Published: Tuesday, December 7, 2010 5:18 PM CST

http://www.scntx.com/articles/2010/12/07/news_update/280.txt

The former owner of a car dealership faces federal time for a money laundering conviction.

A federal jury convicted Richard Alan Arledge, 55, of McKinney for conspiring to commit money laundering along with Steve Ham, 47, of Richardson in the U.S. Eastern District of Texas court through their car dealership.

The indictment that Arledge and Ham sold luxury vehicles to criminal defendants with money earned from illegal practices and the two attempted to concealed the identity of the purchasers to erase their money trail back to their original owners.

The purchasers would make large cash payments disguised as "down payments" on the vehicles and Arledge failed to report these payments to the Internal Revenue Service to further conceal their identities, according to the indictment.

The money used to purchase the vehicles was obtained through illegal business practices such as drugs, mail and wire fraud and prostitution. The laundering started in January of 2006. Arledge's sales team would recruit or recommend purchasers to Arledge or Ham. The purchasers used more than $1 million in cash to purchase expensive and lavish luxury vehicles from Arledge's dealership such as a 2007 GMC Yukon Denali, a 2007 Cadillac Escalade, a 2006 Maserati Quattorporte and a 2008 Mercedes CL63.

Officials from the U.S. Attorney's Office said that prosecutors presented over 30 witnesses to the jury to establish Arledge and Ham's actions. Witnesses told the jury that all the purchases were made in cash delivered to Arledge and Ham in items such as pillowcases, shrink-wrapped plastic packages, backpacks and fast food bags. One of the customers told the court that he gave Arledge $48,000 in cash in two plastic grocery bags.

Arledge and Ham would then advise the purchasers "how to structure payments to evade reporting requirements for cash transactions." Ham and Arledge also disguised the nature of the transactions by labeling them as "leases" instead of "purchases" in their accounting practices in case the vehicles were seized by law enforcement. Arledge stored the money in a Richardson bank in three separate accounts under the name of "PEGA, Inc.," according to the indictment.

The transactions were then placed under the names of third party individuals including 38-year-old Marcus Dean of Dallas, 29-year-old Jason Palmore of Mansfield, 31-year-old Aqueelah Hayat Waters of Dallas and 3-year-old Kendra Quebec Williams of Dallas. The U.S. Attorney's Office said these third-party defendants all had knowledge of Arledge's actions and gave them permission in order to help him conceal the true identity of the purchasers and the location of the money.

One of Arledge's final purchasers was an undercover IRS agent posing as a drug dealer looking to launder his money through the dealership.

Arledge denied any wrongdoing in a 2009 interview with the McKinney Courier-Gazette following his initial indictment.

"I am not a criminal," Arledge said from his dealership office in Richardson. "I sold cars. ThatÕs what I do is sell, finance and lease cars. That's all I did."

He called his actions regular business practices in the car financing business such as allowing customers to place a down payment and reporting the entire amount to the IRS or putting a transaction in another person's name if the car was being purchased for their use.

"That's not trying to hide him by trying to put the car in [their] name," Arledge said. "I've done 4,000 deals and I've done less than 10 like the way we're talking about and half of those were ones that were indicted."

A sentencing date for Arledge and Ham's charges have not been set as of Tuesday. According to the federal criminal code, they could each receive a sentence of 20 years in a federal prison.