Monday, February 19, 2024

Maryland Busts $9.5 Million #BEC Money Laundering Ring

 

Three indictments have been unsealed in Maryland that document an extensive network of shell companies that were used to wash at least $9.5 Million in funds from at least fifteen #BEC (Business Email Compromise) cases across the country.  

In the first indictment, those charged (with an example address from their respective shell companies): 

  • Adanegbe Gift Osemwenkhae - 8304 DEBORAH ST, CLINTON, MD 20735 (this property is listed as owned by Kat Osemwenkhae, who uses the email  kateivie@yahoo. Adanegbe is also listed as  controlling "Ivie LLC"  from the same address.) 
  • Faizou Gnora - 12825 LOCBURY CIR, #B, GERMANTOWN, MD 20874
  • Emily Gil Arias - 4107 DAHILL RD, SILVER SPRING, MD 20906
  • Fatoumata Boiro - 16202 PENTERRA WAY, BOWIE, MD 20716
  • Lawrence Ogunsanwo - 308 WILLOW HILL PLACE, HYATTSVILLE, MD 20785
  • Lakeisha Parker - 2044 NORTH BENTALOU ST, BALTIMORE, MD 21216
  • Martin Ogisi - 8405 CHEVY CHASE LAKE TERR, 701 CHEVY CHASE, MD 20815
  • Blondel Ndjouandjouaka-* - 3323 TEAGARDEN CIRCLE, APT. 202, SILVER SPRING, MD 20904
  • Kevin Colon - 8714 HAYSHED LANE, APT 302, COLUMBIA, MD 21045
  • Lorena Perez Herrera - 9466 GEORGIA AVE #1277, SILVER SPRING, MD 20910


* - Blondel is my favorite of this gang, claiming both Computer Science and Criminal Justice degrees and claiming to work in Cybersecurity including as a Phishing Analyst. 


  • Yahya Sowe - 1012 Good Hope Dr, Silver Spring, MD 20905
  • Victor Killen - 28 Capricorn Ct, Derwood, MD 20855
  • Areal El-Lovieta Harris - 29219 Middleham Ct, Hanover, MD 21076 
  • Gedeon Agbeyome - 25 years old, also mentioned in the case, was arrested in 2020 possessing a credit card skimmer and many cards. Like several others in the case, he studied Computer Science at Montgomery College, Maryland. He was also arrested in Alabama in April 2023) 


We didn't see the alias "Papa Kwam" in use, but his Facebook account is in the name "Don Kwame." 




All three cases make reference to one another, with the exception that Gedeon's 2-page indictment for Aggravated Identity Theft is stand-alone.  While he is not named as a defendant in case #2, he is referred to throughout that case.

Victim Organizations  (many/most are Business Email Compromise)

a) an environmental Trust 
b) an urban redevelopment program 
c) a Medical Center 
d) a transportation company 
e) an apartment complex company 
f) a K-12 school district in Montana
g) a private liberal arts college 
h) the Delaware River & Bay Authority 
i) a Colorado real estate agency 
j) Larimer County, Colorado 
k) an RV dealership 
l) a health care center with 17 locations 
m) a real estate / property management firm 
n) a real estate company in Texas 
o) Vigo County, Indiana 

The indictment makes clear that the defendants' Shell Companies DID NOT:
- have physical operations
- have business premises 
- engage in legitimate business activities 
- earn gross revenues
- incur cost of goods sold 
- incur administrative expenses associated with business operations 
- report wages for employees to the State of Maryland 
- have significant numbers of employees 

A little hint for those who screen business accounts.  If one runs an Automobile Dealership from a residential neighborhood and has never purchased a car and has no employees, it is unlikely to be a thriving business that you would want to bank! 

The Shell companies listed in the indictments include: 
Gifted LLC; Blue Skye Realty; Faiz Automobiles LLC; First Realty Management LLC; FB Morgan LLC; Smart Logistics LLC; Parker Transports LLC; Blaxstone Enterprises LLC; Satisfied Health Care LLC; KC All Pro HVAC Service LLC; Colon Enterprise LLC; Lorena Perez Herrerra LLC; YS Estate and Properties; Victor's Trucking and Pull LLC; Vieta Collection; The Justin Company LLC; [ID-theft victim] Company LLC

That list of companies is not the full extent of the shell corporations operated by the accused.  As an example, Faizou Gnora had many businesses: 

- First Realty Management LLC, 12825 Locbury Cir, #B, Germantown, MD 20874 
- Faiz Express Trucking LLC, 369 W. Side Dr, 102, Gaithersburg, MD 20878 
- Gnora Capital LLC, 6800 Wisconsin Ave #1086, Chevy Chase, MD 20815 
- Premier Strength Training LLC, 12825 Locbury Cir, Apt B, Germantown, MD 20874 
- Faiz Automobiles  LLC,  12825 Locbury Cir, Suite B, Germantown, MD 20874
- Faiz Express Trucking LLC, 225 S Whiting St Apt 307, Alexandria, VA 22304-7132 

Her "Faiz Express Trucking" company is listed with the Department of Transportation, which gives the Alexandria address for the company, but notes Faizou's Gathersburg address for the point of contact. 
 



The companies listed in the indictment had the following accounts use for money laundering:  

Bank of America - 3 accounts
Capital One Bank - 6 accounts 
Citibank - 6 accounts 
JPMorgan Chase - 3 accounts 
PNC Bank - 7 accounts 
M&T Bank Corporation - 2 accounts 
Navy Federal Credit Union - 2 accounts 
SunTrust/Truist - 6 accounts 
Wells Fargo - 5 accounts 
Woodforest Bank - 6 accounts 

As a further example of how tightly connected these cases are, all of the bank accounts listed in the second indictment are also found in the first indictment.  Based on the charges in the two indictments, between 17NOV2020 and 21OCT2022, the crew moved at least $7.2 Million between their shell companies as described below. 






The big unanswered question to me is - THEN WHERE DID THE MONEY GO?  Based on the seizures, very few of the funds were still in the possession of the laundering crew.  So who recruited them?  And where did the funds go when they left their control?  We MUST keep pulling the string and find out! 

I was curious why DCIS was one of the investigating agencies here.   The DOJ Press release says that: "As a result of a law enforcement operation on February 7, 2024, 10 defendants were arrested at locations throughout Maryland and three search warrants were executed related to an alleged money laundering conspiracy involving more than $9.5 million in proceeds from fraud schemes. Law enforcement agents from the Homeland Security Investigations Mid-Atlantic El-Dorado Task Force, the Environmental Protection Agency Office of Inspector General, IRS Criminal Investigation, and the Defense Criminal Investigative Service participated in yesterday’s searches and arrests. Additional defendants are currently fugitives."

The only person among the defendants that I see is military so far is Areal Harris: 




Saturday, February 10, 2024

Identification Documents: an Obsolete Fraud Countermeasure

When I'm talking to bankers and other fraud fighters, I often mention how easy it is for a criminal to obtain a Drivers License bearing any information they desire. I was reminded of this again as I saw the sentencing of Desmond Nkwenya from Brookhaven, Georgia this week. The DOJ press release from the Eastern District of Virginia released 09FEB2024 was entitled "Four Members of Bank Fraud Ring Sentenced." When I read the press release, my eyes went immediately to Desmond Nkwenya, because I was already familiar with that name from a larger case in the Northern District of Georgia that had been announced as "10 charged in business email compromise and money laundering schemes targeting Medicare, Medicaid, and others."

When VoyageATL magazine interviewed Desmond Nkwenya the story was about the young man from Cameroon who was making it in Atlanta under his recording label "Danyvails Entertainment." But since 2016, Nkwenya had actually been making it under another business: Creating counterfeit driver's licenses to enable a multitude of romance frauds and scams.

(photo from VoyageATL)

Anyone who is using the presentation of a Drivers License as a proof of identity theft needs to understand just how simple it is to purchase a D/L online with the photo, name, and address of the purchasers choosing.

In the new case, Brianna Mills, a 28-year old bank teller in Loganville, Georgia would pass bank information to her boyfriend Stanley Desirade, of Lanham, Maryland. Desirade would use the customer information to order drivers licenses from 37-year old Desmond Nkwenya. Desirade would then give the driver's licenses to Terrell Hale, of Rockville, Maryland, who had provided Desirade with photographs of his walk-in crew. At least 25 customers data was used to create at least 100 fake identification documents which were then used to steal $660,082 from the bank customers. They attempted also to steal an additional $1,008,134 but those additional transactions were denied. Desirade was sentenced to six years in prison on 29SEP2023. Mills got an 18 month sentence on 25AUG2023. Hale was sentenced to four years in prison on 21JUL2023.

On 09FEB2024, Nkwenya was sentenced to 30 months in prison, 3 years supervised release, and ordered to pay restitution in the amount of $325,080.

Nkwenya started advertising his ability to create counterfeit drivers licenses in or before 2016. Desirade actually found him through an ad he placed on Craigslist (using another alias.) Nkwenya was not only creating the counterfeit driver's licenses. He also was able to create Mastercard debit cards that appeared to have been issued by the abnk where Brianna Mills was employed.

That other case, which included defendants in South Carolina and Georgia, was related to stealing $4.7 million from Medicare, Medicaid, and private health insurers, and $6.4 million from private and individuals, in a variety of Business Email Compromise and Romance Scam scenarios. Desmond's primary role in this case was also to create identity documents to be used in a variety of frauds.

Desmond Anu Nkwenya of Brookehaven, Georgia was arrested in Texas on his first BEC/Fake ID case on 17NOV2022.In that earlier case, Nkwenya opened shell companies in Georgia in the names JBS Commercial LLC, Raissen Group LLC, and Danyvails Entertainment LLC. He then opened bank accounts at Bank of America, Wells Fargo Bank, PNC Bank using fake drivers licenses, including one in the name Jada Kingston and a Georgia Driver's License in the name Harold Ball. In one example BEC case, $2,328,842 was stolen from the victim by tricking them into send funds to the wrong accounts. $308,650 of those funds were deposited into one of Nkwenya's accounts at Wells Fargo, followed by an additional $57,000 on 01JUL2021 and another $25,000 on 12JUL2021. Desmond also caused his fake "Danyvails Entertainment" account to receive a PPP loan of $47,950 after claiming to have nine employees. He also received a $119,875 PPP loan for another company and their imaginary employees.

Biliamin Fagbewesa of South Carolina - used a stolen identity to open bank accounts in the name of his shell company, Matadam Medical Equipments, and receive $1.4 Million in proceeds from Medicaid. He had a Delaware driver's license with his likeness and a stolen identity's data which he used to open accounts at First Citizens, Truist, Wells Fargo, and TD Bank, and used those accounts to receive both Medicaid fraud funds, and Business Email Compromise funds.

Patrick Ndong-Bike of Atlanta, Georgia - used false Tennessee driver's licenses in the names and contact details of John Arino, Kendrick Odom, and Michael Pulliam, but bearing his image, to open shell companies and then bank accounts for those companies at Regions Bank, Bank of America, Wells Fargo Bank, JPMorgan Chase Bank, and Truist. He used these accounts to receive at least $2,400,000 from multiple Medicare fraud and Business Email Compromise fraud victims. These included a BEC scheme against a hospital in Ohio where a $754,136 Medicare payment was redirected to Ndong-Bike's accounts instead.

Cory Smith of Atlanta, Georgia - opened bank accounts using false identities and received and laundered at least $57,000 in funds from a BEC scheme against a private company.

Chisom Okonkwo of Atlanta, Georgia - received at least $830,000 in BEC fraud schemes, withdrawing at least $535,000 and laundering it through a variety of methods, as well as purchasing herself a luxury automobile with some of the funds. Okonkwo was sentenced on 24JAN2024 to 3 years in prison and ordered to pay $478,538 in restitution. She created alias identities in the names Patrician Young, Desirey Aguilar, Stacy Jack, Lisa Larkin, and Janice Peck, as well as stealing the identities of two real individuals from New Jersey and California and using false driver's licenses to access their accounts. In one case she provided the New Jersey victims name, date of birth, social security number, and a driver's license using her image but the victim's data, in order to purchase a $51,562 Mercedes Benz after acquiring credit in the name of her victim. She did the same with another identity theft victim, acquiring a lease at an the Roxboro in Georgia in the name of the California resident. She lived in the building using the stolen identity from 28NOV2020 through 23MAY2022 before abandoning the apartment owing $15,246 in back rent and fees. She created several shell companies, based in Lawrenceville, Georgia, including A[]Jewelry and Crystals, Young Interior Design, and Larkin Interior Innovation and opened bank account in the names of her aliases and companies at Truist, SunTrust, and Regions Bank. These accounts were used to receive the proceeds of multiple BEC victims, including an automative company in Texas whose payments were diverted to Okonkwo's accounts on three occasions for $268,868, $100,000, and $45,000. Okonkwo also applied for and received Economic Injury Disaster Loans from the Small Business Administration claiming that her company, Larkin Interior Innovation, had five employees and gross revenues of $150,000, none of which was true.

