White Collar Crime Prof Blog Explores Possible Money Laundering Charges Against Former New York Governor Eliot Spitzer

The White Collar Crime Prof Blog published a post earlier this month examining the possible money laundering charges against former New York Governor Eliot Spitzer. The post notes that if Spitzer split deposits or withdrawals in the banks accounts used to pay for his flings to stay below the $10,000 threshold for filing a Currency Transaction Report by the bank, then he could be guilty of structuring under 31 U.S.C. Sec. 5324(a). Supreme Court and Second Circuit decisions discussing the scope of this federal statute are reviewed.

Drug Dealer Pleads Guilty to Money Laundering

The online version of the Boston Globe recently reported that a New Hampshire drug dealer, Christopher Bouchard, has plead guilty to federal money laundering charges and to state charges of being a drug enterprise leader. He was accused of conspiring to distribute thousands of pounds of marijuana and a large amount of cocaine in a scheme that reached from Arizona to New Hampshire.

Prosecutors say Bouchard funneled drug money through a Manchester restaurant, landscaping business, car dealership and real estate. Bouchard will forfeit several vehicles, a Weirs Beach condo, proceeds from the sale of a second condo, his Manchester home and $1.3 million.

See the full story here.

Virginia Man Charged in Money Laundering Scheme

A 56 year old man from Newport News, Virigina, was arrested recently on charges of laundering millions of dollars. The defendant deliberately avoided making deposits of $10,000 or more in cash that he generated from his tobacco store, in order to avoid triggering the filing of "currency transaction reports" by his banks. Instead, the defendant would go to multiple banks and make several smaller deposits just under $10,000. Such actions constitute a Federal offense.

See further details here. 

Mosque Leaders In NY Convicted Of Money Laundering

Two leaders of a mosque in upstate New York, Yassin Aref (the spiritual leader at the Masjid as-Salam mosque in Albany), and Mohammed Hossain (co-founder of the mosque), were convicted of federal charges of laundering money in connection with an FBI sting. The two were also charged with trying to support Jaish-e-Mohammed, a Pakistani group identified as a terrorist organization by the U.S. government.

See further details here.

Bonds' trainer to withdraw guilty plea to steroid distribution and money laundering charges

Greg Anderson, the personal trainer to Barry Bonds, wants to withdraw his 2005 guilty plea to steroid distribution and money laundering charges, his lawyer, Mark Geragos, announced last week. Geragos made his intentions known as he urged a federal judge to release Anderson from prison for refusing to testify before a grand jury investigating whether Bonds lied when he told a grand jury that he never knowingly used steroids.

See further details here.

Former Comverse CEO to Face Money Laundering Charges

As many of our readers were undoubtedly aware, the United States had been searching worldwide for the whereabouts of Kobi Alexander, former CEO of Comverse. A fugitive, Alexander had been charged in a sealed indictment in connection with a stock options scandal.

Recently, Alexander was located in Namibia, where he was arrested while eating lunch with his wife at a country club. Shortly thereafter, the indictment was unsealed. Spread out over 44 pages, the indictment consists of 32 charges, including one for money laundering, which alleges that Alexander transferred $57 million from a Citigroup account in New York to a bank account in Israel for the purpose of hiding said funds from the American authorities.

See the full story here including a brief account of how Alexander was finally located by the FBI.

Florida Businessman Convicted of Laundering Money

Thomas King, the owner of Miralink Group Inc., an employee leasing firm that provided workers to other companies, provided its workers with workers compensation insurance through an insurance company that was not authorized to do business in any state in the U.S. The scheme resulted in, among other things, convictions on three counts of money laundering (each count carries a maximum 20-year sentence).

See the full story here.

mortgage broker charged with money laundering in drug sting

The Department of Justice recently announced that Oregon native Jerod Lee Keyser was charged with money laundering in connection with use of his company, Infinity Financial Group, to furnish loans to individuals involved in a major drug trafficking operation. The loans were used to buy properties in Oregon, Washington, California, Colorado and Hawaii.

See the full story here.

Toronto Lawyer lawyer jailed for money laundering

We wrote about the guilty plea of prominent Toronto attorney Peter Shoniker on money laundering charges in an August post. The recent news from Canada is that Shoniker was sentenced this week to 15 months imprisonment. He can apply for parole after serving one-third of his sentence.

See the full story here.

