Author: Van Smith

Mexican Connection: Baltimore drug case with ties to city politics part of nationwide cartel crack-down

By Van Smith

Published by City Paper, March 4, 2009

On Feb. 25, a Baltimore drug conspiracy was in the limelight as part of the public unveiling of an ongoing federal effort to destroy the Sinaloa Cartel of Mexico. At a press conference in Washington D.C., officials said that Operation Xcellerator, an anti-narcotic initiative targeting the powerful cartel’s operations in the United States, had in the past 21 months arrested more than 750 people and seized more than $59 million in drug proceeds, 12,000 kilos of cocaine, 1,200 pounds of methamphetamine, 1.3 million Ecstasy pills, and more than 160 weapons.

Eight of those arrested and charged for their dealings with the Sinaloa Cartel are part of a Baltimore-based drug conspiracy that is tied, through one of its members–Lawrence Schaffner “Lorenzo” Reeves–to an educational seminar program for children seeking to enter the entertainment business. Reeves is co-founder of the seminar business, called Hollywood in a Bottle, and a seminar it held last summer at a Baltimore City public school received support from Baltimore Comptroller Joan Pratt.

“Just 40 miles from here,” said acting Drug Enforcement Administration (DEA) chief Michele Leonhart, with U.S. Attorney General Eric Holder by her side, “we took down violent drug traffickers which were supplied with hundreds of kilos of cocaine from Mexico.”

Later that day, U.S. Attorney for Maryland Rod Rosenstein told City Paper that the case Leonhart was referring to was against Reeves and his seven accused co-conspirators. Rosenstein added that the Reeves conspiracy is the only Baltimore case that falls under Operation Xcellerator. It was indicted late last August, and has since received extensive coverage in City Paper (“The Hollywood Connection,” Aug. 29, 2008).

Reeves, who has prior drug convictions in Maryland and Arizona, pleaded guilty in January to his part in the conspiracy to import more than 330 pounds of cocaine from Mexico. His criminal-defense attorney, Gary Proctor, had no comment for this story.

In July 2008, a City Paper reporter dropped by the National Academy Foundation School, a Baltimore city public school in Federal Hill, where the well-attended Hollywood in a Bottle program was being held. It featured experienced Hollywood professionals sharing career advice with youngsters.

“Joan Pratt was our biggest sponsor,” the event’s publicist, Sharon Page of Synergy Communications, proclaimed at the time. A month later, after Reeves’ indictment, Page backed off on that claim, saying that Pratt only “paid for our T-shirts.”

When asked in a Feb. 26 e-mail about the heightened profile of the Reeves case, Pratt gave the following prepared statement: “I’m always concerned about crime and it is troubling to hear about this investigation. I have no knowledge of this conspiracy or facts surrounding this investigation.”

Last August, Pratt explained to City Paper that, while she does not know Reeves personally, she does know Reeves’ Hollywood in a Bottle co-founder, LaVern Whitt, a native Baltimorean and former Hollywood stuntwoman. Pratt, who runs an accounting business aside from her public duties, filed incorporation papers on behalf of Page’s Synergy Communications.

Pratt and her private attorney, Sharon King Dudley, who was hired last year by Baltimore City to investigate employee-discipline matters, were two of Hollywood in a Bottle’s four listed sponsors on the company’s web site.

Nothing has come to light suggesting that Pratt had any direct interactions with Reeves, or that Pratt had any knowledge of Reeves’ criminal activities.

Whitt has said she didn’t know about Reeves’ involvement in drug activities either. “I needed help, so he came on board,” she told City Paper after Reeves’ indictment. “I just met him five months ago. This is my hard-earned idea. I need sponsors to help me. I have no idea about that other world. I don’t know him like that.”

Whitt had Baltimore criminal defense attorney Warren Brown handle any further inquiries on the matter. On Feb. 26, after being told that Operation Xcellerator tied Reeves to Sinaloa, Brown said that Whitt, “is just like probably tons of other people who may have received funds from this guy. She would not know about his involvement in any criminal activities.” Lending credence to this claim, he said, is “the fact that she was never contacted by the U.S. Attorney’s Office” in connection with the case.

