Government Suggests that Unusual Pleas are Just the Tip of an Iceberg
Chinese law generally prohibits its citizens from converting more than $50,000 in Chinese yuan into foreign currency in a year. On Monday, two men living in Las Vegas pleaded guilty in federal district court in the Southern District of California to operating an unlicensed money transmitter business, in violation of 18 U.S.C. § 1960. Allegedly, they ran a scheme in which they helped clients circumvent this Chinese law — as well as the anti-money laundering programs of U.S. financial institutions — by converting electronic funds in China into hard currency in the United States, which the clients then used to gamble at casinos.
The case reflects the continuing ingenuity employed by individuals to use expanding technologies to circumvent currency controls and money laundering laws. The case is also interesting because the defendants allegedly ran their scheme with the help of insiders at the casinos, who provided assistance in exchange for a cut of the cash.