BANK VP SENTENCED TO PRISON FOR BANK FRAUD

FROM:  U.S. JUSTICE DEPARTMENT
May 4, 2015
Appalachian Community Bank Vice President Sentenced to Federal Prison for Bank Fraud

GAINESVILLE, Ga. - William R. Beamon, Jr., a/k/a “Rusty” Beamon has been sentenced to three years, six months in federal prison for defrauding Appalachian Community Bank, in Ellijay, Georgia. Beamon was convicted by a jury of five counts of bank fraud on December 19, 2014, after a five-day trial.

“Bank fraud is a critical problem that has hit Georgia especially hard,” said Acting United States Attorney John A. Horn. “Georgia leads the nation in bank failures since 2008, with 88 banks failing—including Appalachian Community Bank, the bank this defendant defrauded. These failures significantly affect the economy, making these cases important to safeguard the nation’s financial health.”

J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “The sentencing of Mr. Beamon will hold him accountable for his actions but, unfortunately, will not be able to restore the bank in which he worked for and betrayed. Bank fraud is not a victimless crime and the FBI will continue to provide extensive resources in investigating those who engage in such criminal acts.”

“Former banker Beamon, of TARP applicant Appalachian Community Bank, was sentenced to three years, six months in federal prison for raiding the bank’s inventory of foreclosed real estate when the bank was seeking a TARP bailout,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “A federal jury convicted Beamon of bank fraud. Beamon fraudulently rented out bank-owned properties and collected rent payments for his own use, and he caused the bank to sell properties to his wife and to a shell company he controlled at severely discounted prices—prices well below what others were willing to pay. He claims he did it to save the bank, but these transactions put the bank in jeopardy, and Beamon profited. SIGTARP and our law enforcement partners will shut down TARP-related fraud, swindling, and self-dealing and ensure that perpetrators pay for their crimes.”

“The sentencing of Mr. Beamon reflects fitting punishment for an individual who abused his position of trust at Appalachian Community Bank for personal gain and caused irreparable harm to the institution. The Federal Deposit Insurance Corporation Office of Inspector General is firmly committed to helping ensure integrity in our nation’s banks. We value the cooperative working relationships with our law enforcement partners that bring about such successful outcomes,” said Fred W. Gibson, Acting Inspector General, FDIC.

According to Acting U.S. Attorney Horn, the charges, and other information presented in court: Beamon was Vice President of Appalachian Community Bank in Ellijay, Ga. Due to its poor financial condition, Appalachian was forced to close on March 19, 2010, and the FDIC was appointed receiver.

Beamon was in charge of Appalachian’s foreclosure liquidation department. In 2009, he represented to a real estate agent that he personally owned a house in Cumming, Georgia. Beamon hired that agent to market and lease the property on his behalf. In truth, however, the property was owned by Appalachian and was part of the bank’s foreclosure inventory. Beamon’s real estate agent found someone to lease the property and negotiated a lease on Beamon’s behalf. Beamon then deposited into his personal bank account more than $20,000 in rent payments and security deposits that he obtained by leasing out the bank’s property as if he were the owner. Beamon also caused Appalachian to sell bank-owned properties to his wife and to a shell company that he owned—all at prices that were substantially below what other buyers were ready, willing, and able to pay the bank.

Beamon, 54, of Atlanta, Georgia, was sentenced to three years, six months in federal prison, to be followed by five years on supervised release following his prison term, a $500 special assessment, and forfeiture of all real properties involved in the offense.

This case was investigated by the FDIC Office of Inspector General; the Department of Treasury, Special Inspector General Troubled Asset Relief Program; and the Federal Bureau of Investigation.

Assistant United States Attorneys J. Russell Phillips, Douglas W. Gilfillan, and Jenny R. Turner prosecuted the case.

REAL ESTATE BUSINESSMAN PLEADS GUILTY TO FRAUD

FROM:  U.S. JUSTICE DEPARTMENT
Thursday, February 19, 2015
Detroit Real Estate Businessman Pleads Guilty to Tax and Bank Fraud

On Feb. 18, a Detroit man pleaded guilty in the U.S. District Court for the Eastern District of Michigan to obstructing and impeding the Internal Revenue Service (IRS) and conspiring to commit bank fraud, Principal Deputy Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.

According to the information and other court documents, Richard Pierce failed to report over $9 million in gross business receipts during 2007 through 2013, derived from the various Detroit-area businesses that he operated and controlled, including Phoenix Real Estate Company, Phoenix Preferred Properties LLC, Detroit Matrix, First Metro Properties LLC, First Metro Real Estate Services LLC, Phoenix Office Plaza-II LLC, Rosedale/Grandmont Properties LLC, and RFP Ventures LLC.  In addition, on Nov. 26, 2007, Pierce participated in a bank fraud scheme wherein he caused the submission of a false loan application to a mortgage lender on which he falsely reported that the buyer was paying $77,900 for a residential property without disclosing that the buyer received a $46,340 “kickback” from the seller.

Sentencing is scheduled for July 8 before U.S. District Court Judge Arthur J. Tarnow of the Eastern District of Michigan.  Pierce faces a statutory maximum sentence of three years in prison for filing a false tax return and a statutory maximum sentence of 30 years in prison for conspiring to commit bank fraud, with maximum potential fines totaling $1.25 million.

Principal Deputy Assistant Attorney General Ciraolo commended special agents of IRS – Criminal Investigation, who investigated the case, and Trial Attorneys Mark McDonald and Christopher O’Donnell of the Tax Division, who are prosecuting the case.  She also thanked the U.S. Attorney’s Office in the Eastern District of Michigan for their assistance.

U.S. ANNOUNCES $5 MILLION REWARD FOR KARL LEE IN WEAPONS PROLIFERATION CASE

Photo Credit:  U.S. State Department

FROM:  U.S. STATE DEPARTMENT 
Transnational Organized Crime Rewards Program Announces Reward Offer for Li Fangwei

On April 29, 2014, the U.S. Department of State announced the second reward offer under the Transnational Organized Crime Rewards Program. The reward is for up to $5 million for information leading to the arrest and/or conviction of Chinese weapons proliferator Li Fangwei, also known as Karl Lee. (Photo At Right.)

