TWO ARMY NATIONAL GUARD SOLDIERS PLEAD GUILTY FOR ROLES IN BRIBERY AND FRAUD SCHEMES

FROM:  U.S. JUSTICE DEPARTMENT 
Friday, December 13, 2013
Two Army National Guard Soldiers Plead Guilty in Connection with Bribery and Fraud Schemes to Defraud the U.s. Army National Guard Bureau
To Date, 19 Individuals Have Pleaded Guilty in Ongoing Corruption Investigation

Two U.S. Army National Guard soldiers pleaded guilty for their roles in bribery and fraud schemes that caused a total of at least $70,000 in losses to the U.S. Army National Guard Bureau.   Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas made the announcement.

Specialist Edia Antoine, 28, and former Staff Sergeant Ernest Millien, 49, both of Houston, each pleaded guilty to one count of conspiracy and one count of bribery.   The cases against both defendants arise from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging corruption scheme to illegally obtain fraudulent recruiting bonuses.   To date, the investigation has led to charges against 25 individuals, 19 of whom have pleaded guilty.

According to court documents filed in both cases, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. (Docupak) to administer the Guard Recruiting Assistance Program (G-RAP).   The G-RAP was a recruiting program that offered monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard.   Through this program, a participating soldier could receive up to $3,000 in bonus payments for referring another individual to join.   Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account.   To participate in the program, soldiers were required to create online recruiting assistant accounts.

Antoine and Millien both admitted they paid Army National Guard recruiters for the names and Social Security numbers of potential Army National Guard soldiers.   They used the personal identifying information for these potential soldiers to claim that they were responsible for referring these potential soldiers to join the Army National Guard, when in fact they had not referred them.   As a result of these fraudulent representations, Antoine and Millien collected approximately $17,000 and at least $12,500 in fraudulent bonuses, respectively.

The charge of bribery carries a maximum penalty of 15 years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss.   The charge of conspiracy carries a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss.

Antoine and Millien are scheduled to be sentenced before U.S. District Judge Lee H. Rosenthal of the Southern District of Texas on June 24, 2014.

These cases are being investigated by Special Agents from the San Antonio Fraud Resident Agency of Army Criminal Investigation Command’s Major Procurement Fraud Unit.  The cases are being prosecuted by Trial Attorneys Sean F. Mulryne, Mark J. Cipolletti and Heidi Boutros Gesch of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John Pearson of the Southern District of Texas.

GERMAN ENGINEERING FIRM RESOLVES FCPA CHARGES, WILL PAY $32 MILLION

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, December 11, 2013
German Engineering Firm Bilfinger Resolves Foreign Corrupt Practices Act Charges and Agrees to Pay $32 Million Criminal Penalty

Bilfinger SE, an international engineering and services company based in Mannheim, Germany, has agreed to pay a $32 million penalty to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA) by bribing government officials of the Federal Republic of Nigeria to obtain and retain contracts related to the Eastern Gas Gathering System (EGGS) project, which was valued at approximately $387 million.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.

As part of the agreed resolution, the department today filed a three-count criminal information in U.S. District Court for the Southern District of Texas charging Bilfinger with violating and conspiring to violate the FCPA’s anti-bribery provisions.   The department and Bilfinger agreed to resolve the charges by entering into a deferred prosecution agreement for a term of three years.   In addition to the monetary penalty, Bilfinger agreed to implement rigorous internal controls, continue cooperating fully with the department, and retain an independent corporate compliance monitor for at least 18 months.   The agreement acknowledges Bilfinger’s cooperation with the department and its remediation efforts.

According to court documents, from late 2003 through June 2005, Bilfinger conspired with Willbros Group Inc. and others to make corrupt payments totaling more than $6 million to Nigerian government officials to assist in obtaining and retaining contracts related to the EGGS project.   Bilfinger and Willbros formed a joint venture to bid on the EGGS project and inflated the price of the joint venture’s bid by 3 percent to cover the cost of paying bribes to Nigerian officials.   As part of the conspiracy, Bilfinger employees bribed Nigerian officials with cash that Bilfinger employees sent from Germany to Nigeria.   At another point in the conspiracy, when Willbros employees encountered difficulty obtaining enough money to make their share of the bribe payments, Bilfinger loaned them $1 million, with the express purpose of paying bribes to the Nigerian officials.

Including today’s action, the department has filed criminal charges in the Southern District of Texas against three institutions and four executives and consultants in connection with the EGGS bribery scheme:

·          On Sept. 14, 2006, Jim Bob Brown, a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract and in connection with his role in making corrupt payments in Ecuador.  Brown was sentenced on Jan. 28, 2010, to serve 12 months and one day in prison, to be followed by two years of supervised release, and ordered to pay a $17,500 fine.

·          On Nov. 5, 2007, Jason Steph, also a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract.   Steph was sentenced on Jan. 28, 2010, to serve 15 months in prison, to be followed by two years of supervised release, and ordered to pay a $2,000 fine.

·          On May 14, 2008, Willbros Group Inc. and Willbros International Inc. entered into a deferred prosecution agreement and agreed to pay a $22 million criminal penalty in connection with the company’s payment of bribes to government officials in Nigeria and Ecuador.   On March 30, 2012, the government moved to dismiss the charges against Willbros on the grounds that Willbros had satisfied its obligations under the deferred prosecution agreement, and on April 2, 2012, the court granted the United States’ motion.

·          On Dec. 19, 2008, Kenneth Tillery, a former Willbros executive, was charged with conspiring to make and making bribe payments to Nigerian and Ecuadoran officials in connection with the EGGS project and pipeline projects in Ecuador and conspiring to launder the bribe payments.   Tillery remains a fugitive.   The charges against Tillery are merely accusations, and he is presumed innocent unless and until proven guilty.

·          On Nov. 12, 2009, Paul Grayson Novak, a former Willbros consultant, pleaded guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract.   Novak was sentenced on May 3, 2013, to serve 15 months in prison, to be followed by two years of supervised release, and ordered to pay a $1 million fine.

The case was investigated by the FBI’s Washington Field Office and its team of special agents dedicated to the investigation of foreign bribery cases.   The case is being prosecuted by Senior Trial Attorney Laura N. Perkins of the Criminal Division’s Fraud Section.

OFFICIAL AT VENEZUELAN STATE DEVELOPMENT BANK PLEADS GUILTY FOR ROLE IN BRIBERY SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, November 18, 2013
High-Ranking Bank Official at Venezuelan State Development Bank Pleads Guilty to Participating in Bribery Scheme

A senior official in Venezuela’s state economic development bank has pleaded guilty in New York federal court to accepting bribes from agents and employees of a New York-based broker-dealer (Broker-Dealer) in exchange for directing her bank’s security-trading business to the Broker-Dealer.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York, and Assistant Director in Charge George Venizelos of the New York Office of the FBI made the announcement.

Maria De Los Angeles Gonzalez De Hernandez, 55, pleaded guilty today before U.S. District Judge Paul A. Engelmayer in the Southern District of New York to conspiring to violate the Travel Act and to commit money laundering, as well as substantive counts of these offenses.  Sentencing for Gonzalez is scheduled for Aug. 15, 2014, before Judge Engelmayer.
     
At all times relevant to the charges, Banco de Desarrollo Económico y Social de Venezuela (BANDES) was a state-run economic development bank in Venezuela.  The Venezuelan government had a majority ownership interest in BANDES and provided it with substantial funding.

According to court records, Gonzalez was an official at BANDES and oversaw the development bank’s overseas trading activity.  At her direction, BANDES conducted substantial trading through the Broker-Dealer.  Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed income investments for which the Broker-Dealer charged the bank a mark-up on purchases and a mark-down on sales.

From early 2009 through 2012, Gonzalez participated in a bribery scheme in which she directed trading business she controlled at BANDES to the Broker-Dealer and, in return, agents and employees of the Broker-Dealer shared the revenue the Broker-Dealer generated from this trading business with Gonzalez.  During this time period, the Broker-Dealer generated over $60 million in mark-ups and mark-downs from trades with BANDES.  Agents and employees of the Broker-Dealer devised a split with Gonzalez of the commissions paid by BANDES to the Broker-Dealer.  Emails, account records, and other documents collected from the Broker-Dealer and other sources reveal that Gonzalez received a substantial share of the revenue generated by the Broker-Dealer for BANDES-related trades.  Specifically, Gonzalez received millions in bribe payments from Broker-Dealer agents and employees.

