Baltimore Car Dealers Sentenced to Prison for Laundering Money and Defrauding IRS
Case Demonstrates How Criminals Buy Cars for Cash and Protect Them Against Subsequent Forfeiture
Baltimore, Maryland - U.S. District Judge Richard D. Bennett sentenced Larry Young, age 40, to 18 months in prison, followed by three years of supervised release; and sentenced his brother, Damon Young, age 35, to a year and a day in prison, followed by three years of supervised release, with the first six months to be served in home detention with electronic monitoring. The Youngs, both of North Carolina, but formerly of Baltimore, previously pleaded guilty to money laundering, relating to their sale of a car using funds represented to be the proceeds of criminal activity. Damon Young also pleaded guilty to failing to file the IRS form 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). Judge Bennett also ordered that Damon Young pay restitution of $129,272, which represents the full amount of taxes due on his personal tax returns.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Ava Cooper-Davis of the Drug Enforcement Administration - Washington Field Division; and Special Agent in Charge Rebecca Sparkman of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
“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.”
“Today's sentencing of the Youngs is a direct result of the excellent partnership the IRS-Criminal Investigation, the U.S. Attorneys Office and DEA have in combating violations of Federal law,” stated Rebecca Sparkman, Internal Revenue Service-Criminal Investigation Special Agent in Charge, Washington DC Field Office. “The IRS-Criminal Investigation is united with the rest of the law enforcement community in our resolve to financially disrupt those that commit crimes against our society and economy.”
“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 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 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. Although Damon Young and Larry Young received $19,000 in cash, the required IRS form was never filed in connection with this vehicle purchase. 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).
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 the Youngs. 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.
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 prosecuted the case.