Saturday, July 31, 2010

CBP Officers Seize Heroin at Hidalgo Bridge

Florida Man Arrested

Hidalgo, Texas – U.S. Customs and Border Protection (CBP) officers working at the Hidalgo International Bridge seized 8.2 pounds of Mexican brown heroin Tuesday evening. The estimated street value of the heroin is $663,000.00.

On July 26, CBP officers working at the Hidalgo International Bridge came in contact with a northbound 1997 Toyota Corolla sedan and its male driver, a 40-year-old Mexican citizen from Dade City, Florida. A CBP officer referred the driver and vehicle to secondary for further inspection. In secondary, officers seized five packages containing Mexican brown heroin that were found hidden within the vehicle. Officers also seized the vehicle.

The traveler was transferred to the custody of U.S. Immigration and Customs Enforcement (ICE) special agents for further investigation.

Hector A. Mancha, CBP Port Director, Hidalgo-Pharr said, “Our frontline officers continue working hard to secure our nation’s border and this is an excellent example of the great enforcement work our officers do on a daily basis to prevent this type of contraband from entering our country.”

Louisiana Vessel Company Pleads Guilty to Dumping Oil on High Seas, Will Pay $2.1 Million in Penalties

WASHINGTON – Offshore Vessels LLC (OSV) has entered a plea of guilty to knowingly discharging waste oil from one of its vessels, in violation of the Act to Prevent Pollution from Ships (APPS), the Justice Department announced today. OSV, based in Louisiana, entered the plea in U.S. District Court in New Orleans.

OSV owned and operated the R/V Laurence M. (L.M.) Gould (R/V Gould). The R/V Gould is a 2,966 gross ton American-flagged vessel that served on a contractual basis as an ice-breaking research vessel for the National Science Foundation on research voyages to and from Antarctica. OSV admitted that on or about Sept. 8, 2005, on the high seas, R/V Gould crew members knowingly discharged oily wastewater from the bilge tank of the ship overboard, in violation APPS. Regulations under APPS require that oily wastewater be discharged only after it has been processed through an oily water separator, to ensure that the concentration of oil in the wastewater is below the legal limit.

OSV’s plea agreement with the Justice Department requires the company to pay a criminal fine of $1.75 million and remit a payment of $350,000 as community service to the National Marine Sanctuary Foundation, to be used for study of polar water pollution and protection of vulnerable marine ecosystems in the Antarctic region. OSV will also serve a period of probation for three years, during which it will be subject to an Environmental Compliance Plan.

"The Department of Justice will vigorously pursue all vessel companies, American and foreign, that deliberately violate the laws enacted to protect the oceans," said Assistant Attorney General Ignacia S. Moreno. "This case is particularly egregious because the defendant is an American company tasked with providing passage for the National Science Foundation in order for it to perform important environmental research in Antarctica."

The case was investigated by the U.S. Coast Guard Investigative Service and was prosecuted by Senior Trial Attorney Daniel Dooher, Environmental Crimes Section, Department of Justice; and Assistant U.S. Attorney Dorothy Manning Taylor, Eastern District of Louisiana.

Agency Chief FOIA Officers Respond to the President’s and Attorney General’s Call for Transparency

July 29th, 2010 Posted by Alisa Finelli

This year, for the first time, all agencies subject to FOIA were required to submit Chief FOIA Officer reports. In those reports, agencies were asked to describe the steps they had taken to improve transparency in accordance with the President’s FOIA Memorandum, and the Attorney General’s FOIA Guidelines. The department’s Office of Information Policy (OIP) has analyzed and prepared a summary of the reports. The reports show that more documents have been released, more information has been made available on websites, and backlogs of pending requests have decreased in the past year.

“These 94 agencies have taken significant steps forward in providing the American people with the transparency they want and deserve,” said Attorney General Eric Holder. “Much work needs to be done in the effort to open up the government’s FOIA process and improve its efficiency, but these results indicate we have made important strides in the right direction.”

Among the results:

•All agencies reported progress in implementing the presumption of openness, with over half having that progress rated as “remarkable.”

•Almost half of the ninety four agencies reported divulging documents in discretionary releases – i.e., the documents were requested under the FOIA and the agency could legally have withheld information, but chose not to. Over half looked for opportunities to do so.

•More information is being released to FOIA requesters. In Fiscal Year 2009, the number of responses with released records, either records released in full or in part, increased overall. The number of partial releases increased by approximately 50,000 documents.

•89% of agencies reported proactively disclosing material on their websites – i.e., producing material that has not (yet) been requested by the public.

•95% of agencies, including all Cabinet agencies, can receive FOIA requests electronically, rather than merely via snail mail or other non-technological methods. 91% track the requests electronically as well.

•60% of agencies either had no backlog in processing FOIA requests or reduced that backlog in Fiscal Year 2009. 85% reduced the age of the oldest request or had no backlogged request to close.

Former Deputy Sheriff from Choctaw County, Oklahoma, Sentenced for Civil Rights Violations

WASHINGTON – Former Choctaw County, Okla., deputy sheriff Ben Westley Milner was sentenced today in Muskogee, Okla., to serve 18 months in prison and two years supervised release for violating the civil rights of three men by assaulting them without legal justification.

In one incident, which took place on Oct. 31, 2005, Milner physically abused a truck driver following a traffic stop. In a second incident on Oct. 18, 2007, Milner assaulted two inmates at the Choctaw County Jail with a large axe handle. Milner was convicted on Sept. 24, 2009, on three counts of violating the civil rights of his victims and two counts of falsifying official reports.

"The investigation and prosecution of this case shows that the Department of Justice does not tolerate abuse of authority by the people we entrust to enforce our laws. The sentence imposed today shows the seriousness of these crimes," said Thomas E. Perez , Assistant Attorney General for the Civil Rights Division.

"Law enforcement officers in the Eastern District of Oklahoma are generally well trained in the exercise of reasonable force. We expect that they will survive the dangers inherent in their shifts of work and return home to their families and loved ones. But when those who swear to obey the law, violate that law, a day of reckoning awaits," said U.S. Attorney Sheldon J. Sperling for the Eastern District of Oklahoma.

The convictions resulted from an investigation by the Oklahoma Division of the FBI, and a prosecution by Assistant U.S. Attorney Dean Burris for the Eastern District of Oklahoma, and Trial Attorney Ryan McKinstry for the Civil Rights Division.

Thursday, July 29, 2010

Superseding Indictment Charges Romelia Puig and Mission Clinic Staff with Defrauding Medicare and Medicaid

McALLEN, TX—A 13-count superseding indictment charging Romelia Sanchez Puig, 41, of Edinburg, Texas, and two staff members of the Mission Clinic in Mission, Texas, with conspiracy to commit health care fraud, health care fraud arising from a scheme to defraud Medicare and Medicaid from the operation of two clinics and mail fraud has been returned by a Corpus Christi grand jury, United States Attorney José Angel Moreno and Texas Attorney General Greg Abbott announced today.

The two Mission Clinic staff members, Eliza Lozano Lumbreras, 63, and San Juanita Gallegos Lozano, 54, both of Mission, Texas, were arrested this morning and are expected to appear before a U.S. Magistrate Judge in McAllen later today. Their release on bond is expected to be decided then. Romelia Puig, on bond since the return of the first indictment is expected to surrender herself to federal authorities on Friday, July 30, for arraignment on the new charges against her.

Puig was originally indicted along with her husband, Manuel Anthony Puig, 44, of Edinburg, Texas, on March 9, 2010, charged with health care fraud, mail fraud and conspiracy to commit health care fraud arising from their operation of the La Hacienda Family Clinic in Mission, Texas. The superseding indictment, returned by a federal grand jury on July 27, 2010, adds Lumbreras and Lozano as defendants to each of the original counts alleged in the first indictment along with Romelia Puig and adds charges accusing Lumbreras and Lozano of conspiracy to commit health care fraud and five new counts of health care fraud arising from the operation of the Mission Clinic. The superseding indictment also charges all three defendants with four additional counts of mail fraud arising from the operation of both clinics. The Medicare program is also identified as a victim of the alleged fraud scheme.

Puig, along with her husband, a physician assistant, operated La Hacienda Family Clinic in Mission, Texas. By state law, as a physician assistant, Manuel Puig was required to have a licensed physician supervising his work and delegating responsibilities to him. The original indictment accused the Puigs of fraudulently using the Medicaid provider number of R.J.P., a medical doctor who owned the Mission Clinic in Mission, Texas to fraudulently bill Medicaid for services performed by Manuel Puig without required delegation of authority nor supervision. According to the indictment, R. J. P.’s physical and mental condition prevented him from practicing medicine, and R. J. P. had not delegated authority to the Manuel Puig to see patients nor did he supervise Manuel Puig’s activities, yet beginning in or about May 1, 2005, through on or about Jan. 10, 2006, Manuel Puig provided medical care and services for Medicaid beneficiaries without the authority or the supervision of R.J.P. During the same time period, the Puigs alleged sent 6,000 claims to Medicaid fraudulently using the Texas Medical provider number for R.J.P. Medicaid paid over $173,000 as a result of these claims.

The superseding indictment alleges that between September 2001 and January 2006, R. J. P. was physically and mentally unable to practice medicine but that his office staff, Lumbreras and Lozano, kept the Mission Clinic open for patient care. Despite R. J. P.’s inability to practice medicine, the superseding indictment alleges Lumbreras and Lozano took him to the Mission Clinic where they placed him in an office while Lumbreras saw and treated patients. Neither Lumbreras or Lozano were licensed to provide any medical services. Between September 2001 and January 2006, Lumbreras and Lozano allegedly submitted bills to the Medicare and Medicaid programs which fraudulently claimed that R. J. P. had provided patients with over 7,000 medical benefits, items or services when in fact those services had been provided by Lumbreras or not at all. Medicare and Medicaid paid over $195,000 on those claims.

The indictment further alleges that Lumbreras and or Lozano arranged for Manual Anthony Puig to operate La Hacienda Family Clinic in Alton, Texas, beginning in April 2005 and to send bills to Medicare and Medicaid using the provider number of R.J. P. Romelia Puig allegedly did the billing for her husband and La Hacienda Clinic and also gave billing advice to Lumbreras and Lozano.

