CAR DEALER ACCUSED OF LAUNDERING CASH

Fortuna Ford, a car dealership on California's North Coast, is under
federal investigation for allegedly laundering money for Humboldt County
marijuana dealers, according to federal court documents.

Last month, agents from the Internal Revenue Service's Criminal
Investigation Division served a search warrant on the dealership, which is
in the tiny North Coast lumber town of Fortuna.

The investigators seized a wide variety of sales records and other business
documents from the dealership, including credit applications, bank
statements and canceled checks.

No criminal charges have been filed, but documents contained in the search
warrant application make it clear the agents were looking for evidence that
the company's customers had purchased automobiles with large sums of cash,
which the dealership then deposited in smaller amounts to avoid federal
reporting requirements.

``I am informed . . . that now located at the premises are fruits, evidence
and instrumentalities of criminal offenses against the United States,'' IRS
Special Agent Michael Hagstrom said in an affidavit.

Edward Tanferani, president of Fortuna Ford, did not return calls about the
investigation.

According to court records, the IRS apparently became suspicious when a
compliance officer visited the dealership in March 1996 to make sure the
company knew about federal regulations requiring that a special form be
filed each time a cash transaction involving more than $10,000 takes place.

The compliance officer noted several transactions reflected in company
records that showed a customer had initially paid a large amount of cash,
but the transaction was later voided and receipts were filed showing a
number of smaller cash payments.

For example, a Humboldt County man purchased a car with a cash value of
$14,000 in March 1994. A receipt filed at the time of the sale that showed
a $14,000 cash down payment was later voided, and two counter receipts with
different dates were written out to the man, showing a $6,400 payment on
March 29 and a $7,600 payment the next day.

Hagstrom's affidavit notes that Humboldt County narcotics officials
identified the man who purchased the car as a marijuana grower in southern
Humboldt County.

Some of the paperwork examined by the compliance officer had been handled
by a woman who was no longer working for Fortuna Ford. When the IRS
contacted her about the strange paperwork, she said she had been told to
structure the payments that way deliberately by Tanferani in order to avoid
currency transaction reports showing the large transactions.

©1998 San Francisco Chronicle Page A21