19 May 2016
Stefan Cassella of Asset Forfeiture Law, LLC discusses a recent Fifth Circuit judgement, which established that using 74 bank accounts to conduct circuitous transactions that served no purpose was sufficient to prove the concealment element of money laundering, even though the money moved through bank accounts held in defendant’s own name.
[United States v. Biyiklioglu, ___ Fed. Appx.___, 2016 WL 1391447 (5th Cir. April 7, 2016).]
Defendant opened numerous bank accounts in his own name at various banks, as well as accounts in false names at PayPal, an internet payment processor. He defrauded PayPal through a pattern of transactions in which he transferred money from one of his bank accounts to one of the fraudulent PayPal accounts and from there to another one of his bank accounts. He would then dispute the first transaction, claiming it was an unauthorized transfer, which would cause his bank to debit PayPal and to credit the funds back to him. Because Defendant had already transferred the money out of the PayPal account, this would result in a loss to PayPal and a doubling of Defendant’s money. In total, Defendant caused PayPal to lose more than $418,000.
Among other things, Defendant was convicted of laundering the fraud proceeds. He appealed on the ground that because he moved the money through bank accounts held in his own name, there was insufficient evidence of an intent to conceal or disguise. But the court held that Defendant’s use of 74 accounts to conduct “circuitous transactions . . ., often on the same day, that served no purpose other than to disguise the source of the money,” provided the jury with “ample evidence” to conclude that the purpose of the transactions was to conceal the fraudulent source of his funds.
Defendants love to argue that they cannot be convicted of concealment money laundering if all of the transactions were conducted through bank accounts held in their own names. But the courts hold that a person can design a transaction to conceal or disguise the nature of source of criminal proceeds without concealing his identity. This case is another illustration of that important point.
Stefan Cassella, Asset Forfeiture Law, LLC
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