Limousine Company Owner Pleads Guilty to Racketeering Charge
LAS VEGAS, NV—The owner of CLS Transportation, a Las Vegas, Nev. limousine company, has pleaded guilty to a federal racketeering charge for using the company to commit and promote criminal activities, including prostitution, drug trafficking, and financial fraud, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
Charles Horky, 54, of Las Vegas, pleaded guilty on Thursday, Dec. 18, before U.S. District Judge Robert C. Jones to one count of conspiracy to conduct or participate in an enterprise engaged in a pattern of racketeering activity. Horky faces up to 20 years in prison and a $250,000 fine, and is scheduled to be sentenced on April 16, 2015.
“As this case demonstrates, persons who commit serious criminal offenses as part of an organized criminal enterprise, including prostitution, drug dealing and credit card and bank fraud, will be charged with federal racketeering crimes,” said U.S. Attorney Bogden. “Through the guilty pleas of these defendants and the dismantling of their racketeering organization, law enforcement has closed the books on Charles Horky and his coconspirators and the limousine service used to further a number of criminal activities and schemes.”
Five others charged in the scheme have also pleaded guilty, including CLS office manager Kimberly Flores, CLS accountant and financial advisor Archie Granata, two limousine drivers, James Reda and Clarence Adams, and Solomon Zemedhun, who was supplying controlled substances to the organization. Two other limousine drivers and a drug supplier are pending trial.
According to Horky’s plea agreement, Horky owned a controlling interest in and was the managing member of CLS Nevada, LLC, which operated as CLS Transportation, Las Vegas. Beginning no later than September 2008 and continuing through November 2012, Horky and his co-defendants used the limousine service to conduct and facilitate a broad range of criminal activities, including selling controlled substances, facilitating illegal prostitution, credit card fraud, bank fraud and check-kiting. Horky encouraged and directed the criminal activity, and required drivers to pay him a cut of the money they were receiving from the criminal activities.
In addition to distributing illegal drugs from CLS limousines and procuring prostitutes for CLS customers, Horky, Flores, and Granata devised and executed a scheme to defraud American Express by placing fraudulent unauthorized transactions on the American Express accounts of CLS customers. Many of the customers disputed the charges, and American Express notified CLS of the fraudulent transactions and executed charge-backs. American Express eventually cancelled the CLS Transportation account, but the defendants perpetuated the fraudulent scheme by opening successive additional American Express merchant accounts under false names, aliases and nominees. In this manner, Horky, Flores, Granata and others, fraudulently obtained more than $2.8 million from American Express. Horky, Flores and Granata also devised a check-kiting scheme in which they drew checks on CLS Transportation’s payroll account knowing that the account did not contain sufficient funds. Horky, Flores, and Granata knowingly issued themselves and their associates thousands of checks on the account without sufficient funds to honor the checks.
The plea agreement also states that Horky agreed to the entry of a criminal forfeiture money judgment of $5.2 million. He is released on a personal recognizance bond pending sentencing.
The case is being investigated by the FBI and the Las Vegas Metropolitan Police Department through the Safe Streets Task Force.