German Attorney Pleads Guilty to Money Laundering

Earlier today, at the federal courthouse in Brooklyn, Henning Schwarzkopf, a citizen of Germany and an attorney licensed to practice in Germany, pleaded guilty before United States Magistrate Judge Ramon E. Reyes, Jr., to money laundering by transferring funds that he believed to be the proceeds of a securities fraud scheme through the bank account of a Hong Kong shell company controlled by the defendant.  Schwarzkopf was arrested on a criminal complaint in October 2020.  When sentenced, Schwarzkopf faces up to 20 years in prison, as well as forfeiture and a fine of up to $250,000. 

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.

“Schwarzkopf brazenly plotted to launder over $1 million in funds that he believed had been stolen from investors trading in the securities markets,” stated Acting United States Attorney Lesko.  “This Office, together with our law enforcement partners, will vigorously prosecute and hold accountable corrupt lawyers like the defendant who abuse their specialized knowledge to commit crimes.”  Mr. Lesko thanked the Hamburg, Germany State Bureau of Criminal Investigation, the Hamburg, Germany Prosecution Service, and the Monaco Police Department Criminal Division for their assistance during the investigation. 

“Schwarzkopf  knew the money he was moving from the account of a Hong Kong-based shell company to bank accounts in New York was obtained through fraudulent means, but proceeded to engage in this money laundering scheme anyway in exchange for more than $50,000 in illegal kickbacks.  Today’s guilty plea signals an end to Schwarzkopf’s fraud, but our office will continue to pursue all criminals whose crimes affect the integrity of the financial markets,” stated FBI Assistant Director-in-Charge Sweeney.

According to court filings and facts presented at his guilty plea, an undercover agent (“Undercover Agent”) was introduced to Schwarzkopf in October 2019 as someone who would launder money for the Undercover Agent.  In subsequent encrypted communications and in two face-to-face meetings in Monaco and Germany, the Undercover Agent told Schwarzkopf that he was a stock promoter who operated pump-and-dump schemes in which he manipulated the price and trading volume of shares of publicly-traded companies.  Furthermore, the Undercover Agent explained that as part of those schemes, he paid illegal kickbacks to stockbrokers who purchased the shares.  The Undercover Agent advised Schwarzkopf that he wanted him to “create a fog” around those illegal kickbacks in order to disguise the source of the funds before they reached the brokers.  Schwarzkopf agreed to transfer the funds and to falsely characterize the payments as “invoices” or “loan agreements.”  Schwarzkopf retained a five percent fee from each transfer, even though he provided no services except to receive funds from the Undercover Agent in the bank account of a Hong Kong-based shell company that he controlled, and then forward those funds to bank accounts in New York.

Between December 29, 2019 and August 2020, Schwarzkopf sent 30 transfers totaling approximately $1,100,784 that he believed were the proceeds of securities fraud from the Hong Kong bank account of his shell company to bank accounts in the United States, earning approximately $57,936 in fees. 

The case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Mathew S. Miller and David Gopstein are in charge of the prosecution. 

The Defendant:

HENNING SCHWARZKOPF
Age:  69
Hamburg, Germany

E.D.N.Y. Docket No. 21-CR-117 (EK)