News

The Cornerstone Report

Safeguarding America Through Financial Investigations

Volume VI: No. 1 • January 2009

Operation Living Large

In October 2000, ICE agents in New Jersey opened a money laundering investigation after learning that possible drug proceeds were being laundered through a local bank. Working in partnership with law enforcement agencies in New York and Brazil, ICE targeted companies that were using U.S. bank accounts as conduits into the U.S. financial system for funds laundered through Brazilian doleiros. Bank Secrecy Act reports filed by U.S. financial institutions assisted this investigation by identifying additional bank accounts that were used by the doleiros.

The doleiros established U.S. bank accounts where they would receive and send wire transfers, with one of these accounts opened at Merchants Bank of New York, a division of Valley National Bank of New Jersey. Incoming and outgoing wire transfers were credited to the doleiros accounts from different entities, including businesses and individuals in the United States, Brazil and elsewhere, for payments in Brazil and the United States.

ICE learned that a bank employee, Maria Carolina Nolasco, a U.S. citizen originally from Portugal, was facilitating these wire transfers. In return for kickbacks from the doleiro organization, she used dozens of bank accounts under her control to transmit money on behalf of currency exchange houses and money transmitting businesses in Brazil. From May to December 2001, more than a half-billion dollars passed through 26 of these bank accounts.

ICE agents arrested Nolasco, and she was charged in an eight-count criminal complaint for conducting an illegal money transmitting business.

ICE ultimately seized 39 accounts worth over $21 million connected to the doleiro organization. Nolasco has since been convicted in the District of New Jersey for violations of operating an unlicensed money service business and tax evasion, and is currently awaiting sentencing. During the course of the investigation, Brazilian authorities developed additional information concerning these doleiros, which led to more than100 individuals being charged in Brazil for money laundering and other related crimes.

In August 2006, indictments were brought in this case against 16 corporate entities and 34 individuals for operating a money transmitting business without a license.

Red Flag Indicators

• Large amounts of wire transfers sent and received from different business entities.
• Large amounts of currency were sent and received into the target account, but the company was a shell company and nonexistent. Know-your-customer rules should help determine if a company has a physical location and is actively engaged in its stated business purpose.
• The companies were incorporated offshore, but the individuals and contact information were located in Brazil.
• A heavy volume of wire transfer activity with little or no corresponding cash deposits into any of the related accounts.
• Even though a company has business accounts at a financial institution, personal accounts are being used for business purposes.