An American investment advisor based in the Cayman Islands was sentenced by a federal court in Virginia Friday to 30 months in prison for a money-laundering conspiracy, the DOJ and Internal Revenue Service (IRS) said.
Joshua Vandyk, 34, pleaded guilty on June 12. He was arrested in March this year in Miami after a grand jury indicted him a week earlier.
Also charged were Eric St-Cyr and Patrick Poulin, both Canadian citizens
St-Cyr, 50, pleaded guilty on June 27, and Poulin, 41, pleaded guilty on July 11.
Their sentencings are set for October 3.
The three defendants admitted in their plea agreements that they “conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud, specifically $2 million,” the DOJ said.
They were caught in a sting by IRS agents posing as American clients. The undercover agents told Vandyk, St-Cyr, and Poulin they had money that came from bank fraud.
Vandyk and St-Cyr told them to create offshore foundations with help from Poulin so the investment firm wouldn’t look like it dealt with U.S. clients.
The indictment alleged that Poulin created an offshore foundation for these “clients” and wired payments from the offshore foundation to the Cayman Islands. Vandyk and St-Cyr then invested the money outside the United States in the name of the offshore foundation.
Vandyk and St-Cyr told the the undercover agents that Clover Asset Management charged clients higher fees to launder criminal proceeds than to assist them in tax evasion.
The firm didn’t disclose its clients or their gains to the U.S. government, or send the clients any investment statements.
Clients, including many U.S. citizens, could monitor their investments online through the use of anonymous, numeric passcodes and liquidate their accounts on request, the DOJ said.
St-Cyr was the founder and head of the investment firm.
Poulin was a partner in the law firm Bishops based in the Turks and Caicos. He acted as a nominee intermediary for his clients to hide their identities, the DOJ said.
“Vandyk, St-Cyr, and Poulin solicited U.S. citizens to use their services to hide assets from the U.S. government, including the IRS,” the DOJ said.
The DOJ’s September 5, 2014 release is here.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.