New York Jeweler Pleads Guilty to Falsifying Records and Making False Statements
OCT 31 -- Jacob Arabov, the owner of a New York City jewelry store pleaded guilty today to falsifying records in order to obstruct a federal drug investigation and making false statements to federal agents and the United States Attorney ’ s Office, United States Attorney Stephen J. Murphy announced.
Murphy was joined in the announcement by Robert Corso, Special Agent in Charge, Drug Enforcement Administration and Maurice M. Aouate, Special Agent in Charge, Internal Revenue Service, Criminal Investigation.
Jacob Arabov, 42, entered the guilty plea in United States District Court in Detroit before Judge Avern Cohn.
The information presented to the court at the time of the plea showed that between July 2005 and June, 2006, Arabov, in an effort to assist co-defendant Terry Flenory and other members of Flenory ’ s drug trafficking organization in concealing their ownership of a portion of $5 million dollars worth of jewelry that had been seized, falsified documents and later submitted those documents to the Drug Enforcement Administration (DEA) and the United States Attorney ’ s Office in support of Arabov ’ s false claim of personal ownership for the jewelry. Specifically, Arabov claimed in a memorandum he submitted to federal agents and the United States Attorney ’ s Office, that his jewelry store, Jacob & Company, had cosigned certain pieces of jewelry to a co-defendant when, in fact, he had already sold the items directly to Terry Flenory. In a further attempt to obstruct DEA ’ s drug investigation of the Flenory organization and the United States Attorney ’ s Office ’ s administrative forfeiture of the jewelry, Arabov made false statements to federal agents and the United States Attorney ’ s Office regarding his relationship with Terry Flenory and Flenory ’ s true ownership of the jewelry.
United States Attorney Murphy said, “ Defendants who deal in high-end goods like expensive jewelry , luxury cars, or real estate are prohibited by federal money laundering laws from shrouding the ill-gotten gains of narcotics dealers. Obviously, a business owner who makes false statements and obstructs a federal money laundering investigation compounds the crime and further aids the criminal enterprise. Through aggressive prosecution, my office will continue to strike at the heart of the drug trade where it hurts: interfering with narcotics dealing profits by following dirty money wherever it leads and prosecuting those who traffic in it.
DEA Special Agent in Charge Corso said, “ Today ’ s plea agreement shows that the DEA and our law enforcement partners will not turn a blind eye to any form of obstruction of justice. We will vigorously pursue anyone who lies or misleads our agents during the course of an investigation. Mr. Arabov made a huge mistake when he chose to help members of the Black Mafia Family. Today he faces the consequences of that decision. ”
IRS Special Agent in Charge Aouate said, “ Not only did Jacob the Jeweler provided pricey 'bling' to his narcotic clientele, he also falsified statements and records as part of his services to ensure that their illegal proceeds could not be traced. At least, that was what he thought until IRS Criminal Investigation, in partnership with DEA and the United States Attorney's Office, started following the money trail, identifying all the guilty parties, and shutting them down for good."
Under the terms of the plea agreement, Arabov faces up to 46 months imprisonment and will be required to forfeit $2 million dollars. A sentencing hearing was not yet set by Judge Cohn.
According to the charges in the Indictment, Terry Flenory and his brother, Demetrius Flenory have been operating a drug organization, at some point named the "Black Mafia Family" (BMF), which dealt in multi-kilo quantities of cocaine in the Detroit metropolitan area beginning in the early 1990's. Since 2000, law enforcement officers from across the country have seized over 476 kilograms of cocaine destined for distribution by this organization. More than million in cash was seized by law enforcement officers between October,1997 and June 2005. The members of this organization, using the illegal proceeds of their narcotic sales, purchased and leased numerous luxury vehicles, acquired and sold real property and purchased jewelry while concealing the true source and nature of the funds involved in the transaction through false names and nominee purchasers.
Of the 41 defendants who were indicted along with Arabov, 28 have pleaded guilty and 8 are scheduled for trial on November 19, 2007 before Judge Cohn.