Lumbreras, according to the indictment, had power of attorney over R. J. P.’s finances and was able to obtain control over the money Medicare and Medicaid paid for the fraudulent bills submitted from the Mission and La Hacienda clinics, which was divided among Lumbreras, Lozano, and the Puigs. The clinic operated by the Puigs and the clinic operated by Lumbreras and Lozano are no longer in operation.

Conspiracy to commit health care fraud, and each count of health care fraud carries a maximum punishment of 10 years’ imprisonment upon conviction. Mail fraud carries a maximum punishment of 20 years’ imprisonment upon conviction. Maximum fines of $250,000 fine can also be imposed upon conviction for each count.

On July 23, 2010, Manuel Anthony Puig pleaded guilty before Chief United States District Judge Ricardo H. Hinojosa to the conspiracy charge of the original incitement and faces up to 10 years in prison and a $250,000 fine for the conviction. Mr. Puig, who is not charged in the superseding indictment, remains on bond pending an Oct. 26, 2010 sentencing hearing.

The investigation leading to the charges was conducted by the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit with the assistance and cooperation of the Mission Police Department. Assistant United States Attorney Casey N. MacDonald and Special Assistant United States Attorney Rex G. Beasley are prosecuting the case.

Drug Kingpin Sentenced to Life Imprisonment Co-Conspirator Sentenced to 10 Years

Ring Distributed $1 Million of PCP

WASHINGTON - Lonnell Glover, 48, was sentenced today to life imprisonment for his role as leader of a Phencyclidine (PCP) and heroin distribution organization in the District of Columbia and Maryland. The Honorable Thomas F. Hogan, of the U.S. District Court for the District of Columbia, also entered a final order requiring him to forfeit $1,050,000 as proceeds from his drug conspiracy.

The sentencing was announced by United States Attorney Ronald C. Machen Jr., Shawn Henry, Assistant Director in Charge of the FBI’s Washington Field Office, Cathy L. Lanier, Chief of the Metropolitan Police Department, and Edwin D. Sloane, Acting U.S. Marshal for the District of Columbia. Judge Hogan described Glover as “the leader of the largest PCP ring ever in D.C. ”

On June 24, 2010, Glover, of Temple Hills, Md., was sentenced to 20 years’ imprisonment by the Honorable Ellen S. Huvelle, U.S. District Judge for the District of Columbia, for his leadership role in a separate cocaine trafficking organization. These sentences are to run consecutively.

Also today, Jerome Hampton, 51, from Upper Marlboro, Md. was sentenced to 10 years and one month of imprisonment for his role in assisting Glover to obtain multiple gallons of PCP from California, to the Washington D.C. area. Hampton is the owner of Custom Interiors in Upper Marlboro.

In this case, from 2005 to 2007, the FBI conducted a long-term investigation, including months of electronic surveillance, which revealed that Glover was one of the largest regional suppliers of PCP and heroin in the area.

Between February and June of 2007, Glover along with 25 other co-conspirators, obtained and distributed approximately 50 gallons of PCP in various locations in Washington, D.C. and Maryland. The PCP had a wholesale street value of more than $1,000,000.

Hampton permitted Glover to have multiple-gallon shipments of PCP sent to his business office, Custom Interiors. Glover would then retrieve the PCP from Hampton’s business, and Glover would pay Hampton several thousands of dollars for his assistance. Hampton also sold some of Glover’s PCP in the community.

During that same time period, Glover also obtained and distributed multiple kilograms of heroin in the Washington, D.C., area. On June 19, 2007, most of the co-conspirators were arrested in this investigation. More than $400,000 in U.S. currency, numerous firearms, several gallons of PCP, and a large amount of heroin was recovered. As a result of the investigation, approximately 32 individual defendants were charged for conspiracy to commit drug trafficking offenses.

On November 3, 2008, Glover was convicted of conspiracy to distribute and possession with intent to distribute over one kilogram of PCP. Also, on November 23, 2009, after a bench trial, Judge Hogan determined that the defendant’s Brentley Road residence in Temple Hills was used to facilitate the drug conspiracy and therefore forfeited the residence, and also required Glover to forfeit $1,050,000 in proceeds from his drug conspiracy. Hampton was convicted in October 2009 of conspiracy to distribute one kilogram or more of PCP.

In announcing the sentencings, U.S. Attorney Machen noted that this investigation and prosecution was an example of the dedication and resolve of law enforcement, including the FBI, the Metropolitan Police Department, the U.S. Marshals Service, and the U.S. Attorney’s Office to protect our community from those who would prey on it for profit.

Machen commended the work of the FBI agents from the Washington Field Office who investigated the case, as well as Metropolitan Police Department Detective Michael Eames, U.S. Marshals Service deputies Thomas O’Brien, Richard Kelly, and Brendan O’Neill, and U.S. Attorney’s Office Supervisory Paralegal James Mazzitelli, and Assistant U.S. Attorneys John Han and Anthony Scarpelli who investigated and prosecuted the case. This investigation was supported by the Organized Crime Drug Enforcement Task Force.

Distributor of Child Pornography Sentenced to 15 Years in Federal Prison

Defendant Believed to Have Possessed Largest Collection of Child Pornography Prosecuted in the District of Oregon

PORTLAND, OR—U.S. District Judge Robert E. Jones today sentenced Dewey S. Burr, 51, of Hillsboro, Oregon, to 15 years in federal prison, to be followed by a life-term of supervised release. As a condition of supervision, the defendant will have to register as a sex offender.

On March 19, 2010, the defendant pled guilty to one count of distribution of child pornography. The investigation stemmed from an undercover investigation by the Federal Bureau of Investigation (FBI), in June 2009, when an undercover FBI agent in Maryland signed on to a publicly available file sharing program as part of an ongoing child pornography investigation. The agent located an individual using the screen name “Skippy20” who was logged into the same file sharing program. “Skippy20” sent a message to the agent which stated, “Feel free to browse, and take what u like. I do not judge, please do not judge me.” The agent then browsed through “Skippy20’s” shared directories on his computer and observed a number of files depicting images of child pornography, as well as video titles that also appeared to be of child pornography. The agent selected 116 files and proceeded to download copies of them directly from “Skippy20.” A review of the files revealed images of prepubescent children, both male and female, engaged in sexually explicit conduct.

“Child pornography records the sexual exploitation and rape of children and those who distribute, collect, and view such images, like the defendant, continue to further victimize these children and actively encourage the illegal market for these images,” noted United States Attorney Dwight C. Holton. “Because of this, my office remains steadfast in its commitment to prosecute these cases to the fullest extent.”

On July 14, 2009, a federal search warrant was executed at defendant’s residence in Hillsboro, Oregon, and agents seized the defendant’s computer and data storage devices. During questioning, Burr admitted that he viewed and traded child pornography on a daily basis and had been collecting images for a very long time. After a forensic review of the defendant’s computer and digital media storage devices, agents estimated the defendant possessed over 1.1 million images of child pornography, including graphic images of male and female prepubescent children, as well as babies and toddlers being sexually abused.

The defendant’s collection of child pornography is believed to be the most extensive collection of child pornography that has been prosecuted through the United States Attorney’s Office in the District of Oregon.

In imposing the sentence, Judge Jones noted that a “very severe sentence” was warranted in this case because the defendant’s “conduct was very severe.”

The case was investigated by the Innocent Images Task Force, an FBI task force made up of federal and state law enforcement agents who investigate individuals who manufacture and traffic in child pornography and those who prey on children on-line. The case was prosecuted by Assistant U.S. Attorney Scott Kerin, the Deputy Chief of the U.S. Attorney’s Office Violent Crimes Unit.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit

The Portland FBI’s Innocent Images Task Force includes representatives from the Hillsboro Police Department.

Spokane, Washington Man Pleads Guilty to Civil Rights Charges Related to Threats to Reproductive Health Services Clinic

WASHINGTON—Donald Hertz, 70, of Spokane, Washington pleaded guilty today in federal court in Spokane to one count of violating the Freedom of Access to Clinic Entrances (FACE) Act and one count of transmitting a threat in interstate commerce. The FACE Act makes it a federal crime to injure, intimidate or interfere with, by force or threat of force, employees of a facility that provides reproductive health services.

During the plea proceedings and in documents filed in court, Hertz admitted that he intentionally intimidated and interfered with employees of the Boulder Abortion Clinic, located in Boulder, Colo., because they were and had been providing reproductive health services. Specifically, on June 23, 2009, approximately three weeks after the murder of Dr. George Tiller, a Kansas physician who provided reproductive health services, Hertz anonymously contacted the Boulder Abortion Clinic and stated that two of his associates were driving to Boulder to kill members of a clinic employee’s family in order to make that employee suffer.

“Threats of violence against facilities that provide reproductive health services are illegal, and they will not be tolerated in this country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The defendant’s conviction should send a clear message to others who would carry out similar criminal acts that they will be brought to justice and held accountable for their actions.”

Sentencing has been scheduled for Oct. 27, 2010. Hertz faces a maximum prison sentence of up to six years and a fine of up to $350,000.

The case was investigated by special agents from the Denver and Spokane Divisions of the FBI and deputies from the U.S. Marshals Service. The case is being prosecuted by the Civil Rights Division of the Justice Department with the assistance of the U.S. Attorney’s Office for the Eastern District of Washington.

Former Contract Dispatcher Pleads Guilty to Accepting Kickbacks

NEW ORLEANS, LA—HULON EUGENE PARSONS, a/k/a/ Gene Parsons, age 60, of Hammond, Louisiana, a former employee of Boh Brothers Construction Company, Inc., pled guilty today before U.S. District Judge Ivan L. R. Lemelle to illegally accepting kickbacks relating to a prime contract with the United States, announced United States Attorney Jim Letten.

