8.1 billion yen seized
U.S. law enforcement agencies have executed multiple seizures against U.S. bank accounts managed by Deltec Bank in the Bahamas, legal documents released on Thursday showed.
On June 12, 23 and 28, the U.S. District Court for the Eastern District of Virginia granted a seizure warrant against Deltec funds held at Mitsubishi UFJ Trust and Banking Corporation, New York. The warrants related to the three cases authorized the seizure of up to ¥8.1 billion ($58,465,480), ¥3.8 billion ($27,337,385.47) and ¥2.6 billion ($19,099,652.07), respectively.
According to the affidavit, the Mitsubishi UFJ Trust and Banking custody account where the funds were seized was opened by Deltek for its corporate clients and was under investigation as an “organized international criminal money laundering syndicate engaged in cryptocurrency investment and other wire fraud.” The foreclosure was enforced by the authorities on justifiable charges of wire fraud, bank fraud and money laundering.
According to the U.S. Secret Service, Deltek’s client was a shell company that ran an international fraud scheme that tricked investors into believing they had invested in cryptocurrency or cash by deceiving them through fake cryptocurrency investment sites.
Fake sites extort users into making more deposits by displaying increased account balances. On the other hand, users could not withdraw their funds. At least 74 shell companies received wire fraud proceeds, transferred them to one of their custody accounts, and then transferred them to other accounts in the Bahamas, “establishing ways to avoid the scrutiny typically applied to international money transfers,” federal officials said.
Victims were fraudulently induced to send money to shell companies. To conceal the origin, nature, ownership and custody of the funds, a series of transfers were made, most often ending up overseas.
Mitsubishi UFJ Trust and Banking said it issued a warning about Deltech’s accounts because it was unable to obtain information from Deltech about paper companies called Axis Digital Limited and GTAL.
About Deltec Bank
Bahamas-based Deltek Bank has close ties to cryptocurrency companies, including holding reserves for the US dollar stablecoin Tether (USDT).
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FTX, a cryptocurrency exchange that went bankrupt last November, was also a customer of Deltec Bank. A U.S. lawmaker has pointed out that FTX invested 1.6 billion yen ($11.5 million) in March 2022 in Moonstone Bank, a U.S. regional bank closely related to the chairman of Deltec Bank, through sister company Alameda Research. Moonstone’s valuation was about 800 million yen at the time, and lawmakers were skeptical about the investment amount, which was more than double that value.
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Alameda Research lent Deltek about 7 billion yen ($50 million) in 2021, but in April, a bankruptcy court in Delauware ordered Deltek to repay Alameda about 7.3 billion yen ($53 million), including interest on the loan. FTX and Alameda’s financial records contain “inaccuracies and numerous inconsistencies” and “absolute absences,” according to Chief Executive Officer John Ray III, who was tasked with restructuring FTX.
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