Dov Shellef, Chemical Diversion, New York 2006

New York, NY – Dov Shellef was sentenced to 60 months in federal prison for his role in a complex scheme to illegally divert a chemical compound, CRC-113, intended for export to the domestic market. The case, originating in 2003 and culminating in a sentencing amendment in 2011, revealed a network that ultimately supplied a key ingredient for methamphetamine production in Mexico. Shellef, along with co-defendant Rubenstein, exploited loopholes in export regulations to profit from the illicit trade, evading taxes and defrauding the government.

The investigation, led by the Environmental Protection Agency’s Criminal Investigation Division, uncovered that Shellef and Rubenstein knowingly diverted CRC-113 – a precursor chemical – from its designated export channels. Rather than shipping the chemical abroad as intended, they sold it to All Discount, a domestic distributor, who then facilitated its sale to Mexican nationals. These individuals subsequently used the CRC-113 in the illegal manufacture of methamphetamine. Crucially, the pair failed to report any of these diverted exports, deliberately concealing their activities from federal authorities.

Initially charged in June 2003, Shellef faced a staggering 46 counts of wire fraud (18 U.S.C. 1343), 41 counts of racketeering (18 U.S.C. 1956(a)(1)(A)), one count of conspiracy (18 U.S.C. 371), and multiple tax violations – including failing to file required information returns (26 U.S.C. 7206(1)) and filing false tax returns (26 U.S.C. 7201). Rubenstein faced similar charges, totaling 43 counts of fraud and one count of conspiracy. After a trial in July 2005, both men were convicted on all counts.

The original sentencing in March 2006 saw Shellef receive a 70-month prison sentence, followed by 36 months of probation, a $8,800 special assessment, and a substantial order to pay $1,880,461 in restitution to the IRS, jointly with Rubenstein. Rubenstein received an 18-month prison sentence, 36 months probation, a $4,400 special assessment, a $10,000 federal fine, and was also held jointly liable for the $1,880,461 restitution. However, following a motion for acquittal, the court partially granted a reduction in Shellef’s sentence in February 2011, amending it to 60 months incarceration and removing the restitution requirement, but maintaining the probation period and a reduced special assessment of $5,300.

Key Facts

Defendant: Dov Shellef
Crime: Illegal diversion of CRC-113, a chemical precursor used in methamphetamine production.
Location: New York
Year: 2006 (charges filed 2003, sentencing amended 2011)
Violated Statutes: 18 U.S.C. 1343 (Wire Fraud), 18 U.S.C. 1956(a)(1)(A) (Racketeering), 18 U.S.C. 371 (Conspiracy), 26 U.S.C. 7206(1) & 26 U.S.C. 7201 (Tax Violations)
Penalties: Shellef received 60 months imprisonment, 36 months probation, and a $5,300 special assessment. Rubenstein received 18 months imprisonment, 36 months probation, a $4,400 special assessment, and a $10,000 fine. Both were jointly liable for $1,880,461 in IRS restitution initially.

The case highlights the critical intersection between environmental regulations and drug enforcement, demonstrating how seemingly innocuous chemicals can be exploited by criminal organizations. The EPA’s ongoing efforts to track and regulate these substances are vital in disrupting the supply chain for illicit drug manufacturing, both domestically and internationally. The amended sentencing, while reducing Shellef’s financial burden, does not diminish the severity of the crimes committed or the damage inflicted by the methamphetamine trade.

Source: EPA ECHO Enforcement Case Database

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