Former Iraqi Terrorists Living in Kentucky Sentenced for Terrorist Activities

WASHINGTON—Two Iraqi citizens living in Bowling Green, Kentucky who admitted using improvised explosive devices (IEDs) against U.S. soldiers in Iraq and who attempted to send weapons and money to al Qaeda in Iraq (AQI) for the purpose of killing U.S. soldiers were sentenced today to serve federal prison terms by Senior Judge Thomas B. Russell in U.S. District Court for the Western District of Kentucky.
The sentences was announced Lisa Monaco, Assistant Attorney General for National Security; David J. Hale, U.S. Attorney for the Western District of Kentucky; and Perrye K. Turner, Special Agent in Charge of the FBI Louisville Division.
Mohanad Shareef Hammadi, 25, a former resident of Iraq, was sentenced to life in federal prison, and Waad Ramadan Alwan, 31, a former resident of Iraq, was sentenced to 40 years in federal prison, followed by a life term of supervised release. Both defendants had pleaded guilty to federal terrorism charges.
“These two former Iraqi insurgents participated in terrorist activities overseas and attempted to continue providing material support to terrorists while they lived here in the United States. With today’s sentences, both men are being held accountable,” said Assistant Attorney General Monaco. “I thank the dedicated professionals in the law enforcement and intelligence communities who were responsible for this successful outcome.”
“These are experienced terrorists who willingly and enthusiastically participated in what they believed were insurgent support operations designed to harm American soldiers in Iraq,” stated U.S. Attorney Hale. “The serious crimes of both men merit lengthy punishment, and only the value of Alwan’s immediate and extensive cooperation with law enforcement justifies our recommendation of a reduced sentence for him. Bringing these men to justice is the result of a comprehensive law enforcement effort. The FBI agents of the Louisville Division, along with the federal and local law enforcement members of the Joint Terrorism Task Forces here in Kentucky, including the Bowling Green Police Department, and our many other partners, are to be commended.”
“Protecting the United States from terrorist attacks remains the FBI’s top priority,” said FBI Special Agent in Charge Turner. “Using our growing suite of investigative and intelligence capabilities, FBI agents and analysts assigned to our Bowling Green Office were able to neutralize a potential threat. Our local Joint Terrorism Task Force, composed of FBI agents and other local, state, and federal agencies from across the Commonwealth, remains committed to dismantling extremist networks and cutting off financing and other forms of support provided by terrorist sympathizers, whether they are operating in Kentucky or worldwide.”
“Today, the sentencing of Alwan and Hammadi represents the culmination of the extensive, effective, and focused efforts of the U.S. Attorney’s Office and the Kentucky Division of the FBI for their roles in the investigation and prosecution of these would-be terrorists. I want to thank U.S. Attorney David Hale, the Kentucky Division of the FBI, and the members of the FBI Bowling Green local office for their individual and collective efforts in bringing Alwan and Hammadi to justice for their crimes against the people of Kentucky and the United States,” stated Chief Doug Hawkins, Bowling Green Police Department.
Alwan, whose fingerprints were found on an unexploded IED found in Iraq, pleaded guilty earlier in the case on December 16, 2011, to all counts of a 23-count federal indictment. He pleaded guilty to conspiring to kill U.S. nationals abroad; conspiring to use a weapon of mass destruction (explosives) against U.S. nationals abroad; distributing information on the manufacture and use of IEDs; attempting to provide material support to terrorists and to AQI; and conspiring to transfer, possess, and export Stinger missiles.
Hammadi pleaded guilty on August 21, 2012, to a 12-count superseding indictment. Charges against him included attempting to provide material support to terrorists and to AQI; conspiring to transfer, possess, and export Stinger missiles; and making a false statement in an immigration application. At today’s sentencing, at the request of the United States, Alwan received a reduced sentence due to his cooperation with federal law enforcement. The United States asked for no reduction of Hammadi’s sentence.
According to information presented by the United States in connection with today’s sentencings, Hammadi and Alwan both admitted, in FBI interviews that followed waiver of their Miranda rights, to participation in the purported material support operations in Kentucky, and both provided the FBI details of their prior involvement in insurgent activities while living in Iraq. Both men believed their activities in Kentucky were supporting AQI. Alwan admitted participating in IED attacks against U.S. soldiers in Iraq, and Hammadi admitted to participating in 10 to 11 IED attacks as well as shooting at a U.S. soldier in an observation tower.
Court documents filed in this case reveal that the Bowling Green Resident Agency of the FBI’s Louisville Division initiated an investigation of Alwan in which they used a confidential human source (CHS). The CHS met with Alwan and recorded their meetings and conversations beginning in August 2010. The CHS represented to Alwan that he was working with a group to ship money and weapons to Mujahadeen in Iraq. From September 2010 through May 2011, Alwan participated in 10 separate operations to send weapons and money that he believed were destined for terrorists in Iraq. Between October 2010 and January 2011, Alwan drew diagrams of multiple types of IEDs and instructed the CHS how to make them. In January 2011, Alwan recruited Hammadi, a fellow Iraqi national living in Bowling Green, to assist in these material support operations. Beginning in January 2011 and continuing until his arrest in late May 2011, Hammadi participated with Alwan in helping load money and weapons that he believed were destined for terrorists in Iraq.
Documents filed by the United States describe in detail the material support activities of the men in Bowling Green. Without Hammadi present, Alwan loaded money and weapons he believed were being sent to Iraq on five occasions from September 2010 through February 2011, handling five rocket-propelled grenade launchers, five machine guns, two sniper rifles, two cases of C4 explosive, and what he believed to be $375,000. After Hammadi joined Alwan in January 2011, the two men loaded money and weapons together on five occasions from January to May 2011. Together, on these five occasions, they loaded five rocket-propelled grenade launchers, five machine guns, five cases of C4 explosive, two sniper rifles, one box of 12 hand grenades, two Stinger surface-to-air missile launchers, and what they believed to be a total of $565,000. Alwan and Hammadi were recorded by video during these operations.
In speaking with the CHS, Alwan spoke of his efforts to kill U.S. soldiers in Iraq, stating “lunch and dinner would be an American.” Hammadi told the CHS that he had experience in Iraq with “Strelas” (a Russian-made, portable, shoulder-fired, surface-to-air missile launcher) and discussed shipping “Strelas” in future operations.
According to the charging documents, Hammadi entered the United States in July 2009, and, after first residing in Las Vegas, moved to Bowling Green. Hammadi and Alwan were arrested on May 25, 2011, in Bowling Green on criminal complaints. Both defendants were closely monitored by federal law enforcement authorities in the months leading up to their arrests. Neither was charged with plotting attacks within the United States. All the weapons, including Stinger missiles, had been rendered inert before being handled by Hammadi and Alwan. The weapons and money handled by the men in the United States were never provided to AQI but instead were carefully controlled by law enforcement as part of the undercover operation.
This case was investigated by the Louisville Division of the FBI. Assisting in the investigation were members of the Louisville and Lexington Joint Terrorism Task Forces, U.S. Immigration and Customs Enforcement, U.S. Marshals Service, U.S. Department of Defense, U.S. Citizenship and Immigration Services, and the Bowling Green Police Department.
The prosecution was handled by Assistant U.S. Attorneys Michael Bennett and Bryan Calhoun from the U.S. Attorney’s Office for the Western District of Kentucky and Trial Attorney Larry Schneider from the Counterterrorism Section of the Justice Department’s National Security Division.

