“I’ve Been Here Before,’ Silberman Boasted to FBI Agent : Swiss Accounts, Threats of ‘Muscle’
The drug money-laundering allegations facing millionaire businessman Richard T. Silberman involve tantalizing details about Swiss accounts, secretly taped meetings, deals transacted via tens of thousands of dollars in cash in shoe boxes, and threats of bringing in “muscle” when a deal went sour.
In a 76-page affidavit released Monday, federal prosecutors vividly detail incidents that sound as if they were drawn from a Hollywood script in portraying Silberman’s alleged role in schemes to conceal the source of money that he had been told originated with Colombian narcotics traffickers.
According to prosecutors, Silberman either used or discussed various methods--among them, a stock swap involving a local mining company that he controls, the purchase of U.S. Treasury bonds and wiring cash to foreign banks--to launder money for an undercover FBI agent posing as a representative of Colombian cocaine dealers.
Tape recordings of telephone conversations and face-to-face meetings between Silberman and other principals in the alleged money-laundering plans show that he sought on several occasions to assure the undercover agent that he was experienced in such matters, according to the affidavit.
“Just for your background, this is not my first go-around, OK?” Silberman told the agent last November in discussing a $100,000 “test run” laundering operation. “I’ve been here before.”
Designed to ‘Cleanse’ Cash
Money-laundering schemes such as those detailed in the charges against Silberman and three other men are designed to “cleanse” illegally gained cash by moving it through various legitimate transactions--such as bank deposits or stock deals--in an effort to conceal the money’s source. If the plans succeed, the illegal funds need not be smuggled out of the country, but rather can simply be transferred to other banks or invested in other legal ways.
One of the major difficulties faced by anyone attempting to set up large-scale laundering operations is that banks, stock brokerage houses and other financial institutions are required to file records with the federal government detailing cash transactions over $10,000, according to Assistant U.S. Atty. Charles Gorder Jr., the prosecutor in Silberman’s case.
Aware that large cash transactions could attract the attention of federal authorities, drug traffickers and other criminals with millions of dollars on hand often need the cooperation of someone in a legitimate investment business to circumvent those reporting requirements. In the court papers released Monday, prosecutors allege that Silberman played that role in this case.
The affidavit provide the following account of the alleged laundering:
At their first meeting Nov. 9, the undercover agent told Silberman that he represented Colombians who were worried about how they could get large amounts of illegitimate money out of the country without it being traced through the so-called Currency Transaction Reports. That meeting was set up through Chris Petti, whom federal officials have described as having ties to the Chicago Cosa Nostra, an organized crime group whose operations in Southern California and Nevada triggered the government’s 2 1/2-year investigation.
During that meeting, in a Mission Valley hotel’s coffee shop, Silberman promised that he “could handle everything,” assuring the agent that he would not have to file the required cash-transaction reports.
Silberman outlined a plan under which the undercover agent could use the “drug money” to buy stock in Yuba American Gold, a subsidiary of Yuba Natural Resources Inc., the San Diego-based mining company that he heads. Within 90 days to six months, the stock was to be sold on the Canadian exchange, with Silberman arranging that the proceeds would be sent outside the United States, perhaps to Switzerland.
Although Silberman initially told the agent that he was not interested in any deal under $500,000, the agent insisted on a $100,000 “test run.” In the hope of gaining the agent’s confidence, Silberman agreed to the test.
In subsequent conversations, Silberman arranged for two associates to pick up the $100,000 from the agent at a hotel near Los Angeles International Airport.
When the agent expressed reluctance about giving the money to two strangers “because of fear of a possible rip-off,” Silberman explained that his familiarity in statewide political and business circles made it too risky for him to pick it up himself.
“Part of this, believe it or not, is . . . as much for your protection as mine,” Silberman told the agent in one taped conversation. “There’s no place I can walk and not believe that someone might recognize me.”
Trying to allay the agent’s concerns, Silberman noted that he had often used couriers under similar circumstances.
“I’ve done it 15 or 20 times (and) it works like absolute, clean, uninterrupted, greased lightning,” Silberman is quoted as saying. “I’ve had zero problems, no noise, nothing. . . . These guys have a very unique operation and they’re not amateurs.”
On Nov. 30, Silberman’s couriers contacted the agent at the Los Angeles hotel. In a transaction recorded by a concealed camera--during which Silberman telephoned from San Diego to make sure that everything had gone smoothly--one of the men put the cash in a shoe box wrapped in red paper. Adding a perhaps-unintentional bit of semantic humor to the scene, the man then placed the shoe box inside a gray hotel laundry bag, according to the court papers.
About a week later, Silberman had a certificate for 50,000 shares of Yuba American Gold delivered to the agent’s “friend"--actually, another FBI agent--at the Holiday Inn Embarcadero in San Diego.
Convinced that the first deal had been a success, Silberman began pressing the agent for larger transactions, the affidavit said. The agent replied that bigger deals were possible, if they could be completed much quicker than the three- to six-month period involved in the stock transaction. The drug dealers, the agent explained, were “just interested in moving the money from Point A to Point B and didn’t want to tie it up for a long period of time,” the court filings said.
To satisfy those demands, Silberman proposed converting $200,000 in drug funds into Treasury bonds, certificates of deposit or currency, depending on the agent’s preference. For a 12% fee, Silberman told the agent, he could guarantee a five-day “turnaround time” on the money, according to the affidavit.
After agreeing to buy bonds, Silberman arranged for Darryl Nakatsuka and Jack Myers--the two men involved in the earlier $100,000 Los Angeles deal--to pick up $200,000 from the agent at San Diego’s Hyatt Islandia hotel on Feb. 22. Through a brokerage house in Westlake Village, north of Los Angeles, that money was exchanged for 40 $10,000 U.S. Treasury zero-coupon bonds with a due date of 2001.
Trouble began brewing with that deal several weeks later, however, when the agent calculated that the bonds’ current value of $3,028 meant that Silberman, even after taking his commission, owed an additional $50,000 on that transaction. Claiming to be surprised, Silberman learned that the shortfall stemmed from the insistence of an employee of the Westlake Village firm and another unidentified man involved in the deal that the bonds were valued at more than they actually were worth.
When the pair balked at providing more bonds to make up for the difference, Myers proposed to Silberman that he arrange for a man named “Kaboda"--a member of the Japanese Yakuza an organized-crime group--to “talk” to the people withholding the money. Silberman agreed with that idea, and later, in a conversation laced with vulgarities, suggested that some of Petti’s “muscle” also could be employed to show how serious they were about getting the problem resolved.
As that dispute dragged out, Silberman expressed a willingness to handle another laundering operation for little or no fee in order to offset the money that the agent had coming from the earlier deal. Over several days, Silberman and his associates discussed possibilities ranging from other stock deals to cash transfers in $100,000 increments to banks in Mexico and South America.
‘3 Brick Walls’
Eventually, the undercover agent told Silberman that he might be willing to proceed with another deal for more than $750,000. Although the precise details of that plan are not spelled out in the affidavit, Silberman told the agent that the money would pass through three places, describing those stops as “three brick walls.”
Those discussions apparently were never completed, however. When Silberman was arrested last Friday, he allegedly was still negotiating with the undercover agent to launder $1.1 million.