MAN PLEADS GUILTY FOR PARTICIPATING IN BUSINESS OPPORTUNITY FRAUD SCHEMES

FROM:   U.S. JUSTICE DEPARTMENT I
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Wednesday, April 29, 2015
U.S. Citizen Pleads Guilty in Connection with Internationally Based Business Opportunity Fraud Ventures

A U.S. citizen charged in connection with the operation of a series of fraudulent business opportunities based in Costa Rica pleaded guilty today in Miami, the Justice Department announced.

John White was charged in a Nov. 29, 2011, indictment in the Southern District of Florida with conspiracy to commit mail and wire fraud as well as mail fraud and wire fraud counts.  White was arrested on Feb. 9, 2012, in Costa Rica pursuant to the indictment, and extradited to the United States on Feb. 11.  As part of his guilty plea to the conspiracy charge, White, also known as Gregory Garrett, admitted that he and his co-conspirators fraudulently sold beverage and greeting card business opportunities to victims in the United States.

The case against White is part of the government’s continued nationwide crackdown on business opportunity fraud.  In addition to White, 11 other defendants have been charged in connection with related business opportunity fraud ventures that operated in Costa Rica.  Nine of those other defendants have been convicted in the United States with sentences ranging from three to 16 years in prison.  Two remaining defendants are not yet in the custody of the United States.

“Business opportunity schemes target innocent victims who simply want to work for the American dream,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “We will continue to prosecute those who commit fraud and take advantage of those seeking to start a new business.”

As part of his guilty plea, White admitted that from 2005 to 2008, he and his co-conspirators fraudulently induced purchasers in the United States to buy business opportunities in USA Beverages Inc., Twin Peaks Gourmet Coffee Inc., Cards-R-Us Inc., Premier Cards Inc. and The Coffee Man Inc.  White and his co-conspirators claimed that these opportunities would allow purchasers to sell coffee and greeting cards from display racks located at other retail establishments.  The business opportunities cost thousands of dollars each and most purchasers paid at least $10,000.  Each company operated for several months and after one company closed, the next opened.

White admitted that the conspiracy used various means to make it appear to potential purchasers that the businesses were located entirely in the United States.  The companies used bank accounts, office space and other services in the Southern District of Florida and elsewhere.  In reality, White and his co-conspirators operated out of call centers in Costa Rica.

White admitted that he and his co-conspirators made numerous false statements to potential purchasers of the business opportunities, including that purchasers likely would earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands.  Potential purchasers also were falsely told that the profits of the companies were based in part on the profits of the business opportunity purchasers, thus creating the false impression that the companies had a stake in the purchasers’ success and in finding good locations.

As alleged in the indictment against White and others, the companies employed various types of sales representatives, including fronters, closers and references.  A fronter spoke to potential purchasers when the prospective purchasers initially contacted the company in response to an advertisement.  A closer subsequently spoke to potential purchasers to close deals.  References spoke to potential purchasers about the financial success they purportedly had experienced since purchasing one of the business opportunities.  The companies also employed locators, who were typically characterized by the sales representatives as third parties who worked with the companies to find high-traffic locations for the prospective purchaser’s merchandise display racks.  White admitted that he worked as a fronter and reference using assumed names.

White faces a statutory maximum sentence of 25 years in prison, a fine and mandatory restitution on the conspiracy count.  U.S. District Court Judge Patricia A. Seitz set a sentencing hearing for Aug. 5 at 10 a.m., at the federal courthouse in Miami.

“This international and domestic investigation shows the Postal Inspection Service’s resolve to protect Americans from business opportunity scams,” said Postal Inspector in Charge Ronald J. Verrochio of the U.S. Postal Inspection Service (USPIS) Miami Division.

Principal Deputy Assistant Attorney General Mizer commended the investigative efforts of USPIS.  The case is being prosecuted by Trial Attorney Alan Phelps of the Civil Division’s Consumer Protection Branch.

WOMAN SENTENCED FOR SMUGGLING HUMANS INTO U.S.

FROM:  U.S. JUSTICE DEPARTMENT 
Friday, December 12, 2014
Costa Rican Woman Sentenced to Prison for Role in Human Smuggling Conspiracy

A citizen and resident of Costa Rica was sentenced today to 30 months in prison for her leadership role in a conspiracy to smuggle undocumented migrants to the United States.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, and Special Agent in Charge Clark E. Settles of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE- HSI) Washington, D.C., Field Office made the announcement.  U.S. District Judge Ursula M. Ungaro of the Southern District of Florida imposed the sentence.

Mercedes Morera Roche, 49, of Costa Rica, was extradited to the United States from Panama on Aug. 21, 2014, to face human smuggling charges.  Roche pleaded guilty on Oct. 6, 2014, to conspiracy to smuggle more than 25 undocumented migrants from Cuba to the United States.

