Bahavioral Program

The inmate’s wrist and leg shackles were removed and he was led into a small conference room to meet two special agents from our Behavioral Analysis Unit (BAU). The agents were there to conduct an interview into every aspect of the inmate’s life—from his earliest childhood experiences to the abduction, sexual assault, and murder of a preteen girl that sent him to prison for life without the possibility of parole.

	Special Agent Mark Hilts discusses the Behavioral Analysis Unit-2. Podcast

Such interviews are part of an ongoing BAU program to understand the minds of violent offenders. The offender interview program is in keeping with BAU’s overall mission to provide behavioral-based support to federal, state, local, and international law enforcement agencies investigating time-sensitive crimes such as kidnappings and other violent offenses.

“We are never going to get the full and complete truth from offenders,” said one of the agents who conducted the interview. “But we gather all the information, the truth and the lies, and we learn from both.”

The insights from these consensual interviews are used for research and training, and they also have the potential to help investigators in the field. “The next time BAU responds to a child kidnapping case and a young person’s life is at stake,” the agent explained, “we can say, ‘we sat across from a guy who did something similar, and here’s what he told us.’ ”

Behavioral analysts have been popularized in television and movies as expert “profilers,” capable of comprehending and even anticipating the thoughts and actions of the worst criminal minds. In real life, the expertise acquired by BAU personnel takes years of training and investigative experience. Offender interviews are an invaluable part of that process.

Behavioral Analysis Unit The Behavioral Analysis Unit actually consists of three separate units, each with a specialty: counterterrorism/threat assessment, crimes against adults, and crimes against children. The mission is to provide behavioral-based operational support to federal, state, local, and international law enforcement agencies investigating unusual or repetitive violent crimes, terrorism, and time-sensitive matters such as kidnappings. The expertise of BAU’s agents, analysts, and support staff has helped investigators solve countless violent crimes. BAU is part of the National Center for the Analysis of Violent Crime (NCAVC), which is managed under the FBI’s Critical Incident Response Group (CIRG).

“These are not investigative interviews to collect evidence or to determine guilt or innocence,” said one of the agents. “We already know the ‘how’ of the crime. Now we want to know ‘why.’ ”

Sitting in the small conference room across from the 31-year-old offender, the agents explained the ground rules. “There will be no tricks and no games,” they said. “We are going to talk about your life, including the murder. We want to know how you think about things and how you see things.”

There is nothing confrontational about the videotaped interview, which lasted for six hours. The offender—who consented to the meeting as part of a plea agreement to avoid the death penalty—talked openly, but perhaps not always truthfully.

“What they choose to share and disclose and what they choose not to disclose can be very revealing,” one of the agents said. “Sometimes it is difficult for them to face what they have done and to speak about it out loud.”

“From a behavioral standpoint,” the other agent said later, “we got a lot out of the interview.” Videotaped segments will be used by BAU staff when they train researchers, social workers, medical staff, and law enforcement personnel around the country about offenders who commit violent crimes against children.

“When you can illustrate a point by showing a video clip of the offender in his own words,” the agent said, “it is a very compelling teaching tool.”

Biometrics

The Afghan biometrics program was barely off the ground when it started having an impact.

Formally established in late 2009 to collect the fingerprints, iris scans, and facial images of Afghan national security forces, the program’s initial goal was to keep criminals and Taliban insurgents from infiltrating the army and police force. But information sharing—with partners like the FBI—is also a key component of the program.

	Entrance to biometrics facility at the Ministry of Interior in Kabul.

“The FBI has collected thousands of latent prints from the battlefield in Afghanistan,” said Special Agent Janeen DiGuiseppi, our liaison officer in Kabul for the biometrics program. “When the Afghans started enrolling people, we began to cross-check our records with theirs.”

In fact, when they searched their database, the Afghans identified the 82nd unidentified latent print the FBI passed to them and found that it belonged to an individual they had arrested a few months before as an accessory to a crime. The individual’s prints had originally been collected in 2007 in connection with a different crime.

“We were able to give the Afghans information to help them prosecute the case,” DiGuiseppi said. “That’s exactly the kind of information exchange we are looking for—going both ways. It helps solve crimes, and it enhances security for Afghans and Americans in the war theater.”

The biometric program answers two basic questions, said Air Force Lt. Col. Cristiano Marchiori, an advisor to the program: “Who are you, and are you a bad guy?” Already 300,000 Afghans have been enrolled, from soldiers and police to criminals in prison. The ability of the Afghans to collect, store, and match this data against other sources of information is an invaluable tool as the government strives to prevent fraud and corruption.

