FROM: U.S. JUSTICE DEPARTMENT
Monday, June 22, 2015
California Man Pleads Guilty in Prescription Drug Diversion Scheme
A Corona, California, man pleaded guilty today in U.S. District Court in Cincinnati to one count of conspiracy to commit mail and wire fraud for his participation in a large-scale, nationwide prescription drug diversion scheme.
Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Special Agent In Charge Antoinette V. Henry of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI) Metro Washington Field Office and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service (USPIS) Cincinnati Field Office announced the guilty plea, entered today by U.S. District Judge Timothy S. Black.
According to court documents, from May 2010 through December 2012, Vin Nguyen, 45, and others conspired to distribute illegally-diverted prescription drugs while concealing the true, illicit sources of the drugs. Nguyen purchased prescription drugs, including HIV medications, anti-psychotic medications and other brand name drugs, from various unlicensed and illegal sources in California and Florida. Working with co-conspirators, Nguyen then sold the drugs to other drug diverters without the statutorily required pedigree documents stating the origin of the drugs. Nguyen and his co-conspirators sold more than $6.5 million worth of diverted drugs.
“Illegal prescription drug diversion threatens the security of America’s drug supply chain,” said Principal Deputy Assistant Attorney General Mizer. “The Department of Justice will continue to protect American consumers by prosecuting those who engage in prescription drug diversion.”
From December 2011 through December 2012, Nguyen and others sold diverted prescription drugs to David Miller and his company, Minnesota Independent Cooperative (MIC). On May 6, David Miller and MIC were indicted in the Southern District of Ohio and charged with one count of conspiracy to commit mail and wire fraud, 10 counts of mail fraud and one count of conspiracy to make false statements and to distribute prescription drugs without a wholesale license. Those charges remain pending.
Nguyen and his co-conspirators used the company name “Modern Medical” when selling drugs to Miller and MIC. Modern Medical is a real California company that had no involvement in the drug sales. Nguyen and his co-conspirators simply hijacked the name to conceal their involvement and the true, illicit drug sources.
Miller and MIC, in turn, sold the prescription drugs obtained from Nguyen – and multiple other illegal sources – to wholesale and retail customers throughout the United States, including in the Southern District of Ohio. Miller and MIC are alleged to have created fraudulent pedigree documents falsely stating that they had purchased the drugs from B&Y Wholesale, a company in Puerto Rico. These false pedigrees covered up the illegitimate sources of the drugs – various illicit, unlicensed suppliers, including Nguyen – and falsely stated that B&Y Wholesale was an authorized distributor of the prescription drugs.
Showing posts with label WIRE FRAUD. Show all posts
Showing posts with label WIRE FRAUD. Show all posts
Wednesday, June 24, 2015
Sunday, May 31, 2015
FORMER U.S. SENATE COMMITTEE STAFFER CHARGED WITH WIRE FRAUD
FROM: U.S. JUSTICE DEPARTMENT
Thursday, May 28, 2015
Former Senate Staffer Charged with Wire Fraud
A former staff member of the U.S. Senate Committee on Commerce, Science and Transportation was charged by indictment in the Eastern District of Virginia with defrauding at least three women of approximately $500,000, announced Assistant Attorney General Leslie Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Dana J. Boente of the Eastern District of Virginia.
The indictment charges Robert Lee Foster, 65, of De Pere, Wisconsin, with nine counts of wire fraud.
According to the indictment, from 2008 through May 2015, Foster devised a scheme to fraudulently obtain money and property from at least three women, whom Foster targeted because of their age, health, marital or family status, or other personal circumstances. The indictment alleges that Foster used his affiliation with the U.S. Senate to gain the victims’ trust and confidence, and that he made various false and fraudulent representations to the victims, which prompted them to send Foster money, which funds he then used for his own personal benefit.
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. The case is being prosecuted by Trial Attorneys Kevin Driscoll and Peter Halpern of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Jamar Walker of the Eastern District of Virginia.
Thursday, May 28, 2015
Former Senate Staffer Charged with Wire Fraud
A former staff member of the U.S. Senate Committee on Commerce, Science and Transportation was charged by indictment in the Eastern District of Virginia with defrauding at least three women of approximately $500,000, announced Assistant Attorney General Leslie Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Dana J. Boente of the Eastern District of Virginia.
The indictment charges Robert Lee Foster, 65, of De Pere, Wisconsin, with nine counts of wire fraud.
According to the indictment, from 2008 through May 2015, Foster devised a scheme to fraudulently obtain money and property from at least three women, whom Foster targeted because of their age, health, marital or family status, or other personal circumstances. The indictment alleges that Foster used his affiliation with the U.S. Senate to gain the victims’ trust and confidence, and that he made various false and fraudulent representations to the victims, which prompted them to send Foster money, which funds he then used for his own personal benefit.
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. The case is being prosecuted by Trial Attorneys Kevin Driscoll and Peter Halpern of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Jamar Walker of the Eastern District of Virginia.
Sunday, May 17, 2015
PHOTOBUCKET.COM BREACHED; TWO MEN ARRESTED
FROM: U.S. JUSTICE DEPARTMENT
Friday, May 8, 2015
Two Men Who Breached Photobucket.com Indicted and Arrested on Conspiracy and Fraud Related Charges
Two men have been arrested after breaching the computer services of Colorado based Photobucket, a company that operates an image and video hosting website, announced U.S. Attorney John Walsh for the District of Colorado and Special Agent in Charge Thomas Ravenelle for the Denver Division of the Federal Bureau of Investigations (FBI). Brandon Bourret, 39, of Colorado Springs, Colorado and Athanasios Andrianakis, 26, of Sunnyvale, California, were arrested today without incident at their homes. Both made initial appearances today, where they were advised of their rights and the charges pending against them.
According to the indictment, beginning on July 12, 2012 and continuing through July 1, 2014, Bourret and Andrianakis knowingly conspired to commit acts and offenses against the United States, namely computer fraud and abuse, access device fraud, identification document fraud and wire fraud. The indictment further alleges that there was interdependence among the members of the conspiracy.
The purpose of the conspiracy was for the conspirators to enrich themselves by selling passwords and unauthorized access to private and password protected information, images and videos on the Internet and by selling private and password protected information, images and videos that the conspirators obtained from the Internet.
The conspirators developed, marketed and sold a software application called Photofucket, which allowed viewers to circumvent the privacy settings of the image and video hosting website at Photobucket.com and to access and copy users private and password protected information, images and videos without authorization. The conspirators used Photofucket to obtain guest passwords to access users’ password protected albums. They also transferred, or caused to be transferred, guest passwords to others who paid to use the Photofucket application.
“It is not safe to hide behind your computer, breach corporate servers and line your own pockets by victimizing those who have a right to protected privacy on the internet,” said U.S. Attorney Walsh. “The U.S. Attorney’s Office is keenly focused on prosecuting those people for their theft -- and for the wanton harm they do to innocent internet users.”
“Unauthorized access into a secure computer system is a serious federal crime,” said Special Agent in Charge Ravenelle. “The arrest of Brandon Bourret and his co-conspirator reflects the FBI’s commitment to investigate those who undertake activities such as this with the intent to harm a company and its customers.”
The investigation regarding the breach and who’s albums were accessed is ongoing. For those who want to follow the status of this case, visit http://www.justice.gov/largecases – and then select “Photobucket.” In addition, the U.S. Attorney’s Office and the FBI commend Photobucket for their cooperation from the inception of the investigation – and thanked them for their continued assistance as both the investigation and prosecution moves forward.
Bourret and Andrianakis both face one count of conspiracy, which carries a penalty of not more than five years in federal prison and up to a $250,000 fine. They each face one count of computer fraud, aid and abet, which also carries a penalty of not more than five years in federal prison and up to a $250,000 fine. Finally, they each face two counts of access device fraud, which carries a penalty of not more than ten years in federal prison, and up to a $250,000 fine, per count.
This case is being prosecuted by Assistant U.S. Attorney David Tonini.
The charges contained in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.
Friday, May 8, 2015
Two Men Who Breached Photobucket.com Indicted and Arrested on Conspiracy and Fraud Related Charges
Two men have been arrested after breaching the computer services of Colorado based Photobucket, a company that operates an image and video hosting website, announced U.S. Attorney John Walsh for the District of Colorado and Special Agent in Charge Thomas Ravenelle for the Denver Division of the Federal Bureau of Investigations (FBI). Brandon Bourret, 39, of Colorado Springs, Colorado and Athanasios Andrianakis, 26, of Sunnyvale, California, were arrested today without incident at their homes. Both made initial appearances today, where they were advised of their rights and the charges pending against them.
According to the indictment, beginning on July 12, 2012 and continuing through July 1, 2014, Bourret and Andrianakis knowingly conspired to commit acts and offenses against the United States, namely computer fraud and abuse, access device fraud, identification document fraud and wire fraud. The indictment further alleges that there was interdependence among the members of the conspiracy.
The purpose of the conspiracy was for the conspirators to enrich themselves by selling passwords and unauthorized access to private and password protected information, images and videos on the Internet and by selling private and password protected information, images and videos that the conspirators obtained from the Internet.
The conspirators developed, marketed and sold a software application called Photofucket, which allowed viewers to circumvent the privacy settings of the image and video hosting website at Photobucket.com and to access and copy users private and password protected information, images and videos without authorization. The conspirators used Photofucket to obtain guest passwords to access users’ password protected albums. They also transferred, or caused to be transferred, guest passwords to others who paid to use the Photofucket application.
“It is not safe to hide behind your computer, breach corporate servers and line your own pockets by victimizing those who have a right to protected privacy on the internet,” said U.S. Attorney Walsh. “The U.S. Attorney’s Office is keenly focused on prosecuting those people for their theft -- and for the wanton harm they do to innocent internet users.”
“Unauthorized access into a secure computer system is a serious federal crime,” said Special Agent in Charge Ravenelle. “The arrest of Brandon Bourret and his co-conspirator reflects the FBI’s commitment to investigate those who undertake activities such as this with the intent to harm a company and its customers.”
The investigation regarding the breach and who’s albums were accessed is ongoing. For those who want to follow the status of this case, visit http://www.justice.gov/largecases – and then select “Photobucket.” In addition, the U.S. Attorney’s Office and the FBI commend Photobucket for their cooperation from the inception of the investigation – and thanked them for their continued assistance as both the investigation and prosecution moves forward.
Bourret and Andrianakis both face one count of conspiracy, which carries a penalty of not more than five years in federal prison and up to a $250,000 fine. They each face one count of computer fraud, aid and abet, which also carries a penalty of not more than five years in federal prison and up to a $250,000 fine. Finally, they each face two counts of access device fraud, which carries a penalty of not more than ten years in federal prison, and up to a $250,000 fine, per count.
This case is being prosecuted by Assistant U.S. Attorney David Tonini.
The charges contained in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.
Monday, April 20, 2015
BUSINESS OWNER PLEADS GUILTY FOR ROLE IN $2.6 MILLION HOME HEALTH CARE SCHEME
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, April 15, 2015
Michigan Home Health Agency Owner Pleads Guilty in Connection with $2.6 Million Home Health Care Scheme
The owner of a greater Detroit-area home health care agency pleaded guilty today to fraud and money laundering charges in connection with her role in a $2.6 million home health care scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office and Special Agent in Charge Jarod Koopman of Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.
