2008 - #yemen'i currency smuggling, loan shark ring targeted by ic

8/3/2019 2008 - #Yemen'i Currency Smuggling, Loan Shark Ring Targeted by IC

1/4

TheCorner

ston

eReport

Inside This Issue

Safeguarding America through

Financial Investigations

www.ice.gov/cornerstone

Toll-Free Tip Line:

1-866-DHS-2-ICE

Cornerstone is U.S. Immigrationand Customs Enforcements (ICE)comprehensive investigative initiativefor fighting financial crime.

The Cornerstone Report is a quarterlybulletin highlighting key issues

related to ICE financial, narcotics andpublic safety investigations.

ICE Cracks Boston,

Dominican Money

Laundering Scheme. . . . . 2

Yemeni Currency

Smuggling, Loan Shark

Ring Targeted by ICE . . . . 3

ICE Investigation Uncovers

Drug Money

Laundering Scheme. . . . . 4

Volume V: No. 1 April 2008

Financial Crime Trends:ICE Identifies Bulk Euro Shipments

New money laundering trends show euros being laundered through Colombia and the U.S.back to Europe.

Billions of euros and U.S dollarsentering the U.S. in 2006 and

the first three quarters of 2007 wereexported from Latin American andCaribbean-based countries. Information from the Federal Reserve andstatistical analysis generated fromICE's specialized computer systemcalled the Data Analysis & Researchfor Trade Transparency System(DARTTS) confirm that Colombiancasas de cambio are being used tophysically move bulk currency rather

than through established bank-tobank transfers. DARTTS is an analytical software program that assistsagents and analysts to detect andtrack potential money laundering,contraband smuggling and tradefraud by analyzing trade and otherdata in ways not previously available.

Recent investigative analysis usingDARTTS identified bulk shipmentsof euros moving from Colombia to

the United Kingdom via the UnitedStates. From 2006-2007, Colombiancasas de cambio shipped bulk currency valued at $4.8 billion to various U.S. ports of entry. Euros andU.S. dollars were manifested andshipped as cargo aboard U.S.-boundflights from Colombia. Upon arrivalto the U.S., International Transportation of Currency or MonetaryInstruments Reports are filed by

armored car couriers who transportthe currency from the U.S. airport

to banks or secured storage facilitiesused by foreign exchange companies. If the currency is in U.S. dollars, it is deposited into U.S. bankaccounts belonging to U.S.-basedforeign currency establishments.Wires are then sent to the designated bank accounts of the Colombia-based casas de cambio, therebyconverting dollars into pesos.Thismechanism can allow for the place

ment, layering and integration ofproceeds from known andunknown sources into U.S. and foreign financial sectors. When thecurrency is in euros, it is processedby the U.S.-based foreign exchangecompanies and ultimately sold toEuropean currency dealers andshipped to Europe.

Recent trends indicate that euros areoriginally smuggled from Europe to

Colombia and other South American countries. Euros in Colombiaand/or Peru are sold by Colombianor Peruvian-based casas de cambioto U.S.-based exchange houses andlegitimately transported into theU.S. With the completion of thesale, funds are wired back to theseller. This kind of bank-to-banktransfer converts U.S. dollars intoColombian or Peruvian pesos. $


2/4

TICE Cracks Boston, Dominican Money Laundering Scheme

This licensed money services business in Boston was the target of an ICE moneylaundering investigation.

Red Flag Indicators

Frequent wire transfer activity with little long-term investment in the account

Sudden increase in unexplained or extensive wiretransfers

Frequent deposits of third-party checks andmoney orders

Reluctance to provide identification whenmaking large deposits

Splitting or "smurfing" deposits in an attempt toavoid reporting requirements

Frequent deposits into and/or withdrawals fromaccounts that were opened in different areas of

the country

A

he

ston

eRepo

Page 2 of 4

Volume V: No. 1April 2008

recent ICECorner

rinvestigation in

the Boston arearevealed how alicensed money

services businesswas serving as a front for an international money laundering schemetied to drug trafficking.

ICE, in conjunction with severalU.S. and international law enforcement agencies, investigated themoney laundering activities ofSanto Melo and Claudio TejedaAndujar, who were doing business

as Boston Envio de Valores, Inc.(Envio). The business operatedas a licensed money service business and was sending in excess of$10 million per year to theDominican Republic, the majorityof which was alleged to have beennarcotics proceeds.

