Check Cashiers in Brooklyn, Philadelphia, and Los Angeles Charged for Alleged Violations of Anti-Money Laws

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WASHINGTON—Seven individuals and fourcheck cashing businesses were charged today in the Eastern District of New Yorkand the Central District of California for their alleged roles in separateschemes to violate the Bank Secrecy Act (BSA). The defendants allegedly failedto follow reporting and anti-money laundering requirements for transactionstotaling more than $50 million.
The enforcement actions were announcedtoday by Assistant Attorney General Lanny A. Breuer of the Justice Department’sCriminal Division; U.S. Attorney Loretta E. Lynch of the Eastern District ofNew York; U.S. Attorney André Birotte of the Central District of California;U.S. Immigration and Customs Enforcement (ICE) Director John Morton; FBIAssistant Directors in Charge Janice K. Fedarcyk and Steven Martinez; RichardWeber, Chief of the Internal Revenue Service Criminal Investigation (IRS-CI);Daniel R. Levinson, Inspector General of the Department of Health and HumanServices (HHS); and Benjamin M. Lawsky, Superintendent of the New York StateDepartment of Financial Services.
Four indictments filed under seal onJune 12, 2012 and unsealed today charge the defendants with failure to filecurrency transaction reports (CTRs) or falsely filing CTRs, as well as failureto have an effective anti-money laundering program, all violations under theBSA.
Two of the indictments, charging threeindividuals and two check cashing businesses, were returned in Los Angeles andtwo indictments, charging four individuals and two check cashing businesseswere returned in Brooklyn, New York. All seven individual defendants werearrested or surrendered to authorities today.
The BSA is a set of laws and regulationsenacted by Congress to address an increase in criminal money laundering throughfinancial institutions, which includes check cashing businesses. Check cashersenable people to cash checks without having to go to a bank or maintain a bankaccount. A check casher will typically charge a fee for this service.
Under the BSA, financial institutions,including check cashers, are required to file a CTR with the Department ofTreasury for any transaction involving more than $10,000 in currency. As partof the CTR, the check casher is required to verify and accurately record thename and address of the individual who conducted the currency transaction, theindividual on whose behalf the transaction was conducted, as well as the amountand date of the transaction. CTRs are important law enforcement tools foruncovering criminal activity.
The BSA also requires financialinstitutions, including check cashing businesses, to maintain an effectiveanti-money laundering (AML) program. The purpose of an AML program is toeffectively detect and prevent attempts to facilitate money laundering.Check-cashing businesses are therefore required to have written policies andprocedures regarding CTR filings, records maintenance, and responses to lawenforcement.
According to the indictments, despitethese regulations, check-cashing businesses are a common venue for individualswho want to anonymously cash large numbers of checks to facilitate fraud andmoney laundering schemes. According to the indictments, the use of checkcashers to launder money is particularly prevalent in the area of health carefraud, where fraudulent health care businesses commonly convert the proceeds oftheir fraud into cash by presenting checks to check cashers who they know willnot ask for proof of the payee’s identity and will either not file CTRs or filefalse CTRs.
“Today’s indictments put unscrupulouscheck cashers on notice that we are scrutinizing their conduct,” said AssistantAttorney General Breuer. “They may think that they are flying under the radar,but they are not. These defendants are charged with filing false currencytransaction reports, or not filing them at all, and other serious violations ofthe Bank Secrecy Act. We will not tolerate check cashing businesses evadinganti-money laundering laws.”
“These indictments send a clear messagethat we will not tolerate the willful failure of check cashing businesses totake all steps under the law to prevent their businesses from being used tolaunder the proceeds of crime,” said U.S. Attorney Lynch. “We are pleased to beworking closely with the Asset Forfeiture and Money Laundering Section of theDepartment of Justice and our federal law enforcement partners in theinvestigation and prosecution of these important cases.”
