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What is money laundering? There are various definitions available which describe the phrase Money Laundering .

Article 1 of the draft European Communities (EC) Directive of March 1990 defines it as: the conversion or transfer of property, knowing that such property is derived from serious crime, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in committing such an offence or offences to evade the legal consequences of his action, and the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from serious crime. Another definition is: Money laundering is the process by which large amounts of illegally obtained money (from drug trafficking, terrorist activity or other serious crimes) is given the appearance of having originated from a legitimate source. If done successfully, it allows the criminals to maintain control over their proceeds and ultimately to provide a legitimate cover for their source of income. Money laundering plays a fundamental role in facilitating the ambitions of the drug trafficker, the terrorist, the organised criminal, the insider dealer, the tax evader as well as the many others who need to avoid the kind of attention from the authorities that sudden wealth brings from illegal activities. By engaging in this type of activity it is hoped to place the proceeds beyond the reach of any asset forfeiture laws.

Money laundering happens in almost every country in the world, and a single scheme typically involves transferring money through several countries in order to obscure its origins. In this article, we'll learn exactly what money laundering is and why it's necessary, who launders money and how they do it and what steps the authorities are taking to try to foil money-laundering operations. Money laundering, at its simplest, is the act of making money that comes from Source A look like it comes from Source B. In practice, criminals are trying to disguise the origins of money obtained through illegal activities so it looks like it was obtained from legal sources. Otherwise, they can't use the money because it would connect them to the criminal activity, and law-enforcement officials would seize it. What is Cyberlaundering? Cyberlaundering is the natural evolution of money laundering, or what we call throughout the site legacy laundering or just plain money laundering". Being that most monetary assets have moved into the digital realm, it makes sense that one of the most recurrent financial crimes has evolved as well. Money laundering, in aggregate is simply taking illicit gains from some class of illegal activity and filtering the funds back into a legitimate economic system. Some definitions strictly say that it is the transforming of the dirty money into clean money, but the more problematical issue is making the

money appear legitimate in the eyes of the concerning governmental parties (integration, the third step and last step in the general laundering model).

What is being done to prevent cyberlaundering? As stated in the previous question, there is very little being done. There is a current fallacy that exists with those who can take action that cyberlaundering is very considerably distant from being production ready, and isnt being used by illicit profit bearing groups. Nothing could be further from the truth, as cyberlaundering tactics have been in place and being used for almost a decade now, and both the governmental and private sectors have chosen to ignore them for the time being.

Are there certain countries that practice cyberlaundering more than others? Yes, however similar to the case of the legacy laundering, the money is typically made in the US and filtered out. The US will remain the largest conduit of illicit laundering due to the fact that theortically the largest laundering operations are concerned with the narcotics trade, and the US is the largest narcostics consuming nation on the planet. As well, it is land bound to the largest narcotics producing countries in the world, so the math is pretty solid.

What are the benefits to Cyberlaundering as opposed to legacy laundering? The benefits of cyberlaundering are fairly immeasurable. Not being bound to physical cash anymore allows a laundering to directly control the flow of money, where it is going, and often times the movement is instantaneous, leaving little or no paper trail. As well, gathering a team of persons in order to set up a cyberlaundering campaign is normally an easier endeavor than that of legacy laundering due to the predominance of IT assets that exist within the United States, and the benefit of covered outsourcing.

Briefly, what do you think that the steps are in order to eliminate cyberlaundering? With technological crimes, it requires a fight fire with fire approach. Cyberlaundering cannot be combated with legislation and bills, rather, it has to be fought on the field by battling the launderers with outsmarting their techniques, not by enacting bills or building new divisional relationships (i.e. the recent marriage between the FBI and FinCen). No matter how many datawarehouses are built, no matter how many new laws are made for prevention, it wont stop a multi trillion dollar industry. We have to think about it in terms of how much financial instruments we are dealing with and how that promotes new creativity and the ability to hire the best in the industry, it is literally the worlds third

largest commodity. If you would like my information regarding this, please read my paper on the subject in the database.

Does cyberlaundering have to deal with coding or networking? Elements of both are necessary in any fully standalone outfit. The best equipped cyberlaundering campaigns normally use a combination of tactics in order to facilitate a discovery and automation process that is usually tiered similar to a standard software development lifecycle. Meaning, it normally looks something like this: No AML software disassembly Discovery and Coordination Functional Design Specifications Generation Networking Engineering Assimilation Coding integration and Association Implementation and Testing Staging and pre-production Piloting and Finalization Production AML software disassembly Discovery and Coordination Implemented AML Software Reverse Engineering Functional Design Specifications Generation Networking Engineering Assimilation Coding integration and Association Revised Application Security Testing Application Network Adoption Implementation and Testing Implementation and Testing Staging and pre-production Piloting and finalization Production The reasoning ...

Will cyberlaundering phase out legacy money laundering? Most likely, observe the changes that have been made in the last 5 years with the banking industry. It is very unusual (at least in my case), to actually enter a bank to make a deposit or to make a withdrawl. It is a lot easier for me to just go to an ATM, pay my bills online, or make transfers by using an intelligent transfer client (usually provided by your bank, allowing you to transfer monies between native customer accounts). I believe that this is the natural evolution of laundering as well, however the age old legacy techniques will always play a strong role due to their primitive nature, often times it actually makes them quite effective if a campaign is willing to relinuisgh the benefits that are gained through cyberlaundering. Smurf = engage in hacking, launder money Smurfing = term related to money laundering. The term "smurfing" is derived from the image of the cartoon characters, The Smurfs, having a large group of many small entities. Miami-based lawyer Gregory Baldwin is said to have coined the term in the 1980s Smurf Attack = a type of denial service (DoS) attack on computer networks. This attack relies on a perpetrator sending a large amount of ICMP echo request (ping) traffic to IP broadcast addresses, all of which have a spoofed source IP address of the intended victim. If the routing device delivering traffic to those broadcast addresses delivers the IP broadcast to all hosts (for example via a layer 2 broadcast), most hosts on that IP network will take the ICMP echo request and reply to it with an echo reply, multiplying the traffic by the number of hosts responding. On a multi-access broadcast network, hundreds of machines might reply to each packet.[1]

Money laundering involves concealing the nature, location, source, ownership, or control of proceeds from an illegal activity or placing them back into further illegal activity.[1] The ill-gotten proceeds are laundered through a variety of methods to become clean money. With the expansion of the Internet and increased globalization, the methods of money laundering continue to become increasingly complex and difficult to detect. The Financial Crimes Enforcement Network (FinCEN), under the Department of the Treasury, indicates that the routes for money laundering include banks, check cashers, money transmitters, businesses, and casinos. Money launderers use methods such as complex wire transfers, shell companies, and currency smuggling to hide their dirty money. Money laundering became a federal crime in the Money Laundering Control Act of 1986.[2] It came to Congress s attention that organized criminals were camouflaging their proceeds, and Congress strengthened the federal criminal statues to better combat criminal organizations. Recently, the scope of the money laundering statute has come under examination. The statute prohibits financial transactions of proceeds from illicit activities, but it does not currently define what constitutes proceeds. The U.S. Supreme Court ruled in United States v. Santos[3] that in the money laundering statute, the term proceeds refers to profits rather than gross receipts. Internet gambling Edit Congress has enacted several statutes to deal with money laundering. It would be difficult for an illegal Internet gambling business to avoid either of two of the more prominent statutes 18 U.S.C. §§1956 and 1957 both of which involve financial disposition of the proceeds of various state and federal crimes, including violation of 18 U.S.C. §1084 (Wire Act), 18 U.S.C. §1955 (Illegal Gambling Business Act), 18 U.S.C. §1952 (Travel Act), or any state gambling law (if punishable by imprisonment for more than one year).[4] In fact, the courts have frequently upheld money laundering convictions predicated upon various gambling offenses.[5] The crimes under Section 1956 are punishable by imprisonment for not more than twenty (20) years or a fine of the greater of not more than twice value of the property involved in the transaction or not more than $500,000[6]; those under Section 1957 carry a prison term of not more than ten (10) years or a fine of the greater of twice the amount involved in the offense or not more than $250,000 (not more than $500,000 for an organization).[7] Any property involved in a violation of either section is subject to the civil and criminal forfeiture provisions of 18 U.S.C. §§981, 982. Laundering the Proceeds Edit Section 1956 is really several distinct crimes: (1) laundering with intent to promote an illicit activity such as an unlawful gambling business; (2) laundering to evade taxes; (3) laundering to conceal or disguise; (4) structuring financial transactions (smurfing) to avoid reporting requirements; (5) international laundering; and (5) laundering conduct by those caught in a law enforcement sting.

g. e. attempts to conduct such a financial transaction 3.[13] The promotion element of the offense can be satisfied by proof that the defendant used the proceeds to continue a pattern of criminal activity[14] or to enhance the prospect of future criminal activity. with the intent to promote the carrying on of specified unlawful activity. B.[15] Concealment Edit The concealment offense shares several common elements with the other offenses in Section 1956. . the elements of the promotion offense begin with a financial transaction and the knowledge that the proceeds involved flow from a predicate offense like illegal gambling: 1..[12] The jurisdictional requirements of the section may be satisfied in two ways with a transaction which affects commerce or with a financial institution whose activities affect commerce. represents the proceeds of some form of unlawful activity. knowing A.[11] including disposition as informal has handing cash over to someone else. e. represents the proceeds of some form of unlawful activity. cash or debt. A. the effect on interstate or foreign commerce need be no more than de minimis to satisfy the jurisdictional requirement.[10] Financial transaction for purposes of section 1956 make take virtually any shape that involves the disposition of something represent the proceeds of an underlying crime. checks written on depleted accounts. knowing A. Concealment occurs when anyone: 1.Promotion Edit In its most basic form the promotion offense essentially involves plowing the proceeds of crime back into an illegal enterprise. conducts or B.[9] The proceeds may be tangible or intangible. that the property involved in a financial transaction B. things of value or things with no intrinsic value. 2.. which in fact involves the proceeds of specified unlawful activity (A)(i) 4. In either case. that the property involved in a financial transaction. Like most of the crimes under Section 1956.g.[8] The knowledge element is the subject to special definition which allows a conviction without the necessity of proving that the defendant know the exact particulars of the underlying offense or even its nature.

attempts to conduct such a financial transaction 3. Part III examines the relationship between current money laundering law and cyberlaundering.[17] That having been said. unusual secrecy surrounding the transactions. which in fact involves the proceeds of specified unlawful activity (A)(i) 4. but not that the defendant knew that his conduct violated the tax laws.[16] The courts have made it clear that conviction for the concealment offense requires proof of something more than simply spending the proceedings of a predicate offense. A tax evasion. Part I is a brief race through laundering history. the proscription drafted to permit the prosecution of money launderers taken in by under cover officers claiming have proceeds in need of cleansing from illegal gambling or other predicate offenses. the proof the transportation element alone is insufficient without the evidence of an intent to promote. Smurfing and International Laundering Edit The tax evasion[19] and structured transactions ( smurfing ) offenses[20] shadow the promotion and concealment offenses. the line between innocent spending and criminal laundering is not always easily discerned. depositing illegal profits in the bank account of a legitimate business. conviction for the smurfing offense does not require a showing that the defendant knew that his conduct was criminal as long as the government establishes that the defendant acted with the intent to frustrate a reporting requirement. location. Evidence that may be considered when determining whether a transaction was designed to conceal includes: [deceptive] statements by a defendant probative of intent to conceal. conceal or smurf. the ownership.[21]Similarly. conducts or B. laundering prosecution requires the government to show that the defendant acted intentionally rather than inadvertently. a series of unusual financial moves cumulating in the transaction. Part IV addresses the underlying policy . knowing that the transaction is designed in whole or in part to conceal or disguise the nature.[22] The international laundering crime replicates the elements of the promotion.[24] The final crime found in Section 1956 is a sting offense. the source.[18] Tax Evasion.[23] Of course. highly irregular features of the transaction. A. structuring the transaction to avoid attention. Introduction This article will explore the latest technique in money laundering: Cyberlaundering by means of anonymous digital cash.2. concealment and smurfing offenses (but not the tax evasion offense) and adds an international transportation element. and expert testimony on practices of criminals. using third parties to conceal the real owner. Part II discusses how anonymous Ecash may facilitate money laundering on the Intenet. or the control of the proceed of specified unlawful activity.

the illegal source. In 1986. affect everyone's ability to conduct convenient. In conclusion. thus alerting the Internal Revenue Service (IRS) and other government agencies 3 involved in searching out ill-gotten gains. As the physical world of money laundering began to erode.5 bribing a bank teller. in turn.4 In what could be described as the "lo-tech" world of money laundering.12 Thus.000 reporting limit as required under the Bank Secrecy Act."10Under the Act.2 The trick was. to avoid attracting unwanted attention.000 wire transfers occur daily in the United States. laundering money was a physical effort. rather than rigidly formal tone. and the number of persons depositing the money. the balance between individual financial privacy rights and legitimate law enforcement interests. and still is.7 The result was the formation of a serious loophole under the Bank Secrecy Act. money laundering is a serious issue which should not be taken lightly. the number of instruments purchased. platoons of couriers assaulted the lobbies of banks throughout the United States with deposits under the $10. efficient and relatively private financial transactions. Part V raises a few unanswered societal questions and attempts to predict the future. Disclaimer: Although the author discusses this subject in a casual. Essentially. as well as legitimate businesses and individual banking customers. allowing couriers almost limitless variables in depositing dirty money such as the number of banks. and then disguising that income to make it appear legitimate 1 required that the launderer have the means to physically transport the hard cash.13 Wire transfer systems allow criminal organizations. it appeared as if the ability to launder the profits from illegal activity would be severely hampered. the number of teller stations at one branch office. or discretely purchasing real or personal property. or illegal application of income. Electronic transfers of funds are known as wire transfers. the Money Laundering Control Act (the Act)8 attempted to close the loopholes in the prior law that allowed for the structuring of transactions to flourish. Other than flying cash out of one country and depositing it in a foreign bank with less stringent banking laws. the classic approach was for a "smurf"6 to deposit cash at a bank. fear of money laundering only serves to increase banking regulations which. Congress attempted to "hit criminals right where they bruise: in the pocketbook. the tendency to use electronic transfers to avoid detection gained a loyal following.14 Considering that an estimated 700. As this article will show. the number of accounts at each bank.9In criminalizing the structuring of transactions to avoid reporting requirements. Part I Humble Beginnings In the beginning. . the process of cleaning "dirty money" was limited by the creative ability to manipulate the physical world.debate surrounding anonymous digital currency. Essentially. the number of branch offices. the filing of a currency transaction report (CTR)11 is required even if a bank employee "has knowledge" of any attempted structuring. to enjoy a swift and nearly risk free conduit for moving money between countries. The art of concealing the existence.