Between September 2004 andMarch 2006, Melo and TejedaAndujar conspired to launder

money that had been represented asdrug proceeds. A two-year "sting"operation was conducted duringwhich a cooperating witnessbrought cash to Envio, representingthe funds to be drug traffickingproceeds, and requested that themoney be wired to the DominicanRepublic.

Investigative Results

Melo, president of Envio, wascharged in an indictment withconspiracy to commit moneylaundering and other charges.Tejeda Andujar was also chargedwith money laundering conspiracy,conspiracy to distribute cocaineand two counts of distributionof cocaine.

Jose Garcia, a former employee ofEnvio, was indicted on 10 counts offailure to report a cash transactionexceeding $10,000. The chargesagainst Garcia relate to 10 occasions

when Garcia handled transactions ofmore than $10,000 in cash andfailed to file required currencytransaction reports.

The investigation concluded withthe simultaneous execution ofnumerous arrest, search andseizure warrants in Boston andthe Dominican Republic. A totalof $165,988 was seized during asearch of the business and fundswere seized from the businesssbank account in Boston. In theDominican Republic, 11 individualswere arrested, several of whomwere Tejeda Andujar's immediatefamily members. In addition, itemsseized included $42,000 in cash,three vehicles, four motorcyclesand four firearms. $


3/4

orC

orner

Yemeni Currency Smuggling, Loan Shark Ring Targeted by ICETheRe

Aston

ePage 3 of 4

Volume V: No. 1April 2008

n ICE investigap

tion in NewYork illustrates howseemingly legitimate transactions

were used to mask amassive currency smugglingscheme that illegally transportedmore than $5 million to the MiddleEastern nation of Yemen.

This case was initiated as a result ofseveral outbound courier mailinspections conducted at the mailfacility at JFK International Airportthat focused on parcels being

shipped from New York to Yemen.One package contained checksdrawn on the pension trust accountof Neil S. Kramer, a New York attorney.These checks were consecutively written in the amount of$9,000 each and mailed from different addresses of businesses in theNew York Yemeni community.

Subsequent investigation revealedthat Kramer, attorney Michael Weis

berg, real estate broker IsadoreUserowitz and other co-conspirators were involved in a scheme thatinvolved a fraudulent pension trustfund, lawyer's escrow accounts andshell corporations to facilitate andconceal a major currency smuggling and "loan sharking" operationin the New York metropolitan area.

ICE worked this investigation jointly

with the New York offices of the Federal Bureau of Investigation (FBI) andthe Internal Revenue Service (IRS).

The investigation identified two separate schemes employed by the defendants. In the first scheme, Kramer,Userowitz and six other conspiratorswere charged with operating an unlicensed money transmitting business.Four of the co-conspirators, who are

Yemeni expatriates, collected moniesfrom other Yemeni expatriates in theUnited States for shipment to knownmoney remitters in Yemen.Thesefour defendants gave the cash to

Kramer, Weisberg and Userowitz,who issued checks in correspondingamounts from their professionalchecking accounts.

The conspirators then wouldarrange for couriers traveling toYemen to smuggle the checks outof the United States without filingcurrency transaction reports withthe U.S. government as required bylaw. Using this method, more than$5 million was smuggled to Yemenin a 16-month period.

The second scheme operating duringthe same time period involvedunlawful money lending or "loansharking." Yemeni expatriates in needof cash were introduced to Kramer,who provided loans ranging inamounts from $5,000 to $100,000.

In return, the borrowers wererequired to sign a "confession ofjudgment," wherein the debtor"confesses" an amount due to acreditor before any lawsuit is filedand the creditor can use it to obtainjudgment if the debtor does notmake restitution. A confession ofjudgment requires the debtor towaive important due process rights,such as the right to a trial by jury,and is not legally recognized inmany states. In addition, the confession of judgment left blank theamount of the loan, the terms of theloan and the due date - all to befilled in at a later time by the defendants. In some instances, the debtorswere required to surrender the leasesto their businesses, as well as theirtravel and residency documents, suchas U.S. Citizenship and Immigration

Red Flag Indicators

Multiple third-party endorsed financialinstruments

Structuring cash deposits

Multiple deposits of non-bearer instrumentsDifferent handwriting between payee, endorser

and/or amounts

Frequent visits to safe deposit boxes

Irregular credit to debit ratios

Multiple check endorsements

Multiple overseas check endorsements

Financial transactions split among multipleaccounts

Unusually friendly relationships betweencustomers and bank teller

Service Permanent Resident AlienCards ("green cards") and passports,until their debts were paid in full.