According to court documents, PARSONS’ former employer was awarded a subcontract to perform asphalt work on the Naval Air Station Joint Reserve Base Belle Chasse in Belle Chasse, Louisiana. The prime contract on that job was awarded by an agency of the Department of the Navy, the Naval Facilities Engineering Command Southeast. PARSONS was employed as a dispatcher in the trucking department and was responsible for awarding trucking business to various trucking subcontractors on that other jobs.

A principal in a trucking company, which sought and received work as a trucking subcontractor, reported to law enforcement that for a period of ten years, he dealt almost exclusively with PARSONS, who required him to pay kickbacks to obtain work as a subcontractor. He estimated that over a ten-year time span, he paid about $200,000 in kickbacks to PARSONS. In December, 2008, the individual decided he no longer was willing to pay kickbacks to PARSONS, so he stopped paying kickbacks and the amount and frequency with which he was awarded work by PARSONS decreased dramatically. Because Boh Brothers was the trucker’s only client, the decrease in work led him to having to dispose of several trucks and his company was on the verge of bankruptcy.

The trucker reported to the Federal Bureau of Investigation that he had been required to pay kickbacks to PARSONS in order to be awarded trucking work. The FBI provided cash to the trucker from which he paid three kickbacks to PARSONS. The trucker also recorded conversations between PARSONS and himself relating to those payments. In September, 2009, after the trucker had been paid $1,110 for work his company performed on the NAS Belle Chasse subcontract, he paid PARSONS a $300 kickback. PARSONS then awarded the trucker an additional $3,000 in trucking work on the Belle Chasse subcontract, and the trucker paid PARSONS an additional $600 in kickbacks. During the same time period, PARSONS awarded the trucker a total of $20,460 in trucking work on various jobs. Of that amount, the sum of $4,020 related to work on the Belle Chasse job.

During the court proceedings, it was noted that PARSONS previously had turned over to the Government a $50,000 check payable to the trucker as an immediate payment of restitution. The final amount of restitution owed will be determined by the court.

The defendant faces a maximum term of imprisonment of ten (10) years' imprisonment, a fine of $250,000.00, and up to three (3) years of supervised release following any term of imprisonment. Sentencing has been scheduled for October 27, 2010.

Speaking to today’s conviction, U.S. Attorney Jim Letten stated:

“It is important that our citizens know that successful cases such as this one are often difficult if not impossible without the courageous assistance of individuals such as the trucking company executive who worked with the FBI to assist in addressing this corrupt scheme. Thanks to his efforts, this investigation continues.”

The case was investigated by the Federal Bureau of Investigation and the Louisiana State Police. The case was prosecuted by Assistant U.S. Attorney Eileen Gleason.

Investment Manager Pleads Guilty in Manhattan Federal Court to Several Hundred Million-Dollar Fraud

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that PAUL GREENWOOD pled guilty today in Manhattan federal court to a six-count Indictment charging him with conspiracy, securities fraud, commodities fraud, wire fraud, and money laundering for running a fraudulent commodities trading and investment advisory scheme while a principal of WG Trading Company and WG Trading Investors. GREENWOOD, 63, of North Salem, New York, pled guilty before United States District Judge MIRIAM GOLDMAN CEDARBAUM.

According to the Indictment, other documents filed in Manhattan federal court, and statements made at the plea proceeding:

From at least 1996 through February 2009, GREENWOOD and others ran a fraudulent commodities trading and investment advisory scheme using an entity they controlled called WG Trading Investors. Through a marketer, GREENWOOD and others solicited $7.6 billion in investor funds on the understanding that they would invest the funds in a program called "equity index arbitrage," which they represented was a conservative trading strategy that had outperformed the results of the S&P 500 Index for more than 10 years. As a result, several institutional investors -- including charitable and university foundations, retirement and pension plans, and other institutions -- invested billions of dollars with GREENWOOD and others. Investors either became limited partners in WG Trading Company, LP, or received promissory notes issued by WG Trading Investors that the defendants represented would pay interest at a rate equal to the investment returns earned by a limited partner of WG Trading Company. Contrary to their representations to their investors, GREENWOOD and others misappropriated at least $331 million in investor funds. Among other things, GREENWOOD used the funds to construct his home, purchase expensive collectible items, and operate a horse farm. GREENWOOD and others also diverted investor funds to satisfy obligations on investments that were unrelated to the "equity index arbitrage" trading business.

GREENWOOD and others executed promissory notes in favor of WG Investors to, among other things, conceal trading losses and their misappropriation of investor funds. These promissory notes totaled approximately $554 million, of which approximately $293 million was GREENWOOD's. GREENWOOD and others also created and caused others to create false account statements that were sent to clients to reflect fictitious returns consistent with the returns that had been promised to those clients.

GREENWOOD pled guilty to each of the six charges in the Indictment, which carry the following maximum penalties:

Count Charge Penalty

• One Conspiracy 5 years in prison; fine of $250,000, or twice the gross gain or loss fromthe crime

• Two Securities Fraud 20 years in prison; fine of $5 million, or twice the gross gain or loss from the crime

• Three Commodities Fraud 10 years in prison; fine of $1 million, or twice the gross gain or loss from the crime

• Four Wire Fraud 20 years in prison; fine of $250,000, or twice the gross gain or loss from the crime

• Five Wire Fraud 20 years in prison; fine of $250,000, or twice the gross gain or loss from the crime

• Six Money Laundering 10 years in prison; fine of $250,000, or twice the gross gain or loss from the crime, or twice the amount of criminally derived property involved in the transaction

Pursuant to a plea agreement, GREENWOOD agreed to forfeit a sum of money equal to at least $331 million, which represents the amount of funds that GREENWOOD and others personally misappropriated and diverted to make an investment in Signal Apparel Company, Inc., which was not disclosed to investors.

On July 21, 2009, DEBORAH DUFFY, the former Chief Compliance Officer of WG Trading Company, pled guilty to conspiracy, securities fraud, and money laundering, for her role in the fraud scheme.

STEPHEN WALSH, another principal of WG Trading Company and WG Trading Investors, is charged with conspiracy, securities fraud, commodities fraud, wire fraud, and money laundering for his role in orchestrating and perpetrating the fraud scheme. WALSH allegedly used investor funds for himself and to make large cash payments to his ex-wife and, like GREENWOOD, executed $261 million worth of promissory notes in favor of WG Investors to conceal trading losses and the misappropriation of investor funds. The charges against WALSH remain pending, and he is presumed innocent unless and until proven guilty.

Mr. BHARARA praised the work of the Federal Bureau of Investigation, and thanked the United States Securities and Exchange Commission, the United States Commodity Futures Trading Commission, and the National Futures Association, for their assistance. He added that the investigation is continuing.

This case is being handled by the Office's Securities and Commodities Fraud Task Force. Assistant United States Attorneys JOHN J. O’DONNELL, MARISSA MOLÉ, and AMY LESTER are in charge of the prosecution.

Manassas Teacher Charged with Child Pornography Offenses

ALEXANDRIA, VA—Kevin Garfield Ricks, 50, of Federalsburg, Md., was charged in a criminal complaint today on charges of transporting and possessing child pornography.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Shawn Henry, Assistant Director in Charge of the FBI Washington Field Office; and Douglas W. Keen, Chief of Police for the City of Manassas, made the announcement. Ricks faces a minimum of five years and a maximum of 30 years in prison and up to a lifetime of supervision if convicted on all charges.

According to an affidavit filed with the complaint, between about September 2007 and his arrest on Feb. 18, 2010, the defendant was a teacher at a high school in Manassas, Va. After his arrest on local charges stemming from allegations that Ricks had sexual relations with a 16-year-old boy, Ricks’s laptop computer was searched. The search allegedly uncovered several images of child pornography. The affidavit alleges that further investigation revealed that Ricks brought the laptop from his residence in Virginia to his residence in Maryland when he returned on weekends.

The investigation into the case remains ongoing. Ricks is currently incarcerated in the Prince William County Adult Detention Center.

This case is being investigated by the FBI Washington Field Office and Manassas Police Department. Assistant United States Attorneys John Eisinger and Jerry Smagala are prosecuting the case on behalf of the United States.

Criminal complaints are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

Wednesday, July 28, 2010

Statement of the Attorney General on Passage of the Fair Sentencing Act

"I congratulate the House of Representatives on today’s passage of the Fair Sentencing Act. The bill greatly reduces the unwarranted disparity in sentences for crack and powder cocaine offenses, and will go a long way toward ensuring that our sentencing laws are tough, consistent, and fair.

"By sending the bill to the President, the House has taken an important step toward more just sentencing policies while enhancing the ability of law enforcement officials to protect our communities from violent and dangerous drug traffickers.

"This day was long in coming, and I want to express my appreciation to the members of the House and Senate who worked tirelessly to bring about this result. Particular thanks are due to Majority Whip Clyburn, House Judiciary Committee Chairman Conyers and Crime Subcommittee Chairman Scott, and to the bipartisan leadership of the Senate Judiciary Committee, including Chairman Leahy, Ranking Member Sessions and Senators Durbin and Graham.

"I join them in celebrating this achievement, and look forward to working with them to implement the new law."

National Academy Associates Annual Training Conference Boston, Massachusetts

Robert S. Mueller, III
Federal Bureau of Investigation

July 27, 2010

Good evening. As always, it is great to be here with you.

I want to thank each of you for taking time away from your departments to come to this conference. And I especially want to welcome the family of James Sheehan.

Jim joined the Boston Police Department in 1920. Through his hard work, his unfailing integrity, and his dedication to the rule of law, he rose through the ranks to serve as deputy superintendent. Jim graduated from the first session of the National Academy and served as the first president of the alumni association. He was an example of law enforcement at its finest, and we are grateful to have his family here with us tonight.

As I understand it, this is the first time this conference has been held in Boston. I lived here for many years. For those of you who have never visited, a few words of advice.

First and foremost, the letter “r” disappeared when you crossed the state line. This can make communicating with the locals a challenge.

Some of you may know a graduate of the 238th named Scott Livingston, who I believe may be here tonight. For 10 weeks, Scott kept complaining about his biggest pet peeve, “da bumpa da bumpa.” No one could figure out what he was talking about, until he explained that he was referring to the heavy traffic on I-95, as in “the bumper-to-bumper” traffic.