Rahmat Begum, 49, of Farmington Hills, Michigan, pleaded guilty today – during the second day of her trial – to all charges in a six-count indictment, including one count of conspiracy to commit wire fraud, one count of making false statements relating to health care matters, one count of conspiracy to violate the Anti-Kickback Statute and three counts of money laundering. A sentencing hearing is scheduled for Aug. 18, 2015, before U.S. District Judge Bernard A. Friedman of the Eastern District of Michigan.
According to admissions made as part of her guilty plea, Begum conspired to submit falsified claims to Medicare where the claims were based upon referrals obtained through illegal kickbacks to patient recruiters and physicians. Begum also admitted to conspiring to pay illegal kickbacks to patient recruiters and physicians and to making a false statement to Medicare pledging not to pay kickbacks, when in fact she was paying them. Finally, Begum admitted to laundering the proceeds of the wire fraud conspiracy.
This case was investigated by the FBI, HHS-OIG and IRS-CI and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case is being prosecuted by Trial Attorneys Niall M. O’Donnell and James P. McDonald of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Wednesday, April 15, 2015
Michigan Home Health Agency Owner Pleads Guilty in Connection with $2.6 Million Home Health Care Scheme
The owner of a greater Detroit-area home health care agency pleaded guilty today to fraud and money laundering charges in connection with her role in a $2.6 million home health care scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office and Special Agent in Charge Jarod Koopman of Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.
Rahmat Begum, 49, of Farmington Hills, Michigan, pleaded guilty today – during the second day of her trial – to all charges in a six-count indictment, including one count of conspiracy to commit wire fraud, one count of making false statements relating to health care matters, one count of conspiracy to violate the Anti-Kickback Statute and three counts of money laundering. A sentencing hearing is scheduled for Aug. 18, 2015, before U.S. District Judge Bernard A. Friedman of the Eastern District of Michigan.
According to admissions made as part of her guilty plea, Begum conspired to submit falsified claims to Medicare where the claims were based upon referrals obtained through illegal kickbacks to patient recruiters and physicians. Begum also admitted to conspiring to pay illegal kickbacks to patient recruiters and physicians and to making a false statement to Medicare pledging not to pay kickbacks, when in fact she was paying them. Finally, Begum admitted to laundering the proceeds of the wire fraud conspiracy.
This case was investigated by the FBI, HHS-OIG and IRS-CI and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case is being prosecuted by Trial Attorneys Niall M. O’Donnell and James P. McDonald of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Saturday, March 28, 2015
DOJ ANNOUNCES CONVICTION OF OXYWATER MAKERS WITH FRAUD, MONEY LAUNDERING, TAX CRIMES
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, March 25, 2015
Jury Convicts Makers of OXYwater for Wire Fraud, Money Laundering and Tax Crimes
Today, a federal jury convicted a man from Lewis Center, Ohio, and his business partner of Powell, Ohio, of defrauding their company’s investors and diverting investors’ funds for their own personal use. Preston Harrison and his wife, Lovena E. Harrison, 42, were also both convicted of conspiracy to defraud the United States and filing a false income tax return, and Lovena Harrison was convicted of structuring financial transactions to evade currency reporting requirements.
Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Special Agent in Charge Kathy Enstrom of Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Field Division announced the verdict reached today, which was returned following a trial that began on March 16 before U.S. District Judge Gregory L. Frost.
According to court testimony, Thomas E. Jackson, 40, of Powell, and Preston J. Harrison, 43, of Lewis Center, operated Westerville, Ohio, based Imperial Integrated Health Research and Development LLC and developed a product called OXYwater, a beverage that promoters claimed was an all-natural, vitamin-enhanced sports drink that contained added oxygen for improved physical performance.
The defendants engaged in a scheme to deceive the investors in their company about the structure, composition, finances, sales and profits of OXYwater in order to make the company appear to be a lucrative and profitable financial investment. Jackson and Harrison produced and sent false and fraudulent documents intended to deceive investors, the ultimate purpose of such false statements being for Jackson and Preston Harrison to obtain money invested in the company. They then misappropriated that money for their own personal use and household expenditures including the purchase of jewelry, a Cadillac Escalade, a BMW, weapons, clothing, home improvements and a swimming pool.
“This case was about the millions of dollars that the defendants stole from investors to fuel their lavish lifestyle,” said Assistant U.S. Attorney Jessica Kim in court.
Jackson and Harrison misappropriated approximately $2 million of the investors’ funds between August 2010 and spring 2013. The defendants’ scheme caused investors to suffer substantial losses when the corporation was forced to declare bankruptcy with no assets. As a result of the defendants’ conduct, investors lost approximately $9 million.
Jackson and Preston Harrison were each convicted of one count of conspiracy to commit wire fraud, for which they face a statutory maximum sentence of 20 years in prison, and one count of conspiracy to commit money laundering, for which they face a statutory maximum sentence of 10 years in prison. Jackson was convicted of eight counts of wire fraud, which carries a statutory maximum sentence of 20 years in prison, and 12 counts of money laundering, which carries a statutory maximum sentence of 10 years in prison. Harrison was convicted of 12 counts of money laundering, for which he faces a statutory maximum sentence of 10 years in prison.
Preston and Lovena Harrison were both convicted of conspiracy to defraud the United States and with filing a false tax return. Preston Harrison misappropriated approximately $1.1 million in 2011 from his company, which he and his wife, Lovena Harrison, placed in an account in the name of her daycare business. They used the money for personal expenses and did not report the money as income on their 2011 income tax return. Lovena Harrison was also convicted of one count of structuring financial transactions to evade currency reporting requirements. Conspiracy to defraud the United States and structuring financial transactions to evade currency reporting requirements are each crimes with a statutory maximum sentence of five years in prison, and filing a false tax return carries a statutory maximum sentence of three years in prison.
Preston Harrison and Jackson also face potential forfeiture of $1.1 million, including two vehicles, eight weapons, cash and the contents of a bank account.
The three defendants were indicted by a grand jury on May 20, 2014.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Stewart commended the cooperative investigation by the IRS-CI and FBI, as well as Assistant U.S. Attorney Jessica Kim and Trial Attorneys Andrew Young and Jason Scheff of the Tax Division, who prosecuted the case.
Wednesday, March 25, 2015
Jury Convicts Makers of OXYwater for Wire Fraud, Money Laundering and Tax Crimes
Today, a federal jury convicted a man from Lewis Center, Ohio, and his business partner of Powell, Ohio, of defrauding their company’s investors and diverting investors’ funds for their own personal use. Preston Harrison and his wife, Lovena E. Harrison, 42, were also both convicted of conspiracy to defraud the United States and filing a false income tax return, and Lovena Harrison was convicted of structuring financial transactions to evade currency reporting requirements.
Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Special Agent in Charge Kathy Enstrom of Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Field Division announced the verdict reached today, which was returned following a trial that began on March 16 before U.S. District Judge Gregory L. Frost.
According to court testimony, Thomas E. Jackson, 40, of Powell, and Preston J. Harrison, 43, of Lewis Center, operated Westerville, Ohio, based Imperial Integrated Health Research and Development LLC and developed a product called OXYwater, a beverage that promoters claimed was an all-natural, vitamin-enhanced sports drink that contained added oxygen for improved physical performance.
The defendants engaged in a scheme to deceive the investors in their company about the structure, composition, finances, sales and profits of OXYwater in order to make the company appear to be a lucrative and profitable financial investment. Jackson and Harrison produced and sent false and fraudulent documents intended to deceive investors, the ultimate purpose of such false statements being for Jackson and Preston Harrison to obtain money invested in the company. They then misappropriated that money for their own personal use and household expenditures including the purchase of jewelry, a Cadillac Escalade, a BMW, weapons, clothing, home improvements and a swimming pool.
“This case was about the millions of dollars that the defendants stole from investors to fuel their lavish lifestyle,” said Assistant U.S. Attorney Jessica Kim in court.
Jackson and Harrison misappropriated approximately $2 million of the investors’ funds between August 2010 and spring 2013. The defendants’ scheme caused investors to suffer substantial losses when the corporation was forced to declare bankruptcy with no assets. As a result of the defendants’ conduct, investors lost approximately $9 million.
Jackson and Preston Harrison were each convicted of one count of conspiracy to commit wire fraud, for which they face a statutory maximum sentence of 20 years in prison, and one count of conspiracy to commit money laundering, for which they face a statutory maximum sentence of 10 years in prison. Jackson was convicted of eight counts of wire fraud, which carries a statutory maximum sentence of 20 years in prison, and 12 counts of money laundering, which carries a statutory maximum sentence of 10 years in prison. Harrison was convicted of 12 counts of money laundering, for which he faces a statutory maximum sentence of 10 years in prison.
Preston and Lovena Harrison were both convicted of conspiracy to defraud the United States and with filing a false tax return. Preston Harrison misappropriated approximately $1.1 million in 2011 from his company, which he and his wife, Lovena Harrison, placed in an account in the name of her daycare business. They used the money for personal expenses and did not report the money as income on their 2011 income tax return. Lovena Harrison was also convicted of one count of structuring financial transactions to evade currency reporting requirements. Conspiracy to defraud the United States and structuring financial transactions to evade currency reporting requirements are each crimes with a statutory maximum sentence of five years in prison, and filing a false tax return carries a statutory maximum sentence of three years in prison.
Preston Harrison and Jackson also face potential forfeiture of $1.1 million, including two vehicles, eight weapons, cash and the contents of a bank account.
The three defendants were indicted by a grand jury on May 20, 2014.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Stewart commended the cooperative investigation by the IRS-CI and FBI, as well as Assistant U.S. Attorney Jessica Kim and Trial Attorneys Andrew Young and Jason Scheff of the Tax Division, who prosecuted the case.
Tuesday, March 24, 2015
FORMER RABOBANK TRADER ARRAIGNED ON CHARGES RELATED TO LIBOR INTEREST RATE MANIPULATION
FROM: U.S. JUSTICE DEPARTMENT
Friday, March 20, 2015
Former U.K. Rabobank Trader Appears in U.S. Court to Face LIBOR Interest Rate Manipulation Charges
The former global head of liquidity and finance for Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) has waived extradition and appeared in U.S. federal court today for an arraignment on charges related to his alleged role in a scheme to manipulate the U.S. Dollar (USD) and Yen London InterBank Offered Rate (LIBOR), a benchmark interest rate.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division and Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office made the announcement.
Anthony Allen, 43, of Hertsfordshire, England, appeared in the Southern District of New York and pleaded not guilty to a superseding indictment charging him with conspiracy to commit wire and bank fraud and substantive counts of wire fraud. The court released Allen on a $500,000 bond and set a trial date for Oct. 5, 2015.
According to the superseding indictment, at the time relevant to the charges, LIBOR was an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believed they would be charged if borrowing from other banks. It serves as the primary benchmark for short-term interest rates globally and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products. LIBOR was published by the British Bankers’ Association (BBA), a trade association based in London. LIBOR was calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year. The published LIBOR “fix” for U.S. Dollar and Yen currency for a specific maturity was the result of a calculation based upon submissions from a panel of 16 banks, including Rabobank.
