Texas Man Convicted In $3.9 Million Money Laundering Scheme
The United States Attorney’s Office for the Middle District of Pennsylvania, announced that following a week long jury trial before U.S. District Court Judge Christopher C. Conner, a Texas man was convicted on July 19 on 14 Conspiracy and Money Laundering counts stemming from a scheme to defraud hundreds of victims across the country, including several from central Pennsylvania, out of more than $3.9 million and to launder the proceeds.
Olufemi Adigun, age 27, of Stafford, Texas, was indicted in December 2012 along with two other defendants, Uchechukwu Stanley Ohiri, age 29, and Benjamin Chikwe, age 32, both of Houston, Texas.
According to U.S. Attorney Peter J. Smith, the trial revealed that in 2008, Adigun operated MoneyGram and Western Union outlets out of an empty Houston storefront known as “FAB Tax Services,” a fictional tax service provider. The storefront was used by Adigun and his codefendants to intercept and launder $3.9 million sent by victims defrauded by advance fee, mass marketing schemes via the MoneyGram and Western Union money transfer systems.
The schemes rely heavily upon the MoneyGram and Western Union money transfer systems for success. More commonly known as Secret Shopper, Advance Fee, or Canadian Lottery schemes, perpetrators contact victims via the U.S. mail or the internet promising large cash prizes, lottery winnings, fictitious loans, or automobiles and motorcycles for sale. Counterfeit checks are sometimes sent to the victims who are induced into depositing them before returning a portion of the funds to the fraudsters via the MoneyGram and Western Union money transfer systems. The victims suffer a financial loss when the counterfeit checks bounce or after they send the fraudsters thousands of dollars of their own money for non-existent merchandise.
Adigun and his codefendants would intercept the victims’ money transfers and launder the proceeds before sending the proceeds back to the fraudsters minus a money laundering fee, typically 10-20%. Adigun and his codefendants would also enter false payee identification information into the MoneyGram and Western Union databases, thereby maintaining the anonymity of the fraudsters and creating the illusion that a bona-fide payee had physically entered the receiving outlet.
In almost all of the schemes the victim sender is instructed to provide the Money Transfer Reference Number (MTRN) to the fraudster immediately after the transfer is sent. Armed with the MTRN, FAB Tax Services or any other corrupt money transfer agent could query the MoneyGram and Western Union money transfer databases and remove the funds from the systems, even though FAB was physically located thousands of miles away from the intended payee.
Adigun began operating FAB as a Western Union outlet in December 2007 and as a MoneyGram outlet in May 2008. Thereafter, more than 500 customers filed Consumer Fraud Reports (CFRs) with the two companies complaining they had been defrauded. The investigation revealed all 500 of the transfers had been paid out at FAB. As a result, MoneyGram and Western Union terminated FAB on August 20, 2008 and September 2, 2008 respectively. By that time, however, more than 1,241 victims had been defrauded out of $3,919,711. Adigun and his codefendants laundered $3.1 million of the $3.9 million by converting it into cash, withdrawing as much as $70,000 to $80,000 a day from 3 FAB bank accounts they controlled in the greater Houston area. The trio also forwarded another $650,000 offshore via the MoneyGram and Western Union money transfer systems, primarily to Canada, Nigeria and Romania. More than $100,000 of the offshore transfers were sent to just one MoneyGram agent in Toronto, which was also later closed for money laundering activity.
Adigun’s codefendant, Benjamin Chikwe, pleaded guilty to conspiracy to commit money laundering and is awaiting sentencing. Uchechukwu Stanley Ohirihas remains a fugitive.
Following the conviction, Judge Conner revoked release and committed Adigun to prison pending the sentencing in October.
This case was investigated by the Harrisburg Office of the U.S. Postal Inspection Service and was prosecuted by Assistant United States Attorney Kim Douglas Daniel.
The Postal Inspectors’ investigation has resulted in the conviction of more than 21 corrupt MoneyGram and Western Union agents from across the United States and Canada in the Middle District of Pennsylvania. The Postal Service’s investigation has also resulted in the prosecution of MoneyGram in the Middle District for aiding and abetting wire fraud, and for its failure to maintain an effective anti-money laundering program as required by federal law. In November 2012 the Company entered into a Deferred Prosecution Agreement with the government that required MoneyGram to pay $100,000,000 into a victim’s restitution fund, to make substantive improvements to its anti-money laundering programs, and to retain a Corporate Compliance Monitor selected by the government for the next five years.