has been the launderer's salvation. illicit wire transfers are easily hidden. bolster purchasing power on the Internet. and. The recent explosion of Internet access.15 Federal agencies estimate that as much as $300 billion is laundered annually. or other potentially invasionary tactics. DigiCash's contribution to Internet commerce is an online payment product called "ecash.21 then the leap from the physical to the virtual world will be nearly complete. the focus of this article is upon one aspect of DigiCash that is of particular interest to money launderers and law enforcement: Anonymity. The "blinding" carried out by the user's own device makes it impossible for anyone to link payment to payer. earn substantial profit in a new area of commerce.30 a well respected cryptologist. is an electronic replacement for cash.moving well over $2 trillion. worldwide. of course.25 Using digital cash . Part II Enter.20 electronic surveillance of transfers. But users can prove unequivocally that they did or did not make a particular payment. . If laundering is to survive it must expand its approach.similar to serial numbers on hard currency. As the above mentioned race through laundering history demonstrates. unlike even paper cash.22 may be the new type of detergent which allows for cleaner laundry. for the purpose of this article. creativity.29 Digicash is an Amsterdam-based company created by David Chaum. over e-mail or Internet. the ability to successfully launder increases as the workload of investigators increases. The exception to the general rule of lack of anonymity is DigiCash. that wishes to remain open for business.24 Digital cash has been defined as a series of numbers that have an intrinsic value in some form of currency.33 In providing security and privacy for its customers. it is a necessity. actual assets are transferred through digital communications in the form of individually identified representations of bills and coins . each vendor plays by slightly different rules.28 Although the intricacies of individual vendors are quite fascinating.34Ecash. computerized information regarding these transfers reaches for the virtual stars above.17 Although wire transfers currently provide only limited information regarding the parties involved. electronic cash by DigiCash "combines computerized convenience with security and privacy that improve on paper cash. Anonymous Ecash In the virtual universe of cyberspace the demand for efficient consumer transactions has lead to the establishment of electronic cash. due to burdensomely detailed record keeping regulations. DigiCash uses public key digital blind signature techniques. without revealing anything more.23 Electronic cash. entering the world of cyberspace. While change is often a frighteningly awkward experience."32 Ecash is designed for secure payments from any personal computer to any other workstation. or digital money.35 While ecash's security technology may be among the best in the business as of this writing. for an enterprising criminal operation.18 the growing trend is for greater detail to be recorded. and not necessarily greed. it is fair to say that all but one vendor have one trait in common: lack of anonymity.19 If the privacy of wire transfers is compromised.27 While the ultimate goal of each vendor is to facilitate transactional efficiency.16 As the mountain of stored. is unconditionally untraceable."31 According to DigiCash.

If the Internet bank is FDIC insured.000 filing requirement. the best way to explain how anonymous digital cash could benefit money launderers' is by example. The purpose of the 1986 Act was to specifically criminalize the structuring of transactions so as to avoid the reporting requirements. Doug Drug Dealer is. This operation is repeated twice a week for as long as is required. likely to be found guilty of more than just participating in a money laundering scheme. The catch is that Linda Launderer's transfer was deposited into an ecash account. Nevertheless. Linda Launderer has been transferring these same funds from each branch. Once the hard currency has been converted into digital ecash.38 The problem is how to apply current money laundering law to cyberlaundering.42 As in the tangible banking world.000 from non-Internet bank accounts to Internet-based ecash accounts. commonly referred to as the Money Laundering Control Act of 1986.Part III The Money Laundering Control Act and Anonymous Laundering This section examines how the Amendments to the Bank Secrecy Act of 1970. and depositing the money with Internet banks that accept ecash. purchase real or personal property or even draw interest on these ill-gotten gains. To be safe. the cyberbank will not automatically be required to file a CTR regarding these transactions as all are under the $10. Doug employs Linda Launderer to wash this dirty money. blind signatures or any other encryption or decryption device.36 apply to cyberspace and cyberlaundering.45 A lack of federal insurance protection is understandable for the reason that digital money is currently created by private . making withdrawals only once a week. Linda Launderer transfers sums of money less than $10. if any employee of the Internet bank has even a suspicion of structuring.44 ecash accounts are not FDIC insured. Of course. but efficiency demands legality. The following example will be used to demonstrate the law's application. mainstream economy so that Doug can either purchase needed supplies and employees. the information contained on a CTR is only as insightful as the information presented by the bank conducting the prior transaction. However. Doug Drug Dealer now has access to legitimate electronic cash. the illegally earned money has become virtually untraceable. Linda has these transfers limited to a maximum of $8200 each. Without delving into the actual techniques involved in using public keys.43 In essence. this could be accomplished without a bank account. of course. In the scenario above.39 as Mark Twain Bank40 then federal depository regulations may apply. This currency needs to enter into the legitimate. Anyhow. In the meantime.41 a CTR may be filed. each record in the chain of transfers is only as strong as the previous recordation. anonymous. Doug Drug Dealer is the CEO of an ongoing narcotics corporation. Linda hires couriers ("smurfs") to deposit funds under different names in amounts between $7500 and $8500 at branches of every bank in certain cities. However. According to one cyberbank which currently accepts ecash. Doug has rooms filled with hard currency which is the profits from his illegal enterprise. how the law applies to Linda Launderer and the Internet banks is more confusing.37 Linda and her army of couriers are almost certainly violating structuring regulations by depositing small amounts in regular bank accounts.

to name a few. are prime targets for the deposit of large sums of cash. Congress could attempt to legislate in this new area of commerce. thus concealing her true identity. and even the bank can not trace the spent ecash. digital funds can be accessed from any computer that is properly connected to the Intenet.vendors.54 If the purchaser's identity is anonymous. Once the ecash account has been established. of course. However. rather than the Federal Reserve. anonymous ecash would allow for anonymous purchases of real and personal property. a seller of property must file a CTR for any cash transaction over $10. Thus. If a seller or dealer understands that it can not possibly trace who spent ecash at its establishment. launderer could access funds via telnet. then there should be no mandatory compliance with the filing regulations contained within the Money Laundering Control Act of 1986. First. such agents and dealers have been indicted for allowing drug money to be used to purchase expensive property.52 Second. Since Linda Launderer's transfer was deposited into a non-FDIC insured. not necessarily protect their deposits from institutional banking failures. if not paranoid. . on the Internet is virtually nonexistent. telneting to her account leased from any unknowing Internet Service Provider49 in the United States and have her leased Internet account actually call the bank to transfer the funds. digital cash does not enter into the marketplace of hard currency thereby affecting monetary supply or policy. or even specific non-FDIC currency accounts within a cyberbank are able to operate outside the reach of current federal regulations. the force of the Money Laundering Control Act of 1986 is withered into mere words on a page. presumably nonfederally regulated account.000 is subject to a transaction filing requirement. If these assumptions prove correct.48 Thus. has virtually no means of identifying the purchaser. as well as any seller which accepts ecash.46 Thus. money can be laundered by the purchase of real and personal property. but interrelated problems. In the world of earth and soil.51 On the Internet. the launderer or drug dealer will be able to discretely use illegally obtained profits to legitimately purchase property.50 Real estate agents and automobile dealers. allows the account holder total privacy to make Internet transactions. Therefore.47 Telnet is a basic command that involves the protocol for connecting to another computer on the Internet.53 Under current law. Of course. or ecash for that matter. currently. ecash. the opportunity to spend thousands of dollars of digital money. It should be remembered that a criminal organization desires to clean its dirty money. the combination of anonymous ecash and the availability of telnet may give a launderer enough of a head start to evade law enforcement. This fact yields at least two separate. Linda Launderer could transfer illegally earned funds from her laptop on the Pacific Island of Vanuatu. Anyhow. and thus.000. If certain cyberbanks. being completely anonymous. This would. whether digital money is anonymous or not will be of less relevance to money launderers and law enforcement. yet. leave an even longer trail for law enforcement to follow. However. for the moment. A truly creative. In fact. laundering on the Web may become one of the most rapidly expanding growth industries. the temptation for automobile and real property dealers to become players in the game for anonymous ecash seems overwhelming. any cash transaction over $10. the fear of becoming involved with dirty money is drastically reduced. the bank holding the digital cash.

despite its lack of accountability to the general population.000 reporting limit. or FinCen is somehow granted the constitutional authority to secretly monitor all cyberbanking transactions. The fact of complete anonymity guarantees that some money laundering will be easier to pull off. these banks have no duty to file any currency transaction reports. presently. professed that the "right to be let alone"57 was of the utmost importance. Linda.. it might put a suspicious agent on notice. A transfer from completely anonymous ecash to hard currency might alert law enforcement as to the existence of the ecash account. the desire to convert private and untraceable ecash into a more functional means of purchasing is understandable. Filing a CTR would be a legal necessity if the transfer amount is over the $10. Thus. Whether a regular.56 This article. Almost two hundred years after the Constitution was initially ratified. non-Internet currency account already exists or must be created to deposit the transferred ecash into may be irrelevant. However. Under current law she is in violation of The Money Laundering Control Act of 1986. Thus. Thus. the lack of anonymity means that every move made on the Internet will be traceable.Obviously. Part IV The Struggle For Privacy To be or not to be. assuming that cyberbanks which accept anonymous ecash are somehow subject to the same laws and regulations which financial institutions in the tangible world are. institutionalized. transferring hard currency to ecash and then spending the ecash is an appealing opportunity to potential launderers'. may enjoy the benefits of completely anonymous money laundering. This is where anonymous ecash may save Linda from fines and jail time. our devious drug dealer. the reports will be virtually useless. Any discussion of privacy rights would be woefully incomplete without mentioning the famous privacy article published by Samuel Warren and Louis Brandeis in 1890. our overly creative launderer. That is. as the transfer will deposit hard currency in a tangible. While this alone would not track down laundered money. What if the ecash is then transferred back to a regular hard currency account? This may seem a foolish act as the entire purpose is to reap the benefits of anonymous ecash. However.59 . and regulated bank account. there are no opportunities to purchase automobiles or real property by the exclusive use of anonymous ecash. barely a century after the Constitutional Convention.. whether money laundering becomes rampant under the guise of anonymous ecash may be one of the first tests of the practical aspects of DigiCash's future. unless Congress decides to attempt legislation in the area of digital money and virtual banking. Linda must first be caught before she can be found guilty.55 Even if cyberbanks are required to file transactional reports pertaining to ecash. Nevertheless. and Doug. Linda Launderer has knowingly structured financial transactions so as to avoid reporting requirements. In summary. anonymous digital cash! That is the question! The battle that emerges is between the right to privacy by means of anonymous digital cash verses the desire of law enforcement to ferret out crime. On the other hand. if the cyberbanks in which she has ecash deposits are outside the reach of current banking regulations. as the banks have no knowledge as to which funds are Linda's. the Supreme Court defined the scope of privacy58 for an individual's financial information in two landmark decisions.

occasions.62 Concluding over two centuries of Constitutional erosion.In California Bankers Association v. in order to obtain a customer's financial records from a financial institution.68 Next.70 The government must show that the records are related to a "legitimate law enforcement inquiry. the Court held that a criminal defendant had no Fourth Amendment right to protection of his bank records.77 A "legitimate law enforcement inquiry" is clearly an easier requirement to meet than a Fourth Amendment probable cause standard.72 Finally. Expanding into cyberspace.69 Under RFPA.60 In United States v. it is apparent that an individual's right to financial privacy is limited. the result is inadequate protection of individual financial privacy. as it is an electronic communication. The combination of The Privacy Act and RFPA prevent the government from groundless searches of individual financial records. The Privacy Act of 1974. Congress has attempted to restore financial and informational privacy rights to the individual. Schultz.61 and did not have a legitimate expectation of privacy regarding these papers.73 Title I focuses on the interception of wire. While the Supreme Court has sliced financial privacy rights on several. rendering completely anonymous digital cash completely pointless."76 Due to this relaxed standard. Miller. the standard required for a search is only that there exist some evidence that the records are related to a "legitimate law enforcement inquiry. The Right to Financial Privacy Act of 1982 ("RFPA") attempted to further protect financial records. The issue involving cyberspace is whether financial privacy rights are so limited that the federal government could monitor a digital cash user's financial transactions in a detailed fashion. if the Internet falls under the protection of the ECPA. In effect.63 The Right to Financial Privacy Act of 1982. The Privacy Act of 1974 regulates the practices of federal agencies regarding personal information. previously mentioned.66 With certain exceptions. oral and electronic communications. However. First.74 Title II prohibits an electronic communications service provider from knowingly divulging the contents of a communication while in electronic storage.67 no federal agency may disclose any record contained in its system to any other person or agency without the written request or consent of the individual.64 and The Electronic Communications Privacy Act of 198665 are currently the three best hopes for individual financial privacy.75 Applying current law to the Internet. individual financial privacy may be violated without any probable cause. then individual financial privacy in cyberspace is afforded as little protection as financial . The Electronic Communications Privacy Act of 1986 ("ECPA") attempts to protect the individual against the unauthorized interception of electronic communications. the federal government must serve a subpoena on the customer before or concurrently with service on the bank. the Court held that bank record keeping requirements do not violate the Fourth Amendment right to privacy and do not amount to an illegal search and seizure."71 and notify the customer that it can take steps to block the bank's disclosure of the records.

