The following examples of narcotics related fraud investigations are excerpts from public record documents on file in the court records in the judicial district in which the cases were prosecuted. IRS Special Agents participated in the financial investigative aspect of these cases.

Drug Trafficking Ringleader Sentenced to Additional 30 Years in Prison

On September 24, 2008, in Dayton, Ohio, Charles Goff was sentenced to serve an additional 30 years in federal prison for his leadership role in a massive drug trafficking and money laundering conspiracy dating back to 2004. Goff was convicted on October 11, 2006. According to testimony presented at trial, federal agents arrested Goff in 1996 after undercover agents seized more than 40 kilograms of cocaine and $1 million in cash from his organization. While awaiting trial, and on home detention, Goff organized yet a second drug trafficking conspiracy from his home.  Trial testimony also disclosed that Goff's drug ring arranged for deliveries of illegal drugs concealed inside concrete road construction barriers.  These construction barriers were delivered to a rural Montgomery County farmhouse owned by Goff.  In March 1999, Goff was sentenced to 15 years in federal prison for the initial drug trafficking conspiracy.  His 30 year sentence will run consecutive with this prior sentence.

Cocaine Trafficker Sentenced to 18 Months in Prison for Structuring More than $750,000 in Drug Proceeds

On September 15, 2008, in San Francisco, Calif., Daniel King was sentenced to 18 months in prison, followed by three years of supervised release, for structuring cash transactions for the purpose of evading financial institution reporting requirements.  According to court documents, King was a high volume cocaine trafficker in the mid-1990's.  In 1996, King purchased a $1.15 million residence in Saratoga with money derived from his cocaine trafficking activities.  He further engaged in numerous other financial activities with the proceeds of his drug trafficking conduct, including the purchase of vehicles and structuring approximately $755,460 in drug proceeds to avoid bank reporting requirements.  The government seized $233,500 of these drug proceeds in the late 1990's pursuant to seizure warrants.  Following these seizures, King left the United States for a year.  When he returned in 1999, he lived under a false name in Texas for a number of years.  King was apprehended in March of 2008 and pleaded guilty on June 30, 2008 to one count of structuring.  In his plea agreement, King admitted that between October 1995 and December 1996, he knowingly structured cash transactions into several bank accounts under his control in the San Jose area.

Two Sentenced in Georgia on Drug and Money Laundering Charges

On September 12, 2008, in Atlanta, Ga., Lena Celedon was sentenced to 135 months in prison to be followed by five years of supervised release. On September 11, 2008, Sylvia Rodrigues-Poblano was sentenced to 236 months is prison to be followed by five years of supervised release. Both Celedon and Rodrigues-Poblano previously pleaded guilty of money laundering and conspiracy to possess with intent to distribute at least 5 kilograms of cocaine. According to court documents, Lena Celedon, a truck driver, was detained on November 28, 2006, in Falfurrias, Texas. In a search of her vehicle, law enforcement officials discovered that she was transporting approximately 54 kilograms of cocaine. After the cocaine was discovered, Celedon admitted to law enforcement her involvement in a conspiracy to transport drugs from Mexico to cities in Texas and Georgia. She identified Sylvia Rodriguez-Poblano as one of the individuals that she was working for in the transportation of the drugs. During this recorded meeting, Celedon provided Rodriguez-Poblano with almost $50,000 in drug proceeds as a fee for transporting the cocaine at which time Sylvia Poblano-Rodriguez was arrested. 

