Criminals creatively conceal dirty deals

Laundered money takes many paths

Tuesday, December 26, 2006
Kevin Mayhood
THE COLUMBUS DISPATCH

A group of Cleveland men used a fake driver’s license to withdraw more than $1 million from another man’s bank account.

In Columbus, businessman Richard D. Schultz sold his company for $11.3 million but didn’t want the IRS to know.

Anthony "Ant" Whittaker had his girlfriend and friends run his cocaine and marijuana business while he directed them from a state prison.

What they all did next, the IRS says, is launder the money.

Identity thieves, executives with their hands in the till and drug traffickers all try to fool the federal government by making dirty profits look like clean income.

Since Congress passed the Money Laundering Control Act in 1986, money-laundering cases have become a major part of the IRS’ business. They accounted for nearly 40 percent of the agency’s 2,020 criminal convictions nationally and 35 percent of the 97 convictions in Ohio during the fiscal year that ended Sept. 30, the agency says.

"Money laundering is tax evasion in progress," said Craig Casserly, spokesman for the IRS criminal-investigation section in Columbus.

In Ohio, the tax men and law-enforcement agencies have uncovered both simple schemes and complex operations.

In the identity-theft scam, Leander Williams, Anthony P. McGhee and Wallace Wilson withdrew $200,000 in cash and more than $800,000 in checks from a Cleveland bank in 2004 and 2005, authorities say.

The men handed the checks to others who, for a few thousand dollars, deposited them in other banks and then, days later, withdrew cash or had bank checks made out to other individuals or businesses. The money was moved through three or four accounts. When it got back in the hands of the thieves, the stolen money appeared to have come through businesses doing legitimate work.

Launderers "typically use shell corporations set up just to receive and move money," said Dale Smith, training director for the National White Collar Crime Center, in Glen Allen, Va. "On its face, you see a company spending a lot of money and bringing in a lot of money, which is what a company is supposed to do."

In the Columbus case, Schultz, who didn’t want to pay taxes on legitimate income, devised some of the most-sophisticated schemes seen here, authorities said. He sold National Revenue Corp., a billcollecting business, for $11.3 million in 1994 but claimed on his tax return that he was paid $6.5 million.

To hide his wealth, Schultz and co-defendants forged a letter to make it look like his father was due half the stock based on conditions set up when Schultz founded National Revenue in 1971. His father "sued" him in Florida. Schultz settled the case by paying his father about $5 million, but the money remained under Schultz’s control, authorities said.

Schultz also set up bogus businesses and deals that made it appear he’d lost millions. One contract said Schultz was to pay a Canadian company about $4 million. On paper, Schultz paid $2 million but failed to pay the rest. In accordance with the contract, he forfeited the $2 million.

The money Schultz "lost" was sent through Canadian banks to banks in the Caribbean and the Channel Islands off England. Schultz and eight others were convicted; the last two were sentenced this year.

The scheme came to light during Schultz’s divorce when his wife’s attorney became suspicious that he was hiding money.

Whittaker, who was in and out of prison while leading a drug operation, tried to clean his profits close to home.

He put drug money in Sovereign Investment Group, a Columbus company set up by co-defendant Cortney J. Roberts, and received "paychecks" and a W-2 form as if he worked there.

To buy a house, he and his girlfriend, Jeanette E. LeBron, had their real-estate agent deposit $18,000 of drug money into the agent’s company account and then pay them back with two cashier’s checks. LeBron took the checks, along with an $8,700 check from Roberts and a $9,300 check from Sovereign, and converted them to one cashier’s check. The couple used that cashier’s check as a down payment.

Authorities gathered much of their information in the case by listening in on more than 100 phone calls Whitaker made from prison.

All three players have pleaded guilty to the schemes and await sentencing. The house is being seized by the government.

kmayhood@dispatch.com

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