Linda is simply transferring funds into anonymous ecash accounts so as to conceal the illegally obtained profits of her employer. Hence. Since insuring anonymous ecash might prove unprofitable. Second. the IRS and FinCen will capitalize on the additional information being unearthed. Since even the bank can not trace ecash to a user. the scenario of a far away beach. the IRS and FinCen could use the preliminary information obtained from the "legitimate law enforcement inquiry" so as to have sufficient facts to establish probable cause. Doug Drug Dealer. cyberbanks could be convinced to implement special "investigatory software" into their computer systems so as to flag suspicious ecash accounts.privacy in the tangible world. Essentially. these banks would be subject to federal scrutiny and pressured into insuring anonymous ecash deposits. greeting the soft warm sand. Unlike the AT&T commercial which portrays an individual faxing messages from a sunny beach to a business associate in a cold northern state. While current money laundering laws apply to the fledgling art of cyberlaundering. it is probable that many timid cyberbanks will succumb to federal intimidation and abandon anonymous ecash altogether. First. Waves of liquid life endlessly wash ashore. Linda is laundering money over the Internet while sipping a Margarita. While the technical aspects of such a system are beyond the scope of this article. a "legitimate law enforcement inquiry" into the situation would likely allow access to ecash account records." Taking one step further. Since there is no requirement of probable cause to search an individual's financial account. then no ecash account would be safe from the "legitimate law enforcement inquiring" software. Finally. The truth is that technology has created the means and ability to launder money by use of completely untraceable digital currency. it is fair to say that if such programming is both possible and practical. Amidst this tranquil bliss. If the government believes that ecash is overflowing with money launderers. if ecash accounts become subject to greater scrutiny. If anonymous digital cash becomes a practical reality. Part V Conclusion Above. the actual effect of these laws may be limited. a portable "laundering laptop" and one creative launderer may be more fact than fantasy. . Linda Launderer sits on the beach with her laptop computer "jacked-in" to the Internet. the government need only claim that it requires access to financial records due to a "legitimate law enforcement inquiry. the application of current financial privacy laws to DigiCash's Ecash may be the eulogy for completely anonymous digital cash. pressure would be placed on various agencies to solve the problem. the Federal Reserve would likely announce that all cyberbanks accepting anonymous ecash conform with FDIC regulations. Thus. Palm trees gracefully sway in a quiet dance with the wind. the sky is a swirling mixture of pale blue and chalky white. enabling a full scale search and seizure of an individual's financial records.

then use the cards to withdraw money from the accounts at ATMs.Structuring of transactions so as to avoid currency reporting requirements becomes less risky if the funds used to structure are virtually untraceable.5 million in this way by operating as an e-Gold money exchanger.S. rather than confiscated prior to its misuse. should completely anonymous digital cash be prohibited or secretly monitored solely for the reason that it may facilitate some illegal activities? Such action would be one additional nail in the coffin of privacy rights. In addition. if sufficient cause exists. In effect. the filing of currency transaction reports may be pointless if the money can not be traced into a specific account. Fear of the unknown is not an adequate reason to quash a potential privacy restoring means of conducting financial transactions.81 the government clearly has the right to compel an individual and his or her banking establishment to produce all relevant financial records upon court order. Authorities say Carranza helped launder about $2. it may be more difficult to trace criminal activity which uses anonymous currency. the federal government is justifiedly worried that the Internet may become a launderer's paradise. prohibiting or secretly monitoring ecash transactions on the grounds that such transactions are more difficult to trace is not sufficient justification for invasionary tactics aimed at further limiting financial privacy.. Therefore. Nevertheless. However. The mules would give him cash or deposit money into his bank account. Since the business of collecting and then selling information on individuals is becoming common. If such liberty is misused. then it should be taken away from that specific violator. Hackers in East Europe and elsewhere would steal credit and debit card numbers and PINs through phishing and other means. For these reasons. or he would change the money himself into e-Gold currency through his own e-Gold account. who would encode the numbers onto the magnetic stripe of blank cards. then pass the data to so-called mules in the U. shouldn't an individual who desires some protection from prying eyes have the right to prevent his or her financial history from becoming a mere commodity for sale to the highest bidder? The result may be a compromise between federal agencies that wish to have access to all financial records and the individual desire for some reasonable level of financial privacy.79 and that the production of such records is not self-incriminating in violation of the Fifth Amendment. the actual requirement that a transaction report be filed may be nonexistent if cyberbanks which accept ecash deposit accounts do not fall under current federal or state regulation of financial institutions. In essence.78 Since it has been determined that there is no legitimate expectation of complete privacy in financial records held at a financial institution. forcing the ecash account holder to disclose its identity by revealing its "blinding" factors.80 then allowing for anonymous digital cash transactions is not as threatening as once believed. However. an online digital currency. . and he would either transfer the money to the bank account of another e-Gold exchanger who would convert it to e-Gold for a carder. They would then send the money back to their co-conspirators in East Europe through Western Union or through e-Gold.82 The result being that the privileged right to privacy regarding digital currency carries a price: responsibility.

VOLYNSKIY participated in a scheme to steal funds from bank accounts by withdrawing money from those accounts at ATMs. and then laundering the stolen proceeds. along with co-conspirators residing in the United States. The man. keeping a portion of the fraud proceeds for themselves. authorities say that more than $2 million went into and out of Carranza s eGold account.000 from ATM machines before transferring the money back to East Europe through Western Union and through an eGold money exchanger in California. . On three separate occasions. From approximately September 2006 through December 2007. It's the latter who have helped turn carding into a multibillion-dollar worldwide crime.then transfer it to the e-Gold account of carders in East Europe and elsewhere. authorities say Carranza was a middleman for carders to purchase dumps (account and other data stored on a bank card s magnetic stripe) from one another. In addition to the scheme to hack into victims' brokerage accounts. VOLYNSKIY. To carry out this scheme. These Trojan Horses were designed to steal personal account information from individual victims as they accessed their bank and brokerage accounts through the internet. withdrew more than $150. Between 2003 and 2007. They would then use a local e-Gold money exchanger to convert the digital fund into their local currency. and thereafter made unauthorized sales of securities and unauthorized wire transfers out of these accounts. VOLYNSKIY and his co-conspirators then sent a portion of the stolen funds from the various "drop" accounts in the United States to co-conspirators in Russia. VOLYNSKIY provided a total of 180 stolen credit card numbers to a cooperating witness. through money remitting services. using personal financial information obtained through computer viruses.with the technical skills to hack databases and online bank accounts. At the top of the pyramid are sophisticated hackers -. VOLYNSKIY and co-defendant ALEXANDER BOBNEV participated in a scheme to steal funds from bank and brokerage accounts by hacking into those accounts through the internet. In addition to laundering stolen funds. After the Trojan Horses captured the victims' personal account information. who used the nickname John Dillinger. BOBNEV and other co-conspirators used the information to access victims' bank and brokerage accounts. BOBNEV and co-conspirators in Russia used concealed computer codes known as "Trojan Horses" to hack into the personal computers of multiple victims in the United States. One such mule who transmitted stolen money in this way described to Threat Level in 2006 how he obtained hundreds of stolen card numbers from Romanian phishers and Russian hackers that he met online. then set up various "drop" accounts to receive the funds stolen from their victims' bank and brokerage accounts. using stolen credit card numbers.many of them East Europeans -. from September 2006 through December 2007. directing that they be fabricated into credit cards.

gif images on the criminal's own webserver and when clicked on will not display information that originates from the genuine Verisign https secure server. generally overseas. If it doesn't. Clearly innocent . sometimes for goods which the company claims to be supplying. (usually in the range 5-10%). The criminals have retaliated by trying to smear the website by sending spam in Bobbear's name and asking for donations. The final destination of the transferred funds will be an organised crime syndicate. Amlo acting secretary-general Seehanart Prayoonrat said people had complained to the agency that they had been cheated by a criminal gang using his office's telephone number. These job offers are always illegal and fraudulent. Always ensure that the URL of the pop-up seal verification page begins with the address https://seal. Learn to recognise fake 'Verisign' certificates which will simply be . These companies can be very convincing in their attempts to perpetrate their Most of those cheated said they had received a telephone call from gang members posing as Amlo officials investigating crimes. Any person who agrees to act as an the agency is demanding that TOT Plc provide it with better protection. Many of them try and give an air of legitimacy by displaying bogus 'Verisign' and other certificates. Money Laundering Fraud Fraudsters send unsolicited e-mails or place job offers on legitimate Internet recruitment sites or forums looking to recruit 'Money Transfer Agents' with bank or Paypal accounts.Anti money laundering office phone number hijacked by scam gang Submitted by hitbsecnews on Wed. (more correctly a money laundering 'mule'). but simply another bogus .gif image from the criminal's site. These bogus companies offer part-time employment as an agent receiving payments in the form of fake checks or stolen money transfers. The gang fooled them into believing they were being prosecuted for a crime and they had to transfer money to Amlo to escape prosecution. is actually receiving stolen or counterfeit funds into their account. 01/26/2011 . the seal is fraudulent.23:00 Computer hackers are using the Anti-Money Laundering Office phone number in a scam to cheat people out of their money . and then passing the payment on to the company via a money transfer company such as Moneygram and/or Western Union less an 'agent's percentage'. "Clearly the good people at Bobbear have upset the bad guys.

but the only pockets they would be filling belong to the criminals themselves." said Graham Cluley. it seems that the crime could have been organized by two Estonian citizens. The crime was executed in several European countries through a malware program that criminals used to contaminate customers computers and make approximately a hundred bank transfers attacking 89 private individuals or companies bank accounts. according to what Police explained. . the money was transmitted to bank accounts in Finland and several other European countries registered under the name of the two Estonians. five people were arrested and. Hackers stole approximately 1. 2011 Two Estonian Hackers Attacked Nordea Netbank Two Estonian Hackers Attacked Nordea Netbank The Finnish National Bureau of Investigation and the the Estonian Police are investigating on an attack against Nordea internet banking system. The fifteen suspects seemed then to have acted as middlemen transferring money to the two main ones.2 million euros most of which have been tracked and found. Bobbear makes clear on its website that it never sends spam and never asks for donations. "It's a dirty trick by the cybercriminals to try and undermine an organization that is actually trying to do something positive to make the internet a safer place. One person is now suspected of aggravated fraud while another one is of aiding and abetting of an aggravated fraud." Saturday. The investigation on the issue started in January 2011 while the crimes were committed between December 2009 and April 2010.people might be tempted into contributing in the fight against internet child abuse and money laundering. All email users need to learn to be suspicious of unsolicited emails and not take everything they read at face value. May 21. Fifteen people are being suspected of money laundering. Once in the hands of the middlemen. Nordea communicated that the bank has already reimbursed all the damages to the victims. Police suspects that 17 people were involved in the crime. senior technology consultant for Sophos. During the investigation.

During the years 2007-2010. this one. mules are used as third persons to illegally transfer money and goods. A measure. the possession of an e-mail address and a of a bank account with netbank user ID. Nordea decided to answer improving its netbank s security. if you like seeing it like this in half of the cases.The secret is in your SPAM folder Middlemen. Activities as the one under enquiry are in fact often hidden behind messages offering opportunities for an extra income with tremendously easy requirements as having reached the age of majority. According to the official reconstruction of the events. What people usually do not think of while answering to such messages is that once a person is involved in an action similar to the one discovered by Estonian and Finnish authorities. the bank now decided to ask for a confirmation by phone or by text message. the police faces similar kinds of mule cases almost weekly. Several money laundering cases have been revealed in recent years also in Estonia. that might still not be enough to guarantee an absolute security of e-banking environments if it is true that according to the Finnish National Bureau. so that not everything can be achieved solely online. . Nordea adopts new measures: is it enough? After netbank frauds. The most common destination for illegal bank transfers is Ukraine and Russia. or so-called mules. Finnish police faced 159 money laundering cases and good news. this very same person become at risk of crimes as (to say the most common) money laundering. have been recruited by using direct contacts and through some internet sites: in internet crime. it is legitimate to think that the main suspects used mass e-mails and text messages promising lucrative job opportunities in international finance to get middlemen involved in this fraud. where the sensational case of a 19 million euro money laundering issue gained the front page of international papers only one year ago. police have been able to prevent bank transfers. When attempting to complete considerable bank transfers.

" said Judge Wassall. as the hacker left an online trace when he netted £53. assuming that Mitchell would have gone on to sell all the chips. The hacker also received a 30 week sentence for breaching an earlier suspended sentence. Mitchell managed to sell some of the virtual chips and Zygna's investigators put the gaming company's potential losses at £7 million. netted more than $3 million dollars from banks in the United States. and more than $9 million from banks in the UK. According to the Guardian.theinquirer.Mon Mar 21 2011. stolen the identities of two of its staff and snarfed up 400 billion virtual chips. That obviously didn't go down too well with Judge Philip Wassall.612 by selling discounted chips on the social notworking website Facebook. thought to be lead by Russian The international heist. if not easier to trace than real ones. It turns out that virtual chips are just as easy. Judge Wassall handed Mitchell a two year prison sentence for computer misuse and four counts of money laundering. In 2008 Mitchell had hacked into the network of his previous employer. 12:10 A BRITISH HACKER has been sentenced to two years' porridge for pilfering £7 million worth of virtual poker chips. He later posed as an administrator of its poker games on Facebook. . "The sentence has to reflect the impact on public confidence in security systems and online business when someone breaches security in this way. The INQUIRER reported in February that Mitchell had pleaded guilty but his sentence was just handed down at Exeter crown court. µ Read more: http://www. He had hacked into the online gaming website Zygna. Torbay council. Ashley Mitchell might consider himself a top quality hacker but his chips were down after he got well and truly caught. Mitchell's defence team said the losses weren't quantifiable because Zygna could simply conjure up new virtual chips out of thin air.

