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Posted on Thursday, 04.25.13

Florida man behind Medicare money-laundering transfers to Cuba sentenced
to 4 years


A Florida "middleman" convicted of laundering millions of dollars of
fleeced Medicare payments to Cuba — in the first criminal case of its
kind in the United States — was sentenced to 4 1/2 years in by a
Miami federal judge Thursday.

Oscar L. Sanchez was also ordered to serve an additional 1 1/2 years 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.

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 related to
Sanchez's crime.

His defense attorney, Peter Raben, urged the judge to give his client a
three-year sentence. Sanchez must surrender on June 15 to start his
prison term.

Last summer, the U.S. attorney's office in Miami made national headlines
when prosecutors charged Sanchez, owner of the Naples check-cashing
store, with conspiring to launder millions of Medicare dollars via
and Trinidad into Cuba's national bank.

His case marked the first time that investigators traced tainted
Medicare proceeds to Cuba's state-controlled bank. Medicare, funded by
U.S. taxpayers, is a national healthcare program for senior citizens and
the disabled. South Florida is known as the nation's capital of Medicare

In late August, Sanchez, 47, pleaded guilty to a single conspiracy
charge and agreed to cooperate with authorities and repay the U.S.
government, consisting primarily of residential 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.

In October, prosecutors revealed that Sanchez collaborated with a
currency exchange businessman who allegedly played the dominant role in
the Medicare money-laundering 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.

Prosecutors filed 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, have since
pleaded guilty to laundering their Medicare profits through the
convicted check-cashing store owner, who did business with Caribbean

The information about Caribbean Transfers, which prosecutors say is
licensed by the Cuban government, was disclosed during Ruiz's bond
hearing in October. Ruiz, a Cuban-born U.S. citizen, was denied bail
because a judge found he might flee to Cuba or another country.

Ruiz, 38, owned two medical equipment businesses under others' names in
Miami-Dade, and Vega, 35, owned a local pharmacy under another person's
name that also sold medical supplies.

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," Davidson, the prosecutor, said
during Ruiz's bond hearing in October. 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 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 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."

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 last 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," wrote Davidson, who worked on the
unprecedented case with fellow prosecutor Eloisa Delgado Fernandez.

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 checks was Magnus Aviation Logistics, which
the prosecutor identified in court. The company was dissolved in 2011.

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