Mayfair Fine Art administrators struggle to trace paintings linked to money-laundering scandal

By Kabir Jhala

Administrators cannot locate two paintings supposedly belonging to Mayfair Fine Art Limited, whose former director Matthew Green is being charged with attempted money laundering following the scandal involving the city stockbroker Beaufort Securities earlier this year.

In a progress report, Kingston Smith & Partners, the corporate recovery and insolvency firm who have been administering Mayfair Fine Art following its bankruptcy in March, claim that the two paintings allegedly purchased from a third party cannot be found.

The contact information provided by Mayfair Fine Art, which states that the works were purchased by an “associated company” and were “apparently held in Dubai”, was found to be insufficient in ascertaining the ownership, location or existence of the artworks. A source at Kingston Smith has declined to share further details of the works in question.

The report also reveals that MBU Capital Limited, the secured creditor who called time on an overdue loan and initiated the administration of Mayfair Fine Art, is still owed an estimated £520,000 to be paid from the company’s assets. Kingston Smith & Partners are continuing to enquire into the full extent of the company’s assets and transactions, including examining the company’s historic bank transactions in order to reach a fair settlement.

In March, Green was charged with conspiring with Panayiotis “Peter” Kyriacou, an investment manager at Beaufort’s London office, and his uncle Aristos Aristodemou to “clean up” £6.7m through the attempted sale of a Picasso painting to an undercover FBI agent.

The ensuing multi-court indictment by US federal court has seen six individuals and four companies charged with an array of crimes relating to money laundering and conspiracy.

Of the six individuals charged, two defendants have since pleaded guilty. Arvinsingh Canaye, who ran the Mauritius branch of Beaufort Management, pled guilty to charges of conspiracy to launder money in August and Adrian Baron, the chief business officer of Loyal Bank pled guilty to conspiracy to defraud the US in September.

Green, 51, who left his directorial roles at his family’s company Richard Green & Sons Limited in 2012, is among the four remaining defendants who have yet to plead.

https://www.theartnewspaper.com/news/administrators-struggle-to-trace-paintings-linked-to-money-laundering-scandal

Bitcoin [BTC] worth $5.84 million stolen from MapleChange; Binance CEO gives his insight

MapleChange, a Canada-based cryptocurrency exchange, recently announced that their platform was hacked. The exchange platform took to their Twitter handle to provide clarity on the situation, stating that they could not refund the stolen cryptocurrencies.

According to their official post, a bug on the platform enabled a group of hackers to withdraw funds remotely. The platform reported that 913 Bitcoins [BTC] were stolen and that they cannot refund any of the funds until a “thorough investigation” was conducted.

Another controversial aspect was that the “thorough investigation” resulted in the exchange platform realizing that they did not have funds for repaying its users. Furthermore, they stated that the platform would not function anymore and that they would soon deactivate their social media channels. Their official post stated:

“We have sustained a hack, and we are investigating the issue.”

On their official Twitter handle, the exchange stated that they had not “disappeared”, but had temporarily turned off their accounts to think of a solution.

In addition, they could not refund “everyone with all their funds”, but would soon open wallets in order to allow its users to “hopefully” withdraw whatever funds were left on the exchange. They added:

“We CANNOT refund any BTC or LTC funds unfortunately. We will try our best to refund everything else.”

Changpeng Zhao, the CEO of Binance, the world’s largest cryptocurrency exchange in terms of trading volume, was surprised by the hack and stated that a procedure was required to rank exchanges based on their wallet storage. He added that users had to avoid using exchange platforms which did not have anything in their cold wallets.

Maplechange’ed, a platform dedicated to find, take down and expose maplechange.com, with the help of members from the Lumeneo [LMO] telegram channel, allegedly found that Glad Poenaru, a service technician at American Piledriving Equipment, could have been responsible for the hack.

