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 operated “numerous purported diamond, gold and jewellery businesses” in New York’s Diamond District, the DOJ said in a statement on Thursday. They include Arya Diamond Jewellery – doing business as Karats and Carats – as well as Diamspark LGD, Royal Diamonds, Raj Gold and Diamond, and Royal Arya Jewellery.
The fifth defendant, Youssef Janfar, also known as Joe Rodeo, allegedly ran companies including Rodeo of NY, which trades as Sarah Jewels. Each was 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 into checks or wire transfers – in exchange for substantial fees,” the filing said. “At times, they moved millions of dollars in cash in a single day.”
None of the companies were registered as money transmitters with New York, New Jersey or the Financial Crimes Enforcement Network (FinCEN), the DOJ said. 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 accompanying the DOJ’s statement.
The overarching scheme, according to the complaint, was for Janfar to collect cash and give it to the Vaidyas and Patel, who would then deposit it into various bank accounts in the names of what the document calls “Vaidya Entities”. They would then transfer the money to Janfar’s bank accounts and take a fee for their services, the complaint said.
The transactions were made through several financial institutions and were almost always in large, round dollar amounts. Once deposited, the funds were usually quickly withdrawn from the vaidya’s business accounts.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 monetary gain derived from the offense, whichever is greater, the DOJ added.
