Bank employees easiest path to financial crimes

Fees make up a large part of any bank’s profits. And when it comes to correspondent banking, such as when money is wired across borders from one bank to another, this includes service fees that create an important aspect of banking incomes.

That aspect of a bank’s returns is hurting which could make a bad situation worse, especially with government spending and private sector lending  slowing as a result of an anemic oil price situation.

To start with, look at what some bank employees are doing to undermine these types of transactions:

 Employee crime categories

According to PriceWaterhouseCoopers 2017 study and survey of businesses, 40 per cent of respondents indicated that their organisations had never performed a fraud risk assessment and that 65 per cent cited opportunity as the biggest factor driving crimes that are committed by employees.

The survey said that 49 per cent of the time, the crime involved asset misappropriation, 12 per cent of the time cybercrime, 15 per cent bribery and corruption and 16 per cent procurement fraud.

“74 per cent of all economic crimes reported in the last two years were committed by staff,” said PWC.

It said that global spending on anti-money laundering compliance could top $8bn by 2017.

According to the Committee on Payments and Market Infrastructures (CPMI), an international financial organization that promotes the safety of payments, correspondent banking is “an arrangement under which one bank (correspondent) holds deposits owned by other banks (respondents) and provides payment and other services to those respondent banks.”

Unless well regulated, these types of transactions are fraught with dangers, including tax transparency issues, money laundering and terrorism funding.

According to an IMF 2017 report, correspondent banking relationships (CBRs), which facilitate global trade and economic activities, have been under pressure in several countries.

“Factors leading to global banks’ withdrawal of CBRs are multiple, generally reflecting correspondent banks’ assessment of the profitability and risk of the relationships. In particular, decisions to terminate CBRs often relate to the correspondent bank’s lack of confidence in the respondent bank’s capacity to effectively manage risk,” said the report.

Swift action

In September 2017, SWIFT, the global provider of secure financial messaging services, announced that Saudi Arabia’s National Commercial Bank (NCB) signed up for its global payments innovation (gpi) service.

“The bank is the first in the country to join forces with over 100 leading banks globally. SWIFT gpi dramatically improves the customer experience in cross-border payments by increasing the speed, transparency and end-to-end tracking of transactions,” SWIFT said in a statement.

SWIFT gpi banks are able to log in to instantly check the status of the payments that they have sent, of those in progress and of those that have been received.

The IMF says that communication between correspondent and respondent banks needs to be robust, and financial institutions are to implement regulatory and supervisory frameworks, particularly those geared for anti-money laundering and terrorism funding.

According to SWIFT data, between beginning-2011 and end-2016, the number of active corridors decreased by 6.3 per cent and the number of active correspondents went down

For both the U.S. Dollar (USD) and Euro (EUR), the number of active correspondents decreased over that same period by around -15 per cent.

“While these two currencies make up about a third of the number correspondent accounts, they represent the vast majority of the value of payments made through SWIFT messages (82 per cent in December 2016), against 5 per cent for the next most used currency, the British pound (GBP),” said Swift in a 2017 report.

Drop in remittances

According to a recent article by the Economist, remittances to developing countries fell in 2015 and 2016 (to $429bn). It said that charities had also experienced financial issues, such as delayed transfers or account closures, for fear of involvement in illicit activities.

Qatar’s banking system was accused of being tolerant of fund-raising for terrorist groups, and was partly responsible for the current isolation of the GCC member.

The Middle East challenge

According to a 2016 PWC report, the Middle East region faces special challenges, including very high level of money service businesses and cash transactions.

The report said that 1 in 6 financial services respondents experienced enforcement actions by a regulator and 35 per cent of correspondents cited challenges with data quality.

“Only 52 per cent of money laundering transactions were detected by system alerts, while 35 per cent of respondents say the ability to hire (expertise in the area) is the biggest challenge,” PWC said.

Finally, PWC says that 18 per cent of surveyed businesses feel that they are struggling with upgrading or implementing systems and that 34 per cent have systems that generate large numbers of false positive alerts, which is high compared to 23 per cent globally.

