New Guilty Pleas For Using Cayman Islands Bank Accounts to Conceal Funds

On July 11, 2014, the DOJ and the IRS announced that Joshua Vandyk, a U.S. citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, have each pleaded guilty to conspiring to launder monetary instruments and conceal funds using Cayman Islands bank accounts (mostly through foreign corporations). Patrick Poulin, 41, pleaded guilty on July 11, 2014, Vandyk, 34, pleaded guilty on June 12, 2014, and St-Cyr, 50, pleaded guilty on June 27, 2014. The three defendants were indicted by a grand jury in the U.S. District Court for the Eastern District of Virginia on March 6, 2014, and the indictment was unsealed on March 12, 2014, after the defendants were arrested in Miami.

According to the plea agreements and statements of facts, Vandyk, St-Cyr and Poulin conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud, specifically $2 million by using Cayman Islands bank accounts and foreign corporations. Vandyk, St-Cyr and Poulin assisted undercover law enforcement agents posing as U.S. clients in laundering purported criminal proceeds through an offshore structure and Cayman Islands bank accounts designed to conceal the true identity of the proceeds’ owners. Vandyk and St-Cyr invested the laundered funds on the clients’ behalf and represented that the funds and the Cayman Islands bank accounts would not be reported to the U.S. government.

“These three defendants played a shell game by creating offshore entities designed to help their U.S. clients evade taxes and other legal requirements, and they used that same shell game to launder purported criminal proceeds,” said U.S. Attorney Dana J. Boente for the Eastern District of Virginia. “We are committed to working with our law enforcement partners to penetrate and combat these schemes wherever they occur.”

According to the DOJ, Vandyk and St-Cyr lived in the Cayman Islands and worked for an investment firm based in the Cayman Islands. St-Cyr was the founder and head of the investment firm, whose clientele included numerous U.S. citizens. Poulin, an attorney at a law firm based in Turks and Caicos, worked and resided in Canada as well as the Turks and Caicos. His clientele also included numerous U.S. citizens. Vandyk, St-Cyr and Poulin solicited U.S. citizens to use their services (including creations of Cayman Islands bank accounts) to hide assets from the U.S. government, including the IRS. Vandyk and St-Cyr directed the undercover agents posing as U.S. clients to create an offshore corporation (and Cayman Islands bank accounts) with the assistance of Poulin and others because they and the investment firm did not want to appear to deal with U.S. clients. Vandyk, St-Cyr and Poulin used the offshore entity to move money into the Cayman Islands bank accounts and used Poulin as a nominee intermediary for the transactions.

This case just emphasizes again how the focus of the IRS has expanded far beyond Switzerland into Central America, including Cayman Islands bank accounts.

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