29 Nov 2017
(U.S. Attorney’s Office) — Shawn N. Anderson, acting United States attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant Hong Mei Xu was sentenced in the District Court of the Northern Mariana Islands to 12 months and one day in prison for operating an unlicensed money-transmitting business, in violation of 18 U.S.C. § 1960(b)(1)(B).
The defendant was indicted by a federal grand jury on Aug. 5, 2016, and pled guilty on Dec. 9, 2016.
Ms. Xu managed an unlicensed money-transmitting business on the island of Tinian. The business operated under the pretense of being a jewelry store. Customers would enter the store and purportedly buy jewelry with their UnionPay International credit card.
In reality, the customers would not receive any merchandise, only a receipt, which they would redeem for cash, minus Xu’s 5 percent commission.
Customers then used the cash to gamble at Tinian Dynasty Hotel and Casino.
The purchase transactions were transmitted to UnionPay International Bank, allowing the customers to avoid China’s strict capital-flight restrictions.
During the federal investigation, agents executed a search warrant at the store in an effort to obtain financial-transaction records.
Agents discovered merchant card transaction slips totaling $501,800.11 for the period of Nov. 22, 2014 through Aug. 3, 2015.
Xu later disclosed to agents that the business was not licensed as a money-transmitting business and that she would run customers’ credit cards in exchange for U.S. currency.
Acting U.S. Attorney Anderson stated, “Federal law requires certain money-services businesses or MSBs to register with the Financial Crimes Enforcement Network. Registration enables the government to monitor and enforce compliance with financial regulations. These regulations are important in terms of deterring money laundering and terrorist financing, within our homeland and abroad. Our office will continue to pursue criminal prosecutions and civil monetary penalties against those who fail to register as MSBs and choose to operate in the shadows of our financial system. Additional guidance can be found at www.fincen.gov”
Special agents from the Internal Revenue Service conducted the investigation. Assistant U.S. Attorneys Russell Lorfing and James Benedetto prosecuted the case.
Source: Marianas Variety : http://www.mvariety.com/cnmi/cnmi-news/local/100452-hong-mei-xu-sentenced-for-operating-unlicensed-money-transmitting-business