Feds Order Wells Fargo To Pay $3.4M In Fines

Winston-Salem Journal (NC)

This time, the agency ordered $3.4 million in customer restitution related to investment advice provided from July 2010 to May 2012 by Wells Fargo Clearing Services LLC and Wells Fargo Advisors Financial Network LLC.

The agency said Wells Fargo neither admitted nor denied the charges in the settlement.

Regulators said the Wells Fargo units provided “unsuitable recommendations of volatility-linked exchange-traded products and related supervisory failures.”

It determined some Wells Fargo representatives recommended the products “without fully understanding their risks and features,” in particular “mistakenly believing that the products could be used as a long-term hedge on their customers’ equity positions in the event of a market downturn.”

In fact, the agency said, volatility-linked ETPs typically are considered short-term trading products that degrade significantly over time and “should not be used as part of a long-term buy-and-hold investment strategy.”

The agency issued a regulatory notice to financial institutions that reminds them “of their sales practice obligations relating to these products.”

The agency said it took into consideration that Wells Fargo “took remedial action to correct its supervisory deficiencies in May 2012, prior to detection by FINRA and around the time that the firm was fined for similar violations relating to sales of leveraged and inverse ETPs.” The bank assisted the agency in its investigation.

“FINRA seeks restitution when customers have been harmed by a member firm’s misconduct,” Susan Schroeder, executive vice president of the agency’s enforcement department, said in a statement. “We also credit firms that proactively detect and correct issues prior to detection by FINRA, as Wells Fargo did in this matter.”

Wells Fargo confirmed the settlement in a statement.

“We are committed to helping our clients achieve their investment goals through advice that is regularly reviewed and aligned to their objectives and risk tolerances,” according to the statement.

“In cooperating fully with FINRA, we have made significant policy and supervision changes, including the discontinuation of the ETPs in focus.”

On Dec. 22, five Wells Fargo financial-services units were fined a combined $5.5 million by FINRA “for significant deficiencies relating to the preservation of broker-dealer and customer records in a format that prevents alteration.”

Wells Fargo Securities LLC and Wells Fargo Prime Services LLC were jointly fined $4 million. Wells Fargo Advisors LLC, Wells Fargo Advisors Financial Network and First Clearing LLC were jointly fined $1.5 million.

In 2013, FINRA ordered Bank of America Corp. and Wells Fargo to pay fines and restitution to settle charges that investor clients were pushed into investments that were inconsistent with their risk preferences. The Wells Fargo Advisors unit was fined $1.25 million and ordered to reimburse $2 million in losses to 239 customers.

In May 2012, FINRA imposed more than $2.7 million in fines and penalties on Wells Fargo Advisors for investment-related violations stemming from January 2008 to June 2009. Some of the violations were related to Wachovia Securities, which Wells Fargo took over at the end of 2008.

Wells Fargo was fined $2.1 million and ordered to pay $641,489 in restitution.

Also affected at that time were Citigroup ($2 million fine and $146,431 in restitution), Morgan Stanley ($1.75 million fine and $604,584 in restitution), and UBS ($1.5 million fine and $431,488 in restitution).

Wachovia, now Wells Fargo, sold risky nontraditional exchange-traded funds to customers who did not want that type of investment strategy, FINRA said.

Intel launches AI-enabled anti-money laundering adviser

http://www.zdnet.com/article/intel-launches-ai-enabled-anti-money-laundering-advisor/

Ben Fox Rubin/CNET

Leveraging the technology it gained via its 2015 acquisition of Saffron, Intel on Wednesday launched the Saffron anti-money laundering (AML) Advisor — the first product on the market, Intel says, to use “associative memory” AI for the financial services sector.

Intel Saffron’s associative memory AI mimics the way the human brain learns and creates new associations, and then recalls connected information. It can fuse together associated information from different data stores, surfacing similarities and anomalies that otherwise would’ve remained hidden.

