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Financial Crimes
06/19/2013

4 arrested, charged in $1.5 million bank fraud, money laundering scheme

MIAMI – Four individuals were arrested Tuesday and charged with various counts of bank fraud, money laundering and wire fraud. The charges resulted from an investigation conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Internal Revenue Service (IRS) Criminal Investigation, the Florida Department of Insurance Fraud and the Miami-Dade Police Department.

Eduardo Hernandez Jr., 32, of Miami, Alexander Orriols, 43, of Miami Beach, Jose Arias, 50, of Miami, and Milena Hernandez, 30, of Miami, were charged with one count of conspiracy to commit bank fraud and one count of conspiracy to commit money laundering.

According to the indictment, the defendants engaged in a bank fraud scheme using straw buyers as loan applicants to obtain loans using false financial information and documentation. To execute the scheme, the defendants allegedly recruited and persuaded individuals to apply for boat loans from companies owned or controlled by the defendants. They would then submit the loan applications to financial institutions. The applications included false information regarding down payments and deposits made to the defendants’ companies.

The defendants also allegedly falsified the straw buyers’ financial records, including IRS W-2 forms. They then submitted these false financial documents to financial institutions. Based on these false documents and misrepresentations, the financial institutions approved and issued loans to the straw buyers.

The indictment also alleges that the defendants paid the straw buyers a portion of the loan proceeds as payment for their service and to cover some of the monthly payments on the loans in order to keep the fraud from being detected. As a result, the defendants diverted the loan proceeds for their personal use and used some of the money to further the fraud scheme.

If convicted, the defendants face possible maximum statutory sentences of 30 years in prison for conspiracy to commit bank fraud and substantive bank fraud; 20 years in prison for money laundering conspiracy, substantive money laundering and wire fraud; and 10 years in prison for substantive money laundering.