Investigative Results

The investigation resulted in 12criminal arrests as well as the seizureof $2.2 million from the defendantsbank accounts and an additional $1million in cash from a defendant'ssafety deposit box. In addition, two

vehicles were seized and numerouslis pendens (forfeiture liens) werefiled against properties with a netmarket value of $20 million.

Kramer pleaded guilty to conspiringwith others to operate an unlicensed money transmitting businessand agreed to forfeit approximately$1.2 million seized at the time ofhis arrest.

On December 7, 2007, charges werebrought against 11 defendants,including eight previously arrestedsubjects and three new subjects withcharges that included conspiracy;operating an unlicensed moneytransmitting business; failure todeclare international transportationof U.S. currency; and structuringtransactions to avoid filing Currencyand Monetary Instrument Reports. $


4/4

ICE Investigation Uncovers Drug MoneyLaundering Scheme

oneRepor

TheCorner

IPage 4 of 4Volume V: No. 1

April 2008

n August 2003,st

ICE initiatedOperation Rain

maker, a long-termmultinational, multi-agency investigation into a money laundering anddrug trafficking organization.Thisorganization allegedly laundereddrug proceeds through the BlackMarket Peso Exchange (BMPE), alarge-scale international moneylaundering system used by SouthAmerican drug lords to convertdollars into pesos.

The investigation identified atraditional BMPE scheme beingemployed to launder drug moneyto Colombia. Drug traffickingproceeds in the U.S. were used topurchase textiles fromU.S. companies.These textiles werethen exported to companies inColombia and sold, with the proceeds ultimately paid to Colombian

drug trafficking organizations.ICE initiated an undercover operation that infiltrated the criminalorganization and identified over 65people involved in the BMPEscheme.The investigation eventuallygrew to include ICE offices in NewYork, Philadelphia, Boston, Miami,Puerto Rico, Mexico, Colombia andPanama.The investigation wasworked in conjunction with the

Internal Revenue Service (IRS)Criminal Investigation office inAtlanta and ICE attach offices inMexico, Colombia and Panama.

The organization arranged for drugproceeds in the form of U.S. dollarsto be collected by undercover agentsfor ultimate placement in financialinstitutions in numerous locations,

ICEs Operation Rainmaker led to the seizure of more than $8.5 million in allegeddrug proceeds.

including New York; Brockton,Mass.; Atlanta; Philadelphia; andPuerto Rico.Then, an equivalentamount of Colombian pesos wasdelivered to the organization inColombia. In some instances, following the collection and placementof the currency, the U.S. dollars, lessa commission, were wire transferredinto bank accounts in the UnitedStates and elsewhere, as instructed

by the organization.During the course of the investigation more than $8.5 million inalleged drug proceeds were seized.In addition, 26 kilograms ofcocaine and more than two kilograms of heroin were also seized.

For this case:

Increase in unexplained cash activity in abank account

Deposits of sequentially numbered money orders

Money is wired into an account and subsequentlywired out of the account in the same (or close

to the same) amount

For BMPE in general:

Payments to business in cash by unrelated thirdparties

Payments to business through wire transferfrom unrelated third parties

Payments for goods through checks, bank draftsand postal money orders

Red Flag Indicators

In April 2006, 30 individuals wereindicted by a federal grand jury inAtlanta as a result of the investiga

tion. Twenty-five of those subjectshave been arrested and five remainfugitives at large. Nineteen individuals have since pled guilty, with themost recent plea coming in December 2007. The majority of the individuals pled guilty to a conspiracyto launder drug proceeds; they faceprison sentences ranging from 24months to 108 months. $

2008 - #yemen'i currency smuggling, loan shark ring targeted by ic

Documents