Mableton Man Pleads Guilty to Multi-Million-Dollar Cargo Theft Conspiracy

JOHN RAYMOND SMITH, JR., a/k/a “Johnny Ray Smith,” 50, of Mableton, Georgia, pleaded guilty June 2 in federal district court to conspiring to buy, receive, and possess goods stolen from multiple interstate tractor trailer and container shipments throughout Georgia and the southeastern United States between May 2005 and July 2009. Smith also pleaded guilty to related cargo theft and money laundering charges.

United States Attorney Sally Quillian Yates said of today’s plea, “Metro Atlanta is a major transportation hub, which makes it an attractive target for cargo thieves. By creating a market in this area for stolen goods, dealers like SMITH encourage others to steal interstate shipments, knowing that they will have a safe haven to unload and sell their truckloads of stolen goods. Consumers who buy these products should suspect they are stolen if they seem to be first-quality, name-brand products at unrealistically low prices.”

IRS Criminal Investigation Special Agent In Charge Reginael D. McDaniel said, “Money laundering is not a victimless crime. This case is a prime example of how a criminal enterprise creates an underground, untaxed economy that harms our country's overall economic strength.”

Georgia Bureau of Investigation Director Vernon Kennan said, “Cargo theft is an under-reported criminal phenomenon that has disastrous cascading economic consequences to Georgians. This annual estimated five billion dollar criminal activity negatively impacts transportation providers, retailers and consumers through higher shipping, insurance premiums and retail costs. These modern-day pirates cruise the nation's asphalt interstate corridors and parking lots, much like their predecessors who sailed the open seas for unsuspecting targets of opportunity. These pirates have been stopped.”

According to United States Attorney Yates, the charges, and other information presented in court: Between May 2005 and July 2009, SMITH, who operated “Smith Sales Company”out of warehouses in Mableton and Hiram, Georgia, conspired with ROBIN L. CHEATWOOD, who operated “A-Z Discount” in Cedartown, Georgia, and other co-conspirators to buy, receive, and possess goods stolen from nearly two dozen interstate tractor trailer and container shipments valued at over $3 million throughout the Southeastern United States, including shipments stolen in Alabama, Georgia, South Carolina, and Tennessee. The tractor trailers and containers were stolen while parked at truck stops, motels, and container storage facilities, often at night. SMITH, CHEATWOOD, and others then sold the goods at discounted prices to consumers and wholesalers.

Federal, state, and local law enforcement officers recovered portions of the stolen interstate shipments during searches of warehouses controlled by SMITH, CHEATWOOD, and others in 2005, 2007, and 2009. The stolen goods included a $123,000 shipment of brand name TVs and computers, a $164,000 shipment of “Casio, Inc.” electronics, $100,000 in “GT One” cigarettes, a $1.8 million shipment of computerized “Husqvarna” and “Pfaff” sewing machines, an $86,000 shipment of “Starkist” canned tuna, $40,000 in “Carter’s, Inc.” baby clothes, and $64,000 in “Wrigley’s” chewing gum. Many of the stolen shipments were bound for major retailers such as “Best Buy,” “Lowe’s,” “Sam’s Club,” “Target,” “Wal-Mart,” “OfficeMax,” and “Office Depot.”

As part of a plea agreement with the government, SMITH pleaded guilty to a three count Criminal Information filed on May 17, 2010, charging one count of conspiracy; one count of buying, receiving, and possessing goods stolen from an interstate cargo shipment; and one count of money laundering. He could receive a maximum sentence of up to 5 years in prison on the conspiracy count, 10 years in prison on each of the cargo theft and money laundering counts, and a fine of up to $250,000 on each count. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

CHEATWOOD, who cooperated in the investigation, pleaded guilty to charges related to the stolen goods recovered by law enforcement in 2005. He pleaded guilty in federal court in Rome, Georgia on September 11, 2009, and is currently serving a ten month prison sentence. Neither SMITH nor CHEATWOOD are charged with the actual theft of the cargo containers.