. of similarly creating drop accounts as well as laundering stolen cash.000 in fines. a New Hampshire (USA) resident. the feds had got a clear picture when the alleged culprits moved cash from accounts related to investment service vendor Charles Schwab and other places to credit the sums to their own financial accounts. The sinister Trojan stole passwords and account numbers every time victims accessed their accounts on the Internet. showing the sum transmitted to the latter's drop account. Consequently. Reportedly. After this. a third individual from New York. Man Pleads Guilty to Hacking Brokerage Accounts for Money Laundering Alexey Mineev. during November 2008. Along with that. Investigating officials state that Alexander Bobnev. The screenshots were further accompanied by instructions to withdraw the money immediately. the New Hampshire man along with two accomplices was legally charged of running a scam in which a malicious Trojan program was furtively planted on the computers of brokerage and bank customers. the Department of Justice in the United States charged Aleksey Volunskiy.000 to Russia through the Western Union money transfer. another conniver.A large scale international law enforcement effort culminated in October with the indictment of more than 60 people in the US. The Zeus Trojan was spread through tainted emails and communications designed to look like messages from the popular business-oriented social networking service LinkedIn. The court documents state that Mineev agreed to give up $111. When Mineev together with Bobnev were accused in November 2008. The defendants knew little that the federal investigators were monitoring their accounts using a secret informant's services. e-mailed the compromised accounts' screenshots to Mineev. Mineev transferred the money amounting up to US$10. in the 1st week of June 2009 admitted in Manhattan (USA) federal court that he had been involved in a money laundering scheme. Mineev has been sentenced to serve prison for up to 20 years and pay $500.954 to compensate the amount he swindled.

N. Poole was also held accountable for an additional .000 of income he received in connection with his involvement in the financing of a highend community in Carteret County. In the sentencing. in Raleigh. cyber criminals often recruit money mules who engage in siphoning money from compromised accounts to offshore accounts.The court documents state that the scam operated during September 2006-Decemebr 2007. In April 2010. Many-a-times these mules hardly know about the fraudulent schemes they work for other than believing that their recruiters are some international companies. Charles Ruffin Poole was sentenced to 12 months and 1 day in prison. Poole attempted to evade a portion of his 2005 federal income tax liability by concealing his receipt of $30. In the meantime. 2011. and ordered to pay $16. For such illegal activity. Former Governor s Assistant Receives Federal Prison Term On May 17.629 in restitution for underpaid taxes. According to the plea agreement.. Poole pleaded guilty to federal income tax evasion. the security researchers commented that hacking accounts was an increasing problem for brokerage firms and banks. followed by two years of supervised release. albeit Mineev participated in it for only during August-December 2007.C.

West Virginia. and continuing to on or about July 6. West Virginia Man Sentenced on Money Laundering Charges and Illegal Gun Possession On May 5. Hanna admitted that he used cash proceeds obtained from drug trafficking to purchase two properties. He also made multiple false statements to banks and in reports in order to obtain lines of credit. Yost failed to disclose to the limited partners that a certified public accountant had not completed an audit because the financial statements included inflated and improperly recorded values of the partnership s interests in a privately held company and a publicly traded company. Yost diverted money which he was not entitled to and converted those funds for his own use and benefit. Colorado Man Sentenced for Fraud. 2011.626 in restitution to the victims.. to one count of wire fraud. was sentenced to 46 months in prison on possession of firearms by a convicted felon and money laundering charges.Va. was sentenced to 78 months in prison for fraud. Money generated from the . aka Deuce. in Denver. W.P. Hargis.880. As part of the scheme.000 he received from the same source. Texas. Yost devised a scheme to defraud Yost Partnership and the limited partners by means of materially false and fraudulent pretenses. Hanna pleaded guilty to the charges in January. manager of Yost Partnership.$25. four counts of false statements to a financial institution. knowing each one of the statements to be false in that it overstated the value of the limited partner s share of the assets of Yost Partnership. 2011. Hanna will forfeit two pieces of real property. 2005.000 cash and his interest in more than 40 firearms. He subsequently had the deeds to the properties directed to a third party to conceal the nature. Mark Yost. based in Boulder. 2011. On February 4. and five other defendants were charged in an indictment in June 2010 with felony offenses related to an elaborate operation to cultivate and sell large quantities of marijuana plants. Colo. During the course of the scheme. approximately 24 acres of real property and approximately 9 acres of unimproved hunting property. As a result of his conviction. admitting that he was a member of an oxycodone distribution enterprise operating in and around Nicholas County from 2007 through September 2008. As part of the plea agreement. at the conclusion of each quarter of each year. in Charleston. $9. Nancy Ann Hargis was sentenced to 42 months in prison following her guilty plea in September 2010 to one count of money laundering. Hargis opened separate bank accounts for three marijuana grow houses at three financial institutions. source and ownership of the property and the cash he used to complete the purchase. Colorado. one count of bank fraud and one count of money laundering. False Statements. and ordered to pay $10. L.. According to his plea agreement. and Money Laundering On May 12. prepared account statements and caused them to be delivered to the limited partners. Last Defendant Sentenced in Elaborate Marijuana Growing Operation in Texas On May 4.. beginning with the first quarter of 2005 and continuing through the second quarter of 2010. Yost. 2010. Yost received investor funds to trade in securities and to make other investments. in Dallas. Poole agreed that he failed to report and correctly identify the source of income from criminal activity. Jerry Lee Hanna. which was also not reported on his tax returns. of Nicholas County. followed by five years of supervised release. Yost pleaded guilty in February 2011.

assisted Bartko in the laundering of these fraudulent proceeds. receiving. 2011.410 in restitution. with the exception of one fugitive. 2011. property tax and utility payments) of the three houses. buying. Darryl Lynn Laws. and one count of the sale of unregistered securities in November 2010.. the sale of unregistered securities and money laundering.. of one count of conspiring to commit mail fraud. He conspired with others to buy and receive goods stolen from nearly two dozen interstate tractor trailer and container shipments valued at just under $2 million.. in Raleigh. a securities attorney. mortgage. 2011. California. have pleaded guilty and have been sentenced. Georgia Man Sentenced for Multi-Million Dollar Cargo Theft Conspiracy On May 3. Jr. Bartko met with potential investors in the offices of Legacy Resource Management. Bartko and Laws had a newly formed fund called the Caledonian Private Equity Bridge and Mezzanine Fund which accepted more than $701. Rebecca Plummer was sentenced to 12 months and one day for conspiring to commit mail fraud. Laws failed to report or pay taxes on the $125. Of that amount $250. All defendants. was sentenced to five years probation on one count of false statements to a federal officer and one count of filing a materially false tax return. N. Plummer and Laws were two co-defendants in the mail fraud and money laundering scheme involving Gregory Bartko. between May 2005 and July 2009.000 he received. Smith operated Smith Sales Company out of warehouses in Mableton and Hiram. This money had also been fraudulently raised and did not comply with registration requirements for securities. According to court . followed by three years of supervised release and ordered to pay $2. The tractor trailers and containers were stolen while parked at truck stops. Florida Realtor Sentenced for Tax Evasion On May 3. was sentenced to 50 months in prison followed by three years of supervised release and ordered to pay $993. Co-Defendants in Mail Fraud and Money Laundering Scheme Sentenced On May 4.. through Legacy Resource Management.. he is awaiting sentencing. and money laundering. Ga. Georgia.000 in restitution. in connection with the purchase and distribution of goods traced to interstate tractor trailer and container thefts throughout the southeastern United States.000 in fraudulently raised funds. in Fort Myers. John Raymond Smith. In January 2005. and money laundering. and container storage facilities. in Atlanta. Georgia.000 in restitution. Plummer. the sale of unregistered securities. 2011.063. Smith pleaded guilty in June 2010 to conspiracy. of La Jolla.903 in restitution. Fla. Laws was ordered to pay $150. a business run by Rebecca Plummer and another individual.C.g. Bartko asked Legacy Resource Management to allow him to filter money through their bank accounts. of Mableton. January 2004. According to court documents. motels.000 was paid to Bartko and Laws as draws or compensation for their work as partners in the Caledonian Fund. A jury convicted Gregory Bartko. According to evidence presented at Bartko s trial. four counts of mail fraud. On May 5. aka Johnny Ray Smith. Smith and others then sold the goods at discounted prices to consumers and wholesalers. Thomas Daugherty was sentenced to 24 months in prison. often at night.marijuana grow operation was deposited into these bank accounts from which Hargis made payments to cover the operating expenses (e. and possessing stolen goods. She was also ordered to pay over $400.

J. Park and Jones pooled the investor funds and used the funds as their own personal bank account. Shaunette Moody pleaded guilty to money laundering conspiracy and theft from an organization receiving federal benefits and Jackson pleaded guilty to conspiring to steal from an organization receiving federal benefits. rather than depositing the money in a bank account from which the money could have been seized by the IRS. Alexander Moody was the organizer of the criminal scheme to exploit Shaunette Moody s position as the SGO office manager to steal funds from NJCU by cashing unauthorized checks drawn on the SGO bank account. Jones fabricated documents designed to deceive investors into believing that their funds were being actively traded and managed. 2011. three co-conspirators were sentenced for their roles in a scheme to steal more than $500. home renovations costing more than $300. as needed. Tennessee Woman Sentenced for Investment Fraud Ponzi Scheme On April 27. Shaunette Moody. admitting that between September 2001 and June 26.000. 2011. was sentenced to 72 months in prison. Tenn. 2008. among others. Park. Laundering Over $500. Three Sentenced for Stealing. Curtis Shearer and Kimberly Jackson.000 in federally subsidized funds. Additionally. Approximately $516. of Dickson. they were both order to pay $516. through July 21. Daugherty cashed the cashier s checks.106 was stolen in the course of the scheme.954 in restitution for her role in the operation of a massive ponzi scheme that defrauded investors of more than $12. Daugherty placed real properties in the names of others and purchased cashier s checks with money he earned. the former office manager for the New Jersey City University ( NJCU ) Student Government Organization ( SGO ) was sentenced to 18 months in prison. including the purchase of approximately $19.199.documents. the two stole approximately 275 checks that were then fraudulently signed and made payable to. from 1998 through 2005. along with co-defendant Michael Park. the Moodys falsified documents. in Nashville. According to court documents. In January 2011. who was a real estate agent specializing in commercial real estate transactions. Alexander Moody pleaded guilty to money laundering conspiracy and aiding and abetting theft from an organization receiving federal benefits. followed by two years supervised release. Alexander Moody.000 in cash withdrawals that were deposited into defendant's personal bank account. Tennessee.690. in Newark.6 million in federal income tax. Jones used investor funds to pay her personal expenses. operated a scheme to defraud investors who deposited funds with PCMG for investment in brokered stocks and other marketable securities. From January 4. followed by three years supervised release. the Moodys and co-conspirators Arsenio Willey. transferred funds among SGO financial accounts. attempted to evade paying approximately $1. Kimberly Jackson was also sentenced to three years of probation and ordered to pay $34.299. she. Jones pleaded guilty to charges of mail fraud and money laundering..315 in restitution. to cover his living expenses. was sentenced to 72 months in prison and ordered to pay $8.. In order to conceal and perpetuate their crime. A third co-conspirator. 2007. Donna Jones.000 from New Jersey City University On April 26. 2010. her husband. Daugherty. and that PCMG was generating and meeting promised growth expectations. N.106 in restitution. Jones was a former office manager of Park Capital Management Group (PCMG) and personal assistant to convicted Brentwood financial advisor Michael J. The stolen money was used to .000 in clothes. and obtained fraudulent audits of the SGO s finances. and approximately $225.

2009. and April 27. in Chicago. of Shelby County. 2011. According to court documents. Alaska. Lane conducted the fraud with her father. Bryant owned and operated Taxbiz. Standefer either wire transferred or deposited approximately $46.361 representing the proceeds of the unlawful distribution of Oxycontin. from 2004 through at least November 2008. . Justin M. Between January 27. Bryant offered a guarantee to purchasers of the tax certificates that if the property owner redeemed the property. Illinois Man Sentenced for Structuring Financial Transactions On April 13. which bought and sold tax certificates. Paul H. aggravated identity theft and conspiracy to launder money in August 2011.000 checks to cash from three different accounts at two different banks. three years of supervised release. Paul Lane is charged with soliciting money from friends and acquaintances in Michigan. and April 27.. 2011. to be followed by three years of supervised release. According to court documents. including entertainment and gambling in Atlantic City. Alabama Woman Sentenced for Fraud Scheme Based on Non-existent Lawsuit On April 22. Ala.200 representing the proceeds of the unlawful distribution of Oxycontin. and ordered to pay a $100 special assessment. In truth. of Pelham. Lane pleaded guilty to charges of wire fraud. or the County declared the tax sale void.000 by writing six $9. Paul Lane was indicted in October 2009 on mail fraud.purchase goods and services for the co-conspirators benefit. Robert Anthony Bryant was sentenced to 108 months in prison. Bryant would refund 100 percent of the purchase price of the tax certificate. In March 2006. to be followed by two years of supervised release. Two Alaskans Sentenced on Money Laundering Charges On April 15.500 to the government. 2011. Bryant purposefully structured approximately $54. Bryant pleaded guilty in August 2010 to one count of structuring financial transactions to avoid the requirement that financial institutions report currency transactions of more than $10. in Anchorage. and was ordered to pay $1. Standefer was sentenced to 18 months in prison.575 in restitution to victims who thought they were helping her pay the expenses of a personal-injury lawsuit and forfeit proceeds of the fraud totaling $406. Alabama was sentenced to 87 months in prison.131. Lane was also ordered to pay $368. in part because he frequently used purchasers' money for his personal purposes. Bryant was financially unable to refund the purchase price as promised. and ordered to pay a $100 special assessment. 2009. 2008. to help pay expenses for the non-existent lawsuit. wire fraud and money laundering charges. Inc.600 in restitution. Katherine Hope Lane. Lucas Allen Deweese was sentenced to 12 months and a day in prison. where he once lived. Deweese either wire transferred or deposited approximately $10. Lane was never assaulted and there was never a lawsuit. In fact. in Birmingham. Lane led family friends and associates to believe they were helping her pursue a lawsuit filed as the result of her suffering a brutal assault while at work. Lane Jr.. Between December 26.. 2009.000. Ill. Standefer and Deweese pleaded guilty in June 2010 to conspiracy to launder the proceeds of the unlawful distribution of controlled substances.

