Executives of Panamanian Corporation and Aviation Company Arrested in Multi-Million-Dollar Money Laundering Sting
Michael J. Dodd, also known as “Michael Stanley,” Kenneth Ardell Landgaard, and James Robert Shipman, Jr. were arrested today on charges that they conspired to launder over two million dollars of proceeds from what they thought to be a penny stock fraud scheme. The money was, in fact, provided to the defendants by an undercover law enforcement agent who posed as a criminal stock promoter as part of a sting operation. Defendants Landgaard and Shipman were arrested after flying to an airport in New York on a private jet to take possession of $2,200,000 in cash they had agreed to launder through banks in Panama and Belize. The defendants had already laundered $400,000 in cash previously provided by the undercover agent. Dodd was arrested a few hours later at a Manhattan restaurant where he expected to meet with the undercover agent.
The charges were announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Shantelle P. Kitchen, Special Agent-in-Charge, United States Internal Revenue Service, Criminal Investigation, New York (IRS-CI); and Raymond R. Parmer Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations, New York (HSI).
“As charged in the criminal complaint, these defendants agreed to transport millions of dollars of stock fraud proceeds on private jets to Panama and then engage in a series of financial transactions. They did so with the intention of laundering the money, evading federal tax and banking laws, and lining their own pockets,” stated Acting United States Attorney Currie. “Today’s arrests have grounded these defendants, and will serve as a warning to others who are similarly inclined. We are committed to closing fraudulent offshore safe havens and prosecuting those who seek to abuse the financial markets to enrich themselves.”
“As alleged, the defendants willingly entered a scheme to transport more than $2 million of stock fraud profits out of the United States using private jets and financial transactions in exchange for a 13 to 15 percent fee. The FBI is committed to working with our law enforcement partners to investigate and bring those who seek to evade federal tax and banking laws to justice.” stated FBI Assistant Director-in-Charge Rodriguez.
“Conspiring to launder millions of dollars on a private jet may have seemed like a great idea to evade law enforcement but we have proven this method does not fly,” said HSI New York Special Agent-in-Charge Parmer. “HSI and its partners will continue to investigate and prosecute those who attempt to conceal and launder illicit proceeds, no matter what the method.”
“Although it is not primarily thought about from this perspective, consider how money laundering erodes our nation’s tax system,” said IRS-CI Special Agent-in-Charge Kitchen. “This is why money laundering investigations are important to the Internal Revenue Service and why we work with our law enforcement partners to dissect all types of complex money laundering schemes, including those with international ramifications.”
According to the complaint unsealed this afternoon and other documents filed in the Eastern District of New York, the defendants used private jets and off-shore bank accounts in Panama to launder cash for an undercover FBI agent who posed as a corrupt stock promoter. In his dealings with the defendants, the undercover agent represented himself to be a middleman working with corrupt stock brokers who artificially inflated prices for worthless stock in exchange for high commissions. In exchange for a 13% to 15% fee, the defendants agreed to launder $2,600,000. Immediately prior to their arrest earlier today, Landgaard and Shipman accepted $2,200,000 from the undercover agent, which they believed to be proceeds from the penny stock fraud. In conversations which were recorded by the FBI, the defendants explained in detail the measures they took to avoid detection of their money laundering scheme by law enforcement. Dodd insisted that the undercover agent download and use encryption software for online chats and voice communications. Landgaard insisted that the cash be provided in expensive Louis Vuitton duffel bags, and Shipman explained their reasoning: “You know why they do that? Because cops can’t get the authority to buy a Louis Vuitton bag, it’s too expensive … they can’t get the authorization to buy a Louis Vuitton bag. And if you think about it, it’s very smart.” Landgaard and Shipman also insisted that the undercover agent buy a “throwaway” or “burner” phone on which to speak to them about the scheme.
The defendants are scheduled to be arraigned on Thursday, July 9, 2015 before a United States Magistrate Judge at the federal courthouse in Brooklyn. The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the men face a maximum sentence of 20 years’ imprisonment.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Jack Dennehy is in charge of the prosecution. Assistant United States Attorneys Brian Morris and Karin Orenstein of the Office’s Civil Division will be responsible for the forfeiture of assets.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established 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. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
Name: Michael Dodd, also known as “Michael Stanley”
Panama City, Panama
Name: Kenneth Landgaard
Name: James Robert Shipman, Jr.