Articles Posted in Money Laundering

Some would say that the exclusive island village of Bal Harbour, Florida doesn’t even need a police department. With a population of just more than 2,500 residents; as of the latest census, the town’s crime rate is minimal in comparison to other parts of Miami-Dade County. In addition to its permanent residents, Bal Harbour boasts close to fifteen percent of Miami’s overall tourism (as of 2014), with luxury hotels such as The Ritz-Carlton and St. Regis as well as the world class luxury Bal Harbour Shops, Bal Harbour Beach and Haulover Beach Park.

The latest statistics show a total of two violent crimes included in the one assault and robbery that occurred, with the rate of murders and rape exhibiting at zero. There were only two vehicle thefts last year which amounts to a miniscule percentage when compared to the overall incidents of motor vehicle theft in the entire county of Miami-Dade. Complete crime statistics can be found by clicking here.

So it may seem odd that a small police agency in a town facing little crime would concoct a plan to take on the world’s most treacherous drug cartels. But in a partnership with the Glades County Sheriff’s Office that’s exactly what they did. Or did they?

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Venezuela has recently been experiencing a shortage of all foreign currencies due to a substantial drop in oil prices, the country’s central source of US dollars. It has gone through an economic contraction of close to three percent and is fighting a very high rate of inflation which is currently more than sixty percent.

Because of these financial difficulties, the government-determined exchange rate of the Bolivar, (Venezuela’s currency) has skyrocketed from approximately 4.25 Bolivar for 1 US dollar in 2013, to the current 6.29-1 legal rate of exchange (Source: Bloomberg 5/15/2015).

But the rate of exchange on Venezuela’s black market dwarfs the legal rate as US dollars become more precious to purchase items considered to be “essential goods” such as food and medicine that are not manufactured in Venezuela. These items make up around seventy percent of all imported products. The difference between the official exchange rate and the black-market rate can be up to as much as an exorbitant one-thousand percent. Recently, one U.S. dollar could be exchanged for close to three hundred Bolivars.

Due to this unique situation in the country, drug cartels have found a way to amass huge profits by carrying away loads of these essential products such as gasoline, imported medicines and foodstuffs to Colombia where they are traded for drugs, and dollars which are then brought back and sold in Venezuela making mammoth profits. These highly lucrative smuggled goods have bankrolled the rise of paramilitary groups, which now control significant strips of territory between the Venezuelan and Colombian border.

Allegedly, cashing in on the action, under the ruse of running a enterprise that would lend money to Venezuelan businesses so they could trade with companies in the United States, Martin Lustgarden Acherman, a Venezuelan-Austrian residing in Miami-Dade County perpetrated a scheme where he would fly drug profits out of Columbia; route them through his bank accounts in South Florida as well as other locations, and then exchange the funds for the local currency in Venezuela after flying the laundered currency back to that country.

The recent violence in Venezuela’s Capital of Caracas and other major cities, hand-in-hand with a collapsed economy has left store shelves sparsely filled. American cash is king on the black market, which in many cases has become the lifeline for local businesses so they are able to conduct commerce outside the country.

Earlier this month, federal authorities arrested Acherman, charging that he used his bank accounts here in South Florida to take advantage of the economic crisis in Venezuela to the benefit drug cartels, not businesses. He was arrested in Miami with Salomon Bendayan and Rama Krishna Kuchibhotla according to The Venezuelan Daily Brief.

Specifically, the federal government has charged that Acherman used his three Bank of America accounts located in Doral as conduits to launder $100 million in drug profits originating in Colombian back into Venezuela where he allegedly exchanged the proceeds for local currency at excessive black market prices.

Earlier this week federal prosecutors stated in court that Acherman “quarterbacked an international scheme to move U.S. dollars around on behalf of drug cartels and paramilitary organizations in Colombia… He takes advantage of the unique situation in Venezuela… has made a business of gathering U.S. dollars and making them available in places they are hard to come by such as Venezuela.”

Acherman has been charged with money laundering, conspiracy and obstruction and is being held pending further action. His lawyer commented that some of the government’s charges were “fantasy”, but did not provide further comment.