	About This Series FBI.gov recently traveled to Afghanistan to report on the Bureau’s important mission in the war zone. In the coming weeks we will highlight the work of the FBI’s dedicated men and women who volunteer for what is often a difficult and dangerous assignment. Part 1: Our Role in a War Zone | Video Part 2: Major Crimes Task Force | Video Part 3: Contract Corruption

The centerpiece of the program is the Afghan Automated Biometric Identification System (AABIS), administered by about 50 Afghans at the Ministry of Interior in Kabul. The FBI supports the effort through training and mentoring, along with data sharing, said DiGuiseppi. “So far it’s been a great partnership. And as the program grows, it will become even more useful.”

At the biometrics offices, three shifts of examiners catalog and check fingerprints on large computer screens, while technicians prepare “jump kits”—laptop computers, scanners, and other equipment used in the field to collect fingerprints, facial images, and iris scans. The Afghan colonel who supervises the program emphasized that Afghans are doing all the collections and maintaining the database, but he readily acknowledged the FBI’s role in the program. “We are very thankful for the FBI’s help and their willingness to train and assist us,” he said.

Afghan Ministry of Interior officials plan to use the biometrics program to enroll eight million citizens as part of a national ID effort.

The partnership is mutually beneficial. “A strong Afghan biometric program reduces the enemy’s anonymity and his capability to operate anonymously in the battle space,” said Marchiori. “If we have one unique identifier—a set of prints, an iris scan—it’s hard for the enemy to hide among the population when he’s trying to register a vehicle or vote or move around the country freely.”

Afghan Ministry of Interior officials plan to use the biometrics program to enroll eight million citizens as part of a national ID effort. “This is for the betterment of the country,” one Afghan official said. “This is for security and for helping the Afghan people.”

Child Predators ( Dirtbags)

t’s a recipe for trouble: naive teenagers, predatory adults, and a medium—the Internet—that easily connects them.

	In a new video blog, Executive Assistant Director Shawn Henry warns against the dangers of online predators. - Watch Video | Download (50 MB)

“It’s an unfortunate fact of life that pedophiles are everywhere online,” said Special Agent Greg Wing, who supervises a cyber squad in our Chicago Field Office.

When a young person visits an online forum for a popular teen singer or actor, Wing said, “Parents can be reasonably certain that online predators will be there.” It is believed that more than half a million pedophiles are online every day.

Agents assigned to our Innocent Images National Initiative are working hard to catch these child predators and to alert teens and parents about the dark side of the Internet—particularly when it comes to social networking sites and, increasingly, online gaming forums.

Pedophiles go where children are. Before the Internet, that meant places such as amusement parks and zoos. Today, the virtual world makes it alarmingly simple for pedophiles—often pretending to be teens themselves—to make contact with young people.

Advice for Parents Parents should talk to their children about the danger of being sexually exploited online, and they should monitor their children’s Internet use along with online video gaming, an area where pedophiles are increasingly operating. Parents should also understand that teens are not always honest about what they are doing online. Some will let their parents “friend” them on social networking sites, for example, and will then establish another space online that is hidden from their parents. Youngsters often employ a secret Internet language to use when their parents are nearby. Examples include: - PAW or PRW: Parents are watching- PIR: Parents in room - POS: Parent over shoulder- P911: Parent emergency - (L)MIRL: (Let’s) meet in real life Parents can get more information from our [Parent’s Guide to Internet Safety]. http://www.fbi.gov/stats-services/publications/parent-guide

Even without being someone’s “friend” online, which allows access to one’s social networking space, pedophiles can see a trove of teenagers’ personal information—the town they live in, the high school they attend, their favorite music and TV programs—because the youngsters often post it for anyone to see.

“The younger generation wants to express themselves, and they don't realize how vulnerable it makes them,” Wing said.

For a pedophile, that personal information is like gold and can be used to establish a connection and gain a child's trust.

There are basically two types of pedophiles on the Internet—those who seek face-to-face meetings with children, and those who are content to anonymously collect and trade child pornography images.

Those seeking face-to-face meetings create bogus identities online, sometimes posing as teenagers. Then they troll the Internet for easy victims—youngsters with low self-esteem, problems with their parents, or a shortage of money. The pedophile might find a 14-year-old girl, for example, who has posted seemingly harmless information on her space for anyone to see. The pedophile sends a message saying he goes to high school in a nearby town and likes the same music or TV shows she likes.

Then the pedophile cultivates a friendly online relationship that investigators call “grooming.” It could continue for days or weeks before the pedophile begins bringing up sexual topics, asking for explicit pictures or for a personal meeting. By that time an emotional connection has been made—and pedophiles can be master manipulators. Even if an actual meeting never takes place, it is important to note that youngsters can be victimized by such sexually explicit online contact.

