Potomac Business Man Pleads Guilty to Laundering Drug Proceeds
Greenbelt, Maryland - Todd Lubar, age 39, of Potomac, Maryland, pleaded guilty today to money laundering in connection with a scheme to launder drug proceeds through legitimate businesses owned by Lubar.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Theresa R. Stoop of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; and Acting Special Agent in Charge Jeannine A. Hammett of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
“Money laundering is tax evasion in progress” said Acting IRS Special Agent in Charge, Jeannine Hammett. “Money Laundering is a global threat, fuel for criminals to conduct their criminal affairs and is used to manipulate and erode our financial systems”
According to Lubar’s plea agreement, from September 2007 to at least 2009, Lubar was involved with several legitimate businesses in Maryland and Pennsylvania, including a demolition business, Red Rock Service Co., LLC, and a scrap metal business, Scrap USA. During 2008, drug dealers David Anthony Kittrell, Philip A. Forde, Jamal A. Daniels, and others were involved in the distribution of cocaine, heroin, MDMA, and marijuana to an undercover Special Agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives (“the UC”). The conspirators met at a business owned by Kittrell, known as The Image House, located on 10th Street NE, in Washington, DC, and at Kittrell’s home in Silver Spring, Maryland and sold more than 581 grams of cocaine, just under 150 grams of heroin, and more than two kilograms of marijuana to the UC. During this time, Kittrell introduced the UC to Lubar, who Kittrell said was a partner in real estate and other ventures.
During a meeting with the UC, Lubar advised the UC that: he has a mortgage company and has been in the mortgage business for 15 years; that he has a nightclub in Washington, DC, as well as a scrap metal business in Reading, Pennsylvania; and that while attending Syracuse University, he was a bookmaker who also sold five to ten pounds of marijuana per week and 350 ecstasy pills per week. The UC told Kittrell and Lubar that he was looking for ways to invest and hide cash proceeds from narcotics distribution in Chicago. Lubar advised the UC that he could provide professionals to transport narcotics cross country without law enforcement detection on behalf of the UC. Lubar then explained the financial positives of his scrap metal business and the ease with which he is able to launder money by explaining how the business conducts most of its transactions in cash. Over the course of the year, Lubar had other conversations with the UC, offering “investment opportunities” in which the UC could launder cash. Lubar explained that the UC could invest the cash, then Lubar would repay that investment with a guaranteed minimum return over a period of time, thereby legitimizing the source of the funds. Eventually, the UC agreed to launder $20,000 through Lubar by investing in a business venture suggested by Lubar. After receiving the cash, Lubar presented a contract to the UC which indicated that the UC would provide $20,000 that day, and in return would receive $25,000 from Lubar no later than December 31, 2008. On December 29, 2008, Lubar advised the UC that the $25,000 payment of funds owed to the UC would be delayed until the middle of January 2009 due to the recent drug arrest of Daniels and his need for bail. The UC told Lubar to personally contact the UC when the money was available. On September 2, 2009, Lubar deposited $200 into the UC’s undercover bank account.
Telephone records reflect that between July 2008 and September of 2009, Kittrell and Lubar were in contact with each other 1,495 times. Between August of 2008 and April of 2009, Daniels and Lubar were in contact with each other 28 times. Records reflect two telephone contacts between Forde and Lubar on July 6, 2008. In addition, numerous transactions were conducted between bank accounts for the scrap businesses and accounts for The Image House, as well as direct transactions between the narcotics conspirators and scrap metal business accounts controlled by Lubar.
Lubar faces a maximum penalty of 20 years in prison. U.S. District Judge Alexander Williams, has scheduled sentencing for October 26, 2011 at 9:30 a.m.
Kittrell, Forde and Daniels have previously pleaded guilty to drug charges. Kittrell and Forde are awaiting sentencing. Daniels was sentenced to five year in prison.
United States Attorney Rod J. Rosenstein commended the ATF and IRS-CI for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Stuart A. Berman and Andrea L. Smith, who are prosecuting this Organized Crime Drug Enforcement Task Force case.