Brooklyn Business Owner Sentenced to 15 Years in Prison for $55 Million Illegal Check Cashing, Bank Fraud, and Tax Evasion Scheme

Earlier today, in federal court in Brooklyn, David Motovich was sentenced by United States District Judge William F. Kuntz, II to 15 years in prison for operating an illegal money transmitting business, failure to file currency transaction reports, bank fraud, conspiracy to commit bank fraud, money laundering, aggravated identity theft, and conspiracy to defraud the United States.  In addition to the term of imprisonment, Judge Kuntz ordered Motovich to forfeit approximately $38 million, including his interests in a penthouse apartment on the Upper East Side of Manhattan featuring a private indoor swimming pool, commercial real estate buildings in the Midwood neighborhood of Brooklyn, and luxury jewelry and handbags.  Motovich was convicted by a jury following a three-week trial in July 2024.

Joseph Nocella, Jr., United States Attorney for the Eastern District of New York; Christopher G. Raia, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Harry T. Chavis, Jr., Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI) announced the sentence.

“The defendant used his family-run lumber business to orchestrate a massive illegal check cashing scheme and facilitate rampant tax evasion in the New York City construction industry,” stated United States Attorney Nocella.  “The defendant put his own greed and thirst for luxury above the needs of helpless victims, whose identities, company names, and signatures he ruthlessly stole.  The defendant’s significant sentence should send a message that fraud does not pay, and federal banking and tax rules apply to all.”   

“David Motovich allegedly deposited more than $55 million into accounts he opened in the names of other individuals to selfishly fund an unearned lavish lifestyle, by swindling unsuspecting victims and companies,” stated FBI Assistant Director in Charge Raia.  “The FBI will relentlessly pursue those individuals who not only deceive others, but also defraud the United States for their own personal gain.”

“David Motovich made millions from his shady business, making back-office deals to hide cash for clients,” stated IRS-CI Special Agent in Charge Chavis.  “While trying to conceal more that $55 million from the U.S. government, Motovich adorned himself with watches and jewelry and luxury cars.  Now, after today’s sentencing, he will have years to think of his actions as he lives in less luxurious federal housing.  There is no penthouse with a pool available.”

As proven in court proceedings, Motovich used his family-run business in the Midwood section of Brooklyn as a front for an illegal, unlicensed check-cashing operation.  From the second floor of Midwood Lumber on Coney Island Avenue, Motovich offered his services primarily to the owners and operators of construction companies, cashing millions of dollars in checks to fund off-the-books payrolls for those businesses.  As part of the scheme, Motovich cashed checks for his customers in exchange for a fee or a percentage of the face amount of the checks, ranging between four and 15 percent.  Motovich’s customers paid a higher fee to Motovich than the fees charged by licensed check cashing businesses because the customers understood that Motovich would not file Suspicious Activity Reports or Currency Transaction Reports for cash transactions in amounts greater than $10,000, as required by federal anti-money laundering statutes.  Motovich supplied his check cashing customers with fraudulent documents that they could use to disguise the transactions as payments by the customers for materials and/or subcontracting work if the customers were audited by the New York State Workers Compensation Board or tax authorities.    

In furtherance of his scheme, Motovich created shell companies for the purpose of facilitating his illegal check cashing business and enabling himself and his associates to evade taxes.  Motovich instructed his customers to issue checks drawn against their business accounts and to make the checks payable to one of the companies.  Motovich then deposited the checks into bank accounts that he created at several financial institutions.  Motovich facilitated tax evasion by using these accounts to conceal millions of dollars in payments from his own companies and those of his associates.

To conceal his control and ownership of the funds in the accounts, and to avoid detection of his scheme, Motovich opened the accounts in the names of other individuals.  In one instance, Motovich stole the identity of a low-level worker and then bribed a banker to open accounts in the victim’s name and funnel millions of dollars through the accounts.  In other instances, Motovich impersonated the name of a legitimate company to open shell accounts and repeatedly forged the signature of an unwitting insurance broker.

In total, between 2012 and 2019, Motovich deposited more than $55 million into the accounts that he had opened in the names of other individuals and used the funds to purchase real estate; pay personal and corporate credit card accounts; purchase luxury items, including millions of dollars of diamonds, watches, jewelry, and clothing; make lease and purchase payments for Porsche and Lexus luxury vehicles; pay premiums on multi-million dollar life insurance policies for himself, his wife and others; renovate his penthouse apartment in Manhattan to include a swimming pool; and to fund other business ventures.

Motovich’s co-defendants Marina Kuyan, Kemal Sarkinovic, and Joshua Markovics all previously pleaded guilty to various charges in connection with the scheme.  They are awaiting sentencing.

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorneys Erik Paulsen, Andrew Grubin, and Matthew Skurnik are in charge of the prosecution, with assistance from Paralegal Specialist Daniel Arakawa.

The Defendant:

DAVID MOTOVICH
Age: 50
New York, New York

E.D.N.Y. Docket No. 21-CR-497 (WFK)