KANSAS CITY, MO – Kevin Brandes, 60, and William Graham, 56, both of Kansas City, Missouri, pleaded guilty yesterday to conspiring with bankers to willfully fail to implement appropriate anti-money laundering (AML) controls at a Missouri bank, in violation of the Bank Secrecy Act (BSA).
Brandes and Graham owned and operated multiple sweepstakes businesses and maintained accounts for those businesses at the Missouri bank. Court documents revealed that from 2013 to 2019, they collaborated with bank officials to neglect critical elements of the bank’s AML program.
Under the BSA and its regulations, the bank was required to file currency transaction reports (CTRs) with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) for any currency transaction over $10,000. In 2017, at the request of bank officials, Brandes and Graham signed FinCEN CTR Exemption Review Forms, misclassifying their companies as “direct mail advertising” businesses. Following the signed exemption forms, the bank ceased filing CTRs for transactions involving their businesses. Despite the companies being labeled as “high risk” and subject to enhanced monitoring, Brandes and Graham understood that the exemption would result in less scrutiny of their transactions.
Additionally, on October 11, 2016, at the direction of two bank officials, Brandes and Graham had an outside attorney sign a legal opinion letter that they knew contained false information. The letter falsely stated that one of Brandes’ companies had not faced negative legal action from regulatory bodies or private suits in over three years, despite a state regulatory agency having filed legal action against the company. Brandes and Graham believed the letter would assist the bank in circumventing its BSA obligations.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Acting U.S. Attorney Teresa A. Moore for the Western District of Missouri made the announcement. The case is being prosecuted by Trial Attorneys James D. Peterson and Della Sentilles of the Criminal Division’s Money Laundering and Asset Recovery Section, with assistance from the Kansas City Office of the FBI.