Delaware Man Pleads Guilty to Extortion, Computer Intrusion

COLUMBUS—Donald Christopher Dailey, 37, of Delaware, Ohio, pleaded guilty in U.S. District Court today to extortion for demanding money from the company where he was the information technology administrator in exchange for not disclosing internal financial and other information. Dailey also admitted to hacking into an ex-girlfriend’s e-mail account.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the guilty pleas entered today before U.S. District Judge Michael Watson.
According to court documents, Dailey abruptly resigned from the engineering company where he worked on October 1, 2012. Employees found a laptop connected to the company network and streaming live e-mail of the company’s CEO. It was hidden in Dailey’s private and secure workroom. In a resignation letter he sent to the CEO, Dailey claimed he had knowledge of what he alleged was damaging financial and other information regarding internal company communications that he would disclose to authorities and certain customers unless the CEO and his business partner sat down and talked with him.
On October 13, Dailey called the CEO and made an opening demand of 75 percent of the $92,500 expected salary if he had stayed with the company. FBI agents arrested Dailey on October 16 and searched his residence. An analysis of Dailey’s computer revealed that he had gathered personal information about the company’s employees, including everyone’s names and salaries, and had stored the data on his personal computer. The alleged documents or information referenced by Dailey as part of the extortion were not found.
Dailey also admitted illegally accessing an ex-girlfriend’s e-mail and bank accounts from a computer at the engineering company where he worked before he resigned.
Dailey remains on house arrest pending sentencing on a date to be set by Judge Watson. Extortion is punishable by up to two years in prison and a fine of $250,000. Intentionally accessing a computer without authorization is punishable by up to one year in prison.
U.S. Attorney Stewart commended the FBI agents who investigated the case and Assistant U.S. Attorney Deborah A. Solove, who represented the United States in the case.

Mount Olive Inmate Pleads Guilty to Mailing Threatening Communications

CHARLESTON, WV—U.S. Attorney Booth Goodwin announced today that a Mt. Olive Correctional Complex inmate pleaded guilty in federal court for mailing threatening communications. Joseph Michael Pettaway, 38, admitted that beginning around 2000 and continuing until 2012, he wrote several letters that contained threats to harm a former acquaintance.
Specifically, Pettaway admitted that on approximately October 6, 2011, he mailed a letter to his former acquaintance. The defendant was incarcerated Mt. Olive Correctional Complex at the time the letter was mailed. Pettaway admitted that the letter contained descriptions of violent acts that he intended to commit, including beating and raping his former acquaintance, following his release from prison. The letter was mailed from Mount Olive Correctional Complex and delivered to the individual’s Huntington residence.
Pettaway admitted that along with the letter was an attached violation report containing information about an incident at the prison. The violation report provided details of an incident in which the defendant was reprimanded for throwing boiling water onto another inmate. The inmate suffered second degree burns as a result of the incident.
Pettaway faces up to five years in prison and a $250,000 fine when he is sentenced on May 1, 2013, by United States District Judge John T. Copenhaver, Jr.
The FBI conducted the investigation. Assistant United States Attorney Blaire Malkin is in charge of the prosecution.

Jacksonville Man Indicted for Operating Fraudulent Investment Scheme

JACKSONVILLE, FL—U.S. Attorney Robert E. O’Neill announces today the arrest and unsealing of a federal indictment charging Anderson Scott Hall (48, Jacksonville) with 10 counts of mail fraud and 10 counts of wire fraud in connection with his operation of a fraudulent investment scheme. If convicted, Hall faces a maximum penalty of 20 years in federal prison for each count of mail and wire fraud and fines up to $5 million. His initial appearance is scheduled today at 2:30 p.m. in Jacksonville before U.S. Magistrate Judge Thomas Morris.
According to the indictment, while working for a national investment services company, Hall operated a sham company (Abaco Securities International Ltd.), which he held out to be a legitimate international investment company. It is alleged that Hall was the mastermind behind a complex scheme to defraud numerous investors, including Duval County school teachers and administrators. Hall would allegedly induce victim investors into transferring their retirement savings from legitimate life insurance companies and investment companies over to his control. It is further alleged that instead of investing victim investors’ funds as promised, Hall would use the funds for his own personal use, including purchasing high value luxury items and commercial and residential real estate. On occasion, as part of the fraud scheme, Hall would use money taken from new investors to pay earlier investors. In total, Hall allegedly defrauded investors of more than $4 million.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation and the state of Florida’s Department of Financial Services and the Florida Office of Financial Regulation. The case is being prosecuted by Assistant United States Attorney Mark Devereaux.