Olugbenga Abu of Atlanta, Georgia - used false identities including in the name "Kingsley Perete" to open bank accounts that received $95,000 in BEC fraud proceeds. Also received $341,000 in a real estate mortgage loan based on patently false information and forged documents, including false W-2 documents and false bank statements. Abu was sentenced to 24 months in prison and ordered to pay $105,500 in restitution.

Trion Thomas of Stone Mountain, Georgia - used false identities to open bank accounts which were used to received $93,000 in Medicare payments that were diverted in a BEC fraud scheme.

Malachi Mullings of Sandy Springs, Georgia - used false identities to create companies and open bank accounts which were used to receive and launder millions of dollars from BEC and Romance Scam programs, including BEC schemes against two state Medicaid programs. In one situation, a Romance Scam victim sent a $200,000 Cashier's Check to Mullings which was then used as part of the payment for a 2017 Ferrari 488 Spider which Mullings purchased in Atlanta. Another Romance Scam victim sent payments of $28,369, $12,000, $20,000, $15,000, $30,000, and $17,000 to Mullings.

Adewale Adesanya of Jonesboro, Georgia - used false identities, including a fake Nigerian passport in the name "Timi Graig" to open a shell company, Blue Springs, and then to open bank accounts at Bank of America, BBVA, JPMorgan Chase, Wells Fargo, Truist (then BB/T), Regions Bank, and Navy Federal Credit Union. These accounts were used to receive funds from BEC Scams, including scams against Medicaid and Medicare, as well as funds from Romance Scam victims. He was eventually sentenced to 48 months and ordered to pay $1,582,510 in restitution. He used some of these funds to purchase two Lexus LX 570s and a Mercedes GLE 350.

Sauveur Blanchard of Richmond, Virginia - used false identities to create multiple shell companies to receive funds stolen from Medicaid programs via BEC schemes. Mr. Blanchard was acquitted of all charged by Judge Robert Payne on 10AUG2023, and I can't wait to read the transcripts to understand why!

Sunday, January 21, 2024

Classic Baggie: Part Three - the Romance Scam Victims

 If you are just joining us, we are reviewing the court transcripts of a Business Email Compromise / Romance Scam Money Laundering case.  Part One reveals "Classic Baggie: A Delaware BEC Case calls him the leader of an International Criminal Organization" and Part Two was called "Classic Baggie: Part 2 - How to run a Money Laundering Operation."

Today, we'll share the stories of three of the romance scam victims in this case. I would normally address them by their surnames as Mr. X or Mrs. Y out of respect, but to help protect their anonymity, I'm using only their first names.

Sally From Ohio

Sally was a 74-year old Ohio woman. Her husband of 42 years passed away in February of 2016. Three years later, Sally joined several online dating websites, including Match.com. In August 2019, she received a message from "Harry Oppenheimer" who was a 79-year old man living in Chicago, a dual citizen of the US and Switzerland, and a semi-retired aeronautical engineer. They talked daily by phone, text, or email and Sally believed she would spend the rest of her days with him.

In September 2019, Mr. Oppenheimer began to ask Sally for financial favors. He claimed he was selected as an independent contractor to rebuild a fleet of airplanes for KLM Royal Dutch Airlines, who had wired him $3.5 Million Euros into his Swiss bank account at Neue Privat Bank. His attorney, Phillip Richardson, said that he had to fly to Switzerland to unfreeze the funds. He provided Sally with a bank statement showing his account held 5,239,800.38 Euros.

In order to unfreeze the account, his attorney needed him to bring a "refundable deposit" of $240,000.

The Email from the attorney read:

"I really abhor putting your hopes up, but I can guarantee we can resolve this muddle amicably by resulting into making the payment of the refundable $240,000 security deposit. This will help in securing the money laundering certificate, as well as qualify Harry Oppenheimer to be cleared by anti-terrorist and money laundering departments. It will also hasting up the process of the funds release. Please be advised that this is a mere suggestion as I still need to contact authorities involved in this, those Harry worked with/for, to get all necessary documentation in place. I also need to get in touch with the IMF money laundering department to be fully guaranteed that."

A second request came on 04DEC2019 after Sally had sent the $240,000, stating that an additional $511,000 was also needed,and included a promisary note that Sally "will be refunded and paid" once Harry was able to gain full access to his funds "in the amount of $5,239,800 in NPB."

On 13MAR2020, a new document came from the "International Monetary Fund."

"Per your last request, having thoroughly examined the situation on ground, the board has decided that we will not be held responsible in any way for the misconduct of your former attorney, Phillip Richardson. You solely appointed him your representative with all parties involved granting him full power of attorney. In conclusion, the contractor's funds that were initially set to be released on the 16th of January 2020, shall now be rescheduled for April 2nd, 2020, provided that Harry Oppenheimer completes the final payment of $200,000 before the deadline."

Sally wired $511,000 on or about 06DEC2019 to "Debbie" who Mr. Oppenheimer represented was the wife of an attorney named Charles Schneider. (This wire was recalled by the bank.)

Sally also wired $261,000 on 13DEC2019 from a Navy Federal Credit Union account in the name of Top Slope Ventures, LLC. (We saw in Part 2 that Top Slope Ventures is the name of Michael Hermann's watch-selling business.)

She also wired $150,000 on 26MAR2020 to a Citibank account in the name of KLAM Properties.

She was also instructed by "Attorney Phillip Richardson" to wire funds to a bank account associated with the Mullings Group LLC at Delta Community Credit Union.


Richard From Delaware

Richard is a 66-year old man who lives in Delaware, married, but separated from his spouse for four years. He worked selling medical devices in 2019 and 2020, the period of interest for this case.

Richard met Samantha Smith online in October 2019, on the dating website Silver Singles. Samantha was a Gemologist who had a degree in the same from the University of New Zealand. She was currently living in Istanbul, Turkey, where she was working on a project related to mining precious stones, but her permanent residence was Norfolk, Virginia.

They began talking regularly through text message and email. She sent photos of herself to Richard via email, and he received a video of her describing her project in Istanbul. Samantha had an attorney named Sousa Darius, who began calling him on the phone several times a week. To validate his identiy, Sousa Darius sent Richard a copy of his Turkish passport.

Samantha had claimed that her project was a success and that tshe had been able to mine a quantity of Tanzanite stones. In order to sell them, however, she had to receive a certificate of completion from the Turkish government, and later had to pay taxes on the stones, prior to selling them.

Richard had to go to an M&T Bank branch near his home to arrange for wire transfers, which he refused to do until he had a notarized contract from Sousa, proving he would get the money back.

In the contract, Richard commits to transfer 22,000 Euros to a bank account designated by Samantha Smith, and that in return, he would receive 8% of the gross funds, or 144,000 Euros from the "Project Bank Account."

Richard produced bank statements that showed he had wired $25,000 (the equivalent at that time to 22,000 Euros) to "Delores R. Shawhan" based on the instructions he received from Attorney Sousa. Richard also transfered $26,624.37 from his pension account at Chase Bank to himself to cover that wire.

A second contract was for Richard to send Samantha $40,000, for which he would receive 1.5% of the gem sales, or 270,000 Euros (from the supposed sale of 1.8 Million Euros for the Tanzanite.) This $40,000 was also sent to Delores R. Shawhan. (Richard transferred himself another $41,514.37 from his Chase Bank retirement account to cover that wire.)

A third request came, promising him he would receive 455,000 Euros from the "total contract sum" if he would send $100,000. He did the wires, again to Delores R. Shawhan, and again moved funds from his Chase Pension account (this time $127,738.) Part of these funds, $30,000, were sent via wire to Baines Properties.

At one point, Attorney Sousa informed Richard that Samantha was imprisoned, and needed additional funds, again. When Richard pushed back, Sousa drew up a Power of Attorney and promised Richard that he would be given the ability to draw funds to repay himself directly from a Trust Fund that Samantha Smith's father had set up for her at Europa Off Shore Bank.

To cover these additional payments, Attorney Sousa modified their contract so that it now promised 9 40,000 Euros from the "total contract sum" if he would pay $166,000. [this analyst's understanding is that the $166,000 was cumulative, including previous payments sent.] Which he did. He sent an international wire transfer for $33,000 to "Charles Globe Teskitil Tecaret Sirketi Limited" which was who Attorney Sousa told him to send the funds to.

Later he received documents from Europa Off Shore Bank via email proving that the funds were really available and providing him a PIN that he could use to confirm this himself. When he logged in to the Europa Off Shore Bank, he could see that more than $9 million were in the balance of the account but there wasn't a way that he could find to transfer any of the funds to himself.

When he contacted Europa Off Shore Bank's Customer Support via email, he was told that he could not withdraw the funds because there were fees that had to be paid first. Dormant Account Fees totaling $88,950, Reactivation Fees totaling $52,000, and a Tracking Code fee of $45.

To help cover these fees, he sent a cashier's check in the amount of $42,500 which the Europa Off Shore Bank had agreed would be enough to allow them to open the account. After receiving the check, Europa Off Shore Bank informed him that there were still issues which must be resolved in person, and that he needed to fly to Amsterdam to do so.

To wrap up Richard's testimony ... he made six payments, totaling $205,500, which he says he would not have made had he known the gem mining project did not exist and that there was no Europa Off Shore Bank.


(The next witness is a Financial Crimes Examiner, Thomas Michael Trusty, from JP Morgan Chase ... who testifies about deposits being made to Mr. Lawal's account that he was asked by Bank of America to review)

Frank from California

This story may sound rather familiar. Frank is a 75-year old man from California. He and his wife separated after 33 years in 2017. In 2020, Frank made a profile on Silver Singles and was approached by a woman who wanted to develop a relationship with him. Samantha Hope Smith was a gemologist from New Zealand. Her moniker on the site was "Pretty Gorgeous" and they met on the platform in March 2020, but she quickly asked to move their conversation off the dating website. She claimed that unseemly individuals were contacting her on Silver Singles and that she was canceling her subscription but wanted to stay in touch with him.

Samantha was from New Zealand. In one of her first emails she explains:

"I have a mixed upbringing, my papa is from Florida, and my mom is from New Zealand. I was born in Florida. In my teen years, we lived in New Zealand. We lived in the best side of town, a nice house in Wellington by the lake. I grew up with mountains, creeks, hills, and basically nature at its finest."

She would later send a copy of her Florida drivers license to Frank.

For 16 days, from March 8, 2020 until March 24, 2020, they had "long very emotional sort of conversations telling each other about ourselves, trying to find common ground, and many of the emails were very, very lengthy." He was romantically interested in her.

Frank says that Samantha was in Istanbul, Turkey where she was mining Zultanite. But it turns out, she needed a Zultanite gemstone certificate from the Turkish government, and they were expensive. It was going to cost $316,500 to process the certificate.

About the same time, Samantha decided to fly to Reno and sent her itinerary to Frank. He was supposed to meet her there at the airport.

Turns out Samantha the Zultanite miner had something else in common with Samantha the Tanzanite miner. She had an online bank account that she wanted Frank to access for her. "AffinityAllied[.]com" with the account number 1867364926. She had $2 million in the account and needed Frank to send her $300,000 from that account to help cover the Gem Certificate.

