22 people indicted in drug trafficking, money laundering scheme

TULSA, Okla. – Authorities say more than a dozen people have been indicted on money laundering and drug trafficking charges.

Officials say the money laundering scheme was based out of Casa Herrera and Servicios Perez in east Tulsa.

Investigators allege that the suspects would take photos of business customers’ IDs and form a library of them for drug traffickers to use while wiring drug proceeds back to Mexico. The IDs belonged to unknowing locals who used the business legitimately to send money to families.

Authorities say the alleged traffickers would then give money to the business for helping them with the operation. The wire transfers were structured to prevent drawing attention to their operation from federal investigators.

However, officials told FOX 23 that they got sloppy and used one man’s ID enough times that it was flagged.

In all, 22 people connected to the business were indicted on the charges.

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.

Maple Valley man sentenced to prison for money laundering

A former Microsoft employee was sentenced today to 18 months in prison after pleading guilty to conspiracy to commit money laundering in connection with the spread of a particular type of ransomware commonly referred to as Reveton.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Benjamin C. Greenberg for the Southern District of Florida and Special Agent in Charge Matthew J. DeSarno of the FBI Washington Field Office’s Criminal Division, made the announcement.

Raymond Odigie Uadiale, 41, of Maple Valley, was sentenced by U.S. District Court Judge William P. Dimitrouleas for the Southern District of Florida following his June 4 guilty plea.

The indictment charged Uadiale with one count of conspiracy to commit money laundering and one count of substantive money laundering. As part of the plea agreement, the government dismissed the substantive count. In addition to his prison sentence, Uadiale was also sentenced to three years of supervised release.

According to the factual proffer filed in connection with the plea agreement, Uadiale helped to “cash out” the payments of victims whose computers were infected with Reveton, a type of ransomware that displayed a splash screen on the victim’s computer with the logo of a law enforcement organization.

The splash screen would include a message falsely telling the victim that the law enforcement organization had found illegal material on the infected computer and required the payment of a “fine” to regain access to the computer and its data. The ransomware directed the victim to purchase a GreenDot MoneyPak and enter the account number into a form on the splash screen. Using prepaid debit cards, Uadiale transformed the MoneyPak funds into cash, kept a portion for himself, and sent a portion back to Reveton’s distributor, who resided in the United Kingdom.

“By cashing out and then laundering victim payments, Raymond Uadiale played an essential role in an international criminal operation that victimized unsuspecting Americans by infecting their computers with malicious ransomware,” said Assistant Attorney General Benczkowski. “This conviction and sentence is another demonstration of the Department of Justice’s commitment to prosecuting cybercriminals and shutting down the networks they use to launder their criminal proceeds. We are grateful for the outstanding collaboration of our U.S. and international law enforcement partners in this successful investigation.”

According to court documents, Uadiale used the digital currency platform Liberty Reserve to transfer approximately 70 percent of the ransomware proceeds back to the ransomware distributor.

Between Oct. 2012 and March 27, 2013, while he was a graduate student at Florida International University, Uadiale sent approximately $93,640 in Liberty Reserve dollars to his co-conspirator as part of their scheme. Public records show that Uadiale was hired by Microsoft as a network engineer after the conspiracy charged in the indictment ended.

“This was a sophisticated scheme to conceal the proceeds of a particularly insidious type of ransomware,” said U.S. Attorney Greenberg. “By claiming to originate from law enforcement agencies, Reveton not only victimized computer users, it also exploited the agencies in whose names the ransomware claimed to be acting. Today’s sentence demonstrates that those who seek to profit from the spread of such malicious software face serious consequences.”

The case was investigated by the FBI, with assistance from the U.K.’s National Crime Agency, and was prosecuted by Assistant U.S. Attorney Jared M. Strauss of the Southern District of Florida and Senior Counsel W. Joss Nichols of the Criminal Division’s Computer Crime and Intellectual Property Section, with assistance from the U.S. Attorney’s Offices for the Eastern District of Virginia and the Western District of Washington.