Drug Trafficking Brothers Sentenced To 30 Years in Prison

On September 12, 2008, in Detroit, Mich., Terry and Demetrius Flenory, were each sentenced to 30 years in prison for cocaine distribution and 20 years for money laundering. The two brothers led a drug trafficking organization known as the Black Mafia Family. They pleaded guilty to being the leaders of a continuing criminal enterprise throughout the United States from 1990 through 2005. According to the charges in the indictment, Terry Flenory and his brother, Demetrius Flenory, dealt in multi-kilogram quantities of cocaine in the Detroit area beginning in the early 1990's. By the mid 1990's, the organization extended its drug trafficking activities to other parts of the country. They used the illegal proceeds of their narcotic sales to buy and lease numerous luxury vehicles, real property and jewelry while hiding the true source and nature of the funds involved in the transaction through false names and nominee purchasers. They deposited cash derived from cocaine sales into various bank accounts and purchased cashier’s checks and money orders. They also used drug proceeds to buy winning lottery tickets from a person who paid cash to the true winners. The winning tickets, worth $1 million, would be redeemed and used to purchase homes, make mortgage payments, and purchase vehicles, hiding the fact that the true source of the money was derived from Flenorys' drug organization cocaine sales.

Ohio Man Sentenced on Drug and Money Laundering Charges

On August 18, 2008, in Cleveland, Ohio, Lawrence Fassler, author of the book “Busted by the Feds” (a manual for individuals facing federal criminal charges), was sentenced to 135 months in prison for drug trafficking and money laundering.  Fassler, of Tucson, Arizona, was the leader of a multi-state organization that was responsible for transporting approximately 400 kilograms of marijuana from Arizona to Ohio between June 2007 and February 2008.  According to court documents, Fassler utilized the U.S. mail to send over $30,000 in U.S. currency from Ohio to Arizona. The money was the proceeds of Fassler’s drug trafficking. To date, persons targeted by the investigation have agreed to forfeit U.S. currency and real property to the United States valued at approximately $500,000.

Maryland Used Car Dealer Sentenced to Almost 11 Years in Prison

On August 6, 2008, in Baltimore, Md., Harrington Campbell was sentenced to 130 months in prison for cocaine distribution and possession and structuring financial transactions. Campbell, a Jamaican national, is expected to be deported to after serving his federal prison sentence. According to testimony in court, Campbell, an officer and director of Charm City Motors, a used car business, conspired with Steven Custis, Norman Edmond and others to distribute cocaine. Edmond was arrested in Chambers County, Texas, driving a vehicle which had been purchased from Charm City Motors. Hidden in a trap inside the vehicle were approximately 3.2 kilograms of cocaine, which had been placed there by Campbell. After his arrest, Edmond had his girlfriend contact Custis who gave her cash to pay for an attorney to represent Edmond. Campbell and his co-conspirators also had a source of supply for cocaine and marijuana in California and traveled there to meet with the source of supply and acquire both cocaine and marijuana. The source of supply would then ship the drugs to Maryland and Campbell and Custis would wire money via Western Union to the source of supply in California. Trial evidence also showed that from March 1999 through November 2003, Campbell structured more than $1.7 million in cash and money orders deposited into either the Charm City Motors account or his personal bank accounts. Campbell, and others acting at his direction, deposited cash or sequentially numbered money orders, purchased with cash, just below the $10,000 reporting threshold at one or more bank branches to avoid having the bank file currency transaction reports with the IRS.

South Texas Man Sentenced on Money Laundering and Drug Trafficking Charges

On July 28, 2008, in Houston, Texas, Ricardo Garcia-Heredia, of McAllen, Texas, was sentenced to 360 months in prison for drug trafficking, money laundering and illegal re-entry into the U.S. after being deported. A jury convicted Garcia-Heredia in May 2008. He was indicted in March 2001, but remained a fugitive until his arrest in January 2008. During the trial, witnesses testified about Garcia-Heredia’s role as manager of the transportation and distribution of cocaine and about his role in managing the flow of drug proceeds from Chicago back to the Rio Grande Valley and, eventually, Mexico. Trial evidence proved Garcia-Heredia used his trucking business, Earth Transportation, in Edinburg, Texas, as a front to recruit drivers who transported the large loads of cocaine.