There were other asks for funds as well. The court read into evidence this email from Samantha to Frank:

"Good morning, Frank. I had a restless night. I wish you were around to make me feel much better. I appreciate your concerns and your suggestions yesterday towards me, and I can't wait to be back home and get to know more about you. Loan or no loan, I still want to meet and be with you. I understand you not being comfortable in loaning me over $16,000 when you haven't met personally, I may not feel the same way too, but I think I would help if I were to be in your shoes. I want you to know that this project means a lot to me, as I have invested so much of my money and time. I am almost done before this happened. I did plan for extra expenses, I have to utilize the money I was meant to use to pay for the fee in the past, due to extra expenses, that is why I asked you to help me transfer money from my account, again thanks for helping me out. I still have about 5,000 in my balance as you know."

He decided to send her the money. He received "very specific instructions" to send the money to Samantha's relative who had an account at Huntington National Bank in the name "Luxe Logistics Transportation LLC."

He wired the money from his Charles Schwab account. Before the transfer was made an employee of Charles Schwab called him and "her last words to me," Frank says, were "are you sure you know these people do you really want to send this in that there are a lot of fraudulent schemes out there." Frank says the second he got off the phone with the Schwab agent, he was on the Internet looking for Luxe Logistics and he found them in Los Angeles.

About this time, Frank received an email from Samantha informing him that she had her Zultanite professionally appraised and that it was valued at $17,650,000.

But Frank had already determined that Luxe Logistics was a fraud and he cut off communications. He made five phone calls to Charles Schwab that same night and was able to get the wire stopped.


(Stay tuned for Part Four! We still have two more days of testimony to review! )

Saturday, January 20, 2024

Book Review: The Crypto Launderers: Crime and CryptoCurrencies

The Crypto Launderers: Crime and Cryptocurrencies from the Dark Web to DeFi and Beyond - by David Carlisle   

I wish I had a way to review this book without having first read last year’s “Tracers in the Dark.” While Tracers talked about the people involved in investigating various crypto-based crimes and those early researchers who made the tracing process possible, Carlisle tells many of the same stories, but in a less engaging way. The facts are there, and when they talk about the same cases, they align nicely. But Andy Greenberg’s Tracers makes those cases stories about people, while Carlisle portrays facts without character development which I would not have realized was necessary or useful in a book on Money Laundering had I not read Tracers first. 

 As to the facts? I learned a ton, especially by feeding my ADD nature by chasing interesting footnotes — more than 350 references are provided! Thank you!!! In the early part of the book he covers all of the mandatory cases: Silk Road, Mt. Gox, etc. 

Where this book is great, and it is far superior to Tracers as an educational resource in this regard, is how money-laundering works in Crypto. Mixers and Coinswaps are explained well, with several of the related cases such as Helix and Bitcoin Fog, being explained. The importance of regulation and how regulators have followed behind crypto developments is a major theme of the book. From regulating exchanges, to Bitcoin ATMs, to privacy wallets such as Wasabi Wallet, and the debate on whether privacy wallets can or should be regulated. The attempts of FinCEN to introduce further regulations and the (in my opinion) Astroturfed outcry against them is especially interesting. 

An example of what I believed to be a very rational and necessary AML policy would be the FinCEN Draft Rule-Making Proposal, introduced 18dev2020 for “requirements for certain transactions involving convertible virtual currencies or digital assets” tried to require transactions greater than $3k to require proof of the identity of the recipient if sent to a private wallet, and would have required a currency transaction report on any movement above $10k. The outlash was severe and the rule-making placed on hold. 

A nice coverage of the history of crypto sanctions by OFAC is also portrayed, from Suex, Chatex, Garantex, Bitzlato, and IRGC-related ransomware. And a history of the evolution of ransomware, which would not be possible without those unidentified and unaccounted for large currency transactions that cryptocurrency has enabled (and that FinCEN has been TRYING to prevent!) 

One example of sanctioning crypto was the OFAC sanctions against Lazarus Group Ethereum addresses, sanctioned along with one of their chosen Mixers, Blender.io. (Sanctioned addresses are listed here.)  I appreciated some of the additional details Carlisle provided on Lazarus Group crypto hacker money launderers Tian Yinyin and Li Jaidong (snowjohn and khaleesi) who moved at least $100M, including purchasing at least $1.4 M in Apple iTunes gift cards! (Though again, no “characters”, just names.) 

The latter part of the book does a nice job explaining the way Ethereum opened up a number of possibilities with Smart Contracts. Carlisle does a great job explaining Ethereum and ERC-20 tokens and how DAOs, DEXs, and DApps are built using the Smart Contracts of Ethereum with more on the DeFi system including how Bridges work. He also explains NFTs and how they also were supercharged by ERC-721 (and abused by thieves, fraudsters, insiders, and money launderers.)  This was the best introduction to that whole ecosystem that I’ve read. Great job! 

The Bitfinex hack, which opens the book, focused on 94,643.29 BTC from 2016 sitting under a microscope, untouched for six years, until it moved in Feb 2022 leading to the arrest of Dutch and Razzlekhan with $3.5 Billion seized, felt like it was set up as the climax of the book as we returned to the story from the opening chapter. The intermediary chapters helped us understand the now-revealed mechanisms, but again, it was facts without characters, which is fine - I just got ruined by the engagement of Tracers. 

The final chapter seems like something the Elliptic marketing department forced on him. (The other major crypto industry players all do the same thing, so not picking on Elliptic. It was the first crypto tracing tool I ever used!) The obligatory industry toeing the line of “oh, but less than 1% of crypto transactions are illicit!” was a frustrating end to an otherwise decent book. No one will ever convince me that the vast majority of crypto transactions involve no “transaction” at all, but are wash trading at an inconceivable scale designed to manipulate the value of cryptocurrencies to encourage investment and enrich the HODLers and corporations whose livelihood crypto is. 

Fantastic content - even possibly as an accompanying text for a crypto crime course at a university (yes, my wheels are turning!) especially with the rich depth of referenced articles, policies, and cases. But for a fun crypto crime STORY I would still go with “Tracers In the Dark.”

Saturday, January 13, 2024

Classic Baggie: Part 2 - How to run a Money Laundering Operation

In Part 1 of this story Classic Baggie: A Delaware BEC Case calls him the leader of an International Criminal Organization the prosecutor in the case of Olugbenga Lawal has given his opening arguments, where he calls Classic Baggie the leader of an international criminal enterprise.

On the first day of the trial, before selecting the jury, an FBI Agent specializing in Transnational Organized Crime is brought in before the judge. This agent was supposed to testify about how West African Organized Crime works. The prosecutor and the judge discussed it before the Agent was summoned, and the judge said she would not allow the Agent to refer to it as "West African Organized Crime" in his testimony, even though the prosecutor assured her that there were unique things about how West African Organized Crime functions, because the judge believed it would tend to create a prejudice against the defendant in the minds of the jury, since the defendant is West African himself. After the jury was brought in and selected and the case began, a different FBI Special Agent, who works on a White Collar Crime Squad is brought in to testify. Here's a small portion of that testimony, which takes the nature of a Question and Answer session, with the questions being asked by the prosecutor, Mr. Wenger:


BY MR. WENGER:
Q. Did the FBI's investigation determine whether that south Florida based group was operating independently or at someone else's direction?
A. Yes, we did.

Q. What did the investigation uncover?
A. We learned that the group was operating at the direction of an individual in Nigeria.

Q. And are you aware of who that individual in Nigeria is?
A. Yes. His name is Ehonre Oluwaseun, which I can spell if you need but he's better known publicly and to law enforcement as Classic Baggie.

Q. Can you briefly describe how the investigation uncovered this group who was operating at the direction of who I am go to refer to as Classic Baggie?
A. During our investigation we seized a number of cell phones from Michael Hermann and executed a warrant from the cell phones and we were able to review text messages between Michael Hermann and Classic Baggie.

Q. Over the course of executing that warrant, did that also further the investigation?
A. Yes, it did.

Q. How did that further the investigation in terms of identifying who this group was operating at the direction of?
A. We -- I identified other members of the network who were also working for Classic Baggie.

Q. Now, over the course of the investigation, did the FBI identified bank accounts controlled by Michael Hermann, Rita Assane and Dwight Baines?
A. Yes.


Now its time to hear from the Government's witness, Michael Hermann, who is also charged in this case. His testimony was on Day Two of the trial and I've cut some portions of it. We'll start with some of his personal background and who the key players in the case are, all from the courtroom transcript of Day Two. I'm including all this extra detail especially for the benefit of my overseas readers, who may be less familiar with how U.S. court process works, I know it is long, but I think you'll be glad to have read the details!

DAY TWO - Direct Examination by Mr. Wenger

MICHAEL HERMANN, having been duly sworn, was examined and testified as follows:
DIRECT EXAMINATION
BY MR. WENGER:

Q. Good morning, Mr. Hermann.
A. Good morning.

Q. How old are you?
A. I am thirty-five.

Q. Where did you grow up?
A. I grow up in the Ivory Coast, West Africa.

Q. When did you move to the United States?
A. In 2005.

Q. How old were you then?
A. I was eighteen.

Q. When you first moved to the United States, where did you live?
A. I lived in Oklahoma City, Oklahoma.

Q. How long did you live in Oklahoma?
A. About ten years.

Q. Did you go to college?
A. Yes.

Q. Did you graduate from college?
A. Yes.

Q. Where did you go to college?
A. At the University of Central Illinois.

Q. What did you study?
A. Finance.

Q. Are you married?
A. Yes.

Q. How long have you been married?
A. About twelve years.

Q. Where were you living in the 2019, and 2020 time frame?
A. I was living in Miami.

Q. And how long had you been living in Miami at that point?
A. Probably about like two years, year-and-a-half, two years.

Q. Were you living with your wife at that time?
A. No.

Q. Where was your wife living?
A. She was in Texas.

Q. Were you separated from your wife at that time?
A. Yes.

Q. Turning your attention to 2019, what were you doing for a living at that time?
A. In 2019, I was throughout the part of the year, I was doing different things, I was in marketing, I had a marketing company and I was also an apprentice for a watch business.

Q. What was the name of your marketing company?
A. Top Slope Ventures LLC.

Q. Where you making a lot of money doing those things in the first part of 2019?
A. Not really.

Q. At some point in 2019, did you get involved in the money laundering conspiracy?
A. Yes.

Q. Are you here to testify about your involvement in that money laundering conspiracy?
A. Yes.

Q. Were you a member of that conspiracy?
A. Yes.

Q. Who got you involved in that money laundering conspiracy?
A. Classic Baggie.

Q. Is that a nickname?
A. Yes, it's a nickname.

Q. Do you know Classic Baggie's real name?
A. Ehonre Oluwaseun.

Q. Approximately when did you work -- I'm going to refer to that individual as Classic Baggie, that's how you knew him best?
A. Yes.

Q. Approximately when did you begin working with Classic Baggie to launder money?
A. Around November of 2019.

Q. And where were you living in November of 2019?
A. Miami, Florida.

Q. How long were you actively involved in this money laundering conspiracy?
A. About a year.

Q. Did you work with anybody else in the Miami area as part of this money laundering conspiracy?
A. Yes.

Q. Who did you primarily work with?
A. I worked with Rita Assane, and Dwight Baines.

Q. How did they get involved in this money laundering conspiracy?
A. They were around the vicinity, so I got involved.

Q.Before you got involved with Classic Baggie, had you ever been involved in money laundering before?
A. No.

Q. How did you know what to do?
A. Classic Baggie taught me everything I needed to know.

Q. Mr. Hermann, when you talk about he taught you everything you needed to know, who were you referring to as he?
A. Classic Baggie.

Q. How did you communicate with Classic Baggie?
A. Primarily WhatsApp messages, phone call and video calls.

Q. And as you really got started with the money laundering, how frequently were you communicating with Classic Baggie?
A. Every day, every other day.

Q. Can you please turn to what is the smaller binder in front of you with your name on the front. And flip to the document marked Government Exhibit 132(c). What is that document?
A. This is a picture of Classic Baggie.

Q. Do you recognize that individual as Classic Baggie?
A. Yes.
MR. WENGER: The government moves to admit and briefly publish Government Exhibit 132(c).
MR. SPARACO: No objection.
THE COURT: Thank you. Its admitted.

Q. That individual up there on the screen is who you would have video calls with?
A. Yes.

Q. And who you would be in communication with?
A. Yes.

Q. And who taught you how to do money laundering?
A. Yes.

Q.Where did you understand Classic Baggie to live?
A. Nigeria.

