Southwest Detroit Store Managers Plead Guilty To Failing To Maintain An Effective Anti-Money Laundering Program
Two Detroit store managers pleaded guilty yesterday to charges of failing to maintain an effective anti-money laundering program, U.S. Attorney Barbara L. McQuade announced today.
United States Attorney McQuade was joined in the announcement by Acting Special Agent in Charge Jarod Koopman, IRS Criminal Investigation.
John Miri, 55, and Wisam Daman, 38, entered their guilty pleas before U.S. District Court Judge Stephen J. Murphy, III.
According to court records, Daman managed and operated Big Apple Fruit Market on McGraw Street, and Miri managed and operated Junction Party Store on Junction Street, both of which are located on the southwest side of Detroit. Each store was registered as a Money Services Business (MSB) with the State of Michigan. As MSB’s, the Big Apple Fruit Market and Junction Party Store cashed checks for their customers in amounts greater than $1,000, for which they would charge a fee. Businesses that cash checks in this manner qualify as a financial institution under the Bank Secrecy Act (BSA) which obligates them to file Currency Transaction Reports (CTRs) with the Financial Crimes Enforcement Network. CTRs must be filed by the financial institution when a customer conducts a transaction involving more than $10,000. As managers/operators of the businesses, Daman and Miri were required to develop, implement and maintain effective anti-money laundering programs for the stores. The BSA regulations also require that financial institutions treat multiple currency transactions, totaling more than $10,000, as a single transaction and file a CTR if the financial institution has knowledge that the multiple transactions were made by, or on behalf of, a single person.
From late 2011 and continuing through April 2012, Miri and Daman cashed federal income tax refund checks, issued by the U.S. Treasury Department, that were provided to them by Juan Carlos Pena-Lora. These checks were issued to alleged taxpayers with addresses in eastern states, such as New York and New Jersey. Miri cashed approximately 751 income tax refund checks totaling $5,427,903 for Pena-Lora. Daman cashed approximately 1,268 income tax refund checks totaling $9,311,883 for Pena-Lora. Miri and Daman provided Pena-Lora with the cash from the refund checks, less a fee that they charged for cashing the checks. The fee that Miri and Daman charged Pena-Lora was based on a percentage of the total checks they cashed. The U.S. Treasury checks had actually been generated through the filing of false tax returns using the names and social security numbers of Puerto Rican nationals whose identity information had been stolen.
Payments in cash to Pena-Lora by Miri and Daman exceeded $10,000 on the days that they cashed the checks for him. Miri and Daman failed to file CTRs for some of the cash payments to Pena-Lora violating the requirement to implement and maintain an effective anti-money laundering program.
Failure to maintain an effective anti-money laundering program is punishable by a maximum penalty of 5 years imprisonment and/or a fine of $250,000. A sentencing date will be set by the court.The investigation of this case was conducted by special agents of the Internal Revenue Service Criminal Investigation and prosecuted by Assistant U.S. Attorney’s Ross MacKenzie and Philip Ross.