Gilbert man sentenced to prison for $13M money laundering scheme

PHOENIX — A Gilbert man was ordered to serve prison time for leading an investment scheme that allowed him to scam millions of dollars out of dozens of victims in two years.

The U.S. Attorney’s Office announced Monday that 40-year-old Cory Ryan Williams was sentenced to seven years in prison by U.S. District Judge Douglas L. Rayes.

Williams had pleaded guilty to one count of transactional money laundering last year.

He was accused of lying to his family, friends and fellow church members about the profitability of his investment scheme over the course of two years.

Court documents showed that Williams “traded significant volumes of E-Mini S&P 500 futures contracts in his personal trading accounts.”

In order to get others on board, he told them that he consistently earned a five percent return each week and that all investments were safe and would not lose money, the attorney’s office said.

Williams was able to solicit more than $13 million from more than 50 victims in a more than two-year period.

However, Williams lost more than $8.3 million of that money, “while at the same time fraudulently telling participants he was trading on their behalf at a profit,” court documents said.

Court documents said he used the remaining funds to pay approximately $1.3 million for his personal expenses and to return approximately $3.4 million to some participants.

He also diverted more than $800,000 of the victims’ funds to his own personal use.

A restitution hearing was scheduled for September. Williams will be ordered to pay restitution up to $13.5 million

‘Game Over’: Wall Street Analyst Says Bitcoin Must Not Breech Year-To-Date Support

By: William Suberg

Renaissance Macro Research’s head of technical research Jeff deGraaf concluded it may be “game over” for Bitcoin (BTC) in a new analysis, CNBC reports August 9.

In a note to clients, deGraaf, who has received multiple accolades for his trading insights in the past twenty years, claimed Bitcoin’s price movements suggest the largest cryptocurrency is “permanently impaired.”

CNBC quotes deGraaf as writing that Bitcoin’s “parabolic moves are notoriously dangerous for short-sellers,” adding that a top normally develops with the appearance of a “descending triangle over months, with reduced volatility and little [fanfare],”

“Once the top is complete on the support violation, the security in question can often be considered permanently impaired or even ‘game‐over’. We are of course referencing Bitcoin as exhibit ‘A’ in today’s market.”

Such a situation would become a genuine consideration if BTC/USD broke year-to-date support levels, deGraaf added.

Bitcoin prices have come full circle over the past three weeks to trade around $6,359 by press time, after previously rising as high as $8,450 in late July.

This time last year, Bitcoin traded at around half that figure — $3,400 — as markets began their ascent that brought Bitcoin’s price to around $20,000 in December 2017.

Chart

Meanwhile, misgivings from traditional finance sources have continued in recent months, despite increased Wall Street interest and pledges to build out Bitcoin-related infrastructure.

Last week, JPMorgan CEO Jamie Dimon broke silence once more to call the cryptocurrency a “scam” after previously saying he “was not going to talk about” it.

https://cointelegraph.com/news/blockchain-encyclopedia-launches-as-developers-iron-out-token-challenges

Federal Indictments In ICE Raid Reveals $8 Million Money Laundering Scheme

By: Michelle Bandfur

Investigators said a group of undocumented residents and U.S. citizens exploited illegal aliens working at plants.

The U.S. Attorney’s office began laying out its case against 17 defendants charged with conspiracy to harbor illegal aliens and conspiracy to commit money laundering.

Most of the 17 suspects accused in the exploitation of undocumented workers appeared in federal court in Lincoln Thursday.

Federal prosecutors said they played a part in an elaborate plot to defraud the government and take money from undocumented workers.