Q. Is that based on your conversation with him?
A. Yes.

Q. And your video calls with him?
A. Yes.

Q. What did you understand Classic Baggie to do in Nigeria?
A. He told me that he had a few businesses, including the construction company. And a money business where he exchanged money from across the countries and stuff, also in the car import and export car business.

Q. Through the course of your communications with Classic Baggie, does the name Olugbenga Lawal come up?
A. Yes.

Q. How did that first come up?
A. It came up when he first asked me to do small favors to him at the beginning, he had me send money to Olugbenga.

Q. And did that name Olugbenga Lawal repeatedly come up over the course of your money laundering relationship with Classic Baggie?
A. Yes, a lot.

Q. When that name would have come up, how would it come up?
A. It would come up, he would tell me to send $50,000 to Lawal with an address or something like that, send CashApp to Lawal and send me the details and things like that, yeah.

Q. Have you ever met Olugbenga Lawal?
A. No.

Q. Have you ever spoken to him?
A. No.

Q. Would you know what Olugbenga Lawal looks like?
A. No.

Q. Did you also communicate with Rita Assane and Dwight Baines about your money laundering activities?
A. Yes.

Q. And how would you communicate with them about the money laundering activities you were doing together?
A. Via text message and phone calls.

Q. Would you use any apps?
A. WhatsApp messages, yes.

Q. Is that also how you were communicating with Classic Baggie?
A. Yes.

Q. Ms. Busch, can we pull up what's been previously admitted as Government Exhibit 205? Zoom in on that chart. Mr. Hermann, is that a chart that we've gone over before?
A. Yes.

Q. And you've looked at all those government exhibits that are referenced in the right-hand column?
A. Yes.

Q. And do you understand that these are all messages that on-these exhibits were all messages obtained from phones of yours?
A. Yes.

Q. And are those names in the left-hand column contacts that were saved in either your phone or your WhatsApp app?
A. Yes.

Q. I want to first start with the top line of these rows. Who is Mike RM Plug?
A. That's me.

Q. Is that a user name, or a name you had used on your phone or your WhatsApp?
A. Yeah.

Q. How about Mike Miami?
A. That's me, also.

Q. And Michael Hermann?
A. That's me.

Q. Now I want to look at the bottom names on each of those rows. Who do you have saved in your phone as Manu New S?
A. Rita Assane.

Q. Who do you have save in your phone as Manu Newcell?
A. Also Rita Assane.

Q. Who do you have saved in your phone as Baggie?
A. Classic Baggie.

Q. Who do you have saved in your phone as D Heavy?
A. Dwight Baines.

Q. Who do you have saved in your phone as Heavy 2x?
A. Dwight Baines, also.

Q. And all those messages referenced in those government exhibits we have gone over before, were all those conversations centered on your money laundering activities with those various individuals?
A. Yes.

Q. We're going to get into more details about your involvement in money laundering in a moment. First, I want to skip ahead to the winter and spring of 2022. Were you charged in Federal Court for your involvement in this money laundering conspiracy?
A. Yes.

Q. Were you arrested on those charges?
A. Yes.

Q. About when were you arrested?
A. About March of 2022.

Q. And do you remember where you were arrested?
A. I turned myself in here.

Q. Here in this court house?
A. Well, in Delaware, but I think it was in a different court house, if it was here, I don't remember.

Q. You remember turning yourself in to a Federal Court house somewhere in Delaware?
A. Right. Yes.

Q. Did you get to go home after you turned yourself in?
A. No, bail was set, and I was put on house arrest.

Q. When you said you were not able to go home, does that mean you were not able to go home to Miami?
A. That's correct, yes.

Q. Were you kept in custody or any significant amount of time after you turned our yourself in?
A. Yeah, one day and then I was sent to Texas.

Q. Who was living in Texas?
A. My wife and my kids.

Q. Did you have any restrictions placed on you at that time?
A. Yes, I was on house arrest.

Q. Have you been living in Texas under similar restrictions ever since that time?
A. Yes.

Q. Did you ultimately decide to cooperate with the government's investigation in this case?
A. Yes.

Q. Did you later agree to plead guilty to your federal charge?
A. Yes.

Q. Can you turn to paragraph 15 of this agreement. Just briefly read it and look up when you've read that paragraph.
A. (Witness reviewing document. ) Yes.

Q. What do you understand that paragraph to mean?
A. It means that I would be responsible along with the co-conspirators to repay restitution for the sum of 3,761,066 back to the victims.

Q. So restitution was $3,761,066?
A. Yes.

Q. What's your understanding of what restitution is?
A. It is paying it back.

Q. Paying it back to who?
A. To the victims.

Q. That's the amount you've agreed to work to pay back?
A. Right.

Mr. Hermann starts recruiting more money launderers for Classic Baggie

Q. I want to turn back to the money laundering operation, and I want to begin by asking you about your relationship to some of the individuals that we already talked about. How long have you known Rita Asane?
A. Over a decade.

Q. How did you meet her?
A. I met her through a friend of her sister at the time.

Q. And what was the nature of your relationship with Ms. Asane in 2019?
A. We were romantically involved at that time.

Q. How long have you been romantically involved?
A. Probably about a year-and-a-half at that point.

Q. Why did you turn to Ms. Asane to join the money laundering operation?
A. She was close, and pretty much saw everything, just being that close, when I was talking to Classic Baggie and every time like that, so she wanted to join, she saw the opportunity also and I was like yeah, it works out, like I talked to him, he was okay with it, and she joined.

Q. Did she hesitate at all?
A. No, she was excited.

Q. Was she financially struggling at the time?
A. Yeah, we all were.

Q. Did you say you were all financially struggling at the time?
A. Yes.

Q. Turning to Dwight Baines, how did you meet Dwight Baines?
A. I met him at the beginning of 2019.

Q. How did you meet Dwight Baines?
A. I was selling some clothing online, on an app called Offer Up, and he contacted me through Offer Up and we started talking, I told him about the jeans, clothing, we started being friends and we were cool from there.

Q. Why did you turn to Mr. Baines to join the money laundering conspiracy?
A. He was already in that world, you know, so it was easy for me to have a conversation with him as well.

Q. When you say he was already in that world, can you briefly explain what you mean by that world?
A. He was already doing like small scams, like getting apartments and small things like that.

Q. Do you know if Mr. Baines had any association with the name Kyle Miller?
A. Yeah, that was his alias.

A Strange Way to Buy A Watch: How Mr. Hermann met Classic Baggie

Q. I want to focus on your relationship with Classic Baggie. About when did you first have contact with Classic Baggie?
A. I first had contact with him when I sold a watch to one of the biggest artist in Nigeria, his name is Davido, so when I sold him the watch, he got it and had a concert in Dubai, he was so excited about it, he posted on his story, I think at the time he had 20 million followers, and when he posted it, he posted I was one of the best watch dealers, and on his story he tied me in there and blew up my Instagram page, he has a big Nigerian following, and a bunch of those people followed me and out of those when Classic Baggie started following me.

Q. Was this had in the summer of 2019?
A. That happened around August of 2019.

Q. So around August of 2019, that summer, to early fall, did you continue to talk to Classic Baggie?
A. Yes.

Q. And at that time, what was the focus of the relationship between you and Classic Baggie?
A. At that time it was me being apprentice watch dealer talking to a client, he wanted to buy a watch, so we was basically talking about the whole watch thing, just send me a picture of this watch, how much is this, responding back, things like that, so it was just business.

Q. Are we talking about $10 watches, $10,000 watches, $100,000 watches?
A. No, we talking about $275,000 watches, 300,000, type of watches.

Q. You said you were working as an apprentice at that time. Can you just briefly describe the business relationship with the people that you were apprenticing for?
A. Sure. So I have been working under them for -- they're watch dealers, right, so I wanted to learn the business, so I was working with them going to the store and things like that, like learning the business for over a year just working for free and just trying to learn, going to watch events, conferences to get familiar with the business and try to get sales. So my job was to take pictures of watches, post them on social media, promote it, go out and try to network and try to get clients for them so I could make a sale and make a commission from the sale.

Q. Did you wind up selling any watches to Classic Baggie?
A. Yes.

Q. What watch did you sell?
A. I sold him a Richard Mille RN11-03 McLaren.

Q. How much money did you sell him that watch for?
A. $275,000.

Q. When did that happen?
A. That happened in November 2019.

Q. So when you were apprenticing, how much money did you make when you sold a $275,000 watch?
A. I didn't make that much on this watch in particular. They just give me like $2,000.

Q. And when you were talking to Classic Baggie about this watch purchase, how were you communicating with him?
A. At first he contacted me through Instagram, and then we moved to WhatsApp, send me his number through WhatsApp, it was easier to communicate.

Q. Did Classic Baggie write you a personal check for $275,000 to buy that watch?
A. No.

Q. Did he wire you $275,000 from a personal Nigerian bank account to buy that watch?
A. No.

Q. How did Classic Baggie pay for that $275,000 watch?
A. He had someone make cashier checks in small increments to pay for the watch.

Q. And where was that person located?
A. In Georgia.

Q. In the United States?
A. Yes.

Q. So Classic Baggie wasn't depositing those cashier's checks?
A. No.

Q. Where were those cashiers's check getting deposited?
A. To the business bank account of my boss, my partners for the watch business.

Q. Is that how you were expecting to get paid?
A. No.

Q. Is that an unusual way to get paid for luxury watches?
A. Yes, there is usually require a wire, direct wire so we can make sure we track and know everything, but he paid through cashier checks, different cashier checks for different companies.

Q. Did that raise any red flags for you or the people you were working for?
A. Yes, at the time, yes.

Q. Can you describe why that raised red flags for you and the people you were working for?
A. It was, as I said, unusual and we sent them the wire information and he replied with a receipt of a payment, but it looks like it was a deposit. So it was weird, and they had to look into it more, just get more information about this guy, the way he was paying.

Q. Can you turn to that slightly larger binder that's in front of you that has Government Exhibits 300 to 405. Can you take a moment to look at what's marked as Government Exhibits 402(a) through 402(d-1).
A. Yes.

Q. Do you recognize those documents?
A. Yes.

Q. Are these some of those phone messages we were talking about earlier?
A. Yes.

Q. Who are these phone messages between?
A. Those are messages between Classic Baggie and I.

Q. And over these couple of exhibits, what are you talking about with Classic Baggie?
A. In this I am discussing with Classic Baggie, in here he asked me, he wanted to buy three watches, I confirmed how many watches. And we basically exchanging what he's asking me to send my information to receive the payments for these watches. So I sent him the wire information for the watch business.

Q. I want to talk to you about a few of those government exhibits. If you could focus your attention first just on 402(a) and 402(b). Ms. Busch, can you please pull up Government Exhibit 402(a). And zoom in on that middle message on page 4 of this exhibit. And just the first time we're looking at one of these up close, I want to talk about a few different parts of this message. Mr. Hermann, up on the top left-hand corner where it says from, what name does it say?
A. Baggy.

Q. Who is baggy to you?
A. That is Classic Baggie.

Q. What's the date of this message on the bottom right-hand corner?
A. November 20th of 2019.

Q. And what is Classic Baggie sending you in this message?
A. He's sending me a picture of a receipt from a deposit from -- to pay for the watch that he purchased.

Q. Ms. Busch, can we please pull up Government Exhibit 402(b), which is a larger version of that attachment. Mr. Hermann, can you explain again what this receipt meant to you?
A. This receipt was deposited, that would go towards the purchase of the $275,000 watch that he sent, that was his confirmation that he sent a deposit towards that watch so he sent it to me.

Q. Again when you say he sent the deposit, did he make this deposit?
A. No, he had somebody else make a deposit.

Q. This message was dated November 20th, what's the date of that receipt?
A. November 20th.

Q. Thank you, Ms. Busch. Ms. Busch, if you could please pull up Government Exhibit 402(c) to focus on that top message. Who is this message from, Mr. Hermann?
A. Baggie.

Q. What's the date of this message?
A. November 21, 2019.

Q. And what is Baggie sending you in this message?
A. He's sending me another payment that will go towards the purchase of the $275,000 watch.

Q. Ms. Busch, could we pull up 402(c-1), which again is a larger version of that image. How much was this deposit for?
A. $82,700.

