Last summer, Miami prosecutors made a splash when they charged Oscar L. Sanchez, owner of a Naples check-cashing store, with laundering millions of Medicare dollars that wound up in Cuba.
His case marked the first time that authorities traced fleeced U.S. healthcare proceeds to Cuba’s state-controlled bank.
On Thursday, without fanfare, the now-convicted “financier for fraudsters’’ was sentenced to 4½ years in prison by a Miami federal judge.
Sanchez, 47, was also ordered to serve an additional year of home confinement, turn over about a half-million dollars in assets to the U.S. government and perform 1,600 hours of community service. He must surrender on June 15 to start his prison term.
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U.S. District Judge Paul Huck generally granted prosecutor Ron Davidson’s recommendation to reduce Sanchez’s sentence by 40 percent because the defendant helped authorities bring Medicare fraud and money-laundering charges against three other suspects.
At the sentencing, Huck reprimanded Sanchez’s relatives and supporters who wrote several letters saying he made a “mistake.” The judge reminded them that he “committed a crime” against the taxpayer-funded federal healthcare program for the elderly and disabled, which has been bleeding incalculable amounts of money due to fraud in Miami and elsewhere.
Sanchez’s defense attorney, Peter Raben, urged the judge to give his client a three-year sentence, noting that Sanchez was involved in the money-laundering conspiracy from 2005 to 2006, though it continued for another three years. “This is not the typical case where a defendant’s criminal activity continued unabated until an arrest,” Raben wrote in court papers.
Sanchez, a Cuban-born U.S. citizen, was indicted on a 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. In late August, he pleaded guilty, held responsible for laundering about $10 million of that total.
Soon after, however, it became apparent that Sanchez was not the mastermind of the scheme, as many first believed.
In October, prosecutors revealed that Sanchez collaborated with a currency exchange businessman who allegedly played the dominant role in the scheme.
Through Sanchez’s cooperation, prosecutors discovered that an offshore remittance company called Caribbean Transfers financed the complex money-laundering ring that moved more than $30 million in stolen Medicare money from South Florida into Cuba’s banking system.
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.
Prosecutors filed conspiracy charges against Jorge Emilio Perez, the founder of the Caribbean-based company who is at large, and two Miami-Dade men suspected of defrauding Medicare. The latter defendants, Felipe Ruiz and Kirian Vega, were charged with laundering their Medicare profits through Sanchez, who did business with Caribbean Transfers.
Ruiz, 38, a Cuban-born U.S. citizen who owned two medical equipment businesses under others’ names in Miami-Dade, was denied bail because a judge found he might flee to Cuba or another country.
Vega, 35, who owned a local pharmacy under another person’s name that also sold medical supplies, has pleaded guilty and been sentenced to three years in prison.
“They used Oscar Sanchez as a middle man,” Davidson, the prosecutor, said during Ruiz’s bond hearing in October.
Davidson described Caribbean Transfers 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 FBI, which investigated Sanchez’s case along with agents from the federal Health and Human Services department and the Florida Department of Law Enforcement, 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 Cuba.
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. The company used aliases, including the name “Bill Clinton,” according to court records.
But the process was “costly and time consuming,” prosecutors said.
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 court papers.
For a fee of 1 to 1.5 percent, Sanchez matched up the two sides: One side led by Caribbean Transfers supplied millions in ready cash — generated by Cuban exiles’ remittances — to the Medicare fraud ringleaders.
Those criminals, 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. And those tainted proceeds were then moved by Caribbean Transfers as remittances to Cubans on the island.
“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,” wrote Davidson, who worked on the case with fellow prosecutor Eloisa Delgado Fernandez.