BATON ROUGE, LA—United States Attorney Donald J. Cazayoux, Jr., announced today that DEREK A. LEWIS, age 50, of Port Allen, Louisiana, pled guilty before U.S. District Court Judge Brian A. Jackson to violating the Racketeer Influenced and Corrupt Organizations Act (RICO). LEWIS, the Mayor of the City of Port Allen, Louisiana, had been charged by a federal grand jury with a variety of offenses related to his taking of bribes while Mayor. His trial had been scheduled to begin on July 25, 2011. RICO provides for a maximum sentence of 20 years’ imprisonment, a $250,000 fine, and forfeiture. Given LEWIS’s acceptance of responsibility and cooperation, the parties have agreed that a sentence of imprisonment not to exceed five years is appropriate. In addition to any term of imprisonment, LEWIS will be required to forfeit all of the proceeds from the offense and faces up to $250,000 in fines and a term of up to three years of supervised release following imprisonment. LEWIS’s conviction is part of Operation Blighted Officials, an investigation utilizing undercover operations to determine the extent and scope of public corruption. As part of the operation, individuals working undercover for the FBI posed as businessmen (hereinafter referred to as “the Businessmen”) affiliated with a company involved in the development of a conceptual product known as the “Cifer 5000.” The Cifer 5000 was marketed as an automated waste container cleaning system using specially-designed and equipped trucks to clean and sanitize commercial and residential waste containers. Its potential customer pool was represented to be governmental entities, such as municipalities. During his guilty plea, LEWIS admitted that, during the period from October 2008 through June 2010, he used his position as Mayor to take actions favorable to the Businessmen, including the promotion of the Cifer 5000 in the city and elsewhere, in exchange for cash and other things of value totaling over $15,000. LEWIS admitted that such official actions included (1) writing a false official letter of support which he believed would be used to secure millions of dollars in private investor capital; (2) writing a false official letter of support which he believed would be used to convince other public officials to contract with the Cifer 5000; (3) agreeing to propose a City ordinance favorable to the Cifer 5000 project; (4) writing an official letter of support which he believed would be provided to the U.S. Environmental Protection Agency in connection with a multi-million dollar grant request; (5) providing access to confidential law enforcement information through the Chief of Police; and (6) guaranteeing that the Cifer 5000 would receive a contract with the City. The status of the other defendants in Operation Blighted Officials is as follows:
U.S. Attorney Cazayoux stated, “I am pleased that the defendant has accepted responsibility for his actions. His guilty plea allows his community to move forward and past this dark period in its history. This case highlights the importance of discovering and prosecuting public corruption and demonstrates the continued commitment of the U.S. Attorney’s Office in prosecuting these crimes which undermine the public’s confidence in its government. We look forward to proceeding with other cases under Operation Blighted Officials.” FBI Special Agent-in-Charge David Welker stated: “Today’s guilty plea marks a significant step in this ongoing investigation and should send a clear message to any public official contemplating using his office to line his pockets for self-enrichment. This guilty plea and other ongoing public corruption probes reflect the FBI’s commitment and dedication to deterring and preventing future schemes that involve elected officials.” Operation Blighted Officials is an ongoing investigation being conducted by the Federal Bureau of Investigation and the United States Attorney’s Office for the Middle District of Louisiana. The U.S. Department of Housing and Urban Development, Office of Inspector General, has also assisted. These matters are being prosecuted by Assistant United States Attorney Corey R. Amundson, who serves as the Senior Deputy Criminal Chief, and Assistant United States Attorney M. Patricia Jones, who serves as the Senior Litigation Counsel. In addition, Assistant United States Attorney Alan A. Stevens is a member of the LEWIS prosecution team and Assistant United States Attorney Michael Jefferson is a member of the NELSON prosecution team. |
Wednesday, June 29, 2011
Mayor of Port Allen, Louisiana Convicted of Racketeering
Former D.C. Council Chief of Staff Sentenced to Eight-Month Prison Term for Accepting Illegal Gratuities and Making a False Statement
WASHINGTON—Ted G. Loza, the former chief of staff for a District of Columbia Council member, was sentenced today to eight months in prison for his role in a large-scale, long-term scheme to corrupt the taxicab industry in Washington, D.C.
The sentencing, which took place this morning, was announced by U.S. Attorney Ronald C. Machen Jr., James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Loza, 46, pled guilty in February 2011 to two charges of accepting illegal gratuities and one charge of making a false statement to the District of Columbia Board of Elections and Ethics. He was sentenced by Senior Judge Paul L. Friedman. Upon completion of his prison term, Loza will be placed on four months of supervised release. The judge also ordered Loza to perform 150 hours of community service for what he called an abuse of public trust.
“In this case, the victims are the citizens of the District of Columbia, who are entitled to honest government,” Judge Friedman declared at the sentencing.
Loza, of Washington, D.C., is among 27 people who have pled guilty in the investigation. He was a member of the staff of Council member Jim Graham, and was chief of staff from 2007 until November 2009. In connection with his guilty plea, Loza admitted that in June and July of 2009, while working as the chief of staff, he received $1,500 in cash payments from Abdul Kamus, then a representative of individuals having a financial interest in the District of Columbia taxicab industry.
These cash payments were accepted by Loza for his assistance with legislation for a hybrid vehicle exception to a moratorium on new taxicab company licenses in the District of Columbia. The legislation was introduced by Council member Graham on June 30, 2009.
Loza also admitted that in May of 2009, he submitted a false financial disclosure statement to the District of Columbia Board of Elections and Ethics that failed to reflect gifts in excess of $100 from Kamus during 2008.
Previously, Kamus, 54, of Silver Spring, Md., pled guilty to charges of bribery and conspiracy to commit bribery in connection with his contacts with Loza and other activities. He is awaiting sentencing in U.S. District Court.
In addition to Loza and Kamus, those convicted include Yitbarek Syume, 53, of Silver Spring, Md., Berhane Leghese, 46, of Arlington, Va., and Amanuel Ghirmazion, 53, of Washington, D.C.. All three men pled guilty in March 2011 to conspiring to commit bribery.
Syume, Leghese and Ghirmazion admitted to conspiring to bribe public officials in an effort to obtain multi-vehicle taxicab company licenses in a scheme that lasted from September 2007 until September 2009. This scheme, an attempt to corner the market in the D.C. taxicab industry, involved approximately $270,000 in illegal payments and attempted illegal payments. Syume, Leghese and Ghirmazion also are awaiting sentencing in U.S. District Court.
The other guilty pleas came in an unrelated case involving the issuance of taxicab operator licenses. In that matter, a total of 22 people have pled to charges and 15 are awaiting trial.
“Today’s sentence demonstrates our steadfast commitment to aggressively investigating and prosecuting cases of public corruption in the District of Columbia,” said U.S. Attorney Machen. “This defendant is one of 27 people convicted in a multi-year investigation into the District of Columbia’s taxicab industry. Now, instead of continuing to line his own pockets at the expense of the District’s taxpayers, Mr. Loza will be spending the next eight months in prison.”
“Unfortunately some public servants expect their position gives them the right to illegally profit,” said Assistant Director McJunkin. “Today’s sentence is a reminder that taking illegal gratuities and lying about it has its consequences.”
In announcing today’s sentence, U.S. Attorney Machen, Assistant Director in Charge McJunkin, and Chief Lanier commended the work of FBI Special Agents on the case, as well as MPD Sergeant Andrew Struhar, Detective Joseph Sopata and Detective Elliott Taylor. They also acknowledged the efforts of the staff of the U.S. Attorney’s Office, including Paralegals Jeannette Litz, Carolyn Cody and Jared Forney, Joshua Ellen, of the Litigation Technology Unit, and Assistant U.S. Attorney John Crabb Jr. and former Assistant U.S. Attorney John Griffith, who investigated and prosecuted the case
Tattoo Shop Owner Pleads Guilty to Money Laundering, Conspiracy to Distribute Marijuana
COLUMBUS—Edward A. Rife, 31, of Westerville pleaded guilty in U.S. District Court to one count of conspiracy to possess with intent to distribute more than 100 kilograms of marijuana and one count of money laundering.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Tracey E. Warren, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), Acting Franklin County Sheriff Stephan L. Martin, Columbus Police Chief Walter Distelzweig and J. Mark Batts, Acting Special Agent in Charge, Federal Bureau of Investigation, announced the pleas entered today before U.S. District Judge Gregory L. Frost.
