Source: Office of United States Attorneys
John J. Durham, United States Attorney for the Eastern District of New York and Harry T. Chavis, Jr., Special Agent in Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI) announced today that Dubai-based Wall Street Exchange (WSE) entered into a non-prosecution agreement (the NPA) on January 19, 2025 with the United States Attorney’s Office for the Eastern District of New York (the Office) and the Department of Justice’s Money Laundering and Asset Recovery Section (MLARS), and has agreed to pay more than $9 million to resolve a bank fraud investigation into false statements that it made to a U.S. financial institution concerning the anti-money laundering compliance of WSE and its United Kingdom (U.K.)-based subsidiary, Wall Street Forex London Limited (Forex).
Under the terms of the NPA, WSE agreed to pay to the United States a criminal monetary fine of $3,920,000, and forfeiture in the amount of $5,326,648. The NPA also requires WSE to continue to cooperate with and provide information to the United States for the term of the agreement.
“With this agreement, WSE admits that it is responsible under U.S. law for the past acts of its former officers, directors, employees and agents which constitute a violation of law, specifically bank fraud, and has implemented a program to detect and prevent money laundering violations,” stated United States Attorney Durham. “My Office is committed to holding foreign actors accountable for abusing our financial system and ensures that we protect the integrity of U.S. banks.”
Mr. Durham expressed his appreciation to the Drug Enforcement Administration, New York Division, for their work on the case.
“WSE’s failure to inform the US bank of an open investigation in the UK left the bank vulnerable to regulatory scrutiny. Anti-money laundering compliance is not only necessary to protect the sovereignty of our financial institutions but also that of our nation. IRS-CI worked closely with our federal partners to ensure that there is accountability in this case, and now WSE will pay the US government more than $9 million in fines and forfeiture,” stated IRS-CI New York Special Agent in Charge Chavis.
WSE and its Subsidiary, Forex
WSE is a money exchange service provider headquartered in Dubai, United Arab Emirates (UAE). Forex was incorporated in the United Kingdom in 1992 and was a wholly owned subsidiary of WSE. Prior to 2018, three of WSE’s most senior executives (collectively, WSE Executives) were also directly involved in directing and managing Forex. Two of the WSE Executives – Officer 1 and Officer 2— simultaneously served as executives of WSE and directors of Forex.
Between 2009 and 2018, WSE had a U.S. dollar correspondent bank account in New York with Bank A, which allowed WSE to execute transactions in U.S. dollars, access the U.S. financial system, and remit funds globally. Between 2012 and 2017, Forex had a similar trading account with Bank A in London.
Prior to 2016, Forex’s business included facilitating international dollar-denominated wires for money service businesses (MSBs) that could not wire funds internationally on their own. Forex was required to register with U.K. financial authorities, including His Majesty’s Revenue and Customs (HMRC) and the U.K. Financial Conduct Authority (FCA). Forex was also required to comply with U.K. money laundering regulations, including having to establish internal controls to prevent its clients from laundering money through its business.
Through its external compliance consultant and its own employees and directors, Forex was aware that its money services business clients were using Forex’s operations to engage in suspicious money laundering activities. For example, Forex’s external consultant alerted Forex that several of its clients were providing demonstrably false information to Forex. At least one Forex employee also raised concerns about the inadequacy of Forex’s internal controls and by extension, Forex’s potential facilitation of money laundering. These concerns were raised and elevated to one or more of the WSE Executives.
In 2016, HMRC revoked the “fit and proper” status of all of Forex’s directors, including the “fit and proper” status of Officer 1 and Officer 2. In withdrawing the directors’ “fit and proper” status, HMRC concluded that Forex repeatedly engaged in non-compliant financial activities and persistently failed to comply with key aspects of the requisite money laundering regulations and that among other deficiencies, Forex and its directors failed to establish and maintain appropriate internal controls to detect money laundering activities. HMRC also canceled Forex’s registration and notified Forex that it could not continue to do business in the U.K. After HMRC’s revocation, Forex subsequently ceased its U.K. operations in 2016.
Bank Fraud
Despite the above-described regulatory action against Forex, Forex and WSE never disclosed to Bank A negative findings regarding Forex’s money laundering controls and compliance, the regulatory action by HMRC, and the reason that Forex ceased operations in the U.K. Instead, Forex and WSE reported in multiple communications between 2015 and 2018, including in WSE’s and Forex’s audited financial statements for 2015, that Forex’s agents were the subjects of both an internal investigation and an investigation by U.K. authorities, while omitting that Forex itself was also a subject of both investigations. For example, when Bank A was conducting its due diligence review on WSE in 2015 and 2016, and asked WSE whether WSE had identified “any issues” in “internal/external audits,” each time, WSE responded, “No.” Moreover, in 2016, when Bank A asked whether WSE had any “regulatory action regarding any AML [anti-money laundering] issues” that year, WSE also reported “No,” –even though weeks prior, HMRC had revoked the “fit and proper” status of Forex’s directors, including officers of WSE, for AML issues and had notified Forex it could no longer operate as an MSB in the U.K. WSE repeated this misrepresentation to Bank A in 2017. Between 2016 and 2018, WSE also misrepresented to Bank A that Forex was voluntarily withdrawing from the U.K. and surrendering its license, characterizing the move as a “business decision” rather than the result of the HMRC regulatory action.
WSE, through its former officers and directors, failed between 2015 and 2018 to disclose information regarding Forex and made material misrepresentations to Bank A. WSE was able to maintain its banking relationships with Bank A until September 2018, when Bank A terminated its banking relationships with WSE globally.
The Non-Prosecution Agreement
The Justice Department reached this resolution with WSE based on a number of factors, including, among others: (i) the nature and seriousness of the offense, including that the events relevant to this matter largely related to a WSE affiliate no longer in operation and occurred under former WSE management and that WSE has had no bank accounts in the United States since 2018; (ii) WSE’s remedial measures to enhance its compliance program; and (iii) WSE’s lack of a criminal history in the United States. In addition, WSE received credit for cooperating with the department including by providing documents and information not otherwise available to the department.
The government’s case is being handled by the Office’s Business and Securities Fraud Section and MLARS, in coordination with the Office’s Bank Integrity Task Force, which is charged with investigating and charging corporate and individual actors who launder criminal proceeds using the U.S. banking system and enforcing anti-money laundering controls under the Bank Secrecy Act. Assistant U.S. Attorney Hiral D. Mehta, former Assistant U.S. Attorneys Genny Ngai and Brian Morris of the Eastern District of New York, and Trial Attorneys Elizabeth Carr and Michael P. Grady of MLARS’ Bank Integrity Unit, are in charge of the prosecution, with the assistance of MLARS Paralegal Specialist Nicholas Aholt. The Justice Department’s Office of International Affairs provided substantial assistance.
The Defendant:
Wall Street Exchange
Dubai, United Arab Emirates