A Los Angeles check-cashing store and its designated anti-money laundering compliance officer pleaded guilty today to federal charges, including violating the Bank Secrecy Act.
G&A Check Cashing, a business located in the Westlake section of Los Angeles, California, and Humberto Sanchez, 53, of El Monte, pleaded guilty this morning before United States District Judge John F. Walter. G&A pleaded guilty to conspiracy and failing to maintain an effective money-laundering policy. Sanchez pleaded guilty to failing to maintain an effective money laundering policy.
Under federal anti-money laundering laws, financial institutions, including check-cashing businesses, are required to file a CTR for any transaction involving more than $10,000 in currency. As part of the CTR, the financial institution is required to verify and accurately record the name and address of the individual who conducted the currency transaction, the individual on whose behalf the transaction was conducted, as well as the amount and date of the transaction. CTRs are important law enforcement tools for uncovering criminal activity. Financial institutions are also required to maintain and enforce policies to prevent money laundering.
In June, a federal grand jury in Los Angeles issued two indictments naming a total of five defendants as part of a nationwide crackdown of check-cashers alleged to have violated anti-money laundering laws. One indictment related to G&A, while the second related to AAA Cash Advance, another check-cashing store southwest of downtown Los Angeles. According to the indictments, check-cashing businesses are a common venue for individuals who want to anonymously cash large numbers of checks to facilitate fraud and money laundering schemes. The indictments further allege that the use of check cashers to launder money is particularly prevalent in the area of health care fraud, where fraudulent health care businesses commonly convert the proceeds of their fraud into cash by presenting checks to check cashers who they know will not ask for proof of the payee’s identity and will either not file CTRs or file false CTRs.
Previously in the G&A case, Karen Gasparian, 31, of Canyon Country, who is the manager of G&A, pleaded guilty on September 20 to conspiring to fail to file CTRs and failure to have an effective anti-money laundering program. Over a six-year period, G&A allegedly failed to file CTRs on transactions totaling $24 million.
FBI press release link: click here