From Sixth Street to Beirut

Texas Alcoholic Beverage Commission notice at Hyde, one of several bars caught in the money laundering case (Photo by Richard Whittaker)

If drugs, guns and nightclubs weren't eye catching enough, at this morning's detention hearing in the money laundering case against the Yassine family the Federal government threw everything from the Texas Syndicate to Hezbollah into the mix.

It was standing room only this morning in Judge Dennis Green's court on the fourth floor of the Federal Court House. Clerks were asking onlookers and journalists to smoosh together on the six open benches, and there were so many lawyers that they were instructed to wait their turn in the jury box. Finally, the ten defendants entered, four in the green and white striped uniforms marked with BSCO (for Bastrop County Sheriff's Office) and the other six in the green shirts and striped pants of Caldwell County.

During the three hour hearing, federal lawyers and witnesses from the FBI and the IRS started to lay out the bones of their case. It begins in 2006, when the FBI contacted what they called a "confidential human source" (or CHS) to help them investigate the Yassines. The alleged criminal activity began in Dec. 2007, the CHS brought some marijuana, but the meat of the case starts in Feb. 2008. The Feds allege that Mohammed "Steve Austin" Ali Yassine introduced the CHS to Nizar "Nino" Hakiki, who provided a kilo of cocaine to the CHS. The state argues that he also sold two guns – a nine millimeter and a 22 caliber pistol – to the CHS, who told Hakiki that he needed them to protect himself during drug deals Colorado. At the time Hakiki was employed in real estate, but now he works as a risk management specialist at the Texas Facilities Commission.

The Feds then say that Steve's brother Hussein "Mike" Ali Yassine and his executive assistant Marisse Marthe Ruales then agreed to use the multiple bars Yassine owns to launder that money, and then gave some of that money to their youngest brother, Hadi Ali Yassine, to help found his firm Famous Vodka.

So where do Hezbollah and the Texas Syndicate come into all of this? The state alleges that another co-defendant, Alejandro "Cueta" Melendrez, was a member of the drug gang and sold two small amounts of cocaine to the CHS. However, Melendrez attempted to tell the judge he was not a member of the organization. The federal attorneys also mentioned that there had been some kind of "physical altercation" between Melendrez and the Yassines in 2008, implying some kind of falling out at the time.

As for Hezbollah, that came up during the raids on the Yassine's homes. Their father apparently told the agents that his son's maternal uncle, Mohammed Ishmael, was connected to the Lebanese terror group. Whether there is any veracity to that claim or not, the Feds says they found cashiers checks valuing $45,000 made out to Ishmael. Even if the US attorney cannot make any of these claims stick, during testimony the FBI and IRS indicated that there are multiple other investigations – including tax evasion and witness tampering – hanging around several of the defendants. The IRS seemed particularly interested that Yassine Enterprises seemed to have under-reported their operating gross over the last half decade by between $7 million and $10 million.

Lawyers for the defendants started assembling what may be the terms of their defense. Several argued that, since many of the defendants are either foreign nationals or naturalized US citizens, prosecutors were using that to amp up the idea that they could be a flight risk. Also, since the activities from which the charges stemmed occurred between 2007 and 2009, there was a real question of whether they were a danger to the public (if they were, why hadn't the feds pulled them in three years ago?) Kristine Etter, representing Ruales, probed the question of whether Ruales was aware of the source of the money in question, especially since some of the conversations recorded by the FBI were in French and Arabic. Lawyers for Hussein Ali Yassine took a different tack, asking for their client to be released because he is such a big employer: Since the state has frozen all his assets, they reasoned, the court should allow others to post sureties on his behalf, so he could work with his civil lawyers to get his assets unfrozen and put the 150 to 200 employees in his clubs back to work.

Judge Green was having none of it, and refused to issue bond terms to either Melendrez or Mohammed and Hussein Ali Yassine: All three have been detained. He rejected a pretrial recommendation for a $500,000 cash bond or surety for Hussein. However, he released their brother Hadi on a $25,000 cash bond, and Ruales on $10,000 or 10% cash.

The state also released two men, both charged with distribution of more than 500 grams of cocaine and conspiracy to distribute, on bonds. Green ordered Amar Thabet Araf to be released on provision of $20,000 bail while Sami Derder must post a $25,000 bond. Both men could post 10% cash instead. Green took a similar recommendation for Hakiki under advisement, and was expected to make a decision by close of business today. However, the clerk of the court informed the Chronicle that decision has been pushed back until tomorrow.

The hearing is not over yet. Green removed the court appointed attorney for Edgar Orsini (charged with distribution of cocaine and conspiracy to distribute) after he discovered that Orsini owns two Mercedes and a Range Rover. As for the tenth defendant, Karim Faiq, his attorney Ben Florey said after the hearing that his client was simply a taxi driver who did not know what was happening in his cab, and said he expected the Feds to drop the charges of distribution and conspiracy to distribute charges against him. The hearing continues at 1pm tomorrow.