By David Voreacos From Bloomberg

A Caribbean-based lawyer charged in a sting operation pleaded guilty to helping launder what he was told were proceeds of a bank fraud designed to hide $2 million from U.S. tax officials, according to the Justice Department.

Patrick Poulin, 41, appeared today in federal court in Alexandria, Virginia. He pleaded guilty to conspiring to launder monetary instruments, a crime which two investment advisers, Joshua Vandyk, 34, and Eric St-Cyr, 50, admitted last month. The three were indicted on March 6.

The men agreed to help undercover agents posing as U.S. clients hide the source and ownership of $2 million that they were told was dirty money. Vandyk and St-Cyr invested the money on behalf of clients and said it wouldn’t be reported to the U.S. government, according to a Justice Department statement.

“These three defendants played a shell game by creating offshore entities designed to help their U.S. clients evade taxes,” Dana Boente, the U.S. attorney for the Eastern District of Virginia, said in a statement. “They used that same shell game to launder purported criminal proceeds.”

St-Cyr is a Canadian who ran a Cayman Islands investment firm; Vandyk, a U.S. citizen who worked at the firm; and Poulin, a Canadian lawyer who worked in Turks and Caicos, prosecutors said.

The arrests came amid a U.S. crackdown on offshore tax evasion that has led to charges against more than 70 clients and about three dozen bankers, lawyers and advisers.

Avoiding Prosecution

More than 45,000 Americans avoided prosecution by disclosing accounts to the Internal Revenue Service and paying $6.5 billion in back taxes, fines and penalties.

The men met with undercover agents who posed as a wealthy U.S. citizen, a financial planner, and an American “looking for ways to launder criminal proceeds and avoid taxes,” according to the indictment. Agents met with the men in Miami, San Francisco, Turks and Caicos, and Quebec as they looked to move proceeds of a purported bank fraud offshore.

St-Cyr and Vandyk said their firm helped U.S. clients create corporations, trusts and foundations in offshore locations like the Cayman Islands and used foreign attorneys as intermediaries, according to the indictment.

Agents met with one of Poulin’s partners in Turks and Caicos, with Poulin on the phone, according to the indictment. The lawyers set up an offshore foundation called Zero Exposure Inc. Agents later wired $200,000 to Poulin’s firm, and he wired it to a Cayman account, according to the indictment.

Caymans Meeting

Agents met in the Caymans on Jan. 16, 2014, with Vandyk and St-Cyr, according to the indictment.

“Vandyk and St-Cyr indicated that use of a foundation as intermediary was the preferable process for money laundering, while use of a trust intermediary was sufficient for tax evasion,” prosecutors said. The men said they would charge more for laundering than tax evasion.

For more on this story go to: http://www.businessweek.com/news/2014-07-11/caribbean-based-lawyer-pleads-guilty-in-laundering-sting

See also all related iNews Cayman stories with the links under iNews Briefs dated July 2 2014 “Cayman money manager charged with money laundering changes plea to guilty” at: http://www.ieyenews.com/wordpress/inew-briefs/

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