LawFuel – Legal Announcement Service – LEV L. DASSIN, the Acting United States Attorney for the Southern District of New York, JOHN P. GILBRIDE, the Special Agent-in-Charge of the Drug Enforcement Administration’s New York Field Division, and PATRICIA J. HAYNES, the Special Agent-in-
Charge of the New York Field Office of the Internal Revenue
Service (“IRS”), announced that MAURICIO ALFONSO MAZZA-ALALUF,
owner of the Chilean financial services company Turismo Costa
Brava S.A., was found guilty of violating the Federal unlicensed
money transmitting statute, an anti-money-laundering measure that
was broadened by the USA PATRIOT Act. The guilty finding was
handed down yesterday in a written Opinion by United States
District Judge P. KEVIN CASTEL following a November 2008 bench
trial in Manhattan federal court.
As reflected in the evidence at trial and Judge
MAZZA-ALALUF was one of the owners of Chilean financial
services company, Turismo Costa Brava, S.A. (“Turismo”), that
provided fund transfer and currency exchange services for its
customers. Turismo’s owners and employees physically carried
bulk cash, often in Euros or other European currencies, into the
United States on flights from South America to Los Angeles.
Turismo’s couriers openly declared the cash as they passed
through U.S. Customs. The cash was then handed over to an
armored car service that delivered it to a Los Angeles currency
exchange business, Associated Foreign Exchange (“AFEX”). AFEX
then transmitted the dollar equivalent of the foreign currency to
accounts that Turismo maintained at banks in New York, Chicago,
and Dearborn, Michigan. Turismo then used those accounts to
facilitate thousands of wire transfers totaling hundreds of
millions of dollars to accounts all over the world.
As a means of ensuring effective regulation of money
transfer businesses, which are frequently used to launder illicit
funds, United States federal law requires money transmitting
businesses operating in the United States both to comply with
federal regulations of the United States Treasury, and to obtain
a license from every state in which they operate if the state has
a licensing requirement. New York, Illinois and Michigan all
require money transmitting businesses to obtain a license.
Turismo, however, did not obtain a license to operate as a money
transmitting business in any of those states.
As a consequence of his involvement in conducting the
operations of Turismo, MAZZA-ALALUF was charged with one count of
conspiring to conduct an unlicensed money-transmitting business,
and one count of conducting an unlicensed money-transmitting
business. Judge CASTEL found that Turismo had not violated U.S.
Treasury regulations because the Treasury regulations applied
only to financial institutions “within” the United States.
However, Judge CASTEL nonetheless found MAZZA-ALALUF guilty on
both counts because Turismo’s use of bank accounts in New York,
Illinois, and Michigan did subject it to the requirement to
obtain licenses in those states.
MAZZA-ALALUF faces a maximum potential sentence of five
years in prison on each count.
The investigation of MAZZA and Turismo was conducted by
agents of the IRS and DEA, working together as part of the New
York Organized Crime Drug Enforcement Strike Force, which is
comprised of agents and officers of the DEA, the New York City
Police Department, the IRS, the Department of Homeland Security
Bureau of Immigration and Customs Enforcement, the Federal Bureau
of Investigation, the New York State Police, the United States
Marshals Service, the United States Secret Service, and the
Bureau of Alcohol, Tobacco, Firearms and Explosives. Mr. DASSIN
thanked the IRS and DEA for their work in conducting the
extensive international financial investigation.
Assistant United States Attorneys SARAH LAI and MARK
LANPHER are in charge of the prosecution, which was conducted out
of the Office’s International Narcotics Trafficking Unit.