Tigard Man Indicted in Connection with Illegal Money Transmitting Business

Shell Corporations Created by Defendant to Move Millions of Dollars in and out of United States

March 4, 2010 - PORTLAND, OR—Dwight C. Holton, U.S. Attorney for the District of Oregon, and Assistant Attorney General Lanny A. Breuer of the Criminal Division announced the indictment and arrest and of Victor Kaganov, of Tigard, Oregon. Kaganov established multiple shell corporations in Oregon on behalf of Russian clients. Kaganov allegedly then used the shell corporations to move more than $172 million in and out of the United States to more than 50 countries. Kaganov was indicted by a federal grand jury with a single count of operating an unlicensed money transmitting business after more than 4,200 wire transactions had been made. The charge carries a maximum penalty of five years, a $250,000 fine, and three years of supervised release.

The indictment alleges that Kaganov emigrated from Russia to the United States in 1998. In order to move money in and out of the country, Kaganov created various shell corporations under Oregon law, and then opened bank accounts, including accounts at Wells Fargo, Key Bank, Bank of America, and Bank of the West, which he used to deposit money he received from his Russian clients. It is alleged that Kaganov would then wire the money out of the accounts based on wire instructions he received from his clients.

The indictment also alleges that Kaganov did not comply with Oregon statutes requiring him to obtain a license to operate the money transmitting business and that Kaganov also failed to register his money transmitting operation with the United States Department of Treasury, as required by federal statutes and regulations. “When shell corporations are illegally manipulated in the shadows to hide the flow of tens of millions dollars overseas, it threatens the integrity of our financial system. Sunshine kills the stink of corruption—our laws aim to bring the sunshine in, and we will enforce these laws vigorously,” said U.S. Attorney Dwight C. Holton

This case was investigated by the Federal Bureau of Investigation (FBI) as part of a larger investigation of the use of Oregon shell corporations to facilitate illegal activities by foreign businesses and individuals. In January 2009, the grand jury indicted Marina Chernova, Vadim Piskunov, and Maria Ivanov on charges of mail and wire fraud, and in two of these cases, with aggravated identity theft. Each of these indictments charges the individuals with establishing Oregon shell corporations to facilitate and disguise illegal activities.

“We will not allow Oregon banks to be used as cash machines, facilitating the international transfers of significant amounts of money without any known association to legitimate commerce in the U.S.” said, Arthur Balizan, FBI Special Agent in Charge in Oregon. “The use of Oregon shell companies to support the transfer of funds of unknown origin is a matter the FBI takes very seriously.”

An indictment is only an allegation of a crime. Defendants are presumed innocent until proven guilty.

The case was investigated by the FBI and the U.S. Postal Inspection Service. It is being prosecuted by Assistant U.S. Attorney and Senior Litigation Counsel Allan M. Garten and Robert Livermore, Trial Attorney in the Organized Crime and Racketeering Section of the Department of Justice.