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Three plead guilty to Cayman Islands money laundering
Published on July 14, 2014 Email To Friend    Print Version

By Caribbean News Now contributor

ALEXANDRIA, USA -- Two Cayman Islands residents and a Turks and Caicos Islands (TCI) attorney have now pleaded guilty to money laundering charges under an indictment unsealed in the US District Court for the Eastern District of Virginia in March.

Joshua Vandyk, a US citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, have each pleaded guilty to conspiring to launder monetary instruments, the Justice Department and Internal Revenue Service (IRS) announced on Friday.

Poulin, 41, pleaded guilty on Friday, Vandyk, 34, pleaded guilty on June 12, and St-Cyr, 50, pleaded guilty on June 27.

According to the plea agreements and statements of facts, Vandyk, St-Cyr and Poulin conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud, specifically $2 million. Vandyk, St-Cyr and Poulin assisted undercover law enforcement agents posing as US clients in laundering purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds’ owners. Vandyk and St-Cyr invested the laundered funds on the clients’ behalf and represented that the funds would not be reported to the US government.

“This investigation highlights the Justice Department’s commitment to worldwide enforcement of federal laws designed to ensure that US taxpayers fully disclose and report all foreign income and assets,” said Deputy Assistant Attorney General Ronald Cimino of the Justice Department's Tax Division. “The Tax Division is committed to using every tool available to hold these wrongdoers accountable.”

“These three defendants played a shell game by creating offshore entities designed to help their US clients evade taxes and other legal requirements, and they used that same shell game to launder purported criminal proceeds,” said US Attorney Dana Boente for the Eastern District of Virginia. “We are committed to working with our law enforcement partners to penetrate and combat these schemes wherever they occur.”

“Individuals who assist others in laundering criminal proceeds will be held accountable for their own criminal actions,” said IRS-Criminal Investigation Chief Richard Weber. “The defendants in this investigation had a blatant disrespect for the laws and laundered purported criminal proceeds through offshore structures to conceal the identity of the proceeds’ owners. IRS Criminal Investigation has ramped up its presence in the international arena and will aggressively pursue those who commit financial crimes.”

According to court documents, Vandyk and St-Cyr lived in the Cayman Islands and worked for an investment firm based in the Cayman Islands. St-Cyr was the founder and head of the investment firm, whose clientele included numerous US citizens. Poulin, an attorney at a law firm based in Turks and Caicos, worked and resided in Canada as well as the Turks and Caicos. His clientele also included numerous US citizens.

Vandyk, St-Cyr and Poulin solicited US citizens to use their services to hide assets from the US government, including the IRS. Vandyk and St-Cyr directed the undercover agents posing as US clients to create an offshore corporation with the assistance of Poulin and others because they and the investment firm did not want to appear to deal with US clients. Vandyk, St-Cyr and Poulin used the offshore entity to move money into the Cayman Islands and used Poulin as a nominee intermediary for the transactions.

According to court documents, Poulin established an offshore corporation called Zero Exposure Inc. for the undercover agents posing as US clients and served as a nominal board member in lieu of the clients. Poulin transferred approximately $200,000 that Poulin, St-Cyr and Vandyk believed to be the proceeds of bank fraud from the offshore corporation to the Cayman Islands, where Vandyk and St-Cyr invested those funds outside of the United States in the name of the offshore corporation.

The investment firm represented that it would neither disclose the investments or any investment gains to the U.S. government, nor would it provide monthly statements or other investment statements to the clients. Clients were able to monitor their investments online through the use of anonymous, numeric passcodes. Upon request from the US client, Vandyk and St-Cyr liquidated investments and transfer money, through Poulin, back to the United States.

According to Vandyk and St-Cyr, the investment firm would charge clients higher fees to launder criminal proceeds than to assist them in tax evasion.
 
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