The investigation is ongoing. The GBI has asked that any members of the public who may have seen semi-trailer trucks being unloaded at rest stops, truck stops, industrial areas or residential areas, particularly at night or on weekends, and believe such off-loading may be suspicious, to call the GBI’s Major Theft Unit at 404-244-2600.

SMITH’s sentencing is scheduled for August 17, 2010, at 9:30 a.m., before United States District Judge William S. Duffey, Jr.

The prosecution is the result of a joint investigation conducted by Special Agents of the Federal Bureau of Investigation and the Internal Revenue Service, and by Special Agents and Task Force Officers with the Major Theft Unit of the Georgia Bureau of Investigation. Multiple additional local law enforcement agencies and offices assisted with the investigation, including the Marietta-Cobb-Smyrna Organized Crime Intelligence Unit, Cobb County Police Department, Cobb County District Attorney’s Office, the DeKalb County Police Department, and the Cedartown Police Department.

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Armed Robber Sentenced to Life in Prison

ADOLPHUS DIXON, 43, of Atlanta, Georgia, was sentenced January 7 by United States District Judge Charles A. Pannell, Jr. to serve life in federal prison on charges of armed commercial robbery, brandishing a firearm in furtherance of a crime of violence and attempted bank robbery.

Acting United States Attorney Sally Quillian Yates said of the case, “After having been convicted twice of armed robbery, this defendant committed five more armed robberies, victimizing the stores that provide us with the basic supplies that we use in our daily lives. He violently robbed those stores with a gun and endangered the lives of hard working employees and unsuspecting customers. He will no longer be able to terrorize this community.”

DIXON was sentenced to life in prison under the federal “three-strikes” statute which requires federal judges to impose a life sentence when a person is convicted of a serious violent felony and the government proves that the person was convicted on separate prior occasions of two or more serious violent felonies. On October 16, 2009, DIXON was convicted of five counts of commercial robbery, five counts of brandishing a firearm during a crime of violence and attempted bank robbery.

According to Acting United States Attorney Yates, the charges and other information presented in court: During a five-day period between September 10 and September 15, 2008, DIXON robbed three “Family Dollar” Stores, a “Super IGA” grocery store, a “Rite Aid” Pharmacy and attempted to rob a “SunTrust” bank. DIXON's co-defendant, CHRISTOPHER SMITH, 37, also of Atlanta, participated in the Family Dollar Store robberies in Atlanta, Georgia. During the Family Dollar Store robberies, DIXON and SMITH entered the stores, pretended to make a purchase and took money from cash registers after pointing a pistol at store cashiers. DIXON used a similar ruse during the armed robbery of a Super IGA grocery store in Atlanta, Georgia before pointing a pistol at a cashier and taking money from a cash register as other employees fled from the front of the store. Similarly, DIXON entered the Rite Aid Pharmacy in Atlanta, Georgia and pretended to make a purchase before pointing a pistol at the cashier and removing cash from the register. DIXON also posed as a customer of a SunTrust Bank branch in Douglasville, Georgia and handed the bank teller a note demanding all the cash in the drawer. The bank teller was able to alert bank employees and DIXON fled the bank without receiving any money. The Federal Bureau of Investigation was able to identify DIXON and SMITH from video surveillance and descriptions of the robbers and the getaway vehicle which was registered to DIXON. Additionally, on September 12, 2008, officers with the Atlanta Police Department identified DIXON and SMITH during a traffic stop of a vehicle that matched descriptions of the getaway vehicle.

At sentencing, the Government proved that DIXON had two previous serious violent felony convictions for armed robbery and armed bank robbery in Georgia.

DIXON’s co-defendant, SMITH, was convicted of charges related to the three Family Dollar Store robberies on September 25, 2009, and was sentenced to serve 22 years in federal prison.

