Two Individuals Charged with Bank Secrecy Act Offenses and Operating an Unlicensed Money Transmitting Business
Defendants Facilitated More Than $1 Billion in High-Risk Transactions Without Anti-Money Laundering Controls
BROOKLYN, NY (STL.News) An indictment was unsealed today in federal court in Brooklyn charging Gyanendra Asre and Hanan Ofer with Bank Secrecy Act (BSA) offenses and operating an unlicensed money transmitting business. Asre is charged with two counts of failure to maintain an anti-money laundering program, five counts of failure to file Suspicious Activity Reports and one count of operation of an unlicensed money transmitting business. Ofer is charged with one count of operation of an unlicensed money transmitting business. The defendants were arrested today and are scheduled to be arraigned this afternoon before United States Magistrate Judge Vera M. Scanlon.
Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division, and Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), announced the arrests and charges.
“The defendants allegedly operated an illegal money transmitting business and took advantage of smaller financial institutions to engage in risky financial transactions, without the oversight and compliance with anti-money laundering controls they had promised,” stated Acting United States Attorney Lesko. “This Office will vigorously prosecute those who deliberately avoid reporting requirements and put the integrity of U.S. financial institutions at risk.”
“As alleged, Asre and Ofer used a small, unsophisticated financial institution to process high-risk, high-dollar international transactions without the anti-money laundering procedures required by law,” stated Acting Assistant Attorney General McQuaid. “Today’s announcement demonstrates the Department’s commitment to hold accountable individuals who knowingly expose the U.S. financial system and U.S. financial institutions to the risk of laundering criminal proceeds.”
“The Bank Secrecy Act was established to protect our financial system and maintain the integrity of our banking system. As alleged, Ofer and Asre blatantly disregarded our laws and placed their own enrichment above all else,” stated HSI Special Agent-in-Charge Fitzhugh. “The defendants took advantage of a small, unsophisticated financial institution and pumped billions of dollars of high-risk transactions through it, any one of which could have left the bank in ruin. HSI New York’s El Dorado Task Force continues to protect the nation’s financial systems and working with its partners, will see to it that those seeking to exploit our laws for their own financial gain are brought to justice.”
As alleged in the indictment, from 2014 to 2016, Asre and Ofer devised a scheme to bring lucrative and high-risk international financial business lines such as international currency trading to small, unsophisticated financial institutions. Asre and Ofer were trained in anti-money laundering compliance and procedures, and represented to the financial institutions that, because of their experience and training, they understood the risks associated with the high-risk business lines and would conduct appropriate anti-money laundering oversight as required by the Bank Secrecy Act.
Based on Asre and Ofer’s representations, the New York State Employees Federal Credit Union (“NYSEFCU”), a small financial institution with a volunteer board that primarily served New York state public employees, allowed Asre and Ofer to conduct high-risk transactions through the NYSEFCU. Asre and Ofer then caused the transfer of more than $1 billion in high-risk transactions, including hundreds of millions of dollars originating from high-risk foreign jurisdictions, through the NYSEFCU and other entities. Contrary to their representations, Asre willfully failed to implement and maintain the requisite anti-money laundering programs or conduct oversight required to detect, identify and report suspicious transactions. This caused, among other things, the NYSEFCU to process more than $1 billion in high-risk transactions during Asre’s tenure, without ever filing a single Suspicious Activity Report as required by law.
Asre and Ofer also owned and operated DDH Group, LLC, a money transmitting business and money services business that conducted some of these high-risk transactions without licensing or registering that entity as required by law.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section, in coordination with the Office’s Bank Integrity Task Force, which is charged with investigating and charging corporate and individual actors who launder criminal proceeds using the U.S. banking system and enforcing anti-money laundering controls under the Bank Secrecy Act. Assistant United States Attorneys Ryan C. Harris and Francisco J. Navarro of the Eastern District of New York are prosecuting the case with Trial Attorneys Margaret Moeser and Leigh Kessler of the Criminal Division’s Money Laundering and Asset Recovery Section. The investigation is being conducted by HSI’s El Dorado Task Force in New York.
New York, New York
E.D.N.Y. Docket No. 21-CR-174 (DG)