Baltimore Armed Robber Sentenced to More Than 15 Years in Prison for Robbing Two Stores

BALTIMORE—U.S. District Judge Catherine C. Blake sentenced Cedric Lamont Scott, age 39, of Baltimore, today to 183 months in prison, followed by three years of supervised release, for robbery and using a gun in relation to the robbery. Judge Blake also ordered Scott to pay restitution of $1,175.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Baltimore City State’s Attorney Gregg L. Bernstein; and Commissioner Anthony W. Batts of the Baltimore Police Department.
According to his plea agreement, on January 21, 2012, Scott entered a store in the 6700 block of Reisterstown Road in Baltimore and selected some items that he took to the cash register. The store owner’s 9-year-old son asked his mother if he could ring up the sale. As the boy rang up the sale, Scott pointed a handgun at the boy and his mother, and demanded all the cash. The boy and his mother handed Scott all the cash from the register. Scott also took an envelope filled with cash proceeds from the business, the coin drawer from beneath the register, and the mother’s cell phone, before fleeing.
On February 16, 2012, Scott robbed a business in the 4600 block of W. Northern Parkway in Baltimore by pretending to want to purchase an item and then demanding money from the cashier. The store manager approached the cash register and, realizing that a robbery was taking place, ran out the front door to get help. Scott chased the manager and during a struggle between the two, Scott fired his gun at least once. Scott reentered the store and fired a shot into the cash register drawer lock. When the register failed to open, Scott slammed it to the ground, which caused the cash drawer to open. Scott took all the bills and some coins and fled on foot.
Baltimore Police officers arrived, saw Scott running away, and ordered him to stop. Scott continued running, but the officers were eventually able to capture and arrest Scott. Officers seized from Scott a loaded .22 caliber revolver, $282 stolen in the second robbery, and the cell phone Scott took from the store owner during the first robbery.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department, and Baltimore City State’s Attorney’s Office for their work in this investigation. Mr. Rosenstein thanked Assistant United States Attorney Debra L. Dwyer, who prosecuted the case.

Former Bank Director Charged with Securities and Wire Fraud

A former director of a Georgia bank who managed two private investment funds has been charged by a federal grand jury in the Eastern District of New York with securities fraud and wire fraud. According to court documents, defendant Aubrey Lee Price sent a letter to acquaintances in mid-June 2012 in which he admitted that he had lost a large amount of investor money through trading activities and that he planned to kill himself by jumping from a ferry boat in Florida. Price remains missing. Anyone with information regarding Price’s whereabouts or the alleged crime is urged to contact the Federal Bureau of Investigation office in New York at (212) 384-1000 or at ny1@ic.fbi.gov.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation (FBI), New York Field Office.
According to the indictment, Price managed investment funds PFG LLC (PFG) and the Montgomery Growth Fund (Montgomery Growth). Starting in or about June 2009, PFG raised approximately $40 million from approximately 115 investors from across the nation. Price unsuccessfully invested PFG funds in various equity securities, options, and real estate, including farms in South America. To cover up his losses, Price allegedly lied to his investors by posting fake account statements on a secure PFG website that fraudulently reflected fictitious assets and fabricated investment returns.
The indictment also states that, starting in or about January 2011, Price became a director of Montgomery Bank & Trust (MB&T), a financial institution in Ailey, Georgia. Price also invested some of the bank’s capital, which he told the bank’s management he would invest safely in U.S. Treasury securities. Instead, Price lost much of the bank’s money through risky investments in equity securities and options. Price also embezzled MB&T money to pay redemptions to some PFG investors. The indictment charges that Price covered up his embezzlement and losses of MB&T’s funds by giving the bank’s management fabricated documents falsely indicating that approximately $17 million was on deposit in the bank’s name at a large financial services firm in New York.
“As charged in the indictment, this defendant repeatedly abused the trust placed in him by his investors and MB&T by lying about his investment losses, fabricating documents, and embezzling bank funds. Through this web of deception, Price acted to create the image of a successful investor. When that image was shown to be a lie, he then orchestrated his confession and disappearance. We are using every resource available to locate him and recover the funds he stole,” said U.S. Attorney Lynch.
FBI Assistant Director in Charge Venizelos stated, “As alleged, Price lied to investors about where their money would be invested and lied to them about the solvency of his company. He lied to the bank on whose board he served about investment of bank capital and lied again to cover up that lie. It is therefore reasonable to assume that Price’s talk of suicide was also a lie. The FBI is actively looking for Aubrey Lee Price.”
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a maximum prison sentence of 30 years for wire fraud and 25 years for securities fraud.
The government’s case is being prosecuted by Assistant United States Attorneys David C. Woll, Jr., James McMahon, and Brian Morris.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency 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.
Defendant:Aubrey Lee Price
Age: 46

Man Sentenced to 40 Months in Federal Prison for Bank Robbery and Attempted Bank Robbery of Two Banks in Coffee County

MONTGOMERY, AL—Benjamin Michael Smith, a resident of Coffee County, Alabama, was sentenced to 40 months in federal prison for federal felony charges for bank robbery and attempted bank robbery, United States Attorney George L. Beck, Jr. announced today.
In October 2012, the United States Attorney filed a felony information against Smith alleging the federal charges. During Smith’s guilty plea hearing, he admitted that on February 16, 2010, he attempted to rob Citizen’s Bank located in Coffee County. Smith also admitted that on December 5, 2011, he robbed CB&T Bank located in Coffee County.
United States District Judge Mark E. Fuller sentenced Smith to a total term of 10 months in federal prison and three years of supervised release following his release from prison. Smith remains in the custody of the United States Marshals Service pending placement by the Bureau of Prisons.
This case was investigated by the Federal Bureau of Investigation with the assistance of the Enterprise Police Department. Assistant United States Attorney Jerusha T. Adams prosecuted the case.

