Romanian Citizens Arrested and Charged with Laundering $1.4 Million in Proceeds from Jewelry Thefts and Covid Fraud
For Further Information, Contact: Assistant U.S. Attorney Joshua Mellor (619) 546-9733
NEWS RELEASE SUMMARY – December 9, 2015
SAN DIEGO – Twenty five people are charged in a federal grand jury indictment with participating in an illegal gambling operation that laundered an estimated $10 million in gambling proceeds through Chula Vista and San Diego card rooms in what is believed to be the biggest illegal gambling prosecution in San Diego county in recent memory.
More than 200 agents from the FBI, Homeland Security Investigations and the IRS plus San Diego County Sheriff’s deputies and investigators from the California Department of Justice Bureau of Gambling Control served five search warrants and 22 seizure warrants early today at locations in Chula Vista, San Diego and elsewhere.
The search and seizure locations included the Village Club Card Room, also known as Seven Mile Casino in Chula Vista, and the Palomar Card Room in San Diego. The card rooms are also charged in the indictment, which was unsealed in federal court this morning. Agents seized more than $600,000 during today’s searches of player accounts and bank accounts.
Authorities around the country arrested 21 people so far today at locations around San Diego, Orange and Los Angeles counties as well as San Jose, Las Vegas, New Jersey, Arizona, New Mexico, Pennsylvania and Iowa. Five indicted defendants remain fugitives and warrants have been issued for their arrests.
These defendants, plus the two corporations, are charged in a federal grand jury indictment with various crimes, including running an Illegal Gambling Business, Conspiracy to Launder Monetary Instruments, Failure to Maintain an Anti-Money Laundering Program and Transportation for Prostitution.
Four defendants were arraigned on the indictment in federal court this afternoon before U.S. Magistrate Judge Barbara Major. Craig Kolk, Ricardo Castellanos-Velasquez, Duy Trang were granted bail; Ali Lareybi was detained pending a hearing on Friday at 10 a.m. before Judge Major. The remaining San Diego are scheduled to be arraigned before Judge Major tomorrow. The United States is seeking the removal of out-of-state defendants to San Diego.
According to court documents, some of the defendants allegedly operated unlicensed casinos out of rented Rancho Santa Fe mansions. Up to three times a week, some defendants held intimate high-stakes poker and black jack games in extravagant settings that featured professional card dealers, prostitutes, chefs and waitresses.
Court documents allege that lead defendant David Stroj operated an illegal bookmaking business that extended throughout North America, including San Diego, Los Angeles, Albuquerque, Las Vegas, Chicago, Philadelphia, South Carolina and Florida, as well as locations in Mexico and Canada.
Millions of dollars in proceeds from the gambling events were laundered through the Palomar and Village Club card rooms, Las Vegas casinos, various bank accounts, shell companies, and a bail bonds business. The ring also operated illegal offshore online gaming websites.
“This indictment describes a massive operation that laundered millions of dollars in illicit proceeds,” said U.S. Attorney Laura Duffy. “We are committed to putting an end to any activity that enables criminals to hide illicit proceeds.”
“The defendants in this case allegedly acted as a criminal enterprise that allowed the proceeds from illegal gambling to be laundered through local card rooms thereby avoiding federal financial reporting requirements that help keep our communities safe,” said FBI Special Agent in Charge Eric S. Birnbaum. “Today's indictment is an example of the FBI's commitment to work with our law enforcement partners to identity, disrupt and dismantle complex criminal conspiracies.”
“HSI is committed to serving side-by-side with our partners in the San Diego law enforcement community,” said Dave Shaw, special agent in charge for HSI San Diego. “This investigation has dismantled an illicit gambling operation with ties to money laundering and a cross-border prostitution recruitment scheme. Let it be clear, HSI will aggressively pursue any and all leads involving transnational criminal activity linked to the U.S.-Mexico border.”
“These defendants allegedly participated in an illegal sports gambling business, lining their pockets with profits from an illicit poker and blackjack business,” said Special Agent in Charge Erick Martinez of IRS Criminal Investigation. “Taking assets away from illegal operations is one of the government’s most effective tools against money laundering and organized crime.”