Li Fangwei previously was sanctioned by the United States for his alleged role as a principal supplier to Iran’s ballistic missile program. According to the indictment, Li controls a large network of front companies he uses to move millions of dollars through U.S.-based financial institutions to conduct business in violation of the International Emergency Economic Powers Act (IEEPA) and the Weapons of Mass Destruction Proliferators Sanctions Regulations. Li Fangwei has also been charged with conspiring to commit wire fraud and bank fraud, a money laundering conspiracy, and two separate counts of wire fraud in connection with such illicit transactions.

The Transnational Organized Crime Rewards Program was established in 2013 as a tool to assist U.S. Government efforts to dismantle transnational criminal organizations and bring their leaders and members to justice. The Bureau of International Narcotics and Law Enforcement Affairs (INL) manages the program in coordination with U.S. federal law enforcement agencies. It is a key element of the White House Strategy to Combat Transnational Organized Crime.

The April 29 announcement was made in coordination with other U.S. agencies taking action against Li Fangwei. The U.S. Department of Justice unsealed an indictment against Li Fangwei on charges including conspiracy to commit money laundering, bank fraud, and wire fraud. The U.S. Department of the Treasury’s Office of Foreign Assets Control also added eight of Li Fangwei’s front companies to its List of Specially Designated Nationals and Blocked Persons, and the U.S. Department of Commerce announced the addition of nine of his China-based suppliers to its Entity List.

More information about Li Fangwei is available on the Transnational Organized Crime Rewards Program website at www.state.gov/tocrewards. Anyone with information on Li Fangwei should contact the Federal Bureau of Investigation via the Major Case Contact Center at 1-800-CALLFBI (225-5324) or the nearest U.S. Embassy or Consulate. All information will be kept strictly confidential.

SIX FLORIDIANS PLEAD GUILTY TO MORTGAGE FRAUD INVOLVING CONDOMINIUM DEVELOPMENTS

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, May 15, 2014

Six Miami-Area Residents Plead Guilty to Mortgage Fraud Scheme Involving Four Condominium Developments

Six Miami-area residents, including three former loan officers, pleaded guilty in the Southern District of Florida this week to participating in a fraudulent scheme designed to enrich real estate developers by selling condominium units to straw buyers.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Special Agent in Charge Phyllis Robinson of the Department of Housing and Urban Development’s Office of the Inspector General (HUD-OIG) in Miami and Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency (FHFA) made the announcement.

Today, Leidy Masvidal, 42, of Miami, pleaded guilty before U.S. District Court Judge Marcia G. Cooke to conspiring to commit bank fraud.   Sentencing is scheduled for Sept. 24, 2014.   Alfredo Jesus Chacon, 48, of Orange Park, Florida, and Francisco Martos, 63, and Dorian Wong Magarino, 49, both of Miami, also pleaded guilty today to conspiring to commit wire fraud and mail fraud before U.S. District Court Judge Ursula Ungaro.   Sentencing is scheduled for Aug. 1, 2014.

On May 14, 2014, Tania Masvidal, 49, and Douglas Ponce, 40, both of Miami, each pleaded guilty before Judge Cooke to conspiring to commit bank fraud.  Sentencing is scheduled for July 30, 2014.

According to the defendants’ plea agreements and other court documents, the defendants participated in a scheme to pay straw buyers to submit false loan applications to lending institutions to purchase condominiums owned by co-conspirators.   Leidy Masvidal and Tania Masvidal used a mortgage brokerage they owned, EZY Mortgage Inc., to arrange financing for the purchases.   Because the straw buyers were not credit-worthy, the Masvidals secured loans in their names by submitting to lending institutions loan applications and other fraudulent documents containing false statements about the buyers’ income, employment and assets, and falsely stating that the buyers intended to reside in the properties.   Additionally, the Masvidals enabled their co-conspirators to secretly fund the buyers’ obligations to pay money at closing (known as “cash to close” obligations) by establishing shell corporations, which the co-conspirators used to funnel cash from conspirators to the escrow account used at closing, as well as paying the straw buyers.   The co-conspirators compensated the Masvidals for their role in the scheme by sending kickback payments taken from the loan proceeds to the Masvidals’ shell corporations for every straw buyer identified.

According to admissions in court records, Martos was a former loan officer at a mortgage company known as State Lending who helped secure financing for straw buyers in exchange for kickbacks by procuring false employment documents and by including false information in buyers’ loan applications. Chacon and Ponce recruited straw buyers to purchase properties owned by co-conspirators in exchange for kickbacks paid from the sales proceeds.   Chacon also allowed a company that he controlled to be used as a false employer for the straw buyers.   Magarino accepted payments to act as one of Chacon’s straw buyers and recruited other straw buyers into the scheme.   For the properties in which Margarino acted as the straw buyer, he represented to the lender that he personally met his cash-to-close obligations when in fact he knowingly paid these costs with funds supplied by conspirators.

Many of the straw buyers defaulted on their loans after the conspirators stopped making their mortgage payments on their behalf, causing millions of dollars in losses to lenders.

On March 31, 2014, Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez, Marie Mendez, Wilkie Perez and Enrique Angulo were indicted in the Southern District of Florida for their alleged participation in this scheme.   They have pleaded not guilty and trial is currently set for Sept. 8, 2014.   The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The case is being investigated by HUD-OIG and FHFA-OIG.  The case is being prosecuted by Trial Attorneys Gary A. Winters and Brian Young of the Criminal Division’s Fraud Section.

AMERICAN POWER GANG LEADERS CONVICTED IN RACKETEERING CONSPIRACY

FROM:  U.S. JUSTICE DEPARTMENT

Thursday, April 17, 2014

Armenian Power Gang Leaders Convicted for Their Role in Racketeering Conspiracy

Two leaders of the Armenian Power gang were found guilty today by a federal jury in Los Angeles for their participation in a racketeering conspiracy that included extortion, bank fraud targeting elderly bank customers and a sophisticated credit and debit card skimming scheme that stole account numbers and   personal identification numbers (PINs) from thousands of people who used their cards at 99 Cents Only Stores throughout Southern California.