According to allegations in the superseding indictment, Allen, who was Rabobank’s Global Head of Liquidity & Finance and the manager of the company’s money market desk in London, put in place a system in which Rabobank employees who traded in derivative products linked to USD and Yen LIBOR regularly communicated their trading positions to Rabobank’s LIBOR submitters, who submitted Rabobank’s LIBOR contributions to the BBA. Rabobank traders entered into derivative contracts containing USD or Yen LIBOR as a price component and they allegedly asked others at Rabobank to submit LIBOR contributions consistent with the traders’ or the bank’s financial interests, to benefit the traders’ or the banks’ trading positions.
The charges in the superseding indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The investigation is being conducted by special agents, forensic accountants and intelligence analysts in the FBI’s Washington Field Office. The prosecution is being handled by the Criminal Division’s Fraud Section and the Antitrust Division. The Criminal Division’s Office of International Affairs has provided assistance in this matter.
The Justice Department expresses its appreciation for the assistance provided by various enforcement agencies in the United States and abroad. The Commodity Futures Trading Commission’s Division of Enforcement referred this matter to the department and, along with the U.K. Financial Conduct Authority, has played a major role in the investigation. The Securities and Exchange Commission also has played a significant role in the LIBOR series of investigations, and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation. The department has worked closely with the Dutch Public Prosecution Service and the Dutch Central Bank in the investigation of conduct at Rabobank. Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance.
Friday, March 20, 2015
Former U.K. Rabobank Trader Appears in U.S. Court to Face LIBOR Interest Rate Manipulation Charges
The former global head of liquidity and finance for Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) has waived extradition and appeared in U.S. federal court today for an arraignment on charges related to his alleged role in a scheme to manipulate the U.S. Dollar (USD) and Yen London InterBank Offered Rate (LIBOR), a benchmark interest rate.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division and Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office made the announcement.
Anthony Allen, 43, of Hertsfordshire, England, appeared in the Southern District of New York and pleaded not guilty to a superseding indictment charging him with conspiracy to commit wire and bank fraud and substantive counts of wire fraud. The court released Allen on a $500,000 bond and set a trial date for Oct. 5, 2015.
According to the superseding indictment, at the time relevant to the charges, LIBOR was an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believed they would be charged if borrowing from other banks. It serves as the primary benchmark for short-term interest rates globally and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products. LIBOR was published by the British Bankers’ Association (BBA), a trade association based in London. LIBOR was calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year. The published LIBOR “fix” for U.S. Dollar and Yen currency for a specific maturity was the result of a calculation based upon submissions from a panel of 16 banks, including Rabobank.
According to allegations in the superseding indictment, Allen, who was Rabobank’s Global Head of Liquidity & Finance and the manager of the company’s money market desk in London, put in place a system in which Rabobank employees who traded in derivative products linked to USD and Yen LIBOR regularly communicated their trading positions to Rabobank’s LIBOR submitters, who submitted Rabobank’s LIBOR contributions to the BBA. Rabobank traders entered into derivative contracts containing USD or Yen LIBOR as a price component and they allegedly asked others at Rabobank to submit LIBOR contributions consistent with the traders’ or the bank’s financial interests, to benefit the traders’ or the banks’ trading positions.
The charges in the superseding indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The investigation is being conducted by special agents, forensic accountants and intelligence analysts in the FBI’s Washington Field Office. The prosecution is being handled by the Criminal Division’s Fraud Section and the Antitrust Division. The Criminal Division’s Office of International Affairs has provided assistance in this matter.
The Justice Department expresses its appreciation for the assistance provided by various enforcement agencies in the United States and abroad. The Commodity Futures Trading Commission’s Division of Enforcement referred this matter to the department and, along with the U.K. Financial Conduct Authority, has played a major role in the investigation. The Securities and Exchange Commission also has played a significant role in the LIBOR series of investigations, and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation. The department has worked closely with the Dutch Public Prosecution Service and the Dutch Central Bank in the investigation of conduct at Rabobank. Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance.
Saturday, March 7, 2015
2 FORMER CIVILIAN MILITARY EMPLOYEES AND A MILITARY CONTRACTOR CONVICTED IN BRIBERY SCHEME
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, March 3, 2015
Two Former Civilian Military Employees and One Military Contractor Convicted in Bribery Scheme at Georgia Military Base
Two former civilian employees at the Marine Corps Logistics Base (MCLB) in Albany, Georgia, and one military contractor were convicted by a federal jury today of bribery and fraud charges related to military trucking contracts, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.
Christopher Whitman, 48, co-owner of United Logistics, an Albany-based trucking company and freight transportation broker, was convicted of 43 counts of honest services wire fraud, five counts of bribery, five counts of obstructing justice and one count of theft of government property. Shawn McCarty, 36, of Albany, Georgia, a former employee at the MCLB-Albany, was convicted of 15 counts of honest services wire fraud, one count of bribery and one count of obstructing justice. Bradford Newell, 43, of Sylvester, Georgia, also a former employee at the MCLB-Albany, was convicted of 13 counts of honest services wire fraud, one count of bribery and one count of theft of government property.
According to evidence presented at trial, Whitman paid more than $800,000 in bribes to three former officials of the Defense Logistics Agency (DLA) at the MCLB-Albany, including the head of the DLA Traffic Office and McCarty, to obtain commercial trucking business from the base. The transportation contracts were loaded with unnecessary premium-priced requirements, including expedited service, expensive trailers and exclusive use, which requires that freight be shipped separately from other equipment, even if that results in a truck not being filled to capacity. As a result of these contracts, Whitman’s company grossed more than $37 million over less than four years.
The evidence further demonstrated that Whitman paid approximately $200,000 in bribes to the former inventory control manager of the Distribution Management Center at MCLB-Albany, Newell and others, who used their official positions to help Whitman steal more than $1 million in surplus equipment from the base, including bulldozers, cranes and front-end loaders. In exchange for the bribes, Newell and the inventory control manager removed the surplus items from Marine Corps inventory and arranged to have them transported off the base by Whitman’s company. Whitman then arranged to improve and paint the stolen equipment, and sell it to private purchasers.
One former United Logistics employee, a business partner of Whitman’s, two former DLA officials and another MCLB official previously pleaded guilty for their roles in the fraud and corruption scheme.
The case was investigated by the Naval Criminal Investigative Service, with assistance from the Dougherty County District Attorney’s Office Economic Crime Unit, Defense Criminal Investigative Service, DLA Office of the Inspector General, and the Department of Labor Office of the Inspector General. The case is being prosecuted by Deputy Chief J.P. Cooney and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia. The associated forfeiture litigation is being handled by Assistant Deputy Chief Darrin McCullough of the Asset Forfeiture and Money Laundering Section and the Middle District of Georgia.
Tuesday, March 3, 2015
Three Florida Men and a Corporation Convicted for Running Illegal International Gambling Enterprise
A federal jury in Oklahoma City convicted three Florida men and a Florida corporation today for their participation in an illegal international gambling and money laundering enterprise, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Sanford C. Coats of the Western District of Oklahoma.
“In the age of the internet, what used to be a crime conducted by bookies on street corners is now an international criminal enterprise,” said Assistant Attorney General Caldwell. “Operating on-line but off-shore, the individuals convicted in this case raked in more than a billion dollars in illegal gambling proceeds. But as these convictions demonstrate, no matter where or how organized criminals operate, the Criminal Division will bring them to justice.”
“This is a great result in this important case,” said U.S Attorney Coats. “I applaud the tremendous, collaborative efforts of our law enforcement partners and the prosecution team.”
Paul Francis Tucker, 50, of Mount Dora, Florida, Luis Robles, 50, of St. Pete Beach, Florida, and Zapt Electrical Sales Inc., a corporation registered in Florida and owned by Tucker, were found guilty of engaging in a racketeering conspiracy, conducting an illegal gambling business and conspiracy to commit money laundering. Christopher Lee Tanner, 58, of Sarasota, Florida, was found guilty of conducting an illegal gambling ring. A sentencing date will be set by the court in approximately 90 days, and the hearing will take place before U.S. District Judge Stephen P. Friot of the Western District of Oklahoma.
According to evidence presented at trial, from 2003 to 2013, Tanner, Tucker, Robles and Zapt Electrical Sales conspired with others to operate internet and telephone gambling services from Panama City, Panama through an enterprise known as Legendz Sports. The international gambling enterprise took more than $1 billon in illegal wagers, almost exclusively from gamblers in the United States on American sporting events.
The evidence demonstrated that Tanner and Tucker worked as bookies in Florida, and illegally solicited and accepted sports wagers and settled gambling debts. Tucker also used Zapt Electrical Sales and its bank account to launder gambling proceeds collected from losing bettors.
The evidence showed that Robles worked as a runner for the enterprise, delivering cash to Legendz Sports bookies to make payouts and picking up cash profits from the bookies. According to the evidence at trial, bookies and runners for Legendz Sports transported millions of dollars of gambling proceeds in cash and checks from the United States to Panama. The checks were made out to various shell companies created by Legendz Sports all over Central America to launder gambling proceeds.
The case was investigated by the FBI and Internal Revenue Service-Criminal Investigation, with the assistance of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the U.S. Marshals Service. The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Susan Dickerson Cox and Travis D. Smith of the Western District of Oklahoma.
Tuesday, March 3, 2015
Two Former Civilian Military Employees and One Military Contractor Convicted in Bribery Scheme at Georgia Military Base
Two former civilian employees at the Marine Corps Logistics Base (MCLB) in Albany, Georgia, and one military contractor were convicted by a federal jury today of bribery and fraud charges related to military trucking contracts, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.
Christopher Whitman, 48, co-owner of United Logistics, an Albany-based trucking company and freight transportation broker, was convicted of 43 counts of honest services wire fraud, five counts of bribery, five counts of obstructing justice and one count of theft of government property. Shawn McCarty, 36, of Albany, Georgia, a former employee at the MCLB-Albany, was convicted of 15 counts of honest services wire fraud, one count of bribery and one count of obstructing justice. Bradford Newell, 43, of Sylvester, Georgia, also a former employee at the MCLB-Albany, was convicted of 13 counts of honest services wire fraud, one count of bribery and one count of theft of government property.
According to evidence presented at trial, Whitman paid more than $800,000 in bribes to three former officials of the Defense Logistics Agency (DLA) at the MCLB-Albany, including the head of the DLA Traffic Office and McCarty, to obtain commercial trucking business from the base. The transportation contracts were loaded with unnecessary premium-priced requirements, including expedited service, expensive trailers and exclusive use, which requires that freight be shipped separately from other equipment, even if that results in a truck not being filled to capacity. As a result of these contracts, Whitman’s company grossed more than $37 million over less than four years.
The evidence further demonstrated that Whitman paid approximately $200,000 in bribes to the former inventory control manager of the Distribution Management Center at MCLB-Albany, Newell and others, who used their official positions to help Whitman steal more than $1 million in surplus equipment from the base, including bulldozers, cranes and front-end loaders. In exchange for the bribes, Newell and the inventory control manager removed the surplus items from Marine Corps inventory and arranged to have them transported off the base by Whitman’s company. Whitman then arranged to improve and paint the stolen equipment, and sell it to private purchasers.
