Zein Automobiles Inc. d/b/a Independence Auto Sales and Best Bet Auto Sales, pleaded guilty and was sentenced Wednesday in U.S. District Court in Seattle for failure to file a monetary transaction report, according to U.S. Attorney Jenny A. Durkan.
The largest volume used car dealership in Washington paid a $250,000 fine and entered into a corporate integrity agreement to ensure the illegal conduct does not happen again. The car dealership was the subject of searches by law enforcement in September 2013.
“This resolution takes substantial profit from a business that flouted the law to fatten its bank account,” said U.S. Attorney Jenny A. Durkan. “It should serve as a warning to others – we will enforce laws on currency reporting which are an important tool for keeping illegal conduct out of the stream of commerce.”
In the plea agreement the corporation admits that between January 2010 and September 2013, its employees and agents entered into cash sales of vehicles in excess of $10,000 and failed to report the cash sales to the IRS. In a search warrant affidavit describing the Drug Enforcement Administration led investigation, undercover officers and confidential sources repeatedly purchased vehicles for cash at the two dealerships.
Posing as drug traffickers, the undercover agents told sales people they did not want the cash transactions reported. The undercover agents were very clear that they wanted the vehicles for drug trafficking purposes. The sales people assured the agents that they were familiar and comfortable with such transactions and proposed various schemes that they said would avoid the cash transactions reporting requirements. Such schemes are illegal.
Under the terms of the corporate integrity agreement, the company is required to keep a log and report every cash transaction in excess of $10,000. Both the sales managers and title clerks are required to ensure the reports are made to the IRS. During a two year probationary period, the company is subject to unannounced audits to ensure such reports are being made. The company has also agreed to publicize its guilty plea, penalties, and compliance plan in formats to be approved by U.S. Probation.
The case was investigated by the Drug Enforcement Administration (DEA), the Internal Revenue Service Criminal Investigation (IRS-CI), the Seattle Police Department and the King County Sheriff’s Office.