The case was investigated by the Federal Bureau of Investigation, the Atlanta Police Department and the Douglasville Police Department.

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Arsonists Who Set Fire to Adult Club Sentenced to Prison

BOYD SMITH, 41, of Atlanta, Georgia; SANDEO PABLO DYSON, 46, of Gainesville, Georgia; and HOWARD “BIT” THROWER, 52, of Alpharetta, Georgia, were sentenced today by Chief District Court Judge Julie E. Carnes relating to a conspiracy to burn down “Club Onyx,” an adult entertainment establishment in Atlanta, just after New Year’s Day 2007.

Acting United States Attorney Sally Q. Yates said, “These prison terms bring to a close a successful arson investigation involving local and federal authorities. While thankfully no one was hurt during the fire and its aftermath, the defendants in this case, in their senseless pursuit of financial gain, put the lives of innocent civilians and our brave firefighters at risk.”

“Setting afire a rival business to gain a competitive edge is not only a threat to free enterprise; it is a crime of violence,” said Special Agent in Charge Gregory Gant of the Bureau of Alcohol, Tobacco, Firearms and Explosives in Atlanta. “Every time an arsonist strikes a match, the loss of human life is a distinct possibility. ATF's arson enforcement efforts are directed toward preventing arson, providing effective post-incident response, and safeguarding our community from the impact of arson.”

SMITH was sentenced to five years in prison to be followed by three years of supervised release. DYSON was sentenced to five years in prison to be followed by three years of supervised release. THROWER was sentenced to three years in prison to be followed by three years of supervised release.

According to Acting United States Attorney Yates and evidence presented in court: The investigation of this case began on January 2, 2007, when the City of Atlanta Fire Department and agents from the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) responded to a fire at Club Onyx, an adult entertainment club at 1888 Cheshire Bridge Road in Atlanta. An internal surveillance system that was not destroyed by the blaze showed a male figure moving about the club after it had been locked and alarmed by management. This individual can be seen starting the fire and then hurrying beyond the range of the cameras and out of the building. The owners of Club Onyx spent nearly $1 million to rebuild the facility and had to keep the club shuttered for over six months.

For many months, investigators were unable to develop any leads on the arson. A break in the case occurred in August and September, 2007, when agents from the ATF and the FBI learned that THROWER was involved in the arson. From that lead, agents eventually determined that THROWER, who was a senior manager at Platinum 21, had conspired with SMITH, also a manager, and DYSON, head of security at Platinum 21, to burn Club Onyx. Club Onyx had recently begun to compete with Platinum 21. With revenues and profits collapsing, THROWER, SMITH, and DYSON decided that they must shut Onyx down. After discussing a variety of less extreme options, the conspirators settled on the arson plan in December 2006.

DYSON was paid $5,000 by SMITH and THROWER to “do the burn,” which he executed on January 2, 2007, just after the last employees had left the building. The night before the fire, DYSON scaled the outside of Club Onyx and diverted the external security cameras so that they would not record his exit after the fire was started.

DYSON pled guilty on April 24, 2008. THROWER pled guilty on January 29, 2009. SMITH went to trial and was found guilty by a jury on February 25, 2009. DYSON and THROWER both testified at SMITH’s trial, as did several other Platinum 21 employees.

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“Career Criminal” Pleads Guilty to Armed Bank Robbery

ARTHANIEL SMITH JR., 37, pleaded guilty today in federal court in Rome to the armed bank robbery of the Wachovia Bank at 4580 Jimmy Lee Smith Parkway in Hiram, Georgia. Classified as an armed “career criminal,” because of an extensive criminal history, SMITH agreed to a sentence of over 40 years in prison.

Acting United States Attorney Sally Quillian Yates said, “Today a career offender has been removed from the society he has victimized for more than fifteen years. This defendant’s long confinement in federal prison ensures that Georgia citizens will not again fall prey to his violent crimes.”

