LOS ANGELES—The CEO and co-owner of a Diamond Bar investment company
pleaded guilty this afternoon to two federal felony counts arising from
his scheme to defraud investors who put $49 million into his bogus
day-trading venture.
Syed Qaisar Madad pleaded guilty to wire fraud and tax fraud,
admitting in court today that investors lost more than $31 million when
his scheme collapsed in March 2011.
Starting in 2005, Madad collected money from investors who believed
he generated consistent, substantial profits and that their money would
be safe and available upon request. During the five-and-a-half-year life
of the scheme, Madad received more than $49 million from investors.
Madad, 66, a resident of Diamond Bar who ran his scheme through a
company called Technology for Telecommunication and Multimedia Inc.
(TTM), portrayed himself as a successful investor who had not lost money
in a single day of trading—except one day in 2006. Madad, who was
profiled and interviewed in media serving the Pakistani-American
community, told reporters and potential investors that he had developed a
day-trading technique that was always profitable.
Over the course of the scheme, Madad sent victims monthly account
statements that always showed gains in their accounts, and some victims
gave Madad additional funds based solely on these account statements.
Madad admitted today that the balances shown on these statements were
false, and that, in fact, he lost more than $15 million in unsuccessful
trading.
While Madad promised that he would not take any fees or compensation
for managing the invested funds, Madad admitted today that he spent well
over $15 million of investors’ money on personal expenses, including
real estate, jewelry for his wife and daughters, vehicles, and cash
disbursements to himself and family members.
Although Madad returned approximately $17.7 million to investors,
many of the payments he made were Ponzi payments, meaning that the money
came from funds entrusted to him by other investors, rather than from
profits or interest he had earned.
Madad also admitted today that he under-reported his income for tax
year 2009 by approximately $4.9 million on tax returns filed with the
Internal Revenue Service.
Madad’s scheme originally came to light two years ago when he was sued by one of his investors.
Prior to and following Madad’s arrest in October 2012, pursuant to
court-authorized warrants, the government seized a Mercedes-Benz C63,
numerous pieces of diamond and other precious gemstone jewelry, and
funds that were traceable to investor money. As part of his agreement
with the goverment, Madad has agreed to forfeit his Diamond Bar mansion,
the Mercedez-Benz, 68 pieces of jewelry, and other luxury items,
including silk and wool handmade oriental carpets. Madad also agreed to
pay the IRS approximately $5 million in unpaid taxes for tax years 2006
through 2010.
Madad is scheduled to be sentenced by United States District Judge
Percy Anderson on June 24. As a result of today’s guilty pleas, Madad
faces a statutory maximum sentence of 23 years in federal prison.
The case against Madad is the result of an investigation by the Federal Bureau of Investigation and IRS-Criminal Investigation.
Wednesday, February 27, 2013
Former Silicon Valley Engineer Sentenced to Prison After Conviction for Stealing Marvell Trade Secrets
SAN JOSE—Suibin Zhang was sentenced this morning
following his conviction on five felony counts of theft of trade secrets
by a federal district judge, United States Attorney Melinda Haag
announced today.
United States District Judge Ronald M. Whyte sentenced Zhang to serve three months in prison, to be followed by a three-year term of supervised release. Among the conditions of supervised release are that Zhang shall perform 200 hours of community service. The defendant was also ordered to pay $75,000 in restitution to the victim, Marvell Semiconductor Inc. (Marvell); that sum is to be paid in full on or before May 31, 2013. Judge Whyte stated that Zhang’s conduct was “unacceptable” and that he hoped his sentence would carry a “strong deterrent message.”
In a verdict published on May 29, 2012, Judge Whyte found Zhang guilty of three counts of theft and copying of trade secrets for downloading the trade secrets from a secure database, one count of duplication of trade secrets for loading those trade secrets onto a laptop provided by his new employer, and one count of possession of stolen trade secrets. Zhang was acquitted of three counts of computer fraud and one count of unauthorized transmission of a trade secret. The guilty verdict followed a two-and-a-half-week trial before Judge Whyte, which began on October 24, 2011 and concluded on November 9, 2011.
Evidence at trial showed that Zhang, 44, of Belmont, California, was employed as a Project Engineer at Netgear Inc., of San Jose, which gave him access to Marvell’s secure database (“Extranet”). On March 8, 2005, Zhang accepted a position at Broadcom Corporation (Broadcom), which is also Marvell’s chief competitor. Beginning the very next day, March 9, 2005, and continuing on two other days before he left Netgear, Zhang used his Netgear account to download and steal trade secret information found in dozens of documents, datasheets, hardware specifications, design guides, functional specifications, application notes, board designs, and other confidential and proprietary items from Marvell. On April 27, 2005, Zhang loaded the Marvell trade secrets onto a laptop issued by Broadcom, where they continued to reside on June 24, 2005, when the FBI served search warrants at Zhang’s home and at Broadcom and took possession of his laptop.
“The protection of intellectual property rights, especially in Silicon Valley, is of vital importance to the economic security of our region,” said United States Attorney Melinda Haag. “The investigation and prosecution of thefts of trade secrets remains a significant priority for this office. I certainly hope the court’s sentence sends a strong message that in addition to the personal, professional, and financial costs, which are significant in themselves, these offenses result in prison time.”
The conviction is the result of an investigation by the Federal Bureau of Investigation. The investigation was overseen by the Computer Hacking and Intellectual Property (CHIP) Unit of the U.S. Attorney’s Office. Matthew Parrella and David Callaway are the Assistant U.S. Attorneys in the CHIP Unit who prosecuted the case with the assistance of Legal Tech Nina Burney-Williams. Both Marvell Semiconductor Inc. and Netgear Inc. cooperated fully with the FBI in the investigation.
United States District Judge Ronald M. Whyte sentenced Zhang to serve three months in prison, to be followed by a three-year term of supervised release. Among the conditions of supervised release are that Zhang shall perform 200 hours of community service. The defendant was also ordered to pay $75,000 in restitution to the victim, Marvell Semiconductor Inc. (Marvell); that sum is to be paid in full on or before May 31, 2013. Judge Whyte stated that Zhang’s conduct was “unacceptable” and that he hoped his sentence would carry a “strong deterrent message.”
In a verdict published on May 29, 2012, Judge Whyte found Zhang guilty of three counts of theft and copying of trade secrets for downloading the trade secrets from a secure database, one count of duplication of trade secrets for loading those trade secrets onto a laptop provided by his new employer, and one count of possession of stolen trade secrets. Zhang was acquitted of three counts of computer fraud and one count of unauthorized transmission of a trade secret. The guilty verdict followed a two-and-a-half-week trial before Judge Whyte, which began on October 24, 2011 and concluded on November 9, 2011.
Evidence at trial showed that Zhang, 44, of Belmont, California, was employed as a Project Engineer at Netgear Inc., of San Jose, which gave him access to Marvell’s secure database (“Extranet”). On March 8, 2005, Zhang accepted a position at Broadcom Corporation (Broadcom), which is also Marvell’s chief competitor. Beginning the very next day, March 9, 2005, and continuing on two other days before he left Netgear, Zhang used his Netgear account to download and steal trade secret information found in dozens of documents, datasheets, hardware specifications, design guides, functional specifications, application notes, board designs, and other confidential and proprietary items from Marvell. On April 27, 2005, Zhang loaded the Marvell trade secrets onto a laptop issued by Broadcom, where they continued to reside on June 24, 2005, when the FBI served search warrants at Zhang’s home and at Broadcom and took possession of his laptop.
“The protection of intellectual property rights, especially in Silicon Valley, is of vital importance to the economic security of our region,” said United States Attorney Melinda Haag. “The investigation and prosecution of thefts of trade secrets remains a significant priority for this office. I certainly hope the court’s sentence sends a strong message that in addition to the personal, professional, and financial costs, which are significant in themselves, these offenses result in prison time.”
The conviction is the result of an investigation by the Federal Bureau of Investigation. The investigation was overseen by the Computer Hacking and Intellectual Property (CHIP) Unit of the U.S. Attorney’s Office. Matthew Parrella and David Callaway are the Assistant U.S. Attorneys in the CHIP Unit who prosecuted the case with the assistance of Legal Tech Nina Burney-Williams. Both Marvell Semiconductor Inc. and Netgear Inc. cooperated fully with the FBI in the investigation.
Cynthia Suratos Lorica Sentenced for Mortgage Fraud and Tax Evasion
OAKLAND—Cynthia Suratos Lorica was sentenced yesterday to
18 months in prison and ordered to pay more than $1 million in
restitution for bank fraud and tax evasion, United States Attorney
Melinda Haag announced.
Ms. Lorica, age 51, of Hayward, California, waived indictment and pleaded guilty to an information charging her with bank fraud and tax evasion. According to the plea agreement, Ms. Lorica admitted to participating in a fraudulent scheme to obtain money from Washington Mutual Bank in 2006 and 2007 by making false statements in loan applications secured by real property. During that time period, she was the owner and chief executive officer of All Ways Financial Services Inc., a financial services company. She was also an officer of Absolute Value Financial Inc. Absolute Value was licensed by the state of California to originate mortgage loans and to engage in real estate transactions. Both businesses were located at 3900 Newpark Mall Road, Suite 201 in Newark, California. Ms. Lorica was involved in the preparation and submission of loan applications to various federally insured financial institutions and other lending institutions.
Ms. Lorica also admitted to evading taxes on income she received in 2006 and 2007. She admitted to substantially under-reporting her gains from the sale of real estate as well as under-reporting her income from All Ways Financial and claiming a mortgage interest deduction that she was not entitle to receive.
The sentence was handed down by Chief U.S. District Court Judge Claudia Wilken following a guilty plea on one count in violation of 18 U.S.C. § 1344(2) and one count in violation of 26 U.S.C. § 7201. Judge Wilken also sentenced the defendant to a three year period of supervised release. The defendant will begin serving the sentence on March 27, 2013.
This prosecution is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service.
A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.
Ms. Lorica, age 51, of Hayward, California, waived indictment and pleaded guilty to an information charging her with bank fraud and tax evasion. According to the plea agreement, Ms. Lorica admitted to participating in a fraudulent scheme to obtain money from Washington Mutual Bank in 2006 and 2007 by making false statements in loan applications secured by real property. During that time period, she was the owner and chief executive officer of All Ways Financial Services Inc., a financial services company. She was also an officer of Absolute Value Financial Inc. Absolute Value was licensed by the state of California to originate mortgage loans and to engage in real estate transactions. Both businesses were located at 3900 Newpark Mall Road, Suite 201 in Newark, California. Ms. Lorica was involved in the preparation and submission of loan applications to various federally insured financial institutions and other lending institutions.
Ms. Lorica also admitted to evading taxes on income she received in 2006 and 2007. She admitted to substantially under-reporting her gains from the sale of real estate as well as under-reporting her income from All Ways Financial and claiming a mortgage interest deduction that she was not entitle to receive.
The sentence was handed down by Chief U.S. District Court Judge Claudia Wilken following a guilty plea on one count in violation of 18 U.S.C. § 1344(2) and one count in violation of 26 U.S.C. § 7201. Judge Wilken also sentenced the defendant to a three year period of supervised release. The defendant will begin serving the sentence on March 27, 2013.
This prosecution is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service.
A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.
Bank Executive Sentenced to 30 Months in Prison for Mortgage Fraud Scheme in California
SACRAMENTO, CA—U.S. District Judge William B. Shubb
sentenced Joel Blanford, 44, of San Ramon, California, to 30 months in
prison, to be followed by three years of supervised release, for a
mortgage fraud scheme, U.S. Attorney Benjamin B. Wagner announced. On
September 19, 2012, following a seven-day trial, a jury found Blanford
guilty of six counts of mail fraud.
This case was the product of an investigation by the FBI and the Internal Revenue Service-Criminal Investigation (IRS-CI). Assistant U.S. Attorneys Paul A. Hemesath and Michael M. Beckwith prosecuted the case.
According to evidence presented at trial, from approximately April 2003 through October 2005, Blanford, while working as a senior sales representative for Long Beach Mortgage, a wholesale subprime lender and former subsidiary of Washington Mutual Inc., participated in a scheme to defraud his employer. Blanford earned compensation based on the volume of loans processed by Long Beach Mortgage. The evidence established that he paid a loan coordinator in cash and checks to falsify documents, provide false verification of borrowers’ employment or professional licensing status and turn a blind eye to fraudulent representations contained in loan applications and other documents submitted to Long Beach Mortgage.
In each of the years 2003, 2004, and 2005, before taxes and payroll deductions, Blanford received more than $1 million in commissions and other compensation from Long Beach Mortgage as a result of his scheme. Between April 2003 and October 2005, he paid the loan coordinator more than $50,000 in checks alone.
U.S. Attorney Wagner stated, “This investigation exposed a sophisticated chain of fraud that started at the homebuyer level and extended all the way to banking insiders. It is a lesson that those earning million-dollar paychecks are not exempt from significant criminal penalties.”
This case was done in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending; and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
This case was the product of an investigation by the FBI and the Internal Revenue Service-Criminal Investigation (IRS-CI). Assistant U.S. Attorneys Paul A. Hemesath and Michael M. Beckwith prosecuted the case.
According to evidence presented at trial, from approximately April 2003 through October 2005, Blanford, while working as a senior sales representative for Long Beach Mortgage, a wholesale subprime lender and former subsidiary of Washington Mutual Inc., participated in a scheme to defraud his employer. Blanford earned compensation based on the volume of loans processed by Long Beach Mortgage. The evidence established that he paid a loan coordinator in cash and checks to falsify documents, provide false verification of borrowers’ employment or professional licensing status and turn a blind eye to fraudulent representations contained in loan applications and other documents submitted to Long Beach Mortgage.
In each of the years 2003, 2004, and 2005, before taxes and payroll deductions, Blanford received more than $1 million in commissions and other compensation from Long Beach Mortgage as a result of his scheme. Between April 2003 and October 2005, he paid the loan coordinator more than $50,000 in checks alone.
U.S. Attorney Wagner stated, “This investigation exposed a sophisticated chain of fraud that started at the homebuyer level and extended all the way to banking insiders. It is a lesson that those earning million-dollar paychecks are not exempt from significant criminal penalties.”
This case was done in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending; and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Connecticut Hedge Fund Executives Charged with Conspiracy, Securities Fraud, and Wire Fraud Offenses
NEW HAVEN, CT—A federal grand jury sitting in New Haven
has returned a 19-count indictment charging three executives of New
Stream Capital LLC, a Ridgefield, Connecticut hedge fund, with
conspiracy, securities fraud, and wire fraud offenses, announced David
B. Fein, U.S. Attorney for the District of Connecticut, and Kimberly K.
Mertz, Special Agent in Charge of the New Haven Division of the FBI.
David Bryson, 44, of Ridgefield, Connecticut; Bart Gutekunst, 61, of Weston, Connecticut; and Richard Pereira, 40, of Ridgefield, surrendered this morning to the FBI in New Haven. Bryson and Gutekunst were managing partners and principals at New Stream Capital LLC, and Pereira was the chief financial officer. The defendants appeared before U.S. Magistrate Judge Donna F. Martinez in Hartford, Connecticut, and pleaded not guilty to the charges. Bryson and Gutekunst were released on $5 million bonds and Pereira was released on a $300,000 bond. The indictment, which was returned on February 22, 2013, was unsealed at that time.
“As alleged, fearing the loss of their fund’s largest investor, these defendants orchestrated a scheme to deceive investors in order to obtain and maintain investments,” stated U.S. Attorney Fein. “The U.S. Attorney’s Office and our many partners on the Connecticut Securities, Commodities and Investor Fraud Task Force are committed to protecting investors and the integrity of American capital markets.”
