The Chicago Syndicate: Federal Racketeering, Drug, Prostitution, and Fraud Charges Filed Against Limo Company Owner and Employees

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Friday, December 28, 2012

Federal Racketeering, Drug, Prostitution, and Fraud Charges Filed Against Limo Company Owner and Employees

Federal authorities this morning arrested nine persons, including the owner and eight employees or associates of a prominent limousine service in Las Vegas, following their indictment on federal racketeering charges related to the distribution of controlled substances, the facilitation of illegal prostitution, and the commission of credit card and bank fraud crimes, announced Daniel G. Bogden, United States Attorney for the District of Nevada.

“Persons who use legitimate businesses to shield their criminal activities will get the attention of law enforcement,” said U.S. Attorney Daniel G. Bogden. “In addition to promoting prostitution and selling drugs, these defendants are accused of defrauding customers, many of whom were undoubtedly tourists to Las Vegas. The FBI and U.S. Attorney’s Office, along with our federal and state law enforcement partners, will continue to vigorously investigate and prosecute persons who participate in such criminal enterprises.”

“The arrests today disrupted a major racketeering enterprise that has negatively impacted the citizens, safety, and image of Las Vegas,” said Kevin Favreau, Special Agent in Charge of the FBI for Nevada. “The success of this long term investigation was due to the efforts of the Las Vegas Safe Streets Task Force, comprised of the FBI and LVMPD.”

Arrested were Charles Horky, 52, the primary owner of CLS Transportation; Kimberly Flores, 42, the manager of CLS; Archie Granata, 69, a financial advisor for CLS; Dawit Moszagi, 47, Clarence Adams, 38, James Reda, 38, Mikhail Maleev, 48, limousine drivers for CLS; and Solomon Zemedhun, 39, and Olive Toli, 48, associates of the enterprise who allegedly supplied and aided in the distribution of controlled substances. They are charged with conspiring to participate in an enterprise through a pattern of racketeering activities including wire fraud, access device fraud, bank fraud, distribution of controlled substances, and the use of facilities of interstate commerce to promote, facilitate, and distribute the proceeds of prostitution. They face sentences of up to life in prison and fines of up to twice the gross profits or proceeds from their criminal activity. A complete list of the defendants and the charges they face can be found at the end of this release.

According to the indictment that was returned by the grand jury on November 27, 2012 and unsealed this morning, CLS Transportation operates limousines in and around Las Vegas. Beginning no later than September 2008 and continuing through November 2012, the defendants are accused of using the limousine service to conduct and facilitate a broad range of criminal activities, including selling controlled substances, facilitating illegal prostitution, credit card fraud, bank fraud, and check-kiting. Horkey, the owner of CLS, allegedly encouraged and directed the criminal activity, and required drivers to pay him a cut of the money they were receiving from the criminal activities. In addition to the distribution of drugs and the facilitation of prostitution, CLS offered limousines for hire to its customers whom often paid for services with credit cards. The defendants allegedly devised and executed a scheme to defraud American Express and American Express card holders of more than $2.8 million through fraudulent and unauthorized charges. Many of the card holders disputed the charges, and American Express notified CLS of the fraudulent transactions and executed charge-backs. American Express eventually cancelled the CLS Transportation account. Horky and Granata allegedly perpetuated the fraudulent scheme by fraudulently opening successive additional American Express merchant accounts under false names, aliases and nominees. Horky, Flores, and Granata also devised a check-kiting scheme in which they drew checks on CLS Transportation’s payroll account knowing that the account did not contain sufficient funds. Horky, Flores, and Granata knowingly issued themselves and their associates thousands of checks on the account without sufficient funds to honor the checks. The indictment alleges that in 2010 alone, the conspirators issued and cashed more than 1,500 checks and obtained more than $2.4 million through the fraudulent check-kiting scheme.

A number of the defendants are expected to make their initial appearances before a federal magistrate judge at 3:00 p.m. today.

The case is being investigated by the FBI and the Las Vegas Metropolitan Police Department through the Safe Streets Task Force. The cases are being prosecuted by Assistant U.S. Attorney Timothy S. Vasquez.

An indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Defendant and Case Information
Case No: 02:12-CR-00440

  • Charles Horky, 52, Las Vegas, Nevada
  • Kimberly Flores, 42, Las Vegas, Nevada
  • Archie Granata, 69, Reno, Nevada
  • Dawit Moszagi, 47, Las Vegas, Nevada
  • Solomon Zemedhun, 39, Las Vegas, Nevada
  • Clarence Adams, 38, Las Vegas, Nevada
  • James Reda, 38, Las Vegas, Nevada
  • Mikhail Maleev, 48, Las Vegas, Nevada
  • Olive Toli, 48, Las Vegas, Nevada

All defendants are charged with one count of conspiracy to conduct or participate in an enterprise engaged in a pattern of racketeering activity.

Horky, Flores, and Adams are also charged with one count of conspiracy to commit wire fraud and bank fraud and one count of conspiracy to use a facility of interstate commerce (telephone and wire) to facilitate unlawful activity (prostitution). Granata is also charged with one count of conspiracy to commit wire fraud and bank fraud. Reda is also charged with one count of conspiracy to use a facility of interstate commerce (telephone and wire) to facilitate unlawful activity (prostitution).

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