Alan Kashi, accused of being a jeweler to drug dealers, pleaded guilty Tuesday to violating an IRS reporting requirement, and his attorney said he's paying the government nearly $1 million and encouraging others to respect the law.
Mr. Kashi, 32, of Squirrel Hill was charged following a yearlong probe by IRS Criminal Investigations, said assistant U.S. attorney Carolyn Bloch. She said informants told agents that Mr. Kashi "would willingly agree not to prepare the required paperwork" that merchants must submit to the IRS when they receive $10,000 or more.
Twice in 2012 an IRS agent went to the Downtown Kashi Jewelers store and bought Breitling watches for more than $10,000, telling store staff that the money came from cocaine distribution, according to an affidavit filed in federal court. The IRS investigator wrote in the affidavit that the Fifth Avenue store "engaged in numerous cash transactions in excess of $10,000 with known drug traffickers."
Mr. Kashi pleaded guilty to one count of failing to file a report of a transaction of $10,000 or more.
"I'm here to accept my responsibility," he told U.S. District Judge Gustave Diamond.
"I think that probably a number of people who deal in drugs buy jewelry at both Kashi and all the other jewelry stores," said Mr. Kashi's attorney, Stanton Levenson. "I would say that the Kashis have certainly become much more mindful" of such matters, he said.
"If somebody walked into Kashi and said, 'Look I'm a drug dealer, I've got $11,000 and I want to buy a watch,' they aren't going to do business with the guy."
He added that Mr. Kashi has posted on YouTube public service videos regarding the requirement that merchants report five-figure transactions.
Mr. Kashi's plea agreement demands that he forfeit to the federal government the $933,075 that IRS agents found in the Downtown store's two safes during a February search.
"That was money that had not yet been reported," said Mr. Levenson. "The government took the position that it was unreported income and therefore forfeitable to the government."
Federal sentencing guidelines suggest he could face upwards of six months in prison, but they don't rule out probation. Mr. Kashi could also face fines.
Judge Diamond scheduled sentencing for May 14.
Rich Lord: firstname.lastname@example.org or 412-263-1542. Twitter: @richelord. First Published January 14, 2014 12:52 PM