This only proves that we do not need translators for our international students, who speak perfect English. But we do need translators for the students from Massachusetts.

If something is good, it must hail from Boston. If it is bad, it can only come from New York.

If you are not a rabid fan of the Red Sox, as I am, pretend you are. And if all else fails, say something negative about the Yankees—there is so much to choose from.

By the way—any Yankees fans here tonight? Okay, please relinquish your Yellow Bricks on your way out.

The first speech I gave as Director of the FBI was to the graduates of the 206th session on September 7, 2001—just four days before the terrorist attacks on America.

In my remarks that day, I suggested that these were tough times for law enforcement, given that crime had become more global and more varied than ever. Advances in travel and technology had opened the doors to a new world of communication and commerce. Yet they had also made us more vulnerable to criminal and terrorist attacks.

It has been nearly nine years since then, but the same speech could be given tonight.

We continue to confront terrorist threats, both at home and abroad. Nine years ago, al Qaeda was our primary concern. Today, we also confront homegrown terrorists and individuals who may travel overseas to train for and perhaps commit acts of terrorism, but who may one day return home to plan and execute attacks here.

At the same time, we face increasingly dangerous criminal threats. Our gang population continues to grow, with members migrating to mid-size cities across the country.

Organized crime is on the rise. We are not merely speaking of money laundering and extortion, but human trafficking and health care fraud.

Child exploitation is a growth industry. Computer hackers do not need to know each other’s real names, or even live on the same continent, to steal millions in mere hours. And, as evidenced by recent events, espionage continues to pit country against country and company against company.

It is an understatement to say that our plates are indeed full. And yet look at how far we have come, together.

Ten years ago, when confronted by a surge in street crime, the migration of MS-13, or a child abduction, the question to any one police department or agency might have been, “What are you going to do about it?”

Today, the question is, “What are we going to do about it?”

A few examples of our collective success:

Together, we are fighting violence and corruption on the Southwest border. In June, through Project Deliverance, more than 3,000 agents and officers in 16 states arrested 2,200 individuals.

This past May, 600 agents and officers arrested 78 top members of two street gangs—the Bloods and the Latin Kings. These gangs were responsible for much of the drug trafficking, street crime, and violence in Newburgh, a city north of Manhattan. Newburgh used to lead New York state in per capita homicides, but through the Hudson Valley Safe Streets Task Force, we are having a substantial impact on the city’s crime rate.

We are working with ICE, the Department of Labor, and the LAPD to combat human trafficking. Earlier this year, we arrested nine defendants who had smuggled young girls from Guatemala to the United States to work as prostitutes. The ringleader was sentenced to 40 years in prison.

Our collaboration is equally important in white collar criminal cases. In June, we arrested nearly 500 individuals, from industry insiders to straw buyers, in a nationwide mortgage fraud takedown. And earlier this month, nearly 400 officers and agents from Miami, Baton Rouge, Brooklyn, Detroit, and Houston joined forces with HHS to charge 94 individuals with Medicare fraud.

These diverse threats illustrate how difficult our jobs have become, on every level.

As I said to the graduates of the 206th back in 2001, there was a day in law enforcement when teamwork and partnership were virtues. Today, they are minimum requirements. Collaboration is not something for which we strive. It is an absolute necessity.

But the National Academy represents more than just partnership. It represents friendship. It guarantees that you can pick up the phone, day or night, anywhere around the world, and find someone who will stand behind you.

The Yellow Bricks you earned are more than mementos of your time at Quantico—they are symbols of your commitment.

I recently visited a European country and met with the Deputy Minister of Justice—a graduate of the National Academy. I told him that I was not pleased with a position his minister had taken on a recent extradition case. I jokingly threatened him with the ultimate sanction—the loss of his Yellow Brick. He threw up his hands in surrender and said, “No, anything but that!”

It is my hope that while you are here, you will re-connect with old friends and cultivate new colleagues and future partners.

You came to Quantico as strangers. But you left as lifelong friends. Along the way, you learned to live with your roommate’s annoying habits. And believe it or not, they learned to live with yours. You survived the grueling PT, the cafeteria food, the homework, and International Night. Many of you became almost proficient at doing your own laundry—a fact for which your families should be forever grateful.

More importantly, you stood in solidarity when your classmates lost colleagues in the line of duty. You passed the hat in times of personal illness and family emergency. You reminded one another of why you chose to serve as law enforcement officers and why we must continue to work side by side.

The 241st session of the National Academy graduated this past June. They were visiting New York City on the day of the attempted bombing in Times Square.

The group dined that night at Carmine’s. In the middle of dinner, several bagpipers from the NYPD walked in and began to play, without notice or fanfare. Those who were there spoke of the silence that descended over the room and of the sense that they were all part of something greater than themselves.

A day that could have ended in tragedy instead came to represent for that class the very best in partnership.

That is what the National Academy stands for. That is why we are here tonight—to build on the foundation begun 75 years ago, when just 23 strangers met to talk about what they together could do to keep their communities safe.

Today, you are part of a network nearly 43,000 strong. That’s 43,000 yellow bricks sitting on desks and bookcases around the world. That amounts to a line of bricks that extends for nearly six miles—the same length as the Yellow Brick Road itself.

But what it really amounts to is a worldwide network of trust and teamwork—a network that represents the best of who we are and what we do.

I am honored to serve beside each of you, and I look forward to continuing the legacy we have built.

Thank you and God bless

Tuesday, July 27, 2010

Birmingham Man Indicted for Robbery of Downtown Birmingham Bank

BIRMINGHAM—A federal grand jury today indicted a 27-year-old Birmingham man in connection with the June robbery of Regions Bank in downtown Birmingham, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Patrick J. Maley.

The indictment filed in U.S. District Court charges QUINTON DUWAN POSEY with robbing the bank on June 10 “by force and violence and by intimidation.”

“Our financial institutions, the people who work within them and the customers who depend on them must be protected,” Vance said. “Bank robbery is a serious crime. We answer it with stern prosecution.”

The bank robbery charge carries a maximum prison sentence of 20 years.

This matter was investigated by the Birmingham Police and the FBI. Assistant U.S. Attorney Gregory R. Dimler is prosecuting the case.

Members of the public are reminded that an indictment contains only charges. A defendant is presumed innocent of the charges and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.

Former CEO of the Morgan Crucible Co. Found Guilty of Conspiracy to Obstruct Justice

WASHINGTON — A federal jury in Philadelphia today convicted Ian P. Norris, the former CEO of The Morgan Crucible Company plc, a United Kingdom corporation, of conspiring with others to obstruct justice, the Department of Justice announced.

In 2004, a federal grand jury indicted Norris, a citizen of the United Kingdom, on one count of fixing prices of carbon brushes and other carbon products, one count of conspiring to obstruct justice, and two counts of obstructing justice in connection with the Department of Justice’s antitrust investigation of price fixing in the carbon products industry. Norris was extradited to the United States in March 2010 on the three obstruction charges. The jury returned a guilty verdict today on the conspiracy to obstruct justice count and not guilty verdicts on the witness tampering count and the count of corruptly persuading others to destroy or conceal documents. Sentencing has been scheduled for Nov. 2, 2010.

The department said that Norris conspired with his subordinates to obstruct the grand jury’s investigation. Morgan Crucible employees conspired with Norris to create a false script that employees of both Morgan Crucible and a competitor were to follow when questioned in the investigation. Also, a document destruction task force was formed to collect and destroy or conceal documents from the grand jury, the department said.

"The Antitrust Division uncovered this elaborate and egregious obstruction of justice scheme," said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "Today’s verdict holds Norris accountable for his actions and sends a message that corporate leaders must promote a culture of law abiding conduct within their companies or be prepared to face stiff prison sentences. The Antitrust Division will remain vigilant in protecting the integrity of its criminal investigations from obstruction in order to effectively carry out its mandate to protect American businesses and consumers from price-fixing cartels."

Carbon products are used to transfer electrical current in automobiles, trains, public transit vehicles and consumer products and are used in pumps and compressors to contain liquids and gases.

Including today’s conviction, more than $11 million in criminal fines have been obtained and four executives and two companies have pleaded guilty or have been convicted as a result of the department’s antitrust investigation of price fixing in the carbon products industry.

The Morgan Crucible Company plc, based in Windsor, England, pleaded guilty in 2002 to one count of tampering with witnesses and one count of document destruction. The company paid a $1 million criminal fine.

A former subsidiary of the company, Morganite Inc., which was based in Dunn, N.C., pleaded guilty in 2002 to fixing prices of carbon brushes and other carbon products and paid a $10 million fine.

In addition, three subordinates of Norris previously pleaded guilty to obstruction charges. Jacobus Johan Anton Kroef, the former Chairman of the Industrial and Traction Division of The Morgan Crucible Company plc, pleaded guilty in 2003 to witness tampering. Robin D. Emerson, former pricing coordinator at Morganite Electrical Carbon Ltd. of Swansea, U.K., pleaded guilty in 2003 to corruptly persuading another person to destroy or conceal documents in connection with the investigation. F. Scott Brown, the former Global President and a member of the Board of Directors of Morgan Advanced Materials and Technology Inc. (MAMAT), now headquartered in Greenville, S.C., pleaded guilty in 2003 to aiding and abetting document destruction in connection with the investigation. Morganite Electrical Carbon Ltd. and MAMAT are subsidiaries of The Morgan Crucible Company plc.

The conspiracy count carries a maximum penalty of five years in prison and a $250,000 fine.

Trial attorneys Lucy McClain, Richard Rosenberg, and Kimberly Justice of the Antitrust Division’s Philadelphia Field Office prosecuted the case.

Third individual arrested in alleged conspiracy to traffic Haitian nationals

JACKSONVILLE, Fla. - The third individual indicted for conspiracy to commit human trafficking offenses involving Haitian nationals was arrested in Miami on Thursday.

The arrest of Willy Edouard, 47, follows a four-count indictment on June 22 by a federal grand jury in the Northern District of Florida that charged him and two others with forced labor and conspiracy, visa fraud, holding documents and conspiracy, following an investigation by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) special agents in Jacksonville and Miami and other state, local and federal agencies.