Defendant from Shirley Arrested for Aiming a Laser Beam at Aircraft Flying Over Long Island

Federal agents arrested a Shirley, Long Island man this morning on the charge of aiming a laser pointer at two aircraft in August 2012.
The arrest of Angel Rivas was announced today by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director in Charge of the Federal Bureau of Investigation, New York Field Office. The defendant is scheduled to be arraigned before the United States Magistrate Judge Arlene R. Lindsay at the United States Courthouse in Central Islip, New York, later today.
According to court filings, on August 21, 2012, the defendant used a laser pointer to direct a laser beam at a commercial aircraft and a Suffolk County Police Department helicopter sent up to investigate the initial incident. Investigators first determined that the beam of light came from the vicinity of the defendant’s residence on William Floyd Parkway in Shirley, New York, and then confirmed that the defendant himself had directed the laser beam at the aircraft and helicopter.
“Laser pointers aimed at aircraft pose many dangers, including disrupting the vision of pilots,” said United States Attorney Lynch. “Last February, President Obama signed the FAA Modernization and Reform Act of 2012, which specifically prohibited the conduct alleged in the complaint. The safety of American air travelers has been and will continue to be a priority for law enforcement.” Ms. Lynch expressed her grateful appreciation to the U.S. Department of Transportation, Office of Inspector General-Investigations, the FBI Joint Terrorism Task Force in New York, the Suffolk County Police Department, and the Port Authority Police Department for their participation in the investigation leading to today’s arrest.
FBI Assistant Director in Charge Venizelos stated, “On a night last summer, Rivas allegedly endangered the lives of passengers and crew of not one but two aircraft and, potentially, people on the ground. Pointing a laser at an aircraft is not a prank; it is a federal crime with penalties befitting its seriousness.”
If convicted of the charge, the defendant faces a maximum sentence of five years’ imprisonment and a maximum fine of $250,000.
The government’s case is being prosecuted by Assistant United States Attorney Charles N. Rose.
The charges contained in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Defendant
Angel M. Rivas
Age: 33

Federal Grand Jury Indicts Maverick County Commissioner Rodolfo Bainet Heredia in Connection with a Bribery, Kickback, and Bid-Rigging Scheme

In Del Rio this morning, a federal grand jury indicted Maverick County Precinct Two Commissioner Rodolfo Bainet Heredia, age 54, of Eagle Pass, Texas, in connection with an alleged bribery, kickback, and bid-rigging scheme, announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.
The federal grand jury indictment charges Heredia with six counts of receiving a bribe and one count of paying a bribe to an agent of an organization receiving federal funds. The indictment alleges that in 2010 and 2011, Heredia manipulated the bidding process to guarantee that contractors he chose would be awarded Maverick County construction contracts. Those contractors deposited the checks issued to them by Maverick County and then made cash payments to Heredia. According to the indictment, the private contractors submitted inflated bids to Maverick County in order to ensure the availability of sufficient funds to perform the construction work, make a profit, and also to pay the bribe to Heredia. The indictment further alleges that Heredia gave benefits to a county employee to guarantee that checks were issued to the contractors involved in this scheme.
Upon conviction, Heredia faces up to 10 years in federal prison on each count. Heredia remains in custody following his arrest in October of last year on federal money laundering and bulk cash smuggling charges. A trial on those charges is scheduled for April 16, 2013. No court dates have been scheduled in connection with today’s indictment.
This ongoing investigation is being conducted by the Federal Bureau of Investigation and the Texas Department of Public Safety. Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741.
Assistant United States Attorney Michael Galdo is prosecuting this case on behalf of the government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.

Knoxville Woman Sentenced to One Year in Prison for Lying to Court About Cancer Diagnosis

KNOXVILLE—Angela Elwood, 48, of Knoxville, Tennessee, was sentenced on January 17, 2013, by the Honorable Thomas W. Phillips, U.S. District Court Judge, to serve one year in federal prison.
On August 17, 2012, United States Attorney William C. Killian filed an information in U.S. District Court charging Elwood with obstructing justice by lying to the court about having cancer so that she could delay her reporting date to the federal Bureau of Prisons to begin a prison term imposed for a bank fraud conviction.
According to court documents, Elwood admitted that following her bank fraud conviction in 2009, and while awaiting designation and a reporting date to a federal prison facility, she obstructed the due administration of justice by having the court extend her reporting date to federal prison based on medical documents submitted to the court that she fabricated to falsely state that she had been diagnosed with breast cancer and needed immediate medical treatment. At the time Elwood submitted the false medical documents to the court, she already had been told by a medical professional that she did not have breast cancer.
This investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney F. M. (Trey) Hamilton, III represented the government.

