Money Laundering News Stories 10

FINANCIAL CRIME NEWS

MONEY LAUNDERING NEWS STORIES

By Stephanie Ayres
15 February 2016
Washington, D.C.

The Financial Crimes Enforcement Network (FinCEN) announced in January that it had issued a Geographic Targeting Order (GTO) effective between March and August 2016 to gather information from US title insurance companies regarding the “natural persons” entering into cash purchases of expensive residential real estate in Manhattan, New York, and Miami-Dade County, Florida.

Apparently in response to high-profile speculation concerning individuals using front companies to conceal their identities in the purchase of such properties, sometimes for the presumed purpose of laundering money from illegal activities in or outside of the US, FinCEN will require the settlement agents to identify the true buyers of the properties meeting the order’s criteria during the period of time covered by the temporary order, according to the agency’s announcement of the plan on January 13.

By Stephanie Ayres
15 February 2016
Miami, Florida

In an administrative action settled in early February, the SEC alleged that Miami-based E.S. Financial Services (now known as Brickell Global Markets) was not able to produce books and records which adequately identified its non-US customers, especially certain customers who were trading through an account in the name of a Central American bank affiliated with E.S. Financial Services.

According to the SEC’s statement of February 4, the Central American bank had maintained a trading account with E.S. Financial for about ten years. During this time, thirteen foreign corporations and 23 foreign individuals were able to trade through the bank’s account without disclosing their identities to E.S. Financial Services as required under US anti-money-laundering (AML) regulations.

E.S. Financial agreed to pay a $1 million penalty and hire an independent monitor to help improve its AML compliance for a period of two years.

E.S. Financial had been an affiliate of the failed Espirito Santo Bank of Portugal.

By Stephanie Ayres
10 January 2016
Alexandria, Virginia

Three individuals associated with the Cayman Islands-based Clover Asset Management were charged with conspiracy and money laundering in a federal indictment in the Eastern District of Virginia in March 2014.

Clover founder Eric St-Cyr, his associate Joshua Vandyck, and Canadian attorney Patrick Poulin were accused of colluding with US undercover agents to conceal and disguise the origin and ownership of funds they reportedly believed to be the proceeds of a bank fraud scheme carried out in the United States.

Poulin, working from the Turks & Caicos Islands, set up a foundation for the agents. As the nominee director of the foundation which received funds from the agents, Poulin wired money on to accounts controlled by Clover, which said it would invest the money for the agetns and not report any income or profits to the IRS.

According to a March 24 statement from the US Attorney’s office in Virginia, the defendants used this two-step process to market their scheme to potential US customers as a means to hide assets. When a customer wanted to terminate the arrangement, the process worked in reverse – Clover would sell the investments and transfer the proceeds to the entity controlled by Poulin, who passed it on to the US customer.

By Stephanie Ayres
10 January 2016
Los Angeles, California

Three indictments announced December 10 by the US Attorney’s office in Los Angeles reveal a sprawling international network of drug money laundering and related offenses centered on a small bank in Westminster, California which had originally been established to serve the local Vietnamese American community and strayed far from this mission.

Twenty suspects were indicted in December, with the key figure in the schemes being Tu Chau “Bill” Lau, who was president of Saigon National Bank between 2009 and 2015. Lu and fourteen co-defendants were charged with racketeering for their scheme to launder the proceeds of international drug traffic that encompassed a network from China, Cambodia, Liechtenstein, Mexico, Switzerland, and the United States.

Lu’s operation was reportedly interrupted by the arrival of a couple of US undercover agents posing as drug traffickers with money in need of laundering. Lu had several suggestions of how he might help them out.

One idea involved setting up a foundation in Liechtenstein to facilitate the movement of the drug proceeds to accounts around the world. Lu even proposed that the undercover agents or their boss could make their banking activity more secure by buying an interest in Saigon National Bank, just like, confided Lu, the Sinaloa Cartel had done. Lu allegedly claimed that Sinaloa members had invested a million dollars in Saigon National, apparently implying that the cartel received special treatment in money processing because of this.

In addition to the racketeering charge, the underlying offenses in the indictment included conspiracy, money laundering, and structuring transactions to avoid federal reporting requirements. Named iwth Lu in this case were Tsung Wen “Peter” Hung, Edward Kim, John Edmundson, Pablo Hernandez, Emilio Herrera and nine others. Kim was also charged with evidence tampering for encouraging one of the undercover agents to destroy evidence.

A second indictment charges three individuals – Hung Wei, Jian Sheng “Raymond” Tan, and Derrick Cheung (who used several aliases) – with conspiracy to launder money. They were accused of accepting money from an undercover agent, funds that they believed to be the proceeds of narcotics sales and laundering them by charging fees to issue cashiers checks and money orders.

A third indictment also charged three suspects with conspiracy to launder money which they believed to be drug proceeds. Jian Sheng Tan (also named in the second indictment), Ruimin Zhao, and Vivian Tat were the named defendants in this third case.

By Stephanie Ayres
10 January 2016
Chicago, Illinois

A federal case filed in Chicago in February 2015 alleged that two major money brokers for the Sinaloa drug cartel laundered over $100 million of narcotics sales proceeds through a scheme to use the cash to buy gold in the United States, resell the gold to refiners, then send the proceeds of the gold sales to Mexico to complete the cycle.

Diego Pineda Sanchez and Carlos Parra Pedroza were named as the ringleaders of the gold scheme. They were said to have used a network of associates in Chicago, South Florida, and Los Angeles to buy gold and ship it to refineries in Florida and California. The refineries allegedly either paid Parra directly to send the proceeds of the sales to designated individuals in Mexico or he was paid by the recipeints in Mexico.

FINANCIAL CRIME NEWS
© STEPHANIE AYRES 2004-2017 ALL RIGHTS RESERVED