Crypto Fraud Busted! Feds Seize $58M from Deltec Bank Money Laundering Account

Key Takeaways:

• US Law enforcement authorities are chasing a money laundering case
• The Feds have confiscated at least $58 million from its accounts held at Mitsubishi Bank
• Authorities accuse Deltec of laundering funds generated from crypto scams

YEREVAN (CoinChapter.com) — The United States has confiscated $58 million from a bank account held by Deltec Bank & Trust, based in the Bahamas. The account in question is was allegedly involved in laundering the profits from cryptocurrency-related investment fraud and various other fraudulent schemes, according to the crypto media.

“Law enforcement has been investigating organized, international criminal money laundering syndicates operating cryptocurrency investment and other wire fraud scams. Victims were fraudulently induced to transfer money into shell companies, at which point the money underwent a series of transfers, generally ending overseas, designed to conceal the source, nature, ownership, and control of the funds,”

the affidavit reads.

Based on the affidavit, the seizures occurred on June 13 and June 15. The targeted accounts in question were custodial accounts which Deltec opened at Mitsubushi Bank UFJ Trust in New York on behalf of their corporate clients.

According to the report, Deltec Bank held funds from shell companies which had duped clients through various fraudulent crypto schemes.

Upon failing to acquire information about the companies from Deltec, Mitsubushi Bank raised concerns regarding the accounts of Axis Digital Limited and GTAL.

Federal law enforcement officials have identified a minimum of 74 shell companies suspected of receiving funds derived from wire fraud.

The Bahamas-based bank allegedly laundered these funds on behalf of its clients.

Deltec Bank and the FTX money-laundering saga

News of Deltec’s alleged involvement with money laundering is not new. The Bank also had deep connections with defunct crypto exchange FTX. 

Moreover, its Chairman, Jean Chalopin, allegedly used his friendship with Sam Bankman-Fried (SBF), the CEO of FTX, to secure a $50 million loan for his company. 

In return, he acted as as his agent, providing “a suite of non-routine, high risk banking services to FTX”. 

A Class Action Complaint against Celtec Bank earlier, among other financial institutions, revealed the depth of the alleged corruption. According to the allegations by Connor O’Keefe, Mr. Chalopin assisted SBF in funneling more than $50 million to entities he separately owned through accounts at the bank.

“Defendant Deltec, at Mr. Chalopin’s direction, provided one-of-a-kind digital asset banking services to FTX and, upon information and belief, served as a primary vehicle through which SBF routed Class Member funds offshore, beyond the reach of U.S. regulators and law enforcement,” 

the complaint reads. 

In November 2018, Brazilian authorities also accused Deltec Bank and Trust of laundering money from the Odebrecht corruption case. According to the Federal Public Prosecutor’s Office in São Paulo, around $25 million in laundered funds ended up in the bank.