National Drug Trafficking And Money Laundering Organization In Sandy Springs Dismantled

ATLANTA – Jiles and Shannon Johnson, a husband and wife who owned the now closed KC Pit BBQ Restaurant in Sandy Springs, Ga., and Matthew Ware, the accountant for the restaurant, have been sentenced to federal prison.

“Businesses and professionals who use legitimate organizations to filter laundered drug proceeds denigrate legitimate earnings while destroying the jobs of those who work in those businesses,” said United States Attorney Sally Quillian Yates. “Illegal drugs lure many into that lifestyle with offers of big money, easily made. In the end, what really happens is lives are destroyed, businesses close, and the dealers go to jail. We will continue working to remove harmful drugs from our streets.”

“All of the defendants in this case are deserving of the sentences handed down.  Several of these individuals masked themselves as legitimate businessmen, while everyone lined their pockets with excessive profits gained from drug trafficking,” said Harry S. Sommers, the Special Agent in Charge of the DEA Atlanta Field Division.  “These sentences should serve as a clear reminder to those business operators who facilitate fraud and money laundering schemes, that while you think you may be flying under the radar, you are not.  It’s just a matter of time before you get caught and brought to justice.  I express gratitude to the law enforcement partners who helped make this case a success.”

George Frazier, Assistant Postal Inspector in Charge of the Atlanta Field Office stated, “This investigation was an excellent example of a partnership between local, state and federal law enforcement agencies across the country, working together to bring down a nationwide organized drug ring. I fully commend the hard work and countless hours put forth by all of the law enforcement agencies involved, which resulted in bringing these individuals in this case to justice.”

“We are proud to have worked with our law enforcement partners in disrupting this organization’s money laundering ability, the trafficking of drugs and the commission of crimes against our community,” stated Veronica F. Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “Pretending to operate legitimate businesses will not thwart law enforcement’s efforts in determining the true nature of the businesses and the crimes they promote.”

“This case goes to show the success of task force investigations, where local police detective’s team up with our federal counterparts and share our resources, experience and knowledge to bring down criminal enterprises.  This is a great example of the effectiveness of working together to reach a common goal, which is the protection of our community,” said Police Chief Kenneth DeSimone, Sandy Springs Police Department.

According to United States Attorney Yates, the charges, and other information presented in court: This large scale drug trafficking and money laundering organization coordinated (1) the distribution of thousands of kilograms of cocaine imported from Mexico and transported from California to Kansas City, Philadelphia and Washington D.C., and (2) the laundering of millions of dollars in drug proceeds in Georgia.  The organization coordinated its efforts through the KC PIT BBQ Restaurant in Sandy Springs, with the assistance of other businesses and professionals.    

In 2003, Jiles and Shannon Johnson were the owners of the KC PIT BBQ Restaurant.  Jiles Johnson was also a commercial truck driver.  To supplement his restaurant income, he began driving kilograms of cocaine from California to Philadelphia on behalf of Mark Walker.  Mark Walker was a Philadelphia cocaine distributor with access to street-level dealers, including his brother Sidney Walker, Ronald Martin, Lloyd Ellis and others.  Johnson also supplied cocaine to Kansas City and Washington D.C. 

As Johnson and Walker generated cash from cocaine sales, they purchased real estate in Georgia through Linda Tong, a local real estate broker.  Tong made “structured” deposits of over $500,000 into bank accounts.  “Structuring” occurs when a person breaks down over $10,000 in cash into smaller deposits under $10,000 to avoid the filing of a Currency Transaction Report (CTR) by a financial institution.  The Johnsons invested over three million dollars in real estate holdings, including an 80 acre motorcycle racetrack in Twiggs County.

Matthew Ware, the accountant for the KC PIT BBQ Restaurant, accepted bags of cash in excess of $10,000 from Jiles Johnson.  Ware provided the cash to some of his accounting firm’s clients and they repaid him with checks made payable to Johnson and his businesses.  When the cash volume increased, Ware connected Johnson to another client, financial planner Jacques Degaule, to assist with the laundering.  Degaule traveled to banks in Georgia, Missouri, Pennsylvania and New Jersey where he deposited over seven million dollars.  No IRS 8300 Forms were filed, which are required when a trade or business receives cash over $10,000.  The Johnsons used these laundered funds to underwrite their investments and their restaurant’s operations.  Evan Francis, a local car broker, coordinated the delivery of loads of cocaine, solicited customers, and structurally deposited cash.  Schawn Lemon Wortham laundered Mark Walker’s funds while he remained incarcerated.

The cocaine originated from Mexico and was supplied from California by Jose Gastelum and Lorenzo Vargas.  When Johnson experienced financial losses, Gastelum and Vargas collateralized his drug debt on behalf of the source of supply by taking ownership interests in his restaurant and racetrack.  Ware, the accountant, assisted them in the process. 

The organization unraveled in 2010 when Thallas Amie, Lavern Simon and Jiles Johnson attempted to deliver 35 kilograms of cocaine to Philadelphia. The cocaine was intercepted by law enforcement which ultimately led to the organization’s dismantlement.

