A Pennsylvania man who pleaded guilty in 2014 to federal charges in connection with a February 2013 explosion at a Wilmington storage facility and other charges out of Maryland and Pennsylvania was sentenced Wednesday to more than 11 years in federal prison.
Istvan Merchenthaler, 45, formerly of Downingtown in Pennsylvania, was sentenced by U.S. District Judge Robert F. Kelley to 140 months in federal prison on multiple charges, including wire fraud, aggravated identity theft, money laundering, filing false tax returns, interstate transportation of stolen property, possessing unregistered destructive devices, possessing firearms and ammunition as a fugitive, and possessing an illegally manufactured firearm, according to U.S. Attorney’s Office Spokeswoman Patty Hartman, of the Eastern District of Pennsylvania.
On Oct. 6, 2014, Merchenthaler pleaded guilty to all counts in four federal indictments, Hartman said. The charges stemmed from one indictment in the Eastern District of North Carolina, two indictments in the Eastern District of Pennsylvania and one indictment in the District of Maryland.
In the case out of the Eastern District of North Carolina, Merchenthaler pleaded guilty to two counts of being a fugitive in possession of firearms and ammunition, and one count of possession of an unregistered destructive device.
While a fugitive from justice, Merchenthaler possessed approximately 39 improvised explosive devices (IEDs), a firearm and 580 rounds of ammunition in the Wilmington area, Hartman said. In February 2013, federal state and local authorities in Wilmington executed search warrants at his Mainsail Lane home and the North State Storage Facility on Carolina Beach Road, where bomb squads detonated the devices.
“During render safe procedures at a North Carolina storage facility, several of the IEDs exploded, resulting in damage to a bomb squad robot and the storage facility,” Hartman said.
Merchenthaler rented the properties under aliases. Some of the items in his possession included 560 rounds of ammunition that was not manufactured in North Carolina and IEDs (seven PVC pipes and 32 cardboard tubes, all center-primed with flash powder), according to his plea agreement.
At the time the explosives were found in Wilmington, Merchenthaler was considered a fugitive from justice. He had removed his electronic monitoring bracelet and fled from Pennsylvania authorities, Hartman said.
Merchenthaler was out on pre-trial release for federal charges related to a “Ponzi” scheme that he operated between May 2006 and February 2013. In that scheme, Merchenthaler claimed to be the founder of PhoneCard USA – a company that was a distribution source for prepaid phone cards, cell phones and “adult entertainment cards,” Hartman said.
“Merchenthaler falsely claimed that PhoneCard USA had ‘lucrative contracts’ with major retail chain stores including Wal-Mart, 7-Eleven, and BJ’s Wholesale Club,” Hartman said. “”To line his pockets with these victims’ funds, Merchenthaler used stolen identities, impersonated corporate executives, forged signatures, and fabricated bogus contracts.”
Merchenthaler stole more than $3 million from over 250 investors, using much of the funds to buy expensive cars, jewelry, and firearms and to perpetuate his scheme, Hartman said. He also filed false tax returns, defrauding the United States of more than $400,000.
In order to evade authorities, Merchenthaler also stole two vehicles from car dealerships in Pennsylvania and North Carolina and fled from the scene of a traffic stop by the Pennsylvania State Police while driving one of the stolen vehicles. The U.S. Marshals Service Fugitive Task Force and the Maryland State Police later apprehended Merchenthaler in Bel Air, Maryland.
Prior to and after jumping bail from Pennsylvania, Merchenthaler amassed approximately 17 firearms and over approximately 11,580 rounds of ammunition, as well as approximately 634 IEDs, including the ones stored in North Carolina, as well as in Pennsylvania and Maryland. He drove these IEDs in his stolen vehicles to storage facilities in all three states.
“Approximately 67 of these IEDs were comprised of PVC pipe, almost all of which contained shrapnel in the form of nails, screws, or rocks. The remaining approximately 567 IEDs were comprised of cardboard tubes in varying sizes and explosive power. All of the IEDs – PVC and cardboard – were center primed with flash powder,” Hartman said.
Merchenthaler also pleaded guilty to four counts of wire fraud, two counts of aggravated identity theft, four counts of money laundering, two counts of filing false tax returns, and two counts of interstate transportation of stolen goods as federally charged in Pennsylvania, according to Hartman. He also pleaded guilty to one count of possession of unregistered destructive devices, one count of being a fugitive in possession of firearms and ammunition, and one count of possession of an illegally manufactured firearm, as charged in a federal indictment out of Maryland.
Along with his sentence, the judge ordered Merchenthaler to serve three years of supervised release and pay $2,200 special assessment and more than $3.4 million in restitution.
The case was investigated by the FBI, the Internal Revenue Service Criminal Investigations, the U.S. Marshals Service Fugitive Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Pennsylvania State Police, the Philadelphia Police Bomb Disposal Unit, the Montgomery County Bomb Squad, the Montgomery County Sheriff’s Office, the East Whiteland Police Department, the East Whiteland Fire Department, the Malvern Fire Department, the Maryland State Police, the N.C. State Bureau of Investigation, the Downingtown Police Department, and the Chester County District Attorney’s Office.
The case was prosecuted by Assistant U.S. Attorneys Vineet Gauri, Jason Kellhofer, and Adam Ake in the United States Attorney’s Offices for the Eastern District of Pennsylvania, Eastern District of North Carolina, and the District of Maryland, respectively.