US authorities have charged Robert Lenard Booth, Michael D’Urso, Alyssa D’Urso, Jay Garnock, and Antonella Chiaramonte with conspiracy to commit securities fraud, wire fraud, and ML, and operation of unlicensed money transmitting businesses. In 2019-21, the five defendants participated in a sophisticated international mass-marketing investment fraud scheme to defraud investors internationally, launder the proceeds and distribute them among the conspirators.

Booth ran a boiler room operation in Thailand, presenting it as a Manhattan-based investment firm to the investors. Booth and his co-conspirators created fake identities, webpages, email addresses, and phone numbers to support their lie. By convincing the investors that they were purchasing securities in privately-held and publicly-traded American companies, Booth stole over $1 million from the victims.

The other four defendants operated a network of shell companies and their bank accounts in New York. They conspired with several boiler rooms, including Booth’s, to receive over $8.4 million in stolen funds from victims of the investment fraud in shell company accounts. They then laundered over $4.6 million of the stolen money and distributed it to the conspirators.

Source: US Department of Justice

US authorities have sentenced Victor Ahaiwe to 84 months in prison for his part in a conspiracy to launder the proceeds of business email compromise frauds and romance frauds. In 2021, Ahaiwe was found guilty of bank fraud conspiracy, ML conspiracy, and aggravated identity theft. 

During 2018-20, Ahaiwe and co-conspirators conspired to launder the proceeds of many business email compromise and romance fraud schemes, targeting corporate, organizational, and individual victims. The conspirators coerced the victims to transfer over $10 million to bank accounts that they controlled. The victims believed that the funds were being sent to the intended recipients. In reality, the conspirators received the funds illicitly by opening bank accounts in the names of the intended recipients. They moved the illicitly-obtained funds through additional accounts to conceal their nature and origin. Particularly, Ahaiwe stole the identities of several individuals, including a recently deceased friend, to open bank accounts that he then used to launder hundreds of thousands of dollars of the fraudulently-obtained money.

In addition to the prison sentence, Ahaiwe must pay $514,063 in restitution to the victims. He must also forfeit $590,123 in criminal proceeds. Note that nine other defendants have already been sentenced in this case.

Source: US Department of Justice

US authorities have sentenced 80-year-old Mary Margaret Kreuper, the principal of St. James Catholic School in Los Angeles, to over a year in prison for embezzling $835,339 from school funds to pay for personal expenses. Kreuper, who had pleaded guilty to wire fraud and ML in July 2021, must now pay $825,338 in restitution.

Kreuper’s embezzlement lasted for 10 years till 2018. She had been the school principal for 28 years and was responsible for handling the tuition, fees, and charitable donations. She controlled a savings account for the school and another to pay the living expenses of the school’s nun employees. Kreuper diverted school funds into these two accounts and used them for personal expenses, including gambling trips.

Moreover, Kreuper falsified the monthly and annual reports she submitted to the school administration to conceal her fraudulent activities. During a school audit, she also asked school employees to manipulate and destroy certain financial records.

Source: US Department of Justice

The Gambling Authority of Denmark has reprimanded the gaming company Reel Denmark Ltd. for breaching the know your customer (KYC), investigation and reporting obligations of the country’s AML Act. 

Reel allowed a player to deposit DKK 2.4 million ($370,000) in 2019 and 2020 without recording the source of funds. In 2021, when the Gambling Authority chose this player for a spot check related to responsible gambling and ML, Reel requested the required data. Reel’s favorable conclusion about the client’s income and employment records was also misguided. Indeed, the player had deposited substantially more money to his gaming account than he could afford.

The Gambling Authority found Reel to be in breach of KYC obligations because it should have obtained the information sooner. Further, the authority pointed out that Reel should have investigated the player’s financial circumstances more thoroughly. Based on the available red flags, Reel should have suspected that the client was involved in ML. Further, it should have promptly reported the matter to the relevant authority. Reel only reported the case nearly two years later, when the Gambling Authority consulted it. Reel has already taken measures to correct its errors by introducing new KYC and investigation procedures to prevent future violations. 

Source: Gaming Authority of Denmark (Spillemyndigheden)

US authorities have sentenced Florida resident Bradley Jason Kantor to 10 years in prison for submitting over $42 million in fraudulent health care claims to United Healthcare.

During 2013-17, Kantor ran a medical clinic, called Mobile Diagnostic Imaging, Inc. (MDI), in Florida. The clinic was portrayed as a center where antigen therapy, allergy testing, allergy shots and similar services were provided to beneficiaries of commercial insurance. Kantor paid kickbacks to co-conspirators so they would refer beneficiaries to MDI. This allowed MDI to bill commercial insurers for services that were never provided. 

MDI submitted over fraudulent claims of $42 million to United Healthcare. In turn, it received reimbursements of over $12 million from United. Using the proceeds of his crime, Kantor purchased real estate, motor coaches, and a yacht. Note that Kantor had previously pleaded guilty to health care fraud, wire fraud and ML conspiracy.

Source: US Department of Justice

US authorities have arrested New York-based married couple Ilya Lichtenstein and Heather Morgan for conspiring to launder cryptocurrency. The laundered cryptocurrency was stolen during the 2016 hack of the virtual currency exchange Bitfinex. The current value of the total stolen cryptocurrency is nearly $4.5 billion. Authorities have so far seized over $3.6 billion in stolen cryptocurrency from the 2016 hack.

Lichtenstein and Morgan allegedly conspired to launder the proceeds of 119,754 bitcoin stolen from Bitfinex’s platform after a hacker initiated more than 2,000 unauthorized transactions from the platform. Authorities have alleged that the stolen bitcoin from that theft was sent to a digital wallet that Lichtenstein controlled. Over the last five years, the conspirators transferred nearly 25,000 of the stolen bitcoin out of Lichtenstein’s wallet.

Lichtenstein and Morgan both used several complex ML tactics, including using fictitious identities to set up online accounts, employing computer programs to automate transactions, converting bitcoin to anonymity-enhanced virtual currency, etc. The couple can receive up to 25 years in prison for conspiring to commit ML and defraud the US.

Source: US Department of Justice

The Public Prosecution Service of the Netherlands has demanded a prison sentence of 18 months and a fine of €10,000 for a 40-year-old detainee upon suspicion of money laundering and the possession of 174 pills with MDMA. The public prosecutor also demanded forfeiture of the laundered money (€100,900 or $115,687, €21,700 or $24,880 and part of a bitcoin). The prosecutor also demanded the confiscation of the 174 MDMA pills seized from the suspect.

The National Public Prosecutor’s Office started an investigation in February 2020, after receiving information about a person engaged in drug trade and the laundering of illicit proceeds. They tapped the phone of one of the suspects, which led them to overhear a pertinent conversation in March 2020. Following the suspect, the police reached Amsterdam where money was transferred among four people. The suspect currently on trial was the one who received the money in Amsterdam.

Authorities suspect that the detainee laundered large sums of money and part of a bitcoin. While searching the suspect’s house, the investigators found a bag of money concealed in the bathroom. This bag had two other bags inside it, one carrying €13,000 ($14,905) in cash while the other €7,700 ($8,828). More money and bitcoin were then seized from a hall closet. Notably, this was the third arrest in the ongoing money laundering case.

Source: Public Prosecution Office, Netherlands

Brazilian Federal Police has launched Operation Valletta to bust the criminal organization responsible for a billion-dollar fraud involving cryptocurrencies. This is the third phase of Operation Kryptos that began in August 2021. As part of the operation, the authorities have executed one preventive arrest warrant and five search and seizure warrants in the Brazilian states of Mato Grosso do Sul (MS) and São Paulo (SP).

A lawyer managing two MS-based companies became an intermediary for conducting financial transactions between the main company investigated in Kryptos and some foreign-based companies. However, even after the first phase of the operation had been initiated, the company continued its illicit activities. It also created a crypto-asset brokerage to prevent the blocking and confiscation of the values ​​​​moved under the criminal scheme.

Those convicted may face up to 22 years in jail.

Source: Federal Police, Ministry of Justice and Public Security, Government of Brazil

The European Banking Authority (EBA) has launched its central database for AML/CFT, known as the European Reporting System for Material CFT/AML Weaknesses or EuReCA. EuReCA will help coordinate the actions of authorities and the EBA to mitigate ML/TF risks in the European Union (EU).

EuReCA will share information on material weaknesses in EU-based financial institutions that authorities have identified previously. Internal audit reports, prepared by authorities during onsite inspections, are also included on EuReCA, even in the cases where no remedial actions were taken despite the senior management being aware of the issues. Further, authorities will share the steps they asked deficient financial institutions to implement in order to overcome their weaknesses.

Lack of adequate AML/CFT policies, including those related to transaction monitoring and high-risk customers, increases the ML/TF risk in a financial institution. Information shared on EuReCA will help the EBA to reassess its view of ML/TF risks to the EU financial sector. Information from EuReCA will also aid authorities at various stages. Particularly, it will act as an early warning tool so they can take adequate action before facing an ML/TF risk.

Source: European Banking Authority

UK’s National Crime Agency (NCA) has seized millions of dollars derived from a complex international ML scheme – the Azerbaijan laundromat. NCA’s action came after an investigation of the bank accounts linked to Javanshir Feyziyev, a member of the Azerbaijan parliament. Feyziyev is also Chair of the UK-Azerbaijan All Parliamentary Cooperation Committee, and Co-chair of the EU-Azerbaijan Parliamentary Cooperation Committee.

The authorities secured a Forfeiture Order for £5.6 million ($7.6m) in UK bank accounts of family members of Feyziyev. Additionally, the authorities obtained six Account Freezing Orders for accounts in the name of Feyziyev’s wife Parvana Feyziyeva, son Orkhan Javanshir, and nephew Elman Javanshir. The funds in these bank accounts were sourced from the Azerbaijan laundromat and thus can be used as recovery assets.

The ML scheme involved the flow of money through a sophisticated network of shell companies with bank accounts in Estonia and Latvia. The criminals added contracts and invoices with some of the transfers to misrepresent the transactions as legitimate business transactions. The authorities found that these documents were fake and meant to conceal the ML activities of the account holders. Overall, over £15.3m ($20.7m) were frozen in the bank accounts, of which over £5.6 million ($7.6m) were designated for forfeiture.

Source: National Crime Agency, UK