Category Archives: Fraud

Illinois Real Estate Developer Pleads Guilty to Investment Fraud Scheme

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Thursday, May 25, 2017

ROCK ISLAND, Ill. – A Rock Island, Ill., businessman, Todd B. Raufeisen, waived indictment and pled guilty to an information that charged him with defrauding investors in his land development and management projects of approximately $1.7 million. Raufeisen, 56, entered his guilty pleas to one count each of wire fraud and money laundering today before U.S. District Judge Sara Darrow. Sentencing is scheduled on Sept. 14, 2017.

In court documents and statements, Raufeisen admitted that from 2010 to August 2016, he engaged in a scheme that defrauded approximately 22 investors in his development projects and resulted in a loss of approximately $1.7 million. Raufeisen engaged in business under various business names, including RDC Hotel Solutions.

As part of the scheme, Raufeisen promised prospective investors a higher rate of interest than conventional, insured investments and short turnarounds on return of the principle and interest. In exchange for the money invested, Raufeisen promised certain investors that the money would be placed in escrow until needed, would only be used for specific development or management projects, and, if unused, the money would be returned to the investor. In fact, Raufeisen used the investors’ money for personal expenses and to pay previous investors to whom he was indebted.

Further, Raufeisen provided certain investors with promissory notes that promised repayment of invested principle and interest. The notes were purportedly signed and guaranteed by persons who knew nothing of the promissory notes and had not guaranteed repayment to the investors. In fact, Raufeisen admitted that he forged the signatures on the promissory notes.

The Internal Revenue Service Criminal Investigation Division; Federal Bureau of Investigation; and, the Office of the Illinois Secretary of State conducted the investigation. Assistant U.S. Attorney Donald Allegro is prosecuting the case on behalf of the government.

The maximum statutory penalties for the offenses – 20 years in prison for wire fraud; 10 years for money laundering – are provided here for informational purposes, as final sentencing is determined by the court based on the advisory Sentencing Guidelines and other statutory factors. The court may also order the defendant to pay restitution to victims of the offenses.

12 Debarred Over Role in Syria Humanitarian Aid Fraud Scheme

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May 26, 2017

Washington, D.C.—The U.S. Agency for International Development (USAID) Office of
Inspector General (OIG) announced the debarment of 12 companies and individuals over their participation in a fraud scheme affecting humanitarian aid in Syria. USAID officials made the decision in April barring Orhan Senkardes, the Senkardes Company, and certain related individuals and companies from future business with the
U.S. Government for 5 years.

USAID OIG, which has been investigating corruption in cross-border humanitarian aid programs in Syria since 2015, provided information that led to USAID’s debarment action. “OIG’s pursuit of corrupt actors in Syria and the surrounding region remains as critical as ever as we work to protect life-saving aid programs from fraud, waste, and abuse,” said Ann Calvaresi Barr, USAID Inspector General. “I commend our special agents for their tenacity, insight, and continued dedication to our investigative efforts and recognize USAID’s willingness to take decisive action to protect taxpayer resources based on OIG’s work.” The OIG’s investigation is open and ongoing.

USAID’s debarment of the 12 companies and individuals applies across the U.S. Government. OIG’s investigative work contributed to the decision, establishing that Orhan Senkardes, the Senkardes Company, and Mr. Senkardes’ affiliated companies or personnel participated in a procurement fraud scheme with corrupt nongovernmental organization staff, including Luan Meraku, who implemented USAID-funded programs. Further, investigative results revealed that although the Senkardes Company, Selkas, Forvet, and Yigit Motorlu companies were all under Mr. Senkardes’ control, they bid against each other for U.S.-funded procurements under the appearance of fair and open competition. The debarred companies and affiliated individuals are:

  • Senkardes Gida San ve Tic Ltd.
  • Selcuk Benli
  • Forvet
  • Ismet Kalin
  • Selkas
  • Hecran Kalin
  • Yigit Motorlu
  • Zerrin Nalbanoglu
  • Orhan Senkardes
  • Erol Senkardes
  • Luan Meraku
  • Erdal Senkardes

The U.S. Government’s System for Award Management (SAM), www.sam.gov, provides further information on each of the debarred entities and individuals, which are currently excluded from transactions with U.S. Government departments, agencies, and contractors.

To date, OIG’s investigations in Syria and the surrounding region have identified a
network of commercial vendors and nongovernmental organizations employees who
colluded to engage in bid-rigging and multiple kickback schemes related to Syrian
humanitarian aid awards. The investigations to date have led to $239 million in
suspended program funds; 35 agency suspension or debarment decisions; 19 personnel resignations, terminations, or suspensions; and $19.6 million in savings for USAID.

