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Gambling problem leads to account shortfall, fraud charges

Even in an age of ascendant wireless communication, wire fraud remains a commonly charged white-collar offense.

As we explained in our August 21 post last year, wire fraud long ago broke free of its connection to telegraph wires and now includes many different types of electronic communications.

In today's post, we will discuss a recent St. Louis area case involving allegations of wire fraud and improper currency transactions.

The case concerns a 65-year-old woman who owned a real estate title company based in Belleville. Prosecutors contended that the woman took money from the title company's escrow accounts in order to finance a gambling problem.

The alleged interference with these escrow accounts apparently caused cash-flow problems for the title company. A loan underwriter sued the company, claiming that the company did not deliver proceeds of a land sale to the proper party.

The woman pleaded guilty this week to two types of fraud. One was wire fraud. The other was improper structuring of transactions under the Bank Secrecy Act (BSA).

Under provisions of the BSA and the Internal Revenue Code intended to discourage money laundering, there are various reporting requirements for currency transactions. The threshold for this reporting is generally $10,000. Illegal "structuring" of transactions involves dividing transactions up into smaller amounts in order to avoid reporting requirements.

The title company owner has not been sentenced. A hearing is scheduled, however, for May 2.

It remains to be seen what effect the woman's gambling problem will have on the sentence that a judge will impose. Like many other addictions, it is the type of problem what could very well be addressed with proper treatment.

Source: St. Louis Business Journal, "Metro East Title owner pleads guilty to wire fraud," Feb. 3, 2014

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