Arvinsingh “Vinesh” Canaye, who was general manager of Beaufort Management, an offshore company connected with Beaufort Securities.
In late July, he withdrew a not-guilty plea and admitted taking part in the money-laundering conspiracy, according to an article by UK newspaper The Times.
He is also facing charges of conspiracy to defraud the US, which he has denied.
Canaye, a Mauritian citizen, ran Beaufort Management from the Indian Ocean island and was one of six defendants named in a US indictment issued in March.
This indictment came just hours after the Financial Conduct Authority (FCA) shut down Beaufort Securities, a discretionary fund manager, over concerns it was insolvent.
Canaye and the FBI
According to the court documents, Canaye, along with the other defendants, was accused to have “devised and engaged in a scheme whereby they agreed to launder money by facilitating financial transactions to and from the US, which involved securities fraud proceeds and property represented to be proceeds of fraud in the sale of securities”.
Second defendant extradited
The Times also reports that a second defendant, Adrian Baron, has been extradited from Hungary to the US.
A British citizen, Baron was chief business officer of Loyal Bank, an offshore bank that has offices in St Vincent and the Grenadines and Budapest.
He has been accused of a money laundering conspiracy involving Beaufort and Loyal Bank, and conspiracy to defraud the US.
According to court documents, Baron has pleaded not guilty to all counts.
‘Pump and dump’
US prosecutors claim an investigation into Beaufort Securities by the Federal Bureau of Investigation revealed that it was operating “pump-and-dump-schemes”.
These are schemes where investors are encouraged to buy shares from fraudsters, pushing up the stock, which then collapses once the scammers sell.
It is also alleged that Beaufort, along with its accomplices, had discussed laundering £6.7m ($8.7m, €7.5m) through the sale of a Picasso painting.
Beaufort Securities insolvency
UK-based Beaufort Securities and its subsidiary Beaufort Asset Clearing Services entered insolvency in March 2018.
All client money and assets were held with Beaufort Asset.
It was revealed at the time that the firms had been given a stay of execution by the FCA to allow the FBI to finish an undercover operation.
In April, the UK’s Financial Services Compensation Scheme announced it was aiming to reimburse circa 2,700 clients, provided their investment was worth less than £2,000.
In May, investors were dealt a blow after it was revealed they could face covering £100m in liquidation costs.
However, it was later stated that nearly all of the firm’s individual customers would be protected.