Q. Again, what accounts are these deposits being made into?
A. They are depositing the money into the Chase account for my business partners in the watch business.

Q. What's the date of this receipt?
A. November 21st, 2019.

Q. Did you have a conversation with Classic Baggie about who was depositing these checks?
A. Yes.

Q. If you could turn your attention to Government Exhibit 402(d). Just briefly read through the messages contained in 402(d). What are you talking about with Classic Baggie in those messages?
A. In these messages, I asked him the send me more information about whoever is sending the money, because we're concerned about the way that the money was being deposited into the account, and I urged him to send more detail about the person sending the money or the company, and just send more information, ID and things like that, just to verify.

Q. Ms. Busch, can you please pull up Government Exhibit 402(d), and focus on the last message of page 2. Can you explain what's going on in this message, Mr. Hermann?
A. This is a forwarded message that Classic Baggie sent me, and this is the information of the person that sent the payments to the business account for the watch.

Q. You say send the payments, do you mean the person that was depositing those cashier checks?
A. Right.

Q. And sending those receipts?
A. Correct.

Q. We're going to see this word forwarded, in the top left-hand corner on quite a few messages. Can you explain based on your use of WhatsApp what that means?
A. It means a message that has been forwarded from another person that was sent to me.

Q. Based on your understanding, would Classic Baggie have typed out the information on that message or would you have forwarded that information from somebody else?
A. Right, he had forwarded that information from somebody else.

Q. Can you just read the business name and individual name that appears on this message?
A. Sure. It is the Mullings Group LLC, and Malachi Mullings.

Q. Thank you, Ms. Busch. If we could leave out Government Exhibit 402(d), and turn to the top of page 3. Can you zoom in on that top message. What does that message mean to you, Mr. Hermann?
A. This message is a forwarded message from Classic Baggie with the ID of the individual that sent the payments, the deposit to this account.

Q. Why were you getting this ID?
A. I was getting it to verify the information that I previously was asking for to make sure that whoever is sending the money you know, is actually the person.

Q. Can we please pull up Government Exhibit 402(d-1) which again is a larger version of that attachment. What's the name on that driver's license?
A. Malachi Anthony Mullings.

Q. Is that an individual that you ever met in person?
A. Yes.

Q. And what resulted in you meeting Malachi Mullings in person?
A. I had to meet him because Classic Baggie arranged a meeting between us for him to drop me off some money.

Q. And over the course of your relationship with Classic Baggie, did you develop an understanding of what Classic Baggie's relationship was to this Malachi Mullings person?
A. Yeah, they were working together.

Q. Thank you, Ms. Busch. Now, at some point did Classic Baggie start to ask you for favors that had nothing to do with $275,000 watches?
A. Yes.

Q. Can you tell me how that started to happen?
A. That started in -- at the end of -- towards the end of 20 -- November of 2019. He asked me to pick up $25,000 from someone in Fort Lauderdale in Florida, and it was supposed to go towards the purchase of the watch, because he was making payments, and I told him that we couldn't take cash because of the way my partners accept money, it has to be straight wired, the way you have been paying is already complicated, so I can't add cash to it, it's going to be too much, he did insist that I go pick up the money, because he said it would be safe with me, than the person he had the money with, so I went and picked up $25,000.

Q. Is that a normal thing you do with people, go and pick up tens of thousands of dollars in cash and hold on to it for them?
A. No.

Q. Why were you doing this for Classic Baggie at that time?
A. At that time, I just wanted to be on his good side, have some small favors, hopefully because he looked like he had a lot of money, I just wanted to be cool with him and be on his good side, just do favors, help him out, it didn't seem like anything crazy, hold on to the money, I'll tell you what to do, I was like okay, cool.

Q. What did he wind up asking you to do with that $25,000 or so in cash?
A. He started asking me to send cashier -- deposit money orders, make money orders with it, like he told me to go to like Publix, for example, just go do money orders, $5,000 and send it to this person, do another 5,000, 2,000, send it to this person, things like that.

Q. What is Publix?
A. Sorry, it's a store, it's like a Wal-Mart or something like that in Florida, very popular.

Q. I just want to break this down a little bit. He would ask you to go to Publix, and how would you get a money order?
A. You go to the cashiers, customer service people and you just ask them, you want money orders and you give them cash and they give you money orders and then you have it, and you can send it to whoever.

Q. And Classic Baggie gave you names of people to send those money orders to?
A. Yes.

Q. And would you mail them at times?
A. Yes.

Q. Did he also ask you to send any mobile payments from that $25,000?
A. Yes.

Q. Can you turn to what is marked as Government Exhibit 402(g), 402(g-1) and 402(g-2). Mr. Hermann, if you could turn in your binder and take a look at what's marked as Government Exhibit 402(g), 402(g-1)and 402(g-2).
A. Yes.

Q. Do you recognize those documents?
A. Yes.

Q. And at a high level, what are you talking about with Classic Baggie in these documents?
A. In these documents, Classic Baggie sent me instructions to send payments to Lawal R.

Q. Ms. Busch, could you see what it looks like if we pull up 402(g), just the last two messages on that page. Is that the instruction that Classic Baggie is sending to you?
A. Yes. He sent me a screen shot of this and with a name of like a CashApp tag, I had to send money to.

Q. Could you scroll down to that next message Ms. Busch, what does that say Mr. Hermann?
A. He say kindly pay my balance in here.

Q. What balance is Classic Baggie referring to?
A. He's referring to the money that he has with me.

Q. Ms. Busch, could we pull up Government Exhibit 402(g-1), which is a larger version of that attachment that Classic Baggie was sent to Michael Hermann. What's the name on that CashApp account?
A. Lawal R.

Q. At that time, did you have any idea who or what Lawal R was?
A. No.

Q. And can you please turn to the next -- Government Exhibit 402(G-2), Ms. Busch. Mr. Hermann, what is this message, what is this image?
A. This is a screen shot that I sent back to Classic Baggie to let him know that I in fact went ahead and made the payments that he asked me to make for the sum of $3,500.

Mr. Hermann starts laundering money for Classic Baggie

Q. Thank you, Ms. Busch. Now, at this time, do you fully appreciate that you are working with someone to launder money?
A. At this time I am --

Q. At the end of November, very early December?
A. At that time, I am not in the mind frame that I'm actually laundering money at that time.

Q. Did you think something weird was going on with all these favors that Classic Baggie was asking you to do?
A. Yes, yes, for sure.

Q. Did you think maybe there was something a little off about these favors?
A. Yes.

Q. Had you ever been in the business of just sending money to different people at someone's direction before?
A. No.

Q. So can you explain how you went from doing these favors to knowingly joining a money laundering conspiracy?
A. Sure. So while this was going on, you know, after this he gave me like a thousand dollars, 1,500, something like that, that I remember, and so after that he basically -- because the first time he -- because he wanted to buy three watches originally, so he bought one from my guys and when I told him how much I made on those, it was like $2,000, he's like that is no money, spending $275,000, you're only getting $2,000, you should make more money, do you have a business account so I could buy through you directly, I said I do, but it's not an actual watch business, I have to pay to a watch business, I have a marketing company, he said that's fine, as long as you have a business account, I can pay through you, you don't have to share your money with these guys, we can figure it out together, we can make money, I was like okay, I can definitely do that, that works, so I sent him my information and supposedly doing a watch business together.

Q. Can you turn to Government Exhibit 402(h), Ms. Busch, can we pull up Government Exhibit 402(h), and zoom in on the top message of page 1. Mr. Hermann, what's the date on this message?
A. This is December 12, 2019.

Q. And looking at this Government Exhibit in its entirety, not just on that message that -the portion of the message that we zoomed in on, what are you talking about with Classic Baggie here?
A. In this message, Classic Baggie -- well he asked me -- he sent me reference on how I should send my information to him, like my business information to him because I think I sent it before and it was so disorganized, so he was like this is how you should send it to me.

Q. Is this in reference to the watch purchase you were hoping to make?
A. Yes.

Q. Did he explain why you had to send your user name and password?
A. He indicated he didn't trust -- it's my first time working with him, he wanted to make sure I wouldn't play him, I wouldn't try to do anything funny, so he asked me to send everything plus my user name and password so he could verify.

Q. Ms. Busch, could you pull up page 2 of this document, the top message. Is that the message that you sent in response?
A. Yes.

Q. And what are you sending him in this message, and him being Classic Baggie?
A. Yeah. I'm sending Classic Baggie all my marketing information, my business information for my marketing company, all of the details that he asked me, and how he asked me to send it.

Q. Based on this exchange, did you ultimately receive a large deposit into one of your bank accounts?
A. Yes.

Q. Into this bank account that's referenced in this message?
A. Yes.

Q. What bank is that?
A. Navy Federal Credit Union.

Q. Had you opened an account in the name of Top Slope Ventures LLC?
A. Yes.

Q. Do you remember how much money that deposit was for?
A. Yes, $261,000.

Q. Did that deposit come straight from Classic Baggie?
A. No.

Q. Again, did somebody else wire that money to you?
A. Yes.

Q. Did he tell you who that person was?
A. Yeah, he sent me the information of that person.

Q. Ms. Busch, can you please pull up Government Exhibit 402(i). And zoom in on the top of page 2. What name does it say there, Mr. Hermann?
A. Sally McCune.

Q. From what city and state?
A. Sandusky, Ohio.

Q. Why did you understand Classic Baggie to be sending you that name and that information?
A. He sent it to me in reference to the wire that was sent just to make sure I know where that wire came from, who sent the wire, the name, I guess, of the person.

Q. If you could turn Ms. Busch, and zoom in on the top message of page 3. Mr. Hermann, can you explain what's happening in this message?
A. In this message, I sent them a screen shot of the money appearing in my account, because he had contacted me and asked me to make sure the money was in my account. And when I saw it, I said yes it was, he said send me a screen shot of it to verify, so I sent it, that's the picture I sent him.

Q. Ms. Busch, could you pull up 402(i-1), which is a larger version of that attachment. What's the available balance that you're sending to Classic Baggie in that attachment?
A. Yes.

Q. What is the available balance?
A. It was $261,209.70.

Q. Can you explain where you took this picture from?
A. I took the picture and I sent it to him.

Q. Is that your online log-in for Navy Federal Credit Union?
A. Yes. Yes.

Q. If you could briefly take out that other small binder in front of you Mr. Hermann, and take a look at what's been marked as Government Exhibit 100.
A. Yes.

Q. Do you recognize that document?
A. Yes.

Q. What is it?
A. This is a bank statement from Navy Federal Bank account.

Q. And what is the name on that bank account?
A. Top Slope Ventures, LLC.

Q. Is that your bank account?
A. Yes.

Q. The bank account you opened?
A. Right. MR. WENGER: The government moves to admit and publish Government Exhibit 100. MR. SPARACO: No objection. THE COURT: Thank you. It's admitted. (Government Exhibit no. 100 was admitted into evidence. BY MR. WENGER:

Q. Ms. Busch, if you could zoom in on the top of page 1. What's the statement period for this document, Mr. Hermann?
A. December 1st, 2019, to December 31, 2019.

Q. Ms. Busch, if we could turn to page 2. Strike that. Page 3. And zoom in on the first December 13th entry. What happened to your bank account on December 13th, Mr. Hermann?
A. On December 13th, I received a wire for $261,000.

Q. And what was the balance in your account before you received that wire?
A. $262.14.

Q. Did Classic Baggie buy a watch with that $261,000?
A. No.

Q. What did he have you do with all that money?
A. He had me send to car business to make payment for car and various things.

Q. I want to turn your attention back to this December 13th, mid December time frame. Before that money hit your account, what did you think it was going to be for?
A. For a watch.

Q. How quickly did you learn that it was not actually for a watch?
A. The next day.

Q. At that point, did you start to have anymore red flags raised in your mind?
A. Yeah, for sure.

Q. Was that the first time you had received a very, very large amount of money directed to you from Classic Baggie?
A. Yes.

Q. Did you think this was all above board at that point?
A. Did I think it was what?

Q. Above board, legit?
A. No, I definitely felt weird about it, but I was also excited because I never seen that much money before, it was nerve racking, but also excited at the same time.

Q. Turning back to what he actually had you do with that money, you said he had you write a cashiers check to a car company?
A. Yeah.

