Former North Carolina Resident Pleads Guilty to Money Laundering Conspiracy

February 12, 2012

The Federal Bureau of Investigation (FBI) on February 10, 2012 released the following:

“Defendant Engaged in Money Laundering Scheme in Connection with Queen Shoals Ponzi Scheme

CHARLOTTE, NC— A former North Carolina resident pleaded guilty to conducting a money laundering conspiracy in connection with the $32.5 million Queen Shoals Ponzi scheme announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Gary D. Martin, 60, of St. Augustine, Fla. entered his guilty plea on Wednesday, February 8, 2012, before U.S. Magistrate Judge David C. Keesler.

Joining U.S. Attorney Tompkins in making today’s announcement are Chris Briese, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and the North Carolina Secretary of State Elaine F. Marshall.

A criminal bill of information filed on January 25, 2012, charged Martin with engaging in a money laundering conspiracy in connection with the Queen Shoals Ponzi scheme. According to court documents and court proceedings, on or about December 2007, Martin formed Queen Shoals Consultants, LLC (QSC) in North Carolina. Thereafter, Martin and others induced victims to invest over $28.5 million in the Queen Shoals Ponzi scheme operated by Sidney Hanson. Although Hanson never directly told Martin that Queen Shoals was a Ponzi scheme, Martin induced victims to invest in the Queen Shoals Ponzi scheme through a series of false and fraudulent representations, omissions of material facts and deceptive half truths. Specifically, Martin admitted to falsely claiming that QSC had over 20 years experience in financial services and international finance and that he had a vast background in financial services, including the silver, gold, and foreign currency trading markets. In truth and fact, Martin had no such experience, held no professional licenses related to finance or investments, and never had engaged in any silver, gold, or foreign currency trading.

According to court documents, Martin, through the QSC website and other means, also made false claims about, among other things, QSC’s financial expertise in “Self-Directed IRA Strategies and Fixed Rate Accounts.” Martin held QSC out as “leaders in Professional Private Placement Retirement Planning” and claimed that QSC had a “proven method of diversification [that] spreads the risk nicely for a balanced portfolio.” In truth and fact, QSC offered no such diversification, funneled victim funds solely into the Queen Shoals Ponzi scheme, and had received no recognition as “leaders in Professional Private Placement Retirement Planning.” Martin admitted that he routinely vouched for the success and reliability of Queen Shoals by claiming to have personally invested a significant amount of his own money into Queen Shoals. On at least one occasion, Martin claimed that he invested his retirement life savings in Queen Shoals. In truth and fact, while Martin and others induced victims to invest over $28.5 million in Queen Shoals through QSC, Martin personally invested only $4,000.

According to the plea agreement and other filed documents, Martin engaged in money laundering transactions by utilizing the referral fees he received from Hanson to pay commissions to himself and the so-called QSC consultants. From in or about 2007 to in or about 2009, Martin received over $1.9 million in referral fees from Hanson and paid the consultants over $1.5 million during the relevant time period in return for inducing victims to invest in the Queen Shoals Ponzi scheme. These payments caused QSC consultants to induce additional victims to invest in the Queen Shoals Ponzi scheme, thereby perpetuating the scheme.

The bill of information filed against Martin includes a notice of forfeiture, which gives notice that the defendant must forfeit to the United States all of the property involved in the offenses charged in the information, and all property which is proceeds of such offenses.

Martin, who was charged with and pled guilty to one count of money laundering conspiracy, has been released on bond. At sentencing, he faces a maximum of 10 years’ imprisonment and a $250,000 fine or a fine of not more than twice the amount of criminally derived property involved in the money laundering conspiracy. A sentencing date has not been set yet.

Martin’s guilty plea is the second conviction arising from the Queen Shoals Ponzi scheme investigation. Sidney Hanson pled guilty to securities fraud and wire fraud and was sentenced on March 31, 2011 to 22 years in prison by Chief U.S. District Judge Robert J. Conrad, Jr.

The case was investigated by the FBI with assistance from the Securities Division of the North Carolina Department of the Secretary of State. U.S. Attorney Tompkins also acknowledges the invaluable assistance provided by the Commodities Futures Trading Commission and the Florida Office of Financial Regulation, Bureau of Financial Investigations in this case. The prosecution is handled by Assistant United States Attorney Mark T. Odulio, of the U.S. Attorney’s Office in Charlotte.”

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Douglas McNabb – McNabb Associates, P.C.’s
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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Florida Telecommunications Company, Two Executives, an Intermediary and Two Former Haitian Government Officials Indicted for Their Alleged Participation in Foreign Bribery Scheme

July 13, 2011

The U.S. Department of Justice (DOJ) on July 13, 2011 released the following press release:

“WASHINGTON – Cinergy Telecommunications Inc., Cinergy’s president and director, the president of Florida-based Telecom Consulting Services Corp. and two former Haitian government officials have been charged in a superseding indictment for their alleged roles in a foreign bribery, wire fraud and money laundering scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Special Agent in Charge Jose A. Gonzalez of the Internal Revenue Service – Criminal Investigation’s (IRS-CI) Miami Field Office.

