Former Texas dealer fails in bid to overturn U.S. money laundering sentence

Anti Money Laundering
Anti Money Laundering

A suburban Dallas ex-dealer has failed to overturn his 188-month prison term in a money laundering conspiracy that enabled drug dealers, pimps and other criminals to pay cash for luxury vehicles without reporting the transactions to the IRS.

The May 18 decision by a U.S. magistrate means Richard Arledge, the former owner and operator of Richard Arledge Suzuki and president of Expressway Financial Inc., in Hickory Creek, Texas, must continue to serve his full sentence. Expressway Financial was the dealership’s financing and leasing arm, according to court documents.

A jury convicted Arledge and Expressway Financial sales manager Steve Ham in 2010. Thirteen other defendants, including ex-dealership employees and customers, pleaded guilty in the case.

According to trial testimony, Expressway Financial, Arledge’s finance arm, acquired brands outside Arledge’s franchise and sold them for cash from January 2006 through August 2009. As Ham’s legal papers put it: “For a fee, Arledge would venture outside the realm of Suzuki cars and into the spot market for high-end (new and used) sports cars, such as a Maserati or a Bentley.”

Paper bags, pillow cases

Prosecutors said in a brief: “Bentleys, Aston Martins, Mercedes and Maseratis all changed hands at the dealership in exchange for hundreds of thousands of dollars and agreements not to reveal the source or nature of the financial transactions to federal authorities.” Some customers brought cash in paper bags and pillowcases.

For example, the criminal indictment showed Arledge sold a 2005 Maserati Quattroporte and a 2006 Aston Martin to a drug dealer who paid $213,756 in cash, “which represented proceeds from the distribution of controlled substances.” Another customer bought a $145,675 2006 Aston Martin DB9 Volante with a $25,000 cash down payment “which represented proceeds from financial crimes.”

Rejecting Arledge’s bid for freedom this month, U.S. Magistrate Judge Don Bush, in Plano, wrote: “Cars were titled in the name of friends and relatives to conceal true ownership. Purchases were disguised as leases to allow the dealership to claim cars that were seized by law enforcement.

“Some purchasers smelled strongly of marijuana. Employees noticed that these unusual purchasers seemed to have traveled great distances to purchase cars from Arledge and they did not fit the general demographics of the population in the area around the dealership.”

One ex-employee, who was a paid informant cooperating with authorities, testified that Arledge ordered him to “convert large amounts of cash into cashier’s checks to be used as down payments for some criminal customers. This allowed the dealership to avoid having to report large cash transactions to the IRS in the name of the criminal.”

Arledge’s original appeal was unsuccessful, and the U.S. Supreme Court refused to hear the case.

Sentence upheld

In the new ruling, Bush refused to vacate or set aside the sentence on the grounds that prosecutors violated Arledge’s constitutional rights and used “false statements and misrepresented evidence.”

Bush found no basis for the claim that lawyers who represented him at trial and sentencing were ineffective for not challenging a search warrant for his office or prosecutors’ use of allegedly perjured testimony.

Arledge, who represented himself, is at the low-security Seagoville Federal Correctional Institution in Texas. Ham, described by prosecutors as Arledge’s “right-hand man,” received a 16-month sentence and has been released, Bureau of Prison records show.

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