US Copier Fraud Case Exposes Trade-Based Money Laundering Risks

Two Texas residents have been charged in connection with an alleged international money laundering scheme that used the purchase and export of secondhand photocopiers to move proceeds from overseas fraud operations.

The US Department of Justice (DOJ) announced the charges on October 21, 2026, following an investigation involving multiple federal agencies.

According to prosecutors, the defendants allegedly used a Houston-based copier wholesaling business to purchase equipment using funds connected to fraud schemes. The machines were subsequently exported to India and sold, with the proceeds allegedly reaching individuals involved in those schemes.

The case highlights how apparently legitimate commercial transactions, international shipments and business documentation can potentially be misused to conceal the movement of illicit funds.

For US businesses involved in international trade, the allegations reinforce the importance of understanding counterparties, verifying commercial relationships and examining unusual financial arrangements.

What Happened in the Texas Copier Case?

Federal prosecutors charged Ketan Kamdar, 61, and Jheel Kamdar, 30, both residents of Katy, Texas, with offences connected to an alleged trade-based money laundering operation.

According to the indictment, Ketan Kamdar was the majority owner of Jainam International Inc., a Houston-based business specialising in wholesale used copiers.

Prosecutors allege that, beginning around 2023, the defendants worked with individuals based in India to move funds obtained through fraudulent activity.

The alleged operation involved purchasing used photocopiers from American businesses, including suppliers in Connecticut, using money originating from overseas fraud schemes.

The equipment was shipped through Texas and exported to India, where it was sold for Indian rupees.

Prosecutors also allege that invoices were fabricated to misrepresent transactions, including supposed sales involving companies controlled by the defendants' family.

The indictment seeks forfeiture of approximately $4.18 million.

Both defendants face two counts of conspiracy to commit money laundering. They have been released on bond and are presumed innocent unless proven guilty.

How Does Trade-Based Money Laundering Work?

Trade-based money laundering, commonly abbreviated as TBML, involves using international commercial transactions to disguise or transfer the value of funds associated with criminal activity.

Rather than transferring money directly between individuals or criminal organisations, those involved may use the purchase, shipment or sale of goods to move value across borders.

Such activity can be difficult to distinguish from legitimate trade because genuine businesses routinely purchase equipment, arrange international shipments and receive payments from overseas counterparties.

Potential methods associated with trade-based money laundering include:

• Misrepresenting the value of goods on commercial invoices.
• Creating documentation for transactions that did not occur.
• Misstating the quantity or description of products.
• Using intermediary companies to obscure commercial relationships.
• Moving funds through transactions with little genuine business purpose.
• Exploiting inconsistencies between financial records and physical shipments.

These practices differ in their operation and should not be assumed to occur in every suspected case.

The DOJ's allegations concern the use of genuine used equipment alongside allegedly fabricated documentation and payments linked to fraud proceeds.

Fraud Proceeds Disguised as Commercial Payments

The indictment describes an alleged incident involving a Massachusetts resident who was contacted by someone impersonating a Social Security Administration official.

According to prosecutors, the individual was falsely told that criminal charges had been brought against them and was instructed to transfer funds to resolve the supposed matter.

The victim reportedly withdrew approximately $248,000 from a retirement account and transferred the money into five bank accounts.

More than $48,000 allegedly reached an account belonging to Jainam International.

Prosecutors claim that the payment was then represented in business records as revenue from a copier transaction involving an India-based company.

This example demonstrates the alleged connection between the original fraud and the subsequent commercial activity.

The case also illustrates why financial investigations may require examination of both the source of payments and the underlying business transactions used to explain them.

Why Trade-Based Money Laundering Matters for US Businesses

International trade involves complex relationships between manufacturers, suppliers, distributors, freight providers and financial institutions.

Most transactions are legitimate. However, complicated arrangements can create opportunities for misleading documentation or unclear payment structures to go undetected.

