Money Laundering

December 20, 2022

Futures commission merchant CHS Hedging LLC will pay civil penalty of $6.5 million to resolve claims that it failed to implement an adequate AML program and failed to implement risk-based limits concerning trading in an account controlled by one of its customers that owned and controlled a ranching company and other related businesses.  The customer engaged in speculative trading that was inconsistent with its financial resources and hedging needs, and, over the course of four years, made net margin payments of more than $147 million to CHS Hedging.  The government alleged that the company did not adequately investigate the source of the customer’s funds or report the transactions as suspicious.  CFTC

December 13, 2022

Danske Bank will pay over $2 billion to resolve charges from the SEC and DOJ arising from failures in its anti-money laundering compliance program at an Estonian bank it acquired and began operating as a branch in 2007, and from its failure to disclose the risks posed by the program’s significant deficiencies.  Danske Bank had received information from an internal whistleblower, conducted internal audits, and received information from regulators, from which it knew that the Estonian branch served high-risk customers, including many Russians, who were engaged in billions of dollars in suspicious and potentially criminal transactions; that its internal policies were inadequate; and, that its AML and KYC procedures were not being followed.  Despite this knowledge, the bank made materially misleading statements and omissions that it complied with its AML obligations and that it had effectively managed its AML risks.  These statements mislead investors and U.S. banks and allowed its high-risk customers to gain unlawful access to the U.S. financial system.  Danske agreed to pay an SEC penalty of $413 million and, as part of a criminal plea to conspiracy to commit bank fraud, will forfeit over $2 billion, with $850 million of that amount being credited from separate criminal or civil resolutions with foreign and domestic authorities, including the SEC.  DOJ, SEC, SDNY

October 18, 2022

Building materials manufacturer Lafarge S.A., together with its Syrian subsidiary, pleaded guilty to conspiring to provide material support and resources to U.S.-designated foreign terrorist organizations, paying penalties, fines, and forfeitures totaling $778 million.  According to the plea, during the civil war in Syria, Lafarge negotiated to pay armed factions to ensure continued operation of a cement plant it operated in Syria.  Defendants effectively entered into a revenue-sharing agreement with ISIS, paying the terrorist organization based on the amount of cement that defendants were able to sell.  DOJ; USAO EDNY

June 28, 2022

Paulette Carpoff will spend over 11 years in prison for her role in DC Solar’s billion-dollar Ponzi scheme. Between 2011 and 2018, DCS manufactured and sold trailer-mounted mobile solar generators, using the available federal solar tax credit to lure investors. In a leaseback arrangement, investors paid a percentage of the cost and financed the rest via DCS. Instead, DCS paid early investors with new investors’ money. Carpoff controlled the Ponzi-like payments, generated fake engineering reports for nonexistent MSGs, and lied to investors about DCS’ success. Carpoff enjoyed the spoils of the fraud, which included over 150 luxury and collector vehicles, lavish jewelry, and a private subscription jet service. USAO EDCA

May 20, 2022

Wells Fargo Advisors, which is a registered broker-dealer and investment advisor, agreed to pay $7 million to resolve allegations that it had an inadequate anti-money laundering system.  As a result, the SEC alleged, Wells Fargo did not file timely suspicious activity reports including with respect to foreign wire transfers to or from its customers’ brokerage accounts.  SEC

May 5, 2022

Robert Narvett will spend 15 years in prison for wire fraud and money laundering. Narvett, of Appleton, WI, defrauded nearly 70 different victims of over $2 million, in the end ruining credit scores, rendering victims unable to afford basic life necessities, and having to return to the workforce after retiring. USAO EDWI

April 19, 2022

John Rick Winer, 68, will spend 262 months in federal prison and pay $11 million in restitution for conspiring to defraud investors via a scheme spanning several US states. Winer, with his co-conspirators, solicited millions from donors for nonexistent charitable or humanitarian projects, and then laundered the proceeds. The conspirators utilized numerous fake entities, including one “House of Winer” to further the fraud. Winer is required to forfeit a residence in Norway, a luxury vehicle, approximately $4 million in silver coins, and a laptop. Upon completion of his prison term, Winer will spend 3 years under supervised release. USAO SD