Saturday, October 31, 2020

Managers of California-Based Global Gold Exchange Plead Guilty to Money Laundering

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Global Gold Exchange, LLC and its managers, Jeffrey Morrow and Richard M. Owen, pleaded guilty in federal court on August 2 to multiple financial crimes, admitting that they laundered money through their unlicensed money transmitting business by falsely reporting cash transactions as sales of “gold” and other precious metals.

As part of their guilty pleas, the defendants agreed to forfeit approximately $2 million in assets involved in the money laundering and unlicensed money transmitting business.

Special Agents from IRS-Criminal Investigation’s Financial Investigations and Border Crimes Task Force worked with FBI agents and the United States Postal Inspection Service during the multi-year investigation to unravel millions of dollars in suspicious transactions taking place at the San Diego-based office and bank accounts of Global Gold Exchange, or GGEX. GGEX also pleaded guilty to mail fraud, while Owen also pleaded guilty to unlawful possession of a firearm or ammunition.

As detailed in the plea agreements entered today before U.S. Magistrate Judge Jill L. Burkhardt, GGEX unlawfully laundered cash and funds from a variety of sources – both lawful and unlawful – and fraudulently documented the transactions as “a complete gold transaction.”

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In sum, GGEX and its managers admitted operating “as an informal money transfer system engaged in facilitating the transfer of money domestically and internationally outside of the conventional financial institutions system, and did so without regard for the source, destination, purpose, or legality of the funds transmitted.”

Between 2017 and 2018, GGEX and managers Morrow and Owen admitted that they and others employed various money laundering and unlicensed money transmitting techniques to conduct unlawful transactions through GGEX and GGEX’s bank accounts, including:

-Transacting with a “local cartel out of Mexico;”

-Falsifying invoices for sales of gold, when in reality it was the receipt of a large cash deposit, and returned by check after GGEX took a 10 percent fee;

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-Agreeing with “clients” to tell law enforcement or tax authorities that the transactions were sales/purchases of precious metals; and

-Advising clients to mail GGEX parcels filled with heavy substances to mimic the weight of gold to falsely document the nature of GGEX’s transactions.

“Global Gold Exchange and its managers attempted to operate as a one-stop-shop for money laundering,” said United States Attorney Robert S. Brewer, Jr.

“The package of guilty pleas entered today makes clear that the United States will pursue and prosecute any individual, asset, or business attempting to launder the proceeds of crimes, or that threaten the integrity of our financial system.”

Related: Local Men Plead Guilty to Laundering Millions of Dollars Through Gold Exchange Business

“Criminal organizations are becoming increasingly dependent on individuals and businesses who offer their expertise and services to assist in laundering illegal proceeds,” said Internal Revenue Service-Criminal Investigation Special Agent in Charge Ryan L. Korner. “Today’s plea should send a clear message to these individuals and businesses that they will be held accountable and face the consequences.”

“Global Gold Exchange and its managers Jeffrey Morrow and Richard M. Owen accepted money from all sources regardless of lawfulness,” said Nichole Cooper, Los Angeles Division Inspector in Charge, United States Postal Inspection Service. “They then subverted conventional financial institution systems by using fraudulent invoices, directing clients to mislead law enforcement, and labeling it ‘a complete gold transaction.’ The result of this plea agreement shows the US Postal Inspection Service and its federal partners bring justice to those who seek to hide their crimes from the law.”

This case is the result of ongoing efforts by the Financial Investigations and Border Crimes Task Force, a partnership targeting unlawful transactions through the financial system.

The task force brings together the combined expertise of federal, state, and local law enforcement including IRS-CI, California Franchise Tax Board, United States Postal Inspection Service, and the San Diego Police Department.

FBI and United States Postal Inspection Service partnered with the FIBC in this coordinated investigation. This case is being prosecuted by Assistant U.S. Attorney Daniel Silva.

Sentencing is scheduled to occur on October 16, 2019. Owen faces a maximum of 20 years in prison. Morrow faces a maximum of five years in prison. GGEX faces a maximum of five years probation.

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