Businesses may encounter warning signs such as:

• Payments originating from unexpected third parties.
• Invoices that do not correspond with shipping records.
• Commercial relationships involving unexplained intermediaries.
• Inconsistent descriptions of goods or services.
• Transactions with no clear economic rationale.
• Unusual ownership connections between trading partners.

These factors are not, individually, proof of money laundering.

Nevertheless, material inconsistencies may justify further enquiries, particularly where a business is entering a significant international relationship or processing unusual transactions.

Independent Due Diligence Services can assist organisations in examining corporate ownership, relevant principals, business relationships and other information that may influence commercial decisions.

The Importance of Verifying International Counterparties

A company may have an established address, commercial website, registered business name and genuine trading history while still presenting risks that are not immediately apparent.

Effective counterparty verification should therefore extend beyond confirming that a business legally exists.

Depending on the relationship, enquiries may include:

• Establishing the company's registration and corporate history.
• Identifying directors, officers and relevant beneficial owners.
• Examining connected companies and commercial relationships.
• Reviewing relevant litigation and regulatory information.
• Assessing sanctions exposure where appropriate.
• Identifying discrepancies in representations or supporting documentation.

For international transactions, understanding the relationships between purchasers, sellers, intermediaries and payment recipients can be particularly important.

The objective is to establish whether the available information supports a credible commercial relationship and whether material questions remain unresolved.

Enhanced enquiries may be justified where ownership is unclear, unusual payment arrangements arise or substantial financial exposure is involved.

The Role of Corporate Investigations

Where suspicious transactions have already occurred, a business may need to establish what happened and identify the relevant parties.

Depending on the circumstances, an investigation could involve examining corporate relationships, reviewing available commercial documentation, identifying relevant individuals and developing a chronology of transactions.

For example, an organisation may need to determine whether a supplier's claimed business activities align with independently available information.

Other enquiries may concern the background of company principals, connected entities or previous commercial disputes.

Conflict International USA provides Specialized Private Investigation Services to support businesses and legal professionals dealing with complex commercial and fraud-related concerns.

Investigative findings should distinguish between verified information, reasonable areas of concern and allegations that have not been substantiated.

Private investigators do not possess the statutory powers available to federal law enforcement agencies, and investigations must operate within applicable legal and privacy requirements.

Supporting Legal Teams in Cross-Border Financial Disputes

Trade-based money laundering allegations can involve several jurisdictions, commercial entities and categories of documentation.

Where financial losses or legal proceedings arise, attorneys may require independent factual enquiries to establish relationships between companies, individuals and relevant transactions.

This may involve public-record research, corporate intelligence, locating potential witnesses or examining information relevant to disputed commercial activity.

Conflict International USA's Litigation Support Services can assist legal professionals with appropriately scoped research and evidence-gathering assignments.

Where overseas companies or individuals are involved, enquiries may also require coordination across jurisdictions.

Investigative information can support legal assessment, but determining admissibility, liability or available remedies remains a matter for qualified legal professionals and the relevant courts.

Lessons From the DOJ Investigation

The Texas copier case illustrates how allegations of international financial crime may involve ordinary commercial goods rather than obviously suspicious products or transactions.

The alleged scheme depended on the movement of equipment, funds and supporting documentation across different jurisdictions.

For US businesses, the wider lesson is that commercial due diligence should focus on the substance of a relationship, not simply the appearance of legitimacy.

Reliable business records, appropriate payment controls and independent verification can help organisations identify inconsistencies requiring further attention.

The charges announced by the DOJ remain allegations, and the criminal proceedings will determine the defendants' legal responsibility.

Nevertheless, the case provides a useful example of the questions businesses and legal advisers may need to consider when investigating unusual international trading arrangements.

Conflict International USA supports corporations, investors, attorneys and private clients with corporate intelligence, due diligence and specialist investigations across the United States and internationally.

If your organisation requires assistance assessing a commercial counterparty or investigating suspicious business relationships, contact Conflict International USA to discuss your requirements in confidence.