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US Attorney Prosecutes MRB for Making False Statements to Open Bank Account
Published on August 18, 2021

 

Oklahoma City Man Pleads Guilty to Making False Statement to  open a Bank Account for Marijuana Business

August 17th, Victor Ngo of Oklahoma City, OK and his company Friendly Management Group, LLC pleaded guilty in connection with a scheme to open a bank account under false pretenses to launder proceeds from marijuana sales.

Ngo operated Cannabless, a leading medical direct marijuana-related business in Oklahoma. Ngo used FMG to open a bank account by falsely stating that FMG was a wellness and fitness company, when in fact FMG engaged in a marijuana-related business. Based on this false statement, the bank opened an account it otherwise would have not opened. This fraudulent conduct allowed Ngo and FMG to illegally access the banking system and deposit proceeds generated by Cannabless’s sale of marijuana.

The US Attorney alleges that Ngo made cash deposits on nearly a daily basis, breaking up or structuring the transactions to amounts below $10,000 to avoid triggering the bank’s transaction reporting obligations under federal law and FMG laundered more than $770,000 in marijuana proceeds through the bank account during the scheme.

Ngo pleaded guilty to making a false statement to a bank. As part of his plea, Ngo agreed to forfeit $621,570.00. At sentencing, Ngo faces up to 30 years and a potential fine of $1,000,000.00. FMG pleaded guilty to structured money laundering. As part of its plea, FMG admitted to laundering more than $770,000. At sentencing, FMG faces a potential fine of $770,000, or an amount equal to the value of the funds involved in the money laundering transactions.

This case is the result of an investigation by the Drug Enforcement Administration, the United States Marshal’s Service, and the Oklahoma Highway Patrol. Assistant U.S. Attorney Wilson D. McGarry prosecuted the case.

With over 51,000 Direct Marijuana-Related Businesses operating in the United States and Canada, and very few banks "knowingly" servicing the marijuana industry with bank accounts, payments and lending, this is only one instance of marijuana-related bank fraud and money laundering occuring, quite possibly, systemically in the financial system.

As law enforcement and bank regulators continue to slowly wake-up to this fact, expect more pressure on financial institutions to effectively screen for and identify this particular risk. CRB Monitor is specifically designed to help financial institutions effectively identify and manage cannabis-related risks, whether or not they are knowingly serving the industries.

If your institution is NOT proactively screening for marijuana-related risk, it is NOT effectively identifying the risk or managing the related fraud, money laundering and/or tax evasion. Whether or not the MRB is fully-licensed does not really matter, if it is making false statements to financial institutions to "trick" them into opening an account.

For further information, see the US Attorney's Press Release: Oklahoma City Man Pleads Guilty to Making False Statement to Bank to Open Account for Marijuana Business.

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