WINCHESTER, Ind. (AP) - Three prominent Winchester business and civic

leaders face charges stemming from the alleged laundering of money from

Colombian drug cartels.

A federal grand jury accused the operators of Silver Towne, a nationwide

dealer in rare coins and precious metals, with selling about $1 million in gold

bought with cocaine profits.

Those named in Wednesday's indictment were: Leon E. Hendrickson, 66, owner

of Silver Towne; David J. Hendrickson, 44, his son and partner; and Stanley R.

Hendrickson, 54, the owner's brother, company comptroller and current president

of Randolph County Bank.

"There are two sides to every story," said Thomas W. Farlow, an attorney for

Silver Towne. "We'll have our opportunity to tell our side. "We've cooperated

with the government in their investigation. We'll continue to do so."

The indictment said the gold was sold from late February to mid-April of

l990 to New York-based Manhattan Coin Corp. and Trend Precious Metals Co.

Leon Hendrickson faces eight money laundering charges. The two other men are

accused of not filing necessary forms with the Internal Revenue Service

concerning 11 cash transactions with Manhattan Coin totaling $1,094,745. The

suspects are scheduled to appear in federal court Tuesday.

The government alleges that Silver Towne was one of more than 20 businesses

used as part of a nationwide scheme to launder profits from Colombian cocaine

cartels. A suspected leader of that operation, Stephen Saccoccia, was indicted

in 1991 and convicted earlier this month in Rhode Island.

The indictment contends a Manhattan Coin official, who has since been

charged, bought gold from Silver Towne and on several occasions sent cans

filled with small bills as payment.

Government agents believe Silver Towne officials should have known they were

handling drug money because all the gold was paid for in cash - mostly in small


The government also contends the decision not to complete the proper IRS

forms is further proof that Silver Towne knew the money came from cocaine sales.

But Farlow said the size of the transaction wasn't unusual.

"The volume of their business is such that this sale, while it might appear

to be a large sale, is a pretty insignificant part of their business," Farlow


The government is continuing to investigate the firm's business transactions

with other people, said Donna Eide, an assistant U.S. attorney. Silver Towne

will remain open for business.

Silver Towne, which has been in business about 40 years, is among the

nation's largest coin dealers with sales last year of more than $65 million.

The company, an official licensee for the 10th Pan American Games in Indiana in

1987, designed and manufactured a line of products with the games logo,

including earrings, medallions and key chains.

"This is going to be a tough time for them," Farlow said of the

Hendricksons. "They've always been very proud of their business."

If convicted, Leon Hendrickson faces a maximum penalty of 10 years in prison

and a $1.48 million fine. David and Stanley Hendrickson each faces a maximum

penalty of five years in prison and a $250,000 fine.