Date: Aug. 28, 2024 Contact: newsroom@ci.irs.gov $4.3 million in goods were resold on Amazon and eBay over a three-year period PITTSBURGH — After deliberating for approximately 5 hours, a federal jury found Pittsburgh resident Durrell Waters guilty of five counts of money laundering and conspiracy in connection with the sale and interstate transportation of stolen goods, United States Attorney Eric G. Olshan announced today. Waters was tried before Chief United States District Judge Mark R. Hornak in Pittsburgh. He was found guilty of one count of conspiracy and four counts of money laundering. According to evidence presented during the two-and-a-half-week trial, Waters was one of the primary owners of a series of second-hand or resale businesses called Trader Electronics, Last Call Entertainment, and The Outlet. Waters conspired with others to use these businesses as a front for a criminal fencing operation that sold over the internet a wide variety of health and beauty aids and over-the-counter medications. From 2013 through 2016, retailers in the greater Pittsburgh area experienced a drastic uptick in the volume of thefts occurring at their stores. The investigation into those thefts led to the discovery that Waters’ stores and similar stores in the area engaged in high-volume purchases of brand-new retail health and beauty aids and other products, such as new-release DVDs, from walk-in sellers who had shoplifted the items. The evidence established that, throughout this time, Waters and his co-conspirators knew that the vast majority of the products they were buying were stolen. The health and beauty aids included items like teeth whiteners, vitamins, hair and skin care products, makeup, and other similar items. Store records reflected that Waters and his businesses purchased hundreds of thousands of brand-new items from a group of repeat shoplifters. Waters and his businesses then resold that stolen property online via several Amazon and eBay storefronts, with the proceeds from the stores’ main Amazon account totaling over $4.3 million during the conspiracy. Walk-in sellers to the Trader Electronics stores, several of whom testified during the trial, were often people experiencing drug addiction who would routinely steal large amounts of the products to fund their addiction by selling them at Waters’ and his co-conspirators’ stores. In addition to knowing that the items were stolen when purchasing them, Waters on several occasions bailed some of those same so-called “boosters” out of jail following their arrests for stealing goods and allowed the individuals to repay him the bail money in the form of other stolen goods. “Durrell Waters and his conspirators brazenly used their second-hand stores as a front for fencing massive amounts of shoplifted retail products—some with the store identification and security stickers still intact—that they then turned around and sold for millions of dollars to online customers across the United States,” said U.S. Attorney Olshan. “To pull off their scheme, they relied on desperate people deep in the throes of addiction to maintain the flow of stolen goods, using them to steal from and ultimately undercut legitimate retailers. The ‘boosters’ in this case were reportedly lined up down the street outside Waters’ stores in the morning—waiting to get their first cash of the day so they could pay their dealers. This successful prosecution is the result of a regional effort involving the cooperation of many local law enforcement agencies, as well as the IRS, FBI, and U.S. Postal Inspection Service. We are committed to holding accountable those who would exploit the opioid epidemic as a way to line their pockets.” “Today’s verdict reflects that those who commit financial crimes such as money laundering, and who steal and profit from money to which they were not entitled, will be held accountable,” said IRS-CI Philadelphia Field Office Acting Special Agent in Charge Denise Leuenberger. “It should also serve as notice to others not to take part in similar unlawful conduct.” “Legitimate businesses and the greater community suffer when fraud and money laundering take place,” said FBI Pittsburgh Special Agent in Charge Kevin Rojek. “The ripple effect of consequences from these criminal acts undermines the foundations of fairness and trust in the economy. The FBI and our partners continue to work diligently to investigate and bring to justice those who feel they can get ahead through criminal means.” Waters’ date of sentencing will be determined by the Court. The law provides for a maximum sentence of ten years in prison and a fine of $250,000 on each money laundering count. The conspiracy offense carries a maximum sentence of five years in prison and a fine of $250,000 or twice the gross pecuniary gain associated with the offense, whichever is greater. Under the federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offenses and the prior criminal history, if any, of the defendant. Waters’ co-defendant and co-owner of the various resale shops, Anthony Costanzo, 35, of Carnegie, Pennsylvania, pleaded guilty on July 24, 2024, to four counts of engaging in monetary transactions involving property from an unlawful act. His sentencing is scheduled for Dec. 17, 2024. Waters is the eighth and final resale store owner to be found guilty of similar schemes that occurred during the same time and were part of the same investigation. Thach Duc Le, Milton Barr, Shane McFall, Michael McDavid, Qamar Zaman, and Aliya Zaman all pleaded guilty to similar charges related to stores affiliated either with Waters and Costanzo or another entity known as Ninja Entertainment. Assistant United States Attorneys James R. Wilson and Benjamin C. Dobkin are prosecuting the case on behalf of the government. The IRS Criminal Investigation (CI), Federal Bureau of Investigation, and United States Postal Inspection Service conducted the investigation that led to the prosecution of Waters. Police departments from the City of Pittsburgh, Ross Township, and Shaler Township also assisted in the investigation. CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