Edouard and Carline Ceneus, 32, both of Miami, and Cabioch Bontemps, 34, of Gainesville, Fla., were charged with crimes arising from an alleged scheme to coerce the labor and services of Haitian nationals brought by Ceneus and Edouard to northern Florida to work under the federal agricultural guest worker program. Ceneus was also charged with taking the victims' travel and identity documents.

"Targeting human traffickers is a top priority for ICE," said Susan McCormick, ICE special agent in charge of the Office of HSI in Tampa. "Those who are motivated by greed to prey on people have a callous disregard for the value of human life. That is why ICE will continue to aggressively investigate those involved in this kind of criminal activity."

On July 1, ICE special agents in Miami arrested Ceneus after she arrived from Haiti at Miami International Airport. Bontemps was arrested July 6 in Gainesville.

Edouard had been considered a fugitive when he was arrested Thursday by the U.S. Marshal's Service.

If convicted, Ceneus faces a maximum sentence of 25 years and Edouard and Cabioch each face 10 years in prison.

"Human trafficking denies individuals their freedom and their dignity. Those who prey on the most vulnerable through force, fraud or coercion will be prosecuted to the fullest extent of the law," said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. "The Civil Rights Division will continue to work with DHS, law enforcement agencies across the globe, and victim assistance organizations to vindicate the rights of victims, bring traffickers to justice and dismantle human trafficking networks."

According to the indictment, Ceneus, Bontemps and Edouard engaged in a conspiracy and devised a scheme to obtain the labor of 34 Haitian nationals by enticing them to the Gainesville area to pick beans and peas with false promises of lucrative jobs over three years culminating in permanent residency.

The three defendants then maintained the victims' labor and services through threats of serious harm, according to the indictment. Ceneus and Edouard arranged for the workers to pay substantial recruitment fees, procured by loans provided by loan sharks and often secured by the victims' property. After arrival in the United States, the defendants confiscated the victims' passports and failed to honor the promised terms of employment. The defendants kept the Haitian nationals in their service by threatening to report them to law enforcement and have them deported or sent home to face their large unpaid debts. The indictment also charges that the defendants engaged in visa fraud by making false statements in documents filed with the U.S. Department of Labor to procure H2A guest worker visas.

The charges set forth in an indictment are merely accusations and the defendants are presumed innocent until proven guilty.

This case is being investigated by ICE; the U.S. Department of Labor, Office of Inspector General; and the Alachua County, Fla., Sheriff's Office.

The case is being prosecuted by trial attorney Susan French of the Human Trafficking Prosecution Unit of the Civil Rights Division, Criminal Section, and Assistant U.S. Attorney Frank Williams of the Northern District of Florida.

Numerous non-governmental organizations have provided services to the victims and include: Alachua County Victim Services and Rape Crisis Center; Alachua County Housing Authority; Gainesville Harvest; Alachua County Health Department; Trinity United Methodist Church; Child Advocacy Center of Gainesville; United Way; St. Francis House; Peaceful Paths; Florida Rural Legal Services in Fort Myers, Fla; Florida Freedom Partnership in Miami; and World Relief in Jacksonville.

Former Port Townsend Area Organic Farmer Sentenced to 10 Years in Prison for Bank Robbery Spree

Defendant Robbed Four Banks Across the West Using Fake Bomb

MICHAEL JOHN FENTER, 40, of Port Townsend, Washington, was sentenced today in U.S. District Court in Tacoma to 10 years in prison, five of supervised release, and $86,000 in restitution for three counts of bank robbery, one count of armed bank robbery, and one count of possession of a firearm during a crime of violence. FENTER pleaded guilty March 18, 2010 admitting in his plea agreement that he robbed banks in Seattle, Tacoma, San Francisco, and Sacramento. FENTER was arrested October 8, 2009, following the robbery of a Bank of America branch on South 9th Street in Tacoma. Officers located FENTER following the robbery and recovered $73,000 stolen from the bank. At sentencing U.S. District Judge Benjamin H. Settle noted that one of the victim tellers appropriately called Fenter a “terrorist.” The judge said the tellers “had been given a life sentence of reliving the terror” of the bank robberies.

According to the plea agreement, on February 4, 2009, FENTER entered a Washington Mutual Bank branch on 4th Avenue in Seattle. FENTER asked one of the tellers to meet with him at a desk. FENTER claimed he had highly explosive material in a briefcase he was carrying, and said he could wipe out the bank. FENTER told the teller to fill a black bag he was carrying with money. FENTER threatened to detonate the bomb by remote control if the teller called police. FENTER escaped with $9,200.

FENTER used the same bomb ruse twice in California. On April 15, 2009, he robbed a Bank of America branch in San Francisco. FENTER told the victim teller that his name was “Patrick Henry,” and he represented an organization that was angry about how the government was spending “bail-out” money and that he intended to take the money and give it to people who needed it. The distraught teller filled the bag with $43,000. FENTER told her if she called police too soon after he left, he would detonate the bomb using his cell phone. In August 2009, FENTER robbed a Wells Fargo branch in Sacramento, saying the money was for “The cause.” He claimed to have associates outside the bank and showed the bank manager an ear piece as if he were in touch with conspirators who could detonate the bomb. FENTER escaped from the bank with $34,000.

On October 8, 2009, FENTER entered the Bank of America branch in Tacoma and told the assistant manager that he wanted to make a large transaction. FENTER sat at the manager’s desk, and showed her the contents of a black box that appeared to contain wires and an antenna. FENTER told the assistant manager that he had a triggering device for the bomb. FENTER said that the robbery was not about the bank, but about a fight against the government. FENTER told the assistant manager she had 10 minutes to fill his black bag with money. Another bank employee saw what was going on and called police with his cell phone. FENTER was apprehended a short distance away from the bank. He had a fully loaded Glock .40 caliber pistol in a holster on his hip. The object he claimed was a bomb was disabled and analyzed. The device contained a commercial grade blasting cap and battery. The two were not wired together. Had they been wired, the blasting cap could have exploded injuring anyone nearby.

In his sentencing memo, Special Assistant United States Attorney Jerry Costello noted that the robberies were prompted by greed, and that they traumatized the bank employees. “The victims understandably feared being blown to bits or being maimed for life—along with others—by the apparent bomb defendant carried. One of the victims was so frightened that she lost emotional control. Creating intense, palpable fear is exactly what defendant wanted, and his motivations are reprehensible. The victims will never forget the day that defendant both threatened their lives and invaded their psyches,” Mr. Costello wrote in his sentencing memo.

The case was investigated by the FBI and the Tacoma Police Department. The case is being prosecuted by Special Assistant United States Attorney Jerry Costello. Mr. Costello is a Deputy Pierce County Prosecutor, specially designated to prosecute gun crimes in federal court.

Monday, July 26, 2010

ICE arrests 22 in Idaho immigration enforcement surge

All had been previously deported or had criminal convictions in the United States

BOISE, Idaho - Two previously deported felons were among the 22 immigration violators arrested by officers with U.S. Immigration and Customs Enforcement (ICE) during a three-day enforcement surge in Idaho's Magic Valley and the surrounding area.

During the operation, which began July 20, ICE arrested 15 immigration fugitives who had outstanding orders of deportation or had been previously deported and returned to the United States illegally. Six of the immigration fugitives had criminal histories ranging from drug possession, assault, theft, driving under the influence and domestic violence.

Two of the previously deported felons will be federally prosecuted in the District of Idaho on charges of illegal re-entry after deportation. Francisco Garcia-Ramirez, 34, of Mexico has a prior conviction for possession of cocaine and has previously been deported four times. Jesus Jaimes-Flores, 32, of Mexico has criminal convictions for DUI and assault and was previously convicted on federal charges of illegal entry. He has been previously deported once.

"ICE is committed to smart and effective immigration enforcement that targets individuals who pose a threat to public safety," said Steven M. Branch, field office director for ICE's Enforcement and Removal Operations (ERO) in Idaho. "ICE is committed to identifying those who come to the United States, commit crimes and blatantly disregard our nation's laws."

ICE officers made the arrests in nine Idaho communities including Burley, Buhl, Castleford, Hailey, Jerome, Rupert, Shoshone, Twin Falls, and Wendell. Those arrested are from Mexico (18), Nicaragua (1), Honduras (1), Peru (1) and Russia (1).

The arrests were made by ERO Fugitive Operations Teams (FOTs) based in Boise, Idaho, and Salt Lake City. The teams, two of 104 deployed nationwide, are responsible for locating, arresting, and removing criminal aliens and immigration fugitives who have ignored final orders of deportation handed down by the nation's immigration courts.

In fiscal year 2009, the FOTs made 35,904 arrests. More than 31,000 of those arrests, nearly 90 percent involved immigration fugitives and aliens with prior criminal convictions. Criminal aliens accounted for about 45 percent of the overall total, including more than 3,600 individuals with prior convictions for violent crimes such as murder and assault.

13 indicted for selling counterfeit documents at Houston flea markets

HOUSTON - Thirteen individuals were charged by indictment on Monday for allegedly conspiring to possess or obtain counterfeit identity documents. The indictments were announced by U. S. Attorney José Angel Moreno, Southern District of Texas, and Michael Fienberg, the U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations (HSI) acting special agent in charge.

"The sale of counterfeit identification documents is a matter of national security," said U. S. Attorney José Angel Moreno. "These types of enforcements actions are necessary to secure our borders and protect our citizens."

Two indictments charging a total of 20 persons returned under seal by a Houston grand jury on July 22 resulted from an 18-month investigation dubbed "Operation Fake I. D.," conducted by the ICE-HSI-led Document and Benefit Fraud Task Force (DBFTF), which includes special agents from the Department of State Diplomatic Security Service and officers of the Houston Police Department. "Operation Fake I. D." focused its investigative efforts on individuals allegedly involved in trafficking counterfeit government identity documents, including U.S. permanent resident cards, at the Sunny, La Tia Pancha and Cintas flea markets in north Houston.

