Days after Sánchez’s arrest in Naples last month, Magistrate Judge Jonathan Goodman ordered his detention in Miami, saying the prosecution’s case was “very strong” and that he was a “flight risk” who faces up to 20 years in prison if convicted.
Both prosecutors and FBI agents started to zero in on Sánchez in recent years after convicted Medicare fraud offenders began cutting plea deals and pointing the finger at him as their money man. Also, authorities began to notice millions of dollars being transferred from medical equipment businesses and HIV-therapy clinics in Florida to shell companies’ accounts at the Royal Bank of Canada in Montreal.
According to court records, this is how Sánchez’s alleged money-laundering scheme worked between 2005 and 2009:
South Florida’s healthcare scammers routinely put their Medicare-licensed businesses in the names of “straw” owners — often recently arrived Cuban migrants — to conceal from authorities their own identities as the real owners of the accounts.
In the Sánchez case, prosecutors said 70 South Florida medical companies billed Medicare for $374.4 million and were paid $70.7 million — money that was directly deposited into their corporate bank accounts. But the challenge for the “Medicare fraud masterminds” was withdrawing that money from their accounts because they would have to reveal their identities at the banks, according to court records.
So, many of them turned to Sánchez and his check-cashing business to launder at least $31 million of those Medicare reimbursements, according to court records.
Among those who used Sánchez’s services: Michel De Jesus Huarte, who is serving a 22-year prison sentence for running a $100 million HIV-clinic scam in Miami-Dade and other parts of the southeastern United States.
At the same time, Sánchez came to know a “group of individuals” who controlled shell companies with 15 bank accounts in Canada and Trinidad that wanted to move millions of dollars derived from criminal activity into Cuba’s banking system. They had purchased more than 20 boxes of money orders, moving money in amounts less than $10,000 at a time to avoid having to declare the source of the funds under U.S. laws. They used aliases, including the name “Bill Clinton,” according to court records.
But the process was “costly and time consuming.” Enter Sánchez, who helped them transfer larger amounts of money to Cuba, totaling $63 million, prosecutors allege.
For a 10 percent fee, Sánchez matched up the two sides: One group of criminals supplied millions in ready cash to the Medicare fraud ringleaders. Those leaders, in turn, sent checks or wired money drawn from their South Florida corporate bank accounts to the other criminals’ shell companies in Canada, records show.
The laundered money was deposited in accounts at the Royal Bank of Canada in Montreal, with the proceeds later wired to numerous shell companies in Trinidad — then deposited into unknown accounts in Cuba’s national bank.
In one example, “Sánchez benefitted both sides by wiring $468,985 from a South Florida company engaging in fraud to a Canadian bank account,” Davidson, the prosecutor, alleged in the motion to detain Sánchez before trial.
According to court and public records, one of the alleged Canadian shell companies that received the laundered checks was Magnus Aviation Logistics. Corporate papers say Magnus was headed by Anthony Caristo and dissolved last year.
Canadian records also show that Caristo was a director of two other Montreal companies, Arxe Capital and Monetaria Card Solutions, which were also dissolved. Monetaria became inactive just days after Sánchez’s arrest last month, records show. Neither Caristo nor his listed businesses could be reached for comment.
Like the United States, Canada has a federal agency — Financial Transactions Reports Analysis Centre (FINTRAC) — that collects intelligence on suspected money laundering and terrorist financing activities.
Under Canadian law, financial institutions that receive or send foreign wire transfers of $10,000 or more are required to file a report with FINTRAC. That means checks or wires sent to and from the Magnus account should have generated reports.
The Canadian agency did not return calls from The Miami Herald.