According to the superseding indictment, the defendants allegedly participated in a scheme to commit foreign bribery and money laundering from December 2001 through January 2006. The indictment alleges that during this time period Cinergy and its related company, Uniplex Telecommunications Inc., allegedly paid more than $1.4 million to shell companies to be used for bribes to foreign officials of the Republic of Haiti’s state-owned national telecommunications company, Telecommunications D’Haiti (Haiti Teleco).

According to court documents, Cinergy and Uniplex executed a series of contracts with Haiti Teleco that allowed the companies’ customers to place telephone calls to Haiti. The bribe payments allegedly were authorized by Washington Vasconez Cruz, the telecommunications companies’ president, and Amadeus Richers, the companies’ director, and were allegedly paid to Haitian government officials at Haiti Teleco, including Patrick Joseph and Jean Rene Duperval. According to the superseding indictment, the purpose of these bribes was to obtain various business advantages from the Haitian officials for Cinergy and Uniplex, including preferred telecommunications rates and credits toward sums owed. To conceal the bribe payments, the defendants allegedly used various shell companies to receive and forward the payments, including J.D. Locator Services, Fourcand Enterprises and Telecom Consulting Services.

The six defendants charged in the superseding indictment are:

  • Washington Vasconez Cruz, 63, of Miami, the president of Cinergy and Uniplex, is charged with one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering and 19 counts of money laundering;
  • Amadeus Richers, 60, of Pembroke Pines, Fla., and Brazil, the then-director of Cinergy and Uniplex, is charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering and 19 counts of money laundering;
  • Cinergy Telecommunications Inc., a privately-held telecommunications company incorporated in Florida, is charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering and 19 counts of money laundering;
  • Patrick Joseph, 49, of Miami and Haiti, a former general director for telecommunications at Haiti Teleco, is charged with one count of conspiracy to commit money laundering;
  • Jean Rene Duperval, 44, of Miramar, Fla., and Haiti, a former director of international relations for telecommunications at Haiti Teleco, is charged with two counts of conspiracy to commit money laundering and 19 counts of money laundering; and
  • Marguerite Grandison, 42, of Miramar, the former president of Telecom Consulting Services Corp., and Duperval’s sister, is charged with two counts of conspiracy to commit money laundering and 19 counts of money laundering.

The superseding indictment also charges Duperval and Grandison with laundering corrupt payments authorized by Joel Esquenazi and Carlos Rodriguez on behalf of another Florida telecommunications company.
Duperval was charged previously in the indictment returned on Dec. 7, 2009, with one count of conspiracy to commit money laundering and 12 counts of money laundering. Grandison was previously charged with one count of conspiracy to violate the FCPA and to commit wire fraud, seven counts of FCPA violations, one count of conspiracy to commit money laundering and 12 counts of money laundering.
Esquenazi and Rodriguez were charged in the initial December 2009 indictment and are unaffected by the superseding indictment. They are scheduled to stand trial on July 18, 2011.

An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.

The conspiracy to commit violations of the FCPA and wire fraud count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost. The conspiracy to commit money laundering counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The money laundering counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The superseding indictment also gives notice of criminal forfeiture.

On May 15, 2009, Juan Diaz, the president of J.D. Locator Services, pleaded guilty to one count of conspiracy to violate the FCPA and money laundering. He admitted to receiving more than $1 million in bribe money from telecommunications companies. On July 30, 2010, he was sentenced to 57 months in prison.

On Feb. 19, 2010, Jean Fourcand, the president and director of Fourcand Enterprises Inc., pleaded guilty to one count of money laundering for receiving and transmitting bribe monies in the scheme. On May 5, 2010, he was sentenced to six months in prison.

On March 12, 2010, Robert Antoine, the former director of international affairs for Haiti Telco, pleaded guilty to one count of conspiracy to commit money laundering. He admitted to receiving more than $1 million in bribes from Miami-based telecommunications companies. On June 2, 2010, he was sentenced to 48 months in prison.

The government’s investigation is ongoing. The Department of Justice is grateful to the government of Haiti for continuing to provide substantial assistance in gathering evidence during this investigation. In particular, Haiti’s financial intelligence unit, the Unité Centrale de Renseignements Financiers (UCREF), the Bureau des Affaires Financières et Economiques (BAFE), which is a specialized component of the Haitian National Police, and the Ministry of Justice and Public Security provided significant cooperation and coordination in this ongoing investigation.

The case is being prosecuted by Senior Trial Attorneys Nicola J. Mrazek and James M. Koukios of the Criminal Division’s Fraud Section, with the assistance of the U.S. Attorney’s Office for the Southern District of Florida. The Office of International Affairs in the Justice Department’s Criminal Division also provided assistance in this matter. The cases were investigated by the IRS-CI Miami Field Office.”

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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