In todays Palm Beach Post
Raided lottery store laundered money for the mob
Posted: 6:00 a.m. Sunday, Sept. 7, 2014
By Lawrence Mower - Palm Beach Post Staff Writer
POMPANO BEACH —
When Florida Lottery investigators seized machines at Akel Market in March, they found something inside so suspicious that they noted it in their reports.Cash — lots of it — was scattered everywhere.Stacks of $20 and $50 bills in a paper bag in the store’s office. “Large bundles” in a plastic bag on the floor. Loose bills under the front counter.Wads of cash aren’t unusual for the tiny, dilapidated store in a rundown section of Pompano Beach. One man once walked in and cashed a $270,000 check.In fact, years before the store’s owner, Kaiser Akel, was implicated in a lottery ticket-cashing scheme uncovered by The Palm Beach Post, he laundered hundreds of thousands of dollars at the store for mobsters through an illegal check-cashing operation.
Even though the state denied him a check-cashing license because of the mob case, the Office of Financial Regulation turned around and gave one to his brother months later, who himself flouted money laundering laws, The Post has learned.
After 14 years of glaring red flags, check-cashing regulators are only now taking action after hearing from the lottery.
Akel Market should never have been operating a check-cashing store in 1999. It didn’t have a license.But that didn’t stop Akel, who’d found a lucrative business cashing dirty checks for anyone — the Colombo crime family, the Trafficante mob as well as Ponzi schemers, court documents show.The New York-based Colombo family’s South Florida operation caught the FBI’s attention for doing what mobs do: running illegal gambling rings, loansharking, selling stolen goods, bribing people. To protect their enterprise, they resorted to kidnapping, murder and assault, the federal indictment says.Like all criminal organizations, however, the Colombos needed a way to launder their cash — to make their dirty money appear legitimate, if law enforcement ever asked.An example of money laundering included the Florida Lottery, when a Miami drug dealer bought winning tickets from people. When police — and the IRS — asked how he made his money, he could claim he got lucky playing the lottery.
Until recently, the stores escaped any real enforcement or oversight in Florida. And criminals have exploited that to launder millions, often by issuing checks from one phony business to another, creating a shell game to disguise the source of the money.They turn those checks into cash often at convenience stores, where the check-cashers either ignore the suspicious activity or are willing participants. Akel was an essential part of the Colombo’s money-laundering operation, using Akel Market’s unlicensed check-cashing store, court documents show. But the Colombos weren’t his only customers.
The Tampa-based Trafficante crime family, Florida’s largest original mob family, ran a lucrative money-laundering business through several check-cashing stores, with Akel’s help. In 1999, he cashed six checks over two weeks for the Trafficantes, worth a combined $90,000, according to court records.Later that year, he helped the operators of a multi-state Ponzi scheme when he cashed their $270,000 check.All of these schemes were illegal, and federal authorities took notice.
In 2000, Akel and 17 other members in the Colombo scheme were indicted. A few months later, the FBI arrested 19 members of the Trafficante crime family, led by John Mamone.“Akel’s Market was engaged in the check cashing business, as well as in assisting the enterprise in the laundering of substantial proceeds derived from the commission of several criminal acts,” the Trafficante indictment stated.But Akel himself wasn’t named in that indictment.He snitched.As a result, prosecutors in the Trafficante case urged the judge in the Colombo case to go easy on Akel because of his “substantial assistance.”He got five years of probation for pleading guilty to a felony conspiracy charge. Akel has not responded to repeated requests for comment, including at his home in a gated northwest Broward community, where a $200,000 Bentley convertible was parked in the driveway. He and his brother are Arab-Israelis and came to this country in the mid-1980s.
Failing to register a check-cashing business with the U.S. Treasury Department could result in a five-year prison sentence and a $5,000 per day fine.But Kaiser Akel wasn’t punished.
In 2000, after state regulators investigated Akel Market for operating without a license, Akel and his brother Foad Akel applied for a formal license. Rejected because of the federal investigation, Kaiser Akel removed his name from the business and added his ex-wife’s, using her maiden name. Foad Akel and Dimitris Schaeffer applied for a check-cashing license in January 2001.Regulators gave it to them, provided that Kaiser Akel “shall not, at any time, have any affiliation whatsoever” with the store.
