SAN DIEGO – San Diego criminal defense attorney James Warner pleaded guilty today to two federal felony offenses, admitting that he laundered $100,000 of a client’s drug trafficking proceeds and then tampered with a potential witness in the case.
Warner, 65, a San Diego resident who has been a member of the California bar since December of 1974, pleaded guilty before United States District Judge Jeffrey T. Miller to conspiracy to launder drug proceeds and attempted harassment of a witness.
At today’s hearing in United States District Court in San Diego, which was Warner’s first court appearance in this case, bond was set at $5,000. Judge Miller also scheduled a sentencing hearing for October 16, at which time Warner will face a statutory maximum sentence of 23 years in federal prison.
According to the plea agreement filed today, federal drug agents searched the home and business of one of Warner’s clients in May of 2012. The drug trafficker told Warner that agents had overlooked $100,000 in cash during their search, and Warner agreed to conceal the money.
As part of the money laundering scheme, Warner took the $100,000 – which he knew to be drug proceeds – and invested it in an off-shore business. According to his plea agreement, Warner used his own funds from his U.S. bank accounts and wired approximately $99,965 to an off-shore bank account in the British Virgin Islands. Warner then structured the $100,000 he received from the drug trafficker into his personal and business bank accounts to further conceal and disguise the nature of the drug proceeds. Structuring is the breaking up of cash deposits under $10,000 to avoid bank reporting requirements.
According to the plea agreement, Warner created a fictitious corporation named Grenadine Development Inc., and opened a bank account in the name of Grenadine Development Inc., to issue checks to the drug trafficker.
To further conceal his criminal activity, Warner admitted that he failed to file an IRS Form 8300 “Report of Cash Payments Over $10,000 received in a trade or business” which was required to be filed by defendant Warner when he received currency greater than $10,000 in his business as an attorney.
According to his plea agreement, Warner also admitted that he tampered with a witness when he told his client, a drug trafficker identified as “T.K.,” that he should pay legal fees of another drug trafficker to Warner, to prevent him from cooperating against T.K. Warner further told T.K. that if a court-appointed taxpayer-funded lawyer would “squeeze” the other trafficker to cooperate against T.K.
Federal search warrants were executed at Warner’s law office and his residence on September 11, 2013, following an investigation by IRS – Criminal Investigation and the Drug Enforcement Administration/Narcotics Task Force.
As part of his guilty plea, Warner agreed to a criminal forfeiture in the amount of $100,000 – the sum that was laundered. Warner also agreed to administratively forfeit approximately $200,080 in cash which was seized from his law office during the execution of a federal search warrant, along with $34,527.60 seized from Warner’s personal and business accounts.
Erick Martinez, Special Agent in Charge for IRS – Criminal Investigation, commented that James Warner is a well-known criminal defense attorney in San Diego, who devised a complex scheme to launder drug money. “Mr. Warner’s efforts were matched by the financial skill set and determination of our special agents. Today’s admission of guilt by Mr. Warner is another example of IRS Criminal Investigation’s continued commitment to protect the integrity of the nation’s financial system from illicit activity.”
DEA San Diego Special Agent in Charge William R. Sherman, stated: “Individuals who assist drug traffickers in their endeavors will be held just as accountable as the person who is actually selling the drugs. Regardless of your profession, if you assist drug dealers with their criminal activities, you will be punished. The fines assessed show the seriousness of getting involved in this kind of illegal activity.”
The case is being prosecuted by San Diego-based Assistant United States Attorney Sherri Walker Hobson. The United States Attorney’s Office in San Diego was recused from the matter, and the prosecution was supervised by the United States Attorney’s Office in Los Angeles.
Media inquiries may be directed to Assistant U.S. Attorney Sherri Walker Hobson, (619) 546-6986.