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SAN FRANCISCO – Seven persons -- Vladimir Handl, Michael Rose, Peter Scalise, David Gaither, Richard Leyland, Edwin Hetherton, and Paul Fink -- were arrested after being charged with racketeering, money-laundering, and drug trafficking related crimes, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.
According to an indictment that was unsealed yesterday, Handl and Rose were businessmen in Myrtle Beach, South Carolina, whose interests included restaurants, nightclubs, and strip clubs in several states. Handl operated and controlled businesses such as VIP Group, LLC, International VH, LLC, and Heat Lounge, LLC, while Rose operated and controlled defendant PML Clubs, Inc., along with Explosive Clubs, Inc., Nightclub and Restaurant Services, LLC, Legacy Entertainment, East Coast Restaurant & Nightclubs, and Micro Management Group, LLC. Rose, through PML Clubs, Inc., operated several strip clubs in South Carolina, Delaware, and New Hampshire under the name “The Gold Club.” Rose, through PML Clubs, Inc., also licensed the use of the name “The Gold Club” to franchisees throughout the United States.
According to the indictment, Handl and Rose, along with their associates, Peter Scalise, and David Gaither, conspired to conduct the affairs of an enterprise through a pattern of racketeering involving money laundering, bank fraud, and drug trafficking. Between 2011 through the present, the defendants knowingly accepted more than $2.3 million that they believed either had been fraudulently diverted from a bankruptcy court proceeding or constituted proceeds from drug trafficking, and then laundered the money through their businesses, including Rose’s Gold Clubs. The indictment further alleges that as part of their laundering scheme, the defendants created fraudulent invoices, contracts, and other business records to make it appear that the money they received and “cleaned” was for legitimate business transactions. The defendants also sought to acquire cocaine to sell.
Handl, Rose, Scalise, Gaither, and PML Clubs, Inc., are all charged with racketeering conspiracy, in violation of 18 U.S.C. § 1962(d), while Handl, Rose, Scalise, and PML Clubs, Inc., are also charged with substantive racketeering, in violation of 18 U.S.C. § 1962(c). In addition, Handl, Rose, Scalise, and PML Clubs, Inc., are charged with conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). Furthermore, Handl and Scalise are each charged with 118 counts of substantive money laundering, in violation of 18 U.S.C. § 1956(a)(3), while Rose and PML Clubs, Inc., are each charged with 105 counts of substantive money laundering.
Richard Leyland and Edwin Hetherton, in turn, are charged with a money laundering conspiracy of their own. In addition to the conspiracy change, Leyland is charged with four counts of substantive money laundering and Hetherton is changed with three counts of substantive money laundering. Both Leyland and Hetherton also are charged with theft of United States property.
Handl and Paul Fink are also charged with conspiring to possess cocaine with intent to distribute, in violation of 21 U.S.C. § 846.
All seven defendants were taken into custody today in arrests coordinated throughout the country. Rose and Scalise were arrested in the vicinity of Myrtle Beach, South Carolina. Handl and Gaither were arrested in the vicinity of Florence, South Carolina. Fink was arrested in the vicinity of Chico, California; Hetherton was arrested in the vicinity of Sacramento, California; and Leyland was arrested in the vicinity of Fort Washington, Pennsylvania. They all are expected eventually to make appearances in San Francisco in connection with the indictment filed in the federal district court in the Northern District of California.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the corporate defendant PML Clubs, Inc., could face a maximum fine of $250,000 for each of the two racketeering-related counts, and $500,000 for each count of the 106 money laundering-related counts. Additional special assessments may apply.
The individual defendants face a maximum 20-year term of imprisonment for each racketeering-related count and each money laundering-related count. Further, the individual defendants face a maximum 10-year term of imprisonment for each theft of United States property count, and a maximum 20-year term of imprisonment for the conspiracy to possess cocaine with intent to distribute. Each defendant’s maximum terms of imprisonment are as follows:
Additional periods of supervised release, fines, and special assessments also could be imposed. Any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorneys David Countryman and W.S. Wilson Leung are prosecuting the case with the assistance of Lance Libatique and Carolyn Jusay. The prosecution is the result of an investigation by the Federal Bureau of Investigation.