Auto dealer laundered drug money

He gets 4 years for helping hide, transport $580,000 to Mexico, Texas.
March 29, 2007
By Jameson Cook
Macomb Daily Staff Writer

A New Baltimore businessman will spend nearly four years in federal prison for laundering more than $500,000 in drug-sale profits.

Phillip Michaels Jr., 41, owner of Team Auto Sales in Lenox Township, was sentenced to 46 months in federal custody and a $500,000 monetary judgment by U.S. District Court Judge Abele Cook Jr. last month for helping drug traffickers hide $580,000 in proceeds from the sale of cocaine and marijuana.

Michaels received the lowest possible sentence under the recommended sentencing guidelines, which were reduced because of his providing "substantial assistance" to investigators about other drug defendants.

"Drug dealers and the people they solicit to help them, like any other criminals, are motivated by greed," said Maurice Aouate, IRS special agent in charge. The IRS' "unique role is to follow the money trail and, in partnership with the DEA (Drug Enforcement Administration) and other law enforcement agencies, identify all of the guilty parties, shuttingthem down for good."

According to federal officials, Michaels in 2003 and 2004 assisted Detroit-area drug traffickers, including Charles Holmes, who was indicted in April 2005 for conspiracy to distribute cocaine and marijuana and laundering more than $100 million nationally. Also, Brenda Ogun, who was convicted of conspiracy to distribute cocaine, is serving a 14-year prison term. Holmes' case is pending.

Michaels sold vehicles and aided in hiding the vehicles' ownership, officials said. He deposited cash into financial accounts in ways to avoid reporting requirements, sent wire transfers and assisted in the transportation of chunks of cash from the Detroit area to Mexico, Texas and other locations, officials said.

Michaels, a Richmond High School graduate, owns a 3,400-square-foot home on Murdicks Street near the lake in north New Baltimore. It has a market value of about $681,000, according to New Baltimore records. A second structure on the 1.3-acre parcel has a market value of $86,000, records say. The taxes on the property are up to date, according to records.

Michaels is the resident agent of Custom Color Inc. on Gratiot Avenue, which does business as Team Auto Sales. In April 2004, Michaels said he owned Tropical Tan in Chesterfield Township on Gratiot with his then fiancee, who is listed in city records as an owner of the home.

In a plea agreement, he was allowed to keep his house and his interest in properties on Gratiot in Lenox and on Grand River Avenue in Farmington Hills, multiple automobiles and six Rolex watches.

In addition to the $500,000 judgment, of which he has paid $225,000, he must turn over a boat called the "Vicious Cat Avenger Boat," the plea deal says.

The original recommended sentencing guideline range showed 70-87 months, but it was reduced to 46-57 months due to his cooperation in providing information to federal investigators, based on the plea deal. Details were not provided.

According to an affidavit of DEA agent James Wahle in the 2004 criminal complaint, Michaels received $580,000 from Safuria Ogun in late October 2004 to store until he gave it to Donnie Glover, a member of the Brenda Ogun drug-trafficking network, on Nov. 19, 2004, to transport to Mexico.

The affidavit points out six instances in which Michaels deposited sums of cash between $5,000 and $9,300 into bank accounts in his name or the name of Team Auto Sales in November 2003. The money was deposited into accounts at Comerica branches on Gratiot in Richmond and Chesterfield, on 14 Mile Road in Walled Lake and one unknown branch.

Source: The Macomb Daily