Silberman Allegedly Boasted to Agent of Drug Money Laundering
Prominent businessman Richard T. Silberman believed that $300,000 he allegedly laundered for an undercover FBI agent came from Colombian cocaine traffickers and boasted to the agent that he had been involved in money-laundering ventures numerous times before, according to an affidavit unsealed by federal prosecutors Monday.
During a wiretapped telephone conversation, Silberman told the agent that “this is not my first go-around” and said he solicited money-laundering business through Chris Petti, an alleged co-conspirator and organized crime figure, because he “wanted a little diversification,” the affidavit says.
Silberman also said he was anxious to move on to “bigger and better things” after allegedly completing two laundering transactions negotiated with the agent during meetings at several San Diego hotels, the document says.
A wealthy San Diego businessman and powerful player in local and state Democratic politics for 15 years, Silberman was arrested by FBI agents Friday afternoon at the Hyatt Islandia Hotel while allegedly arranging to launder $1.1 million in funds that were portrayed by an undercover agent as proceeds from cocaine sales. The arrest--along with several other transactions conducted during the six months that Silberman was under FBI scrutiny--was secretly videotaped.
In a complaint issued by prosecutors Monday, Silberman, 59, is accused of conspiring with Petti and two other men still at large to launder $300,000 in cash represented to be the proceeds of cocaine trafficking. He is also charged with violating a federal law requiring that all financial transactions be reported to the U.S. Treasury Department.
Silberman, who is married to San Diego County Supervisor Susan Golding, faces up to 20 years in federal prison if convicted of the charges. After spending one night in the federal Metropolitan Correctional Center, he was released on a $500,000 personal surety bond Saturday afternoon.
On Monday, Silberman and Petti, 62, were formally charged before U.S. Magistrate Roger McKee and a swarm of news reporters and onlookers. Dressed in a dark blue suit and looking haggard, Silberman was accompanied to court by Golding and noted criminal defense attorney Milton J. Silverman, who was making a special appearance and who has not been retained.
Although prosecutors asked that McKee require Silberman to secure the bond with property, the magistrate declined, saying he believed that Silberman would honor his promise to return to court. McKee, who confiscated Silberman’s passport and required him to sign a list of standard conditions required of those posting bail, scheduled a preliminary hearing for April 21.
Supported by Wife
Outside the courthouse, Silberman declined to comment, on the advice of his attorney. But Golding, wrapping her arm tightly around her husband, vowed that Silberman’s name would be cleared.
“He’s innocent, that’s all there is to it,” said Golding, her voice tremulous. As for the effect her husband’s legal woes may have on her rising career in Republican politics, Golding said, “I haven’t thought much about that. I’m a county supervisor and will continue to be one.”
At one point during the couple’s brief meeting with reporters, Golding whispered “I love you” to her husband. Silberman then leaned down and kissed his wife on the cheek.
Assistant U.S. Atty. Charles Gorder said the government has “a very strong case” against Silberman and is optimistic that its charges will hold up in court. In particular, he said, Silberman was told frequently that the source of the agent’s money was cocaine trafficking and that such knowledge did not dim his desire to do business.
“On several occasions, to make it clear that the money was coming from cocaine sales, the agent would say it was furnished by Colombian traffickers,” Gorder said. “Silberman would say something like, ‘Well, I don’t want to hear that,’ or ‘I didn’t hear that.’ (But) clearly he did.”
In addition to Silberman and Petti, prosecutors have charged Darryl Nakatsuka--also known as Darryl Naka--and Jack Norman Myers in the case. Petti, who was also arraigned Monday before McKee, is being held without bail. He was serving probation for a federal gaming conviction at the time of his arrest.
Myers, the former son-in-law of MCA Chairman Lew Wasserman, helped Silberman raise money for former Gov. Edmund G. Brown Jr. as early as 1978, sources said. Top Brown campaign officials, including Gray Davis, who is now state controller, often stayed overnight at the Myers’ Beverly Hills residence while visiting Los Angeles on campaign trips, said two sources close to the Brown Administration who asked not to be identified.
Silberman--who held several top posts in the Brown Administration, including business and transportation secretary, finance director and the chief of staff--was a close personal and political confidant of the former governor.
Details of Deal
The 76-page affidavit released Monday provides the first glimpse of how solid a case the government may have against Silberman. Prepared by FBI Special Agent Charles B. Walker, it details the genesis of the laundering deals and the system Silberman allegedly used to dispose of the $300,000. The document suggests that evidence against Silberman ranges from extensive transcripts of wiretaps of more than a dozen telephones--including pay telephones frequently used by Petti and Silberman’s office phone at Yuba Natural Resources Inc.--to videotapes of cash transfers and the negotiating session on the day of Silberman’s arrest.
According to the affidavit, Silberman proposed a laundering scheme to Petti, the initial target of the investigation, last fall, telling the alleged associate of the Chicago Mafia that he could “get money out of the country, launder it, and realize a profit at the same time.”
Petti then allegedly set up a meeting with Robert Benjamin, a convicted felon and longtime acquaintance of Petti who became a cooperating witness for the FBI in 1986. Benjamin said he had a New Jersey associate who needed to move money on the West Coast for Colombian cocaine traffickers, and offered to put him in touch with Silberman. The New Jersey associate was, in fact, the undercover FBI agent.
A series of meetings among the agent, Petti and Silberman followed at coffee shops around San Diego, the affidavit says. Although Silberman said he was not interested in laundering less than $500,000, the agent insisted on a “test” run of $100,000, and Silberman agreed, the affidavit says.
As details of the deal were hammered out, Silberman was told that the agent represented Colombians whose money was “not legitimate.” During one wiretapped call to Silberman, the agent said of his associates, “All they know is coke and they don’t know nothing else.” And in a meeting with Silberman in February, the agent called his sources “a bunch of . . . Colombian cocaine drug lords.” Silberman responded, “I don’t want to hear that.”
The affidavit says the first “test” deal, involving $100,000 in federal money, was made Nov. 30 when Nakatsuka picked up the money from the undercover agent at the Airport Hilton Hotel in Los Angeles.
Those funds were apparently to be used in a stock swap involving Yuba American Gold Inc., a subsidiary of Yuba Natural Resources formed in April, 1987, but prosecutors say details of Silberman’s plans are unclear.
Transcripts of several wiretapped conversations quote Silberman as touting his accomplishments and saying he was anxious to arrange larger deals with the agent. During a wiretapped conversation on Dec. 2, Silberman asked if the agent and he could conduct another transaction before the end of the year. He told the agent that there would be “a lot more potential if we got active” and said he hoped that the agent realized “you’re dealing with something . . . I’ve done . . . 15, 20 years a lot of different ways.”
The second $200,000 transaction, also involving federal money, occurred Feb. 22, and that money was used to purchase zero coupon bonds, the affidavit says.
But the bonds turned over to the undercover agent came up $50,000 short, prompting the undercover agent to hesitate in negotiating additional deals with Silberman, the affidavit said. Angry about the snafu, Silberman told the agent that the Westlake stockbrokerage firm that he used for the transfer was normally reliable but apparently was “playing games.”
If the firm failed to rectify the situation, Silberman promised to bring in some of Petti’s “friends” and have them use “muscle” to express his displeasure “in no uncertain terms,” according to the affidavit.