“It goes without saying that investing carries certain risks,” stated FBI Special Agent in Charge Mertz. “Those risks, however, should not include any chance that hedge fund managers or other investment professionals are lying to or deceiving their investors about the current state of investments. Investors have a right to full disclosure. Today’s arrests underscore the FBI’s continuing commitment to investigate those who provide material misrepresentations to investors.”
According to the indictment and statements made in court, in November 2007, New Stream launched new feeder funds, one based in the United States (U.S. Fund) and a series of funds based in the Cayman Islands (Cayman Fund). New Stream also announced that its existing Bermuda Fund would be closing, and all foreign investors would have to move their investments into the Cayman Fund. Rather than transfer into the new structure, New Stream’s largest investor placed a redemption on its whole investment in the Bermuda Fund in March 2008. At risk of losing their largest investor, it is alleged that Bryson, Gutekunst, and Pereira set in motion a scheme to secretly keep the Bermuda Fund open and give priority to Bermuda Fund investors in an effort to reverse the redemption. As part of the scheme, Bryson, Gutekunst, and Pereira had New Stream staff secretly reorganize the fund structure so as to effectuate the priority change.
The indictment further alleges that New Stream failed to inform investors who had transferred from the Bermuda Fund into the Cayman Fund that the Bermuda Fund was remaining open or that it was being given priority over the Cayman Fund. Moreover, New Stream continued to market New Stream to investors by concealing from them the magnitude of the actual pending redemptions and by using deceptive marketing materials that failed to disclose the existence of New Stream’s Bermuda Fund.
Each of the defendants is charged with one count of conspiracy, 10 counts of securities fraud and eight counts of wire fraud. The conspiracy charge carries a maximum term of imprisonment of five years, and the securities fraud and wire fraud charges carry a maximum term of imprisonment of 20 years on each count.
This matter is being investigated by the FBI and the U.S. Department of Labor, Office of Inspector General, with the assistance of the Securities and Exchange Commission. The case is being prosecuted by Assistant U.S. Attorneys Liam Brennan and Michael S. McGarry.
The Connecticut Securities, Commodities and Investor Fraud Task Force investigates matters relating to insider trading, market manipulation, Ponzi schemes, investor fraud, financial statement fraud, violations of the Foreign Corrupt Practices Act, and embezzlement. The task force includes representatives from the U.S. Attorney’s Office; FBI; Internal Revenue Service-Criminal Investigation; U.S. Secret Service; U.S. Postal Inspection Service; U.S. Department of Justice’s Criminal Division, Fraud Section and Antitrust Division; U.S. Securities and Exchange Commission (SEC); U.S. Commodity Futures Trading Commission (CFTC); Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Office of the Chief State’s Attorney; State of Connecticut Department of Banking; Greenwich, Connecitcut Police Department; and Stamford, Connecticut Police Department.
Citizens are encouraged to report any financial fraud schemes by calling, toll-free, 855-236-9740, or by sending an e-mail to ctsecuritiesfraud@ic.fbi.gov.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
David Bryson, 44, of Ridgefield, Connecticut; Bart Gutekunst, 61, of Weston, Connecticut; and Richard Pereira, 40, of Ridgefield, surrendered this morning to the FBI in New Haven. Bryson and Gutekunst were managing partners and principals at New Stream Capital LLC, and Pereira was the chief financial officer. The defendants appeared before U.S. Magistrate Judge Donna F. Martinez in Hartford, Connecticut, and pleaded not guilty to the charges. Bryson and Gutekunst were released on $5 million bonds and Pereira was released on a $300,000 bond. The indictment, which was returned on February 22, 2013, was unsealed at that time.
“As alleged, fearing the loss of their fund’s largest investor, these defendants orchestrated a scheme to deceive investors in order to obtain and maintain investments,” stated U.S. Attorney Fein. “The U.S. Attorney’s Office and our many partners on the Connecticut Securities, Commodities and Investor Fraud Task Force are committed to protecting investors and the integrity of American capital markets.”
“It goes without saying that investing carries certain risks,” stated FBI Special Agent in Charge Mertz. “Those risks, however, should not include any chance that hedge fund managers or other investment professionals are lying to or deceiving their investors about the current state of investments. Investors have a right to full disclosure. Today’s arrests underscore the FBI’s continuing commitment to investigate those who provide material misrepresentations to investors.”
According to the indictment and statements made in court, in November 2007, New Stream launched new feeder funds, one based in the United States (U.S. Fund) and a series of funds based in the Cayman Islands (Cayman Fund). New Stream also announced that its existing Bermuda Fund would be closing, and all foreign investors would have to move their investments into the Cayman Fund. Rather than transfer into the new structure, New Stream’s largest investor placed a redemption on its whole investment in the Bermuda Fund in March 2008. At risk of losing their largest investor, it is alleged that Bryson, Gutekunst, and Pereira set in motion a scheme to secretly keep the Bermuda Fund open and give priority to Bermuda Fund investors in an effort to reverse the redemption. As part of the scheme, Bryson, Gutekunst, and Pereira had New Stream staff secretly reorganize the fund structure so as to effectuate the priority change.
The indictment further alleges that New Stream failed to inform investors who had transferred from the Bermuda Fund into the Cayman Fund that the Bermuda Fund was remaining open or that it was being given priority over the Cayman Fund. Moreover, New Stream continued to market New Stream to investors by concealing from them the magnitude of the actual pending redemptions and by using deceptive marketing materials that failed to disclose the existence of New Stream’s Bermuda Fund.
Each of the defendants is charged with one count of conspiracy, 10 counts of securities fraud and eight counts of wire fraud. The conspiracy charge carries a maximum term of imprisonment of five years, and the securities fraud and wire fraud charges carry a maximum term of imprisonment of 20 years on each count.
This matter is being investigated by the FBI and the U.S. Department of Labor, Office of Inspector General, with the assistance of the Securities and Exchange Commission. The case is being prosecuted by Assistant U.S. Attorneys Liam Brennan and Michael S. McGarry.
The Connecticut Securities, Commodities and Investor Fraud Task Force investigates matters relating to insider trading, market manipulation, Ponzi schemes, investor fraud, financial statement fraud, violations of the Foreign Corrupt Practices Act, and embezzlement. The task force includes representatives from the U.S. Attorney’s Office; FBI; Internal Revenue Service-Criminal Investigation; U.S. Secret Service; U.S. Postal Inspection Service; U.S. Department of Justice’s Criminal Division, Fraud Section and Antitrust Division; U.S. Securities and Exchange Commission (SEC); U.S. Commodity Futures Trading Commission (CFTC); Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Office of the Chief State’s Attorney; State of Connecticut Department of Banking; Greenwich, Connecitcut Police Department; and Stamford, Connecticut Police Department.
Citizens are encouraged to report any financial fraud schemes by calling, toll-free, 855-236-9740, or by sending an e-mail to ctsecuritiesfraud@ic.fbi.gov.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
Atlanta Man Sentenced in Multi-Million-Dollar Fraud Schemes
ATLANTA—An Atlanta man was sentenced today by United
States District Judge Julie E. Carnes to 30 years on charges of bank
fraud, credit card fraud, and aggravated identity theft. Jean-Daniel
Perkins, 37, of Atlanta, Georgia, was convicted of defrauding American
Express, SunTrust Bank, and hundreds of individual credit card holders.
United States Attorney Sally Quillian Yates said of today’s sentencing, “This defendant was a habitual fraudster and a world-class manipulator. He bought, sold, and traded in other people’s personal information to enrich himself, and he tried to manipulate the court system to his own advantage. Today’s sentence reflects the seriousness of his crimes.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated, “The FBI remains committed in conducting such investigations that help build solid criminal prosecutions against aggressive fraudsters such as Mr. Perkins. Today’s sentencing not only holds Mr. Perkins accountable for his actions but puts an end to his reckless victimization of others through his fraudulent financial schemes.”
Perkins was sentenced to 30 years, to be followed by five years of supervised release. He was also ordered to pay $510,509 in restitution. Perkins was convicted on June 27, 2011, after a five-day jury trial.
Judge Carnes orally pronounced the sentence on a “tentative” basis because Perkins refused to leave his jail cell to be escorted to the courtroom for the sentencing hearing. Perkins further refused to meet with his lawyer to discuss the potential sentence.
Perkins, who also was in custody at the time of his trial, refused to attend court during the trial as well. Instead, he viewed a live video and audio feed of the proceedings while remaining in a cell at the courthouse. Because Perkins was not present at the sentencing, Judge Carnes gave him 30 days to file any objections to her oral sentence, after which it will become final.
According to United States Attorney Yates and the evidence and testimony at trial and sentencing, from November 2008 through February 2010, Perkins executed several different fraud schemes in Atlanta. An undercover FBI agent, posing as an employee of a company with financial data, made contact with Perkins, offering to make the sensitive financial data available to Perkins. The undercover agent ultimately met in person with Perkins, who gave the agent a dozen counterfeit credit cards, and the two discussed a wide variety of criminal schemes involving financial data and credit cards. The FBI agent recorded approximately 30 telephone calls with Perkins in which they discussed the schemes and how the maximum amounts of money could be withdrawn from victim financial institutions and their customers.
The evidence at trial showed that, in one of his fraud schemes, Perkins purchased information needed to make credit cards, such as account numbers, from a source in Ukraine. He then encoded credit cards with the data and used the cards. The dozen credit cards Perkins gave to the FBI agent were in fact encoded with information obtained from the source in Ukraine.
The evidence at trial also showed that from February 2009 through February 2010, Perkins engaged in another fraud scheme in which he gained internal SunTrust account information and impersonated the account holders, resulting in the transfer of money from victim accounts to accounts under his control. In one instance involving an account held by a local construction company, Perkins impersonated the company’s president, signed up for online banking services from SunTrust, and authorized transfers of over $3,500,000 from the company’s account to approximately 100 accounts under his control. Fortunately, SunTrust was able to recover the transferred money before Perkins spent it.
In yet another fraud scheme, Perkins set up numerous fictitious merchant accounts with American Express. The evidence at trial showed that Perkins set up the merchant accounts at American Express to allow him to accept American Express credit cards as payment for nonexistent goods and services. Perkins, using stolen American Express credit card account numbers, then ran American Express credit card transactions through the merchant accounts, resulting in American Express paying millions of dollars to the fictitious merchants. The American Express credit cards used by Perkins belonged to hundreds of individual credit card holders.
On the day of Perkins’ arrest, law enforcement officials recovered dozens of counterfeit credit cards from Perkins, as well as digital media connecting Perkins to the fraud schemes. On the same day, law enforcement seized from Perkins’ apartment hundreds of counterfeit credit cards; items used to make counterfeit credit cards; including a device used for encoding cards with stolen credit card information; machines used to make counterfeit identification cards; items purchased with counterfeit credit cards; and additional digital evidence linking Perkins to several of the fraud schemes. In total, Perkins had approximately 100,000 credit card numbers on his digital devices.
This case was investigated by special agents of the Federal Bureau of Investigation and the Duluth Police Department.
Former Assistant United States Attorneys Robert McBurney and Nick Oldham, and Assistant United States Attorneys Lawrence Sommerfeld and Kurt Erskine prosecuted the case.
For further information please contact the U.S. Attorney’s Public Information Office at USAGAN.Pressemails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
United States Attorney Sally Quillian Yates said of today’s sentencing, “This defendant was a habitual fraudster and a world-class manipulator. He bought, sold, and traded in other people’s personal information to enrich himself, and he tried to manipulate the court system to his own advantage. Today’s sentence reflects the seriousness of his crimes.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated, “The FBI remains committed in conducting such investigations that help build solid criminal prosecutions against aggressive fraudsters such as Mr. Perkins. Today’s sentencing not only holds Mr. Perkins accountable for his actions but puts an end to his reckless victimization of others through his fraudulent financial schemes.”
Perkins was sentenced to 30 years, to be followed by five years of supervised release. He was also ordered to pay $510,509 in restitution. Perkins was convicted on June 27, 2011, after a five-day jury trial.
Judge Carnes orally pronounced the sentence on a “tentative” basis because Perkins refused to leave his jail cell to be escorted to the courtroom for the sentencing hearing. Perkins further refused to meet with his lawyer to discuss the potential sentence.
Perkins, who also was in custody at the time of his trial, refused to attend court during the trial as well. Instead, he viewed a live video and audio feed of the proceedings while remaining in a cell at the courthouse. Because Perkins was not present at the sentencing, Judge Carnes gave him 30 days to file any objections to her oral sentence, after which it will become final.
According to United States Attorney Yates and the evidence and testimony at trial and sentencing, from November 2008 through February 2010, Perkins executed several different fraud schemes in Atlanta. An undercover FBI agent, posing as an employee of a company with financial data, made contact with Perkins, offering to make the sensitive financial data available to Perkins. The undercover agent ultimately met in person with Perkins, who gave the agent a dozen counterfeit credit cards, and the two discussed a wide variety of criminal schemes involving financial data and credit cards. The FBI agent recorded approximately 30 telephone calls with Perkins in which they discussed the schemes and how the maximum amounts of money could be withdrawn from victim financial institutions and their customers.
The evidence at trial showed that, in one of his fraud schemes, Perkins purchased information needed to make credit cards, such as account numbers, from a source in Ukraine. He then encoded credit cards with the data and used the cards. The dozen credit cards Perkins gave to the FBI agent were in fact encoded with information obtained from the source in Ukraine.
The evidence at trial also showed that from February 2009 through February 2010, Perkins engaged in another fraud scheme in which he gained internal SunTrust account information and impersonated the account holders, resulting in the transfer of money from victim accounts to accounts under his control. In one instance involving an account held by a local construction company, Perkins impersonated the company’s president, signed up for online banking services from SunTrust, and authorized transfers of over $3,500,000 from the company’s account to approximately 100 accounts under his control. Fortunately, SunTrust was able to recover the transferred money before Perkins spent it.
In yet another fraud scheme, Perkins set up numerous fictitious merchant accounts with American Express. The evidence at trial showed that Perkins set up the merchant accounts at American Express to allow him to accept American Express credit cards as payment for nonexistent goods and services. Perkins, using stolen American Express credit card account numbers, then ran American Express credit card transactions through the merchant accounts, resulting in American Express paying millions of dollars to the fictitious merchants. The American Express credit cards used by Perkins belonged to hundreds of individual credit card holders.
On the day of Perkins’ arrest, law enforcement officials recovered dozens of counterfeit credit cards from Perkins, as well as digital media connecting Perkins to the fraud schemes. On the same day, law enforcement seized from Perkins’ apartment hundreds of counterfeit credit cards; items used to make counterfeit credit cards; including a device used for encoding cards with stolen credit card information; machines used to make counterfeit identification cards; items purchased with counterfeit credit cards; and additional digital evidence linking Perkins to several of the fraud schemes. In total, Perkins had approximately 100,000 credit card numbers on his digital devices.
This case was investigated by special agents of the Federal Bureau of Investigation and the Duluth Police Department.
Former Assistant United States Attorneys Robert McBurney and Nick Oldham, and Assistant United States Attorneys Lawrence Sommerfeld and Kurt Erskine prosecuted the case.
For further information please contact the U.S. Attorney’s Public Information Office at USAGAN.Pressemails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.
Washington Park Man Sentenced for Firearm Offense
Sean J. Redd, Jr., 23, of Washington Park, Illinois, was
sentenced in United States Federal District Court in East St. Louis,
Illinois, for unlawful possession of a firearm by a previously convicted
felon, the United States Attorney for the Southern District of
Illinois, Stephen R. Wigginton, announced today.
Redd was sentenced to 46 months in prison, to be followed by three years’ supervised release, a $100 special assessment, and a $300 fine. Court proceedings revealed that on March 11, 2012, law enforcement officers responded to a call for backup in Washington Park, Illinois, where a crime was committed. The officers noticed a group of men walking away from the scene and driving off in a visibly damaged vehicle. An officer then observed the vehicle for several blocks, noticing a missing front registration plate. The officer initiated a traffic stop of the vehicle, but the driver sped off. The officer continued pursuit. The vehicle stopped in the middle a street and two men got out. Redd exited the vehicle and began running through a residential neighborhood holding his pants, appearing as if he was holding something near his waist. Redd tripped and fell to the ground while running, causing the item to fall underneath him. Redd was arrested on the scene. The officer checked the area where the item fell and found a loaded firearm.