Former Marijuana Business Proprietor Sentenced to 51 Months in Prison

On July 22, 2008, in Sacramento, Calif., Richard Marino, of New Castle, California, was sentenced to 51 months in prison for narcotics conspiracy and money laundering. Marino pleaded guilty to the charges in May 2008. According to the U.S. Attorney, District of Oregon, trial evidence showed that Marino’s business, Capitol Compassionate Care (CCC) sold $2.3 million in marijuana. Federal agents seized approximately 3,022 grams of hashish, approximately 18,805 grams of processed marijuana, 617 live marijuana plants (364 at CCC and 253 at his residence), and $105,000 (at CCC) during a September 2005 search warrant. Agents also seized CCC’s business records that showed that CCC sold about 482 pounds of marijuana under brand names such as “AK-47,” “Chernobyl,” “High Lander,” “Romulin,” and “Trainwreck.” CCC business records also show that Marino caused CCC to pay over $150,000 towards dry cleaning, outside dining, apartment rental payments, a housekeeper, loan payments for a residence that was used to grow marijuana, a down payment for that residence, improvements to the residence, and payments on personal credit cards.

Four Members of a Virginia Cocaine Hydrochloride Distribution Ring Sentenced for Money Laundering

On July 8, 2008, in Danville, Va., Saundra Jean Martin, Hazel Martin Adams, Ronald K. White, Jr., and Kimberly Dayle Hughes, were sentenced for their roles in a cocaine hydrochloride distribution ring.  Martin was sentenced to 12 months in prison, Adams received a 13 month sentence, White was sentenced to 51 months, and Hughes was sentenced to 24 months in prison. Martin, Adams and Hughes admitted to helping ring leader Clarence James Martin, Jr. launder money from the sale of drugs. They admitted that they knew that the money came from an unlawful activity and bought motor vehicles and real estate for Clarence Martin. Ronald K. White, Jr. also admitted guilt to money laundering and conspiracy to distribute more than 5 kilograms of cocaine.

New York Jeweler Sentenced for Falsifying Records and Making False Statements in a Federal Investigation

On June 24, 2008, in Detroit, Mich., Jacob Arabov, the owner of a New York City jewelry store, was sentenced to 30 months in prison, to be followed by two years of supervised release, and ordered to pay a $50,000 fine.  As part of his plea agreement, Arabov forfeited $2 million.  According to information presented in court, between July 2005 and June 2006, Arabov falsified documents submitted to the government which concealed the true ownership of a portion of $5 million worth of jewelry that had been seized.  Specifically, Arabov claimed in a memorandum he submitted to federal agents and the United States Attorney’s Office, that his jewelry store, Jacob & Company, had cosigned certain pieces of jewelry to a co-defendant when, in fact, he had already sold the items directly to Terry Flenory.  In a further attempt to obstruct the federal drug investigation of the Flenory's organization and the United States Attorney’s Office’s administrative forfeiture of the jewelry, Arabov made false statements to federal agents and the United States Attorney’s Office regarding his relationship with Terry Flenory and Flenory’s true ownership of the jewelry.  According to the charges in the Indictment, Terry Flenory and his brother, Demetrius Flenory have been operating a drug organization, at some point named the "Black Mafia Family" (BMF), which dealt in multi-kilo quantities of cocaine in the Detroit metropolitan area beginning in the early 1990's.  Since 2000, law enforcement officers from across the country have seized over 476 kilograms of cocaine destined for distribution by this organization.  More than million in cash was seized by law enforcement officers between October 1997 and June 2005.

