NEW YORK—A now defunct $2-million credit union in this state was allegedly victimized by two men who misrepresented themselves as AML experts who ran more than a billion dollars in “high-risk transactions” through the credit union without ever filing a single Suspicious Activity Report, according to an indictment unsealed in the Eastern District of New York.
The Justice Department alleged in the indictment that from 2014 to 2016, Gyanendra Asre, 53, of Greenwich, Conn., and Hanan Ofer, 67, of New York, “devised and executed a scheme to bring lucrative and high-risk international financial business to small, unsophisticated financial institutions.”
The two defendants have been charged with failing to maintain anti-money laundering controls, failing to file suspicious activity reports, and operating an unlicensed money transmitting business, the Department of Justice reported.
According to the indictment, Asre and Ofer were trained in anti-money laundering compliance and procedures, and represented to the financial institutions that, because of their experience and training, they understood the risks associated with the high-risk business and would conduct appropriate anti-money laundering oversight as required by the Bank Secrecy Act.
Named in the indictment as having relied upon Asre and Ofer’s representations is the former $1.9-million New York State Employees Federal Credit Union (NYSEFCU), in New York City (which was not affiliated with the $4.9-billion State Employees FCU in Albany), which the DoJ said allowed Asre and Ofer to conduct high-risk transactions, along with other entities.
The credit union was liquidated in 2017. According to NYSEFCU’s September 2017 5300, it reported a $133,829 loss and a 1.95% net worth ratio at the time it was shuttered.
‘Contrary to Representations’
“Contrary to their representations, Asre willfully failed to implement and maintain the requisite anti-money laundering programs or conduct oversight required to detect, identify, and report suspicious transactions,” the indictment states. “This caused, among other things, the NYSEFCU to process more than a billion dollars in high-risk transactions during Asre’s tenure, without ever filing a single Suspicious Activity Report, as required by law.”
Asre and Ofer owned and operated DDH Group LLC, a money transmitting business and money services business that conducted some of these high-risk transactions, without it being licensed or registered as required by law, the DoJ said.
“As alleged, Asre and Ofer used a small, unsophisticated financial institution to process high-risk, high-dollar international transactions without the anti-money laundering procedures required by law,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “The announcement demonstrates the department's commitment to hold accountable individuals who knowingly expose the U.S. financial system and U.S. financial institutions to the risk of laundering criminal proceeds.”
‘Vigorous’ Prosecution
“The defendants allegedly operated an illegal money transmitting business and took advantage of smaller financial institutions to engage in risky financial transactions, without the oversight and compliance with anti-money laundering controls they had promised,” said Acting U.S. Attorney Mark J. Lesko for the Eastern District of New York. “This office will vigorously prosecute those who deliberately avoid reporting requirements and put the integrity of U.S. financial institutions at risk.”
Asre is charged with two counts of failure to maintain an anti-money laundering program, five counts of failure to file Suspicious Activity Reports, and one count of operation of an unlicensed money transmitting business. Ofer is charged with one count of operation of an unlicensed money transmitting business, the DoJ said.