215. Va. Over 100 out-of-status aliens worked for the company and were charged for housing and transportation to and from jobs. followed by two years of supervised release. only approximately $4. Li and co-conspirators Fajun Zhang and his daughter. the defendant and his co-conspirators engaged in 63 cigarette transactions with ATF undercover agents from whom they purchased 137. through June 9. meaning. Although the client businesses paid over $6. 2009.8 million to Shakhanov and others on behalf of all workers. .000 bribe to pay a Jersey City Housing Department property improvement field representative. 2010. a Cincinnati company which leased out-of-status alien employees to hotels. Altman admitted that he engaged in approximately 15 transactions between May 2007 and July 2009 in which he accepted checks and returned cash. On December 21. and was order to pay $4. along with co-conspirators. out of legal status. three years supervised release. and was ordered to pay $4.439 in restitution.223 cartons of contraband cigarettes. between approximately 1999 and 2001. based on the employee hours worked.9 million was paid as wages to the workers. non-profit entities to wash approximately $668. Fla. Li pleaded guilty to one count of money laundering. thereby converting themselves to out-of-status. 2011. Altman arranged for payment of a $20. in Norfolk. of Delray Beach.. The term outof-status alien refers to aliens who had lawfully entered the US but had exceeded the authorized terms of their stay.593. Yakov Shakhanov.378 in restitution.405. in Newark. Shakhanov ran the Cleveland and Pittsburgh franchises of ARRA Corporation. Cigarette Smuggler Sentenced to Prison On March 29. In September 2010. It was further part of the conspiracy that Li and Fajun Zhang knowingly conducted financial transactions affecting interstate and foreign commerce which involved the proceeds of unlawful activity in that they used the proceeds of selling contraband cigarettes to purchase additional contraband cigarettes. three years of supervised release. and later in 2005. less a fee for laundering the money.. were involved in a scheme to purchase contraband cigarettes in Virginia and Maryland that they would sell to purchasers in New York and New Jersey for the purpose of evading state and local taxes in those states. Mei Zhang was sentenced to two years on probation and ordered to pay $4. 2011. On that same date. in Pittsburgh.000 in dirty checks. Mei Zhang. N. Fajun Zhang was sentenced to 48 months in prison. Yong Jin Li was sentenced to 36 months in prison. from June 11. Altman pleaded guilty to conspiracy to obstruct commerce by extortion under color of official right and conspiracy to launder money..J.876 in restitution. Shakhanov was also ordered to forfeit cash and property to the United States. 2011. 2010. In total. According to court documents. According to the Indictment. Shakhanov paid royalties to ARRA.New Jersey-Based Real Estate Developer Sentenced for Money Laundering and Corruption On March 31. Moshe Altman was sentenced to 41 months in prison. was sentenced to 33 months in prison followed by three years of supervised release on his conviction of conspiracy to harbor illegal aliens and conspiracy to launder monetary instruments.. collecting approximately $109. used purported charitable. Florida Man Sentenced on Conspiracy and Money Laundering Charges On March 25. Pa. While managing these franchises. The money laundering charge arose from a scheme in which Altman. According to court documents.300 in fees over the course of the scheme.

while running a daycare center out of her home. it applied for a loan through First Commonwealth Bank.Pennsylvania Woman Sentenced to Over Five Years for Laundering Drug Money On March 22. Jody Taylor was sentenced to 63 months in prison followed by three years of supervised release on her conviction of money laundering. Affordable Housing's purported purpose was to purchase homes.. who was then a fugitive from related drug charges in Allegheny County. a then newly formed not for profit entity. former member of New Castle City Council. the Lawrence County Housing Authority. Four of the seven properties were owned or associated with DeRosa. Affordable Housing hired Robert Ratkovich.000 for each trip. and ordered to pay more than $300. Ratkovich and Felasco funneled some of the money from the housing schemes through a series of transactions to Felasco's attorney who did not know that the money was illegally obtained funds. In 2004. Pennsylvania Man Sentenced for Bank Fraud and Money Laundering On March 22. the son of one of DeRosa's friends. Taylor also wired drug proceeds to various nominees in the Dominican Republic intended for her sister. and then rent or sell them to the elderly or disabled. 2011. Pa.000 in restitution. Two of the other properties were owned by DeRosa's cousin. followed by three years of supervised release. DeRosa. New Jersey. Jr. Staph. Many of these homes were in dreadful condition. First Commonwealth financed the majority of the purchases through a $250. and Affordable Housing contributed approximately $90.. On March 6. a search warrant was executed at Taylor's residence where $102. 2008. among other things. In summary.000 to $200. at that time. either lent or made a grant of $200.000 toward the purchases. and the seventh property was owned by one of DeRosa's longtime friends. under the direction of then Lawrence County Treasurer Gary Felasco. Affordable Housing lacked sufficient funds to purchase these homes.000 loan. Angie Morgan. According to information presented to the court. That individual then forwarded money to Felasco's attorney. in Pittsburgh. According to information presented to the court. 2011.000 to Affordable Housing of Lawrence County. and Ratkovich recommended these homes despite the availability of homes in better condition and for less money. The idea of depositing the money into the .535 in drug proceeds were recovered. Pa.. Ratkovich. Ratkovich recommended that Affordable Housing purchase seven properties. and therefore. Nicholas DeRosa. Felasco was. the president of New Castle City Council and a maintenance employee for the Lawrence County Housing Authority. the now retired Assistant Superintendent of the New Castle Area School District. fix them up. between 2005 and approximately June 2008. Pa. In September 2006 Affordable Housing auctioned all but one of the properties. the co conspirators arranged for cash from the transactions to be deposited into the account of an individual who ran a business that received cash receipts. was sentenced to 41 months in prison. After Affordable Housing paid Ratkovich approximately $60. of New Castle. facing state corruption charges. As far as the money laundering conspiracy charge. Taylor financed trips to Newark.. through Ratkovich. was to search for suitable homes for Affordable Housing to purchase as part of its purported mission.000 in consulting fees. where drug couriers obtained funds for heroin purchases from Taylor. submitted fraudulent appraisals of the properties that drastically overstated the values of the homes. in Pittsburgh. often $100. Anthony J. First Commonwealth received pennies on the dollar when Affordable Housing auctioned off the properties. By March 2006. Affordable Housing defaulted on the loan.

2009. Evidence during the trail proved that from 2002 until about July 6. and used the funds for his personal benefit. and try to make it look like legitimate money.476.000. Kenneth M.. McMinnville.769 in restitution..129 in restitution to the Internal Revenue Service. goods. According to court documents. Ill. 2011. was sentenced to 41 months in prison. Treasury. three years of supervised release. of approximately $407. and one count of money laundering. Filing False Tax Returns and Money Laundering On March 15. and merchandise.. Campbell used the funds to purchase services. Asad withdrew cash from Sheridan Liquors bank account by writing checks payable to cash which were structured to avoid the reporting requirements. Tennessee Resident Sentenced in Embezzlement Scheme On March 21. a jury convicted Asad of conspiracy to structure and unlawful money structuring of approximately $4. and ordered to pay $119. Stewart Pharmacy. she devised a scheme to defraud her employer.4 million in monetary transactions to avoid reporting requirements related to the business practices of WISAM 1 Inc. in Chattanooga. Best. Best further admitted that he filed false income tax returns for the federal tax years 2002 through 2006. Tenn. Sheridan Liquors primary business was the sale of liquor and other products. Mohamed Nimer Asad was sentenced to 36 months in prison. 2011.account of this individual was to disguise the illegal nature of the funds and its connection to them. Jr. Liquor Store Operator Sentenced for Structuring On March 11. structured cash withdrawals from the business s bank account for the purpose of evading the requirement of filing currency transaction reports with the U. ordered to pay a fine of $250. Arizona Man Sentenced in Investment Fraud Scheme . doing business as Sheridan Liquors. resulting in failure to pay more than $80. filing false income tax returns and money laundering.000. In June 2010. Glenna R. She embezzled cash and money orders from her employer which she then converted into her own personal use.. The government presented evidence that Asad. Stewart's Pharmacy. Campbell. and other luxury items. jewelry. Inc. Best admitted that from 2002 to 2006. who operated not-for-profit organizations that served the developmentally disabled. Ill. and ordered to pay $1. of McMinnville. including an Allegro motor home. was sentenced to 30 months in prison. vehicles... Tenn. Tennessee Titan football tickets.000 from the organization and that he transferred the funds to non-organization bank accounts which he controlled. in Urbana. followed by two years supervised release. however the government presented evidence that the business cashed checks for a fee without a license by the State of Illinois to operate a check cashing business. in Peoria. Illinois Man Sentenced for Embezzlement.000 in federal income tax.S. who was involved in the management and operation of Sheridan Liquors from August 2005 to March 2007. 2011.835 in addition to $100.000 in forfeiture already paid in cash to the victim.000 and $81. jet skis. he embezzled $667. Best. According to court documents. pleaded guilty in April 2010 to embezzling approximately $667. Tenn. one count of wire fraud. Campbell was convicted by a federal jury in November 2010 on six counts of mail fraud. a Tracker Pontoon boat.

2007. The daughter deposited the cashier's check into a savings account held in the name of Splash International.000 of the funds to a cashier's check made payable to the daughter of Cundiff s wife. 5 years of supervised release and ordered to pay more than $2.000 to finance approximately 150 concerts or concert tours. at the direction of Cundiff. cash withdrawals and payments on personal loans. New Jersey Man Sentenced to 71 Months in Prison for Scamming Victims with Phony Real Estate. Most of the funds were instead returned by the promoter to the Cundiffs within a short period of time under the guise that these repayments represented the net proceeds from some other concert or tour that was recently completed.On March 7. the Cundiffs.190. in Waco Texas. Arizona. followed by two years of supervised release.. then took the money for his personal use. In addition to the prison term. Cundiff pleaded guilty to one count of money laundering in November 2010. film. 2007. Gevers was sentenced to three years of supervised release and ordered to pay a total of $1. Because the alleged tour promoter had no association or contractual arrangements with any of the concerts or tours. Texas Methamphetamine Distributor Sentenced in Waco On March 2. 2010. Gevers pleaded guilty on November 9.000.. and ordered to pay $313. including payments to credit card companies.5 million and a net worth of more than $14 million.. converted $230. a company established solely to secure "investment" financing for concerts and tours. he used it for personal expenditures. Dezert Heat Worldwide. 2011. the daughter obtained a cashier's check in the amount of $57. providing false tax returns and false financial statements to potential investors. distribution of a . Cundiff s wife. the investor funds given to the alleged tour promoter from the Cundiffs were not used as represented to the victim investors.180 to the personal checking account of Cundiff s wife. From in and between January 25. 2007 and February 20. According to documents filed in this case and statements made in court. However. and obtained no less than $50. the alleged tour promoter made four intra-bank electronic transfers totaling $313. Instead. On March 28. James S. 2011. also was used to obtain victim investor funds to finance purported concerts and tours. or more. in Phoenix.500 in fines for money laundering. and television ventures.136 that was used to purchase Cundiff s residence located in Chandler. 2011. Gevers fraudulently obtained more than $1. Cundiff and his two sons operated TransCapital LLC. in Trenton. to an Information charging one count each of wire fraud and money laundering.J. LLC. Those documents purported to show he had an adjusted gross income of more than $1.5 million dollars as a result of the scheme. N. through TransCapital or Worldwide. Gevers solicited loans allegedly to fund real estate ventures and movie and television productions.180 in restitution and a $100 special assessment. 2007. a joint venture among the Cundiffs and an alleged tour promoter. entered into loan and event funding agreements with more than 250 victim investors. From on or about August 2004 through on or about March 2007. The next day. Martin Gevers was sentenced to 71 months in prison for a scheme in which he sought investments purportedly for real estate. LLC.272 in restitution to 11 victims of his scheme. According to his plea agreement. Film and Television Investments On March 10. Gevers did not invest the money he received. Investors were told they would receive returns ranging from twenty-five to seventy percent. March 29. Cundiff was sentenced to 24 months in prison. Ariz. John Milligan was sentenced to 262 months in prison.