Additionally, Gonzalez paid a portion of the bribe payments she received to another BANDES employee who was also involved in the scheme.

To further conceal the scheme, the kickbacks to Gonzalez were often paid using intermediary corporations and offshore accounts that Gonzalez and others held in Switzerland, among other places.

Previously, three former employees of the Broker-Dealer – Ernesto Lujan, Jose Alejandro Hurtado, and Tomas Alberto Clarke Bethancourt – each pleaded guilty in New York federal court to conspiring to violate the Foreign Corrupt Practices Act (FCPA), to violate the Travel Act and to commit money laundering, as well as substantive counts of these offenses, relating, among other things, to the scheme involving bribe payments to Gonzalez.  Sentencing for Lujan and Clarke is scheduled for Feb. 11, 2014, before U.S. District Judge Paul G. Gardephe.  Hurtado is scheduled for sentencing before U.S. District Judge Harold Baer Jr. on March 6, 2014.

This ongoing investigation is being conducted by the FBI, with assistance from the SEC and the Justice Department’s Office of International Affairs. Assistant Chief James Koukios and Trial Attorneys Maria Gonzalez Calvet and Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant United States Attorneys Harry A. Chernoff and Jason H. Cowley of the Southern District of New York’s Securities and Commodities Fraud Task Force are in charge of the prosecution.  Assistant United States Attorney Carolina Fornos is also responsible for the forfeiture aspects of the case

SOLDIER, CIVILIAN SENTENCED FOR ROLES IN FUEL THEFTS IN AFGHANISTAN

FROM:  U.S. JUSTICE DEPARTMENT 
Tuesday, October 29, 2013
Army Soldier and Civilian Sentenced on Bribery Charges for Facilitating Thefts of Fuel in Afghanistan

A former U.S. Army Sergeant and a co-conspirator have been sentenced in the District of Colorado for their roles in stealing fuel at Forward Operating Base (FOB) Fenty, Afghanistan, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division announced.

U.S. Army Sergeant Christopher Weaver, 30, of Fort Carson, Colo., was sentenced on Oct. 28, 2013, to serve 37 months in prison.  Weaver pleaded guilty Oct. 20, 2012, and was sentenced by U.S. District Court Judge Marcia S. Krieger.                    

Jonathan Hightower, 31, of Houston, Texas, who worked at FOB Fenty as a civilian employee of a contractor and who had conspired with Weaver, was also sentenced on Oct. 28, 2013, to serve 27 months in prison. He pleaded guilty Aug. 3, 2012, and was sentenced by U.S. District Court Judge William J. Martinez.

A third conspirator, former soldier Stephanie Charboneau, pleaded guilty on Sept. 5, 2013, before U.S. District Court Judge Philip A. Brimmer.  Her sentencing is set for Dec. 9, 2013.

Weaver and Hightower were also ordered to pay $1,225,000 in restitution, jointly with Charboneau.  Hightower was also ordered to pay $400,000 in restitution for a related fuel theft scheme that was the subject of the prosecution.

According to court documents, from in or about January 2010 through June 2010, Weaver, Hightower and Charboneau were involved in handling the uploading and transportation of fuel from FOB Fenty, near Jalalabad, Afghanistan, to nearby military bases.  Weaver and Charboneau created false and fraudulent documents purporting to authorize the transport of fuel from FOB Fenty to other military bases, even though no legitimate fuel transportation was required.  Hightower was a civilian who worked at the base’s “fuel point” uploading fuel trucks, occasionally filling the trucks with fuel to be stolen and taking other steps to assist the conspiracy.  At the direction of Weaver and Charboneau, fuel truck drivers used the fraudulent documents to justify the filled trucks’ departures from FOB Fenty.  In truth, after the filled fuel truck left the base, the fuel was simply stolen, and Weaver and Charboneau would receive cash from the representative of the trucking company that supplied the fuel trucks.  The cash would be split among the three conspirators.    

All three conspirators pleaded guilty to receiving payments from a representative of the trucking company in exchange for facilitating the theft of approximately 70 5,000-gallon truckloads of fuel.  Each of the three acknowledged that the loss to the United States was in excess of $1 million.

The cases were investigated by the Special Inspector General for Afghanistan Reconstruction, the Department of the Army, Criminal Investigations Division (CID); the Defense Criminal Investigative Service; and the FBI.

These cases were handled by Special Trial Attorney Mark H. Dubester of the Criminal Division’s Fraud Section, who is on detail from the Special Inspector General for Afghanistan Reconstruction (SIGAR).

FORMER CONGRESSMAN RICK RENZI SENTENCED IN CONNECTION WITH ILLEGAL FEDERAL LAND SWAP

FROM:  U.S. JUSTICE DEPARTMENT, EXTORTION 
Monday, October 28, 2013
Former Congressman Richard G. Renzi Sentenced for Extortion and Bribery in Illegal Federal Land Swap

Former U.S. Congressman Rick Renzi was sentenced today to serve 36 months in prison following his June conviction by a federal jury in Tucson, Ariz., for extortion, bribery, insurance fraud, money laundering and racketeering. Renzi’s co-defendant, James Sandlin, was also sentenced today to serve 18 months in prison for his role in the extortion, bribery and money laundering scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Elizabeth A. Strange of the District of Arizona, Special Agent in Charge Douglas G. Price of the FBI’s Phoenix Division, and Special Agent in Charge Dawn Mertz of the Internal Revenue Service – Criminal Investigation (IRS-CI) made the announcement following sentencing by Senior U.S. District Judge David C. Bury.

Renzi, 55, of Burke, Va., and Sandlin, 62, of Sherman, Texas, were convicted on June 11, 2013. Renzi was found guilty of 17 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right, racketeering, money laundering and making false statements to insurance regulators. Sandlin was convicted of 13 felony offenses including conspiracy, honest services wire fraud, extortion under color of official right and money laundering.

“Mr. Renzi abused the power – and the corresponding trust – that comes with being a member of Congress by putting his own financial interests over the interests of the citizens he had sworn to serve,” said Acting Assistant Attorney General Raman.  “He fleeced his own insurance company to fund his run for Congress, and then exploited his position for personal gain.  Mr. Renzi’s conviction and today’s sentence demonstrate the Justice Department’s commitment to fighting corruption at the highest levels of government.”

“Former Congressman Renzi disregarded his oath to uphold the law, ignoring the interests of the people he was elected to serve in favor of his own interests,” stated First Assistant U.S. Attorney Strange.  “The sentences imposed today reinforce the fundamental principle that no one, including an elected official, is above the law.”

“When our elected officials betray the trust of the American people it strikes at the very core of our democracy,” said FBI Special Agent in Charge Price.  “The sentencing of former Congressman Rick Renzi illustrates the commitment by the FBI and our law enforcement partners to investigate and prosecute corruption at all levels.   Today’s sentencing is a reminder that when a public official violates the public's trust they will be held accountable to the fullest extent of the law.”

“The public expects its elected officials to be honest, to be trustworthy and to show respect for the law," stated IRS Special Agent in Charge Mertz.  “Those in public office should be held to a higher standard and are not exempt from criminal prosecution.  The prison sentence imposed today should serve as a wake-up call to other public officials who believe there are no consequences for betraying the public trust.”

According to evidence at trial, Renzi, then a member of Congress from Arizona’s 1st Congressional District, promised in 2005 to use his legislative influence to profit from a federal land exchange that involved property owned by Sandlin, a real-estate investor.

At the time, Sandlin owed Renzi $700,000 in future payments from their business dealings, and Renzi threatened proponents of the land exchange that he would not support it unless they purchased Sandlin’s property in Cochise County, Ariz.  When they refused, Renzi promised a second proponent of a land exchange that he would support the exchange if they purchased Sandlin’s property.  According to an agreement reached in May 2005, Sandlin was paid $1 million in earnest money, out of which he paid $200,000 to Renzi.  Just before Sandlin received the $1.6 million balance owed on the exchange, he paid an additional $533,000 to Renzi.

