The United States Department of Justice (DOJ) says that an American and two Canadian citizens have been charged with using offshore accounts in the Caribbean to launder US$200,000.
The DOJ said that Joshua Vandyk, a U.S. citizen, and Canadians Eric St-Cyr and Patrick Poulin, were nabbed in an undercover sting operation.
They were indicted for conspiracy to launder monetary instruments, the DOJ and Internal Revenue Service (IRS) announced.
The indictment alleges that Vandyk, St-Cyr and Poulin conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud.
The DOJ said the Cayman Islands and Turks and Caicos-based defendants allegedly assisted undercover law enforcement agents, posing as U.S. clients, in laundering “purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds’ owners.”
“Vandyk and St-Cyr invested the laundered funds on the clients’ behalf and represented the funds would not be reported to the U.S. government,” the statement said.
The DOJ said the indictment was returned in the Eastern District of Virginia on March 6 and unsealed on March 12, when all three defendants were arrested in Miami, Florida.
In addition to the conspiracy charge, Vandyk, St-Cyr and Poulin were each charged with two counts of money laundering.
“These charges result from an extensive investigation and are the latest demonstration of the department’s resolve to find and prosecute those who aid money laundering and tax fraud globally,” said DOJ Deputy Attorney General James M. Cole.
According to the indictment, Vandyk and St-Cyr lived in the Cayman Islands and worked for an investment firm based there.
St-Cyr was the founder and head of the investment firm, whose clientele included numerous U.S. citizens, the DOJ said.
It said Poulin, an attorney at a law firm based in the Turks and Caicos, worked and resided in Canada and in the Turks and Caicos. His clientele also included numerous U.S. citizens.
According to the indictment, Vandyk, St-Cyr and Poulin solicited U.S. citizens to use their services to hide assets from the U.S. government.
It said Vandyk and St-Cyr directed the undercover agents posing as American clients to create offshore foundations with the assistance of Poulin and others because they and the investment firm did not want to appear to deal with American clients.
“Vandyk and St-Cyr used the offshore entities to move money into the Cayman Islands and used foreign attorneys as intermediaries for such transactions,” the indictment states.
It said Poulin established an offshore foundation for the undercover agents posing as American clients and served as a nominal board member in lieu of the clients.
The indictment says Poulin transferred wire payments from the offshore foundations to the Cayman Islands, where Vandyk and St-Cyr invested those funds outside the United States in the name of the offshore foundation.
“The investment firm represented that it would neither disclose the investments or any investment gains to the U.S. government, nor would it provide monthly statements or other investment statements to the clients,” the statement noted.
Chief of IRS Criminal Investigation, Richard Weber, said the defendants were in the business of creating layers of transactions so their American clients could launder criminal proceeds.
“IRS Criminal Investigation is committed to unravelling complex financial and money laundering schemes and holding those accountable for creating mechanisms to hide assets offshore and dodge the tax system,” he added.