A Brooklyn business owner on Wednesday was sentenced to 15 years in federal prison for operating an illegal money transferring business, described by prosecutors as a $55 million illegal check cashing, bank fraud and tax evasion scheme.
Defendant David Motovich, 50, was sentenced for operating an illegal money transmitting business, failure to file currency transaction reports, bank fraud, conspiracy to commit bank fraud, money laundering, aggravated identity theft, and conspiracy to defraud the United States, according to Joseph Nocella, Jr., United States Attorney for the Eastern District of New York.
Motovich used his family business, Midwood Lumber & Millwork on Coney Island Avenue, as an unlicensed check-chasing operation, according to prosecutors.
Motovich offered his services primarily to the owners and operators of construction companies, cashing millions of dollars in checks to fund off-the-books payrolls for those businesses. As part of the scheme, Motovich cashed checks for his customers in exchange for a fee or a percentage of the face amount of the checks, ranging between 4% and 15%, prosecutors said.
Motovich’s customers used this service because they knew he would not file Suspicious Activity Reports or Currency Transaction Reports for cash transactions in amounts greater than $10,000, as required by federal anti-money laundering statutes, Nocella's office said.
Motovich supplied his check cashing customers with fraudulent documents that they could use to disguise the transactions as payments by the customers for
materials and/or subcontracting work if the customers were audited by the New York State Workers Compensation Board or tax authorities.
Prosecutors said Motovich created shell companies to run the illegal check-cashing operation and help himself and his associates evade taxes. He told customers to write business checks to these companies, then deposited them into accounts he opened at multiple banks. Using those accounts, he concealed millions in payments from his own companies and those of his associates to facilitate tax evasion.
To conceal his control and ownership of the the accounts, Motovich opened the accounts in the names of other individuals. In one instance, Motovich stole the identity of a low-level worker and then bribed a banker to open accounts in the victim’s name. In other instance, Motovich impersonated the name of a legitimate company to open shell accounts and repeatedly forged the signature of an unwitting insurance broker, according to prosecutors.
Motovich deposited more than $55 million into the accounts that he opened between 2012 and 2019 and used the funds to purchase real estate; pay personal and corporate credit card accounts; purchase millions worth of diamonds, watches, jewelry and clothing; make lease and purchase payments for Porsche and Lexus vehicles; pay premiums on multi-million dollar life insurance policies for himself, his wife and others; renovate his penthouse apartment in Manhattan to include a swimming pool; and to fund other business ventures.
Motovich’s co-defendants Marina Kuyan, Kemal Sarkinovic and Joshua Markovics all previously pleaded guilty to various charges in connection with the scheme. They are awaiting sentencing.
“The defendant put his own greed and thirst for luxury above the needs of helpless victims, whose identities, company names and signatures he ruthlessly stole," Nocella said in a statement. "The defendant used his family-run lumber business to orchestrate a massive illegal check cashing scheme and facilitate rampant tax evasion in the New York City construction industry.”
Motovich was also ordered to forfeit approximately $38 million, including his interests in the penthouse apartment, commercial real estate buildings in Midwood, and luxury jewelry and handbags.
