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45 months in jail for $50 million of laundered fraud proceeds

Department of Justice

U.S. Attorney’s Office

District of New Jersey


FOR IMMEDIATE RELEASE

Friday, November 4, 2022

Florida Man Sentenced to 45 Months in Prison for Laundering Funds Related to $50 Million Wire and Securities Fraud Scheme

NEWARK, N.J. – A Florida man was sentenced to 45 months in prison for laundering funds obtained from a $50 million internet-enabled fraud scheme, U.S. Attorney Philip R. Sellinger announced today.

Denis Sotnikov, 39, of Hallandale Beach, Florida, previously pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging him with one count of conspiracy to commit money laundering. Judge Vazquez imposed the sentence on Nov. 3, 2022, in Newark federal court.

According to the documents filed in this case and statements made in court:

From 2012 to October 2020, Allen Giltman, 56, of Irvine, California, and others engaged in an internet-based financial fraud scheme, which generally involved the creation of fraudulent websites to solicit funds from investors. At times, the fraudulent websites were designed to closely resemble websites being operated by actual, well-known, and publicly reputable financial institutions; at other times, the fraudulent websites were designed to resemble seemingly legitimate financial institutions that did not exist. 

Victims of the fraud scheme typically discovered the fraudulent websites via internet searches. The fraudulent websites advertised various types of investment opportunities, most prominently the purchase of certificates of deposit, or CDs. The fraudulent websites advertised higher than average rates of return on the CDs to lure potential victims.

Sotnikov received funds from at least 18 victims of the fraud scheme, totaling approximately $6 million, in accounts at various domestic banks that were controlled by him or by a close relative. Of this amount, approximately $3.7 million was either frozen by the banks or returned to victims, and $707,380 was wired by Sotnikov overseas. The remaining stolen funds – approximately $1.5 million – were transferred to numerous other accounts controlled by Sotnikov, where they were used to fund personal expenditures.

To date, law enforcement has identified at least 150 fraudulent websites created as part of the scheme. At least 70 victims of the fraud scheme nationwide, including in New Jersey, collectively transmitted funds that they believed to be investments in the aggregate amount of at least approximately $50 million.

Giltman pleaded guilty for his role in the fraud scheme Jan. 5, 2022, and is awaiting sentencing.

In addition to the prison term, Judge Vazquez sentenced Sotnikov to three years of supervised release.

The U.S. Securities and Exchange Commission (SEC) previously filed a civil complaint against Sotnikov and several companies associated with him based on the same conduct.

U.S. Attorney Sellinger credited special agents of the FBI, including the FBI’s Cyber/Financial Crimes Task Force, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the sentencing. He also thanked the SEC for the assistance provided by its Enforcement Division.

The government is represented by Assistant U.S. Attorney Anthony P. Torntore of the U.S. Attorney’s Cybercrime Unit in Newark.

U.S. Department of Justice Press Release

Link:

DOJ Press Release

Categories: Anti-Money Laundering Department of Justice (DOJ) Updates Enforcement Actions Fraud Incarceration/Prison Sentences Security Fraud Wire Fraud

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