A man who laundered money from the sale of counterfeit erectile dysfunction and slimming pills through bank accounts linked to a charity has been jailed.
On Thursday, 4 July, Edward Cohen, 67 of Paget Road, London N16, was sentenced to a total of seven-and-a-half years for money laundering and theft offences, and two years and three months’ imprisonment for the benefit fraud. The sentences are to run concurrent, to bring the total jail sentence to nine years and nine months’ imprisonment.
Cohen was found guilty of the following offences on Friday, 21 June:
– One charge of money laundering (entering into an arrangement to control/use criminal property).
– One charge of money laundering (acquiring criminal property).
– Theft (totalling £165,000).
– Supplying false information (to the Charity Commission).
He was found not guilty of a second money laundering charge.
At an earlier hearing at Southwark Crown Court in April 2019, Edward Cohen was found guilty of fraud relating to housing benefits to the value of £233,000.
The London Regional Asset Recovery Team (London RART), part of the Met’s Specialist Crime Command, launched an investigation in March 2013 after receiving information about the sale and purchase of counterfeit, unlicensed medication from a number of online internet pharmacies.
A large number of websites offering erectile dysfunction medication and slimming aids – primarily aimed at customers in Austria, Germany, Switzerland and France – were identified.
Further enquiries established that a group of UK-based companies based in Stamford Hill linked to the Chabad UK charity was receiving card payments for these products via a number of merchant accounts.
Edward Cohen was the Administrator of Chabad UK charities, and operated the financial accounts.
This matter was referred to police after a number of pharmaceutical companies had received a number of complaints from customers receiving counterfeit medication.
The bank accounts linked to Chabad UK were analysed. Investigators found that from March 2012, the number of transactions dramatically increased and the majority were payments from overseas accounts.
The number of “chargebacks” on these merchant accounts – when the customer requests a refund of the card payment, often due to goods being faulty or not received – linked to the sale of the medication also saw a large rise from this period.
From March 2012, 14 bank accounts which received payments from the merchant accounts were opened in the names of charities and companies associated with Chabad UK.
Between March 2012 and September 2014, nine companies of the Chabad UK group – seven of which were registered charities – processed over £10.3million. A very small proportion of which were confirmed as legitimate charitable donations.
During the same period, £8,601,299 was transferred to Foreign Exchange accounts, and £1,676,011 was transferred to a number of Money Service Bureaus. Thousands of pounds were also transferred to the defendants’ personal accounts.
During the course of this investigation, links were identified between this operation and investigations being conducted in a number of European countries into online pharmacies supplying of counterfeit medication.
Edward Cohen also stood trial for theft, relating to the personal use of funds given as charitable donations. In analysing the charity’s accounts, a small proportion of nearly £1.5m identified as donations were actually sent to charities, with payments to personal debit and credit accounts identified.
Cohen was arrested during a series of search warrants executed at several addresses in September 2014.
Evidence including accounts books, trading documents and computers were recovered from the addresses. This material confirmed links to charities, the sale of the counterfeit prescription, receipts of payment and information about accounts.
Edward Cohen was also sentenced for benefit fraud after being convicted at an earlier trial. The court heard that he sold a property in Paget Road in 2000 to a company, Masbro Ltd. It was found that one director of Masbro Ltd was an associate of Edward Cohen’s. Edward Cohen was the sole signatory of two bank accounts opened by Masbro Ltd, for the purpose of committing the fraud and using the housing benefit to pay for the mortgage held by Masbro while Edward Cohen was a tenant at the property.
Detective Sergeant John Nagle from the North West Command Unit, who led the investigation, said: “Edward Cohen set up a pan-European operation selling dangerous counterfeit medication to thousands of unsuspecting people, pocketing millions of pounds in the process.
“In an effort to conceal the profits from Edward’s business venture and with full knowledge that what he was doing was illegal, the money was funnelled through bank accounts set up by a legitimate charity that he ran.
“Edward Cohen also transferred large sums from donations made to the charity in good faith into his own bank accounts, which paid for rent and other personal expenses.
“This was a hugely complex case, spanning several years and European borders with multiple suspects, which was meticulously unpicked by investigators.
“This conviction should send a message to anyone who thinks that they can run online businesses selling illegal products and launder the proceeds to throw law enforcement off the scent; there is always a money trail and we will follow it until we have enough to convince a jury of the true scale of offending.”
+ Edward Cohen’s son David Cohen, 38 (31/08/1980) of Ashbourne Avenue, NW11, was found not guilty of money laundering and supplying false information to the Charity Commission.
Two additional charges – money laundering, and theft – were dismissed during the trial.
At the 4 July hearing, he was sentenced to six months’ imprisonment, suspended for 18 months and ordered to complete 200 hours of unpaid work after being convicted of fraud (to the value of £15,000) at an earlier trial.