Two Admit to Using Casinos to Facilitate Financial Crime

justice.gov ^ | October 28, 2020 | U.S. Attorney’s Office Southern District of California

[ransomnote]

NEWS RELEASE SUMMARY – October 28, 2020

SAN DIEGO ­– Fan Wang pleaded guilty in federal court today to operating an unlicensed money transmitting business. His guilty plea is the fourth in this ongoing investigation targeting operators of unlawful underground financial institutions that transfer money between the United States and China, thereby circumventing domestic and foreign laws regarding monetary transfers and reporting, including United States anti-money laundering scrutiny and Chinese capital flight controls.

As part of his agreement to plead guilty, Wang agreed to forfeit $225,000 to the United States as property involved in the operation of his unlicensed money transmitting business.

“As this series of guilty pleas makes abundantly clear, individuals facilitating the illegal transfer of money to and from China will be held accountable,” said U.S. Attorney Robert Brewer. “The security of our banking system depends on it.” Brewer commended prosecutors Mark Pletcher and Daniel Silva, as well as agents from Homeland Security Investigations, IRS Criminal Investigation Las Vegas Financial Crimes Task Force and the Drug Enforcement Administration for their excellent work on this case.

“HSI will continue to hunt down these underground hawalas and disrupt the ability of criminal organizations to cash-in on their ill-gotten gains,” said Cardell T. Morant, special agent in charge for Homeland Security Investigations (HSI). “HSI and our partners are committed to pursuing criminal prosecutions and civil monetary penalties against those who choose to operate in the shadows of our financial system and enable the flow of dirty money across international borders.”

As admitted in the plea agreement entered today before U.S. Magistrate Judge Daniel E. Butcher, Wang sold hard currency in U.S. dollars that he collected from various third parties.  His customers were typically individuals with bank accounts in China who could not readily access cash in the United States due to capital controls that cap the amount of Chinese yuan that an individual can convert to foreign currency.  Often these customers needed the money to gamble at the casinos in Las Vegas and elsewhere. Upon receiving U.S. dollars, the customers would transfer from a Chinese bank account an equivalent value in yuan, over their mobile phones in the United States, to a separate bank account in China designated by Wang.  As part of a typical money exchange transaction, Wang was introduced to his customers by a casino host whose job it was to facilitate that customer’s play at a particular casino.  The customer then used the U.S. currency to gamble.

Sentencing is scheduled for January 29, 2021.  

Extending the series of guilty pleas in this investigation, Jeffrey B. Miklus of Phoenix, Arizona admitted to tax fraud, after using funds from his business to fund his gambling activity at casinos throughout the southwestern United States.

As admitted this morning in his plea agreement that was also entered before U.S. Magistrate Judge Daniel E. Butcher, Miklus withdrew over $1.5 million dollars from his pest control business, and used these proceeds to gamble—all without reporting that income to the IRS. This activity spanned years, resulting in restitution and taxes due and owing to the IRS of more than $650,000, an amount that will grow with interest and a 75 percent fraud penalty. As a material term of his plea agreement, Miklus must satisfy the tax due in full before his sentencing date.

Sentencing for Miklus is scheduled for January 31, 2021.  

DEFENDANTS                                           

Fan Wang                                            Case Number 20CR3390-DMS                                          

                                                            Las Vegas, NV                        Age: 38

Jeffrey B. Miklus                                Case Number 20CR3328-GPC                                           

                                                            Phoenix, AZ                            Age: 57

SUMMARY OF CHARGES

Operation of Unlicensed Money Transmitting Business – Title 18, U.S.C., Section 1960

Maximum penalty: Five years in prison, forfeiture, and $250,000 fine

Tax Fraud and False Statements Under Penalties of Perjury – Title 26, U.S.C., Section 7206(1)

Maximum Penalty: Three years in prison, restitution, and $250,000 fine

AGENCIES

Homeland Security Investigations

IRS Criminal Investigation Las Vegas Financial Crimes Task Force

Drug Enforcement Administration

Topic(s): 

Financial Fraud

Component(s): 

USAO - California, Southern

Press Release Number: 

CAS20-1028-Wang

[ransomnote]

China, again.

[WASCWatch]

I am not so convinced that Chinese individuals trying to move money from China to the United States should be dealt with harshly.

[Zhang Fei]

[I am not so convinced that Chinese individuals trying to move money from China to the United States should be dealt with harshly.]

---

It’s almost as if the DOJ were trying to help China. Isn’t one way to destabilize the Chinese regime to encourage and facilitate capital flight from there so that there are bank runs, etc? Why is the DOJ helping to enforce the regime’s laws? Is the DOJ now an arm of the Chinese regime?

[WASCWatch]

The more money expatriated out of China, the better.