One former United Logistics employee, a business partner of Whitman’s, two former DLA officials and another MCLB official previously pleaded guilty for their roles in the fraud and corruption scheme.
The case was investigated by the Naval Criminal Investigative Service, with assistance from the Dougherty County District Attorney’s Office Economic Crime Unit, Defense Criminal Investigative Service, DLA Office of the Inspector General, and the Department of Labor Office of the Inspector General. The case is being prosecuted by Deputy Chief J.P. Cooney and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia. The associated forfeiture litigation is being handled by Assistant Deputy Chief Darrin McCullough of the Asset Forfeiture and Money Laundering Section and the Middle District of Georgia.
Tuesday, March 3, 2015
Three Florida Men and a Corporation Convicted for Running Illegal International Gambling Enterprise
A federal jury in Oklahoma City convicted three Florida men and a Florida corporation today for their participation in an illegal international gambling and money laundering enterprise, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Sanford C. Coats of the Western District of Oklahoma.
“In the age of the internet, what used to be a crime conducted by bookies on street corners is now an international criminal enterprise,” said Assistant Attorney General Caldwell. “Operating on-line but off-shore, the individuals convicted in this case raked in more than a billion dollars in illegal gambling proceeds. But as these convictions demonstrate, no matter where or how organized criminals operate, the Criminal Division will bring them to justice.”
“This is a great result in this important case,” said U.S Attorney Coats. “I applaud the tremendous, collaborative efforts of our law enforcement partners and the prosecution team.”
Paul Francis Tucker, 50, of Mount Dora, Florida, Luis Robles, 50, of St. Pete Beach, Florida, and Zapt Electrical Sales Inc., a corporation registered in Florida and owned by Tucker, were found guilty of engaging in a racketeering conspiracy, conducting an illegal gambling business and conspiracy to commit money laundering. Christopher Lee Tanner, 58, of Sarasota, Florida, was found guilty of conducting an illegal gambling ring. A sentencing date will be set by the court in approximately 90 days, and the hearing will take place before U.S. District Judge Stephen P. Friot of the Western District of Oklahoma.
According to evidence presented at trial, from 2003 to 2013, Tanner, Tucker, Robles and Zapt Electrical Sales conspired with others to operate internet and telephone gambling services from Panama City, Panama through an enterprise known as Legendz Sports. The international gambling enterprise took more than $1 billon in illegal wagers, almost exclusively from gamblers in the United States on American sporting events.
The evidence demonstrated that Tanner and Tucker worked as bookies in Florida, and illegally solicited and accepted sports wagers and settled gambling debts. Tucker also used Zapt Electrical Sales and its bank account to launder gambling proceeds collected from losing bettors.
The evidence showed that Robles worked as a runner for the enterprise, delivering cash to Legendz Sports bookies to make payouts and picking up cash profits from the bookies. According to the evidence at trial, bookies and runners for Legendz Sports transported millions of dollars of gambling proceeds in cash and checks from the United States to Panama. The checks were made out to various shell companies created by Legendz Sports all over Central America to launder gambling proceeds.
The case was investigated by the FBI and Internal Revenue Service-Criminal Investigation, with the assistance of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the U.S. Marshals Service. The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Susan Dickerson Cox and Travis D. Smith of the Western District of Oklahoma.
Monday, February 16, 2015
JAMAICAN MAN EXTRADITED FOR ROLE IN INTERNATIONAL LOTTERY SCHEME
FROM: U.S. JUSTICE DEPARTMENT
Thursday, February 12, 2015
Jamaican Man First to Be Extradited to Face Fraud Charges in International Lottery Scheme
A 28-year-old man was extradited from Jamaica based on charges that he committed fraud as part of an international lottery scheme against elderly victims in the United States, the Justice Department announced today.
Damion Bryan Barrett is charged in a 38-count indictment in the Southern District of Florida with conspiracy and 37 counts of wire fraud, and with committing these offenses via telemarketing. According to the indictment, Barrett and his co-conspirators fraudulently induced elderly victims in the United States to send them thousands of dollars to pay purported fees for lottery winnings that victims had not in fact won. Barrett is the first Jamaican citizen to be extradited from Jamaica to the United States based on charges of defrauding Americans in connection with a lottery scheme.
Barrett arrived today in Opa-locka, Florida. He will make his initial appearance on Feb. 13 before Magistrate Judge Alicia O. Valle in Fort Lauderdale, Florida. Barrett was indicted by a federal grand jury in Fort Lauderdale on Aug. 9, 2012, and was arrested last month in Jamaica based on the United States’ request that he be extradited. Barrett’s extradition is the latest step in the United States’ ongoing crackdown on fraudulent lottery schemes based in Jamaica.
According to the indictment, beginning in October 2008, Barrett and his co-conspirators contacted victims in the United States announcing that the victims had won cash and prizes and persuaded the victims to send them thousands of dollars in fees to release the money. The victims never received cash or prizes. The defendant and his co-conspirators allegedly made calls from Jamaica using voice over internet protocol technology that allowed them to use a telephone number with a U.S. area code. According to the indictment, Barrett convinced victims to send money to middlemen in South Florida, who then forwarded the money to Jamaica.
“The Department of Justice will find and prosecute those responsible for fraud against American consumers, no matter where the perpetrator resides,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “Lottery schemes that target elderly victims for fraud cannot, and will not, be tolerated.”
“Persons who commit crimes against American seniors from outside of the United States will be held accountable,” said U.S. Attorney Wifredo Ferrer of the Southern District of Florida. “This case serves as an example that there are no borders when it comes to obtaining justice for the victims of these lottery schemes.”
“Today's extradition signals strong partnership between the Jamaica Constabulary Force and our U.S. law enforcement partners,” said Commissioner of Police Dr. Carl Williams of the Jamaica Constabulary Force. “We use this opportunity to warn other lottery scammers who continue to prey on unsuspecting U.S. citizens, that they too will pay the penalty, whether through conviction in Jamaica or through extradition to the United States. We continue to address this with a high level of attention to contain the scourge.”
If convicted, Barrett faces a statutory maximum sentence of 30 years in prison per count, a possible fine and mandatory restitution. Barrett’s co-defendant, Oneike Barnett, 29, pleaded guilty on Feb. 28, 2014, to conspiracy to commit wire fraud. On April 29, 2014, U.S. District Court Judge William J. Zloch sentenced Barnett to serve 60 months in prison and five years of supervised release, and to pay $94,456 in restitution for his role in this case.
“These criminal telemarking scams heartlessly target the elderly in the United States, at times stealing their life savings,” said Special Agent in Charge Alysa D. Erichs of Homeland Security Investigations (HSI) Miami. “The successful extradition of Damion Bryan Barrett sends a clear message that the cooperation between our countries is focused on bringing these offenders to justice despite borders that separate us. This extradition and hopefully others that may follow suit will have a positive impact on diminishing this crime.”
“Together with our international and domestic law enforcement partners we have proven that justice has no borders,” said U.S. Postal Inspector in Charge Ronald Verrochio of the U.S. Postal Inspection Service’s (USPIS) Miami Division. “We will continue to investigate and prosecute those who defraud American citizens, anywhere in the world.”
“The U.S. Marshals Service, together with our federal partners, will continue to track down and bring to justice those that would pray on our most vulnerable in our country,” said U.S. Marshal Amos Rojas of the Southern District of Florida.
Acting Assistant Attorney General Branda and U.S. Attorney Ferrer commended the investigative efforts of USPIS, U.S. Immigration and Customs Enforcement’s (ICE) HSI Miami and the U.S. Marshals Service. The case is being prosecuted by Trial Attorney Kathryn Drenning of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Bertha Mitrani of the Southern District of Florida.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Thursday, February 12, 2015
Jamaican Man First to Be Extradited to Face Fraud Charges in International Lottery Scheme
A 28-year-old man was extradited from Jamaica based on charges that he committed fraud as part of an international lottery scheme against elderly victims in the United States, the Justice Department announced today.
Damion Bryan Barrett is charged in a 38-count indictment in the Southern District of Florida with conspiracy and 37 counts of wire fraud, and with committing these offenses via telemarketing. According to the indictment, Barrett and his co-conspirators fraudulently induced elderly victims in the United States to send them thousands of dollars to pay purported fees for lottery winnings that victims had not in fact won. Barrett is the first Jamaican citizen to be extradited from Jamaica to the United States based on charges of defrauding Americans in connection with a lottery scheme.
Barrett arrived today in Opa-locka, Florida. He will make his initial appearance on Feb. 13 before Magistrate Judge Alicia O. Valle in Fort Lauderdale, Florida. Barrett was indicted by a federal grand jury in Fort Lauderdale on Aug. 9, 2012, and was arrested last month in Jamaica based on the United States’ request that he be extradited. Barrett’s extradition is the latest step in the United States’ ongoing crackdown on fraudulent lottery schemes based in Jamaica.
According to the indictment, beginning in October 2008, Barrett and his co-conspirators contacted victims in the United States announcing that the victims had won cash and prizes and persuaded the victims to send them thousands of dollars in fees to release the money. The victims never received cash or prizes. The defendant and his co-conspirators allegedly made calls from Jamaica using voice over internet protocol technology that allowed them to use a telephone number with a U.S. area code. According to the indictment, Barrett convinced victims to send money to middlemen in South Florida, who then forwarded the money to Jamaica.
“The Department of Justice will find and prosecute those responsible for fraud against American consumers, no matter where the perpetrator resides,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “Lottery schemes that target elderly victims for fraud cannot, and will not, be tolerated.”
“Persons who commit crimes against American seniors from outside of the United States will be held accountable,” said U.S. Attorney Wifredo Ferrer of the Southern District of Florida. “This case serves as an example that there are no borders when it comes to obtaining justice for the victims of these lottery schemes.”
“Today's extradition signals strong partnership between the Jamaica Constabulary Force and our U.S. law enforcement partners,” said Commissioner of Police Dr. Carl Williams of the Jamaica Constabulary Force. “We use this opportunity to warn other lottery scammers who continue to prey on unsuspecting U.S. citizens, that they too will pay the penalty, whether through conviction in Jamaica or through extradition to the United States. We continue to address this with a high level of attention to contain the scourge.”
If convicted, Barrett faces a statutory maximum sentence of 30 years in prison per count, a possible fine and mandatory restitution. Barrett’s co-defendant, Oneike Barnett, 29, pleaded guilty on Feb. 28, 2014, to conspiracy to commit wire fraud. On April 29, 2014, U.S. District Court Judge William J. Zloch sentenced Barnett to serve 60 months in prison and five years of supervised release, and to pay $94,456 in restitution for his role in this case.
“These criminal telemarking scams heartlessly target the elderly in the United States, at times stealing their life savings,” said Special Agent in Charge Alysa D. Erichs of Homeland Security Investigations (HSI) Miami. “The successful extradition of Damion Bryan Barrett sends a clear message that the cooperation between our countries is focused on bringing these offenders to justice despite borders that separate us. This extradition and hopefully others that may follow suit will have a positive impact on diminishing this crime.”
“Together with our international and domestic law enforcement partners we have proven that justice has no borders,” said U.S. Postal Inspector in Charge Ronald Verrochio of the U.S. Postal Inspection Service’s (USPIS) Miami Division. “We will continue to investigate and prosecute those who defraud American citizens, anywhere in the world.”
