FORMER SILK ROAD INVESTIGATOR PLEADS GUILTY TO CHARGES STEMMING FROM BITCOIN FRAUD

FROM:  U.S. JUSTICE DEPARTMENT
Wednesday, July 1, 2015
Former Silk Road Task Force Agent Pleads Guilty to Extortion, Money Laundering and Obstruction
Ex-DEA Agent Used Undercover Status to Fraudulently Obtain Digital Currency Worth Over $700,000

A former DEA agent pleaded guilty today to extortion, money laundering and obstruction of justice, which he committed while working as an undercover agent investigating Silk Road, an online marketplace used to facilitate the purchase and sale of illegal drugs and other contraband.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California, Chief Richard Weber of the IRS-Criminal Investigation (IRS-CI), Special Agent in Charge David J. Johnson of  FBI’s San Francisco Division, Special Agent in Charge Michael P. Tompkins of the Department of Justice Office of the Inspector General’s Washington, D.C. Field Office and Special Agent in Charge Lori Hazenstab of the Department of Homeland Security’s Office of the Inspector General in Washington D.C. made the announcement.

“While investigating the Silk Road, former DEA Agent Carl Force crossed the line from enforcing the law to breaking it,” said Assistant Attorney General Caldwell.  “Seduced by the perceived anonymity of virtual currency and the dark web, Force used invented online personas and encrypted messaging to fraudulently obtain bitcoin worth hundreds of thousands of dollars from the government and investigative targets alike.  This guilty plea should send a strong message: neither the supposed anonymity of the dark web nor the use of virtual currency nor the misuse of a law enforcement badge will serve as a shield from the reach of the law.”

“Mr. Force has admitted using his position of authority to weave a complex veil of deception for personal profit,” said U.S. Attorney Haag.  “Mr. Force’s actions put at risk other important investigations and betrayed the trust placed in him by his law enforcement partners and the public.  We are grateful for the work done by our federal partners to assist in unraveling this crime.”

“Through following the money in the Silk Road investigation it became clear that the defendant was engaged in wire fraud, money laundering, and other related offenses,” said Chief Weber.  “He used his position in the investigation to bring himself significant personal financial gain.  This investigation sends a clear message -- no person, especially those entrusted with the public’s trust such as federal law enforcement, is above the law and IRS-CI will use their financial investigative skills to track you down.”

Carl M. Force, 46, of Baltimore, Maryland, pleaded guilty before U.S. District Judge Richard Seeborg of the Northern District of California to an information charging him with money laundering, obstruction of justice and extortion under color of official right.  Force’s sentencing hearing is scheduled for Oct. 19, 2015.

Force was a Special Agent with the DEA for 15 years.  Between 2012 and 2014, he was assigned to the Baltimore Silk Road Task Force, a multi-agency group investigating illegal activity on the Silk Road.  Force was the lead undercover agent in communication with Ross Ulbricht, aka “Dread Pirate Roberts,” who ran the Silk Road.

In connection with his guilty plea, Force admitted that, while working in an undercover capacity using his DEA-sanctioned persona, “Nob,” in the summer of 2013, Force offered to sell Ulbricht fake drivers’ licenses and “inside” law enforcement information about the Silk Road investigation, which information Nob claimed to have accessed through a corrupt government employee.  Force admitted that he attempted to conceal his communications with Ulbricht about the payments by directing Ulbricht to use encrypted messaging.  Although Force understood these payments, which were made in bitcoin, to be government property, as they constituted evidence of a crime, he admitted that he falsified official reports and stole the funds, depositing the bitcoin into his own personal account and then converting them into dollars.  Force admitted that, at the time, the value of the bitcoin he received from Ulbricht was in excess of approximately $100,000.

Force also admitted that he devised and participated in a scheme to fraudulently obtain additional funds from Ulbricht through another online persona, “French Maid,” of which his Task Force colleagues were not aware.  Force admitted that, as French Maid, he solicited and received bitcoin payments from Ulbricht worth approximately $100,000 in exchange for information concerning the government’s investigation into the Silk Road.

In connection with his guilty plea, Force also admitted that, in late 2013, in his personal capacity, he invested $110,000 worth of bitcoin in CoinMKT, a digital currency exchange company.  Although he did not receive permission from the DEA to do so, he served as CoinMKT’s Chief Compliance Officer.  In this role, in February 2014, Force was alerted by CoinMKT to what the company initially believed to be suspicious activity in a particular account.  Force admitted that, thereafter, in his capacity as a DEA agent, but without authority or a legal basis to do so, he directed CoinMKT to freeze $337,000 in cash and digital currency from the account and he subsequently transferred the approximately $300,000 of digital currency funds into a personal account that he controlled.