FATF Gives United States High Marks on Its Anti Money Laundering and Counter Terrorism Financing Program

The Financial Action Task Force (FATF) is an inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing. The FATF reviews money laundering and terrorist financing techniques, and monitors members' progress in implementing necessary counter-measures. 

The CounterTerrorism Blog noted in a post yesterday that the FATF had sent a team to the United States last spring to evaluate American compliance with FATF recommendations. A report was issued in June that provides valuable insights into the strengths and weaknesses of the United States' anti money laundering program. In particular, the report praised U.S. progress in "terms of prosecutions, convictions, seizures, asset freezing, confiscation and regulatory enforcement actions." These favorable results stem in large part from the from the enactment and implementation of the Patriot Act and the Bank Secrecy Act. One sore point was overlap between the jurisdictions of the various law enforcement agencies, which complicates coordination between these agencies.

See the full FTAF evaluation report of the United States here.

Visit the FATF website here.

Alaskan Ponzi Scheme Promoter Arrested in Malaysia on Money Laundering Charges

Alaskans will remember Bryan John Marsden as the promoter of the PIPS "2% Plan" where investors were told they would get paid 2% per day on their investment. Marsden was one of nine ordered in August 2005 by the State of Alaska's Administrator of Securities Division to stop selling the PIPS investment in Alaska. Earlier in April 2005, Alaska Attorney General David Marquez issued a warning that PIPS is an illegal Ponzi scheme.

The news from Malaysia is that Marsden and his wife Phan Sew Ken are now awaiting trial after being in Malaysian courts last Thursday with 48 counts of money laundering involving RM34.2 million (9.34618 million USD).

See the full story here.

Former brokerage CEO indicted on money laundering and other charges

Tony J. Daniloo, the former chief executive officer of DreamLife Financial, a financial services business based in California, was indicted last Thursday on more than 100 counts of money laundering and fraud in an alleged scheme to defraud homeowners of $7 million.  Federal prosecutors say that Daniloo fraudulently altered his client's escrow documents and deposited large amounts of their cash into his personal accounts. If convicted on all charges, Daniloo faces 20 years imprisonment, a $250,000 fine and restitution.

See the full story here.

Boston Men Arrested in Money Laundering Investigation

Three Boston-area men were recently arrested on charges relating to money laundering, currency reporting offenses, and drug distribution in connection with a Massachusetts-based business that remitted money to the Dominican Republic.

The indictment alleges that between September 2004 and March 2006, the defendants conspired to launder money that had been represented to them to be drug proceeds by wiring the money to the Dominican Republic.

See the full story here.

Maine Man charged in money laundering scheme

A gas station owner in Maine, Ricky Daigle, faces federal money laundering and other charges in connection with a scheme in which Daigle took money from an alleged drug dealer to buy property that was registered in Daigle's name. If convicted, Daigle faces up to 20 years in prison and a fine of up to $500,000.

See the full story here.

Ex-nursing home execs indicted on embezzlement and money laundering charges

Former nursing home operator Antonio L. Giordano, who pleaded guilty in June to federal charges of diverting hundreds of thousands of dollars to a company run by his daughter, was indicted this week by a statewide grand jury on charges of embezzlement, money laundering and Medicaid fraud.

Among other things, the indictment alleges that, while operating a nursing home, Giordano and his chief financial officer submitted false records for the "intentional purpose of obtaining greater compensation’’ from the federal government than they were legally entitled.

See the full story here.

Treasury Department Report Says Wells Fargo Let Off Easy for Weak Bank Secrecy Act Safeguards

A Treasury Department report issued last week argues that federal banking regulators should have publicly reprimanded Wells Fargo & Co. for failing to comply with various requirements of the Bank Secrecy Act, including what is said were inadequate safeguards for detecting illicit banking activities that terrorists, drug smugglers and other criminals use to launder money.

The Bank Secrecy Act requires financial institutions to tip off authorities to any suspicious activity, such as large cash deposits.  The report said examiners from the Office of the Comptroller of Currency found "numerous and recurring deficiencies" in Wells Fargo's ' Bank Secrecy Act compliance program from 1999 through 2004, but decided to keep private its criticisms and demands for change.  Problem areas identified in the report included weak internal controls, inadequate independent testing of business lines, lack of Bank Secrecy Act oversight and failure to file suspicious-activity reports as required.