Evidence at trial further showed that from 2001 to 2003, Renzi engaged in insurance fraud by diverting his clients’ insurance premiums to fund his first campaign for Congress, and he subsequently sent false letters to his insurance customers and provided false statements to various state regulators who were investigating his activities.

This case was investigated by the FBI and the Internal Revenue Service – Criminal Investigation.  The prosecution was handled by Trial Attorneys David Harbach and Sean Mulryne of the Department of Justice’s Public Integrity Section and Assistant U.S. Attorneys Gary Restaino and James Knapp of the District of Arizona.

14 MORE CHARGED IN ONGOING BRIBERY AND FRAUD INVESTIGATIONS INVOLVING THE MILITARY

FROM:  U.S. JUSTICE DEPARTMENT 
Friday, August 16, 2013
Fourteen More Army National Guard Recruiters and Soldiers Charged in Ongoing Bribery and Fraud Investigation

To Date, 25 Individuals Charged in San Antonio and Houston Areas
Fourteen current and former recruiters and soldiers of the U.S. Army National Guard have been charged in the Southern District of Texas for engaging in a multi-year scheme to defraud the U.S. Army National Guard Bureau, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

The cases against all 14 defendants arise from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging corruption scheme to illegally obtain fraudulent recruiting bonuses.  To date, the investigation has led to charges against 25 individuals, 11 of whom have pleaded guilty.

According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. (Docupak) to administer the Guard Recruiting Assistance Program (G-RAP).  The G-RAP was a recruiting program that offered monetary incentives to Army National Guard soldiers who referred others to join the Army National Guard.  Through this program, a participating soldier could receive up to $3,000 in bonus payments for referring another individual to join.  Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account.  To participate in the program, soldiers were required to create online recruiting assistant accounts.

In an indictment unsealed today in its entirety, Michael Rambaran, 50, of Pearland, Texas; and Edia Antoine, 27, Ernest A. Millien III, 49, and Christopher D. Renfro, 25, all of Houston, were charged with conspiracy, bribery, wire fraud and aggravated identity theft.  According to court documents, between February 2008 and August 2011, Rambaran was a National Guard recruiter and Antoine, Millien and Renfro were recruiting assistants in G-RAP.  Rambaran allegedly provided the names, addresses and Social Security numbers of potential soldiers to Antoine, Millien and Renfro so they could claim fraudulent recruiting referral bonus payments by falsely claiming they were responsible for referring those potential soldiers to join the military.  The indictment alleges Antoine, Millien and Renfro paid kickbacks to Rambaran by providing a portion of the fraudulent bonus payments.

In a separate indictment unsealed on Aug. 9, 2013, Zaunmine O. Duncan, 37, of Austin, Texas, was charged with conspiracy, bribery, wire fraud, aggravated identity theft and witness tampering.  According to court documents, between February 2008 and August 2010, Duncan, an Army National Guard recruiter, allegedly provided the personal identifiers of potential soldiers to four co-conspirators, identified as Recruiting Assistants 1 through 4, who used the personal identifiers to claim fraudulent recruiting referral bonuses through their G-RAP accounts.  According to the indictment, Recruiting Assistants 1 through 4 paid kickbacks to Duncan by providing a portion of the fraudulent proceeds.  The indictment also alleges Duncan and Recruiting Assistant 1, without permission or lawful authority, used the identity of a potential soldier to set up a G-RAP account through which Duncan and Recruiting Assistant 1 received additional fraudulent bonus payments.  The indictment also charges Duncan with witness tampering, alleging Duncan instructed a witness, identified in the indictment as Recruiting Assistant 1, to make certain false exculpatory statements to federal law enforcement officers.

In another related but separate indictment also unsealed on Aug. 9, 2013, Jammie T. Martin, 36, and Michelle H. Davis, 32, both of Katy, Texas; and Danielle V. Applin, 27, of Harker Heights, Texas, were charged with conspiracy, bribery, wire fraud and aggravated identity theft.  According to the indictment, from February 2009 through April 2011, Martin served as an Army National Guard recruiter and Applin and Davis served as recruiting assistants with the G-RAP.  According to court documents, Martin allegedly provided the personal identifiers of potential soldiers to Applin and Davis so they could claim fraudulent recruiting referral bonus payments by falsely claiming they were responsible for referring the potential soldiers to join the military.  The indictment alleges Applin and Davis paid kickbacks to Martin by providing a portion of the fraudulent bonus payments.

In addition, in the last three weeks, Melanie D. Moraida, 33, of Pearland, Texas; Elisha M. Ceja, 26, of Barboursville, W.Va.; Kimberly N. Hartgraves, 28, of League City, Texas; Lashae C. Hawkins, 27, of San Antonio; Annika S. Chambers, 27, of Houston; and Vanessa Phillips, 35, of Houston, were all charged in separate criminal informations with one count of conspiracy and one count of bribery.

A conviction for bribery carries as possible punishment a maximum penalty of 15 years in federal prison.  Witness tampering and wire fraud, upon conviction, could each result in a maximum of 20 years imprisonment, while a conviction for the conspiracy charge carries a five-year maximum sentence.  If convicted of aggravated identity theft, a defendant will also have to serve a mandatory penalty of two years in prison, which must be served consecutively to any other sentence imposed.  All charges also carry a possible $250,000 maximum fine or twice the pecuniary gain or loss.

A criminal indictment or information is a formal accusation of criminal conduct, not evidence.  A defendant is presumed innocent unless convicted through due process of law.

The cases are being investigated by special agents from the San Antonio Fraud Resident Agency of Army Criminal Investigation Command’s Major Procurement Fraud Unit. Trial Attorneys Edward J. Loya Jr., Brian A. Lichter, Sean F. Mulryne and Mark J. Cipolletti of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John Pearson of the Southern District of Texas are prosecuting the case.

FORMER FBI SPECIAL AGENT CHARGED WITH BRIBERY

FROM:  U.S. JUSTICE DEPARTMENT 
Friday, August 2, 2013
Former FBI Special Agent and Two Co-Conspirators Charged with Bribery Scheme

A former FBI agent and two others have been charged in the Southern District of New York with engaging in a bribery scheme to secure confidential, internal law enforcement documents about a prominent individual in Bangladesh.

Acting Assistant U.S. Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York, and Inspector General Michael E. Horowitz of the Department of Justice made the announcement.

 Robert Lustyik, 50, a former FBI special agent in the White Plains Resident Agency, is accused in a criminal complaint of conspiring with his friend, Johannes Thaler, 49, of soliciting cash payments from Thaler’s acquaintance, Rizve Ahmed, 34, aka “Caesar,” in exchange for confidential, internal law enforcement documents and information that Lustyik could access by virtue of his position at the FBI.  Ahmed and Thaler were arrested today on the charges in the complaint and will be presented later today before U.S. Magistrate Judge George A. Yanthis in the federal court in White Plains.  Lustyik is currently detained in connection with an unrelated indictment in U.S. District Court for the District of Utah, where he will be initially presented on the charges in the complaint.

Lustyik, Thaler, and Ahmed are each charged in a four-count complaint. Count one charges Lustyik, Thaler, and Ahmed with conspiring to bribe a public official.  Count two charges Lustyik and Thaler with soliciting and receiving bribes.  Count three charges Ahmed with bribing a public official and offering to bribe a public official.  Count four charges Lustyik with unlawfully disclosing a Suspicious Activity Report.

If convicted, Lustyik, of Westchester County, faces a maximum sentence of 25 years in prison. Thaler, of Fairfield County, Conn., faces a maximum sentence of 20 years in prison. Ahmed, of Fairfield County, faces a maximum sentence of 20 years in prison.

According to allegations in the complaint unsealed today in the White Plains federal courthouse, from about September 2011 through March 2012, Lustyik, Thaler and Ahmed engaged in a bribery scheme on behalf of Ahmed, a native of Bangladesh who sought confidential law enforcement information pertaining to a prominent citizen of Bangladesh who was affiliated with an opposing political party (Individual 1).  Ahmed sought, among other things, to obtain information about Individual 1, to locate Individual 1, and to harm Individual 1 and others associated with Individual 1.

