Bank money laundering whistleblower threatened

Sep 30, 2013 7:41 PM

A whistleblower, who played a major role in the arrest and conviction of a Utah banking official involved with the offshore gambling sites PokerStar and Full Tilt Poker in laundering some $200 million of illicit gambling proceeds, was lauded last week at an anti-money-laundering conference in Las Vegas.

Cathy Scharf, identified as a compliance officer for SunFirst Bank of Utah, told of the threats and intimidation she had to endure while accumulating the necessary evidence that resulted in an end to the bank’s involvement and the jailing of the bank’s vice chairman.

According to Scharf, her bosses told her the bank would fail without the illegal income and brought in criminal lawyers to threaten her with arrest if she told on them.

Despite the threats, Scharf told her colleagues, she hired a lawyer, started a diary of her travails, and began working with federal authorities, according to what Hannah Dreier wrote in her report for the Associated Press.

Scharf described the period as “a scary time,” adding that during one weekend when she was taking a trip to Las Vegas, she saw a yellow Lamborghini shoot by her. The driver, she said, was one of the “honchos” of the bank.

“All I could do was shut my eyes,” she said.

How did she get herself in such a position? It was during the recession, she said, when she needed a job and found an opening at the Utah bank. She moved from Las Vegas to St. George, Utah, only to find during the first week of her employment that the bank was conducting illegal business.

The bank was making $400,000 a month in transaction fees, Scharf said, violating a 2006 law that makes it a federal crime to knowingly accept payment for illegal Internet gambling.

Scharf received the plaudits of her colleagues at the Association of Certified Anti-Money Laundering Specialists who credited her with spurring a raft of new policies, including increased attention to these kinds of operations by the Federal Deposit Insurance Corp.

Ray Poirier is the longtime executive editor at GamingToday.

Contact Ray at [email protected].

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