Utilizing associative memory, the AML Advisor promises to detect financial crime by unifying structured and unstructured data from enterprise systems, email, web, and other data sources. It can surface patterns from that data and transparently explain how the connections were identified, helping organizations catch money launderers.

“The amount of data that banks and insurers collect is growing at massive scale, doubling every two years,” Gayle Sheppard, VP and GM of Saffron AI Group at Intel, said in a statement. “While the quantity of data is growing, so are the types and sources of data, which means today that much of the data isn’t queried for insights, because it’s simply not accessible with traditional tools at scale.”

Because AML Advisor surfaces patterns in a transparent way, it helps financial services organizations comply with regulatory standards by explaining the rationale behind recommendations.

Unlike traditional machine learning methods, the AML Advisor offers “continuous learning.” In other words, it doesn’t require domain-specific models or training and retraining. This helps surface insights more quickly and is especially useful in a dynamic landscape like financial services.

Intel on Wednesday also announced the Intel Saffron Early Adopter Program (EAP) for organizations that want “the first-mover advantage” in the use of associative memory AI. The Bank of New Zealand (BNZ) has joined the Intel Saffron EAP, expanding its existing relationship with Intel.

 

Bitcoin laundering suspect caught in US, Russia extradition spat

The two countries are fighting over where the Russian national should have his day in court.

By  for Zero Day

http://www.zdnet.com/article/bitcoin-launderer-suspect-caught-in-us-russia-extradition-spat/

Alexander Vinnik is a popular man, with both the United States and Russia fighting over which country has the right to charge the suspected Bitcoin laundering mastermind.

Vinnik, a 38-year-old Russian national, is at the heart of the fight as the suspected leader of a Bitcoin laundering scheme.

In July, Vinnik was arrested by US law enforcement for allegedly being involved in BTC-e, a cryptocurrency exchange platform which “washed” funds without taking customer information, allowing for laundering to take place.

According to US prosecutors, Vinnik owned a number of accounts on the platform and used them to launder cash — and may have also been involved in laundering Bitcoin received from the “hack” of now-defunct exchange platform Mt. Gox, as well as Tradehill, another dead exchange.

In total, the Bitcoin laundering scheme is believed to have laundered roughly $4 billion.

Mt. Gox was once a thriving Bitcoin exchange, but after its sudden collapse in 2014, investors lost roughly $375 million. Former CEO Mark Karpeles originally blamed the closure on unknown cyberattackers, but Japanese law enforcement is charging him with embezzlement.

It is believed that Vinnik not only funneled proceeds from Mt. Gox but has also been involved in identity theft and drug trafficking schemes.

US law enforcement wants to charge Vinnik on American soil with operating an unlicensed money service business, conspiracy to commit money laundering, money laundering, and engaging in unlawful monetary transactions.

If convicted, Vinnik could face up to 55 years behind bars.

The Russian national is currently being held in Greece, and a local court in Thessaloniki ruled on Wednesday that the United States is permitted to extradite him to face these charges.

However, the Russian government is not impressed with the Greek court’s decision.

On Friday, the Russian Ministry of Foreign Affairs said in a statement that the verdict was “unjust and a violation of international law.”

The ministry believes that as Vinnik is a Russian national, he should be prosecuted in his home country and this should overrule any other extradition requests. The Russian Prosecutor General’s Office requested an extradition order to Russia, but it appears this request has been ignored by the Greek authorities.

“Based on legal precedent, the Russian request should take priority as Mr. Vinnik is a citizen of Russia,” the ministry said. “The verdict is even more surprising in the context of the atmosphere of friendly relations between Russia and Greece.”

Vinnik has denied the charges but has agreed to be sent back to Russia, according to the Reuters news agency.

However, Vinnik’s legal team have appealed the ruling, and now the Russian national’s case will be considered by the Supreme Civil and Criminal Court of Greece, before being submitted to the Greek Minister of Justice for approval.

“We hope the Greek authorities will consider the Russian Prosecutor General’s Office request, and Russia’s reasoning, and act in strict compliance with international law,” the ministry says.

