Seattle Boat Dealer Charged With Laundering Drug Money

The president of a major Northwest boat dealership and one of his managers have been indicted on federal charges that they laundered money for drug dealers.

Mark Lawhead, 35, of Portland and Sumner and Catherine Michael, 33, of Beaverton, Ore., allegedly helped drug dealers in "buying a boat in a manner designed to hide where the money comes from and who really owns the boat," Assistant U.S. Attorney Charles Stuckey said yesterday.

Lawhead is the president of MasterCraft Boats Northwest and Michael runs his store in suburban Portland. Lawhead also has a dealership in Leschi.

They were arrested yesterday after an 11-month investigation by the Regional Organized Crime Narcotics Task Force. Undercover officers, posing as drug dealers, bought two boats from Lawhead and Michael.

In one of the deals, an undercover agent and an informant handed Lawhead $11,000 cash in payment for a boat, according to an affidavit by Special Agent Ronald Leikem of the Internal Revenue Service.

The informant told Lawhead it was drug money and they could not afford any mistakes that would lead to their detection by police.

"Lawhead said that he understood and that he would probably make three separate cash deposits, therefore getting around the $10,000 IRS requirement," Leikem wrote.

Federal law requires banks to report cash transactions of $10,000 or more. Lawhead told an undercover agent he had never filled out such reports.

Michael told an undercover agent that the company was the top-selling MasterCraft dealership in the world. The boats sell for $20,000 to $40,000.

Investigators served eight search warrants yesterday on homes and the boat dealerships in Portland and Seattle. They seized business records and $46,500 from the company's bank account at Seafirst Bank in Seattle, alleging that it was the money paid by the undercover agents.

Michael pleaded innocent in a brief court appearance in Portland. Lawhead, who was arrested in Sumner, appeared in federal court in Seattle but did not enter a plea.