Armenian Power leaders Mher “Capone” Darbinyan and Arman “Horse” Sharopetrosian were each found guilty for their roles in a racketeering conspiracy, and an associate of the gang, Rafael Parsadanyan, was found guilty for his role in the 99 Cents Only Stores skimming scheme.

Acting Assistant Attorney General David O’Neil of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement following a four-week jury trial before United States District Judge R. Gary Klausner of the Central District of California.

Darbinyan, 38, of Valencia, was found guilty of 57 criminal counts, including racketeering conspiracy, extortion conspiracy, extortion, bank fraud, access device fraud conspiracy, aggravated identity theft and possession of a firearm by a convicted felon.   According to the evidence presented at trial, Darbinyan was a powerful leader of Armenian Power who operated a sophisticated bank fraud scheme that used middlemen and runners to deposit and cash hundreds of thousands of dollars in fraudulent checks drawn on the accounts of elderly customers and jewelry businesses.   Darbinyan also organized and operated a sophisticated debit card skimming operation targeting customers of 99 Cents Only Stores.   This expansive scheme involved installation of skimmers in stores that were used to steal customers’ debit card numbers and PINs.   The scheme targeted stores throughout Southern California and involved the bank accounts of thousands of customers of the discount store.   Separately, Darbinyan conspired to extort and extorted funds from a member of the Armenian community using threats of violence.   He also possessed, on two separate occasions, firearms and ammunition after having previously been convicted of felony grand theft for his role in a 2004 debit card fraud scheme.

Sharopetrosian, 35, was convicted of three counts: racketeering conspiracy, extortion conspiracy and extortion.   The evidence at trial showed that while Sharopetrosian was incarcerated in Avenal State Prison in 2009, he directed the extortion of a member of the Armenian community.   Sharopetrosian worked together with Darbinyan and others to carry out the extortion over a period of six months, at one point even arranging the kidnapping of the victim in order to hasten the extortion payments.   Sharopetrosian, at different times, threatened to kill and kidnap the victim to coerce the victim into paying him over $100,000.

Parsadanyan, 29, of Los Angeles, was convicted of 14 counts of bank fraud for his role in the 99 Cents Only Store scheme.    The evidence at trial showed that Parsadanyan assisted Darbinyan by, among other things, collecting and storing proceeds of the fraud scheme, including delivering approximately $34,000 in criminal proceeds to a co-schemer.

Darbinyan is scheduled to be sentenced on July 21, 2014.   Sharopetrosian is scheduled to be sentenced on Sept.15, 2014.   Parsadanyan is scheduled to be sentenced on July 14, 2014.

Darbinyan, Sharopetrosian and Parsadanyan were among 90 individuals charged in 2011 in two indictments targeting Armenian Power.   One indictment accused 29 defendants, including Darbinyan and Sharopetrosian, of participating in the Armenian Power racketeering conspiracy that involved a host of illegal activities such as sophisticated bank fraud schemes, identity theft, debit card skimming and manufacturing counterfeit checks.   Some defendants in the case were charged with participating in a variety of violent crimes, such as kidnapping, extortion and firearms offenses.

According to court documents, the Armenian Power street gang formed in the East Hollywood area of Los Angeles in the 1980s.   The gang’s membership consisted primarily of individuals of Armenian descent, as well as of other countries within the former Soviet bloc.   Armenian Power has more than 250 documented members, as well as hundreds of associates.   According to court documents, Armenian Power members and associates regularly carry out violent criminal acts, including murders, attempted murders, kidnappings, robberies, extortions and witness intimidation to enrich its members and associates and preserve and enhance the power of the criminal enterprise.

Out of the 90 defendants charged in the two indictments, 85 have now been convicted.   Two of the defendants are still pending trial, two defendants are fugitives and prosecutors dismissed charges against one defendant.   The charges contained in the indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The case was investigated by the Eurasian Organized Crime Task Force, which is composed of the FBI, the Glendale Police Department, the Los Angeles Police Department, the Burbank Police Department, the Los Angeles Sheriff’s Department, IRS – Criminal Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the U.S. Secret Service.   The Huntington Beach Police Department and the Beverly Hills Police Department provided assistance.

The case is being prosecuted by Trial Attorney Andrew Creighton of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys E. Martin Estrada and Elizabeth Yang of the Central District of California.

NINE FACE CHARGES IN "ZEUS" MALWARE MULTIMILLION DOLLAR IDENTITY THEFT CONSPIRACY

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, April 11, 2014

Nine Charged in Conspiracy to Steal Millions of Dollars Using “Zeus” Malware

Two Defendants Extradited to U.S. Will Make Initial Court Appearance Today

Nine  alleged members of a wide-ranging racketeering enterprise and conspiracy who infected thousands of business computers with malicious software known as “Zeus” have been charged in an indictment unsealed today in Lincoln, Neb.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Deborah R. Gilg for the District of Nebraska and Special Agent in Charge Thomas R. Metz of the FBI’s Omaha Division made the announcement.

The indictment alleges that the “Zeus” malware captured passwords, account numbers, and other information necessary to log into online banking accounts.  The conspirators allegedly used the information captured by “Zeus” to steal millions of dollars from account-holding victims’ bank accounts.

The indictment was unsealed in connection with the arraignment this afternoon at the federal courthouse in Lincoln of two Ukrainian nationals, Yuriy Konovalenko, 31, and Yevhen Kulibaba, 36.  Konovalenko and Kulibaba were recently extradited from the United Kingdom.  All of the defendants were charged by a federal grand jury in August 2012 with conspiracy to participate in racketeering activity, conspiracy to commit computer fraud and identity theft, aggravated identity theft, and multiple counts of bank fraud.