Force also admitted to entering into a $240,000 contract with 20th Century Fox Film Studios related to a film concerning the government’s investigation into the Silk Road.  Force admitted that he did not secure the necessary approvals from the DEA to do so.

According to his plea agreement, Force admitted that he had obstructed justice both by soliciting and accepting bitcoin from Ulricht and by lying to federal prosecutors and agents who were investigating potential misconduct by Force and others.

The investigation is ongoing.  To date, Force is one of two federal agents charged with crimes in connection to their roles in investigating the Silk Road.  Shaun W. Bridges, 32, of Laurel, Maryland, a former Special Agent with the U.S. Secret Service, is charged in a two-count information with money laundering and obstruction of justice related to his diversion of over $800,000 in digital currency that he gained control over as part of the Silk Road investigation.  The charges contained in an information are merely accusations, and a defendant is presumed innocent until and unless proven guilty.

The case was investigated by the FBI’s San Francisco Division, the IRS-CI’s San Francisco Division, the Department of Justice Office of the Inspector General and the Department of Homeland Security Office of the Inspector General in Washington, D.C.  The following additional components assisted with the investigation: IRS-CI’s New York Field Office, HSI’s Chicago/O’Hare Division, the U.S. Attorney’s Office for the Southern District of New York, the Criminal Division’s Computer Crime and Intellectual Property Section, the Criminal Division’s Office of International Affairs, the U.S. Embassy in Slovenia and the FBI Legal Attaché Office in Tokyo.

The case is being prosecuted by Assistant U.S. Attorneys Kathryn Haun and William Frentzen of the Northern District of California and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, with assistance from Assistant U.S. Attorney Arvon Perteet.

FTC SAYS NEARLY $4 MILLION RETUNED RELATED TO DEBT COLLECTION SCAM

FROM:  U.S. FEDERAL TRADE COMMISSION

FTC Returns Almost $4 Million to Consumers in Debt Collection Scam
The Federal Trade Commission is mailing almost 95,000 checks totaling approximately $4 million to consumers who lost money to a debt collection operation that extorted payments from them using false threats.

In May 2014, the FTC settled charges against Asset Capital and Management Group, which, under various names, illegally extracted payments from consumers for credit card debt the defendants had purchased from creditors. The settlement order banned the defendants from the debt collection industry.

Consumers who receive the checks from the FTC’s refund administrator for this matter, Analytics Consulting LLC, should deposit or cash them within 60 days of the mailing date. The FTC never requires consumers to pay money or to provide information before refund checks can be cashed.

MAN CONVICTED FOR ROLE IN DEFRAUDING AND EXTORTING MONEY FROM SPANISH-SPEAKERS THROUGH CALL CENTERS

FROM:  U.S. JUSTICE DEPARTMENT

Friday, October 17, 2014

Jury Convicts Peruvian Man of Defrauding and Extorting Spanish-Speaking Customers through Fraudulent Call Centers

A jury in Miami convicted a Lima, Peru, man on 26 felony charges of conspiracy, fraud and attempted extortion arising from his operating call centers in Peru that lied to and threatened Spanish-speaking victims into paying fraudulent settlements, the Department of Justice announced today.

Juan Alejandro Rodriguez Cuya, 35, was convicted by a jury after less than two hours of deliberation following a two-week trial before U.S. District Court Judge Patricia A. Seitz in Miami federal court. His co-defendant at trial, Maria Luzula, 52, of Miami, pleaded guilty to all of the charges against her midway through the trial.  Luzula is Cuya’s mother.

Cuya and Luzula both face a statutory maximum of 20 years in prison on each count. Both defendants remain in custody pending their sentencing on Jan. 22, 2015, and Dec. 18, respectively.

“The defendants targeted and preyed upon the Spanish-speaking community – and the evidence of the harm that their fraud caused on individual victims is heart-wrenching,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “The Justice Department is committed to prosecuting those who defraud consumers for their own personal gain.”

According to evidence presented at trial, the defendants’ employees in Peru used Internet-based telephone calls to threaten Spanish-speaking victims in the United States.  The Peruvian callers falsely accused the victims of having refused delivery of certain products and claimed that the victims owed thousands of dollars in fines and that lawsuits would be brought against them.  In reality, the victims had never ordered these products and nothing had been delivered.

