An offshore remittance company called Caribbean Transfers financed a complex money-laundering ring that moved more than $30 million in stolen Medicare money from South Florida into Cuba’s banking system, federal authorities said Thursday.
The revelation surfaced in the widening case of a now-convicted check-cashing store owner who was first believed to be at the center of the federal case. It marked the first time that investigators traced tainted Medicare proceeds to Cuba’s state-controlled bank.
Now, Caribbean Transfers appears to have played the dominant role in the unprecedented money-laundering scheme.
Prosecutors have filed new conspiracy charges against the founder of the Caribbean-based company, Jorge Emilio Perez, who is at large, and two Miami-Dade men suspected of defrauding the taxpayer-funded Medicare program. The latter defendants, Felipe Ruiz and Kirian Vega, are accused of laundering their Medicare profits through the convicted check-cashing store owner, who did business with Caribbean Transfers.
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The new information about Caribbean Transfers, which prosecutors say is licensed by the Cuban government, was disclosed during Ruiz’s bond hearing Thursday. Ruiz, a Cuban-born U.S. citizen, was denied bail because a judge found he might flee to Cuba or another country.
In June, the U.S. attorney’s office in Miami made national headlines when prosecutors charged Oscar L. Sanchez, owner of the Naples check-cashing store, with conspiring to launder millions of Medicare dollars via Canada and Trinidad into Cuba’s national bank. By late August, Sanchez, 47, pleaded guilty and agreed to cooperate with authorities and repay the U.S. government $10 million, consisting primarily of residential investment properties he acquired with his wife in Southwest Florida.
The U.S. attorney’s office has said it has no evidence that the Cuban government was involved in the laundering scheme, and Cuban officials have denied any involvement.
Sanchez, who is also a Cuban-born U.S. citizen, was indicted on the single conspiracy charge of playing a pivotal role in laundering the profits of 70 South Florida medical companies that falsely billed Medicare for $374.4 million and were paid $70.7 million.
Those payments were directly deposited into their corporate bank accounts. Prosecutors say the challenge for the “Medicare fraud masterminds” was withdrawing that money, because they would have to reveal their identities at the banks.
Among the alleged Medicare fraud offenders: Ruiz, 38, who owned two medical equipment businesses under others’ names in Miami-Dade, and Vega, 35, who owned a local pharmacy under another person’s name that also sold medical supplies.
Ruiz’s lawyer, Mario Machado, said his client plans to “fight the charges” and has pleaded not guilty. Vega’s attorney, Thomas Payne, did not return a call for comment.
Both men, along with dozens of medical providers in South Florida, turned to Sanchez and his check-cashing business to launder tens of millions of dollars in fraudulent Medicare reimbursements, according to court records.
“They used Oscar Sanchez as a middleman,” prosecutor H. Ron Davidson said during Ruiz’s bond hearing Thursday. Sanchez had a business relationship with Perez, the owner of Caribbean Transfers, which Davidson described as a sort of “Western Union” for money remittances. The company’s website says it specializes in remittance services to Cuba, the Dominican Republic and other countries.
The company founder’s attorney, Elio Perez, declined to comment about the case or the whereabouts of his client. U.S. authorities suspect Caribbean Transfers’ founder is in the Dominican Republic.
As part of the money-laundering network, Sanchez collaborated with Perez and his associates at Caribbean Transfers, which controlled shell companies with bank accounts in Canada and Trinidad, according to court records. Caribbean Transfers, stymied by U.S. restrictions on remittances from the United States to Cuba, wanted to move millions of dollars to the island nation.
Caribbean Transfers 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 Sanchez, who helped them transfer larger amounts of money to Cuba.
“Benefitting both sides of the transactions, [Sanchez] was a financier for fraudsters and a capitalist for the Cuban banks,” Davidson wrote in a motion to detain the defendant this summer.
For a 10 percent fee, Sanchez matched up the two sides: One side led by Caribbean Transfers 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 side’s shell companies in Canada, records show.
“Through this process, [Perez] and his associates successfully moved millions of dollars of cash from the United States to Cuba without detection by U.S. law enforcement,” Davidson wrote in court papers.
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, “Sanchez benefitted both sides by wiring $468,985 from a South Florida company engaging in fraud to a Canadian bank account,” Davidson alleged.
According to court and public records, one of the alleged Canadian shell companies that received the laundered checks was Magnus Aviation Logistics, which the prosecutor identified in court Thursday. The company was dissolved last year.