“The Bank Secrecy Act provides lawenforcement with a powerful tool to detect and prevent crime by requiringfinancial institutions to document and submit reports on certain currencytransactions,” said U.S. Attorney Birotte. “Those who seek to evade therestrictions of the Bank Secrecy Act—both individuals and financialinstitutions—will be aggressively pursued by the Department of Justice and itspartners in federal, state, and local law enforcement.”
According to a superseding indictmentfiled in the Eastern District of New York, Belair Payroll Services, a check cashingstore in Flushing, New York; its owner, Craig Panzera; and two otherindividuals, Lasha Goletiani and Zhan Petrosyants, are charged for theiralleged roles in a scheme to violate the BSA. Specifically, Goletiani andPetrosyants allegedly caused Belair to file false CTRs, and Panzera allegedlycaused Belair to fail to have an effective AML program. In addition, Panzerahas been charged with conspiring to commit tax violations with respect to thefees Belair received in connection with the scheme.
As part of the scheme, which lasted fromJune 2009 through June 2011, Goletiani, 32, and Petrosyants, 30, presented toBelair’s manager and other employees checks to be cashed at Belair. The checkswere written on accounts of shell corporations that appeared to be health carerelated, but in fact, the corporations did no legitimate business. The shellcorporations and their corresponding bank accounts on which the checks werewritten were established in the names of foreign nationals, many of whom wereno longer in the United States.
The indictment alleges that employees atBelair accepted these checks and provided cash in excess of $10,000 toGoletiani or Petrosyants. Panzera, 46, and others at Belair never obtained anyidentification documents or information from Goletiani or Petrosyants. Belairallegedly filed CTRs that falsely stated the checks were cashed by the foreignnationals who set up the shell corporations, and in certain CTRs, Belairallegedly failed to indicate the full amount of cash provided to Goletiani orPetrosyants. Goletiani and Petrosyants cashed more than $19 million throughBelair during the course of the scheme. The indictment unsealed todaysupersedes an indictment returned against Goletiani in July 2011 for conspiringto cause Belair to file false CTRs. Approximately $3.2 million has been seizedfrom Belair’s bank accounts in connection with this conduct.
A second indictment filed in the EasternDistrict of New York charges Bargain Island, a check cashing business inPhiladelphia, and its owner and operator, George Gonchar, 51, with failure tofile CTRs and failure to have an effective AML program. According to theindictment, from October 2009 through October 2010, individuals acting as checkcouriers brought multiple checks from Brooklyn made payable to various medicalservices companies to Bargain Island and presented them to Gonchar for cashing.On almost all occasions, the checks exceeded, in the aggregate, $10,000. Asalleged in the indictment, Gonchar knew that the check couriers presenting thechecks to Bargain Island had no connection to the checks other than acting ascouriers. Despite this knowledge, Gonchar falsely indicated in CTR filings thatthe checks were cashed on behalf of the couriers themselves or for companiesassociated with the couriers. Bargain Island cashed more than $5.8 million inchecks from couriers in this manner.
A third indictment filed in the CentralDistrict of California charges G&A Check Cashing, a check cashing businessin Los Angeles; its general manager, Karen Gasparian, 31; and an employee anddesignated compliance officer, Humberto Sanchez, 53, with BSA violations. Theindictment alleges that two separate cooperating witnesses presented bundles ofchecks totaling more than $10,000 to Gasparian and Sanchez at G&A. Thechecks were written on accounts for businesses that purported to be health carebusinesses. G&A deposited the checks into its operating accounts over aperiod of several days, and then provided cash in excess of $10,000 to thecooperating witnesses. Neither Gasparian nor Sanchez filed CTRs on thesetransactions even though they were well aware of the requirement to do so. Morethan $100,000 in checks were cashed in this manner over the course of 10transactions, yet no CTRs were ever filed. This practice extended beyond thecooperating witnesses. From 2006 through 2012, G&A conducted approximately800 transactions that were each in excess of $10,000 and paid out more than $20million in cash on those transactions without ever filing a CTR.