Cocaine Suppliers of the “Gangsta Killa Bloods” Sentenced

On May 28, 2008, in Columbia, S.C., United States Attorney Kevin F. McDonald announced the sentencings of the last four defendants in a gang-related drug case.  Over the past several weeks, 10 members of the Bautista-Teran family and their affiliates were sentenced in federal court for their respective roles in supplying cocaine to the “Gangsta Killa Bloods” street gang.  According to court documents, the defendants pleaded guilty to various federal drug, money-laundering, firearms, and immigration violations.  Emilio Bautista-Teran, Jose Jimenez-Villaseca, Alfredo Jimenez-Villaseca, and Javier Colemenares-Meneses were all sentenced.  Evidence presented in court showed that the cocaine trafficking organization was headed by Emilio Bautista-Teran and by fugitive co-defendant Valdemar Bautista-Teran.  Evidence also showed that Emilio Bautista-Teran was one of the primary multi-kilogram cocaine suppliers of Jarvis McKenzie, who in turn supplied the Gangsta Killa Bloods (GKB) street gang in Columbia. McKenzie was recently convicted in federal court after a week-long trial, and he awaits sentencing.  The defendants were sentenced to the following terms of imprisonment:

• Emilo Bautista-Teran was sentenced to 262 months;
• Fortino Bautista-Teran was sentencedd to 120 months;
• Fredy Bautista-Teran was sentenced to 135 months;
• Sotero Bautista Venancio was sentenced to 120 months;
• Maria Teran Espinoza was sentenced to 6 months;
• Benito Estrada-Bautista was sentenced to 12 months;
• Emiterio Saucedo Luviano was sentenced to 10 months;
• Hector Jimenez-Villaseca was sentenced to 151 months;
• Jose Alfredo Jimenez-Villaseca was sentenced to 70 months;
• Javier Colmenares-Meneses was sentenced to 60 months

The case was worked by many agencies under the Organized Crime and Drug Enforcement Task Force (OCDETF). 

Massachusetts Man Sentenced on Drug and Money Laundering Charges

On May 28, 2008, in Concord, N.H., Richard G. Lizotte, of Newton, Massachusetts, was sentenced to 60 months in prison to be followed by four years of supervised release.  Lizotte pleaded guilty in December 2007 to conspiracy to distribute marijuana and conspiracy to commit money laundering.  Lizotte was arrested on August 9, 2006 after an undercover investigation identified him as a source of supply for large quantities of marijuana throughout New Hampshire and Massachusetts.  As part of his plea agreement, Lizotte admitted that over a five year period, he distributed approximately 1,378 kilograms of marijuana and laundered approximately $123,295.  Lizotte paid a $500,000 cash forfeiture to the United States, representing the net value of property used to facilitate his drug trafficking offenses.

Oklahoma Men Sentenced for Drug Distribution and Money Laundering

On May 21, 2008, in Muskogee, Okla., Michael Fry was sentenced to 120 months in prison for money laundering and conspiracy to travel in interstate commerce to carry on unlawful activities.  Fry’s co-defendant, Jared Macchirella was sentenced to 60 months imprisonment for interstate travel in aid of racketeering.  Fry and Macchirella operated a methamphetamine Drug Distributing Organization, based out of McAlester, Oklahoma.  Their organization distributed in excess of 20 pounds of methamphetamine per month in eastern Oklahoma and northern Texas since 2003.  During the investigation, an extensive financial investigation was conducted which included document search warrants, cash flow analysis, ex-parte tax orders, analysis of cash trade assets, asset tracing and analysis of real property.  The investigation resulted in the arrests of 53 defendants, the seizure of over 115 firearms and the removal of approximately 7,000 rounds of ammunition.

Texas Man Convicted of Marijuana Conspiracy and Money Laundering

On March 13, 2008, in Corpus Christi, Texas, Homero Rey Cantu Jr., of Realitos, Texas, was sentenced to 325 months in prison and was ordered forfeit $74,632 for drug distribution, conspiracy to launder money and providing false statements on a bank loan.  During his jury trial, witnesses testified about Cantu’s involvement in transporting and distributing marijuana and cocaine from the Rio Grande Valley to other destinations within the United States, including Corpus Christi and Houston, Texas, and Louisiana.  According to the witnesses, Cantu was the leader within this organization but also acted as a "Gate-Keeper" for other drug trafficking organizations for the transportation of marijuana and cocaine through the ranches of South Texas in order to circumvent federal checkpoints.