Innocent Images Investigators Agents on our Innocent Images squads around the country take part in overt and covert operations to stop online child predators and to identify victims. During investigations, agents sometimes pose online as teens to infiltrate pedophile networks and to gather evidence by downloading files that are indicative of child pornography. During the investigation of known suspects, undercover agents may also “friend” people the suspect is associated with. “Pedophiles regularly create bogus online profiles,” said Special Agent Greg Wing, who supervises a cyber squad in our Chicago Field Office. “Usually, anyone associated with that profile is either a fellow offender or a victim.”

Even worse than posting personal information for anyone to see is the fact that many youngsters will accept “friends” who are total strangers. “Nobody wants to just have five friends online,” Wing said. “It's a popularity thing.”

Special Agent Wesley Tagtmeyer, a veteran cyber investigator in our Chicago office who works undercover during online investigations, said that in his experience, about 70 percent of youngsters will accept “friend” requests regardless of whether they know the requester.

Tagtmeyer and other cyber investigators say a relatively new trend among pedophiles is to begin grooming youngsters through online gaming forums, some of which allow two-way voice and video communication. Parents who might be vigilant about monitoring their children’s Internet activity often have no idea that online video gaming platforms can pose a threat.

“Parents need to talk to their children about these issues,” he said. “It’s no longer enough to keep computers in an open area of the house so they can be monitored. The same thing needs to be done with online gaming platforms.”

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Former Gitto/Global Executive Sentenced for Fraud

BOSTON—A Leominster man was sentenced today in federal court for conspiracy and wire fraud in connection with a multi-million-dollar scheme run from a former plastics company in Lunenburg, the Gitto/Global Corporation.

GARY C. GITTO, 49, of Lunenburg, was sentenced by U.S. District Judge F. Dennis Saylor IV to 59 months’ imprisonment, to be followed by three years of supervised release, and was further ordered to pay restitution in the amount of $23 million. GITTO previously pleaded guilty to conspiracy, mail fraud and money laundering on October 4, 2010.

At the earlier plea hearing, the prosecutor told the court that had the case proceeded to trial, the government’s evidence would have proven that during the period 1998 through September 2004, the principals of Gitto/Global Corporation, a plastics manufacturer in Lunenburg, were engaged in a complex scheme to defraud the company’s secured lenders by systematically overstating the company’s sales and inventory, thereby inducing the lenders to advance millions of dollars that would not have been advanced had the company accurately reported its assets. In order to support the false claims, numerous Gitto/Global employees spent hours of every business day generating supporting false documentation including invoices, bills of lading, and packing slips. GITTO was an owner and officer of Gitto/Global. A co-defendant and company co-owner, FRANK MILLER, who was responsible for the day-to-day operation of the fraud, was previously sentenced to 87 months in prison. Two remaining co-defendants, WILLIAM DEAKIN and LOUIS PELLEGRINE, JR. are scheduled to be sentenced later this month.

United States Attorney Carmen M. Ortiz; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation - Boston Field Office made the announcement today. The case was prosecuted by Assistant U.S. Attorney Lori J. Holik and Auditor Thomas J. Zappala of Ortiz’s Economic Crimes Unit.

Donald E. Oswald Named Special Agent in Charge of FBI’s Minneapolis Division

Director Robert S. Mueller, III appointed Donald E. Oswald the special agent in charge of the Minneapolis Division. In this role, he will oversee the FBI’s operations in Minnesota, North Dakota, and South Dakota. He most recently served as the chief inspector in the Office of Inspections.

Mr. Oswald entered on duty as a special agent in May 1992. He served in the Los Angeles Division and investigated bank robberies and street gang activities and also served as a division legal advisor. In 1994, he transferred to the New York Division, where he investigated complex multi-agency public corruption matters. Mr. Oswald also served for more than three years as associate division counsel in the New York Division.

Mr. Oswald was promoted in February 2000 to supervisory special agent in the Office of the General Counsel at FBI Headquarters and was assigned to the Investigative Law Unit. There, he provided advice and counsel concerning investigative operations and proposed undercover operations. Mr. Oswald’s tour at FBI Headquarters also included an assignment as assistant inspector in the Office of Inspections.

In July 2003, Mr. Oswald was transferred to the Miami Division as a field supervisor for the South Florida Joint Terrorism Task Force squad, which was responsible for investigating matters related to state sponsors of terrorism. He also served as the division’s international terrorism program coordinator and was responsible for assisting with evaluating resource utilization and progress toward the goals and objectives of seven counterterrorism squads.

Mr. Oswald was promoted in December 2005 to assistant special agent in charge of the Miami Division’s Field Intelligence Group, which included oversight of surveillance operations. Mr. Oswald also served as the chairman of the Southeast Florida Regional Domestic Security Task Force’s investigations and intelligence committee and is distinguished as the first federal official to serve in such a capacity in the state of Florida.