As part of the scheme, Lustyik and Thaler exchanged text messages, including messages about how to pressure Ahmed to pay them additional money in exchange for confidential information.  For example, in text messages, Lustyik told Thaler, “we need to push [Ahmed] for this meeting and get that 40 gs quick . . . . I will talk us into getting the cash . . . . I will work my magic . . . . We r sooooooo close.”  Thaler responded, “I know.  It’s all right there in front of us.  Pretty soon we’ll be having lunch in our oceanfront restaurant . . . .”  As another example, in or about late January 2012, Lustyik, upon learning that Ahmed was considering using a different source to obtain confidential information about Individual 1, texted Thaler, “I want to kill [Ahmed] . . . . I hung my [***] out the window n we got nothing? . . . . Tell [Ahmed], I’ve got [Individual 1’s] number and I’m pissed. . . . I will put a wire on n get [Ahmed and his associates] to admit they want [a Bangladeshi political figure] offed n we sell it to [Individual 1].”

According to the complaint, Lustyik and Thaler accepted at least $1,000 from Ahmed in exchange for confidential FBI information, including a Suspicious Activity Report.  The complaint also alleges that Lustyik and Thaler schemed to obtain monthly cash bribes from Ahmed, in increments of tens of thousands of dollars, in exchange for the provision of additional confidential law enforcement information about Individual 1 and for assistance in having criminal charges against a Bangladeshi political figure dismissed.

This case was investigated by the Department of Justice’s Office of Inspector General. The prosecution is being handled by the U.S. Attorney’s Office for the Southern District of New York’s White Plains Division and by the Public Integrity Section of the U.S. Department of Justice’ Criminal Division. Assistant U. S. Attorney Benjamin Allee and Trial Attorney Emily Rae Woods are in charge of the prosecution.

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

THREE SENTENCED IN GOVERNMENT CONTRACTS BRIBERY CASE

FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, June 6, 2013
Three Georgia Residents Sentenced for Their Roles in Bribery Scheme Related to the Award of Government Contracts
A former employee at the Marine Corps Logistics Base Albany (MCLB-Albany) and two local businessmen were sentenced today for their roles in a bribery scheme related to the award of contracts for machine products that resulted in approximately $907,000 in fraudulent overcharges to the U.S. Marines, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.


Michelle Rodriguez, 32; Thomas J. Cole, 43; and Fredrick W. Simon, 55, all of Albany, Ga., were sentenced today by U.S. District Judge W. Louis Sands in the Middle District of Georgia. Rodriguez was sentenced to 70 months in prison and ordered to pay $161,000 in restitution; Cole was sentenced to 46 months in prison and ordered to pay $209,000 in restitution; and Simon was sentenced to 32 months in prison and ordered to pay $74,500 in restitution. Each is also subject to a $907,000 restitution order and three years of supervised release.

During her guilty plea in February 2013, Rodriguez, a supply technician in the Maintenance Center Albany (MCA), admitted to participating in a scheme to award contracts for machine products to Company A and Company B, companies operated by Cole and Simon. Cole and Simon pleaded guilty to bribery charges related to the same scheme in January 2013 and cooperated with the government’s criminal investigation. The MCA is responsible for rebuilding and repairing ground combat and combat support equipment, much of which has been utilized in military missions in Afghanistan and Iraq, as well as other parts of the world. To accomplish the scheme, Rodriguez would transmit bid solicitations to Simon via facsimile or email, and then usually follow that communication with a text message specifying how much Company A should bid. Simon, on Company A’s behalf, and with Cole’s knowledge, bid the amount specified by Rodriguez on each order, which was normally in excess of fair market value. Rodriguez was then paid $75 in cash for each order awarded to Simon and Cole during the previous week. According to court records, during the relevant period Rodriguez awarded Cole and Simon’s companies nearly 1,300 machine product orders, all of which were in exchange for bribes paid to Rodriguez.

Rodriguez further admitted that in 2011, she began routing some orders through a second company, Company B, owned by Cole, because the volume of orders MCA placed with the first company was so high. Company A, however, continued to perform the required services. Court records state that Rodriguez received approximately $161,000 in bribes during the nearly two-year scheme, while Cole and Simon personally received $209,000 and $74,500, respectively. Court records also indicate that the total loss to the U.S. Marines from overcharges associated with the machine product orders placed during the scheme was approximately $907,000.

The case was investigated by the Naval Criminal Investigative Service, with assistance from the Dougherty County District Attorney’s Office Economic Crime Unit and the Defense Criminal Investigative Service. The case was prosecuted by Trial Attorneys Richard B. Evans and J.P. Cooney of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia.

SOLDIER INDICTED FOR FUEL THEFT CRIMES IN AFGHANISTAN

Photo:  Iraq War.  Credit:  DOD.

FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, April 11, 2013
Former Army Soldier Indicted on Bribery and Related Charges for Facilitating Thefts of Fuel in Afghanistan

Stephanie Charboneau, aka Stephanie Shankel, 34, of Fountain, Colo., formerly a Specialist in the United States Army, has been indicted in the District of Colorado for her alleged role in assisting the thefts of fuel in Afghanistan and laundering the proceeds of crime, Acting Assistant Attorney General Mythili Raman of the Criminal Division announced.

According to the indictment returned on April 9, 2013, and now filed publicly, Charboneau was assigned to Forward Operating Base (FOB) Fenty, in eastern Afghanistan, as part of the 704th Brigade Support Battalion. Her duties included overseeing the movement of fuel by private Afghan trucking companies from FOB Fenty to nearby military bases. The indictment alleges that Charboneau conspired with Sergeant Christopher Weaver, her supervisor, and Jonathan Hightower, a civilian employee of FLUOR Inc., to facilitate the theft of fuel for money. Charboneau and her co-conspirators allegedly received money from a representative of an Afghan trucking company to enable that company to steal truckloads of fuel. The conspirators allegedly authorized the movement of truckloads of fuel from FOB Fenty – ostensibly to nearby bases – knowing and intending that when the fuel left FOB Fenty it would never reach the designated base and would instead be stolen. These events occurred from approximately February 2010 through approximately May of 2010.

In addition, the indictment charges that when Charboneau returned to the United States, she engaged in a series of transactions with the bribe proceeds to avoid the currency transaction reporting requirements. Charboneau allegedly purchased an automobile for $33,179 in cash through a $5,000 down payment, two $9,900 cashier’s checks she funded but were in the name of two acquaintances, and an $8,379 cashier’s check in her name.

Charboneau was charged with conspiracy, bribery, theft, money laundering and structuring. If convicted, she faces penalties of 20 years in prison for money laundering, 15 for bribery, 10 for theft of government property, and five for conspiracy and structuring. She also faces fines of $250,000 per count.

Weaver and Hightower have each pleaded guilty to a bribery conspiracy scheme and are awaiting sentencing.

This case was investigated by former Fraud Section Trial Attorney Mark Pletcher, who is currently an Assistant United States Attorney for the Southern District of California, and Special Trial Attorney Mark H. Dubester. The case was investigated by the Special Inspector General for Afghanistan Reconstruction, the Department of the Army, Criminal Investigations Division, the Defense Criminal Investigative Service and the FBI Denver field office.

CONSTRUCTION CONTRACTOR SENTENCED FOR ROLE IN BRIBERY, EMBEZZLEMENT SCHEME

 
CINCINNATI – The owner and president of Sigma Capital, Inc. in Cincinnati, Samuel P. Mays, 62, was sentenced in U.S. District Court today to 51 months in prison followed by three years of supervised release for bribing a government official and stealing from his employees’ 401k funds.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Robert Hughes, Acting Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Office (FBI), Elton Malone, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Special Investigations Branch, and L. Joe Rivers, Regional Director, U.S. Department of Labor, Employee Benefits Security Administration announced the sentence handed down today by Senior U.S. District Judge Sandra S. Beckwith.

A jury convicted Mays in September 2012 of one count each of bribery of a public official, conspiracy, theft or embezzlement from an employee pension plan, and making false statements.

The scheme involved Mays and another construction contractor, Paul McDonald, 70, of Pleasant Hill, California, and David Mersch, 61, the former Operations Officer for the Cincinnati offices of the U.S. Centers for Disease Control in Cincinnati.

According to trial testimony, Mersch, who lived in Florence, Kentucky accepted bribes from Mays and McDonald in the form of cash and home improvements with a value of at least $175,000 between 2005 and 2011. The jury also convicted Mays of deducting approximately $125,000 from his employees’ paychecks for contribution to their 401k plans, but never depositing the money.