Oklahoma Men Sentenced in McAlester Area Drug Conspiracy

On May 7, 2008, in Muskogee, Okla., Brian Fry was sentenced to 240 months imprisonment and Shannon Fry was sentenced to 120 months in prison for money laundering.  Brian Fry pleaded guilty in October 2007 and Shannon pleaded guilty in November 2007.  Shannon Fry received an additional 60 month sentence on conspiracy charges.  The Fry’s were among 13 co-defendants involved in a McAlester-area drug conspiracy.  According to U.S. Attorney Sheldon Sperling, the conspirators engaged in financial transactions in criminally derived property to further their drug business and concealed the true source of assets.  The co-defendants used money derived from the sale of methamphetamine to buy more drugs.  Additionally, they invested proceeds from their illegal drug sales in assets to hide the true source of the money.  As part of the conspiracy, they purchased assets using currency in such an amount, quantity and form so that the true source of the funds used to purchase the assets were hidden from law enforcement.  They also titled assets that they bought in the names of nominee owners to avoid potential exposure to forfeiture provisions of drug and money laundering statutes in an effort to keep their ill gotten gains.

Defendant Sentenced to 130 Months for Drug Conspiracy, Money Laundering, and Tax Evasion Charges

On May 5, 2008, in Harrisonburg, Va., Richie Hansford Conner, aka “Shag,” of Edinburg, Virginia, was sentenced to 130 months in prison.  In addition, a money judgment was leveled against Conner, ordering him to pay $5 million to the United States.  This monetary total will consist of $736,497 in United States currency and the profits from the sale and/or liquidation of several properties Conner agreed to forfeit to the United States.  Conner was charged in a September 2007 indictment and a November 2007 superseding indictment with a variety of drug, money laundering and tax evasion charges.  In December 2007, Conner pleaded guilty to one count of conspiring to distribute and possess with the intent to distribute methamphetamine, one count of conspiracy to launder money, and one count of criminal tax evasion.  Contained in the plea agreement was Conner’s acknowledgment that he owed the United States $69,663 in taxes for the 2001 tax year.

Drug Trafficker Sentenced on Drug and Money Laundering Charges; Forfeits up to $2 Million in Drug Proceeds

On March 5, 2008, in Greensboro, N.C., Bernard Norvell Barr, aka “B-Mac,” of Winston-Salem, N.C., was sentenced to 360 months in federal prison, followed by 10 years of supervised release, and ordered to pay a $200 special assessment.  Barr was also ordered to forfeit up to $2 million in proceeds of criminal activity.  Barr pleaded guilty on September 25, 2007, to one count of conspiracy to distribute cocaine and marijuana, and one count of conspiracy to commit money laundering.  According to court documents, Barr was involved in large scale drug trafficking since at least 2002, and distributed more than 50 kilograms of cocaine hydrochloride during that time period.  The investigation further revealed that despite reporting no income for tax purposes, Barr spent large sums of money on jewelry and vehicles.  Barr typically placed the vehicles in the names of nominees to conceal the true ownership.

Detroit Party Store Operator Sentenced to Prison after Pleading Guilty to Structuring Cash Transactions

On January 22, 2008, in Detroit, Mich., Milad Knouna was sentenced to 12 months and one day in prison after pleading guilty to an Information charging him with structuring transactions to evade reporting requirements.  Knouna, an officer and operator of Diamond Liquor Store in Detroit, met with undercover agents between February and June 2003 and knowingly wire transferred cash using a Western Union machine from the Diamond Liquor Store that was represented to be from drug proceeds.  After receiving cash amounts of over $10,000, Knouna structured the amount, usually about $2,500 per wire transfer, in order to evade the reporting requirements.  These reporting requirements include a Currency Transaction Report for cash transactions over $10,000, filed with the Internal Revenue Service and the maintenance of a log for cash transactions over $3,000.  During this time period, structured cash transactions totaled over $139,000.

