises, Bulger and his associates engaged in numerous illegal activities such as loan sharking, extortion of local business owners and bookmakers, trafficking of narcotics and firearms, and murder. Bulger, and associates under his direction, used violence, threats, and intimidation to carry out these illegal activities. In late 1994, upon learning of his impending indictment, Bulger fled Massachusetts. On June 22, 2011, Bulger and his companion, Catherine Greig, were arrested in Santa Monica, California after 16 years on the run. Greig was later convicted of conspiracy to harbor a fugitive and is currently serving eight years in federal prison.
California Man Sentenced for Debit Card Fraud and Student Loan Fraud
On November 8, 2013, in Sacramento, Calif., Mordechay Altit, of Elk Grove, was sentenced to 63 months in prison. Altit pleaded guilty on August 23, 2013 to two counts of mail fraud and one count of money laundering. According to court documents, Altit applied for debit cards issued from banks or other providers of debit cards in his own name or using the names and social security numbers of other persons. Altit then used merchant and terminal identification numbers issued to merchants and businesses across the country to cause fraudulent refunds and credits to be placed on the debit cards he controlled. Before the businesses could rescind these transactions, Altit used the cards to spend and transfer the money. Altit attempted to have at least $450,000 in fraudulent merchant returns credited to his debit cards. In another fraudulent scheme, Altit obtained more than $200,000 in student loans and attempted to receive an additional $250,000 in student loans from banks by means of fraudulent representations. Altit submitted fraudulent applications with names of the students applying for the loans, their social security numbers, their incomes, and that they were attending or planned to attend schools. After receiving some of the proceeds from two of the student loans, Altit then wrote checks for more than $19,000 each to his brother Shay Din Altit. On April 4, 2013, Shay Din Altit pleaded guilty to conspiracy to commit money laundering. He was sentenced on September 27, 2013 to 12 months and a day in prison.
Mississippi Woman Sentenced for Money Laundering
On November 1, 2013, in Jackson, Miss., Bridget Michelle Bland, of Forest, was sentenced to 60 months in prison, two years of supervised release and ordered to pay a $1,000 fine. Bland pleaded guilty on March 18, 2013 to conspiring to launder the drug proceeds of Jessie Hall, of Forest, Mississippi, and for causing a business to file a Form 8300 containing material omission and a misstatement of fact. Five defendants have participated in this extensive scheme to launder proceeds from Jesse Hall’s drug trade. Hall created Hall’s Trucking to facilitate his drug trade and as a way to launder his drug proceeds. As part of the conspiracy, the defendants made purchases in excess of $10,000 and, in an effort to avoid the IRS reporting requirements, they used a combination of cash, cashier's checks and money orders to make the purchases. It was further a part of the conspiracy to cause a misstatement on the IRS Form 8300 by falsely stating the source of funds for the cash purchase. Through these schemes, Hall was able to launder over $900,000 in cash over a two year period.
Member of Drug and Money Laundering Conspiracy Sentenced
On October 25, 2013, in Boston, Mass., Brant Welty, of South Boston, was sentenced to 100 months in prison and ordered to pay a criminal forfeiture money judgment of $85,500. In March 2013, Welty pleaded guilty to conspiracy to distribute oxycodone and money laundering conspiracy. According to court documents, Welty, along with 12 others, was first charged in 2011 for a conspiracy which spanned Massachusetts, Florida, New York, Rhode Island, South Carolina and elsewhere. The conspirators trafficked hundreds of thousands of oxycodone pills and generated over $4 million in proceeds. The investigation has resulted in the seizure of over $480,000 in cash, a 38-foot speed boat, numerous luxury vehicles, 13 firearms and approximately 12,000 oxycodone pills. Investigators also uncovered extensive evidence of illegal gambling and prostitution, as well as the use of extortionate threats to collect loans to gamblers and others.
Businessman Sentenced for Fraudulently Importing $30 Million of Chinese-Made Textiles
On October 21, 2013, in San Diego, Calif., Sunil Jiwat Mirwani was sentenced to 27 months in prison and five years of supervised release. In addition, Mirwani was ordered to forfeit over $30,000 in cash, the contents of a Hong Kong-based bank account, and an inventory of more than 220,000 pairs of blue jeans valued at more than $1 million. According to the evidence presented at a trial in June 2012, Mirwani hired a group of San Diego-based businessmen and logistics professionals to initiate shipments of Chinese-made merchandise from ports in China to the Port of Long Beach, California. When the goods arrived at Long Beach, Mirwani and his conspirators would ensure that the merchandise was classified as “in bond” which is a special customs classification meaning that they had to be shipped directly to Mexico. However, rather than complete the shipment to Mexico, Mirwani and his conspirators forged documents and falsified database entries, allowing them to send the merchandise to warehouses in the Los Angeles area. Mirwani would then sell his merchandise throughout the United States, effectively evading customs duties on more than $30 million in Chinese-made wearing apparel. Mirwani laundered his ill-gotten gains through a complex web of international wire transfers. Mirwani transmitted nearly $10 million from M Trade, Inc.’s bank account to the account of Mirvana International, a Hong Kong-based company. In addition, Mirwani transmitted similar sums to the Mirvana International account through a series of intermediary accounts in the United States and Mexico and even sent money from M Trade Inc.’s account directly to accounts in mainland China.
