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Leroy Mitchan Jr., Structuring Financial Transactions, Texas 2013
A shocking case of financial deceit has rocked the Corpus Christi community, with two individuals, Leroy Mitchan Jr. and Justin Colmenero, being sentenced for structuring financial transactions to avoid reporting requirements. The complex case, involving multiple agencies, highlights the cunning methods employed by those who seek to evade the law.
Mitchan, 34, the co-owner of Mr. Nice Guys Smoke Shop, and Colmenero, a 30-year-old real estate agent, were found guilty of participating in a conspiracy to structure more than $100,000 in cash deposit transactions over a 12-month period with a domestic financial institution. Their actions, aimed at avoiding the reporting requirements of the bank, have now landed them in hot water.
According to the investigation, Mitchan and his wife, Kimberly Davis, 27, were the owners of Mr. Nice Guys Smoke Shop, as well as another smoke shop and a used car dealership. The Corpus Christi Police Department seized over 40.93 grams of synthetic marijuana during undercover purchases from both smoke shops. The subsequent search warrants revealed 1.5 kilograms of synthetic marijuana, along with various smoking paraphernalia and detailed drug ledgers.
The Drug Enforcement Administration (DEA) became involved after discovering that Mitchan and Davis had recently purchased three real estate properties in Corpus Christi, making payments with large cash transactions. The Internal Revenue Service – Criminal Investigation (IRS-CI) then initiated a financial investigation, uncovering several cash deposits under $10,000.
The Bank Secrecy Act of 1970 requires financial institutions to file reports with the Treasury of cash transactions exceeding $10,000. In one instance, Davis made three separate deposits in one morning at Members First Credit Union, totaling $44,101. Mitchan admitted to working with Colmenero, providing him with large amounts of cash to deposit into his personal bank account and later withdraw in the form of cashier’s checks or via Moneygram.
The court handed down severe sentences, with Mitchan receiving 20 months to be followed by one year of supervised release. Colmenero was given three years of probation, with a $6,000 fine. The case serves as a stark reminder of the consequences of attempting to evade the law through financial deceit.
Key Facts
- State: Texas
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release ↗
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