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ALBUQUERQUE, N.M. — Car dealer Reza Ella says Homeland Security targeted him over his heritage

Copyright © 2013 Albuquerque Journal

Federal law enforcement doesn’t like the way used car dealer Reza Ella does his banking, and as a result has seized $841,883.84 from his business and personal bank accounts.

A civil forfeiture action claims Ella’s Discount Auto Sales doesn’t generate enough business to account for more than $1.7 million he deposited in local banks over 11 months, and that he structured deposits to keep them under $10,000 to avoid having the banks file currency transaction reports with the Department of the Treasury.

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But Ella, who first started getting visits from federal agents around the time of the 9/11 attacks, says he’s done nothing wrong and that there is a more sinister motive behind the forfeiture action filed by the U.S. Attorney’s Office.

He contends federal agents from the Department of Homeland Security don’t understand his successful business on Fourth NW and that they singled him out because he is a naturalized American citizen from Iran.

“It’s my name. My ethnicity,” the successful car dealer said in an interview. “I don’t like saying that, but what other reason can they have for trying to destroy me, my business.”

“I like being American. I’m proud to be an American, but I feel like I’m under friendly fire.”

This isn’t his first go-round with federal agents.

In 2007, federal prosecutors tried to seize $489,732.02 through a civil action that ended with Ella getting almost all his money back. The feds got to keep a grand total of $12,000 according to the settlement agreement.

The U.S. Attorney’s Office rejects any allegation it is prosecuting Ella because of his Iranian heritage.

“To be clear, Mr. Ella’s national origin, ethnicity and/or religion played no role whatsoever in the United States’ decisions to file the two forfeiture actions,” the statement said. “Instead, the United States filed these actions based on bank records of Mr. Ella’s financial transactions and other information set forth in the civil complaints.”

In the 2007 case, the government accused Ella of structuring cash withdrawals from banks to avoid federal reporting requirements.

Ella’s attorney in that case, Robert Gorence, said, “Mr. Ella just wanted to get back to his business, or else we would have gone to trial.”

The latest case accuses him of structuring deposits to avoid reporting requirements.

But Ella said federal agents and prosecutors don’t understand his business.

Ella has been a used car dealer in Albuquerque for 23 years, running Discount Auto Sales and catering to people with bad or no credit and little money for a down payment.

Ella’s background

Ella came to the United States from Iran in 1978 on a student visa and attended colleges in Texas. He married, obtained a green card and lived in Oklahoma for a time. He became a naturalized citizen in the early 1990s and moved to Albuquerque after he was divorced.

He got into the used car business shortly after moving here and opened Discount Auto Sales.

Federal agents began coming to Ella’s car lot around the terrorist attacks on Sept. 11, 2001.

Ella says the agents were from U.S. Customs.

“They asked me about other people of Iranian descent,” he said.

Ella said he didn’t have much information to give the agents but they kept coming around for about two years.

“I’m not a political man,” Ella said. “I work at my business. I try to make it better.”

“I don’t give money to groups (either for or against the current regime) involved with Iranian politics,” he said.

He said he tries to be an observant Muslim but doesn’t consider himself a radical.

Then, in 2002, IRS agents came to his dealership and he talked to them about how he conducts his business. Since then, Ella said federal agents from different agencies have shown up to ask questions.

He said he agreed to the negotiated settlement in the 2007 forfeiture case to get most of his money back and because he believed that would end his problems with federal law enforcement.

“They ambush you,” he said. “They don’t tell you they are seizing your bank accounts. You find out when checks are returned.

“You go to the bank and everyone stares at you. They think you’re crooked.”

The latest case, he said, has left him exhausted and his business suffering.

Banking issues

It’s not the way Ella conducts his used car business that is the focus of the federal action. Rather, federal law enforcement agencies don’t like the way Ella makes bank deposits and allege he structures deposits to avoid generating Currency Transaction Reports designed to combat cash flows used by terror cells and drug cartels.

Ella finances and holds the car loans, then receives bi-weekly or monthly payments from the people who purchased his cars. Some pay in cash. Sometimes, he cashes their payroll checks.

He said he uses multiple banks for business reasons – one bank for out-of-state business, mostly consisting of car auctions; a second bank for local business transactions; and a third bank for his personal banking.

The key to the government case is the federal law requiring a financial institution to generate a Currency Transaction Report (CTR) when the financial institution is involved in a transaction for payment, receipt or transfer of United States coins or currency in an amount that exceeds $10,000. Failure to file such a report is a violation of Federal criminal law.

A person who “structures” deposits or withdrawals so a bank doesn’t have to file a CTR is subject to the same laws.

The federal complaint against Ella does not allege that he is involved in a criminal enterprise.

According to the forfeiture complaint, Ella and one of his employees made approximately 223 structured cash deposits totaling $1,728,722.21 into Ella/Discount Auto bank accounts at Wells Fargo Bank, Bank of Albuquerque and New Mexico Educators Federal Credit Union branch locations in Albuquerque between Sept. 19, 2011, and July 3, 2012.

Each deposit was less than $10,000 and in even dollar amounts, except one cash deposit that included 21 cents ($7,363.21 on 10/12/11).

Of the approximately 223 cash deposits, 37 were same-day deposits at two banks totaling over $10,000 per day.

On seven occasions, same-day deposits were made at three banks totaling over $10,000 per day, according to the complaint.

Gorence said that during the same time period covered by the complaint, Ella did sign currency transaction reports more than a dozen times.

Prosecutors allege that, based on the Homeland Security investigation, it does not appear that Discount Auto Sales, a small car dealership, generates sufficient vehicle sales to account for the cash deposits.

But Ella said in the interview that he has more than 900 car loans outstanding, although the number of overdue payments is increasing because he is preoccupied with the forfeiture case.

The complaint also brings up the last time he was targeted by federal agents.

“Ella had previously engaged in illegal structuring of cash transactions between 2005 and January 2007, Ella had structured cash withdrawals at Wells Fargo Bank. On February 23, 2007, the FBI executed warrants on two accounts at WFB held by Ella totaling $489,732.02. The funds were seized based on structured cash withdrawals as evidenced by bank records.”

The complaint doesn’t mention that all but $12,000 of that money was returned to Ella.

Headed to trial

The U.S. Attorney’s Office says facts are in dispute and they will be resolved through the discovery process and in open court hearings.

Ella’s attorneys, Gorence and Jason Bowles, said they don’t intend to negotiate a deal this time.

They have asked for a jury trial.