2002-06-27 -- Nolasco, Maria Carolina et.al. -- Criminal Complaint -- News Release

Black Market Currency Exchange Busted; Jersey City Woman, Brazilian Company Charged in Criminal Complaint

NEWARK - A Jersey City woman employed by Valley National Bank was arrested today, charged with operating a money transmitting business without a license, tax evasion, and other charges, U.S. Attorney Christopher J. Christie announced.

Charged in an eight-count criminal complaint was Maria Carolina Nolasco, 44, an assistant vice president at a branch of Valley National Bank located at 275 Madison Avenue, New York, N.Y. Nolasco had been responsible for international private banking at Merchant's Bank, and continued in that role when Merchant's Bank was acquired by Valley National Bank. Nolasco, who was born in Portugal, is a naturalized U.S. citizen.

Nolasco was arrested this morning near her home by Special Agents of the U.S Customs Service. Nolasco is scheduled to make an initial appearance today before U.S. Magistrate Judge Stanley R. Chesler at 2 p.m.

Also charged in the complaint was Turist-Cambio Viagens e Turismo, Ltda., a Brazilian currency exchange and money transmitting business. Together with Nolasco, the Brazilian company was charged with operating a money transmitting business without the necessary state license.

Over $15 million dollars was seized today from 39 of the accounts handled by Nolasco at the Valley National branch in New York. Federal statutes authorize the seizure of funds involved in illegal money transmitting schemes.

Valley National Bank is not charged in connection with the scheme and has cooperated fully in the government's investigation.

According to the complaint, Nolasco, acting in return for remuneration separate from the salary paid to her by Valley National Bank, was using dozens of bank accounts under her control to transmit money on behalf of currency exchange houses and money transmitting businesses in Brazil. The accounts were held in the names of individuals and shell companies, mostly based in Brazil, that were fronts for the currency exchange houses and money transmitting businesses. The complaint alleges that during the eight-month period from May 2001 through December 2001, over a half billion dollars passed through 26 of these bank accounts.

The tax evasion counts in the complaint offer detail on Nolasco's unreported illegal income.

The complaint states that the transactions conducted by Nolasco were part of a black market currency exchange system that circumvents South American laws and regulations that prohibit, limit, or tax the purchase of United States dollars. According to the complaint, the primary source of United States dollars available for sale on the black market is narcotics trafficking. The complaint does not allege that Nolasco laundered narcotics proceeds; however, it does allege that she deposited $9,000 that an undercover agent gave her and told her was drug proceeds.

The Complaint explains that New Jersey and New York both require a license issued by the State Department of Banking to conduct a money transmitting business, and Nolasco did not have a license to conduct a money transmitting business in either state. Valley National Bank has no obligation to obtain a state license because state laws requiring a license to operate a money transmitting business do not apply to banks. According to the Complaint, however, the transactions conducted by Nolasco were conducted using the facilities of Valley National Bank, but were not conducted on behalf of the bank.

"This hits them where it hurts," said U.S. Attorney Christopher Christie. "Large-scale movement of money through illegal channels is almost always part of other criminal activity, usually international drug trafficking. "

"This arrest and seizure bring an end to a massive, illegal financial scheme that moved roughly half a billion dollars in the course of just eight months. Closing down the financial infrastructures that allow criminals to reap their profits is a priority for the U.S. Customs Service," said Joseph R. Webber, Special Agent in Charge of the U.S. Customs Service in New York.

The Internal Revenue Serice Criminal Investigation section, under the direction of Special Agent in Charge Anne D. Fahy, and the Drug Enforcement Administration, under the direction of Special Agent in Charge Anthony Cammarato, worked the case closely with Customs.

The Complaint alleges that during the four-year period from 1998 through 2001 Nolasco received a total of $1,242,211 from the bank accounts she controlled, and she did not declare that income on her tax returns for those years. The Complaint alleges that Nolasco owes $434,904 in additional taxes. The income she and her husband declared during the same four years, according to the Complaint, totaled only $183,454.

The Complaint also alleges that Nolasco structured cash transactions for the purpose of avoiding the filing of currency transaction reports that banks are required to file for deposits of currency in excess of $10,000. According to the Complaint, Nolasco accepted $30,000 from an undercover agent and deposited those funds in increments under $10,000. In addition, the Complaint alleges, she deposited the $9,000 that she had been told was the proceeds of narcotics trafficking.

Nolasco is charged with four counts of tax evasion, each of which carries a maximum penalty of five years in prison and a $100,000 fine. Nolasco is charged with two counts of cash structuring, each of which carries a maximum penalty of five years in prison and a $25,000 fine. Nolasco is charged with money laundering (for the $9,000 transaction), which carries a maximum prison sentence of 20 years and $250,000 fine, and with operating a money transmitting business without a state license, which also carries the a maximum prison sentence of five years and a $250,000 fine. The Brazilian currency exchange business is charged in this latter count as well.

Under U.S. Sentencing Guidelines, the U.S. District Judge to whom a case is assigned would, upon conviction, determine the actual sentence each defendant receives based upon a formula that takes into account the severity and characteristics of the offense and the defendants' criminal histories, if any.

Parole, however, has been abolished in the federal system. Under the Sentencing Guidelines, defendants who are given federal custodial terms must serve nearly all that time.

Christie credited Special Agents of the U.S. Customs Service, under the direction of Special Agent in Charge Joseph R. Webber; Special Agents of the Internal Revenue Service Criminal Investigation section, under the direction of Special Agent in Charge Anne D. Fahy; and Special Agents of the Drug Enforcement Administration, Special Agent in Charge Anthony Cammarato, with developing the case.

Christie and the Special Agents in Charge expressed appreciation for the assistance of Valley National Bank during the course of the investigation.

The Government is represented by Assistant U.S. Attorney Percell, of the U.S. Attorney's Criminal Division, in Newark.

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