This case was investigated by the Federal Bureau of Investigation and assigned to Assistant United States Attorney Daniel T. Kapsak for prosecution.
Redd was sentenced to 46 months in prison, to be followed by three years’ supervised release, a $100 special assessment, and a $300 fine. Court proceedings revealed that on March 11, 2012, law enforcement officers responded to a call for backup in Washington Park, Illinois, where a crime was committed. The officers noticed a group of men walking away from the scene and driving off in a visibly damaged vehicle. An officer then observed the vehicle for several blocks, noticing a missing front registration plate. The officer initiated a traffic stop of the vehicle, but the driver sped off. The officer continued pursuit. The vehicle stopped in the middle a street and two men got out. Redd exited the vehicle and began running through a residential neighborhood holding his pants, appearing as if he was holding something near his waist. Redd tripped and fell to the ground while running, causing the item to fall underneath him. Redd was arrested on the scene. The officer checked the area where the item fell and found a loaded firearm.
This case was investigated by the Federal Bureau of Investigation and assigned to Assistant United States Attorney Daniel T. Kapsak for prosecution.
Owner of Ocean City Architectural Firm Admits Submitting False Corporate Returns
NEWARK—The owner of an Ocean County, New Jersey
architectural and engineering firm today admitted filing fraudulent tax
returns on behalf of his firm, U.S. Attorney Paul J. Fishman announced.
Pravin H. Patel, 67, of Toms River, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with subscribing to false corporate tax returns on behalf of his firm, Pravin H. Patel Associates Inc., of Toms River, New Jersey.
According to documents filed in this case and statements made in court:
Patel was the owner and operator of Pravin H. Patel Associates Inc. for more than 25 years; in recent years, the firm’s primary clients included the Toms River Board of Education and Ocean County College. Between 2005 and 2009, Patel filed corporate tax returns that falsely passed off personal expenses as legitimate business deductions.
Among the personal expenses which Patel admitted to improperly using to reduce the tax liability owed by his company was $112,650 in payments for renovations on his personal residence in 2006. Patel also admitted that the corporate tax return for the year ending in March 2007 improperly included more than $8,200 in expenses related to a personal country club membership and associated fees, as well as numerous personal expenses paid through a corporate credit card. Patel admitted that the corporate tax return for the year ending in March 2007 included false deductions of more than $145,000 and that the tax loss over a four-year period for which he is criminally liable totaled $63,815.
The count to which Patel pleaded guilty is punishable by a maximum potential penalty of three years in prison and a maximum fine of $250,000. Sentencing is scheduled for June 4, 2013.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and special agents of the FBI under Acting Special Agent in Charge David Velazquez, with the investigation that resulted in today’s plea.
The government is represented by Special Litigation Counsel Mark J. McCarren of the U.S. Attorney’s Office Special Prosecutions Division.
Pravin H. Patel, 67, of Toms River, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with subscribing to false corporate tax returns on behalf of his firm, Pravin H. Patel Associates Inc., of Toms River, New Jersey.
According to documents filed in this case and statements made in court:
Patel was the owner and operator of Pravin H. Patel Associates Inc. for more than 25 years; in recent years, the firm’s primary clients included the Toms River Board of Education and Ocean County College. Between 2005 and 2009, Patel filed corporate tax returns that falsely passed off personal expenses as legitimate business deductions.
Among the personal expenses which Patel admitted to improperly using to reduce the tax liability owed by his company was $112,650 in payments for renovations on his personal residence in 2006. Patel also admitted that the corporate tax return for the year ending in March 2007 improperly included more than $8,200 in expenses related to a personal country club membership and associated fees, as well as numerous personal expenses paid through a corporate credit card. Patel admitted that the corporate tax return for the year ending in March 2007 included false deductions of more than $145,000 and that the tax loss over a four-year period for which he is criminally liable totaled $63,815.
The count to which Patel pleaded guilty is punishable by a maximum potential penalty of three years in prison and a maximum fine of $250,000. Sentencing is scheduled for June 4, 2013.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, and special agents of the FBI under Acting Special Agent in Charge David Velazquez, with the investigation that resulted in today’s plea.
The government is represented by Special Litigation Counsel Mark J. McCarren of the U.S. Attorney’s Office Special Prosecutions Division.
Friday, February 22, 2013
Former California Assemblyman Admits Defrauding Banks out of $193,661 by Falsely Claiming to be Identity Theft Victim
LOS ANGELES—Carl Edward Washington, a former California assemblyman
who represented the state’s 52nd district, has agreed to plead guilty to
federal bank fraud charges, admitting that he bilked financial
institutions by falsely claiming to be the victim of identity theft.
As part of a plea agreement filed yesterday in United States District Court, Washington agreed to plead guilty to three counts of bank fraud for causing losses of $193,661 to financial institutions that include Farmers and Merchants Bank, First City Credit Union, and LA Financial Credit Union.
Washington, 47, a resident of Paramount who currently is employed as a division chief with the Los Angeles County Probation Department, admitted in the plea agreement that during a lengthy scheme that ran through the summer of 2011, he defrauded the three banks by concealing several unpaid debts—debts that he simply stopped paying—and his overall lack of creditworthiness.
Washington was able to hide his bad debts by filing a series of bogus police reports with the Los Angeles County Sheriff’s Department in which he falsely claimed to be the victim of identity theft. After filing the false police reports, Washington sent copies of the reports to the credit reporting agency Experian and demanded that the information relating to the bad debts be removed from his credit report. Once Experian removed this data from his credit report, Washington submitted applications for new credit cards to the victim banks, applications that failed to disclose all of his outstanding debts and the fact that he had negative information reported by other financial institutions removed from his credit report. Once the victim banks issued new credit cards to Washington, he purchased goods and services. But, after making several payments, Washington contacted Experian and, claiming that he was the victim of identity theft, requested that information related to the new credit cards be removed from his credit report. Washington admitted filing five false police reports with LASD.
Washington’s scheme was exposed when he attempted to refinance two auto loans through LA Financial. When the credit union examined Washington’s credit report, it discovered that the auto loans it had previously issued were not showing up on his credit report. LA Financial subsequently learned from Experian that Washington disputed he had earlier sought to refinance his auto loans and that he claimed to be a victim of identity theft. Because LA Financial knew Washington’s claims were false, it froze Washington’s credit card account and reported him to authorities.
Washington was elected to the California legislature in 1996 and he served in the assembly until 2002. Washington later went to work for the Los Angeles County Probation Department, where he ran a unit called Intergovernmental Relations and Legislative Affairs. Washington has been on administrative leave from the Probation Department since his arrest in this case in September.
Washington is scheduled to enter his guilty pleas on Monday before United States District Judge S. James Otero. Once he pleads guilty, Washington will face a statutory maximum penalty of 30 years in federal prison for each of the three bank fraud counts. However, the parties have agreed that the United States Sentencing Guidelines call for a term of imprisonment of one year to 18 months. The actual sentence will be determined by Judge Otero later this year.
The case against Washington was investigated by the Federal Bureau of Investigation’s Public Corruption Squad.
As part of a plea agreement filed yesterday in United States District Court, Washington agreed to plead guilty to three counts of bank fraud for causing losses of $193,661 to financial institutions that include Farmers and Merchants Bank, First City Credit Union, and LA Financial Credit Union.
Washington, 47, a resident of Paramount who currently is employed as a division chief with the Los Angeles County Probation Department, admitted in the plea agreement that during a lengthy scheme that ran through the summer of 2011, he defrauded the three banks by concealing several unpaid debts—debts that he simply stopped paying—and his overall lack of creditworthiness.
Washington was able to hide his bad debts by filing a series of bogus police reports with the Los Angeles County Sheriff’s Department in which he falsely claimed to be the victim of identity theft. After filing the false police reports, Washington sent copies of the reports to the credit reporting agency Experian and demanded that the information relating to the bad debts be removed from his credit report. Once Experian removed this data from his credit report, Washington submitted applications for new credit cards to the victim banks, applications that failed to disclose all of his outstanding debts and the fact that he had negative information reported by other financial institutions removed from his credit report. Once the victim banks issued new credit cards to Washington, he purchased goods and services. But, after making several payments, Washington contacted Experian and, claiming that he was the victim of identity theft, requested that information related to the new credit cards be removed from his credit report. Washington admitted filing five false police reports with LASD.
Washington’s scheme was exposed when he attempted to refinance two auto loans through LA Financial. When the credit union examined Washington’s credit report, it discovered that the auto loans it had previously issued were not showing up on his credit report. LA Financial subsequently learned from Experian that Washington disputed he had earlier sought to refinance his auto loans and that he claimed to be a victim of identity theft. Because LA Financial knew Washington’s claims were false, it froze Washington’s credit card account and reported him to authorities.
Washington was elected to the California legislature in 1996 and he served in the assembly until 2002. Washington later went to work for the Los Angeles County Probation Department, where he ran a unit called Intergovernmental Relations and Legislative Affairs. Washington has been on administrative leave from the Probation Department since his arrest in this case in September.
Washington is scheduled to enter his guilty pleas on Monday before United States District Judge S. James Otero. Once he pleads guilty, Washington will face a statutory maximum penalty of 30 years in federal prison for each of the three bank fraud counts. However, the parties have agreed that the United States Sentencing Guidelines call for a term of imprisonment of one year to 18 months. The actual sentence will be determined by Judge Otero later this year.
The case against Washington was investigated by the Federal Bureau of Investigation’s Public Corruption Squad.
Excelsior Coin Dealer Pleads Guilty to Defrauding Customers and Investors out of $2.7 Million
MINNEAPOLIS—Earlier today in federal court, a 53-year-old
Excelsior coin dealer pleaded guilty to devising and executing a scheme
to defraud customers and investors out of $2.7 million. David Laurence
Marion pleaded guilty to one count of conspiracy to commit mail and wire
fraud and one count of money laundering. Marion, who was indicted on
November 14, 2012, entered his plea before United States District Court
Judge Patrick J. Schiltz.
In his plea agreement, Marion admitted that he owned International Rarities Corporation (IRC), a business that bought, sold, and traded gold coins and precious metals, among other things. Marion directed his sales staff to “cold call” people from “lead” sheets in an attempt to get them to buy, sell, or trade coins and precious metals.
Marion also admitted that between December 2010 and August 2011, IRC received over $2 million in coins, precious metals, and money from customers who intended to purchase or exchange coins and precious metals. In August 2011, IRC purportedly had over $2 million in unfulfilled customer orders. When customers inquired about the status of their orders, Marion admitted that he and the IRC sales staff ignored them, falsely indicated that their orders were being processed, or told them that their money, coins, and precious metals could not be returned because they were not available. Meanwhile, Marion used the customers’ money, coins, and precious metals for gambling and his lavish lifestyle or to pay commissions and salaries, fulfill other customer orders, or to support his family. Customers lost approximately $1.7 million in money, coins, and precious metals as a result of this scheme.
In addition, Marion was the president of International Rarities Holdings (IRH), and in that capacity, he directed his sales staff to sell securities in the form of ownership shares in the company. However, at the time, Marion was not registered with the Securities and Exchange Commission (SEC) as a broker or dealer, nor was he associated with a registered SEC broker or dealer. In fact, in April 2009, the SEC rejected Marion’s attempt to register the IRH offering as a security yet, from at least November 2008 through July 2009, Marion and his sales staff raised approximately $1 million from at least 26 investors who believed they were purchasing ownership shares in IRH. Marion admittedly used approximately $200,000 of those investor funds for his own personal use.
For his crimes, Marion faces a potential maximum penalty of 20 years in federal prison for conspiracy and 10 years for money laundering. Judge Schiltz will determine his sentence at a future hearing, yet to be scheduled.
This case is the result of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation Division, and the U.S. Postal Inspection Service. It is being prosecuted by Assistant U.S. Attorney Karen B. Schommer.
The U.S. Attorney’s Office wants to remind people to protect themselves from securities fraud. For more information, visit http://www.stopfraud.gov/protect-securities.html.
In his plea agreement, Marion admitted that he owned International Rarities Corporation (IRC), a business that bought, sold, and traded gold coins and precious metals, among other things. Marion directed his sales staff to “cold call” people from “lead” sheets in an attempt to get them to buy, sell, or trade coins and precious metals.
Marion also admitted that between December 2010 and August 2011, IRC received over $2 million in coins, precious metals, and money from customers who intended to purchase or exchange coins and precious metals. In August 2011, IRC purportedly had over $2 million in unfulfilled customer orders. When customers inquired about the status of their orders, Marion admitted that he and the IRC sales staff ignored them, falsely indicated that their orders were being processed, or told them that their money, coins, and precious metals could not be returned because they were not available. Meanwhile, Marion used the customers’ money, coins, and precious metals for gambling and his lavish lifestyle or to pay commissions and salaries, fulfill other customer orders, or to support his family. Customers lost approximately $1.7 million in money, coins, and precious metals as a result of this scheme.
In addition, Marion was the president of International Rarities Holdings (IRH), and in that capacity, he directed his sales staff to sell securities in the form of ownership shares in the company. However, at the time, Marion was not registered with the Securities and Exchange Commission (SEC) as a broker or dealer, nor was he associated with a registered SEC broker or dealer. In fact, in April 2009, the SEC rejected Marion’s attempt to register the IRH offering as a security yet, from at least November 2008 through July 2009, Marion and his sales staff raised approximately $1 million from at least 26 investors who believed they were purchasing ownership shares in IRH. Marion admittedly used approximately $200,000 of those investor funds for his own personal use.
For his crimes, Marion faces a potential maximum penalty of 20 years in federal prison for conspiracy and 10 years for money laundering. Judge Schiltz will determine his sentence at a future hearing, yet to be scheduled.
This case is the result of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation Division, and the U.S. Postal Inspection Service. It is being prosecuted by Assistant U.S. Attorney Karen B. Schommer.
The U.S. Attorney’s Office wants to remind people to protect themselves from securities fraud. For more information, visit http://www.stopfraud.gov/protect-securities.html.
New York Man Indicted on Federal Charges Related to 10 Central Pennsylvania Fast Food Restaurant Robberies
The United States Attorney’s Office for the Middle
District of Pennsylvania announced that Maurice Lebron Davis, age 39, of
Brooklyn, New York, was indicted today by a federal grand jury in
Harrisburg. The indictment charges Davis with 10 counts of interference
with commerce by robbery.
According to United States Attorney Peter J. Smith, the charges against Davis are a result of allegations that Davis and others broke into and robbed or attempted to rob 10 fast food restaurants in Cumberland, Dauphin, and York Counties between December 2011 and February 2012. The restaurants include:
These cases were investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, and the police departments of Upper Allen Township, Middlesex Township, Harrisburg, Carroll Township, Swatara Township, Lower Allen Township, and Silver Spring Township. The case is being prosecuted by Assistant United States Attorney Meredith A. Taylor.
Indictments and criminal informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this particular case, the maximum penalty under the federal statute is 20 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the judge is also required to consider and weigh a number of factors, including the nature, circumstances, and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public, and provide for the defendant’s educational, vocational, and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
According to United States Attorney Peter J. Smith, the charges against Davis are a result of allegations that Davis and others broke into and robbed or attempted to rob 10 fast food restaurants in Cumberland, Dauphin, and York Counties between December 2011 and February 2012. The restaurants include:
- Chick-fil-A, 6416 Carlisle Pike, Mechanicsburg;
- Wendy’s, 3465 Simpson Ferry Road, Camp Hill;
- Wendy’s, 427 N. 21st Street, Camp Hill;
- Burger King, 3253 Paxton Street, Harrisburg;
- Wendy’s, 2 Old Mill Road, Dillsburg;
- Wendy’s, 71 S. Conestoga Drive, Shippensburg;
- Burger King, 2000 N. Cameron Street, Harrisburg;
- Wendy’s, 331 S. Hanover Street, Carlisle;
- McDonald’s, 1176 Harrisburg Pike, Carlisle; and
- Arby’s, 240 Cumberland Parkway, Mechanicsburg
These cases were investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, and the police departments of Upper Allen Township, Middlesex Township, Harrisburg, Carroll Township, Swatara Township, Lower Allen Township, and Silver Spring Township. The case is being prosecuted by Assistant United States Attorney Meredith A. Taylor.
