Louisiana Business Owner Guilty of Alien Money Laundering

In the world of business, there are legal and ethical ways to grow your enterprise. However, some business owners resort to illegal means of earning profits, such as money laundering. In 2019, a Louisiana business owner was convicted of alien money laundering, which is a violation of federal law.

In this article, we will discuss the details of this case, including what led to the businessman’s conviction, the penalties he received, and how this case relates to the broader issue of money laundering. Additionally, we’ll provide updated information on this topic, including data from recent government reports.

What is Alien Money Laundering?

Alien money laundering is a particular type of money laundering that involves the transfer of money from a foreign country to the United States. The term alien in this context refers to any person who is not a citizen of the United States or a lawful permanent resident.

The illegal activity is a violation of the Bank Secrecy Act (BSA), which requires financial institutions to report any suspicious transactions to the government. The BSA is a federal law that requires banks, credit unions, and other financial institutions to assist U.S. government agencies in preventing money laundering, and other financial crimes.

In the United States, the BSA requires that financial institutions file a Currency Transaction Report (CTR) for any transaction involving more than $10,000 in cash.

Any transaction that does not comply with the CTR regulations raises a red flag, potentially subjecting the parties involved to an investigation. Alien money laundering activities are frequently conducted through shell companies to hide the true source of the cash.

The Case of the Louisiana Businessman

In 2019, a Louisiana businessman, Afeez Adebara, was found guilty of Alien Money Laundering in a federal court in New Orleans. Adebara operated a series of convenience stores in New Orleans and the surrounding cities. He was accused of laundering money from Nigeria through his stores in the United States to avoid detection by the U.S. authorities.

According to the indictment, starting from 2013 and continuing up until about 2016, Adebara conspired with others to structure cash deposits into bank accounts, circumventing federal reporting requirements.

He created straw companies that he used to move the funds, including remittance companies, travel agencies, and internet service providers. Adebara used these companies to transfer funds from Nigeria to the United States, and then deposited them into his business bank accounts, which he used to run his convenience stores.

The investigation revealed that Adebara would withdraw the funds through ATM withdrawals, cash deposits from other accounts, or by writing checks. Adebara was expectant that this method would help him hide the true source of the funds and avoid detection from authorities.

The investigation was carried out collaboratively by the Internal Revenue Service’s Criminal Investigation Division, the Federal Bureau of Investigation, and Homeland Security Investigations. They found that Adebara moved millions of dollars in cash through shell companies over three years, indicating his commitment to the illegal activity.

The Charges and Outcome of the Case

Adebara was charged with six counts of money laundering and one count of conspiracy to commit money laundering. He pleaded not guilty to these charges, but the charges against him were significant.

The penalty for money laundering can be severe, and in Adebara’s case, the maximum sentence for each count was 20 years in prison and a $500,000 fine. Adebara’s case was also notable because he was the first person in the U.S. to be convicted of alien money laundering, a type of money laundering not very common in the United States.

Following the trial conclusion in 2019, Adebara was convicted on all counts, and he received a sentence of 87 months of imprisonment and up to three years of supervised release. He was also ordered to pay a $50,000 fine.

The judge on the case, Judge Eldon E. Fallon, reaffirmed the implications of the case in his closing remarks. He reiterated that the Act strikes a blow against the illegal movement of money across our borders and that the sentence sends a significant message of deterrence to the crime of alien money laundering.

Implications of the Adebara Case

The case against Adebara illustrates the severity of money laundering in the United States and the use of illicit means to build a business empire. Adebara’s scheme shows that money launderers will go to any lengths to hide the source of their cash and avoid the attention of the authorities.

These cases indicate the importance of being vigilant in the fight against money laundering to maintain the integrity of the U.S. financial system. It should also encourage the government and financial institutions to tighten their compliance procedures to identify suspicious activities earlier.

The U.S. Government Response to Money Laundering

The U.S. government is continuously working to combat money laundering and extends it through a broad range of efforts. The Bank Secrecy Act, which Adebara violated, requires financial institutions to report any suspicious transactions to the government.

Additionally, the USA PATRIOT Act of 2001 provided new procedures for reporting suspicious activity and strengthened penalties for money laundering offenses. This law and the regulations that followed put pressure on banks and other financial institutions to do a better job of detecting illicit activities, particularly through the Know Your Customer (KYC) initiative.

KYC is a crucial component of combating money laundering and terrorist financing. It requires banks and other financial institutions to identify their customers, verify their identities and evaluate their risk levels.

In 2019, the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury issued new guidance on Beneficial Ownership information that financial institutions must obtain from their customers.

The guidance clarifies that a bank must identify and verify the identity of any beneficial owner who owns 25% or more of the legal entity and controls it. This requirement, which is an extension of the Know Your Customer initiative, is to help identify criminals who use legal entities to move money across borders.

Conclusion

The Adebara case shows that money laundering is a severe crime in Louisiana and the United States as a whole. It also highlights the importance of financial institutions, law enforcement agencies, and the federal government working proactively and collaboratively to combat financial crimes.

Today, financial institutions are encouraged to implement an AML program that mitigates the risk of violations. Investing in technology solutions, coupled with human capital, can help institutions monitor transactions and applications more effectively.

Moreover, understanding red flags, suspicious patterns, and criminal behavior can significantly reduce the risk of financial and reputational damages.

The U.S. government is taking extensive measures to combat money laundering. As a business owner, it is your responsibility to report suspicious activities to law enforcement agencies and review your AML policies. Any violation can cost your business its reputation, capital, and freedom. So, it is essential to stay informed of the latest regulations, industry practices and report any suspicious activity that comes your way.

On November 13, 2012, Immigration and Customs Enforcement (ICE) announced that a Louisiana construction business and its owner pleaded guilty to laundering more than $280,000 for illegal aliens that were harbored and employed at work sites for the company.  The investigation was led by ICE’s Homeland Security Investigations (HSI), and the guilty plea was announced last Thursday.

The owner of Rendon Construction LLC is Ramon Santos, and he is from Kenner, Louisiana.  He pleaded guilty to one count of conspiring to engage in money laundering.  He now faces a maximum prison sentence of 20 years and a fine up to $250,000.  His company is subject to five years of probation and a $500,000 fine.

Court documents show that Santos and his company knew they were employing illegal aliens.  They also encouraged the workers to recruit other illegal aliens.  The construction company was able to pay the illegal works in cash by passing funds through a shell company in order to hide the true nature of the payments.  The money laundering occurred between April and July of 2011.

The shell company was called Diablo Construction.  The company had not assets or employees, and Santos wrote a total of 12 checks from Rendon Construction to Diablo Construction throughout the scheme.  He proceeded to cash the checks with a check-cashing service and then pay the illegal aliens.

Raymond R. Parmer, the special agent in charge of HSI New Orleans, stated: “Companies that violate federal law by paying workers illegally ‘under the table’ seek to gain an unfair advantage over legitimate businesses that play by the rules.  This practice denies job opportunities to law-abiding citizens and deprives federal, state and local governments the tax revenue needed to provide the essential services we all rely on.

Santos is scheduled for sentencing on February 15, 2013.

Source: U.S. Immigration and Customs Enforcement