Laundering in Connection with Costa Rica-Based Telemarketing Fraud Scheme

Ohio Man Sentenced to 108 Months in Prison for Money Laundering in Connection with Costa Rica-Based Telemarketing Fraud Scheme

An Ohio man was sentenced to 108 months in prison for his role in laundering money for a Costa Rica-based “sweepstakes fraud” scheme that victimized U.S. residents, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.

Paul R. Toth Jr., 41, of Wintersville, Ohio, was sentenced yesterday by U.S. District Judge Robert J. Conrad Jr. of the Western District of North Carolina.  In addition to imposing the prison sentence, Judge Conrad ordered Toth to pay $307,702 in restitution and to forfeit the same amount.

Toth was convicted on Aug. 4, 2015, following a two-day jury trial, of one count of conspiracy to commit money laundering and six counts of international money laundering stemming from his role in laundering money for a scheme to defraud two U.S. residents over the age of 55 out of more than $300,000 in savings.  The evidence at trial showed that telemarketers in Costa Rica, who were the defendant’s co-conspirators, posed as federal agents and deceived the two victims, who were husband and wife, into believing that they had won a large monetary prize in a sweepstakes contest.  The co-conspirators falsely told the victims that in order to receive the “prize,” the victims had to wire thousands of dollars to Costa Rica for a “refundable insurance fee.”

The evidence at trial showed that, between approximately November 2009 and November 2010, Toth was a U.S.-based “smasher,” an individual who arranges to pick up victims’ money and take it to the fraudulent telemarketing organization, who facilitated the laundering of funds received from the elderly victims.  Specifically, according to trial evidence, Toth and others he recruited and supervised received more than $300,000 from victims and, using various individuals as senders and recipients to conceal the fraudulent nature of the transactions, wired more than $200,000 to co-conspirators in Costa Rica.  The evidence further demonstrated that Toth kept the remainder as his profit.

The U.S. Postal Inspection Service, Internal Revenue Service, FBI, Federal Trade Commission and Department of Homeland Security investigated the case.  Senior Litigation Counsel Patrick M. Donley and Trial Attorneys William H. Bowne and Anna Kaminska of the Criminal Division’s Fraud Section prosecuted the case.