Q. Do you remember how much that cashiers check was for?
A. $122,000.

Q. Could we please pull up what's marked as Government Exhibit 402(k-2), and zoom in on the bottom message. Is this a message between you and Classic Baggie?
A. Yes.

Q. What are you sending him in this message?
A. This message I am sending him a picture of the cashier check that he had me make, and just sending it to him so that he knows that I actually did it.

Q. What is the date on this message?
A. It is December 17, 2020, -- I mean 2019, I'm sorry.

Q. Ms. Busch, could you pull up Government Exhibit 402(k-3), which is a larger version of that attachment. Is that the cashier check you obtained at Classic Baggie direction?
A. Yes.

Q. How much money is that cashier check for?
A. $122,312.

Q. Who is made payable to?
A. Bespoke Motor Group.

Q. Would that name come up time and time again over the course of your relationship with Classic Baggie?
A. Yes.

Q. What do you understand was going to happen with that $122,000 check?
A. He was going to buy a car with it.

Q. Ms. Busch, could you please pull up Government Exhibit 402(o). Zoom in on that top message. This message between you and Classic Baggie?
A. Correct, yes.

Q. What's the date on this message?
A. December 28, 2019.

Q. And we'll fill in some of these gaps, by this time are you fully invested in the money laundering conspiracy?
A. Yes.

Q. You know what's going on?
A. Yes.

Q. There are no tricks going on?
A. Right.

Q. So can you walk us through what this message means and why you were sending it to Classic Baggie, and just start with that top line, deposit, what payment means, what commission means, what balance means?
A. Okay. So he sent $261,000. This is basically an accounting of everything that was done with the money that he sent. The commission was ten percent of the whole thing, and 90 percent to be sent back to him in various ways. So payment one, payment two, all those payments, everything, the instruction that he sent, whether it's a cashier check or like wire or whatever it is, this is basically outlining everything and so he knows exactly what was done with the money, what was left and everything like that, like the money order, there is a fee $75,000, it was $10,000, so basically everything that was done, had to be documented so he knows exactly what was done with the money so you know, there is no confusion, it tells you his balance so he knows what he has left and what he wants to do with it.

Q. Is this generally over the course of the relationship with Classic Baggie how you would document and account for all the money coming in and going out?
A. Yes. Yes. He required that.

Q. And every payment listed, was there a specific instruction that came to you from Classic Baggie about how much money to get and who to send it to?
A. Yes.

Q. You talked about your admission of ten percent on that $261,000 wire. So how much money was that?
A. $26,000. 26,100.

Q. Is that the most money you had ever made in your life at that point?
A. Yes.

Q. At least at one time?
A. Yeah.

Q. Was it the easiest way to make money?
A. Yes.

Q. How did that feel?
A. I had $200, so to have $26,000 at once, it's life changing for me, yeah, I felt like I was rich.

Q. And did you talk to Rita Assane and Dwight Baines about this?
A. Yeah. Yeah.

Q. Did you guys get excited about the prospect of what could happen here?
A. Yeah, for sure. We went out to eat, you know, celebrated, all that stuff.

Q. Did you begin to realize exactly what was going on?
A. Yeah.

Q. After getting that $261,000 wire, did you continue to work with Classic Baggie to receive money at his direction?
A. Yes.

Q. And to move it at his direction?
A. Yes.

Q. To who he asked you to move it to?
A. Correct.

Q. Did you continue to receive anymore large deposits directly into your own bank account?
A. No.

Q. So is this when Rita Assane and Dwight Baines got more actively involved?
A. Yes.

Q. In the days following that $261,000 deposit?
A. Yes.

Q. Can you explain why you got them involved at that time?
A. It was first Classic Baggie wanted more accounts, more business accounts to be opened, more business accounts so he could send money to. And I just couldn't do it, it was too much for me and it was easier also for me to delegate it, I also was excited to work, because I saw the money, just put me on, I want to work, I'm ready, I will do it, so it's easy for them to join and just get started. And so that's kind of how he got -- that's how he really got started really.

Q. Were there any added benefit to you to having them get involved and open up bank accounts?
A. Yeah, yeah, because first I didn't have to do it myself because it's definitely nerve racking believe it or not, to go to the bank and have to do a cashier check and just not know what is going to happen, I didn't have to go to the bank anymore and I could still share the profit, the ten percent between all of us, it was definitely a benefit to me, I was helping them out so they were also making money, so that was also a benefit.

Q. Was your name on all those accounts?
A. No, their name was on them.

Q. Was that also a benefit to you?
A. Yes.

Q. Can you explain at a high level what Rita Assane's role in this organization came to be?
A. Sure. She was in charge of opening up LLC's. Of course the more LLC's you have, the more business bank accounts you can open, and the more money you can receive. So that's what she was doing, and also she had to receive money and send money to whoever she was supposed to send money to according to -- from the instructions that were sent to us.

Q. The instructions sent to you by Classic Baggie?
A. Yes.

Q. Did Dwight Baines have a similar role?
A. Yes.

Q. Who were the primary LLC for businesses that Rita Assane used for this organization?
A. KLAM Properties LLC and KLAM Entertainment LLC.

Q. What were the primary business or businesses that Dwight Baines used as part of this operation?
A. Baines Properties LLC.

Q. Once you had Rita Assane and Dwight Baines involved, what did your role become?
A. I was more of almost like a liaison, I would get information from Classic Baggie, like the instructions and I would just forward it to either Baines or Rita.

Q. Now, were you left to your own devise to figure out how to do this or did Classic Baggie give you specific instructions on what to do?
A. He gave me very specific instructions on what to do.

Q. Can you explain some of the instructions that Classic Baggie gave to you?
A. He would tell me, for example, like to open up business bank account instead of personal bank account, what bank to open the account with.

Q. I want to briefly pause right there, why did he tell you to open up business bank accounts instead of personal bank accounts?
A. Yeah, he did say that business bank accounts is a lot easier to move money. I guess, you know, if you receive a large sum of money in or take it out, take it out of your account, from a business perspective, it was easier and the bank would not request anything. Whereas, if it's a personal bank account, when you receive a big amount of money, or you go to take it out, it gets questioned because this is personal, personal people don't move money like that, businesses are more lenient, the money in basis to do.

Q. Did he also advise to you at what particular banks to open accounts?
A. Yes.

Q. What did he tell you about that?
A. He said that bigger banks are easier for some transaction, and then some small banks are also good for some type of transactions.

Mr. Hermann confronts Classic Baggie about his source of funds (and learns about Romance Scams)

Q. At some point while accounts are getting opened and you, Rita Assane and Dwight Baines are getting off the ground, do you have a conversation with Classic Baggie about exactly where all this money was coming from that you were directing your way?
A. Yes.

Q. Can you tell me about that conversation?
A. Yeah. It came about when one of the accounts was on hold, frozen for like -- for a certain reason and we didn't understand why. And the bank started asking questions which at first everything was fine and then it just became more rowdy, you have to close it, you have to send some information, there are some fraud things going on so we became concerned --

Q. I want to briefly pause you, just to orient the jury to when this conversation was taking place, was this kind of also in mid December when this was all getting started?
A. Yes, yes, yes, so it was around December, and so when that happened, first it wasn't my account at the time, it was Rita's account, so she was concerned, and she was like need to try to figure out what's going on here because he told us everything is supposed to be fine, and now they're calling her and things like that. She started to be a little bit scared, so I had to have a serious conversation with him because he made us feel like everything is good, this is his own account or -- at first he said something about it was -- it's business partners like the Saudi and the one that sent money, he had businesses in the U.S., we were comfortable, even though it was a little funny. But when the accounts started being on hold and frozen, the bank is calling, then it's like is it really your stuff, you got to tell me what's going on here, this is not my personal account, I'm involved with other people, I want to know what's going on, otherwise it's not going to fly, so you have to tell me what's going on.

Q. Let's get to that in a second. But within a week or so of getting your first large deposit into your bank account and working with Classic Baggie, all these issues with the bank started coming up?
A. Yes.

Q. And red flags were being raised by the bank?
A. Yes.

Q. Within a week?
A. Yeah.

Q. So tell me more about this conversation with Classic Baggie where you confronted him about where this money was really coming from?
A. So when I asked him, he basically explained to me that he had everything under control because the people that are sending the money are actual people who send the money to people -- okay, the people that send the money will not recall the money because they have them under control. So and so when I ask him to elaborate more, he told me that it was his people that are in the love relationship with him.

Q. What do you mean by -- can you explain about his people being in the love relationship with them?
A. So he told me there was a love thing, so a love scam, right. And so the people that he works with have these people under control. That basically are the partners or the lovers, and instruct them to send the money to us so we can send the money back to them. The reason why the bank account wouldn't freeze or anything could happen is because the person that is in love is actually going to the bank and sending the money to us, so there is no reason for them to recall it or for anything to happen. It wasn't stolen money, somebody goes into an account and hack it and send it to you where you can get in trouble, so they will fix it, it will only be a problem, you have to focus on working because it will get taken care of. But the explanation that he give me in detail was more like his people that he's working with basically have the people that send us the money like in control, like they control them, they'll work with them, they're in love with them, and so they basically send us the money and everything will be fine.

Q. And did Classic Baggie describe these people who are in love, about what type of people they were?
A. Yeah. They were older people that had money. And they think they in love with this person that is behind a computer, and they asking them for favors, and the favors turned into money, and that's when they start sending money to help them out.

Q. Did you have a conversation with Classic Baggie about whether those favors were based in the truth or based in lies?
A. Yeah. I mean, it was tricky, you know, he did explain that those are the things they do online, they basically find older people that have money and get them out of their money, trick them out of their money and have them send us the money and take our percentage I guess and send the rest to them.

Q. Were you doing anything for these people sending you, Rita Assane and Dwight Baines money?
A. No.

Q. Now, you talked about being comforted because Classic Baggie said the money wouldn't get recalled or anything, this wasn't stolen money. Could you talk in a little bit more detail first by what you mean by the money won't get recalled and why that comforted you?
A. Yeah, he did -- well the reason why it comforted me and us altogether, is because the first part is never going to come back where like the person -- he explained that it wasn't stolen, so that is good enough first of all, because the person actually goes to the bank, if it's Sally or whoever, they sit there and actually sent us the money. So that was, okay, at least it's not stolen, they're not going to come after us or whatever, but the second thing it was that if anything happened, he could fix it, that was another way to -- you know, that we felt also comfortable.

Q. And when you say the money wasn't stolen, do you mean that the money was not taken without the sender's knowledge?
A. Right, right. Right.


Mr. Hermann Explains How Classic Baggie's Operation Worked

BY MR. WENGER:

Q. Over the course of your working relationship with Classic Baggie, did you gain an understanding of how his operation worked?
A. Yes.

Q. Was that based on conversations with Classic Baggie?
A. Yes.

Q. And doing things at his direction?
A. Yes.

Q. Can you explain at a high level how you understood his operation to work?
A. Yes, sure. For the sake of I guess, administration, I will call the people doing scam, the actual, what I call victim, and fraudsters, just to -- so everybody follow and understand the way I understand. So Step 1, is that the fraudsters create an online profile, like a dating profile. With the dating profile targeting a certain number of people, older people with money, they get to talk to them, get them to fall in love with them and get to ask for certain favors and those favors are you know, money, small gift and things like that. And so after the clients -- I mean not clients, the victims agree to --

Q. Stop right there, you just used the terms clients. Is that a term that you had used with Classic Baggie?
A. Yeah.

Q. Is that how he would refer to what you have described as the victims?
A. Yeah. You refer to them as clients.

Q. That was the terminology you would use, clients?
A. Right. Right. I would say that's my partner's clients, things like that. But I wanted everybody to follow so I said victim and fraudsters. And so they would create the profile, get them to fall in love with them. And after they fall in love with them, then they can ask them for favors including money and they would tell them they have like certain issues or whatever, they need money for investment like whatever it is, they want to invest in a business or an estate, things like that, and the client then sends money. That's Step 1. The Step 2 is when the client is getting ready to send the money --

Q. Quick pause. Step 1, was it ever explained to you how long it might take for Step 1 to be completed, how long it took to convince someone to send money for an online relationship?
A. That I'm not a hundred percent sure, I couldn't say something I don't know, but I'm assuming it might take a few months or a few weeks, it's the older people, too, that's the reason for the target because of their need for companionship from what I understand.

