Los Angeles Check-Cashing Business and Man Who Was Supposed to Lead Its Anti-Money Laundering Efforts Plead Guilty to Violating Federal Anti-Money Laundering Laws
Five Defendants in L.A. Have Been Convicted in Anti-Money Laundering Crackdown
|U.S. Attorney’s Office October 02, 2012|
LOS ANGELES—A Los Angeles check-cashing store and its designated anti-money laundering compliance officer pleaded guilty today to federal charges, including violating the Bank Secrecy Act.
G&A Check Cashing, a business located in the Westlake section of Los Angeles, California, and Humberto Sanchez, 53, of El Monte, pleaded guilty this morning before United States District Judge John F. Walter. G&A pleaded guilty to conspiracy and failing to maintain an effective money-laundering policy. Sanchez pleaded guilty to failing to maintain an effective money laundering policy.
Under federal anti-money laundering laws, financial institutions, including check-cashing businesses, are required to file a CTR for any transaction involving more than $10,000 in currency. As part of the CTR, the financial institution is required to verify and accurately record the name and address of the individual who conducted the currency transaction, the individual on whose behalf the transaction was conducted, as well as the amount and date of the transaction. CTRs are important law enforcement tools for uncovering criminal activity. Financial institutions are also required to maintain and enforce policies to prevent money laundering.
In June, a federal grand jury in Los Angeles issued two indictments naming a total of five defendants as part of a nationwide crackdown of check-cashers alleged to have violated anti-money laundering laws. One indictment related to G&A, while the second related to AAA Cash Advance, another check-cashing store southwest of downtown Los Angeles. According to the indictments, check-cashing businesses are a common venue for individuals who want to anonymously cash large numbers of checks to facilitate fraud and money laundering schemes. The indictments further allege that the use of check cashers to launder money is particularly prevalent in the area of health care fraud, where fraudulent health care businesses commonly convert the proceeds of their fraud into cash by presenting checks to check cashers who they know will not ask for proof of the payee’s identity and will either not file CTRs or file false CTRs.
Previously in the G&A case, Karen Gasparian, 31, of Canyon Country, who is the manager of G&A, pleaded guilty on September 20 to conspiring to fail to file CTRs and failure to have an effective anti-money laundering program. Over a six-year period, G&A allegedly failed to file CTRs on transactions totaling $24 million.
Judge Walter is scheduled to sentence Gasparian on December 3. G&A and Sanchez are scheduled to be sentenced on December 10.
In the case involving AAA Cash Advance, the business and its manager, Diana Brigitt, 35, of Valley Village, pleaded guilty on September 19 before United States District Judge Dolly M. Gee to violations of anti-money laundering laws. Brigitt pleaded guilty to eight counts of failing to file CTRs and one count of failing maintain and enforce policies to prevent money laundering. AAA also pled guilty to one count of failing to maintain and enforce policies to prevent money laundering.
Judge Gee is scheduled to sentence AAA on October 15 and Brigitt on December 3.
At sentencing, Gasparian faces a maximum statutory penalty of 10 years in federal prison and a fine of up to $500,000. Sanchez faces a maximum statutory penalty of five years in prison and a fine up to $250,000. Brigitt faces a statutory maximum sentence of 45 years in prison and a fine of $2.25 million. G&A faces a maximum statutory penalty of five years of probation and a fine of up to $1 million. AAA faces a maximum statutory penalty of five years’ probation and a fine of up to $500,000.
The cases are being prosecuted by Assistant United States Attorney David Kirman (213-894-4442), and Trial Attorneys Matthew Haslinger and Matthew Klecka from the Money Laundering and Bank Integrity Unit within the Asset Forfeiture and Money Laundering Section of the Department of Justice.
The cases were investigated by special agents from the Federal Bureau of Investigation, IRS-Criminal Investigation, and the Office of Inspector General for the United States Department of Health and Human Services. The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) also provided substantial assistance in the investigation.