  • Juan Pablo Sanchez Delgado, aka “Pablo,”
  • Antonio De Jesus Castro, aka “Tony,”
  • Magdalena Castro Benitez, aka ”Nena,”
  • Alma Hernandez Moreno, aka “Aunt,”
  • Anayancy Castro Hernandez, aka “Anay,”
  • Fabian Castro, aka “Fabi,”
  • Suni Sarahi Sanchez Delgado
  • Osvaldo Sanchez Delgado, aka “Lalo,” aka “Lalito,”
  • John Christopher Good,
  • *Aracely Heredia Martinez, aka “Donita,”
  • Eric Beringer,
  • Christopher Thurlow,
  • Mayra P. Jimenez Castellon,
  • Asiyadeth Jimenez Castellon,
  • John Glidden,
  • Jaime Garcia Cota, aka “David,” and
  • Lillian Ajin.

Court records show as part of the conspiracy, Juan Pablo Sanchez Delgado, an alien, Magdalena Castro Benitz, an alien previously removed and deported from the United States to Mexico, and Antonio De Jesus Castro, a son of Magdalena Castro Benitez, who was born in the United States set up two companies. “JP and Sons” and “J Green Vally” for the “purpose of providing unlawful employment to aliens in Nebraska, Minnesota, and Nevada.”

The indictment also shows Delgado would advertise his phone number and available jobs over Facebook.

It also reveals Delgado had contracts with Elkhorn River Farms and O’Neill Ventures, which owns a tomato plant where ice agents converged Wednesday. Delgado would allegedly work with supervisors, Eric Beringer and Christopher Thurlow to employ workers, who are not in the country legally.

The investigation reveals from January 1, 2015 to July 17, 2018, Delgado controlled $8 million worth of transactions at the Great Western Bank in O’Neill. DACA recipient Anayancy Castro Hernandez works at the branch and is accused of helping Delgado cash the paychecks.

The indictment also shows Delgado required his employees to cash their paychecks at his O’Neill grocery store, El Mercadito.

It says he would withhold money from those checks telling undocumented workers it was for federal taxes, but he kept the money.

The court records said the group also used part of the millions to buy property in Nebraska and Las Vegas to house undocumented workers.

The group would also tip each other off, if there was any ICE activity in O’Neill or by the plants.

If convicted, the suspects could be sentenced to 10-30 years in federal prison and/or a fine of $500,000 or double the amount of what was laundered.

https://www.ketv.com/article/federal-indictments-in-ice-raid-reveals-dollar8-million-money-laundering-scheme/22691654

Teen Reunites With postal Worker Who Saved Her From Sex Trafficking

Source: CNN

Postal worker Ivan Crisostomo helped 16-year-old Crystal Allen escape after being abducted and held captive for three months. They finally reunited.

https://www.cnn.com/videos/us/2018/08/08/human-trafficking-survivor-reunites-with-postal-worker-orig-rf.cnn

Danske’s Woes Grow as Denmark Opens Money Laundering Probe

By Peter Levring

Danske Bank A/S’s legal jeopardy is deepening.

Prosecutors in Denmark said on Monday they had opened a criminal investigation into the bank, acting on “multiple complaints” that the Estonian unit of the country’s biggest lender was used to funnel billions of kroner of dirty money.

The prosecutors said that they had been following “the case very closely” for a long period “due to the very serious nature and scope of the case” and vowed to “turn every stone.”

A similar investigation was launched by Estonia last week. The probes come after Bill Browder, co-founder and chief executive officer of Hermitage Capital, filed criminal complaints in July alleging that Danske was guilty of “gross negligence and money laundering and related offenses.”

According to Browder, Danske became a hub for financial crime from 2007 to 2015, as more than $8 billion in illicit funds from Russia, Moldova and Azerbaijan were funneled through its Estonian operation and into Europe. The case takes its starting point in $230 million that Browder says can be traced back to transactions linked to the death of his lawyer, Sergei Magnitsky. He says the full amount laundered through the bank may exceed $9 billion.

Serious Case

The state prosecutor said it was too early to say if the investigation would result in charges. A spokesman for the office declined to comment about any potential targets or on how long the probe might take.

