WASHINGTON—Seven individuals and four
check cashing businesses were charged today in the Eastern District of New York
and the Central District of California for their alleged roles in separate
schemes to violate the Bank Secrecy Act (BSA). The defendants allegedly failed
to follow reporting and anti-money laundering requirements for transactions
totaling more than $50 million.
The enforcement actions were announced
today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s
Criminal Division; U.S. Attorney Loretta E. Lynch of the Eastern District of
New York; U.S. Attorney André Birotte of the Central District of California;
U.S. Immigration and Customs Enforcement (ICE) Director John Morton; FBI
Assistant Directors in Charge Janice K. Fedarcyk and Steven Martinez; Richard
Weber, Chief of the Internal Revenue Service Criminal Investigation (IRS-CI);
Daniel R. Levinson, Inspector General of the Department of Health and Human
Services (HHS); and Benjamin M. Lawsky, Superintendent of the New York State
Department of Financial Services.
Four indictments filed under seal on
June 12, 2012 and unsealed today charge the defendants with failure to file
currency transaction reports (CTRs) or falsely filing CTRs, as well as failure
to have an effective anti-money laundering program, all violations under the
BSA.
Two of the indictments, charging three
individuals and two check cashing businesses, were returned in Los Angeles and
two indictments, charging four individuals and two check cashing businesses
were returned in Brooklyn, New York. All seven individual defendants were
arrested or surrendered to authorities today.
The BSA is a set of laws and regulations
enacted by Congress to address an increase in criminal money laundering through
financial institutions, which includes check cashing businesses. Check cashers
enable people to cash checks without having to go to a bank or maintain a bank
account. A check casher will typically charge a fee for this service.
Under the BSA, financial institutions,
including check cashers, are required to file a CTR with the Department of
Treasury for any transaction involving more than $10,000 in currency. As part
of the CTR, the check casher is required to verify and accurately record the
name and address of the individual who conducted the currency transaction, the
individual on whose behalf the transaction was conducted, as well as the amount
and date of the transaction. CTRs are important law enforcement tools for
uncovering criminal activity.
The BSA also requires financial
institutions, including check cashing businesses, to maintain an effective
anti-money laundering (AML) program. The purpose of an AML program is to
effectively detect and prevent attempts to facilitate money laundering.
Check-cashing businesses are therefore required to have written policies and
procedures regarding CTR filings, records maintenance, and responses to law
enforcement.
According to the indictments, despite
these regulations, check-cashing businesses are a common venue for individuals
who want to anonymously cash large numbers of checks to facilitate fraud and
money laundering schemes. According to the indictments, the use of check
cashers to launder money is particularly prevalent in the area of health care
fraud, where fraudulent health care businesses commonly convert the proceeds of
their fraud into cash by presenting checks to check cashers who they know will
not ask for proof of the payee’s identity and will either not file CTRs or file
false CTRs.
“Today’s indictments put unscrupulous
check cashers on notice that we are scrutinizing their conduct,” said Assistant
Attorney General Breuer. “They may think that they are flying under the radar,
but they are not. These defendants are charged with filing false currency
transaction reports, or not filing them at all, and other serious violations of
the Bank Secrecy Act. We will not tolerate check cashing businesses evading
anti-money laundering laws.”
“These indictments send a clear message
that we will not tolerate the willful failure of check cashing businesses to
take all steps under the law to prevent their businesses from being used to
launder the proceeds of crime,” said U.S. Attorney Lynch. “We are pleased to be
working closely with the Asset Forfeiture and Money Laundering Section of the
Department of Justice and our federal law enforcement partners in the
investigation and prosecution of these important cases.”
“The Bank Secrecy Act provides law
enforcement with a powerful tool to detect and prevent crime by requiring
financial institutions to document and submit reports on certain currency
transactions,” said U.S. Attorney Birotte. “Those who seek to evade the
restrictions of the Bank Secrecy Act—both individuals and financial
institutions—will be aggressively pursued by the Department of Justice and its
partners in federal, state, and local law enforcement.”
According to a superseding indictment
filed in the Eastern District of New York, Belair Payroll Services, a check cashing
store in Flushing, New York; its owner, Craig Panzera; and two other
individuals, Lasha Goletiani and Zhan Petrosyants, are charged for their
alleged roles in a scheme to violate the BSA. Specifically, Goletiani and
Petrosyants allegedly caused Belair to file false CTRs, and Panzera allegedly
caused Belair to fail to have an effective AML program. In addition, Panzera
has been charged with conspiring to commit tax violations with respect to the
fees Belair received in connection with the scheme.
As part of the scheme, which lasted from
June 2009 through June 2011, Goletiani, 32, and Petrosyants, 30, presented to
Belair’s manager and other employees checks to be cashed at Belair. The checks
were written on accounts of shell corporations that appeared to be health care
related, but in fact, the corporations did no legitimate business. The shell
corporations and their corresponding bank accounts on which the checks were
written were established in the names of foreign nationals, many of whom were
no longer in the United States.
The indictment alleges that employees at
Belair accepted these checks and provided cash in excess of $10,000 to
Goletiani or Petrosyants. Panzera, 46, and others at Belair never obtained any
identification documents or information from Goletiani or Petrosyants. Belair
allegedly filed CTRs that falsely stated the checks were cashed by the foreign
nationals who set up the shell corporations, and in certain CTRs, Belair
allegedly failed to indicate the full amount of cash provided to Goletiani or
Petrosyants. Goletiani and Petrosyants cashed more than $19 million through
Belair during the course of the scheme. The indictment unsealed today
supersedes an indictment returned against Goletiani in July 2011 for conspiring
to cause Belair to file false CTRs. Approximately $3.2 million has been seized
from Belair’s bank accounts in connection with this conduct.