According to a statement read by an IRS agent during the hearing, Rife came to law enforcement’s attention during an investigation into a major drug trafficking organization. Rife was receiving and distributing between 10 and 20 pounds of marijuana per month from the organization starting in 2008. In 2009, Rife developed another source of marijuana and began receiving up to 500 pounds of marijuana at a time. He occasionally used his business, Fine Line Ink Tatoos and Piercings, to launder the drug proceeds.
Rife distributed more than 400 kilograms but less than 700 kilograms of marijuana between 2008 until April 1, 2010. The plea agreement requires Rife to forfeit $50,000 which is equal to the amount he acquired as a result of his drug trafficking activities.
Conspiracy to possess with intent to distribute more than 100 kilograms of marijuana is punishable by at least five years and up to 40 years’ imprisonment. Money laundering is punishable by up to 20 years in prison. Judge Frost will schedule a date for sentencing.
Stewart commended the cooperative investigation by the task force agents who are conducting the investigation and Assistant U.S. Attorney Kevin W. Kelley, who is prosecuting the case.
Tuesday, June 28, 2011
Former Citigroup Vice President Charged with Bank Fraud for Embezzling More Than $19 Million
Gary Foster, a former vice president in Citigroup, Inc.’s treasury finance department has been arrested on bank fraud charges arising from his embezzlement of more than $19 million. Foster was apprehended at John F. Kennedy International Airport Sunday morning when he arrived on a flight from Bangkok.1
The defendant’s initial appearance is scheduled this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr. at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges and arrest were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Janice K. Fedarcyk, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.
According to the complaint, Foster transferred money from various Citigroup accounts to Citigroup’s cash account and then to his personal account at a different bank. Between July 2010 and December 2010, he allegedly caused approximately $900,000 to be moved from Citigroup’s interest expense account and approximately $14.4 million from Citigroup’s debt adjustment account to the bank’s cash account, and then caused the money to be wired out of Citigroup’s cash account to his personal account at another bank in eight separate wire transfers. The complaint further charges that Foster caused a fraudulent contract or deal number to be placed in the reference line of the wire transfer instructions to create the appearance that the transfers were in support of an existing contract.
“The defendant allegedly used his knowledge of bank operations to commit the ultimate inside job. We are committed to ensuring the integrity of the banking system and to prosecuting those who would undermine it for their personal gain,” stated United States Attorney Lynch. Ms. Lynch expressed her appreciation to Citigroup, which brought this matter to the attention of the FBI and the U.S. Attorney’s Office.
“The egregious behavior of those who would exploit our banking system for personal and criminal gain will not be tolerated. We remain committed to investigating and apprehending those who cheat the system,” said FBI Assistant Director-in-Charge Fedarcyk.
If convicted, the defendant faces a maximum sentence of 30 years’ imprisonment on the bank fraud charges.
The government’s case is being prosecuted by Assistant United States Attorneys Michael L. Yaeger and Karen Hennigan.
The Defendant:
GARY FOSTER
Age: 35
Age: 35
1 The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Man Who Shot at FBI Agents Sentenced to 20 Years in Federal Prison
KANSAS CITY, KS—A Kansas City, Kan., man who shot at FBI agents has been sentenced to 20 years in federal prison, U.S. Attorney Barry Grissom said today. Nicholas Henry, 28, Kansas City, Kan., pleaded guilty to one count of attempting to kill an FBI agent and one count of discharging a firearm during a crime of violence. In his plea, Henry admitted that on Nov. 1, 2009, he fired at an FBI Task Force Officer in a parking lot at 151st and Ridgeview Road in Olathe, Kan. Henry was in the parking lot when he was approached by members of the FBI Violent Crime Task Force who were attempting to serve a warrant for his arrest. When agents approached him, he produced a .40 caliber handgun and fired two shots at one of the agents who was no more than 10 feet away. Other agents returned fire. Henry was struck multiple times. He was taken into custody and transported to a hospital. Grissom commended the Federal Bureau of Investigation, Assistant U.S. Attorney Terra Morehead and Assistant U.S. Attorney Tris Hunt for their work on the case. |
MS-13 Street Gang Member Sentenced to 35 Years’ Imprisonment for Murder
Earlier today, Edwin Henriquez, also known as “Joker,” a member of the La Mara Salvatrucha (“MS-13”) street gang on Long Island, was sentenced to 35 years' imprisonment for the September 19, 2004, murder of 16-year-old fellow MS-13 member Olivia Melendez Mendoza (“Melendez”) in Old Westbury, New York. The sentence was imposed pursuant to Henriquez’s November 3, 2010, guilty plea. The proceeding was held before Senior United States District Judge Leonard D. Wexler at the United States Courthouse in Central Islip, New York.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, Janice K. Fedarcyk, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, and James T. Hayes, Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York Field Office.
According to his plea allocution and documents previously filed in the case, Henriquez and other Long Island MS-13 members decided to kill Melendez because they believed that she was not abiding by the gang’s rules. Pursuant to their plan, Henriquez lured Melendez to a wooded area in Old Westbury where he shot her once in the back of the head. On April 12, 2011, Judge Wexler sentenced MS-13 member Jose Recinos, also known as “Psycho” and “Little Psycho,” to 20 years' imprisonment for aiding and abetting Henriquez in the murder.
“This sentence makes clear that gang members will pay a heavy price for such cold, calculated acts of violence,” stated United States Attorney Lynch. “Eliminating gang violence continues to be a priority of this Office and the Justice Department.” Ms. Lynch praised the work of the FBI Long Island Gang Task Force,1which investigated the case. FBI Assistant Director-in-Charge Fedarcyk stated, “Gangs resort to violence for a variety of reasons, not one of them morally defensible. In this case, as he admitted, Henriquez cold-bloodedly executed a young woman for violating MS-13 rules. For violating the rule of law, he will spend decades in prison.”
“This sentencing sends a clear message to gang members: we will deal strongly with those who ignore our laws and place our neighborhoods at risk,” said ICE/HSI Special Agent-in- Charge Hayes. “Gang violence and all of its accompanying destructive conduct will not be tolerated.”
The MS-13 is a violent international street gang comprised primarily of immigrants from El Salvador, Honduras, and Guatemala. With several chapters, which members refer to as “cliques,” MS-13 is the largest street gang on Long Island. The United States Attorney’s Office for the Eastern District of New York has obtained convictions against more than 120 MS-13 members, including ten clique leaders, for felony offenses, including racketeering, murder, assault, firearm possession, and narcotics trafficking.
The government’s case was prosecuted by Assistant United States Attorneys Richard P. Donoghue, James McGovern, Raymond Tierney, and John Durham.
