Five dealers in New York’s Diamond District have been arrested and charged with illegally transferring more than $600 million since 2019, according to the US Department of Justice (DOJ).
Raj Vaidya, Rakesh Vaidya, Shrey Vaidya and Neel Patel have operated “numerous purported diamond, gold and jewelry companies” in New York’s Diamond District, the DOJ said in a statement Last week.
Those include Arya Diamond Jewellery which trades as Karats and Carats as well as Diamspark LGD, Royal Diamonds, Raj Gold and Diamond, and Royal Arya Jewelry.
The fifth defendant, Youssef Janfar, who is also known as Joe Rodeo, purportedly ran companies including Rodeo of NY, which trades under the name Sarah Jewels.
Each has been charged with one count of operating and aiding and abetting the operation of an unlicensed money-transmitting business.
“The defendants used these and other entities as fronts to conduct hundreds of millions of dollars in illegal financial transactions for customers including converting cash to checks or wire transfers in exchange for substantial fees,” the filing stated. “At times, they moved millions of dollars in cash in a single day.”
None of the companies were registered as money-transmitting businesses with New York, New Jersey, or the Financial Crimes Enforcement Network (FinCEN), the DOJ noted.
The US Drug Enforcement Administration and Homeland Security Investigations uncovered the illegal business while investigating a large-scale, unlicensed money-transmitting business operating in New Jersey, New York and elsewhere, according to a criminal complaint the DOJ included with its statement.
The overarching scheme, according to the complaint, consisted of Janfar collecting cash and giving it to the Vaidyas and Patel, who then deposited it into various bank accounts in the names of what the document calls “Vaidya entities.”
They would then send the money to Janfar’s bank accounts, taking a fee for their services, the filing noted.
The transactions were made using multiple financial institutions, and were nearly always large, round-dollar figures. After being deposited, the funds were generally quickly moved out of the Vaidya business accounts.
“Many of the accounts used by the Vaidyas and Patel did not show regular transactions typical of legitimate businesses, such as payroll, employment taxes, insurance payments…or other legitimate business expenses,” the filing said.
The charge of operating and aiding and abetting an illegal money-transmitting business carries a maximum penalty of five years in prison and a fine of $250,000, or twice the amount of any monetary gain derived from the offense, whichever is greatest, the DOJ added.