"The nature of a bribery offense is difficult to quantify, because the victim is the public at large and the damage extends beyond the dollars exchanged," Assistant U.S. Attorney Tim Mangan wrote in a memorandum filed with the court prior to sentencing. "This pattern of bribery undermines the government contracting process and destroys the presumed impartiality of federal contracting officers."

McDonald pleaded guilty on November 9, 2011 to one count of bribery. He was sentenced on October 31, 2012 to serve five years of probation including 21 months of home confinement and pay a $5,000 fine. He was also disqualified from holding any office of honor, trust or profit and ordered to resign his employment with Entek Mechanical Corporation and to cooperate with the United States in seeking the surrender of Entek’s certification as a government contractor. Mersch pleaded guilty on July 19, 2011 to bribery and is serving 42 months in federal prison. Both testified against Mays during the trial.

"Mays victimized taxpayers and jeopardized his hard-working employees’ futures," said Elton Malone, Special Agent in Charge of the Special Investigations Branch within the U.S. Department of Health and Human Services’ Office of Inspector General. "We will not tolerate conspiracy schemes and will continue to work tireless to punish such corruption."

"Employer sponsored retirement plans serve a vital role in providing a financially secure retirement for America’s workers," said L. Joe Rivers, Regional Director for the Cincinnati Regional Office of the Labor Department’s Employee Benefits Security Administration. "This case underscores EBSA’s commitment to protecting the assets of 401(k) and other employee benefit plans and punishing those who would divert these funds for their own enrichment."

Stewart commended the cooperative investigation by FBI, HHS inspector general, and Department of Labor investigators, as well as Assistant U.S. Attorneys Timothy Mangan and Christy Muncy, who represented the United States in this case.

Mays will surrender to begin serving his prison sentence on a date to be set by the U.S. Marshals Service and the Bureau of Prisons.

U.S. OFFICIALS REMARK'S ON FIGHTING INTERNATIONAL CRIME

FROM: U.S. DEPARTMENT OF STATE
Remarks
David M. Luna
Director for Anticrime Programs, Bureau of International Narcotics and Law Enforcement Affairs
Jakarta, Indonesia
January 26, 2013
 
Good morning.

It is a pleasure to be here with you as we begin the new APEC year.

The United States applauds the leadership of the Government of the Republic of Indonesia as the APEC Host Economy in 2013 and the Indonesian Corruption Eradication Commission (KPK) as Chair of this year’s APEC Anticorruption and Transparency (ACT) Working Group.

Your Excellency, Bambang Widjowanto, KPK Deputy Chairman, as a previous Chair of this very important and influential sub-forum in APEC, let me congratulate you on your appointment as our new ACT Chair and commend your life-long commitment to promoting human rights, advancing the rule of law, and safeguarding integrity in Indonesia.

The KPK remains a model within APEC on prosecuting high-level corruption cases, including within the police and security agencies, and demonstrating to us all that no official is above the law. The ACT must continue to support the KPK and all of our economies’ anticorruption authorities to eradicate corruption, safeguard integrity and public trust, and restore people’s faith in government as a steward of equality and justice.

I would also like to thank the Government of the Russian Federation for its leadership last year, and applaud all of the economies here for our collective achievements in 2012. I am confident that we will make great gains this year on developing an APEC regional network of anticorruption authorities that further protects our economies against abuses of power and the plunder of our national assets, human capital, and natural resources.

In 2013, we must work together to achieve the three core objectives outlined in our ACT five-year strategy: 1) to minimize impunity and kleptocracy by preventing and prosecuting public corruption; 2) to level the playing field for all businesses by fighting foreign bribery; and 3) to shut down the illegal economy and criminalized markets by combating corruption and illicit trade.

Combating Impunity and Kleptocracy: Enough is Enough!

No economy is immune from corruption, nor can any economy combat it alone. In addition to effective governance within our own jurisdictions, we must take collective action to improve governance across borders and reconfigure the way we fight corruption with smarter, more holistic strategies and approaches. We must work to prevent the flow of illicit funds, including proceeds of corruption.

APEC Leaders recognized the ACT work program in the 2012 Vladivostok Declaration on Fighting Corruption. They emphasized their commitment to investigate and prosecute corruption; to enforce our domestic bribery laws and laws criminalizing the bribery of foreign public officials; to fight money laundering and deny safe haven to assets illicitly acquired by individuals engaged in corruption. They also vowed to combat illicit trade by attacking the financial underpinnings of transnational criminal organizations and illicit networks; stripping criminal entrepreneurs and corrupt officials of their illicit wealth; and severing their access to the global financial system.

The Vladivostok Declaration also renewed and elevated APEC Leaders’ commitment to "enhance public trust by committing to transparent, fair, and accountable governance" to empower communities to monitor government policies and voice their perspectives on the use of resources.

Voice and accountability can not only help check corruption, but also allow our citizens and communities to take hold of their destinies, enjoy higher standards of living, and trust that their governments exist to do good. Transparent and open governments tend to pursue cost-effective policies; minimize misallocation of resources; and attract investment from companies looking for solid investment environments and opportunities. This is why eight APEC member countries (Canada, Chile, Indonesia, Mexico, Peru, Philippines, Russia, and the United States) have joined the Open Government Partnership (OGP), a multi-stakeholder initiative launched in 2011 to promote transparency, enhance accountability, and fight corruption. Indonesia is also a co-chair of the OGP’s Steering Committee this year, and its leadership of both the OGP and the ACT presents an opportunity for us all to further our efforts to enhance public trust and raise standards of living.

Our Leaders have spoken. They have repeatedly affirmed their will to combat corruption across the Asia Pacific region. We must answer them with a transformative good governance agenda that will anchor economic growth and development from Moscow to Jakarta, from Beijing to Lima, from San Francisco to Sydney, and transform people’s lives across all markets in APEC.

ACT colleagues, we must act decisively and collectively to implement the five-year strategy. I am confident that we can fulfill our Leaders’ mandate and achieve APEC’s broader agenda to secure open markets, economic prosperity, and the rule of law.

Fighting All Forms of Bribery

Continued cooperation with the private sector is a critical component of our efforts to level the playing field for businesses across APEC economies.

Our recent work with the APEC Business Advisory Council (ABAC) and other partners has ushered in a new era of cooperation between the public and private sectors. This partnership is enhancing market integrity and forging a more connected, innovative, and dynamic Asia Pacific region that thrives on openness and a rules-based approach to trade and investment.

We can do more. Building on the APEC Santiago Commitment, the APEC Code of Conduct for Business (Business Integrity and Transparency Principles for the Private Sector), and the Complementary Anti-Corruption Principles for the Public and Private Sectors, we can vigorously enforce domestic bribery laws, including laws criminalizing the bribery of foreign public officials, and fulfill our international obligations. I also hope that we can continue to share experiences and best practices in combating foreign bribery, enlist the private sector as a partner in combating bribery, and provide specialized training to make greater inroads on this important front.

We can minimize corruption as a significant market and trade barrier and improve the investment climate in our economies by ensuring that we effectively investigate and prosecute corrupt public officials and those who bribe them, in compliance with our respective domestic laws and international obligations, where appropriate, under the UN Convention against Corruption (UNCAC), the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and similar instruments.

The United States looks forward to working with Indonesia, China, and all economies to support stronger bribery enforcement, prosecutions, and other actions in APEC in 2013-2014.

Combating Illicit Trade and Shutting Down the Illegal Economy

Sustainable economic growth also depends on our progress to combat illicit trade and its pernicious impact on the environment and markets.

Illicit trade and the illegal economy undermine social stability and the welfare of our communities. Illicit enterprises not only distort the legal economy, but they also divert revenue from legitimate market drivers such as businesses and governments. Illicit trade further hampers development by preventing the equitable distribution of public goods. But this goes beyond just economic harm. The illegal economy also incurs a significant negative social cost, and in some cases, devastates vital ecosystems and habitats.

The dumping of toxic waste contaminates our food and water supplies. Illegal logging and deforestation or poaching exacerbate climate change and undermine our ability in APEC to advance inclusive, green, sustainable development. Poaching and trafficking of endangered wildlife robs economies of their natural assets and their future.

