Third Adams Produce Official Pleads Guilty in Federal Court

BIRMINGHAM—Former Adams Produce Chief Executive Officer Scott David Grinstead pleaded guilty today in federal court to fraud against the company, failure to report a felony against the government, and failure to file federal income tax returns, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein, Jr., and IRS-Criminal Investigation Division Special Agent in Charge Veronica Hyman-Pillot.
Grinstead, 45, of Birmingham, entered his plea before U.S. District Judge Karon O. Bowdre. His sentencing is scheduled August 21.
Federal prosecutors charged Grinstead in January, and he entered a plea agreement with the government at that time. As part of that agreement, Grinstead must pay $450,000 in restitution to the bankruptcy estate of Adams Produce for the benefit of the company’s employees who were not fully paid because of Adams’ abrupt closing and its filing for bankruptcy last year.
Grinstead is the third Adams Produce official to plead guilty to federal charges in connection with fraud at the Birmingham-based company that had been a leading distributor of fresh fruits and vegetables across the Southeast for many years.
David Andrew Kirkland, 44, formerly of Birmingham and now living in Texas, pleaded guilty in March before U.S. District Judge Abdul Kallon to conspiracy to defraud the federal government of several hundred thousand dollars through a scheme to create false invoices and purchase orders. Kirkland is scheduled for sentencing June 27.
Kirkland, director of purchasing for Adams Produce, was charged in the same purchasing fraud scheme as Christopher Alan Pfahl, a purchasing program specialist for Adams. Kirkland was Pfahl’s supervisor. Pfahl, 41, of Birmingham, pleaded guilty in January to conspiracy to defraud the government of $481,000 on produce contracts.
Pfahl and Kirkland engaged in a scheme to create false records that reflected a higher purchasing cost for fruits and vegetables than the company actually paid. The inflated costs were then presented to the U.S. government, which had agreed to pay a certain amount over Adams’ cost for produce.
The federal government, through the Defense Supply Center Philadelphia, was one of Adams’ customers. The supply center contracted with Adams Produce to provide fresh fruits and vegetables to military bases, public school systems, junior colleges, and universities. Adams Produce entered into contracts with the government worth millions of dollars, according to court records.
Grinstead pleaded guilty to misprision of a felony for knowing of the fraud Pfahl and Kirkland were engaged in and allowing it to continue and end slowly, so as to avoid raising red flags with the government, rather than stopping it immediately and reporting it to authorities.
Grinstead also pleaded guilty to wire fraud for wiring hundreds of thousands of dollars from an Adams Produce account to American Express to pay for clothing, jewelry, personal travel for himself and his family, lawn care at his home, and items for a house on Lake Martin. He pleaded guilty to two counts of failure to file a federal tax return, one for 2009 and one for 2010. According to court records, Grinstead had a gross income of about $748,801 for the 2009 calendar year and willfully failed to file an income tax return with the Internal Revenue Service. In 2010, he received about $1,878,700 in gross income and willfully did not file a return with the IRS.
The FBI and the IRS investigated the cases, which are being prosecuted by Assistant U.S. Attorney George A. Martin, Jr.

Former Tuscaloosa Police Sergeant Pleads Guilty to Civil Rights Violation for Sexually Assaulting a Woman

