Brooklyn business owner charged with $55M bank fraud, identity theft, witness tampering
The U.S. District Court for the Eastern District of New York, more informally known as Brooklyn Federal Court, in Downtown Brooklyn. Photo: Rob Abruzzese/Brooklyn Eagle
David Motovich, owner of a lumber and construction materials business, was charged in Brooklyn Federal Court on Tuesday with bank fraud, aggravated identity theft and witness tampering. He was arrested in the morning and appeared before United States Magistrate Judge Roanne L. Mann on Tuesday afternoon.
The complaint charges that since at least 2012, Motovich operated an illegal check-cashing business from his family-run lumber business in Midwood.
The customers of Motovich’s illegal check-cashing business were primarily the owners and operators of construction companies who paid their employees in cash to avoid having to pay state and federal employment taxes, including taxes owed under the Federal Income Contributions Act.
As part of the scheme, Motovich allegedly cashed millions of dollars of checks for his customers in exchange for a fee or a percentage of the face amount of the checks, ranging between 4 and 10 percent.
Motovich’s customers paid a higher fee to Motovich than the fees charged by licensed check-cashing businesses because the customers understood that Motovich would not file Currency Transaction Reports for cash transactions in amounts greater than $10,000 or Suspicious Activity Reports, as required by federal anti-money laundering statutes, the complaint charges.
Motovich allegedly supplied his check-cashing customers with fraudulent documents that they could use to disguise the transactions as payments by the customers for materials and/or subcontracting work if the customers were audited by the New York State Workers Compensation Board or tax authorities.
To further his scheme, Motovich created shell companies for the sole purpose of facilitating his illegal check-cashing business. He instructed his customers to issue checks drawn against their business accounts and make the checks payable to one of the companies, according to the complaint.
Motovich then allegedly deposited the checks into bank accounts that he created at several financial institutions. To conceal his control and ownership of the funds in the accounts, and to avoid detection of his scheme, Motovich opened the accounts in the names of other individuals.
In total, between 2012 and 2019, Motovich deposited more than $55 million into the accounts that he had opened in the names of other individuals, according to the U.S. Attorney’s Office.
He allegedly used the funds to purchase real estate; pay personal and corporate credit card accounts; purchase luxury items, including millions of dollars of diamonds, watches, jewelry and clothing; make lease and purchase payments for Porsche and Lexus luxury cars; pay premiums on multimillion-dollar life insurance policies for himself, his wife and others; make renovations to his penthouse apartment; and fund other business ventures.
Acting U.S. Attorney for the Eastern District Jacquelyn Kasulis. Photo courtesy of U.S. Justice Dept.
When Motovich became aware of the government’s investigation, he encouraged his customers not to cooperate with the government and to fire their attorneys and retain attorneys that he had handpicked for them, the complaint charges. He also allegedly paid at least one witness and that witness’s family members so that they would not cooperate with law enforcement.
Jacquelyn M. Kasulis, acting United States attorney for the Eastern District of New York, Michael J. Driscoll, assistant director-in-charge, FBI, New York Field Office; and Thomas Fattorusso, acting special agent-in-charge, IRS-Criminal Investigation, announced the arrest and charges.
“As alleged, the defendant used a seemingly legitimate, family-run business as a front for engaging in a $55 million check-cashing scheme that deliberately flouted federal banking and anti-money laundering laws. Further, as law enforcement was closing in on his schemes, Motovich attempted to derail the government’s investigation by tampering with witnesses,” said Acting U.S. Attorney Kasulis.
“Federal banking laws exist to protect the industry from fraud and the general public from money laundering schemes that often further criminal activity. Motovich, as alleged, broke these laws in order to advance his own monetary interests,” said FBI Assistant Director-in-Charge Driscoll.
The government’s case is being handled by the Office’s Public Integrity Section. Motovich’s attorney is Jeremy Gutman.
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