The corruption that allows counterfeit or ineffective pharmaceuticals to enter our communities endangers public health, denying the sick effective treatment and permitting deadly diseases to mutate and become untreatable.

The corruption that allows traffickers to move people across borders and exploit them with impunity not only violates individuals’ basic rights and freedoms but also stunts both their and their communities’ economic potential and political development.

Kleptocracy and the embezzlement of national revenue and assets that are intended to finance the future for our citizens impair the ability of communities to make the investments necessary to stimulate growth. Revenue that could be used to build roads to facilitate commerce, hospitals to save lives, homes to raise and protect families, or schools to educate future leaders and entrepreneurs is instead siphoned away for private gain.

APEC has a number of tools in its toolkit to combat corruption and illicit trade, and we have an ongoing opportunity to work together to comprehensively and holistically combat corruption, as well as illicit finance more broadly; to foster integrity in global markets and supply chains; and to protect and promote economic growth and shared prosperity.

Among them is the ACT Multi-Year Project that Thailand and Chile are co-leading on ways to combat money laundering, recover the fruits of corrupt and criminal activity, and track illicit financial flows. As kleptocrats and criminal entrepreneurs continue to hide the proceeds of their crimes in legal structures such as offshore shell companies and foundations and then launder most of that through casinos, financial institutions, or real estate into the global financial system, we must bring them to justice and, where possible, return their illicit wealth back to impacted communities.

To do this effectively, we must also target more aggressively the financial facilitators and service providers who commit crimes in helping corrupt officials, criminals, and illicit networks inject their dirty money into our financial system.

The APEC-ASEAN Pathfinder Workshop on Combating Corruption and Illicit Trade that will be held in Siem Reap, Cambodia, in June 2013, will advance a dialogue among partners across the Asia Pacific region and strengthen cooperation by creating a network of anticorruption authorities, promoting information and intelligence exchanges, and facilitating cooperation and information sharing in investigations related to corruption and illicit trade and efforts to shut down the illegal economy.

More broadly, we can and should support the effective implementation of global anti-money laundering standards promulgated by the Financial Action Task Force. Among these are preventive measures that facilitate financial transparency and help prevent the flow of proceeds of corruption.

Converting Political Will into Action: Regional Networks and Partnerships

We can build on our APEC anti-corruption and transparency commitments and the collaborative relationships around this table to create a regional network of anti-corruption bodies that would facilitate the sharing of intelligence and information, as well as the sharing of best practices and challenges in effectively tracking cross-border corruption, other crime, and illicit financial flows.

The United States is more committed than ever to combating corruption and illicit trade, and we look forward to the discussion here in Jakarta.

Together, we will create a better, more prosperous future by uniting our efforts to combat corruption and support accountability and good governance. We must turn our shared interests into collective action by developing more comprehensive approaches to combating corruption so that we can prosecute corrupt public officials and those who bribe them.

Again, I wish Indonesia a great and successful year in APEC 2013 and applaud my ACT colleagues for developing and pressing forward on a vibrant course of action to fight corruption and promote integrity—a course that I know will lead us towards economic growth and a stronger foundation to build the new markets and investment frontiers of tomorrow.

Thank you.

FORMER BORDER PATROL AGENT AND GIRLFRIEND PLEAD GUILTY IN ALIEN SMUGGLING BRIBERY CASE

FROM: U.S. DEPARTMENT OF JUSTICE

Thursday, December 13, 2012

Former U.S. Customs and Border Protection Officer, His Girlfriend and Two of Their Associates Plead Guilty to Participating in Multi-year Bribery and Alien Smuggling Activities Along U.S./Mexico Border

WASHINGTON – A former U.S. Customs and Border Protection (CBP) officer, his girlfriend and two of their associates pleaded guilty today in federal court for their participation in multi-year bribery and alien smuggling activities along the U.S./Mexico border, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

Former CBP Officer Juan Carlos Guerrero, 39, of Mission, Texas, pleaded guilty before U.S. District Judge Andrew S. Hanen in the Southern District of Texas to one count of substantive bribery, one count of conspiracy to commit bribery and one count of alien smuggling conspiracy. Guerrero’s girlfriend Claudia Flores, 34, of Mission; Maribel Rivera, 43, of Mission; and Rodolfo Caballero Rojas, 40, of Oklahoma City, each pleaded guilty today before Judge Hanen to separate informations charging each of them with one count of conspiracy to commit bribery and alien smuggling.

The defendants were indicted on Oct. 5, 2012, in U.S. District Court for the Southern District of Texas in Brownsville. They each were charged with one count of conspiracy to commit bribery, one count of conspiracy to smuggle aliens for financial gain and various substantive counts of bribery and alien smuggling.

According to court documents, between approximately October 2008 and approximately January 2011, Guerrero worked the midnight shift at the Hidalgo Port of Entry (Hidalgo POE), Pharr Port of Entry (Pharr POE) and the Anzalduas Port of Entry (Anzalduas POE), where, among other things, he was responsible for vehicle inspections of northbound traffic traveling from Mexico to the United States.

According to court documents, between approximately January 2009 and approximately May 2011, Guerrero and Flores organized a bribery and alien smuggling operation, whereby Guerrero, Flores, Rivera, Rojas, Guerrero’s nephew Jose Cantu and other co-conspirators arranged for undocumented aliens (UDAs) from Mexico to be smuggled into the United States through Guerrero’s inspection lanes at the Hidalgo POE, Pharr POE and Anzalduas POE, in exchange for bribe payments ranging from $500 to $3,000 per UDA. Guerrero admitted that he organized and directed a total of at least approximately 80 to 150 different smuggling events, in which he knowingly permitted approximately 80 to 165 UDAs to gain illegal entry into the United States.

According to court documents, Flores admitted that she helped Guerrero organize and direct a total of at least approximately 50 to 75 of the illegal crossings, in which approximately 50 to 100 UDAs gained illegal entry into the United States. Rivera admitted that she assisted Guerrero and Flores by identifying and soliciting UDAs, communicating smuggling prices and details of the illegal crossings to UDAs, and collecting bribe payments from the UDAs on Guerrero and Flores’s behalf. Rojas admitted, among other things, that he assisted Guerrero by personally driving UDAs through Guerrero’s inspection lane at the Anzalduas POE and that he paid Guerrero a bribe of approximately $1,500 as payment for Guerrero’s decision to permit a UDA to pass illegally through his inspection lane.

As part of his plea agreement, Guerrero resigned today from CBP.

On July 24, 2012, Guerrero’s nephew Jose Cantu pleaded guilty in U.S. District Court in the Southern District of Texas, to conspiracy to commit bribery and alien smuggling and a separate charge of conspiracy to import marijuana and cocaine.

The charge of bribery carries a maximum penalty of 15 years in prison and a maximum fine of $250,000 or twice the gain or loss. The charge of conspiracy carries a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the gain or loss. The charge of conspiracy to commit alien smuggling for private financial gain carries a maximum penalty of 10 years in prison and a maximum fine of $250,000 or twice the gain or loss. Sentencing for Guerrero, Flores, Rivera, Rojas and Cantu is scheduled for March 18, 2013

LT. COLONEL SENTENCED FOR BRIBERY IN IRAQ

FROM:  U.S. DEPARTMENT OF JUSTICE
Thursday, June 14, 2012
Retired U.S. Army Lieutenant Colonel Sentenced to 41 Months in Prison for Bribery Related to Contracting in Support of Iraq WarDefendant Accepted $250,000 in Bribes Related to Bottled Water Contracts in Kuwait

WASHINGTON – A retired lieutenant colonel in the U.S. Army was sentenced yesterday to 41 months in prison for engaging in bribery related to his work as a contracting officer’s representative in Kuwait from 2004 to 2006, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

Derrick L. Shoemake, 50, of Moreno Valley, Calif., was sentenced by U.S. District Court Judge Dolly M. Gee in the Central District of California.  In addition to his prison term, Shoemake was sentenced to two years of supervised release and was ordered to pay $181,900 in restitution and forfeit $68,100.

