FBI Charge 6 With Running $500 Million Offshore Laundering Scheme…..Rule of Thumb – If it Seems To Good to be True? Don’t walk away….RUN!!!!

Posted September 11, 2014

Federal prosecutors charged six men Tuesday with running a complicated offshore scheme that allegedly enabled clients to manipulate stocks, avoid U.S. taxes and launder hundreds of millions of dollars.

An indictment unsealed in federal court in Brooklyn alleged the men laundered some $500 million in proceeds from fraudulent securities transactions for more than 100 U.S. citizens and helped commit tax fraud.

A person briefed on the probe said the amount of laundered money and the number of clients could be much larger and the investigation is ongoing. The indictment didn’t name any of the U.S. clients.

The men—all of whom reside in Belize, according to the indictment—concealed their U.S. clients’ ownership in offshore shell companies over a five- year period. Some of the clients used the entities to mask transactions in order to manipulate stocks, and then launder the proceeds through the offshore accounts, prosecutors alleged.

The indictment came after a two-year undercover investigation by the Federal Bureau of Investigation during which an undercover agent traveled to Belize to meet with the alleged conspirators and set up offshore entities. The agent explicitly told the defendants that he planned to use a sham company to manipulate stocks, according to the indictment.

The defendants— Robert Bandfield, Andrew Godfrey, Kelvin Leach, Rohn Knowles, Brian De Wit and Cem Can—are all charged with one count of securities fraud and conspiracy to launder money. Mssrs. Bandfield, Godfrey and Can are also charged with conspiracy to defraud the U.S. government. The corporate entities allegedly controlled by the men are also charged in the indictment. Most of the companies appear to small, offshore companies controlled by the defendants.

The defendants couldn’t be immediately reached for comment and their lawyers couldn’t immediately be identified.

Source: http://blogs.wsj.com/law/2014/09/09/feds-charge-6-with-running-500-million-offshore-laundering-scheme

Six Corporate Executives and Six Corporate Entities Indicted for Orchestrating a $500 Million Offshore Asset Protection, Securities Fraud, and Money Laundering Scheme
Defendants Created Three Brokerage Firms in Belize to Assist U.S. Citizens in Fraudulent Manipulation Schemes of Publicly Traded Companies, Including Cannabis-Rx Inc. (CANA)

U.S. Attorney’s OfficeSeptember 09, 2014

Eastern District of New York(718) 254-7000

A multi-count indictment was unsealed this morning in federal court in Brooklyn, New York, against six individual defendants: Robert Bandfield, a U.S. citizen; Andrew Godfrey, a citizen of Belize; Kelvin Leach, a citizen of the Bahamas; Rohn Knowles, a citizen of the Bahamas; Brian De Wit, a citizen of Canada; and Cem Can, a citizen of Canada; and six corporate defendants: IPC Management Services, LLC; IPC Corporate Services Inc.; IPC Corporate Services LLC (collectively, IPC Corp); Titan International Securities, Inc. (Titan); Legacy Global Markets S.A. (Legacy); and Unicorn International Securities LLC (Unicorn).1 The charges include conspiracy to commit securities fraud, tax fraud, and money laundering. Bandfield’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for tomorrow at the Wilkie D. Ferguson Jr. United States Courthouse, 400 North Miami Avenue, Miami, Florida. The government will seek extradition for the other individual defendants.

The indictment was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Shantelle P. Kitchen, Acting Special Agent-in-Charge, United States Internal Revenue Service, Criminal Investigation, New York (IRS-CI); and James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York.

“As alleged, Bandfield and his co-conspirators devised not only a fraudulent scheme but an elaborate corporate structure based on lies and deceit designed to enable U.S. citizens to evade and circumvent our securities and tax laws. They set up sham companies with figureheads at the helm in an attempt to deceive U.S. law enforcement and regulators and bragged about their scheme to their clients,” stated United States Attorney Lynch. “Today’s sweeping indictment, charging the individuals and companies responsible for this $500 million scheme, closes this fraudulent offshore safe haven and sends a strong message to those who seek to abuse the financial markets in order to enrich themselves that we will investigate and prosecute them no matter where they set up shop.” Ms. Lynch expressed her grateful appreciation to the United States Securities and Exchange Commission for its significant cooperation and assistance in the investigation.

“As alleged, the defendants concocted an intricate scheme using sham companies to make money while repeatedly evading and violating U.S. securities and tax laws. The indictment of these defendants should serve as a stern reminder that such greed-based behavior comes at a cost. The FBI will continue to use its investigative expertise in working with law enforcement partners to identify, disrupt, and dismantle sophisticated fraud schemes to ensure the integrity and transparency of our financial markets,” stated FBI Assistant Director-in-Charge Venizelos.