“The ‘Zeus’ malware is one of the most damaging pieces of financial malware that has ever been used,” said Acting Assistant Attorney General O’Neil.  “As the charges unsealed today demonstrate, we are committed to making the Internet more secure and protecting the personal information and bank accounts of American consumers.  With the invaluable cooperation of our foreign law enforcement partners, we will continue to bring to justice cyber criminals who steal the money of U.S. citizens.”

“In this case, the victims included a Nebraska bank and a Nebraska company,” said U.S. Attorney Gilg.  “This demonstrates the global reach of cybercrime and the significant threat to our financial infrastructure.  We are grateful for the collaboration of our international and federal law enforcement partners in this complex financial fraud crime."

This case illustrates the vigorous cooperation between national and global law enforcement agencies and sends a strong message to cyber thieves,” said FBI SAC Metz.  “The FBI and our international partners will continue to devote resources to finding better ways to safeguard our systems, fortify our cyber defenses and stop those who do us harm."

According to the indictment, the defendants participated in an enterprise and scheme that installed, without authorization, malicious software known as “Zeus” or “Zbot” on victims’ computers.  The defendants are charged with using that malicious software to capture bank account numbers, passwords, personal identification numbers, RSA SecureID token codes and similar information necessary to log into online banking accounts.  The indictment alleges that the defendants falsely represented to banks that they were employees of the victims and authorized to make transfers of funds from the victims’ bank accounts, causing the banks to make unauthorized transfers of funds from the victims’ accounts.

As part of the enterprise and scheme, the defendants allegedly used as “money mules” residents of the United States who received funds transferred over the Automated Clearing House network or through other interstate wire systems from victims’ bank accounts into the money mules’ own bank accounts.  These “money mules” then allegedly withdrew some of those funds and wired the money overseas to conspirators.

According to court documents unsealed today, Kulibaba allegedly operated the conspirators’ money laundering network in the United Kingdom by providing money mules and their associated banking credentials to launder the money withdrawn from U.S.-based victim accounts.  Konovalenko allegedly provided money mules’ and victims’ banking credentials to Kulibaba and facilitated the collection of victims’ data from other conspirators.

The following four identified defendants remain at large:

• Vyacheslav Igorevich Penchukov, 32, of Ukraine, who allegedly coordinated the exchange of stolen banking credentials and money mules and received alerts once a bank account had been compromised.
• Ivan Viktorvich Klepikov, 30, of Ukraine, the alleged systems administrator who handled the technical aspects of the criminal scheme and also received alerts once a bank account had been compromised.
• Alexey Dmitrievich Bron, 26, of Ukraine, the alleged financial manager of the criminal operations who managed the transfer of money through an online money system known as Webmoney.
• Alexey Tikonov, of Russia, an alleged coder or developer who assisted the criminal enterprise by developing new codes to compromise banking systems.

The indictment also charges three other individuals as John Doe #1, John Doe #2 and John Doe #3.

The case was investigated by the FBI’s Omaha Cyber Task Force.  The Metropolitan Police Service of the United Kingdom, the National Police of the Netherlands’s National High Tech Crime Unit and the Security Service of Ukraine provided significant assistance in the investigation.

The case is being prosecuted by Trial Attorney William A. Hall, Jr. of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Steven A. Russell of the District of Nebraska. The Office of International Affairs in the Justice Department’s Criminal Division provided valuable assistance with the extradition.

The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

JUSTICE ANNOUNCES INDICTMENTS IN FLORIDA MORTGAGE FRAUD SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, March 31, 2014
Seven Indicted in Florida in Mortgage Scheme

Seven individuals have been indicted in the Southern District of Florida for their alleged participation in a mortgage fraud scheme in the Miami area.

The charges were announced by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Inspector General David A. Montoya of the Department of Housing and Urban Development and Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency’s Office of the Inspector General.

A 19-count indictment, returned on March 13, 2014, by a federal grand jury and unsealed today, charges Miami-Dade County residents Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez, Marie Mendez, Wilkie Perez and Enrique Angulo with one count of conspiracy to commit wire and bank fraud.   Some of those defendants have also been charged with bank fraud and wire fraud.   Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez and Marie Mendez were taken into custody today and made their initial appearances before United States Magistrate Judge Jonathan Goodman in Miami, while the other three defendants remain at large.

As alleged in the indictment, Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez and Marie Mendez owned or controlled various real estate properties in the Miami area.   They enlisted mortgage brokers and other individuals, including Perez and Angulo, to recruit straw buyers to act as qualifying mortgage applicants to fraudulently purchase condominiums in the properties.   The defendants prepared and caused to be prepared loan documents containing false statements and representations relating to the buyers’ income, assets and other information necessary to enable lenders to assess the buyers’ qualifications to borrow money, which induced the lenders to make loans to finance the condominiums.   Luis Michael Mendez and Marie Mendez are alleged to have submitted their own fraudulent loan applications for two condominiums, and they, as well as Luis Mendez and Stavroula Mendez, advanced the buyers cash to close the transactions.

After the loans were funded, the defendants allegedly caused fraudulent payments to be made from the loan proceeds to pay kickbacks through shell companies to the brokers, recruiters and straw buyers, as well as to pay the mortgages to conceal the conspiracy.   Eventually, the conspirators were unable to make mortgage payments, causing many of the condominium units to go into foreclosure and leading to losses by the lenders.

The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The case is being investigated by HUD-OIG and FHFA-OIG.  The case is being prosecuted by Trial Attorneys Gary A. Winters and Brian Young of the Criminal Division’s Fraud Section.

SPYEYE MALWARE DISTRIBUTOR PLEADS GUILTY TO FRAUD CHARGES

FROM:  JUSTICE DEPARTMENT 
Tuesday, January 28, 2014
Cyber Criminal Pleads Guilty to Developing and Distributing Notorious Spyeye Malware

Aleksandr Andreevich Panin, a Russian national also known as “Gribodemon” and “Harderman,” has pleaded guilty to conspiracy to commit wire and bank fraud for his role as the primary developer and distributor of the malicious software known as “SpyEye,” which, according to industry estimates, has infected over 1.4 million computers in the United States and abroad.