Mark Christian. According to documents filed in federal court and statements Starr made at his guilty plea proceeding. 2011.312. Michigan Home Builder Gets Jail Time in Mortgage Fraud Scheme On February 22. The straw buyers generally had good credit ratings. Members of the organization distributed in excess of 300 pounds of methamphetamine. N. To satisfy his restitution obligation. he assumed total control over his clients finances by collecting their earnings.7 million in restitution for mortgage fraud. from 2002 through 2005. Under the terms of his plea agreement. After the loans were approved by the . According to court documents. Milligan was one of fourteen people indicted in this investigation.782 in actual or intended loss. A final restitution amount will be determined at a later date. owner of Edgewood Property Management recruited and paid individuals to act as straw buyers in fraudulent mortgage loan transactions. Starr pleaded guilty in September 2010 to one count of wire fraud. 2011.. Evidence presented at trial revealed that from July 2007 until the spring of 2010. and paying their bills. These false documents were used by the straw buyers to support the fraudulently inflated asset and income information submitted on their mortgage loan applications."). including fictitious W-2 forms and pay stubs. and by causing funds to be transferred from the attorney escrow account for his benefit.112. Some members of the organization also placed assets in nominee names to hide the true ownership of those assets. and lacked the qualifications necessary to purchase the properties. Milligan and others distributed in excess of 300 pounds of methamphetamine. three years of supervised release and ordered to pay nearly $1. He further agreed to pay restitution in the amount of $29. Starr & Company. Starr made material misstatements and/or material omissions in an effort to fraudulently induce his clients to make certain investments. LLC and Starr Investment Advisers. The methamphetamine was often fronted to other distributers which is the practice of buying and selling methamphetamine on consignment. and made investments on their behalf and for their benefit. Starr participated in fraudulent schemes that involved more than $33 million in actual or intended losses. In some cases. advised them about their taxes. According to court documents. Second. Starr has already forfeited his interest in a Luxury Apartment. between March 2009 and April 2010. while serving as an investment adviser in Manhattan. "Starr & Co.Y. Through his two companies. Inc (MCI). but not enough income. The scheme involved homes built by Cracchiolo. in Manhattan. paid their bills. Ted Carter participated in the conspiracy by creating false documents. Starr served for decades as a financial planner and investment adviser to numerous clients including high net-worth businessmen and well-known celebrities. First. in Detroit. between 2005 and 2010. one count of money laundering. Mich. Kenneth Starr was sentenced to 90 months in prison in connection with a multi-million dollar scheme to defraud his clients.controlled substance and other charges. Financial Advisor Kenneth Starr Sentenced to 90 Months in Prison On March 2. Giuseppe Cracchiolo was sentenced to six months in prison. investing their savings. Atiim Collins. Between 2005 and 2010. and one count of fraud by an investment adviser.. Starr managed his clients' finances. Romeo. Starr stole millions of dollars from his clients by directing unauthorized transfers of funds from his clients' accounts to one of two attorney escrow accounts. Starr admitted that he was responsible for $33.782. six months home confinement. LLC (collectively. through his company.

In addition. Inc. Cracchiolo used MCI to receive and disburse the illegally gained proceeds. three years of supervised release and ordered to pay nearly $374. From October 2005 through January 2007. in the Lawrence area. According to court documents. Russell D'Anton was sentenced to 24 months in prison. Arias-Cartagena pleaded guilty to seven separate counts of laundering drug money.. On December 6. In July 2010. Over the course of the next 14 months. followed by two years supervised release. The money was then picked up in the Dominican Republic (minus AriasCartagena's percentage fee) by a DEA undercover agent several days after being given to AriasCartagena. AriasCartagena then used his shipping business.1 million in fraudulent mortgage loans. 2010. purposely failing to report the value of the kickbacks as income on his personal federal tax returns. in Boston. Lawrence Man Sentenced to 48 Months for Laundering $315.000. D'Anton also took steps to conceal the payments from his employer. 2011. checks and in-kind payments. in Oklahoma City. the CW made six separate deliveries of money represented to be drug proceeds to Arias-Cartagena and his co-conspirators. Arias-Cartagena s guilty plea arose from a joint IRS/DEA investigation beginning in 2007. he arranged to have the illegally obtained loan proceeds transferred back to borrowers and others without the knowledge and approval of the lending companies. They must also pay restitution. Dover was employed as an Accounts Receivable Manager by Comprehensive Medical Billing Solutions. D'Anton and a co-conspirator used their positions as executives to direct business to vendors who paid kickbacks in the form of cash. in Trenton N. On December 3. from at least as early as 1999 through 2008.000 in Drug Money On February 16. Melissa Dover was sentenced to 27 months in prison.J. followed by two years of supervised release for conspiring to defraud the company by accepting more than $1 million in kickbacks in exchange for awarding contracts to vendors. Mass. Embezzlement by Former Billing Service Employee Results in 27 month Sentence On February 15.lending companies. Okla. Carter was sentenced to one year and a day imprisonment. law enforcement authorities made extensive use of a cooperating witness (CW). totaling approximately $315. 2011. 2011. involving the laundering of drug money. during the conspiracy. All of the properties involved in the fraud went into foreclosure resulting in approximately $2. Collins was sentenced to five years probation.000 in restitution for tax fraud and wire fraud. Dover illegally diverted money from CMBS bank account to her personal credit and debit card accounts. Freddy Arias-Cartagena was sentenced to 48 months in federal prison for his role in laundering $315. In that investigation. (CMBS) and had authority to refund overpayments using a credit card terminal. with one year to be served at a residential reentry center and six months home confinement. Dover pled guilty to filing a false tax return for the 2006 tax year.5 million in losses to the lenders. . Former President and CEO of Charlie Brown's Restaurants Sentenced to Two Years in Prison for Fraud Conspiracy and Tax Evasion On February 10. This scheme resulted in the approval and disbursement of over $4. ARIAS Shipping & Towing to wire the purported drug money to the Dominican Republic. According to court records. Cracchiolo admitted that.. 2010.000 in drug money.

which would then be sold and the proceeds split between the investors and JMI. Mo.J.670 to 21 individual victim investors for using the Internet to promote a real estate scheme in which investors lost more than $1 million. Eliasof obtained mortgage loans for various borrowers to purchase two. Eliasof conspired with several others to originate mortgage loans fraudulently and to launder proceeds of the loans during 2004 and 2005. 2006.038. Inc. or manage the properties because Eliasof would do that for them. in Newark. Sheehan pleaded guilty to conspiracy to commit mail and wire fraud as well as a money laundering conspiracy. Sheehan used his businesses. Eliasof began diverting checks from the closings to himself. 2010. Property-Flipping Scheme On January 31. In addition.578. by April 2004. When problems arose with keeping the mortgage loans current.569 in restitution in connection with a mortgage fraud and property-flipping scheme involving rental properties.and three-family homes. During the scheme. Sheehan used a Web site to solicit investments to purchase and rehabilitate single family residential homes. Investors Lost More Than $1 Million On February 7. In addition. Eliasof prepared contracts of sale that included fictitious deposits and down payments. 2011. Eliasof would arrange to pay them off by refinancing them with new. make monthly mortgage payments.. Eliasof pleaded guilty to one count of money laundering conspiracy. Eliasof used much of this money to cover carrying costs and to pay kickbacks and bribes. Eliasof induced the borrowers to buy properties by claiming that the properties would be good investments and that they would not have to pay deposits and closing costs. knowing that the borrowers would not qualify for the loans. Investors also attended investment seminars hosted by Sheehan. Eliasof told borrowers they would receive monthly cash payments and a percentage of future sales profits when the properties were sold.. California Man Sentenced on Money Laundering Charges . According to court documents. John Michael Sheehan was sentenced to 64 months in prison and ordered to pay $1. Eliasof grossed millions of dollars in real estate commissions and payments to entities that he controlled for supposed repairs to the properties. to defraud investors who paid to purchase and rehabilitate residential properties from June 1. 2011. fraudulent mortgage loans. The Web site promoted John Sheehan (using the name of John Michael ) as the King of Bling and promised investors a 10 to 18 percent return within a year on a minimum investment of $15. Although investors were told that they would be the sole investor on each property. 2005.. LLC. John Michael Investment. Michael Eliasof was sentenced to 40 months in prison. Former New Jersey Real Estate Agent Sentenced to 40 Months in Prison for Role in Mortgage Fraud. (JMI) and 3MOM.000. three years of supervised release and ordered to pay $8. N. To help borrowers qualify for mortgage loans. to hide from the lenders how much money he was receiving from these transactions. in Springfield. He also placed money into their bank accounts to make them appear more creditworthy. Sheehan also admitted that he diverted some of these investments and did not actually use the money to purchase or rehabilitate the properties. On August 3.Springfield Man Sentenced for Internet Fraud. Sheehan admitted that he collected investments from multiple investors for the same properties. from 2002 through 2005. through June 30.

North Carolina Attorney Sentenced for Mortgage Fraud On January 24. The builder would sell the property to the buyer at the inflated price and the lender would make the mortgage loan on the basis of the inflated price. Kansas City.. in Charlotte.000 and $500. The mortgage fraud cells would agree with a builder to purchase a property at a set price. N.000 as the result of the death of her son. Mo.. 2011. and Lee s Summit. He then wrote a check for $13. The proceeds were from a woman who received approximately $200.On January 27. Eric Rabicoff was sentenced to 51 months in prison and ordered to forfeit $50.000 above the true price. Smith and other attorneys received the proceeds of the fraud into their trust accounts and distributed the funds to the members of the mortgage fraud cells. The difference between the inflated price and the true price would be distributed among the members of the cell. Rabicoff and his co. followed by three years of supervised release. cell participants caused loan packages to be prepared and submitted to lenders that contained false and fraudulent information. 2011.conspirators arranged for straw buyers to purchase homes in Olathe. Inc. They provided false information including employment. Kansas Man Sentenced to Federal Prison in $3 Million Mortgage Fraud On January 25. They obtained financing for the deals by submitting false loan applications to lenders.000 for their own benefit. The scheme also called for contract prices to be increased and for conspirators to receive money by submitting false invoices to title companies for improvements on the houses that never were made. Raymond and Robert Brogan obtained approximately $163.000 for money laundering. The cell would then arrange for a buyer to purchase the property at an inflated price. Rabicoff admitted he was the leader of a scheme to defraud mortgage lenders that resulted in more than $3 million in loans to straw buyers who were not qualified to receive them. Smith was an attorney with an office in Waxhaw. Brogan assisted his nephew. Smith served as a closing attorney for two mortgage fraud cells operating in Union and Mecklenburg Counties in North Carolina. 2011. According to court documents. Mo. the money was used to purchase a number of items including two LG model 77 and 45 flat screen televisions. income and rent history in order for the straw buyers to obtain loans. At the time he did this. According to the indictment. a United States Marine. Calif. The memo portion of the check written to Norcal states: Supplies and office equipment. Robert Brogan was sentenced to 37 months in prison. Troy Anthony Smith was sentenced to 18 months in prison and three years of supervised release.539 to Norcal Distributing.. Robert Brogan pleaded guilty in February 2010 to conspiracy to commit money laundering.C. According to court documents. Raymond Brogan was sentenced in October 2009 to 33 months in prison and ordered to pay $190.900 of the fraudulently obtained money into his bank account. in Sacramento. and ordered to pay $162.. To induce lenders to make the mortgages. North Carolina. Kan. Kan. On December 22. that were for sale by owners. In fact. Robert Brogan deposited $31. Rabicoff directed conspirators in recruiting straw buyers and assembling fraudulent . he was aware this check had been fraudulently obtained by Raymond Brogan from the victim s checkbook. in Kansas City.747 in restitution to the victim. In all. which was usually between $200. Raymond Brogan..290 in restitution. Smith pleaded guilty to two counts of mortgage fraud conspiracy and two counts of money laundering conspiracy. 2008. in controlling fraudulently obtained life insurance proceeds.

2010. knowing that the borrowers would be putting no money down to purchase the properties. from 2002 through 2004. not knowing that the company made no actual improvements to the properties.375. N. Rabicoff committed the crime of money laundering by transferring $50. In addition to the prison term. Antonio Perez.J. along with others. Fla. Gerald Carti. Carti was sentenced to three years of supervised release and ordered to pay $1. Perez admitted to conspiring to make corrupt payments to foreign government officials to secure business advantages for the telecommunications company from Telecommunications D Haiti. in Newark. According to court documents and statements made in court. of Miami. in Miami. Carti conspired with several others to obtain mortgage loans for various borrowers to purchase two.and three-family homes in Paterson. Locator Services. a company Rabicoff controlled. N.000 in money criminally derived from the conspiracy from his MSM account to another conspirator s account held in the name of Cappo Investment Agency. Former Controller of a Miami-Dade County Telecommunications Company Sentenced for His Role in Foreign Bribery Scheme On January 21. 2011..028. under his direction. the owner of J. submitted false invoices to title companies for purported improvements made to the properties.851 in bribes to former Haitian government officials while serving as an intermediary for three private telecommunications companies. On July 30.375. Antoine admitted accepting .J.. Former Loan Officer Sentenced for Role in Mortgage Fraud. the former director of international relations for Telecommunications D Haiti and Juan Diaz. Perez pleaded guilty on April 27. Property-Flipping Scheme On January 24. checks and ledgers. 2011.034. Carti helped arrange their repayment through new fraudulent loans. even though the borrowers had not made any down payments. 2006.956 in restitution. Carti further permitted the borrowers to submit loan applications falsely stating that they had made substantial down payments and allowing the mortgage company to fund the loans. in violation of Foreign Corrupt Practices Act (FCPA) and money laundering laws. 2009. He and the conspirators. The invoices were submitted in the name of MSM Enterprises. On April 5. to conspiring to making corrupt payments for a Miami-Dade County telecommunications company to officials of the Republic of Haiti s state-owned national telecommunications company. At the time of the closings of the loans Carti received as a commission 50 percent of the fees that the mortgage company received for each loan. The title companies paid MSM Enterprises from the loan proceeds at closing. Perez and his co-conspirators concealed the bribe payments in part by conducting financial transactions that involved wiring money to shell companies and mislabeling invoices. When many of these loans began defaulting. Perez was also ordered to serve two years of supervised release and to forfeit $36. Diaz was sentenced to 57 months in prison after pleading guilty to paying and concealing $1. was sentenced to 27 months in prison for wire fraud and money laundering conspiracy in connection with a mortgage fraud and property-flipping scheme involving rental properties in Paterson. In his guilty plea. Perez conspired with Robert Antoine.D. Telecommunications D Haiti. According to court documents. was sentenced to 24 months in prison for participating in a conspiracy to pay and conceal bribes to former Haitian government officials. Perez admitted that he was personally involved with two bribe payments totaling approximately $ files.