The Defendant:
EDWIN HENRIQUEZ, also known as “Joker” Age: 26
Monday, June 27, 2011
Michigan Man who Operated Residential Facility for Youth in Haiti Indicted for Sexual Abuse of Minors at the Facility
WASHINGTON—The operator of Morning Star Center, a residential facility located in Port-au-Prince, Haiti, that provided food and shelter to minors, has been charged with offenses involving the sexual abuse of minors in Haiti, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Director John Morton, U.S. Immigration and Customs Enforcement (ICE). Matthew Andrew Carter, aka “William Charles Harcourt” and “Bill Carter,” 66, of Brighton, Mich., was charged in a superseding indictment filed yesterday in the Southern District of Florida with four counts of traveling in foreign commerce for the purpose of engaging in illicit sexual conduct with minors. On May 8, 2011, Carter was arrested in Miami on a criminal complaint filed in the Southern District of Florida. He is currently detained. “The acts that the defendant is charged with committing, quite simply, defy belief. As charged in the indictment, he preyed upon and terrorized impoverished Haitian children who were in dire need of the services offered by the Morning Star Center – the very children he was purporting to help,” said Assistant Attorney General Breuer. “As this indictment shows, we will not allow sexual predators to avoid facing justice by committing their crimes in foreign countries. Together with our law enforcement partners abroad, we are determined to combat the sexual abuse of children no matter where it occurs.” “This defendant preyed on innocent Haitian children living in severely depressed conditions, making his conduct particularly deplorable,” said U.S. Attorney Ferrer. “Rather than using Morning Star as he promised – to administer aid and provide sanctuary to needy children – he used the center to manipulate, abuse and sexually exploit them. Sexual predators like this defendant cannot act with impunity. We will pursue and prosecute them, no matter where they choose to commit their heinous crimes.” “Few crimes are as despicable as the ones committed against these children in Haiti. For years, he sexually abused poor and orphaned children who depended upon him for food and shelter – all under the guise of doing noble work,” said ICE Director Morton, “ICE is committed to working with our partners here and abroad to catch individuals, like this man, who engage in child sex tourism.” According to court documents, prior to his arrest, Carter operated and lived at Morning Star Center in Port-au-Prince, Haiti. Morning Star Center, which Carter operated since the mid-1990s, was a residential facility that provided shelter, food and education to Haitian minors. The minors who lived at the center were orphans or from impoverished families who could not support them. From the mid-1990s to the present, Carter frequently traveled back and forth between the United States and the center in Haiti, often to raise funds for the continued operation of the center. According to court documents, Carter allegedly sexually abused several minors in his care and custody at Morning Star Center during this time period. As alleged in court documents, Carter required the child victims to engage in illicit sexual conduct in exchange for gifts or money or in order to remain at the center and continue receiving food, shelter and schooling. The case against Carter was investigated by ICE’s Homeland Security Investigations (HSI) in Miami; the ICE HSI Assistant Attache’s Office in Santo Domingo, Dominican Republic; and the ICE HSI Santo Domingo Transnational Criminal Investigative Unit. Substantial assistance was provided by the FBI’s Washington and Miami Field Offices, the U.S. Secret Service in Miami, and the U.S. Embassy in Port-au-Prince, Haiti. The case is being prosecuted by Trial Attorney Bonnie L. Kane of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Maria K. Medetis of the Southern District of Florida. If convicted, Carter faces a maximum sentence of 15 years in prison for one count of child sex tourism and a maximum sentence of 30 years in prison for each of the other three child sex tourism counts. The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law. |
East Hartford Woman Sentenced to More Than Nine Years in Federal Prison for Sex Trafficking of Minors
David B. Fein, United States Attorney for the District of Connecticut, and Lanny A. Breuer, Assistant Attorney General for the Criminal Division of the Department of Justice, today announced that HASSANAH DELIA, 24, of East Hartford, was sentenced yesterday, June 23, by United States District Judge Mark R. Kravitz in New Haven to 110 months of imprisonment, followed by five years of supervised release, for the sex trafficking of two minor girls in 2009.
According to court documents and statements made in court, DELIA and Jarell Sanderson recruited two 14-year-old girls to work as prostitutes. In July 2009, Sanderson and DELIA transported the girls to hotels in Hartford and East Hartford where the girls engaged in sexual conduct with men in exchange for money that was paid either to Sanderson or DELIA. The men who paid to engage in sexual conduct with the girls had responded to an advertisement placed on a website by Sanderson by calling a phone that was answered by DELIA, who then set up appointments for the girls.
On December 7, 2010, DELIA pleaded guilty to two counts of sex trafficking by force, fraud or coercion.
Sanderson pleaded guilty to one count of conspiracy to commit sex trafficking of children and two counts of sex trafficking of children. On June 7, 2011, he was sentenced to 310 months of imprisonment.
DELIA and Sanderson will be required to pay restitution to the minor victims in an amount to be determined after further court proceedings.
U.S. Attorney Fein noted that federal prisoners are required to serve at least 85 percent of their sentenced term of imprisonment and are not eligible for parole.
This matter was investigated by the Federal Bureau of Investigation and the East Hartford Police Department. The case was prosecuted by Assistant United States Attorney David E. Novick and Trial Attorney Alecia Riewerts Wolak of the Child Exploitation and Obscenity Section of the Criminal Division of the Department of Justice.
Friday, June 24, 2011
Two Men Charged in Plot to Attack Seattle Military Processing Center Defendants Sought Firearms and Grenades to Attack Complex where Enlistees Report
SEATTLE—Two men were arrested late last night and are charged by criminal complaint with terrorism and firearms related charges. The complaint alleges that Abu Khalid Abdul-Latif, a/k/a Joseph Anthony Davis, 33, of Seattle, and Walli Mujahidh, a/k/a Frederick Domingue, Jr., 32, of Los Angeles, took possession of machine guns that they purchased and planned to use in an attack on the Military Entrance Processing Station (“MEPS”) located on East Marginal Way, Seattle. Law enforcement has been monitoring Abdul-Latif and Mujahidh, including the weapons transaction, to prevent the attack and protect the public. Unbeknownst to the defendants, the weapons were rendered inoperable and posed no risk to the public. The defendants initially planned an attack on Joint Base Lewis-McChord, but later changed targets. The defendants intended to carry out their attack with both grenades and machine guns.
“The complaint alleges these men intended to carry out a deadly attack against our military where they should be most safe, here at home,” said United States Attorney Jenny A. Durkan. “This is a sobering reminder of our need to be vigilant and that our first line of defense is the people who live in our community. We were able to disrupt the plot because someone stepped forward and reported it to authorities. I commend the joint efforts of the FBI, the Seattle Police Department, and the Joint Terrorism Task Force who quickly recognized the seriousness of the threat and ensured the safety of the community.”
Law enforcement first became aware of the potential threat when a citizen alerted them that he/she had been approached about participating in the attack and supplying firearms to the conspirators. The person then agreed to work with law enforcement, which began monitoring Abdul-Latif and Mujahidh. Since early June the conspirators were captured on audio and videotape discussing a violent assault on the Military Entrance Processing Station. The MEPS is where each branch of the military screens and processes enlistees. In addition to housing many civilian and military employees, the building houses a federal daycare center.
“Driven by a violent, extreme ideology, these two young Americans are charged with plotting to murder men and women who were enlisting in the Armed Forces to serve and protect our country. This is one of a number of recent plots targeting our military here at home,” said Todd Hinnen, Acting Assistant Attorney General for National Security. “The threat was averted by the combined efforts of the federal, state and local law enforcement officers that make up the FBI’s Joint Terrorism Task Force.”
“The FBI remains committed to utilizing intelligence-based investigations to thwart would-be terrorists,” said Laura Laughlin, Special Agent in Charge of the FBI Seattle Division. “This case epitomizes the value and capabilities of the FBI’s Joint Terrorism Task Force concept as a means of preventing acts of terrorism. But for the courage of the cooperating witness, and the efforts of multiple agencies working long and intense hours, the subjects might have been able to carry out their brutal plan.”
“This attack was foiled because of the trust and relationships the men and women of the Seattle Police Department enjoy with our community,” said Seattle Police Chief John Diaz. “The complainant felt safe approaching a Seattle Police Detective and, in doing so, ended the plot intended to take innocent lives. This cooperative investigation involving local, state, and federal partners worked exactly as intended.”
Abdul-Latif and Mujahidh are charged by complaint with conspiracy to murder officers and employees of the United States, conspiracy to use a weapon of mass destruction (grenades), and possession of firearms in furtherance of crimes of violence. Abdul-Latif is also charged with two counts of illegal possession of firearms. The defendants will make their initial appearance on the complaint at 2:30 p.m. in front of Magistrate Judge Mary Alice Theiler, on the 12th floor of the federal courthouse at 700 Stewart Street, Seattle. Both Abdul-Latif and Mujahidh face potential sentences of life in prison if convicted of the charges.
The case is being prosecuted by the U.S. Attorney’s Office for the Western District of Washington, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division. The investigation is being conducted by the FBI’s Joint Terrorism Task Force, which has investigators from federal, state and local law enforcement. The Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) contributed significant expertise to this investigation.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
Alexandria Man Charged with Shooting at Military Buildings in Northern Virginia
ALEXANDRIA, VA—Yonathan Melaku, 22, of Alexandria, Va., has been charged with destruction of property and firearm violations involving five separate shootings at military installations in Northern Virginia between October and November 2010.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement.