Shoemake pleaded guilty in June 2011 to two counts of bribery.  According to court documents, Shoemake was deployed to Camp Arifjan, Kuwait, as a contracting officer’s representative in charge of coordinating and accepting delivery of bottled water in support of our troops in Iraq.  While serving in Kuwait, Shoemake agreed to assist a contractor with his delivery of bottled water.  In return, the contractor paid Shoemake a total of approximately $215,000, most of which was delivered to Shoemake’s designee in Los Angeles.  Shoemake received an additional $35,000 from a second contractor for his perceived influence over the award of bottled water contracts in Afghanistan.  All told, Shoemake admitted receiving approximately $250,000 from these two government contractors in 2005 and 2006.

This case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Trial Attorney Mark W. Pletcher of the Criminal Division’s Fraud Section.  The case is being investigated by the Army Criminal Investigations Division, the Defense Criminal Investigative Service, the FBI, the Special Inspector General for Iraq Reconstruction, the Internal Revenue Service, U.S. Immigration and Customs Enforcement at the Department of Homeland Security and members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).

SCHEME TO LAUNDER BRIBES GETS FORMER HAITIAN OFFICIAL A NINE YEAR PRISON TERM

FROM:  U.S. DEPARTMENT OF JUSTICE
Monday, May 21, 2012
Former Haitian Government Official Sentenced to Nine Years in Prison for Role in Scheme to Launder Bribes
WASHINGTON – Jean Rene Duperval, a former director of international relations for Telecommunications D’Haiti S.A.M. (Haiti Teleco), a Haitian state-owned telecommunications company, was sentenced today to nine years in prison for his role in a scheme to launder bribes paid to him by two Miami-based telecommunications companies.

The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer; and Special Agent in Charge Jose A. Gonzalez of Internal Revenue Service-Criminal Investigation (IRS-CI), Miami Field Office.

Duperval, 45, of Miramar, Fla., was sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida.   Judge Martinez also ordered Duperval to forfeit $497,331.  

Duperval was convicted in March 2012 of two counts of conspiracy to commit money laundering and 19 counts of money laundering.  He has been in custody since his conviction.
 
“Mr. Duperval took bribes in exchange for giving companies an unfair and illegal advantage in the marketplace, and then tried to hide these illicit transactions behind the cloak of shell corporations and fake invoices,” said Assistant Attorney General Breuer.  “Just as we prosecute corrupt businesspeople under the FCPA, we will hold accountable corrupt foreign officials when they seek to launder the proceeds of that bribery through the U.S. financial system.  Today’s nine-year prison sentence sends a strong message to foreign officials and others who would facilitate foreign corruption that they will face serious consequences.”

“Duperval’s money laundering scheme was an attempt to conceal the payment of bribes to foreign officials to obtain an unfair business advantage in the marketplace,” said U.S. Attorney Ferrer.  “Today’s sentence, however, helps level the playing field for all legitimate businesses that honestly compete in the marketplace for foreign or domestic business.”

“IRS Criminal Investigation continues to expand its international efforts to aggressively investigate those individuals who engage in money laundering and bribery schemes,” said IRS-CI Special Agent in Charge Gonzalez.  “Individuals involved in corrupt international endeavors, as uncovered in this case, will get caught and this sentencing should serve as a strong warning to those considering similar conduct.”

Duperval was the director of international relations for Haiti Teleco, the sole provider of land line telephone service in Haiti.  According to the evidence presented at trial, two Miami-based telecommunications companies had a series of contracts with Haiti Teleco that allowed the companies’ customers to place telephone calls to Haiti.

Duperval was convicted for participating in a scheme to commit money laundering from 2003 to 2006, during which time the telecommunications companies collectively paid approximately $500,000 to two shell companies to funnel the bribes to Duperval.  
 
The purpose of these bribes, according to the evidence presented at trial, was to obtain various business advantages from Duperval, including the issuance of preferred telecommunications rates, a continued telecommunications connection with Haiti and the continuation of a particularly favorable contract with Haiti Teleco.  To conceal the bribe payments, Duperval instructed the companies to forward the payments to the shell companies.  To support these payments, the companies and their executives created false documents claiming that the payments were for “consulting services” or for “international minutes from USA to Haiti.”  No actual services were performed.  The funds were then disbursed from the shell companies for the benefit of Duperval and his family.  To conceal the nature of these funds, Duperval falsely characterized these payments as “commissions” and “payroll.”

Duperval was the seventh defendant involved in the corruption scheme to be sentenced, which includes the following individuals:

On April 27, 2009, Antonio Perez, a former controller at one of the Miami-based telecommunications companies, pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and money laundering.  On Jan. 12, 2010, he was sentenced to 24 months in prison.
On May 15, 2009, Juan Diaz, the president of J.D. Locator Services, pleaded guilty to one count of conspiracy to violate the FCPA and money laundering.  He admitted to receiving more than $1 million in bribe money from telecommunications companies.  On July 30, 2010, he was sentenced to 57 months in prison, which he is currently serving.

On Feb. 19, 2010, Jean Fourcand, the president and director of Fourcand Enterprises Inc., pleaded guilty to one count of money laundering for receiving and transmitting bribe monies in the scheme.  On May 5, 2010, he was sentenced to six months in prison, which he is currently serving.
On March 12, 2010, Robert Antoine, a former director of international affairs for Haiti Teleco, pleaded guilty to one count of conspiracy to commit money laundering.  He admitted to receiving more than $1 million in bribes from Miami-based telecommunications companies.  On June 2, 2010, he was sentenced to 48 months in prison, which he is currently serving.

On Aug. 4, 2011, Joel Esquenazi and Carlos Rodriguez, who were the former president and vice-president, respectively, of one of the telecommunications companies, were convicted by a federal jury of one count of conspiracy to violate the FCPA and wire fraud, seven counts of FCPA violations, one count of money laundering conspiracy and 12 counts of money laundering.  On Oct. 25, 2011, Esquenazi was sentenced to 15 years in prison, the longest sentence ever imposed in a case involving the FCPA.  On the same day, Rodriguez was sentenced to 84 months in prison for his role in the bribery scheme.  Both are currently serving their sentences.

In a second superseding indictment, Washington Vasconez Cruz, Amadeus Richers and Cecilia Zurita were charged in a related scheme to commit foreign bribery and money laundering from December 2001 through January 2006.  The defendants are fugitives.  An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

The Department of Justice is grateful to the government of Haiti for continuing to provide substantial assistance in gathering evidence during this investigation.  In particular, Haiti’s financial intelligence unit, the Unité Centrale de Renseignements Financiers (UCREF), the Bureau des Affaires Financières et Economiques (BAFE), which is a specialized component of the Haitian National Police, and the Ministry of Justice and Public Security provided significant cooperation and coordination in this ongoing investigation.
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The case is being prosecuted by Assistant Chief James M. Koukios and Trial Attorney Daniel S. Kahn of the Criminal Division’s Fraud Section.  The Criminal Division’s Office of International Affairs also provided assistance in this matter.  These cases were investigated by the IRS-CI Miami Field Office.

ARIZONA POLITICIAN CHARGED WITH BRIBER, FRAUD, ATTEMPTED EXTORTION AND FALSE STATEMENTS

Photo:  Lady Justice.  Credit:  Wikimedia
FROM:  U.S. DEPARTMENT OF JUSTICE
Wednesday, May 16, 2012
Arizona State Representative Charged with Bribery, Fraud, Attempted Extortion and Making False Statements
WASHINGTON – A member of the Arizona House of Representatives was charged today by a federal grand jury in the District of Arizona with bribery, fraud, attempted extortion and false statements in connection with receiving more than $6,000 in tickets to sporting and special events while serving as a Tempe, Ariz., City Council councilmember and member-elect of the Arizona House, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Special Agent in Charge James L. Turgal of the FBI’s Phoenix Field Office.

The indictment charges Paul Ben Arredondo, 63, of Tempe, with one count of federal programs bribery, two counts of honest services mail fraud, one count of attempted Hobbs Act extortion and one count of making false statements.  Arredondo will be arraigned on May 30, 2012, in U.S. District Court for the District of Arizona before U.S. Magistrate Judge Lawrence O. Anderson.