The report argued that a public reprimand and demand for changes would have sent a powerful enforcement message to the nation's banks.

See the full story here.

Prominent Toronto Attorney Pleads Guilty to Money Laundering

Peter Shoniker, a prominent Toronto attorney, pleaded guilty last week to money laundering and theft in a case that started in 2001 with a corruption probe led by the Royal Canadian Mounted Police. After the guilty plea was entered, the court was presented with letters of support from several prominent friends of Shoniker.

See the full story here.   

Four Oakland Men Indicted in Gambling and Money Laundering Scheme

Four Oakland men have been indicted in connection with an ongoing investigation into a gambling and money laundering scheme that allegedly involves facilitating illegal betting through a Costa Rica-based Web site. According to the indictment, the gambling scheme involved bets and wagers placed via the Internet, at Web site bettheduck.com or through a toll-free number, with one or more people in Costa Rica who were paid to operate the illegal gambling business there.

See the full story here.

Seattle Loan broker admits to laundering drug money

In the ongoing prosecution of money laundering activities in Seattle (see earlier post here), federal prosecutors recently announced that Todd Love, 48, a broker at Seattle Mortgage Advisors LLC, pleaded guilty to a federal charge of conspiracy to engage in money laundering in connection with helping three drug dealers with property investments, though he knew that the hundreds of thousands of dollars in cash used as the down payments came from drug dealing. Love faces up to 20 years in prison.

See further details here.

Also see the press release announcing the guilty plea issued by the United States Attorney for the Western District of Washington here.

Another Seattle attorney admits laundering drug money

The Seattle Post-Intelligencer reported earlier this month that Seattle attorney Joel Manalang, who specializes in real estate law and runs an escrow business, admitted in court that he received more than $200,000 in cash stored in duffel bags and shoe boxes, money that he used to buy real estate for drug dealers.  Manalang is the third member of the Seattle bar since last fall to plead guilty to either laundering drug-trafficking money or failing to report transactions involving drug cash.

Read the full story here.

Denver Man Faces Trial for Money Laundering

A recent indictment by a federal grand jury in Denver alleges that, in 2002, Herman Regusters and others obtained a stolen U.S. Treasury check for $474,150.26 made out to Sinai Temple in Los Angeles. Regusters and his accomplices then allegedly contacted Centennial Precious Metals, a Denver-based dealer in gold and precious metals, and used the stolen check to purchase 1,409 gold coins.

If convicted on the two counts of money laundering, Regusters faces up to 20 years in prison and a maximum fine of $500,000 per count. 

See full story here.

Financial Firms Want Guidance on Anti Money Laundering Reports

The tougher anti-money laundering (AML) rules spawned by the September 11 attacks, have created their own set of problems in the form of a onerous and self-defeating crush of paperwork. The Patriot Act requires that financial services firms report any suspicious financial transactions by filing a form called a Suspicious Activity Report (SAR) with Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The problem is that in the absence of further guidance on what constitutes suspicious activity, firms are submitting an inordinate number of SARs, increasing the workload on compliance departments and making it difficult for law enforcement to find truly suspicious trades. For example, in 2005, firms filed almost 800,000 SARs with FinCEN, and the agency expects almost a million to be filed by the end of this year. With that many reports coming in, many in the industry are concerned that FinCEN will be unable to find any decent leads because of the sheer volume of paperwork.

See further details here.

Pennsylvania Chiropractor charged with fraud and money laundering

The Attorney General’s Office for the State of Pennsylvania charged a chiropractor last Thursday with money laundering and Medicare fraud as part of an ongoing investigation into illegal pain killer prescriptions in Luzerne County. Gary Weissberger, 54, of Stroudsburg, Pennsylvania, faces up to 62 years in prison and $230,000 in fines and civil penalties if convicted of these charges.

See full story here.

California loan broker pleads guilty to fraud and money laundering

A California-based loan broker has pleaded guilty to federal wire fraud and money laundering charges related to a scheme that cost lenders more than $9 million.  The defendant operated a business that purported to fund home loans for borrowers throughout the country. But rather than using the commercial lenders' money as promised, the defendant, Kenneth Ketner, diverted the money for his own use.

See full story here.

Former attorney pleads guilty in money laundering

A former attorney who gave up practicing law in 1995 has pleaded guilty to lying to federal agents about his knowledge of financial matters involving a phony investment scheme organizer rather than face a trial on a money laundering charge for, among other things, taking a $100,000 check made out to a client's business to Costa Rica and arranging for a large sum to be wired from there to an account not in the client's name.