If convicted, Melaku faces a maximum penalty of 10 years in prison on each of the two willfully injuring the property of the United States charges and a total mandatory minimum of 35 years and a maximum of life in prison if he is convicted of both use of a firearm during a crime of violence charges.
“Today’s charges allege a long-term pattern of violent behavior against the U.S. military that escalated until his detention last Friday,” said U.S. Attorney MacBride. “The affidavit states that what began as a drive-by shooting at the National Museum of the Marine Corps grew to a series of armed attacks targeting multiple military installations seeking to shut them down. It culminated with Mr. Melaku’s apprehension near the Pentagon in possession of a backpack containing ammonium nitrate, one of the components used in the 1995 Oklahoma City bombing.”
“Great investigative and intelligence analysis on this case has brought us to where we are today,” said James McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office. “The permanent partnership shared in the FBI’s Joint Terrorism Task Force has allowed investigators to follow up on every lead and continue to pursue so many matters in this case, leaving no stone unturned. This was an eight-month investigation involving hundreds of hours of interviews, evidence collection and analysis by investigators from Prince William County Police, Virginia State Police, Pentagon Force Protection Agency, Fairfax and Arlington Police, the Naval Criminal Investigative Service, U.S. Park Police and the United States Marine Corps. This is a shining example of how together we work tirelessly to keep Northern Virginia residents safe.”
According to an affidavit filed in court, Melaku is accused of engaging in a series of five shootings from Oct. 17, 2010, through Nov. 2, 2010, at the following locations: the National Museum of the Marine Corps (twice), the Pentagon, a Marine Corps recruiting sub-station in Chantilly, Va., and a U.S. Coast Guard recruiting office in Woodbridge, Va. Each shooting allegedly took place late at night or early in the morning and involved multiple 9mm rounds fired at each building. The cost for repairs at the facilities exceeded $100,000.
The affidavit states that Mr. Melaku attempted to flee law enforcement after he was spotted on the property of Ft. Myer in Arlington, Va., at approximately 1:30 a.m. on June 17, 2011. During the pursuit, he dropped a backpack that allegedly contained numerous spent 9mm shell casings; four bags containing ammonium nitrate, and a spiral notebook with numerous Arabic statements referencing the Taliban, Al Qaeda, Osama bin Laden, “The Path to Jihad,” as well as a list of several other individuals associated with foreign terrorist organizations.
Later on June 17, 2011, the affidavit states, law enforcement recovered a typed list in Melaku’s bedroom closet titled “Timer” that included nine items that are consistent with the requirements for a time power unit and firing mechanism of an Improvised Explosive Device (IED). Combined with ammonium nitrate, these items would make up several significant components needed for an IED.
The affidavit alleges that law enforcement also found a videotape in Melaku’s bedroom that shows Melaku in an automobile driving near what appears to be the U.S. Marine Corps Heritage Museum and repeatedly firing a handgun out the passenger-side window. Melaku allegedly made numerous statements on the video, including “That’s my target. That’s the military building. It’s going to be attacked” and at the conclusion of multiple shots exclaiming “Allahu Akbar.”
According to the affidavit, an analysis of the shootings determined that a brand of ammunition, based on class characteristics consistent with bullets loaded into cartridges, were manufactured by Prvi Partizan, and some of the shell casings allegedly found in Melaku’s backpack when he was taken into custody were also Prvi Partizan. The affidavit states that the bullets and fragments recovered from all five shooting incidents were fired from the same firearm.
The United States Marine Corps reports that Melaku joined the Marine Corps Reserve on Sept. 4, 2007, and is currently listed as a Marine Corps reservist Lance Cpl and a motor vehicle operator with Combat Engineer Support Company, 4th Combat Engineer Battalion, 4th Marine Division, Marine Forces Reserve. He has previously been awarded the National Defense Service Medal and the Selected Marine Corps Reserve Medal. He has not deployed overseas.
The investigation was conducted by the FBI Washington Field Office’s Joint Terrorism Task Force, including the police departments of Arlington County, Fairfax County and Prince William County; the Pentagon Force Protection Agency; the Virginia State Police; the Naval Criminal Investigative Service; the Coast Guard Investigative Service; the U.S. Park Police; U.S. Marine Corps Base Quantico; and the Military District of Washington Provost Marshal Office. Assistant United States Attorneys Daniel Grooms, Neil Hammerstrom, and Lynn Haaland of the National Security and International Crime Unit are prosecuting the case on behalf of the United States.
Criminal complaints are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
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 at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.
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Thursday, June 23, 2011
Top Ten Fugitive James ‘Whitey’ Bulger Arrested
FBI Agents have arrested Top Ten Fugitive, James J. "Whitey" Bulger, and his companion, Catherine Greig, in California.
Recent publicity produced a tip which led agents to Santa Monica, California, where they located both Bulger and Greig at a residence early this evening.
Bulger and Greig were arrested without incident. Both are currently scheduled for an initial appearance in U.S. District Court in the Central District of California (downtown Los Angeles) on Thursday.
Former Hamtramck Police Officer Pleads Guilty to Divulging Federal Wiretap During Highwaymen Motorcycle Club Investigation
A former Hamtramck police officer, and federal Drug Enforcement Administration (DEA) task force officer, Randall Hutchinson pleaded guilty yesterday to one count of providing notice of a federal wiretap to the former Downriver Chapter President of the Highwaymen Motorcycle Club during the Federal Bureau of Investigation’s (FBI) investigation into that organization in 2005 - 2006, United States Attorney Barbara L. McQuade announced. Hutchinson, 45, is one of ninety-one individuals indicted as part of the United States Attorney’s Office’s case against the Detroit Highwaymen.
“Disclosing a wiretap investigation not only violates the law, it also betrays an officer’s duty to the mission of seeking justice.” McQuade said. “We have no tolerance for that sort of betrayal.“
The Highwaymen Motorcycle Club was Detroit’s largest, and most violent, motorcycle club with upwards of 100 members, and was seen by many as a rogue club. Numerous of its leaders, members, and associates have been successfully prosecuted over the last year for a variety of criminal offense including racketeering, violent acts, narcotics trafficking, and stolen vehicles.
During the fall of 2005, while working as a task force officer for the DEA, Hutchinson learned that the FBI was conducting a wiretap investigation that involved a large scale marijuana dealer who was a member of the Highwaymen Motorcycle Club. Shortly after learning about this wiretap, Hutchinson saw Phil McDonald, the Downriver Chapter President of the Highwaymen, in the gym where they both worked out. Hutchinson told McDonald about the FBI’s investigation into the marijuana dealer within the Highwaymen and told McDonald that he had to be careful.
Later in May 2006, the FBI and the Brownstown Township Police Department executed a search warrant at Phil McDonald’s house in which illegal steroids and growth hormones were found. After the search warrant was executed, McDonald called and spoke with Hutchinson several times about the search and his legal troubles. On May 10, 2006, during a phone conversation with McDonald, Hutchinson told him that if the trouble was bad, then “they” were on his phones.
On June 19, 2006, Hutchinson and McDonald met again in the gym. Hutchinson stated that he had “been thinking” and that McDonald needed to see if his “phone was hot.” McDonald understood this mean that he needed to check to see if his phone was being tapped by law enforcement. McDonald then stated that Hutchinson should know whether he was a target of a wiretap, to which Hutchinson replied, “not necessarily, if your phone is hot it would be the FBI.” Hutchinson then formulated a plan for McDonald to figure out whether the FBI was intercepting his phone calls.
The case against Hutchinson was investigated by the Federal Bureau of Investigation and the Brownstown Township Police Department. FBI Special Agent Ted Brzezinski was the lead case agent responsible for handling and coordinating the multiyear investigative effort into the Highwaymen and Mr. Hutchinson.
Mr. Hutchinson faces a maximum of 5 years’ imprisonment and a $250,000 fine. The case was prosecuted by Assistant U.S. Attorney’s Diane Marion and Christopher Graveline.