During 2008, Mr. Oswald served on the FBI’s Strategic Execution Team (SET), developing plans for the phased implementation of the intelligence operations portion of the SET mission, for which he received a Director’s Award for excellence in intelligence analysis.

In December 2008, Mr. Oswald was promoted into the FBI’s senior executive service in the Inspection Division.

Mr. Oswald was born in Brick Township, New Jersey. He served in the U.S. Air Force and New Jersey Air National Guard and received his Bachelor of Science degree in criminal justice from Trenton State College in New Jersey. Later, he earned a Juris Doctor degree from Nova University Law School and became a member of the Florida bar.

Before joining the FBI, he served as a police officer and detective in Brick Township and as a deputy sheriff and detective in Broward County, Florida. After graduating from law school, he practiced law and was appointed as a traffic magistrate for Broward County, where he presided in traffic court.

Richmond Man Sentenced to 16 Years for Orchestrating Multi-Million-Dollar Rehabilitation Tax Credit Scheme

RICHMOND, VA—Justin Glynn French, 40, of Richmond, Va., was sentenced today to 196 months, followed by three years of supervised release, for stealing millions from federal and state tax credit programs intended to rehabilitate historic buildings.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Ken Cuccinelli, Attorney General of Virginia; Michael F.A. Morehart, Special Agent in Charge of the FBI's Richmond Field Office; Rebecca Sparkman, Special Agent in Charge of the Internal Revenue Service Criminal Investigation's Washington, D.C., Field Office; and Colonel W. Steven Flaherty, Superintendent of Virginia State Police, made the announcement after sentencing by United States District Judge John A. Gibney, Jr.
"Justin French lined his pockets with millions in stolen tax dollars and defrauded more than 100 investors," said U.S. Attorney MacBride. "Mr. French exploited the rich history of the commonwealth to cheat taxpayers and investors out more than $11 million intended to preserve historic homes in Virginia. While Mr. French spent lavishly on a beach house, a personal jet, and trips to Las Vegas, more than 100 investors lost their retirement funds, their medical care accounts, and their kids' college funds."
"Justin French violated the trust of investors and defrauded the state and federal governments out of millions of dollars," said Attorney General Cuccinelli. "Today's sentence sends a message not only to French that his tax-credit scheme was reprehensible, but also to anyone else attempting to cheat taxpayers out of their hard-earned money. Unfortunately, the repercussions of French's crimes will be felt for years to come by those who unwittingly invested in his tax-credits and by honest people who are currently rehabilitating properties in the commonwealth."
On Jan. 24, 2011, French pled guilty to wire fraud and engaging in unlawful monetary transactions through a criminal information for his role in orchestrating a multi-million-dollar rehabilitation tax credit scheme and defrauding more than 110 investors who purchased tax credits from French for their own use.
According to the statement of facts filed with the plea agreement, Justin French was the owner and operator of French Consulting Company, a Richmond-based real estate development company. He actively sought state and federal historic tax credits as his company worked to rehabilitate a number of historic properties throughout the Richmond area.
At the state level, the Virginia Department of Historic Resources (VDHR) administered the Virginia Historic Rehabilitation Tax Credit program. That program allowed the property owner to receive a state income tax credit equal to 25 percent of the amount spent on eligible rehabilitation expenses. At the the federal level, the U.S. Department of the Interior National Park Service (DOI-NPS) administered the Federal Historic Preservation Tax Incentives program. This program encouraged private sector rehabilitation of historic buildings through tax credit equal to 20 percent of the amount spent on eligible rehabilitation expenses.
Through court documents, French admitted that since 2005, he has initiated the historic rehabilitation tax credit application process on at least 36 properties in Richmond; 14 were approved by state authorities and 20 were approved by federal authorities. Upon receiving the approved credits, and sometimes before receiving final approval, French would sell the credits to private investors who would use those credits on their own tax returns.