Transporting Cocaine and Money Laundering for a Drug Organization Lands a Hollywood, Florida Man in Jail

On Jan. 17, 2008, in Detroit, Mich., Gregory West, of Hollywood, Fla., was sentenced to 63 months imprisonment, followed by three years of supervised release, for conspiracy to distribute cocaine and money laundering conspiracy.  West will also forfeit property, real or personal, which was traceable to the sale of narcotics, to be applied to an agreed $270 million money judgment against the members of the “Black Mafia Family,” also known as BMF.  According to court records, between 2002 and 2005, West was a member of the BMF drug trafficking organization led by Terry Flenory, originally from Detroit, and his brother, Demetrius.  West’s main role was to transport the drug money and cocaine, using vehicles with hidden compartments.  During this time period, he transported more than $1 million in cash knowing that the cash that he transported was used to purchase cocaine, real estate, vehicles and jewelry for BMF.

Woman Sentenced for Laundering Drug Money for Criminal Gang

On January 11, 2008, in Chicago, Ill., Sophia Luna was sentenced to 51 months in prison, to be followed by three years of supervised release.  Luna pleaded guilty in August 2007 to 1 count of money laundering and 1 count of cocaine distribution.  According to the indictment, Luna facilitated the criminal activities of the Aurora, Illinois Chapter of the Almighty Latin King Nation street gang by acting as a money and narcotics courier for their operation.  Luna will begin serving her sentence on February 25, 2008.

Court Sentences Man for Evading Income Taxes on Sale of Illegal Steroids

On January 4, 2008, in Houston, Texas, Vernon Albert Richardson III was sentenced to 24 months imprisonment for one count of tax evasion and ordered to pay restitution to the United States in the amount of $151,512.  Richardson previously pleaded guilty to one count of tax evasion on his 2003 U.S. individual income tax return.  In a signed plea agreement, Richardson admitted he sold illegal steroids for profit from 2000 through 2003 and failed to report the profit from his steroid sales on his income tax returns filed for those years.  Richardson admitted that some of the money he received from the sales of steroids included approximately 98 wire transfers of funds in 2000 to Richardson’s alias name of “Frank Drackman.”  Richardson also admitted in the plea agreement that the total taxable income he failed to report for the four year period was approximately $471,386 and that the total amount of income taxes he evaded for the four year period was approximately $151,512.

Georgia Businessman and Co-Conspirator Sentenced for Drug Trafficking and Money Laundering

On December 20, 2007, in Rome, Ga., Mario Armas, aka Mario Doninelli, was sentenced to 180 months in prison, to be followed by five years of supervised release, and ordered to forfeit $1,144,000, which will be satisfied through the sale of properties named in the indictment and seized by the United States.  On October 9, 2007, Armas pleaded guilty to charges of conspiracy to distribute and possess with intent to distribute marijuana and money laundering.  Co-conspirator Lonnie Merren, of Aliceville, Alabama, was sentenced to 55 months in prison, to be followed by five years of supervised release.  Merren pleaded guilty to drug and money laundering charges on September 18, 2007.   Sentencing for another co-conspirator, Kevin Redstrom, of Hamilton, Texas, was continued to January 2008.  According to information presented at court, Armas conspired with Merren and Redstrom between January 2003 and November 2004 to distribute at least 1,000 kilograms of marijuana in North Georgia.  The defendants were also charged with money laundering in relation to the drug conspiracy. 

Cocaine Trafficker/Money Launderer Sentenced to 121 Months in Prison

On December 14, 2007, in Portland, Maine, Timothy Pulk, of Sabattus, Maine, was sentenced to 121 months in prison and ordered to forfeit real estate and personal property, including his residence, worth approximately $500,000.  Pulk pleaded guilty on May 25, 2007, to drug and money laundering charges.  According to court records, Pulk led a conspiracy that brought cocaine from Texas to Maine.  Court records further showed that Pulk and others, including his mother, father, and wife, assisted him in laundering the proceeds of his drug trafficking.  Pulk and his mother and father bought real estate in Maine with the proceeds from drug trafficking.  James and Elaine Pulk, Timothy Pulk’s parents, previously were convicted and sentenced for their involvement in this money laundering activity.  Angela Sargent, Timothy Pulk’s wife, has also pleaded guilty to drug and money laundering charges.

