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January 19, 2017

Colorado-based global money services business Western Union Company agreed to forfeit $586 million and enter into agreements with DOJ, FTC, and the U.S. Attorney’s Offices for the Middle District of Pennsylvania, the Central District of California, the Eastern District of Pennsylvania and the Southern District of Florida to settle criminal violations relating to the company's failure to maintain an effective anti-money laundering program and aiding and abetting wire fraud. According to company admissions, Western Union violated the Bank Secrecy Act (BSA) and anti-fraud statutes by processing hundreds of thousands of transactions for Western Union agents and others involved in an international consumer fraud scheme. As part of the scheme, fraudsters contacted victims in the U.S. and falsely posed as family members in need or promised prizes or job opportunities. The fraudsters directed the victims to send money through Western Union to help their relative or claim their prize. Various Western Union agents were complicit in these fraud schemes, often processing the fraud payments for the fraudsters in return for a cut of the fraud proceeds. The company also agreed to pay a $586 million judgement to settle related FTC charges. DOJ

February 4, 2016

Miami-based brokerage firm E.S. Financial Services, now known as Brickell Global Markets, will pay a $1 million penalty to settle charges that it violated anti-money laundering rules by allowing foreign entities to buy and sell securities without verifying the identities of non-U.S. citizens who beneficially owned them.  Federal law requires all financial institutions to maintain an adequate customer identification program to ensure they know their customers and do not become a conduit for money laundering or terrorist financing.  But during SEC examinations, the firm twice failed to provide required books and records identifying certain foreign customers whom they were soliciting directly and to whom they were providing investment advice.  An ensuing investigation found that the firm’s customer identification program failed to obtain and maintain documentation to verify the identities of 23 non-U.S. citizens, the beneficial owners of 13 non-U.S. corporate entities, who executed more than $23 million in securities transactions through a brokerage account opened by a Central American bank affiliated with the firm.  SEC

January 29, 2016

Arthur Budovsky, founder of Liberty Reserve, which billed itself as the Internet’s "largest payment processor and money transfer system," pleaded guilty to running a massive money laundering enterprise used by cybercriminals around the world to launder the proceeds of their illegal activity.  Budovsky specifically designed Liberty Reserve to help users conduct anonymous and untraceable illegal transactions and launder the proceeds of their crimes.  Before the government shut it down in May 2013, Liberty Reserve had more than 5 million user accounts worldwide and had processed millions of transactions.  Budovsky admitted to laundering more than $250 million in criminal proceeds.  DOJ

September 30, 2015

Former chief financial officer of Siemens S.A. – Argentina Andres Truppel pleaded guilty to conspiring to pay tens of millions of dollars in bribes to Argentine government officials to secure, implement and enforce a $1 billion contract to create national identity cards.  In connection with his guilty plea, Truppel admitted he engaged in the decade-long scheme which involved concealing the illicit payments through various means, including using shell companies associated with intermediaries to disguise and launder the funds and by paying $7.4 million as part of a hedging contract with a foreign currency company incorporated in the Bahamas.  Truppel also admitted he used a $27 million contract between a Siemens entity and a company called MFast Consulting AG that purported to be for consulting services to conceal bribes to Argentine officials.  DOJ.

August 31, 2015

Vadim Mikerin, a Russian official residing in Maryland, pleaded guilty to conspiracy to commit money laundering in connection with his role in arranging over $2 million in corrupt payments to influence the awarding of contracts with the Russian state-owned nuclear energy corporation.  DOJ

January 30, 2015

Maxim Chukharev, former information technology manager for Liberty Reserve, a company that operated one of the world’s most widely used digital currency services, was sentenced to 36 months in prison for conspiring to operate an unlicensed money transmitting business. According to the government, Liberty Reserve billed itself as the Internet’s “largest payment processor and money transfer system” but instead was created, structured and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes. According to court records, before being shut down by the government in May 2013, Liberty Reserve conducted approximately 55 million transactions through its system totaling more than $6B in funds which encompassed suspected proceeds of credit card fraud, identity theft, investment fraud, computer hacking, child pornography, narcotics trafficking and other crimes.DOJ

August 14, 2014

Azzeddine El Amine of Costa Rica pleaded guilty to money laundering and operating an unlicensed money transmitting business in connection with his role in running Liberty Reserve, a company that operated one of the world’s most widely used digital currency services. Liberty Reserve was created to help users conduct illegal transactions anonymously and launder the proceeds of their crimes, and it emerged as one of the principal money transfer agents used by cybercriminals around the world to distribute, store, and launder the proceeds of their illegal activity. El Amine served as a principal deputy to Liberty Reserve founder Arthur Budovsky. Before being shut down by the government in May 2013, Liberty Reserve had more than one million users worldwide, including more than 200,000 users in the United States, who conducted approximately 55 million transactions through its system and laundered more than $6 billion in suspected proceeds of crimes, including credit card fraud, identity theft, investment fraud, computer hacking, child pornography and narcotics trafficking. DOJ

December 22, 2015

Participants in an alleged credit card “laundering” scheme have agreed to settle FTC charges that they illegally helped provide access to payment networks, thereby enabling scammers to place bogus charges on consumers’ credit cards. According to the FTC’s complaint, PayBasics, Todd Hatch and Jimmy Shin helped the defendants behind the Tax Club fraud to open and maintain merchant accounts used to process credit card payments for sales made by a number of different third-party scammers. The defendants in the Tax Club work at home scheme settled FTC charges last year. FTC
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