Acting Assistant Attorney General Mythili Raman of the Department of Justice’s Criminal Division, U.S. Attorney Sally Quillian Yates of the Northern District of Georgia and Acting Special Agent in Charge Ricky Maxwell of the FBI’s Atlanta Field Office made the announcement.

“Given the recent revelations of massive thefts of financial information from large retail stores across the country, Americans do not need to be reminded how devastating it is when cyber criminals surreptitiously install malicious codes on computer networks and then siphon away private information from unsuspecting consumers,” said Acting Assistant Attorney General Raman.  “Today, thanks to the tireless work of prosecutors and law enforcement agents, Aleksandr Panin has admitted to his orchestration of this criminal scheme to use ‘SpyEye’ to invade the privacy of Americans by infecting their computers through a dangerous botnet.  As this prosecution shows, cyber criminals – even when they sit on the other side of the world and attempt to hide behind online aliases – are never outside the reach of U.S. law enforcement.”

“As several recent and widely reported data breaches have shown, cyber-attacks pose a critical threat to our nation’s economic security,” said U.S. Attorney Yates. “Today’s plea is a great leap forward in our campaign against those attacks.   Panin was the architect of a pernicious malware known as ‘SpyEye’ that infected computers worldwide.   He commercialized the wholesale theft of financial and personal information.   And now he is being held to account for his actions.   Cyber criminals be forewarned: you cannot hide in the shadows of the Internet.   We will find you and bring you to justice.”

“This investigation highlights the importance of the FBI’s focus on the top echelon of cyber criminals,” said Acting FBI SAC Maxwell.   “The apprehension of Mr. Panin means that one of the world’s top developers of malicious software is no longer in a position to create computer programs that can victimize people around the world.   Botnets such as SpyEye represent one of the most dangerous types of malicious software on the Internet today, which can steal people’s identities and money from their bank accounts without their knowledge.   The FBI will continue working with partners domestically and internationally to combat cyber-crime.”

According to the charges and other information presented in court, SpyEye is a sophisticated malicious computer code that is designed to automate the theft of confidential personal and financial information, such as online banking credentials, credit card information, usernames, passwords, PINs, and other personally identifying information.   The SpyEye virus facilitates this theft of information by secretly infecting victims’ computers, enabling cyber criminals to remotely control the infected computers through command and control (C2) servers.   Once a computer is infected and under their control, cyber criminals can remotely access the infected computers, without authorization, and steal victims’ personal and financial information through a variety of techniques, including “web injects,” “keystroke loggers,” and “credit card grabbers.”   The victims’ stolen personal and financial data is then surreptitiously transmitted to the C2 servers, where it is used to steal money from the victims’ financial accounts.

Panin was the primary developer and distributor of the SpyEye virus.   Operating from Russia from 2009 to 2011, Panin conspired with others, including codefendant Hamza Bendelladj, an Algerian national also known as “Bx1,” to develop, market and sell various versions of the SpyEye virus and component parts on the Internet.   Panin allowed cyber criminals to customize their purchases to include tailor-made methods of obtaining victims’ personal and financial information, as well as marketed versions that specifically targeted designated financial institutions.   Panin advertised the SpyEye virus on online, invitation-only criminal forums.   He sold versions of the SpyEye virus for prices ranging from $1,000 to $8,500.   Panin is believed to have sold the SpyEye virus to at least 150 “clients,” who, in turn, used them to set up their own C2 servers.   One of Panin’s clients, “Soldier,” is reported to have made more than $3.2 million in a six-month period using the SpyEye virus.

According to industry estimates, the SpyEye virus has infected more than 1.4 million computers in the United States and abroad, and it was the preeminent malware toolkit used from approximately 2009 to 2011.   Based on information received from the financial services industry, over 10,000 bank accounts have been compromised by SpyEye infections since 2013 alone.   Some cyber criminals continue to use SpyEye today, although its effectiveness has been limited since software makers have added SpyEye to malicious software removal programs.

In February 2011, pursuant to a federal search warrant, the FBI searched and seized a SpyEye C2 server allegedly operated by Bendelladj in the Northern District of Georgia.   That C2 server controlled over 200 computers infected with the SpyEye virus and contained information from numerous financial institutions.

In June and July 2011, FBI covert sources communicated directly with Panin, who was using his online nicknames “Gribodemon” and “Harderman,” about the SpyEye virus.   FBI sources then purchased a version of SpyEye from Panin that contained features designed to steal confidential financial information, initiate fraudulent online banking transactions, install keystroke loggers, and initiate distributed denial of service (DDoS) attacks from computers infected with the malware.

On Dec. 20, 2011, a Northern District of Georgia grand jury returned a 23-count indictment against Panin, who had yet to be fully identified, and Bendelladj.   The indictment charged one count of conspiracy to commit wire and bank fraud, 10 counts of wire fraud, one count of conspiracy to commit computer fraud, and 11 counts of computer fraud. A superseding indictment was subsequently returned identifying Panin by his true name.

Bendelladj was apprehended at Suvarnabhumi Airport in Bangkok, Thailand, on Jan. 5, 2013 and was extradited from Thailand to the United States on May 2, 2013.   His charges are currently pending in the Northern District of Georgia.

Panin was arrested by U.S. authorities on July 1, 2013, when he flew through Hartsfield-Jackson Atlanta International Airport.

The investigation also has led to the arrest of four of Panin’s SpyEye clients and associates in the United Kingdom and Bulgaria.

On Jan. 28, 2014, Panin pleaded guilty to conspiring to commit wire and bank fraud.   Sentencing for Panin is scheduled for April 29, 2014, before United States District Judge Amy Totenberg of the Northern District of Georgia.

The case is being investigated by the FBI.   Assistant United States Attorney Scott Ferber of the Northern District of Georgia, Trial Attorney Ethan Arenson of the Criminal Division’s Computer Crime and Intellectual Property Section and Senior Litigation Counsel Carol Sipperly of the Criminal Division’s Fraud Section are prosecuting the case.   Former Assistant United States Attorney Nicholas Oldham also participated in the prosecution while with the Criminal Division.