Indictments and criminal informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this particular case, the maximum penalty under the federal statute is 20 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the judge is also required to consider and weigh a number of factors, including the nature, circumstances, and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public, and provide for the defendant’s educational, vocational, and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Wednesday, February 20, 2013
Modesto Surrogate Parenting Agency Owner Pleads Guilty in $2 Million Fraud Scheme
FRESNO, CA—Tonya Ann Collins, 37, formerly of Modesto,
pleaded guilty today to four counts of wire fraud in connection with a
scheme she carried out through her agency Surrogenesis USA Inc. and a
related escrow company, United States Attorney Benjamin B. Wagner
announced.
According to court documents, from approximately November 2006 through March 2009, Collins, as owner of Surrogenesis and the Michael Charles Independent Financial Holding Group, carried out a scheme to defraud prospective parents, surrogates, and financial institutions. Surrogenesis was a surrogate and egg donation agency that marketed itself as assisting individuals in having children through third-party assisted reproduction. Michael Charles Independent Financial purported to be an independent personal property escrow company that would hold clients’ funds in trust and pay out those funds upon the clients’ authorization for legitimate expenses associated with the surrogacy process, such as surrogacy fees and medical costs. Collins admitted in her plea agreement that she steered Surrogenesis clients to Michael Charles Independent Financial but concealed her ownership and operation of the escrow company, including creating fictitious employee identities to make it appear that Michael Charles was an independent company with its own staff.
According to the plea agreement, Collins used the Surrogenesis and Michael Charles accounts for unauthorized personal purchases: automobiles, homes, jewelry, clothing, and vacations for herself and others, without the clients’ knowledge or consent. Collins used client trust funds in the Michael Charles accounts to directly pay for her personal purchases and also transferred client funds from the Michael Charles accounts to other bank accounts that she controlled before spending the funds. As a result of Collins’ conduct, Surrogenesis and Michael Charles Independent Financial suffered substantial cash flow problems and various surrogate mother fees and related surrogacy expenses were not paid by the companies as required. Collins nonetheless continued to solicit new surrogate parent clients and funds. As a result, Surrogenesis and Michael Charles clients, surrogates, and financial institutions suffered losses of more than $2 million.
U.S. Attorney Wagner said, “Tanya Collins cruelly took advantage of clients who sought nothing more than to bring children into the world. Her greed left a trail of devastation, both financial and emotional, in its wake.”
“Clients of Surrogenesis and Michael Charles Independent Financial confidently entrusted large sums of money in trust, believing that the expenses related to expanding their family would be paid,” said Herbert M. Brown, Director in Charge of the Sacramento Division of the Federal Bureau of Investigation. “Unfortunately, Tonya Collins’ greed has forever tarnished what should be happy memories of the arrival of children and the financial well being of her victims.”
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Kirk E. Sherriff is prosecuting the case.
Collins is scheduled to be sentenced by U.S. District Judge Anthony W. Ishii on May 13, 2013. Collins faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
According to court documents, from approximately November 2006 through March 2009, Collins, as owner of Surrogenesis and the Michael Charles Independent Financial Holding Group, carried out a scheme to defraud prospective parents, surrogates, and financial institutions. Surrogenesis was a surrogate and egg donation agency that marketed itself as assisting individuals in having children through third-party assisted reproduction. Michael Charles Independent Financial purported to be an independent personal property escrow company that would hold clients’ funds in trust and pay out those funds upon the clients’ authorization for legitimate expenses associated with the surrogacy process, such as surrogacy fees and medical costs. Collins admitted in her plea agreement that she steered Surrogenesis clients to Michael Charles Independent Financial but concealed her ownership and operation of the escrow company, including creating fictitious employee identities to make it appear that Michael Charles was an independent company with its own staff.
According to the plea agreement, Collins used the Surrogenesis and Michael Charles accounts for unauthorized personal purchases: automobiles, homes, jewelry, clothing, and vacations for herself and others, without the clients’ knowledge or consent. Collins used client trust funds in the Michael Charles accounts to directly pay for her personal purchases and also transferred client funds from the Michael Charles accounts to other bank accounts that she controlled before spending the funds. As a result of Collins’ conduct, Surrogenesis and Michael Charles Independent Financial suffered substantial cash flow problems and various surrogate mother fees and related surrogacy expenses were not paid by the companies as required. Collins nonetheless continued to solicit new surrogate parent clients and funds. As a result, Surrogenesis and Michael Charles clients, surrogates, and financial institutions suffered losses of more than $2 million.
U.S. Attorney Wagner said, “Tanya Collins cruelly took advantage of clients who sought nothing more than to bring children into the world. Her greed left a trail of devastation, both financial and emotional, in its wake.”
“Clients of Surrogenesis and Michael Charles Independent Financial confidently entrusted large sums of money in trust, believing that the expenses related to expanding their family would be paid,” said Herbert M. Brown, Director in Charge of the Sacramento Division of the Federal Bureau of Investigation. “Unfortunately, Tonya Collins’ greed has forever tarnished what should be happy memories of the arrival of children and the financial well being of her victims.”
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Kirk E. Sherriff is prosecuting the case.
Collins is scheduled to be sentenced by U.S. District Judge Anthony W. Ishii on May 13, 2013. Collins faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Boom Boom Bandit and Purse Packing Bandit Wanted for Multiple Bank Robberies in Los Angeles
Federal and local law enforcement in Los Angeles are
seeking information from the public that leads to the identity of two
unidentified suspects wanted for two separate series of bank robberies
that appear to be unrelated. The suspects were given monikers of “Boom
Boom Bandit” and “Purse Packing Bandit” to assist law enforcement
responding to the banks with information about active bank robbery
suspects. Bandit names are generated based on witness descriptions of
the appearance or behavior of a suspect during the initial robberies to
which they are linked.
Boom Boom Bandit
During the robberies linked to the Boom Boom Bandit, the suspect uses a written note demanding cash that also provides an assortment of instructions for the victim teller. Witnesses have described the suspect as a white male, 6’1” to 6’3” tall, 180 to 220 pounds, 35 to 40 years of age, with brown hair that may be a wig. In a bank surveillance photo being released to the media, the Boom Boom Bandit can be seen displaying a device in a bag described by witnesses as red flares wrapped in tape with wires attached. The barrel of a handgun was also seen inside the bag presented to the victim teller. The demand note stated, in part, “no drama, no boom boom,” which appears to suggest that an explosive device would be detonated if the victim did not comply with the suspect’s demand. The suspect took the device with him as he exited the banks. The Boom Boom Bandit is wanted for a bank robbery and an attempted bank robbery on February 12, 2013, at the following locations:
Purse Packing Bandit
During the robberies linked to the Purse Packing Bandit, the suspect approaches the victim teller carrying a purse in which she advises the teller there is a gun. The Purse Packing Bandit passes a note to the victim teller demanding specific amounts of cash. The Purse Packing Bandit is seen in bank surveillance photos with various hairstyles, possibly wigs, and, in some cases, sunglasses. The Purse Packing Bandit is described as a black female, 5’2” to 5’4” tall, 120 to 140 pounds, and 35 to 45 years of age. The Purse Packing Bandit has been linked to the following robberies:
Anyone with information about the identity or whereabouts of either
suspect is urged to contact their nearest FBI office or dial 911.
The FBI is conducting these investigations jointly with the Los Angeles Police Department. The Los Angeles County Sheriff’s Department is also jointly investigating the case of the Purse Packing Bandit.
Additional information about bank robbers currently wanted by the FBI’s Los Angeles Division can be found at www.labankrobbers.org.
Boom Boom Bandit
During the robberies linked to the Boom Boom Bandit, the suspect uses a written note demanding cash that also provides an assortment of instructions for the victim teller. Witnesses have described the suspect as a white male, 6’1” to 6’3” tall, 180 to 220 pounds, 35 to 40 years of age, with brown hair that may be a wig. In a bank surveillance photo being released to the media, the Boom Boom Bandit can be seen displaying a device in a bag described by witnesses as red flares wrapped in tape with wires attached. The barrel of a handgun was also seen inside the bag presented to the victim teller. The demand note stated, in part, “no drama, no boom boom,” which appears to suggest that an explosive device would be detonated if the victim did not comply with the suspect’s demand. The suspect took the device with him as he exited the banks. The Boom Boom Bandit is wanted for a bank robbery and an attempted bank robbery on February 12, 2013, at the following locations:
- Chase Bank 12335 Venice Blvd. in Los Angeles
- Bank of America 11501 Santa Monica Blvd. in Los Angeles
During the robberies linked to the Purse Packing Bandit, the suspect approaches the victim teller carrying a purse in which she advises the teller there is a gun. The Purse Packing Bandit passes a note to the victim teller demanding specific amounts of cash. The Purse Packing Bandit is seen in bank surveillance photos with various hairstyles, possibly wigs, and, in some cases, sunglasses. The Purse Packing Bandit is described as a black female, 5’2” to 5’4” tall, 120 to 140 pounds, and 35 to 45 years of age. The Purse Packing Bandit has been linked to the following robberies:
- October 20, 2012: Citibank 8900 Santa Monica Blvd. in West Hollywood
- November 14, 2012: Chase Bank 310 N. Fairfax Blvd. in Los Angeles
- December 20, 2012: Bank of America 8025 Santa Monica Blvd. in West Hollywood
- December 24, 2012: Chase Bank 3738 Crenshaw Blvd. in Los Angeles
The FBI is conducting these investigations jointly with the Los Angeles Police Department. The Los Angeles County Sheriff’s Department is also jointly investigating the case of the Purse Packing Bandit.
Additional information about bank robbers currently wanted by the FBI’s Los Angeles Division can be found at www.labankrobbers.org.
Four Plead Guilty to Selling Homes without Knowledge of Real Property Owners
ALEXANDRIA, VA—Four individuals—including two settlement
agents in Annandale, Virginia—have pleaded guilty to conspiring to
fraudulently taking over the titles of homes in Washington, D.C.,
without the real property owners’ knowledge, selling those homes, and
keeping the profit.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the pleas were accepted by United States District Judge Gerald Bruce Lee.
According to court records, Jamaul Roberts, 25, College Park, Maryland, conspired with others to visit the D.C. tax courts to identify properties with overdue property tax bills. They would use sources such as Ancestry.com and the D.C. property tax database to locate vulnerable properties where they could take over a home’s title without the real owners’ knowledge. These homes included those left vacant, passed on to heirs after the owner’s death, or owned by the elderly in nursing homes who did not understand the transactions taking place.
The fraudulent sales were facilitated by two settlement agents, Patricia Mantilla, 35, of Lorton, Virginia, and Melissa McWilliams, 35, Chantilly, Virginia, who worked at Ace Title & Escrow in Annandale. The agents knew the home sales were fraudulent and that the owners appearing at settlement were not the rightful owners. They also assisted the conspirators in hiding profits on the property sales from other parties involved in the sale through fictitious invoices to be paid at closing.
The conspirators, including Michael Brown, 41, Hyattsville, Maryland, recruited straw sellers to sign documents and falsely represent themselves as the owners of the properties. Brown, for example, appointed himself the personal representative of the rightful owner of a property and prepared a fake death certificate for the owner, although the owner was still living. He attempted to sell the property to another member of the conspiracy for $350,000.
During the course of the scheme, numerous properties were fraudulently sold, resulting in more than $1 million in actual and intended losses.
Roberts and Brown pled guilty to conspiring to commit wire fraud and face a maximum penalty of 20 years in prison when they are sentenced on May 10, 2013 and May 3, 2013, respectively.
Mantilla and McWilliams pled guilty to conspiring to commit wire fraud and face a maximum penalty of five years in prison when they are sentenced on April 26, 2013 and June 7, 2013.
This ongoing investigation is being conducted by the FBI’s Washington Field Office. Assistant United States Attorney Chad Golder of the Office’s Financial Fraud and Public Corruption Unit is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the pleas were accepted by United States District Judge Gerald Bruce Lee.
According to court records, Jamaul Roberts, 25, College Park, Maryland, conspired with others to visit the D.C. tax courts to identify properties with overdue property tax bills. They would use sources such as Ancestry.com and the D.C. property tax database to locate vulnerable properties where they could take over a home’s title without the real owners’ knowledge. These homes included those left vacant, passed on to heirs after the owner’s death, or owned by the elderly in nursing homes who did not understand the transactions taking place.
The fraudulent sales were facilitated by two settlement agents, Patricia Mantilla, 35, of Lorton, Virginia, and Melissa McWilliams, 35, Chantilly, Virginia, who worked at Ace Title & Escrow in Annandale. The agents knew the home sales were fraudulent and that the owners appearing at settlement were not the rightful owners. They also assisted the conspirators in hiding profits on the property sales from other parties involved in the sale through fictitious invoices to be paid at closing.
The conspirators, including Michael Brown, 41, Hyattsville, Maryland, recruited straw sellers to sign documents and falsely represent themselves as the owners of the properties. Brown, for example, appointed himself the personal representative of the rightful owner of a property and prepared a fake death certificate for the owner, although the owner was still living. He attempted to sell the property to another member of the conspiracy for $350,000.
During the course of the scheme, numerous properties were fraudulently sold, resulting in more than $1 million in actual and intended losses.
Roberts and Brown pled guilty to conspiring to commit wire fraud and face a maximum penalty of 20 years in prison when they are sentenced on May 10, 2013 and May 3, 2013, respectively.
Mantilla and McWilliams pled guilty to conspiring to commit wire fraud and face a maximum penalty of five years in prison when they are sentenced on April 26, 2013 and June 7, 2013.
This ongoing investigation is being conducted by the FBI’s Washington Field Office. Assistant United States Attorney Chad Golder of the Office’s Financial Fraud and Public Corruption Unit is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.
Brokerage Executive Pleads Guilty in Illegal Hotel Flipping Scheme
ALEXANDRIA, VA—Jonathan Propp, 48, of McLean, Virginia,
pleaded guilty today to conspiring with others to steal more than $20
million from Host Hotels and Resorts L.P. (Host), one of the nation’s
largest hotel owners, by executing a series of illegal sales of hotels.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the pleas were accepted by United States District Judge Liam O’Grady.
According to court records, Propp was the chief operating officer of Molinaro-Koger, an international hotel real estate brokerage firm headquartered in Tysons Corner, Virginia. From 2009 through 2012, Propp conspired with others to illegally sell hotels owned by Host to straw buyers, who would then immediately sell the properties to a buyer at a higher price, with the conspirators pocketing the difference. Propp admitted that he posed as a straw buyer, forged signatures, and obtained a driver’s license for one of the straw buyers who had died before the fraudulent sale could be completed.
Todd Lawyer, 53, of Fairfax, Virginia, also pleaded guilty today for his role as a straw buyer in the conspiracy. The conspirators earned more than $20 million by illegally flipping the hotels.
In addition, Propp admitted that he participated in a scheme to steal and launder an additional $15 million from deposits provided by prospective buyers of hotels, which they purported to hold in escrow but instead used to pay for personal and business expenses. Propp used the money to pay Molinaro-Koger’s expenses and employee salaries, despite knowing the escrowed funds were obtained fraudulently.
