Money Transmitter Pleads Guilty to Willful Failure to Maintain Adequate Anti-Money Laundering Program
Assistant U.S. Attorney Daniel C. Silva at (619) 546-9713
NEWS RELEASE SUMMARY – January 22, 2016
SAN DIEGO – San Diego-based money transmitter Baltazar Fitch pleaded guilty today in federal court to failing to maintain an adequate anti-money laundering program at his various money transmitting businesses (“MTBs”). Fitch was the manager, supervisor, and owner of the MTBs.
As defined in the Bank Secrecy Act (the “BSA”), a money transmitting business is an entity that provides various financial services, including but not limited to accepting currency and transmitting the currency by any means. As part of Fitch’s duties as manager, supervisor, and owner of the MTBs, he coordinated the receipt, transmission, and delivery of currency for the MTBs’ customers. He was aware that the BSA, at Title 31, United States Code, Section, 5318(g), required the MTBs to “report any suspicious transaction relevant to a possible violation of law or regulation” (a “5318(g) Report”) with the Department of Treasury.
As detailed in the Plea Agreement entered today in front of U.S. Magistrate Judge Mitchell D. Dembin, the MTBs repeatedly accepted large quantities of cash from Mexican-based currency exchange houses, knowing that the cash transactions were relevant to a possible violation of law or regulation without filing any 5318(g) Reports. Fitch, acting through the MTBs, provided currency exchange and transmission services to clients in Mexico and the U.S. In order to be able to deposit currency into U.S. bank accounts and wire transfer those funds to locations abroad, Fitch partnered with businesses located within the Southern District of California that maintained active bank accounts at various U.S. financial institutions. By utilizing these bank accounts, Fitch knew that the banks falsely believed the cash deposits were revenues/expenses generated from the sale of goods, when, in reality, they were funds transferred on behalf of the MTBs.
Fitch was also aware that the BSA, specifically Title 31, Code of Federal Regulations, Section 1022.210, required each MTB to develop, implement, and maintain an effective anti-money laundering program that: (i) was reasonably designed to prevent the MTBs from being used to facilitate money laundering; (ii) maintained written policies, procedures, and controls governing the verification of customer identification, the filing of reports such as 5318(g) Reports, the creation and retention of records, response to law enforcement requests, and other compliance with BSA requirements; and (iii) the MTBs designated a compliance officer, who was responsible for assuring that the business complied with all BSA requirements. Fitch failed to comply with any of these regulations.
The criminal case is assigned to U.S. District Court Judge Cynthia Bashant (16cr123-BAS). U.S. Magistrate Judge Mitchell D. Dembin allowed Fitch to remain on pretrial release, pursuant to the terms of a bond posted by Fitch.
“When criminal networks attempt to evade U.S. banking regulations by concealing unlawful money transfers with legitimate business transactions, they can expect to quickly find law enforcement on the money trail,” said Dave Shaw, special agent in charge for ICE Homeland Security Investigations in San Diego. “I commend the investigators for their work that not only unraveled a significant financial scheme with cross border ties, but underscores HSI’s commitment to combating financial crime.”
DEFENDANT Case No. 16cr123-BAS
Baltazar Fitch Chula Vista, CA
SUMMARY OF CHARGES
Willful Failure to Maintain Adequate AML Program – Title 31, U.S.C., Section 5322
Maximum penalty: Five years’ imprisonment, $250,000 fine or twice the gross gain resulting from offense, whichever is greatest
Homeland Security Investigations
Drug Enforcement Administration