ZDNet has reached out to the US Department of Justice (DoJ) and Greek Ministry of Foreign Affairs and will update if we hear back.

Couple admits to stealing $1.2M from Amazon with elaborate scam

INDIANAPOLIS – An Indiana couple has admitted stealing more than $1.2 million in merchandise from Amazon in an elaborate scheme. Erin Joseph Finan, 38, and Leah Jeanette Finan, 37, pleaded guilty in federal court in Indianapolis to charges of mail fraud and money laundering in connection with the racket, the Star Press reports.

The duo bought hundreds of electronics such as Go Pro cameras, Samsung smartwatches, and Xboxes, then told Amazon the products weren’t working and requested replacements at no charge.

The couple created “hundreds” of false identities to conceal the scam. Prosecutors say the Finans sold the loot to Danijel Glumac, 28, who marked it up before reselling it to an unnamed New York outfit, Fox59 reported in May when the trio was busted.

Glumac, who was also charged, allegedly paid the Finans about $725,000. The merchandise was eventually resold on the black market. “Consumer fraud is absorbed by all of us through higher retail prices,” US Attorney John Minkler said at the time.

The Finans were ordered to repay Amazon $1.2 million, and they face up to 20 years in prison. Sentencing is set for Nov. 9. (A cashier managed to embezzle $13 million.)

This article originally appeared on Newser: Couple Admits Fleecing Amazon Out of $1.2M

FinCEN Issues Advisory on Widespread Public Corruption in Venezuela

FinCEN Issues Advisory on Widespread Public Corruption in Venezuela

The Financial Crimes Enforcement Network (FinCEN) released an advisory on September 20, 2017, to alert financial institutions of widespread public corruption in Venezuela and the methods Venezuelan senior political figures may use to move and hide corruption proceeds.1

The advisory also identified red flags that may assist financial institutions in identifying suspicious activity that may be indicative of Venezuelan corruption, including the abuse of Venezuelan government contracts, wire transfers from shell corporations, and real estate purchases in the South Florida and Houston, Texas regions. The FinCEN advisory also reminds financial institutions of their obligations to monitor, detect, and report such conduct.

Background

Venezuela has been in political and economic turmoil due to the deterioration of its democratic and constitutional order. FinCEN warns that widespread corruption may further destabilize its economic growth and stability. In recent years, financial institutions have reported to FinCEN suspicions that transactions may be linked to Venezuelan public corruption, including government contracts. As a result of these reports and other relevant information, FinCEN considers all Venezuelan government agencies and bodies, including state owned enterprises (SOEs), vulnerable to public corruption and money laundering. According to FinCEN, the Venezuelan government appears to use its control over large parts of the economy to enrich government officials and SOE executives, their families, and associates. FinCEN, therefore, believes that there exists a high risk of corruption involving Venezuelan government officials and employees at all levels, including those managing or working at Venezuelan SOEs.2

FinCEN warns that transactions involving Venezuelan government agencies and SOEs, particularly those involving government contracts, can potentially be used as vehicles to move, launder, and conceal embezzled corruption proceeds. SOEs and their officials may also try to use the U.S. financial system to move or hide proceeds of public corruption. In an effort to thwart the movement of these proceeds, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has recently designated as persons engaged in, or materially assisting, sponsoring, or supporting, public corruption various Venezuelan SOEs, including: National Center for Foreign Commerce (CENCOEX), Suministros Venezolanos Industriales, CA (SUVINCA), the Foreign Trade Bank (BANCOEX), the National Telephone Company (CANTV), the National Electric Corporation (CORPELEC), and the Venezuelan Economic and Social Bank (BANDES). As scrutiny of these enterprises increases, FinCEN warns financial institutions that corrupt officials may try to channel illicit proceeds through lesser-known or newly-created SOEs.

