Pawn Shop Owner Pleads Guilty in Scheme to Launder $20 Million in Proceeds in Stolen Merchandise
Admitted Laundering Millions of Dollars in Proceeds of Stolen Over-the-Counter Medicines, Health and Beauty Aid Products, Gift Cards, DVDs, Tools and other Items
Baltimore, Maryland - Louis Leitch, Sr., age 62, of Baltimore, pleaded guilty today to conspiracy to commit money laundering and attempting to evade taxes.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Postal Inspector in Charge Daniel S. Cortez of the U.S. Postal Inspection Service - Washington Division; Chief James W. Johnson of the Baltimore County Police Department; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; Baltimore Police Commissioner Frederick H. Bealefeld III; and Special Agent in Charge Rebecca Sparkman of the Internal Revenue Service - Criminal Investigation.
“For the last six years the Ponemon Institute has ranked the Postal Service the ‘Most Trusted Government Agency’,” said Inspector in Charge Daniel S. Cortez. “The Postal Inspection Service will continue to ensure that trust by thwarting criminals that use the U.S. Mail in furtherance of their crimes.”
“The IRS-Criminal Investigation's largest enforcement program is directed at those who willfully and intentionally violate their legal duty of filing and paying their fair share of taxes,” stated Rebecca Sparkman, Internal Revenue Service-Criminal Investigation Special Agent in Charge, Washington DC Field Office. “Honest taxpayers pay when others swindle the government.”
According to his plea agreement, from 2007 to March 2010, Leitch conspired with others to conduct monetary transactions involving the sale of mass quantities of stolen over-the-counter medications, health and beauty aid products, gift cards, DVDs, tools and other merchandise. Shoplifters, also known as “boosters,” stole products from Target, Safeway, Wal-Mart, Kohl’s and other retailers in Maryland and other states. Pawn shops bought large amounts of stolen items from the boosters. Louis Leitch, Sr. and others were owners of E-Z Money Pawn Shop and 2Brothers Liquidators, Inc. Leitch and others would receive stolen products at E-Z Money. The stolen items were “cleaned,” meaning that the security labels and retail tags from the stolen product were removed. Sometimes a heat gun and lighter fluid would be used to peel away the plastic security labels. In addition, Leitch worked with co-defendants to purchase and transport stolen material. Leitch knew that many of his co-defendants and others participated in the scheme. Some of the defendants also had on-line auctions sites, such as eBay and Amazon.com, where they would sell the stolen products far below normal retail value. The stolen products were then delivered to unsuspecting customers via the United States mail. The defendants received payment back by interstate wire transfers using PayPal accounts and through various financial institutions in Maryland.
On March 25, 2010, agents from the U.S. Postal Inspection Service, Baltimore County Police Department and the Federal Bureau of Investigation executed search warrants at E-Z Money and the other pawn shops in this case. Agents recovered well over $1 million in stolen merchandise, approximately $1 million in bank accounts and over $140,000 in cash, and 44 firearms. Although the entire conspiracy involved approximately $20 million in stolen merchandise, at least $2.5 million but less than $7 million in stolen product was reasonably foreseeable to Leitch.
In addition, Leitch failed to file income tax returns for tax years 2005 and 2006, although he received substantial income through his pawn shop and other business. During 2005 through 2006, Leitch withdrew from his bank accounts more than $2.5 million of his gross income, with each withdrawal being less than $10,000. During 2007, Leitch made cash deposits of more than $200,000 of his gross income into bank accounts, with each deposit being less than $10,000. By making deposits and withdrawals in amounts less than $10,000, Leitch was able to avoid bank reporting requirements and conceal from the Internal Revenue Service that he had substantial income and knowingly failed to pay taxes on the income. The tax loss as a result of this conduct for 2005 and 2006 is $401,600.
Leitch faces a maximum sentence of 10 years in prison and a $250,000 fine for the money laundering conspiracy and a maximum of five year in prison for attempting to evade taxes. U.S. District Judge Benson E. Legg has scheduled sentencing for December 17, 2010 at 10:00 a.m.
Co-defendants who have pleaded guilty to the money laundering conspiracy to date, include: Justin Noel Mayhew, age 29; Robert Anthony Reed and Daniel Filip Mimer, both age 27; Spencer Michael Garonzik, age 43; Michael Ender, age 32; and Warren Allen Culver II, age 31; and Michael B. Levy, age 51, all of Baltimore; Jared Lee Ezra, age 41, of Reisterstown, Maryland; and Nicholas Acosta, age 22, of Baltimore.
United States Attorney Rod J. Rosenstein thanked the U.S. Postal Inspection Service; Baltimore County Police Department; Federal Bureau of Investigation; Baltimore Police Department; and Internal Revenue Service - Criminal Investigation for their work in this investigation and commended Assistant United States Attorneys Kwame J. Manley and Richard Kay, who are prosecuting the case.