If you would like to read an article about the indictment you can read about it here on the Atlantic Journal Constitution.
If you're really interested in this subject matter you'll also want to check out the website IraqiDinar.Org. The site does a great job of laying out various lawsuits between Sterling Currency Group and other Dinar dealers, as well as the recent legal actions against Sterling Currency Group. The site does a great job of explaining things through easy to follow charts and infographics. You should definatly check it out
Why Sterling Currency Group is in trouble with the government, is that the government alleges that Sterling Currency Group did two things, money laundering, and fraud.
To give a little background. Most currency sellers and dealers must register as either Money Transmitters or Money Services Businesses (MSB's). Ever since 2001 and when terrorism really hit the mainstream, MSB's have been considered "high risk" to financial institutions such as banks and credit card merchant processors.
Because of this it's very difficult for these types of businesses to acquire bank accounts and merchant processing which is why you see very few currency sellers accepting credit cards. Typically it requires a lot of due diligence on the bank and merchant accounts part, and also comes with hefty fees. Some "high risk" industries, either currency or other can pay as much as 10% for credit card processing if they are even able to get it. As far as (MSB) bank accounts it can take years to acquire one of these accounts and again comes with steep fees and a lot of red tape.
Sterling Currency Group had a number of issues and lawsuits with various banks. If you're interested you can read the details on IraqiDinar.Org, they have all the court transcripts and descriptions of these issues posted there.
Knowing this, we can assume Sterling, as any MSB or currency business most likely had difficulty acquiring bank accounts. Several other Dinar dealers such as DinarCorp have also been in trouble for using shell companies with non currency related names to filter money through and hide from either banks or merchant processors the true nature of their business.
Sterling Currency Group, according to the government, had a number of "shell companies". You can read all the court docs on IraqiDinar.Org. Sterling had a number of other non currency related companies such as Sterling Online Processing or Sterling Funder, possibly among others.
In court documents as well as on their very own website they directed their customers to make checks payable to "Sterling". They said checks made out to any other name, including "Sterling Currency Group" would be returned and the orders would not be accepted.
It seems that the government is alleging that Sterling Currency Group specifically did this so they could put those checks into bank accounts not for Sterling Currency Group, but for Sterling Funding and any other businesses that had the name Sterling in them.
Most likely when depositing checks at the bank a teller would not take issue that a check was made out to "Sterling", and would deposit said check in pretty much any bank account whether it was "Sterling Currency Group", "Sterling Funder" or "Sterling Online Processing". By doing this Sterling would be able to more easily obtain bank accounts for non currency related businesses, but would still be able to deposit checks from Sterling Currency Group into those other businesses.
Now again, getting back to the currency industry. As some of you may know, in order to legally sell currency over $1,000 per person per day according to Fincen and the US Treasury one must be registered as a (MSB) or money services business. It doesn't seem as if these other companies of Sterlings were registered as money services business. One other thing they may have been able to do is make those businesses an "agent" of Sterling Currency Group, and in that case it would most likely be okay to do that, however that would have probably made it difficult to get the bank account for that business which seems to be the exact reason one would use a "shell company".
Long story short that is what the money laundering charge the government is alleging seems to hing on. You can view a picture of a check made payable to "Sterling" below. We'll also include some snippets from court documents which may explain this in a more clear fashion.
|Sterling Currency Group Indictment|
Above is the check showing how Sterling Currency Group was instructing customers to make checks payable only to "Sterling" and stating checks made out any differently would be returned. Below we'll include a few snippets from the court documents which may explain this more clearly.
79. Based upon SCG’s strict policy of requiring customers to make all checks payable to “Sterling” (rather than “Sterling Currency Group”), as well as the fact that two affiliated companies also begin with the name “Sterling” (Sterling Online Processing Services, LLC9 and SterlingFunder, LLC10), it appears that Defendants have “formed a shell company” (or two), which is being used to “mask payments” (i.e. launder money as SCG often implies) to SCG, and/or that Defendants “filed fraudulent statements and documents to obtain [bank] account[s].”