Propp and Lawyer pled guilty to conspiring to commit wire fraud and face a maximum penalty of 20 years in prison when they are sentenced on May 31, 2013 and May 24, 2013, respectively.
This ongoing investigation is being conducted by the FBI’s Washington Field Office. Assistant United States Attorneys Chad Golder of the Office’s Financial Fraud and Public Corruption Unit and Michael Rich of the Office’s Major Crime’s Unit are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the pleas were accepted by United States District Judge Liam O’Grady.
According to court records, Propp was the chief operating officer of Molinaro-Koger, an international hotel real estate brokerage firm headquartered in Tysons Corner, Virginia. From 2009 through 2012, Propp conspired with others to illegally sell hotels owned by Host to straw buyers, who would then immediately sell the properties to a buyer at a higher price, with the conspirators pocketing the difference. Propp admitted that he posed as a straw buyer, forged signatures, and obtained a driver’s license for one of the straw buyers who had died before the fraudulent sale could be completed.
Todd Lawyer, 53, of Fairfax, Virginia, also pleaded guilty today for his role as a straw buyer in the conspiracy. The conspirators earned more than $20 million by illegally flipping the hotels.
In addition, Propp admitted that he participated in a scheme to steal and launder an additional $15 million from deposits provided by prospective buyers of hotels, which they purported to hold in escrow but instead used to pay for personal and business expenses. Propp used the money to pay Molinaro-Koger’s expenses and employee salaries, despite knowing the escrowed funds were obtained fraudulently.
Propp and Lawyer pled guilty to conspiring to commit wire fraud and face a maximum penalty of 20 years in prison when they are sentenced on May 31, 2013 and May 24, 2013, respectively.
This ongoing investigation is being conducted by the FBI’s Washington Field Office. Assistant United States Attorneys Chad Golder of the Office’s Financial Fraud and Public Corruption Unit and Michael Rich of the Office’s Major Crime’s Unit are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.
Kansas City Man Gets 95 Years in Federal Prison for Robberies in Topeka and Leavenworth
KANSAS CITY, KS—A Kansas City man has been sentenced to
95 years in federal prison for robbing financial institutions in Topeka
and Leavenworth, U.S. Attorney Barry Grissom said today.
Charles E. Shaw, 55, Kansas City, Missouri, was convicted in a jury trial in November of the following:
The judge also ordered Shaw to pay $54,052 in restitution.
Grissom commended the Topeka Police Department, the Leavenworth Police Department, the FBI, and Assistant U.S. Attorney Terra Morehead for their work on the case.
Charles E. Shaw, 55, Kansas City, Missouri, was convicted in a jury trial in November of the following:
- Robbing the Main Street Credit Union at 1609 S. 4th in Leavenworth, Kansas, on November 24, 2010, and brandishing a firearm during the robbery.
- Robbing the Citizens National Bank at 601 Delaware Street in Leavenworth on February 14, 2011.
- Robbing the Educational Credit Union at 901 Topeka Boulevard in Topeka, Kansas, on December 30, 2011, and brandishing a firearm during the robbery.
- Attempting to rob the Educational Credit Union again on February 9, 2012, carrying a firearm during the attempted robbery, and carrying a firearm after a felony conviction.
The judge also ordered Shaw to pay $54,052 in restitution.
Grissom commended the Topeka Police Department, the Leavenworth Police Department, the FBI, and Assistant U.S. Attorney Terra Morehead for their work on the case.
Former Wayne County Official Found Guilty of Falsifying Documents to Conceal Bribery Scheme
Zayd Allebban, former Wayne County Director of Enterprise
Applications, the office that does software application development for
Wayne County, was found guilty today by a federal jury in Detroit on
charges of falsifying documents with the intent to obstruct justice,
U.S. Attorney Barbara L. McQuade announced. The purpose of the falsified
documents was to conceal a bribery/extortion scheme by Allebban’s
friend and supervisor, Tahir Kazmi, former Wayne County Chief
Information Officer.
McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III of the Federal Bureau of Investigation (FBI).
The eight-day trial was conducted before United States District Judge Stephen J. Murphy. The jury deliberated for approximately a day and a half before reaching their verdict.
The evidence presented at trial established that Allebban and Kazmi sought to obstruct justice by seeking to persuade a private contractor to provide false information to the FBI and to a federal grand jury investigating corruption in the Wayne County government. Allebban and Kazmi sought to conceal the fact that the contractor had given Kazmi tens of thousands of dollars in cash and trips to Hawaii, Turkey, and Florida. Allebban was found guilty of falsifying documents that indicated that all payments from the contractor had been repaid by Kazmi, prior to the initiation of the grand jury investigation, with the intent to obstruct the grand jury and FBI investigation. Allebban, as part of the scheme, also delivered $24,000 in cash to the private contractor in an effort to induce the contractor to tell the FBI that the contractor had never given anything to Kazmi.
Allebban faces up to 20 years in prison and a fine of up to $250,000 on each of the two counts of falsifying documents.
A sentencing date will be set by Judge Murphy’s chambers.
Allebban was found not guilty on separate charges of conspiracy to obstruct justice and obstruction of justice by means of false documents.
Tahir Kazmi pleaded guilty on July 26, 2012, to accepting a bribe and is scheduled to be sentenced on February 22, 2013. He faces a maximum sentence of 10 years in prison and/or a $250,000 fine.
U.S. Attorney McQuade said, “Public officials who illegally enrich themselves will be detected and brought to justice. Efforts to conceal their crimes will bring additional charges and higher penalties.”
FBI Special Agent in Charge Foley said, “The citizens of Wayne County deserve honest government and leaders committed to serving the needs of taxpayers. This verdict should serve as a reminder that the FBI-led Detroit Area Public Corruption Task Force will remain vigilant and dedicated to stopping these illegal acts.”
The case was investigated by Special Agents of the FBI and Detroit Area Public Corruption Task Force. It is being prosecuted by Assistant United States Attorney Sheldon Light.
McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III of the Federal Bureau of Investigation (FBI).
The eight-day trial was conducted before United States District Judge Stephen J. Murphy. The jury deliberated for approximately a day and a half before reaching their verdict.
The evidence presented at trial established that Allebban and Kazmi sought to obstruct justice by seeking to persuade a private contractor to provide false information to the FBI and to a federal grand jury investigating corruption in the Wayne County government. Allebban and Kazmi sought to conceal the fact that the contractor had given Kazmi tens of thousands of dollars in cash and trips to Hawaii, Turkey, and Florida. Allebban was found guilty of falsifying documents that indicated that all payments from the contractor had been repaid by Kazmi, prior to the initiation of the grand jury investigation, with the intent to obstruct the grand jury and FBI investigation. Allebban, as part of the scheme, also delivered $24,000 in cash to the private contractor in an effort to induce the contractor to tell the FBI that the contractor had never given anything to Kazmi.
Allebban faces up to 20 years in prison and a fine of up to $250,000 on each of the two counts of falsifying documents.
A sentencing date will be set by Judge Murphy’s chambers.
Allebban was found not guilty on separate charges of conspiracy to obstruct justice and obstruction of justice by means of false documents.
Tahir Kazmi pleaded guilty on July 26, 2012, to accepting a bribe and is scheduled to be sentenced on February 22, 2013. He faces a maximum sentence of 10 years in prison and/or a $250,000 fine.
U.S. Attorney McQuade said, “Public officials who illegally enrich themselves will be detected and brought to justice. Efforts to conceal their crimes will bring additional charges and higher penalties.”
FBI Special Agent in Charge Foley said, “The citizens of Wayne County deserve honest government and leaders committed to serving the needs of taxpayers. This verdict should serve as a reminder that the FBI-led Detroit Area Public Corruption Task Force will remain vigilant and dedicated to stopping these illegal acts.”
The case was investigated by Special Agents of the FBI and Detroit Area Public Corruption Task Force. It is being prosecuted by Assistant United States Attorney Sheldon Light.
Tuesday, February 19, 2013
Essex County Man Sentenced to 118 Months in Prison for Armed Carjacking
NEWARK—An Essex County man was sentenced today to 118
months in prison for his role in an armed carjacking in Elizabeth, New
Jersey, on January 25, 2011, U.S. Attorney Paul J. Fishman announced.
Jermaine May, 29, of Newark, previously pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to a superseding information charging him with conspiracy to commit carjacking, theft of a motor vehicle by force, violence and intimidation, and use of a firearm in furtherance of a crime of violence.
According to documents filed in this case and statements made in court:
May conspired with Alhakim Young, David Jones, and Maurice Williams to carjack a vehicle. On January 25, 2011, May, Young, Jones, and Williams traveled to Elizabeth, New Jersey, in a white Jeep Cherokee to look for a vehicle to carjack. May and Young approached two victims who were standing near a 2004 Infiniti G-35 that was parked and warming up on Britton Street in Elizabeth and, at gunpoint, ordered the two victims to the ground. Williams and Jones fled in the Infiniti, while May and Young fled in the white Jeep Cherokee. Young, Jones, and Williams previously pleaded guilty to conspiracy to commit carjacking, carjacking, and use of a firearm in furtherance of a crime of violence.
May was sentenced to concurrent 58-months prison terms on the conspiracy and carjacking counts and a consecutive 60-month prison term on the count of using a firearm in furtherance of a crime of violence, for a total sentence of 118 months in prison. Judge Cecchi also sentenced May to five years of supervised release. Restitution will be determined at a later date.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Acting Special Agent in Charge David Velazquez B. Ward in Newark, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Dara Aquila Govan of the General Crimes Unit and Gurbir Grewal of the Economic Crimes Unit in Newark.
Jermaine May, 29, of Newark, previously pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to a superseding information charging him with conspiracy to commit carjacking, theft of a motor vehicle by force, violence and intimidation, and use of a firearm in furtherance of a crime of violence.
According to documents filed in this case and statements made in court:
May conspired with Alhakim Young, David Jones, and Maurice Williams to carjack a vehicle. On January 25, 2011, May, Young, Jones, and Williams traveled to Elizabeth, New Jersey, in a white Jeep Cherokee to look for a vehicle to carjack. May and Young approached two victims who were standing near a 2004 Infiniti G-35 that was parked and warming up on Britton Street in Elizabeth and, at gunpoint, ordered the two victims to the ground. Williams and Jones fled in the Infiniti, while May and Young fled in the white Jeep Cherokee. Young, Jones, and Williams previously pleaded guilty to conspiracy to commit carjacking, carjacking, and use of a firearm in furtherance of a crime of violence.
May was sentenced to concurrent 58-months prison terms on the conspiracy and carjacking counts and a consecutive 60-month prison term on the count of using a firearm in furtherance of a crime of violence, for a total sentence of 118 months in prison. Judge Cecchi also sentenced May to five years of supervised release. Restitution will be determined at a later date.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Acting Special Agent in Charge David Velazquez B. Ward in Newark, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Dara Aquila Govan of the General Crimes Unit and Gurbir Grewal of the Economic Crimes Unit in Newark.
Justin Worley to Plead Guilty in Federal Court to Nine Counts of Bank Robbery
PROVIDENCE, RI—According to documents filed in U.S. District Court in
Providence today, Justin L. Worley, 34, has agreed to plead guilty in
federal court to robbing eight banks in Rhode Island and one in
Massachusetts, announced United States Attorney Peter F. Neronha.
According to court documents, Worley will plead guilty to nine counts of bank robbery. Worley will admit to the court that on nine separate occasions he entered financial institutions, and, using implied or explicit threats, including the threat of death in at least four of the robberies, he robbed the banks of a total of $32,633.
According to the documents, Worley will admit to robbing eight financial institutions in Rhode Island between April 16, 2012, and September 18, 2012, and to robbing one in Seekonk, Massachusetts, on February 23, 2012.
Worley was arrested at a motel in Seekonk on September 19, 2012, by East Providence, Rhode Island and Seekonk, Massachusetts Police Departments.
The bank robberies were investigated by the Barrington, Cranston, East Providence, North Providence, Pawtucket, Seekonk, and Warwick Police Departments and the FBI.
The maximum statutory penalty for bank robbery is 20 years in federal prison; a fine of up to $250,000; and a term of supervised release of three years.
Worley has been detained in federal custody since November 15, 2012.
The case is being prosecuted by Assistant U.S. Attorneys William J. Ferland and Paul F. Daly, Jr
According to court documents, Worley will plead guilty to nine counts of bank robbery. Worley will admit to the court that on nine separate occasions he entered financial institutions, and, using implied or explicit threats, including the threat of death in at least four of the robberies, he robbed the banks of a total of $32,633.
According to the documents, Worley will admit to robbing eight financial institutions in Rhode Island between April 16, 2012, and September 18, 2012, and to robbing one in Seekonk, Massachusetts, on February 23, 2012.
Worley was arrested at a motel in Seekonk on September 19, 2012, by East Providence, Rhode Island and Seekonk, Massachusetts Police Departments.
The bank robberies were investigated by the Barrington, Cranston, East Providence, North Providence, Pawtucket, Seekonk, and Warwick Police Departments and the FBI.
The maximum statutory penalty for bank robbery is 20 years in federal prison; a fine of up to $250,000; and a term of supervised release of three years.
Worley has been detained in federal custody since November 15, 2012.
The case is being prosecuted by Assistant U.S. Attorneys William J. Ferland and Paul F. Daly, Jr
Pair Sentenced to Federal Prison in Connection with Foreign Currency Exchange-Related Ponzi Scheme
In Austin this morning, 43-year-old Christopher Brown
Cornett of Buda, Texas, and 49–year-old Heidi Beryl Beyer of Scottsdale,
Arizona, were sentenced to 40 years and six years in federal prison,
respectively, for carrying out a Ponzi scheme that victimized more than
150 individuals and resulted in a total estimated loss to investors of
more than $10.6 million, announced United States Attorney Robert Pitman,
Federal Bureau of Investigation Special Agent in Charge Armando
Fernandez, and Internal Revenue Service-Criminal Investigation Special
Agent in Charge Steve McCollough.
In addition to the prison terms, United States District Judge Sam Sparks ordered that the defendants jointly and severally pay restitution in the amount of $9,525,031.77. Judge Sparks ordered Cornett to pay an additional $795,701.62 restitution. Furthermore, Judge Sparks ordered that both defendants be placed under supervised release for a period of three years after completing their prison terms.
“Mr. Cornett and Ms. Beyer defrauded investors out of millions of dollars, and the sentences handed down today exemplify the consequences criminals face for such crimes. Investment schemes cause serious damage to victims, both financially and emotionally, and therefore demand serious punishments. My office is committed to bringing white-collar criminals to justice, and today’s sentences are evidence of that commitment,” stated United States Attorney Robert Pitman.
In October 2012, Cornett pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering; Beyer pleaded guilty to one count of wire fraud. By pleading guilty, Cornett admitted that from April 2008 to October 2011, he devised a scheme to obtain money from investors under false pretenses. Beyer joined in the scheme in September 2009. According to court records, the defendants represented to investors that their money would be placed into a common pool of funds that would be invested in foreign currency exchange trades and that investors would receive the profits of the trades, less a fixed share of the profits for the defendants (usually between 25 to 30 percent of the profits). These representations were made both orally and in writing, in the form of e-mails and, eventually, in the form of a Subscription Agreement each investor had to sign.
Information which the defendants failed to disclose to investors included the fact that Cornett had previously been fired from Morgan Stanley for failure to follow company rules; Cornett was terminated from Brookstreet Securities in 2002 because he had violated securities regulations; on January 8, 2003, the National Association of Securities Dealers (NASD” barred Cornett from associating with any member of the NASD in any capacity based on Cornett’s theft of approximately $28,000 of an investor’s money; Cornett was not properly registered as required by the Commodities Exchange Act and CFTC regulations; and Cornett’s previous federal conviction in 2003 for five counts of federal bank fraud and the fact that he served two years in federal prison as a result of that prior conviction.
