Newark Car Dealers Charged with Money Laundering After Undercover Sting
The owner of a Newark auto dealership, Gilberto A. Teixeira, Jr., and his father, Gilberto A. Teixeira, Sr., were arrested this week and charged for allegedly using the dealership to launder money they thought was the proceeds of drug distribution. The Teixeiras, who were set up in the transaction by undercover federal agents, were arrested at GT Motor Sport LLC in Newark and were each charged with one count of money laundering conspiracy. As a result of the charges, father and son each face up to twenty years in prison and fines up to $500,000.
According to law enforcement authorities, an undercover IRS agent initially met with Teixeira Sr. at the dealership, and told Teixeira Sr. he was a drug trafficker who was looking to purchase a vehicle with drug money. The agent negotiated the purchase of a BMW M5 for $50,000. Law enforcement allege that Teixeira Sr. told the agent the contract would reflect a $9,000 down payment because a down payment of $10,000 would be “trouble,” and that the contract would reflect that the automobile was financed, even though the agent planned to pay cash in full.
Later that day, the agent purportedly returned to the dealership with the $50,000 in cash, and completed the transaction with Teixeira Jr., whose father was not present. Federal authorities allege that the undercover agent also advised Teixeira Jr. that he was a drug trafficker and Teixeira Jr. also allegedly assured him no paperwork would be filed. Federal agents also allege that some time later, they completed a second similar transaction for another vehicle at the same dealership. The federal government claims that IRS records show that Teixeira, Sr., Teixeira, Jr., GT II Auto Sales Corp. (Teixeira, Sr.’s former auto dealership), and GT Motor Sport LLC have never filed the required form that must be filed with the government for cash transactions over $10,000.
Under 18 U.S.C. § 1956(a), “(1) whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity – (A) (i) with the intent to promote the carrying on of specified unlawful activity; or (ii) with intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986; or (B) knowing that the transaction is designed in whole or in part— (i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or (ii) to avoid a transaction reporting requirement under State or Federal law, shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both.”
Engaging in cash transactions in a manner that evidences an intent to avoid a reporting requirement is one of the most typical ways in which businesses, and those who conduct them, find themselves the target of white collar criminal prosecutions. In this case, the defense may raise an entrapment argument since the transaction was conducted entirely with undercover IRS agents, who appear to have pushed the car dealers into this transaction; however, entrapment is a very difficult defense to prove. Anyone charged with money laundering or any other crime in New Jersey should contact New Jersey criminal defense lawyer Nace Naumoski for representation.