Atlanta Jeweler Sentenced for Laundering Drug Money - Forfeits Stores, Condo Worth $6 Million

On December 12, 2007, in Atlanta, Ga., Toros Seher was sentenced to 72 months in prison, pay a personal money judgment of $1.6 million and forfeit a condominium. Seher laundered drug proceeds and undercover sting money at various jewelry stores and failed to notify the Internal Revenue Service of cash received by those businesses. On August 28, 2007, the businesses of Chaplin’s Inc. and Chaplin’s Midtown, Inc. were sentenced to five years probation and fined $100,000 and $250,000 respectively. In addition, the court ordered forfeitures totaling approximately $6 million in inventory and all funds held in the companies’ bank accounts and $54,800 in monetary judgments. According to the indictment, Seher helped drug dealers as well as undercover agents who posed as drug dealers to hide drug proceeds by failing to report cash transactions of more than $10,000.

Three Sentenced on Money Laundering Charges; Defendants Mailed Marijuana

On November 27, 2007, in Columbia, S.C., Daniel Pounds, of Clyde, N.C., Richard Hobbs, of St. Cloud, Minn., and Eddie Ball, of Waynesville, N.C., were sentenced in federal court on money laundering charges.  Pounds was sentenced to 18 months in prison; Hobbs received 12 months in prison, and Ball was sentenced to six months in prison.  According to court documents, Pounds bought marijuana in Canada and recruited Hobbs and Ball to open post office boxes in each state to receive the marijuana by mail.  The men would then wire money to the supplier in Canada.  The men came to the attention of federal authorities examining the numerous money transfers they made from North and South Carolina to Canada.  Over the course of the scheme, the men sent approximately $260,000 to Canada to pay for the marijuana.

Former Leader of Arellano-Felix Drug Trafficking Organization Sentenced to Life in Prison

On November 5, 2007, in San Diego, Calif., Francisco Javier Arellano-Felix, the former leader of the deadly drug trafficking Arellano-Felix Organization (AFO), was sentenced to serve life in prison and ordered to forfeit $50 million and his interest in a yacht.  Arellano-Felix pleaded guilty in September 2007 to operating a continuing criminal enterprise and conspiring to launder monetary instruments.  According to court documents, since the 1980s, the AFO has controlled narcotics trafficking through the Tijuana and Mexicali corridors adjacent to the southern United States border with Mexico.  As part of his guilty plea, Arellano-Felix admitted that, until his arrest, he was a principal administrator of the AFO.  During that time, the AFO distributed indeterminable amounts of cocaine and marijuana, exceeding hundreds of tons.  Arellano-Felix admitted that he and other AFO members repeatedly and willfully obstructed and impeded the investigation and prosecution of AFO activities by paying millions of dollars in bribes to law enforcement and military personnel, murdering informants and potential witnesses, and murdering law enforcement personnel.  AFO members also routinely wiretapped rival drug traffickers and Mexican law enforcement officials; impersonated Mexican military and law enforcement officials; trained assassination squads; “taxed” individuals seeking to conduct criminal activities in Tijuana and Mexicali; and kidnapped individuals for ransom.

Ohio Man Receives 12-Month Sentence in Marijuana and Income Tax Case

On October 23, 2007, in Columbus, Ohio, Steven Whiting was sentenced to 12 months and one day of in prison, to be followed by three years of supervised release, ordered to perform 50 hours of community service, and ordered to pay $11,282 in restitution to the Internal Revenue Service.  Earlier, Whiting pleaded guilty to one count of filing a false income tax return and to one count of conspiracy to distribute more than 100 kilos of marijuana.  Whiting was a courier in a narcotics distribution ring.  He failed to report as gross receipts the money earned from transporting the narcotics.

