Date: July 30, 2024 Contact: newsroom@ci.irs.gov A federal jury in Brooklyn 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 of an indictment charging him with 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. The verdict followed a three-week trial before United States District Judge William F. Kuntz, II. When sentenced, Motovich faces up to 30 years in prison. Breon Peace, United States Attorney for the Eastern District of New York, Christie M. Curtis, Thomas Fattorusso, Special Agent in Charge, Internal Revenue Service-Criminal Investigation (IRS CI), and Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the verdict. “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,” stated United States Attorney Peace. “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.” “Motovich made millions from his back-office deals, cashing checks for clients who paid more in fees just to know their transactions were hidden from the government. But we found out. And although his shady business allowed him to lease a high-end apartment with expensive renovations and luxury cars, today’s verdict will ensure that his next lease is only for a prison cell, no renovations required,” said Thomas M. Fattorusso, Special Agent in Charge of IRS CI New York. “David Motovich developed an illicit scheme using his family’s business to launder more than $55 million through construction companies to finance lavish purchases. For seven years, Motovich funneled his proceeds through falsely named bank accounts to conceal the profits and evade authoritative oversight. Despite his efforts to disrupt our investigation into his unlawful activity, today’s verdict highlights the FBI’s tireless dedication to apprehending criminals who employ fraudulent tactics to fund expensive lifestyles,” stated FBI Acting Assistant Director in Charge Curtis. 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. In furtherance of his scheme, 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. The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Robert Polemeni, Erik Paulsen, Andrew Grubin and Matthew Skurnik are in charge of the prosecution, with assistance from Eastern District of New York Special Agent George Dietz and Paralegal Specialist Kavya Kannan. CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
