Feds: Seattle’s ‘Ice Nightclub’ a none-too-subtle front for meth money Olympia man alleged to have promised to launder more than $500k a month

If Steven Asir Thomas gets convicted on the federal charges he now faces, the club owner and purported money launderer won’t get any points for subtlety.

Federal prosecutors in Seattle contend Thomas tried to launder hundreds of thousands of dollars in methamphetamine money through his aptly named nightspot – Ice Nightclub.

According to charges filed earlier this month, neither Thomas’ Queen Anne club nor his money laundering ring ever really got off the ground. Informants turned on him before the club opened its doors and federal investigators claim to have watched drugs, money and guns flow through the business from the beginning.

Arrested Friday, Thomas, an Olympia resident, has been charged in U.S. District Court with conspiring to deal meth and money laundering.

Writing the court, a Homeland Security Investigations special agent said the investigation into Thomas’ fledgling business in October following a tip from a police informant.

At the time, Thomas planned to open Ice Nightclub at 332 5th Avenue North, the former home of several notoriously rowdy clubs. Thomas is alleged to have met several undercover agents while looking for drug traffickers who needed to legitimize their income.

The scheme Thomas proposed, as outlined by the HSI agent, was straightforward.

The club would report drug money as the proceeds of ticket sales; the actual ticket revenue would be paid directly to performers. According to charging papers, Thomas planned to take a 10 percent cut of the cleaned drug money and the legitimate income made through liquor sales.

“When you do shows … you can run up a few hundred thousand dollars in revenue on one show,” Thomas told an undercover agent, according to charging papers. “We can say we made $400,000 off of one event.”

Such an arrangement would solve a classic problem facing high-volume drug dealers – it’s surprisingly hard to spend drug money. Most major purchases – cars, homes – are reported to the government in some fashion, and large cash deposits raise red flags with banks and regulators.

Dealers with no reportable income have difficulty explaining how they paid cash for a house or a boat when the Internal Revenue Service comes calling. Foreign drug cartels must either clean the money so it can be deposited in a bank or physically remove it from the country.

Ice Nightclub was to provide a steady stream of cleaned money to methamphetamine dealers, the HSI agent said in court papers. The dealers would be paid by check to a “square-bear” – a licensed, taxpaying business – posing as a promoter.

Speaking with an undercover agent, Thomas explained there was almost no limit to how much money they could launder through the club, the agent continued.

“You can write off you shit, and it can all be totally legit,” Thomas told the undercover agent in October, according to charging papers. “You’ll get your tax forms and tax statements that says this is how much was paid out for the shows that were done and you guys are on your own at that point.”

Thomas is also alleged to have brokered a guns-for-meth deal on behalf of drug traffickers associated with a Mexican cartel.

According to charging papers, Thomas said he wanted to know if any of the guns had been used in killings and provided the agent with a list of weapons his cartel contacts were interested in.

As the scheme wore on, Thomas moved three test loads of methamphetamine around the West Coast, the agent continued. To do so, he is alleged to have relied on an informant and undercover agents.

Agents seized several pounds of methamphetamine during the investigation. The Mexico-made drugs were being moved north on Interstate 5 aboard long-distance buses.

Those seizures complicated Thomas’ plans to open Ice Nightclub, as he needed the money from the drug sales to refurnish the space, formerly home of Diamond Nightclub International and Element, the HSI agent said.

According to charging papers, Thomas laundered $20,000 for an agent posing as a meth dealer in December. He is alleged to have done so again in January for another undercover agent.

Currently jailed, Thomas is expected to appear for a preliminary hearing Tuesday before Magistrate Judge James Donohue at the U.S. District Court in Seattle. He has not yet entered a plea.

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Seattlepi.com reporter Levi Pulkkinen can be reached at 206-448-8348 or levipulkkinen@seattlepi.com. Follow Levi on Twitter at twitter.com/levipulk.