According to court records, the defendants solicited from pool participants a total of approximately $14.6 million during their scheme. The defendants lost approximately $7.3 million of the pool’s funds in foreign currency exchange trading. They used the remaining pool funds for personal enrichment or to make payments to other investors so as to lull those investors into the mistaken belief that their investment was profitable and sound. Court records reflect that Cornett used pool funds to cover gambling losses in Las Vegas that exceeded $600,000 and to purchase a new Chevrolet Corvette.
“This type of scheme threatens our economy and undermines the trust in our financial system,” stated Internal Revenue Service-Criminal Investigation Special Agent in Charge Steve McCollough. “IRS-Criminal Investigation wants to make sure that criminals face the consequences of their actions just as these defendants did.”
“The FBI, IRS-CI, and the Western District of Texas United States Attorney’s Office recognize the importance of protecting Americans from criminals who steal from victims without violence but through broken promises and deceit. Americans now, more than ever in tough economic times, count on law enforcement to protect them from white-collar criminals and to send messages to future fraudsters that these law enforcement agencies will actively pursue them to ensure crime does not pay,” stated Federal Bureau of Investigation Special Agent in Charge Armando Fernandez.
This investigation was conducted by the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorney Chris Peele prosecuted this case on behalf of the government.
In addition to the prison terms, United States District Judge Sam Sparks ordered that the defendants jointly and severally pay restitution in the amount of $9,525,031.77. Judge Sparks ordered Cornett to pay an additional $795,701.62 restitution. Furthermore, Judge Sparks ordered that both defendants be placed under supervised release for a period of three years after completing their prison terms.
“Mr. Cornett and Ms. Beyer defrauded investors out of millions of dollars, and the sentences handed down today exemplify the consequences criminals face for such crimes. Investment schemes cause serious damage to victims, both financially and emotionally, and therefore demand serious punishments. My office is committed to bringing white-collar criminals to justice, and today’s sentences are evidence of that commitment,” stated United States Attorney Robert Pitman.
In October 2012, Cornett pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering; Beyer pleaded guilty to one count of wire fraud. By pleading guilty, Cornett admitted that from April 2008 to October 2011, he devised a scheme to obtain money from investors under false pretenses. Beyer joined in the scheme in September 2009. According to court records, the defendants represented to investors that their money would be placed into a common pool of funds that would be invested in foreign currency exchange trades and that investors would receive the profits of the trades, less a fixed share of the profits for the defendants (usually between 25 to 30 percent of the profits). These representations were made both orally and in writing, in the form of e-mails and, eventually, in the form of a Subscription Agreement each investor had to sign.
Information which the defendants failed to disclose to investors included the fact that Cornett had previously been fired from Morgan Stanley for failure to follow company rules; Cornett was terminated from Brookstreet Securities in 2002 because he had violated securities regulations; on January 8, 2003, the National Association of Securities Dealers (NASD” barred Cornett from associating with any member of the NASD in any capacity based on Cornett’s theft of approximately $28,000 of an investor’s money; Cornett was not properly registered as required by the Commodities Exchange Act and CFTC regulations; and Cornett’s previous federal conviction in 2003 for five counts of federal bank fraud and the fact that he served two years in federal prison as a result of that prior conviction.
According to court records, the defendants solicited from pool participants a total of approximately $14.6 million during their scheme. The defendants lost approximately $7.3 million of the pool’s funds in foreign currency exchange trading. They used the remaining pool funds for personal enrichment or to make payments to other investors so as to lull those investors into the mistaken belief that their investment was profitable and sound. Court records reflect that Cornett used pool funds to cover gambling losses in Las Vegas that exceeded $600,000 and to purchase a new Chevrolet Corvette.
“This type of scheme threatens our economy and undermines the trust in our financial system,” stated Internal Revenue Service-Criminal Investigation Special Agent in Charge Steve McCollough. “IRS-Criminal Investigation wants to make sure that criminals face the consequences of their actions just as these defendants did.”
“The FBI, IRS-CI, and the Western District of Texas United States Attorney’s Office recognize the importance of protecting Americans from criminals who steal from victims without violence but through broken promises and deceit. Americans now, more than ever in tough economic times, count on law enforcement to protect them from white-collar criminals and to send messages to future fraudsters that these law enforcement agencies will actively pursue them to ensure crime does not pay,” stated Federal Bureau of Investigation Special Agent in Charge Armando Fernandez.
This investigation was conducted by the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorney Chris Peele prosecuted this case on behalf of the government.
Friday, February 15, 2013
East County Regional Gang Task Force Arrests More Than Two Dozen Following Year-Long Investigation of Major Meth Traffickers
Early yesterday, a contingent of 150 federal, state, and
local law enforcement officials arrested 28 people and seized 19
firearms—including fully automatic and semi-automatic assault rifles,
silencers, and high-capacity magazines—in connection with a year-long
investigation of major methamphetamine traffickers.
Many of the defendants are scheduled to be arraigned before U.S. Magistrate Judge David Bartick at 1:30 p.m. today. Prosecutors will be available for interviews after court.
The arrests—from Spring Valley, La Mesa, and Jamul to National City, Chula Vista, and San Diego—were based on three grand jury indictments of 33 suspected methamphetamine traffickers unsealed in federal court Tuesday. The charges include conspiracy to distribute controlled substances, distribution of methamphetamine, and possession of methamphetamine with intent to distribute. Three defendants are still at large.
During the predawn raids, agents seized about 26 pounds of methamphetamine with an estimated $291,200 street value; a pound of cocaine with estimated $12,800 street value; $151,000 in cash; and weapons that included an AR-15, a TEC 9, a Glock semi-automatic handgun, bolt action rifles, and five silencers. Eight of the guns and the silencers were found at one home on Millar Ranch Road in Jamul. Authorities also discovered indoor marijuana grows with hundreds of plants in two apartment units in Spring Valley.
The investigation, dubbed Red Menace, involved federal wiretaps, undercover drug buys, and extensive surveillance. Numerous defendants are documented members of gangs, including Skyline, Emerald Hills, and Oriental Killer Boys. Rival criminal street gangs often cross gang affiliation for the purpose of facilitating drug distribution.
The arrests are the latest in a series of large-scale, multi-agency crackdowns on street gang activity in San Diego County neighborhoods. Including yesterday’s action, more than 180 defendants have been charged in various federal gang prosecutions since January 2012, with more than 80 guilty pleas so far. Most charges are drug- and gun- related; sentences have ranged from 10 to 21 years in federal prison.
“We are committed to keeping neighborhoods out of the clutches of gang members who deal in drugs and who stash deadly, high-powered automatic weapons in their homes, next door to unwitting neighbors,” said U.S. Attorney Laura Duffy.
U.S. Attorney Duffy praised the law enforcement agencies of the East County Regional Gang Task Force under the Organized Crime Drug Enforcement Task Force (OCDETF) for the coordinated team effort culminating in the charges filed in these cases. The OCDETF program was created to consolidate and utilize all law enforcement resources in this country’s battle against major drug trafficking.
San Diego FBI Special Agent in Charge Daphne Hearn commented, “As our communities are faced with increasing threats of crime and violence, the FBI and our partners with the East County Regional Gang Task Force will work together to confront these threats and make our communities safer.”
San Diego County Sheriff Bill Gore said, “This operation is ongoing. It’s a team effort that requires careful planning and persistent follow-through. Our aim is straightforward: take back communities for law-abiding families and protect them from gang members and drug dealers who threaten their safety.”
In the 1990s, San Diego County had the dubious distinction of being called the meth capital of the country, and East County was the hub of meth-related activity. Until recent years, methamphetamine was typically produced in small to medium quantities in local clandestine laboratories in homes, garages, storage units, apartments, and motel rooms.
Because of a law enforcement crackdown and policies that restrict access to ingredients needed to manufacture meth, San Diego County today has very few meth labs. But now, most of the methamphetamine available for sale here is linked to the sophisticated manufacturing and distribution operations of international drug cartels and local street gangs.
While law enforcement efforts have curtailed local manufacturing, methamphetamine use is still one of the biggest drug-related threats in the district—and the country.
And it’s coming across the border in significant quantities. While there has been a decline in the amount of marijuana and cocaine being smuggled through our district, there has been a significant increase in the amount of methamphetamine.
Border officials seized 427 loads of methamphetamine at San Diego ports of entry in fiscal year 2012 compared to 364 in fiscal year 2011. That’s a 17 percent increase. In Imperial County, the amount of methamphetamine seized jumped by almost 100 percent, from 745 kg to 1,442 kg.
Defendants
Case Number: 13cr0492-GPC
Many of the defendants are scheduled to be arraigned before U.S. Magistrate Judge David Bartick at 1:30 p.m. today. Prosecutors will be available for interviews after court.
The arrests—from Spring Valley, La Mesa, and Jamul to National City, Chula Vista, and San Diego—were based on three grand jury indictments of 33 suspected methamphetamine traffickers unsealed in federal court Tuesday. The charges include conspiracy to distribute controlled substances, distribution of methamphetamine, and possession of methamphetamine with intent to distribute. Three defendants are still at large.
During the predawn raids, agents seized about 26 pounds of methamphetamine with an estimated $291,200 street value; a pound of cocaine with estimated $12,800 street value; $151,000 in cash; and weapons that included an AR-15, a TEC 9, a Glock semi-automatic handgun, bolt action rifles, and five silencers. Eight of the guns and the silencers were found at one home on Millar Ranch Road in Jamul. Authorities also discovered indoor marijuana grows with hundreds of plants in two apartment units in Spring Valley.
The investigation, dubbed Red Menace, involved federal wiretaps, undercover drug buys, and extensive surveillance. Numerous defendants are documented members of gangs, including Skyline, Emerald Hills, and Oriental Killer Boys. Rival criminal street gangs often cross gang affiliation for the purpose of facilitating drug distribution.
The arrests are the latest in a series of large-scale, multi-agency crackdowns on street gang activity in San Diego County neighborhoods. Including yesterday’s action, more than 180 defendants have been charged in various federal gang prosecutions since January 2012, with more than 80 guilty pleas so far. Most charges are drug- and gun- related; sentences have ranged from 10 to 21 years in federal prison.
“We are committed to keeping neighborhoods out of the clutches of gang members who deal in drugs and who stash deadly, high-powered automatic weapons in their homes, next door to unwitting neighbors,” said U.S. Attorney Laura Duffy.
U.S. Attorney Duffy praised the law enforcement agencies of the East County Regional Gang Task Force under the Organized Crime Drug Enforcement Task Force (OCDETF) for the coordinated team effort culminating in the charges filed in these cases. The OCDETF program was created to consolidate and utilize all law enforcement resources in this country’s battle against major drug trafficking.
San Diego FBI Special Agent in Charge Daphne Hearn commented, “As our communities are faced with increasing threats of crime and violence, the FBI and our partners with the East County Regional Gang Task Force will work together to confront these threats and make our communities safer.”
San Diego County Sheriff Bill Gore said, “This operation is ongoing. It’s a team effort that requires careful planning and persistent follow-through. Our aim is straightforward: take back communities for law-abiding families and protect them from gang members and drug dealers who threaten their safety.”
In the 1990s, San Diego County had the dubious distinction of being called the meth capital of the country, and East County was the hub of meth-related activity. Until recent years, methamphetamine was typically produced in small to medium quantities in local clandestine laboratories in homes, garages, storage units, apartments, and motel rooms.
Because of a law enforcement crackdown and policies that restrict access to ingredients needed to manufacture meth, San Diego County today has very few meth labs. But now, most of the methamphetamine available for sale here is linked to the sophisticated manufacturing and distribution operations of international drug cartels and local street gangs.
While law enforcement efforts have curtailed local manufacturing, methamphetamine use is still one of the biggest drug-related threats in the district—and the country.
And it’s coming across the border in significant quantities. While there has been a decline in the amount of marijuana and cocaine being smuggled through our district, there has been a significant increase in the amount of methamphetamine.
Border officials seized 427 loads of methamphetamine at San Diego ports of entry in fiscal year 2012 compared to 364 in fiscal year 2011. That’s a 17 percent increase. In Imperial County, the amount of methamphetamine seized jumped by almost 100 percent, from 745 kg to 1,442 kg.
Defendants
Case Number: 13cr0492-GPC
- Pedro Millan; Age: 53; San Diego, CA; Arrested 2/12/13
- Carlos Contreras Sanchez; Age: 30; Chula Vista, CA; Arrested 2/12/13
- Laura Millan; Age: 31; Chula Vista, CA; Arrested 2/12/13
- Princeton Beon Franks; Age: 32; Spring Valley, CA; Arrested 2/12/13
- Eduardo Sanchez; Age: 29; Bonita, CA; Arrested 2/12/13
- Gilberto Lamas; Age: 49; San Diego, CA; Arrested 2/12/13
- Adolfo Siordia; Age: Unk; National City, CA; Arrested 2/12/13
- Rosita Eunice Corrales; Age: 28; Chula Vista, CA; Fugitive
- Nicholas Oliveri; Age: 48; San Diego, CA; Arrested 2/12/13
- William Kilmer; Age: 56; San Diego, CA; Arrested 2/12/13
- Stephanie Cleveland; Age: 43; Coronado, CA; Fugitive
- James Cheevers; Age: 48; Coronado, CA; In state custody
- Raymond Lopez; Age: 50; San Diego, CA; Arrested 2/12/13
- Jasmine Millan; Age: 20; San Diego, CA; Arrested 2/12/13
- Daniel Erique Millan-Aispuro; Age: 18; San Diego, CA; Arrested 2/12/13
- Ascarelli Lopez; Age: 23; Highland, CA; Arrested 2/12/13
- Title 21, United States Code, Sections 841(a)(1) and 846—Conspiracy to Distribute Methamphetamine
- Title 21, United States Code, Section 841(a)(1)—Possession of Methamphetamine with Intent to Distribute
- Maximum Penalties: Life in Custody; Minimum Custody: 10 Years; Maximum Fine: $4 million
- Christopher Robles; Age: 28; San Diego, CA; Arrested 2/12/13
- Sarat Sek; Unconfirmed; San Diego, CA; Fugitive
- Ronald Bonoan; Age: 40; Chula Vista, CA; Arrested 2/12/13
- Shannon White; Age: 39; La Mesa, CA; Arrested 2/12/13
- Robert Duren; Age: 41; San Diego, CA; Arrested 2/12/13
- Joshua Wayne McGuire; Age: 34; La Mesa, CA; Arrested 2/12/13
- Robert McKinney; Age: 42; San Diego, CA; Arrested 2/12/13
- Alfredo Barias; Age: 65; San Diego, CA; Arrested 2/12/13
- Robert Young; Age: 31; San Diego, CA; Arrested 2/12/13
- David Marinelli; Age: 41; San Diego, CA; Arrested 2/12/13
- Cory Evans; Age: 39; San Diego, CA; Arrested 2/12/13
- Keith Lusk; Age: 44; San Diego, CA; Arrested 2/12/13
- Pamela Miranda; Age: 25; San Diego, CA; Arrested 2/12/13
- Scott Smith; Age: 52; San Diego, CA; Arrested 2/12/13
- Title 21, United States Code, Sections 841(a)(1) and 846—Conspiracy to Distribute Methamphetamine
- Title 21, United States Code, Section 841(a)(1)—Possession of Methamphetamine with Intent to Distribute
- Maximum Penalties: Life in Custody; Minimum Custody: 10 Years; Maximum Fine: $4 million
- Roberto Carrillo Gonzalez; Age: 49; San Diego, CA; In state custody
- Cedric Gregory; Age: 45; San Diego, CA; Arrested 2/12/13
- Marcel Clady; Age: 43; San Diego, CA; In state custody
- Title 21, United States Code, Sections 841(a)(1) and 846—Conspiracy to Distribute Methamphetamine
- Title 21, United States Code, Section 841(a)(1)—Possession of Methamphetamine with Intent to Distribute
- Maximum Penalties: Life in Custody; Minimum Custody: 10 Years; Maximum Fine: $4 million
- Federal Bureau of Investigation
- San Diego County Sheriff’s Department
- La Mesa Police Department
- San Diego County District Attorney’s Office
- San Diego County Probation Department
- El Cajon Police Department
- San Diego Police Department
- Chula Vista Police Department
- Bureau of Alcohol, Tobacco, Firearms, and Explosives
- U.S. Immigration and Customs Enforcement, Homeland Security Investigations
- U.S. Customs and Border Protection
- U.S. Marshals Service
- U.S. Border Patrol
- California Highway Patrol
- Drug Enforcement Administration’s Narcotics Task Force
- Bureau of Prisons
- Internal Revenue Service
East County Regional Gang Task Force Seeks Public’s Assistance to Locate Red Menace Fugitives
The East County Regional Gang Task Force (ECRGTF) is seeking the
public’s assistance to locate three fugitives who were charged with 30
other defendants on federal charges of possessing and distributing
methamphetamine.
