A Florida man was sentenced to 45 months in prison for laundering funds obtained from a $50 million internet-enabled fraud scheme, federal officials announced today.
According to federal officials, Denis Sotnikov, 39, of Hallandale Beach, Florida, previously pleaded guilty to one count of conspiracy to commit money laundering.
According to the documents filed in this case and statements made in court:
From 2012 to October 2020, Allen Giltman, 56, of Irvine, California, and others engaged in an internet-based financial fraud scheme, which generally involved the creation of fraudulent websites to solicit funds from investors.
Officials say, at times, the fraudulent websites were designed to resemble those operated by actual, well-known and publicly reputable financial institutions; at other times, the fraudulent websites were designed to resemble seemingly legitimate financial institutions that did not exist.
Victims of the fraud scheme typically discovered fraudulent websites via internet searches.
According to officials, the fraudulent websites advertised various investment opportunities, most prominently the purchase of certificates of deposit or CDs.
The fraudulent websites advertised higher-than-average rates of return on the CDs to lure potential victims.
Federal officials say, Sotnikov received funds from at least 18 victims of the fraud scheme, totaling approximately $6 million, in accounts at various domestic banks that were controlled by him or by a close relative.
Of this amount, approximately $3.7 million was frozen by the banks or returned to victims, and $707,380 was wired by Sotnikov overseas.
The remaining stolen funds – approximately $1.5 million – were transferred to numerous other accounts controlled by Sotnikov, which were used to fund personal expenditures.
To date, law enforcement has identified at least 150 fraudulent websites created as part of the scheme.
Officials say, at least 70 victims of the fraud scheme nationwide, including in New Jersey, collectively transmitted funds that they believed to be investments in the aggregate amount of at least approximately $50 million.
Giltman pleaded guilty for his role in the fraud scheme on Jan. 5, and is awaiting sentencing.
According to federal officials, in addition to the prison term, he was sentenced Sotnikov to three years of supervised release.
The U.S. Securities and Exchange Commission (SEC) previously filed a civil complaint against Sotnikov and several companies associated with him based on the same conduct.