Former Ohio State Representative Clayton R. Luckie, II Sentenced to Three Years in Prison

COLUMBUS, OH—Edward J. Hanko, Special Agent in Charge (SAC) of the Cincinnati Division of the Federal Bureau of Investigation (FBI), and Franklin County Prosecutor Ron O’Brien today announced that former Dayton-area State Representative Clayton R. Luckie, II pleaded guilty to eight felonies and one misdemeanor and was sentenced to three years in prison in relation to acts committed while serving in the Ohio General Assembly.
Special Agent in Charge Hanko stated, “When public officials betray the trust that has been given to them, it can have a devastating impact on our system of government. These officials are accountable for their actions and when they violate the law, there are very real consequences.” SAC Hanko went on to say, “I would like to thank Prosecutor Ron O’Brien and his staff for their hard work in this investigation and the plea negotiations. This is another example of federal, state, and county officials working together in pursuit of justice.”
Specifically, Luckie pleaded guilty to one count of money laundering, one count of grand theft, six counts of election falsification (one for each year he was in office), and one count of failure to disclose on state ethics disclosure statements. As a part of the plea agreement, Luckie will also have to make restitution in the amount of $11,893 to the State of Ohio Treasury for the salary he received as a state representative following his indictment on October 10, 2012.
Luckie was first appointed to the House of Representatives in 2006 and withdrew his name from the November 2012 ballot when he acknowledged the existence of this criminal investigation. However, he did not resign and served the remainder of his term until December 31, 2012.
The original 49-count indictment against Luckie alleged a pattern of intent to steal campaign funds, spend these funds for personal use, and falsify required financial disclosure forms to cover up these unlawful acts.
SAC Hanko noted that the sentence was the result of a lengthy investigation by FBI special agents with the support of FBI professional staff in the Columbus Resident Agency.

C. Ray Nagin, Former New Orleans Mayor, Indicted on Federal Bribery, Honest Services Wire Fraud, Money Laundering, Conspiracy, and Tax Charges

NEW ORLEANS—C. Ray Nagin, 56, a resident of Frisco, Texas, and formerly the mayor of New Orleans, was charged in a 21-count indictment with bribery, honest service wire fraud, money laundering, conspiracy, and filing false tax returns, announced U.S. Attorney Dana J. Boente, FBI Special Agent in Charge Michael Anderson, and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge James Lee.
According to today’s federal grand jury indictment, between December 2004 and the present, Nagin and several others participated in a conspiracy to commit bribery and honest services wire fraud. The indictment alleges that Nagin, in his role as chief executive, devised a scheme to defraud the city of New Orleans and its citizens of his honest services through bribery and a kickback scheme, whereby Nagin used his public office and official capacity to provide favorable treatment, including awarding contracts, that benefitted business and financial interest of individuals providing him with bribes and kickbacks in the form of checks, cash, granite inventory, wire transfers, personal services, and free travel. The indictment charges Nagin with accepting numerous bribes and payoffs from consultants and contractors, money laundering conspiracy, and filing false tax returns for the years 2005 to 2008.
“This office will continue its history of investigating and prosecuting public corruption,” said U.S. Attorney Dana J. Boente. “This is an important part of the office’s mission to serve the citizens of the Eastern District of Louisiana and make certain they have honest public officials.”
“This indictment should serve as a reminder to current and former public officials that, in the interest of full accountability, the FBI pursues corruption even after an official leaves office,” said Michael Anderson, Special Agent in Charge of the FBI’s New Orleans Field Office.
“IRS will continue to do our part to hold the elected officials of New Orleans accountable for their actions,” stated Damon Rowe, IRS-CI Acting Special Agent-in-Charge. “No one is excused from obeying the laws of this country.”
According to the indictment, in January 2005, Nagin created Stone Age LLC, a granite company based in New Orleans.
The indictment alleges, among other things, that Nagin accepted approximately $72,250 in bribes from Rodney Williams and his company, Three Fold Consultants LLC. The indictment also alleges Nagin accepted bribes from Frank Fradella, including $50,000, granite inventory, and nine payoffs in the form of wire transfers from Fradella totaling $112,500. In some cases, money was deposited into Nagin’s Stone Age corporate account, or free granite inventory was provided to Stone Age.
If convicted of conspiring with others to commit bribery and honest services wire fraud (count one), Nagin faces statutory penalties of up to five years in prison, a $250,000 fine, and three years of supervised release. If convicted of accepting a bribes (counts two through seven), Nagin faces statutory penalties of up to 10 years in prison, a $250,000 fine, and three years of supervised release on each count. If convicted of accepting payoffs that caused interstate wire communications to occur between Louisiana and other states (counts eight through 16), Nagin faces statutory penalties of up to 20 years in prison, a $250,000 fine, and three years of supervised release on each count. If convicted of conspiring to commit money laundering (count 17), Nagin faces statutory penalties of up to 10 years in prison, a $250,000 fine, and three years of supervised release. If convicted of filing false tax returns for years 2005 through 2008 (counts 18 through 21), Nagin faces statutory penalties of up to three years in prison, a $100,000 fine, and three years of supervised release on each count.
The indictment also contains notices of forfeiture which puts the defendant on notice that the government intends on forfeiting any and all property and profits concerned with and/or derived from any illegal activity referenced in the indictment.
U.S. Attorney Boente reiterated that today’s indictment describes allegations and that the guilt of the defendant must be proven beyond a reasonable doubt.
The case was investigated by the FBI, the IRS-CI, and the New Orleans Office of Inspector General. U.S. Attorney Boente would also like to acknowledge the assistance provided by the New Orleans Inspector General’s Office and the Metropolitan Crime Commission. The case is being prosecuted by Assistant U.S. Attorneys Matthew M. Coman and Richard R. Pickens, II.