“The U.S. Marshals Service, together with our federal partners, will continue to track down and bring to justice those that would pray on our most vulnerable in our country,” said U.S. Marshal Amos Rojas of the Southern District of Florida.
Acting Assistant Attorney General Branda and U.S. Attorney Ferrer commended the investigative efforts of USPIS, U.S. Immigration and Customs Enforcement’s (ICE) HSI Miami and the U.S. Marshals Service. The case is being prosecuted by Trial Attorney Kathryn Drenning of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Bertha Mitrani of the Southern District of Florida.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Friday, December 19, 2014
U.S. CONTRACTOR'S FORMER EMPLOYEE INDICTED FOR BRIBERY
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, December 16, 2014
Former Employee of U.S. Contractor in Afghanistan Indicted for Bribery
A former employee of a U.S. contractor was indicted today in the Eastern District of Texas for allegedly soliciting and accepting bribes in exchange for his influence in awarding U.S. government-funded contracts in Afghanistan, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney John Malcolm Bales of the Eastern District of Texas.
George E. Green, 57, of Carrollton, Texas, was charged with conspiracy to structure financial transactions to avoid currency transaction reporting requirements, wire fraud and receipt of bribes in connection with a program receiving federal funds.
According to the indictment, Green was the former director of contracts, procurement and grants for International Relief and Development Inc. (IRD), and was part of a cooperative agreement between IRD and the U.S. Agency for International Development (USAID) that sought to promote long-term agricultural development in specific areas in Afghanistan.
The indictment alleges that while working for IRD in Afghanistan, Green solicited and received bribes totaling $66,000 from a representative of an Afghan firm that contracted with IRD. Some of those bribe payments were allegedly wired directly to an Italian automobile dealer for Green’s benefit. After returning to Texas, Green allegedly attempted to conceal the bribe proceeds by engaging in a conspiracy to structure cash deposits into his bank and credit card accounts to avoid mandatory cash reporting requirements. Additionally, even after leaving IRD, Green allegedly continued to solicit bribes from the Afghan firm by falsely claiming that he still had the ability to influence the contracting process.
The charges and allegations contained in the indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the Office of Special Inspector General for Afghanistan Reconstruction (SIGAR), FBI and USAID Office of Inspector General. The case is being prosecuted by Trial Attorney Mark H. Dubester on detail to the Criminal Division’s Fraud Section from SIGAR and Assistant U.S. Attorney Kevin McClendon of the Eastern District of Texas.
Tuesday, December 16, 2014
Former Employee of U.S. Contractor in Afghanistan Indicted for Bribery
A former employee of a U.S. contractor was indicted today in the Eastern District of Texas for allegedly soliciting and accepting bribes in exchange for his influence in awarding U.S. government-funded contracts in Afghanistan, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney John Malcolm Bales of the Eastern District of Texas.
George E. Green, 57, of Carrollton, Texas, was charged with conspiracy to structure financial transactions to avoid currency transaction reporting requirements, wire fraud and receipt of bribes in connection with a program receiving federal funds.
According to the indictment, Green was the former director of contracts, procurement and grants for International Relief and Development Inc. (IRD), and was part of a cooperative agreement between IRD and the U.S. Agency for International Development (USAID) that sought to promote long-term agricultural development in specific areas in Afghanistan.
The indictment alleges that while working for IRD in Afghanistan, Green solicited and received bribes totaling $66,000 from a representative of an Afghan firm that contracted with IRD. Some of those bribe payments were allegedly wired directly to an Italian automobile dealer for Green’s benefit. After returning to Texas, Green allegedly attempted to conceal the bribe proceeds by engaging in a conspiracy to structure cash deposits into his bank and credit card accounts to avoid mandatory cash reporting requirements. Additionally, even after leaving IRD, Green allegedly continued to solicit bribes from the Afghan firm by falsely claiming that he still had the ability to influence the contracting process.
The charges and allegations contained in the indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the Office of Special Inspector General for Afghanistan Reconstruction (SIGAR), FBI and USAID Office of Inspector General. The case is being prosecuted by Trial Attorney Mark H. Dubester on detail to the Criminal Division’s Fraud Section from SIGAR and Assistant U.S. Attorney Kevin McClendon of the Eastern District of Texas.
Thursday, December 11, 2014
SEC ANNOUNCES INDICTMENT OF ATTORNEY FOR ROLE IN SHEME TO MANIPULATE STOCK
FROM: U.S. U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23154 / December 9, 2014
USA v. Richard Weed, Case No. 1:14-cr-10348-DPW
Securities and Exchange Commission v. Richard Weed, et al. , Civil Action No. 1:14-cv-14099
California Attorney Indicted for Securities Fraud in Scheme to Manipulate Stock of Sports Ticket Broker
The Securities and Exchange Commission announced today that on December 4, 2014, Richard Weed ("Weed"), a partner in a Newport Beach, California law practice, was indicted on eleven criminal charges by a grand jury in the U.S. District Court for the District of Massachusetts in connection with an alleged pump-and-dump scheme that defrauded investors in a Boston-based ticket brokering business. The indictment charges Weed with one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, and nine counts of wire fraud.
The allegations in the criminal indictment stem from the same misconduct underlying the Commission's pending action filed against Weed and two other defendants on November 6, 2014. In that case, the SEC alleges that Weed facilitated a scheme to pump and dump the stock of CitySide Tickets Inc., which he helped structure into a publicly traded company through reverse mergers. Weed created backdated promissory notes and authored false legal opinion letters that enabled Thomas Brazil and Coleman Flaherty to obtain millions of purportedly unrestricted shares of stock in the company. Investors were then blitzed with a false and misleading promotional campaign touting CitySide Tickets as a budding national leader on the verge of acquiring smaller ticket firms across the country and positioning itself as an attractive takeover target for Ticketmaster. As the company's stock price increased on the false hype, Brazil and Flaherty sold their shares to unsuspecting investors for illicit proceeds of approximately $3 million, and Weed was well-compensated for his role in the scheme. Shortly thereafter, the market for CitySide Tickets stock collapsed and the company eventually went out of business.
Weed was originally charged by a criminal complaint and arrested on November 6, 2014. The SEC's action, which is pending, seeks disgorgement of ill-gotten gains plus pre-judgment interest and penalties as well as penny stock bars and permanent injunctions against further violations of the securities laws. The SEC also seeks to bar Weed from serving as an officer or director of any public company.
Litigation Release No. 23154 / December 9, 2014
USA v. Richard Weed, Case No. 1:14-cr-10348-DPW
Securities and Exchange Commission v. Richard Weed, et al. , Civil Action No. 1:14-cv-14099
California Attorney Indicted for Securities Fraud in Scheme to Manipulate Stock of Sports Ticket Broker
The Securities and Exchange Commission announced today that on December 4, 2014, Richard Weed ("Weed"), a partner in a Newport Beach, California law practice, was indicted on eleven criminal charges by a grand jury in the U.S. District Court for the District of Massachusetts in connection with an alleged pump-and-dump scheme that defrauded investors in a Boston-based ticket brokering business. The indictment charges Weed with one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, and nine counts of wire fraud.
The allegations in the criminal indictment stem from the same misconduct underlying the Commission's pending action filed against Weed and two other defendants on November 6, 2014. In that case, the SEC alleges that Weed facilitated a scheme to pump and dump the stock of CitySide Tickets Inc., which he helped structure into a publicly traded company through reverse mergers. Weed created backdated promissory notes and authored false legal opinion letters that enabled Thomas Brazil and Coleman Flaherty to obtain millions of purportedly unrestricted shares of stock in the company. Investors were then blitzed with a false and misleading promotional campaign touting CitySide Tickets as a budding national leader on the verge of acquiring smaller ticket firms across the country and positioning itself as an attractive takeover target for Ticketmaster. As the company's stock price increased on the false hype, Brazil and Flaherty sold their shares to unsuspecting investors for illicit proceeds of approximately $3 million, and Weed was well-compensated for his role in the scheme. Shortly thereafter, the market for CitySide Tickets stock collapsed and the company eventually went out of business.
Weed was originally charged by a criminal complaint and arrested on November 6, 2014. The SEC's action, which is pending, seeks disgorgement of ill-gotten gains plus pre-judgment interest and penalties as well as penny stock bars and permanent injunctions against further violations of the securities laws. The SEC also seeks to bar Weed from serving as an officer or director of any public company.
Saturday, October 25, 2014
FISH DEALER RECEIVES PRISON SENTENCE FOR ROLE IN UNDER-REORTING FOUNDER HARVEST
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, October 22, 2014
Brooklyn Fish Dealer Sentenced To Four Months For Wire Fraud
On April 23, 2014, Alan Dresner pleaded guilty to one count of wire fraud. The scheme involved his personal falsification and internet submission of at least 120 fisheries dealer reports from July 2009 to December 2011, as part of a scheme to defraud the United States of 246,376 pounds of overharvested and underreported fluke valued at $510,000.
As part of his sentence, Dresner will serve four months in prison followed by three years of supervised release. The defendant was fined $6000 and ordered to make a $15,000 community service payment to the Cornell Cooperative Extension of Suffolk County in order to pay for the enhancement of fluke habitat in the waters of Long Island through the C.C.E.’s Marine Meadows Program. Dresner was ordered to pay $510,000 in restitution to the Marine Resources Account of the New York State Conservation Fund. Dresner was also ordered to surrender his federal dealer license and was banned from accessing the National Oceanic and Atmospheric Administration’s (NOAA) SAFIS computer system.
“Today, Dresner was held accountable for his role in defrauding a federal research program, a program whose purpose is to help ensure the long-term sustainability of Long Island’s fisheries,” said Acting Assistant Attorney General Sam Hirsch for the Justice Department’s Environment and Natural Resources Division. “We are committed to protecting the natural resources that the American people depend on today and for future generations as well.”
“This scheme to land tremendous amounts of overages for profit was not only detrimental to the RSA program, but also to the law abiding fishermen who will not be able to participate in this program in 2015,” said NOAA Special Agent Logan Gregory. “The Office of Law Enforcement will continue to focus on ensuring a level playing field by investigating these types of environmental crimes.”
Alan Dresner is “Fish Dealer X” as that person is identified in the related case of U.S. v. Anthony Joseph. As a federal fish dealer, Dresner had a NOAA permit to purchase fish directly from commercial fishing vessels without having to go through an intermediary. In July 2009, Dresner learned that Anthony Joseph, captain of the F/V Stirs One, was consistently overharvesting fluke through Joseph’s abuse of the RSA Program. By July 2009, Dresner was making regular purchases of illegal fluke from Joseph at the Point Lookout, New York, waterfront.
In order to cover-up his illegal fishing, Joseph would mail falsified fishing logs, known as FVTRs, to NOAA. However, falsified FVTRs were just one side of the coin. This is because fish dealers are required to report their purchases to NOAA on an electronic form known as a dealer report. The dealer reports include information such as date of landing, port of landing, catch vessel, corresponding FVTR numbers, commercial grade, species, price, and weight. NOAA utilizes the data in the dealer reports to set quotas and implement other management measures designed to ensure a sustainable fisheries. The dealer reports also serve as a check on the information that is submitted in FVTRs. In other words, for their scheme to work, the false data on the FVTRs had to match the false data on the dealer reports. A mismatch would have indicated a serious error or fraud, and would have been a red flag for fisheries managers. Accordingly, during July 2009 to December 2011, the defendant schemed with Anthony Joseph to file at least 120 false dealer reports with NOAA, representing a loss of 246,376 pounds of fluke valued at $510,000.
