Prosecutor wants Downtown jeweler to forfeit $933,000
Because they deal in small, high-value merchandise, jewelers get extra scrutiny from police and federal agencies trying to combat money laundering.
It's not because jewelers are more likely to break the law but rather that they're more likely to be approached by criminals trying to convert ill-gotten money into tangible assets, said Steve Hudak, a spokesman for the Treasury Department's Financial Crimes Enforcement Network.
Jewelry “has an extremely high value for the amount of space it occupies, and it's universally recognized as having value,” he said.
It's easy to hide and carry across borders, and it doesn't carry serial numbers or anything else that makes it easy to track, Hudak said.
The U.S. Attorney's Office in Pittsburgh on Thursday asked a federal judge to order Kashi Jewelers, Downtown, to forfeit about $933,000 authorities seized during a Feb. 27 search of the business.
No criminal charges have been filed against the company or its owners, but prosecutors claim the business is a “preferred location” for drug dealers to buy expensive jewelry.
The business and its owners are under investigation for possible charges of money laundering, structuring financial transactions and failing to report cash transactions of $10,000 or more to the Internal Revenue Service, prosecutors say.
An undercover IRS agent made two purchases over $10,000 last year while telling store employees that it was money from cocaine sales, but the store didn't report the transactions, prosecutors say.
The person who answered the phone at the store declined to identify himself and said the owners have nothing to say about the allegations. Corporate filings list the owners as Alan Kashi, president, and Ron Kashi, vice president.
The U.S. Attorney's Office declined to comment.
Hudak said the transaction reporting requirement applies to all businesses, not just jewelers, and applies to any deals in which $10,000 or more in cash, cashier's checks, money orders or other anonymous currency changes hands.
Cecilia L. Gardner, president, CEO and general counsel of the Jewelers Vigilance Committee in New York City, said she's not aware of any increased scrutiny by the federal government of jewelers and had no data to say whether jewelers are under more scrutiny than other businesses.
University of Pittsburgh law professor David Harris said the forfeiture law, which is a civil matter, only requires the government to prove by a preponderance of the evidence, not beyond a reasonable doubt, that the money was obtained illegally.
“That's the law, for good or for ill,” he said. “The government is entitled to, in effect, sue the property in a civil action. There doesn't even have to be an underlying criminal charge.”
While the transaction reporting requirement applies to any business, jewelers and similar businesses that sell “high-value products” come in for extra scrutiny, he said.
“The more money and the smaller the property, the better,” Harris said.
Unlike a high-ticket item like a car or boat, jewelry rarely loses its value and often gains value, making it a favorite among criminals, he said.
“Jewelry is not just a high-value, small item,” Harris said. “It's eminently resalable.”
Brian Bowling is a staff writer for Trib Total Media. He can be reached at 412-325-4301 or bbowling@tribweb.com.