. Father and Daughter Sentenced in Conspiracy to Purchase and Sell Contraband Cigarettes On December 21. Trimble transferred those same funds to his personal investment account. in Oklahoma City. an investor gave Trimble $2. Camp Fallujah. Fuller served as a Project Purchasing Officer for the Commander s Emergency Response Program (CERP) assigned to the Fifth Civil Affairs Group. While in Iraq. Mark Trimble was sentenced to 120 months in prison. Mei Zhang was sentenced to two years probation of which 12 months will be served on home detention with electronic monitoring. bank accounts. Trimble pleaded guilty to money laundering on April 12. Fajun Zhang was sentenced to 48 months in prison.8 cents per stamp.000 into U. In this capacity. 2010. Chase Bank and the Navy Federal Credit Union. LLC. Fuller is a Marine Major who was deployed to Iraq from February 15. CERP funds were distributed to the Iraqi contractors in the form of brand new $100 United States Currency notes. and pleaded guilty on March 12.S.000. Five days later. Ariz. The funds were then deposited into the bank account of Phidippides. Fajun Zhang and his daughter. of Yuma. Mark Trimble owned and operated Phidippides Capital Management. aka Michelle. Fuller made multiple cash deposits under $10. Soon after returning from his deployment in Iraq. the co-conspirators would pay for a portion of the cost of the contraband cigarettes using . 2007..bribes.405. 2011. in Phoenix. including bribes from Diaz. negotiated contract terms. 2010.000 and was told it would be invested in various securities through Phidippides. to September 27.S. Ariz. in Norfolk. Currency notes.000 of the funds to his personal bank account. 2007. and ordered to pay $4. were sentenced for their roles in a conspiracy to purchase and sell contraband cigarettes. Okla. was sentenced to 12 months and a day in prison for his role in illegally depositing over $440. Between October of 2005 to April of 2006.378 in restitution. According to court records. According to court documents. Fuller began making cash deposits with brand new $100 U. Fuller made 91 cash deposits totaling over $440.000 into various bank accounts to evade federal currency reporting requirements. 2005. to money laundering conspiracy. She pleaded guilty in September 2010 to one count of conspiracy.000. Former Investment Manager Sentenced to 10 Years for Laundering Investor Funds On December 21. and ordered to pay $4. followed by three years of supervised release.. 2010. 2010.. on May 17. Fajun and Mei Zhang and others drove to the Hampton Roads region in Virginia on a regular basis to purchase contraband cigarettes and sell them at a profit. on May 9. Antoine was sentenced to four years in prison. Then. an Oklahoma limited liability company with offices in Edmond and Oklahoma City.000 into bank accounts with Bank of America. 2005. the defendants sold counterfeit Virginia cigarette tax stamps at a price of 3.876 in restitution. Trimble transferred $1. In addition. two years of supervised release and ordered to pay more than $9. Va. Marine Major Sentenced On Financial Crimes On January 10. Mei Zhang. Fuller identified and selected reconstruction projects. As stated in the indictment.215. and verified the completion of projects. awarded reconstruction projects to Iraqi contractors.000.000 in restitution for money laundering. The true value of the Virginia cigarette tax stamp is 30 cents. Marine Major Richard Fuller. He pleaded guilty in September 2010 to one count of money laundering.

2010. Kholstinin will serve three years of supervised release and pay $1. permits. he defrauded certain mortgage lenders by arranging for the fraudulent purchase of condominiums by various unqualified buyers at prices exceeding the true values of the units. 2010. to wire transfer at least $124. Ariz. to bank accounts held by victims in Oregon. show that he structured the transfers and made the transactions at multiple locations on the same date. also agreed to forfeit $80.000 to Wells Fargo Bank and over $687. Thielen admitted that from August of 2006 through April of 2007.820. In order to obtain those funds. and fraud and misuse of visas. 2009. According to his plea agreement.977. Fife. and other documents. Receipts for 47 of the wire transfers. who were mortgage brokers.. Those applications contained false information about buyer income and credit worthiness. In addition. Real Estate Agent Sentenced to Prison for Fraud On December 13. According to court documents. Kholstinin took stolen bank funds from Anderson. In his plea agreement.382 in restitution. the recruited buyers paid for the condos entirely with borrowed funds. Kholstinin. The wire transfers were all made at non-bank locations such as grocery stores. between May 2006 and May 2007. along with two automobiles. . received substantial kickbacks out of the funds borrowed from the mortgage lenders. Fife pleaded guilty to wire fraud and conspiracy to commit money laundering. In late May 2007. 13 condos were purchased by unqualified buyers. Thielen and his accomplices. Brett Thielen was sentenced to 27 months in prison on one count of mortgage fraud through the use of interstate wire and one count of engaging in a monetary transaction in criminally derived property. 2010. the buyers allowed some of Thielen s accomplices. they falsely indicated the value of the condos. Eduard Anatolyevich Kholstinin (aka Edward Belozor) was sentenced to 22 months in prison to run concurrently with his sentence in a New York State case. From September 2006 through April 2007. which was not made known to the lenders. and retail stores. an ATV and computers. in Portland. Roy Fife was sentenced to 30 months in prison. In addition. 2010. which he created. Ore. California to Oregon where he used phony driver s licenses. The Zhangs and others purchased over $3 million in contraband cigarettes. and ordered to pay restitution of $1.151. California and elsewhere. resulting in losses to mortgage lenders in excess of $2. to fill out loan applications on their behalf.920 and $2. five years of supervised release. via hundreds of ATM machines in California and elsewhere. pharmacies. This scheme resulted in a loss of over $463. According to Thielen s plea agreement. in Tucson.counterfeit goods and counterfeit Virginia cigarette tax stamps.5 million. as well as the buyers.000 to various individuals in Russia.000 to Citibank.000 from the sale of gold coins. in Minneapolis. Prolific Identity Thief Sentenced For Stealing $1. Kholstinin used fraudulent credit cards to gain unauthorized access. to not trigger the filing of Suspicious Activity Reports or Currency Transaction Reports with the Internal Revenue Service (IRS). Minn. Minnesota Man Sentenced for Mortgage Fraud On December 20. Washington.870.. On September 9. structuring of monetary transactions. a Russian citizen. On December 15.. purchased with currency for between $1. which they attempted to sell in New York and New Jersey. Kholstinin pleaded guilty to one count each of interstate transportation of stolen property.15 Million On December 15.

000 in cashier's checks from Chris Nero and his surrogates outside the close of escrow. 2010. and the intent to occupy the subject properties as primary residences. Fife did not receive documented real estate commissions even though he was a licensed realtor at the time of the transactions. Davis. including a 1967 Cessna--U206B. Rabicoff and others to defraud mortgage lenders and obtain more than $3 million in loans to straw buyers who were not qualified to receive them. As part of the scheme and to hide his involvement. The scheme also called for contract prices to be increased and for conspirators to receive money by submitting false invoices to title companies at closing. was sentenced to 18 months in federal prison. he knew some of the buyers were submitting materially false loan applications that included false statements regarding assets. was sentenced to serve 180 months in prison for conspiracy to distribute more than 1. Using his business relationships with local mortgage brokers. in Kansas City. Weinstein was the leader/organizer of a drug trafficking operation with ties to Nebraska. Kong Bun Ly. in Omaha. Agents in Nebraska and Arizona have seized over $400. LLC that purported to help people secure loans and real estate financing.045. and Rebecca Gelwix. money laundering and wire fraud. income and rent history. North Carolina. in Raleigh. of Omaha. 2010. Bora Ly. According to a Criminal Information filed on April 1. Kan. Mo. Kan. Lee A.. N. Neb. of Knightdale. of Olathe. Kimithi L. Fife received at least $225. Arizona. Omaha Man Sentenced to Prison On December 9.000 pounds of marijuana and 2.000 kilograms of marijuana and money laundering. of Raytown. Though neither Davis nor his business had any relevant brokerage license. Davis was charged with conspiracy to commit money laundering. California and Mexico. was sentenced to 53 months in prison and ordered to pay $2. of Des Moines.. to eight months.C. They admitted conspiring with co-defendant Eric M. participated in a "cash back" mortgage fraud scheme that also involved Chris Nero and others in Arizona. four defendants were sentenced on charges of taking part in a $3 million mortgage fraud scheme. They obtained financing by submitting loan applications to lenders that contained false information on employment. he assisted buyers in qualifying for mortgages. as part of this investigation. Further. Debora Saulmon. Weinstein.000 and numerous vehicles. At the time of his March 2010 arrest. of Kansas City. agents were able to attribute over 13. Mo. Chris Nero was previously sentenced to 58 months in prison for his role in the conspiracy and for tax evasion. liabilities. they collected a fee from the proceeds of the loans in an amount misrepresented to .a licensed real estate agent. Each of the defendants pleaded guilty to one count of conspiracy to commit bank fraud. Fife admitted that he knew some of these buyers were being paid to be straw buyers and were purchasing multiple properties that they were not going to live in. 2010.. Davis operated a business known as Pro Bowl Brokerage and Pro Bowl Consulting. Two defendants in the scheme have been previously sentenced and four more await sentencing.. Four Sentenced In Mortgage Fraud On December 7. Iowa. All disbursements at the close of a property must be disclosed to the lender.854 in restitution. North Carolina Man Sentenced on Money Laundering Charges On December 1.. 2010.9 million dollars to Weinstein s drug operation. to 15 months. to 12 months..

R. Jr.. Greg Stevenson sentenced to 97 months. Davis and others secured financing for themselves and others based on materially false and fraudulent representations to lending institutions. Terrell Ford sentenced to 135 months. in Kansas City. Two conspirators. the Real Estate Group. Enterprises. The following co-defendants have been sentenced in the case: y y y y y y y y y y y y Wildor Washington. Appraisers. Many of the real estate appraisals submitted by Ragland and the conspirators contained inflated property values and forged signatures of licensed appraisers whose identities had been stolen. 2010. According to court documents. In his plea. Scott Alexander sentenced to 12 months and a day. and others to obtain mortgage loans by submitting inflated property appraisals and other false information to lenders. Ryan Miller sentenced to 135 months. Liberty Escrow and AMSTAR Mortgage. he admitted that in 2003 and 2004 he conspired with co-defendant Wildor Washington. Amanda Childs sentenced to 12 months and a day.T.F. Robinson-Franks sentenced to 36 months.M. Ragland pleaded guilty to one count of wire fraud and one count of money laundering. J. Davis then engaged in financial transactions with these ill-gotten gains.the victim lenders. Inc. During the scheme. Mortgage Fraud Defendant Gets 14 Years in Federal Prison On November 19. sentenced to 200 months. Maurice Ragland was sentenced to 168 months in prison for mortgage fraud. . Kara E. Atlantic Mortgage. T. Jr. Eryc Reese and Lydell Flowers.E.. Victoria Bennett sentenced to 24 months. Les Saunders sentenced to 108 months. are awaiting sentencing. Ragland and other conspirators acted as home buyers and submitted loan applications containing false income and asset information.. as well as false information about the appraiser of the property and the intended use of the property. In addition. The conspirators targeted borrowers with low incomes and little knowledge of the real estate industry. Ron Brown sentenced to 121 months. They urged borrowers to apply for real estate loans that were processed through various entities the conspirators controlled including Heritage Financial Investments. Emma Holmes sentenced to 12 months and a day. Terrence Cole sentenced to 37 months. Kan. Legacy Enterprises.

specializing in residential roofing. 2006. receive so-called promissory notes or time notes.000. Like the earlier scheme. She further admitted that. Kennedy pleaded guilty in March 2009 to one count of wire fraud. Philip Russell. Kennedy also admitted that. were recently convicted after a jury trial of multiple counts of wire fraud. was sentenced to 12 months and one day in prison to be followed by two years of supervised release. in Nashville. They await sentencing.Leader of Multi-Million-Dollar Investment Fraud Sentenced to Over 11 Years in Prison On November 12. their new funds would be used to facilitate Kennedy obtaining her purported inheritance. Conn. Gagnon pleaded guilty on July 22. was sentenced to 136 months in prison for her part in an elaborate investment-fraud scheme. Between September 6 and October 6.. contrary to her representations to the investors. Kennedy also admitted that. no such real estate opportunities had ever existed. of Winsted. and that those investors would receive an additional return on their new investment from the inheritance funds. Two of Kennedy s co-defendants her husband. in Hartford. one count of mail fraud. Gagnon was a self-employed general contractor. thus encouraging investors to extend the deadline for receiving the return of their original real estate investment. individuals will often structure their currency transactions so that no single transaction exceeds $10.000. Kennedy provided extensive details of investment-fraud schemes spanning several years which included several co-conspirators and at least two separate schemes to defraud investors. Karl Gagnon. Gagnon deposited approximately $277. in fact. Sheila Kennedy. A third co-defendant. instead of investing the money she received from investors. she and co-defendant Philip Russell solicited investors to invest in additional fraudulent real estate opportunities. who was scheduled to be tried with Kenneth Kennedy and Ann Scarborough.306 at various branches of Northwest Community Bank and . and her former business partner Ann Scarborough. Tenn. Federal law requires all financial institutions to file a Currency Transaction Report (CTR) for transactions that exceed $10. 2010. According to court documents and statements made in court. of Clarksville. Kennedy admitted that. between 2005 and 2009. To evade the filing of a CTR. Owner of Residential Roofing Company Sentenced for Illegally Structuring Cash Deposits On November 15. she falsely represented to investors that she was about to receive an extremely large inheritance from which she would guaranty each investor s investment. At the plea hearing. she converted the funds to her own personal use and for the benefit of her co-conspirators.. a company operated by Kennedy and Scarborough. Kennedy admitted that she used the funds received from these investors for her own and other s benefit as well. and two counts of money laundering. 2010. and in return. In addition. The real estate scheme required that investors give Kennedy and Scarborough money often in the form of checks payable to ASK. and money laundering. 2010 to charges of structuring cash transactions for the purpose of evading federal reporting requirements. failed to appear and remains a fugitive from justice. LLC. as a further inducement. Kennedy admitted that between 2005 and 2006. Kenneth Kennedy. she never intended to invest the funds in real estate and. she and co-defendant Ann Scarborough solicited investors to invest in fraudulent real estate opportunities. mail fraud. doing business as Karl Gagnon Construction. Kennedy promised certain investors that if they made a new investment.