Additional evidence at trial established that Luzula’s and Cuya’s employees claimed that the consumers could resolve the fines if they immediately paid a “settlement fee.”  Consumers who contested these settlement fees were told that failure to pay could lead to arrest, deportation or forfeiture of property.  Thousands of victims succumbed to these threats and paid fees that they did not owe.  A phone room in Miami collected the fees.

Victims who testified at trial spoke of how anxious the calls made them.  The victims were so afraid of the threats that they paid fees they simply could not afford.

Acting Assistant Attorney General Branda commended the U.S. Postal Inspection Service for their investigative efforts and thanked the U.S. Attorney’s Office for the Southern District of Florida for their contributions to the case.  The case was prosecuted by Trial Attorney Phil Toomajian and Assistant Director Richard Goldberg of the Civil Division’s Consumer Protection Branch.

16 PUERTO RICO POLICE OFFICERS PLEAD GUILTY TO USING BADGES TO COMMIT CRIMES

FROM:   U.S. JUSTICE DEPARTMENT 

Monday, August 25, 2014

Sixteen Former Puerto Rico Police Officers Plead Guilty to Running Criminal Organization from the Police Department

Former Officers Convicted of Racketeering, Robbery, Extortion, and Firearms Charges

Sixteen former Puerto Rico police officers have pleaded guilty for their roles in a criminal organization run out of the police department.   The officers used their affiliation with law enforcement to commit robbery and extortion, to manipulate court records in exchange for bribes, and to sell illegal narcotics.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico and Special Agent in Charge Carlos Cases of the FBI’s San Juan Division made the announcement.

“These 16 police officers were charged with fighting crime, protecting lives and property, and improving the quality of life in Puerto Rico,” said Assistant Attorney General Caldwell.   “Instead, they used their badges and guns to do the opposite, committing crimes, endangering lives, and stealing property under the veil of police authority.  This prosecution demonstrates the Justice Department’s commitment to holding all criminals accountable – including those who wear a badge.  We will use every tool at our disposal, including the RICO laws, to rid our communities of corruption.”

The following 13 defendants pleaded guilty to conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act:  Osvaldo Vazquez-Ruiz, 38; Orlando Sierra-Pereira, 37; Danny Nieves-Rivera, 35; Roberto Ortiz-Cintron, 35; Yovanny Crespo-Candelaria, 34; Jose Sanchez-Santiago, 32; Miguel Perez-Rivera, 35; Nadab Arroyo-Rosa, 33; Jose Flores-Villalongo, 52; Luis Suarez-Sanchez, 36; Eduardo Montañez-Perez, 29; Carlos Laureano-Cruz, 40; and Carlos Candelario-Santiago, 47.   Three defendants, Ruben Casiano-Pietri, 36, Christian Valles-Collazo, 28, and Ricardo Rivera Rodriguez, 39, pleaded guilty to robbery and extortion charges.   Several of the defendants also pleaded guilty to firearms charges in connection with the use of their police-issued firearms in furtherance of their crimes.   At the time of their criminal conduct, Flores-Villalongo and Candelario-Santiago were sergeants with the Police of Puerto Rico (POPR), and the other defendants were police officers.  Sentencing hearings are scheduled for December 2014.

According to court documents, over the course of the conspiracy, the officers worked together to conduct traffic stops and enter the homes of suspected criminals to steal money, property and drugs for their own personal enrichment.   They planted evidence to make false arrests, and then extorted money from their victims in exchange for their release from custody.   Additionally, in exchange for bribe payments, the officers gave false testimony, manipulated court records and failed to appear in court when required so that criminal cases would be wrongfully dismissed.   The officers also sold and distributed wholesale quantities of narcotics.

As just a few examples of their criminal conduct, in April 2012, defendants Vazquez-Ruiz and Sierra-Pereira conducted a traffic stop in their capacity as police officers and stole approximately $22,000 they believed to be illegal drug proceeds.   Vazquez-Ruiz later attempted to extort approximately $8,000 from an individual believed to be a drug dealer’s accomplice in exchange for promising to release a prisoner.

Further, in November 2012, defendants Sierra-Pereira, Nieves-Rivera, Ortiz-Cintron and Valles-Collazo illegally entered an apartment and stole approximately $30,000, which they believed were illegal lottery proceeds.

