2/Executives Charged An Tax Fraud Scheme United Press International NEW YORK, Apral 2—A 74-yeareld garment ndustry executive his son-in-law today were charged ederal court with running a "false invoice” scheme to hide some $150 million in income tax earned by 170 companies and individuals. Among the companies were a major retail chain and a publicly held company, which were not named. The men were also charged with currency violations for distributing sums of currency in excess of $10,000 without filing Currency Transaction Reports as required by law. Schnejer Zalman Gurary, 74, and Nochum Sternberg, 42, face up to 20 years in prison and fines of $750,000, said U.S. Attorney Rudolph Giuliani. Giuliani said the men set up a group of 37 companies, known as the "Zalga" companies, received from 1979 to 1985 more than $150 million from at least 170 companies and individuals, took a 5 to 15 percent "fee" from them and then, using "false invoices," returned most of the money in cash and bonds. They allegedly deposited at least $30 million in Swiss bank accounts. The Zalga companies were rapidly formed and dissolved in an attempt to cover up their illegal operations, Giuliani said. Paul Summit, an assistant U.S. attorney prosecuting the case, explained that a Zalga company would checks from urchasing The Zalga mid return money The purchasing company ob- The publicly held company alleg- Garment center businessman Irwin Feiner pleaded guilty Oct. 24 to charges of conspiracy, tax evasion and wire fraud. The complaint against Gurary and Sternberg says Feiner and his company engaged in more than 700 false invoice transactions as a purchasing company. His company allegedly paid more than $25.6 million and received back more than $24.3 million in cash and bonds. Gurary and Sternberg generally brought the cash in a satchel, it was alleged. Feiner had said that, when the satchel was open and the cash-in the thousands of dollarshe was to receive was taken out, he could see it was only a thin layer of the cash in the satchel. Money W.P. 4/3/86 Ex-Banker Sentenced In Drug Scheme By Nancy Lewis Washington Post Staff Writer A former Riggs National Bank vice president was sentenced yesterday to six months in prison, fined $10,000 and ordered to perform 1,000 hours of community service by a federal district judge here who said the penalties should "send a message" to bank officials who launder drug profits. "This needs to be stopped," said U.S. District Judge Thomas F. Hogan as he sentenced William G. Hessler, 48, who pleaded guilty last month to not reporting to the Internal Revenue Service a $450,000 cash deposit that prosecutors said represented the proceeds of a cocaine distribution ring that smuggled the drug from Columbia and sold it in the United States. Hogan, who told Hessler that he would have imposed the maximum sentence of five years in prison and a $500,000 fine if he thought that the former manager of, Riggs Watergate branch knowingly had laundered the money, called the banking industry the "crucial" link in allowing drug dealers to channel their profits into legitimate business. "Didn't it cause you any concern" when former Washington lobbyist Fred B. Black Jr. showed up at the bank with nearly $500,000 in cash crammed in a shopping bag, Hogan asked Hessler. "No, sir," Hessler replied. Hogan then said that he was "surprised by some of the things that went on at the bank." U.S. Attorney Joseph E. diGenova said prosecutors were "very pleased, very satisfied" with the sentence imposed on Hessler, of 11832 Dinwiddie Dr., Rockville, who resigned from the bank in June 1983, three weeks before he was indicted in connection with the drug ring, which prosecutors said was led by his brother-in-law, Lawrence G. Strickland Jr. "The signal sent, obviously, is that bank officials, who can be the first line of defense in the community against money laundering by international drug dealers, can be held accountable," diGenova said. Hessler is the 14th person convicted in the case, which is the first brought here as a result of an investigation by the Organized Crime Drug Enforcement Task Force formed by the Reagan administration in 1982. At his trial in June, Hessler was acquitted of six charges of misusing bank funds, mail fraud and failure to report taxable income, but the jury could not reach a verdict on 17 other counts. In the same trial, Black, 71, was convicted of three counts of income tax evasion and, in a separate trial, was convicted with three other defendants, of conspiracy to import and distribute cocaine. He is serving a seven-year prison term. Assistant U.S. Attorney Roger Adelman told Hogan that Hessler is different from the others in the case because he "occupied in his career a position of trust." Despite Hessler's guilty plea, Adelman said, Hessler "perpetuates the myth" that he has done nothing wrong. According to testimony during the trial, at the time that Hessler extended unauthorized bank loans to Black, he borrowed $40,000 from Black to help buy the house in which Hessler lives. Prosecutors alleged the money was a bribe; Hessler said it was a loan. A financial statement filed in court indicated that Hessler does not expect to repay the $35,000 loan balance because the money was used to pay legal expenses "caused by Black and Strickland." Edgar Wilhite, Hessler's lawyer, said his client was “strung along" by Black, whom Hessier said he considered "almost as a father to me." and that no one at Riggs knew much about the cash transaction laws. Hessler told Hogan: "I still deny the charge concerning this case." As a result of the case, Hessler said, "Now I'm a self-employed, blue-collar laborer.... My direct family is close to financial ruin." Hogan imposed a three-year jail term, suspending all but six months, and ordered Hessler to work 500 hours in sports programs for poor and handicapped children and to spend 500 hours raising money for the American Cancer Society. 