Trio Indicted For $25 Million Check Cashing Scam

Trio Indicted For $25 Million Check Cashing Scam (for full article)

It seems a married couple and their son moved a total of $25 million through their company’s bank accounts, including $4 million dollars from illegally cashed checks - this according to the Manhattan DA’s office. They got away with it for two years...

Western Express is the name of their company and get this - the $25 million plus 'allegedly' flowed through the business’s bank accounts even though “Virtually every service offered by these defendants and their business was illegal or helped other people profit from illegal activities”.

So, "millions of dollars were transferred illegally out of the United States, evading regulations that exist to safeguard our monetary system from being used as a conduit for criminal proceeds.”

Now in my opinion - that's a very important point. "Millions transferred illegally out of the US, evading regulations". It would seem - and will seem so even more when you read on - that our regulations are pretty much useless. And remember - this is only three people we're talking about - could there be tens, hundreds or thousands more?

Let's move on!

"The one-year investigation began as an inquiry into a report of identity theft." You will note however, this illegal activity took place from 2002 through 2005, so for at least two years (2003/2004), they 'got away with it'.

YOU WOULD THINK in post 9/11 US of A that someone, somewhere within some Federal agency would have caught wind of this within a few weeks of it starting up. Hello??? Anybody out there??? Sheesh!

It seems the indictment charges the defendants for "transmitting money without a license". I like how the article explains the State law - "if you knowingly transmit $250,000 or more in a period of one year or less..."

Uh... translated (I think) -> if you reach the magic number of $250,000 within a minute or within one year, you've violated State law. So apparently, instead of utilizing a single entity, they ought to have used multiple agencies and limited themselves to 249,800 per year maximum.

The second violation was "engaging in the business of cashing checks without a license." Why even cash checks in the first place? You'd think they would have just deposited them and handed out pre-paid debit cards or heck, gift cards from a retailer or some such thing.

"The indictment encompasses illegal money transmitting and check cashing activity from the years 2002 through 2005." So as I mentioned above - it would seem they got away with it for two full years.

Banks are People Too

Here's where it gets good! "The defendants are also charged with falsifying business records in the first degree, a class E felony, for allegedly supplying false information to Commerce Bank and Citibank at the time they opened accounts with those institutions."

It seems the couple were not forthright when they opened their accounts (duh): "... the married couple allegedly falsely reported to the banks that they were in businesses other than check cashing and money transmitting; for example, in one case, the defendants claimed that Western Express was in the “retail business” and, in another case, the defendants claimed that they were involved in computer programming."

Okay - HELLO Commerce Bank and Citibank employees - HELLO!? You just took their word for it because... because??? And oh, how exciting it was that Western Express was doing well not only in the "retail business" but "computer programming". What a winning combination.

Did they have the credentials to back up their claims? Federal Tax ID, State Tax ID, I mean did they at least go through the steps to make the company legal to start with, or did they just claim something and someone believed them? See, I'd really like to know the details... because...

This truly, truly amazes me... Good Lord Above - money must talk. I would think - even at the risk of offending a potential customer - some type of background check/investigation would automatically happen at a bank when funds started flowing in and out - wouldn't you think?

Maybe not hundreds of dollars - but MILLIONS?

Gosh - what's it take to open a merchant account these days? Nothing?

As a side note: I find it interesting the Fed's didn't catch this a long time ago. There 'used' to be a rule involving overseas money transfers (I thought it included electronic tranfers as well) over a certain dollar amount. Two banks handled their accounts but (apparently) neither was complicit, and since not one single bank employee "raised a flag", the threesome beat the odds for two full years.

Finally - I wonder if the two banks who were 'defrauded' will have to pay back any fees charged along with any interest earned by them in the process of handling this company's accounts? And if they did - who would the payee be - the State?

Amazing...