The defendants frequently shared with one another the proceeds they illegally obtained, and used their power, authority and official positions as police officers to promote and protect their illegal activity.   Among other things, the defendants used POPR firearms, badges, patrol cars, tools, uniforms and other equipment to commit the crimes, and then concealed their illegal activity with fraudulently obtained court documents and falsified POPR paperwork that made it appear they were engaged in legitimate police work.

The case was investigated by the FBI’s San Juan Division, and prosecuted by Trial Attorneys Brian K. Kidd, Emily Rae Woods and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Mariana E. Bauzá of the District of Puerto Rico.

16 FORMER, CURRENT MEMBERS PUERTO RICO POLICE INDICTED FOR ROLES IN ORGANIZED CRIME

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, May 22, 2014

Sixteen Current and Former Puerto Rico Police Officers Indicted for Allegedly Running Criminal Organization out of Police Department

Officers Charged with Racketeering, Robbery, Extortion, Firearm, Narcotics, Civil Rights and Theft Charges

Sixteen current and former Puerto Rico police officers have been indicted for their alleged participation in a criminal organization, run out of the police department, that used their affiliation with law enforcement to make money through robbery, extortion, manipulating court records and selling illegal narcotics.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico and Special Agent in Charge Carlos Cases of the FBI’s San Juan Division made the announcement.

“ The criminal action today dismantles an entire network of officers who, we allege, used their badges and their guns not to uphold the law, but to break it,” said Acting Assistant Attorney General O’Neil.   “The indictment portrays a classic criminal shakedown, an organized crime spree of which the most experienced mafia family would have been proud.   But the people wielding the guns and stealing the drugs here weren’t mob goodfellas or mafia soldiers – these were police officers violating their oaths to enforce the law, making a mockery of the police’s sacred responsibility to protect the public. ”

“This is a troubling day for law enforcement in Puerto Rico. Officers who use their badges as an excuse to commit egregious acts of violence and drug trafficking are an affront to the rule of law,” said US Attorney Rosa Emilia Rodríguez-Vélez.  “According to these allegations, the law enforcement officers charged today sold their badges by taking payoffs from drug dealers that they should have been arresting, extorting money, planting evidence and stealing from them, to mention a few of their crimes.  They not only betrayed the citizens they were sworn to protect, they also betrayed the thousands of honest, hard-working law enforcement officers who risk their lives every day to keep us safe.  We will continue to work with our local law enforcement partners to end this cycle of corruption and renew Puerto Rico’s trust in its police officers.”

“Today is a sad day for Puerto Rico, where a group of police officers allegedly disgraced their uniform and are a shame to the Police of Puerto Rico,” said FBI Special Agent in Charge Cases.   “They not only let their colleagues and family down, they let the citizens of Puerto Rico down.”

The indictment, returned yesterday by a federal grand jury in the District of Puerto Rico, includes 36 charges against the following individuals: Osvaldo Vazquez-Ruiz, 38; Orlando Sierra-Pereira, 37; Danny Nieves-Rivera, 34; Roberto Ortiz-Cintron, 34; Yovanny Crespo-Candelaria, 33; Jose Sanchez-Santiago, 31; Miguel Perez-Rivera, 34; Nadab Arroyo-Rosa, 33; Jose Flores-Villalongo, 52; Luis Suarez-Sanchez, 36; Eduardo Montañez-Perez, 29; Carlos Laureano-Cruz, 40; Carlos Candelario-Santiago, 46; Ruben Casiano-Pietri, 36; Ricardo Rivera-Rodriguez, 39; and Christian Valles-Collazo, 28.   At the time of the crimes charged, Flores-Villalongo and Candelario-Santiago were sergeants with the Police of Puerto Rico (POPR); the others were police officers.

The first 13 defendants listed are charged with conspiring to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act.   Other charges against certain defendants include extortion and attempted extortion under color of official right, conspiracy to commit robbery and attempted robbery, illegal use and sale of firearms, narcotics trafficking, civil rights violations, theft of government property, and false statements to federal agents.

According to the indictment, the officers charged with RICO conspiracy were members of a criminal organization who sought to enrich themselves through a pattern of illegal conduct.   The officers worked together to conduct traffic stops and enter homes or buildings used by persons suspected of being engaged in criminal activity to steal money, property and narcotics.    The officers planted evidence to make false arrests, then extorted money in exchange for their victims’ release from custody.   In exchange for bribe payments, the defendants gave false testimony, manipulated court records and failed to appear in court when required so that cases would be dismissed.   The officers also sold and distributed wholesale quantities of narcotics.