Danish anti-money laundering legislation allows for financial penalties tied to the number of suspicious transactions, meaning fines may “significantly exceed profits,” prosecutors said.

In a survey of five analysts by Bloomberg last month, estimates of a potential fine for Danske ranged from a high of $4.7 billion to a low of $315 million, with at least two saying the bank may avoid penalties altogether.

Danske shares slid 0.5 percent on Tuesday in Copenhagen, bringing this year’s decline to 25.5 percent. That compares with a 10 percent drop in the Bloomberg European Banks index. Analysts Kapilan Pillai at Jefferies International and Paulina Sokolova at Barclays said in recent notes the stock is now cheap relative to peers.

For more on the stock, read this: Danske Shares Are Oversold, Barclays Says

With the case having spooked investors, Danske Chief Executive Officer Thomas Borgen has apologized publicly for Danske’s failure to act sooner. Borgen said in June that he and the board had discussed whether he should step down, but that it was decided his experience was needed to steer the bank.

Danske said it would be assisting prosecutors in their investigation.

“We have a good and constructive dialog on an ongoing basis with the authorities, and we will be at the service of SOIK if it needs further clarification on specific matters,” Flemming Pristed, Danske’s general counsel, said in a statement.

Danske Bank said last month it will donate the gross income from suspicious transactions in its Estonian non-resident portfolio (roughly 1.5 billion kroner, or $233 million) to support social programs, including combating financial crime.

The lender agreed in December to pay a $2 million fine after prosecutors charged the bank with breaching rules requiring monitoring of transactions with correspondent banks. In May, Denmark’s financial supervisor raised Danske’s capital requirements by 5 billion kroner as part of a scathing report on the bank’s multiple failures to halt the laundering.

Business Minister Rasmus Jarlov welcomed the probe and said the government would “tighten anti-money laundering even more.”

6 indicted by grand jury in alleged money-laundering scheme costing OtterBox sister company millions

By Saja Hindi

Six people were indicted by a grand jury on allegations of running a theft and money-laundering scheme that cost Fort Collins business Blue Ocean Enterprises millions of dollars, court documents show.

A nine-month investigation by the Larimer County Sheriff’s Office, the Colorado Department of Revenue and the Larimer County District Attorney’s Office found evidence that two men led the scheme that took place between 2012 and 2016, resulting in the loss of more than $2.9 million for the OtterBox sister company.

Blue Ocean was started by OtterBox founders Curt and Nancy Richardson. According to the company’s website, it “fuels business activities and investments that share the (Richardson) family’s passions and strengths.”

The Coloradoan requested the indictment Thursday morning, and was told the document was suppressed from public view. However, the District Attorney’s Office released the document Thursday afternoon, four hours after the Coloradoan’s initial story on the case published.

The six people arrested on 41 criminal allegations were 43-year-old Benjamin Davenport, 39-year-old Kirk Smith, 34-year-old Stephanie Johnson, 33-year-old Christopher Reppert, 31-year-old Jeremy Pond and 36-year-old Jason Lewis.

Davenport and Smith are accused of leading the scheme and are both Fort Collins residents.

In an interview, Larimer County Sheriff’s Office Lt. John Feyen said Davenport pitched Blue Ocean the purchase of a wood pellet plant in Demark, or at least the purchase of its equipment.

After Blue Ocean agreed to pursue the idea, Davenport — who reportedly owned a company with Smith — signed an agreement with Blue Ocean for an initial $500,000 cash investment plus up to $3 million in additional funding. Blue Ocean would own majority shares in the company, according to the indictment.

However, the pair kept informing Blue Ocean that they were running into problems getting the company up and running for various reasons, Feyen said.

As Blue Ocean continued to invest more money into the company, the suspects lost more of their ownership stake  — eventually diluting it to almost nothing.

In 2015, Blue Ocean severed its partnership with Smith and Davenport as the two had very little equity left in the company, Feyen said, and a short while later, Blue Ocean had the Denmark plant up and running.