Phoenix Real Estate Investor Pleads Guilty to $50 Million Mortgage Fraud Scheme
PHOENIX—Brett Matheson, 46, pleaded guilty on Monday in federal court to conspiracy to commit wire fraud in a $50 million mortgage fraud scheme based in Phoenix. Two others have also entered guilty pleas and are awaiting sentencing.
The case against Matheson and his co-conspirators is based on an investigation conducted by the Internal Revenue Service’s Criminal Investigation Division and the Federal Bureau of Investigation. Matheson acknowledged in his guilty plea that as President and CEO of Maricopa Property Investment Solutions, Inc., he recruited straw buyers in real estate seminars. From about January 2005 through September 2006, he facilitated the submission of mortgage loan applications for these unqualified straw buyers containing false information regarding employment, income, assets and the intent to occupy homes as their primary residence. In some cases, the loan application packages contained altered pay stubs, false bank statements, and bogus verifications of employment and deposit. Matheson personally obtained financing for the purchase of two properties using altered pay stubs and bogus verifications of employment. At closing, a portion of the seller proceeds were kicked back to an entity controlled by Matheson and his co-conspirators. The arrangement between Matheson’s company and the “straw” buyers was concealed from the lenders. The kickbacks were often used on Matheson’s personal expenses or to make down payments to qualify additional “straw" buyers for financing on other properties. In total, 52 properties were involved in the scheme with nearly $50 million in fraudulent loans. The losses to lenders approached $20 million.
“This guilty plea reminds us of the destructive role mortgage fraudsters played in the financial crisis that has impacted every Arizonian and the entire country,” said U.S. Attorney Dennis K. Burke. “Schemes like this have destroyed property values, crippled lending institutions, and ruined entire neighborhoods in our community. It has resulted in the loss of tax revenues and jobs. We will continue to investigate and prosecute those who have profited from mortgage fraud.”
“Mortgage fraud threatens the financial health of our communities. IRS Criminal Investigation and our law enforcement partners are committed to following the money trail to ensure those who engage in illegal activities such as Matheson are brought to justice," said Dawn Mertz, Special Agent in Charge, Phoenix Field Office, Internal Revenue Service, Criminal Investigation Division.
A conviction for a single count of conspiracy to commit wire fraud is punishable by a maximum fine of $1 million a maximum term of imprisonment of 30 years, or both, and a term of supervised release of five years. In determining an actual sentence, Federal District Judge Neil V. Wake will consult the U.S. Sentencing Guidelines, which provide appropriate sentencing ranges. The judge, however, is not bound by those guidelines in determining a sentence.
Matheson’s prosecution is part of an initiative called “Operation Stolen Dreams" in which dozens of defendants — including many real estate professionals — were indicted in the summer of 2010. To date, 27 of those indicted have been convicted through guilty pleas.
The investigation in this case was conducted by the Internal Revenue Service, Criminal Investigations Division and the FBI. The prosecution is being handled by Kevin M. Rapp and Monica B. Klapper, Assistant U.S. Attorneys, District of Arizona, Phoenix.
Wednesday, June 22, 2011
Manhattan U.S. Attorney Charges Man with Murdering Members of the United States Air Force in Germany
PREET BHARARA, the United States Attorney for the Southern District of New York, JANICE K. FEDARCYK, the Assistant Director-In-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and RAYMOND W. KELLY, the Police Commissioner of the City of New York, announced today the filing of a criminal Complaint against ARID UKA, a/k/a “Abu Reyyan,” charging UKA with murdering and attempting to murder United States Air Force (“USAF”) personnel in Frankfurt, Germany, on March 2, 2011. The Complaint charges UKA with two counts of murdering officers of the United States Government, one count of attempting to murder officers of the United States Government, one count of using a firearm during a crime of violence resulting in death, and one count of committing an act of violence at an international civil airport resulting in the death of another person. UKA, 21, is currently in custody in Germany.
According to the Complaint filed today in Manhattan federal court:
On March 2, 2011, UKA approached a bus used to transport USAF personnel parked outside of Frankfurt International Airport. After confirming that the bus was used to transport United States military personnel, UKA approached Nicholas Alden, a member of the USAF, from behind and shot and killed him. After murdering Alden, UKA boarded the bus, in which approximately fifteen other USAF personnel were seated. Once on board the bus, UKA shot and killed the driver of the bus, Zachary Ryan Cuddeback, another member of the USAF. UKA then repeatedly fired his gun inside the bus at other USAF members, shooting and badly injuring two other USAF members on the bus. As UKA fired his gun, he repeated aloud an Arabic expression that means, “God is great,” and continued shooting until his gun did not fire. UKA then ran off the bus, pursued by a USAF member, and was ultimately apprehended by German law enforcement officers in the airport terminal.
Mr. BHARARA praised the investigative efforts of the Joint Terrorism Task Force (“JTTF”) in New York, especially those JTTF members from the FBI and the New York City Police Department; the Air Force Office of Special Investigations; and the FBI’s Legal Attaché offices in Germany. He also thanked the Department of Justice’s National Security Division and Office of International Affairs for their assistance in this case, and thanked German law enforcement officials and prosecutors, who are conducting their own investigation of this case under German law.
Assistant U.S. Attorneys JOHN P. CRONAN, EDWARD Y. KIM, and ANNA M. SKOTKO from the Office’s Terrorism and International Narcotics Unit are in charge of the prosecution.
The charges and allegations contained in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
Former TBW CEO Sentenced to 40 Months in Prison for Fraud Scheme
WASHINGTON—The former chief executive officer (CEO) of Taylor, Bean & Whitaker (TBW) was sentenced today to 40 months in prison for his role in a more than $2.9 billion fraud scheme that contributed to the failure of TBW. At one time, TBW was one of the largest privately held mortgage lending companies in the United States.
Paul Allen was sentenced today by U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Acting Special Inspector General Christy Romero for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Deputy Inspector General of the Department of Housing and Urban Development (HUD-OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG); Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA-OIG); and Victor S. O. Song, Chief of the Internal Revenue Service-Criminal Investigation (IRS-CI). Allen, 55, of Oakton, Va., pleaded guilty in April 2011 to one count of making false statements and one count of conspiring to commit bank and wire fraud. Co-conspirator Sean Ragland, a former senior financial analyst at TBW who reported to Allen, was also sentenced today by Judge Brinkema to three months in prison. Ragland, 37, of San Antonio, pleaded guilty in March 2011 to one count of conspiracy to commit bank and wire fraud. Allen and Ragland both admitted to conspiring with Lee Bentley Farkas, the former chairman of TBW, and others, to defraud financial institutions that had invested in Ocala Funding LLC, a facility wholly-owned by TBW. Farkas was convicted on April 19, 2011, on 14 counts of fraud for his role in masterminding the scheme, which was one of the largest bank frauds in the country. Farkas is scheduled to be sentenced on June 27, 2011. The Securities and Exchange Commission (SEC) has a civil action pending against Farkas in the Eastern District of Virginia. Co-conspirators Catherine Kissick, a former senior vice president of Colonial Bank and head of its Mortgage Warehouse Lending Division (MWLD); Teresa Kelly, a former operations supervisor in Colonial Bank’s MWLD; Raymond Bowman, the former president of TBW; and Desiree Brown, the former treasurer of TBW, have also pleaded guilty for their participation in the scheme. Earlier this month, Kissick was sentenced to eight years in prison, Brown was sentenced to six years in prison, Bowman was sentenced 30 months in prison and Kelly was sentenced to 3 months in prison.
“As TBW’s chief executive officer, Mr. Allen served as an accomplice to Lee Farkas and his massive fraud scheme,” said Assistant Attorney General Breuer. “He concealed TBW’s staggering deficits through false financial reports, which ultimately caused investors to lose more than $1.5 billion. Today’s sentence sends a strong message that corporate fraud by senior executives will not be tolerated. At the same time, it demonstrates that substantial assistance in the government’s investigation and prosecution of corporate fraud will be taken into account at sentencing.”