For example, in April 2012, defendants Vazquez-Ruiz and Sierra-Pereira allegedly conducted a traffic stop in their capacity as police officers and stole approximately $22,000 they believed to be illegal drug proceeds.   Vazquez-Ruiz later attempted to extort approximately $8,000 from an individual they believed to be a drug dealer’s accomplice in exchange for promising to release an alleged prisoner.

In another example, the indictment alleges that in November 2012, defendants Sierra-Pereira, Nieves-Rivera, Ortiz-Cintron and Valles-Collazo illegally entered an apartment and stole approximately $30,000, which they believed were illegal lottery proceeds.

The indictment charges that the defendants frequently shared the proceeds they illegally obtained and that they used their power, authority and official positions as police officers to promote and protect their illegal activity.   Among other things, the indictment charges that they used POPR firearms, badges, patrol cars, tools, uniforms and other equipment to commit the crimes and concealed their illegal activity with fraudulently obtained court documents and falsified POPR paperwork to make it appear that they were engaged in legitimate police work.

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

The case is being investigated by the FBI’s San Juan Division.   The case is being prosecuted by Trial Attorneys Brian K. Kidd, Emily Rae Woods and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Mariana Bauza of the District of Puerto Rico.

FORMER VIRGINS ISLANDS LEGISLATURE EXECUTIVE DIRECTOR CHARGED WITH BRIBERY, EXTORTION

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, May 8, 2014

Former Executive Director of Virgin Islands Legislature Charged with Bribery and Extortion in Award of Government Contracts

The former e xecutive director of the Legislature of the Virgin Islands was indicted today by a federal grand jury in the Virgin Islands for accepting bribes and engaging in extortion in the award of contracts with the Legislature, announced Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division and U.S. Attorney Ronald W. Sharpe for the District of the Virgin Islands.

The indictment charges Louis “Lolo” Willis, 56, of St. Thomas, Virgin Islands, with three counts of federal programs bribery and three counts of extortion under color of official right.

According to the indictment, Willis was the executive director of the Legislature between 2009 and 2012.  One of his responsibilities included oversight of the renovation of the Legislature building, which included awarding and entering into contracts on behalf of the Legislature.   These contracts included contracts for general construction, air-conditioning services and carpentry, which were not publicly bid.  Willis was also responsible for paying the contractors for their work.   As alleged in the indictment, Willis accepted payments, including, among other things, thousands of dollars in cash, from three contractors in exchange for using his official position to secure contracting work for the contractors and to ensure they received payment upon completion.

An indictment is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law.

This case was investigated by the FBI’s San Juan Division, the Office of the Virgin Islands Inspector General and the Internal Revenue Service – Criminal Investigation.   The case is being prosecuted by Trial Attorneys Peter Mason and Jennifer Blackwell of the Criminal Division’s Public Integrity Section and First Assistant U.S. Attorney Thomas Anderson of the District of the Virgin Islands.

AMERICAN POWER GANG LEADERS CONVICTED IN RACKETEERING CONSPIRACY

FROM:  U.S. JUSTICE DEPARTMENT

Thursday, April 17, 2014

Armenian Power Gang Leaders Convicted for Their Role in Racketeering Conspiracy

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

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

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

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

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

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

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

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

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

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

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

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

NEW MALWARE PROGRAM HOLDS FILES FOR RANSOM

FROM:  FEDERAL TRADE COMMISSION
FTC, FBI Warn Consumers About ‘Cryptolocker,’ A New Breed of Computer Malware

How much is everything on your computer worth to you?  About $300?  The criminals behind a new malware program are betting on it.

The Federal Trade Commission, the FBI and other federal agencies are warning consumers and businesses about “Cryptolocker,” a malware program that holds the files on your computer for ransom, and doesn’t allow you to access them until you pay up. Even then, there’s no guarantee. It’s essentially extortion, with all your personal documents, photos, and files at risk.

Cryptolocker is spread mostly through email and “drive-by” downloads. The email might look like a routine message from a legitimate company, like a tracking notice from a shipping company. If you click on the hyperlink in the email, Cryptolocker encrypts everything on your hard drive and in your shared folders. When the job is done, you get a “ransom note” demanding payment via Bitcoin or some other anonymous payment method. The criminals behind this malware say they’ll give you the encryption key if you pay, but they’re hardly trustworthy. And there’s no other way to unlock your files. For tips about how to protect your business from Cryptolocker, read Lock, stock, and peril.

