Allegedly Facilitated more than $1 Billion in High-Risk Transactions Without Anti-Money Laundering Controls

An indictment was unsealed in the Eastern District of New York charging two defendants with failing to maintain anti-money laundering controls, failing to file suspicious activity reports, and operating an unlicensed money transmitting business.

As alleged in the indictment, from 2014 to 2016, Gyanendra Asre, 53, of Greenwich, Connecticut, and Hanan Ofer, 67, of New York, New York, devised and executed a scheme to bring lucrative and high-risk international financial business to small, unsophisticated financial institutions. 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.

Based on Asre and Ofer’s representations, the New York State Employees Federal Credit Union (NYSEFCU), a small financial institution with a volunteer board that primarily served New York state public employees, allowed Asre and Ofer to conduct high-risk transactions through the NYSEFCU. Asre and Ofer then caused the transfer of more than $1 billion in high-risk transactions, including hundreds of millions of dollars originating from foreign jurisdictions, through the NYSEFCU and other entities. 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. 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.

“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. “Today's 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.”

“The Bank Secrecy Act was established to protect our financial system and maintain the integrity of our banking system,” said Special Agent in Charge Peter C. Fitzhugh of Homeland Security Investigations (HSI) New York. “As alleged, Ofer and Asre blatantly disregarded our laws and placed their own enrichment above all else. The defendants took advantage of a small, unsophisticated financial institution and pumped billions of dollars of high-risk transactions through it, any one of which could have left the bank in ruin. HSI New York’s El Dorado Task Force continues to protect the nation’s financial systems and working with its partners, will see to it that those seeking to exploit our laws for their own financial gain are brought to justice.”

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.   back...