80. This becomes apparent when looking at the various terms and conditions on SCG’s website; it is no coincidence that SCG refers to itself specifically as “Sterling Currency Group” or “Sterling Currency Group, LLC” almost every time – except when directing customers to make all checks payable to “Sterling”;
A. On SCG’s “Payment Methods & Instructions” webpage, it specifically states – seven times – that (1) “ALL CHECKS MUST BE MADE OUT TO STERLING. CHECKS MADE OUT TO ANY OTHER NAME WILL BE RETURNED TO YOU”; (2) “Make your cashier’s check, certified check, official bank check, or money order payable to Sterling”; (3) “IMPORTANT: Please make your cashier’s check, certified check, official bank check, or money order payable to Sterling. Checks made payable to any other name will be returned”; (4) “All checks must be made out to Sterling”; (5) “Make your cashier’s check, certified check, official bank check, or money order payable to Sterling. Checks made payable to any other name will be returned”; (6) “Send your check or money order to: Sterling”; and (7) IMPORTANT: Please make your cashier’s check, certified check, official bank check, or money order payable to Sterling. Checks made payable to any other name will be returned.” See Payment Methods & Instructions, attached as Exhibit 22 hereto. Curiously, however,
SCG refers to itself as “Sterling Currency Group” or “Sterling Currency Group, LLC” throughout these Instruction – except when directing customers to make all checks payable to “Sterling.” See id. SCG never directs customers to make checks payable to “Sterling Currency Group” or “Sterling Currency Group, LLC” in any part of these Instructions.
B. On SCG’s “Payment Terms” webpage, it specifically states at the top of the page that “ALL CHECKS MUST BE MADE OUT TO STERLING. CHECKS MADE OUT TO ANY OTHER NAME WILL BE RETURNED TO YOU.” See Payment Terms, attached as Exhibit 23 hereto. However, throughout these Terms, SCG refers to itself as “Sterling Currency Group” or “Sterling Currency Group, LLC” 11 out of 12 times — except when directing customers to make all checks payable to “Sterling.”
See id. SCG never directs customers to make checks payable to “Sterling Currency Group” or “Sterling Currency Group, LLC” in any part of these Terms. See id.
C. On SCG’s “Terms & Conditions” webpage, it specifically states in the section entitled “Payment” that “[a]ll checks must be made out to Sterling.” See Terms & Conditions, attached as Exhibit 24 hereto. However, throughout these Terms, SCG refers to itself as “Sterling Currency Group” or “Sterling Currency Group, LLC” 49 out of 53 times — except when directing customers to make all checks payable to “Sterling.” See id. SCG never directs customers to make checks payable to “Sterling Currency Group” or “Sterling Currency Group, LLC” in any part of these Terms. See
81. By having customers make their checks payable to “Sterling,” SCG is likely depositing the checks in the bank accounts held by Sterling Online Processing Services, LLC and/or SterlingFunder, LLC.
82. It appears that Defendants are knowingly and willfully committing bank fraud on a daily basis by intentionally depositing checks on behalf of Sterling Online Processing Services, LLC and/or SterlingFunder, LLC when Defendants are aware that these checks were not intended to be made payable to either Sterling Online Processing Services, LLC or SterlingFunder, LLC.
So where does the fraud element come in? Well it's legal to sell Iraqi Dinar or really any currency for that matter assuming there are not sanctions again the currency such as Cuba or North Korea.
With Free Speech it is also legal for any idiot to start a blog claiming the Iraqi Dinar or any other currency for that matter is going to go up in value. They can even claim to have "high level sources" it would seem.
Where the problem seems to come in is where they work in conjuction with one another. Sterling Currency Group allegedly paid "Terry K" over $160,000 to pump up the Iraqi Dinar with claims he had high level information that the Iraqi Dinar would soon increase in value dramatically. Sterling themselves in internal correspondence seemed to estimate that Terry K was responsible for over 80% of their business.
The government it seems was very clear in their wording and laying out this claim which almost seems to insinuate paying someone to pump Dinar or anything for that matter isn't necessarily in itself illegal, as they seem to go a step further and specifically address the fact that Sterling executives actually went on the radio shows and assured buyers that what Terry K was saying was likely. They also mentioned how Sterling claimed to have "cashout" locations at airports in expectation of Terry K's predicictions comming true. The government alleges Sterling never had any cashout locations setup or planned and the entire thing was a ruse.