Throughout the course of investigations, OIG coordinates closely with USAID’s Bureau
for Management, Office of Management Policy, Budget, and Performance, Compliance
Division. The division is responsible for making recommendations on potential
suspension and debarment actions to the agency.

Protecting humanitarian operations from organized crime is a top priority for USAID
OIG’s Office of Investigations. In addition to aggressively investigating allegations,
USAID OIG has also published a fraud awareness handbook and is actively engaged in providing fraud awareness training within the industry. The handbook, Compliance and Fraud Prevention: A Pocket Guide for the Middle East Crisis Humanitarian Response, can be found on OIG’s web site.

Anyone with information about suspected fraud, waste, or abuse in USAID programs in Syria and around the world is urged to contact USAID OIG directly.
Telephone
+1 (800) 230-6539 or +1 (202) 712-1023
Email
Syria Investigations Team: [email protected]

General: [email protected]

Online, via OIG’s public web site
https://oig.usaid.gov/content/oig-hotline
Information reported to OIG is treated in confidence and OIG protects the identity of
each person providing information to the maximum extent provided by law.
###

Canadian Man Sentenced to 97 months in Prison for Investment Scheme

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Tuesday, June 13, 2017

FORT WORTH — Ryan Steve Magee, a citizen of Canada, was sentenced this morning by Senior U.S. District Judge Terry R. Means to 97 months in federal prison and ordered to pay $2,372,573 in restitution, following his guilty plea in February 2017 to one count of wire fraud, announced U.S. Attorney John Parker of the Northern District of Texas.

Magee, 34, was indicted in July 2016 on five counts of wire fraud. Magee was arrested in December 2016, and has remained in custody since his arrest.

According to plea documents filed in his case, Magee was a business man and an active day trader in the U.S. stock market. Beginning in 2011, and continuing until the end of 2013, Magee devised and operated a scheme to obtain money by means of false and fraudulent material pretense and representations. Magee solicited and obtained money from victim investors by making false representations about how their money would be invested, how much of their money would be invested, how much their investment was earning, how much money they had in their account, and by making other false statements.

Specifically, J.C. and D.C. decided to invest some of their savings with him. At Magee’s direction, D.C. wired $35,000 to Magee’s account on August 12, 2011. After Magee received the money from D.C., he immediately diverted $25,000 for his own personal expenditures. Magee then deposited the remaining $10,000 into his day-trading account located at Interactive Brokers (IB). Magee sent weekly emails to J.C. and D.C. entitled “Trading Update,” which falsely showed the beginning account principal of $35,000 and the daily gains, even though Magee had diverted $25,000 of the investors’ money to his own personal use.

In November 2011, J.C. and D.C. cashed in J.C.’s 401(k) and wired $240,000 to Magee’s account. After Magee received the $240,000, he immediately diverted approximately $160,000 to his personal accounts, transferring only $80,000 into his IB trading account. Magee again sent weekly “Trading Update” emails claiming to have deposited the entire $240,000 in the IB account. Though he lost approximately $75,000 by the end of the month and his trades for November 2011, were a negative 70 percent, Magee listed 200 percent gains in the weekly “Trading Update” emails he sent to J.C. and D.C, between November 16 2011, and November 30, 2011.

On April 10, 2013, in the final “Trading Updates” email Magee sent to J.C. and D.C., Magee claimed their account balance was over $1.3 million. However, Magee’s IB account statement for the time period ending March 31, 2013, showed that Magee’s IB account had a negative cash balance of $9,578. J.C. and D.C. suffered a total loss of approximately $275,000. Between May 2010 and September 2013, other victims of the fraudulent scheme in the United States and Canada suffered a total loss of approximately $2,097,573.

The Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney Nancy Larson prosecuted.

Southern CA Resident Sentenced 34 Months in Prison For Bank Fraud Conspiracy

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Tuesday, June 13, 2017

SAN FRANCISCO – Michael Inman was sentenced to 34 months in prison for his role in a bank fraud conspiracy, announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence was handed down June 7, 2017, by the Honorable Charles R. Breyer, U.S. District Judge, following a guilty plea in which Inman admitted he participated in a scheme to steal checks, open fraudulent bank accounts, write fraudulent checks, and deposit stolen and fraudulent checks as part of a bank fraud scheme.

