Pubdate: Tue, 20 Apr 1999 Source: PR Newswire Copyright: 1999 PR Newswire Author: U.S. Customs Service OPERATION GREEN ICE DISMANTLES MONEY LAUNDERING & STOLEN JEWELRY RING BALTIMORE, April 20 /PRNewswire/ -- Lynne A. Battaglia, United States Attorney for the District of Maryland, today announced the unsealing of an indictment of two brothers and three other individuals for a scheme that used secondhand jewelry stores in Bethesda, Maryland and Washington, D.C. to launder drug proceeds and fence stolen jewelry. The indictment is the result of a two-year undercover investigation, named "Operation Green Ice," that was conducted by the U.S. Customs Service office in Baltimore and the Montgomery County Police Department under the umbrella of the Financial Investigations Group of the Washington/Baltimore High Intensity Drug Trafficking Area. The Federal Bureau of Investigation and the Internal Revenue Service also participated in the investigation. Today, April 20, 1999, Customs and IRS agents and officers from the Montgomery County Police Department served search and seizure warrants on 11 locations, including the Bethesda Jewelry Exchange at 7747 Old Georgetown Road in Bethesda, Maryland, and the Jewel Collection at 1250 Wisconsin Avenue, N.W., in the Georgetown district of Washington, D.C. The agents and officers seized inventory at these stores. During this enforcement effort, Customs agents arrested brothers Daniel Mutai, age 40, of Potomac, Maryland and Moshe Mutai, age 43, of Bethesda, Maryland. The nine-count indictment charges the brothers with violations that include conspiracy to commit money laundering, laundering of monetary instruments, the sale or receipt of stolen goods, and aiding and abetting. Also arrested were Robert Miller, age 39, of Potomac, Maryland, and Baruch Pondak, age 47, of Rockville, Maryland. Andre Coxson, age 27, of Baltimore, has not yet been arrested, but is being sought by law enforcement authorities. Each is charged with conspiracy to commit money laundering. The indictment also charges Pondak and Coxson with laundering of monetary instruments and aiding and abetting. According to the indictment, brothers Motai and Mutai have owned and operated the Jewel Collection in Georgetown since 1989. At the Jewel Collection, the brothers allegedly developed a clientele that included drug dealers. Often, these drug dealer customers purchased jewelry at the store with large sums of cash derived from narcotics sales, the indictment charges. When selling jewelry to these drug dealer customers, the brothers purposely avoided generating receipts or recording the transactions in the store's log, the indictment alleges. Furthermore, if such sales involved cash transactions of more than $10,000, the brothers failed to file a Form 8300 with the Internal Revenue Service, the indictment alleges. Under federal law, retail businesses that receive more than $10,000 in currency during a transaction must file a Form 8300 (Report of Cash Payments over $10,000 Received in a Trade or Business) with the Internal Revenue Service. The indictment also charges that the brothers knowingly purchased stolen jewelry at the Jewel Collection. The brothers allegedly failed to record these jewelry purchases in the store's log or file the required second-hand property report with authorities. In addition, the indictment alleges that the brothers often dismantled the stolen jewelry they purchased to prevent tracing the stolen jewelry to the store. According to the indictment, Moshe Motai took large sums of cash generated by the Jewel Collection to his home and stored the money under the floorboards. Beginning in 1989, he also arranged for large sums of cash to be smuggled out of the United States to Israel, where the funds were deposited in an account at Bank Hapoalim held under his wife's name, the indictment states. The indictment further alleges that money from the Israeli account was wired to a Maryland bank account held under the name of Baruch Pondak. The wire transfers were disguised as business loans. According to the indictment, funds drawn an the Pondak account were then used to purchase and open a second retail jewelry store, the Bethesda Jewelry Exchange, in 1995. Moshe Motai's brother, Daniel Mutai, was primarily responsible for operating the Bethesda Jewelry Exchange. As was the case at the Jewel Collection, the Bethesda Jewelry Exchange soon developed a clientele that included drug dealers, the indictment states. These drug dealer customers often purchased expensive jewelry with cash derived from narcotics sales, the indictment alleges. When selling to his drug dealer customers from the Bethesda Jewelry Exchange, the indictment alleges, Mr. Mutai filed no sales receipt, Form 8300, or other record of sales. Mr. Mutai would further assist his drug dealer clients by providing then false paperwork to legitimize their source of income to authorities and by exchanging small denomination bills for large denomination bills, the indictment states. In addition, the indictment alleges that Mr. Mutai purchased stolen jewelry at the Bethesda Jewelry Exchange. During these transactions, Mr. Mutai allegedly made no record of such transactions and purposely failed to file the required reports with authorities. According to the indictment, Robert Miller assisted Mutai in the day-to-day operations of the Bethesda Jewelry Exchange and helped him with drug dealer customers and with the purchase of stolen Jewelry. The charges carry maximum sentences of 20 years on the money laundering charges and 10 years on the stolen property offenses. U.S. Attorney Lynne A. Battaglia noted: "Laundering drug profits and providing a market for stolen property facilitate crime. Federal law enforcement in partnership with local police are determined to end the low risk, high profit business of those who deal with the dealers." Jeff Casey, Special Agent In Charge (SAIC), U.S. Customs Service, Baltimore, said: "This investigation once again revealed the Achilles heel of street level drug traffickers -- disposal of street level cash." Casey said, "large sums of unexplained cash draws quick attention from law enforcement, banking and other financial institutions. This awareness is the result of the emphasis placed by the Federal government and many states in educating the law enforcement, financial and retail sectors in identifying potential money laundering activity." In this investigation, Casey said, "several money laundering techniques were employed to avoid law enforcement and financial institution scrutiny. This activity included large amounts of cash being smuggled out of the United States and deposited in a foreign bank. Other methods included the exchange of drug dollars for expensive jewelry as well as exchanging small denomination bills for larger, more easily concealable bills." Casey said, "No matter what the method, the intent is the same -- conceal and disguise the true origin of money." U.S. Attorney Battaglia and SAIC Casey commended the outstanding collaborative investigative efforts of the Montgomery County Police Department, the U.S. Customs Service, the Internal Revenue Service, and Federal Bureau of Investigation. - --- MAP posted-by: Patrick Henry