Florida Man Charged With Money Laundering In $30 Million Wire Fraud Scheme
NEWARK, N.J. – A Florida man appeared in court today on charges that he laundered funds related to a $30 million wire fraud scheme, U.S. Attorney Craig Carpenito announced.
Denis Sotnikov, 36, of Hallandale Beach, Florida, is charged by complaint with one count of money laundering. He appeared today before U.S. Magistrate Judge Jared M. Strauss in a Fort Lauderdale, Florida, federal court and was detained.
According to documents filed in this case and statements made in court:
Between April 2018 and March 2020, individuals engaged in an internet-based financial fraud scheme, which generally involved the creation of fraudulent websites to solicit funds from individuals seeking to invest money. At times, the websites were designed to closely resemble websites being operated by actual, well-known, and publicly reputable financial institutions; at other times, the fraudulent websites were designed to resemble financial institutions that seemed legitimate, but did not, in fact, exist.
Victims of the fraud scheme typically discovered the fraudulent websites via internet searches. The fraudulent websites advertised various types of investment opportunities, most prominently the purchase of certificates of deposit, or CDs, with higher than average rates of return on the CDs to lure potential victims.
To date, at least 70 victims of the fraud scheme nationwide, including in New Jersey, have collectively transmitted at least $30 million that they believed to be investments.
In many instances, the victims would contact an individual or individuals via telephone or email, as directed on a fraudulent website, who provided the victims with applications and wiring instructions for the purchase of a CD. The funds wired by the victims would then be moved to various domestic and international bank accounts, including accounts in Russia, the Republic of Georgia, Hong Kong, and Turkey. None of the victims received a CD after wiring the funds.
Sotnikov received funds from at least 18 victims of the fraud scheme, totaling $6 million, in accounts at various domestic banks that were controlled by him or by a close relative. Of this amount, $3.7 million was either frozen by the banks or returned to victims, and $707,380 was wired overseas by Sotnikov. The remaining stolen funds – $1.5 million – were transferred to numerous other accounts controlled by Sotnikov and used to fund personal expenditures, including down payments on several luxury vehicles, purchases at high-end retail stores such as Louis Vuitton, Tiffany & Co., and Cartier, rent exceeding $9,000 per month on a home in Florida, several vacations, living expenses and bills.
The money laundering charge is punishable by a maximum of 20 years in prison and a fine of up to $500,000, or twice the value of the property involved, whichever is greater.
The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against Sotnikov and several companies associated with him today based on the same conduct.
U.S. Attorney Carpenito credited special agents of the FBI, including the FBI’s Cyber Crimes Task Force, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark. He also thanked the SEC for the assistance provided by its Enforcement Division.
The government is represented by Assistant U.S. Attorneys Anthony P. Torntore and Jamie L. Hoxie of the U.S. Attorney’s Cybercrimes Unit in Newark.
The charges and allegations in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense counsel: Roman Groysman Esq., Fort Lauderdale