Banks flagged Leonid Radvinsky's businesses, warning that he may be laundering money and providing platforms to underage and/or coerced foreign sex-workers.March 3, 2021 12:17 pm
Before Leonid Radvinsky acquired the now uber-popular, sex worker-driven subscription company OnlyFans, banks flagged his businesses numerous times and warned that Radvinsky may be laundering money and providing platforms to “underage children, and other vulnerable individuals [who] might be forced to provide services.”
Forensic News has acquired multiple Suspicious Activity Reports (SARs) filed by banks in the U.S. and elsewhere that detail over one billion dollars in what the banks labeled as suspicious transactions.
For years, Radvinsky has owned the company MFCXY Inc. which operates MyFreeCams, an adult webcam community that netted Radvinsky millions.
Radvinsky’s ownership and management of MFCXY made him a pseudo-celebrity in the industry, with his online moniker of “AdminLeo.” He appeared regularly at pornography and adult camming conventions but maintained an aura of secrecy and intrigue.
That reputation continued into the months after he purchased OnlyFans via its UK company Fenix International for an undisclosed sum of money in October of 2018.
At the time, OnlyFans was popular but nowhere near the business behemoth it would become months later. Corporate business records from the UK indicate that the company had just over 5 million euros in assets by the end of 2018, but by the time 2020 arrived, that figure increased seven-fold to 36 million with just 11 employees.
The COVID-19 pandemic, which saw near-record unemployment across the globe and kept millions of people in their residences looking for ways to pay their rent, turned OnlyFans into a household name and Radvinsky into a near-overnight billionaire.
According to its CEO, Tim Stokely, the son of a UK banker, OnlyFans had revenue of approximately $2 billion in 2020, with profits of $300 million. These numbers make OnlyFans more financially successful than competitor Patreon, which was recently valued at $1.2 billion.
Even with these astronomical numbers, though, Radvinsky has largely escaped the limelight. Most publications quote and refer to Stokely, without noting that Radvinsky owns the entire business empire.
Numerous Suspicious Activity Reports
By contrast, banks and the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) have been well aware of Leonid Radvinsky and his business dealings for years, flagging over $1 billion in potentially suspicious financial activity connected to Radvinsky’s companies.
Before learning that FinCEN had collected numerous Suspicious Activity Reports (SARs) from multiple banks concerned with Radvinsky’s businesses, Forensic News detailed in 2020 testimonies from dozens of content creators for MFCXY and OnlyFans that mirrored some complaints noted by the banks.
The models and content creators told Forensic News that they had their accounts arbitrarily deleted, and when customer support proved to be unhelpful, the money they earned via the platforms was gone forever. The dozens of models with whom we spoke said that they felt exploited by these business practices, in an industry with an already burdensome and unfair stigma. Many sex-workers rely on platforms like OnlyFans and MyFreeCams to pay their bills and provide for themselves, and the allegations of theft and fraud have upended their sources of income.
These allegations have caught the attention of the Adult Performance Artists Guild (APAG), a union representing those in the adult industry.
“Onlyfans has been closing accounts and taking money without giving enough reasons, or pointing out the violations,” APAG noted in a tweet in late February. Earlier, in 2020, APAG responded to a user saying his OnlyFans account was deleted resulting in a loss of income. The union said that they were aware of “thousands of others” in a similar situation. “Their support system is broken, and they have absorbed so much money, its [sic] insane,” they said.
Some of the most concerning allegations in the SARs are the banks’ written warnings that MFCXY “may be operating in areas where underage children, and other vulnerable individuals might be forced to provide services.”
Though the banks did not detail specific incidents of underage activity, they highlighted the fact that money was being sent to performers in “high-risk” areas such as Colombia, Romania, Poland, Bulgaria, Ukraine, Lithuania, the Philippines, and Russia.
