Milwaukee man convicted of laundering proceeds of business email compromise fraud schemes

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Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced Wednesday that following a bench trial concluding on April 23, 2024, Chief U.S. District Judge Pamela Pepper found Corey Lee, Sr., 52, of Milwaukee, guilty of one count of conspiracy to commit money laundering in violation of 18 U.S.C. § 1956(h) (Count 1), two counts of concealment money laundering in violation of 18 U.S.C. § 1956 (Counts 2 and 4), and two counts of engaging in financial transactions with money derived from criminal activity in violation of 18 U.S.C. § 1957 (Counts 5 and 6).

According to officials, the evidence presented at trial established that between May 2018 and approximately July 2019, Lee and his co-conspirators laundered over $1.2 million, which were proceeds of four business email compromise (“BEC”) schemes. A BEC scheme is a form of cybercrime in which a fraudster uses false and misleading emails to fraudulently induce a victim to transfer funds to a bank account controlled by the fraudster and the fraudster’s accomplices.

Authorities say, four businesses fell victim to the BEC schemes, and the evidence presented at trial revealed that Lee and his co-conspirators laundered those funds by transferring the money between and among various bank accounts they controlled, withdrawing large amounts in cash, and by transferring some of the money to others, in an elaborate effort to disguise the nature, location, source, ownership, and control of the fraud proceeds. Lee and his co-conspirators also used some of the victim funds for their own personal purposes, including vacations and luxury cars.

“Mr. Lee consciously and repeatedly laundered funds he knew were illicitly obtained by others. His actions helped cyber criminals victimize businesses by laundering money that was fraudulently obtained, making it more difficult for the victims and law enforcement to track the money,” said Haanstad.

“We are committed to working with our federal, state, and local partners to hold everyone involved in these schemes accountable for their actions,” Haanstad said.

“This case demonstrates the commitment of IRS Criminal Investigation in unraveling complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money, “stated Chicago Field Office Special Agent in Charge Justin Campbell.

Lee faces a maximum prison sentence of twenty years each for Counts 1, 2, and 4, and 10-years imprisonment each for Counts 5 and 6.

The case was investigated by the Criminal Investigation Division of the Internal Revenue Service. The case is being prosecuted by Assistant United States Attorneys Benjamin Proctor and Peter Smyczek.