Two brothers, Hamid and Saeid Salari, owners of a luxury used-car dealership in Scottsdale face federal money laundering charges after a raid by Internal Revenue Service agents last week. According to a criminal complaint filed with the U.S. District Court in Phoenix, Hamid Salari, Saeid Salari, and Farah Isaac, a jewelry store owner who works with the Salari brothers, were arrested Wednesday on charges of money laundering, conspiracy and currency-violation charges after the undercover operation.
The undercover investigation began in late September and found that Hamid Salari, Saied Salari, engaged in activities that included narcotics trafficking, and subverting the Bank Secrecy Act, in that they knew that property involved in financial transactions represented the proceeds of a form of unlawful activity, that being drug trafficking.
Luxor Auto Group, Inc. incorporated in 1997 with Hamid Salari listed as president and Saeid Salari listed as secretary and treasurer, sold luxury used cars. Couture Customs has not been officially incorporated but appears to be running under the Luxor entity.
Through online promotional materials and during the undercover operations, the Salaris indicated they had been in business for over 20 years.
Saeid Salari recently told an undercover agent that he opened Customs in April of last year. All the customization on Customs’ vehicles takes place in the auto shops at Luxor. An undercover agent during the investigation met both Hamid Salari and Saeid Salari at Customs and observed that both take an active role in both businesses.
Isaac Jewelers, Inc. incorporated on August 20, 2003 with ISAAC listed as both president and director of the company. The domestic address for the business is listed as 15044 N Scottsdale Rd #130, Scottsdale, AZ 85254.
The Arizona Corporation Commission website also reflects a company named Isaac Jewelers LLC was formed on September 4, 2008 with ownership and control layered through several entities that ultimately lead to Isaac and another individual as owners. The domestic address listed for Isaac Jewelers I, LLC is 10420 E Larkspur Dr, Scottsdale, AZ 85259, which is the residence of Issac.
Law enforcement agents became aware of the allegations against Isaac during an investigation of the Salaris’ companies, Luxor and Customs. Isaac appears to have a cross-promotional business relationship with Hamid Salari and Saeid Salari. The Customs’ website www.coutureCustoms.com, provides direct links to both Isaac Jewelers’ and Luxor’s websites and lists them as partners of Customs.
The undercover activities described were recorded surreptitiously and provides an anatomy of an undercover money laundering and bank fraud operation.
Undercover Meeting September 24, 2013:
On September 24, 2013, IRS-CI undercover agent met with Saeid Salari at Customs. During the meeting, the undercover agent explained that he had cash and would like to buy a vehicle. At that time he told Saeid Salari explicitly that he sells ecstasy and did not want any forms with his name on it saying he spent over $10,000 in cash. After some discussion, Saeid Salari agreed to sell a car to the agent with the understanding that cash obtained from drug trafficking activities would be used for the purchase and would not be reported.
Undercover Meeting November 13, 2013:
The lead agent and a second undercover agent met with Saeid Salari at Luxor. During the meeting the agent reiterated that he sold Ecstasy and said that he did not want paperwork filled out reflecting that he spent more than $10,000 in cash. During the meeting Saeid Salari contacted his brother Hamid Salari to discuss the details of accepting the cash and arranging transfer of the vehicle to the undercover agents.
To conceal the true ownership of the vehicle and nature of the transaction, Hamid Salari suggested the possibility of using a third party nominee for an additional fee. After choosing a vehicle and settling on a price of $80,000, the lead agent left $20,000 in cash in a Crown Royal Scotch bag with Saeid Salari as a down payment and arranged to return later with the balance of $60,000.
Undercover Meeting December 12, 2013:
On December 12, 2013, the agent met with Hamid Salari at Customs and gave him $60,000 cash in another Crown Royal Scotch bag to finalize the purchase of the vehicle. The agent told Hamid Salari that he was an ecstasy dealer and the cash for the vehicle was proceeds of drug tracking to make sure he also knew. The vehicle was eventually titled in the name of the second agent, Hamid Salari reiterated that he would take care of everything and assured the lead agent that the cash transaction would not be reported. HAMID SALARI went on to say that if questioned by authorities, he would claim to have forgotten to file the necessary forms to report cash payments.
The Financial Crimes Enforcement Network (FinCEN) when asked verified that no Forms 8300 were filed on behalf of Luxor Auto Group, Inc or Couture Customs for the cash received during the November 13, 2013 or December 12, 2013 undercover meetings. However $58,000 in cash was deposited into the Luxor Auto Group, INC bank account at Great Western Bank on December 12, 2013.
During the meeting, the agent observed a display case containing watches and advertising for Isaac Jewelry. He asked Hamid Salari about the display and Hamid Salari explained he is friends with the owner of Isaac Jewelers. Hamid Salari offered to introduce the agent to the owner and stated that owner would be willing to take between $20,000 and $30,000 in cash if He wanted to purchase jewelry and not have any documentation filed.
Undercover Meeting on January 14, 2014:
On January 14, 2014, the lead agent met with Isaac, saying he had been referred by Hamid Salari. The agent went on to explain he was a drug dealer who sold ecstasy and wanted to use cash from drug proceeds to buy a watch from Isaac. Isaac agreed to the transaction and said he would hold the watch until he could return with cash.
The agent expressed concern about reporting cash purchases, Isaac assured him that would not happen. Isaac said he regularly accepted cash transactions without filing paper work and explained that the previous customer who had just left the store as the agent entered was also a “cash customer.”
Undercover Meeting on February 20, 2014:
On February 20, 2014, the agent met with Isaac and purchased a watch for $18,500 in cash. During the meeting, the agent mentioned to Isaac that he had a friend in the same business as the agent who may be interested in buying a similar item from Isaac under similar conditions. Isaac said he would to meet the individual because he and Hamid Salari and Saied Salari trusted the agent. The “friend” referred to by the agent was another agent friend, referenced in paragraph 23 below.
As of March 20, 2014, FinCEN research shows no Forms 8300 have been filed on behalf of Isaac Jewelers for cash transactions.
Undercover Meetings on April 16, 2014
On April 16, 2014, the agent met with Hamid Salari to purchase two additional vehicles for $200,000 in cash at the Couture Customs location. Hamid Salari stated he could not do the deal like last time without filing the Form 8300. The lead agent then asked if they could fill out the paperwork in his “girlfriend’s” name, referring to the second agent involved in the first automobile transaction and Hamid Salari agreed to the transaction. After the oral agreement, both Hamid Salari and Saeid Salari were taken into custody.
At approximately the same time on the same day, the third agent met with Isaac. The agent explained that he is a drug dealer and has cash to purchase jewelry. Isaac agreed to sell two watches and a bracelet for approximately $38,000 in cash. Isaac also promised not to fill out any paperwork regarding the cash transaction. After this oral agreement, Isaac was taken into custody.