WASHINGTON—Jason Glenn Thomas, 34, a former sergeant with the city of Tuscaloosa, Alabama Police Department, pleaded guilty today to a criminal civil rights charge for using his authority as a law enforcement officer to sexually assault a woman.
According to court documents filed in connection with his guilty plea, Thomas admitted that while on duty shortly after midnight on March 27, 2011, he stopped and detained a female pedestrian without placing her under arrest. Thomas then transported the woman in his department issued patrol vehicle to a remote area and sexually assaulted her.
“This former officer did the unimaginable when he used his police powers to sexually assault this victim,” said Roy L. Austin, Jr., Deputy Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously prosecute those who abuse their position and authority to harm those individuals whom they have sworn to protect.”
“Most police officers work diligently every day to protect the citizens,” said U.S. Attorney for the Northern District of Alabama Joyce White Vance. “A community must be able to trust its police officers. My office is committed to prosecuting any officers who abuse the authority of the badge to commit a crime. This abuse of the public’s trust will not be permitted.”
“Mr. Thomas dishonored his badge and his fellow officers when he violated the civil rights of a female pedestrian while on duty, in uniform, and in a marked patrol car,” said FBI Special Agent in Charge of the FBI Birmingham, Alabama Field Office Richard D. Schwein, Jr. “Citizens have a right and should expect ethical and proper treatment from all law enforcement officers and we, as civil servants, must never forget that we have sworn an oath to serve and protect them. The public can be assured the FBI will continue to aggressively pursue those rogue officers who violate that trust.”
Thomas faces a maximum sentence of 10 years in prison and a fine of $250,000. Sentencing is scheduled for July 18, 2013, before U.S. District Judge C. Lynwood Smith.
This case was investigated by the Tuscaloosa Resident Agency of the FBI’s Birmingham Field Office and was prosecuted by Trial Attorney D.W. Tunnage of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney George Martin for the Northern District of Alabama.

FBI Seeks Public’s Help in Identifying Alleged Victims of Convicted Killer

The FBI is seeking the public’s assistance in identifying alleged victims of convicted killer Curtis Dean Anderson, who died while serving his prison term on December 9, 2007.
Anderson was convicted and sentenced to over 300 years in prison for the 1999 kidnapping and murder of 7-year-old Xiana Fairchild in Vallejo, California, and other crimes. He was captured after one of his kidnap victims, then 9-year-old Midsi Sanchez, was able to escape.
Anderson was interviewed by FBI agents in November 2007, and he confessed to murdering eight victims in the United States, which includes Fairchild and 7-year-old Amber Swartz-Garcia of Pinole, California, in 1988. Anderson also confessed to two murders in Mexico but did not provide any information on those victims.
The following is a list of the stateside victims’ descriptions by Anderson in chronological order:
Late 1984
Victim #1 was described as a female in her late teens/early 20s. Anderson allegedly met and killed her and disposed of her body near a local swimming hole in Marysville, California. She was a “runaway.”
Victim #2 was a young female hitchhiker in her late teens, whom Anderson claimed he picked up on a road near the northeast side of Clearlake a few days after the death of Victim #1.
Early 1985
Victim #3 was a female who was in her late teens. She was also residing in the Marysville area and was possibly a runaway from Oregon. Anderson claimed to have killed her in early 1985. Anderson allegedly disposed of Victims #2 and #3 near the Ballard’s Bar Dam close to Dobbins, California.
November 1986
Victim #4 was approximately 21 years old. She was a light-skinned black female whom Anderson met in a bar frequented by African-Americans located in the East Bay, off Interstate-80 on San Pablo Avenue. He claims this occurred about 10 days after he was paroled from San Quentin State Prison. Anderson allegedly killed the victim and disposed of her body in the Oakland hills.
June 1988
Victim #5 was Amber Swartz-Garcia. Anderson said Swartz-Garcia was standing on a street in Pinole, California, when he drove up to where she was standing, opened his car door, and physically forced her into his car. He eventually murdered her in Arizona and disposed of her body around Benson, Arizona, in the desert off of Interstate-10 sometime in mid-1988.
1988/1989
Victim #6 was allegedly a Navajo Indian woman who was approximately 23 to 24 years old. Anderson claimed he picked her up near 5th or 6th Street in Benicia, California, coming out of a bar in either 1988 or 1989. He said that he killed his victim in the desert somewhere near Benson, Arizona.
Early 1997
Victim #7 was in her early 20s. She was a black and Hispanic female whom Anderson described as going by the name “Rosie.” Anderson allegedly met the victim at The Bears bar, which he described as being frequented by Hispanics. This bar was located under Highway 87 in San Jose, California, near a bowling alley.
Anderson claimed this victim had noticeable “junkie tracks” on her arms, and he killed her by strangulation. He allegedly disposed of her body less than five miles off the Ben Lomand turnoff near Santa Cruz, California, approximately 300 yards past a water retention pond behind a locked gate.
During this incident, Anderson stated he had been driving a black Toyota truck from his “Parts Company.” He claimed this occurred around February or March 1997.
December 1999
Victim #8 was Xiana Fairchild, who disappeared on December 9, 1999. Her skull was found in early 2001 in an unincorporated area of Los Gatos in Santa Clara County.
If the public has any information regarding the identity of the alleged victims, please call the FBI San Francisco tip line at 1-800-CALL-FBI (1-800-225-5324). All calls are confidential and tips can be left anonymously.
Photos of Curtis Dean Anderson:

Photo taken in 1983	Photo taken in 1999

Examples of vehicles Curtis Dean Anderson may have driven:

Example of a two-door 1977 Chevy sedan (Anderson allegedly drove a vehicle similar to the one seen above in the late 1980s. He received a ticket in 1989 and was driving a vehicle similar the one shown.)
Example of a 1997 black Toyota truck (Anderson allegedly drove a truck similar to the one see above in 1997.)

Members of the media should call Public Affairs Specialist Julianne Sohn at 415-553-7450.
- FBI poster seeking information concerning Anderson

Former Investment Banker and His Associate Plead Guilty in San Francisco to Insider Trading Scheme

SAN FRANCISCO—A former San Francisco investment banker and his college friend both pleaded guilty today for their roles in an insider trading scheme involving two impending corporate mergers, announced U.S. Attorney Melinda Haag and Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
Jauyo Lee, aka “Jason Lee,” 29, of New York, and Victor Chen, 29, of Sunnyvale, California, both pleaded guilty before U.S. District Judge Richard Seeborg in the Northern District of California to one count of conspiracy to commit securities fraud and one count of securities fraud. Lee and Chen were charged in a criminal information on March 21, 2013.
“Securities professionals cannot exploit their positions of trust to enrich themselves and their friends,” said U.S. Attorney Haag. “Those tempted to corrupt our markets in this manner should know the government will get to the bottom of suspicious trading and prosecute securities fraud vigorously.”
“Insider trading undermines ordinary investors’ faith in our financial markets, and the Justice Department has zero tolerance for it,” said Acting Assistant Attorney General Raman. “Today’s guilty pleas show that you cannot trade on inside information, pocket the profit, and expect to escape responsibility. Having now admitted their conduct, Mr. Lee and Mr. Chen must face the consequences.”
According to the plea agreements, Lee, who worked as an investment banker in the San Francisco office of Leerink Swann LLC, disclosed inside information to Chen, a friend from college, about two impending mergers involving Leerink clients. Between August 26, 2009 and September 5, 2009, Lee disclosed inside information to Chen about the merger of Leerink’s client, Syneron Medical Ltd., and Candela Corporation, a medical device company publicly traded on the NASDAQ stock market. Chen used the inside information to buy shares of Candela. After the merger was announced, Candela’s stock price increased more than 40 percent, and Chen sold his shares for a gain of approximately $62,589.
Between June 1 and 13, 2010, Lee also provided Chen with inside information about the impending merger of Somanetics Corporation and a subsidiary of Covidien plc. Leerink was the lead financial advisor to Somanetics, which also was publicly traded on the NASDAQ. Chen used the inside information to buy shares and options of Somanetics. Following the merger announcement, the price of Somanetics stock increased more than 30 percent, and Chen ultimately realized a profit of approximately $547,510.
Lee and Chen are scheduled for sentencing on July 23, 2013, before Judge Seeborg. The maximum penalty for conspiracy to commit securities fraud is five years in prison, and the maximum penalty for securities fraud is 20 years in prison.
This case is being prosecuted by Assistant U.S. Attorney Robert S. Leach and Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section with the assistance of Rayneisha Booth and Mary Mallory. The prosecution is the result of a one-year investigation by the FBI with substantial assistance from the Chicago Regional Office of the U.S. Securities and Exchange Commission.
This prosecution 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. For more information on the task force, visit www.stopfraud.gov.