The 33 defendants were charged via federal indictments, case number 13cr0491-GPC and 13cr0492-GPC, with violating Title 21, United States Code, Sections 841(a)(1) and 846—conspiracy to distribute methamphetamine, and Title 21, United States Code, Section 841(a)(1)—possession of methamphetamine with intent to distribute.
On Tuesday, February 12, 2012, approximately 150 federal state and local law enforcement officers working in coordination with the ECRGTF served federal arrest search and seizure warrants. The law enforcement operation resulted in the seizure of approximately 31 pounds of methamphetamine with an estimated street value of approximately $347,200; a pound of cocaine with an estimated street value of $12,800; $200,000 in U.S. currency; and 31 firearms that included an AR-15 rifle, a fully automatic machine gun, a TEC 9, a Glock semi-automatic pistol, bolt action rifles, and five silencers. Indoor marijuana grow operations were discovered in two apartment units in Spring Valley, California.
The investigation dubbed Red Menace, involved federal wiretaps, undercover drug buys, and extensive surveillance. Many of the defendants in this investigation are documented gang members or associates. The arrests are the latest in a series of large-scale, multi-agency investigations addressing violent criminal enterprises. Many of these investigations have been conducted under the FBI’s Safe Streets Violent Crime Initiative and through Violent Gang Safe Streets Task Forces. Violent Gang Safe Streets Task Forces have become the vehicle through which many federal, state, and local law enforcement agencies can join together to address the violent crime plaguing their communities
These Violent Gang Safe Streets Task Forces pursue violent gangs and criminal enterprises through sustained, proactive, coordinated investigations to obtain prosecutions under the U.S. Code, Titles 18 and 21, including violations such as racketeering, drug conspiracy, and firearms violations. The Safe Streets Task Force concept expands cooperation and communication among federal, state, and local law enforcement agencies, increasing productivity and avoiding duplication of investigative efforts.
The following individuals are being sought by the East County Regional Gang Task Force.
The 33 defendants were charged via federal indictments, case number 13cr0491-GPC and 13cr0492-GPC, with violating Title 21, United States Code, Sections 841(a)(1) and 846—conspiracy to distribute methamphetamine, and Title 21, United States Code, Section 841(a)(1)—possession of methamphetamine with intent to distribute.
On Tuesday, February 12, 2012, approximately 150 federal state and local law enforcement officers working in coordination with the ECRGTF served federal arrest search and seizure warrants. The law enforcement operation resulted in the seizure of approximately 31 pounds of methamphetamine with an estimated street value of approximately $347,200; a pound of cocaine with an estimated street value of $12,800; $200,000 in U.S. currency; and 31 firearms that included an AR-15 rifle, a fully automatic machine gun, a TEC 9, a Glock semi-automatic pistol, bolt action rifles, and five silencers. Indoor marijuana grow operations were discovered in two apartment units in Spring Valley, California.
The investigation dubbed Red Menace, involved federal wiretaps, undercover drug buys, and extensive surveillance. Many of the defendants in this investigation are documented gang members or associates. The arrests are the latest in a series of large-scale, multi-agency investigations addressing violent criminal enterprises. Many of these investigations have been conducted under the FBI’s Safe Streets Violent Crime Initiative and through Violent Gang Safe Streets Task Forces. Violent Gang Safe Streets Task Forces have become the vehicle through which many federal, state, and local law enforcement agencies can join together to address the violent crime plaguing their communities
These Violent Gang Safe Streets Task Forces pursue violent gangs and criminal enterprises through sustained, proactive, coordinated investigations to obtain prosecutions under the U.S. Code, Titles 18 and 21, including violations such as racketeering, drug conspiracy, and firearms violations. The Safe Streets Task Force concept expands cooperation and communication among federal, state, and local law enforcement agencies, increasing productivity and avoiding duplication of investigative efforts.
The following individuals are being sought by the East County Regional Gang Task Force.
 | Name: Rosie Corrales Age: 28 years old Sex: Female Race: White Weight: 140 pounds Height: 5’1” tall Eyes: Brown Hair: Black |
|---|---|
 |
Name: Stephanie Cleveland Age: 43 years old Sex: Female Race: White Weight: 180 pounds Height: 5’8” tall Eyes: Unknown Hair: Brown |
 |
Name: Sarat Sek Age: 28 Sex: Male Race: Asian Weight: 200 pounds Height: 5’11” tall Eyes: Dark Hair: Black |
Looking for Love? Beware of Online Dating Scams
Millions of Americans visit online dating websites every
year, hoping to find a companion or even a soul mate. But today, on
Valentine’s Day, we want to warn you that criminals use these sites,
too, looking to turn the lonely and vulnerable into fast money through a
variety of scams.
These criminals—who also troll social media sites and chat rooms in search of romantic victims—usually claim to be Americans traveling or working abroad. In reality, they often live overseas. Their most common targets are women over 40, who are divorced, widowed, and/or disabled, but every age group and demographic is at risk.
Here’s how the scam usually works. You’re contacted online by someone who appears interested in you. He or she may have a profile you can read or a picture that is e-mailed to you. For weeks, even months, you may chat back and forth with one another, forming a connection. You may even be sent flowers or other gifts. But ultimately, it’s going to happen—your new-found “friend” is going to ask you for money.
So you send money…but rest assured the requests won’t stop there. There will be more hardships that only you can help alleviate with your financial gifts. He may also send you checks to cash since he’s out of the country and can’t cash them himself, or he may ask you to forward him a package.
So what really happened? You were targeted by criminals, probably based on personal information you uploaded on dating or social media sites. The pictures you were sent were most likely phony lifted from other websites. The profiles were fake as well, carefully crafted to match your interests.
In addition to losing your money to someone who had no intention of ever visiting you, you may also have unknowingly taken part in a money laundering scheme by cashing phony checks and sending the money overseas and by shipping stolen merchandise (the forwarded package).
In another recently reported dating extortion scam, victims usually met someone on an online dating site and then were asked to move the conversation to a particular social networking site, where the talk often turned intimate. Victims were later sent a link to a website where those conversations were posted, along with photos, their phone numbers, and claims that they were “cheaters.” In order to have that information removed, victims were told they could make a $99 payment—but there is no indication that the other side of the bargain was upheld.
While the FBI and other federal partners work some of these cases—in particular those with a large number of victims or large dollar losses and/or those involving organized criminal groups—many are investigated by local and state authorities.
We strongly recommend, however, that if you think you’ve been victimized by a dating scam or any other online scam, file a complaint with our Internet Crime Complaint Center (www.ic3.gov).
Before forwarding the complaints to the appropriate agencies, IC3 collates and analyzes the data—looking for common threads that could link complaints together and help identify the culprits. This helps keep everyone safe.
Here are some tips on how to avoid becoming a victim of an online dating scam.
These criminals—who also troll social media sites and chat rooms in search of romantic victims—usually claim to be Americans traveling or working abroad. In reality, they often live overseas. Their most common targets are women over 40, who are divorced, widowed, and/or disabled, but every age group and demographic is at risk.
Here’s how the scam usually works. You’re contacted online by someone who appears interested in you. He or she may have a profile you can read or a picture that is e-mailed to you. For weeks, even months, you may chat back and forth with one another, forming a connection. You may even be sent flowers or other gifts. But ultimately, it’s going to happen—your new-found “friend” is going to ask you for money.
So you send money…but rest assured the requests won’t stop there. There will be more hardships that only you can help alleviate with your financial gifts. He may also send you checks to cash since he’s out of the country and can’t cash them himself, or he may ask you to forward him a package.
So what really happened? You were targeted by criminals, probably based on personal information you uploaded on dating or social media sites. The pictures you were sent were most likely phony lifted from other websites. The profiles were fake as well, carefully crafted to match your interests.
In addition to losing your money to someone who had no intention of ever visiting you, you may also have unknowingly taken part in a money laundering scheme by cashing phony checks and sending the money overseas and by shipping stolen merchandise (the forwarded package).
In another recently reported dating extortion scam, victims usually met someone on an online dating site and then were asked to move the conversation to a particular social networking site, where the talk often turned intimate. Victims were later sent a link to a website where those conversations were posted, along with photos, their phone numbers, and claims that they were “cheaters.” In order to have that information removed, victims were told they could make a $99 payment—but there is no indication that the other side of the bargain was upheld.
While the FBI and other federal partners work some of these cases—in particular those with a large number of victims or large dollar losses and/or those involving organized criminal groups—many are investigated by local and state authorities.
We strongly recommend, however, that if you think you’ve been victimized by a dating scam or any other online scam, file a complaint with our Internet Crime Complaint Center (www.ic3.gov).
Before forwarding the complaints to the appropriate agencies, IC3 collates and analyzes the data—looking for common threads that could link complaints together and help identify the culprits. This helps keep everyone safe.
Here are some tips on how to avoid becoming a victim of an online dating scam.
Recognizing an Online Dating Scam Artist
Your online “date” may only be interested in your money if he or she:- Presses you to leave the dating website you met through and to communicate using personal e-mail or instant messaging;
- Professes instant feelings of love;
- Sends you a photograph of himself or herself that looks like something from a glamour magazine;
- Claims to be from the U.S. and is traveling or working overseas;
- Makes plans to visit you but is then unable to do so because of a tragic event; or
- Asks for money for a variety of reasons (travel, medical emergencies, hotel bills, hospitals bills for child or other relative, visas or other official documents, losses from a financial setback or crime victimization).
Consultant for the Florida Department of Transportation Pleads Guilty to Accepting a Bribe
Wifredo A. Ferrer, United States Attorney for the
Southern District of Florida; Michael B. Steinbach, Special Agent in
Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Jose
A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal
Investigation (IRS-CI); and Marlies T. Gonzalez, Special Agent in
Charge, U.S. Department of Transportation-Office of Inspector General,
announced that defendant Ron Capobianco, Jr., 40, of Pompano Beach, pled
guilty today to committing bribery in connection with programs
receiving federal funds, in violation of Title 18, United States Code,
Section 666. At sentencing, the defendant faces up to 10 years’
imprisonment, three years’ supervised release, and a $250,000 fine.
Sentencing has been scheduled for May 7, 2013, at 8:30 a.m.
According to documents filed with the court, the defendant worked as a construction engineering and inspection consultant at an engineering company, which specialized in the transportation industry. The Florida Department of Transportation (FDOT) contracted with this company to provide services, including designing, inspecting, and troubleshooting the construction of roads, signs, and traffic signals. Because of his position and expertise, the defendant was consulted as an FDOT expert on certain aspects of signalization and lighting construction, including the use of video detection cameras for traffic signalization and control.
Furthermore, according to court documents, in 2009, FDOT began a road construction project along Highway 1 in the Florida Keys—the Marathon Key project—which was designed to improve traffic flow. The defendant agreed to accept a bribe from a subcontractor working on this project. In May 2009, an agent of the subcontractor offered to pay the defendant a bribe if the subcontractor received at least $25,000 for the installation of the video detection equipment. The defendant agreed to the subcontractor’s $25,000 estimate for the installation of the video detection devices, thus enabling the subcontractor to make a significant profit. The subcontractor’s estimate was approved and subsequently paid by the State of Florida after the installation of the video detection equipment. In May 2009, the defendant met with an agent of the subcontractor and was paid $4,000 for his assistance to the subcontractor on this project.
Mr. Ferrer commended the investigative efforts of the FBI, IRS-CI, and the U.S. Department of Transportation-Office of Inspector General, in connection with the investigation of this matter. The case is being prosecuted by Assistant U.S. Attorney Jeffrey N. Kaplan.
According to documents filed with the court, the defendant worked as a construction engineering and inspection consultant at an engineering company, which specialized in the transportation industry. The Florida Department of Transportation (FDOT) contracted with this company to provide services, including designing, inspecting, and troubleshooting the construction of roads, signs, and traffic signals. Because of his position and expertise, the defendant was consulted as an FDOT expert on certain aspects of signalization and lighting construction, including the use of video detection cameras for traffic signalization and control.
Furthermore, according to court documents, in 2009, FDOT began a road construction project along Highway 1 in the Florida Keys—the Marathon Key project—which was designed to improve traffic flow. The defendant agreed to accept a bribe from a subcontractor working on this project. In May 2009, an agent of the subcontractor offered to pay the defendant a bribe if the subcontractor received at least $25,000 for the installation of the video detection equipment. The defendant agreed to the subcontractor’s $25,000 estimate for the installation of the video detection devices, thus enabling the subcontractor to make a significant profit. The subcontractor’s estimate was approved and subsequently paid by the State of Florida after the installation of the video detection equipment. In May 2009, the defendant met with an agent of the subcontractor and was paid $4,000 for his assistance to the subcontractor on this project.
Mr. Ferrer commended the investigative efforts of the FBI, IRS-CI, and the U.S. Department of Transportation-Office of Inspector General, in connection with the investigation of this matter. The case is being prosecuted by Assistant U.S. Attorney Jeffrey N. Kaplan.
Three New York Men Arrested for Armed Robberies of New Jersey T-Mobile Stores
NEWARK—Three Brooklyn, New York men were arrested today by agents of the FBI in connection with two armed robberies of T-Mobile stores in Linden, New Jersey and Woodbridge, New Jersey, U.S. Attorney Paul J. Fishman announced.
Terrell McQueen, 29, is charged by complaint with conspiracy to commit Hobbs Act robbery and two counts of using a firearm in furtherance of a crime of violence. Carl Williams, 29, and Eric Williams, 32, are each charged with one count of conspiracy to commit Hobbs Act robbery and one count of using a firearm in furtherance of a crime of violence. All three defendants are scheduled to appear today before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the complaint:
On September 20, 2012, Carl Williams and a conspirator walked into a T-Mobile store in Linden. The conspirator brandished a firearm, and the men then tied up the employees in the back of the store. After taking 50 to 60 cell phones, the men fled in a Land Rover. Terrell McQueen, Carl Williams, Eric Williams, and other conspirators then delivered the stolen cell phones to a cell phone store in Brooklyn.
On October 2, 2012, two men, one of whom was armed with a firearm, entered a T-Mobile store in Woodbridge. After locking the front door, the men took the employees to the back of the store and tied them up. The men took approximately 40 cell phones. One of the men then used his own cell phone to contact a third individual, who drove the other two men away in a Land Rover. Terrell McQueen, Eric Williams, and other conspirators later delivered the stolen cell phones to the same cell phone store in Brooklyn.
If convicted of the Hobbs Act conspiracy charges, McQueen, Carl Williams, and Eric Williams face a maximum penalty of 20 years in prison and a fine of $250,000. If convicted of the two counts of using a firearm in furtherance of a crime of violence, McQueen faces a mandatory minimum of 32 years in prison to run consecutively to any sentence that he receives for the Hobbs Act conspiracy charge and a maximum of life in prison, as well as a fine of up to $250,000. If convicted of the one count of using a firearm in furtherance of a crime of violence, Carl Williams and Eric Williams each face a mandatory minimum of seven years in prison to run consecutively to any sentence that they receive for the Hobbs Act robbery charge and a maximum of life in prison and a fine of up to $250,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez, with the investigation leading to the arrests and charges. He also thanked the Linden and Woodbridge Police Departments in New Jersey, as well as the New York City and Nassau County Police Departments and the Kings County District Attorney’s Office in New York for their work in this case.