Theft of domestic marine resources has far-reaching consequences beyond illicit financial gain. Fisheries managers operate on the basic assumption that fishers and dealers make accurate and honest reports to NOAA. When harvested fish is misreported or unreported, the integrity of fisheries statistics and associated mathematical models are jeopardized. Recently, based in large part on the recently quantified illegal fluke harvesting revealed by the guilty pleas in the Jones Inlet Seafood, Charles Wertz Jr., Anthony Joseph, and Dresner cases, on Aug. 12, 2014, the Mid-Atlantic Fisheries Management Council voted to suspend the RSA Program for 2015 in order analyze the effect illegal fishing has had on the soundness of the RSA Program.
Anthony Joseph pleaded guilty to wire fraud, mail fraud, and falsification of federal records on April 11, 2014, for his fisheries fraud crimes related to Alan Dresner and Jones Inlet Seafood. He is scheduled to be sentenced on May 20, 2015.
The case was investigated by agents of NOAA’s National Marine Fisheries Service, with assistance from the New York State Department of Environmental Conservation Police. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division.
Saturday, October 18, 2014
TWO PLEAD GUILTY FOR ROLES IN BRIBERY SCHEME INVOLVING AN FBI SPECIAL AGENT WHO WORKED IN COUNTERINTELLIGENCE
FROM: U.S. JUSTICE DEPARTMENT
Friday, October 17, 2014
Two Connecticut Men Plead Guilty to Bribery Scheme Involving FBI Agent in New York
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York, and Justice Department Inspector General Michael D. Horowitz made the announcement.
Johannes Thaler, 51, of Fairfield County, Connecticut, and Rizve Ahmed, aka “Caesar,” 35, of Danbury, Connecticut, pleaded guilty today in White Plains, New York, federal court to bribery and conspiracy to commit honest services and wire fraud before U.S. District Judge Vincent L. Briccetti of the Southern District of New York. Both Thaler and Ahmed admitted to participating in a bribery scheme with Robert Lustyik, a former FBI Special Agent in White Plains who worked on the counterintelligence squad.
In pleading guilty, Thaler and Ahmed admitted that between September 2011 and March 2012, Thaler and Lustyik solicited bribes from Ahmed, in exchange for Lustyik’s agreement to provide internal, confidential documents and other confidential information to which Lustyik had access by virtue of his position as an FBI Special Agent. Thaler was Lustyik’s friend, and Ahmed, a native of Bangladesh, was an acquaintance of Thaler. Ahmed sought confidential law enforcement information, including a Suspicious Activity Report, pertaining to a Bangladeshi political figure who was affiliated with a political party opposing Ahmed’s views. Thaler and Ahmed admitted that Ahmed requested the confidential information to help Ahmed locate and harm his intended victim and others associated with the victim. Ahmed also sought assistance in having criminal charges against a different Bangladeshi political figure dismissed.
Thaler and Ahmed admitted that they exchanged various text messages in furtherance of the scheme, including text messages about a “contract” that would require Ahmed to pay a $40,000 “retainer” and $30,000 “monthly.” In return, Lustyik and Thaler agreed to “give [Ahmed] everything [they] ha[d] plus set up [the victim] and get the inside from the party.”
Thaler and Lustyik also exchanged text 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 . . . .”
Additionally, in late January 2012, Lustyik learned that Ahmed was considering using a different source to obtain confidential information. As a result, Lustyik sent a text message to Thaler stating, “I want to kill [Ahmed] . . . . I hung my ass out the window n we got nothing? . . . . Tell [Ahmed], I’ve got [the victim’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 the victim].” Lustyik further stated, “So bottom line. I need ten gs asap. We gotta squeeze C.”
Sentencing hearings for Thaler and Ahmed are scheduled for Jan. 23, 2015.
Lustyik is scheduled for trial on Nov. 17, 2014. The charges contained in an indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
This case was investigated by the Department of Justice’s Office of the Inspector General and is being prosecuted by Trial Attorney Emily Rae Woods of the Justice Department’s Public Integrity Section and Assistant U.S. Attorney Benjamin Allee of the White Plains Division of the U.S. Attorney’s Office for the Southern District of New York.
Friday, September 5, 2014
FORMER VIRGINIA GOVERNOR AND FIRST LADY CONVICTED OF CORRUPTION
FROM: U.S. JUSTICE DEPARTMENT
Thursday, September 4, 2014
Former Virginia Governor and Former First Lady Convicted on Public Corruption Charges
A federal jury returned guilty verdicts today against former Virginia Governor Robert F. McDonnell and former First Lady of Virginia Maureen G. McDonnell for participating in a scheme to violate federal public corruption laws.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge Adam S. Lee of the FBI’s Richmond Field Office, Chief Richard Weber of Internal Revenue Service – Criminal Investigation (IRS-CI) and Colonel W. Steven Flaherty, Virginia State Police Superintendent, made the announcement.
Robert McDonnell and Maureen McDonnell, both 60 and of Glen Allen, Virginia, were convicted of one count of conspiracy to commit honest-services wire fraud and one count of conspiracy to obtain property under color of official right. Robert McDonnell was convicted of three counts of honest-services wire fraud and six counts of obtaining property under color of official right, while Maureen McDonnell was convicted on two of the three honest services wire fraud counts and five of the six counts of obtaining property under color of official right. Maureen McDonnell also was convicted of one count of obstruction of an official proceeding. In total, Robert McDonnell was convicted of 11 of 13 counts and Maureen McDonnell was convicted of 9 of 13 counts.
“As Virginia’s governor, Robert McDonnell and his wife turned public service into a money-making enterprise, abusing the Commonwealth’s highest office to benefit a Virginia businessman in exchange for more than $170,000 in gifts and loans,” said Assistant Attorney General Caldwell. “In pursuit of a lifestyle that they could ill afford, McDonnell and his wife eagerly accepted luxury items, designer clothes, free vacations and the businessman’s offer to pay the costs of their daughter’s wedding. In return, McDonnell put the weight of the governor’s mansion behind the businessman’s corporate interests. The former governor was elected to serve the people of Virginia, but his corrupt actions instead betrayed them. Today’s convictions should send a message that corruption in any form, at any level of government, will not be tolerated.”
“This is a difficult and disappointing day for the Commonwealth of Virginia and its citizens,” said U.S. Attorney Boente. “When public officials turn to financial gain in exchange for official acts, we have no choice but to prosecute them. I thank the Assistant U.S. Attorneys, FBI, Virginia State Police, and the Internal Revenue Service – Criminal Investigation for their exceptional efforts in the investigation and prosecution of this case.”
“Public corruption, particularly among our elected officials, is the FBI’s highest criminal investigative priority,” said FBI Special Agent in Charge Lee. “We will engage and engage vigorously when we receive credible allegations of any federal, state, or local public official illegally using the power of their position to receive a personal benefit. The people of the Commonwealth deserve better than pay-to-play politics.”
“When public officials commit crimes as part of their official duties, they are violating the public trust,” said IRS-CI Chief Weber. “IRS-CI agents play a critical role in rooting out public corruption of elected officials. The public expects more of their leaders in government and our agents work tirelessly on their behalf to ensure that we are all playing by the same rules.”
According to the evidence presented at trial, from April 2011 through March 2013, the McDonnells participated in a scheme to use the former governor’s official position to enrich themselves and their family members by soliciting and obtaining payments, loans, gifts and other things of value from Star Scientific, a Virginia-based corporation, and Jonnie R. Williams Sr., then Star Scientific’s chief executive officer. The McDonnells obtained the things of value in exchange for the former governor performing official actions on an as-needed basis to legitimize, promote, and obtain research studies for Star’s products, including the dietary supplement Anatabloc.
According to court records and evidence, the McDonnells obtained from Williams more than $170,000 in direct payments as gifts and loans, thousands of dollars in golf outings, and numerous other things of value. As part of the scheme, the official actions that Robert McDonnell performed included arranging meetings for Williams with Virginia government officials, hosting and attending events at the Governor’s Mansion designed to encourage Virginia university researchers to initiate studies of Star’s products and to promote Star’s products to doctors for referral to their patients, contacting other Virginia government officials as part of an effort to encourage Virginia state research universities to initiate studies of Star’s products, and promoting Star’s products and facilitating its relationships with Virginia government officials.
The evidence further showed that the McDonnells attempted to conceal the things of value received from Williams and Star to hide the nature and scope of their dealings with Williams from the citizens of Virginia by, for example, routing things of value through family members and corporate entities controlled by the former governor to avoid annual disclosure requirements.
Similarly, on Feb. 15, 2013, Maureen McDonnell was questioned by law enforcement about the loans and made false and misleading statements regarding the defendants’ relationship with Williams. Additionally, after her interview with law enforcement, Maureen McDonnell drafted a handwritten note to Williams in which she falsely attempted to make it appear that she and Williams had previously discussed and agreed that she would return certain designer luxury goods rather than keep them permanently, all as part of an effort to obstruct, influence, and impede the investigation.
The case is being investigated by the FBI, IRS-CI and the Virginia State Police. The case is being prosecuted by Deputy Chief David V. Harbach II of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Michael S. Dry, Jessica D. Aber and Ryan S. Faulconer o f the U.S. Attorney’s Office for the Eastern District of Virginia.
Friday, August 29, 2014
OWNER, EMPLOYEES OF MORTGAGE COMPANY, TWO REAL ESTATE DEVELOPERS INDICTED FOR ROLES IN $50 MILLION MORTGAGE SCAM
FROM: U.S. JUSTICE DEPARTMENT
Thursday, August 28, 2014
Owner and Seven Employees of Mortgage Company and Two Real Estate Developers Indicted for $50 Million Scam Involving Federally Insured Mortgages
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 David A. Montoya, Inspector General for the Department of Housing and Urban Development (HUD) made the announcement.
Hector Hernandez, 56, of Miami, Florida, the owner and operator of Great Country Mortgage Bankers (Great Country), a mortgage lender in Miami, was charged with one count of conspiracy to commit wire fraud affecting a financial institution and 25 counts of wire fraud affecting a financial institution. Great Country loan officers Durand Deeb, 43, of Miami, Frank Carino, 48, of Apollo Beach, Florida, and Fabian Perez, 39, of Miami; Great Country loan processors Juliette Del Rio, 37, of Miami, and Julissa Saavedra, 43, of Miami,; Great Country underwriters Olga Hernandez, 58, of Lake Mary, Florida, and Olga Rodriguez, 53, of Miami; and real estate developers Armando Bravo, 42, of Coral Gables, Florida, and Aleida Fontao, 61, of Miami, were also indicted for conspiracy to commit wire fraud affecting a financial institution and varying counts of wire fraud affecting a financial institution.