Joseph Young, a cryptocurrency investor and analyst, stated:

“A small crypto exchange pulled off an exit scam, taking all customer funds. There is no incentive for using small exchanges. Use established exchanges that are regulated, & transparent. Small exchanges also focus on maximizing profitability, not security or investor protection.”

MapleChange further added:

“We are sending all of the coin developers the wallets containing the coins we have left. So far, LMO and CCX have been handed over the funds.”

https://ambcrypto.com/bitcoin-btc-worth-5-84-million-stolen-from-maplechange-binance-ceo-gives-his-insight/

How The Unexplained Wealth Order Combats Money Laundering

The UK is a haven for dirty money; more than £90 billion is estimated to be laundered through the country per year. The size of the UK’s financial and professional services sector, its open economy and the attractiveness of the London property market to overseas investors all make it unusually exposed to international money laundering risks. As part of new measures to tackle asset recovery and money laundering, the UK government introduced Unexplained Wealth Orders (UWOs) in January, which are being hailed as the cure to Britain’s dirty money problem.

What is an Unexplained Wealth Order?

UWOs require the owner of an asset worth more than £50,000 to explain how they were able to afford that asset. Introduced primarily to target Russian and Azerbaijan laundromats, UWOs have wide-ranging applications to all situations where the National Crime Agency (NCA) believes wealth was acquired illicitly, including tax evasion.

The game-changing nature of UWOs lies in the power they give UK law enforcement to prosecute. Formerly, little could be done to act on highly suspicious wealth unless there was a legal conviction in the country of origin. In cases where the origin country is in crisis or the individual holds power within a corrupt government, this is unlikely to be achieved. Where previously law enforcement agencies needed to prove in court that an asset was purchased with laundered funds, UWOs shift the burden of proof away from prosecutors and on to the asset’s owner.

Preventing Financial Crime with Unexplained Wealth Orders

The first successful use of a UWO since its implementation is the recent case of Zamira Hajiyeva, who owns millions of dollars in properties in London through offshore companies. Her husband, Jahangir Hajiyev, was convicted and sentenced to 15 years in prison for fraud and misappropriation of public funds, and authorities were able to identify a clear disparity between his income and the couple’s apparent wealth.

With corruption watchdog Transparency International estimating that £4 billion of UK property has been purchased with the proceeds of crime, it is hoped that this successful implementation of a UWO will herald a clampdown on overseas criminals laundering via the property market.

The success of this UWO has been fundamental in beginning to reduce the appeal of the UK as a destination for illicit income. In June, mortgage brokers were already reporting that Russian purchases of prime real estate in London had slowed as a result of both government pressure and a tightening of anti-money laundering rules.

There are, however, reasons to be wary of perceiving the introduction of UWOs as a cure-all for the UK’s money laundering problems. These court orders are ineffective as soon as a defendant can provide an explanation for the source of their wealth. In the absence of evidence to the contrary, they then win the argument. Legal difficulties and costs are other factors that can lead to delays in the UK’s fight against money laundering, while information obtained via a UWO cannot be used in criminal proceedings against the respondent. For UWOs to have credibility, authorities will need to ensure the first uses of them continue to be successful in order to serve as a useful deterrent going forward.

Further, money laundering covers a wide range of criminal activity and consequently can’t be solved by a single approach. Fragmented supervision and anonymous ownership of property in British Overseas Territories and Crown Dependencies are just two areas where Transparency International is still advocating for change to improve the UK’s asset recovery and anti-money laundering regime.

How Can We Continue to Fight Money Laundering?

It is clear that UWOs have the potential to act as powerful tools for law enforcement but are not yet being used frequently enough— more action is required if real change is to come. We need further action from the government to restrict property ownership and levy realistic local taxes.

