THE U.S. Attorney’s Office for the Districts of Guam and the NMI seeks the forfeiture of funds seized from two Bank of Saipan accounts in 2019 for wire fraud and money laundering totaling $310,276.26.
Filed in the District Court of the NMI, the complaint is a civil forfeiture action and did not provide the name of any defendant, but referred to two bank accounts of “MCS” at Bank of Saipan.
According to the complaint, $271,087.88 was seized from “MCS account 1,” and $39,188.38 was seized from “MCS account 2.”
A resident of the CNMI, “A.Y.” is the sole owner and operator of MCS, the complaint added.
The seized funds are currently in the custody of the U.S. Department of the Treasury.
The complaint arises out of an investigation of the Federal Bureau of Investigation and the U.S. Internal Revenue Service of a suspected conspiracy by foreign entities and entities and individuals in the CNMI to commit wire fraud and money laundering.
“The suspected conspiracy involved the transfer of funds, including by international wire transfer, for the purpose of promoting two schemes to defraud: first, to promote the misrepresentation of material facts to, and the concealment of material information from CNMI regulatory authorities, in violation of Title 18, United States Code, Section 1343; and second, to illegally influence government officials in exchange for preferential treatment, thereby depriving the citizens of the CNMI of their intangible right to honest services of those CNMI government officials, in violation of Title 18, United States Code, Sections 1343 and 1346,” the complaint stated.
The suspected conspiracy involved a third scheme: “to evade the payment of the proper amount of income taxes owed to the CNMI government, in violation of Title 18, United States Code, Section 1343.”
In the case of the first two schemes, “conspirators used international wire transfers made with the intent to promote the carrying on of any one or more of these wire fraud schemes, each of which constituted specified unlawful activity,” the complaint stated.
“The wire transfers therefore constituted acts of international promotional money laundering,” it added.
The second scheme also involved acts of laundering of monetary instruments and transacting in criminal proceeds, the complaint stated.
According to the 21-page complaint, MCS maintained MCS Account 1 and MCS Account 2 for which A.Y. was the sole signatory.
A.Y. incorporated MCS for the stated purpose of “banking and financial services, real estate development, and business management.”
The complaint also stated that “a Chinese investment holding company (Foreign Parent Company) is registered in Bermuda and headquartered in Hong Kong, People’s Republic of China. Foreign Parent Company owns a company registered in the British Virgin Islands. In turn, the company registered in the British Virgin Islands owns a company registered and incorporated in the CNMI (Domestic Subsidiary Company).”
Records revealed that the foreign parent company maintained a China Minsheng Banking Corp Ltd. bank account in Hong Kong, People’s Republic of China, the complaint stated.
It added that a domestic subsidiary company maintained a Bank of Saipan account in the CNMI. “The Company (Foreign and Domestic company) was building a resort and casino in the CNMI,” the complaint stated.
Imperial Pacific International, a Hong Kong-based company, is the sole casino licensee on Saipan.
Background
The complaint also mentioned the following:
“Beginning in 2013, the owners and operators of the ‘Company’ established relationships with CNMI political figures by… sponsoring foreign trips, including to Hong Kong and Macau, and on at least one occasion, to Singapore via private jet.
“Following the trips, the participating political figures joined other members of the CNMI legislature to pass a bill which enabled an exclusive gaming license on a certain island within the CNMI.
“The bill contemplated an open competition for the exclusive gaming license.
“The CNMI Senate passed the bill on the first and final reading. The bill was signed into law in March 2014. However, procedural violations that deprived the public of required notice and other defects resulted in two subsequent bills to correct the errors.
“The final bill was signed into law in July 2014.
“‘Individual 3’ [a resident of and a political figure in the CNMI who owes a fiduciary duty to the citizens of the CNMI] played an integral role in the passage of the casino enabling legislation.
“Approximately one month later, a body of appointed CNMI government officials awarded the exclusive license to the ‘Company’ after the only other bidder was disqualified.
“Months prior to receiving the license, in May 2014, the Company had already begun paying MCS and A.Y. several thousand dollars per month.
“On or about June 1, 2015, A.Y. signed a letter agreement with the Domestic Subsidiary Company for MCS to serve as a ‘consultant’ at a rate of $5,000 per month.
“Under this agreement, MCS was to receive reimbursements for costs and expenses only if such payments were previously approved by the Domestic Subsidiary Company.
“Days later, on or about June 18, 2015, A.Y. signed a second letter agreement with the Foreign Parent Company to be a ‘consultant’ at a rate to be ‘further determined and agreed in writing….’
“Under the second agreement, A.Y. was to be reimbursed by the Foreign Parent Company for ‘all reasonable costs and expenses’ upon production of receipts.
“Three years later, A.Y. and the Domestic Subsidiary Company signed an ‘amended agreement’ dated November 6, 2018, which established that A.Y. would be paid at a rate of $184,000 Hong Kong dollars (approximately $23,500) per month, and the Domestic Subsidiary Company would only reimburse pre-approved expenses.
“The written agreements do not fully or accurately depict the true financial dealings or the relationship between the Company and MCS.”
Scheme to defraud
Also according to the complaint, between in or about 2014 and in or about 2019, “A.Y., MCS, the Company, and others knowingly devised a scheme and artifice to defraud the CNMI and Commonwealth Casino Commission or CCC, in violation of Title 18, United States Code, Sections 1343 and 1349.”
“The scheme to defraud involved false statements of material fact and the concealment of 16 material information that A.Y. and MCS had a duty to disclose to the CCC, with intent to defraud, and the transmitted interstate and international wire communications in furtherance of the scheme.
“The essence of the scheme to defraud was to materially understate the extent of the services that A.Y. and MCS provided to the Company.
“The effects of the scheme to defraud were to frustrate the CCC’s ability to accomplish its mission of overseeing and regulating the Company’s operations and to deprive the CCC of fees to which it was entitled,” the complaint stated.
On Nov. 7, 2019, the FBI executed search warrants at the Office of the Governor, IPI and the office of Alfred Yue of Marianas Consultancy Services LLC, among other offices. Marianas Consultancy Services LLC was a consultant of IPI.
The United States Courthouse in Gualo Rai, Saipan.