Leader of Extensive Drug Organization Sentenced to 240 Years

On October 22, 2007, in Charleston, W.Va., Maurice Taft Gibson was sentenced to 240 years in prison, three years of supervised release, and ordered to pay $9,202 in restitution and a $1,200 special assessment.  Gibson was convicted by a trial jury in March 2006 on drug and money laundering charges.  In addition to the drug and money laundering convictions, the preponderance of the evidence linking Gibson to the murder of an informant was taken into consideration when Gibson was sentenced to 240 years.  According to court documents, Gibson and others distributed quantities of controlled substances including cocaine and oxycodone.  In connection with the sale of these drugs, Gibson laundered the drugs proceeds through the purchase of assets.  Specifically, in October 2003, Gibson traveled to North Carolina and purchased a Cadillac Escalade by paying close to $8,000 in U.S. currency.  Also in October 2003, Gibson purchased a Piper Cherokee Aircraft by paying $26,000 in U.S. currency.

Illinois Man Sentenced to Eight Years in Federal Prison

On October 10, 2007 in Urbana, Ill., Brent K. Goselin was sentenced to 96 months in prison to be followed by five years of supervised release for conspiracy to distribute cocaine, tax evasion, unlawful money structuring, money laundering, and filing false tax returns for the years 1999, 2000 and 2001.  Goselin was further ordered to forfeit $42,300 to the U.S. Government.  Goselin pleaded guilty on April 4, 2007 and admitted his drug trafficking activities provided him with significantly more income than he reported on his federal income tax returns.  He also admitted that he concealed his true income by structuring cash deposits to avoid the filing of currency transaction reports.  Goselin failed to pay the IRS more than $40,000 in federal income taxes.

Owner of Wellston Towing Company and Hillsdale Police Officer Sentenced along with Associates of Multi-Million Dollar Drug Conspiracy

On October 5, 2007, in St. Louis, Mo., Bruce Gales, owner of Galez Towing and Recovery; former Hillsdale police sergeant Christopher Cornell; and two area people have been sentenced on charges involving a multi-kilo drug trafficking conspiracy; including money laundering, conspiracy to distribute and use of a communication device to facilitate a felony.  The following sentences were handed down in the case: Bruce Gales, 10 years in prison; Mario Lucas, 262 months in prison; Mark Bonds, 51 months in prison; and Christopher Cornell, 48 months in prison.  Robert Wood III is scheduled for sentencing and Robert L. Jones remains at large.  Beginning in January 2005 and continuing to September 2005, the defendants were involved in the distribution of approximately 120 kilograms of cocaine throughout the St. Louis area.  As a part of the conspiracy, Wood would sometimes steal cocaine from couriers by arranging for Christopher Cornell, a Hillsdale police officer, to arrest the couriers.  While the couriers were being processed by Cornell, Wood, with the assistance of Bruce Gales, would break into the vehicles and take the cocaine.  All defendants pleaded guilty in May 2007.  As part of the plea agreement, certain specific property, including several customized cars and over $140,000 in U.S. currency will be forfeited.

Illinois Attorney Sentenced to 18 Months for Failure to File a Form 8300 and taking $36,000 from Client's Drug Proceeds

On October 5, 2007 in East St. Louis, Ill. Frank Fabbri was sentenced to 18 months in prison to be followed by two years of supervised release for failing to file a required currency transaction report upon receiving a $36,000 payment in cash.  Fabbri was also fined $40,000 and ordered to pay $36,000 restitution to the U.S. government.  The $36,000 in cash was part of the proceeds of his clients’ illegal marijuana distribution activities.  Fabbri was aware that the illegal cash proceeds should have been forfeited to the government.  Fabbri also had a responsibility to file a Form 8300 which requires that the filer identify the source of $10,000 or more in cash, but he did not.  On May 30, 2007, Fabbri pled guilty to accepting the $36,000 which he knew was Trober's drug proceeds.

Fiscal Year 2007 Examples of Narcotics-Related Financial Investigations

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