Chief Executive Officer of Superior Discount Coins Appears in Court in Colorado for Defrauding Gold Coin Investors of More Than $2.4 Million

DENVER—James P. Burg, age 61, formerly of Fairplay, Colorado, faces fraud charges related to a scheme to defraud gold coin investors, the U.S. Attorney’s Office, the FBI, the IRS-CI, and the U.S. Postal Inspection Service announced. Burg was indicted by a federal grand jury in Denver on November 6, 2012, for charges of wire fraud, mail fraud, money laundering, and failure to file tax returns. The indictment remained sealed until his arrest in California on November 29, 2012. Burg then appeared in U.S. District Court for the Southern District of California. In court there, Burg was ordered to be detained and transferred by U.S. Marshals from California to Colorado. Burg’s first Colorado court appearance occurred on January 2, 2013, where he was advised of his rights and the charges pending against him. He appeared in court on January 7, 2013, and again on January 14, 2013, for the purpose of a detention hearing. On January 14, 2013, U.S. Magistrate Judge Michael E. Hegarty ordered that Burg could be released prior to trial on a $50,000 secured property or cash bond. Once released on that pre-trial bond, Magistrate Judge Hegarty ordered Burg to a halfway house (once bed space is available), pending the resolution of the criminal case.
According to the indictment, beginning on or about October 1, 2007, and continuing through and including on or about January 12, 2012, in Colorado and elsewhere, James P. Burg devised and intended to devise a scheme to defraud customers that ordered coins from a business known as Superior Discount Coins and Gold Run Investments and for obtaining money from those customers by means of materially false and fraudulent pretenses, representations, and promises. Burg took and received $2,464,099 from customers that ordered coins, and he failed to deliver the coins as promised.
As part of the scheme, Burg represented that he was the chief executive officer of a company known as Superior Discount Coins (SDC) and that SDC was in the business of selling coins. Burg also conducted business using a company known as Gold Run Investments (GRI) and represented that GRI was in the business of selling coins. At times, Burg operated GRI using the alias “Tim Burke.” Burg advertised and solicited customers through radio advertisements and over the Internet using websites he controlled, including; www.superiordiscountcoins.com, www.yourcoinbroker.com, and www.goldruninvestments.net.
Burg misrepresented and promised customers that if they ordered coins from SDC or GRI and paid him for those coins, he would deliver the coins to them or to accounts designated by them. He sent and caused to be sent to customers that ordered coins from SDC or GRI invoices stating amounts of money owed for the coins and, in some cases, providing information about a bank account to which the customers should transfer their money to purchase the coins.
The money Burg received from customers was not used to purchase coins for such customers, but instead he converted the money to his own use and benefit. Burg refused to refund money to customers in several instances where the customers requested a return of their money after he failed to deliver coins as originally promised. To prevent the scheme’s detection, Burg sometimes filled customers’ orders for coins only after such customers threatened to take legal action or report him to law enforcement authorities. Burg used one customer’s payment for coins to refund funds to another customer.
For calendar years 2006, 2007, 2008, and 2009, Burg failed to file income tax returns with the Internal Revenue Service as required by law. These returns were required to be filed with the IRS on April 15 following the subsequent above mentioned years.
“A core mission of the U.S. Attorney’s Office is to protect victims from scam artists who try to trick them out of their hard earned money,” said U.S. Attorney John Walsh.
“The FBI has made protecting innocent investors a priority,” said FBI Special Agent in Charge James Yacone. “As such, we will vigorously investigate those who engage in schemes to swindle and defraud.”
“The U.S. Postal Inspection Service has no shortage of investment investigations and this is another example of greed overcoming honest business practices,” said Adam Behnen, Inspector in Charge, with the U.S. Postal Inspection Service. “These criminal charges illustrate the commitment of the U.S. Postal Inspection Service to protect the American public by investigating individuals who use the U.S. mail to further their schemes.”
“Fraud schemes are often described as a house of cards and will eventually fall apart exposing the individuals responsible,” said Stephen Boyd, Special Agent in Charge, IRS-Criminal Investigation, Denver Field Office. “This is a great example of federal agencies working together.”
Burg was charged with six counts of wire fraud, nine counts of mail fraud, four counts of money laundering, and four counts of willful failure to file tax returns. If convicted of the wire fraud and mail fraud counts, he faces not more than 20 years in federal prison, and a fine of up to $250,000 per count. If convicted of the money laundering counts, he faces not more than 10 years in federal prison and a fine of up to $250,000 per count. If convicted of failing to file tax returns, he faces not more than one year in federal prison and a fine of up to $25,000 per count.
This case was investigated by special agents with the Federal Bureau of Investigation (FBI), the IRS-Criminal Investigation, and the U.S. Postal Inspection Service.
Burg is being prosecuted by Assistant U.S. Attorney Timothy Neff.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.

Owner of Debt Consolidation and Repair Businesses Pleads Guilty to Defrauding Customers