A BBC study in 2020, found multiple examples of underage individuals advertising sexually-explicit activity on OnlyFans and “evidence of the age verification process being circumvented.” The report featured a woman named Hannah who allegedly signed up for OnlyFans at the age of 16.
OnlyFans responded by saying, “in late May 2019, we introduced an extra safeguard into our account verification process so that a Creator now has to provide us with a ‘selfie’ headshot with his/her ID in the image in order to prove that the ID provided belongs to the account holder.”
However, in mid-2020, Forensic News created an account on OnlyFans as was not asked to provide ID, nor prompted to provide a selfie photo, raising concerns about the verification process.
SARs, it should be noted, are not proof of wrongdoing or criminal behavior. Many of these reports are not followed with charges and the documents themselves should not be considered conclusive.
The above SAR, filed by Wells Fargo in late 2016 highlights numerous indicators of potentially illegal activity on behalf of Radvinsky and his companies, chiefly among them the possibility of underage children operating on his platform and the appearance of “layering” – one of the three steps of money laundering – wherein one “conceals the source of the money through a series of transactions and bookkeeping tricks.”
Here, Wells Fargo flagged millions of dollars flowing between accounts owned by Radvinsky or through 3rd party payment processors for no apparent reason.
Wells Fargo and other banks noted that Radvinsky’s businesses operate in the adult-content industry which is considered high-risk for financial institutions, though the nature of the industry could explain some of the suspicious transactions with customers around the world given that MFCXY hosts models from dozens of countries.
Adult entertainment businesses are considered high-risk by traditional banks and get flagged at higher rates due to a variety of reasons, principally among them the frequency of fraud and chargebacks in online businesses. Many in the industry contest that this label unfairly burdens sex workers, who regularly have to seek alternative methods to receive payments.
The SARs in this report focus largely on Radvinsky’s business dealings, and the vast majority of the complaints filed by the banks concern Radvinsky’s own money transfers apart from his companies’ payments to sex workers.
The following year, in 2017, Wells Fargo issued another SAR for Radvinsky and his companies MFCXY, Cybertania, and Activesoft. This SAR reiterated the bank’s concern about potential underage sexual activity on Radvinsky’s platforms and also Radvinsky’s business relationship with Choice Bank in Belize, a thread that was covered in the previous Forensic News article.
Wells Fargo also conducted a law enforcement database search for MFCXY and noted that the company was previously the subject of a 2012 investigation conducted by Romania’s anti-money laundering government organization, Oficiul Nacional de Prevenire si Combatere a Spalarii Banilor (ONPCSB).
Efforts to reach ONPCSB for comment were unsuccessful.
In late 2016, the New York branch of Barclays Bank conducted a thorough look-back at transactions made by MFCXY and over 30 other companies, mostly in the adult entertainment industry, for the years 2007-to-mid-2016. The review resulted in a SAR that found over $768,000,000 in suspicious transfers made by MFCXY and the 31 other subjects.
The bank found, similarly to the Forensic News report in 2020, that the Leonid Radvinsky-owned companies Cybertania and MFCXY, along with at least 2 other suspects, “are alleged to have not paid their models for their services, employed. . .underage models, among other claims.”
Though Cybertania and MFCXY were not Barclays clients, the banks filed the reports because the companies made multi-million dollar transactions with Barclays clients and, “due to the negative information involving the suspects and the fact that many of their counterparties engaged in USD wire activity in amounts exceeding their expected income.”
Forensic News is redacting the names of the other companies, as they are not the focus of this report and their activity appears to be less suspicious in nature than the activity of Cybertania and MFCXY.
“Barclays NY placed [REDACTED], MFCXY, and [REDACTED] on its Payment Rejection Filter effective July 21, 2016,” the SAR continues. A Payment Rejection Filter, according to an industry source, automatically rejects payments to customers of a bank transacting with the company on which the filter is placed.