See full story here.

Two businessmen sentenced in money laundering case

Two Mississippi businessmen received federal prison terms today of 41 months and 33 months for their roles in helping drug kingpin Starsky Redd launder drug money. Both defendants expressed remorse for their actions.

See full story here.

2 Brooklyn men indicted for money laundering

Two Brooklyn, New York men were indicted last week for operating a multimillion-dollar money laundering scheme out of their apartments, illegally transmitting funds worldwide for customers who paid as much as six figures per transaction, prosecutors said.  See full story here

Georgia Jeweler Accused of Laundering Money

A federal grand jury indicted a jewelry store operator in Atlanta on money laundering charges Wednesday, accusing him of funneling illegal drug profits through two stores in Atlanta. The indictment alleged that the owner, among other things, failed to report cash purchases exceeding $10,000.

See full story here.

Check Cashing Business Owner Indicted on Money Laundering Charges

An upstate New York man was among three people and five companies indicted Tuesday in Manhattan on charges of bribery, money laundering and other charges involving former state Banking Department officials and CLB Check Cashing, Inc., one of the largest check cashing companies in the state.

See full story here.

Movie Execs Charged in Money Laundering Case

Bruno D'Esclavelles, chief executive of Limelight Films, a Los Angeles film production company, was among seven men arrested June 1 as part of a two-year federal investigation dubbed "Operation Director's Cut." Federal authorities have alleged that the film company was a front for an international drug-smuggling and money laundering operation stretching from Los Angeles to Switzerland. The criminal complaint alleges that D'Esclavelles and other Limelight executives laundered $300,000 through the film company for undercover agents posing as drug buyers.

See the full story here.

Wife pleads not guilty in money laundering case

The wife of a Tennessee businessman accused in a drug sting involving a half-ton of marijuana has pleaded not guilty to charges alleging that she laundered at least $2.5 million over a 20-year period representing the profits from her husband's drug sales.

See the full story here.

Bank Robbers Launder Money....Literally

Banks routinely use exploding dye packs to foil bank robbers. The dye turns cash red and renders it unusable. Thus, when Anthony Digiosaffatte and Paul Villanueva, recently arrested in New York on bank robbery charges, allegedly made off with $65,000 in cash from a local bank, they needed a method to clean their money....literally. According to authorities, the pair used a motel washing machine to cleanse their remaining cash. As one official explained, "they went to the coin-operated laundry room and put it in the washing machine. It got rid of some of the dye, but it left the money looking pretty disheveled.”

See the full story in the New York Times here.

Regulators Move to Drop Anti Money Laundering Law

Nevada gaming authorities took initial steps last week toward repealing the state's anti-money laundering regulation, Regulation 6A, and transferring casino oversight to the federal government.

Under Regulation 6A, casinos are required to track all cash transactions of $3,000 or more and submit currency reports to the US. Department of Treasury Department whenever transactions by an individual total more than $10,000 in a 24-hour period. However, Title 31 of the Bank Secrecy Act now classifies casinos as financial institutions, lumping their regulation for large cash transactions under the Treasury Department's Financial Crimes Enforcement Network.

Treasury Kills Money Laundering Database Being Developed by Fincen

The U.S. Treasury Department announced last week that it was cancelling a database program being developed by its Financial Crimes Enforcement Network, or Fincen, to track terrorist financing and money laundering.  Federal law requires financial institutions and other companies, such as casinos, to report suspicious financial transactions to Fincen. Fincen then sorts the records and holds them in a database for law enforcement. There are now more than 100 million records in the database.

The cancellation was attributed to cost overruns, missed milestones and poor quality. Moreover, there was no guarantee that additional spending would ultimately achieve the desired result.

See the full story here.

Political Consultant sentenced in money laundering scheme

Alan Drazek, a veteran Illinois Republican political consultant, was sentenced to 2 months in prison Wednesday for playing a key role in concealing a kickback scheme during former Gov. George Ryan's scandal-scarred tenure as secretary of state of Illinois. Drazek had pleaded guilty in early 2003 to tax fraud stemming from his laundering nearly $400,000 through his direct mail company as a favor to longtime friend Donald Udstuen, a powerful lobbyist and close Ryan confidant. The money was Udstuen's share of kickbacks extorted by another close Ryan friend, Lawrence Warner, from vendors vying for state business.

