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COVID-19 FRAUD:  Federal Bureau of Investigation                

The Federal Bureau of Investigation and the Small Business Administration Office of Inspector General initiated an investigation into the submission on behalf of five businesses of fraudulent Paycheck Protection Program (PPP) loan applications for approximately $800,000 each.  BSA data played an integral role in identifying numerous leads on subjects associated with the fraud and to identify the flow of fraudulent funds.  The BSA records also helped uncover a separate scheme by the main subjects of the investigation involving fraudulent auto loans.

Authorities seized a vehicle valued at $125,000, jewelry, over $120,000 in cash, and over $3 million from 10 bank accounts.  The defendants were charged with conspiracy to commit bank fraud, wire fraud, false statements to a financial institution, and money laundering.

The United States Attorney’s Office, Northern District of Georgia is prosecuting this case.

Cyber Threat:  United States Secret Service

The United States Secret Service (USSS) initiated an investigation into an international criminal organization that engaged in account takeovers, romance schemes, business email compromises (BECs), and ATM cash-out schemes.  From a cell phone photograph depicting a hand holding a debit card, the USSS identified a former U.S. citizen who had been a subject of interest to the USSS since 2013 because of his involvement in cash-out/fast-cash schemes involving ATM machines around the world.  The subject was ultimately found guilty of a BEC attack against a university in the amount of $13 million and the account takeover of an individual’s Home Equity Line of Credit in the amount of $250,000; he was sentenced to over 15 years in prison.

With the information gained from the investigation and arrest of the subject, agents launched an investigation into the activities of the larger transnational criminal organization.  The investigation yielded valuable information related to ongoing hacking, phishing, and BEC.  =

Transnational Organized Crime:  Drug Enforcement Administration

The Drug Enforcement Administration (DEA) initiated a multi-year investigation into a drug trafficking and money laundering organization with ties to Mexican and Colombian cartels.  Using various law enforcement techniques, and information obtained from BSA information, the DEA was able to conduct money pickups throughout the United States and passed dozens of leads to other DEA offices.  These leads resulted in the seizure of over $47 million dollars in narcotics proceeds, 289 kilograms of narcotics, 70 arrests, and the identification of associated drug organizations operating throughout the United States.

Transnational Security Threat:  Homeland Security Investigations

This multi-agency investigation led by the U.S. Department of Homeland Security’s Homeland Security Investigations (HSI) was initiated based on information from a BSA filing that individuals were using cryptocurrency accounts to finance the military wing of a U.S.-designated terrorist organization.  Through its investigative efforts, HSI identified other U.S. supporters and the flow of the donations.  The evidence and intelligence from the investigation provided a blueprint of the organization’s online recruitment, financing, domain, and network infrastructure.  Agents from HSI’s Philadelphia’s Cyber Crime Investigations Task Force, IRS-CI, and the Federal Bureau of Investigation executed a global cyber operation that resulted in the dismantlement of all of the organization’s online infrastructure.

Investigators seized over $2 million, 300 cryptocurrency accounts, and shut down four websites, four Facebook pages, several web domains—including an inaccessible terrorist-controlled domain—and virtual servers.  The United States Attorney’s Office for the District of Columbia prosecuted this case.

State and Local Law Enforcement:  Alaska State Troopers

In May 2018, the Alaska State Troopers’ drug enforcement unit initiated an investigation into a former high school teacher suspected of selling marijuana, LSD, cocaine, and psilocybin mushrooms to high school students.  From BSA data, investigators discovered that the subject had conducted unusual activity at several local banks and that he was the owner of an unregistered money services business (MSB).  The investigator located additional BSA filings on the subject and business through collaboration with FinCEN’s Training Team, which revealed activity of over $600,000 and the use of cryptocurrency exchanges to transfer funds.

After continued investigative efforts, and with the assistance of the U.S. Coast Guard Investigative Service and the Kodiak Police Department, a search warrant of the subject’s residence resulted in the seizure of various controlled substances in amounts consistent with distribution, as well as $320,000 in cryptocurrency.  The subject was arrested and charged with several state felony charges.  The case was later adopted and prosecuted by the U.S. Attorney’s Office, District of Alaska.

Third Party Money Launderers:  Internal Revenue Service-Criminal Investigation

Thanks to the efforts of a Suspicious Activity Report (SAR) team, the Internal Revenue Service-Criminal Investigation (IRS-CI) initiated a multi-year structuring investigation into the illicit activity of a licensed real estate broker, who was purchasing residential properties using structured cash deposits.  Law enforcement determined the subject used his expertise as a real estate broker to help a suspected drug trafficker launder funds by purchasing real estate.  The subject titled the properties in his own name to conceal the property’s true owner and submitted fictitious proof of funds letters during the settlement process.  The subject profited from the scheme by receiving tens of thousands of dollars in real estate commissions.

The subject was convicted on two counts of structuring monetary instruments and sentenced to 14 months of imprisonment.  The United States Attorney’s Office, Northern District of Illinois, prosecuted this case.

SAR Review Team:  Washington-Baltimore HIDTA-Northern Virginia Financial Initiative

This investigation, led by the Washington-Baltimore High-Intensity Drug Trafficking Area-Northern Virginia Financial Initiative, focused on a subject suspected of running a major money-laundering operation using funnel accounts for interstate shipment and distribution of cocaine.

Analysis of BSA filings led to the identification of a number of links to the money laundering operation.  FinCEN’s 314(a) Program was used to identify nine previously unknown accounts used to facilitate the funneling of approximately $1 million in illicit drug proceeds to one individual.

The subject was arrested, pled guilty to drug trafficking and money laundering, and was sentenced to 10 years in prison.  The United States Attorney’s Office, Eastern District of Virginia, prosecuted this case.

Significant Fraud:  New York County District Attorney’s Office

The New York County District Attorney’s Office (NYDA) initiated, based in part on BSA reporting, a large-scale investigation of an institution of higher learning, the parent company of a media company, several corporate principals, and related entities.

The BSA filings concerned two suspicious loan applications totaling over $15 million.  Both loan applicants were associated with an individual who had established a college in the United States that sponsored student visas for travel to the United States.  Those students were required to work, for little pay, for a network of business entities controlled by the subject’s co-conspirators.

The investigators tracked a network of domestic and international financial transactions that revealed an elaborate scheme by an interrelated group of domestic and foreign actors to defraud dozens of financial institutions, and launder the proceeds through domestic and international entities.  False information was used to obtain over $30 million in financing from at least 11 lenders.  The defendants also established a fraudulent equipment vendor to funnel the loan proceeds to the other defendants.  In some instances, the subjects used loan proceeds from newly executed loans to payout earlier fraudulent loans obtained from the same lenders.

Eight individual and corporate defendants were convicted of money laundering, scheming to defraud, conspiracy, criminal contempt, and falsification of business records.  The NYDA is handling the prosecution of this case.

Michael Nelson

Michael has great depth of experiences and skills that evolved from over 35 years of representing international businesses, executives, expatriates and multi-national families. From these years of successful legal representations of CEOs of Fortune 500 Companies to family clients with needs from complex estate planning to international trusts and private foundations. He is committed to his clients, always finding better alternatives or options for his clients. Dedication to the client is synonymous with his name.