Valuable assistance was provided by the Criminal Division’s Office of International Affairs and the following international law enforcement agencies:   The United Kingdom’s National Crime Agency, the Royal Thai Police-Immigration Bureau, the National Police of the Netherlands - National High Tech Crime Unit (NHTCU), Dominican Republic’s Departamento Nacional de Investigaciones (DNI), the Cybercrime Department at the State Agency for National Security-Bulgaria and the Australian Federal Police (AFP).

Valuable assistance also was provided by the following private sector partners: Trend Micro’s Forward-looking Threat Research (FTR) Team, Microsoft’s Digital Crimes Unit, Mandiant, Dell SecureWorks, Trusteer and the Norwegian Security Research Team known as “Underworld.no”.

8 PLEAD GUILTY IN THE CASE OF THE ARMENIAN POWER GANG

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, September 11, 2013

Eight Defendants Plead Guilty in Los Angeles in Armenian Power Gang Case
Four members and associates of the Armenian Power gang and four other individuals pleaded guilty late yesterday to charges relating to the activities of the Armenian Power criminal enterprise, including racketeering conspiracy, bank fraud, aggravated identity theft, drug-trafficking and illegal possession of firearms.

The guilty pleas were announced today by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office.

 The following defendants pleaded guilty before U.S. District Judge Dean D. Pregerson in the Central District of California:

• Karo Yerkanyan, aka “Guilty,” 32, of Tujunga, Calif., pleaded guilty to racketeering conspiracy, bank fraud, aggravated identity theft, conspiracy to possess with intent to distribute marijuana and felon-in-possession of a firearm;

• Arman Tangabekyan, aka “Spito” and “Thick Neck,” 34, of Encino, Calif., pleaded guilty to racketeering conspiracy, bank fraud and aggravated identity theft;

• Artur Pembejian, aka “Cham,” 36, of Burbank, Calif., pleaded guilty to racketeering conspiracy;

• Raymond Tarverdyan, aka “Rye,” 35, of Montrose, Calif., pleaded guilty to racketeering conspiracy and bank fraud;

• Simon Antonyan, aka “Simo,” 38, of Hollywood, Calif., pleaded guilty to aggravated identity theft;

• Khachatur Arakelyan, aka “Khecho,” 39, of Glendale, Calif., pleaded guilty to aggravated identity theft;

• Vartenie Ananian, 29, of Tujunga, pleaded guilty to bank fraud; and

• Adam Davoodian, 32, of Glendale, Calif., pleaded guilty to conspiracy to possess with intent to distribute marijuana.

The defendants who pleaded guilty yesterday were among 70 individuals charged in a 140-count indictment in July 2011 for criminal activities associated with the Armenian Power gang.  The indictment accused 29 defendants, including four of those who pleaded guilty yesterday, of participation in the Armenian Power RICO conspiracy.  The RICO conspiracy charge alleges a host of illegal activities, many of which involved sophisticated fraudulent schemes of identity theft, bank fraud, credit card skimming, manufacturing counterfeit checks and laundering criminal proceeds, often electronically.  In addition, defendants were involved in a variety of violent crimes, such as extortion, kidnapping and firearms offenses.  Among the schemes charged in the racketeering indictment is a bank fraud and identity theft scheme that victimized hundreds of customers of 99 Cents Only Stores throughout Southern California.  Through the scheme, defendants caused more than $2 million in losses when they secretly installed sophisticated “skimming” devices to steal customer debit card account information at cash registers, and then used the skimmed information to create counterfeit debit cards to steal money from victims’ bank accounts.

The eight defendants who pleaded guilty yesterday played various roles in the activities of the Armenian Power gang, including participating in bank fraud, drug distribution, access device fraud, identity theft and illegal firearm possession.

Yerkanyan, a member of the Armenian Power conspiracy, participated in a bank fraud scheme that obtained the personal identifying information and account information of victims.  He and his co-conspirators used the information to open fraudulent bank accounts, loans and lines of credit at HSBC Bank and Bank of America without the knowledge of the victims.  Tangabekyan, a member of the Armenian Power conspiracy, participated in a bank fraud scheme by obtaining personal information and account information for victims and then obtaining or transferring over $475,000 in funds.

Yerkanyan also participated, along with Davoodian, in a scheme to steal approximately 207 pounds of marijuana, worth approximately $450,000, from another drug distributor.

Pembejian, a member of the Armenian Power conspiracy, abetted the illegal possession of a firearm by a leader of the Armenian Power gang, Mher Darbinyan.

Tarverdyan, an Armenian Power member, and Antonyan, Arakelyan and Ananian participated in the scheme to install secret “skimming” devices at the 99 Cents Only Stores in order to obtain victims’ account information.

According to court documents, the Armenian Power street gang formed in the East Hollywood district of Los Angeles in the 1980s.  The gang’s membership consisted primarily of individuals of Armenian descent, as well as of other countries within the former Soviet bloc.  The Armenian Power has been designated under California state law as a criminal street gang and is believed to have over 250 documented members, as well as hundreds of associates. According to court documents, Armenian Power members and associates regularly carry out violent criminal acts, including murders, attempted murders, kidnappings, robberies, extortions, and witness intimidation in order to enrich its members and associates and preserve and enhance the power of the criminal enterprise.

The defendants are scheduled to be sentenced beginning on Nov. 25, 2013.  Yerkanyan faces a maximum penalty of 102 years in prison.  Tangabekyan faces a maximum penalty of 52 years in prison.  Tarverdyan faces a maximum penalty of 50 years in prison.  Ananian faces a maximum penalty of 30 years in prison.  Pembejian and Davoodian each face a maximum penalty of 20 years in prison.  And Antonyan and Arakelyan each face a maximum penalty of two years in prison.

Fifty-one defendants have previously pleaded guilty for their roles in the activities of the Armenian Power gang.

