February 22, 2007

ICE-led investigation unravels Cuba travel scheme that netted more that $1 million in profits
Two men arrested and charged with knowingly conspiring to circumvent OFAC regulations to facilitate travel to Cuba under false religious pretenses

MIAMI- Two men who conspired to defraud the U.S. government by soliciting religious licenses for travel to Cuba were arrested here Wednesday following an investigation led by U.S. Immigration and Customs Enforcement (ICE).

In a criminal complaint unsealed today, Victor Vazquez and David Margolis were charged with conspiring to violate Cuba-related travel regulations. Vazquez is additionally charged with making materially false statements in applications to obtain religious travel licenses to Cuba. As alleged, the fraudulently obtained religious licenses were then used to facilitate more than 4,500 trips to Cuba.

This complaint is the direct result of the work of the Cuban Sanctions Enforcement Task Force, which was launched in Oct. 2006, to investigate and prosecute violations of existing U.S. economic and trade sanctions against Cuba. The Task Force, chaired by the U.S. Attorney's Office, includes members from ICE, OFAC, FBI, IRS, Department of Commerce - Office of Export Enforcement, the U.S. Coast Guard, and the Field Operations, Air and Marine and Border Patrol divisions of U.S. Customs and Border Protection (CBP). Each member agency brings a wealth of experience and particular expertise in areas necessary to successfully investigate and prosecute embargo violations.

The complaint charged Vazquez and Margolis with one count of conspiring to defraud the United States by impairing, obstructing, and defeating the Office of Foreign Assets Control's (OFAC) administration and oversight of the Cuban Assets Control Regulation's restrictions on transactions related to travel to Cuba and to commit an offense against the United States by making materially false statements in an application for a religious travel license submitted to OFAC. Vazquez is additionally charged with two substantive counts of making false statements in two separate applications for religious licenses for travel to Cuba. Each charge is punishable by up to five years imprisonment.

"Those who seek to circumvent our nation's laws by traveling to Cuba under false pretenses should know that they too will be held accountable," said Anthony Mangione, acting special agent in charge of the ICE Office of Investigations in Miami. "ICE will continue working with its law enforcement partners to enforce America's travel restrictions to Cuba."

United States Attorney Alex Acosta stated, "Today's criminal charges are a wake-up call to those who seek to violate the economic and trade sanctions against Cuba. The United States Attorney's Office is determined to enforce vigorously the sanctions program against the Cuban regime, with the aim of hastening a transition to democracy in Cuba."

"Those who seek to evade U.S. sanctions face serious legal consequences," said Adam J. Szubin, director of the Treasury's Office of Foreign Assets Control. "Facilitating fraudulent religious travel to Cuba is a crime, and it unfortunately undermines the good works of legitimate religious groups."

Charles E. Hunter, Acting Special Agent in Charge for the IRS said, "The IRS remains committed to working with the U.S. Attorney's Office in this task force and to vigorously investigate violations of the tax laws."

The Cuban Assets Control Regulations were first issued by the U.S. Government on July 8, 1963, under the Trading With the Enemy Act and remain in force today. The sanctions program applies to all U.S. citizens and permanent residents wherever they are located, to all persons and organizations physically in the United States, and to all branches and subsidiaries of U.S. organizations throughout the world. Administered by OFAC, the basic goal of the sanctions is to isolate the Cuban government economically and deprive it of U.S. dollars.

Under the law, persons subject to the jurisdiction of the United States are prohibited from engaging in Cuba travel-related transactions, unless authorized by OFAC. OFAC issues licenses to religious organizations, and allows individuals in those organizations to travel to Cuba to engage in religious activities under the auspices of the organization that holds the license. Pursuant to the regulation, however, travel-related transactions under the religious license "must be for the purpose of engaging, while in Cuba, in a full time program of religious activities."

According to the complaint affidavit, Vazquez engaged in a scheme through which he fraudulently obtained licenses for religious travel to Cuba by providing false information on the OFAC license applications. Vazquez and Margolis, individually or jointly, fraudulently obtained religious licenses in the names of non-existent churches, including Assumption Church of Christ, Interact Faith Ministry, Outreach Hispanic Ministries, and Woodland Church of Christ.

These fraudulent licenses, according to the allegations, were then provided to travel service providers, which sold the use of the fraudulently obtained travel licenses to thousands of individuals seeking to travel to Cuba for non-religious purposes. Travel agencies sold airline tickets and authorization to travel under these religious travel licenses to individuals who otherwise could not legally travel to Cuba, charging each traveler $250 for the use of the fraudulently obtained license. Individuals who have traveled under these licenses have admitted that they did not travel for religious purposes. Through this scheme, between April 2006 and Jan. 2007, more than 4,500 travelers used the fraudulently obtained religious licenses to travel to Cuba.

Today's announcement was made by Anthony Mangione, acting Special Agent in Charge of the ICE Office of Investigations in Miami; R. Alexander Acosta, United States Attorney for the Southern District of Florida; Adam Szubin, Director, Office of Foreign Assets Control (OFAC) - Department of the Treasury; Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Charles E. Hunter, acting Special Agent in Charge, Internal Revenue Service (IRS); Michael L. Johnson, Special Agent in Charge, Office of Export Enforcement, Department of Commerce, Miami Field Office; Rear Admiral David W. Kunkel, Commander of the 7th Coast Guard District; Thomas S. Winkowski, Director, Field Operations, U.S. Customs and Border Protection (CBP), Miami Field Office; and John Beutlich, Director, Air Operations, U.S. Customs and Border Protection. Mr. Mangione commended the investigative efforts of all Task Force members and the City of Miami Police Department, the Miami-Dade Police Department, the Broward Sheriff's Office and the South Miami Police Department for their outstanding work in this investigation. This case is being prosecuted by Assistant U.S. Attorneys Karen Gilbert and Scott Edenfield.

-- ICE --

U.S. Immigration and Customs Enforcement (ICE) was established in March 2003 as the largest investigative arm of the Department of Homeland Security. ICE is comprised of five integrated divisions that form a 21st century law enforcement agency with broad responsibilities for a number of key homeland security priorities.

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