According to her plea agreement, Roche admitted that between 2004 and 2011, she was an organizer of a human smuggling network that provided instructions, fraudulent identity and travel documents, escorts, transport, safe house locations, and other assistance to facilitate the illicit travel of undocumented migrants to the United States.  Roche admitted that in some cases, she provided fraudulent passports so that undocumented migrants could fly to the United States with the help of corrupt foreign airline and immigration officials.  Roche directed the migrants to destroy the fraudulent documents during the flights to the United States, and instructed the migrants about what to do and say to U.S. immigration authorities upon landing.  In other cases, Roche coordinated the smuggling of undocumented migrants over land routes through Latin America and Mexico into the United States.  Roche solicited payments of up to $10,000 for each undocumented migrant.

The investigation was pursued under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI.  The ECT program focuses on human smuggling networks that may present particular national security or public safety risks or present grave humanitarian concerns.  ECT has dedicated investigative, intelligence and prosecutorial resources.  ECT coordinates with and receives assistance from other U.S. government agencies and foreign law enforcement authorities.

The investigation was conducted by ICE- HSI’s Washington, D.C. Field Office with support from the Human Smuggling Trafficking Center and U.S. Customs and Border Protection’s National Targeting Center.  Critical assistance was also provided by HSI’s Miami Field Office and the ICE Attaché Office in Panama.  Extradition assistance was provided by the Criminal Division’s Office of International Affairs, INTERPOL Washington and the United States Marshals Service.  The Justice Department is grateful for the significant assistance provided by the Panamanian Ministry of Foreign Affairs.  This case was prosecuted by Trial Attorney Michael Sheckels of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Robert Emery of the Southern District of Florida.

TWO CHARGED, ONE PLEADS GUILTY IN COSTA RICAN TELEMARKETING SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, October 23, 2014

Two Individuals Charged, Third Pleads Guilty For Roles In Costa Rican Telemarketing Schemes Targeting U.S. Residents

A California woman pleaded guilty today for her role in a half-million-dollar “sweepstakes fraud” scheme that was run from Costa Rica and targeted U.S. residents.  A Costa Rican national and an Ohio resident were also indicted for their roles in separate but similar schemes earlier this week.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Anne M. Tompkins of the Western District of North Carolina made the announcement.

Patricia Diane Clark, 56, of Sacramento, California, pleaded guilty today before U.S. Magistrate Judge David S. Cayer of the Western District of North Carolina to conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering, all in connection with a Costa Rican telemarketing fraud scheme that targeted U.S. residents.

According to Clark’s plea agreement, from approximately 2007 through February 2013, her co-conspirators called U.S. residents from Costa Rican call centers, falsely informing them that they had won a substantial cash prize in a “sweepstakes.”  The victims, many of whom were elderly, were told that in order to receive the prize, they had to send money for a purported “refundable insurance fee.”  Clark admitted that she picked up money from the victims and sent it to her co-conspirators in Costa Rica.  Clark also admitted that she managed others who picked up money from the victims in the United States and that she kept a portion of the victims’ payments.

Also according to Clark’s plea agreement, once the victims sent money, Clark’s co-conspirators contacted the individuals again and falsely informed them that the prize amount had increased, either because of a clerical error or because another prize winner was disqualified.  The victims then had to send additional money to pay for new purported fees to receive the now larger sweepstakes prize.  The attempts to collect additional money from the victims continued until an individual either ran out of money or discovered the fraudulent nature of the scheme.

Clark admitted that, along with her co-conspirators, she was responsible for approximately $640,000 in losses to hundreds of U.S. citizens.  

Additionally, earlier this week, Marco Vinicio Fallas Hernandez, 41, a Costa Rican citizen, was charged in a superseding indictment in the Western District of North Carolina with one count of conspiracy to commit wire fraud, ten counts of wire fraud, one count of conspiracy to commit money laundering, and nine counts of international money laundering in connection with a similar telemarketing scheme.  According to the indictment, Hernandez and his co-conspirators were responsible for causing approximately $10,000,000 in losses to hundreds of U.S. citizens, many of whom are elderly.  Eight individuals, including Hernandez, are charged in the superseding indictment.

Separately, Paul Ronald Toth Jrj., 38, a resident of Bloomingdale, Ohio, was indicted in the Western District of North Carolina this week on one count of conspiracy to commit money laundering and six counts of international money laundering.  According to the indictment, between November 2009 and November 2010, Toth and others he supervised received money from victims of a Costa Rican telemarketing scheme.  Toth allegedly kept some of the proceeds and wired the remainder to Costa Rica using numerous persons as senders and recipients, all in a manner designed to conceal and disguise the fraudulent source and nature of the transactions.  Toth is alleged to have received more than $300,000 of illegal proceeds during the scheme.

The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

These cases were investigated by the U.S. Postal Inspection Service, FBI, Internal Revenue Service, Federal Trade Commission, and Department of Homeland Security.  These cases are being prosecuted by Senior Litigation Counsel Patrick Donley and Trial Attorneys William Bowne and Anna Kaminska of the Criminal Division’s Fraud Section.