Nonetheless, Whitt’s partnership with Reeves has tainted some of her other endeavors, including a documentary-in-progress she’s co-producing with entertainment titan Kevin Liles, the executive vice president of Warner Music Group and also a Baltimore native. Called Women in Power, a seven-minute promo of which was screened at the historic Senator Theater early last year, the film’s subjects are Baltimore’s four top elected officials: Mayor Sheila Dixon, City Council President Stephanie Rawlings-Blake, State’s Attorney Patricia Jessamy, and Pratt. In late 2007, Whitt did on-camera interviews with each of them. All four have since sought to distance themselves from the project.

After the Reeves indictment came down last year, City Paper contacted the subjects of Women in Power to ask them what they knew about Whitt and her involvement in Hollywood in a Bottle and her relationship with Reeves. Dixon’s then-spokesman Sterling Clifford said he’d vetted Whitt before she interviewed the mayor and turned up no red flags, but Dixon’s office had no comment for this story.

Rawlings-Blake’s spokesman Ryan O’Doherty asserted on Feb. 26 that the council president regarded Whitt as simply another member of the media seeking access. “Ms. Whitt came to this office to do filming for a documentary,” O’Doherty said, “and we granted it, just as we do others, and the relationship ends there.”

Jessamy’s office, which last year confirmed that Whitt had interviewed the state’s attorney, did not return calls for comment on the matter.

Other than Reeves, two other members of the eight-man conspiracy–Devon Marshall and Otis Rich–have also pleaded guilty. Both have violent criminal histories. Marshall was described by prosecutors as Reeves’ enforcer, someone who could be counted on to inflict violence to settle disputes. When his Harford County home was searched last year, among the guns that turned up was an assault rifle with 20 armor-piercing bullets. His familiarity with street-level violence landed him on the potential witness list of a death-penalty trial that ended abruptly last spring when two of the three defendants, Harry Burton and Allen Gill, pleaded guilty to charges of running a murderous, decade-long drug conspiracy based at the Latrobe Homes housing project in East Baltimore. Court records indicate that the third man in the Latrobe Homes case, Stanford Stansbury, who has family ties to notorious Baltimore bailbondsman and ex-con Milton Tillman Jr. (“Grave Accusations,” April 23, 2008), negotiated a pending plea deal in the case.

Rich’s criminal career includes two convictions for drugs and firearms, amid three other dropped murder and attempted-murder charges. On Feb. 20, Rich’s name came up in a court hearing in the federal drugs-and-guns case against Andre Kirby. Prosecutors explained that Kirby, on the day that he was arrested last May, had given Rich a ride to the hospital after Rich had been shot amid a surge in gang-related violence.

The five remaining members of the alleged conspiracy have pleaded not guilty to the charges and are awaiting trial, scheduled to begin Aug. 17.

Two of them–Juan Nunez and Marcos Galindo–have transportation-related businesses. Nunez’ trucking company, J&R Transport, was run out of an East Baltimore building that also houses his former bar, El Rancho Blanco on Fagley Street, and Nunez’ loan for purchasing the building was co-signed by Gilbert Sapperstein, a well-known politically connected figure who was convicted in 2005 of bilking millions of dollars through city government contracts. During hearings in the case, Nunez was described as using drug cash to buy luxury cars from a Los Angeles-based car dealer, selling vehicles with hidden drug-stash compartments, and, despite having no reported income, depositing large amounts of money into bank accounts. Galindo, who has prior guns-and-drugs charges in Arizona, is director of a Mesa, Ariz.-based company called Precision Installation, which designs office space and delivers furniture.

Two other co-conspirators–William Leonardo Graham of Baltimore and Nathaniel Lee Jones of Calvert County–have prior drug-related convictions, and Graham has a prior gun conviction. Also charged in the case is Justin Santiago Gallardo of Annapolis, whose prior criminal history appears to consist of driving-related offenses in Maryland and Arizona.

The prosecution of the Reeves case, says Rosenstein, “makes the obvious connection that drugs are coming to Baltimore from outside of Maryland. We will continue to trace the drugs back to the source, work our way up to the top, and ultimately indict the major players.”

