A Cuban immigrant who laundered millions of dirty Medicare dollars through his Florida check-cashing store into Cuba’s state-controlled banking system has agreed to help federal investigators catch other suspects in the unprecedented case being prosecuted in Miami.
Oscar L. Sánchez, who recently pleaded guilty to one count of conspiring to launder profits from Medicare fraud, agreed to “cooperate fully” with the U.S. attorney’s office in hopes of reducing a potential prison sentence of at least nine years, according to his plea agreement.
The agreement offers no details about his criminal activity because of its highly sensitive nature: Sánchez’s case marks the first prosecution of a defendant accused of laundering taxpayer-funded Medicare proceeds into Cuba’s national bank.
As part of the deal, Sánchez, 47, who had been held at the Federal Detention Center since his arrest in June, was granted a $1.55 million bond. His release will allow him to deal with a medical issue, said his Miami defense attorney, Peter Raben, who declined further comment.
Digital Access For Only $0.99
For the most comprehensive local coverage, subscribe today.
His sentencing before U.S. District Judge Paul Huck is set for Nov. 8, but it will likely be pushed back. As part of his punishment, Sánchez, a naturalized U.S. citizen, must repay the U.S. government $10 million, consisting primarily of numerous residential investment properties he acquired with his wife in southwest Florida.
Sánchez was indicted on the single conspiracy charge of playing a pivotal role in laundering the tainted proceeds 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.
So, many of them turned to Sánchez and his Naples check-cashing business to launder at least $31 million of those Medicare reimbursements between 2005 and 2009, according to court records.
According to his plea agreement, Sánchez is now being held responsible for laundering between $7 million and $20 million of those proceeds — a range that lowers his potential prison sentence. Sánchez is expected to provide details about others who were involved in the laundering, by providing financial records, testimony and other evidence in official meetings, grand jury proceedings or federal trials.
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.
As part of his money-laundering network, Sánchez came to know a “group of individuals” who controlled shell companies with 15 bank accounts in Canada and Trinidad who wanted to move millions of dollars derived from criminal and other activities 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, adding up to a total of $63 million, prosecutors allege.
“Benefitting both sides of the transactions, [Sánchez] was a financier for fraudsters and a capitalist for the Cuban banks,” prosecutor H. Ron Davidson wrote in a motion to detain the defendant before trial.
For a 10 percent fee, Sánchez matched up the two sides: One group 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 group’s 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 alleged.
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 in June.