As an example of this fraud, French purchased a property on March 7, 2008, located at 1509 Belleville Street in Richmond. In correspondence with the bank that funded a loan for the project, French stated that he had purchased the property for $700,000 and expected the rehabilitation costs to be approximately $200,000.
In November 2008, French began the application process seeking federal and state rehabilitation tax credits for this property. On March 20, 2009, he submitted the final tax credit applications and required CPA cost certification for 1509 Belleville Street to the VDHR. In those applications, he represented the rehabilitation costs as $1,571,503. On March 26, 2009, the VDHR approved French's state application and awarded him $392,875.75 in state tax credits. On April 17, 2009, the DOI-NPS approved French's federal application authorizing him $314,300.60 in federal tax credits for this project.
In connection with his plea hearing, French agreed that the requested tax credits for the 1509 Belleville Street, LLC project were grossly inflated. According to the United States, the actual authorized expenses for the purpose of obtaining state and federal historic rehabilitation tax credits should have been approximately $403,200 (including the 20 percent developer fee and an additional 20 percent allowance for allowable expenses), as opposed to the $1,571,503 represented to state and federal authorities. If the actual amounts consistent with the bank loan file had been submitted to the state and federal authorities, French would have received approximately $100,800 in Virginia tax credits (as opposed to $392,875.75 in Virginia tax credits) and $80,640 in federal tax credits (as opposed to $314,300.60 in federal tax credits). The combined total of federal and state tax credits French illegally obtained by inflating the rehabilitation expenses for 1509 Belleville Street was approximately $525,737.
French's subsequent transactions with a number of private investors who purchased these tax credits resulted in his pleading to engaging in unlawful monetary transactions. As part of the investment process, French caused the mailing of subscription agreements via United States mail to the individual investors. Those investors, in turn, executed the subscription agreements and returned those documents along with their investment funds to the defendant. In February 2009, those individual investors provided the defendant with approximately $228,800 in exchange for purchasing the state tax credits related to 1509 Belleville Street. These investor funds were deposited into a First Market Bank business checking account for the 1509 Belleville Street project. French subsequently transferred $218,000 of those funds to his personal money market savings account at First Market Bank.
Overall, French agreed in his plea agreement that the intended and actual tax credit losses connected to the 1509 Belleville Street and other rehabilitation projects was between $7 million and $20 million. The defendant also agreed to pay full restitution for the losses he caused in connection with the ongoing rehabilitation tax credit scheme, which will be determined as the victims and loss amounts are identified in the ongoing investigation. The final restitution amount will be determined at a restitution hearing to be scheduled at a later date, following the completion of the investigation.
To date, the total losses for the scheme have been calculated as $11,266,622. French has agreed to an order of forfeiture imposing a monetary judgment of $7 million, representing the proceeds he received from the fraudulent scheme. At this time, he has agreed to forfeit the assets listed in the First Consent Order of Forfeiture entered at his plea hearing. The investigation to identify additional assets remains ongoing.
This case was investigated by the Federal Bureau of Investigation Richmond Office, the Internal Revenue Service Criminal Investigation Division, the U.S. Department of the Interior Office of Inspector General, the U.S. Department of Energy Office of Inspector General, the Virginia State Police, the Raleigh, North Carolina Police Department, and the National White Collar Crime Center. The Virginia Department of Historic Resources also assisted law enforcement in the investigation. Assistant United States Attorneys Michael Gill and Laura Marshall and Special Assistant Attorneys Patrick Dorgan and Shannon Dion 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. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia athttp://www.vaed.uscourts.gov or on http://pacer.uspci.uscourts.gov.

