Lawyer, client accused of laundering drug money

July 22, 1995|By Marcia Myers | Marcia Myers,Sun Staff Writer

A Baltimore lawyer and a client were indicted by a federal grand jury Thursday, accused of conspiring to launder "drug" money that was really part of an FBI sting operation.

Attorney Zell R. Margolis, 38, of Owings Mills and Gregory A. Scroggins, 41, of Randallstown were charged in a 21-count indictment.

According to court documents:

In June 1994, undercover FBI agent Edward Dickson posed as a drug trafficker seeking help in setting up a business. His role as owner was to be kept secret and his name was not to be used in the official paperwork, he told the lawyer. Mr. Scroggins introduced Mr. Dickson to his lawyer Mr. Margolis, who is a partner in the small Baltimore law firm Margolis and Margolis.

In October, Mr. Dickson gave Mr. Margolis $50,000, which Mr. Margolis deposited over time into his law firm's escrow account in increments of less than $10,000. By keeping the deposit amounts under that figure, he avoided federal requirements for detailed reports about all deposits and withdrawals of $10,000 or more.

Mr. Margolis also arranged for a person to be resident agent of the corporation, and he filed the company's articles of incorporation.

In April, Mr. Margolis issued three checks for $9,000 each, with the intention of promoting what he believed was drug trafficking, and to avoid the federal reporting requirements for the transactions, according to the indictment.

The indictment charges both men with money laundering conspiracy, which carries penalties of up to five years in prison and a $250,000 fine. Mr. Margolis also was indicted on 20 other related charges.

"I've been over the evidence, and I firmly believe Mr. Margolis is not guilty of anything," said his lawyer, Stephen H. Sacks. "This will go to trial -- there's not doubt about that."

Mr. Scroggins, whose home telephone is unlisted, could not be reached for comment.

Over the years, Mr. Scroggins has operated several businesses in Baltimore, including a beauty salon and several dance clubs.

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