According to the indictment, beginning in January 2006 and continuing through September 2008, Hernandez and others allegedly obtained mortgage loans insured by the Federal Housing Administration (FHA), a division of HUD, for unqualified borrowers by exaggerating the borrowers’ income and otherwise misrepresenting their financial condition.
Specifically, Hernandez and others allegedly created false documents on behalf of borrowers who could not otherwise qualify for FHA-insured loans due to insufficient income, high levels of debt, and outstanding collections. These documents included bogus earnings statements that inflated the borrowers’ income and false verification of employment forms that overstated their work histories.
In addition to creating these false documents, Hernandez and others allegedly offered the unqualified borrowers cash back after closing as an incentive to purchase condominiums. These secret payments were not disclosed in the loan applications and were omitted from loan closing documents so that HUD and the financial institutions that subsequently purchased the loans would not know of their existence.
By later selling the fraudulent loans to financial institutions, Great Country transferred the risk of loss to those institutions . The vast majority of the unqualified borrowers failed to meet their monthly mortgage obligations and defaulted on their loans. When the loans went into foreclosure, HUD, which insured the loans, was required to pay the outstanding balances to the financial institutions, resulting in losses in excess of $50 million to the agency.
The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
This case is being investigated by HUD’s Office of Inspector General with assistance from the U.S. Marshals Service, Miami-Dade Police Department Warrants Bureau and Miami-Dade State Attorney’s Office – Public Corruption Task Force. This is being prosecuted by Senior Litigation Counsel David A. Bybee and Trial Attorney Michael T. O’Neill of the Criminal Division’s Fraud Section.
Tuesday, August 5, 2014
OFFSHORE SWEEPSTAKES SCHEMERS PLEAD GUILTY TO DEFRAUDING HUNDREDS OF ELDERLY AMERICANS
FROM: U.S. JUSTICE DEPARTMENT
Monday, August 4, 2014
Two North Carolina Residents Plead Guilty to Defrauding Elderly Through Offshore Sweepstakes Scheme
A North Carolina couple pleaded guilty for leading a Costa Rican sweepstakes fraud scheme that defrauded hundreds of elderly Americans.
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.
Jessica Anne Brown, 39, of Greensboro, North Carolina, pleaded today in federal court in Charlotte, North Carolina. Her husband, Jason Dean Brown, 41, formerly of Burleson, Texas, pleaded guilty on July 30, 2014. The Browns pleaded guilty to wire fraud, conspiracy to commit wire fraud and conspiracy to commit money laundering.
According to the plea agreement, from November 2004 through March 2013, Jessica and Jason Brown owned, operated and worked in sweepstakes call centers located in Costa Rica. The Browns and their co-conspirators placed telephone calls to U.S. residents, many of whom were elderly, and falsely informed them that they had won a substantial cash prize in a sweepstakes. The victims were told that in order to receive the prize, they had to send money to Costa Rica for a purported refundable insurance fee. After receiving the fee, the Browns and their co-conspirators contacted the victims again, and falsely informed them that the prize amount had increased, either because of a clerical error or because another prize winner was disqualified, and therefore the victims had to send additional money to pay for new purported fees, duties and insurance to receive the now larger sweepstakes prize. The attempts to collect additional money from the victims continued until a victim either ran out of money or discovered the fraudulent nature of the scheme. To mask that they were calling from Costa Rica, the Browns and their co-conspirators utilized VoIP phones that displayed a (202) area code, giving victims the false impression that the calls were coming from Washington, D.C. The Browns often falsely claimed that they were calling on behalf of a U.S. federal agency to lure victims into a false sense of security.
The defendants admitted that, along with their co-conspirators, they were responsible for causing more than $840,000 in losses to hundreds of United States citizens.
Jason and Jessica Browns were indicted by a federal grand jury on Nov. 15, 2012. Sentencing will be scheduled at a later date.
The case was investigated by the U.S. Postal Inspection Service, the FBI, the Internal Revenue Service Criminal Investigation Division, the Federal Trade Commission and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Miami Office. This case is being prosecuted by Senior Litigation Counsel Patrick Donley and Trial Attorney William Bowne of the Criminal Division’s Fraud Section.
Monday, June 2, 2014
U.S. ANNOUNCES $5 MILLION REWARD FOR KARL LEE IN WEAPONS PROLIFERATION CASE
 |
| Photo Credit: U.S. State Department |
Transnational Organized Crime Rewards Program Announces Reward Offer for Li Fangwei
On April 29, 2014, the U.S. Department of State announced the second reward offer under the Transnational Organized Crime Rewards Program. The reward is for up to $5 million for information leading to the arrest and/or conviction of Chinese weapons proliferator Li Fangwei, also known as Karl Lee. (Photo At Right.)
Li Fangwei previously was sanctioned by the United States for his alleged role as a principal supplier to Iran’s ballistic missile program. According to the indictment, Li controls a large network of front companies he uses to move millions of dollars through U.S.-based financial institutions to conduct business in violation of the International Emergency Economic Powers Act (IEEPA) and the Weapons of Mass Destruction Proliferators Sanctions Regulations. Li Fangwei has also been charged with conspiring to commit wire fraud and bank fraud, a money laundering conspiracy, and two separate counts of wire fraud in connection with such illicit transactions.
The Transnational Organized Crime Rewards Program was established in 2013 as a tool to assist U.S. Government efforts to dismantle transnational criminal organizations and bring their leaders and members to justice. The Bureau of International Narcotics and Law Enforcement Affairs (INL) manages the program in coordination with U.S. federal law enforcement agencies. It is a key element of the White House Strategy to Combat Transnational Organized Crime.
The April 29 announcement was made in coordination with other U.S. agencies taking action against Li Fangwei. The U.S. Department of Justice unsealed an indictment against Li Fangwei on charges including conspiracy to commit money laundering, bank fraud, and wire fraud. The U.S. Department of the Treasury’s Office of Foreign Assets Control also added eight of Li Fangwei’s front companies to its List of Specially Designated Nationals and Blocked Persons, and the U.S. Department of Commerce announced the addition of nine of his China-based suppliers to its Entity List.
More information about Li Fangwei is available on the Transnational Organized Crime Rewards Program website at www.state.gov/tocrewards. Anyone with information on Li Fangwei should contact the Federal Bureau of Investigation via the Major Case Contact Center at 1-800-CALLFBI (225-5324) or the nearest U.S. Embassy or Consulate. All information will be kept strictly confidential.
Wednesday, May 21, 2014
SIX FLORIDIANS PLEAD GUILTY TO MORTGAGE FRAUD INVOLVING CONDOMINIUM DEVELOPMENTS
FROM: U.S. JUSTICE DEPARTMENT
Thursday, May 15, 2014
Six Miami-Area Residents Plead Guilty to Mortgage Fraud Scheme Involving Four Condominium Developments
Six Miami-area residents, including three former loan officers, pleaded guilty in the Southern District of Florida this week to participating in a fraudulent scheme designed to enrich real estate developers by selling condominium units to straw buyers.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Special Agent in Charge Phyllis Robinson of the Department of Housing and Urban Development’s Office of the Inspector General (HUD-OIG) in Miami and Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency (FHFA) made the announcement.
Today, Leidy Masvidal, 42, of Miami, pleaded guilty before U.S. District Court Judge Marcia G. Cooke to conspiring to commit bank fraud. Sentencing is scheduled for Sept. 24, 2014. Alfredo Jesus Chacon, 48, of Orange Park, Florida, and Francisco Martos, 63, and Dorian Wong Magarino, 49, both of Miami, also pleaded guilty today to conspiring to commit wire fraud and mail fraud before U.S. District Court Judge Ursula Ungaro. Sentencing is scheduled for Aug. 1, 2014.
On May 14, 2014, Tania Masvidal, 49, and Douglas Ponce, 40, both of Miami, each pleaded guilty before Judge Cooke to conspiring to commit bank fraud. Sentencing is scheduled for July 30, 2014.
According to the defendants’ plea agreements and other court documents, the defendants participated in a scheme to pay straw buyers to submit false loan applications to lending institutions to purchase condominiums owned by co-conspirators. Leidy Masvidal and Tania Masvidal used a mortgage brokerage they owned, EZY Mortgage Inc., to arrange financing for the purchases. Because the straw buyers were not credit-worthy, the Masvidals secured loans in their names by submitting to lending institutions loan applications and other fraudulent documents containing false statements about the buyers’ income, employment and assets, and falsely stating that the buyers intended to reside in the properties. Additionally, the Masvidals enabled their co-conspirators to secretly fund the buyers’ obligations to pay money at closing (known as “cash to close” obligations) by establishing shell corporations, which the co-conspirators used to funnel cash from conspirators to the escrow account used at closing, as well as paying the straw buyers. The co-conspirators compensated the Masvidals for their role in the scheme by sending kickback payments taken from the loan proceeds to the Masvidals’ shell corporations for every straw buyer identified.
According to admissions in court records, Martos was a former loan officer at a mortgage company known as State Lending who helped secure financing for straw buyers in exchange for kickbacks by procuring false employment documents and by including false information in buyers’ loan applications. Chacon and Ponce recruited straw buyers to purchase properties owned by co-conspirators in exchange for kickbacks paid from the sales proceeds. Chacon also allowed a company that he controlled to be used as a false employer for the straw buyers. Magarino accepted payments to act as one of Chacon’s straw buyers and recruited other straw buyers into the scheme. For the properties in which Margarino acted as the straw buyer, he represented to the lender that he personally met his cash-to-close obligations when in fact he knowingly paid these costs with funds supplied by conspirators.
Many of the straw buyers defaulted on their loans after the conspirators stopped making their mortgage payments on their behalf, causing millions of dollars in losses to lenders.
On March 31, 2014, Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez, Marie Mendez, Wilkie Perez and Enrique Angulo were indicted in the Southern District of Florida for their alleged participation in this scheme. They have pleaded not guilty and trial is currently set for Sept. 8, 2014. The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case is being investigated by HUD-OIG and FHFA-OIG. The case is being prosecuted by Trial Attorneys Gary A. Winters and Brian Young of the Criminal Division’s Fraud Section.
Wednesday, May 14, 2014
ONE ARRESTED, ANOTHER SOUGHT AS A FUGITIVE FOR ROLES IN PYRAMID SCHEME
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Criminal Charges Filed Against Two Principals of Massachusetts-Based Telexfree
On Friday, May 9, 2014, the U.S. Attorney for the District of Massachusetts charged James M. Merrill, of Ashland, Massachusetts, and Carlos N. Wanzeler, of Northborough, Massachusetts, with conspiracy to commit wire fraud in connection with the alleged TelexFree pyramid scheme previously charged by the Securities and Exchange Commission. Federal authorities arrested Merrill on Friday, and an arrest warrant was issued for Wanzeler, who the Department of Justice announced is a fugitive. The Department of Justice also announced it has executed 37 seizure warrants seizing assets relating to the fraudulent pyramid scheme.