With UWOs beginning to lead to the identification of criminals, questions will be asked of the financial institutions who facilitated the individual’s money management. To better equip themselves for the fight against money laundering, banks need to overhaul outdated AML systems to suit the complexity of the schemes perpetrated by criminals. They need to combat problems by employing entity resolution and network analysis techniques to understand vast data networks and identify hidden money.

https://www.forbes.com/sites/vishalmarria/2018/10/25/how-the-unexplained-wealth-order-combats-money-laundering/#26a904a54703

Bitcoin Hedge Fund and CEO Slapped With $2.5 Million Penalty for Ponzi Scheme

A New York federal court has ordered cryptocurrency hedge fund Gelfman Blueprint, Inc. (GBI) and its CEO Nicholas Gelfman to pay over $2.5 million for operating a fraudulent Ponzi scheme, according to an official announcement published Oct. 18.

GBI is a New York-based corporation and denominated Bitcoin (BTC) hedge fund incorporated in 2014. As stated on the company’s website, by 2015 it had 85 customers and 2,367 BTC under management.

The order is the continuation of the initial anti-fraud enforcement action filed by the U.S. Commodity Futures Trading Commission (CFTC) against GBI in September 2017. The CFTC charged GBI for allegedly running a Ponzi scheme from 2014 to 2016, telling investors that it had developed a computer algorithm called “Jigsaw” which allowed for substantial returns through a commodity fund. In reality, the entire scheme was a fraud.

Per the announcement, GBI and Gelfman fraudulently solicited over $600,000 from at least 80 customers. Moreover, Gelfman set up a fake computer “hack” to conceal the scheme’s trading losses. It eventually resulted in the loss of almost all customer funds.

The current order charges GBI and Gelfman to pay over $2.5 million in civil monetary penalties and restitution. GBI and Gelfman are ordered to pay $554,734.48 and $492,064.53 in restitution to customers and $1,854,000 and $177,501 in civil monetary penalties, respectively.

James McDonald, the CFTC’s Director of Enforcement, said that “this case marks yet another victory for the Commission in the virtual currency enforcement arena. As this string of cases shows, the CFTC is determined to identify bad actors in these virtual currency markets and hold them accountable.”

Last month, the CFTC filed a suit with the U.S. District Court for the Northern District of Texas against two defendants for the allegedly fraudulent solicitation of BTC. Per the suit, defendants Morgan Hunt and Kim Hecroft were running two fraudulent businesses and misleading the public to invest in leveraged or margined foreign currency contracts, such as forex, binary options, and diamonds.

https://cointelegraph.com/news/bitcoin-hedge-fund-and-ceo-slapped-with-25-million-penalty-for-ponzi-scheme

Stolen UI Employee Data Used To Commit Money Laundering

By: Hillary Ojeda

A woman pleaded guilty to money laundering charges involving more than $200,000 after she submitted false tax returns using University of Iowa employees’ data, on Oct. 11 in Davenport.

Nadine Nzuega Robinson entered into a plea agreement at the United States District Court for the Southern District of Iowa.

She waived her right to a jury trial and the district court will decide the verdict on or at the date of sentencing, scheduled for Feb. 22, 2019, according to court documents.

Starting in 2013, or earlier, Robinson and her partner Patrick Koloko opened a check cashing business in a suburb of Atlanta, Georgia. Located in Doralville, the name of the business was Azalea USA, LLC and Robinson was identified as the CEO and 85 percent owner, according to court documents.

Robinson agreed with Koloko and others to carry out illegal financial transactions to make a profit and hide unlawful wire and mail fraud.

Then, in early 2015, Robinson created checking accounts at Bank of America in Georgia under the name of Azalea.

Court documents say in late February and early March of 2015, false tax returns for tax year 2014 were being submitted electronically to the Internal Revenue Service using the names, addresses, occupations and social security numbers of University of Iowa employees.

The court documents did not detail how that data was acquired by Robinson or others.

Following an investigation, it was found that the suspects committed wire fraud and mail fraud, according to court documents. The stolen identities were used to apply for state and federal income tax returns. The fraudsters also provided debit card account numbers for the IRS to authorize payment of the returns to be distributed onto the debit cards.