U.S. CONGRATULATES LUIS SOLIS ON WINNING PRESIDENCY OF COSTA RICA

FROM:  U.S. STATE DEPARTMENT 

Costa Rica Presidential Elections

Press Statement

John Kerry
Secretary of State

Washington, DC

April 7, 2014

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We congratulate Luis Guillermo Solis on his election as the next President of Costa Rica.
The partnership between the United States and Costa Rica has a long history, and reflects many issues of common interest, including energy, education, citizen security, job creation, and economic growth.

As President Obama made clear during his visit last year, the United States and Costa Rica share a close friendship based on a commitment to democratic values and human rights.
We stand ready to build on those common values with the Solis administration in the years to come.

U.S. WORKS TO TRAIN COSTA RICAN AUTHORITIES TO STOP COCAINE TRAFFICK

FROM:  U.S. STATE DEPARTMENT

Strengthening Costa Rica’s Borders

In 2012, more than half of the primary flow of the cocaine trafficked to the United States first transited through the Central American corridor. Costa Rica’s use as a drug transshipment point is credited to its strategic geographic location, linking narcotics-producing countries in South America with the United States and the challenges of patrolling its extensive Caribbean and Pacific coastlines.

INL is taking steps across Central America to assist countries like Costa Rica improve their capabilities through the Central America Regional Security Initiative (CARSI). CARSI programs seek to disrupt crime that operates cross-regionally without regard to national borders, while also helping national governments take greater responsibility for their own security with professional, effective law enforcement.

A key pillar of the CARSI program is its capacity building for law enforcement. Since 2010, INL has partnered with the U.S. Customs and Border Protection (CBP) in Central America, and CBP first offered land interdiction training to the Costa Rican Fuerza Publica, or National Police, in 2012. That training highlighted Costa Rica’s need for a dedicated Border Police force that could recruit cadets to work far from home in the tropical rainforest of Costa Rica’s border zones, and provide a career path that rewarded these specialized officers.
This necessary border police force was created by the Costa Rican government in 2013. On September 13th, 2013, Fuerza Publica officers began a basic border course taught and designed by Costa Ricans with input from CBP. At the end of the course, 170 officers went north to begin putting these lessons into practice, while 30 officers remained for an advanced course taught directly by CBP. The advanced course will give these officers specialized skills in mobile patrols, border post management, inspection of fraudulent documents, as well as day and night tactical operations.

In the weeks following their deployment, graduates of the basic course have made national headlines across Costa Rica with their discovery of ten helipads built on ranches owned by suspected drug traffickers and corrupt local officials, depots of military-style weapons, bulk currency, and stolen aviation fuel hidden in the remote hills along the border with Nicaragua. Costa Rica’s Judicial Investigative Police are now using evidence collected by the Border Police to build a case against the criminal network linked to the discoveries, while the 27 graduates of the advanced course head to the border to add an even greater level of advanced techniques to the efforts already underway.

U.S. EXPORT-IMPORT BANK APPROVES OVER $61 MILLION TO AID EXPORT OF WIND-TURBINE GENERATORS

FROM:  U.S. EXPORT-IMPORT BANK 
Ex-Im Bank Approves $61.1 Million for Export of U.S.-Made Wind-Turbine Generators to Costa Rica 

Washington, D.C. – The Export-Import Bank of the United States (Ex-Im Bank) has approved a $61.1 million direct loan to Inversiones Eolicas de Orosi Dos S.A. (Orosi), a subsidiary of the leading Central American wind-generation company Globeleq Mesoamerica Energy, for the purchase of wind-turbine generators manufactured by Gamesa in Fairless Hills, Pa.    

The authorization, which represents Ex-Im Bank’s first wind transaction in Costa Rica and fourth utility-scale wind project overall, will support approximately 200 U.S. jobs, according to bank estimates derived from Departments of Commerce and Labor data and methodology.

“We at Ex-Im Bank continue to support renewable-energy projects that improve our environment and showcase American innovation,” said Ex-Im Bank Chairman and President Fred P. Hochberg. “Our financing will help Gamesa expand their export of renewable energy technology and in the process support U.S. jobs throughout the wind industry.”

Gamesa’s wind-turbine generators are the chosen technology for the 50 megawatt Orosi wind-farm project located in the province of Guanacaste. Costa Rica is currently focusing on different renewable-energy projects.  

Founded in 1976, Gamesa has manufactured wind turbines since 1994. To date, Gamesa has installed and commissioned wind farms in 42 countries with a total capacity exceeding 27,000 megawatts.

“Ex-Im Bank has been at the vanguard of President Obama's national export initiative," said David Flitterman, chairman of Gamesa North America. "The bank has facilitated a number of export projects for Gamesa, including the Orosi project, and continues to work with us to create new opportunities for growth and expansion. With their competitive rates and expertise, Ex-Im Bank is opening up new markets and opportunities for U.S.-manufactured goods, and that's increasing investments at home and sustaining American jobs across the supply chain.”