A pair of men who duped U.S. financial institutions into carrying out US$150 million worth of illegal transactions have been given jail time for their crimes.
The U.S. attorney’s office for the Southern District of New York said Monday that the operators of a scheme to disguise illegal marijuana transactions as innocuous purchases of legal goods, such as face cream and dog products, have now been sentenced to prison. The men were convicted of fraud in March following a jury trial.
Hamid Akhavan was sentenced to 30 months in jail and co-defendant Ruben Weigand has been ordered to serve 15 months.
Akhavan was also fined US$100,000 and ordered to forfeit US$17.2 million, and Weigand was fined US$50,000 and ordered to forfeit US$384,000. Both men were sentenced to three years of supervised release in addition to the prison terms.
According to the U.S. attorney’s office, the scheme used shell companies that opened offshore bank accounts to process the illegal transactions from phony online merchants purportedly selling dog products, diving gear and face creams through sites such as happypuppybox.com, diverkingdom.com and desirescent.com.
They also created fake traffic to those websites to make it appear as though they were operating legitimate online businesses.
“The scheme involved the deception of virtually all of the participants in the payment processing network, including issuing banks in the U.S. and Visa and MasterCard,” it noted.
“This massive fraud undermined the fundamental integrity of the U.S. financial system, which relies on banks’ ability to identify the nature of the transactions they process,” said Audrey Strauss, U.S. district attorney, in a release.