Warrants issued following the return of the indictments were executed by investigating agents beginning July 23 through the weekend, including arrests July 24 at the Sunny, La Tia Pancha and Cintas flea markets. So far, 13 defendants have been arrested. Warrants remain outstanding for those charged but not yet in custody. All defendants in custody are expected to appear before U. S. Magistrate Judge Mary Milloy July 26 when the issue of bond is expected to be raised. The indictments have been ordered unsealed.

"ICE's HSI-led Document and Benefit Task Force provides a comprehensive approach in targeting criminal organizations and individuals involved in illegally manufacturing and selling fraudulent documents," said Michael Fienberg, acting special agent in charge of ICE-HSI in Houston. "HSI and its agency partners are committed to stopping this threat that undermines our nation's security."

The first of the two indictments charges a total of 17 defendants. All 17 are accused of being involved in a conspiracy to solicit customers at the various flea markets in north Houston to purchase counterfeit U.S. permanent resident cards and other identifying documents beginning in or about February 2009 through June 2010. The customers were allegedly photographed and asked to provide other information necessary to complete the counterfeit immigrant and non-immigrant government documents. Once the photograph and information was obtained, the information was communicated via telephone, text messaging or courier to other co-conspirators operating a counterfeit government document production mill which produced the counterfeit documents which were then sold to customers. A conviction for this conspiracy charge carries a maximum punishment of five years imprisonment and a $250,000 fine.

The remaining nine counts of the indictment charges individual defendants separately for alleged specific instances of fraud and misuse of visas - knowingly possessing a forged, counterfeited, altered or falsely made form I-551 or U.S. Permanent Resident card - between July 26, 2009 through July 10, 2010. A conviction for any one of these offenses carries a maximum punishment of 10 years imprisonment and a $250,000 fine.

Two defendants charged in the second indictment and charged in all three counts - conspiracy to solicit customers at the various flea markets in north Houston to purchase counterfeit U.S. Permanent Resident cards and other identifying documents beginning in or about January 2009 through July 2010 and two substantive counts for alleged specific instances of fraud and misusing visas in April and July 2010 - were also arrested on July 24. Both defendants face the same statutory penalties as the defendants in the first indictment upon conviction and are also in federal custody pending a detention hearing.

The defendants charged in the 10 count indictment are ("*" denotes in federal custody): Name, Age, Nationality (LNU = "last name unknown")

•Israel Arroyo-Mora, 37, Mexico "El Tio," true name Salvador Cobos-Lima, 59,
•Mexico Valentin Romero-Cortez, aka "Carlos," 50, Mexico
•Claudia Perez-Luna aka Claudia Del Villar, 53, Mexico
•Juan Carlos Morales-Garcia, aka "Toto," 38, Mexico
•Erika Cortez-Lopez, 35, Mexico
•Leonardo LNU
•"Gordo," true name Dagoberto Cacares, 33, Honduras
•"Baina," true name Carlos Joel Rosario-Solis, 21, Dominican Republic
•Raul Martin Puga, 41, Mexico
•Zeferino Romero-Cortez, 35, Mexico
•FLU LNU (star tattoos on elbows), true name
•Valentin Leonardo Romero-Cortez, 29, Mexico
•Jairo Bravo Luna, 23, U. S. citizen
•Suzanne Marie Ortegon, 23, U. S. citizen
•Cesar Llaguno-Romero, 23, Mexico
•Eulalio David Velazquez-Garduno, 23, Mexico
•Rodolfo Heredia Monroy, 34, Mexico

Activity in the United States Attorney’s Office


Michael St. Angelo, 33, of Casper, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on July 15, 2010, for conspiracy to steal firearms from a licensed federal firearms dealer, and to stealing from a licensed federal firearms dealer and for possession of stolen firearms. St. Angelo received 121 months of imprisonment, restitution in the amount of $6,436.89 and 3 years of supervised release. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Scott Dodge, 22, of Casper, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on July 19, 2010, for felon in possession of firearms and possession of stolen firearms. Dodge received 60 months of imprisonment, a fine of $500.00 and 3 years of supervised release. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Lester Robinson, 56, of Ranier, Washington, was sentenced by Federal District Court Judge Clarence A. Brimmer. The Washington State Patrol, Investigative Service Bureau, executed a search warrant at a residence in Ranier, Washington owned by the Defendant, Lester B. Robinson. The search warrant authorized the seizure of child pornography and electronic storage media upon which child pornography might be stored. During the course of the search, the investigators seized a computer and digital camera. A forensic analysis of the computer revealed images of child pornography including images of a child that investigators were able to determine lived in Wyoming. The Washington state authorities referred the matter to the Wyoming Internet Crimes Against Children Task Force (ICAC). An FBI agent who is a member of the ICAC task force went to the victim’s residence and was able to determine that the pornographic images of the victim were taken in her bedroom and recovered bedding and other articles that appeared in some of the images. The victim was interviewed by FBI agents it was confirmed that she had been sexually abused by the Defendant and he had taken pictures of that sexual abuse. As a result of this conduct on July 20, 2010, Robinson received 240 months of imprisonment, a fine of $2,300.00 and a life term of supervised release. This case was investigated by the Federal Bureau of Investigation, Internet Crimes Against Children Task Force.

William DeJesus, 30, of Casper, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on July 21, 2010, for conspiracy to steal firearms from a licensed federal firearms dealer, and to stealing from a licensed federal firearms dealer and for possession of stolen firearms. DeJesus received 121 months of imprisonment, restitution in the amount of $6,436.89 and 3 years of supervised release. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Mexican Citizen Sentenced to 20 Years in Federal Prison for Drug Conspiracy and Money Laundering

Anchorage, Alaska — United States Attorney Karen L. Loeffler announced that on July 16, 2010, Gilberto Gonzalez, a.k.a. “Toro,” a.k.a. Victor Manuel Reyes, a citizen of Mexico who illegally returned to the United States after a prior conviction for drug trafficking, was sentenced in federal court in Anchorage to 20 years of imprisonment for his conviction of conspiracy to distribute cocaine and methamphetamine, and money laundering.

United States District Court Judge John W. Sedwick imposed the sentence on Gonzalez, 35.

According to information presented to the court by Lead Organized Crime and Drug Enforcement Task Force AUSA Stephan A. Collins, Gonzalez was a manager of a conspiracy that trafficked in cocaine and methamphetamine between Nevada, California, Alaska, and Hawaii. During a four-month period, the conspiracy distributed multiple kilograms of cocaine and methamphetamine in Alaska and transfered drug proceeds through fictitious bank accounts from Alaska to Nevada. Other members of the conspiracy were previously convicted and sentenced included Alfonso Acosta Ruiz, 32, Mirina Millan Guitierrez, 47, Martin Ochoa Valara, 36, Jose Mata-Linares, 24, and Jose Inoa-Ramos, 34. With the exception of Inoa-Ramos, who is a citizen of the Dominican Republic, all of the conspirators are citizens of Mexico. The Court ordered that all fo the defendants were to be deported from the United States after they complete their respective sentences.

Ms. Loeffler commended the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the United States Department of Homeland Security Investigations for the investigation leading to the successful prosecution of Gonzalez and his co-conspirators.

Thirteen People Indicted on Conspiracy to Distribute Methamphetamine

Thirteen people were indicted this week by a federal grand jury for conspiracy to distribute methamphetamine, the U.S. Attorney’s Office announced. All thirteen have been arrested. Initial appearances were held for 12 of the 13 defendants on July 20, 2010. A trial has been scheduled for September 13, 2010.

The defendants have been identified as:

•Jose Gallardo-Dedios, 36, Nampa, Idaho

•Guadalupe Valenzuela, 42, Nampa, Idaho

•Heidi Tucker, 42, Meridian, Idaho

•Quentin Mick, 27, Boise, Idaho

•Jason Marr, 24, Boise, Idaho

•Francisco Quinones, 47, Los Angeles, California

•Jorge Valdez, 31, Nampa, Idaho

•Haylee Lindauer, 31, Boise, Idaho

•Kalli Lindauer, 28, Boise, Idaho

•Juan Antonio Arvizu-Betancourt, 63, Nampa, Idaho

•Shawn Peterson, 32, American Falls, Idaho

•Fortino Bastidas, 31, Los Angeles, California

•Nabor Martinez-Herrera, 47, Salt Lake City, Utah

According to the indictment, between March 2009 and July 2010, the defendants knowingly and intentionally conspired to distribute at least five hundred grams or more of methamphetamine.

The defendants each face a mandatory minimum sentence of ten years in federal prison, up to life, and a fine of up to $4,000,000.

The Boise Police Department’s Bandit Drug Unit and the Drug Enforcement Administration, as part of the Organized Crime and Drug Enforcement Task Force (OCDETF) led the investigation. The OCDETF program is a federal multi-agency, multi-jurisdictional task force which supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. The Nampa Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives, Ada County Sheriff’s Office, Canyon County Sheriff’s Office, Idaho State Police, and Meridian Police Department assisted in the investigation.

An indictment is a means of charging a person with criminal activity. It is not evidence. The person is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Friday, July 23, 2010

Brooklyn, New York Man Sentenced 13 Years for Transporting 16-Year-Old for Prostitution

ALEXANDRIA, VA—Marc Shawn Brickhouse, 32, of Brooklyn, N.Y., was sentenced today to 156 months in prison, followed by five years of supervised release, for transporting a 16-year-old girl across state lines for the purpose of prostitution.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Shawn Henry, the Assistant Director in Charge of the FBI Washington Field Office, made the announcement after sentencing by United States District Judge Liam O’Grady.

Brickhouse pled guilty on May 11, 2010. According to court documents, Brickhouse was a pimp operating in Virginia, Maryland, and New York. Brickhouse and one of his prostitutes, Julie McKenna, 21, lured a 16-year-old girl from California to the East Coast to work as a prostitute. McKenna befriended the teen earlier when both McKenna and the juvenile lived in California. They kept in contact via MySpace. When the girl contacted McKenna saying she wanted to run away from home, Brickhouse and McKenna agreed for the girl to join them as long as she worked as a prostitute. McKenna flew to California. Then, McKenna and the girl rode a Greyhound bus back to Maryland where they were met by Brickhouse.