The IRS processed the fraudulent returns leading  to U.S. government money being transferred electronically onto those debit cards.

The debit cards were then used to buy hundreds of money orders that were converted to cash in the Atlanta, Georgia area. False payee names were used and the cash was distributed to Robinson and other criminal companions.

Court documents say hundreds of money orders obtained through similar means continued to be deposited by Robinson into the Azalea accounts.

Robinson deposited money orders totaling $215,464 from fraudulent tax returns using University of Iowa employees data, according to Azalea-Bank of America accounts records from March and April of 2015.

If convicted, Robinson faces a maximum sentence of 20 years in prison and a maximum fine of $500,000.

Court documents show Robinson was originally arrested on Oct. 12 last year in Atlanta, Georgia, before a court order moved her case to the United States District Court Southern District of Iowa in Davenport.

https://www.press-citizen.com/story/news/2018/10/17/stolen-ui-employee-data-used-commit-money-laundering/1663905002/

EU to Act on Visa-For-Sale Schemes After Warnings of Money Laundering Risks

BY FRANCESCO GUARASCIO

BRUSSELS (Reuters) – The European Commission said on Wednesday it will provide guidance to EU states on how to manage national schemes to sell passports and residency permits to wealthy foreign citizens, as campaigners and lawmakers warned of money laundering risks.

Government schemes to trade citizenship or residence rights for large investment are currently applied in 13 EU countries: Austria, Cyprus, Luxembourg, Malta, Greece, Latvia, Portugal, Spain, Ireland, Britain, Bulgaria, the Netherlands and France. Hungary has terminated its program.

“If you have a lot of money that you acquired through dubious means, securing a new place to call home far away from the place you stole from isn’t just appealing, it’s sensible,” Naomi Hirst of rights group Global Witness said.

She said checks on individuals that bought EU citizenship or residency permits were not satisfactory and exposed countries to corruption and money laundering risks.

The joint report by Global Witness and Transparency International urged the European Union to set standards for managing the schemes and to extend anti-money laundering rules, applied so far to banks or gaming firms, to all those involved in the visa-for-sale industry.

The European Commission will publish a report on schemes in EU countries by the end of the year, commissioner Dimitris Avramopoulos said on Wednesday. He said the report would offer guidance to member states on managing the programs, “including on necessary background checks for applicants”.

Acquiring these documents costs on average 900,000 euros, but Cyprus’ passport could cost up to 2 millions, the report said.

Cyprus has raised 4.8 billion euros ($5.51 billion) from its scheme, while Portugal could earn nearly a billion euros a year, according to figures cited in the report, called “European Getaway – Inside the Murky World of Golden Visas”.

EU states generated around 25 billion euros in foreign direct investment in a decade from selling at least 6,000 passports and nearly 100,000 residency permits, the report said using what it called conservative estimates.

“Money must not be the criterion for citizens’ and residents’ rights in the EU,” said EU lawmaker Sven Giegold, who sits on the assembly’s special committee on financial crimes.

“The trade in passports and visas by EU states must be stopped as soon as possible. These programs are a gateway to criminal money,” he added, echoing the view of other EU lawmakers.

The report said in Malta, which has raised 718 million euros from its scheme, applicants who have criminal records or are under investigation could still be considered eligible “in special circumstances”.

“Poorly managed schemes allow corrupt individuals to work and travel unhindered throughout the EU and undermine our collective security,” Laure Brillaud, anti-money laundering expert at Transparency International, said.

All the countries who run these schemes, except Britain, Cyprus, Ireland and Bulgaria, are part of the Schengen free-movement area which comprises 26 European states.

($1 = 0.8708 euros)

Kent police captain charged with operating gambling house, money laundering

KENT — Lorain County authorities have charged a Kent police captain and his wife with money laundering and racketeering in a grand jury indictment related to their interest in alleged illegal gambling at so-called “internet cafes.”

