Arvinsingh Canaye, 32, a Mauritian was In 2018 in the United States convicted by US justice for embezzlement and money laundering up to Rs 300 million. In 2019 he was expelled from the US and forced to return to Mauritian soil by US judges (read more below)In April 2019 he was arrested on his arrival at Plaisance airport by the Independent Commission Against Corruption (ICAC) on the evening of Tuesday, 2 April 2019. A “Notice Upon Arrival” had been issued against him by the ICAC.
A New York federal judge on Tuesday declined to order further incarceration for the general manager of an affiliate of now-shuttered brokerage Beaufort Securities Ltd., deeming the nearly 14 months he’s already served in his money-laundering case to be adequate deterrence.
At a morning sentencing hearing in Brooklyn, U.S. District Judge Kiyo Matsumoto handed down a sentence of time served for Arvinsingh Canaye, 31, who previously pled out to a single count of money laundering conspiracy and has been in custody since his arrest last year.
Prosecutors say that while he was heading Beaufort Management Services Ltd. on the island of Mauritius off the coast of Africa, Canaye created shell companies for an undercover federal agent who posed as a U.S. fraudster involved in multiple stock manipulation schemes on the hunt for corporate bank accounts he could control but that couldn’t be traced back to him.
The case came out of an investigation into stock fraud involving multiple Belize-based brokers, and has ensnared offshore Loyal Bank Ltd., its offshore management company, London-based Beaufort Securities, Beaufort Management and several of their employees.
Canaye faced an advisory sentencing guidelines range of roughly five to six years in prison. Prosecutors recommended a below guidelines-range sentence for Canaye, but something north of the time served sentence that Canaye was seeking.
However, Judge Matsumoto cited a number of issues that seemed to tip the scales in favor of the defense. One was the disparity between Canaye and fellow defendant, Loyal Bank CEO Adrian Baron, who admitted to directing others at Loyal Bank to set up bank accounts for the undercover agent posing as a stock fraudster, and was sentenced in January to time served.
Judge Matsumoto said she found Baron more culpable in the scheme that Canaye was, but Baron pled to conspiring to defraud the U.S. in violation of the Foreign Account Tax Compliance Act, which put him in a position for a potentially lesser penalty than Canaye, who copped to a money laundering charge. While Baron directed and supervised others in the scheme, Canaye was acting alone, the judge said.
“You offered to let one plead to a less onerous offense and the other one had to plead to a more onerous offense,” Judge Matsumoto told Assistant U.S. Attorney David Gopstein. “Is Mr. Canaye really more culpable than Mr. Baron, I don’t think so.”
Gopstein had pointed out that Canaye had set the undercover agent up with an acquaintance for purposes of acquiring a fake Albanian passport and had proposed creating false documents to further the scheme.
“He embraced this fraudulent scheme and said, ‘Here are other ways that you, undercover agent, can be more successful in furthering your fraudulent securities scheme and in hiding it,'” Gopstein said.
Canaye’s attorney, James Darrow of the Federal Defenders of New York, noted that Canaye didn’t engage in the wrongdoing for predatory reasons, and called it more of an opportunistic crime.
“What I think the core of Mr. Canaye’s offense conduct is, is that he took advantage of, as the government says, a country and a corporate framework that is designed to shield money and money trails,” Darrow said.
Judge Matsumoto was further troubled by the fact that the loss amount for purposes of calculating the sentencing guidelines was a figure that Canaye had no control over. It was the undercover agent who suggested that he wished to do around $3 million in illicit transactions a month, the judge said, and taking that figure as the intended loss amount for purposes of calculating the guidelines greatly enhanced the potential prison time Canaye faced.
“There are things outside of Mr. Canaye’s control, that were in solely in the control of the undercover agent and the government that drove the loss amount and that drove the offense to which he pled guilty,” Judge Matsumoto said.
Judge Matsumoto also noted that like many others, Canaye endured “inhumane and harsh” conditions while incarcerated at the Metropolitan Detention Center Brooklyn, which in January lost power and heat for about a week during a cold snap. Prisoners were locked in their cells with no plumbing or running water and limited access to food, something the judge said was “beyond comprehension” for a facility in the U.S.
Canaye was also ordered to forfeit $105,000, however the judge imposed no fine, nor did she order any restitution. Canaye is expected to be deported.
Darrow declined to comment after the sentencing, as did a spokesman for the U.S. Attorney’s Office for the Eastern District of New York.
Canaye, also known as Vinesh Canaye, was part of a network of brokers, bankers and other alleged facilitators of financial fraud who have been charged in an operation by the FBI, the U.S. Securities and Exchange Commission and the U.K.’s Financial Conduct Authority.
The U.S. charges last year came hours after the FCA announced it had ordered Beaufort Securities and sister company Beaufort Asset Clearing Services Ltd. to stop all regulated activity, including acting as a broker and clearinghouse, after an investigation into the firms’ finances revealed both were insolvent. The FCA has said it pushed the firms into administration to protect client assets.
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The government is represented by Michael T. Keilty and David Gopstein of the U.S. Attorney’s Office for the Eastern District of New York.
Canaye is represented by James Darrow of the Federal Defenders of New York Inc.
The case is U.S. v. Kyriacou et al., case number 1:18-cr-00102, in U.S. District Court for the Eastern District of New York.
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