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Financial Crimes
12/01/2011

2 New York men charged with violating Cuba trade embargo

NEW YORK — Two New York men have been charged for violating the Trading with the Enemy Act (TWEA), a law which prohibits unlicensed financial transactions with Cuban nationals. Both individuals were arrested on charges stemming from an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), with the assistance of the Internal Revenue Service (IRS).

Marc E. Verzani, 45, of Scarsdale, N.Y., and Arici, 49, of Brooklyn, N.Y., are each charged in a conspiracy to violate the TWEA and witness tampering. Verzani, an attorney, is also charged with obstruction of justice. The conspiracy charge carries a maximum sentence of five years in prison and fine of $250,000., the witness tampering charge carries a maximum sentence of 20 years in prison fine of $250,000 and the obstruction of justice count carries a maximum sentence of 10 years in prison and a fine of $250,000.

Since 1962, the United States has maintained an economic embargo against Cuba. This embargo is enforced through various laws and regulations through TWEA, as well as related federal regulations. With narrow exceptions, it prohibits all commercial transactions with Cuba or Cuban nationals unless licensed in advance by the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC).

"These individuals allegedly violated travel restrictions to Cuba to set up business deals to circumvent the trade embargo – in an attempt to line their pockets with ill-gotten profits," said James T. Hayes, Jr., special agent in charge of ICE HSI in New York. "Protecting the integrity of our nation's imports and exports is among HSI's highest priorities."

"As alleged, these defendants were prepared to place their business interests before compliance with a clearly established trade embargo with Cuba," said U.S. Attorney Preet Bharara, Southern District of New York. "They then allegedly engaged in a cover-up, which underscores the fact that their conduct was illegal. They will now be held to account for their crimes."

According to court documents, in 2011, Verzani traveled to Cuba with a third party, identified in the complaint as the "CW," for the purpose of purchasing property. Verzani told the CW to bring cash for a down payment and indicated that he would also be bringing money to purchase property. On Sept. 8, 2011, Verzani and the CW flew from Cancun, Mexico, to Havana, Cuba. Verzani paid for the flight by wire transferring the money to a Mexican travel agent through a Western Union money transmitter.

Upon arrival in Havana, Verzani and the CW, with the assistance of a Cuban national employed by Arici, exchanged their U.S. dollars for Cuban currency. While in Cuba, Verzani and the CW met with Arici, who showed them a hotel that he was building and a house that he owned. Arici, a businessman, invested millions of dollars in Cuban real estate. Verzani and the CW decided not to purchase Cuban real estate, but they, along with Arici, spent money on food, drinks, transportation, entertainment and personal services. Verzani and the CW left Cuba on Sept. 13, 2011.

Under the TWEA, Arici and Verzani, who are both U.S. citizens, are required to apply for licenses from OFAC before engaging in any financial transaction with a Cuban national. Records indicate that neither Arici nor Verzani applied for the appropriate licenses. Furthermore, Arici had been specifically advised of the licensing requirements during a previous investigation into unlicensed Cuban travel. In addition, the complaint alleges that Arici and Verzani engaged in witness tampering when, during several secretly recorded conversations, they instructed the CW to conceal from, and lie to, federal agents about their trip to Cuba.

The complaint also alleges that in order to conceal his illegal travel, Verzani obstructed justice and lied under oath during a proceeding in court in White Plains, N.Y. Specifically, in an October 2011 hearing, Verzani gave false and misleading information in response to questions about his travel with Arici to Cuba.