Seven years later, Foad Akel landed in trouble with check-cashing regulators.During a 2008 state review of Akel Market’s check-cashing business, investigators found the company lacked many records from 2005. Foad Akel also failed to report at least 20 transactions worth $10,000 or more — a key safeguard against money laundering and a felony, if not reported.The state concluded that Foad Akel “operated in an unsafe and unsound manner.” Foad Akel didn’t dispute the claims.The penalty? A $4,000 fine — payable in installments.The light fines were not unusual.Another market raided by the lottery down the street failed to report 21 transactions worth $10,000 or more, according to a 2010 state review. Operator Tariq Bazian also failed to report other transactions within the required 15 days. His penalty? A $5,500 fine. Bazian’s cousins did face some consequences, however. Ale Bazyan operated a check-cashing store at Georgia Market before opening a second branch in a strip mall at 400 S. Dixie Highway in Lake Worth.
During a review, regulators discovered that Bazyan didn’t report at least 520 transactions, each worth $10,000 or more. He also didn’t collect customers’ thumbprints for some transactions above $1,000.The violations were so egregious that the state in 2010 fined him $5,000 and revoked his license.
Once Ale Bazyan’s license was revoked, his brother Emran kept the business going in the same spot, getting his check-cashing license in 2011.But the Office of Financial Regulation discovered that Emran cashed checks in a multi-million dollar workers compensation scam. He was charged with fraud in 2012 and sentenced to probation.He retained his check-cashing license, though. Regulators said he didn’t tell them about his arrest, as required. OFR is currently working to revoke his license, spokeswoman Jamie Mongiovi said in an email. A new law that took effect this year will let them revoke a license immediately once they learn of an arrest. When The Post asked questions about Emran Bazyan, OFR began an administrative process to revoke the license.
The Akels have since been implicated in another scheme.
In March, The Post published its investigation into frequent lottery winners, people getting lucky too often, against astronomical odds.The top winner was Louis Tillman Johnson, a 68-year-old Pompano Beach man who won prizes worth $600 or more 282 times worth nearly $800,000.When lottery investigators interviewed him three days after the story ran, Johnson said that three neighborhood stores were buying up winning lottery tickets from customers and paying him a 10 percent fee to cash them in. That’s illegal in Florida.His biggest customer was Akel Market, he said. He identified Kaiser Akel and Foad Akel as the ones supplying him with winning tickets.Another big supplier was Georgia Market, he said. The lottery has since permanently revoked both stores’ lottery privileges, but no criminal action has been taken.Among Johnson’s accusations was that Kaiser Akel worked at the store at least since 2011, a potential violation of OFR’s restriction when his brother got a check-cashing license.When lottery investigators arrived at the store to take their machines on April 2, Kaiser Akel was in charge.They photographed the money scattered throughout the store and told the Office of Financial Regulation, which was scheduled to audit the store this year. OFR moved up the audit after the lottery contacted them in May.“Our examination team is taking a look at who’s in charge of the company based on licensure records,” Mongiovi said in an email.They’re also auditing Georgia Market. That store’s check-cashing operation was scheduled for audit this year.
Although OFR might have missed obvious red flags, experts say the agency is more vigilant today.“The landscape has changed dramatically over the last six years,” said Michael McDonald, a former IRS special agent who lives in Wellington.In 2008, a statewide grand jury convened to look at check cashers issued a scathing report.Florida had 1,500 stores statewide, not including different branches of the same store. That was an unusually high number compared with other states, and “a seemingly large portion are involved in illicit activity,” they concluded.OFR’s oversight was so lax that they called it a “charade of enforcement.”Since then, Florida toughened its laws, increasing the penalty for hiding large transactions. The agency has stepped up its exams of the businesses. It has shut down 144, prosecuting three last year, and the number of businesses that weren’t reporting transactions above $10,000 fell to the single digits in the past few years, a Post analysis found.Just last week, OFR fined Circle K Stores $1 million for operating check-cashing services at its stores since 2009 without a Florida license.McDonald said that things also have changed because banks, which finance check-cashing stores and fear government crackdowns, have required the stores to have their own independent audits.“They (check-cashing stores) have tightened up … if nothing else but to make sure they still have a bank account,” he said.
But Linda Webb, founder and CEO of Risk Integrity Management in Palm Beach Gardens, said schemes involving check-cashing stores will always be around, for one simple reason: “There are more fraudsters than there are fraud fighters.”
After years of ignoring evidence that winning lottery tickets were changing hands like currency, the Florida Lottery seized equipment at Akel Market days after a Palm Beach Post story revealed that a single person had won nearly $800,000 playing 282 games there and at nearby stores. Further investigation revealed mob ties to one store and a lack of money-laundering oversight of their check-cashing operations.
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