BGF Leaders Plead Guilty to Participating in a Racketeering Conspiracy

BALTIMORE—Last week, Eric Brown, a/k/a E and EB, age 42; Ray Olivis, a/k/a Ronnie Hargrove, Uncle Ray, Unc, and Ray Ray, age 57; and Rainbow Williams, age 32, all of Baltimore, pleaded guilty to a conspiracy to conduct and participate in the activities of the Black Guerilla Family (BGF), a racketeering enterprise. Brown and Olivis pleaded guilty on April 27, and Williams pleaded guilty on April 28, 2011. Another co-defendant, Randolph Edison, a/k/a Uncle Rudy, age 52, of Baltimore pleaded guilty to possession of a stolen firearm on April 29, 2011. The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Ava Cooper-Davis of the Drug Enforcement Administration - Washington Field Division; Baltimore Police Commissioner Frederick H. Bealefeld III; Baltimore City State’s Attorney Gregg L. Bernstein; and Secretary Gary D. Maynard of the Maryland Department of Public Safety and Correctional Services. United States Attorney Rod J. Rosenstein said, “This case reflects an unprecedented commitment by the Maryland Department of Public Safety and Correctional Services to combat crime and corruption in state correctional facilities. An intensive investigation that included wiretaps on contraband prison cell phones resulted in evidence that BGF leaders ran the gang while incarcerated in state prisons. The crimes included extorting protection money from other inmates and using contraband cell phones to arrange drug deals, approve robberies and arrange attacks on cooperating witnesses. In addition, gang members persuaded corrupt correctional officers to participate in the gang’s criminal activities by smuggling drugs, tobacco, cell phones and weapons into prisons.” “These convictions are an enormous success for law enforcement and the citizens of Maryland,” stated Drug Enforcement Administration Special Agent in Charge Ava A. Cooper-Davis. “These individuals perpetrated a high level of violence on the streets of Baltimore and beyond, and our communities are safer now thanks to the efforts of law enforcement.” According to their plea agreements, the BGF is a nationwide gang operating in prison facilities and major cities throughout the United States. Founded in California in the 1960s and introduced into the Maryland correctional system in the mid-1990s, BGF in Maryland is increasingly active on the streets of Baltimore City, as well as in various prison facilities in Maryland. BGF conducts its affairs through a pattern of criminal activity, including: narcotics trafficking, robbery, extortion, bribery, retaliation against a witness or informant, money laundering, and commercial robbery. BGF members arrange to have drugs, tobacco, cell phones, food, and other contraband smuggled into Maryland prison facilities, sometimes recruiting and paying employees of prison facilities, including corrections officers, to assist BGF and its members in the smuggling of contraband, the collection of intelligence and in the concealment of BGF’s criminal activities. BGF members use violence and threats of violence to coerce incarcerated persons to pay protection money to BGF, to enforce the BGF code of conduct, and to increase their control of the Baltimore City drug trade and the underground “prison economy” in Maryland correctional facilities. According to their plea agreements, from 2006 through June 2010, Brown, Olivis, and Williams were leaders of BGF, enforcing discipline in the gang and directing and participating in the drug trafficking activities of the gang. It was forseeable to each of the defendants that members of the conspiracy possessed with intent to distribute between 700 grams and one kilogram of heroin. Specifically, while Brown was incarcerated, he extorted a fellow inmate for protection from violence at the hands of BGF members and assaulted another inmate who failed to make timely extortion payments to BGF. Brown and Olivis transferred some of the proceeds of BGF’s illegal activities, including drug trafficking and extortion, into prepaid debit card accounts. In addition, Brown arranged for contraband to be smuggled into correctional facilities through the use of couriers and corrections employees. Rainbow Williams delivered contraband, including narcotics, to corrections officers to be smuggled into correctional facilities, sometimes paying the officer for smuggling the contraband into prison. Williams even attempted to smuggle contraband into a Maryland correctional facility via a pair of tennis shoes, but he was discovered by corrections officials. During intercepted phone conversations, Williams and Olivis discussed the day to day operations of BGF, violations of BGF protocols, and the sanctions that should be ordered against the members violating those protocols. On April 9, 2009, Williams arranged a meeting of approximately 100 BGF members at Druid Hill Park in Baltimore. In another phone conversation, Olivis and other BGF members discussed retaliating against a suspected informant and plans to assault an inmate who had been involved in the murder of another BGF member’s brother. The defendants face a maximum penalty of 20 years in prison. U.S. District Judge William D. Quarles, Jr. has scheduled sentencing for Eric Brown on August 18, 2011 at 1:00 p.m.; for Ray Olivis on August 24, 2011 at 1:00 p.m.; and for Rainbow Williams on August 30, 2011 at 1:00 p.m. Edison admitted that, on March 13, 2009, he was traveling in a car with three other individuals when the car was stopped by Baltimore Police officers. During the stop, officers recovered a stolen .44 caliber revolver from Edison. Edison faces a maximum sentence of 10 years in prison and is scheduled to be sentenced on August 23, 2011 at 1:00 p.m. A fifth co-defendant, Kevin Glasscho, a/k/a KG, age 47, of Gwynn Oak also pleaded guilty to conspiracy to participate in a racketeering enterprise on April 22, 2011, and was sentenced to 151 months in prison. The charges against the remaining defendants in the racketeering indictment are pending. Trial is scheduled for November 7, 2011. Mr. Rosenstein praised the DEA; Baltimore City Police Department; Baltimore City State’s Attorney’s Office; and the Maryland Department of Public Safety and Correctional Services for their work in this investigation and prosecution; as well as the Baltimore County Police Department; the U.S. Marshals Service; the Federal Bureau of Investigation; and the Internal Revenue Service - Criminal Investigation, Washington D.C. Field Office, for their assistance. United States Attorney Rod J. Rosenstein thanked Baltimore City Assistant State’s Attorneys Antonio Gioia, Miabeth Marosy, and Rebecca Cox for their work in the investigation and prosecution, and Assistant United States Attorneys James T. Wallner and Clinton J. Fuchs, who are prosecuting this Organized Crime Drug Enforcement Task Force case.

