April 11, 2006

NEW HAVEN CAR DEALER PLEADS GUILTY TO MONEY LAUNDERING, CURRENCY REPORTING VIOLATIONS

Kevin J. O'Connor, United States Attorney for the District of Connecticut, announced that MARK L. KOWALSKI, age 47, of 153 River Road, Killingworth, Connecticut, waived indictment and pleaded guilty today before United States Magistrate Judge Donna F. Martinez in Hartford to one count of money laundering, one count of filing a false currency transaction report, and one count of failing to report a currency transaction of more than $10,000.

As revealed in today's court proceedings, the Federal Bureau of Investigation and Internal Revenue Service conducted an undercover operation in the summer of 2003 during which a law enforcement officer, who was posing as a drug trafficker, purchased a 2001 Volvo Cross Country from Mark Motors of New Haven for $29,051 in cash.  During the negotiations for the vehicle, the undercover officer told KOWALSKI, the owner of Mark Motors, that the money was from drug proceeds and that he did not want his name on any of the paperwork.  KOWALSKI agreed to sell the vehicle to the undercover agent, but placed all of the paperwork in the name of the girlfriend of the undercover agent, who was also an undercover agent.

The law requires that all trades and businesses, which includes car dealerships, file a Form 8300 with the IRS when it receives more than $10,000 in cash in a single transaction or related transactions during a 12-month period.  KOWALSKI filed the IRS Form 8300, but falsely identified the undercover agent's girlfriend as the purchaser of the vehicle, giving rise to the false reporting offense.

KOWALSKI also today admitted that he failed to file an IRS Form 8300 in relation to an unrelated cash transaction of approximately $14,000 that a customer used to purchase a Mercedes Benz.

"This investigation and prosecution should serve as a warning to all business owners who willfully ignore IRS reporting requirements and knowingly accept payment for products and services in drug money," U.S. Attorney O'Connor stated.

KOWALSKI is scheduled to be sentenced by United States District Judge Alvin W. Thompson on June 29, 2006, at which time he faces a maximum term of imprisonment of 20 years and a fine of up to $500,000 on the money laundering count, and a maximum term of imprisonment of five years and a fine of up to $250,000 on each of the two currency reporting counts.  KOWALSKI has also agreed to forfeit to the Government the sum of $100,000.

This matter was investigated by the Federal Bureau of Investigation and the Internal Revenue Service - Criminal Investigation.  This case is being prosecuted by Assistant United States Attorney Mark D. Rubino.