The criminal charges against Merrill and Wanzeler related to the same conduct charged in a civil enforcement action filed by the SEC on Tuesday, April 15, 2014, against Merrill, Wanzeler, and others. Those charges were filed under seal, in connection with the Commission's request for an immediate asset freeze. That asset freeze, which the U.S. District Court in Boston ordered on Wednesday, April 16, secured millions of dollars of funds and prevented the potential dissipation of investor assets. After the SEC staff implemented the asset freeze, at the SEC's request the Court lifted the seal on April 17. On April 30, 2014, the Court entered preliminary injunctions extending the asset freeze as to defendants Santiago De La Rosa, of Lynn, Massachusetts, and Randy N. Crosby, of Alpharetta, Georgia. On May 8 and 9, the Court entered preliminary injunctions extending the asset freeze as to all the remaining defendants (Merrill, Wanzeler, TelexFree, Inc., TelexFree, LLC, Joseph H. Craft, of Boonville, Indiana, Steve Labriola, of Northbridge, Massachusetts, Faith R. Sloan, of Chicago, Illinois, and relief defendants (TelexFree Financial, Inc., TelexElectric, LLLP, and Telex Mobile Holdings, Inc.).
The SEC alleges that TelexFree, Inc. and TelexFree, LLC claim to run a multilevel marketing company that sells telephone service based on “voice over Internet” (VoIP) technology but actually are operating an elaborate pyramid scheme. In addition to charging the company, the SEC charged several TelexFree officers and promoters, and named several entities related to TelexFree as relief defendants based on their receipt of investor funds. According to the SEC's complaint filed in federal court in Massachusetts, the defendants sold securities in the form of TelexFree “memberships” that promised annual returns of 200 percent or more for those who promoted TelexFree by recruiting new members and placing TelexFree advertisements on free Internet ad sites. The SEC complaint alleges that TelexFree's VoIP sales revenues of approximately $1.3 million from August 2012 through March 2014 are barely one percent of the more than $1.1 billion needed to cover its promised payments to its promoters. As a result, in classic pyramid scheme fashion, TelexFree was paying earlier investors, not with revenue from selling its VoIP product but with money received from newer investors.
In related proceedings, on May 6, 2014, the U.S. Bankruptcy Court in the District of Nevada granted the SEC's motion to transfer venue of those proceedings from Nevada to Massachusetts. The SEC had contended that the TelexFree entities hastily filed for bankruptcy in Nevada on Sunday night, April 13, 2014, in a transparent attempt to avoid Massachusetts. The SEC had noted that TelexFree does virtually no business in Nevada but rather was headquartered in Marlborough, Massachusetts. The SEC also argued that TelexFree did not have a legitimate business capable of reorganization under the bankruptcy code. The bankruptcy case will be transferred to Massachusetts for all further proceedings.
Friday, April 11, 2014
THREE PEOPLE ACCUSED OF DEFRAUDING U.S. GOVERNMENT OF $32 MILLION
FROM: FEDERAL COMMUNICATIONS COMMISSION
Thursday, April 10, 2014
Three Men Charged with Allegedly Defrauding the FCC of Approximately $32 Million
Three individuals have been indicted for their alleged roles in an approximately $32 million fraud against a Federal Communications Commission (FCC) program designed to provide discounted telephone services to low-income customers.
The charges were announced today by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office, Inspector General David L. Hunt of the FCC Office of Inspector General (FCC-OIG) and Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI).
Thomas E. Biddix, 44, of Melbourne, Fla., Kevin Brian Cox, 38, of Arlington, Tenn., and Leonard I. Solt, 49, of Land O’Lakes, Fla., were charged by a criminal indictment returned on April 9, 2014, and unsealed today in federal court in Tampa, Fla. The indictment charges the three defendants with one count of conspiracy to commit wire fraud and 15 substantive counts of wire fraud, false claims and money laundering. The court also authorized a seizure warrant seeking the defendants’ ill-gotten gains, including the contents of multiple bank accounts, a yacht and several luxury automobiles.
As alleged in the indictment, the defendants engaged in a scheme to submit false claims with the federal Lifeline Program administered by the Universal Service Administrative Company, a not-for-profit corporation designated and authorized by the FCC. The program aims to provide affordable, nationwide telephone service to all Americans through discounted phone service for qualifying low-income customers.
The indictment alleges that the defendants owned and operated Associated Telecommunications Management Services LLC (ATMS), a holding company that owned and operated multiple subsidiary telephone companies that participated in the Lifeline Program. Biddix, chairman of the board at ATMS, and Cox and Solt allegedly caused the submission of falsely inflated claims to the Lifeline Program between September 2009 and March 2011 that resulted in ATMS fraudulently receiving more than $32 million.
The investigation has been conducted by the FBI, FCC-OIG, and IRS-CI. The United States Marshals Service provided assistance coordinating the seizures of assets.
The case is being prosecuted by Trial Attorneys Andrew H. Warren and Kyle Maurer of the Criminal Division’s Fraud Section, with assistance from Darrin McCullough of the Criminal Division’s Asset Forfeiture and Money Laundering Section, and the United States Attorney’s Offices for the District of Columbia, the Western District of Tennessee and the Middle District of Florida.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Thursday, April 10, 2014
Three Men Charged with Allegedly Defrauding the FCC of Approximately $32 Million
Three individuals have been indicted for their alleged roles in an approximately $32 million fraud against a Federal Communications Commission (FCC) program designed to provide discounted telephone services to low-income customers.
The charges were announced today by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office, Inspector General David L. Hunt of the FCC Office of Inspector General (FCC-OIG) and Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI).
Thomas E. Biddix, 44, of Melbourne, Fla., Kevin Brian Cox, 38, of Arlington, Tenn., and Leonard I. Solt, 49, of Land O’Lakes, Fla., were charged by a criminal indictment returned on April 9, 2014, and unsealed today in federal court in Tampa, Fla. The indictment charges the three defendants with one count of conspiracy to commit wire fraud and 15 substantive counts of wire fraud, false claims and money laundering. The court also authorized a seizure warrant seeking the defendants’ ill-gotten gains, including the contents of multiple bank accounts, a yacht and several luxury automobiles.
As alleged in the indictment, the defendants engaged in a scheme to submit false claims with the federal Lifeline Program administered by the Universal Service Administrative Company, a not-for-profit corporation designated and authorized by the FCC. The program aims to provide affordable, nationwide telephone service to all Americans through discounted phone service for qualifying low-income customers.
The indictment alleges that the defendants owned and operated Associated Telecommunications Management Services LLC (ATMS), a holding company that owned and operated multiple subsidiary telephone companies that participated in the Lifeline Program. Biddix, chairman of the board at ATMS, and Cox and Solt allegedly caused the submission of falsely inflated claims to the Lifeline Program between September 2009 and March 2011 that resulted in ATMS fraudulently receiving more than $32 million.
The investigation has been conducted by the FBI, FCC-OIG, and IRS-CI. The United States Marshals Service provided assistance coordinating the seizures of assets.
The case is being prosecuted by Trial Attorneys Andrew H. Warren and Kyle Maurer of the Criminal Division’s Fraud Section, with assistance from Darrin McCullough of the Criminal Division’s Asset Forfeiture and Money Laundering Section, and the United States Attorney’s Offices for the District of Columbia, the Western District of Tennessee and the Middle District of Florida.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Thursday, April 3, 2014
JUSTICE ANNOUNCES INDICTMENTS IN FLORIDA MORTGAGE FRAUD SCHEME
FROM: U.S. JUSTICE DEPARTMENT
Monday, March 31, 2014
Seven Indicted in Florida in Mortgage Scheme
Seven individuals have been indicted in the Southern District of Florida for their alleged participation in a mortgage fraud scheme in the Miami area.
The charges were announced by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Inspector General David A. Montoya of the Department of Housing and Urban Development and Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency’s Office of the Inspector General.
A 19-count indictment, returned on March 13, 2014, by a federal grand jury and unsealed today, charges Miami-Dade County residents Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez, Marie Mendez, Wilkie Perez and Enrique Angulo with one count of conspiracy to commit wire and bank fraud. Some of those defendants have also been charged with bank fraud and wire fraud. Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez and Marie Mendez were taken into custody today and made their initial appearances before United States Magistrate Judge Jonathan Goodman in Miami, while the other three defendants remain at large.
As alleged in the indictment, Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez and Marie Mendez owned or controlled various real estate properties in the Miami area. They enlisted mortgage brokers and other individuals, including Perez and Angulo, to recruit straw buyers to act as qualifying mortgage applicants to fraudulently purchase condominiums in the properties. The defendants prepared and caused to be prepared loan documents containing false statements and representations relating to the buyers’ income, assets and other information necessary to enable lenders to assess the buyers’ qualifications to borrow money, which induced the lenders to make loans to finance the condominiums. Luis Michael Mendez and Marie Mendez are alleged to have submitted their own fraudulent loan applications for two condominiums, and they, as well as Luis Mendez and Stavroula Mendez, advanced the buyers cash to close the transactions.
After the loans were funded, the defendants allegedly caused fraudulent payments to be made from the loan proceeds to pay kickbacks through shell companies to the brokers, recruiters and straw buyers, as well as to pay the mortgages to conceal the conspiracy. Eventually, the conspirators were unable to make mortgage payments, causing many of the condominium units to go into foreclosure and leading to losses by the lenders.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case is being investigated by HUD-OIG and FHFA-OIG. The case is being prosecuted by Trial Attorneys Gary A. Winters and Brian Young of the Criminal Division’s Fraud Section.
Monday, March 31, 2014
Seven Indicted in Florida in Mortgage Scheme
Seven individuals have been indicted in the Southern District of Florida for their alleged participation in a mortgage fraud scheme in the Miami area.
The charges were announced by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Inspector General David A. Montoya of the Department of Housing and Urban Development and Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency’s Office of the Inspector General.
A 19-count indictment, returned on March 13, 2014, by a federal grand jury and unsealed today, charges Miami-Dade County residents Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez, Marie Mendez, Wilkie Perez and Enrique Angulo with one count of conspiracy to commit wire and bank fraud. Some of those defendants have also been charged with bank fraud and wire fraud. Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez and Marie Mendez were taken into custody today and made their initial appearances before United States Magistrate Judge Jonathan Goodman in Miami, while the other three defendants remain at large.
As alleged in the indictment, Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez and Marie Mendez owned or controlled various real estate properties in the Miami area. They enlisted mortgage brokers and other individuals, including Perez and Angulo, to recruit straw buyers to act as qualifying mortgage applicants to fraudulently purchase condominiums in the properties. The defendants prepared and caused to be prepared loan documents containing false statements and representations relating to the buyers’ income, assets and other information necessary to enable lenders to assess the buyers’ qualifications to borrow money, which induced the lenders to make loans to finance the condominiums. Luis Michael Mendez and Marie Mendez are alleged to have submitted their own fraudulent loan applications for two condominiums, and they, as well as Luis Mendez and Stavroula Mendez, advanced the buyers cash to close the transactions.
After the loans were funded, the defendants allegedly caused fraudulent payments to be made from the loan proceeds to pay kickbacks through shell companies to the brokers, recruiters and straw buyers, as well as to pay the mortgages to conceal the conspiracy. Eventually, the conspirators were unable to make mortgage payments, causing many of the condominium units to go into foreclosure and leading to losses by the lenders.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case is being investigated by HUD-OIG and FHFA-OIG. The case is being prosecuted by Trial Attorneys Gary A. Winters and Brian Young of the Criminal Division’s Fraud Section.
Subscribe to:
Posts (Atom)