Four Indicted for $16 Million Money Laundering Scheme
Monday, March 28, 2022

Four Indicted for $16 Million Money Laundering Scheme

On March 23, 2022, an indictment was unsealed in the Western District of Arkansas, charging four men for their involvement in wire fraud and money laundering schemes involving fake investment offerings amounting to an alleged $16 million.

According to court documents, the four men allegedly engaged in an investment fraud scheme between 2013 and 2021 in which they falsely represented the nature of their investment offerings and promised large returns, which they could not and did not yield. The indictment also alleges that two of the defendants encouraged victims to send their funds to bank accounts controlled by the other two defendants, and then transferred the money through a complex series of accounts worldwide.

The defendants were charged with wire fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering. One defendant was further charged with money laundering. If convicted, the men will face up to 20 years in prison for each count. The additional count of money laundering carries an additional sentence of up to 10 years.

The DOJ press release can be found here.

California Man Pleads Guilty To Stealing Government COVID-19 Relief Funds

On March 18, 2022, a California man pleaded guilty in the Central District of California to misappropriating COVID-19 relief funds obtained through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Under the CARES Act Provider Relief Fund, CARES Act health care providers who were financially harmed by the impact of the COVID-19 pandemic are granted federal funds to provide care to patients suffering from COVID-19. According to court documents, the defendant admitted he owned a hospice agency in North Hollywood that was never operational during the COVID-19 pandemic, yet he received approximately $89,162 designated for the medical treatment and care of COVID-19 patients. The defendant admitted he misappropriated the CARES Act funds by spending them for his personal use and then transferring the funds to family members, including one family member in Armenia, rather than using the funds in any way related to the pandemic relief efforts as required.

As part of his guilty plea, the defendant further admitted that he submitted five Economic Injury Disaster Loan (EIDL) applications to the Small Business Administration (SBA) on behalf of his hospice agency and four other entities he controlled. As a result of his fraudulent applications, the SBA disbursed approximately $428,100 in EIDL funds to the man, which he used for his benefit against EIDL requirements.

The man pleaded guilty to three counts of theft of government property and is scheduled to be sentenced on June 13, facing up to 10 years in prison for each count.

The DOJ press release can be found here.

New Jersey Man Convicted for Fraudulently Obtaining US Visas for Chinese Government Employees

On March 23, 2022, a New Jersey man was convicted by a federal jury of one count of conspiracy to defraud the United States and to commit visa fraud for his participation in a conspiracy to fraudulently obtain United States visas for Chinese government employees.

According to court documents, the defendant was involved in a scheme to fraudulently obtain J-1 research scholar visas for employees of the government of the People’s Republic of China (PRC) to allow them to covertly work for the PRC government while in the United States. The defendant operated an office of the China Association for the International Exchange of Personnel (CAIEP), an agency of the PRC government, in New Jersey that seeks to recruit US scientists, academics, engineers, and other experts for the PRC.

The J-1 research scholar program allows foreign nationals to visit the United States to conduct research at a corporate research facility, library, museum, university, or other research institution. The defendant allegedly worked to obtain a J-1 research scholar visa for a prospective employee based on the false representation that the employee would conduct research at a United States university, to conceal unlawful work of another employee who was present in the United States on a J-1 visa sponsored by a US university. The two employees represented to the US government that they were entering the US for the primary purpose of conducting research at US universities, but their actual purpose consisted of working for the CAIEP. The defendant reported the employee’s arrival to the United States to the US universities, procured a local driver’s license for her and disguised her CAIEP salary as a subsidy for research scholar living expenses to make her presence as a research scholar appear legitimate.

As a result of his conviction, the defendant faces a maximum sentence of five years; he is scheduled to be sentenced on July 11.

The Department of Justice (DOJ) press release can be found here.

UPS To Pay $5.3 Million for False Claims Act Allegations

On March 21, 2022, the DOJ announced that United Parcel Service Inc. (UPS) agreed to pay approximately $5.3 million to settle allegations that the company falsely reported information about the transfer of U.S. mail to foreign posts or other intended recipients under contracts with the U.S. Postal Service (USPS), in violation of the False Claims Act (FCA).

UPS was engaged by USPS to pick up U.S. mail at various locations and deliver it to its international and domestic destinations. As a condition of payment, UPS was required to submit electronic scans to USPS to report when the mail was delivered, and there were specified penalties for mail that was delivered late or to the wrong location. The settlement resolves allegations that scans submitted by UPS were falsified times and that UPS, in fact, transferred possession of the mail.

According to DOJ, this is the fifth civil settlement involving air carrier liability for false delivery scans under the USPS International Commercial Air Contracts, pursuant to which the United States has recovered more than $70 million.

The DOJ press release can be found here.


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