Computer security experts say the best way to minimize the damage Cryptolocker can do is to back up your computer files often.

3 MS-13 LEADERS FOUND GUILTY OF RACKETEERING AND MORE CHARGES RELATED TO MULTIPLE MURDERS

FROM:  U.S. JUSTICE DEPARTMENT 
Tuesday, August 6, 2013
Three MS-13 Leaders Found Guilty of Racketeering and Additional Charges for Multiple Murders and Attacks

Twelve Others Have Pleaded Guilty in the Case

Three leaders of MS-13 in Washington, D.C., were found guilty by a federal jury today of conspiring to participate in racketeering activity and other charges stemming from their roles in murders, extortion and other violent crimes in the Washington area.

The verdicts, which followed a month-long trial, were announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Ronald C. Machen Jr. of the District of Columbia; Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement (ICE) - Homeland Security Investigations (HSI) in Washington; and Cathy L. Lanier, Chief of the Washington, D.C., Metropolitan Police Department (MPD).

“Today, a jury has found three defendants guilty of committing heinous crimes as part of their membership in a brutal international criminal organization that has terrorized communities throughout the United States and Central America,” said Acting Assistant Attorney General Raman.  “As a result of this successful investigation and prosecution, these violent gang members now face substantial prison sentences.”

“After a month-long trial, this jury delivered the message that MS-13 and its brutal brand of violence will not be tolerated in the District of Columbia,” said U.S. Attorney Machen.  “These three killers now face life in prison for their outrageous crimes, including the stabbing death of a 14-year-old boy in Columbia Heights.  I want to thank the prosecutors and our law enforcement partners who have dedicated years to investigating and prosecuting this transnational gang.  The District is safer with these murderers behind bars.”

 “This verdict represents the consequences for the decisions made and the lifestyle choices of the three convicted gang members,” said Special Agent in Charge Torres. “Investigating violent crimes committed by trans-national gang members is a priority for HSI.”

“The convictions of these three violent gang leaders should send a clear message to the members of this ruthless, international criminal organization that gang activity will not be tolerated in our communities,” said Police Chief Lanier.  “I applaud the hard work and dedication by the members of the Metropolitan Police Department and our law enforcement partners who helped make today’s convictions possible.  Our communities will be safer as a result.”

Yester Ayala, 22, aka “Freeway” and “Daddy Yankee,” of Washington; Noe Machado-Erazo, aka “Gallo,” 30, of Wheaton, Md.; and Jose Martinez-Amaya, 26, aka “Crimen,” of Brentwood, Md., were each found guilty in U.S. District Court in the District of Columbia.  At sentencing, scheduled for Nov. 4, 2013, each of the defendants faces a maximum sentence of life in prison.

Ayala was found guilty of one count of conspiracy to participate in racketeering activity, two counts of murder in aid of racketeering, one count of first-degree premeditated murder and one count of second-degree murder. Machado-Erazo was found guilty of conspiracy to participate in racketeering activity, murder in aid of racketeering and possession of a firearm during a crime of violence.  Martinez-Amaya was found guilty of conspiracy to participate in racketeering activity, murder in aid of racketeering and possession of a firearm during a crime of violence.

The government’s evidence showed that MS-13, a large gang that operates in the United States and Central America, engages in racketeering activity including murder, narcotics distribution, extortion, robberies, obstruction of justice and other crimes. The gang has numerous rules, such as enduring a beating of 13 seconds before becoming a member; killing rival gang members; and staying unfailingly loyal.

According to the government’s evidence, Machado-Erazo was a member and Martinez-Amaya was a leader of the Normandie clique, one of a number of smaller MS-13 groups operating in the Washington area. Ayala was a leader of the Sailors, another clique.  The local cliques often act together, and evidence showed that Machado-Erazo was the leader of a program of cliques that worked together.  According to evidence presented in court, the local MS-13 cliques act in accordance with the international MS-13’s strictures and have frequent contact with MS-13 leadership in El Salvador.  The evidence showed that two of the murders were committed on orders from MS-13 leadership in El Salvador.

The three defendants are among numerous people indicted by a grand jury in 2010 following a federal investigation.  Twelve others have pleaded guilty to charges in the case.

The range of criminal activity alleged in the indictment includes acts committed from 2008 through 2010 in the District of Columbia, Maryland, Virginia and other states.