“Paul Allen was a well-respected mortgage executive hired by Lee Farkas to be TBW’s chief executive officer. Working from Oakton, Va., Mr. Allen led Ocala Funding, a TBW multi-billion dollar lending facility that was used to defraud investors of more than $1 billion,” said U.S. Attorney MacBride. “Mr. Allen’s sentence reflects his ultimate cooperation with this investigation, but also sends the message that unless executives expose and stop fraud when they first learn of it, they will be punished.”
According to court documents and information presented at trial, Allen and Ragland participated in the scheme from early 2005 through August 2009 by distributing materially false documents to investors in Ocala Funding that misrepresented the financial condition of the facility. The fraud scheme ultimately caused investors in Ocala Funding to lose more than $1.5 billion and Colonial Bank to lose $900 million. According to court documents and information presented at trial, TBW began running overdrafts in its master bank account at Colonial Bank because of TBW’s inability to meet its operating expenses, which included payroll, servicing payments owed to third-party purchasers of loans and/or mortgage-backed securities and other obligations. In or about 2002, Farkas and other co-conspirators engaged in a series of fraudulent actions to cover up the overdrafts, first by sweeping overnight money from one TBW account with excess funds into another, and later through the fictitious “sales” of mortgage loans to Colonial Bank, a fraud scheme the conspirators dubbed “Plan B.” The conspirators accomplished Plan B by selling Colonial Bank mortgage loans that did not exist or that TBW had already committed or sold to other third-party investors. As Plan B evolved, co-conspirators at TBW also caused TBW to engage in sham sales of groups of mortgage loans, known as “pools,” that other entities already owned to Colonial Bank. As a result, false information was entered on Colonial Bank’s books and records, giving the appearance that the bank owned interests in legitimate pools of mortgage loans, when in fact the pools had no value and could not be securitized or sold. Neither Allen nor Ragland participated in the effort to cover up TBW’s overdrafts or Plan B. Additionally, the co-conspirators at TBW caused TBW to misappropriate more than $1.5 billion in collateral from Ocala Funding. According to court documents, both Allen and Ragland played significant roles in the Ocala Funding misappropriation. The misappropriation caused Colonial Bank and the Federal Home Loan Mortgage Corporation (Freddie Mac) to falsely believe that they each had an undivided ownership interest in thousands of the same loans worth hundreds of millions of dollars. According to court documents, the fraud scheme also included an effort by certain conspirators in the fall of 2008 to obtain $570 million in taxpayer funding through the Capital Purchase Program, a sub-program of the U.S. Treasury Department’s TARP. In connection with the application, Colonial BancGroup submitted financial data and filings that included materially false information related to mortgage loan and securities assets held by Colonial Bank as a result of the fraudulent activity at TBW. Colonial BancGroup never received the TARP funding. According to court documents, Allen played a key role in causing materially false information to be submitted to and received by the government in connection with Colonial Bank’s TARP application. Ragland was not aware of this aspect of the fraud scheme. In August 2009, the Alabama State Banking Department, Colonial Bank’s regulator, seized the bank and appointed the FDIC as receiver. Colonial BancGroup also filed for bankruptcy in August 2009.
“Instead of upholding his position of power and trust as CEO of TBW, Paul Allen chose the path of fraud and deception in helping facilitate the long-running fraud carried out by TBW and Colonial Bank. Fortunately, the scheme came to a halt when an attempt was made to steal more than a half billion dollars from the TARP,” said Acting Special Inspector General for the TARP Romero. “Today’s sentence appropriately recognizes the severity of Allen’s participation in the fraud along with his cooperation in the Government’s investigation.”
“As a result of this complex fraud scheme, these defendants cost investors and our financial markets billions of dollars,” said Assistant Director in Charge McJunkin. “Today’s sentence shows that those who take advantage of investors and our banking and mortgage systems will be held accountable. The FBI will continue to work with our law enforcement partners and remain vigilant in investigating these illegal transactions.”
“Today’s sentencing marks the culmination of a large effort on the part of this agency and of the law enforcement and regulatory community,” said Deputy Inspector General Stephens of HUD-OIG. “More importantly, however, it shows our nation that is slowly recovering from a damaged housing market that we are committed to bringing to justice those whose pernicious behavior contributed to this condition.”
“The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General is pleased to join our law enforcement colleagues in announcing this sentencing,” said Inspector General Rymer of FDIC. “We are particularly concerned in cases like this one where fraudulent activities involving employees of Colonial Bank in association with officials of Taylor, Bean and Whitaker contributed to the failure of Colonial Bank, resulting in a $3.8 billion loss to the Deposit Insurance Fund. We are committed to continuing our investigations of such criminal misconduct to help ensure the integrity of the financial services industry and maintain the safety and soundness of the nation’s financial institutions and the viability of the fund.”
“Paul Allen used his extensive experience gained from employment with the government sponsored enterprises (GSEs) to assist Lee Farkas in his massive fraud scheme,” said Inspector General Linick of FHFA-OIG. “This sentence sends a strong message to individuals who would try to defraud Freddie Mac and American taxpayers, who have invested over $163 billion in the GSEs to date.”
The case is being prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Paul Nathanson of the Eastern District of Virginia. This case was investigated by SIGTARP, FBI’s Washington Field Office, FDIC-OIG, HUD-OIG, FHFA-OIG and the IRS-CI. The department recognizes the substantial assistance of the SEC. The department also recognizes the assistance of the Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury.
This prosecution was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. 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. For more information about the task force visit: www.StopFraud.gov.
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Tuesday, June 21, 2011
Former Weslaco ISD Trustee Convicted of Accepting Bribe for School Renovation Project
A former trustee for the Weslaco Independent School District (WISD) has pleaded guilty to accepting a bribe in exchange for using his official capacity to influence the award of a contract on a school renovation project, United States Attorney José Angel Moreno announced today.
Joe Marines, 55, of Weslaco, Texas, pleaded guilty today to a Hobbs Act violation. Marines admitted that in August 2006, while serving as a trustee for WISD and the district was involved in the bidding process for the renovation of Roosevelt Elementary School, he met with an FBI informant who was soliciting a contract on the project. Marines admitted he received $500 in exchange for Marines exerting his influence as a trustee to award a subcontracting job on the project. Later that same month, the FBI informant paid Marines an additional $1000 for the same purpose.
A conviction for a violation of the Hobbs Act is punishable by no more than 20 years in prison and/or a fine of up to $250,000.
U.S. District Judge Nancy F. Atlas, who accepted Marines’ guilty plea and convicted him of the federal felony offense has set the case for sentencing on Sept. 6, 2011. Marines will be permitted to remain on bond pending the sentencing hearing.
The investigation leading to the charges was conducted by the FBI and Assistant U.S. Attorney James McAlister is prosecuting the case.
Oklahoma Man Pleads Guilty to Kidnapping Women Also Admits Illegal Use of Firearm and Robbery Charges
An Oklahoma man pled guilty on June 16, 2011, to Kidnapping (two counts), Carrying and Use of a Firearm During a Crime of Violence, and Interference with Commerce by Robbery, in the United States District Court for the Southern District of Illinois, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Carey L. Breshers, Jr., 51, of Oklahoma, is scheduled for sentencing on October 14, 2011. Each of the Kidnapping counts carry a maximum penalty of life imprisonment, a $250,000 fine, and five years’ supervised release. Use of a Firearm During a Crime of Violence carries a sentence of not less than seven years’ imprisonment up to life imprisonment, the sentence to run consecutively to the sentences imposed on the Kidnapping counts, a $250,000 fine, and five years’ supervised release. Interference with Commerce by Robbery carries a maximum sentence of up to 20 years’ imprisonment, a $250,000 fine, and up to three years’ supervised release.
According to court documents, on October 26, 2010, at around 10:00 a.m., Breshers walked into World Finance in O’Fallon, Illinois, and held two female employees at gunpoint while questioning them about their personal checking accounts, finances, and vehicles, as well as the location of the bank for the business. He eventually directed one of the employees to write a company check for $3000. Breshers directed the women to leave their cell phones, lock the business, and come with him. He directed one of the employees to drive her car and directed the other to get in the backseat with him.