in Las Vegas. to Medellin. three years of supervised release. of Eaton. drug distribution. were sentenced to 188 months and 151 months. The organization also used stored value cards. Nunes was charged in June 2009.000 fine and forfeit $2. Colombian National Sentenced to 80 Months in Prison in Money Laundering Conspiracy On November 12. Securities Attorney and Former Stock Broker Each Sentenced to More Than 12 Years in Prison for $43 Million Pump-and-Dump Stock Manipulation Scheme On October. in nearly every state across the nation. According to the indictment. in Mobile. Branch. Colorado. which function like debit cards and enabled cardholders to deposit U. to be withdrawn later from banks in Medellin as Colombian pesos. Shawn Ignatious Nunes was sentenced to 24 months in prison. between April 2004 and December 2006.000 in exchange for distributing approximately 500 ecstasy pills in September 2008. Duque pleaded guilty in January 2010 to one count of conspiracy to commit money laundering. He will be deported upon completion of his sentence. The doctor signed the prescription form that Branch had prepared and faxed the form to Applied Pharmacy Services. Owner of Internet-based Business Sentenced in Anabolic Steroids and Money Laundering Conspiracy On November 3. APS filled and shipped the orders. Nunes received $2. Branch owned Infinite Health. securities fraud and money laundering. including teenagers.Webster Bank by making 29 separate cash deposits in amounts equal to or less than $10. was sentenced to 80 months in prison for his role in an international money laundering conspiracy.. Inc. David Gordon.. According to court documents. Okla. Colombia.000. 29. decided what mix of drugs would be prescribed and sold to the user. Clark and other . and solicited three doctors in Greeley. Francisco Dario Duque-Duque. who is not a physician.S. a securities attorney. a businessman and former stock broker. in New Haven. 2010. 2010. 2010.S. and ordered to pay a $3. According to court documents and statements made in court. which he knew were profits from illegal drug dealing. G. Colombia. of Medellin. The drugs were unlawfully distributed to hundreds of users. Branch. 2010. and money laundering conspiracy. Branch was sentenced to 87 months in prison and ordered to pay $4..200. and pleaded guilty on August 6. Man Sentenced to Two Years in Federal Prison for Laundering Money from Ecstasy Sales On November 5. Nunes previously received $200. in Tulsa. and Richard Clark. to one count of money laundering. a Colombian-based organization employed operatives in the United States and funneled millions of dollars in drug proceeds from the U. Gordon. Ala. Nev. Colorado. More than $7 million in drug proceeds were laundered through this scheme. Brett W. Gagnon had not filed federal income tax returns from 1999 to 2006. 2010. (APS)..600 in special assessments. an Internet-based business. Conn. respectively and ordered to forfeit more than $43 million for wire fraud. dollars into accounts locally. Many of the prescriptions included veterinary steroids. In addition. drug distribution to a person under age 21. In addition. According to the plea memorandum. was charged with drug conspiracy. to write steroid prescriptions for his customers.

and did in fact receive over $1.. He used hundreds of thousands of dollars of this stolen money for gambling. was also sentenced to three years of supervised release and was ordered to pay $754. Email and fax blasts promoting two companies. touted investment opportunities purportedly created by Hurricane Katrina..214 in restitution to the Internal Revenue Service (IRS). These blasts touted the respective stocks without accurately disclosing who was paying for the promotions. while under federal court supervision for his previous conviction for conspiring to make false statements to financial institutions relating to mortgage fraud. Lee Howlett filed corporate tax returns for shell companies he had previously established in Oregon. 2010. after which they conducted massive promotional campaigns in which unsolicited fax and e-mail "blasts" were sent to millions of recipients. Todd Howlett pleaded guilty to structuring. Ill. After being confronted with the phony refunds in October 2009. He had previously returned $341. The third company. The evidence at trial established that the conspirators obtained approximately $43 million in proceeds from the manipulation of the three penny stocks. Once the repayments were made. . formerly known as Pacific Peak Investments. In July 2009. to help carry out his scheme.000 to the IRS. Two companies based in Tulsa at the time of the scheme were among those whose stock was manipulated: Deep Rock Oil & Gas Inc. Lee Howlett enlisted the assistance of his brother. in addition to $285. Clark is the former chief executive officer of Global Beverage. Ore. is based in Glen Ellyn. National Storm Management Group Inc. In all. Lee Howlett attempted to defraud the government of over $1. For each of the three manipulated stocks. the defendants sell-off caused declines of the stock price and left legitimate investors holding stock of significantly reduced value.. Then they coordinated trading to create the appearance of an emerging market for these stocks.3 million in fraudulent refunds. This continued up to the time of his arrest in February 2010 by IRS agents. The defendants and their nominees obtained significant profits by selling large amounts of shares after they had artificially inflated the stock price. Lee Howlett repaid more than $340. They hid and "parked" their shares with various nominees. who pleaded guilty to filing false claims on June 30.275 to the IRS. omitted that the defendants intended to sell their shares. relatives or other entities that they owned and controlled. Todd Howlett." in which they manipulated three publicly traded stocks. Lee Howlett. Lee Howlett continued receiving and processing fraudulent refunds.026 being seized from his bank accounts.5 Million Tax Refund Scheme On October 28.5 million through the filing of two dozen phony corporate tax returns. such as friends. Lee Vinton Howlett was sentenced to 60 months in prison and Todd Martin Howlett to five years of probation for their roles in a fraudulent tax refund scheme. in Portland.conspirators devised a scheme to defraud investors known as a "pump and dump. and induced unsuspecting investors to purchase stock in the companies.. National Storm and Deep Rock Oil & Gas. Two Portland Men Sentenced in $1. Gordon and Clark executed the scheme by obtaining a majority of the free-trading shares of stock they intended to manipulate. also of Portland.000 currency withdrawals from a bank over two days to evade the bank's requirement to report the transactions to the IRS on a Currency Transaction Report. which involved him making four $5. using fraudulent and deceptive means to acquire the stock and/or remove the trading restrictions on the shares they obtained. 2010. and Global Beverage Solutions Inc. Lee Howlett began filing phony corporate income tax returns with the IRS and depositing the resulting refund checks.

Avasso. Although Rohm and Bess were aware that the checks were obtained through an insurance fraud scheme.288 in restitution. Donald Eugene Bess. Lucie. The losses from the fraud exceeded $5 million. influence. 2010. According to court documents. followed by three years of supervised release. Ray Eugene Rohm. Alfred P. from which he would transfer money for his personal benefit. in Atlanta. they deposited the checks on his behalf and collected a fee in return for conducting the financial transaction. and proceeds from the sale of securities in APP. in Charlotte. control. Rohm owned and operated Rohm Enterprises.. of Chattanooga. each defendant was ordered to forfeit all property involved in the money laundering conspiracy.. Tennessee. of Port St. Bess and Rohm deposited into their respective business accounts $1. Fla. Avasso was also ordered to forfeit $2. was sentenced to 24 months in prison and ordered to pay $549. 2010. was sentenced to 24 months in prison and ordered to pay $842. the only services Bristol Consulting provided concerned fundraising. 2010. Avasso caused over $1 million in unlawful payments to be made to Bristol Consulting. Ronald Douglass Matheny. Former Home Depot Employee Sentenced for His Role in Conspiracy. Avasso admitted that from approximately July 1998 to January 31.500 fine and . At his plea hearing. Mastermind Behind Multimillion-Dollar Stock Manipulation and Money Laundering Scheme is Sentenced to 10 Years in Prison On October 22. Avasso was the mastermind behind a multimillion-dollar stock manipulation and money laundering scheme involving Accident Prevention Plus. in Camden. of Bessemer City.313 to be paid to the victims of his crimes. Bristol Consulting. On June 7.2 Million Money Laundering Scheme On October 26. Avasso also sold some of the illegally acquired stock and deposited the proceeds into an account in the name of Bristol Consulting. Inc. was sentenced to 120 months in prison.992.129. of Dallas. Avasso caused APP to enter into a false and fraudulent consulting agreement with his company. In addition. and the real purpose of the consulting agreement was to conceal from the investing public the fact that APP was transferring free-trading shares of APP stock to Avasso for his financial benefit.. he conspired with others to manipulate the price of securities and to conceal the ownership. According to court documents. Defendant Took Over $1. N. a window treatment services business and Bess operated a body shop business named Bess Used Car Wrecker Service. In addition. From in or about April 2001 to in or about January 2007. 2010.The account from which Todd Howlett withdrew the funds contained the proceeds of one of Lee Howlett s fraudulent tax refund checks. and ordered to perform 200 hours of community service.2 million in fraudulently obtained checks generated by a former claims manager of Farm Bureau Insurance. Avasso admitted that he caused at least 4. followed by three years of supervised release and ordered to pay $1.800 shares of APP stock to be issued to Bristol Consulting under the consulting agreement.C.4 Million in Bribes On October 19..101.789 in restitution. Matheny was ordered to pay a $7. Two Defendants Sentenced in $1.862 in restitution. North Carolina. Over the course of the scheme. North Carolina. was sentenced to 27 months in prison. Avasso also admitted that he laundered the proceeds of the APP fraud. II.J. Ga. N. (APP). However. 2005.

Harte and O Connor assisted Trier in laundering embezzled funds. was sentenced to 12 months and a day in prison and ordered to pay $482. Harte admitted to being involved in a conspiracy to liquidate and conceal monies and property which had been stolen by a former client. of Aiken. to be followed by ten years of supervised release. and Michael D. When Trier learned that he was under investigation. he contacted Harte to help him hide assets. Trier was sentenced to 63 months in prison. John W. 2009. According to Harte.C. Trier served as the director of logistics in the shipping department of Crane. Mack pleaded guilty in May 2009 to conspiracy to possess with intent to distribute cocaine and conspiracy to launder drug proceeds. In January 2007. Shavo have entered guilty pleas. 2010. Matheny pleaded guilty on May 19. was sentenced to 180 months in prison. and received company payments mailed to a post office box he had opened as the mailing address for the phantom companies. Harte pleaded guilty on September 18.. Two other attorneys involved in the same scheme. According to court documents.. 2009 on charges of conspiracy to commit mail fraud and wire fraud and conspiracy to commit money laundering. Trier. John Fitzgerald O Connor.. he enlisted the help of O Connor and others. in Columbia. He used his position to approve the payment of the fraudulent invoices. Defendant Sentenced to 15 Years on Drug and Money Laundering Charges On October 13. Jr. to money laundering and conspiracy to commit mail fraud.467.000 using the false invoice scam. Harte.000 in restitution. Former South Carolina Lawyer Sentenced in Money Laundering Conspiracy On October 13. In return. Matheny and several unnamed co-conspirators arranged for Home Depot to purchase items for resale in Home Depot's retail stores on less than the most advantageous terms to Home Depot. South Carolina.556 in restitution.$502. William J. ordered to pay $5. Former Chief Operating Office of Law Firm Sentenced in Connection with Money Laundering Conspiracy in Ponzi Scheme . 2010. aka Reggie. a vending machine manufacturing company in Aiken County. II. S. and ordered to pay a $200 special assessment. and to have the coconspirators supply services on less than the most advantageous terms to Home Depot. Around May 2007. Trier collected approximately $5. According to court documents.200. in Columbia. and to forfeit millions of dollars in assets. From May 2002 through April 2005.C. Matheny's co-conspirators paid him approximately $1. Reginald Christopher Mack. S.000 in restitution. He was responsible for overseeing the location of flooring merchandise in all of Home Depot's retail stores and for locating outside firms to facilitate the display of flooring products within those stores. From 1997 through January 2007. Matheny was employed by Home Depot from May 1987 until July 2007. Trier was terminated from Crane Company. from his employer.471. According to court documents. Trier embezzled funds from Crane by creating phony invoices from two fictitious freight transport companies and submitting them to Crane for payment. Over a ten year period. Matheny held the position of Product Merchant in Home Depot's Flooring Department. Mack conspired with others to launder the proceeds from the sale of drugs.272. Mack conspired with others in the distribution of cocaine within South Carolina and other areas.

Hakeem Olokodana was sentenced to 69 months in prison. Canada.. Villegas pleaded guilty in June 2010 to a criminal Information charging that she and co-conspirators participated in an investment Ponzi scheme.. N. pleaded guilty in November 2009. Fla. Olokodana acquired identity information of thousands of victims and used that information to conduct numerous fraudulent schemes.739. Nigeria. Debra Villegas. Villegas participated in the scheme by assisting with the fabrication of names for fictitious plaintiffs and defendants who were purportedly parties in the confidential settlements. Olokodana. According to the charges and statements made in court during her plea. co-conspirators routinely traded confidential customer information over e-mail. Ordered to Pay over $2. Vietnam.. to an Information charging him with conspiracy to commit bank fraud. credit unions.On October 8. and aggravated identity theft. Proceeds from the scheme were sent to conspirators in Japan. former Chief Operating Officer of the law firm of Rothstein. and other countries . was sentenced to 120 months in prison.874 in restitution. China. Rosenfeldt and Adler. Japan. impersonated bank customers on the phone with customer service representatives in a process known as social engineering . and ordered to pay $2. were transferred between and among accounts at financial institutions. Rosenfeldt & Adler. Criminally derived proceeds from the scheme. Villegas was found jointly liable for $363 million in restitution and ordered to forfeit certain assets. in excess of $10. According to court documents. Olokodana and his coconspirators gained access to confidential customer and account information used by customers of banks. money laundering. To further the fraud and to avoid detection. Canada. the United Kingdom. PA. Ring Leader of Sophisticated Identity Theft and Money Laundering Scheme Sentenced. In addition.000.J. 2010. 2010. in Ft. and credit card issuers to conduct financial transactions in the United States. and changed customer address information in bank files. South Korea.7 Million in Restitution On October 7. The scheme involved the sale of purported confidential settlement agreements in sexual harassment and/or whistle blower cases that were purportedly handled by attorneys at Rothstein.Y. South Korea. and other places. Lauderdale. followed by three years of supervised release. Villegas assisted in the preparation of documents relating to the purported confidential settlements. of Queens. In addition. Olokodana was part of a multi-national identity theft ring that operated in the United States. including depleting the victims home equity lines of credit accounts. used technology to disguise caller identification information. in Newark. N.