The government also seems to put a heavy focus on stating that not only did Sterling Currency Group do all of this, but they did so "knowing" or at least having the belief that the Iraqi Dinar would never revalue. Does that mean if Sterling Currency Group executives themselves believed in a revalue they could not be charged? We don't know, but due to the focus the government put on this, it would seem at the very least the case against them would be weaker if it wasn't clear that they pumped these rumors while believing the opposite.
Surprisingly there is no mention of TNT Tony, who seems to be the bigger name in the "Dinar Pumping" industry. This is surprising as TNT Tony seems to be one of Sterlings biggest supporters and also according to most a "pumper".
Currency sellers are licensed and registered to sell currency, they are not licensed nor registered to sell investments or investment advice. DinarCorp, another Dinar dealer recently got into hot water themselves for selling Dinar options which they were not licensed or registered to do. This past summer they were shut down by the SEC for this.
Where Does This Leave The Iraqi Dinar?Is the Iraqi Dinar a scam? The Iraqi Dinar itself is not as scam and never has been. Technically speaking some people actually made money off the Iraqi Dinar. If you were to have bought the Iraqi Dinar way back in late 2003 or early 2004 before the whole Dinar industry popped up, you could probably pick up a million Dinar off of eBay for around $400 or $500. At some points over the past few years you could have sold that Dinar to a Dinar dealer, a bank, or on eBay for as much as $1,000. Some people actually made money off their "investment" or better named "speculation" on the Iraqi Dinar.
Most people however were late to the game and those who bought between 2006 and 2013 could have paid as much as $1400 for a million Iraqi Dinar. Today those people would be lucky to get $800 for their Dinar.
The Iraqi Dinar itself is not a scam, it's a currency. As with any currency people can buy it speculating it will go up. When the British Pound or Euro are at all time lows many people either buy those currencies hoping they will go up, or buy property in those countries hoping to take advantage of the adventagious exchange rate. If the currency rebounds and goes up that property will be worth a lot more due to a more favorable exchange rate.
The idea of speculating on currency is not a scam or unique to the Iraqi Dinar. What is unique to the Iraqi Dinar is the whole "mythology" and the pumping of it with rumors of incredibly high returns and "gurus" claiming to have inside knowledge about not only when it will happen, but at what value the rate will come out at.
The Iraqi Dinar is also unique in the whole "reserve" program thing which popped up in the industry where some Dinar dealers would sell 30, 60 or 90 day "reserves" or "options" at inflated prices. If the Iraqi Dinar did not revalue in that window the buyer lost all their money and had nothing to show for it, but for years many people would continue making monthly payments to continue their reserve.
Today reserves are no more after DinarCorp was shutdown by the SEC for this very practice. Literally within a day or two of DinarCorp being shutdown nearly every dealer offering reserves or options had taken down any mention of the program from their website. The one lone dealer still offering reserves is Treasury Vault.
Wrapping up, the Iraqi Dinar itself is not a scam, it's a currency of a country. The scam is those making false claims that it's going to drastically increase in value. The scam is dealers working in conjuction with Guru's and website operators to perpetuate this "scam" and in some cases even telling these individuals what to say and when to say it. The scam is selling reserves and options without being registered to sell investments or give investment advice.
Does that make the Iraqi Dinar a bad investment? That is for you to decide. Many people who bought Iraqi Dinar back in 2003 and 2004 thought ousting Saddam Hussein and bringing stability to a war torn country who's rich in oil and resources could yield returns in the future.
That is not a crazy thing to think. At the outset no-one knew Iraq would still be a war torn country full of chaos more than a decate later. Things could have turned out differently, Iraq could have found stability and it's possible their currency could have appreciated in value. No where near the 150,000% gurus and dealers claimed but it's possible there could have been a small or reasonable increase in value.
What are your thoughts? Did you ever believe a small $800 investment could yield a million dollar or a multi-million dollar return? Like your grandmother probably told you, if it sounds too good to be true it probably is.
That said many people purchased the Iraqi Dinar hoping Iraq would find stability and maybe would double in value. If that were the case your $800 investment may have turned into $1600 and doubling your investment in itself is incredibly rare but at least that is a more reasonable possibility.
Today however the outlook for Iraq doesnt look promising, that said, only time will tell.