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Financial Crimes
05/10/2016

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Owner of offshore brokerage firm pleads guilty to $250 million money laundering scheme

NEW YORK — A dual U.S. and Canadian citizen and secret owner of Legacy Global Markets S.A. (Legacy), an offshore broker-dealer and investment management company based in Panama City, Panama, and Belize City, Belize, pleaded guilty Monday, to money laundering conspiracy for fraudulently manipulating the stocks of more than 40 U.S. publicly-traded companies and then laundering more than $250 million in profits through at least five offshore law firms. 

The guilty plea follows an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) with assistance from the Federal Bureau of Investigation (FBI), the Internal Revenue Service, Criminal Investigation (IRS-CI), and the United States Attorney for the Eastern District of New York.  

Greeg R. Mulholland, 46, used offshore shell companies in Belize and the West Indies to carry out numerous schemes, including the manipulation of Cynk technology Corp (CYNK). Pursuant to his plea agreement with the government, Mulholland has agreed to forfeit, among other things, a Dassault-Breguet Falcon 50 aircraft, a Range Rover Defender vehicle, two real estate properties in British Columbia, and funds and securities on deposit at more than a dozen bank and brokerage accounts. When sentenced, Mulholland faces up to 20 years in prison.

“Laundering more than a quarter of a billion dollars, this defendant used multiple schemes including manipulating the stocks of more than 40 companies in order to line his pockets at the expense of the U.S. financial system,” said Angel M. Melendez, special agent in charge of HSI New York. “HSI remains committed to using its unique authorities to arrest those that seek to conceal and launder illicit proceeds, causing harm to our economy.”

“Mulholland’s staggering fraud perpetrated on the investing public was built on an elaborate offshore shell game, which included his secret ownership of an offshore brokerage firm. Through manipulative trading, Mulholland generated profits of more than $250 million and used a corrupt lawyer to launder the proceeds into the United States to pay his fraudulent network of stock promoters and broker-dealers,” stated United States Attorney Robert L. Capers. “We are steadfast in our commitment to protect the investing public and will vigorously prosecute those who seek to abuse the financial markets through fraudulent means.”

“Mulholland pleaded guilty today for his role in a stock manipulation and profit hiding scheme totaling more than $250 million,” said Diego Rodriguez, assistant director in charge of the FBI in New York. “Making sure our markets are fair to all investors and bringing charges against those who profit illegally remains a top priority for the FBI.”

“This investigation highlights the government’s ability and resolve to combat global money laundering, in this case, the laundering of illicit proceeds from a stock manipulation scheme,” stated Shantelle P. Kitchen, special agent-in-charge for the IRS-CI in New York. “Prospective money launderers should take note of Mr. Mulholland’s conviction and think twice about the consequences of such actions. The same holds true for individuals who attempt to criminally circumvent IRS reporting requirements regarding foreign accounts, as their actions will attract the attention of IRS Criminal Investigation.”

Between 2010 and 2014, Mulholland controlled a group of individuals (the Mulholland Group) who together devised three interrelated schemes to: (1) induce U.S. investors to purchase stock in various thinly-traded U.S. public companies through fraudulent promotion of the stock, concealment of their ownership interests in the companies, and fraudulent manipulation of artificial price movements and trading volume in the stocks of those companies; (2) circumvent the IRS’s reporting requirements under the Foreign Account Tax Compliance Act (FATCA); and (3) launder the fraudulent proceeds from the stock manipulation schemes to and from the United States through five offshore law firms. Through these schemes, the Mulholland Group laundered more than $250 million in fraudulent proceeds.

To facilitate the interrelated schemes, the Mulholland Group used shell companies in Belize and Nevis, West Indies, which had nominees at the helm. This structure was designed to conceal the Mulholland Group’s ownership interest in the stock of U.S. public companies, in violation of U.S. securities laws, and enabled the Mulholland Group to engage in more than 40 “pump and dump” schemes. For example, this structure enabled the Mulholland Group to manipulate the stock of Cynk Technology Corp, which traded on the U.S. OTC markets under the ticker symbol CYNK. Using liaises such as “Stamps” and “Charlie Wolf,” Mulholland was intercepted on a court-authorized wiretap on May 15, 2014, admitting to his ownership of “all the free trading” or unrestricted shares of CYNK. Prior to this conversation between Mulholland and his trader at Legacy, there had been no trading in CYNK stock for 24 trading days. Over the next two months, the stock of CYNK rose from $0.06 per share to $13.90 per share, a more than $4 billion stock market valuation for a company that had no revenue and no assets.

Mulholland used the services of a U.S.-based lawyer to launder the more than $250 million generated through his stock manipulation of CYNK and other U.S. companies – directing the fraud proceeds to five law firm accounts and transmitting them back to members of the Mulholland Group and its co-conspirators. These concealment schemes also enabled Mulholland to evade reporting requirements to the IRS.

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Last Reviewed/Updated: 05/17/2016