“The investigation of offshore tax evasion and money laundering are top priorities for IRS-Criminal Investigation, and we are committed to using all of our enforcement tools to stop this abuse. The enactment of the Foreign Account Tax Compliance Act (FATCA) is yet another example of how it is becoming more and more risky for U.S. taxpayers to hide their money globally. Moreover, this partnership of IRS-CI, the FBI, HSI, and the U.S. Attorney’s Office demonstrates the government’s resolve to combat international crime,” stated IRS-CI Acting Special Agent-in-Charge Kitchen.

“Today’s arrests and charges disrupt an illicit offshore operation that was allegedly laundering money for corrupt clients and cheating the U.S. government out of half a billion dollars in tax revenue,” said HSI New York Special Agent-in-Charge Hayes. “The collaboration between HSI and its federal law enforcement partners serves as an example of law enforcement’s global reach to dismantle criminal organizations.”

As alleged in the indictment, between January 2009 and September 2014, this group of conspirators, masquerading as financial professionals, concocted three interrelated schemes to: (a) defraud new investors in various U.S. publicly traded companies through, among other things, fraudulent concealment of the defendants’ corrupt clients’ ownership interests in the U.S. publicly traded companies and their fraudulent manipulation of artificial price movements and trading volume in the stocks of those companies; (b) aid the corrupt clients to circumvent the IRS’s reporting requirements under, among other statutes, the Foreign Account Tax Compliance Act (FATCA); and (c) launder money for the corrupt clients through financial transactions to and from the United States involving proceeds of fraud in the sale of securities. As part of this fraudulent offshore scheme, the defendants laundered approximately $500 million for the corrupt clients—who included more than 100 U.S. citizens and residents.

To facilitate these interrelated schemes, the defendants created shell companies in Belize and Nevis, West Indies, for the corrupt clients and placed nominees at the helm of these companies. This structure was designed to conceal the corrupt clients’ ownership interest in the stock of U.S. public companies, in violation of U.S. securities laws, and enable the corrupt investors to engage in trading under the nominee’s names through brokerage firms also set up in Belize. For example, this structure enabled the defendant De Wit and a U.S. corrupt client to manipulate the stock of Cannabis-Rx, Inc., a microcap or penny stock company which traded under the ticker symbol CANA, through a series of orchestrated transactions between March 27, 2014 and April 16, 2014. On March 28, 2014 alone, De Wit received at least five telephone calls from the corrupt client with specific instructions to fraudulently orchestrate the trading of CANA’s stock. That day, CANA’s stock, which had not traded since July 2, 2013, had a trading volume of 189,800 shares. Ultimately, CANA’s stock price plummeted from $13.77 per share on March 27, 2014 to $0.50 per share on April 16, 2014.

The defendants’ scheme also enabled the U.S. corrupt clients evade reporting requirements to the IRS by concealing the proceeds generated by the manipulated stock transactions through the shell companies and their nominees. For example, in response to a request received by a U.S. corrupt client from a U.S. transfer agent who had to determine whether the proceeds from manipulative stock trading transaction were taxable under U.S. law, the defendant Bandfield forwarded an IRS Form signed by co-defendant Godfrey as the nominee for the shell company which had been set up at the request of the client. At one point during the government’s investigation, Bandfield boasted to an undercover law enforcement agent that he had specifically designed this “slick” corporate structure to counter President Barack Obama’s new laws, a reference to FATCA.

An example of how the defendants’ scheme enabled U.S. corrupt clients to launder the proceeds from their fraudulent trading in U.S. public companies was the production of unidentifiable debit cards for the clients allowing them to freely transfer their proceeds back into the United States.

The government’s case is being prosecuted by Assistant United States Attorneys Jacquelyn M. Kasulis, Winston M. Paes, and Brian D. Morris.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit www.stopfraud.gov.

The Individual Defendants:

ROBERT BANDFIELD, also known as “Bob Bandfield” Age: 70 Residence: Belize City, Belize

ANDREW GODFREY Age: 51 Residence: Belize City, Belize

KELVIN LEACH Age: 34 Residence: Belize City, Belize

ROHN KNOWLES Age: 29 Residence: Belize City, Belize

BRIAN DE WIT Age: 45 Residence: Belize City, Belize

CEM CAN, also known as “Jim Can” Age: 44 Residence: Belize City, Belize

E.D.N.Y. Docket No. 14-CR-476 (ILG)

Source: http://www.fbi.gov/newyork/press-releases/2014/six-corporate-executives-and-six-corporate-entities-indicted-for-orchestrating-a-500-million-offshore-asset-protection-securities-fraud-and-money-laundering-scheme