Defendant Allegedly Deposited More Than $55 Million into Shell Bank Accounts and Used the Funds to Purchase Jewelry, Make Payments on Luxury Vehicles and Renovate His Penthouse Apartment
A complaint was unsealed in federal court in Brooklyn charging David Motovich, principal of a lumber and construction materials business, with bank fraud, aggravated identity theft and witness tampering. Motovich was arrested this morning and will make his initial appearance before United States Magistrate Judge Roanne L. Mann this afternoon.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Thomas Fattorusso, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation (IRS-CI), announced the arrest and charges.
“As alleged, the defendant used a seemingly legitimate, family-run business as a front for engaging in a $55 million check cashing scheme that deliberately flouted federal banking and anti-money laundering laws. Further, as law enforcement was closing in on his schemes, Motovich attempted to derail the government's investigation by tampering with witnesses,” stated Acting U.S. Attorney Kasulis. “Today's arrest demonstrates that this Office will take down and vigorously prosecute defendants like Motovich, who circumvent compliance with federal financial laws out of greed, just to line his own pockets and live a life of luxury.” Ms. Kasulis also expressed her appreciation to the U.S. Attorney’s Office for the District of New Jersey for their assistance with the case.
“Federal banking laws exist to protect the industry from fraud and the general public from money laundering schemes that often further criminal activity. Motovich, as alleged, broke these laws in order to advance his own monetary interests,” stated FBI Assistant Director-in-Charge Driscoll. “To make matters worse, he’s also accused of tampering with government witnesses. Rest assured this type of illegal behavior will be aggressively pursued by the FBI and our partners.”
“The multiple schemes Mr. Motovich allegedly devised has great impact on both his clients and the United States treasury,” stated IRS-CI Acting Special Agent-in-Charge Fattorusso. “In our current environment, the services provided by federal and local governments are sorely needed. The allegations in this complaint require the financial expertise IRS-CI provides in order to unravel the complexities of such crimes.”
As alleged in the complaint, since at least 2012, Motovich has operated an illegal check cashing business from his office at his family-run lumber business located in the Midwood section of Brooklyn. The customers of Motovich’s illegal check cashing business are primarily the owners and operators of construction companies who pay their employees in cash to avoid having to pay state and federal employment taxes, including taxes owed under the Federal Income Contributions Act. As part of the scheme, Motovich cashed millions of dollars of checks for his customers in exchange for a fee or a percentage of the face amount of the checks, ranging between four and 10 percent. Motovich’s customers paid a higher fee to Motovich than the fees charged by licensed check cashing businesses because the customers understood that Motovich would not file Currency Transaction Reports for cash transactions in amounts greater than $10,000 or Suspicious Activity Reports, as required by federal anti-money laundering statutes. Motovich supplied his check cashing customers with fraudulent documents that they could use to disguise the transactions as payments by the customers for materials and/or subcontracting work if the customers were audited by the New York State Workers Compensation Board or tax authorities.
In furtherance of his scheme, Motovich created shell companies for the sole purpose of facilitating his illegal check cashing business and instructed his customers to issue checks drawn against their business accounts and make the checks payable to one of the companies. Motovich then deposited the checks into bank accounts that he created at several financial institutions. To conceal his control and ownership of the funds in the accounts, and to avoid detection of his scheme, Motovich opened the accounts in the names of other individuals.
In total, between 2012 and 2019, Motovich deposited more than $55 million into the accounts that he had opened in the names of other individuals and used the funds to purchase real estate; pay personal and corporate credit card accounts; purchase luxury items, including millions of dollars of diamonds, watches, jewelry and clothing; make lease and purchase payments for Porsche and Lexus luxury vehicles; pay premiums on multi-million dollar life insurance policies for himself, his wife and others; make renovations to his penthouse apartment; and to fund other business ventures.
When Motovich became aware of the government’s investigation, he tampered with witnesses by encouraging them not to cooperate with the government, including encouraging them to fire their attorneys and retain attorneys that he had handpicked for them, and by paying at least one witness and that witness’s family members so that the witness would not cooperate with law enforcement.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
