A federal jury in Brooklyn on Tuesday convicted David Motovich of perpetrating a years-long scheme to establish and conceal a massive illegal check-cashing operation.
Motovich was found guilty on 16 counts, including 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 a press release. When sentenced, Motovich faces up to 30 years in prison.
“Taken behind the façade of a seemingly legitimate lumber business in Brooklyn, the jury followed the trail of evidence to find an infestation of crimes,” said Breon Peace, United States Attorney for the Eastern District of New York. “Motovich operated an illegal money transmitting business that funneled millions of dollars to himself to get rich, evade taxes and fund a lavish lifestyle of luxury cars, jewelry and a spectacular penthouse apartment. With today’s verdict, the defendant finds there is a very high price to pay for his blatant disregard for the law.”
As proven at trial, Motovich used his family-run business in the Midwood section of Brooklyn as a front for an illegal, unlicensed check-cashing operation. From the second floor of Midwood Lumber on Coney Island Avenue, 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 four and 15 percent. Motovich’s customers paid a higher fee to Motovich than the fees charged by licensed check cashing businesses because the customers understood that Motovich 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.
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, according to the press release.
In addition, Motovich created shell companies for the sole purpose of facilitating his illegal check cashing business and instructed his customers to issue checks drawn against their business accounts and make the checks payable to one of the companies. Motovich then deposited the checks into bank accounts that he created at several financial institutions. To conceal his control and ownership of the funds in the accounts, and to avoid detection of his scheme, Motovich opened the accounts in the names of other individuals.
In total, between 2012 and 2019, Motovich deposited more than $55 million into the accounts that he had opened in the names of other individuals and used the funds to purchase real estate; pay personal and corporate credit card accounts; purchase luxury items, including millions of dollars of diamonds, watches, jewelry and clothing; make lease and purchase payments for Porsche and Lexus luxury 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.