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In late January, a U.S. District Judge sentenced a Cape Coral, Florida man to four years in federal prison and the forfeiture of almost $1 million after he pleaded guilty to the charge of tax evasion.

Robert Faiella accepted the plea which was the lesser of the allegations charged against him for his role in a case that has direct ties to the headline grabbing “Silk Road” case that came to a conclusion in early February. Faiella’s codefendant, Charlie Shrem was sentenced to two years behind bars for the same crime just one month before this latest plea deal was accepted.

Faiella, a/k/a “BTCKing” was originally arrested and charged last year with operating the unlicensed money transferring business and conspiracy to commit money laundering. He was well-known as a Bitcoin entrepreneur who allowed those who used the Silk Road Website unfettered access to his monetary exchange. Bitcoin is digital currency that has been in use since 2009 for purchasing all types of items on or through the Internet. It cuts out banks as middle men avoiding transaction fees such as percentages charged by credit cards and can be utilized without giving a person’s actual name. Faiella operated his Bitcoin exchange and purchased the digital currency through “BitInstant” within the Silk Road’s confines on the “Dark Web”.

It was suspected that buyers and sellers who used Faiella’s services were able to exchange cash for Bitcoins anonymously which made it possible for them to buy illegal drugs as well as other illegal articles on the Dark Net market site. Shrem and Faiella made profits on the transactions through a handling fee. Allegations of the sale of illegal firearms and even murder for hire were also raised as prospects of the Silk Road’s merchant’s commodities.

The Indictment, unsealed in late January, alleged that Shrem and Faiella colluded to launder in excess of $1 million of Bitcoin transactions that poured over the Silk Road between the years of 2011 through 2013. Shrem was named the CEO and chief compliance officer while Faiella was charged as being the owner/operator mastermind of the monetary exchange.

The Silk Road case itself came to a conclusion early last month when its alleged mastermind Ross Ulbricht was found guilty on all counts charged against him. The feds seized the site in Oct. 2013 and arrested him in San Francisco. Ulbricht’s pseudonym was “Dread Pirate Roberts” and was convicted by a federal jury after a few short hours of deliberations. He was charged with drug trafficking and money laundering among the seven counts brought against him. He faces a minimum of twenty years in prison which can be upped to life in prison upon sentencing. His legal team plans to appeal the verdict.

Almost one year ago to the day, another Florida man was charged with selling Bitcoins for the purpose of money laundering to undercover federal agents. Michell Abner Espinoza was charged with one count of operating an unlicensed money service business, laundering up to twenty thousand dollars, and laundering currency valued at more than twenty thousand dollars. His co-defendant Pascal Reid, a citizen of Canada was also charged as co-defendant in the case. Both men were arrested in Miramar, Florida.

A journalist and security researcher who first broke that story said that the “arrests may be the first state prosecutions involving the use of Bitcoins in money laundering operations,” according to Miami-Dade State Attorney Katherine Fernandez Rundle’s office.

In March, 2013 Florida Regulators issued a warning relating to Bitcoin that can be read at this link.

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A Parkland Florida resident pleaded guilty to Conspiracy to Launder Money after admitting to her part in an expansive $8 million illegal gambling setup that used phony corporations, offshore accounts and operated using the Internet and direct telephone call contact.

Michele Lasso-Barraza, 30, a Panamanian national, delivered her plea from Florida via a video feed which was filed in U.S. District Court in Albany, New York. The prosecution alleged that she laundered the proceeds gained from gambling websites that was made available to her; allowing gamblers to place wagers via the Internet. She then transferred the ill-gotten gains, using bogus entities which she created, into bank accounts that were located offshore.

Lasso-Barraza’s role in the case is connected to Philip Gurian, another Florida man who was purportedly linked to the Mafia and was an important operative in the gambling entity which offered online and by phone sports betting from Costa Rica and Panama to its player base which was predominantly made up of residents of the United States. Gurian, 52, of Boca Raton, and Lasso-Barraza were among over thirty persons that were charged last April for their connection to the Panama-based Corporation known as Legends a/k/a Legendz Sports.