5 Held in Scheme for Laundering Millions of Dollars in Drug Profits By JUDITH CUMMINGS LOS ANGELES, Feb. 10-Govern- rested in Miami and who the investigament agents have arrested five people tors say headed the nationwide operasuspected of involvement in laundering tion; Oswaldo Vera, also arrested in money in connection with a multimil- Miami; Enrique Fernández, arrested lion-dollar drug trade centered in Los in Los Angeles, and Luis Morales, the Angeles and Miami, Federal prosecu- man arrested in New York. The latter tors said today. three are described as employees or couriers. According to Robert C. Bonner, the United States Attorney in Los Angeles, and Leon B. Kellner, the United States Attorney in Miami, Federal agents since last September have seized 254 pounds of cocaine and $11.6 million in cash in connection with the case. Mr. Bonner said the cash was the largest amount ever seized "in a single coordinated drug case." The case was handled as a joint project by the United States Customs Service, the Internal Revenue Service and Federal prosecutors in Miami and Los Angeles. Foreign Traffickers Got Profits According to an affidavit by Lorraine The five men include three Venezue-toms Service, the Sarmiento organizaBrown, a special agent with the Cuslan nationals arrested in Miami Friday, another Venezuelan arrested in Los Angeles the same day and a fifth man, described as a Uruguayan, who was picked up in New York City. They have been charged with conspiracy in connection with violations of Federal laws on currency reporting and disguising the sources of money. Agents Posed as Intermediaries Prosecutors described the operation as a "nationwide money-laundering service," saying the suspects tried to manipulate deposits of currency and electronic transfers of money for "major narcotics traffickers" dealing in large quantities of cocaine mainly in Florida and California. In the investigation Federal undercover agents, working secretly with two commercial banks, one in Los An geles and the other in Miami, posed as American intermediaries having connections with American bankers they said were willing to violate currency reporting requirements, according to documents filed in the case. From the financial institutions that cooperated in the case, the money was transferred to bank accounts in Panama as well as to banks in Miami and New York, the documents say. The documents say that the suspects made payments to the undercover agents to prevent reports of large currency transactions from being filed. But, according to the documents, the cooperating American institutions filed reports on the cash deposits. Financial institutions are required by law to report any cash transaction of $10,000 or more to the Treasury Depart ment. The transactions intercepted by the undercover agents ranged from $103,350 to more than $1 million in a single transaction, the Government said. Since last September, 23 such currency transactions were conducted through the cooperating bank in California alone, the documents said. Those arrested were identified as Carlos Sarmiento-Arechederra and Roberto del Pino Sousa, who were ar tion "moves millions of dollars in She said Mr. Sarmiento and his col laborator, Mr. del Pino, operating from dered. A Customs Service special agent, Awilda Villafane of Miami, an undercover agent in the case, reported that Mr. Sarmiento offered undercover agents commissions of from 1.5 percent to 2.5 percent of cash transactions for help in circumventing reporting laws. He said the suspects kept financial records coded with "computer numerals" to disguise the identities of clients and associates. The financial institutions that cooperated in the case were not identified. Money Laundering NYT. (A16) McLean Bank Admits Failing to File Reports on Cash in Major Drug Case By Elizabeth Tucker McLean Bank pleaded guilty yesterday to The bank, but not bank officials, pleaded fice of the U.S. attorney for the Eastern Financial institutions are required by fed- In January, federal prosecutors issued a On May 17, Christopher Reckmeyer was the drug ring. Robert Reckmeyer was sen- McLean Bank's guilty plea followed a Although the maximum penalty for the Bank officials were not available for com- "The United States has concluded that no individual director, officer or employe of the "Instead, the government's prosecution is "The bank has decided not to contest the tions that are five years old, can be put to Bank President Roy L. Browning was on Assistant U.S. Attorney Robinson said "The bank is saying people in manage- McLean Bank Admits Failing to File Reports MCLEAN, From D1 that gave rise to the need to file. Those two groups of employes never quite hooked up that's the bank's claim. "There is going to be a sentencng in this case, at which point both the bank and government will be able to say more about their position in this case," Robinson said. Robinson said his office has inestigated other banks and found no indication that any other banks that the Reckmeyers were using failed to file currency transaction reports." The Reckmeyers used several banks throughout North ern Virginia," he said, without iden tifying the banks. "Certainly any other cases of this sort which come to our attention will be vigorously prosecuted," he said. Documents filed with the court disclose details of the cash transactions. Since the early 1970s, more than $2.25 million in cash was deposited on 173 separate occations in an account called Crancy's Inc. and controlled by Christopher Reckmeyer, Robinson said. Beginhing in 1978, many of the cash deposits exceeded $10,000. But the McLean Bank filed only six reports to the IRS on the Crancy's account, involving about $200,000 in deposits, the U.S. attorney's office said. No reports were filed on 61 transactions involving more than $1.5 million. Forty of the 61 transactions oc condominium units at Port Royal had been deposited in a savings account at the McLean Bank, instead of in escrow accounts as required by Virginia law. At that time, documents showed that less than $10 remained in that account on Dec. 31, 1983, and that withdrawals had been made to finance other developments directed by Port Royal's principal officers, Eugene Lawson and Charles H. Schools. Schools, who had been chairman of the board for the McLean Bank until shortly before the controversy surfaced, was replaced by Roy L. Browning, but no one had been willing to say at the time why the change had been made. Now, Browning is president, and the chairman is John G. Broumas, according to a bank employe. In 1974, McLean Bank nearly collapsed under the weight of a wine mvestment scandal that touched its two top officers, bank officials said at the time. About $2.5 million in loans had been made to investors in the venture, which subsequently collapsed, leaving the young bank with a potential loss of $1.8 million. The chairman, J. Michael Burry, was an investor in the scheme, which the Securities and Exchange Commission was to describe as fraudulent. Only the overnight infusion of $600,000 in cash by an investors group saved the Northern Virginia bank from having to be liquidated or merged with a holding company. The bank's president, Walter P. Johnson, was removed from office for approving the wine loans and was indicted in 1977. He pleaded guilty to embezzlement and misuse of bank funds and was sentenced to six months in federal prison. |