A fourth indictment filed in the CentralDistrict of California charges AAA Cash Advance, a check cashing business inLos Angeles, and its manager, Diana Brigitt, 35, with violations of the BSA.From August 2010 through February 2012, Brigitt, on behalf of AAA, allegedlyrepeatedly cashed bundles of checks totaling more than $10,000 without filingany CTRs. The checks were presented by a cooperating witness and were writtenon accounts that appeared to be for health care businesses. More than $100,000in checks were cashed in this manner over eight transactions, yet no CTRs wereever filed. From January 2008 through February 2012, AAA’s banks reported thatAAA had withdrawn approximately $5 million in cash, yet during this same timeperiod, AAA filed only seven CTRs on transactions greater than $10,000.
“This complex financial investigation,conducted by Homeland Security Investigation’s (HSI) El Dorado Task Force andour law enforcement partners, is indicative of the lengths that criminalenterprises go in an effort to conceal their illicit conduct,” said ICEDirector John Morton. “These individuals permitted the cashing of over $19million in checks with a blatant disregard for the legal safeguards intended toprevent criminals access to our financial system. HSI is determined to exposethese vulnerabilities and to shutdown money laundering operations that threatenour nation’s security.”
“Money laundering is at the foundationof so many criminal schemes, which is why the FBI and our partners place a highpriority on policing it,” said FBI Assistant Director Fedarcyk. “By crackingdown on money laundering, we put teeth in the truism that crime doesn’t pay.”
“The charges exemplify the increasinglycomplex schemes devised to evade anti-money laundering laws,” said FBIAssistant Director Martinez. “The FBI and our trusted partners are resolute inour commitment to match and counter those efforts with the resources andlong-term focus necessary to decipher these schemes that cost taxpayershundreds of millions annually in the Los Angeles area.”
“From coast to coast, the IRS will takeevery step necessary to ferret out those who attempt to avoid their reportingobligations under the law,” Chief Weber of IRS-CI. “This joint effort continuesto demonstrate our efforts to ensure that the financial services industry willnot be used for personal financial gain and will be operated in a fair andhonest manner to promote the public interest.”
“Anti-money laundering laws are animportant tool in the fight against health care fraud, as check cashers areoften used to convert ill-gotten Medicare proceeds,” said Inspector GeneralLevinson.
“These vital investigations show theneed for constant vigilance against dirty check cashers,” said SuperintendentLawsky. “We will use all our enforcement tools to stamp out the use of checkcashers to facilitate crime such as health care fraud. We will continue to workwith all our law enforcement partners on these important investigations.”
The cases announced today are beingprosecuted by Money Laundering and Bank Integrity Unit Trial Attorneys MatthewHaslinger, Matthew Klecka, and Claiborne Porter and Forfeiture Unit TrialAttorney Jeanette Gunderson from the Asset Forfeiture and Money LaunderingSection of the Justice Department’s Criminal Division and Assistant U.S.Attorney Charles Kleinberg of the Eastern District of New York and AssistantU.S. Attorney David Kirman of the Central District of California. Thedepartment acknowledges the invaluable assistance of the Department ofTreasury’s Financial Crimes Enforcement Network (FinCEN).
The Money Laundering and Bank IntegrityUnit investigates and prosecutes complex, multi-district, and internationalcriminal cases involving financial institutions and individuals who violate themoney laundering statutes, the Bank Secrecy Act, and other related statutes.The unit’s prosecutions generally focus on three types of violators: financialinstitutions, including their officers, managers, and employees, whose actionsthreaten the integrity of the individual institution or the wider financialsystem; professional money launderers and gatekeepers who provide theirservices to serious criminal organizations; and individuals and entitiesengaged in using the latest and most sophisticated money laundering techniquesand tools.
The cases are being investigated byagents from the ICE-HSI, FBI, IRS-CI, HHS-OIG, and the New York StateDepartment of Financial Services.
An indictment is merely a charge anddefendants are presumed innocent until proven guilty.