The case is being prosecuted by Assistant U.S. Attorneys Martin Estrada, Elizabeth Yang and Stephen Wolfe of the Central District of California and Trial Attorney Andrew Creighton of the Criminal Division’s Organized Crime and Gang Section.  The case was investigated by the Eurasian Organized Crime Task Force, which is comprised of the FBI, the U.S. Secret Service, the Los Angeles Police Department, the Glendale Police Department, the Burbank Police Department, the Internal Revenue Service and U.S. Immigration and Customs Enforcement – Homeland Security Investigations.

MAJOR MORTGAGE COMPANY EXECUTIVE GOES TO PRISON FOR FRAUD

FROM:  U.S. DEPARTMENT OF JUSTICE
Friday, June 15, 2012
Former Chief Financial Officer of Taylor, Bean & Whitaker Sentenced to 60 Months in Prison for Fraud Scheme
WASHINGTON – Delton de Armas, a former chief financial officer (CFO) of Taylor, Bean & Whitaker Mortgage Corp. (TBW), was sentenced today to 60 months in prison for his role in a more than $2.9 billion fraud scheme that contributed to the failure of TBW
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De Armas was sentenced today by U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia.  The sentence was announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Christy Romero, Special Inspector General, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; David A. Montoya, 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 Richard Weber, Chief of the Internal Revenue Service Criminal Investigation (IRS-CI).

De Armas, 41, of Carrollton, Texas, pleaded guilty in March to one count of conspiracy to commit bank and wire fraud and one count of making false statements.

“For years, Mr. de Armas, the CFO of one of the country’s largest private mortgage companies, helped defraud financial institutions by concealing from them billions of dollars in losses,” said Assistant Attorney General Breuer.  “His lies and deceits contributed to the devastating losses suffered by major institutional investors.  As a consequence for his crimes, he will now spend the next five years of his life behind bars.”

“As CFO, Mr. de Armas could have – and should have – put a stop to the massive fraud at TBW the moment he discovered it,” said U.S. Attorney MacBride. “Instead, he and others lied for years on end to investors, banks, regulators and auditors and caused more than $2.4 billion in losses to major financial institutions.”

“Rather than blow the whistle on billions of dollars in fraud, de Armas chose to help conceal it,” said Special Inspector General Romero.  “This CFO lied to investors, banks, regulators and auditors to cover up the massive fraud scheme which resulted in the failure of both TBW and Colonial Bank.  The court’s decision to sentence de Armas to five years in prison reflects the seriousness of his role as a gatekeeper within TBW and the contribution of his crime to our nation’s financial crisis.”

“The actions of Mr. De Armas and others resulted in the loss of billions of dollars to major financial institutions,” said Assistant Director in Charge McJunkin.  “Today’s sentence serves as a warning to anyone who attempts to take advantage of investors and our banking system.  Together with our law enforcement partners, the FBI will pursue justice for anyone involved in such fraudulent schemes.”

According to court documents, de Armas joined TBW in 2000 as its CFO and reported directly to its chairman, Lee Bentley Farkas, and later to its CEO, Paul Allen.  He previously admitted in court that from 2005 through August 2009, he and other co-conspirators engaged in a scheme to defraud financial institutions that had invested in a wholly-owned lending facility called Ocala Funding.  Ocala Funding obtained funds for mortgage lending for TBW from the sale of asset-backed commercial paper to financial institutions, including Deutsche Bank and BNP Paribas. The facility was managed by TBW and had no employees of its own.

According to court records, shortly after Ocala Funding was established, de Armas learned there were inadequate assets backing its commercial paper, a deficiency referred to internally at TBW as a “hole” in Ocala Funding.  De Armas knew that the hole grew over time to more than $700 million.  He learned from the CEO that the hole was more than $1.5 billion at the time of TBW’s collapse.  De Armas admitted he was aware that, in an effort to cover up the hole and mislead investors, a subordinate who reported to him had falsified Ocala Funding collateral reports and periodically sent the falsified reports to financial institution investors in Ocala Funding and to other third parties.  De Armas acknowledged that he and the CEO also deceived investors by providing them with a false explanation for the hole in Ocala Funding.

De Armas also previously admitted in court that he directed a subordinate to inflate an account receivable balance for loan participations in TBW’s financial statements.  De Armas acknowledged that he knew that the falsified financial statements were subsequently provided to Ginnie Mae and Freddie Mac for their determination on the renewal of TBW’s authority to sell and service securities issued by them.

In addition, de Armas admitted in court to aiding and abetting false statements in a letter the CEO sent to the U.S. Department of Housing and Urban Development, through Ginnie Mae, regarding TBW’s audited financial statements for the fiscal year ending on March 31, 2009.  De Armas reviewed and edited the letter, knowing it contained material omissions.  The letter omitted that the delay in submitting the financial data was caused by concerns its independent auditor had raised about the financing relationship between TBW and Colonial Bank and its request that TBW retain a law firm to conduct an internal investigation.  Instead, the letter falsely attributed the delay to a new acquisition and TBW’s switch to a compressed 11-month fiscal year.

“We are pleased to have joined our law enforcement colleagues in bringing Mr. de Armas to justice,” said Inspector General Rymer.  “The former Chief Financial Officer’s actions contributed to one of the largest bank frauds in the country and led to the demise of TBW.  His punishment, along with the earlier sentencings of other co-conspirators involved in the Colonial Bank and TBW scheme, sends a clear message that those who abuse their positions of trust and seek to undermine the integrity of the financial services industry will be held accountable.  We will continue to pursue such cases in the interest of ensuring the safety and soundness of our Nation’s banks and the strength of the financial services industry as a whole.”

“Delton de Armas was a key player in the TBW fraud; the significant sentence of 60 months handed down today appropriately takes that role into account,” said Inspector General Linick.

In April 2011, a jury in the Eastern District of Virginia found Lee Bentley Farkas, the chairman of TBW, guilty of 14 counts of conspiracy, bank, securities and wire fraud.  On June 30, 2011, Judge Brinkema sentenced Farkas to 30 years in prison.  In addition, six individuals have pleaded guilty for their roles in the fraud scheme, including: Paul Allen, former chief executive officer of TBW, who was sentenced to 40 months in prison; Raymond Bowman, former president of TBW, who was sentenced to 30 months in prison; Desiree Brown, former treasurer of TBW, who was sentenced to six years in prison; Catherine Kissick, former senior vice president of Colonial Bank and head of its Mortgage Warehouse Lending Division (MWLD), who was sentenced to eight years in prison; Teresa Kelly, former operations supervisor for Colonial Bank’s MWLD, who was sentenced to three months in prison; and Sean Ragland, a former senior financial analyst at TBW, who was sentenced to three months in prison.