Breshers directed the women to attempt to cash the check at the O’Fallon branch of Regions Bank. After two unsuccessful attempts to cash the check, Breshers directed the women back to World Finance where he took $1,104 from the business. Breshers then directed the employees to drive him to St. Louis. During the drive, Breshers removed the firearm from his pocket and fiddled with it. He told the women that he had committed a similar crime in Oklahoma, and that he had safely released the victim in that situation. Breshers directed them to take the exit at I-44 and Jefferson and to drive around the back of an abandoned building where he released them. He left in the employee’s car which was later found at a Metro Link station in Missouri. Breshers was arrested on October 31, 2010, in Topeka, Kansas, in an unrelated incident, and found to be in possession of the firearm. He has been in custody since his arrest.
Information for the Indictment was obtained by the O’Fallon Police Department, the FBI, and the St. Louis Metropolitan Police Department. The case is being handled by Assistant United States Attorney Kit Morrissey.
Richard A. McFeely Special Agent in Charge, Baltimore Office Federal Bureau of Investigation
Good morning, Chairman Leahy and Senator Coons. Thank you for the opportunity to appear before you today to discuss the FBI’s coordination with federal, state, and local law enforcement here in Wilmington and across the country.
Since September 11, 2001, the FBI has shifted from a traditional crime-fighting agency into an intelligence-led, threat-driven organization, guided by clear operational strategies. Today’s FBI is focused on predicting and preventing the threats we face while at the same time engaging with the communities we serve. This shift has led to a greater reliance on technology, collaboration, and information sharing.
The Baltimore field office of the FBI has jurisdictional responsibility for the State of Delaware where we maintain two Resident Agency (RA) offices. These RAs are responsible for all of the FBI’s information sharing and investigative work in Delaware. In addition to task force participation, a number of special agents in Delaware serve in an official liaison role and coordinate with federal, state, and municipal law enforcement agencies. Some of these agents are regularly embedded with the partner agencies, where they facilitate the efficient and frequent exchange of information and work to better understand the intelligence needs of FBI partners.
There was a day in law enforcement when teamwork and partnership were virtues. Today, they are absolute necessities. Also of great necessity is the ability to share real-time information that allows both the FBI and its partners the world over to cross jurisdictional boundaries and quickly ‘connect the dots’ when every minute counts. Gone are the days when information was held onto for fears of compromising investigations; the benefits of full and open sharing with our partners has proven time and time again to be more valuable than the close holding of intelligence.
Information Sharing
The FBI has two strategies we rely on to push information out to our partners: one is a formalized structure and the other is informal and tailored to each individual jurisdiction.
From a formalized perspective, the FBI’s National Information Sharing Strategy (NISS) ensures that information is shared as fully and appropriately as possible with federal, state, local, and tribal partners in the intelligence and law enforcement communities. The NISS is based on the principle that FBI information and information technology systems must be designed to ensure that those protecting the public have the information they need to take action.
The NISS includes three components: Law Enforcement National Data Exchange (N-DEx); OneDOJ; and the Law Enforcement Online (LEO) network.
For its part, N-DEx provides a nationwide capability to exchange data derived from incident and event reports. It serves as an electronic catalog of structured criminal justice information—such as police reports—that provides a “single point of discovery;” leverages technology to relate massive amounts of data that is useful information; automates discovery of patterns and linkages to detect and deter crime and terrorism; and affords enhanced nationwide law enforcement communication and collaboration.
The process of connecting the dots between seemingly unrelated pieces of criminal data housed in different places is the backbone of N-DEx. The system enables its law enforcement users to submit certain data to a central repository—located at our Criminal Justice Information Services (CJIS) Division in West Virginia—where it is compared against data already on file from local, state, tribal, and federal agencies to identify links and similarities among persons, places, things, and activities across jurisdictional boundaries. The state of Delaware is a full partner in the N-DEx project.
OneDOJ enables the FBI to join participating federal, state, tribal, and local law enforcement agencies in regional full-text information sharing systems under standard technical procedures and policy agreements.
Lastly, the LEO network provides web-based communications to the law enforcement community to exchange information, conduct online education programs, and participate in professional special interest groups and topically focused dialogue. It is interactive and provides state-of-the-art functions such as real-time chat capability, news groups, distance learning, and articles on law enforcement issues.
LEO started in 1995 as a small dial-up service with just 20 members. Now, it has more than 100,000 members across the world and a host of features and capabilities offered through a Virtual Private Network on the Internet.
LEO offers many tools that cross-cut all law enforcement agencies on a global basis. There is no other on-line service that matches its capabilities. For example, LEO hosts the eGuardian system, which is a sensitive but unclassified (SBU) information sharing platform developed to help meet the challenges of collecting and sharing terrorism-related activities amongst law enforcement agencies across various jurisdictions. It allows law enforcement agencies to combine new suspicious activity reports (SARs) along with existing (legacy) SAR reporting systems to form a single information repository accessible to thousands of law enforcement personnel. The information captured in eGuardian is also migrated to the FBI’s internal Guardian system, where it is assigned to the appropriate Joint Terrorism Task Force (JTTF) for any further investigative action.
LEO is also home to the Virtual Command Center (VCC). In Delaware, I have made the VCC the main centerpiece of our strategy to share information in a major crisis. VCC provides an “Events Board” feature which allows information to be posted as the event occurs and allows us to post photographs, scanned documents, and any information deemed pertinent to the crisis. Whatever agency is hosting the VCC can allow access to individual persons or entire agencies if needed. Critical Incident Managers, such as emergency planners, now can remotely have access to a crisis without having to be on-scene.
The FBI is a participating member of the Law Enforcement Coordinating Committee (LECC) in the District of Delaware. The LECC serves as a catalyst for forging partnerships with federal, state, and local law enforcement and prosecutors.
But our commitment to information sharing does not stop with our law enforcement partners. The FBI-sponsored InfraGard brings together representatives from the private and public sectors to help protect our nation’s critical infrastructure and key resources from attacks by terrorists, criminals, and others who would do us harm. It is a partnership that makes sense, since most U.S. infrastructure components—like utility companies, transportation systems, telecommunication networks, water and food suppliers, public health, and financial services—are privately owned and operated.
The following are just a few examples of the FBI’s efforts to share information and leverage all available resources and expertise to combat the threats posed by terrorism and criminal enterprises.
Counterterrorism
As one of the few members of the U.S. Intelligence Community with a combined law enforcement and intelligence mission, the FBI serves as a critical link between the intelligence and law enforcement communities in the United States. We are committed to working together to prevent both crime and terrorism, here at home and with our partners around the world.
In Delaware, the FBI maintains a Joint Terrorism Task Force (JTTF) in the Wilmington RA. In addition to FBI agents, there are full-time Task Force Officers (TFOs) from partner agencies, including the Delaware State Police (DSP), U.S. Immigration and Customs Enforcement (ICE), Bureau of Alcohol, Tobacco and Firearms (ATF), Wilmington Police Department (WPD), Delaware Department of Corrections (DOC), and Delaware Division of Alcohol and Tobacco Enforcement (DATE). Each of the JTTF TFOs has the necessary credentials and clearances required to fully participate. In total, 12 agencies participate and contribute to the Task Force.
While JTTFs are certainly considered part of the FBI’s formalized information sharing strategy, many of our successes over the recent years have come from the benefit of co-location and direct outreach to our federal, state and local partners. For example, recognizing that much of the work of the FBI and the rest of the Intelligence Community are within a classified information environment, I have offered every Police Chief in Delaware the opportunity to apply for a SECRET security clearance. This is a vital part of our local information sharing strategy because every month, we bring in all the cleared Chiefs and provide a classified threat briefing, including: (1) timely Homeland threat reporting; (2) threat trend analysis; (3) information about specific terrorist groups and extremist activities; and (4) current investigations of the Baltimore JTTF.
Cyber Crime
We have cyber squads in each of our 56 field offices around the country, with more than 1,000 specially trained agents, analysts, and digital forensic examiners. Together, they run complex undercover operations and examine digital evidence. They share information with our law enforcement and intelligence partners and they teach our counterparts—both at home and abroad—how best to investigate cyber threats. The Wilmington RA has agents specifically designated for cyber investigations with extensive specialized training. In complex cyber cases, additional resources are provided by the Baltimore Field Office and FBI Headquarters.
