3 Monsey Residents Arrested By FBI In $6 Million Financial Scheme

MONSEY (VINnews) — 3 individuals from Monsey, NY were arrested by the FBI Thursday in a case involving a highly controversial tactic by the government.

Essentially, the government takes a person who has violated the law and faces harsh legal repercussions and gets that person – called a Confidential Witness (CW) to help catch other would-be offenders.  Thus far, however, the courts have ruled that it is not legally considered entrapment.

This particular case allegedly involved a multimillion-dollar scheme to operate an unlicensed money transmitting business for the purpose of transmitting proceeds derived from illegal activity. The defendants are scheduled to appear before U.S. Magistrate Paul E. Davison in federal court later today.

According to allegations contained in the Complaint unsealed today in Manhattan federal court the individuals were arrested following an FBI sting operation. As alleged, from approximately in or about September 2014 to in or about August 2016, the defendants engaged in a series of conversations and meetings with a confidential witness. In order to induce the witness to invest approximately $6 million in property owned by one of the defendants, the defendants agreed to receive and transmit what they believed to be millions of dollars of funds that the witness had illegally obtained from his business.

The defendants agreed to conceal the source of the witness’s money by transmitting his money to third parties, with the expectation that it would be returned to the witness, in return for a 10% “fee.”

The scheme was two-pronged. First, the defendants allegedly agreed to take cash from the witness, exchange the cash for checks written from real estate companies controlled by one of the defendants, and make the checks payable to a third party bank account purportedly controlled by the witness. Second, the defendants allegedly agreed to use charitable organizations under their control to transmit the witness’s overseas money into the United States. Over the course of the conspiracy, the defendants transmitted approximately $500,000 of what they believed to be stolen property, and agreed to transmit approximately $6 million total.

Manhattan U.S. Attorney Geoffrey S. Berman said: “The defendants allegedly engaged in a brazen scheme to unlawfully transmit and conceal millions of dollars of proceeds that they believed to be derived from illegal activity. They allegedly did so for personal profit and with the aim of avoiding law enforcement detection. This Office is committed to rooting out such criminal activity.”

FBI Assistant Director William F. Sweeney Jr. said: “Making money illegally is criminal in and of itself, but operating an unlicensed money remitting business, especially from outside of the United States, will almost certainly result in federal criminal charges. Whenever someone needs to hide and move money, there’s a pretty good chance something’s afoot. The FBI is committed to working with our law enforcement partners to ensure this type of behavior ceases to exist.”

Sheriff Carl E. Dubois said: “We continue to work closely with the FBI and our other federal partners, and the success of this long term investigation is proof of the benefits in these relationships. Illegal financial systems pose a great risk to our residents and their financial institutions. Law enforcement must continue work together to deter criminals from operating and engaging with organizations that allow them to evade banking regulations.”