Coordinated Multi-National Arrests in Phony Car Sales Scheme Victimizing Banks and Individuals Across the United States
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Troy Miller, Director, Field Operations, New York, U.S. Customs and Border Protection (“CBP”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced a multinational operation involving 10 arrests in the United States and three other countries, and the unsealing of Indictments and filing of a related Complaint charging MARTINS APSKALNS, PAVELS BERNCS, JANIS BERNS, RAITIS GRIGORJEVS, SERGEJS LOGINS, DIANA MAKSIMOVIC, AGRIS PETROVS, IGORS PIRINS, VALTERS VOLKSONS, and VLADISLAV ZAPOLSKIJ with conspiracy to commit wire and bank fraud and conspiracy to commit money laundering. PAVELS BERNCS was arrested in Helsinki, Finland, and VLADISLAV ZAPOLSKIJ was arrested in Vilnius, Lithuania, and both are pending extradition to the United States; MARTINS APSKALNS and IGORS PIRINS were arrested in Kuldiga, Latvia, extradited to the United States, and arraigned before U.S. Magistrate Judge Debra Freeman on December 21, 2018; DIANA MAKSIMOVIC was arrested in Vilnius, Lithuania, and SERGEJS LOGINS was arrested in Riga, Latvia, and both were extradited to the United States and arraigned before U.S. District Judge Jesse M. Furman on February 4, 2019; and JANIS BERNS, RAITIS GRIGORJEVS, AGRIS PETROVS, and VALTERS VOLKSONS were arrested in Queens, New York, and presented before Magistrate Judge Ona T. Wang on December 3, 2018. APSKALNS, BERNCS, LOGINS, MAKSIMOVIC, PIRINS, and ZAPOLSKIJ are charged by Indictment, and BERNS, GRIGORJEVS, PETROVS, and VOLKSONS are charged by Complaint. The case has been assigned to United States District Judge Jesse M. Furman.
U.S. Attorney Geoffrey S. Berman said: “As alleged, the defendants used an elaborate network of fictitious classic car dealers and collectors to take their victims for a ride financially. Thinking they were remitting money to purchase rare automobiles, victims were instead sending large sums to bogus auto transport companies that were really just vehicles from which the defendants allegedly vacuumed up the proceeds of their fraudulent scheme. Thanks to our law enforcement partners here in New York and in Latvia, Lithuania, and Finland, the defendants’ once-lucrative joyride is over.”
FBI Assistant Director William F. Sweeney Jr. said: “Victims of this fraud not only believed they were getting what they paid for, they were often stuck paying for the classic automobiles they never received. The FBI New York Eurasian Organized Crime Task Force would never have been able to bring these criminals to justice without the help of our task force partners, but also the work and partnership with our international partners in Latvia, Lithuania and Finland. We cannot stress enough how important it is for these suspects to understand the FBI has the ability to bring them back to the United States to face justice and punishment for their crimes.”
CBP New York Director of Field Operations Troy Miller said: “CBP, working in partnership with U.S. Attorney’s office, FBI, and the New York Police Department, demonstrated vigilance and exceptional skill in targeting and detecting this scheme, directly leading to the apprehension and prosecution of the alleged conspirators.”
NYPD Commissioner James P. O’Neill said: “In this increasingly connected world, it has never been more important for the NYPD and our law enforcement partners, in America and abroad, to work in concert toward our shared public-safety goals. It is due to that close cooperation that – after more than two years and across multiple continents – this investigation into international wire fraud and money laundering has successfully resulted in arrests. I commend and thank the attorneys from the Southern District for bringing this case forward, and all the FBI, CBP, and NYPD investigators for their dedication. Together, we will continue to be relentless in fighting crime that impacts the people we serve wherever, and however, it occurs.”
According to the allegations in the Indictments and the Complaint:[1]
From at least January 2016 through December 2018, the defendants participated in a fraudulent scheme that most commonly operated as follows: first, co-conspirators impersonated automotive dealers and collectors and claimed to be selling classic cars on various well-known internet auction and trading websites. Victims responding to the ads were in fact corresponding with a fraud scheme participant. After the victims and co-conspirators came to terms on a sale price, including down payment and shipping costs, victims were next directed to purported automotive transportation companies and were told that these companies would accept payment and transport the cars. These companies were in fact shell corporations established by the conspiracy to help perpetrate the fraud, whose corporate bank accounts were established and controlled by the defendants and co-conspirators, awaiting wired funds from the fraud’s victims. After victims had wired payment, the defendants and co-conspirators went to the banks to drain the victim’s funds, often starting the same day payment had been transmitted, withdrawing from different bank branches in numerous withdrawals on the same day, and withdrawing in denominations that were varied and often kept to an amount that they believed would prevent the financial institutions from recording and reporting the fraud. The defendants and other co-conspirators then sent the fraud proceeds outside the United States to Eastern European countries, from where the defendants and many of their co-conspirators originated. Some of the defendants maintained managerial roles, recruiting co-conspirators to participate and providing directions and victim information to scheme participants once the co-conspirators were inside the United States. Victims never received the goods they believed they had purchased, and many were unable to recover their money or were left paying loans for cars that were never truly for sale.
Each of the defendants is charged with one count of conspiracy to commit wire fraud and bank fraud, which carries a maximum sentence of 30 years in prison, and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. The charges contained in the Indictments and the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
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The investigation was conducted in close cooperation with the International Cooperation Department and the Criminal Investigation Department of the Central Criminal Police Department, State Police of Latvia; Prosecutor’s General Office of Latvia, International Cooperation Division; Police Department of Lithuania, Vilnius County Police Headquarters, Crimes Against Property Board; Lithuanian Criminal Police Bureau, International Liaison Board; Prosecutor General’s Office of the Republic of Lithuania; Vilnius Regional Prosecution Office; and the National Bureau of Investigation of Finland. The Department of Justice Criminal Division’s Office of International Affairs also provided significant assistance.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html.
The prosecution is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Jeffrey Coffman, Matthew Hellman, Emily Johnson, Daniel Nessim, and Thane Rehn are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the texts of the Indictments and the Complaint, and the descriptions of the Indictments and the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.