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 Criminal Investigation.  The Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury also provided support in the investigation.  The Department would also like to acknowledge the substantial assistance of the SEC in the investigation of the fraud scheme.

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.

FOUR CONVICTED FOR ROLES IN IDENTITY THEFT RING

The following excerpt is from the Department of Justice website:
Thursday, March 22, 2012
Armenian Power Member and Three Armenian Power Associates Convicted in Los Angeles for Roles in Identity Theft Ring
WASHINGTON – After a five week trial, four defendants have been convicted for their roles in one of the largest bank fraud and identity theft schemes in California history, with dozens of victims in four states and millions of dollars in losses.

The convictions were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Andre Birotte Jr. of the Central District of California, Assistant Director in Charge of the FBI’s Los Angeles Field Office Steven Martinez and Special Agent in Charge of the U.S. Secret Service (USSS) Joseph Beaty.

Arman Sharopetrosian, Karen Markosian, Artush Margaryan and Kristine Ogandzhanyan were found guilty of conspiring to commit bank fraud, attempted bank fraud and various counts of aggravated identity theft.  Sharopetrosian, Markosian and Ogandzhanyan waived a jury trial and consented to trial by the judge, and Margaryan proceeded with a jury trial.

Yesterday, U.S. District Judge David O. Carter found Ogandzhanyan, 28, of Burbank, Calif., guilty of one count of bank fraud conspiracy, two counts of attempted bank fraud and four counts of aggravated identity theft.  On March 16, 2012, the judge found Sharopetrosian, 33, of Burbank, guilty of one count of bank fraud conspiracy, four counts of bank fraud and seven counts of aggravated identify theft.  On March 16, 2012, the judge also found Markosian, 39, of Glendale, Calif., guilty of one count of bank fraud conspiracy, one count of attempted bank fraud and two counts of aggravated identity theft.  A jury convicted the fourth defendant, Artush Margaryan, 28, of Van Nuys, Calif., on March 16, 2012, of one count of bank fraud conspiracy, one count of attempted bank fraud and three counts of aggravated identity theft.

Evidence was presented at trial that Sharopetrosian is a member of the Armenian Power organized crime group, and Margaryan, Markosian and Ogandzhanyan are Armenian Power associates.

According to evidence presented at trial, Sharopetrosian directed the massive fraud scheme along with co-defendant Angus Brown, while the two were incarcerated at Avenal State Prison.  Using cellular telephones that were smuggled into the prison, Sharopetrosian and Brown worked from behind bars to coordinate with others, including Ogandzhanyn, Markosian and Margaryan, to obtain confidential bank profile information and steal money from victim account holders.  Often targeting high-value bank accounts, the defendants used account holders’ personal identifying information – including names, Social Security numbers and dates of birth – to impersonate victims in phone calls to the bank.  The defendants gathered account information, transferred funds between victims’ accounts and placed unauthorized check orders for the accounts.  They then stole the checks, obtained the victims’ signatures from public documents and paid conspirators to cash the forged checks.  Over the course of the six-year conspiracy, the defendants and their co-conspirators caused more than $10 million dollars in losses to victims in Southern California, Nevada, Arizona and Texas.

“These defendants, including two individuals who were operating from a prison cell, perpetrated a massive fraudulent scheme on behalf of a dangerous criminal enterprise,” said Assistant Attorney General Breuer.  “As members and associates of Armenian Power, they stole sensitive personal and financial information from innocent consumers and caused millions of dollars in losses.  Whether organized criminal groups traffic in drugs, commit financial fraud or wreak other havoc to keep themselves going, they must be stopped.  We are doing everything possible to shut down dangerous gangs like Armenian Power.”

“The safety and sanctity of confidential financial information is paramount in today’s society,” said U.S. Attorney Birotte.  “Identity theft is a fundamental invasion of consumer privacy that cannot be tolerated.  These convictions demonstrate that violators, whoever and wherever they may be, will be caught and will be prosecuted to the fullest extent of the federal law.”

“The defendants were convicted in a trial that uncovered a sophisticated and lengthy scheme that targeted victims in multiple states, and included disturbing details, such as orders made from within prison walls and assistance from bank insiders enlisted by the defendants,” said FBI Assistant Director Martinez.  “This case is also indicative of the growing trend of gang or organized crime-affiliated groups now engaging in identity theft and other financial crimes in furtherance of their enterprise.”  

These defendants are four of 20 defendants who were charged with operating the bank fraud and identity theft scheme in one of a series of federal indictments unsealed on Feb. 16, 2011.  The indictments allege various federal crimes against members and associates of the Armenian Power criminal organization.  To date, 19 of the 20 defendants charged in the bank fraud indictment have been convicted, including Brown.  One defendant, Faye Bell, was arrested earlier this year and is still awaiting trial.

Sharopetrosian, Margaryan, Markosian and Ogandzhanyan face maximum sentences of 30 years in federal prison for each count of bank fraud, 30 years for each count of conspiracy to commit bank fraud and additional mandatory two year sentences for each count of aggravated identity theft.

 Sentencing for all four defendants is scheduled for Aug. 6, 2012, before Judge Carter.

The case is being prosecuted by Assistant U.S. Attorneys Martin Estrada and Joseph McNally of the Central District of California and Trial Attorney Cristina Moreno of the Organized Crime and Gang Section in the Justice Department’s Criminal Division.  The case was investigated by the Eurasian Organized Crime Task Force, which includes the FBI, the USSS, the Los Angeles Police Department, the Glendale Police Department, the Burbank Police Department, the Internal Revenue Service and the U.S. Immigration and Customs Enforcement.