Money Laundering Arrests Very Common – Sometimes in Surprising Situations
Watch any of the popular crime shows and you’ll think that money laundering involves huge amounts of cash, usually stacks of dollar bills bound together in plastic – with the good guys finding the stash in the back of the bad guys’ van, or condo, or plane. There’s probably some shoot out, maybe an explosion or two. And the bad guys are often members of a drug cartel, or maybe a terrorist organization. You watch TV, you know the scenario.
However, in the real world being arrested and charged with money laundering by federal agents isn’t as dramatic as this — and what much of the TV viewing public may not realize is how often a federal money laundering charge is included in a federal arrest. Once that happens, things get serious.
Money laundering is a serious federal felony with serious prison time. Often, the people defending against these allegations are people that you wouldn’t recognize as a TV villain; instead, they are often people that are part of the neighborhood, your local community, everyday folk – until they’re busted.
Consider the following recent federal money laundering situations from around the country:
1. Money Laundering in Williamsburg, Virginia: Day-Trading Son Uses Parents Money
This week, Stephen Kohout pled guilty in a federal court to money laundering and wire fraud and he’s awaiting his federal sentencing hearing where he could get up to 20 years in prison and fines of $750,000.
What’s Kohout’s story? Back in July 2006, he took over the financial reins of his both his parents with a power of attorney they gave him in 2003. With that power of attorney, Kohout was able to do anything he wanted with their real and personal property – which amounted to over $1 Million alone in their total bank accounts as of 2006. In 2007, his mother and father lost their ability to take care of their own financial duties, so their son stepped in, power of attorney in hand.
And he started spending the cash, the cash held in his parents’ accounts, for his own personal use and enjoyment.
Now, this sounds like something that you might hear about down at the Dallas County Probate Court right? Maybe a state prosecutor investigating this, maybe a guardian ad litem appointed for the folks?
Well, in Stephen Kohout’s case, things got trickier and the federal authorities stepped in. Seems that Mr. Kohout was moving some of that cash into his own accounts for investment trading purposes as well as his personal expenses. Eventually, he filed bankruptcy and as part of his federal bankruptcy proceeding, his misuse of his parents’ money was revealed. And federal prosecutors filed federal charges — like money laundering — against him over in the Eastern District of Virginia.
2. Money Laundering in San Antonio: 19 Year Old Mexican National Found With Heroin
Back in March, a teenager named Jose Aguilar-Posada was in a car that the San Antonio Police stopped because the car had a fake license plate. The police officers reported they could smell something like vinegar in and around a Thermos that Jose had in the vehicle, which is known to be how heroin smells.
Questioned by the police, Jose told them that he was from Mexico, that he was not legally in the country, and that he had earned the $5000 in cash they found on him from working on a job.
Since Jose Aguilar-Posada admitted to being a Mexican national who had entered Texas without legal okay, the San Antonio Police turned him over to I.C.E. (Immigration and Customs Enforcement).
Sounds like another South Texas drug case, right? Well, no.
Phone conversations in jails aren’t protected by privacy laws and the police record them. (Except for attorney – client communications, but ask some defense lawyers in Travis County about that one.) They recorded Jose’s chats.
In one of those phone calls, Jose asks someone to fake paperwork to support his story that he had a job that earned him the five grand. In questioning later, Jose admitted that the $5000 was for the drugs found in the Thermos.
So, would you think that Jose was arrested on state drug charges, since heroin was involved? Here, the 19 year old faces federal money laundering charges.
3. Money Laundering in Hawaii: Italian Restaurant Owner With Gambling Co-Workers
A man named Thomas Ky owns and operates a chain of Italian restaurants on the island of Oahu in the State of Hawaii. Mr. Ky was recently sentenced to 6 months in a federal prison on federal money laundering charges (he faced a maximum of 20 years, hat tip to that good Hawaii criminal defense attorney).
What Mr. Ky did was this: for several years, Mr. Ky’s business was involved in online gambling; he was a very small fish in a big sports gambling operation run over the internet by a man named Felix Gee Won Ton.
According to Mr. Ky’s attorney it was not Thomas Ky that was betting, it was his co-workers and friends at his restaurants. This went on a long time, and according to the federal agents who investigated the gambling ring, over $700 Million went through the restaurant’s accounts over an eight year period.
Apparently, what Mr. Ky did was not take any of this money for himself as profit, but the gambling winnings did come into the restaurant accounts and then go out to the gamblers via business checks or cash bonuses.
Hearing this, some might think that Mr. Ky would be arrested for illegal gambling or fraud or something, right? Nope. Italian restaurant owner Mr. Ky got arrested – and sentenced – for federal money laundering.
4. Money Laundering in New Jersey: Banker Pockets Loan Payments
Last month, a mother and daughter were both arrested in New Jersey on money laundering charges. According to the authorities, these two worked together providing customers with loan modification services on home mortgages and were skimming money from the payments their clients made toward loan modification services like processing fees and escrow funds for their own personal use.
Would you think they were arrested for Fraud? Theft? No. Both are facing federal money laundering charges.
Money Laundering Charges Are Popular with Federal Prosecutors Around the Country
The lesson here? Unlike the TV crime shows, the real federal agents and assistant U.S. Attorneys are arresting, charging, and pursuing federal money laundering cases in situations where one might not think a “money laundering” case exists. Most people think of money laundering as a situation where some bad guys with lots of cash from their illegal activities are needing to convert that cash into something that is easier to use in buying things without the government taking notice.
This is true. However, in today’s world the serious felony charge of money laundering is being used in lots of other kinds of circumstances, something that experienced criminal defense lawyers may see happening but the general public may not.
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