Northern California Real Estate Investor Agrees to Plead Guilty to Bid Rigging at Public Foreclosure Auctions

WASHINGTON—A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed today in the U.S. District Court for the Northern District of California in San Francisco against Mohammed Rezaian, of Novato, California. Rezaian is the 30th individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
According to court documents, Rezaian conspired with others not to bid against one another but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Francisco and San Mateo counties, California. Rezaian was also charged with conspiring to use the mail to carry out schemes to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs and to divert to co-conspirators money that would have otherwise gone to mortgage holders and others. According to court documents, a forfeiture allegation was also included in the charges against Rezaian.
The department said Rezaian conspired with others to rig bids and commit mail fraud at public real estate foreclosure auctions in San Francisco and San Mateo counties beginning as early as July 2008 and continuing until about January 2011.
“As a result of this investigation, the Antitrust Division has thus far filed charges against 30 real estate investors in Northern California for their illegal activity at foreclosure auctions,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will vigorously pursue the perpetrators of these fraudulent and anticompetitive schemes.”
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Francisco and San Mateo County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.
“Not only is bid rigging at public foreclosure auctions illegal, it also severely undermines the integrity of a fair and competitive marketplace,” said David J. Johnson, FBI Special Agent in charge of the San Francisco Field Office. “The FBI will continue to investigate and pursue those who commit fraudulent anticompetitive practices at foreclosure auctions and work with those who have fallen victim to such selfish crimes.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
The charges today are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda Counties, California. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Field Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm, or call the FBI tip line at 415-553-7400.
Today’s charges were brought 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.

Laguna Niguel Man Pleads Guilty to Defrauding eBay

SAN JOSE—Brian Andrew Dunning pleaded guilty in federal court in San Jose on April 15, 2013, to wire fraud, United States Attorney Melinda Haag announced.
In pleading guilty, Dunning admitted that, between approximately May 2006 and June 2007, he engaged in a scheme to defraud eBay through so-called “cookie stuffing.” According to the plea agreement, commissions paid to Dunning’s company, Kessler’s Flying Circus (KFC), which Dunning owned jointly with his brother, totaled approximately $5.2 million during that period from eBay’s domestic Affiliate Program.
According to the plea agreement, in approximately April 2005, Dunning and his brother formed KFC, through which they participated in the eBay Affiliate Program. The Affiliate Program was a means by which eBay worked with KFC and other affiliates to drive Internet traffic to eBay’s websites. Under the program, an affiliate was supposed to send visitors to eBay’s website by displaying an eBay advertisement, or link, on the affiliate’s website. If a visitor clicked on the eBay link or ad, he or she was redirected to eBay’s website. If that user subsequently conducted a “revenue action” on eBay’s website within a designated period of time, eBay paid the affiliate a commission for the referral.
Dunning admitted that he carried out his scheme by providing free applications at two of his websites that users could download and use on their own websites: ProfileMaps.info, which showed the physical location of visitors to a MySpace profile, and WhoLinked.com, which showed who was linking to the user’s website or blog. Both applications contained code Dunning had written that operated so that, when a user visited a website that had installed the application, the code would cause the user’s browser to receive a cookie with KFC’s ID number, even though the user did not click on an eBay ad or link, did not see any content from eBay’s website, and did not realize that his or her browser had been re-directed to eBay’s tracking server. As a result, KFC would be paid if that user subsequently conducted an eBay revenue action within a certain period of time.
Dunning, 47, of Laguna Niguel, California, was indicted by a federal grand jury on June 24, 2010, and charged with five counts of wire fraud, in violation of Title 18, United States Code, Section 1343. Under the plea agreement, Dunning pleaded guilty to a superseding information, filed on April 15, 2013, that alleged a separate violation of the same statute. In his plea agreement, Dunning admitted that he received payments for revenue actions for which he was not entitled to be compensated but reserved the right to dispute how much of those payments were attributable to the cookie stuffing scheme.
An evidentiary hearing to determine the loss amount will be held on August 8, 2013, before United States District Judge Edward J. Davila, in San Jose. The maximum statutory penalty for a violation of 18 U.S.C. § 1343 is 20 years’ imprisonment and a fine of $250,000, or twice the gross gain or gross loss from the offense, whichever is greater, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
David R. Callaway and Kyle F. Waldinger are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Elise Etter, Rawaty Yim, and Elizabeth Garcia. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.