According to the indictment, Arredondo was a councilmember in Tempe for 16 years, until July 2010.  He was elected to the Arizona House of Representatives in November 2010.  The indictment alleges that from February 2009 to November 2010, Arredondo accepted, agreed to accept and solicited things of value from representatives of a company whose purported business objective was to acquire city-owned property in Tempe for real estate development purposes.  The representatives were, in fact, undercover agents with the FBI.  According to the indictment, Arredondo received from the undercover agents more than $6,000 worth of tickets to sporting and other special events.  Those tickets included 18 tickets for Arizona Diamondbacks baseball games valued at a total of approximately $2,400, and four tickets to an American League Championship Series baseball game valued at a total of approximately $1,225.

According to the indictment, in return for those tickets, Arredondo took and agreed to take action in his capacity as a Tempe city councilmember and as a member of the Arizona House of Representatives to facilitate the undercover agents’ purported purchase of city-owned property and development project.  The indictment alleges that Arredondo brokered meetings between the undercover agents and other public officials, divulged information regarding the city of Tempe’s bidding process, and attempted to persuade other city officials to approve the purported development project.
The indictment further alleges that Arredondo lied to the FBI about his conduct during an interview in January 2012.

The federal programs bribery charge carries a maximum penalty of 10 years in prison and a $250,000 fine.  Each count of honest services mail fraud and attempted extortion carries a maximum penalty of 20 years in prison and a $250,000 fine.  The false statement charge carries a maximum penalty of 5 years in prison and a $250,000 fine.  The indictment also contains a notice of forfeiture.

An indictment is merely a charge and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

The case is being prosecuted by Trial Attorneys Edward T. Kang and Monique T. Abrishami of the Criminal Division’s Public Integrity Section, and Assistant U.S. Attorney Frederick A. Battista of the District of Arizona.  The case is being investigated by the FBI’s Phoenix Field Office.

FORMER OCEANS BANK EXECUTIVE SENTENCED FOR BRIBERY AND FALSE TAX RETURNS

FROM U.S. DEPARTMENT OF JUSTICE
Wednesday, April 4, 2012
Former Executive of Miami-Based Ocean Bank Sentenced to Serve 37 Months in Prison for Participating in Bribery Scheme and Filing False Tax Returns
WASHINGTON – A former executive of Ocean Bank, a financial institution headquartered in Miami, was sentenced today for participating in a scheme to accept bribes and for failing to report income on federal income tax returns, the Department of Justice announced.

Danilo P. Perez, a former vice president of Ocean Bank, was sentenced today in the U.S. District Court in Miami by District Judge Donald L. Graham to serve 37 months in prison followed by one year of supervised release.

On Jan. 25, 2012, Perez pleaded guilty to one count of conspiracy to solicit or demand money and other things of value to influence an employee of a financial institution and three counts of tax offenses. The charges against Perez stemmed from his accepting nearly $500,000 in cash and other items from co-conspirators in connection with his supervision of certain customer business with the bank. As vice president, Perez generally oversaw Ocean Bank’s lending relationships with corporate customers of the bank.

Perez admitted to accepting bribes, including payments for expensive watches, Super Bowl tickets and other items for his personal use, as well as substantial amounts of cash. Perez accepted the payments intending to be rewarded and influenced in connection with his role in approving Ocean Bank’s issuance of letters of credit, loans and overdraft privileges to his co-conspirators. Perez also admitted that he failed to report income from those bribes for tax years 2005, 2006 and 2007, resulting in lost tax revenue of approximately $91,000 to the federal government.

U.K. CITIZEN AND 2 AMERICANS CHARGED WITH CONSPIRACY TO DEFRAUD THE U.S. GOVERNMENT

The following excerpt is from the U.S. Department of Justice website:
Tuesday, March 13, 2012
WASHINGTON – United Kingdom citizen Ahmed Sarchil Kazzaz and his company, Leadstay Company, were charged in an indictment unsealed today in the Northern District of Alabama for their roles in a conspiracy to defraud the United States and pay kickbacks in exchange for receiving subcontracts for a Department of Defense program in Iraq, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Joyce White Vance of the Northern District of Alabama.

Kazzaz, 45, and Leadstay were charged with one count of conspiracy to defraud and commit offenses against the United States; six counts of unlawful kickbacks; one count of wire fraud; and three counts of mail fraud.   Kazzaz was arrested on Feb. 14, 2012, in Los Angeles.   In addition, two informations filed in the Northern District of Alabama were unsealed today, charging Gaines R. Newell Jr., 52, and Billy Joe Hunt, 57, with conspiracy to commit the federal offenses of kickbacks, wire fraud and mail fraud, and with filing false tax returns.

According to the indictment, Kazzaz paid more than $947,500 in unlawful kickbacks to two employees of a prime contractor to the United States government in order to obtain lucrative subcontracts for himself and Leadstay, in connection with the Coalition Munitions Clearance Program (CMCP).   CMCP is operated in Iraq by the U.S. Army Corps of Engineers, Huntsville Engineering and Support Center (HESC).   HESC, located in the Northern District of Alabama, operated the CMCP to clear out, store and dispose of weapons that were seized or abandoned in Iraq since the 2003 invasion.   HESC awarded a contract to perform this work to an international engineering and construction firm headquartered in Pasadena, Calif.

The indictment alleges that beginning in about March 2006, Kazzaz entered into a kickback agreement with the California prime contractor’s program manager and deputy program manager, who arranged for the award of subcontracts to Kazzaz and Leadstay to provide materials, heavy equipment and operators for equipment for the CMCP.   Kazzaz also allegedly obtained multiple funding increases to those subcontracts.   From April 2006 through August 2008, Kazzaz and Leadstay received more than $23 million in U.S. funds for services under the CMCP.

According to the two informations unsealed today, Newell was the program manager in Iraq for the California-based prime contractor to HESC, and Hunt was the deputy program manager.  Both are charged with conspiring to solicit and accept kickbacks to award subcontracts under the CMCP program and to commit mail and wire fraud by knowingly and intentionally devising a scheme to defraud the United States.   In addition, both are charged with failing to report the kickback income on their federal tax returns.

“Mr. Kazzaz allegedly paid kickbacks to two employees of a California-based contractor in order to secure subcontracts for Department of Defense programs in Iraq,” said Assistant Attorney General Breuer.   “Federal contracts must be won or lost based on the merits of the bid, and we will continue to take aggressive steps to hold accountable anyone who tries to play by their own set of rules instead.”

“Government contracts fraud is an insult to all law-abiding taxpayers,” said U.S. Attorney Vance.  “These defendants’ conduct was even worse in that they tried to illegally profit from defense contracts in Iraq, where American men and women were willing to put their lives on the line for freedom.”

“These charges clearly demonstrate that we will take firm action against those who make illegal payments while engaged in wartime contracting,” said Stuart W. Bowen, Special Inspector General for Iraq Reconstruction (SIGIR).   “SIGIR and its investigative partners will continue our vigorous pursuit of those whose illegal acts undermined the U.S. government’s management of the stabilization and reconstruction effort in Iraq.”

“Individuals and businesses that illegally enrich themselves at the expense of the U.S. taxpayer, especially as wartime profiteers, or those who diminish the combat readiness or effectiveness of the U.S. military, will be aggressively investigated by DCIS and our investigative partners,” said Defense Criminal Investigative Service (DCIS) Special Agent in Charge Chris D. Hendrickson.  “The combined investigative effort, the Department of Justice and the U.S. Attorney’s Office’s work demonstrate the combined federal commitment to combating fraud, waste and abuse.”

“IRS Criminal Investigation provides financial expertise with our law enforcement partners,” said Special Agent in Charge Leslie P. DeMarco of the Internal Revenue Service Criminal Investigations (IRS-CI) Los Angeles Field Office.  “Today’s unsealing of these charges demonstrates our collective efforts in tracing illicit funds internationally to enforce the laws and ensure public trust.”

Kazzaz, Newell and Hunt are also facing criminal forfeiture proceedings.

The cases were investigated by the DCIS, IRS-CI, SIGIR, the FBI, and the U.S. Army Criminal Investigations Division.   The cases are being prosecuted by Trial Attorney Catherine Votaw, on detail from SIGIR to the Fraud Section of the Justice Department’s Criminal Division, and Assistant U.S. Attorney David Estes of the Northern District of Alabama.

An indictment and information contain charges, and defendants are innocent until proven guilty.