Drazek faced up to 16 months in prison, but prosecutors requested a reduced sentence because of his cooperation. 

See the full story here.

Florida International Bankers Association Launches New Anti Money Laundering Institute

The Florida International Bankers Association (FIBA), a Miami-based trade association whose membership represents nearly every major international bank from the US, Europe, and Latin America, has launched the FIBA Anti Money Laundering (AML) Institute. The FIBA focuses on specialized training needed for banks handling higher risk business and international transactions.

FIBA has developed four certificate courses, all of which focus on AML compliance using a risk-based approach.

See the full press release here.

Visit the FIBA website here.

Ohio Woman pleads guilty to money laundering charges

A Clayton businesswoman, Stephanie Woods, who bought, rented and invested in real estate pleaded guilty Wednesday in federal court to charges of conspiracy to commit money laundering and five counts of misdemeanor failure to file a tax return. Woods faces up to 10 years of prison in what court papers describe as a conspiracy with others in a mortgage fraud scheme that placed false statements in mortgage loan documents sent to out-of-state mortgage lending institutions. Court papers indicate the loss, as agreed by both sides, is $399,000.

See full story here. 

Prominent Civil Rights Attorney Pleads Innocence On money laundering Charges

Stephen Yagman, a prominent civil rights attorney who has challenged police conduct for nearly three decades, declared he is pleading "presumed innocent" of federal charges of tax evasion, bankruptcy fraud and money laundering. Yagman claims the 19 counts against him constitute retaliation by the Justice Department and IRS on account of two "successful battles" he won against the agencies, including a $650,000 judgment against the IRS.

See the full story here.

Former Construction Company Owner sentenced for money laundering charges

The U.S. Attorney for the District of Connecticut announced on Wednesday that Michael Ciarcia, former owner of Ciarcia Construction LLC of New Britain, has been sentenced to 13 months in federal prison followed by two years of supervised release for his involvement in a 2001 money laundering scandal in which he had accepted $31,000 in cash from a co-defendant who had generated the money through the processing and sale of cocaine.

See the full story here.

Businessman charged with money laundering and bank fraud

A Pittsburgh-based businessman who owns a painting company was indicted yesterday on 10 federal charges, including money laundering and bank fraud.

See the full story here.

Senate report outlines Reed money laundering scheme

A report released by a Republican-led U.S. Senate committee today provides full details on a complex money laundering scheme Ralph Reed engineered to funnel funds through non-profit groups. See the full story here.

Prominent LA lawyer accused of money laundering and bankruptcy fraud

Stephen Yagman, 61, a prominent attorney who has filed many high-profile lawsuits against law enforcement agencies, was recently indicted on charges of trying to evade paying more than $100,000 in federal income taxes.  Yagman faces 19 counts that include bankruptcy fraud and money laundering. Yagman recently surrendered to federal authorities and was expected to appear in U.S. District Court shortly.

Read the full story here.

Treasury secretly tries to track terror financing

The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, whose network carries up to 12.7 million messages a day containing instructions regarding international bank transfers, acknowledged yesterday that it provided confidental data under subpoena to the U.S. Treasury Department regarding international money transfers handled by its network. Since money laundering is considered an essential means by which terrorist organizations finance their operations, the SWIFT subpoenas are considered an important tactic by the government to extract intelligence on terrorist activity. See the full story here.

Jacob The Jeweler Arrested On Money Laundering Charges

New York celebrity jeweler Jacob Arabov was recently arrested on federal money laundering charges by Officers from the Drug Enforcement Administration Task Force. Arabov appeared briefly in court before being released on $100,000 bail, which he paid immediately. Arabov also agreed to turn himself in to authorities in Detroit on July 12. The jeweler was arrested for allegedly laundering some $270 million in drug money for a gang known as the Black Mafia Family by turning the cash into jewelry without reporting the transactions. See the full story here.

Man sentenced in Internet money-laundering scheme

A Pleasant Valley man who stole more than $100,000 from a local credit union in a worldwide Internet money-laundering scheme was placed on probation Monday and ordered to pay back the money. Christopher Renzo, 20, of Forest Valley Road, was given a five-year probationary sentence by Dutchess County Court Judge Thomas J. Dolan. Renzo spent about a year in jail awaiting disposition of his case. See the full story here.