All sentenced defendants entered guilty pleas except for the accountant, Ware, who was convicted after a jury trial in January 2013.  The sentencing’s were before United States District Judge Richard W. Story, as were other members of the organization who were sentenced for their respective roles as follows:

• Jiles Delwin Johnson, 47, of Sandy Springs, Ga., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine and one count of money laundering conspiracy in the Northern District of Georgia, and one count of distribution of cocaine in the Eastern District of Pennsylvania.  On December 19, 2013, Mr. Johnson was sentenced to 15 years in federal prison, followed by five years of supervised release. 

• Mark Lamont Walker, 46, of Cumming, Ga., and Philadelphia, Penn., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine and one count of money laundering conspiracy.  On September 3, 2013, Mr. Walker was sentenced to eight years, six months in federal prison to run consecutively to an existing nine year sentence he received in the Eastern District of Pennsylvania.  Combined, Mr. Walker’s sentence was 17 years, six months in federal prison, to be followed by five years of supervised release.

• Jose Marcial Gastelum, 33, of Chula Vista, Ca., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine.  On May 16, 2013, Mr. Gastelum was sentenced to 12 years, three months in federal prison, followed by five years of supervised release.

• Lorenzo Vargas, 32, of Fullerton, Ca., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine.  On October 13, 2011, Mr. Vargas was sentenced to ten years in federal prison, followed by five years of supervised release.

• Sidney Walker, 45, of Huntington, Penn., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine and one count of money laundering conspiracy.  On December 20, 2013, Mr. Walker was sentenced to 11 years and three months in federal prison, followed by five years of supervised release.

• Ronald Martin, 67, of Philadelphia, Penn., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine.  On November 26, 2013, Mr. Martin was sentenced to six years in federal prison, followed by five years of supervised release.  Mr. Martin received no credit against his imposed sentence for time previously served.

• Lloyd Ellis, 43, of Philadelphia, Penn., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine.  On October 10, 2013, Mr. Ellis was sentenced to 11 years in federal prison, followed by five years of supervised release.

• Evan Francis, 48, of Lawrenceville, Ga., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine and one count of money laundering conspiracy.  On September 3, 2013, Mr. Francis was sentenced to ten years, one month in federal prison, followed by five years of supervised release.

• Thallas Amie, 32, of Sandy Springs, Ga., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine.  On September 4, 2013, Mr. Amie was sentenced to six years, six months in federal prison, followed by five years of supervised release.

• Laverne Simon, 54, of Forest Park, Ga., entered a guilty plea to one count of conspiracy to possess with the intent to distribute cocaine.  On September 4, 2013, Mr. Simon was sentenced to seven years in federal prison, followed by five years of supervised release.

• Matthew Ware, 57, of Tucker, Ga., was convicted after a jury trial in January 2013, on one count of money laundering conspiracy.  On October 29, 2013, Mr. Ware was sentenced to six years in federal prison, followed by three years of supervised release.

• Jacques Degaule, 52, of Atlanta, Ga., entered a guilty plea to two counts of interstate transportation in aid of racketeering enterprises.  On September 4, 2013, Mr. Degaule was sentenced to three years in federal prison, followed by one year of supervised release.  Mr. Degaule received no credit against his sentence for time previously served.

• Shannon Renee Johnson, 46, of Sandy Springs, Ga., entered a guilty plea to one count of money laundering conspiracy.  On December 19, 2013, Ms. Johnson was sentenced to three years in federal prison, followed by three years of supervised release.

• Schwan Lemon-Wortham, 52, of Sandy Springs, Ga., entered a guilty plea to one count of money laundering conspiracy.  On November 26, 2013, Ms. Wortham was sentenced to two years, six months in federal prison, followed by three years of supervised release.

• Linda Tong, 68, of Alpharetta, Ga., entered a guilty plea to one count of Structuring.  On September 4, 2013, Ms. Tong was sentenced to three years of probation with the special condition of ten months home detention.

In addition, related cases were filed against defendants in the Western District of Missouri, the Eastern District of Pennsylvania, and the Southern District of New York.

The investigation and prosecution of this case was a coordinated effort with the Drug Enforcement Administration (DEA), the United States Postal Inspection Service (USPIS), the Internal Revenue Service-Criminal Investigations (IRS-CI), and the Sandy Springs Police Department through the Atlanta-Carolinas HIDTA High Intensity Drug Trafficking Area (HIDTA) Task Force and the Organized Crime Drug Enforcement Task Forces (OCDETF) Program.  Other agencies that assisted in the investigation include the United States Marshal Service; Federal Bureau of Investigation (FBI) Philadelphia; Gwinnett County District Attorney=s Office; Gwinnett County Police Department; Georgia Bureau of Investigation; Georgia Department of Corrections; Forsyth County Sheriff=s Office; Atlanta Police Department; Heard County Sheriff=s Office; New Mexico State Police, Arkansas State Police; Los Angeles Police Department; Philadelphia Police Department and the Tennessee Highway Patrol.  Other United States Attorney=s Offices that assisted in this investigation include: the Eastern District of Pennsylvania; Southern District of New York; District of Massachusetts; Eastern District of Missouri; Southern District of California; Southern District of Florida; and the Western District of Arkansas.

Assistant United States Attorneys Michael Smith, C. Brock Brockington, R. Scott Ferber and G. Jeffery Viscomi prosecuted the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.