The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Terrell McQueen, 29, is charged by complaint with conspiracy to commit Hobbs Act robbery and two counts of using a firearm in furtherance of a crime of violence. Carl Williams, 29, and Eric Williams, 32, are each charged with one count of conspiracy to commit Hobbs Act robbery and one count of using a firearm in furtherance of a crime of violence. All three defendants are scheduled to appear today before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the complaint:
On September 20, 2012, Carl Williams and a conspirator walked into a T-Mobile store in Linden. The conspirator brandished a firearm, and the men then tied up the employees in the back of the store. After taking 50 to 60 cell phones, the men fled in a Land Rover. Terrell McQueen, Carl Williams, Eric Williams, and other conspirators then delivered the stolen cell phones to a cell phone store in Brooklyn.
On October 2, 2012, two men, one of whom was armed with a firearm, entered a T-Mobile store in Woodbridge. After locking the front door, the men took the employees to the back of the store and tied them up. The men took approximately 40 cell phones. One of the men then used his own cell phone to contact a third individual, who drove the other two men away in a Land Rover. Terrell McQueen, Eric Williams, and other conspirators later delivered the stolen cell phones to the same cell phone store in Brooklyn.
If convicted of the Hobbs Act conspiracy charges, McQueen, Carl Williams, and Eric Williams face a maximum penalty of 20 years in prison and a fine of $250,000. If convicted of the two counts of using a firearm in furtherance of a crime of violence, McQueen faces a mandatory minimum of 32 years in prison to run consecutively to any sentence that he receives for the Hobbs Act conspiracy charge and a maximum of life in prison, as well as a fine of up to $250,000. If convicted of the one count of using a firearm in furtherance of a crime of violence, Carl Williams and Eric Williams each face a mandatory minimum of seven years in prison to run consecutively to any sentence that they receive for the Hobbs Act robbery charge and a maximum of life in prison and a fine of up to $250,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge David Velazquez, with the investigation leading to the arrests and charges. He also thanked the Linden and Woodbridge Police Departments in New Jersey, as well as the New York City and Nassau County Police Departments and the Kings County District Attorney’s Office in New York for their work in this case.
The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Wednesday, February 13, 2013
Former Galleon Group Employee and Hedge Fund Founder Ali Far Sentenced in Manhattan Federal Court for Insider Trading
Preet Bharara, the United States Attorney for the
Southern District of New York, announced that Ali Far, a former employee
of Galleon Group and founder/portfolio manager of Spherix Capital
Partners, was sentenced today to one year of probation for his
participation in multiple insider trading schemes during which he
obtained, shared, and traded based on material, non-public information
(“inside information”) stolen from several public companies. Far pled
guilty in October 2009 to one count of conspiracy to commit securities
fraud and one count of securities fraud pursuant to a cooperation
agreement with the government. He was sentenced today in Manhattan
federal court by U.S. District Judge Robert P. Patterson.
According to the information and statements made during Far’s guilty plea proceeding and his sentencing:
Between 2003 and March 2009—a period that spanned Far’s tenure at Galleon and Spherix—he solicited inside information from a number of sources who provided the information in breach of duties to their employers, for purposes of trading securities. Far traded on the inside information for the benefit of the hedge funds where he worked. He also shared certain inside information with others in the hedge fund industry in exchange for trading ideas and other Inside Information. Together, he and his co-conspirator at Spherix gained approximately $5,209,464 for their hedge fund by placing trades in Spherix accounts based on Inside Information.
For example, Far solicited inside information from Ali Hariri, a family friend and technology executive who pleaded guilty and was sentenced to prison as a result of his participation in illegal insider trading. On multiple occasions, beginning in 2008, Hariri provided Far with inside information about the business performance of Hariri’s company, and Far traded based on that inside information, reaping hundreds of thousands of dollars in illegal profits.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Reed Brodsky is in charge of the prosecution.
According to the information and statements made during Far’s guilty plea proceeding and his sentencing:
Between 2003 and March 2009—a period that spanned Far’s tenure at Galleon and Spherix—he solicited inside information from a number of sources who provided the information in breach of duties to their employers, for purposes of trading securities. Far traded on the inside information for the benefit of the hedge funds where he worked. He also shared certain inside information with others in the hedge fund industry in exchange for trading ideas and other Inside Information. Together, he and his co-conspirator at Spherix gained approximately $5,209,464 for their hedge fund by placing trades in Spherix accounts based on Inside Information.
For example, Far solicited inside information from Ali Hariri, a family friend and technology executive who pleaded guilty and was sentenced to prison as a result of his participation in illegal insider trading. On multiple occasions, beginning in 2008, Hariri provided Far with inside information about the business performance of Hariri’s company, and Far traded based on that inside information, reaping hundreds of thousands of dollars in illegal profits.
* * *
In addition to his probation, Far, 51, of Saratoga, California, was
sentenced to a fine of $100,000, a $200 special assessment, and 100
hours of community service.Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Reed Brodsky is in charge of the prosecution.
Sherry Roebuck Imprisoned for Algiers Fire District Embezzlement
The Office of the United States Attorney for the District of Vermont
announced that Sherry Roebuck, 52, of Guilford, was sentenced yesterday
in United States District Court in Brattleboro following her convictions
last summer by a federal jury on charges of federal program
embezzlement and mail fraud. Senior U.S. District Judge J. Garvan Murtha
sentenced Roebuck to 18 months of imprisonment, to be followed by three
years of supervised release. The court ordered Roebuck to pay slightly
less than $83,000 in restitution. Roebuck was ordered to surrender to
the Bureau of Prisons on March 19 to begin serving her sentence.
On October 5, 2011, a federal grand jury in Rutland returned two-count indictment accusing Roebuck of embezzling more than $80,000 from the Algiers Fire District. Algiers Fire District #1 was established in 1993 by residents of Guilford to provide sewer service to people who lived in the village of Algiers. Between 2007 and March 2011, Roebuck served as the treasurer of the fire district, mailing out quarterly bills to district members, receiving payments, and handling the district’s banking. According to the evidence at Roebuck’s trial, beginning in late 2007 and continuing until March 2011, Roebuck embezzled from the district by writing numerous checks to herself without authorization and then cashing the checks at local banks. Roebuck’s theft was not uncovered until early 2011, shortly after she resigned.
This case was investigated by the Vermont State Police and the Federal Bureau of Investigation.
Roebuck is represented by John Mabie. The prosecutor is Assistant U.S. Attorney Gregory Waples
On October 5, 2011, a federal grand jury in Rutland returned two-count indictment accusing Roebuck of embezzling more than $80,000 from the Algiers Fire District. Algiers Fire District #1 was established in 1993 by residents of Guilford to provide sewer service to people who lived in the village of Algiers. Between 2007 and March 2011, Roebuck served as the treasurer of the fire district, mailing out quarterly bills to district members, receiving payments, and handling the district’s banking. According to the evidence at Roebuck’s trial, beginning in late 2007 and continuing until March 2011, Roebuck embezzled from the district by writing numerous checks to herself without authorization and then cashing the checks at local banks. Roebuck’s theft was not uncovered until early 2011, shortly after she resigned.
This case was investigated by the Vermont State Police and the Federal Bureau of Investigation.
Roebuck is represented by John Mabie. The prosecutor is Assistant U.S. Attorney Gregory Waples
Investment Advisor Sentenced to Prison in $2 Million Scheme
Wifredo A. Ferrer, United States Attorney for the
Southern District of Florida, and Michael B. Steinbach, Special Agent in
Charge, Federal Bureau of Investigation (FBI), Miami Field Office,
announced that Paul D. Wolfe, 42, formerly of Hobe Sound, Florida, was
sentenced today to 44 months’ imprisonment, to be followed by three
years of supervised release. Wolfe was also ordered to pay restitution
in the amount of $2,279,148.36.
Wolfe previously pled guilty to one count in an information charging him with wire fraud in connection with an investment scheme involving approximately $2.2 million in losses.
According to court documents, Wolfe’s investment fraud scheme spanned from 2005 through 2011. Wolfe, who operated as an unlicensed investment advisor, admitted that he provided false and fraudulent investment return data to numerous investors and that he inflated investment returns. Furthermore, Wolfe diverted investor funds, in part, to pay for his personal expenses.
Mr. Ferrer commended the investigative efforts of the Federal Bureau of Investigation in this case. The case is being prosecuted by Assistant United States Attorney Stephen Carlton.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.
Wolfe previously pled guilty to one count in an information charging him with wire fraud in connection with an investment scheme involving approximately $2.2 million in losses.
According to court documents, Wolfe’s investment fraud scheme spanned from 2005 through 2011. Wolfe, who operated as an unlicensed investment advisor, admitted that he provided false and fraudulent investment return data to numerous investors and that he inflated investment returns. Furthermore, Wolfe diverted investor funds, in part, to pay for his personal expenses.
Mr. Ferrer commended the investigative efforts of the Federal Bureau of Investigation in this case. The case is being prosecuted by Assistant United States Attorney Stephen Carlton.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.
Jury Convicts Owner of Tire Recycling Company of Defrauding Small Business Association
DAYTON—A U.S. District Court jury today convicted Paul
David Musgrave, 57, of Warhaw, North Carolina, of conspiring to defraud
the Mutual Federal Savings Bank of Troy, Ohio, and the Small Business
Administration of $1,715,600 in connection with a business loan he
sought to establish a tire recycling plant in Troy.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI); and Scott Dennis, Special Agent in Charge, U.S. Small Business Administration Office of Inspector General, announced the verdict returned on February 7 following a trial that began January 28 before U.S. District Judge Timothy S. Black.
Testimony presented during the seven-day trial showed that in November 2008, Musgrave and others organized Dayton International Tire Recycling as a small business intending to construct and operate a tire recycling plant at 1400 Lytle Road in Troy. Musgrave owned 81 percent interest in the company. The rest was held by a Singapore-based corporation known as Intercontinental Trading of the British Virgin Islands.
In 2010, Musgrave applied for an SBA-backed loan for $1,715,650. In the loan application documents, he falsely certified that he would put money from his personal savings, home equity, and from a home equity line of credit toward the project. The lender required proof that the tire shredding/recycling equipment and machinery they claimed to have purchased from an Australian company had actually been shipped before releasing the loan proceeds. The jury found that Musgrave provided the lender with fabricated financial documents, packing lists, commercial invoices, and bills of lading.
After deliberating three days, the jury convicted Musgrave of one count of conspiracy, two counts of wire fraud, and one count of bank fraud.
Musgrave faces up to 30 years’ imprisonment, a $1 million fine, and five years of supervised release on each count. Judge Black will sentence Musgrave on June 13, 2013.
Stewart commended the cooperative investigation conducted by FBI and SBA-OIG agents, as well as Assistant U.S. Attorneys Dwight Keller and Alex Sistla, who are representing the United States in the case.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI); and Scott Dennis, Special Agent in Charge, U.S. Small Business Administration Office of Inspector General, announced the verdict returned on February 7 following a trial that began January 28 before U.S. District Judge Timothy S. Black.
Testimony presented during the seven-day trial showed that in November 2008, Musgrave and others organized Dayton International Tire Recycling as a small business intending to construct and operate a tire recycling plant at 1400 Lytle Road in Troy. Musgrave owned 81 percent interest in the company. The rest was held by a Singapore-based corporation known as Intercontinental Trading of the British Virgin Islands.
In 2010, Musgrave applied for an SBA-backed loan for $1,715,650. In the loan application documents, he falsely certified that he would put money from his personal savings, home equity, and from a home equity line of credit toward the project. The lender required proof that the tire shredding/recycling equipment and machinery they claimed to have purchased from an Australian company had actually been shipped before releasing the loan proceeds. The jury found that Musgrave provided the lender with fabricated financial documents, packing lists, commercial invoices, and bills of lading.
After deliberating three days, the jury convicted Musgrave of one count of conspiracy, two counts of wire fraud, and one count of bank fraud.
Musgrave faces up to 30 years’ imprisonment, a $1 million fine, and five years of supervised release on each count. Judge Black will sentence Musgrave on June 13, 2013.
Stewart commended the cooperative investigation conducted by FBI and SBA-OIG agents, as well as Assistant U.S. Attorneys Dwight Keller and Alex Sistla, who are representing the United States in the case.
Bonney Lake Resident Sentenced to Prison for $700,000 Embezzlement from Hotel Group
The former controller of a hotel group based in Tacoma, Washington,
was sentenced today to 24 months in prison and three years of supervised
release for six counts of wire fraud, announced U.S. Attorney Jenny A.
Durkan. From 2007 to 2011, Hugo Lingat Caingat, Jr., 59, of Bonney Lake,
Washington, was employed as a controller at Aspen Lodging Group LLC
(ALG). The company owns several hotels in the United States including
Hotel Murano in Tacoma. From March 2010 to December 2011, Caingat
diverted more than $700,000 in income from the hotel group into a
dormant bank account. Then, he used that account to pay his bills,
including significant gambling bills. At sentencing, U.S. District Judge
Benjamin H. Settle said, “The defendant was a man of skill and aptitude
who gained the trust of his employer and then abused it.”
According to records filed in the case, Caingat forged documents and signatures to execute his scheme. He created duplicate invoices for inter-company payments totaling nearly $600,000, and eventually routed these payments into the dormant account. From the dormant accounts the money went to pay his credit card bills. Caingat was fired by the hotel group in December 2011 when the theft was discovered. The case was ultimately referred to the FBI. When agents interviewed Caingat at his home in May 2011, he indicated he wished to provide information on the scheme. Instead, Caingat purchased a one way ticket to the Philippines. Caingat was indicted by the grand jury in July 2011, and the process of extraditing Caingat from the Philippines had begun when he voluntarily returned to Washington State. Caingat pleaded guilty in October 2012.
In asking for a sentence of nearly three years, prosecutors noted that the scheme was sophisticated and lasted nearly two years. “The defendant committed his embezzlement through multiple sub-schemes, which involved pre-configuring of a dormant account to pay his bills, transferring funds through multiple accounts, creating false inter-company payments, and forging another employee’s signature,” prosecutors wrote in their sentencing memo.
Caingat was ordered to pay $750,550 in restitution. That amount includes $50,000 the company spent investigating the embezzlement.
The case was investigated by the FBI. The case was prosecuted by Assistant United States Attorney Matthew Diggs.
According to records filed in the case, Caingat forged documents and signatures to execute his scheme. He created duplicate invoices for inter-company payments totaling nearly $600,000, and eventually routed these payments into the dormant account. From the dormant accounts the money went to pay his credit card bills. Caingat was fired by the hotel group in December 2011 when the theft was discovered. The case was ultimately referred to the FBI. When agents interviewed Caingat at his home in May 2011, he indicated he wished to provide information on the scheme. Instead, Caingat purchased a one way ticket to the Philippines. Caingat was indicted by the grand jury in July 2011, and the process of extraditing Caingat from the Philippines had begun when he voluntarily returned to Washington State. Caingat pleaded guilty in October 2012.
In asking for a sentence of nearly three years, prosecutors noted that the scheme was sophisticated and lasted nearly two years. “The defendant committed his embezzlement through multiple sub-schemes, which involved pre-configuring of a dormant account to pay his bills, transferring funds through multiple accounts, creating false inter-company payments, and forging another employee’s signature,” prosecutors wrote in their sentencing memo.
Caingat was ordered to pay $750,550 in restitution. That amount includes $50,000 the company spent investigating the embezzlement.
The case was investigated by the FBI. The case was prosecuted by Assistant United States Attorney Matthew Diggs.
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