Ayala was convicted of taking part in two murders in 2008, and Machado-Erazo and Martinez-Amaya were convicted of taking part in the murder of another victim.

The government presented evidence that Ayala helped carry out orders to murder Louis Alberto Membreno-Zelaya, a fellow MS-13 member who had removed his gang tattoos.  Membreno-Zelaya, 27, was stabbed at least 20 times, according to evidence presented in court. His body was found on Nov. 6, 2008, in Northwest Washington.

The second murder, according to evidence presented in court, took place in the late afternoon of Dec. 12, 2008.  Ayala joined in on an attack against Giovanni Sanchez, 14, near the Columbia Heights Metro station in Washington.  Giovanni had 11 stab wounds, and witnesses identified Ayala as one of the assailants.

According to evidence presented at trial, Machado-Erazo and Martinez-Amaya took part in the killing of Felipe Enriquez, 25, whose body was found on March 31, 2010, in Montgomery County, Md.  Enriquez, another fellow MS-13 member, was fatally shot.  Evidence presented during trial showed that Machado-Erazao provided the gun and Martinez-Amaya committed the shooting.

This case was prosecuted by Assistant U.S. Attorney Nihar Mohanty of the District of Columbia and Trial Attorney Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section.

The case was investigated by ICE-HSI and the MPD.  Assistance was provided by the Montgomery County and the Prince George’s County, Md. Police Departments, the State’s Attorney’s Office for Montgomery County, the U.S. Attorney’s Office for the District of Maryland and the U.S. Attorney’s Office for the Eastern District of Virginia.  Assistance was provided by the Organized Crime Drug Enforcement Task Force (OCDETF).

FORMER CHICAGO MASSAGE PARLOR OPERATOR SENTENCED TO LIFE IN PRISON FOR HUMAN TRAFFICKING

FROM: U.S. DEPARTMENT OF JUSTICE

Monday, November 26, 2012

Former Chicago Massage Parlor Operator Sentenced to Life in Prison for Human Trafficking of Four Women
Alex Campbell, 45, of Glenview, Ill., a former northwest suburban massage parlor owner was sentenced today to life in federal prison for various crimes including sex-trafficking, forced labor, harboring illegal aliens, confiscating passports to further forced labor and extortion involving four foreign women whom he mentally and physically abused while forcing them to work for him, the Justice Department announced today. The defendant, who operated the Day and Night Spa on Northwest Highway in Mt. Prospect, Ill., used violence and threats of violence to force three women from the Ukraine and one from Belarus to work for him without pay and, at times, little to no subsistence between July 2008 and January 2010.

Campbell, also known as "Dave" and "Daddy" and who called himself "Cowboy," was also ordered to pay approximately $124,000 restitution by U.S. District Judge Robert Gettleman. There is no parole in the federal prison system.

Campbell was convicted at trial in January of this year of three counts each of forced labor, harboring illegal aliens for financial gain and confiscating passports and other immigration documents to force the victims to work and one count each of sex trafficking by force, and extortion. He faced a mandatory minimum sentence of 15 years in prison and a maximum of life on the sex-trafficking count alone, and the judge also imposed maximum prison terms ranging from five to 20 years on each of the remaining counts, to run concurrent with the life sentence.

"Alex Campbell abused women by violently coercing them into labor and commercial sex. By working together with law enforcement and community groups, those women were able to testify about that abuse," said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. "Today’s sentence is a victory not only for the Department and the Cook County Human Trafficking Task Force, but also for those women who so bravely came forward and told the truth about their exploitation."

"If you treat human beings as property, to be branded, beaten, raped, and sold, the law will punish you to the greatest extent possible," said Gary S. Shapiro, Acting U.S. Attorney for the Northern District of Illinois. "This sentence ensures Alex Campbell’s incapacitation, which will prevent him from victimizing other women."

"The sentence handed down today sends a clear message to those who think they can callously prey upon vulnerable women to turn a profit," said Gary J. Hartwig, Special Agent-in-Charge of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations in Chicago. "HSI will continue to work with our law enforcement partners to ensure that those who engage in human trafficking are held accountable for their actions."

Cook County Sheriff Thomas J. Dart, whose sheriff’s police initiated the investigation, said, "I am extremely proud of the effort and resolution of all the agencies involved with the successful investigation, conviction and now sentencing of such a violent individual."

