Global Gold Exchange, LLC and its managers, Richard M. Owen, James Warren, and Jeffrey Morrow, were sentenced in federal court on Friday, December 3 for committing multiple financial and firearms crimes, including laundering money through their unlicensed money transmitting business by falsely reporting transactions as “gold” and other precious metals.
Following the entry of guilty pleas across 2019 and 2020, U.S. District Court Judge Cathy Ann Bencivengo sentenced each of the individual defendants to a term of incarceration. Owen received a custodial sentence of 24 months on his money laundering and felon-in-possession of firearm convictions. Warren and Morrow received custodial sentences of six and eight months, respectively, on their convictions for operating an unlicensed money transmitting business.
As part of their sentences, the defendants agreed to forfeit approximately $2 million in assets involved in the money laundering and unlicensed money transmitting business, and further to provide restitution in the amount of no less than $3,682,063.44 for the crimes of money laundering, mail fraud, and operating an unlicensed money transmitting business. Each defendant is subject to a three-year term of supervised release following their custodial sentences.
Special Agents from IRS-Criminal Investigation’s Financial Investigations and Border Crimes Task Force worked with FBI agents and the United States Postal Inspection Service during the multi-year investigation to unravel millions of dollars in suspicious transactions taking place at the San Diego-based office and bank accounts of Global Gold Exchange, or “GGEX”.
Taken together, the defendants unlawfully laundered cash and funds from a variety of sources—both lawful and unlawful—and fraudulently documented the transactions as “a complete gold transaction.” Their crimes were best summed up in plea agreements that were previously entered by all four defendants, which admitted to operating GGEX “as an informal money transfer system engaged in facilitating the transfer of money domestically and internationally outside of the conventional financial institutions system, and did so without regard for the source, destination, purpose, or legality of the funds transmitted.”
Several victims addressed the court and the defendants, describing how they had “stolen our dignity,” “robbed us of peace of mind,” and “hurt people at a very deep level.” After reviewing the underlying facts of the case and handing down the sentences, Judge Bencivengo stated that the defendants’ crimes allowed people to “hide assets and improper transactions” while causing “irreparable harm” to the victims.
“Global Gold Exchange and its managers attempted to operate as a one-stop-shop for money laundering,” said Acting United States Attorney Randy S. Grossman. “The sentences … make clear that the United States will pursue and prosecute any individual, asset, or business attempting to launder the proceeds of crimes, or that threaten the integrity of our financial system.”
Between 2017 and 2018, defendants GGEX, Owen, Warren, and Morrow employed various money laundering, fraud, and unlicensed money transmitting techniques to conduct unlawful transactions through GGEX and GGEX’s bank accounts, including transacting with a “local cartel out of Mexico;” falsifying invoices for sales of gold, when in reality it was the receipt of a large cash deposit and returned by check after GGEX took a 10 percent fee; agreeing with “clients” to tell law enforcement or tax authorities that the transactions were sales/purchases of precious metals; and advising clients to mail GGEX parcels filled with heavy substances to mimic the weight of gold, all to falsely document the nature of GGEX’s transactions.
“[Friday’s] sentences demonstrate IRS Criminal Investigation’s commitment to disrupting professional enablers, who facilitate the commission and concealment of financial crimes by veiling them behind legitimate business services,” said Special Agent in Charge Ryan L. Korner of the Los Angeles Field Office. “Targeting organizations such as Global Gold Exchange, LLC and its managers, who used their expertise of our financial systems to launder illicit funds, eliminates this avenue for criminal activity.”
“The FBI is proud to partner with IRS Criminal Investigations and the United States Postal Inspection Service to bring our collective authorities to bear in money laundering and fraud cases such as these,” said FBI Special Agent in Charge Suzanne Turner. “[These] sentences should serve as a deterrent to those who seek to launder criminal proceeds by exploiting our financial system. The FBI and our federal partners will continue to bring all available resources to stop the flow of money to criminal organizations.”
“[This] sentencing makes a statement to those who use the U.S. Mail to commit fraud,” stated Carroll N. Harris, Postal Inspector in Charge of the Los Angeles Division, United States Postal Inspection Service. “Instead of seeing gold bars, these fraudsters will be behind prison bars. As always, Postal Inspectors remain committed to keeping the mail free from fraudulent mailings and will hold those that do accountable for their crimes.”
This case is the result of ongoing efforts by the Financial Investigations and Border Crimes Task Force, a partnership targeting unlawful transactions through the financial system. The task force brings together the combined expertise of federal, state, and local law enforcement including IRS-CI, California Franchise Tax Board, United States Postal Inspection Service, and the San Diego Police Department. FBI and United States Postal Inspection Service partnered with the FIBC in this coordinated investigation, with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case is being prosecuted by Assistant U.S. Attorney Daniel Silva.