From late December 2009 to February 2010, Brickhouse and McKenna transported the 16-year-old between Virginia, Maryland, and New York to engage in prostitution. The girl was prostituted in each location. They posted prostitution advertisements for the girl on Craigslist and operated out of hotels, including the Quality Inn and Marriot Residence Inn in Woodbridge, Va. Finally, on Feb. 20, 2010, the girl ran from the Marriot Residence Inn to a nearby Babies 'R Us, where she asked a store employee to call the police.

On July 9, 2010, McKenna was sentenced to 71 months in prison.

This case was investigated by the FBI Washington Field Office and the Prince William County Police Department. Assistant United States Attorney Patricia Giles is prosecuting the case on behalf of the United States.

Miami-Area Husband and Wife Plead Guilty in $13.7 Million HIV Infusion Clinic Fraud Scheme

Two Individuals Sentenced to Prison for Separate HIV Infusion Scheme in Miami

WASHINGTON – Miami-area husband and wife Modesto and Victoria de la Vega pleaded guilty today in U.S. District Court in Miami for their participation in a $13.7 million HIV infusion Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS). Also today, two Miami-area residents were sentenced to prison for their participation in a separate HIV infusion Medicare fraud scheme.

Modesto de la Vega, 59, and his wife, Victoria de la Vega, 59, pleaded guilty before U.S. District Court Judge Adalberto Jordan to one count of conspiracy to defraud the United States, to cause submission of false claims to Medicare, and to pay health care kickbacks; one count of conspiracy to commit health care fraud; and three counts of submitting false claims, as charged in a March 2010 indictment. At sentencing, scheduled for Nov. 5, 2010, Modesto and Victoria de la Vega each face a maximum penalty of five years in prison for the conspiracy to defraud the United States count and each false claims count, and 10 years in prison for the health care fraud conspiracy count.

According to plea documents, Modesto de la Vega was an owner and operator of T&R Rehabilitation Professional Corp., a Miami clinic that purported to provide expensive injection and infusion treatments to patients with HIV. Victoria de la Vega was an office assistant at T&R. Modesto de la Vega admitted at his plea hearing that he agreed with his co-defendants and others to enlist patient recruiters and patients, among others, into a scheme to defraud Medicare. Modesto and Victoria de la Vega admitted that they knew the patients at T&R did not need and/or did not receive the purported services, and that it would be necessary to pay kickbacks and bribes to the patients so that T&R could bill the Medicare program for the HIV infusion services that were not medically necessary and/or were not provided.

The defendants admitted that from approximately January 2003, through approximately July 2005, they and their co-defendants caused T&R to submit fraudulent claims to the Medicare program in the amount of approximately $13.7 million. Medicare paid approximately $4.1 million of these fraudulent claims.

In a separate and unrelated case, two Miami-area residents were sentenced today by U.S. District Judge Ursulla Ungaro in the Southern District of Florida for their participation in a similar HIV infusion Medicare fraud scheme. Keith Earnest Humes, a patient recruiter for a fraudulent HIV/AIDS infusion clinic known as Tendercare Medical Center Inc., was sentenced to 84 months in prison and three years of supervised release, and was ordered to pay restitution jointly and severally with co-defendants in the amount of $539,485. Lawrence Edward Humes, also a patient recruiter for Tendercare, was sentenced to 33 months in prison and three years of supervised release, and was ordered to pay restitution jointly and severally with co-defendants in the amount of $222,967. In addition, based on the court’s consideration of relevant conduct, Keith Humes was ordered to pay further restitution in the amount of $346,889.

According to court documents, Keith Humes and Lawrence Humes admitted that they conspired with each other and other individuals to defraud Medicare by submitting false claims for injection and infusion treatments that were medically unnecessary and that in most instances were not provided. Keith Humes and Lawrence Humes paid kickbacks to beneficiaries in return for their Medicare numbers and signatures, which Tendercare used to submit the false claims. Between January 2005 and December 2007, Tendercare submitted approximately $5.8 million in false and fraudulent claims to Medicare for treatments that were medically unnecessary or never provided. Medicare paid Tendercare approximately $2.7 million.

Today’s guilty pleas and sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies , Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.

The cases were prosecuted by attorneys from the Criminal Division’s Fraud Section, including Trial Attorneys N. Nathan Dimock, Joseph Beemsterboer, Charles D. Reed, former Trial Attorney Michael Padula, former Fraud Section Assistant Chief John S. (Jay) Darden and former Fraud Section Special Trial Attorney Martha Talley, on detail from HHS-OIG. The cases were investigated by the FBI and HHS-OIG and were 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 Southern District of Florida.

Since its inception in March 2007, the Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 810 individuals and organizations that collectively have billed the Medicare program for more than $1.85 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Two Individuals Plead Guilty to Participating in International Child Pornography Group

WASHINGTON – Two individuals have pleaded guilty to charges related to their participation in an international group of child pornography traffickers who used a social networking site to share thousands of sexually explicit images, announced Assistant Attorney General Lanny A. Breuer for the Criminal Division and Acting U.S. Attorney Robert Cessar for the Western District of Pennsylvania.

Fred Woolum, 58, of Lexington, Va., pleaded guilty today before U.S. District Judge Arthur A. Schwab to one count of engaging in a child exploitation enterprise. Daniel Cox, 54, of Houston, pleaded guilty Wednesday before Judge Schwab to one count of conspiring to distribute and receive child pornography. Information presented at court established that from January 2007 to September 2009, Woolum, Cox and others distributed images and videos of children being sexually abused to other members of an international group that had restricted membership and was formed on a social networking website. Members of the group distributed to one another thousands of sexually explicit images and videos of children, many of which graphically depicted prepubescent, male children, including some infants, being sexually abused and sometimes sodomized or subjected to bondage.

Sentencing has been set for Feb. 18, 2011, for Woolum and March 4, 2011, for Cox. At sentencing, Woolum faces a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison, with the possibility of lifetime supervised release. Cox faces a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison, with the possibility of lifetime supervised release. Woolum and Cox both face a fine of up to $250,000.

These cases were brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit

U.S. Immigration and Customs Enforcement and the High Tech Investigative Unit of CEOS conducted the investigation that led to the prosecution of Woolum and Cox. CEOS Trial Attorney Barak Cohen and Assistant U.S. Attorney Craig W. Haller prosecuted the cases.

Police Officer Faces Additional Charges

LAREDO, TX—A superseding indictment accusing Orlando Jesus Hale, aka Chacho, 27, of Laredo, of mail and wire fraud arising from an alleged auto theft insurance fraud scheme in addition to the previous charges of conspiracy to possess with intent to distribute cocaine and using a firearm in furtherance of that drug offense has been unsealed, United States Attorney José Angel Moreno announced today.

The superseding indictment returned under seal on Tuesday, July 20, 2010, was unsealed yesterday following Hale’s arrest. The new indictment adds four new counts of mail and wire fraud to the original indictment returned in April 2010. Hale, who pleaded not guilty to the new charges, has been ordered released on the same conditions originally imposed in April to include electronic monitoring.

Hale was originally charged with conspiracy to possess with intent to distribute cocaine between Oct. 15, 2008, to Nov. 30, 2008, and using and carrying a firearm during and in relation to a drug trafficking crime and possessing the firearm in furtherance of the drug trafficking crime between Nov. 7 to Nov. 25, 2008.

The new charges allege that between May 2008 and February 2009, Hale devised a scheme to defraud insurance companies to obtain money and property by assisting in the theft and sale of vehicles from complicit owners. According to allegations in the indictment, Hale participated in the taking of vehicles from the United States which were driven to Mexico and sold and transferred to others. Hale was to, in turn, allegedly receive money from the persons in Mexico and elsewhere, who had possession of the vehicles and driven them to Mexico. The taking of the vehicles was pre-arranged with the cooperation and consent of the owners of the vehicles who had either fallen behind in payments or no longer wanted to pay on the loan on the vehicles. The owner would falsely report the vehicle stolen to Hale or to another Laredo police officer recruited and paid by Hale to generate an official report of the theft of the vehicle. The owner would then submit the false report of theft to their respective auto insurance companies. The insurance companies, relying on the false reports, would satisfy the claim by sending checks via the U.S. Mail to the insured owners or via wire transfer to satisfy expenses incurred by the owners. The three mail fraud charges and one wire fraud charge arise from the alleged theft of two vehicles in October 2008 and December 2008 resulting in the payment of thousands of dollars in insurance proceeds to pay for the purported loss of the vehicles and expenses allegedly incurred as a result of the thefts.

Each of the four new charges of mail and wire fraud carries a maximum term of imprisonment of 20 years upon conviction. The drug conspiracy count carries a mandatory minimum sentence of 10 years' imprisonment and a maximum of life imprisonment along with a $4 million fine upon conviction. The firearms charge carries a mandatory minimum sentence of five years' imprisonment upon conviction, which must be served consecutive or upon completion of any term of imprisonment imposed for the underlying drug offense as well as a $250,000 fine.

The investigation leading to the charges was conducted by the FBI, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, Immigration Customs Enforcement and Customs Border Protection, with the assistance and cooperation of the Laredo Police Department. Assistant United States Attorney Roberto F. Ramirez and James McAlister are prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence.

A defendant is presumed innocent unless and until convicted through due process of law.

Dallas Man Sentenced to More Than 14 Years in Federal Prison on Cocaine and Firearm Convictions

DALLAS—Jose Miguel Estevane, 26, of Dallas, was sentenced yesterday afternoon by U.S. District Judge Jorge A. Solis to a total of 170 months in federal prison, without parole, on cocaine and firearm convictions, announced U.S. Attorney James T. Jacks of the Northern District of Texas.

Estevane pleaded guilty in March 2010 to one count of possession with the intent to distribute cocaine and one count of carrying a firearm during and relation to a drug trafficking crime. Estevane has been in custody since his arrest in December 2009 by special agents with the FBI on charges outlined in a related federal criminal complaint.