One Angry Man: Two sentencing hearings shed light on city’s shadow economy

By Jeffrey Anderson and Van Smith

Published in City Paper, March 26, 2008

U.S. District Court Chief Judge J. Frederick Motz’s temper flared during the March 20 sentencing hearing of Baltimore mortgage broker David Lincoln, who pleaded guilty last year to bank fraud for his part in an alleged drug and money-laundering conspiracy headed by fugitive Shawn Michael Green (“Flight Connections,” March 12).

“I’m getting myself riled up here,” Motz said from the bench. “I don’t understand why Mr. Lincoln isn’t here as a co-conspirator . . . on the white-collar end of a major drug operation.” Green, himself a former mortgage broker, clothing-store owner, and record-studio executive with a thin rap sheet, has been in hiding since early last year, after being indicted for cocaine and heroin trafficking and money laundering. The indictment calls for the forfeiture of property and assets totaling more than $4 million.

The senior judge’s remarks came as assistant U.S. attorney Kwame Manley was seeking a 10-month prison term for Lincoln for helping Green launder drug money. Motz indicated he would prefer to put the 38-year-old mortgage broker behind bars for 10 years. The judge’s comments were unusually stark and echoed widespread discontent among the federal judiciary regarding decades-old sentencing guidelines that weigh heavily against low-level drug offenders and street-corner dealers.

“So I’m going to postpone the sentencing, think it through myself,” he said before rescheduling Lincoln’s hearing until April 4, the same day that Green’s mother, Yolanda Crawley, is scheduled to be sentenced for using her son’s drug proceeds to pay off fraudulently obtained mortgages on luxury homes in Florida, Georgia, and Maryland.

On March 18, Motz had been less stern when a third participant in the mortgage-fraud scheme–attorney Rachel Donegan, Lincoln’s ex-lover–appeared for sentencing. Donegan, who surrendered her law license after pleading guilty last fall, left Motz’s courtroom in tears, even though the judge had sentenced her to three years probation rather than prison time.

Motz had justified Donegan’s light sentence after defense attorney Gregg Bernstein argued that she was a minor participant who did not know she was dealing with drug money, and that her judgment was clouded by Lincoln’s dominance over her. “I think those arguments are very well put,” Manley said, agreeing with his adversary. “I don’t have any quibble with that at all.” Another mitigating factor, Bernstein argued, was that Donegan was distracted by a bitter custody battle involving her young niece. “Tough to give probation to somebody who committed mortgage fraud who is a member of the bar,” Motz replied, before doing just that.

But on March 20, with Lincoln before him, Motz said he may have misread Donegan’s role. “I came in based upon the Donegan sentencing” believing that “she was motivated into committing a crime because she was trying to maintain a relationship that had fallen apart with Mr. Lincoln,” Motz said. “That may be inaccurate,” the judge observed, after hearing Lincoln’s attorney, William Purpura, oppose attempts to transfer blame to his client.

In addition, Donegan and Lincoln have been sued recently in connection with mortgage irregularities that suggest their improprieties may not have been limited to phony loan applications on behalf of Shawn Green. One lawsuit seeks a full audit of their loan-processing activities.

Outside the courtroom after his hearing, which fell on his birthday, Lincoln seemed taken aback when told by a reporter that Donegan received probation after blaming him for her actions. When asked whether the blame was misplaced, he paused, then replied coolly, “After I think it through, I’ll call you.”

Finger-pointing aside, Motz said his larger concern was how the case reflects entanglements between drug dealers and white-collar professionals. “Seems to me, Mr. Lincoln was on the edge of society” with people who are “probably worse than street dealers,” the judge said. “Here’s an intelligent person . . . taking illegal money and putting it into the legal mainstream.” In contrast to Manley’s recommended sentences for Donegan and Lincoln, Motz continued, prosecutors routinely go for 20-year career-criminal sentences against street dealers.

Manley acknowledged there was “some evidence” that Lincoln knew he was helping a drug dealer, and that the government could have charged Lincoln as a co-conspirator. However, the prosecutor said, “To be fair to Mr. Lincoln . . . he did not participate in the selling of drugs.” In addition, Manley said, Lincoln offered prosecutors a list of 10 clients referred to him by Green: “When people sit down with the government and make efforts to talk with us, help us out, we will do so in response.”