Payoneer and Leonid Radvinsky
In recent years, Payoneer, an American-based financial services company, has appeared in many of these SARs. Founded by Yuval Tal in 2005, Payoneer is a company that allows account holders to send and receive funds using virtual wallets. The company is currently headquartered in New York City, with over a dozen offices around the world. Payoneer partners with a number of large companies, including Amazon and Airbnb, to facilitate money transfers all over the world.
Payoneer users also have the option to receive prepaid credit cards to use the funds in their accounts. In essence, Payoneer’s work is very similar to that of Venmo or PayPal. While Payoneer purports to offer its users an easy service to transfer funds, it has also recently come under the microscope for abandoning those same users. According to a recent NBC News report, Payoneer users lost about 100 million dollars worth of funds held in Choice Bank in Belize when the bank collapsed in 2018.
Many of those that lost money due to the collapse of Choice Bank were in the pornography industry, as the bank notoriously took-on high-risk clients. One of these large clients, according to the secret bank documents, was MyFreeCams, Radvinsky’s venture.
Since at least 2010, MFCXY has transacted business using an account with Payoneer to, among other things, pay the performers who use its platform. Specifically, that same year, Radvinsky requested that a $1,300,000 wire transfer be sent directly to Payoneer. This request was made for reasons that were unknown to the banks.
Radvinsky’s business relationship with Payoneer continued to grow in the transactions. Beginning on or about October 8, 2013, MFCXY made one hundred forty-six wire transfers through an account held with Payoneer and Wells Fargo. These wire transfers were sent to individuals and entities in a number of countries, including but not limited to, Ukraine, Russia, Bulgaria, and Colombia. The wire transfers totaled approximately $28 million raising concerns within the banks due to the amount and location the transfers were sent.
The true source and ultimate destination of many millions flowing through MFCXY’s accounts were unknown, thus triggering the SARs.
Later in 2016, beginning on October 26, 2016, and running through March 8, 2017, Payoneer was flagged in a number of SARs involving MFCXY. During the five-month period, a total of one hundred thirty-three wire transfers, aggregating to $56,150,005, were transferred by MFCXY through two of its accounts.
According to the SAR, approximately $32,800,000 was transferred directly to and through MFXCY’s account with Payoneer. The SAR noted that the large number of transfers, coupled with the number of funds as well as the unknown source and destination of the same, made the transactions suspicious. These funds were later distributed to a number of other accounts not directly associated with MFCXY or Radvinsky.
Sources familiar with the matter told Forensic News that MFCXY is no longer a client of Payoneer, as a result of Payoneer’s decision to stop acting as a program manager for high-risk businesses. Payoneer, according to one of the sources, has never been found to have violated any of its anti-money laundering obligations by FinCEN or any other regulator or authority.
The most blatant suspicious activity within the SARs, according to a current banking expert who spoke with Forensic News on condition of anonymity in order to protect his job, were the many millions of dollars Radvinsky transferred between accounts he owned. These transfers – for which the banks were provided no explanation – gave the appearance of layering, the practice used to conceal the source of potentially illegal activity and make it more difficult for investigators to track.
One SAR filed by JP Morgan Chase in 2016 noted that the MFCXY account at Wells Fargo remitted (transferred) over $87 million to their account at JP Morgan in just a one-year time period. In essence, according to the bank, MFCXY was paying itself via a different bank account for no apparent legitimate business purpose.
The bulk of the transfers were in large round-dollar amounts of $400,000, another red flag in banking compliance. JP Morgan noted that the remittances were also suspicious due to the fact that for every transfer, MFCXY changed the amount sent by one penny, a possible way to avoid scrutiny and/or evade automatic triggers within the bank’s anti-money laundering compliance programs.
The banking documents point to numerous potential legal difficulties for Radvinsky. There have been no charges filed against Radvinsky and the allegations within the banking documents are not conclusive evidence of any criminal wrongdoing.
Radvinsky did not reply to a detailed list of questions for this article.