Owings Mills Woman Pleads Guilty to Obtaining Over $4.3 Million in an Advance Fee Fraud Scheme and to Evading Taxes on that Income
Baltimore, Maryland – Late on November 29, 2018—a few days before she was scheduled to go to trial—Lauren Montillo, age 47, of Owings Mills, Maryland, pleaded guilty to conspiracy to commit wire fraud and to tax evasion. According to her plea agreement, from 2010 through 2015, Montillo and her co-conspirators sought at least $8.7 million in advance fees from foreign and United States victims, purporting to offer access to exotic bank financial instruments. Victims paid $4,342,540 in advance fees into Hong Kong bank accounts or attorney escrow accounts and received nothing in return. For tax years 2012 through 2014, Montillo reported no income other than $100, evading a substantial amount of income taxes.
The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Kelly R. Jackson of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office.
Montillo and her co-conspirators created shell companies, with associated websites, email addresses, and bank accounts, which they used to perpetrate the fraud. Specifically, in February 2010, Montillo opened an account with GoDaddy, which provides web-hosting services. From 2010 to 2015, Montillo and other co-conspirators used GoDaddy to host websites for shell companies such as MLL Holdings, The Bussola Group, Worldwide Escrow Holdings, Ltd., International Insurance of Nebraska, Atlas Investment Bancorp, Entirety Capital, GPF Global, and Atlas-Gayle Trust. Each of these shell companies had associated email addresses, which Montillo and her co-conspirators opened and used.
Also in 2010, Montillo’s father incorporated “Worldwide Escrow Holdings Limited” (“Worldwide Escrow”) in Hong Kong and opened a bank account for Worldwide Escrow at the Hong Kong Shanghai Bank (HSBC), Hong Kong with Montillo as a signatory. Montillo’s father resigned from the company in April 2011. In March 2011, Montillo and a co-conspirator opened two more bank accounts in Hong Kong, the MLL Holdings and the Skywall bank accounts, also at HSBC. Montillo and her co-conspirators had on-line access to the Hong Kong bank accounts so that they could conduct banking transactions over the internet. In 2012, Montillo’s father also opened an escrow account in the name of his mother-in-law, a licensed attorney in Maryland who had stopped practicing law in approximately 2007. She was not aware that the escrow account had been opened in her name. The conspirators directed victims to wire-transfer their advance fees into the HSBC, Hong Kong bank accounts or the attorney escrow account.
Montillo’s co-conspirator, Eric Becker, was her former fiancé. Becker developed, and Montillo edited, websites for the various phony businesses, which purported to offer access to financial instruments, such as standby letters of credit, bank guarantees, bonds, or private placement trading platforms. Montillo and her co-conspirators had no access to any financial instruments. For example, Montillo and several co-conspirators obtained advance fee payments from a victim that would purportedly gain access to a private placement trading platform. The co-conspirators persuaded the victim, through several broker intermediaries, to send $1.7 million to a BB&T bank account in Florida. BB&T returned the funds to the victim. The victim, a Mexican national, was told that the funds were returned because the window had closed on the investment opportunity. Co-conspirators, including Montillo, then informed the victim, through his broker, that they could offer him a private placement trading platform in which he would receive profits and a charitable organization would use its portion of the profits to invest in its projects. The conspirators directed the victim to send his money to the Worldwide Escrow account at HSBC, Hong Kong. On May 8, 2012, the victim used his own and his family’s funds to send $3,099,990 to the Worldwide Escrow Holdings account. The conspirators, including Montillo, moved over $2 million of the funds to a bank account opened at Choice Bank in Belize.
More Read
To conceal the fraud and to reassure the victim and his brokers, co-conspirators including Montillo, created an insurance policy for a non-existent insurance company called International Insurance of Nebraska, which was back-stopped with a website hosted through Montillo’s GoDaddy account. The insurance policy purported to show that the victim’s investment funds would not be at risk because they were fully insured. In addition, co-conspirators, including Montillo, used her GoDaddy account to host the website wweholdingsltd.com to add an air of legitimacy to Worldwide Escrow Both the insurance company and the private placement trading platform were bogus.
Over the next several years, Montillo and her co-conspirators continued with the advance fee scheme. The scheme had both foreign and U.S. victims. To protect her identity, Montillo frequently used the name “Kati Conti” in the frauds and used a “burner phone” so that after the scam was concluded, she could “go dark” and stop communicating with the victims. In all, the scheme sought at least $8.7 million from victims, and actually obtained $4,342,540.
For tax years 2012 through 2014, Montillo filed personal tax returns showing no income or $100 in income, and thus no income tax was owed. Montillo admitted that she was the signatory on bank accounts in the names of limited liability corporations into which victims’ funds were wire transferred from Hong Kong, Choice Bank in Belize, the attorney escrow account, and other accounts controlled by co-conspirators. Montillo used the victim funds transferred to the limited liability accounts for living expenses. Montillo had no accounts in her own name. Montillo admitted that by failing to report her income for 2012 through 2014 to the Internal Revenue Service, she evaded a substantial amount of income taxes.
As part of her plea agreement, Montillo will be required to forfeit a money judgment in the amount of $849,993.12 and to pay restitution in the full amount of the loss, which is at least $4,342,540.
Montillo faces a maximum sentence of 20 years in prison for the wire fraud conspiracy and 5 years in prison for tax evasion. U.S. District Judge Richard D. Bennett has scheduled sentencing for April 12, 2019 at 10 a.m.
Three defendants were charged in a related case in the Western District of Texas, James Edward Cox, Kelly Ray Coronado, and Gordon Richard Moscowitz. They have pled guilty to wire fraud conspiracy (Cox and Coronado) and money-laundering conspiracy (Moskowitz) and are scheduled for sentencing on February 6, 2019. Becker was indicted with Montillo but has since died. Montillo’s father died in 2016.
United States Attorney Robert K. Hur commended the FBI and IRS-CI for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Joyce K. McDonald and Sean Delaney, who are prosecuting the case.