In May 2016, Blue Ocean officials received a call from a man named Curtis Beyer.

According to Feyen, Beyer told Blue Ocean that a company he purportedly ran was actually owned by Davenport and Smith, who allegedly used the company to overcharge Blue Ocean for materials for the plant. Beyer said he was promised a portion of the profits by agreeing to pose as the president of the company, but he never received payment.

Beyer was not charged in the investigation.

Blue Ocean officials then launched their own internal investigation and later contacted the Larimer County Sheriff’s Office and the Larimer County District Attorney’s Office. The Colorado Department of Revenue also joined the investigation.

The agencies found inappropriate use of Blue Ocean funds as well as money that was unaccounted for, which reportedly benefited Davenport and Smith, who also run several other companies, Feyen said.

The other four suspects worked with Davenport and Smith and were aware of the scheme, Feyen said.

Davenport is facing 31 felony charges, and Smith is facing 33 felony charges of theft, Colorado Organized Crime Act racketeering, money laundering, forgery, tax evasion and filing false tax returns.

Johnson and Reppert are also facing numerous felony charges of racketeering, theft, forgery, tax evasion, money laundering and misdemeanor failure to file taxes.

Lewis and Pond are each facing felony theft charges, and Pond is facing a felony charge of filing a false tax return while Lewis is facing a misdemeanor charge of failure to file a return.

The suspects were indicted by a grand jury July 25.

All six suspects have since bonded out of jail custody, but they cannot leave the state or country as part of their bond agreements.

Arizona Bitcoin Trader Handed 41-Month Jail Time for Money Laundering Read more: https://cryptovest.com/news/arizona-bitcoin-trader-handed-41-month-jail-time-for-money-laundering/

By Maryam Manzoor

A Bitcoin (BTC) trader from the US state of Arizona has been sentenced to 41 months in federal prison after he was found guilty of money laundering, the Department of Justice said in a statement on Wednesday.

Thomas Mario Costanzo, 54, known online as Morpheus Titania, will get credit for the time he has already served since his arrest in April 2017.

At the end of March, Costanzo was was found guilty of five counts of money laundering by a federal jury in Phoenix. Federal agents launched an investigation into the suspect in 2014, after Costanzo posted on an exchange website, claiming he was prepared to engage in cash transactions of up to $50,000.

When approached by undercover federal agents posing as drug dealers, Costanzo “provided them with Bitcoin and told them it was a great way to limit their exposure to law enforcement”.

“The jury found that over a two-year period, Costanzo took $164,700 in cash from the agents (whom he believed to be heroin and cocaine traffickers) and exchanged it for Bitcoin in order to conceal and disguise the nature, location, source, ownership, and control of the drug proceeds,” the statement reads.

Last year, federal agents conducted a raid on Costanzo’s home, on suspicion of unlawful possession of ammunition and money laundering via cryptocurrencies, which resulted in his arrest. The jury also found him guilty of using Bitcoin to buy drugs, and aiding other individuals in similar purchases by providing the with Bitcoins.

At its March conviction, the Justice Department acknowledged that Bitcoin may be used for legitimate purposes, as anyone can get BTC from a commercial exchange, paying about 1.5% as a commission. For comparison, Costanzo charged some 7% to 10% in his peer-to-peer transactions.

In addition, the court ruled that the 80 BTC (now worth more than $600,000), provided by Costanzo to the undercover agent as part of the final $107,000 money laundering deal are to be forfeited.

Digital currencies’ potential for usage in illicit activities such as fraud and money laundering is among the most frequently cited concerns by cryptocurrency detractors. Bitcoin has been dismissed by countless critics as a vehicle for crime. A study conducted earlier this year revealed that cybercriminals specifically target cryptocurrencies, as the anonymity they provide makes them ideal for laundering criminal proceeds.

Recent reports of crypto crime include Japanese organized crime groups and California’s “Bitcoin Maven” who was recently sentenced to one year in jail for laundering Bitcoins worth millions of dollars.