DRUG DEFENDANT, ON THE RUN FOR 15 YEARS, PLEADS GUILTY TO MONEY LAUNDERING
Defendant Admits Laundering More than $8,000,000 in Proceeds from Hashish Shipment
FRANK FALCO, 58, pleaded guilty in U.S. District Court in Tacoma to Money Laundering in connection with a drug smuggling conspiracy that imported 50,000 pounds of hashish into the United States in 1992. FALCO was arrested after turning himself in at the U.S. Consulate in Guadalajara, Mexico in March 2008. FALCO had lived in undisclosed locations in Mexico for about 15 years. U.S. Marshals had pursued FALCO since 1997 when a grand jury indicted FALCO up until his surrender in 2008. FALCO faces up to twenty years in prison and a $500,000 fine when sentenced by U.S. District Judge Robert J. Bryan on January 9, 2009.
According to the plea agreement, in 1992 FALCO joined with coconspirators Jeffrey Jay Warren, Lee Rushing, and others in a scheme to smuggle 50,000 pounds of hashish from Pakistan into the United States. The men hired a fisherman, Robert Tillitz, to arrange the transfer of the hashish from a freighter to a smaller fishing boat off the coast of Washington. Tillitz rented a home and a warehouse in South Bend, Washington, and rented a boat, truck and trailer for the transportation of the hashish. The boat, the Kila Kila, was rented in Seattle and transported to Willapa Bay. In July 1992, the Kila Kila and two other fishing boats met the “mother ship” out in the Pacific. The Kila Kila transported 50,000 pounds of hashish to shore and the drugs were distributed to Oregon, California, and New York by rental trucks. FALCO arranged warehouse storage for the hashish in New York and later had the hashish distributed to buyers in Toronto, Canada.
FALCO was in charge of distributing the money from the drug sales. FALCO rented an apartment in New York City which served as the headquarters for the drug distribution conspiracy. The 50,000 pounds was an enormous amount of hashish and they tried to control the distribution so that the market would not be flooded causing the price to drop. FALCO approved all sales and the price. Between 1992 and 1994, FALCO paid between $8 million and $8.2 million to Jeffrey Jay Warren as his share of the drug proceeds. Other conspirators were instructed to contact FALCO for their money. In one instance a suitcase with $1,000,000 was handed over to Warren in the New York apartment. The money was then distributed to Tillitz and others who had assisted with the marine end of the smuggling operation. The large amount of cash ultimately lead to arrests in the case. On September 18, 1992, officers served a search warrant on Tillitz’ home in Crescent City, California, and found $445,000 buried in his front yard. When a federal grand jury in Seattle in 1994 indicted various participants in the smuggle, FALCO and several of his conspirators, including Tillitz and Warren, fled to Mexico where they hid out. In 1998, Tillitz was arrested in Mexico, extradited, and later convicted by a federal jury in Tacoma in connection with the drug smuggling operation. Tillitz served over ten years in prison.
Around April 2007, Mexican authorities arrested co-defendant, Jeffery Warren, where he was living in hiding near Puerto Vallarta, Mexico. The United States extradited Warren and he pleaded guilty in U.S. District Court in Tacoma in January 2008. Warren will be sentenced on November 21, 2008 at 9:30 a.m. before U.S. District Judge Robert Bryan in Tacoma.
Shortly after Jeffery Warren’s arrest, a coconspirator named Richard Harrison surrendered to U.S. Homeland Security officials at the U.S./Mexico border in Nogales. Harrison later pled guilty in U.S. District Court in Tacoma and was sentenced on April 11, 2008, to 21 months in prison to be followed by three years of supervised release.
“Those who turn to the drug trade to profit at the expense of others should know that we will never stop in our pursuit of them in order to hold them accountable," said Kenneth J. Hines, the IRS Special Agent in Charge of the Pacific Northwest. “IRS Criminal Investigation is deeply committed to using its financial expertise to help end this scourge and to protect innocent Americans from the horrors of drug abuse.”
“This case personifies the tenacity of federal law enforcement. Frank Falco was able to live free for 15 years on the profits of his illegal venture. The time has come for him to settle up with the justice system and pay for his past acts,” said Arnold R. Moorin, Special Agent in Charge of DEA in Seattle.
“The importation and trade of drugs is a serious crime with significant consequences,” said Leigh Winchell, Special Agent in Charge of U.S. Immigration and Customs Enforcement Office of Investigations in Seattle. “ICE will continue to work closely with our law enforcement partners to bring individuals who violate drug trafficking laws to justice.”
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI), the DEA, and U.S. Immigration and Customs Enforcement (ICE). The U.S. Marshal Service actively pursued several of the fugitives for almost 15 years. A number of Assistant United States Attorneys have worked on the case over the years including Kenneth Bell, Francis J. Diskin, and Bonnie McNaughten. Currently, Assistant United States Attorney Matthew Thomas is prosecuting the case.
For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110.