According to the dpa, which was executed on December 10, 2018 with the U.S. Attorney`s Office for the Southern District of New York (SDNY), Central States took responsibility for its behavior, agreed to improve its anti-money laundering (AML) program and pay a $400,000 fine. The charge was postponed for two years after the government tried to dismiss the charges. On the same day, the Securities and Exchange Commission (SEC) initiated a recruitment process under sections 15 B and 21C of the Securities Exchange Act of 1934 and Section 203 (e) of the Investment Companies Act of 1940. Tucker tried to vaccinate himself against usurious laws by establishing a series of fictitious relationships with certain Indian tribes to conceal his ownership and control over Tucker`s Payday Lenders, and to obtain protection from the sovereign immunity of tribes – a legal doctrine that generally prevents states from enforcing their laws against Indian tribes. To implement its system, Tucker transferred nominal ownership of its lending companies on turnover to certain businesses created under tribal laws. Late last month, federal prosecutors announced the first criminal prosecution of a U.S. broker under the Secrecy Bank Act (“BSA”). Central States Capital Markets, LLC has entered into a Deferred Prosecution Agreement (DPA) with the U.S. Attorney`s Office for the Southern District of New York. The charge is drawn from various cases where central states ignored red flags when they opened brokerage accounts, failed to follow their written customer identification procedures, and failed to report suspicious transactions. The offences committed against the central states are due to legal proceedings against Scott Tucker for illegal loan on payday. Tucker and his late brother used a series of tribal units to create a payday loan system.
On behalf of tribal companies, Mr. Tucker approached the central governments to open brokerage accounts and incorrectly stated that he had been asked to transfer tribal funds from existing tribal banks to central governments because of the cost of complying with certain regulatory requirements. The U.S. Attorney`s Office also announced that CSCM had entered into a deferred policing agreement in which it agreed to take responsibility for its conduct, lose $400,000 and improve its BSA/Anti-Money Laundering (AML) compliance program. If CSCM complies with the terms of the agreement, the U.S. Attorney`s Office has agreed to postpone the prosecution for two years, after which the government will attempt to dismiss the charge. Mr. Berman also announced an agreement (the “agreement”) whereby CSCM agreed to take responsibility for its conduct by establishing a complete statement of facts, paying a $400,000 fine and continuing to develop its BSA/Anti-Money Laundering (“AML”) compliance program. Assuming that the CSCM continues to abide by the agreement, the government has agreed to postpone the prosecution for two years, after which the government will attempt to dismiss the charges. The fine is incurred by forfeiture of $400,000 in a $400,000 civil action in the United States, also filed today. On the facts, there is no doubt that the central states are turning a blind eye to obvious and monstrous behaviour.