Inman, 55, of Los Angeles, Calif., pleaded guilty on February 8, 2017, to participating in the bank fraud conspiracy. According to the plea agreement, Inman admitted that beginning in January of 2013, he agreed with at least one other person to commit bank fraud. The plea agreement describes a number of transactions in which Inman stole high value cashier’s checks from the victim and he and his co-conspirators used the stolen identity of the victim to write and deposit fraudulent checks. For example, in January of 2013, members of Inman’s conspiracy opened a bank account in the name of the victim and, in February of 2013, a co-conspirator deposited into the account a stolen $99,000 cashier’s check that had been made out to the victim. Similarly, Inman admitted that in June of 2013, co-conspirators opened another two fraudulent accounts and deposited a $99,000 check. Further, Inman admitted participating in a scheme in which people were provided checks drawn on the fraudulent bank accounts.

A grand jury indicted Inman on February 11, 2016, charging him with one count of conspiracy to commit mail fraud, wire fraud, and bank fraud, in violation of 18 U.S.C. § 1349. Pursuant to the plea agreement, Inman pleaded guilty to the conspiracy count.
In addition to the prison term, Judge Breyer sentenced Inman to pay $198,000 in restitution to the victim and to forfeit $198,000. Judge Breyer ordered the defendant to begin serving his sentence on or before August 2, 2017.

Assistant U.S. Attorneys Marc Price Wolf and Claudia A. Quiroz are prosecuting the case with assistance from Kevin Costello, Yanira Osorio, and Lance Libatique. The prosecution is the result of an investigation by the FBI.

Virginia Man Admits to Falsely Certifying Bridge Inspection Vehicles

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Friday, May 26, 2017

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that CAROL “CASEY” SMITH, 56, of Chester, Virginia, waived his right to be indicted and pleaded guilty yesterday before U.S. District Judge Stefan R. Underhill in Bridgeport to a federal charge related to his false certification of bridge inspection vehicles.

According to court documents and statements made in court, Under Bridge Inspection (“UBI”) vehicles are vehicles that contain a moveable boom with a platform. The vehicles are used to conduct inspections of bridges by positioning the vehicle on top of the bridge and, using the boom, lifting a platform carrying inspectors alongside or beneath a bridge deck. “Company A” rents or leases bridge access equipment, including UBI vehicles, to engineering companies and government agencies for use on bridge inspection and bridge maintenance projects. Company A’s UBI vehicles travel on interstate highways to job locations throughout the U.S. Company A has several locations, including one in Connecticut.

SMITH was the president and chief surveyor for Virginia-based Martin Enterprizes, Inc. (“MEI”). Between January 2012 and January 2015, SMITH falsely represented that he, as the chief surveyor for MEI, examined the UBI vehicles in Company A’s fleet on an annual basis. During that time, SMITH created 165 Certificates of Unit Text/Examination of Material Handling Device (the “Certificate of Inspection”) for UBI vehicles in Company A’s fleet. As part of the Certificate of Inspection, SMITH verified that he personally examined the specified UBI vehicle and that the UBI vehicle met federal requirements. SMITH also issued 165 annual stickers representing that he had inspected the UBI Vehicles, and he knew that an employee or employees of Company A would affix the stickers to the UBI vehicles, and that those UBI vehicles would be driven on interstate highways and used on jobs throughout the U.S., including Connecticut.

Between 2012 and 2015, in exchange for the Certificates of Inspection for the UBI vehicles, as well as other vehicles in its fleet, Company A paid SMITH a total of $76,400.

SMITH pleaded guilty to one count of making a false statement, which carries a maximum term of imprisonment of five years. A sentencing date is not scheduled.

This matter is being investigated by the U.S. Department of Transportation – Office of Inspector General and the U.S. Department of Labor – Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorney Nancy V. Gifford.

US Files Forfeiture Complaint Against Chinese Company for Laundering Money for North Korea

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Thursday, June 15, 2017

Company Allegedly Violated Sanctions by Laundering U.S. Dollar Transactions on Behalf of North Korea’s Foreign Trade Bank
WASHINGTON – The United States has filed a complaint to civilly forfeit $1,902,976 from Mingzheng International Trading Limited (Mingzheng), a company based in Shenyang, China. The complaint alleges that Mingzheng is a front company that was created to launder United States dollars on behalf of sanctioned North Korean entities.
According to the complaint, Mingzheng conspired to evade U.S. economic sanctions by facilitating prohibited U.S. dollar transactions through the United States on behalf of the Foreign Trade Bank, a sanctioned entity in the Democratic People’s Republic of Korea (North Korea) and to launder the proceeds of that conduct through U.S. financial institutions.