Between 2008 and 2011, FBI Agents in the Wilmington and Dover RAs, working in coordination with the DSP High Tech Crimes Unit (HTCU), successfully investigated cyber criminals, such as child predators, producers of child pornography and distributors of child pornography. Ongoing joint investigations by the FBI/DSP HTCU involve other cyber-related violations, including computer intrusions, copyright infringement, wire fraud, and mail fraud.
Street Gangs and Violent Crime
Gangs are no longer limited to urban areas, but have migrated to more rural settings. Gangs have also infiltrated our prisons and even the military. Gangs have diversified from drug running and petty crime to armed robbery, home invasions, mortgage and health care fraud, and even human trafficking.
While local neighborhood gangs pose the most serious crime threat in Delaware, national gangs such as the Bloods, Crips, and Almighty Latin Kings are present and active here. The Delaware Safe Streets Task Force has identified members of the Latin Kings operating in the New Castle County area, including the City of Wilmington. Latin King members are involved in a myriad of criminal activities, including the distribution and sale of narcotics, weapon trafficking, murder, assault, armed robbery, kidnapping, burglary, auto theft, money laundering, extortion, racketeering, public corruption and intimidation and alien smuggling. The gang is also known to order “hits” on correctional officers, rival gang members and members who fail to follow orders.
To combat the threat posed by these dangerous gangs, I have redirected resources to the Delaware Violent Crime Safe Streets Task Force over the past year. This task force is focused on violent gangs, significant crimes of violence, and the apprehension of violent fugitives through sustained, proactive, coordinated investigations of racketeering, drug conspiracy, and firearms offenses.
In the past six months, working with the Wilmington Police Department, we have assigned analysts and Special Agents to provide in-depth assessments of repeat violent criminals and uncover indicators of organized gang activity. These assessments, reviewed by our partners in the Offices of the U.S. Attorney and Delaware Attorney General, will be used by the task force to both target the State’s most violent gang members and to determine the most appropriate judicial venue to dismantle these gangs.
It is the FBI’s vision that the Delaware Information and Analysis Center (DIAC)—a primary fusion center within the national fusion center network— will become the state’s “all source” information repository. Our experience in Maryland has been that the fusion center structure offers the best forum to collect, analyze and disseminate information to the entire law enforcement community. To that end, I am working to staff the DIAC with a full-time analyst under the regular supervision of the Delaware State Police.
Our efforts in this area have already helped the FBI and its partners realize some significant successes. In a recent homicide case, for example, an FBI informant provided valuable information regarding the suspected killers. This information was provided to WPD and resulted in the arrest and conviction of the killer. In another case, an FBI agent working with the DSP to solve an armed robbery case was able to identify a subject from a surveillance photograph as a Latin King. This link enabled the DSP to link other robberies and Latin King members. As I appear before you today, all of the agencies on the Delaware Safe Streets Task Force, including the NCCPD, WPD, DSP, DIAC, FBI, ATF, and DEA, are working to identify active members of the organization for use in ongoing and future investigations.
White Collar Crime
As the home of some of the nation’s largest banks and credit card companies, Delaware is an inviting target for white collar criminals. The FBI works closely with local agencies to detect and investigate fraud, theft, or embezzlement occurring within or against Delaware’s financial community. In one recent case, the FBI initiated a mortgage fraud investigation based on information provided by the New Castle County Police Department (NCCPD) and the U.S. Marshals. During the course of a parental kidnapping investigation, the NCCPD and Marshals discovered that David Matuisewicz had fraudulently obtained a second mortgage on his home by forging his ex-wife’s signature on Wilmington Savings Fund Society (WSFS) documents. Working with the FBI, the NCCPD and Marshals discovered that Matuisewicz had used the proceeds from the mortgage fraud to take his three young daughters out of the U.S. By working together, the FBI, NCCPD, and Marshals located Matusiewicz and the children and traced the money. As a result of this joint effort, the children were returned to their custodial parent and Matusiewicz was sentenced to four years in jail, five years of supervised release and a $9,600 fine. In addition, $250,000 in mortgage fraud proceeds were recovered and returned to WSFS Bank.
The FBI also participates in various working groups dedicated to sharing information on serious financial crimes. For example, the Delaware Mortgage Fraud Working Group reviews and coordinates ongoing investigations, complaints, threats and SARs related to mortgage fraud. Participating agencies include, but are not limited to: FBI, Social Security Administration, IRS, Delaware Department of Justice (Attorney General’s Office), U.S. Housing and Urban Development (HUD OIG), and financial institutions. The FBI also coordinates closely with the Securities and Exchange Commission and the Delaware Attorney General’s Office on potential financial frauds. These coordination meetings are critical to assessing and addressing the threat posed by white collar criminals operating in or impacting financial institutions in Delaware.
Drug Trafficking
Drug trafficking is often linked to gang activity and violent crime. The diversion of prescription drugs, such as Oxycodone, is an increasing source of revenue for drug dealers in Delaware and across the nation. The FBI, DEA, and the DSP are sharing information to stem the tide of prescription drugs entering the illegal drug networks in Delaware. In one recent case, the DSP informed the FBI of suspicious money laundering activity by a husband and wife team. Through their joint investigative effort, the FBI, DEA and DSP uncovered a large network of individuals who purchased Oxycodone pills and resold them at a profit to addicts and other drug dealers. As a result of this joint effort, three individuals were arrested on September 12, 2009, and charged with Conspiracy to Distribute Oxycodone and Distribution of Oxycodone. They have since pled guilty and are awaiting sentencing.
Intellectual Property
Intellectual Property Rights (IPR) violations, including theft of trade secrets, digital piracy, and trafficking counterfeit goods, result in billions of dollars of losses each year. These threats also pose significant risk to U.S. public health and safety via counterfeit pharmaceuticals, electrical components, aircraft parts and automobile parts. Protecting intellectual property bolsters confidence in our economy, creates opportunities for growth, and promotes fairness and competitiveness in the marketplace.
IPR investigations are a high priority for the FBI. The FBI is an active partner in, and is co-located at, the National Intellectual Property Rights Coordination Center (IPR Center), an interagency task force consisting of 18 member agencies mandated to combat intellectual property theft. Intellectual property investigations are extremely complicated and difficult to investigate. A criminal organization or hostile intelligence service no longer has to physically infiltrate our businesses or government buildings to steal secrets. With relatively unsophisticated computer hacking skills, terabytes of proprietary information can be downloaded with a few key strokes onto a device smaller than your thumb. U.S. businesses lose billions of dollars, the U.S. government loses critical technology and, oftentimes, these facts are never even known.
A recent example of the FBI’s success in this arena in Delaware is the arrest of former DuPont scientist Dr. Hong Meng. Dr. Meng was a synthetic chemist with DuPont who worked to develop Organic Light Emitting Diodes (OLEDs), the future of lighting and display technologies. Unbeknownst to DuPont, Dr. Meng had covertly accepted a position with Peking University as a chemistry professor despite informing DuPont that he planned to transfer to their offices in Shanghai. Dr. Meng emailed trade secret information to his email account at Peking University, solicited investment funding from Chinese provincial governments, and applied for Chinese government grants for OLED-related research. Faced with compelling evidence collected by the FBI and the U.S. Attorney’s Office in Delaware, Dr. Meng pleaded guilty to theft of trade secrets charges in June 2010. He was sentenced to fourteen months in jail and ordered to pay $58,000 in restitution to DuPont.
Conclusion
The FBI remains committed to its responsibility to aggressively combat the threats posed by criminal elements in our communities. To maximize our current resources, we have used our expanded and maturing intelligence collection and analysis capabilities to better identify and understand the growing threat posed by violent criminals. We also continue to rely heavily on the strong relationships we have with our law enforcement and community partners. Much work remains to be done. We will continue to strive for better methods and enhanced communication among partners in law enforcement and the community.
Thank you for allowing me the opportunity to testify before you today. I am happy to answer any questions at this time.
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