Gregory Jones, Special Agent in Charge, FBI Atlanta, said, “The FBI is relieved to have such a career offender off the streets. I commend the observant witness who relayed vital information in this case to the responding law enforcement officers. It is this type of community involvement and partnership with law enforcement that will help keep their communities safe.”

According to Acting United States Attorney Yates and the information presented in court: SMITH admitted that on March 2, 2009, he and another male unlawfully entered the Wachovia Bank at 4580 Jimmy Lee Smith Parkway in Hiram, Georgia and hid inside the bank. The following morning, when the first employee of the day entered the bank, SMITH and his cohort, armed with handguns, confronted the employee and demanded money contained in the Bank's vault. After obtaining the funds, both men fled from the bank to a waiting vehicle. A concerned citizen observed the men flee the bank and reported the make, model and tag number of their vehicle. SMITH and his cohort were stopped by a Paulding County Sheriff's Deputy within ten minutes. All of the bank's funds were recovered from the vehicle, along with the gloves, masks and handguns used by the robbers. Both men subsequently confessed to committing the crime.

SMITH will be sentenced by United States District Court Judge Robert L. Vining, Jr. on December 17, 2009 at 10 a.m.

This case is being investigated by Special Agents of the FBI.

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Carpet Company Insiders Sentenced in Multi-Million Dollar Fraud‏

JOHNNY LAMAR SMITH, 54, of Bridgeport, Alabama, and WILLIAM J. PERCY, 65, of Dalton, Georgia, were sentenced to prison today by United States District Judge Harold L. Murphy on a charge of conspiracy to commit interstate transportation of property obtained by fraud.

United States Attorney David E. Nahmias said, “The carpet industry is a vital source of jobs and pride for many of our North Georgia communities. But these two defendants had no pride, using their knowledge of and positions in the industry to divert under-valued yarn to illegally obtain millions of dollars. These two insiders are about to go inside a federal prison.”

SMITH was sentenced to 2 years, 6 months in prison to be followed by 3 years of supervised release, and ordered to pay restitution in the amount of $2,499,999. PERCY was sentenced to 1 year, 3 months in prison to be followed by 3 years of supervised release, and ordered to pay restitution in the amount of $2,499,999. SMITH and PERCY pleaded guilty to the charge on January 15, 2009.

According to United States Attorney Nahmias and the information presented in court: SMITH was a long time employee of Beaulieu Carpets, holding the position of Quality Assurance Manager at the Bridgeport, Alabama, plant. SMITH’s wife also worked at the plant in the accounting department. PERCY owned Glenwood Tufters, a carpet processing company in Dalton, Georgia.

For over three years, from 2001 through 2003, using his wife’s password, SMITH manipulated Beaulieu’s computer system and diverted more than 3,931,000 pounds of first-quality yarn. He then sold the yarn as second-quality yarn at a price of twenty cents per pound to PERCY, when the yarn was in fact worth over eighty cents per pound. PERCY paid SMITH more than $289,000 in kickbacks. Beaulieu sustained a loss of almost $2.5 million. When Beaulieu discovered the loss, the company fired SMITH, and SMITH’s wife resigned from Beaulieu.

This case was investigated by Special Agents of the Federal Bureau of Investigation.

Assistant United States Attorney David Leta prosecuted the case.

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Georgia Loan Officer Sentenced for Mortgage Fraud

ANDREW JOHN SMITH, 29, of Cleveland, Georgia, was sentenced April 9, 2009, by United States District Judge William C. O’Kelley to serve over 3 years in prison on a federal charge of conspiracy to commit bank, wire and mail fraud arising from a mortgage fraud scheme.

United States Attorney David E. Nahmias said of the case, “We will continue to use undercover ‘sting’ operations to stop the closing of fraudulent loans before the proceeds are disbursed, especially when a loss of over a million dollars to such frauds could seriously impact the lending banks during these difficult times. We remain committed to the prosecution of mortgage frauds, which has so devastated our local and national economy, and anyone involved in such fraud should fear that everyone else involved in the deal may be cooperating with the FBI.”