James W. “Jayme” Cole, 52, and his wife Audrey Cole, 45, both of Stow, were indicted Wednesday by a Lorain County grand jury on three counts of engaging in a pattern of corrupt activity — commonly called racketeering — which are all first-degree felonies; seven counts of money laundering, all third-degree felonies; four counts of illegal casino gaming, all fifth-degree felonies; and four counts of operating a gambling house, all first-degree misdemeanors.

Cole has been a Kent police officer since July 1988, according to his personnel file, released by the city and reviewed Thursday by the Record-Courier following a public records request.

According to the Elyria Chronicle-Telegram, a Lorain County grand jury was convened following an investigation and a series of raids Aug. 15 in multiple Northeastern Ohio counties.

“These indictments are the result of an ongoing investigation involving numerous law enforcement agencies including the Ohio Casino Control Commission, the Lorain County Sheriff’s Office and a number of other area police agencies,” Lorain County Prosecutor Dennis Will said.

One of the raids was on Cole’s home in Stow. Agents of the Portage County Drug Task Force served a search warrant there Aug. 15 on behalf of Lorain County authorities and seized records and cash, according to a law enforcement official who asked not to be identified due to the ongoing investigation.

Cole was placed on paid administrative leave the following day after the Kent Police Department was made aware of the investigation, Kent police spokesman Lt. Mike Lewis said. That changed to unpaid leave on Wednesday when Cole was arrested.

Lewis and Police Chief Michelle Lee said they have no reason to believe Cole committed any crimes in Kent or Portage County.

Cole became a Kent police officer after attending the Hiram Police Department Basic Police Academy in late 1987. He briefly worked as a dispatcher for both Hiram and Chagrin Falls police before Kent police hired him in July 1988.

He served on road patrol, earning Officer of the Year in 1994 along with a Meritorious Service Award, and was the department’s MADD Officer of the Year every year from 1990-94.

Cole was promoted to sergeant in July 1998 and to lieutenant in June 2006, serving both as a patrol supervisor and later as the department’s spokesman. He was promoted to captain in 2011.

In recent years, howeverm Lee’s performance reviews of her second-in-command cited Cole for “unreliability,” including missing several overtime shifts in 2015-16 and failing to show up for a shift on Halloween 2016 — one of the busiest nights of the year for Kent police.

Only one disciplinary item was included in Cole’s personnel file: An internal departmental investigation in 2012 resulted in a two-week suspension without pay, restitution to the department and the loss of his take-home vehicle after Lee discovered the captain was using it for personal matters.

https://www.ohio.com/news/20180920/kent-police-captain-charged-with-operating-gambling-house-money-laundering/1

Dog Trainer Accused of Tax Fraud, Money Laundering

By Guillermo Contreras

Federal agents have arrested a principal operator of a canine-training operation after he was indicted Wednesday by a grand jury on charges related to fraud and money laundering.

Bradley Croft, 46, who has said he was a founder of Universal K9, was arrested moments ago the San Antonio Express-News confirmed. A reporter observed as a federal grand jury returned several indictments by 3 p.m. that included one against Croft.

Agents with the FBI, and the IRS’ Criminal Investigation division raided Universal K9 at 15329 Tradesman, near Loop 1604, which is billed as a nonprofit, on Aug. 8. Of 31 dogs found on the site, 26 were taken into custody by the city’s Animal Care Services.

Councilman Manny Pelaez, who represents the district that includes the site of Universal K9, said in an online post on Aug. 8 that “the IRS and the FBI just shut down an operation that was preying on veterans and not doing right by dogs. That’s a good thing worthy of mention and support.”

San Antonio Police Department officers assisted. The Express-News confirmed that the Department of Veterans Affairs also was involved in the investigation.

“Universal K9 specifically outreaches to veterans and offers a two-week K9 Handlers course or a ten-week trainers course in which any veteran may utilize his or her GI Bill to cover 100% of course costs, including the canine,” Universal K9 said in a lawsuit it filed recently against former students.

