Executives Of Panamanian Corporation And Aviation Company Plead Guilty In Multi Million Dollar Money Laundering Sting
The Defendants Conspired to Launder $2,600,000 in Stock Fraud Proceeds
BROOKLYN, N.Y. – Earlier today, Michael J. Dodd and James Robert Shipman, Jr. pleaded guilty to charges that they conspired to launder more than two million dollars, which they believed to be proceeds of a penny stock fraud scheme. The money was, in fact, provided to the defendants by an undercover law enforcement agent who posed as a criminal stock promoter as part of an FBI sting operation. A third defendant, Kenneth Landgaard, pleaded guilty to the same charges on January 15, 2016. Defendants Landgaard and Shipman were arrested after flying to an airport in New York on a private jet to take possession of $2,200,000 in cash, which they had agreed to launder through banks in Panama and Belize. Dodd was arrested a few hours later at a Manhattan restaurant where he had expected to meet with the undercover agent. Prior to their arrests, the defendants had already laundered $400,000 in cash previously provided by the undercover agent.
The guilty pleas were announced by Robert L. Capers, United States Attorney for the Eastern District of New York.
“The defendants agreed to transport millions of dollars represented to be stock fraud proceeds on private jets to Panama and then engage in a series of financial transactions designed to conceal the illegal source of the funds. They did so with the intention of lining their own pockets without regard for the law,” stated United States Attorney Capers. “We are committed to stopping the laundering of money through offshore safe havens and prosecuting those who would abuse the financial markets to enrich themselves.” Mr. Capers thanked the Federal Bureau of Investigation (FBI), the Internal Revenue Service, Criminal Investigation (IRS-CI) and the U.S. Immigration and Customs Enforcement’s (ICE), Homeland Security Investigations (HSI) for their hard work and dedication through the course of the investigation and prosecution.
In his dealings with the defendants, the undercover agent represented himself to be a middleman working with corrupt stock brokers who artificially inflated prices for worthless stocks in exchange for high commissions. Despite being made aware this, the defendants agreed to launder $2,600,000 in exchange for a 13% to 15% fee. Immediately prior to their arrest, Landgaard and Shipman accepted $2,200,000 from the undercover agent, which they believed to be proceeds from the penny stock fraud. In conversations which were recorded by the FBI, the defendants explained in detail the measures they took to avoid detection of their money laundering scheme by law enforcement – Dodd insisted that the undercover agent download and use encryption software for online chats and voice communications, Landgaard insisted that the cash be provided in expensive Louis Vuitton duffel bags, and Shipman explained their reasoning, “You know why they do that? Because cops can’t get the authority to buy a Louis Vuitton bag, it’s too expensive ….” Landgaard and Shipman also insisted that the undercover agent buy a “throwaway” or “burner” phone on which to speak to them about the scheme.
The guilty pleas took place before United States District Judge John Gleeson at the United States Courthouse in Brooklyn, New York. When sentenced, the defendants each face a maximum sentence of 20 years’ imprisonment.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Jack Dennehy is in charge of the prosecution. Assistant United States Attorneys Brian Morris and Karin Orenstein of the Office’s Civil Division are responsible for the forfeiture of assets.
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This prosecution was the result of efforts by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets, and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
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Name: Michael Dodd, also known as "Michael Stanley"
Panama City, Panama
Name: Kenneth Landgaard
Name: James Robert Shipman, Jr.
E.D.N.Y. Docket No. 15-CR-552 (JG)