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Financial Crimes
10/05/2010

4 companies and their employees charged in avoiding treasury reporting requirements

BALTIMORE - A federal grand jury has returned three indictments today against the owners of three liquor stores for structuring the bank deposits of their businesses in order to avoid reporting the money to the U.S. Treasury Department. A fourth indictment was returned today against a car dealership and its employee for failing to file a required form reporting the receipt of more than $10,000 in cash represented to be drug proceeds for the purchase of a car. And a civil complaint was also filed seeking forfeiture of money held in a bank account of another liquor store, in connection with the structuring of cash deposits in banks by breaking up large cash transactions into multiple small deposits. The businesses charged today were the result of a joint investigation by the U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations (HSI) and the U.S. Internal Revenue Service (IRS) Office of Criminal Investigation.

The indictments and complaint were announced by U.S. Attorney for the District of Maryland Rod J. Rosenstein; IRS Criminal Investigations Special Agent in Charge Rebecca Sparkman and ICE HSI Special Agent in Charge in Baltimore William Winter.

"Individuals and businesses that fail to file the required treasury forms for large cash transactions create a vulnerability that may allow criminals to spend their illicit cash proceeds without detection by law enforcement," said Winter. "Homeland Security Investigations will continue to target individuals and businesses that engage in this type of activity."

"People who earn money through criminal activity, or who lie to the IRS to evade taxes, usually deal in cash and try to avoid leaving a paper trail," said U.S. Attorney Rosenstein. "Federal law requires large currency transactions to be reported in order to create a paper trail that law enforcement can follow, and businesses that break up their cash deposits to avoid currency reporting requirements face federal criminal prosecution."

"Financial institution reporting requirements can expose structuring activity and put tax dollars back into strengthening the U.S. economy," stated Sparkman. "The IRS-Criminal Investigation, along with our fellow law enforcement agencies, are determined to financially disrupt such schemes against our economy."

According to the eight count indictment returned against a liquor store in Capitol Heights, Md., doing business as Flavors of the South, from September 2008 to February 2010, store owner Jin I. Park, 42, of Pasadena, Md. repeatedly deposited business receipts in bank accounts in amounts less than $10,000, in order to avoid the legal requirement that the bank report transactions involving more than $10,000 in a single day with the IRS. The deposits were generally made at the bank's branch location in Glen Burnie, Md. and other deposits were made at the branch in Severn, Md. Park is alleged to have illegally deposited a total of $2,150,375 under this structuring scheme.

A similar structuring scheme was allegedly used from December 2006 to February 2010 by Jong C. Kim, 51, owner of KJ Market, Inc., doing business as GNG Village Liquors located on Edmonston Avenue in Baltimore. According to the nine count indictment, Kim illegally structured the deposit of a total of $2,482,770 in business receipts at the same, or different, banks.

From August 2008 to December 2009, Jin Ho Kim, owner of Kim's RP Liquors, Inc., doing business as Randallstown Plaza Liquors, located on Offutt Road in Randallstown, Md. and structured the deposit of a total of $591,200 in business receipts at the same or different banks, according to the 41 count indictment.

A civil forfeiture complaint was filed seeking the forfeiture of $61,772 seized on March 10, 2010 from a bank account in the name of Frederick M. Chung, trading as M&L Canton Discount Liquors, located on O'Donnell Street in Baltimore. According to the civil complaint, from January 2008 to March 2010, Chung deposited $587,075 in cash into two bank accounts, generally in the amount of $9,000 divided between the two accounts on the same day, and never exceeding $10,000 on a single day, in order to avoid the Treasury reporting requirement.

Finally, a three count indictment was returned against Fuentes Brothers Auto Sales, Inc., a car dealership located on Dorsey Run Road in Jessup, Md. and employee Nubia Fuentes, for money laundering and failing to file a form reporting the receipt of more than $10,000 in cash. On June 22, 2010 an undercover law enforcement agent went to the car dealership and told Nubia Fuentes that he wanted to pay cash to buy a car, but was involved in drug trafficking and did not want paperwork filed with the government that would identify him as a person paying cash for a car. Nubia Fuentes allegedly assured the undercover agent that no reports would be filed other than the forms needed to document the sale to the Motor Vehicle Administration. The agent paid $11,378 in cash for a car, and the car dealership did not file a form, as required by law, with Treasury's Financial Crimes Enforcement Network (FinCEN form) regarding cash transactions in which more than $10,000 is received.

Banks and other financial institutions are required to file a report with Treasury any time a customer conducts a cash transaction involving more than $10,000 in a single day. Merchants such as car dealerships similarly are required to file a report with Treasury any time a customer pays for merchandise with more than $10,000 in currency in a single transaction. Knowingly structuring currency transactions with the intent to evade the reporting requirement is a federal offense.

The individual defendants named in the three indictments involving the liquor stores face a maximum sentence of five years in prison for attempting to cause a financial institution to fail to file a currency report and for structuring currency deposits. Nubia Fuentes faces a maximum sentence of 20 years in prison for money laundering and five years in prison for failing to file the FinCEN form.