Rama Krisna Kuchibhotla Vyasulu, the former head of Rosemont Financial, is presently completing his short sentence at a halfway house*; he will be released on 14 September, after serving less than one year for money laundering, in a matter where he agreed to launder what he was told was drug profits in the amount of $900,000, for undercover DEA Agents. The true amount of damage that he caused to the international financial community, however, cannot be measured, and his punishment amounts to a mere slap on the wrist from the criminal justice system.
His arrest resulted in the seizure of a reported $240m, from the accounts of 48 money service business clients, maintained through Rosemont, serving the parallel market for dollars in Venezuela. Mr. Vyasulu had represented that their use of "sub-accounts" was covered by Rosemont, but the US Attorney's office in Boston disagreed, asserting that MSB registration was required for both FinCEN & the State of Florida. The result was that huge fines were levied, extracted directly from the seized funds, after months of uncertainty and negotiation through counsel, during which time pointed threats of criminal indictment were directed at the principals of these companies. Some of the MSBs suffered greatly from lack of access to their accounts, which held mainly client funds, the MSBs being currency exchange houses that obtained dollars for Venezuelan buyers.
I was personally engaged to perform Enhanced Due Diligence on the client lists of two of the MSBs, and I failed to find any narcotics traffickers, money launderers, or OFAC-sanctioned parties therein. There was no smoking gun; much ado about nothing. The seized bank accounts did not contain dirty money, plain and simple.
The United States ended up with an obscenely large windfall, due to what some observers have deemed were purely unintentional, technical violations of the registration requirements. Clearly, justice was not served here. Granted, money service businesses must follow the law, but such Draconian penalties are excessive.
I would hope that the cause of this MSB nightmare, Mr. Vyasulu, does not find his way back into the financial services industry after his release.