DOJ seeks recovery of over $1M from Forex Capital Markets account
The United States Attorney for the Southern District of New York Damian Williams has filed a complaint for forfeiture at the New York Southern District Court concerning $1.03 million held in an account at Forex Capital Markets LLC.
The document, seen by FX News Group, depicts a complex scheme for laundering proceeds of narcotics sales and trafficking across various countries, spanning from Zambia to Jamaica and the Turks and Caicos.
The attorney explains that this is a civil action in rem (that is, against the thing, i.e., the money, and not against a person) seeking the forfeiture of $1,032,181 held in an account in the name of Maydaisy Corporation at Forex Capital Markets LLC. The defendant-in-rem (the money in the account) is presently in the custody of the US Marshals Service.
The case, launched on November 10, 2021, stems from events going back to early 2008 when representatives of the United States Commodity Futures Trading Commission (CFTC) contacted a Drug Enforcement Administration Financial Investigation Team (DEA FIT) regarding suspicious investment account activity at Forex Capital Markets LLC involving an account in the name of Maydaisy.
The account in question was held for the benefit of an individual named CC-1 in the complaint .
Soon thereafter, the Drug Enforcement Administration Financial Investigation Team learned that in March 2008, the anti-money laundering unit of the Zambia Drug Enforcement Commission (DEC) had arrested the individual in question (CC-1) for alleged money laundering activities and seized approximately $7 million. The Zambian authorities believed that the source of the funds was not legitimate.
The Drug Enforcement Administration Financial Investigation Team has learned that in or around late March 2008, Company-1 (a Forex dealer and Futures Commission Merchant) has terminated its contractual relationship with CC-1 and Maydaisy as a result of CC-1’s arrest in Zambia.
At that time, the individual in question (CC-1) instructed Company-1 to transfer $1.8 million to a banking institution in Zambia and the balance of the account – $1.03 million, to the Maydaisy account at Forex Capital Markets LLC.
The focus of the investigation then shifted to the Turks and Caicos Islands.
In May 2008, the Drug Enforcement Administration Financial Investigation Team learned that the Turks and Caicos Islands Police Force’s Financial Crimes Unit had been investigating an illegal investment scheme, involving Maydaisy, as well as CC-1 – the individual for whose benefit the account at Forex Capital Markets LLC was held. The scheme also involved two other individuals – CC-2 and CC-3, as well as another entity Company-2.
Maydaisy and Company-2 have transferred at least $100 million to Company-1 (a Forex dealer and FCM) since 2006.
Moreover, the brother of CC-2 – codenamed CC-4, is a major drug trafficker who imports cocaine from Colombia into Jamaica for further distribution into the United States. CC-3 was involved in the shipment of drugs to the United States.
CC-2 operated an investment scheme through which narcotics proceeds were laundered. The money was layered and integrated through a series of banks and foreign exchange houses in the Turks and Caicos and the United States.
CC-2 created Maydaisy and CC-1 worked for CC-2.
The United States Department of Justice alleges that because the defendant-in-rem (that is, the money held in the Maydaisy account at Forex Capital Markets LLC) relates to the concealment and laundering of the proceeds of narcotics sales abroad, it is subject to forfeiture.
The defendant-in-rem constitutes or is traceable to the proceeds of the sale of controlled substances, which crime is a felony in the countries in which the sales occurred. It would have been a felony if committed in the United States and is therefore forfeitable.
The DOJ seeks process issue to enforce the forfeiture of defendant-in-rem and that all persons having an interest in the defendant-in-rem be cited to appear and show cause why the forfeiture should not be decreed, and that the Court decree forfeiture of the defendant-in-rem to the United States of America for disposition according to law.
The FNG team understands that Forex Capital Markets is cooperating with the relevant authorities.
Given the seriousness of allegations in the complaint, FX News Group is attaching the document as provided by the Court: