Gambling operation revealed

[clevfan]

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.

[clevfan]

Mail fraud, tax evasion: Deeb pleads guilty

By GREG JORDAN
Bluefield Daily Telegraph
Apr 8, 2008

— BLUEFIELD — A McDowell County pharmacist facing a 2006 federal indictment in charges of illegal transactions and running an illegal gambling business entered a guilty plea Friday in Charleston.

Saad Kamil Deeb, no age available, of Welch pled guilty to a three-count federal information that included charges of conspiracy to illegally structure fraudulent transactions, tax evasion, and mail fraud, according to information at the U.S. District Court for the Southern District of West Virginia. The plea was made at the federal court in Charleston.

Deeb was indicted Nov. 8, 2006 on 29 counts of illegally structuring financial reactions and one count of conspiracy to illegally structure financial transactions. The federal indictment alleged that Deeb, owner and operation of Deeb Drug, Inc., also known as Citizens Pharmacy and as Citizens Drug Store, in Welch, structured accounts to avoid mandated reporting procedures from 2001 to 2005.

When Deeb was indicted, the IRS alleged that from March of 2001 to December 2005, he received $1,449,770 in international wire transfers from the Deutche Bank in Switzerland, Fun & Sun Investments in Curacao, Netherlands Antillies and others in amounts of a few dollars less than $200,000.

The government alleged that Deeb conspired with others to illegally structure financial transactions at MCNB Bank and Trust Co., formerly McDowell County National Bank, to avoid reporting them to the IRS. The transactions were in connection with an illegal gambling business, according to the indictment.
In addition to the charges, the government was also seeking forfeiture of Riverside Drive property in Welch, a 2002 Mercedes Benz four-door sedan, a 1999 Toyota Land Cruiser V-8, a 2000 Toyota 4-Runner, a 1949 Packard, one 1951 Dodge and a 2004 Toyota Tundra.

Under the plea agreement, Deeb agreed to transfer to the government any real or personal assets up to $871,300, according to court documents.
On the first and second counts, Deeb faces up to 5 years imprisonment, a $250,000 fine or twice the gross pecuniary gain or loss from his conduct, whichever is higher, and three years supervised release. On the mail fraud charge, he faces up to 20 years imprisonment, the same type of fine as in the first two counts, and three years supervision.

In the plea agreement, the government dismissed the remaining count of the indictment.

Sentencing was scheduled for 11:30 a.m., Aug. 5 before Judge David A. Faber in Bluefield. Deeb remains free on bond.

[clevfan]

April 8, 2008
Pharmacist admits crimes tied to gambling
A Welch pharmacist admitted in federal court Monday that he conducted illegal financial transactions to mask that he was skimming money from his business to feed his gambling habit.
By Andrew Clevenger
Staff writer
A Welch pharmacist admitted in federal court Monday that he conducted illegal financial transactions to mask that he was skimming money from his business to feed his gambling habit.

Saad Kamil Deeb, 63, pleaded guilty to a three-count information, charging him with enlisting others to help him conduct transactions at a McDowell County bank so that he could move large amounts of money without triggering a Currency Transaction Report. A financial institution is required to file such a report with the Internal Revenue Service for any transaction over $10,000.

Assistant U.S. Attorney Hunter Smith said that between 2001 and 2005, Deeb became heavily involved in gambling on sports, betting large sums of money and even placing bets on behalf of his friends.

Whether he won or lost, his gambling proceeds or debts were paid in cash, Smith said. Usually, the amounts would approach $100,000 before Deeb or his bookies paid up, he said.

"Mr. Deeb did not want the IRS to know that he was engaged in large cash transactions," Smith said. So he and the others would keep their transactions under the $10,000 ceiling, Smith said, sometimes transferring just under that amount to various accounts several days in a row.

According to the information, Deeb and his associates moved more than $871,000 that way over a four-year period.

Deeb also admitted skimming cash from the pharmacy and filing false tax returns in 2003 and 2004, failing to report roughly $300,000 in income for each year, resulting in a tax loss of $175,000.

Deeb has since filed amended reports and caught up on the taxes he owes, Smith said.

Deeb also pleaded guilty to mail fraud, admitting he mailed an inaccurate quarterly contribution report to the state Unemployment Compensation Trust Fund in October 2005.

In order to mask some of his activities, Deeb paid some of his employees in cash, and then understated the taxable wages, Smith said.

Deeb faces up to 30 years in prison and fines of up to $750,000 when he is sentenced by U.S. District Judge David A. Faber in Bluefield on Aug. 4.

[jwunderdog]

I knew this guy, he was actually a losing gambler, but he did bet big. The funny thing is this is not even a gambling case, it is a guy who didn't pay taxes on income from his business. He was not a bookie either.

[clevfan]

June 12, 2008

State liquor inspector pleads guilty in Welch gambling ring case

A state liquor inspector pleaded guilty in federal court Wednesday to tax evasion, admitting his role in a McDowell County gambling ring run out of a Welch pharmacy.

By Andrew Clevenger
Charleston Gazette

A state liquor inspector pleaded guilty in federal court Wednesday to tax evasion, admitting his role in a McDowell County gambling ring run out of a Welch pharmacy.

Jimmy Kamel Hazemey, 67, of Welch, acknowledged that he failed to report more than $64,000 in income from sports betting in 2004, resulting in more than $15,000 of unpaid taxes. According to the charges against Hazemey, he originally reported $17,042 in income and paid $2,196 in taxes for that year.

Internal Revenue Service Special Agent Matthew Schommer testified that between 2001 and 2005, Hazemey failed to declare more than $212,000 of extra income, resulting in more than $50,000 of unpaid taxes.

Hazemey has cooperated with investigators and has since filed amended tax returns, Schommer said.

Hazemey is a longtime friend and associate of Saeed Kamil Deeb, owner of the Citizen's Drug Store pharmacy in Welch. In April, Deeb pleaded guilty to a three-count information, admitting that he conducted illegal business transactions to mask the gambling operation he was running out of his business.

According to an affidavit filed by IRS Special Agent Stephen Rowley in November 2006, Deeb transferred more than $914,000 to banks in places like Switzerland, Israel and the Dutch Antilles between December 2002 and September 2005.

Deeb received wire transfers from foreign banks totaling $1,449,770 between March 2001 and December 2004, the affidavit states.

In order to hide the large transactions from the IRS, Deeb used friends and pharmacy employees, including Hazemey and former girlfriend Sherrie Hickson, to help him move money around in amounts around or just under $10,000, Rowley wrote.

Deeb kept the amounts low to avoid triggering a Currency Transaction Report, Rowley wrote. Financial institutions have to file such a report with the IRS for any transaction over $10,000.

According to Rowley's affidavit, Deeb's longtime accountant, Charles "Bud" Donchatz, began cooperating with investigators in October 2005. In recorded conversations with Donchatz, Deeb said he skimmed roughly $250,000 a year from his pharmacy over a five-year period.

"I mean, uh, this store's makin' so much money an' I can't, uh, know which way to [expletive] pocket all I can, you know what I'm saying?" Deeb said on one recording. "What's the best way to [expletive] finagle money?"

Deeb told Donchatz that he bet up to $80,000 per game on a variety of sporting events.

In addition to placing his own bets, Deeb placed wagers for other people, covering as many as 100 bets at a time, according to the affidavit.

At one point, one of Deeb's "clients," a Welch restaurant owner, owed him $37,000, Deeb told Donchatz.

Deeb's expenditures included $800,000 in renovations to his home and buying the Moose Lodge building in Welch for $90,000. He also owned numerous cars, including a 1999 Lexus LS-V, a 2005 Lexus, a 2002 Mercedes, a 2004 Toyota Tundra, a 1991 Jaguar, a 1951 Dodge sedan and a 1999 Lexus LX.

Deeb also told Donchatz that he bought a 2002 Mercedes S600 for $150,000, the affidavit states.

After Wednesday's hearing, Assistant U.S. Attorney Hunter Smith said the government's investigation into the gambling ring is "ongoing."

U.S. District Judge Thomas E. Johnston scheduled Hazemey's sentencing for Oct. 20. Deeb's sentencing is set for Aug. 4.

[clevfan]

November 11, 2008
Man gets probation in gambling ring role

A state liquor inspector was placed on three years' probation Monday in federal court in Beckley for his role in a McDowell County gambling ring run out of a Welch pharmacy.

The Charleston Gazette

CHARLESTON, W.Va. -- A state liquor inspector was placed on three years' probation Monday in federal court in Beckley for his role in a McDowell County gambling ring run out of a Welch pharmacy.

Jimmy Kemal Hazemey, of Welch, pleaded guilty to one count of income tax evasion in June. Hazemey acknowledged that he failed to report more than $64,000 in income from sports betting in 2004, resulting in more than $15,000 of unpaid taxes.

U.S. District Judge Thomas E. Johnston also imposed a $1,000 fine. Court records indicate that Assistant U.S. Attorney Hunter Smith asked the judge to impose a lighter sentence because Hazemey had provided substantial assistance to government investigators.

Federal sentencing guidelines recommend between four and 10 months in prison for Hazemey.

Saad Kamil Deeb, a Welch pharmacist and longtime friend of Hazemey's, admitted that he conducted illegal bank transactions to hide the hundreds of thousands of dollars he bet on sports from the government. Deeb was placed on five years' probation in August, with the first year to be spent on home confinement.