JAILED FOR PART IN HUGE FRAUD CONSPIRACY
A former Gwynedd petrol station manager who moved $7.8m in a massive money laundering scam has been locked up.
Michael Kinane admitted being part of a plot to target a Londonbased pharmaceutical investment company and a US-based investment company.
The scam, which was said to be the biggest business email compromise fraud and the highest value fraud in the last decade, was uncovered following an FBI tip-off to North Wales Police.
Kinane was arrested last summer at Gatwick Airport and initially denied being involved in the plot, claiming his identity details had been stolen by others.
The 41-year-old, of High Street, Porthmadog, pleaded not guilty when he appeared at Caernarfon Crown Court and a trial was due to be held later this month.
But, in December, he changed his plea to guilty to a charge of conspiracy to money launder, and appeared yesterday for sentence.
He also pleaded guilty to three frauds totalling £150,000 involving hire purchase agreements for three motor vehicles.
He’d claimed in one for a Range Rover that he was a Shell company director.
Jailing the Sri Lankan-born businessman for seven years and four months, Judge Nicola Jones said: “Your role was to launder money through accounts you had set up specifically.
“You took great care to optimise the use of these accounts and were ultimately successful. You managed to move $7.8m in just three days.”
The judge accepted Kinane was not the architect of the scam, but said she was not convinced his remorse was genuine and added that he was “essentially motivated by greed”.
“You played an essential role,” she said. “Without you, the money would not have been successfully laundered.”
Defence counsel Rhys Meggy said Kinane had found himself “totally out of his depth” after becoming involved in the scam.
“He has been very foolish and has only himself to blame,” he said.
Mr Meggy said Kinane had always worked hard and had taken over the franchise of the Shell petrol station in Porthmadog in 2016.
“He was well known and well liked in the area,” he said. “He worked hard and led a good and honest life, but he always dreamed of achieving more.”
Mr Meggy said Kinane met his coconspirators in London in late 2017 and “had his head turned” by their proposals to create a business that imported electronic goods from Asia.
“He had invested in their business, which he believed was legitimate at the outset,” he said.
The bank accounts were set up and he later discovered the intention was to transfer money in and out of these accounts, the barrister said.
“He is but a fall guy, which is why he sits alone in the dock today,” said Mr Meggy.
Kevin Slack, prosecuting, said pharmaceutical company Avillion were in contact with US investment company Clarus Ventures.
The British company had their email system hacked and requests were made to Clarus Ventures for funds to be paid into accounts, one of which had been opened by Michael Kinane.
On November 2, 2018, $7.8m was paid into Kinane’s NatWest account from the victim company.
In anticipation of the arrival of funds, Kinane had set up two foreign currency accounts: a US dollar account and a euro account.
Mr Slack said that, in order to ensure significant sums were able to be dispersed through his accounts, he had made enquiries with the bank about making multiple transfers of between $500,000 and $600,000 in a single transaction.
Between November 2 and 5, the funds arriving into Kinane’s accounts were dispersed internationally after he provided his banking security details to others.
The money was paid into accounts based in Poland, Germany, Hong Kong, China and Malaysia.
Funds were also transferred to separate accounts linked to Magic Lily Ltd, a business Kinane had set up in February 2018 from his home in Porthmadog.
Mr Slack said two payments totalling £55,888 from the stolen funds were further transferred to his Magic Lily business. These were followed by a payment of about the same amount to a watch shop in London.
Referring to the vehicles, Mr Slack said deposits were paid for an Audi, Mercedes and a Range Rover and hire purchase agreements made, but payments were not maintained. Two of the vehicles have been recovered and the third - a Mercedes - has been traced to Romania, the court heard.
The US company reported the matter to their bank, who in turn contacted the FBI and Action Fraud, who referred the matter to North Wales Police.
The police investigation built up a fuller picture of the scam and led to the arrest of Kinane as he returned to the UK last August.
Bank documents for 32 accounts attributable to Kinane have been found.
The 13-month investigation has resulted in the recovery of $1,616,202 to the victim. The total outstanding funds are $6,241,823.
A Proceeds of Crime Application timetable was agreed and a confiscation hearing will be held in July.