The indictment against a total of 23 companies and 34 individuals accused Legendz of offering betting options by credit, as well as maintained accounts known as “post-ups.” Both types of betting methods combined, netted the company profits of over two-billion dollars over the past ten years.

Those named in the indictment face charges of operating an illegal gambling business, racketeering, conspiring to commit money laundering and money laundering. Penalties for these crimes can range from five to twenty years.

The Department of Justice is also pursuing the forfeiture of a minimum of one-billion dollars of tangible assets of the firm which include balances in bank accounts, real estate, vehicles, as well as other monetary holdings of value.

Gurian had previously waived the grand jury indictment and accepted a guilty plea for the charge of conspiracy in association to the role he played in the international sports betting operation.

A charge and conviction for his type of allegation can yield a prison term of up to twenty years behind bars. However under the plea agreement negotiated between Gurian’s attorneys and the government, combined with sentencing guideline calculations that are utilized in federal cases, it is expected that he will be sentenced to two years in prison at a maximum. He is scheduled to be sentenced on Feb. 6, 2014
As part of her acceptance of the guilty plea, Lasso-Barraza admitted her participation in the illegal gambling business which was directed by Gurian as well as other individuals that permitted bettors to wager thousands of bets originating from Florida, California, Texas, Indiana Nevada and the District of Columbia. She also confessed to participating in at least $8 million of the laundering of money which was fashioned from the unlawful gaming enterprise that she was a part of on Gurian’s behalf. She then had the currency transported to offshore accounts that were deceptively created and set up by her with locations in Panama, Andorra, and the Cayman Islands.

Lasso-Barraza faces a fine of a half a million USD and up to twenty years in prison for her role in her illicit activities. She is scheduled to be sentenced on Feb. 28, 2014.

These proceedings are being prosecuted by AUSA Robert A. Sharpe. All charges were the product of a combined investigation introduced by the Albany County Sheriff’s Office and further assisted by the Albany County District Attorney’s Office, as well as the Saratoga District Attorney’s Office in New York. In Florida, the Broward County Money Laundering Task Force is credited with the role they played. Federal law enforcement agencies recognized for their assistance in the case are the FBI and the IRS-Criminal Investigation Division.

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Follow Up: The Prosecution accused the two doctors of being “drug dealers in white coats”. They inferred that the pair abandoned their medical ethics and were reckless, authorizing illegal pill distributors, and persons addicted to drugs the reward of being prescribed hundreds of pills at a time if they were willing to make the journey to the South Florida pain clinic where they worked. In some cases, individuals described as such would travel more than 1,000 miles to arrive where the two doctors and others like them practiced their craft.

The prosecution originally accused the doctors of murder by causing the deaths of patients who overdosed on the pain medications they prescribed in addition to money laundering; with reference to the proceeds of the prescriptions they wrote.

In a previous article posted here on July 26 it was reported that the two doctors each refused to accept plea deals, emphasizing their innocence. As a result of those decisions the penalty of life imprisonment loomed large.

Nonetheless, last week, although the jury acquitted doctors Cynthia Cadet, 43, and Joseph Castronuovo, 74, on the principal charge of murder (causing the deaths of nine patients that died due to Oxycodone overdoses which they prescribed), they were found guilty of the lesser charge of money laundering for their part in the conspiracy which involved a collection of South Florida pain clinics nicknamed “Oxy Alley”.

Cadet, a retired U.S. Air Force major, and Castronuovo worked at the pain clinic dubbed a pill mill by law enforcement authorities, owned and operated by Chris and Jeff George. Both George brothers are currently serving significant periods of incarceration for their previous guilty pleas in the pain clinic controversy.

Previously in this case, 26 other doctors accepted guilty pleas, most of them receiving five-year sentences. Cadet and Castronuovo were the only two hold-outs.

The West Palm Beach federal jury deliberated for 20 hours before reaching their verdict.

On the money laundering charges, the prosecution sought Castronuovo to pay more than $60,000, and Cadet to pay $1.2 million in a forfeiture of their proceeds. But the decision by the jury was for each to pay $10,001 in the monetary segment of their sentence. There was no mention how and why the jury came up with that specific monetary figure.