Q. You were about to explain Step 2?
A. Step 2 now that they prep them, they're ready to send the money because they're in love and they want to help their lovers which is fraudsters. Step 2, now they're getting ready to send money, there is no account to send the money to, they can't send to them because a lot of times they're not in U.S. or Nigeria sometime, they might be in the US, they don't want association with that bank account. Step 2 is when we come in, they find people like me or Rita or whatever to open bank account where they can send the money to, and the money can be -- you know they can do whatever it is. Step 2 is to get the bank accounts, which they will find people like me or whatever, get them to open a business bank account and send the money to. And then Step 3 is how they recover the money back to them, so we keep the ten percent, and the 90 percent goes back to whoever organized the whole account or whatever it is, and so he can go back to the people that actually started the fraud which is the fraudsters. So that's what I understood the whole thing to work.

Q. Do you have an understanding based on your conversation with Classic Baggie about how he got some of this money back in Nigeria?
A. Yes. And he got it in few different ways, either it will be through let's say, it will be through buying a car, like he'll buy a car in the U.S. and ship it, the car will be bought with the money that we have in our bank account for example, and the car gets shipped to Nigeria, and when it gets to Nigeria, they sell it and he recovers his money that way. Originally he said that he had a money transfer business where people, for example, give him money in Nigeria, 10,000, whatever amount and then he would give them the money in equivalent in the U.S., so he will also -- and the money that he will give in the U.S. of course will be in our bank account and you would tell me or you know, just send so much amount of money to this person and you would do it. So that's how he also recovers the money that way.

Q. Did Classic Baggie ever tell you how maybe people worked for him as part of this operation?
A. Yeah, he told me over 20 people in the U.S. and multiple others outside of the country.

Q. Did Classic Baggie ever tell you whether he had any friends or relatives in America?
A. He told me he had a girlfriend in the U.S.

Q. I want to shift your attention and talk a little bit about the day-to-day logistics of how you, Rita Assane and Dwight Baines laundered money for Classic Baggie. Can you first describe the different ways that you, Rita Assane and Dwight Baines received money?
A. Sure. We received money through multiple different ways, either it will be a check that will be sent to us in the mail, or it will be a wire that will hit the account. Or it will be a check deposited into the account, those are the various ways.

Q. Let's focus on these checks getting mailed to you for a second, did you know any of these people sending checks?
A. No.

Q. How did they know how and where to send checks to you?
A. So, Classic Baggie, I will send -- he will ask for addresses, whether its business address or whatever address, and we will send it to him, so he will then send that information to the fraudsters or the love, whoever, you know, and they would take that, those checks -- not checks, the address and forward it to whoever needs to send the money.

Q. Did it work the same way for wire transfers, did he know the people transferring money by wire into these bank accounts?
A. No, not directly, no.

Q. Do you know how they got the bank account information for your bank accounts and Rita's bank accounts and Dwight Baines's bank accounts?
A. It would be through Classic Baggie.

Q. Was Classic Baggie the only person you gave your address and the bank account information to?
A. Yes.

Q. So now I want to turn your attention to after the -- after a check was received as part of this operation, can you explain what would happen next?
A. After a check is received, the first thing is that we had to send the picture of the check to Classic Baggie so just to -- he knows -- so he knows that we actually receive a check so we have to send a confirmation. That was a requirement. After you send a confirmation, you have to go to the bank and deposit the money into your bank account and he would tell us which one to deposit it into, because he had access to all the big bank account, he said I know you have money coming in this account, don't put the money here, put the money into this account instead. So he would say something like that, and you would put the money in the account, you would send a receipt that it's been deposited, and it takes two days to pay, and after that, he would send instruction on what to do with it.

Q. After the money became available either through a check clearing, or a wire deposit made into an account, can you explain the instructions you would receive from Classic Baggie about what to do next?
A. Yeah, so after the check clears, he would send me, you know, the name, address, or wire info, or you know, account number with the amount of money that he wanted to be sent to whoever, and then we just do it.

Q. And would you personally be doing this or did you forward those instructions on to other people?
A. I would forward it to either to Rita or Baines.

Q. Can you explain some of the different ways that Classic Baggie asked you to distribute money to other people?
A. The different ways would be again, through money orders cashier check, or wire.

Q. For the cashier checks, how would you get it to the people you were instructed to get it to?
A. The cashier check would be either, either you have the bank account so you deposit directly to the bank account or you mail it to them.

Q. What was the primary means that you used to mail these cashier checks?
A. FedEx.

Q. What did you have to do or what were you instructed to do after a FedEx shipment was made at Classic Baggie's direction?
A. After a FedEx shipment was made, you have to take a picture of the receipt with a tracking number and send it to him so he knows that it's actually been done.

Q. Was that something that would happen every time a FedEx shipment was made?
A. Yes.

Q. Typically, who would be taking the picture of that FedEx receipt?
A. It would be Rita or Baines, and they would forward to me, and I would forward to him.

Q. Did you keep track of the money that was getting deposited into the bank accounts opened by Rita Assane and Dwight Baines?
A. Yeah.

Q. Were all those deposits directed your way from Classic Baggie?
A. Say that again, I'm sorry.

Q. Were the deposits being made into those bank accounts all directed to you by Classic Baggie?
A. Yes, correct.

Q. What was your understanding of the source of all that money?
A. After a while, we knew that it was from these victims.

Q. Now, over the months, maybe a year you were working with Classic Baggie, were you instructed to send money to just a couple people or to a whole bunch of people and businesses?
A. A whole bunch of people.

Q. Was there one person that Classic Baggie instructed you to send money to more frequently than anybody else?
A. Yes.

Q. Who was that?
A. Lawal.

Q. Did you ever ask Classic Baggie why you were sending so much money to Lawal?
A. Yes.

Q. What did he tell you?
A. Well, I remember exactly when that happened because it was a payment that we had to send to him that was -- that had taken time because it was a smaller bank and they wouldn't release the money, and he thought it was our fault so he basically called me to curse me out, like you need to be moving faster than this, you know, this person need his money, Lawal needs his money, and he was like that's his money, you know. And basically, he said if we don't move fast enough, no money is going to come, money is not going to keep coming because you're moving too slow, he's the one sending the money so you need to hurry up and get the money out of the way.

Q. And the way Classic Baggie described his money, who is the his in that sentence?
A. Lawal.

Q. And all of that money that was described as Lawal's money, where was that money coming from?
A. From the victims.

Q. And is there a word that Classic Baggie used to describe his relationship with Mr. Lawal?
A. Yes, it was his partner.

Q. His partner and what?
A. His partner, and you said.

Q. You said his partner in what?
A. In the romance fraud thing they had going on.

Q. Can you turn your attention to Government Exhibit 402(q), in that larger binder in front of you. Ms. Busch, if you could please pull up Government Exhibit 402(q). Zoom in on that top message, please, Ms. Busch. Can you briefly state who these messages are between?
A. This is a forwarded message between Classic Baggie and I.

Q. What was the date of this message?
A. January 6, 2020.

Q. And what did you understand it to mean when that term forwarded appears on the top left-hand corner?
A. It was basically a message that I was forwarded from Classic Baggie, from another person to Classic Baggie and he sent it to me.

Q. Can you read what is contained in this message?
A. Sure. Olugbenga Lawal, 3470 Highfield court, Indianapolis, Indiana 46222.

Q. Ms. Busch, can you scroll down to the bottom message of page 1. What are you asking Classic Baggie in this message?
A. I'm asking him how much to send to that address that they send.

Q. Ms. Busch, if you turn to the last page of this exhibit. Zoom in on the bottom message. What does that state?
A. Do 10K, 10,000 money order.

Q. Based on your reading of these messages between you and Classic Baggie, what do you understand Classic Baggie to be asking you to do on January 6th of 2020?
A. He's asking me to send the $10,000 money order to Lawal, Olugbenga Lawal at the address in Highfield Court in Indianapolis, Indiana.

Q. Please turn to the portion of this binder that is the 300 series of exhibits, and turn first to Government Exhibit 301(a). Look up at me when you have gotten yourself to 301(a).
A. Yes.

Q. If you could just briefly take a moment to look through 301(a) through 315, just to get an understanding of who these messages are between.
A. You said 301(a) through 315?

Q. Yes.
A. (Witness reviewing. ) Yes.

Q. And who are these messages between?
A. These are messages between Rita Assane and I.

Q. And is there any common theme to most of those messages?
A. Yeah. It is our forwarded messages for the most part that I sent to Ms. Rita Assane from Classic Baggie.

Q. Ms. Busch, could we please pull up Government Exhibit 301(a). And if you could zoom in on the bottom message. Can you explain what is happening in this message, Mr. Hermann?
A. Sure. Again, this is a forwarded message from Classic Baggie that I sent over to Rita with instructions to send $20,000 cashier check, and a $7,200 money order mailed to Lawal Olugbenga at 3470 Highfield Court Indianapolis, Indiana 46222.

Q. What's the date of that message?
A. January 14, 2020.

Q. Thank you, Ms. Busch. Mr. Hermann, can you turn to Government Exhibit 303.
A. Yes.

Q. What's the date of this message?
A. January 24, 2020.

Q. And what's going on in the message in Government Exhibit 303?
A. This is another forwarded message from Classic Baggie that I sent over to Rita Assane with instruction to send $54,000 to Lawal Olugbenga at 3470 Highfield Court Indianapolis, Indiana 46222.

Q. Ms. Busch could you please pull up the top message of Government Exhibit 303. Is that the message you were just referring to?
A. Yes.

Q. Ms. Busch, can you scroll down to the second message? That contains the amount, $54,000?
A. Correct.

Q. Can you please turn to Government Exhibit 305?
A. Sure.

Q. What's the date of this message?
A. This is January 31st, 2020.

Q. Ms. Busch, could you please pull up Government Exhibit 305 and zoom in on the top message? Mr. Hermann, what do you understand the messages to mean in Government Exhibit 305?
A. This is another forwarded message from Classic Baggie that I sent over to Rita Assane with instruction to send Lawal Olugbenga at the address 3470 Highfield Court Indianapolis, Indiana 46222 for a sum of $20,000 in a cashier check.

Q. Can you scroll down to that second message. Please turn to Government Exhibit 306, Mr. Hermann. Thank you, Ms. Busch. Take a moment to read through these messages.
A. (Witness reviewing documents. )

Q. What's the date on these messages, Mr. Hermann?
A. February 4th, 2020.

Q. And what did you take away from the messages you exchanged between yourself and Ms. Assane in this exhibit?
A. In this exhibit, we are discussing checks that used to be going to Lawal with the amount of $13,200, for the amount with the address of Lawal at 3470 Highfield Court Indianapolis, Indiana 46222, so that's another payment for $13,200.

Q. Ms. Busch, would you please pull up Government Exhibit 306 and zoom in on page two, the second to last message. What are you instructed Ms. Assane there?
A. I'm instructing her to send $13,200.

Q. Can you scroll down to the last message, that is the address you're instructing her to send it to?
A. Yes.

Q. Lawal Olugbenga?
A. Yes.

Q. Can you zoom out to this whole page. This looks a little bit different than the other messages. We didn't look at messages in foreign language just now, but are some of these messages in a dialect of French?
A. Yes.

Q. And have we gone over instances where those messages have been translated?
A. Sure.

Q. For certain select messages?
A. Yes.

Q. And when we have done that, have we gone over whether you agree or not with the translations?
A. Sure, yes.

Q. These aren't translations you did, correct?
A. No.

Q. Have you generally agreed with the translations as they have appeared on the documents that have been translated?
A. Yes.

Q. Thank you, Ms. Busch. Mr. Hermann, can you turn to Government Exhibit 307. Ms. Busch, if you could pull up the bottom message of Government Exhibit 307. Take a look at this Government Exhibit, Mr. Hermann and tell me what's going on in these messages.
A. Sure. In this message, this is also forwarded message from Classic Baggie that I sent over to Rita Assane, and this is more instructions to send, in this case, $50,000 to Lawal Olugbenga at the address 3470 Highfield Court Indianapolis, Indiana.

