Baltimore Car Dealers Admit Laundering Money and Defrauding IRS
Case Demonstrates How Criminals Buy Cars for Cash and Protect Them Against Subsequent Forfeiture
Baltimore, Maryland - Brothers Damon Young, age 35, and Larry Young, age 40, both of North Carolina, but formerly of Baltimore, Maryland, pleaded guilty today to money laundering, relating to their sale of a car involving the purported proceeds of illegal activity, announced United States Attorney for the District of Maryland Rod J. Rosenstein. Damon Young also pleaded guilty to failing to file Internal Revenue Service (IRS) Form 8300, as required in connection with a financial transaction involving the receipt of more than $10,000 and failure to file a federal income tax return. Larry Young also pleaded guilty to making a false statement on a document sent to the Drug Enforcement Administration (DEA).
“A car dealer who sells a car for cash and agrees not to report the cash to the IRS as required is helping the buyer to hide income,” said U.S. Attorney Rod J. Rosenstein. “When the dealer files a phony lien, it conceals the cash sale and helps the criminal get the car back if it is ever seized and forfeited by the government. People who knowingly help criminals launder money and protect their assets against government forfeiture are partners in the crime.”
“IRS-Criminal Investigation has the financial investigators and expertise that is critical to locate the money and prosecute the offenders,” stated C. Andre' Martin, Internal Revenue Service-Criminal Investigation Special Agent in Charge. “Money laundering is not a victimless crime. The underground, untaxed economy harms the entire nation’s economic strength.”
“This long term investigation utilized a myriad of techniques, to include undercover officers, confidential sources and surveillance to expose brothers Damon and Larry Young,” stated Ava Cooper-Davis, Special Agent in Charge of the Drug Enforcement Administration. “Many hours of hard work by DEA and IRS special agents brought this case to a successful conclusion,” stated Cooper-Davis.
According to the Youngs’ plea agreements, on September 14, 2005, a DEA confidential source (CS), wearing a recording device and acting at the direction of the DEA, went to Platinum Motors, located at that time at 4016 Reisterstown Road in Baltimore. The CS met with Damon Young and Larry Young in order to purchase a 1998 BMW 528 automobile and represented to the Youngs that the money used in the transaction was proceeds from illegal activity. The CS purchased the BMW for $19,000 cash, which had been provided to the CS by DEA. The paperwork reflected the purchase price to be $19,000, but showed a down payment of $9,000 and an amount financed of $10,000, with the lien holder being Platinum Motors. No Form 8300 was ever filed with the IRS in connection with this vehicle purchase, even though Damon Young and Larry Young received $19,000 in cash. The recording device captured discussions between the CS and Damon and Larry Young, including the counting of the money given to them by the CS in connection with the purchase.
In addition, according to Damon Young’s plea agreement he had gross income of $322,874 during 2005, for which he was required to file a federal income tax return. No tax return was filed for calendar year 2005. Damon Young further admitted that he failed to file personal income tax returns for calendar years 2002, 2003, and 2004, even though he had unreported gross income of $86,490 in 2002, $103,237 in 2003, and $133,762 in 2004.
Furthermore, as an officer and owner of Platinum Motors, Damon Young failed to file corporate tax returns for Platinum Motors for calendar years 2003 through 2005, even though the business had gross receipts as follows: $8,803,951 (2003); $8,223,499 (2004); and $4,207,932 (2005). As part of his plea agreement Damon Young has agreed to file complete individual and corporate tax returns for the years in question and to pay restitution to the Internal Revenue Service of $129,272 which represents the full amount of his personal tax loss.
According to Larry Young’s plea agreement, on September 13, 2004, DEA – North Charleston seized a 2003 Landrover Rangerover from a cooperating witness (CW), a known drug dealer. The vehicle had Maryland registered tags, and had been purchased from Platinum Motors, with the CW’s mother listed as the vehicle purchaser. The CW was arrested for possession of heroin with intent to distribute, and this vehicle was seized, along with drugs and cash, in connection to his arrest. At the time the vehicle was seized no monies were owed Platinum Motors for the vehicle. Paperwork prepared by Platinum Motors at the time of the purchase of the vehicle, reflected a false lien, so that if the CW was arrested and the vehicle seized, the lien would allow Platinum Motors to reclaim possession of the vehicle, and either return or sell the vehicle.
According to Larry Young’s plea, after the vehicle was seized by the DEA, Larry Young prepared a letter, dated October 13, 2004, which was submitted to the DEA and signed by Damon Young. The letter stated that Platinum Motors held a lien on the vehicle in the amount of $18,263. The letter further stated that the owner was three months behind on payments and that at the time of the sale Platinum Motors was not aware that the vehicle would be used for drug trafficking. None of these statements were true. Based on the letter, the DEA released the vehicle back to Platinum Motors and Damon Young and Larry Young. Once the vehicle was returned, Larry Young had contact with the mother of the CW and paid her for the vehicle, ultimately disposing of the vehicle, keeping the proceeds of the sale of the vehicle.
Both defendants face a maximum sentence of 20 years in prison for money laundering. Damon Young also faces a maximum sentence of five years in prison for failing to file the required forms reporting a transaction involving the receipt of more than $10,000; and a maximum of a year in prison for failing to file a federal tax return. Larry Young faces a maximum sentence of five years in prison for making a false statement on a document submitted to DEA. U.S. District Judge Richard D. Bennett has scheduled sentencing for December 1, 2009 at 10:00 a.m.
United States Attorney Rod J. Rosenstein thanked the Drug Enforcement Administration and the Internal Revenue Service - Criminal Investigation for their investigative work in this Organized Crime Drug Enforcement Task Force case. Mr. Rosenstein commended Assistant United States Attorney Christopher J. Romano, who is prosecuting the case.