FinCEN also identified red flags that may help financial institutions identify corrupt schemes:

  • Transactions involving Venezuelan government contracts that are directed to personal accounts;
  • Transactions involving Venezuelan government contracts that are directed to companies that operate in an unrelated line of business (e.g., payments for construction projects directed to textile merchants);
  • Transactions involving Venezuelan government contracts that originate with, or are directed to, entities that are shell corporations, general “trading companies,” or companies that lack a general business purpose;
  • Documentation corroborating transactions involving Venezuelan government contracts (e.g., invoices) that include charges at substantially higher prices than market rates or that include overly simple documentation or lack traditional details (e.g., valuations for goods and services). Venezuelan officials who receive preferential access to U.S. dollars at the more favorable, official exchange rate may exploit this multi-tier exchange rate system for profit;
  • Payments involving Venezuelan government contracts that originate from non-official Venezuelan accounts, particularly accounts located in jurisdictions outside of Venezuela (e.g., Panama or the Caribbean);
  • Payments involving Venezuelan government contracts that originate from third parties that are not official Venezuelan government entities;
  • Cash deposits instead of wire transfers into the accounts of companies with Venezuelan government contracts;
  • Transactions for the purchase of real estate—primarily in the South Florida and Houston, Texas regions—involving current or former Venezuelan government officials, family members or associates that are not commensurate with their official salaries; and
  • Corrupt Venezuelan government officials seeking to abuse a U.S. or foreign bank’s wealth management units by using complex financial transactions to move and hide corruption proceeds.

Impact and Regulatory Obligations

The recent FinCEN advisory also reminds U.S. financial institutions that in order to meet their due diligence obligations that would apply to activity involving certain Venezuelan persons, they should generally be aware of public reports of high-level corruption associated with senior Venezuelan foreign political figures and those associated with them; they should assess the risk of laundering the proceeds of public corruption associated with specific particular customers and transactions; and they should be aware of OFAC designations related to Venezuela.

FinCEN also recommends that financial institutions take reasonable, risk-based steps to identify and limit any exposure they may have to funds and other assets associated with Venezuelan public corruption, taking care not to put into question a financial institution’s ability to maintain or continue otherwise appropriate relationships with customers or other financial institutions. FinCEN warns, however, that such steps should not be used as the basis to engage in wholesale or indiscriminate de-risking of any class of customers or financial institutions.

The FinCEN advisory also reminds financial institutions of the applicable regulatory obligations that are intended to facilitate the discovery and disclosure of attempts to move and hide corruption proceeds from Venezuela:

  • Enhanced Due Diligence Obligations for Private Bank Accounts: Covered financial institutions maintaining private banking accounts for senior foreign political figures are required to apply enhanced scrutiny of such accounts to detect and report transactions that may involve the proceeds of foreign corruption, consistent with obligations under Section 312 of the USA PATRIOT Act (31 U.S.C. § 5318(i)) and FinCEN’s regulations implementing that Section.
  • General Obligations for Correspondent Account Due Diligence Money Laundering (AML) Programs: U.S. financial institutions must comply with their general due diligence and AML obligations,3 ensuring that their due diligence programs, which address correspondent accounts maintained for foreign financial institutions, include appropriate, specific, risk-based, and, where necessary, enhanced policies, procedures, and controls that are reasonably designed to detect and report known or suspected money laundering activity involving accounts in the United States.
  • Suspicious Activity Reporting: A financial institution is required to file a suspicious activity report (SAR) if it knows, suspects, or has reason to suspect a transaction involves funds derived from illegal activity, or attempts to disguise funds derived from illegal activity; is designed to evade regulations promulgated under the Bank Secrecy Act (BSA); lacks a business or apparent lawful purpose; or involves the use of the financial institution to facilitate criminal activity, including foreign corruption.