San Diego College Pays $700,000 and Former Financial Aid Director Pleads Guilty to Resolve Allegations of Financial Aid Fraud

United States Attorney Laura E. Duffy announced today that United States University, a for-profit college located in San Diego, has agreed to pay a civil settlement in the amount of $686,720 and the school’s former Financial Aid director has pled guilty, resolving allegations that between December 2008 and February 2011, the school submitted falsified financial aid applications to the U.S. Department of Education in order to obtain Pell Grant funds for which students were not eligible.
The civil settlement was paid by Educacion Significativa LLC, and IAC Funding LLC, doing business as United States University. The school, which has campuses in Chula Vista and Cypress, California, was known as InterAmerican University from 1997 to 2010, when it changed its name to United States University. United States University offers courses of study in nursing and other programs.
The school’s former Financial Aid director, Christina Miller, pled guilty in federal court (Case Number 13cr1157MMA) to criminal financial aid fraud, in violation of Title 20, United States Code, Section 1097(b), admitting that she knowingly and willfully falsified student financial aid applications, resulting in the improper awarding of federal Pell Grants to ineligible students. Under federal law, students already holding bachelor’s degrees are generally not eligible for Pell Grant funds, but Miller admitted changing student degree status in order to allow the school to improperly receive Pell Grant funds from the U.S. Department of Education. Miller is scheduled to be sentenced on June 27, 2013.
“We all benefit from successful students’ economic and professional contributions to our country,” said United States Attorney Duffy. “Financial aid fraud not only harms the American taxpayer but robs our community of that investment. This resolution should send a strong message to those who would choose to fraudulently obtain monies from taxpayer-funded financial aid programs. We will continue to work closely with our investigative partners in taking both criminal and civil measures to combat fraud against government programs.”
“Federal student aid exists so that individuals can pursue and make their dream of a higher education a reality. As the law enforcement arm of the U.S. Department of Education, the Office of Inspector General is committed to fighting student aid fraud, and we will continue to aggressively pursue those that participate in these types of crimes,” said Natalie Forbort, Special Agent in Charge of the U.S. Department of Education Office of Inspector General Western Regional Office.
FBI Special Agent in Charge Daphne Hearn stated, “Fraud and abuse of educational taxpayer-funded programs deprives those who are eligible and most deserving of this financial aid. The FBI and our partners will pursue those who would seek to undermine these programs, so that this important block of financial aid is available for those who need it most.”
The investigation arises from a lawsuit that was brought under the qui tam, or whistleblower, provisions of the federal False Claims Act, which permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States. As provided by the False Claims Act, the whistleblower in this case, Veronica Glaser, a former student and employee at the school, will receive a share of the recovery.
The investigation and prosecution of this matter was the result of the collaborative effort of the United States Attorney’s Office for the Southern District of California; the Department of Education, Office of Inspector General; and the Federal Bureau of Investigation. Assistant U.S. Attorney Christopher Tenorio is handling the criminal prosecution of Christina Miller. Assistant U.S. Attorneys Joseph Price and Douglas Keehn handled the civil False Claims Act matter brought against United States University.
Defendant in Criminal Case Number: 13CR1157-MMA
Christina Miller
Summary of Charges
Financial aid fraud, Title 20, United States Code, Section 1097(b)
Investigating Agencies
Department of Education, Office of Inspector General
Federal Bureau of Investigation