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Inside the $55M Brooklyn Shadow Bank That Fooled Everyone
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Subscribe27 NOV 2025 / ACCOUNTING & TAXES
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David Motovich, the owner of Midwood Lumber, was convicted on 16 felony counts in federal court related to a covert banking operation that illegally processed over $55 million for construction companies avoiding payroll taxes. The case underlines the importance of financial compliance, with Motovich's illegal activities - including off-the-books payroll, establishing shell companies, and intentional non-filing of Suspicious Activity Reports or Currency Transaction Reports - serving as a reminder to accountants and construction industry professionals of the consequences of financial fraud and the increasing scrutiny of financial institutions' anti-money laundering systems.
From the outside, Midwood Lumber looked like any neighborhood family business. But upstairs, federal prosecutors say it was something very different, a full-blown underground bank that moved more than $55 million for construction firms looking to keep pay...
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