A couple of Canadians are among a group of six executives that were charged in New York today with operating a $500 million securities fraud and money laundering scheme that involved setting up brokerage firms in Belize to carry out offshore market manipulation.
An indictment was unsealed in federal court in Brooklyn, New York, today charging six people, including two Canadian citizens, one Amercian, two citizens of the Bahamas, and one citizen of Belize; along with six corporate defendants. The charges include conspiracy to commit securities fraud, tax fraud, and money laundering. The U.S. government said that it will seek extradition for the defendants from other countries. None of the allegations have been proven.
The indictment alleges that, between January 2009 and September 2014, the group of alleged conspirators concocted three interrelated schemes to manipulate trading in publicly traded companies; help corrupt clients circumvent U.S. tax reporting requirements, including the Foreign Account Tax Compliance Act (FATCA); and, to launder money for corrupt clients. It claims that the defendants laundered approximately $500 million for corrupt clients.
To facilitate these interrelated schemes, the defendants created shell companies in Belize and Nevis to conceal clients’ ownership interest in the stock of U.S. public companies, and to allow them to trade anonymously through brokerage firms set up in Belize. The companies charged in the scheme are: IPC Management Services, LLC; IPC Corporate Services Inc.; IPC Corporate Services LLC; Titan International Securities, Inc.; Legacy Global Markets S.A.; and Unicorn International Securities LLC.
Separately, the U.S. Securities and Exchange Commission (SEC) charged two of the individuals named in the criminal indictment with violations of federal securities laws.
Loretta Lynch, U.S. attorney for the Eastern District of New York, said that the defendants in the case, “devised not only a fraudulent scheme but an elaborate corporate structure based on lies and deceit designed to enable U.S. citizens to evade and circumvent our securities and tax laws.”
“They set up sham companies with figureheads at the helm in an attempt to deceive U.S. law enforcement and regulators and bragged about their scheme to their clients,” Lynch said. “Today’s sweeping indictment, charging the individuals and companies responsible for this $500 million scheme, closes this fraudulent offshore safe haven and sends a strong message to those who seek to abuse the financial markets in order to enrich themselves that we will investigate and prosecute them no matter where they set up shop.”