The forfeiture action was announced today by U.S. Attorney Channing D. Phillips and Michael DeLeon, Special Agent in Charge of the FBI’s Phoenix Field Office.

The action represents one of the largest seizures of North Korean funds by the Department of Justice.

“This complaint alleges that parties in China established and used a front company to surreptitiously move North Korean money through the United States and violated the sanctions imposed by our government on North Korea,” said U.S. Attorney Phillips. “Sanctions laws are critical to our national security and foreign policy interests, and this case demonstrates that we will seek significant remedies for those companies that violate them.”

“The FBI has dedicated substantial resources to investigate complex illegal monetary transactions involving foreign adversaries. This specific case has significant national security implications,” said Special Agent in Charge DeLeon. “The men and women of the FBI’s Phoenix Field Division worked diligently to identify the illegal transactions. We hope this sends a strong message to those who utilize US banking systems for illegal activities.”

The complaint was filed on June 14, 2017, in the U.S. District Court for the District of Columbia. According to the complaint, Mingzheng is owned by a Chinese national and is based in Shenyang, China. Mingzheng allegedly operated as a front company for a foreign-based branch of the North Korea-based Foreign Trade Bank (FTB). In March 2013, the U.S. Treasury Department designated the Foreign Trade Bank as a sanctioned entity pursuant to the Weapons of Mass Destruction Proliferators Sanctions Regulations. The designation noted that the Foreign Trade Bank is a state-owned bank, and “acts as North Korea’s primary foreign exchange bank.” The designation further noted that North Korea uses the Foreign Trade Bank to facilitate millions of dollars in transactions on behalf of actors linked to its proliferation network.

The United Nations Panel of Experts reported in 2017 as to how North Korean banks have been able to evade sanctions and continue to access the international banking system. Specifically, despite strengthened financial sanctions, North Korean networks are adapting by using greater ingenuity in accessing formal banking channels. This includes maintaining correspondent bank accounts and representative offices abroad, which are staffed by foreign nationals making use of front companies. These broad interwoven networks allow the North Korean banks to conduct illicit procurement and banking activity.

An FBI investigation revealed that Mingzheng’s alleged activities mirror this money laundering paradigm. Specifically, Mingzheng acts a front company for a covert Chinese branch of the Foreign Trade Bank. This branch is operated by a Chinese national who has historically been tied to the Foreign Trade Bank.

The government is seeking to forfeit $1,902,976 that was transacted in October and November of 2015 by Mingzheng, via wire transfers, using their Chinese bank accounts. These U.S. dollar payments, which cleared through the United States, are alleged to violate U.S. law, because Mingzheng was surreptitiously making them on behalf of the Foreign Trade Bank, whose designation precluded such U.S. dollar transactions.

The claims made in the complaint are only allegations and do not constitute a determination of liability.

The FBI’s Phoenix Field Office is investigating the case. Assistant U.S Attorneys Arvind K. Lal, Zia M. Faruqui, Christopher B. Brown, Deborah Curtis and Brian P. Hudak are prosecuting the case, with assistance from Paralegal Specialist Toni Anne Donato.

Houston Man Faces Twenty Years in Prison for His Role in $6.5 Million Diamond Fraud Scheme

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Tuesday, May 30, 2017

DALLAS — A Houston man, Christopher Arnold Jiongo, appeared this morning before U.S. Magistrate Judge Paul D Stickney and pleaded guilty to one count of wire fraud, announced U.S. Attorney John Parker of the Northern District of Texas.

Jiongo, 55, faces a maximum statutory penalty of twenty years in federal prison and a $250,000 fine. He will remain on bond pending sentencing, which is set for September 11, 2017, before U.S. District Judge David C. Godbey. Co-defendants Craig Allen Otteson, 64, of McKinney and Jay Bruce Heimburger, 58, of Dallas, are scheduled for trial July 17, 2017.

According to plea documents filed in the case, Otteson acted as the Managing Member and Chief Compliance Officer of Stonebridge Advisors, LLC, located on Belt Line road in Dallas. Stonebridge Advisors was involved as the Managing Partner of Worldwide Diamond Ventures, L.P., located at 6029 Belt Line in Dallas, and it acted as the General Partner of Worldwide Diamond. Heimburger acted as a Principal Partner of Worldwide Diamond, and he was also listed as the registered agent and Director of JBH Securities, Inc. located on San Rafael in Dallas. JBH Securities was primarily involved in the business of providing investment advice. Worldwide Diamond was primarily involved in the business of buying and reselling diamonds on the international market. On October 1, 2013, Worldwide Diamond filed for bankruptcy in the Northern District of Texas.