Conclusion

FinCEN emphasizes that reports and information from financial institutions are critical to stopping, deterring, and preventing the proceeds tied to suspected Venezuelan public corruption from moving through the U.S. financial system. Accordingly, companies should remain vigilant of these risks and ensure their due diligence and monitoring programs are up-to-date and comply with all relevant regulatory obligations.

https://www.lexology.com/library/detail.aspx?g=1b0f91d1-43b9-4031-83e7-fbf2ed5768ab

Money-Laundering Prosecutor Joins Trump-Russia Probe

An attorney working on the Justice Department’s highest-profile money-laundering case recently transferred off that assignment in order to join the staff of the special prosecutor investigating the Trump campaign’s potential ties to Russia, POLITICO has learned.

Attorney Kyle Freeny was among the prosecutors on hand Friday as Jason Maloni, a spokesman for former Trump campaign chairman Paul Manafort, testified before a grand jury at federal court in Washington.

Freeny, whose assignment to special counsel Robert Mueller’s staff has not been previously reported, is the 16th lawyer known to be working with the former FBI chief on the investigation into Russian meddling in the 2016 presidential election. She departed from the courthouse Friday with two other members of Mueller’s squad: former Criminal Division chief and Enron prosecutor Andrew Weissman and Civil Division appellate attorney Adam Jed, a former clerk to Supreme Court Justice John Paul Stevens.

Before being detailed to Mueller’s team, Freeny was shepherding the Justice Department’s headline-grabbing effort to seize the profits from the film “The Wolf of Wall Street” on grounds that the film was financed with assets looted from the Malaysian government.

Freeny withdrew from the “Wolf of Wall Street” case on June 26, court records show, shortly before many of Mueller’s attorneys joined his team in early July.

Lawyers for the production company behind the film, Red Granite Pictures, said in a court filing in Los Angeles on Friday that they’ve reached a settlement with prosecutors. A Justice Department spokesperson said he was aware of the filing, but declined to comment.

IRS Hunts Bitcoin User Identities With Software In Tax Enforcement Push

Is bitcoin in the IRS cross hairs? Users of bitcoin seem to be. In IRS Notice 2014-21, the IRS announced that bitcoin and other digital currency is actually property for tax purposes, not currency. That in itself has some big tax consequences. For example:

Wages paid to employees using virtual currency are taxable, must be reported on a Form W-2, and are subject to federal income tax withholding and payroll taxes. If you pay someone in property, how do you withhold taxes? You have to send the IRS money from something else. You either pay the employee some cash and some bitcoin and withhold plenty on the cash. Or you sell some of the bitcoin to get dollars to pay the IRS.

Payments using virtual currency made to independent contractors are taxable and payers must issue Form 1099. You can’t enter “1,000 bitcoin” on the 1099. You must value it in dollars as of the time of payment. Valuation swings can be brutal.

Gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in your hands. This can be a huge issue, and is not an easy subject to summarize.

A payment made using virtual currency is subject to Form 1099 reporting just like any other payment made in property. Yes, this bears repeating. How much compliance there is in the real word remains to be seen.

It takes time for people to adapt, and that is one reason compliance may be poor so far. But part of the lack of compliance may also be the nature of digital currency. It is meant to be anonymous, and attracts some users for that reason. They may be less inclined to, for example, start handing out IRS Forms 1099. Recipients of those forms may go somewhere else.

All of this leaves the IRS wondering how to get a piece of the action. That’s where enforcement comes in. Last year, the IRS started fighting to obtain vast amounts of data on Bitcoin and other digital currency transactions. In late 2016, a federal court authorized the IRS to serve a John Doe Summons on Coinbase, Inc., the digital currency transaction hub. The IRS wants information on the site’s users and their transactions.

Some Coinbase users, led by Mr. Jeffrey K. Berns, moved to intervene in the IRS’s case. They argued that the IRS request was not properly calibrated and threatened their privacy. In turn, the IRS argued that Mr. Berns already identified himself as a Coinbase user, so could not say his privacy was threatened. It is worth remembering that the IRS used a John Doe Summons to get names of Swiss bank account holders from UBS. After that, offshore banking changed forever, with all other Swiss (and other) banks eventually coming clean. The IRS ended up collecting over $10 billion.

