As a lead agency investigating bulk cash smuggling, U.S. Immigration and Customs Enforcement (ICE) agents frequently intercept vast amounts of cash - much of it tracked directly to transnational criminals trying to funnel illicit proceeds out of the country.
An ICE-led investigation that began in October 2009, however, highlights how ICE can bring to prosecution individuals who otherwise abide by the law, yet try to conceal or transport more than $10,000 in currency, with the intent to evade federal reporting requirements.
On February 16, 2010, Andrew Silva was convicted of conspiracy to evade currency reporting requirements, tax evasion and lying to federal officials. His sentencing is in May and he faces a possible 10 years in prison plus a $500,000 fine.
Make no mistake, Silva is no Al Capone nor is he a gang member, a narcotics trafficker or a terrorist. In fact, Silva is a pediatrician - an ear, nose and throat surgeon - residing in Sterling, Va. Now, he is also a convicted felon. Silva's medical license is currently suspended, and he could lose his license to ever practice medicine again.
In 1997, Silva inherited $250,000 from his mother in Zurich, Switzerland. Working with a Swiss attorney, Silva kept this sum in a "hush" Swiss bank account without ever declaring his windfall to the U.S. Internal Revenue Service.
Silva ignored federal law that states anyone with a financial interest, or authority over a financial account that exceeds $10,000 in a country at any time during the year, is required to file with the IRS a Foreign Bank Account Report. U.S. residents (or a person in and doing business in the U.S.) are required to keep a record and/or file reports concerning transactions with a foreign financial institution.
"If Silva thought Swiss financial institutions are, and always would be safe havens to hide funds from tax authorities and financial regulatory agencies, he was wrong," said Scot R. Rittenberg, Deputy Special Agent in Charge (DSAC) of ICE, Office of Investigations, Washington, D.C.-Va.
In September 2009, the U.S. and Switzerland signed a treaty to share more tax information. Treasury Secretary Timothy Geithner said the treaty "will increase our ability to enforce our tax laws and will help bring an end to an era of offshore accounts and investments being used for tax evasion."
In view of the treaty, Silva and his Swiss attorney masterminded a scheme to move Silva's money from the Swiss bank to his home. Thus began Silva's rapid descent from a respected doctor to a convicted criminal.
Silva withdrew cash from his Swiss account and taped it to the inside pages of multiple brochures, careful to include just under $10,000 per brochure (staying under the federal reporting requirements). Packaging the cash-laden brochures in envelopes, he mailed each one at different times from different Swiss post offices to his Virginia residence.
The carefully hatched plot was foiled in October 2009, when Newark Airport mail facility personnel intercepted one of Silva's envelopes. Opening the brochure, they found sequentially marked $100 dollar bills totaling $8,700. This amount did not constitute a legal violation, but the odd mailing transaction with this much cash emanated a strong scent of foul play to ICE, who followed up with a further investigation.
By December 2009, ICE seized $101,500 from 12 intercepted mailing envelopes that Silva had addressed to himself, his wife and his children. A federal search warrant of Silva's home turned up another $110,000 hidden in a closet.
Lest anyone get the impression Silva's case is an isolated incident, it's just one illustration of how ICE, the nation's second largest federal law enforcement agency, investigates not only criminal organizations, but individuals who seek to earn, move and store their funds within the U.S. and offshore while evading detection.
ICE agents have discovered that cash - lots of it - can crop up in unexpected places before its illegal journey is intercepted. ICE has found the following and more in recent years:
- $176,320 packed inside the pant legs of an air traveler headed for Turkey
- $3 million hidden in a compartment of a bus headed for Mexico
- $515,000 in a false-bottom suitcase about to embark to Columbia
- $2.1 million concealed in a boat in Puerto Rico
- $147,921 strapped underneath the shirt of a woman headed to Mexico
- $186,000 rolled and concealed in cigarette packs destined for Turkey
"At ICE, we follow the money trail to identify, disrupt and dismantle the most complicated financial schemes and seize criminal assets," said DSAC Rittenberg.