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Mobtown Beat

Twice Stung

Drug-Money-Laundering Jewelry-Store Owner Convicted in Federal Sting--Again

Rarah
The owner of Metro Broker Ltd. (pictured) recently pled guilty to using the company to launder drug money.

By Van Smith | Posted 8/12/2009

The lawyer, the mortgage broker, the retired Social Security worker, the used-car dealer, the strip-club owner--these are the careers of convicted drug money-launderers in Maryland in recent years. As of July 31, add another to the list: the jewelry dealer.

On July 31, 58-year-old Eugene Petasky pleaded guilty to charges of washing drug money through his company Metro Broker Ltd. for two dozen years, from 1982 through 2006, the year he was indicted. For Petasky, it's a case of déjà vu. Not only was he convicted in a similar money-laundering scheme involving Metro Broker in a 1990 jury trial, but on both occasions the feds nabbed him using a sting operation.

Petasky's most recent sting occurred in 2006, according to assistant U.S. attorney Bryan Giblin, speaking at Petasky's July 31 hearing before U.S. District Court Judge William Quarles. Giblin explained that Petasky, at his Pikesville jewelry store, accepted cash on two occasions that year--$12,500 in May, and $23,500 in August--from an U.S. Internal Revenue Service (IRS) undercover agent posing as a drug dealer from Tennessee. On each occasion, Giblin said, Petasky failed to file the required IRS form to document the transaction. The investigation culminated in a November 2006 raid of Metro Broker that turned up two Smith & Wesson firearms, which Petasky is prohibited from possessing due to his 1990 conviction.

The fruits of the sting operation and the raid were not the only evidence to which Petasky pleaded guilty, though. According to his plea agreement, from 1982 until his indictment, Petasky "knowingly accepted at least $336,000 in cash from drug traffickers in exchange for jewelry. The majority of these transactions took place before the year 2000." The agreement says that Petasky "knew that the money he was accepting was the proceeds of drug trafficking," and, as "dealers repeatedly brought drug proceeds to him to disguise the true nature and source of those funds," Petasky "agreed to accept those proceeds to further that unlawful purpose." He also "intentionally concealed the nature of those transactions" by "failing to file required tax forms" and by "structuring certain transactions to make them appear legitimate."

In 2000--the year before most of Petasky's drug-money laundering occurred--Metro Broker moved to Pikesville, after it was forced from its longstanding downtown location at 4 Eutaw St. in order to make room for the city's plans to renovate and expand Metro Broker's neighbor, the Hippodrome Theater. In 2001 when City Paper talked to Petasky about the relocation ("Moving Experiences," Mobtown Beat, Mar. 14, 2001), he complained that the city provided inadequate funds for the move. "There was no way I was going to stay in the city," he was quoted as saying, "you can't fight them."

Despite his acrimony toward City Hall, campaign-finance records show Petasky has been, at times, supportive of politicians. He or Metro Broker has donated to the campaigns of Gov. Martin O'Malley (D) when he was running for mayor in 1999, former governor and state comptroller William Donald Schaefer (D) in 2002 and 2005, and Connie DeJuliis (D), who ran unsuccessfully for U.S. Congress in 1996.

Fighting federal criminal charges can be tough, as Petasky has learned before. His 1990 jury conviction arose from another money-laundering transaction that Petasky had with an undercover law enforcer and Baltimore attorney Neil Steinhorn (Petasky's co-defendant in the case, who also was convicted) at Metro Broker.

According to court documents, Steinhorn and the undercover, who was posing as a drug dealer's partner who needed to unload stolen gold, visited Petasky at his store in January 1989. In this instance, the undercover exchanged the stolen gold for cash as part of a money-laundering scheme that involved another out-of-state precious-metals dealer. The record shows Petasky told the undercover "that he was in the business of making illicit 'big deals' involving stolen gold."

Petasky was found guilty of conspiracy to transport stolen goods across state lines in that case, and was sentenced to 90 days of home detention, two years of supervised release, and was fined $10,000. This time around, Petasky is likely facing a prison term at his sentencing hearing, which is scheduled for Oct. 19.

When Petasky pleaded guilty to the current charges, Judge Quarles took testimony about Petasky's competency to stand trial due to depression. According to psychiatrist Dr. Neil Blumberg, Petasky was suffering from "moderate depressive disorder" that set on after the 2006 charges, though at times since then--and Petasky has been in and out of hospitals and treatment since then--Petasky's diagnosis has been "severe," and included "some psychotic symptoms," Blumberg explained. Nonetheless, Blumberg pronounced him "competent," and said that Petasky, after his 1990 trial, also suffered from depression that was "treated with medication and therapy for several years."

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