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The United States Attorney's Office Southern District of Florida Public Affairs Office: Alicia Valle Yovanny Lopez Public Affairs Fax August 19, 2008 FOR IMMEDIATE RELEASE SEVEN CHARGED IN INTERSTATE TRANSPORTATION OF STOLEN PROPERTY CONSPIRACY R. Alexander Acosta, United States Attorney for the Southern District of Florida, Jonathan Solomon, Special Agent in Charge, Federal Bureau of Investigation, Michael E. Yasofsky, Special Agent in Charge, Internal Revenue Service, Al Lamberti, Broward County Sheriff, and Anthony V. Mangione, Special Agent in Charge, Immigration and Customs Enforcement, announced that seven (7) defendants have been charged in an indictment returned by a Federal Grand Jury in Fort Lauderdale. The defendants are charged in a multi-million dollar conspiracy involving the interstate transportation of stolen property. The Defendants were buying and selling millions of dollars worth of stolen over the counter medications and health and beauty aids. The indictment charges the defendants with conspiracy to transport stolen property, interstate transportation of stolen property, possession and receipt of stolen property and conspiracy to commit money laundering. The case has been assigned to United States District Judge Donald Middlebrooks. Since November 2004, numerous law enforcement agencies in the tri-county area of Broward, Palm Beach, and Miami-Dade Counties, have been investigating organized retail theft, a multi-billion dollar industry. In retail theft organizations, the term "boosters" is used to describe individuals who are professional shoplifters of retail merchandise. A booster shoplifts with the intent to resell the stolen goods. The term "fence" is used to describe an individual or group of individuals who purchase mixed quantities and brands of stolen products from the boosters. There can be multiple levels of fences: lower level fences obtain smaller amounts of stolen products from boosters, and higher level fences obtain larger amounts of stolen products usually from lower level fences. In this case, the defendants were buying and selling over the counter medications and health and beauty aids, that had been stolen from retail stores including Walgreens, Target, CVS and Rite-Aid. PHARMACARE was a wholesaler who often purchased bulk quantities of mixed and damaged stolen products from fences. Agents were able to follow the stolen products from the boosters to first line fences who then sold them to higher level fences. The higher level fences then sold stolen over the counter medications and health and beauty aids to PHARMACARE, which operated a warehouse cleaning and packaging the merchandise, removing store markings and anti-theft devices that were on the merchandise. The Defendants are all PHARMACARE employees or people who sold stolen products to PHARMACARE. They include NASIR KHAN a/k/a "DAVID KHAN" who was the controller and operator of PHARMACARE. DUANE SCHNEIDER was listed as the owner of PHARMACARE. SCHNEIDER and acted as the owner of the business, but DAVID KHAN remained in control of the business. ASIF KHAN a/k/a "JORDAN KHAN", was DAVID KHAN’s brother and a warehouse manager at PHARMACARE. He often traveled with other PHARMACARE employees to North Carolina to obtain over the counter medications and health and beauty aids. MICHAEL SPENCER was DAVID KHAN’ s former brother-in-law and a PHARMACARE employee. He traveled with other PHARMACARE employees to North Carolina to purchase over the counter medications and health and beauty aids. EDWARD JOSEPH SMITH had a warehouse in Bessemer City, North Carolina. He also had a storage facility in Grover, South Carolina. He was the owner/operator of EDS Wholesale, and purchased stolen merchandise from boosters and fences. JAMES EDWARD FOY lived in Gastonia, North Carolina. He worked for SMITH at EDS Wholesale, in North Carolina, buying and selling stolen property. MICHAEL TODD DAGNEN resided in Kings Mountain, North Carolina, and was involved in the sale and purchase of stolen over the counter medications and health and beauty aids. DAGNEN was a fence who purchased large amounts of stolen merchandise directly from boosters. DAGNEN often sold the stolen merchandise to higher level fences such as SMITH and FOY, who sold the stolen products to PHARMACARE. The indictment charges 9 counts, plus forfeiture. The first count charges all seven defendants with conspiracy to transport stolen merchandise, and conspiracy to receive and sell stolen property, in violation of 18 U.S.C. 371 and 2314 and 2315. Defendants bought and sold approximately $7.9 million of stolen over the counter medications and health and beauty aids. As to Count 1, Defendants are facing a statutory maximum of 5 years imprisonment, 3 years of supervised release and a $250,000 fine. Counts 2, 3, 4, 5, and 6 charge all seven defendants with transporting in interstate commerce, the over the counter medications and health and beauty aids which had been stolen, in violation of 18 U.S.C. §2314. As to Counts 2,3,4,5,and 6, Defendants are facing a statutory maximum of 10 years imprisonment, 3 years of supervised release and a $250,000 fine. Counts 7 and 8 charge Defendants with possession and receipt of stolen merchandise, in violation of 18 U.S.C. 2315. Defendants are facing a statutory maximum of 10 years imprisonment, 3 years of supervised release and a $250,000 fine as to Counts 7 and 8. Count 9 charges Defendants DAVID KHAN, DUANE SCHNEIDER, JORDAN KHAN and MICHAEL SPENCER with a money laundering conspiracy, in violation of 18 U.S.C. 1956. As to Count 9, Defendants are facing a statutory maximum of 20 years imprisonment, 3 years of supervised release and a $500,000 fine. In addition, the United States seeks forfeiture of $7,900,000. Mr. Acosta commended the investigative efforts of the Federal Bureau of Investigation, Internal Revenue Service, Broward Sheriff’s Office, and Immigration and Customs Enforcement. In addition, Mr. Acosta commended the efforts and support of Walgreens and Target, Anti-Retail Theft Divisions. This case is being handled by Assistant United States Attorney Laurence Bardfeld, and Trial Attorney Peter Frandsen from the Department of Justice, Fraud Section. A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.# # #
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