All four victims testified as government witnesses at trial, as well as co-defendant, Danielle John, 25, who pleaded guilty before trial to two counts of harboring illegal aliens for financial gain. She was sentenced previously to three years’ probation. In addition to the trial victims, the government presented evidence that investigators learned of approximately 20 women that Campbell victimized.

The trial showed that Campbell recruited and groomed foreign women without legal status in the United States to become part of his "Family," which he claimed was an international organization that would provide them with support. He offered them jobs in his massage parlor, a place to live, assistance with immigration, and lured each of them to enter into a romantic relationship with him. After gaining their trust, he forced the victims to get tattooed with his moniker, which he said made them his property and allowed him to stop paying them. At the same time, he acquired the women’s passports and visas. The women were forced to work long hours every day and do as Campbell instructed them, and they were beaten and punished if they disobeyed him.

Trial testimony established that Campbell confiscated passports and identity documents from three of the victims, as well as harbored and transported them to ensure their continued labor. Campbell forced one victim to engage in commercial sex acts with customers at various other massage parlors, but not at the Day and Night Spa, which testimony showed he operated "cleanly" to avoid problems with law enforcement. He extorted another victim to pay him more than $25,000 to leave the "Family" by threatening to send a sexually-explicit video recording to her parents in Belarus.

The Cook County State’s Attorney’s Office assisted in the investigation, which was coordinated by the Cook County Human Trafficking Task Force. The task force, together with the Salvation Army Family and Community Services STOP-IT Initiative Against Human Trafficking, operate a toll-free hotline, (877) 606-3158, which victims of trafficking or those with information about human trafficking can call for assistance. The government is represented by Assistant U.S. Attorneys Diane MacArthur and Steven Grimes and Special Litigation Counsel John Richmond of the Civil Rights Division’s Human Trafficking Prosecution Unit.

NEW ENGLAND CRIME BOSS SENTENCED FOR RACKETEERING AND EXTORTION

FROM:  U.S. DEPARTMENT OF JUSTICE 
Friday, May 11, 2012
Former New England Organized Crime Leader and Associate Sentenced for Racketeering and Extortion Activities

WASHINGTON – Luigi “Louie” Manocchio, an admitted former boss and underboss of the New England La Cosa Nostra (NELCN), was sentenced today to 66 months in federal prison for his leadership of and participation in a racketeering and extortion conspiracy that demanded and received between $800,000 and $1.5 million in “protection” payments from several Rhode Island adult entertainment businesses from 1995-2009.
Raymond R. “Scarface” Jenkins, an admitted associate of the NELCN, was also sentenced today to 37 months in prison for his admitted participation in a conspiracy to extort $25,000 from a Rhode Island individual and his wife by using implied threats of violence, including a visit to the individual’s residence.

The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Peter F. Neronha, U.S. Attorney for the District of Rhode Island; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; and Providence, R.I., Public Safety Commissioner Steven M. Pare.

Manocchio and Jenkins were sentenced by U.S. District Court Judge William E. Smith in the District of Rhode Island.  Manocchio, 84, was also sentenced to serve three years of supervised release following his prison sentence.  Jenkins, 47, was sentenced to serve three years of supervised release following his prison sentence.

Manocchio pleaded guilty on Feb. 22, 2012, to one count of racketeering conspiracy and Jenkins pleaded guilty on Feb. 23, 2012, to one count of conspiracy to violate the Hobbs Act by participating in extortion.

Manocchio and Jenkins are among eight Rhode Island men charged in a second superseding indictment returned on Sept. 22, 2011, for crimes involving racketeering and extortion.  Edward “Eddy” Lato, an NELCN leader; NELCN member Alfred “Chippy” Scivola; and NELCN associates Albino “Albie” Folcarelli, Thomas Iafrate and Richard Bonafiglia pleaded guilty to participating in racketeering and extortion activities.  Iafrate was sentenced on Dec. 12, 2011, to 30 months in prison to be followed by three years of supervised release.  The remaining defendants are awaiting sentencing.

An eighth defendant named in the second superseding indictment, Theodore Cardillo, pleaded not guilty to three counts of racketeering conspiracy and three counts of extortion conspiracy.  He is awaiting trial.

A third superseding indictment was returned in this matter on April 24, 2012, which charges Anthony L. Dinunzio, 53, of East Boston, Mass., the alleged acting leader of the NELCN, with one count each of racketeering and extortion, and five counts of travel in aid of racketeering.  He entered a plea of not guilty on April 25, 2012, and was ordered detained while awaiting trial.