A second indictment filed in the Eastern
District of New York charges Bargain Island, a check cashing business in
Philadelphia, and its owner and operator, George Gonchar, 51, with failure to
file CTRs and failure to have an effective AML program. According to the
indictment, from October 2009 through October 2010, individuals acting as check
couriers brought multiple checks from Brooklyn made payable to various medical
services companies to Bargain Island and presented them to Gonchar for cashing.
On almost all occasions, the checks exceeded, in the aggregate, $10,000. As
alleged in the indictment, Gonchar knew that the check couriers presenting the
checks to Bargain Island had no connection to the checks other than acting as
couriers. Despite this knowledge, Gonchar falsely indicated in CTR filings that
the checks were cashed on behalf of the couriers themselves or for companies
associated with the couriers. Bargain Island cashed more than $5.8 million in
checks from couriers in this manner.
A third indictment filed in the Central
District of California charges G&A Check Cashing, a check cashing business
in Los Angeles; its general manager, Karen Gasparian, 31; and an employee and
designated compliance officer, Humberto Sanchez, 53, with BSA violations. The
indictment alleges that two separate cooperating witnesses presented bundles of
checks totaling more than $10,000 to Gasparian and Sanchez at G&A. The
checks were written on accounts for businesses that purported to be health care
businesses. G&A deposited the checks into its operating accounts over a
period of several days, and then provided cash in excess of $10,000 to the
cooperating witnesses. Neither Gasparian nor Sanchez filed CTRs on these
transactions even though they were well aware of the requirement to do so. More
than $100,000 in checks were cashed in this manner over the course of 10
transactions, yet no CTRs were ever filed. This practice extended beyond the
cooperating witnesses. From 2006 through 2012, G&A conducted approximately
800 transactions that were each in excess of $10,000 and paid out more than $20
million in cash on those transactions without ever filing a CTR.
A fourth indictment filed in the Central
District of California charges AAA Cash Advance, a check cashing business in
Los Angeles, and its manager, Diana Brigitt, 35, with violations of the BSA.
From August 2010 through February 2012, Brigitt, on behalf of AAA, allegedly
repeatedly cashed bundles of checks totaling more than $10,000 without filing
any CTRs. The checks were presented by a cooperating witness and were written
on accounts that appeared to be for health care businesses. More than $100,000
in checks were cashed in this manner over eight transactions, yet no CTRs were
ever filed. From January 2008 through February 2012, AAA’s banks reported that
AAA had withdrawn approximately $5 million in cash, yet during this same time
period, AAA filed only seven CTRs on transactions greater than $10,000.
“This complex financial investigation,
conducted by Homeland Security Investigation’s (HSI) El Dorado Task Force and
our law enforcement partners, is indicative of the lengths that criminal
enterprises go in an effort to conceal their illicit conduct,” said ICE
Director John Morton. “These individuals permitted the cashing of over $19
million in checks with a blatant disregard for the legal safeguards intended to
prevent criminals access to our financial system. HSI is determined to expose
these vulnerabilities and to shutdown money laundering operations that threaten
our nation’s security.”
“Money laundering is at the foundation
of so many criminal schemes, which is why the FBI and our partners place a high
priority on policing it,” said FBI Assistant Director Fedarcyk. “By cracking
down on money laundering, we put teeth in the truism that crime doesn’t pay.”
“The charges exemplify the increasingly
complex schemes devised to evade anti-money laundering laws,” said FBI
Assistant Director Martinez. “The FBI and our trusted partners are resolute in
our commitment to match and counter those efforts with the resources and
long-term focus necessary to decipher these schemes that cost taxpayers
hundreds of millions annually in the Los Angeles area.”
“From coast to coast, the IRS will take
every step necessary to ferret out those who attempt to avoid their reporting
obligations under the law,” Chief Weber of IRS-CI. “This joint effort continues
to demonstrate our efforts to ensure that the financial services industry will
not be used for personal financial gain and will be operated in a fair and
honest manner to promote the public interest.”
“Anti-money laundering laws are an
important tool in the fight against health care fraud, as check cashers are
often used to convert ill-gotten Medicare proceeds,” said Inspector General
Levinson.
“These vital investigations show the
need for constant vigilance against dirty check cashers,” said Superintendent
Lawsky. “We will use all our enforcement tools to stamp out the use of check
cashers to facilitate crime such as health care fraud. We will continue to work
with all our law enforcement partners on these important investigations.”
The cases announced today are being
prosecuted by Money Laundering and Bank Integrity Unit Trial Attorneys Matthew
Haslinger, Matthew Klecka, and Claiborne Porter and Forfeiture Unit Trial
Attorney Jeanette Gunderson from the Asset Forfeiture and Money Laundering
Section of the Justice Department’s Criminal Division and Assistant U.S.
Attorney Charles Kleinberg of the Eastern District of New York and Assistant
U.S. Attorney David Kirman of the Central District of California. The
department acknowledges the invaluable assistance of the Department of
Treasury’s Financial Crimes Enforcement Network (FinCEN).
The Money Laundering and Bank Integrity
Unit investigates and prosecutes complex, multi-district, and international
criminal cases involving financial institutions and individuals who violate the
money laundering statutes, the Bank Secrecy Act, and other related statutes.
The unit’s prosecutions generally focus on three types of violators: financial
institutions, including their officers, managers, and employees, whose actions
threaten the integrity of the individual institution or the wider financial
system; professional money launderers and gatekeepers who provide their
services to serious criminal organizations; and individuals and entities
engaged in using the latest and most sophisticated money laundering techniques
and tools.
The cases are being investigated by
agents from the ICE-HSI, FBI, IRS-CI, HHS-OIG, and the New York State
Department of Financial Services.
An indictment is merely a charge and
defendants are presumed innocent until proven guilty.
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