It costs $12,500 for a 10-month course, according to exhibits included in the lawsuit.

Universal K9 is also listed as a nonprofit foundation that donates dogs to police departments nationwide and has been featured on local and national media, including CBS News and the Express-News.

Croft is expected to make his initial court appearance on Thursday.

Money Laundering Links Romance Scams To Corporate Cyberattacks

By JohnWilson

On the long list of cybersecurity threats facing corporate leaders, romance scams would at first glance hardly seem to crack the top 10. What could cons of lonely middle-aged singles have to do with the business email compromise (BEC) attacks increasingly targeting American corporations? Plenty, it turns out. Recent Justice Department enforcement actions and published research reports have illuminated the connection: Romance scam victims are turned into money mules — conduits for funds stolen from corporations and other victims.

Scamming people online is relatively easy. The harder part is getting money out of the U.S. and back to Nigeria, where many of the scammers are based. A corporate treasurer is likely to hesitate before wiring tens of thousands of dollars to an unknown person or company in Nigeria, even if asked to do so by the company’s CEO. A transfer request like this is also more likely to raise eyebrows at the company’s bank, but a “consulting company” with a U.S. bank account is more likely to slip through unquestioned. The romance scam victim, who has an established history of transferring money to Nigeria, is the

“consulting company” receiving the funds and transferring them onward. Why would these victims agree to do this? In many cases, they remain under the scammer’s spell and are willing to do whatever they are asked to do. In other cases, they have become financially desperate or they are being blackmailed to force their ongoing cooperation.

Romance scammers frequently target women who are 40 or older. They will often pose as an American military man living overseas, using photos grabbed from Facebook or other sites. After a period of relationship building, the male partner will start asking for money. He may say he needs surgery, but the military will cover only 80% and he asks to borrow the remaining 20%. Or perhaps he has been arrested in a dangerous part of the world and needs money to buy his freedom.

Caution and prudence are no match for hope and loneliness. It’s surprising how often this works — how willing people are to ignore the warning signs and repeated disappointments. Time after time the scammer finds an excuse about why he can’t come to visit his romantic victim, yet he always finds a way to ask for more money. In one especially sad case we tracked, a divorced woman with two children sent more than half a million dollars to a Nigerian scam artist, losing her home and forcing her to move her children out of their school.

There’s a long history of Nigeria-based scams. These criminals have had little fear of being brought to justice, bragging about their ill-gotten gains in their Facebook posts. The long arm of the law is finally reaching them. The U.S. Justice Department and other U.S. agencies are increasingly going after Africa-based scammers, including in two recently announced enforcement actions, and have succeeded in getting accused criminals extradited to the United States for prosecution.

On June 11, the Justice Department and a group of other U.S. federal agencies announced the arrest of 74 individuals involved in scamming in an enforcement action it called Operation Wire Wire. Among them, 23 individuals were charged with money laundering of at least $10 million from BEC scams, which they also call “cyber-enabled financial fraud.” Of the 23, 8 people were charged with laundering $5 million stolen from a Seattle corporation, a law firm and several title companies.

“The fraudsters enlist and manipulate the money mules through romance scams or ‘work-at-home’ scams,” the Justice Department said.

The same Nigerian scammers (both individuals and groups) who have long run romance scams are now unleashing BEC attacks against corporations. Agari recently analyzed the contents of 78 criminal email accounts captured from 10 organized crime groups and dating as far back as 2009. It found after focusing for years on simple romance and rental scams, most of the groups began conducting BEC attacks between 2016 and 2018. BEC has become the most popular attack vector (24% of all attacks over the life of the accounts), a surprising finding given that most of these groups did not begin BEC attacks until 2016 or later. Most of the groups also engage in apartment rental scams, which aren’t as lucrative as BEC or romance scams but are much easier to pull off and replicate.

