A family crime organization trafficked more than $6.6 million in black market cigarettes and more in illegal foreign drugs through a Baltimore restaurant and a Pikesville pharmacy that received a Baltimore County-backed loan, authorities said in a federal indictment that was unsealed Wednesday.
Authorities said the "Yusufov organization" laundered the proceeds of their operations through wire transfers to Eastern Europe. Some of those accused also established themselves as legitimate businesspeople in the community.
Eleven people were arrested Wednesday, including the owner of Health-Way pharmacy on Reisterstown Road, which moved there with $300,000 in public financing and has since been recognized by the Pikesville Chamber of Commerce for its role in helping to revitalize that community's downtown business district.
Also charged was the proprietor of the Europe Restaurant, just down the street and over the city line. The business, tucked away along the busy corridor without a visible sign, is popular among area Russians.
Authorities said most members of the family are of Azerbaijani descent.
Family members used the pharmacy and restaurant to further their illegal trade, authorities said. The defendants are accused of buying cigarettes in Maryland and reselling them in New York, where the taxes are higher.
Pharmacy owner Salim Yusufov was charged with selling prescription drugs from Germany and Eastern Europe that are not approved by the FDA, according to a second indictment.
Authorities say he received more than $81,000 in "kickbacks" for the contraband cigarette transactions, and that money was laundered though the business. He could not be reached for comment and did not have a lawyer listed in online court records.
Baltimore County gave Health-Way a loan in 2010 to help it move from a nearby strip mall to its current location on Reisterstown Road and Sudbrook Lane. Under the terms of the loan, the business has not yet been required to pay back the money.
The loan was intended to help the Yusufov family demolish vacant properties to make way for the 10,000-square-foot retail and office center now anchored by the pharmacy. The indictment Wednesday left business leaders wondering what would become of the crucial intersection.
"I'm shocked that this is all taking place," said Jessica Normington, executive director of the Pikesville Chamber of Commerce. "People were in and out all the time."
Normington said she worried about the specter of a "big vacant building where there was once a thriving pharmacy."
County officials, who awarded the loan from a $1 million fund intended to revitalize downtown Pikesville, said they reviewed the pharmacy owner's financial history before granting the loan. The business also borrowed more than $1.7 million from Northwest Savings Bank, according to county loan documents.
"Prior to issuing the loan, the County conducted a full review of credit reports, as did the private bank that provided funding for the project," county spokeswoman Fronda Cohen said in an email. "The County and the bank have rights to call the note in default for illegal activity, which is typically included in all of the County loan documents."
Cohen said the county would not comment further.
Alan Zukerberg, president of Pikesville Communities Corp., a group that represents neighborhood associations, said it was "outrageous" that the county gives such loans to businesses.
He said the stretch of Reisterstown Road where the pharmacy is located is critical to Pikesville's economic vitality.
"I'm sure the community will have concerns about a vacant building," Zukerberg said. "It's a very important commercial district."
On Wednesday morning, the parking lot of Health-Way was packed with unmarked police cars. At the back door, a uniformed county police officer turned away customers as they attempted to pick up prescriptions. Inside, plainclothes officers questioned employees.
When Health-Way received the county loan, Timur Yusufov described the business as a "one-stop shop" for homeopathic medical supplies and equipment provided to customers with a personal touch.
Authorities said Elmar "Eric" Rakhamimov, the owner of the Europe Restaurant, bought about $5.4 million worth of cigarettes, which they said were delivered and stored at his home on Woodsyde Court in Owings Mills and at the restaurant.
A man who answered the phone at his home declined to comment.
From Maryland, the cigarettes were taken to New York for resale. Maryland levies a tax of $2 per pack or $20 per carton. New York takes more than twice as much: $4.35 per pack and $43.50 per carton.
Authorities said the group could make between $15 and $20 on a carton of cigarettes.
Elmar Rakhamimov, Artur Zakharyan and Ilgar Rakhamimov acted as a broker, middleman and distributor of the cigarettes, authorities said. Nikolay Zakharyan, Adam Azerman, Shamil Novakhov and Ruslan Ykiew took them to New York and other cities to sell, they said.
Authorities said they laundered the profits through banks in Latvia, Cyprus and Estonia. The banks would return the funds disguised as business payments for medical supplies or other equipment, they said.
At midmorning Wednesday, a neon "open" sign remained on at the Europe Restaurant and employees continued to serve customers from trays of deli meats, pickled vegetables and delicate desserts in a long glass case.
Next to the door were stacks of fliers and newspapers in Cyrillic writing, along with advertisements for vodka in Cyrillic on the wall.
A woman behind the counter declined to comment.
twitter.com/aliknezCopyright © 2015, The Baltimore Sun