The IRS pursued Coinbase in the same way. Small fries may be OK, though. The IRS agreed to limit its request for customer records from Coinbase to accounts with transactions over $20,000. Beyond that, the IRS will clearly do more data mining for digital currency users. Reports about compliance suggest the IRS may need to. Reports underscore IRS claims that only 802 people declared a capital gain or loss related to bitcoin in 2015. With millions of transactions, 802?

This suggests that the bulk—the vast bulk—of bitcoin transaction are simply not reported. With millions of transactions and the meteoric rise of bitcoin from under $100 to over $4,000 in just a few years, the IRS seems to be missing out. That is where IRS tech comes in. Well, private tech then. It has been widely reported that the IRS is using software to find bitcoin users who have failed to report profits. The Daily Beast revealed the Chainalysis contract that is at the root of this new IRS enforcement effort.

If Chainalysis identifies owners of digital wallets, the IRS can take over. Matching up transactions and tax returns is not that hard. Taxpayers who have hidden income could face taxes, and potentially big civil penalties. Some cases could even end up as criminal tax cases. The IRS is generally more forgiving if a taxpayer makes corrective filings before being caught or audited. Those who do not make filings until they are caught could face harsher treatment. Remember, the IRS treats Bitcoin and other digital currencies as property. That means sales could give rise to capital gain or loss, rather than ordinary income. Be careful out there.

https://www.google.com/amp/s/www.forbes.com/sites/robertwood/2017/08/24/irs-hunts-bitcoin-user-identities-with-software-in-tax-enforcement-push/amp/

Photo: Getty 

 

Man indicted after selling fentanyl on ‘dark net’ that caused fatal overdose, feds say

A man was indicted Thursday after federal prosecutors say he sold synthetic fentanyl that caused an Orange County man to die of an overdose.

Jeremy Achey 43, of Bethlehem, Pennsylvania, faces up to life in federal prison if convicted.

Achey is accused of selling a variety of synthetic substances over the “dark net,” an area of the Internet only accessible through the use of an encrypted browsing platform, according to the U.S. Department of Justice.

In February, an Orange County man, whose name wasn’t released, died after taking tetrahydrofuran fentanyl, a synthetic substance similar to fentanyl, federal prosecutors said.

The Drug Enforcement Administration determined that the man bought the substance from Achey, who was using the name “Etiking” online, according to the indictment.

Achey is facing charges of conspiracy to distribute and distribution of controlled substance analogues.

http://www.orlandosentinel.com/news/breaking-news/os-jeremy-achey-arrest-dark-web-fentanyl-20170720-story.html

 

 

Cuban man accused of laundering $238 million in Medicare payments must face trial

A Cuban businessman charged with laundering $238 million in illicit Medicare payments through South Florida will have to face trial now that a federal judge has rejected his motion to dismiss a massive money laundering case against him.

The motion by Jorge Emilio Perez de Morales to dismiss the indictment was highly unusual because the 52-year-old is considered a fugitive after fleeing to Spain.

Through his Miami defense attorney, the absent Perez asked a magistrate judge to throw out the case, claiming he was running a legitimate remittance company outside the United States so he couldn’t have committed a crime.

But this month, Magistrate Judge Patrick Hunt denied his motion, saying the U.S. money-laundering conspiracy charge filed five years ago extends beyond the boundaries of this country because the alleged offense happened here.

“If he wishes to contest the charges in this case, [Perez] will have to first submit to the court’s jurisdiction,” Hunt wrote in a nine-page ruling. “If he would like to go to trial, the door to the federal court, as always, remains open.”

Perez’s attorney, Stephen Golembe, has until Friday to appeal the judge’s ruling. It came in response to an unusual hearing in March, when the judge, Golembe and federal prosecutor Ron Davidson debated whether Perez is a fugitive — a thorny legal issue arising from the fact that he has yet to be arrested on the money-laundering conspiracy charge. His lawyer said he isn’t; the prosecutor said he is.

https://www.google.com/amp/amp.miamiherald.com/news/local/article157126544.html