Feds Charge NJ Man $55M Fraudulent Check Cashing Scheme
Brooklyn Paper, The (NY)
A Brooklyn man is facing federal charges related to an illegal check-cashing scheme that netted him more than $55 million over the past decade.
David Motovich, 46, faces charges of bank fraud, identity theft, and witness tampering in relation to the scheme, federal prosecutors at the Eastern District of New York announced Tuesday.
"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," Acting US Attorney Jacquelyn Kasulis said in a statement. "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."
Prosecutors say that Motovich had, since 2012, run the illegal check-cashing operation out of his family's legitimate Midwood lumber business, which was not specified in the lawsuit but was confirmed as Midwood Lumber & Millwork on Coney Island Ave by a source familiar with the case.
Most of his clients were the owners and operators of construction companies, who sought to pay their employees in cash and to evade reporting requirements that would force them to dish out money to the IRS in payroll taxes. Motovich's surreptitious operation also did not file reports for cash transactions of more than $10,000 or "suspicious activity reports," both tools the feds use to catch money launderers. Motovich's service fee could be as high as 10 percent.
Motovich also allegedly supplied customers with phony documents disguising the transactions as payments for materials or to subcontractors, in the event that they were audited.
The checks from the construction firms were made out to one of a number of shell companies Motovich allegedly created to launder the money, which was then deposited into banks. Motovich deposited over $55 million into the shell companies' bank accounts between 2012 and 2019, prosecutors say. He spent lavishly with his ill-gotten gains, buying real estate, diamonds, watches, jewelry, luxury clothing, and cars, as well as to renovate his penthouse apartment, settle credit card debt, and purchase large life insurance policies.
Prosecutors say that Motovich attempted to interfere with witnesses. The federal complaint shows one witness who wore a wire in a conversation with Motovich, who attempted to get him to fire his attorney and hire one of his own choosing, and prosecutors say Motovich also tried to pay off at least one witness.