During the trial, both defense attorneys argued that the two doctors were uninformed of any conspiracy and were only practicing medicine within state standards regarding the prescribing of drugs to their patients. This standard allows a licensed physician to dispense psychoactive chemical opioid pain pills without fear of reprimand.

“There was not a single piece of evidence at this trial that showed she knew of any conspiracy,” argued Cadet’s attorney.

“It’s an inconsistent verdict when you’re saying to the judge, we’re finding her not guilty, yet on the proceeds of the conspiracy, she’s guilty of that.”

Lawyers for the defendants said that the convictions were a “compromise verdict” handed down by a jury that needed to find the doctors guilty of “something” after a trial that lasted eight-weeks. But both defense attorneys said they were pleased by the outcome thus far. They also both asserted they would appeal the money laundering sentences, on the grounds that they were inconsistent with acquittals in the more serious drug charges.
To read our previous article on this topic, click here

The FBI Press Release can be read by clicking here.

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JM2 Auto sales, in Apopka, Florida are known for their customer service and “lovely people”. If you visit their Website you’ll find rave reviews written in both English and Spanish saying so. One satisfied customer wrote: “Do not hesitate going to this place. They have the best customer service and nice people in the area. The cars inventory is excellent for used cars”
However, that superlative “customer service” has also been linked to a money laundering scheme, resulting in the convictions of both the president and vice president of the car dealership.

Joel Torres, 40, the president of the dealership and his second in command, Eladio Marroquin-Medina, 30, were indicted in August of 2012, accused of violations relating to the laundering of marijuana sales proceeds. They were both charged with one count of conspiracy to commit money laundering; 11 counts of evading reporting requirements and 11 counts of engaging in a monetary transaction of criminally derived property valued at more than $10,000. Additionally, the vice president was also charged with one count of conspiracy to possess with the intent to distribute over 1,000 kilograms of marijuana.

The two car salesman’s involvement with one of Mexico’s most infamous drug cartels became apparent to law enforcement officials according to court documents. The Gulf Cartel has made the headlines on numerous occasions and in 2009, the U.S. government offered a reward of up to $50 million for the arrest of leaders of the criminal organization. In May, 2011, Mexican police did in fact arrest Gilberto Barragan Balderas, who was one of the leaders of the dynamic drug dealing organization. Barragan Balderas was also wanted in the U.S. and at the time the State Department was offering a separate $5 million reward for his capture.

For their part in the scheme Medina and Torres received money that originated from sales of narcotics as compensation for vehicles provided. These vehicles originating from their automobile showroom in Apopka were sent to associates of the Gulf cartel functioning in Texas and were similarly used by local members of the cartel operating in Florida. In one episode, during the activity of the conspiracy, one cartel associate conveyed more than $115,000 in cash to the JM2 dealership for the procurement of vehicles. This incidence transpired sometime between the dates of late October and mid-November 2010.

Medina, pleaded guilty, admitting that Torres came up with the plan to send cars to associates of the Cartel. He was sentenced to six years in February of last year following his conviction on charges of conspiracy to possess with the intent to distribute 1,000 kilograms or more of marijuana, and conspiracy to engage in money laundering.

Torrez was found guilty by a federal jury on December 3 and was sentenced by U. S. District Judge Roy B. Dalton, Jr. to 40 months of incarceration in a federal prison early last month. He was convicted of three counts of money laundering and 11 counts of failure to file the IRS Form 8300, which is a document required to be submitted for any cash purchases that exceed $10,000.

The investigation was spearheaded by the Internal Revenue Service-Criminal Investigation with assistance from the Federal Bureau of Investigation (FBI); the Drug Enforcement Administration (DEA); U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE); the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) in conjunction with the Apopka Police Department; Orange County Sheriff’s Office; and the Osceola County Sheriff’s Office. Both defendants were prosecuted by AUSA’s Christopher LaForgia and Shawn Napier.

To read the latest FBI press release on the story, click here
The press release relating to the Torrez conviction can be found by clicking here posted on the U.S. Immigration and Customs Enforcement’s Website.

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