Deltec Bank’s Funds Seized by U.S. Secret Service in Money Laundering and Fraud Probe

The U.S. Secret Service seized multiple corporate accounts last month controlled by Deltec Bank, a Bahamian bank with ties to crypto-related firms. 

New documents unsealed in a federal court on Monday reveal that the secret service seized several U.S bank accounts controlled by Deltec last month. 

As per the documents, the amount seized by the U.S authorities is above $58 million. 

The seizures were made amid an investigation into organized, international criminal money laundering syndicates operating cryptocurrency investment and other wire fraud scams. 

The bank accounts that were seized by the secret service were custodial accounts with Mitsubushi Bank UFJ Trust in New York, opened by Deltec on behalf of corporate clients.

U.S authorities linked certain Bahamian bank’s customers to shell firms involved in a cross border scheme. 

The scheme allegedly involves creating fake crypto websites to dupe victims into depositing their assets or cash. 

74 Shell Companies Identified in International Fraud

The US law enforcement agency has identified at least 74 shell companies involved in this international fraud scheme. 

As per the affidavit filed in a court in the Eastern District of Virginia, officials traced the funds linked to the shell companies before they transferred to accounts in the Bahamas. 

The US Secret Service further noted in its warrant that the international fraud scheme worked by luring in victims to invest their digital assets or cash into accounts that did not really exist. 

The victims were promised a sizable return on their investments. 

The fake crypto website would show an increase in the victim’s account balance to coerce more deposits. However, no withdrawals were processed from the website. 

Mitsubushi Bank flagged the accounts to authorities that Deltec kept with them on behalf of those shell companies, Axis DigitalLimited and GTAL, as they could not obtain information on the companies from the Bahamian bank. 

The Secret Service found the shell companies received wire fraud proceeds and transferred them to one of the custodial accounts with the bank, which then transmitted them to other accounts in the Bahamas.

The companies structured these wire transfers in such a way as to dodge scrutiny that typically applies to cross-border payments.

US officials claimed that the banks operating in the United States require KYC (Know Your Customer) information for opening a bank account. However, law enforcement officials were not able to identify registered agents, business locations, or business purposes of Axis DigitalLimited and GTAL,” the affidavit states.