Operator of Underground, International Financial Institution Pleads Guilty to Operating Unlicensed Money Transmitting Business | USAO-SDCA

For Further Information, Contact:
Assistant U.S. Attorneys Daniel C. Silva (619) 546-9713 and Mark W. Pletcher (619) 546-9714

SAN DIEGO – Liang Zhou pleaded guilty in federal court today to operating an unlicensed money transmitting business. His guilty plea is the third in this ongoing investigation targeting operators of unlawful underground financial institutions that transfer money between the United States and China, thereby circumventing domestic and foreign laws regarding monetary transfers and reporting, including United States anti-money laundering scrutiny and Chinese capital flight controls.

As part of his agreement to plead guilty, Zhou agreed to forfeit $446,330 to the United States as property involved in the operation of his unlicensed money transmitting business.

As admitted in the plea agreement entered today before U.S. Magistrate Judge Karen S. Crawford, Zhou sold hard currency in U.S. dollars that he collected from various, and occasionally unknown, third parties. His customers were typically individuals with bank accounts in China who could not readily access cash in the United States due to capital controls that cap the amount of Chinese yuan that an individual can convert to foreign currency. Often these customers needed the money to gamble at the casinos in Las Vegas. Upon receiving U.S. dollars, the customers would transfer from a Chinese bank account an equivalent value in yuan, over their mobile phones in the United States, to a separate bank account in China designated by Zhou.

“Individuals and organizations operating outside the conventional financial system represent a clear and present danger to the international banking system and the ability of law enforcement to detect and confront the criminal activity,” said U.S. Attorney Robert S. Brewer. He commended prosecutors Daniel Silva and Mark Pletcher, as well as federal agents from Homeland Security Investigations, IRS Criminal Investigation Las Vegas Financial Crimes Task Force and the Drug Enforcement Administration for their excellent work on this case.

Sentencing is scheduled for January 8, 2021 before U.S. District Court Judge Dana Sabraw.

DEFENDANTS Case Numbers 20-CR-3084

Liang Zhou          Las Vegas, NV Age: 37

SUMMARY OF CHARGES*

Operation of Unlicensed Money Transmitting Business – Title 18, U.S.C., Section 1960

Maximum penalty: Five years in prison, forfeiture, and $250,000 fine

AGENCIES

Homeland Security Investigations

IRS Criminal Investigation Las Vegas Financial Crimes Task Force

Drug Enforcement Administration

*The charges and allegations contained in an indictment or information are merely accusations, and the defendants are considered innocent unless and until proven guilty.

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