During the summer of 2011 through November 2011, Jiongo drafted $50,000 diamond notes which were later used as investment vehicles to generate investment funds. Jiongo, Otteson and Heimburger represented that all investment funds would be used to buy and resell diamonds and that every dollar invested would always be fully secured by the cash and diamond inventory of Worldwide Diamond. Sometime in the summer of 2011, Jiongo, Otteson and Heimburger realized that the original business plan was not working out as planned and that the defendants therefore could not honor the original promises and representations made to investors. Jiongo, Otteson, and Heimburger then engaged in a scheme to defraud investors by fraudulently concealing from investors that investor funds were being used for unauthorized purposes unrelated to the purchase and resale of diamonds. These unauthorized purposes included making several loans totaling approximately $2.4 million to third parties and to Global Reach Industries Limited for purposes not disclosed to or authorized by the investors. Jiongo, Otteson and Heimburger also fraudulently concealed from Worldwide Diamond investors that defendants planned to make an unauthorized $1 million loan of investor funds to Global Reach Industries Limited, a company established and controlled by defendant Jiongo.

During July 2011, Jiongo, Otteson and Heimburger all agreed to fraudulently wire transfer $400,000 of investor funds into several bank accounts designated by Jiongo. In August 2011, all three defendants agreed that defendant Jiongo would cause another $600,000 of investor funds to be wire transferred directly into a trust account controlled by Jiongo.

As a result of this scheme to defraud during the period from about 2011 through 2012, documents reflect that millions of dollars were fraudulently collected from Worldwide Diamond investors.

This case is one of several felony prosecutions of bankruptcy-related crimes generated by the Bankruptcy Fraud Initiative in the Northern District of Texas. Of the 26 defendants charged as part of that initiative – 17 have been convicted, 1 resulted in a mistrial and 8 are pending trial.

The U.S. Postal Inspection Service investigated the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.

Former Rutherford County Sheriff Sentenced On Federal Corruption Charges

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Department of Justice U.S. Attorney’s Office

Middle District of Tennessee

FOR IMMEDIATE RELEASE

Thursday, May 4, 2017

Former Rutherford County Sheriff Sentenced On Federal Corruption Charges
Former Rutherford County Sheriff Robert Arnold, 41, of Murfreesboro, Tenn., was sentenced today to 50 months in prison, followed by 3 years of supervised release, after pleading guilty earlier this year to fraud and corruption charges, announced Acting U.S. Attorney Jack Smith of the Middle District of Tennessee and Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division.

 

Arnold was indicted in May 2016 and in January 2017, he pleaded guilty to wire fraud, honest services fraud and extortion under color of official right. These charges resulted from an investigation into his role in the formation and operation of the electronic cigarette company, JailCigs, LLC. In his plea, Arnold admitted to using his official position as Sheriff of Rutherford County to benefit JailCigs by allowing the company’s electronic cigarettes to come into the Rutherford County jail as non-contraband and be distributed by county employees; taking steps to disguise his involvement in the company; and misrepresenting the benefits that Rutherford County was supposedly receiving from JailCigs. Additionally, Arnold admitted that he personally received over $66,000 from the company, and that he lied about his income from, and knowledge of, JailCigs when he was confronted by local media in April 2015.

 

In addition to his prison sentence, Senior U.S. District Judge Marvin E. Aspen of the Northern District of Illinois (sitting by designation in the Middle District of Tennessee) ordered Arnold to pay $52,500 in restitution to Rutherford County and to forfeit $66,790, an amount equal to the commission payments he received from sales at the Rutherford County jail, plus the additional payments Arnold obtained that should have been paid to the county general fund. Judge Aspen also ordered Arnold to serve a three-year term of supervised release following his prison sentence.

 

Co-defendants, former Chief Administrative Deputy Joe L. Russell II, of Rutherford County, Tennessee, and John Vanderveer, of Marietta, Georgia, pleaded guilty on Jan. 20 and Jan. 30, respectively. Vanderveer is set to be sentenced on September 6, 2017 and Russell is set to be sentenced on September 8, 2017.