Q. What is the date of this message?
A. February 6, 2020.

Q. Can you scroll down to the top of page 2. That's where you -- the amount you understood you had to send to Lawal Olugbenga?
A. Correct.

Q. If you could turn to Government Exhibit 308(a). Ms. Busch, if you could just zoom in only on the top message of 308(a). Mr. Hermann, what do you understand this message to mean?
A. This is a message that I sent to Rita Assane, basically saying he want cashier check from the Chase account, $3,500 mailed to Lawal.

Q. Who is the he in that message?
A. Classic Baggie.

Q. I don't see that as a forwarded message, where would you have gotten that instruction from?
A. I got it from him.

Q. Him being Classic Baggie?
A. Classic Baggie, yes.

Q. And you agree with that English translation of your message?
A. Yes. Yes.

Q. Can you turn to Government Exhibit 308(c). Ms. Busch, can you please pull up Government Exhibit 308(c), and zoom in only on that middle message. What's the date on that message, Mr. Hermann?
A. February 11, 2020.

Q. Can you read the English translation of that message?
A. Sure. It says because really we ship too much to this Lawal.

Q. Why did you send that to Ms. Assane?
A. I sent that because we were sending way too many shipments or cashier checks to that same address, it kept coming up and we're sending it without real name, real address and everything like that, so we're concerned at some point there is going to be some issues, so I'm telling her to be careful, we need to use a different name or not put our own name on that shipment because it became too much, too frequent.

Q. Turn to Government Exhibit 310. Can you briefly read through the first and second page, and tell me what these messages mean?
A. These are more forwarded message that -- well, more instructions that are sent to Rita with Lawal Olugbenga's address to send $50,000.

Q. Ms. Busch, can you please pull up the top message on the first page of Government Exhibit 310? Why are you sending that name and address to Ms. Assane?
A. I sent it from instruction from Classic Baggie to send more money to Lawal.

Q. Ms. Busch, can you scroll down to the next message? What is Ms. Assane writing here?
A. Yes.

Q. What is Ms. Assane writing here?
A. Oh, $50,000.

Q. Can you go to the next message, Ms. Busch. And go to the top message on page 2. What did you respond?
A. I responded yes.

Q. And what did you mean when you said yes?
A. Yes, $50,000.

Q. Can you turn to Government Exhibit 311? What do you understand these messages to mean, Mr. Hermann?
A. These are forwarded messages from Classic Baggie that I sent to Rita with instruction to send $87,000 to Luxe Logistics LLC, to the PNC Bank account, and I sent also the account number and address.

Q. Where did you get all that information from?
A. From Classic Baggie.

Q. Ms. Busch, can you scroll down to the next message? Is that why you're referring to sending $87,000?
A. Yes.

Q. Mr. Hermann, can you please turn to what's marked as Government Exhibit 312(b). Ms. Busch, if you could please pull up the bottom message through 12(b). That indicates a forwarded message. Who would that have been forwarded from?
A. From Classic Baggie.

Q. Can you read what that says on that message?
A. My own address 3512 North Dukane Way Indianapolis, Indiana 46224.

Q. And what is the date of that message?
A. This is February -- this is April 3rd, 2020.

Q. Now, did you live at 3512 North Dukane Way?
A. No.

Q. Did Classic Baggie live at 3512 North Dukane Way?
A. No.

Q. Who did you learn was associated with 3512 North Dukane Way?
A. Lawal.

Q. Please turn to Government Exhibit 313. Ms. Busch, if you could pull up the top message of Government Exhibit 313. Who did you forward this message from?
A. From Classic Baggie to Rita.

Q. What is the date of this message?
A. April 4th, 2020.

Q. Can you please read this message?
A. Sure. Help me send the money order to my new address, 3512 North Dukane Way Indianapolis, Indiana 46224.

Q. Ms. Busch can you scroll down to the second message. What does that message say?
A. Lawal Olugbenga.

Q. Ms. Busch, can you please scroll to the next message on the top of page 2? What does that message say?
A. 10K money order.

Q. What were you instructing Ms. Assane to do during these messages?
A. Instructing her to send a $10,000 money order to Lawal Olugbenga at the new address that was provided to us.

Q. Can you turn to Government Exhibit 315? And could you briefly describe while Ms. Busch pulls up the top message, what's going on in these messages?
A. Sure. This is another forwarded message from Classic Baggie that I sent over to Rita, instructing her to send $5,000 money order to Lawal so --

Q. Can you scroll down to the middle message?
A. Lawal Olugbenga 3512 North Dukane Way Indianapolis, Indiana 46224.

Q. Can you read that message, Mr. Hermann, put that up on the screen?
A. Sure. You can mail money order to Lawal Olugbenga 3512 North Dukane Way Indianapolis, Indiana 46224.

Q. Where did you forward that message from?
A. From Classic Baggie.

Q. Now, we just looked at quite a few messages between January 2020, and the April of 2020 and we may look at one or two more. That every single instruction that you ever sent to Ms. Assane concerning Mr. Lawal?
A. Yeah. I mean, not, is it every single instruction? Yeah, for the most part, yeah.

Q. For the most part that was the number of times you were instructing Ms. Assane to send money?
A. Right. Correct.

Q. Mr. Hermann, can you turn your attention to what's marked as 405(a). Can you just let me know when you have reached 405(a).
A. Yes.

Q. Now, are these messages between different people in this exhibit?
A. Yes, this is messages between Dwight Baines and I.

Q. And Ms. Busch, if we could please pull up the bottom message of Government Exhibit 405(a). What are you -- what does this message mean?
A. This is instruction that I sent to Dwight Baines, basically from Luxe Logistics LLC, to send 19,247.

Q. Is this the example of the type of instruction you would also send to Dwight Baines as part of your money laundering operation?
A. Yes.

Q. Thank you, Ms. Busch. All this money, the $50,000 checks, the $13,200 checks, the $10,000 in money orders, what was the source of every dollar of that money you were instructing people to send to Lawal?
A. What was that question again?

Q. What was the source, where did all the money come from that you were sending to Lawal?
A. It was from the romance fraud victims.

Q. That was your understanding?
A. Yes.

Q. I want to shift gears just a little bit. Were you ever made aware that Rita Assane or Dwight Baines had problems getting the money out of the accounts that had been deposited?
A. Yes.

Q. And we talked about some of those issues?
A. Yes.

Q. Would you bring those issues to Classic Baggie's attention?
A. Yes.

Q. Would you have conversations with him about it?
A. Yes.

Q. What could he do about it?
A. He could possibly fix it sometimes, sometimes he couldn't, but we had to write it to his attention if something happens.

Q. How could he fix it, was he calling the banks?
A. No.

Q. Could you explain how that happened, how he could ever fix a problem you were having with one of your bank accounts?
A. Well, first we have to tell him if anything happens because then he would think that we did it or we trying to steal his money. But we had to tell him because he could contact the people that sent the money to try to contact the bank or you know, something like that and fix the problem.

Q. Did you ever have issues with -- either you, Rita Assane, or Dwight Baines have issues with withdrawn money by a woman that had been sent and deposited into your accounts by the name of Debra?
A. Yes.

Q. Did you bring those issues to Classic Baggie's attention?
A. Yes.

Q. Can you flip in your binder to what is marked as 402(k-4) through 402(k-9). Please take a moment to look at each of those exhibits in 402(k-4) through 402(k-9) and look up at me when you have had a chance to do that.
A. (Witness reviewing documents. ) Yes.

Q. And are those conversations between yourself and Classic Baggie?
A. Yes.

Q. And what are you discussing over the course of those Government Exhibits?
A. In these messages, we discussing pretty much, it's a situation that happened where $60,000 was stuck, frozen or on hold from the bank, and we couldn't get the money out what I contacted him for so he could help and try to figure out exactly what happened, what's going on. And in here, he is sending me the conversation between the victim and the fraud center in this situation to try to fix the situation, trying to fix the issue.

Q. Ms. Busch, can you pull up Government Exhibit 402(k-4) and go right on the middle message. Is that what you're describing when you said Classic Baggie sent you a screen shot of the conversation between the victim and their lover?
A. Yes.

Q. Could we please pull up the larger version of that attachment, Government Exhibit 402(k-5). Can you explain what exactly you understood this conversation, who you understand this conversation to be between?
A. Yes. So this is a conversation between the actual victim and the lover, here she is mentioning that they need an invoice, I guess the bank needed an invoice, to, you know that we had to make an invoice from KLAM Property that shows that the $60,000 she sent is actually legitimate to make sure those are her pattern or it matches whatever she is saying, whatever she sent.

Q. So Classic Baggie had that message to send to you?
A. Yes.

Q. And what did you do -- thank you, Ms. Busch -- as a result of this conversation with Classic Baggie?
A. I made an invoice.

Q. And Ms. Busch, could we please pull up Government Exhibit 402(k-8). And zoom in on that bottom message. Does that reflect you sending an attachment to Classic Baggie?
A. Yes.

Q. Ms. Busch, could you pull up 402(k-9), which attachment contained on that message. Is this the invoice we were just talking about?
A. That's correct, yes.

Q. Who created this invoice?
A. I did.

Q. Who did you send it to?
A. That is Classic Baggie.

Q. What was the purpose of this invoice?
A. Is to resolve the issue of the $60,000 that was on hold.

Q. What's the name in the to line of this invoice?
A. Debra Ann Czodli.

Q. Did you understand that to be the victim who message you were sent by Classic Baggie?
A. Correct.

Q. I want to talk a little bit more and turn your attention back to the role that cars played in the money laundering operation you did with Classic Baggie. And we touched on this a little bit earlier in your testimony. We talked about the name Bespoke?
A. Yes.

Q. Can you explain whether that name is an entity you were instructed to send money to over and over again?
A. Yes. Bespoke was one of the first checks that was issued under Classic Baggie's instruction, the $122,000, it was sent to Bespoke.

Q. Did he send you more instructions to send money to Bespoke after that?
A. Yes.

Q. What other types of car dealerships or places that sold cars would be instructed to send money to?
A. We got to make checks payable to auction places, car auctions, and other regular dealerships to buy different cars.

Q. And do you remember the name of any of those car auction houses?
A. Sure, one of them was IA
A. And another one was Copart.

Q. What was your understanding of what was happening with all these checks that you were making payable to car auction houses and car dealerships?
A. My understanding is that they bid on those cars early, buy them, win the bid, and then we have to go cut the check, whatever amount you tell me to, and just pay them so the car can be paid off so you know, it didn't sit on the auction or whatever. So they already bid on and everything, everything is taken care of, they say pay it so we can pick it up and ship it and do what we had to do.

Q. Where did these cars get shipped?
A. For the most part, Nigeria.

Q. That's based on conversations you had with Classic Baggie?
A. Yes.

Q. Again, what money were you, Rita Assane, and Dwight Baines using when sending these checks to the car auction houses and the car dealerships?
A. We were using the romance money that was deposited into an account.

Q. At some point were you contacted by the FBI in relation to all this money laundering activity?
A. Yes.

Q. Do you remember that first time you were contacted by the FBI?
A. Yes.

Q. About when was it?
A. It was around May of 2020.

Q. Did you tell Classic Baggie that the FBI had contacted you?
A. Yes.

Q. Can you tell me about that conversation you had with him?
A. Sure. I remember I was with Rita and we called him freaking out, like, you know, they contacted us and everything like that, like what to do, are we going to be in trouble, things like that. And he basically calmed us down and said that you know, it's going to be fine, get rid of anything evidence wise that you have and he's going to try to keep everything under control on his end, as far as the client goes, if they don't talk, nobody will get in trouble, just to get everything and calm everyone else.

Q. Did you attempt to follow those instructions?
A. Yes.

Q. Did you go into phones and delete messages?
A. Yes.

Q. A lot of messages?
A. Yes.

Q. Messages between yourself and Classic Baggie?
A. Yes.

Q. Messages between yourself and Dwight Baines?
A. Yes.

Q. Messages between yourself and Rita Assane?
A. Yes.

Q. Did Classic Baggie ask if you had talked to the FBI?
A. Yes.

Q. What did you tell him?
A. I told him I didn't.

Q. Was that the truth at the time?
A. Yeah, at the time it was.

MR. WENGER: At this time I have no further questions, Your Honor.


Please check back for Classic Baggie: Part 3 - The Romance Scam Victims Testify