According to documents filed in the case, on December 9, 2009, Estevane agreed to sell five kilograms of cocaine to a confidential informant, working with the FBI, for $125,000. When the FBI executed a search warrant at Estevane’s residence on Fernwood Drive in Dallas that day, they discovered approximately nine kilograms of cocaine on a table, in plain view. In addition, his co-defendant, Alex Noel Mendoza-Cano, 34, was at the residence guarding the drugs. This amount of cocaine is consistent with bulk distribution, not personal use.

Mendoza-Cana pleaded guilty in March 2010 to one count of possession with intent to distribute cocaine and faces a minimum statutory sentence of not less than 10 years or more than life in prison and a $4 million fine. He is scheduled to be sentenced by Judge Solis on September 8, 2010.

Estevane had a .40 caliber pistol on his person when he was arrested, and admitted that he carried the pistol to protect his interests in the commission of the drug trafficking crime.

The case was investigated by the FBI. Assistant U.S. Attorney Gary Tromblay is in charge of the prosecution.

Former Law Enforcement Officer Pleads Guilty to Mail Fraud

TRENTON, NJ—Michael Palermo, 51, of Jackson Township, New Jersey, pleaded guilty today to committing mail fraud in connection with a civil lawsuit that he instituted against a contracting company, its principal, and others who constructed and sold him a house in 2006, United States Attorney Paul J. Fishman announced.

Palermo, a former Task Force Officer with the Federal Bureau of Investigation, pleaded guilty to an Information charging him with one count of mail fraud before United States District Judge Peter G. Sheridan in Trenton federal court. Palermo was initially charged with the fraud in a criminal Complaint on October 8, 2009. Judge Sheridan allowed Palermo to remain on $50,000 bail pending his sentencing, scheduled for October 29, 2010.

According to documents filed in this case and statements made in court:

Palermo was an officer with the Port Authority Police Department (PAPD) for over 16 years and was detailed to work with the FBI as a Task Force Officer on violent crime investigations for the last 11 years.

Palermo admitted that, from February 2007 to January 2009, he perpetrated a scheme to defraud the adverse parties in the civil lawsuit by misrepresenting the cost to clean up water damage in the basement of his home. To further the scheme, Palermo enlisted an individual serving as cooperating witness in cases with which he was involved in an official capacity. Palermo admitted he asked this individual to create a false bill indicating Palermo had paid him $10,000 for repairs, which Palermo later provided in civil discovery to the adverse parties. Palermo never actually paid the individual for any services related to the cleanup of his basement. Palermo also admitted that he made false, sworn statements in a relevant deposition and provided false answers to interrogatories in the civil lawsuit, including that he paid $10,000 for the repairs, and directed his attorneys to mail those answers to the adverse parties.

The mail fraud charge to which Palermo pleaded guilty carries a maximum statutory penalty of 20 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark, New Jersey, with the investigation leading to today’s plea. Fishman also thanked Department of Justice Office of the Inspector General, under the direction of Special Agent in Charge James. E. Tomlinson, and the PAPD, under the direction of Superintendent Michael Fedorko, for their vital roles in the investigation.

This case is being prosecuted by Assistant U.S. Attorney Eric T. Kanefsky of the U.S. Attorney’s Office Special Prosecutions Division.

Kidnappers of 7-Month-Old Indicted in Federal Court

Amber Alert Results in Federal Carjacking and Kidnapping charges

KNOXVILLE, TN—A federal grand jury in Knoxville returned a two-count indictment on July 20, 2010, against David Jackson, 35, of Miami, Florida, Ashlea Melynda Laughlin, 21, of Greeneville, Tennessee, and Brooke Lashae Collins Stumbo, 21, of Afton, Tennessee. Jackson, Laughlin, and Stumbo were arrested in Miami, Florida, on July 13, 2010, after removing a 7-month-old from the custody of his mother and taking her car from Greeneville, Tennessee. All three defendants have remained in federal custody since their arrests.

The indictment alleges that on July 11, 2010, Jackson took the car of Anne Boyd with the intent to cause her serious bodily injury or death, and Laughlin and Stumbo took the 7-month-old from his mother, Anne Boyd.

If convicted, Jackson faces a term of 15 years in prison, a $250,000 fine, three years on supervised release, and a $100 special assessment. If convicted, Laughlin and Stumbo face a term of life in prison, a $250,000 fine, a minimum of five years and a maximum of life on supervised release, and a $100 special assessment.

Gregg L. Sullivan, Acting United States Attorney, attributed the safe return of the baby and the prompt charges to the quick response of local, state, and federal law enforcement authorities, the National Center for Missing and Exploited Children, and the public who participated in the nationwide Amber Alert.

This indictment is the result of an investigation by the Greene County Sheriff’s Office, Tennessee Bureau of Investigation, Federal Bureau of Investigation, and Miami Safe Streets Task Force. Assistant U.S. Attorney Helen Smith will represent the United States.

Members of the public are reminded that an indictment constitutes only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.

Denver Man Faces Federal Charges in Connection with United Airline Flight Diverted to Salt Lake City

SALT LAKE CITY—A federal grand jury returned a one-count indictment Wednesday afternoon charging Andrew Escobar, age 40, of Denver, with communicating false information endangering aircraft safety.

The charges stem from a Feb. 18, 2010, incident involving a United Airlines flight from Denver to San Francisco. The plane was diverted to Salt Lake City after a flight attendant on the flight discovered a note taped to the beverage service cart. Based on the note, the pilot decided to land the plane in Salt Lake City. The FBI and members of its Joint Terrorism Task Force responded to the airport to investigate.

The indictment alleges Escobar willfully communicated information, knowing it to be false, and under circumstances in which it may reasonably be believed, thereby endangering the safety of an aircraft in flight.

“An aircraft with more than 160 passengers and crew members was diverted to Salt Lake City where it undertook an emergency landing. The flight crew was subjected to considerable stress and the passengers feared for their personal safety, had their travel plans disrupted, and were inconvenienced by the delays associated with the necessary security precautions taken in Salt Lake City. Given the circumstances of the case, I believe a federal prosecution is appropriate,” Acting U.S. Attorney Carlie Christensen said today.

The maximum potential penalty for the charge is up to 20 years in federal prison and a $250,000 fine. A summons will be issued to Escobar to appear on the charges. An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.

Bountiful Man Pleads Guilty to Wire Fraud in Connection with Scheme to Get Kickback from Investment Manager

SALT LAKE CITY—Cameron Hayes Cox, age 28, of Bountiful, pled guilty in federal court Tuesday morning to a charge of wire fraud in connection with a scheme to defraud the Utah Retirement Systems (URS) by soliciting a side deal from an investment manager. Cox is a former employee of URS.

Cox was charged in a one-count Felony Information filed in federal court in Salt Lake City in June. At a sentencing hearing Tuesday afternoon, U.S. District Judge Dale Kimball sentenced Cox to a year in federal prison. Judge Kimball also ordered him to serve 36 months of supervised release when he finishes his prison sentence.

Cox was employed by URS as an investment analyst from around January 2008 to around January 2010. URS is an independent agency established by the State of Utah and is responsible for the operation of various funds maintained as retirement accounts for active and retired state public employees.

According to court documents, one aspect of URS’ operations is the selection of third-party investment companies to serve as investment managers for portions of URS’ portfolio. The process of identifying a potential third-party manager, reviewing information, conducting due diligence, negotiating terms, and entering into a formal agreement typically occurs over a period of several months and involves a team of investment analysts, legal counsel, and others. The final step in this process involves a URS committee reviewing a proposed agreement for final approval.

According to the Felony Information, beginning in the spring of 2009, URS was introduced to representatives of a hedge fund based in London. A series of negotiations started between the parties concerning a potential agreement. Cox was a member of the URS team responsible for collecting, reviewing, and analyzing information provided by the company, negotiating terms, and presenting a proposed agreement for consideration by URS. Court records show that negotiations progressed to a point where URS intended to consider a proposed agreement between the parties around November 2009. The proposed agreement, if approved by URS, contemplated the hedge fund would manage approximately $50 million of URS’ portfolio.

Cox admitted in his plea agreement with federal prosecutors that beginning in November 2009 and continuing through January 2010, he communicated with an individual in London using an anonymous identity to negotiate a “side deal” whereby he would be paid $150,000 by the investment manager to ensure URS approved the proposed agreement between the parties. The individual Cox was communicating with was the point person involved in negotiations with URS.

Under the side deal, the company would agree to pay Cox money to facilitate URS’ approval of the company as a third-party fund manager. In truth and in fact, Cox did not have the authority or influence over URS to honor the side deal. Cox concealed all of his communication with the company from URS. Once propositioned, the London investment manager notified URS who notified federal law enforcement officials. Thereafter, hedge fund officials cooperated with the FBI’s efforts to conduct a sting operation.

URS officials say that no retirement trust funds were ever at risk during the course of Cox’s conduct and that he did not have the ability to take trust funds. Cox also did not have the authority or influence to make the decision on whether to hire an investment manager and the processes in place, which were followed in this situation, would not have allowed the improper hiring of an investment manager.

Law enforcement authorities believe Cox acted alone in this case and that no other URS employees were involved. URS worked closely with the FBI in the investigation of this case.

Federal prosecutors said the investment manager and hedge fund, which are not identified in court records, reported the conduct and cooperated fully in the investigation.

“This prosecution underscores our office’s commitment to holding accountable those who abuse their positions of trust. It also demonstrates the strength of effective coordination between potential victims and law enforcement. URS’s and the London hedge fund’s timely and responsible reporting of unlawful conduct, coupled with the FBI’s swift and thorough investigation, provided the foundation to bring a misguided junior investment advisor to justice,” Acting U.S. Attorney Carlie Christensen said today.

James S. McTighe, Special Agent in Charge of the FBI in Salt Lake City, said, “For a public employee to attempt to negotiate this type of secret deal for personal gain is not only a violation of federal law; it's a violation of the public’s trust. This case is an example of why public corruption is the FBI’s top criminal priority. Such illegal activity strikes at the heart of fair competition in the public sector. A public employee who promises contracts or business in exchange for a personal payout will find themselves in trouble with the FBI.”