 

 

This case was prosecuted by Assistant U.S. Attorney Cecil W. VanDevender, of the Middle District of Tennessee and Trial Attorney Mark J. Cipolletti of the Criminal Division’s Public Integrity Section. The case was investigated by special agents from the FBI and Tennessee Bureau of Investigation.

GrantFraud.Com: Former DHS Employee Inprisoned for Stealing USDA Funds

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As part of our effort to track white collar enforcement trends with the new Administration we will be tracking developments in grant fraud enforcement and procurement fraud enforcement over at GrantFraud.Com that is under construction and open.  You may click the title below to see a new USDA grant fraud case filing.  For a variety of reasons that Brad Geyer will be blogging about, we are projecting emboldened grant fraud and procurement fraud enforcement moving forward

Former DHS Employee Sentenced to Prison in Scheme to Steal USDA Funds Intended to Feed Hungry Children & Little Rock Man Pleads Guilty in Same Scheme

 

 

 

Liberty Reserve Exec Gets 20 Years For Laundering

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Arthur Budovsky, 42, was sentenced today in the Southern District of New York to 20 years imprisonment for running a massive money laundering enterprise through his company Liberty Reserve S.A. (“Liberty Reserve”), a virtual currency once used by cybercriminals around the world to launder the proceeds of their illegal activity.

Assistant Attorney General Leslie R. Caldwell for the Justice Department’s Criminal Division and U.S. Attorney Preet Bharara for the Southern District of New York made the announcement.

In January, Budovsky pleaded guilty to one count of conspiring to commit money laundering.  In imposing sentence, the court noted that Budovsky ran an “extraordinarily successful” and “large-scale international money laundering operation.”  U.S. District Judge Denise L. Cote also ordered Budovsky to pay a $500,000 fine.

“The significant sentence handed down today shows that money laundering through the use of virtual currencies is still money laundering, and that online crime is still crime,” said Assistant Attorney General Caldwell.  “Together with our American and international law enforcement partners, we will protect the public even when criminals use modern technology to break the law.”

“Liberty Reserve founder Arthur Budovsky ran a digital currency empire built expressly to facilitate money laundering on a massive scale for criminals around the globe,” said Manhattan U.S. Attorney Bharara.  “Despite all his efforts to evade prosecution, including taking his operations offshore and renouncing his citizenship, Budovsky has now been held to account for his brazen violations of U.S. criminal laws.”

According to the indictment, Liberty Reserve billed itself as the Internet’s “largest payment processor and money transfer system” and allowed people all over the world to send and receive payments using virtual currency.  At all relevant times, Budovsky directed and supervised Liberty Reserve’s operations, finances, and business strategy and was aware that digital currencies were used by other online criminals, such as credit card traffickers and identity thieves.

Liberty Reserve grew into a financial hub for cybercriminals around the world, trafficking the criminal proceeds of Ponzi schemes, credit card trafficking, stolen identity information and computer hacking.  By May 2013, when the government shut it down, Liberty Reserve had more than 5.5 million user accounts worldwide and had processed more than 78 million financial transactions with a combined value of more than $8 billion.  United States users accounted for the largest segment of Liberty Reserve’s total transactional volume – between $1 billion and $1.8 billion – and the largest number of user accounts – over 600,000.

Four co-defendants, Vladimir Kats, Azzeddine El Amine, Mark Marmilev and Maxim Chukharev, have already pleaded guilty.  Marmilev and Chukharev were sentenced to five years and three years in prison, respectively.  Judge Cote is expected to sentence Kats and El Amine May 13. Charges remain pending against Liberty Reserve and two individual defendants who are fugitives.

The U.S. Secret Service, the Internal Revenue Service-Criminal Investigation and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations investigated this case as part of the Global Illicit Financial Team.  The U.S. Secret Service’s New York Electronic Crimes Task Force assisted with the investigation.  The Judicial Investigation Organization in Costa Rica, Interpol, the National High Tech Crime Unit in the Netherlands, the Spanish National Police’s Financial and Economic Crime Unit, the Cyber Crime Unit at the Swedish National Bureau of Investigation and the Swiss Federal Prosecutor’s Office also provided assistance.

Trial Attorney Kevin Mosley of the Criminal Division’s Asset Forfeiture and Money Laundering Section and Assistant U.S. Attorneys Christian Everdell, Christine Magdo and Andrew Goldstein of the Southern District of New York are prosecuting the case.  The Criminal Division’s Office of International Affairs and Computer Crime and Intellectual Property Section provided substantial assistance.