Tigard man indicted on illegal money-trasmitting charges

Indictment says Victor Kaganov wired more than $172 million in illegal funds over last 12 years

By Geoff Pursinger

The Times, Mar 4, 2010

Federal prosecutors indicted a Tigard man Wednesday on charges that he operated an unlicensed money-transmitting business for more than a decade.

The indictment alleges that Victor Kaganov, a 68-year-old Russian immigrant, wired more than $172 million around the world between 1997 and 2009. Kaganov allegedly established several businesses with the Oregon Corporations Division which served as shell companies for Russian clients. According to the indictment, he then used the companies to move millions of dollars in and out of the United States to more than 50 countries.

Kaganov was charged with a single count of operating an unlicensed money transmitting business, which is illegal under Oregon statutes.

"When shell corporations are illegally manipulated in the shadows to hide the flow of tens of millions (of) dollars overseas, it threatens the integrity of our financial system," said U.S. Attorney Dwight Holton in a statement. "Sunshine kills the stink of corporation - our laws aim to bring the sunshine in, and we will enforce these laws vigorously."

Prosecutors allege that Kaganov's clients would wire money into the companies' bank accounts, then Kaganov would instruct the bank to wire the money overseas.

Under Oregon law Kaganov would have needed to obtain a license to operate the money transmitting business. He would also need to register with the U.S. Department of Treasury.

The case was investigated by the FBI as part of a larger investigation involving shell corporations being used by foreign businesses and individuals to commit crimes.

"We will not allow Oregon banks to be used as cash machines," said Arthur Balizan, FBI Special Agent in Charge of Oregon in a written statement. "Facilitating the international transfers of significant amounts of money without any known association to legitimate commerce in the U.S. The use of Oregon shell companies to support the transfer of funds of unknown origin is a matter the FBI takes very seriously.

Kaganov, who emigrated from Russia in 1998, faces a maximum penalty of five years in prison and a $250,000 fine.

At a U.S. District Court on Wednesday, Kaganov plead not guilty to the charge against him.

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