Lincoln and Donegan offered title services and mortgage brokering for real-estate transactions, turning out loan applications via two companies: Guilford Title and Escrow and First Metropolitan Mortgage. Green is described in court proceedings as a social and business acquaintance of Lincoln.

Maryland U.S. Attorney Rod Rosenstein told City Paper on March 20 that Green’s alleged conspiracy includes at least two other men charged with drug-trafficking crimes. In 2006, Green was stopped in a car containing nearly $1 million in cash, along with Maurice K. Phillips and Anthony W. Ballard, who since have been indicted in Pennsylvania and Maryland, respectively. Phillips is the alleged kingpin of the Phillips Cocaine Organization, whose members are charged with murder-for-hire to protect a $31 million international enterprise that stretched from Mexico to the U.S. East Coast. Unlike Green, Phillips and Ballard are in federal custody awaiting trial.

Adding to Green’s mystique are his ties to a pair of politically connected East Baltimore businessmen: Noel Liverpool Sr. and Milton Tillman Jr. Green turned to Liverpool Sr. in the mid-1990s for help in setting up a now-defunct urban apparel store, Total Male II, in Mondawmin Mall. Tillman Jr., a convicted felon and former club owner who boasts the largest share of Baltimore City’s bail-bonds market, is a founding board member of the company that owns the Total Male trade name, which Green used with the company’s written permission.

Law enforcement documents obtained by City Paper also show one of Green’s addresses as 2330 E. Monument St., a location shared by Total Male and two of Tillman Jr.’s companies: Four Aces Bail Bonds and New Trend Development.

Green and his far-flung connections loom over the pending sentencing hearings for Yolanda Crawley and David Lincoln–and the lenient sentence that Motz already handed to Rachel Donegan.

Challenging Donegan’s love-gone-bad story are court records claiming that other home loans processed by Guilford Title and Escrow are improper. Two lawsuits recently filed in Baltimore City Circuit Court portray a pattern of questionable conduct rather than an “isolated, aberrant episode” during the summer of 2005, as Donegan’s attorney successfully argued before Motz. The lawsuits allege that, since that summer, she failed to record numerous loan documents with the courts, a lapse that has clouded title to at least seven properties in the Baltimore area.

One lawsuit claims the total number of affected properties is unknowable without a full audit of the company. That has yet to happen, but the lawsuit contends available records “raised additional questions concerning the proper handling of funds received and disbursed by Guilford,” and calls transactions in and out of Guilford’s escrow account “highly unusual.”

The other lawsuit makes the same claim–that Donegan failed to record loan documents–regarding a home purchase by Carolyn Pratt and Cynthia Glover, also named as defendants. Pratt confirms she was in the bail bonds business at the time of the purchase and wrote bails in conjunction with Milton Tillman Jr.’s company as recently as 2006. A public-records search for contact information for Glover leads to an address related to Shawn Green’s drug conspiracy: 2339 Eutaw Place. The Reservoir Hill apartment building was owned by Green until the government seized it in a forfeiture proceeding and sold it at auction on March 20–the date of Lincoln’s cut-short sentencing hearing.

Pratt says she knows little about Donegan and Lincoln, and nothing about Green. “This mixes us up with something that we don’t even know anything about,” she says, adding that she and Glover are “kind of stuck in the middle of not knowing what these people are up to.” City Paper‘s attempts to reach Glover, including through Pratt, were unsuccessful.

Green’s alleged ties to the Phillips Cocaine Organization add to the intrigue. Details of his own conspiracy case remain under seal, but the Phillips indictment offers a road map for the convoluted world of high-level drug dealing.

The 62-page Phillips indictment that federal authorities filed last September identifies several key modus operandi requiring the services of lawyers and money managers. They include: compartmentalizing the organization so that members of the conspiracy do not know what the others are doing; using fraudulently obtained loans to purchase investment properties, and drug proceeds to repay those loans; employing relatives, friends or money-laundering associates to open bank accounts and purchase expensive homes and cars; and making cash payments to attorneys representing co-conspirators and other drug traffickers to engender loyalty.

The question Judge Motz will be asking at David Lincoln’s sentencing on April 4 is: To what extent was he knowingly involved with more than simply a handful of bogus loans? The question Lincoln and his lawyer could be asking is: How did Rachel Donegan get off without facing a single night in prison?