Two Miami-Area Corporations Plead Guilty to More Than $200 Million Medicare Fraud

WASHINGTON—Two Miami-area corporations, American Therapeutic Corporation (ATC) and Medlink Professional Management Group Inc., pleaded guilty today in U.S. District Court in Miami for a fraud scheme that resulted in the submission of more than $200 million in fraudulent claims to Medicare, the Departments of Justice and Health and Human Services (HHS) announced.
According to court documents, ATC is a Florida corporation headquartered in Miami that operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando, Fla. A PHP is a form of intensive treatment for severe mental illness. Medlink is a Florida corporation headquartered in Miami that purported to act as a “management company” for health care businesses. In reality, ATC and a related company, the American Sleep Institute (ASI), were Medlink’s only clients. ATC and Medlink are each charged with conspiracy to commit health care fraud in a superseding indictment unsealed on Feb. 15, 2011. ATC is also charged in the superseding indictment with health care fraud and conspiracy to defraud the United States and to pay and receive illegal health care kickbacks.
“ATC and Medlink, and their owners, have now pleaded guilty to perpetrating a massive $200 million Medicare fraud scheme in South Florida,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “The fraud scheme was staggering in scope, and those who concocted the scheme exhibited a complete disregard for the elderly, infirm, and disabled victims who were used to commit it. Today’s guilty pleas mark an important step forward in our effort to hold accountable everyone—and every entity—involved in the scheme, and to recover the maximum amount possible on behalf of American taxpayers.”
“The defendants altered patient files, diagnoses, and medication types and levels to make it appear that patients being treated qualified for PHP treatments,” said U.S. Attorney Wifredo Ferrer for the Southern District of Florida. “This was done so that the defendants could fraudulently bill Medicare for more than $200 million in medically unnecessary services. We are pleased to have put these unscrupulous operators out of business.”

Venezuelan Accountant Pleads Guilty in Connecticut to Obstructing SEC Investigation

David B. Fein, United States Attorney for the District of Connecticut, announced that JUAN CARLOS GUILLEN ZERPA, 44, a citizen of Venezuela, pleaded guilty today before United States District Judge Stefan R. Underhill in Bridgeport to one count of conspiracy to obstruct an official proceeding of the U.S. Securities and Exchange Commission (SEC).
“The U.S. Attorney’s Office, FBI and our Connecticut Securities, Commodities, and Investor Fraud Task Force partners will pursue aggressively individuals who attempt to obstruct the SEC and its critically important mission of protecting investors and the integrity of American capital markets,” stated U.S. Attorney Fein.
According to court documents and statements made in court, Francisco Illarramendi, of New Canaan, Connecticut, acted as an investment adviser to certain hedge funds. In approximately 2006, one hedge fund he advised lost millions of dollars of the money he was charged with investing. Rather than disclose to his investors the truth about the losses incurred, Illarramendi intentionally chose to conceal this information by engaging in a long-running scheme to defraud and mislead his investors, creditors, and the SEC to prevent the truth about the losses from being discovered. As part of the scheme, Illarramendi and others created fraudulent documents, including a fictitious asset verification letter falsely representing that one of the hedge funds, the Short Term Liquidity Fund (STLF), had at least $275 million in credits as a result of outstanding loans, when Illarramendi and others knew it did not have any such credits.
GUILLEN is a resident and citizen of Venezuela who was the managing partner of a Venezuelan accounting firm associated with a major international accounting firm. In late 2010, GUILLEN agreed to prepare the asset verification letter that would falsely indicate that the STLF had made outstanding loans to Venezuelan companies. A co-conspirator then worked with other persons to create a fraudulent list of loans and to incorporate this list in the asset verification letter to be signed by GUILLEN.
In approximately January 2011, GUILLEN executed the false asset verification letter and sent it by e-mail to Illarramendi. Thereafter, GUILLEN learned that the false asset verification letter had been supplied to the U.S. Securities and Exchange Commission, and that the SEC had initiated a civil action against Illarramendi and others (SEC v. Illarramendi, et al., 3:11-CV-00078). In an effort to deceive and mislead the SEC and to prevent the SEC from learning during the civil action that the asset verification letter was false, GUILLEN, Illarramendi and others sought to create fraudulent documentation to falsely support the information contained in the letter. GUILLEN also participated in a telephone call with representatives of the SEC in January 2011 in which he intentionally misrepresented that the assertions in the asset verification letter about the existence of the hedge funds’ assets were true, when he knew they were false.
GUILLEN expected to receive approximately $1 million for his willingness to sign the false asset verification letter. As partial payment for GUILLEN’s services in this conspiracy, a co-conspirator caused $250,000 to be transferred to a third party for the benefit of GUILLEN.
Judge Underhill has scheduled sentencing for July 22, 2011, at which time GUILLEN faces a maximum term of imprisonment of 20 years and a fine of up to approximately $2.5 million. GUILLEN also has agreed to forfeit $250,000 to the government.
GUILLEN has been detained since his arrest by FBI special agents on March 3, 2011, in Florida. Following his guilty plea today, GUILLEN was released into home confinement under electronic monitoring after he posted a bond in the amount of $1.35 million, which is secured by $550,000 in cash and real property. GUILLEN will reside in an apartment in Miami, Florida while awaiting sentencing.
On March 7, 2011, Illarramendi waived his right to indictment and pleaded guilty to two counts of wire fraud, one count of securities fraud, one count of investment adviser fraud, and one count of conspiracy to obstruct justice, to obstruct an official proceeding and to defraud the SEC. He awaits sentencing.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Senior Litigation Counsel Richard J. Schechter and Assistant U.S. Attorney Paul A. Murphy.
U.S. Attorney Fein also acknowledged the substantial assistance provided by the U.S. Attorney’s Office for the Southern District of Florida.
In December 2010, the U.S. Attorney’s Office and several law enforcement and regulatory partners announced the formation of the Connecticut Securities, Commodities, and Investor Fraud Task Force, which is investigating 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; Federal Bureau of Investigation; 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 Police Department and Stamford 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.
This case was brought in coordination with the President’s Financial Fraud Enforcement Task Force, which was established to wage an aggressive and coordinated 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.

