Jail sentence for Cayman-based money launderer
Joshua VanDyk
(CNS Business): An investment advisor based in the Cayman Islands was sentenced by a federal court in Virginia Friday to 30 months in prison for his part in a $2 million money-laundering conspiracy, the DOJ and Internal Revenue Service (IRS) said. US citizen Joshua VanDyk (34) pleaded guilty on June 12, having been arrested in March this year following a sting operation by US undercover agents. Also arrested were Eric St-Cyr (50), a Canadian working with VanDyk in Cayman, and Patrick Poulin (41), a Canadian attorney working in Turks and Caicos. They have both pleaded guilty and are due for sentencing on 3 October.
According to the plea agreements and statements of facts, VanDyk, St-Cyr and Poulin conspired to hide the $2 million proceeds of bank fraud. The three men assisted undercover US law enforcement agents posing as clients in laundering purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds’ owners. Vandyk and St-Cyr invested the laundered funds on the clients’ behalf, telling them that the funds would not be reported to the US government.
VanDyk and St-Cyr lived in the Cayman Islands and worked for investment firm, Clover Asset Management, which was based there. St-Cyr was the founder and head of the firm, whose clientele included numerous US citizens. Poulin, who was a partner in the law firm Bishops based in the Turks and Caicos also had many US clients.
The three men solicited Americans to use their services to hide assets from the US government, including the IRS. VanDyk and St-Cyr directed the undercover agents to create an offshore corporation with the assistance of Poulin and others to disguise the fact that they were dealing with US clients. VanDyk, St-Cyr and Poulin used the offshore entity to move money into the Cayman Islands and used Poulin as a nominee intermediary for the transactions.
According to court documents, Poulin established an offshore corporation called Zero Exposure Inc. for the undercover agents and served as a nominal board member in lieu of the clients. Poulin transferred approximately $200,000 that the defendants believed to be the proceeds of bank fraud from the offshore corporation to the Cayman Islands, where VanDyk and St-Cyr invested those funds outside of the United States in the name of the offshore corporation. The investment firm told the undercover agents that it would neither disclose the investments or any investment gains to the US government, nor would it provide monthly statements or other investment statements to the clients.
Clients were able to monitor their investments online through the use of anonymous, numeric passcodes. Upon request from the US client, VanDyk and St-Cyr liquidated investments and transferred money, through Poulin, back to the United States. According to VanDyk and St-Cyr, the investment firm would charge clients higher fees to launder criminal proceeds than to assist them in tax evasion.
See related article:Â Convicted money launderers now whistleblowers
Category: Finance, Financial Crime
This is the kind of activities that gives our financial industry a bad name and black eye.