Two former Myrtle Beach club owners were sentenced to less than four years in a federal courtroom in San Francisco, Calif., Tuesday afternoon for their part in a racketeering and money laundering operation instituted under the premise of a drug trafficking conspiracy.
Prosecutors said in a news release last year that Michael Rose, owner of the former The Gold Club gentleman’s club in Myrtle Beach, “operated and controlled PML Clubs,” conspiring through the business and with associates “to conduct the affairs of an enterprise through a pattern of racketeering involving money laundering, bank fraud and drug trafficking.”
But attorneys for Rose and another accomplice said they lived law-abiding lives until they were suckered into criminal activity by an undercover government agent, who prosecutors say was on the hunt for bigger criminals in Russia.
Rose was sentenced to serve three years and four months in federal prison and was ordered to surrender for the start of his prison sentence on Aug. 2.
A 132-count indictment filed last year accused Rose; Vladimir Handl, owner of Heat Ultra Lounge; Peter Scalise, owner of Zest Restaurant; and David Gaither, a former Myrtle Beach police officer, of working in conjunction with others from outside the area to keep the conspiracy alive.
Handl was sentenced to serve three years and eight months in federal prison beginning Aug. 1. Early release and parole does not apply to federal sentences.
Rose’s attorney petitioned the court to sentence his client to “time served,” saying although Rose knew what he was doing was criminal, he was lured into the act by an undercover agent.
“Rose is a fundamentally good man,” Solomon Wisenberg told the court. “Through hard work and a natural bent for business, he turned himself into a successful entrepreneur with a chain of nightclubs up and down the east coast. Mike (Rose) was legendary within the Gentlemen’s Club industry for ethical integrity toward colleagues, fair dealing with entertainers and extraordinary concern for his employees.”
(Rose’s) idyllic world came to an abrupt end on March 18, 2015, when he was arrested in the middle of the night for his involvement in this crime.
Solomon Wisenberg, attorney for Mike Rose
Wisenberg said Rose “donated time, money and organizational skills to raise thousands of dollars for local charities.” And for three years, Rose “delivered gifts and hot meals to hundreds of disadvantaged children at Christmas, organized and financed a huge buffet lunch for first responders and paid out of his own wallet to keep multiple employees from going homeless.”
But in court documents, the attorney said Rose’s “idyllic world came to an abrupt end on March 18, 2015, when he was arrested in the middle of the night for his involvement in this crime.”
Rose pleaded guilty Jan. 25 to 109 counts involving charges of racketeering, money laundering and conspiracy to distribute narcotics.
Through a plea agreement, Rose confessed: “I, in agreement with others, engaged in financial transactions involving proceeds I believed to be derived from drug trafficking with the intent to conceal and disguise the nature, location and source of the proceeds.”
Rose told the court he and/or his accomplices “accepted cash” that he “believed was derived from drug trafficking, deposited it into business bank accounts” he and/or his accomplices controlled “and then returned the cash to the owner via check or wire transfers, keeping approximately 10 percent of the cash as the money laundering fee” from May 2012 through December 2014.
Rose admitted he and/or his accomplices also “created false business records to justify the checks and wire transfers sent to the owner of the cash,” according to court records.
The government helped turn Mike (Rose) from a decent, hardworking, job-creating, tax-paying, law-abiding citizen into a criminal.
Solomon Wisenberg, attorney for Mike Rose
But Rose’s attorney said his client was lured into the criminal conspiracy by an undercover government agent and asked the court to grant him “time served.”
“The government helped turn Mike (Rose) from a decent, hardworking, job-creating, tax-paying, law-abiding citizen into a criminal,” Solomon stated in a court record.
Prosecutors disagreed, citing transcripts from a trial that showed the “most interesting targets in the case were these high-level Russian money launderers, which we estimated from one set of financial documents to have laundered $56 million.”
Prosecutors also said the undercover agent gave Rose multiple chances to quit the enterprise, telling Rose in recordings presented at trial: “If you want out you let me know. If you decided this is not what you want, you let me know.”
Prosecutors asked the court to sentence Rose to seven years and three months in prison.
Handl was found guilty of 122 counts of racketeering, money laundering and conspiracy to distribute a controlled substance at a bench trial Jan. 22.
“Vladimir Handl freely agreed to launder money for a person he believed belonged to a drug cartel,” said his attorney, Rees Morgan. “He also eventually agreed to engage in a drug transaction with this person. These egregious decisions have ruined him financially, shamed him before his family and his community, devastated his personal and professional reputation and will haunt him for the rest of his life.
After a life of hard work aimed at achieving the American dream, he let the lure of easy money overcome him.
Rees Morgan, attorney for Vladimir Handl
“After a life of hard work aimed at achieving the American dream, he let the lure of easy money overcome him,” Handl’s attorney said. “The fact that he was motivated by financial setbacks and a desire to take care of his family, that he never before had been involved in any criminal activity, and that to that point in his life he had been a hard-working and contributing member of his community do not excuse his decisions or expunge his guilt.”
Morgan said Handl “lived a law-abiding and laudatory life” until he met the undercover agent, who set in motion everything Handl would eventually be charged with and found guilty of committing.
He said it was the undercover agent, who “determined when and how much money to launder” and “who urged Vlad (Handl) to buy more drugs than he could afford.”
Handl’s attorney petitioned the court for a sentence “no longer than a year and a day.”
Scalise pleaded guilty to 17 counts, including charges of racketeering, money laundering, racketeering conspiracy and money laundering conspiracy on Jan. 5. He is set to be sentenced at 2 p.m. Aug. 23 in a federal courtroom in San Francisco.
Gaither has yet to be tried on charges of racketeering, racketeering conspiracy, money laundering conspiracy and conspiring to distribute a controlled substance.