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December 15, 2006

Gambling operation revealed

Undercover IRS agents recorded Welch pharmacist


By Tom Searls
Staff writer
Charleston (WVa) Gazette

A McDowell County pharmacist under federal indictment on money laundering and gambling charges spoke freely to undercover Internal Revenue Service agents about how he ran the gambling operation and skimmed profits from his drug store, a federal search warrant affidavit unsealed Thursday revealed.

Saad Kamil Deeb, who owns and operates Citizen's Pharmacy in Welch, was indicted last month by a federal grand jury on charges of conspiracy to evade reporting about $1.7 million in income he received from allegedly operating a gambling parlor, his own gambling profits and from skimming $250,000 or more a year from the business for four or five years.

Deeb's accountant, Bluefield resident Charles "Bud" Donchatz, has been cooperating with federal investigators for more than a year and introduced the undercover agents to the pharmacist.

Agents recorded a number of the meetings, including one at Donchatz' office in February where Deeb admitted he had been making deposits and withdrawals from a McDowell County bank in amounts just below the $10,000 federally-required reporting mark, the affidavit states.

He also acknowledged doing Internet gambling, most of it in Curacao, Netherlands Antilles, according to the affidavit. And, the affidavit states, Deeb said he did not want to pay taxes on his profits.

"I'm taking about a quarter of a million a year," Deeb is quoted as telling the agent about skimming the pharmacy profits. "I don't like to report all this sh - and pay taxes on it."

But he also expressed reservations about his alleged illegal activities in February and seemed to have the feeling IRS agents were closing in on his activities.

"I'm expecting any day they're going to come," the undercover agent reported Deeb told him.

Investigators also went through the income tax returns of Deeb's former girlfriend, Sherrie Hickson, and his friend, state liquor inspector Jimmy Kemal Hazemey, the affidavit revealed.

Both allegedly did banking and moved money around for Deeb, though neither has been charged.

Federal agents also spoke with a number of Deeb's current and former employees and employees at MCNB Bank & Trust, a Welch banking institution. They all corroborated stories of Deeb giving them checks for a little less than $10,000 to cash, or cash in amounts a little less than $10,000 to deposit.

In addition, bank records showed Deeb dealing in large amounts of money with foreign banks and sending money to Fun & Sun Investments at Giro Bank in Curacao, Netherlands Antilles. That company is identified in the affidavit as "a company which processes payments by customers involved in offshore Internet gambling operations."

The undercover agent said Deeb admitted doing most of his gambling through Curacao.

At one point Deeb told Donchatz he had two or three overseas bank accounts, the affidavit states. Other banks he did business with were in Switzerland and Lebanon, the affidavit alleges.

Federal agents also noted the pharmacy has 10 separate telephone lines and Deeb's residence has five. From December until June, more than 51,000 calls were made to or from those phone lines.

The agent who wrote the affidavit, IRS Special Agent Stephen Rowley, stated that "is consistent with large scale sports gambling."

But Deeb didn't know what to do with all the cash. In one recorded meeting with Donchatz he allegedly told the accountant, "This between me and you. You know really kills me ... I mean, uh, this store's making so much money an' I can't, uh, know which way to f------g pocket all I can, you know what I'm saying?"

He then asks the best way to do that.

Rowley also wrote that Deeb agreed to place bets for the IRS undercover agent's clients, saying he kept six cell phones around from which he placed bets.

Deeb also allegedly revealed to the undercover agent that he had as many as 100 bets to cover at a time, and one of his gambling clients, who owned a Welch restaurant, owed him $37,000. A Welch restaurant owner killed himself Saturday.

Deeb also said he had begun placing bets in Charleston in October 2005 and placed between $100,000 and $150,000 in bets there, the affidavit states. With whom he placed the bets was not revealed in the affidavit.

Deeb had purchased the former Moose Lodge in Welch, and a reliable informant told IRS agents he paid a Charleston firm to install an in-floor safe in the structure, the affidavit states. He told the undercover agent he planned to open a bar on the first floor of the building and a methadone clinic on the second, according to the affidavit.

Federal agents have not revealed what they found in searches of Deeb's residence, businesses and other properties.

Earlier this week, it was revealed IRS agents intercepted a Federal Express overnight package Deeb had attempted to send to a man in Beirut, Lebanon. The contents were not revealed.

Deeb's attorney, Charleston lawyer Lonnie Simmons, filed a motion Thursday asking Chief District Judge David Faber to delay the January trial date.