New Silberman Indictment Raises Possible Penalties

Adding new charges and a fifth defendant to the money-laundering case against San Diego businessman Richard T. Silberman, a federal grand jury Friday returned an indictment stemming from Silberman’s alleged involvement in a scheme to launder $300,000 in purported drug money.

In a seven-count indictment that replaces one handed down in April, Silberman and three co-defendants indicted with him last spring are charged with laundering funds that an undercover FBI agent had portrayed as proceeds from Colombian cocaine trafficking.

The four also face charges that they conspired to launder money and avoid federal laws requiring the reporting of financial transactions involving cash sums of $10,000 or more, structured deals to avoid reporting requirements and filed false currency transaction reports. Cumulatively, the charges carry maximum penalties of 75 years in prison and $2.75 million in fines--roughly double the penalties included in the original indictment--as well as forfeiture of various stocks and bonds involved in the alleged laundering scheme.

No New Major Allegations

A fifth defendant indicted Friday, investment broker Terry Ziegler of Moorpark, faces five of those counts, charging that he was involved in attempts to conceal the transactions.

Although Friday’s superseding indictment detailed no new major allegations against Silberman and his alleged accomplices, it did produce additional legal charges and potential penalties. In short, the government’s case against Silberman and the others has not grown, but the potential sentences facing the defendants, should they be convicted, have.

James Brosnahan, Silberman’s attorney, described Friday’s developments as little more than the government’s attempt to correct flaws in the original indictment, emphasizing that no new allegations were lodged against his client.

Silberman, a powerful political fund-raiser married to San Diego County Supervisor Susan Golding, is expected to be arraigned later this month on the new charges along with the three other original defendants: Chris Petti of San Diego, and Darryl Nakatsuka and Jack Norman Myers of Los Angeles. Ziegler probably will be arraigned Tuesday, according to Assistant U.S. Atty. Charles Gorder Jr.

Silberman, who was a top aide to former Gov. Edmund G. Brown Jr., was arrested April 7 in a “sting” involving an undercover FBI agent posing as a representative of Colombian drug dealers. Prosecutors have said that they stumbled upon Silberman during their 2 1/2-year-old investigation of Petti, a reputed mobster now being held in jail without bail on probation-violation charges stemming from his role in the alleged money-laundering scheme.

Portrayal of Alleged Role

Though the allegations contained in Friday’s 37-page indictment largely mirror those included in the earlier indictment and a supporting FBI affidavit released last spring, some new colorful anecdotes reinforce the government’s attempt to portray Silberman as a willing--indeed, eager--participant in the alleged plan to move purported drug money through a confusing series of transactions intended to conceal the funds’ origins.

The indictment, which draws heavily on wiretapped conversations among the defendants, alleges that Silberman late last year told Petti, a longtime acquaintance, that he was eager to launder money. Subsequently, Petti introduced Silberman to the undercover FBI agent, a contact that eventually led to the laundering of $300,000 provided by the agent in two deals in November, 1988, and last February.

Before the first $100,000 deal--which Silberman allegedly intended to disguise through a complicated stock swap involving a subsidiary of Yuba Natural Resources, a mining company of which he was president--the undercover agent told Silberman that all his clients “know is the coke.” In response, Silberman stressed that, if the proposed laundering deal proceeded, it would not be his “first go-around”--a comment that prosecutors interpret as his effort to assure the agent of his experience in such matters.

“I’ve been here before,” Silberman is quoted as saying. “I just want a little diversification.”

According to the indictment, Silberman arranged for Nakatsuka, who is described principally as a courier who, in Silberman’s own words, “doesn’t ask any questions,” to pick up the $100,000 from the agent last Nov. 30 at the Airport Hilton in Los Angeles. At Silberman’s instruction, Nakatsuka and the agent exchanged the code words “Baja” and “Mexico” when the pickup was made, prosecutors charge.

Movement of Cash

Over the next two weeks, Nakatsuka and Ziegler allegedly moved $90,000 of the cash through several bank accounts and businesses in California and Nevada. After the money, part of which at one point was identified as belonging to “John House,” was transferred to a bank account in Hong Kong, Silberman allegedly had it wired to a bank account in Switzerland in the name of Bellmare Anstalt. Later, Silberman had a stock certificate in Yuba American Gold, Ltd., delivered to the agent in a San Diego hotel, but cautioned him not to attempt to cash it before contacting him, the indictment says.

The second transaction involved $200,000 in federal money that the agent allegedly gave to Nakatsuka and Myers Feb. 22 at the Hyatt Islandia Hotel in San Diego--money that eventually was converted to U.S. Treasury bonds bought in the name of “Joseph Cloud.”

That deal started going sour, however, when the agent calculated that the bonds were worth about $50,000 less than he was owed. As attempts to rectify the discrepancy dragged out, Silberman told the agent that he would have one of Petti’s “friends” talk to the person who supposedly had cheated them, according to the indictment.

Even as he sought to iron out that problem, Silberman allegedly had many conversations with the undercover agent in which he expressed a desire to handle bigger laundering deals. The laundering options he outlined, the indictment charges, included banks or other investment vehicles in Costa Rica, South America and Mexico, as well as additional stock transactions.

At the time of his arrest in April, Silberman allegedly was negotiating with the agent to launder $1.1 million. Since then, Silberman, whose trial is scheduled for January, has been free on a $500,000 personal surety bond.