The Justice Department has opened in a new front in its battle against criminal money laundering, targeting so-called “non-bank” institutions that help hide the proceeds of crime.
The new emphasis was evident last week, when the department announced it had charged seven people and four check-cashing businesses under the Bank Secrecy Act for failing to follow anti-money-laundering reporting procedures and requirements. The combined value of the transactions described in the charges was more than $50 million.
Four indictments were filed under seal on June 12 and unsealed two days later.
“We wanted to use these charges as an initial warning that we are looking here, and that we will use our enforcement powers when necessary,” Jennifer Shasky Calvery, chief of the Asset Forfeiture and Money Laundering section in the Criminal Division, said in a telephone interview. “The criminals are going to find the weakest link” to launder money, she added.
The Bank Secrecy Act, the government’s chief anti-money laundering statute, covers not just banks but a wide range of entities and people that process money in some way.
Casinos, car dealerships, travel agencies, securities and commodities brokers, credit card system operators and pawnbrokers are examples of “non-bank” professionals and entities subject to the Bank Secrecy Act. The use of such non-bank institutions is suspected to be widespread, with Medicare and Medicaid fraudsters especially known to use alternative financial systems.
The cases were brought by the Money Laundering and Bank Integrity unit, formed in October 2010. Shasky Calvery described it as a “specialized unit with a boutique practice dedicated to hardening the system to money laundering.”
The unit focuses on three priorities: financial institutions and their officers whose actions threaten the broader financial system; emerging technologies that can open up new avenues of money laundering, and what Shasky Calvery calls the “professionals” – lawyers, brokers, accountants, freight forwarders – who can help drug cartels and other criminal organizations launder profits.
The check cashing cases fall under the third category.
In the charges unveiled last week, check-cashing businesses in New York, Los Angeles and Philadelphia were accused of filing false currency transaction reports and failing to follow anti-money laundering procedures. The individual transactions in question were more than $10,000 each, the level at which reporting requirements are triggered.
All of the cases appear to be related to underlying health care fraud investigations.
A check-cashing store called Belair Payroll in Flushing, N.Y., and its owner, Craig Panzera, were charged with violations of the Bank Secrecy Act. Two individuals, Lasha Goletiani and Zhan Petrosyants, were also charged for presenting some $19 million worth of checks to be cashed at Belair, written on the accounts of shell corporations. The shell corporations appeared to be health care related and were established in the name of foreign nationals who were no longer in the United States.
Belair filed currency transaction reports that falsely identified the foreign owners of the shell corporation as having cashed the checks, the charges said. The schemed lasted from June 2009 to June 2011, the department said.
In Philadelphia, a store called Bargain Island is alleged to have cashed more than $5.8 million in checks written to different medical services companies and brought to the store by check couriers. The owner of Bargain Island, George Gonchar, was charged with failing to file currency transactions reports and for not having an effective anti-money laundering program.
The indictment, returned in the Eastern District of New York, alleges that Gonchar knew the couriers for whom he cashed the checks were not the people to whom the checks were made out. He also allegedly knew that the couriers were not connected to the companies in whose names the checks were cashed.
In Los Angeles, G&A Check Cashing, its general manager Karen Gasparian, and its compliance officer Humberto Sanchez were charged with Bank Secrecy Act violations. From 2006 to 2012, G&A allegedly paid out more than $20 million on checks larger than $10,000, but no currency transaction reports were filed.
Also in Los Angeles, AAA Cash Advance and its manager, Diana Brigitt, were accused of cashing some $5 million in checks between January 2008 and February 2012 but only filing seven transaction reports. The checks were written to businesses that appeared to be health-care related, the department said.
The cases are being prosecuted by trial attorneys Matthew Haslinger, Matthew Klecka and Claiborne Porter of the Money Laundering and Bank Integrity unit; and Jeanette Gunderson, a trial attorney in the Forfeiture unit. Assistant U.S. Attorneys David Kirman in Los Angeles and Charles Kleinberg in Brooklyn are also prosecuting the cases.