Jurors are told how drug money is laundered Manglitz trial opens in Baltimore federal court

June 04, 1996|By Caitlin Francke | Caitlin Francke,SUN STAFF

Marijuana trafficking is a billion-dollar business with one central problem -- how to conceal the profits. And Glenwood developer Philip Manglitz had a plan to hide them, federal prosecutors told a jury yesterday.

As Manglitz's money-laundering and drug conspiracy trial began in U.S. District Court in Baltimore, federal prosecutors outlined the staggering profits marijuana trafficking generates and the problems it causes for traffickers.

"A lot of cash like that generates a lot of attention," said Assistant U.S. Attorney Richard Kay, explaining that banks and other businesses have to report movements of large amounts of cash. "If you can't make large transactions [in cash], what do you do? That is why money-laundering was invented."

Prosecutors say Manglitz, 48, helped western Howard County drug wholesaler Randolph Ayersman and one of his alleged distributors launder more than $660,000 in illegal proceeds by selling them subdivision lots. They say Manglitz sold Ayersman and Dana Kleberg lots in return for drug money.

Defense attorneys argued that Manglitz was a legitimate businessman. Manglitz did sell lots to the two but never knew they were paying with drug money, they said.

"The reason we are here is because Ayersman and Kleberg are not who they seemed," said defense attorney Adam Hoffinger. "They were not who they seemed to Philip Manglitz or to all of the other legitimate businessmen with whom they did business."

Ayersman, a federal witness, imported more than 3 tons of marijuana to Maryland from 1984 to 1994. He earned $75,000 for every 300-pound load he brought from California, Kay said.

Ayersman is expected to testify that he gave Manglitz hundreds of thousands of dollars during a seven-year period.

Prosecutors say Manglitz helped conceal the amount of cash in each purchase by recording a lower selling price in his books.

Defense attorneys attacked the credibility of Ayersman and the other principal witnesses, saying they were desperate men looking to avoid prison.

Ayersman has pleaded guilty to drug conspiracy and money-laundering charges. Manglitz's former partner Ron Carter has pleaded guilty to tax evasion and is expected to testify. Kleberg, who has not been charged but is alleged to have been the main distributor, is cooperating with authorities.

"Ayersman and Kleberg had to give the government a body. A prominent well-to-do businessman like Philip Manglitz represented a perfect target," Hoffinger said.

The defense steered attention toward Carter, saying Manglitz's role in the business had declined in recent years. Carter handled the day-to-day business out of his home on Daisy Road in Woodbine.

When federal investigators searched Carter's home, they found $12,000 in a locked box and later $32,000 in a safe-deposit box, Hoffinger said. At Manglitz's Glenwood house, they found no "drugs, no drug paraphernalia, no cash, no guns," he said.

Pub Date: 6/04/96

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