“The same criminal organizations that perpetrate BEC also exploit individual victims, often real estate purchasers, the elderly and others, by convincing them to make wire transfers to bank accounts controlled by the criminals,” the Justice Department said in its June 11 announcement. In a separate set of eight arrests announced on June 25, dubbed Operation Keyboard Warrior, a group of Africa-based defendants were charged with perpetrating “romance scams, fraudulent-check scams, gold-buying scams, advance-fee scams and credit card scams,” and sending the proceeds of those scams from the U.S. to Ghana, Nigeria and South Africa “through a complex network of both complicit and unwitting individuals that had been recruited through the various internet scams.”

In one of the accompanying indictments, the defendants were charged with carrying out “fictitious online romance relationships … in order to convince them to carry out” acts including “receiving and shipping merchandise, depositing and forwarding counterfeit checks and transferring the proceeds of the conspiracy via wire, U.S. Mail, ocean freight and express package delivery services.”

Amid the crackdown, however, losses are mushrooming. The FBI’s Internet Crime Complaint Center (IC3) in July reported a 136% increase in identified global exposed losses between December 2016 and May 2018.

It’s a tough problem. The victims I’ve spoken with have a gambler’s mentality. Deep down they know it’s a scam, but if they cut off the communication they know they’ll never see the money the scammer supposedly borrowed from them. Better to keep playing, hoping their luck will change. Sadly, the odds they’ll ever see a dime are zero. They’d be better off in Vegas, where winning is at least a possibility. Emotionally and financially broken, they are easily manipulated into aiding the scammer by helping to launder the proceeds of BEC scams.

They froze computers, then demanded ransom. A former FIU student is going to prison

A former FIU graduate student received an 18-month federal prison sentence this week for helping computer extortionists launder more than $93,000.

From October 2012 to Marc 27, 2013, while at FIU, Raymond Uadiale’s version of unofficial work-study involved moving extorted money for those who wielded a type of ransomware called “Reveton.” Uadiale, now 41, went to work for Microsoft as a network engineer after the scheme ended.

That job ended in March, the same month Uadiale was indicted on money laundering charges.

As explained in Uadiale’s admission of facts, “When Reveton infected a victim’s computer, it would display a splash screen that included the logo of a law enforcement organization and a message falsely informing the victim that the law enforcement organization had found illegal material on the infected computer. The Reveton ransomware splash screen would direct the victim to pay a “fine” in order to regain access to the computer and its data.”

Scam Smashing Tip No. 1: No law enforcement agency legally does business by demanding cash on the spot. And if you have illegal material on your computer worth law enforcement’s time, your punishment will come from a court and likely will be stiffer than a fine.)

To pay the “fine,” the person would be told to buy a GreenDot MoneyPak, which works something like a Starbucks card and is available at many stores. Then, they would put the MoneyPak account number into a form on the ransomeware splash screen. This sent the account number to the person controlling the ransomware from the United Kingdom, called in Uadiale’s admission “Co-conspirator 1.”

Uadiale bought prepaid debit cards and sent those account numbers across the Atlantic to Co-conspirator 1. GreenDot’s online transfer system allowed Co-conspirator 1 to move the extortion money from the MoneyPaks to the debit cards. Or, Co-conspirator 1 would send the MoneyPak account numbers to Uadiale and he would do the transferring of funds.

With the money on the debit cards held by Uadiale, he then hit ATMs or other places around South Florida he could use for withdrawing money off the cards.

“Using an account with the digital currency platform Liberty Reserve, the defendant would transfer the approximately 70 percent of the funds loaded onto the debit cards back to Co-conspirator 1,” Uadiale’s admission of facts states. “The defendant and Co-conspirator 1 agreed that the defendant would send Co-conspirator back approximately 70 percent of the funds loaded onto the defendant’s debit cards, while the defendant would keep the remaining amount for the defendant’s payment and to cover transaction fees.”

At those black market transaction rates, Uadiale made just over $40,000 in those months.

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