Car Dealer Owner Sentenced for Structuring Deposits to Evade Bank Reporting Requirements
On October 17, 2013, in Baltimore, Md., Amefika Gray was sentenced to 30 months in prison, two years of supervised release and ordered to forfeit $800,000, a Mercedes Benz vehicle and three residential properties located in Baltimore. Gray pleaded guilty to structuring bank deposits totaling over $2 million over a two year period to avoid bank reporting requirements. According to his plea, Gray owns Network Auto Group, a car dealership operating in Baltimore. Between January 15, 2010 and April 28, 2012, Gray made regular deposits of $10,000 or just under $10,000 into his personal and business bank accounts, including at least 25 instances in which Gray made multiple deposits under $10,000 the same day into the same bank or into different banks. The amount of the structured deposits over this two year period totaled $2,017,205. Gray deposited the money in such amounts because he knew that the banks were required to report to the IRS all deposits over $10,000. The government presented evidence to the court that the cash that Gray structured was the proceeds of drug trafficking activity.
Former Attorney and Her Ex-Husband Sentenced for Stealing $2.8 Million from Clients
On October 17, 2013, in Orlando, Fla., Ross and Linda Littlefield, of Kissimmee, Fla., were sentenced to 48 months and 60 months in prison, respectively. The Littlefields pleaded guilty on June 11, 2013 to money laundering. As part of their sentence, the court also entered a restitution order in the amount of $2,888,418 and a money judgment in the amount of $155,739. According to court records, Linda Littlefield, a former attorney, formed The Littlefield Law Group, P.A which specialized in Medicaid planning. In 2007, Ross and Linda Littlefield and others created a non-profit organization called the JNN Foundation, Inc. and represented that a JNN Special Needs Asset Preservation Pooled Trust could shelter a client’s assets and not affect the beneficiary’s Medicaid or Social Security Income eligibility. Ross Littlefield served as the trustee. Between 2007 and 2010, Ross and Linda Littlefield fraudulently induced approximately 27 clients to contribute more than $4.7 million to the JNN Foundation. Once the client funds were received by the foundation, the Littlefields transferred the money to other accounts under their control and used the money for their own personal benefit. As part of their fraudulent scheme, the Littlefields sent false quarterly statements to their clients showing fictitious balances. Consequently, the Littlefields stole more than $2.8 million from their clients.
Director and Treasurer of Black Nurses Association Sentenced for Fraud Scheme
On October 15, 2013, in Springfield, Ill., Margaret Davis and Tonja Cook, both from Chicago, Ill., were sentenced for their participation in a scheme to defraud state grant programs. Davis was sentenced to 41 months in prison, three years of supervised release and ordered to pay $377,573 in restitution. Cook was sentenced to 19 months in prison, two years of supervised release and ordered to pay $137,111 in restitution. Davis previously pleaded guilty to mail fraud and money laundering; Cook previously pleaded guilty to mail fraud. According to the indictment, from December 2005 to June 2009, Davis, with the assistance of Cook, solicited and received 15 different grants and contracts totaling $1,062,000 by representing herself as acting on behalf of the Chicago Chapter of the Black Nurses Association. The fraudulent grants and contracts were received from various Illinois state agencies. Instead of using the grant funds for their intended purposes, Davis and Cook used a large amount of the funds for their personal use.
New York Man Sentenced for Conspiracy to Import and Distribute Synthetic Drug
On October 11, 2013, in Syracuse, N.Y., Rosario Gambuzza, of East Syracuse, N.Y., was sentenced to 188 months in prison and three years of supervised release. In May 2013, Gambuzza was convicted after a jury trial on charges of a drug conspiracy and money laundering. According to court documents, between January 2010 and April 2011, Gambuzza conspired to import and distribute a controlled substance analogue, known on the street as “Molly” in Syracuse, N.Y. Gambuzza was also convicted of 19 counts of money laundering relating to $73,000 he wired to a co-conspirator in Shanghai, China, in order to purchase the drug.