FRESNO, CA—Sharanjit Kaur, 36, of Fresno, pleaded guilty today to conspiring to commit mail and wire fraud, United States Attorney Benjamin B. Wagner announced.
According to the plea agreement, from approximately July 2010 to June 2011, Kaur and co-defendant Baljit Singh owned and operated several companies based in Fresno for the sole purpose of defrauding hundreds of customers located throughout the United States. According to court documents, the defendants, through their companies Consumer Financial Services, Consumer Credit Repair, and Client Financial Services, touted to potential customers that these businesses could provide debt consolidation services. The defendants also falsely promised that they could obtain low-interest loans for customers, assist in avoiding lawsuits, lower car payments, replace high-interest credit cards with low-interest ones, and correct errors in credit reports. The defendants utilized a call center in India from which individuals would call customers under aliases such as “Neil McKenzie” or “Anthony Jones.”
After luring customers into using these purported services, Kaur and his agents instructed customers to send in monthly payments of $500 or more. Even though they collected regular payments from customers, no creditors were contacted on behalf of customers as promised. To mislead customers, forged letters from creditors were sent, indicating that loan modifications had been approved. When customers would contact the debt repair companies about late-payment or default notices they had received from their creditors, the defendant and his agents would either hang up on customers or request that customers continue to make service payments. The funds received from customers were used for their own benefit or wired to an individual located in Kolkata, India.
As part of the plea agreement, Kaur agreed to forfeit $26,943 from bank accounts and a residence owned by him. The U.S. Attorney’s Office has also initiated separate civil actions to recover funds wired by the defendants to India.
Kaur is scheduled to be sentenced on April 8, 2013, at 8:30 a.m. before U.S. District Judge Lawrence J. O’Neill. He faces a maximum sentence of 20 years in prison and a $500,000 fine. 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. Co-defendant Baljit Singh, 47, has a hearing before Judge O’Neill scheduled for February 4, 2013. The charges against him are only allegations, and he is presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.
This case is the product of an extensive investigation by the Federal Bureau of Investigation and the Fresno Police Department. Assistant United States Attorney Grant B. Rabenn is prosecuting the case.

Hualapai Nation Tribal Member Sentenced to Prison for Assault on a Federal Officer

PHOENIX—On January 14, 2012, Jordan Reed Sumatzkuku, 25, of Peach Springs, Arizona, was sentenced by U.S. District Judge David G. Campbell to 36 months in prison. Sumatzkuku was also sentenced to 12 months in prison for violating his supervised release in another case. The sentences were ordered to run consecutively for a total sentence of 48 months in prison, followed by a term of three years of supervised release. Sumatzkuku, a member of the Hualapai Nation Indian Tribe, pleaded guilty on November 7, 2012, to assault on a federal officer. Sumatzkuku’s sister, co-defendant Raema Sumatzkuku, was sentenced to 12 months in prison for assault on a federal officer on December 17, 2012.
According to court records, on July 2, 2012, when a Hualapai Nation Police officer tried to arrest Sumatzkuku’s sister, Sumatzkuku grabbed the officer, knocked him to the ground, and wrestled with the officer. The victim sustained a fracture to his left foot as a result of the assault.
The investigation in this case was conducted by the Hualapai Nation Police Department and the Federal Bureau of Investigation. The prosecution was handled by Christina J. Reid-Moore, Assistant U.S. Attorney, District of Arizona, Phoenix.

Kodiak Woman Sentenced for Wire Fraud

ANCHORAGE—U.S. Attorney Karen L. Loeffler announced today that a Kodiak woman was sentenced in federal court in Anchorage for two counts of wire fraud. This is the first of five defendants to be sentenced for her role in a scheme to embezzle almost $500,000 from Trident Seafoods.
Jamie Fathke, 29, of Kodiak, Alaska, was sentenced today by Chief U.S. District Court Judge Ralph R. Beistline to four months in prison for her role in embezzling $30,000 from Trident Seafoods.
According to Assistant U.S. Attorney Aunnie Steward, who presented the case, between 2008 and 2010, the lead defendant Isairis Wolfe is alleged to have used her position as the bookkeeper for Trident Seafoods in Kodiak to write Trident checks to four of her personal associates; co-defendants Anne Wilson, Jeremy Smith, Valerie Olivares, and Jamie Fathke totaling almost $500,000. Specifically, Fathke worked with Wolfe to cash three fraudulent Trident checks drafted by Wolfe totaling $30,000 in March 2009. Wolfe and Fathke shared the proceeds of the fraudulent checks.
Defendant Anne Wilson has pled guilty to two counts of wire fraud for her role in working with Wolfe to embezzle almost $300,000 from Trident Seafoods. Wilson is scheduled to be sentenced on March 20, 2013. Smith, Olivares, and Wolfe are scheduled for trial on March 18, 2013.
Ms. Loeffler commends the FBI for the investigation of this case.

Former South Carolina State University Police Chief Pleads Guilty in Connection with Extortion Plot

CHARLESTON, SC—United States Attorney Bill Nettles stated today that Michael Bartley, age 48, of Orangeburg, South Carolina, pled guilty to an information charging him with conspiring to violate the Hobbs Act and other federal statutes, all in violation of Title 18, United States Code, Section 371. United States District Judge David C. Norton of Charleston accepted the plea and will impose sentence after he has reviewed the presentence report, which will be prepared by the U.S. Probation Office.
Evidence presented at the plea hearing established that Bartley, then the police chief of South Carolina State University (SCSU), agreed with another SCSU official to use their positions and relationships to arrange SCSU’s purchase of real property in Orangeburg County owned by Person A. Bartley and his conspirators agreed that Person A would pay Bartley approximately $30,000 in cash, buy Bartley an all-terrain vehicle (ATV), and also provide a separate kickback to the other SCSU official in return for Bartley and the other SCSU’s official’s assistance in arranging SCSU’s purchase of the real property at the price set by Person A.
Mr. Nettles stated that the maximum penalty Bartley can receive is a fine of $250,000 and imprisonment for five years, plus a special assessment of $100.
Mr. Nettles stated, “South Carolina State University and its students are the victims of the crime charged in this Information, not the target. This investigation does not target South Carolina State University. Rather, this information focuses on an individual who used his position and relationships in an effort to line his pockets at the university’s expense.”
The case was investigated by agents of the Federal Bureau of Investigation (FBI), the South Carolina Law Enforcement Division (SLED), the Department of Housing and Urban Development Office of Inspector General (HUD-OIG), and the Internal Revenue Service-Criminal Investigation (IRS-CI). This case and its companion cases are being prosecuted by Assistant United States Attorneys Mark C. Moore, Nancy C. Wicker, Jane B. Taylor, and DeWayne Pearson. Mr. Nettles stated that other charges are expected in connection with this ongoing investigation.