FBI Atlanta Special Agent in Charge Gregory Jones said, “This investigation should send a clear message to those criminals involved in mortgage fraud that the FBI may also be at the closing with cameras rolling and a set of handcuffs.”

FDIC-OIG Special Agent in Charge, Southeast Region, C. Ed Slagle said, “This investigation should serve as a warning to those who continue to attempt mortgage frauds in ever increasing amounts at a time when the community has already been so negatively impacted by such frauds.”

SMITH was sentenced to 3 years, 6 months in prison to be followed by 5 years of supervised release. The court has ordered SMITH to pay restitution but has not yet set a final amount. SMITH pleaded guilty to the charge on January 9, 2009.

According to United States Attorney Nahmias and information presented in court: In early 2007, SMITH was employed as a part-time Loan Officer by United International Mortgage (UIM) in Buford, Georgia, when he originated a fraudulent loan for his own residence. SMITH was later recruited by an UIM co-conspirator not named in the indictment to refinance UIM loans with other lenders, as well as to sell UIM foreclosed properties on which construction was not complete to unqualified straw borrowers funded by other lenders. SMITH’s own loan for his residence had been included in the UIM portfolio of non-performing loans facing imminent foreclosure.

On June 9, 2008, SMITH and his UIM co-conspirator were caught in an FBI/FDIC-OIG (Federal Deposit Insurance Corporation-Office of Inspector General) “sting” after SMITH had arranged for the sales price of a Pendergrass, Georgia, property to be inflated from $2 million to $4 million. Prior to his arrest, SMITH submitted fraudulent documents to federally insured banks to arrange a $3.2 million purchase money mortgage loan to finance the purchase of the property. SMITH then negotiated a side agreement with the sellers (who were, unbeknownst to SMITH, cooperating with the FBI) for the secret kickback of $2 million to his shell company. SMITH was arrested by federal agents at the property during a subsequent meeting to negotiate his multi-million dollar kickback for the “deal.”

Notably, the property at issue was sold for its true market value of $1.8 million immediately upon conclusion of the FBI’s sting operation.

The FBI investigation is ongoing.

This case was investigated by Special Agents of the Federal Bureau of Investigation and the Office of Inspector General, Federal Deposit Insurance Corporation.

Assistant United States Attorney Gale McKenzie prosecuted the case.

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Three Former Atlanta Police Officers Sentenced to Federal Prison in Fatal Shooting of Elderly Atlanta Woman

David E. Nahmias, United States Attorney for the Northern District of Georgia; Loretta King, Acting Assistant Attorney General, Civil Rights Division, U.S. Department of Justice; and Gregory Jones, Special Agent in Charge, Federal Bureau of Investigation, announced that three former Atlanta Police Department (APD) officers were sentenced to prison today by Chief United States District Judge Julie E. Carnes on a charge of conspiracy to violate civil rights resulting in death, arising from the fatal police shooting of Kathryn Johnston, a 92-year old Atlanta woman, at her home during the execution of a search warrant obtained by the defendants based upon false information on November 21, 2006.

JASON R. SMITH, 36, of Oxford, Georgia, was sentenced to 10 years in federal prison. GREGG JUNNIER, 42, of Woodstock, Georgia, was sentenced to six years in federal prison. ARTHUR TESLER, 42, of Acworth, Georgia was sentenced to five years in federal prison. There is no parole in the federal system. Each defendant was also sentenced to serve three years of supervised release following his prison term, and collectively to pay $8,180 in restitution for the costs of Ms. Johnston’s funeral and burial.