California’s Bureau of Gambling Control Chief Wayne Quint, Jr. issued Emergency Closure Orders on both the Palomar and Village Club card rooms effective immediately.
“These casinos allegedly engaged in money laundering and illegal gambling schemes that undermine the well-being of our communities,” said Attorney General Kamala D. Harris. “I thank our California Department of Justice Bureau of Gambling Control Special Agents, as well as our local and federal law enforcement partners, for holding the alleged perpetrators accountable for their financial crimes.”
The investigation, which began in 2013, involved hundreds of intercepted calls and text messages, border crossing records plus extensive surveillance and reviews of financial records.
Stroj, the lead defendant, is described as a large-scale international bookmaker based in the San Diego area. He is charged with conducting an illegal bookmaking business, conducting an illegal poker and blackjack business and conspiracy to launder money.
According to court records, Stroj and codefendants used offshore gambling websites, including betblackdiamond.com, LBTsports.com and diamondsb.ag, to manage his bookmaking business. Stroj used financiers, a business manager, sub agents, money runners, money couriers and debt collectors to conduct the bookmaking business and launder millions of dollars.
The bookmaking clients would make checks out to the casinos such as Palomar and the Village Club, or the Wynn and Bellagio casinos in Las Vegas, and the funds would be deposited into marker or player bank accounts, court records said.
During one intercepted call, Stroj discussed gambling income and how to launder it through a card club: “Palomar is the best way I can wash the money. I don’t have to report it. I just deposit it at the Palomar and there’s no problems for me.”
In another call, Stroj said: “Between you and me, the best way to launder money, you do it through these local casinos in San Diego…that’s how, if someone owes me a 100 ($100,000) and they want to wire it to me, I wire it to the Palomar and leave it in my player’s bank and they give me chips.”
Card rooms are legal in the state of California if they comply with strict regulations. For example, an owner of a gambling establishment must apply for and obtain a valid state gambling license from the Bureau and the California Gambling Control Commission (Commission). The Bureau's Licensing staff will conduct in-depth background investigations on applicants to determine whether they are suitable to hold a state gambling license. Suitability is determined by a number of factors including but not limited to the applicant's honesty, integrity, general character, reputation, habits, and financial and criminal history.
DEFENDANTS Case Number: 15cr2932-BAS
Jean Paul Rojo
Palomar Card Club
VC Cardroom, Inc., dba Seven Mile Casino and Village Card Club
SUMMARY OF CHARGES
Two counts, Conducting an Illegal Gambling Business, in violation of Title 18 U.S.C. Sec. 1955
Maximum Penalty Five Years in Custody, $250,000 fine, three years supervised release
(Count one is the first 20 defendants in the indictment)
(County two is David Stroj, Jeffrey Stoff, Arturo Diaz-Ramirez, Jaime Behar, Duy Trang and Alfredo Barba)
One count, Conspiracy to Launder Monetary Instruments, in violation of Title 18 U.S.C. Sec 1956 (h)
Maximum Penalty 20Years in Custody, $500,000 fine, three years supervised release
(David Stroj, Matthew Greenwood, Jeffrey Broadt, Jeffrey Stoff, Arturo Diaz-Ramirez, Jaime Behar, Robert Stroj, Craig Kolk, Jean Paul Rojo, Ricardo Castellanos-Velasquez, Alexandra Kane, Bryan Sibbach, Joseph Palermo, Christopher Parsons, Jeffrey Mohr, Duy Trang, Ali Lareybi, Naseem Salem and Palomar Card Club)
Two counts, Failure to Maintain Anti-Money Laundering Program , in violation of Title 31 U.S.C. Sec. 5318 (h) (1) and 5322 (a)
Maximum Penalty Five Years in Custody, $250,000 fine, three years supervised release
Once count for each corporation
Two counts, Transportation for Prostitution, in violation of Title 18 U.S.C. Sec. 2421
Maximum Penalty 10 Years in Custody, $250,000 fine, three years supervised release
(Defendants David Stroj and Jeffrey Broadt only)
Homeland Security Investigations
Internal Revenue Service
California Department of Justice Bureau of Gambling Control
San Diego County Sheriff’s Department