Former Consultant Wesley Wang Sentenced in Manhattan Federal Court for Insider Trading

Preet Bharara, the United States Attorney for the Southern District of New York, announced that Wesley Wang, a former consultant with Trellus Management, was sentenced today to two years’ probation for his participation in insider trading schemes in which Wang provided material, non-public information (“inside information”) about various publicly traded companies to several individuals, including Doug Whitman, the president and founder of Whitman Capital. Wang pled guilty in July 2012 to two counts of conspiracy to commit securities fraud pursuant to a cooperation agreement with the government. He was sentenced in Manhattan federal court by U.S. District Judge Jed S. Rakoff.
According to the information, statements made during Wang’s guilty plea proceeding, Wang’s testimony during the criminal trial of Doug Whitman, and the government’s sentencing submission in Wang’s case:
From 2005 through 2008, Wang provided Whitman, among others, inside information on Cisco with the understanding that Whitman would use the information to trade securities. In exchange for this inside information, Whitman provided Wang with inside information on other publicly traded companies, including Marvell and Polycom, which Wangin turn provided to others. In addition, from 2002 to 2005, Wang was involved in a separate conspiracy in which he exchanged inside information about various publicly traded companies with other individuals, with the expectation the information would be used to trade securities.

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In addition to his probation, Wang, 39, was ordered to pay a $200 special assessment fee.
Whitman was convicted in a jury trial on August 20, 2012 of four counts of conspiracy and securities fraud.
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. Attorneys Christopher L. LaVigne and Jillian Berman are in charge of the prosecution.

El Paso Truck Driver Admits Committing Armed Bank Robbery of First Bank Texas in Abilene

ABILENE, TX—Frank Esparza, Sr., 40, of El Paso, Texas, appeared today before U.S. Magistrate Judge E. Scott Frost and admitted committing the September 27, 2012 armed robbery of First Bank Texas (FBT), SSB, in Abilene, Texas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Specifically, Esparza pleaded guilty to one count of armed bank robbery and one count of using and carrying a firearm during and in relation to a crime of violence. The armed bank robbery count carries a maximum statutory penalty of 25 years in federal prison and a $250,000 fine, and the firearm count requires imprisonment for a period of not less than seven years and up to life and a $250,000 fine. Esparza remains in federal custody; a sentencing date was not set.
According to plea papers filed in the case, at approximately 4:30 p.m. on September 27, 2012, a Hispanic male wearing a dark hooded jacket, sunglasses, and a ski mask, who was later identified as Esparza, entered FBT and approached the teller counter. Esparza pointed a .25 caliber pistol at the tellers and said, “You know what this is.” Esparza then walked behind the teller counter, held up a plastic grocery bag, and demanded money from the tellers. The tellers gave Esparza the money, and he said, “Thank you ladies, I did not want anyone to get hurt.” As he began to exit the bank, an FDIC auditor was also leaving the bank, and Esparza pointed the pistol at the auditor and told him not to say anything. Esparza then fled the scene.
The plea papers also state that Esparza was driving an 18-wheeled tractor-trailer to Lubbock when it broke down in Abilene and that his son and a friend picked him up. Esparza said he decided to rob a bank because he needed a quick way to obtain money. His son and the friend took him to a bank, but it was closed when Esparza tried to go inside and rob it. They then took him to FBT, where, after his son went inside the bank to get an idea of what was inside, Esparza entered the bank and robbed it, using a .25 caliber pistol he had acquired earlier in the day.
The investigation is being conducted by the FBI and the Abilene Police Department. Assistant U.S. Attorney Jeffrey R. Haag of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.

Former President Pro Term of Oklahoma Senate Sentenced to Serve Five Years’ Probation for Bribery

OKLAHOMA CITY—Former Oklahoma Senate President Pro Tem Michael Steven Morgan, 57, of Stillwater, Oklahoma, was sentenced today by United States District Judge Robin J. Cauthron to serve five years’ probation for bribery, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
“While this was not the sentence for which we advocated, the determination of sentencing in federal court is within the discretion of the Judge,” said U.S. Attorney Coats. “This is one of the most significant public corruption cases in this district in decades. Both the U.S. Attorney’s Office and the FBI remain committed as ever to the pursuit of public corruption cases and holding accountable any public officials who abuse their positions for personal gain. I commend the Assistant United States Attorneys and FBI special agents for their extraordinary work in this long and complex investigation and prosecution.”
The government alleged three different schemes. On March 5, 2012, the federal jury found Morgan guilty of bribery on one scheme, acquitted him on one scheme, and could not reach a unanimous verdict on a third scheme. According to evidence at trial on the scheme in which he was convicted, Morgan, an attorney, accepted payments from a business that owned assisted-living centers, disguised as legal fees, in exchange for favorable treatment in the legislature. Evidence at trial showed that Morgan took 12 $1,000 bribe payments in 2006 and 2007, disguised as legal fees, from Silver Oak Senior Living Center. Evidence showed that Silver Oak had been at odds with the Oklahoma Department of Health, which was attempting to impose regulations on assisted-living facilities. In exchange for the bribe payments, evidence showed that Morgan authored Senate Bill 738, which became law at the end of the 2007 session and helped Silver Oak by lifting some of its regulatory burdens.
In addition to serving five years of probation, Morgan was ordered to forfeit $12,000.
This case was the result of an investigation conducted by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorneys Scott E. Williams and Vicki Zemp Behenna.