In a brief news conference after the sentencing hearings, United States Attorney David E. Nahmias said in part, “As Atlanta police narcotics officers, these three defendants repeatedly failed to follow proper procedures and then lied under oath to obtain search warrants. Their routine violations of the Fourth Amendment led to the death of an innocent citizen. The death of Kathryn Johnson in a police shooting was a terrible tragedy for a law-abiding elderly woman, her family, and friends and our entire community. But as her family and others hoped, from this tragedy have come two positive results. First, it has led the Atlanta Police Department to implement useful reforms in training and supervision and to entirely revamp its Narcotics Unit, reducing the possibility of a similar tragedy in the future. Second, the significant prison sentences imposed by the Court today should send a strong message to other law enforcement officers who may be tempted to lie under oath or otherwise violate the law. Officers who think, as these defendants once did, that the ends justify the means or that ‘taking shortcuts' and telling lies will not be discovered and punished should realize that they are risking their careers and their liberty. And officers who try to obstruct justice when their misconduct faces exposure, rather than cooperating in the investigation, should realize that they will face even more severe punishment.”

In Washington D.C., Acting Assistant Attorney General Loretta King said, “The Justice Department is committed to vigorously prosecuting law enforcement officers who willfully disregard the Constitution and abuse their authority to violate the rights of others. This sort of unlawful behavior, resulting in Ms. Johnston's tragic death, undermines the efforts of law enforcement officers who honorably perform their duties.”

Gregory Jones, Special Agent in Charge, FBI Atlanta, said, “This is a sad day in the law enforcement community. Few crimes are as reprehensible as those committed by police officers who violate the very laws they have sworn to uphold. Our thoughts and prayers are with the Johnston family, and we hope today's sentencing helps bring closure to this tragedy. Further, we want the public to know the FBI will continue to pursue and bring to justice those who violate their oaths of office and the civil rights of others.”

JUNNIER and SMITH pleaded guilty to the federal civil rights conspiracy charge, as well as voluntary manslaughter and related state charges in Fulton County ( Georgia) Superior Court, on April 26, 2007. Pursuant to their plea agreements, they are scheduled to be sentenced in state court on March 5, 2009, to the same sentence imposed in federal court, with the sentences to be served concurrently. TESLER initially declined to plead guilty and was indicted in state court on charges of violation of oath of office by a public officer, false imprisonment and false statements. In 2008, TESLER was convicted at trial in state court on the false statement charges, but that conviction has been reversed on appeal. Following the state trial, federal authorities re-evaluated TESLER’S case, conducted further investigation, and determined that federal prosecution of TESLER was appropriate. TESLER pleaded guilty to the federal charge on October 30, 2008.

JUNNIER began cooperating truthfully with authorities shortly after the federal investigation began and provided valuable assistance in the investigation and prosecution of SMITH and TESLER. Additionally, JUNNIER’S cooperation led to guilty pleas to federal charges by two additional APD officers, including a separate civil rights offense committed by the sergeant who commanded the narcotics team involved in the shooting. SMITH cooperated to a more limited extent. Both former officers provided information relevant to a broader FBI investigation of misconduct by APD narcotics and other officers, which culminated in a report provided by the FBI to APD Chief Richard Pennington in October 2008 for consideration of potential administrative discipline against other APD officers. As a result of their cooperation, the Court reduced JUNNIER’s sentence by 40 percent and SMITH’s sentence by 20 percent. TESLER did not provide substantial assistance in the investigation and received no sentence reduction on that ground, although his sentence was reduced based on his lesser role in the conspiracy.

The facts and other details regarding the case are set forth in the government’s Sentencing Memorandum attached to this release. (NEWS MEDIA NOTE: additional copies of the Sentencing Memorandum are available upon request.)

This case was investigated by special agents of the Federal Bureau of Investigation.

Assistant United States Attorney Jon-Peter Kelly, United States Attorney David E. Nahmias, and Department of Justice Civil Rights Division Special Litigation Counsel Paige M. Fitzgerald prosecuted the case.

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