Malicious Software Features Usama bin Laden Links to Ensnare Unsuspecting Computer Users

The FBI today warns computer users to exercise caution when they receive e-mails that purport to show photos or videos of Usama bin Laden’s recent death. This content could be a virus that could damage your computer. This malicious software, or “malware,” can embed itself in computers and spread to users’ contact lists, thereby infecting the systems of associates, friends, and family members. These viruses are often programmed to steal your personally identifiable information.

The Internet Crime Complaint Center (IC3) urges computer users to not open unsolicited (spam) e-mails, including clicking links contained within those messages. Even if the sender is familiar, the public should exercise due diligence. Computer owners must ensure they have up-to-date firewall and anti-virus software running on their machines to detect and deflect malicious software.

The IC3 recommends the public do the following:

• Adjust the privacy settings on social networking sites you frequent to make it more difficult for people you know and do not know to post content to your page. Even a “friend” can unknowingly pass on multimedia that’s actually malicious software.
• Do not agree to download software to view videos. These applications can infect your computer.
• Read e-mails you receive carefully. Fraudulent messages often feature misspellings, poor grammar, and nonstandard English.
• Report e-mails you receive that purport to be from the FBI. Criminals often use the FBI’s name and seal to add legitimacy to their fraudulent schemes. In fact, the FBI does not send unsolicited e-mails to the public. Should you receive unsolicited messages that feature the FBI’s name, seal, or that reference a division or unit within the FBI or an individual employee, report it to the Internet Crime Complaint Center at www.ic3.gov.

Hogsett Announces the Take-Down of Multi-State Criminal Organization

INDIANAPOLIS—Joseph H. Hogsett, U.S. Attorney, today announced the dismantling of a criminal organization similar to those involved in the illegal importation and distribution of controlled substances—the only difference being that the product being imported and sold by this organization was the services of prostitutes.
The organization, which operated out of Indianapolis over the course of several years, was headed by three brothers who procured prostitutes, some of whom were smuggled into the United States from Mexico and Central America. Another group of individuals acted as managers of the locations where the prostitutes conducted business. The organization maintained and operated houses of prostitution in multiple states—including Indiana, Michigan, Illinois, Ohio—and caused the prostitutes to move between these houses on a near-weekly basis.
The organization operated primarily in the Hispanic community and advertised its services by distributing business cards bearing advertisements and telephone numbers for auto repair or western wear outfitters. These business cards were known within the Hispanic community as contact numbers for arranging appointments with prostitutes. Each such appointment, referred to as a "ticket," cost between $40 and $50.
The complaint charges 16 defendants with having conspired to utilize interstate and/or foreign travel in aid of racketeering enterprises, in violation of Title 18, United States Code, Section 371.
The complaint alleges that the criminal organization was primarily controlled by brothers Jose Louis Hernandez-Castilla, Norberto Hernandez-Castilla, and Gregorio Hernandez-Castilla.
The complaint further alleges that the houses of prostitution were managed by Hector Elizalde-Hernandez, Javier Aguilera-Sanchez, Fredy Arnulfo Valle-Soto, Jorge Armando Rodriguez-Sanchez, Jose Mejia, Santos Nunez, and Elvin Herrara.
The arrests of these individuals are based on an investigation by multiple law enforcement agencies, including the Federal Bureau of Investigation, the Department of Homeland Security (Homeland Security Investigations and Immigration and Customs Enforcement, Enforcement and Removal), the Indianapolis Metropolitan Police Department, the Marion County Sheriff’s Department, the Addison, Illinois Police Department, and others.
According to Assistant U.S. Attorneys Bradley P. Shepard and Gayle Helart, who are prosecuting the case for the government, each of these defendants faces a maximum of five years in prison and a $250,000 fine. An initial hearing will be scheduled for each of the arrested defendants in Indianapolis, Indiana before a U.S. Magistrate Judge.
A complaint is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.