Federal Grand Jury Returns Indictments

MADISON, WI—A federal grand jury in the Western District of Wisconsin, sitting in Madison, returned the following indictments today. A charge is merely an accusation, and a defendant is presumed innocent until and unless proven guilty.

Fitchburg Man Charged with Fraud Scheme

Christian Peterson, 42, Fitchburg, Wisconsin, is charged with four counts of bank fraud, four counts of making a false statement to a financial institution, and four counts of money laundering. The indictment alleges that Peterson misrepresented to banks that loans and a business line of credit were intended for a legitimate business purpose when, in fact, he used all or a portion of each loan and line of credit to gamble at casinos or for personal expenses. The indictment also alleges that Peterson claimed that certain accounts receivable were loans when, in fact, they were the result of gambling debts.

If convicted, Peterson faces a maximum penalty of 30 years in federal prison on each bank fraud and false statement count and a maximum penalty of 10 years on each money laundering charge. The charges against him are the result of an investigation by the Internal Revenue Service-Criminal Investigation and Federal Bureau of Investigation. The prosecution of this case has been assigned to Assistant U.S. Attorney Paul W. Connell.

Minnesota Man Charged with Producing False Identification Documents

Cherub Kumar, 19, Woodbury, Minnesota, is charged with two counts of producing a false identification document, two counts of transferring a false identification document, and one count of trafficking in false authentication features for use in false identification documents.

The indictment alleges that Kumar produced and transferred a false Florida driver’s license in February 2012 and produced and transferred a false Ohio driver’s license in March 2012. The indictment also alleges that he transported 300 counterfeit holographic overlays for use in producing false drivers’ licenses.

If convicted, Kumar faces a maximum penalty of 15 years in federal prison on each count. The charges against him are the result of an investigation by U.S. Immigration and Customs Enforcement, the U.S. Postal Inspection Service, and University of Wisconsin Police Department. The prosecution of this case has been assigned to Assistant U.S. Attorney Meredith P. Duchemin.

Superior Resident Charged with Possessing Child Pornography

Samuel L. Dewitt, 40, Superior, Wisconsin, is charged with distributing visual depictions of minors engaging in sexually explicit conduct and with possessing a computer hard drive containing visual depictions of minors engaging in sexually explicit conduct. The indictment alleges that he distributed the child pornography on November 6, 2011, and that he possessed the hard drive on December 15, 2011.

If convicted, Dewitt faces a mandatory minimum penalty of five years and a maximum penalty of 20 years in federal prison. The charges against him are the result of an investigation by the Wisconsin Department of Justice, Division of Criminal Investigation and the Lake Superior Forensic Technology and Internet Crimes Against Children Task Force. The prosecution of this case has been assigned to Assistant U.S. Attorney Elizabeth Altman.

Watertown Man Faces Child Pornography Charges

Russell J. Forsman, 43, Watertown, Wisconsin, is charged with knowingly receiving visual depictions of minors engaging in sexually explicit conduct. The indictment alleges that on February 28, 2005, Forsman received an e-mail containing a child pornography video. The indictment also charges Forsman with possessing child pornography. The indictment alleges that on October 27, 2011, he possessed CDs containing visual depictions of child pornography.

If convicted, Forsman faces a mandatory minimum penalty of five years and a maximum penalty of 20 years in federal prison. The charges against him are the result of an investigation by the Federal Bureau of Investigation and Milwaukee Police Department. The prosecution of this case has been assigned to Assistant U.S. Attorney Elizabeth Altman.

This case, and the Dewitt case, were brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “Resources.”

Madison Man Charged with Illegal Possession of Firearm

Christopher Carthans, 23, Madison, Wisconsin, is charged with being a felon in possession of a firearm. The indictment alleges that he possessed a 9mm pistol on May 15, 2012.

If convicted, Carthans faces a maximum penalty of 10 years in federal prison. The charge against him is the result of an investigation by the Madison Police Department; Fitchburg Police Department; and Bureau of Alcohol, Tobacco, Firearms, and Explosives. The prosecution of this case has been assigned to Assistant U.S. Attorney Rita M. Rumbelow.

Rhinelander Man Charged with Gun Crimes

John W. Houghton, 43, Rhinelander, Wisconsin, is charged with being a felon in possession of ammunition and possessing ammunition after previously being convicted of a misdemeanor crime of domestic violence. The indictment alleges that he possessed the ammunition on May 31, 2012.

If convicted, Houghton faces a maximum penalty of 10 years in federal prison on each count. The charges against him are the result of an investigation by the Rhinelander Police Department and Oneida County Sheriff’s Department. The prosecution of this case has been assigned to Assistant U.S. Attorney Rita M. Rumbelow.

Chicago Man Charged with Making a False Statement When Attempting to Purchase a Firearm

Jeffrey R. Vali, 32, Chicago, is charged with making a false written statement when attempting to purchase a 9mm semi-automatic pistol from a licensed firearms dealer in Prairie du Chien, Wisconsin, on June 22, 2012. The indictment alleges that Vali falsely stated he was a resident of Wisconsin and resided in Neenah, Wisconsin.

If convicted, Valli faces a maximum penalty of 10 years in federal prison. The charge against him is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The prosecution of this case will be handled by United States Attorney John W. Vaudreuil.

Madison Man Charged with Distributing Cocaine

Rodolfo Juarez, 37, Madison, Wisconsin, is charged with distributing cocaine. The indictment alleges that he distributed 500 grams or more of cocaine on June 25, 2012.

If convicted, Juarez faces a mandatory minimum penalty of five years and a maximum penalty of 40 years in federal prison. The charges against him are the result of an investigation by the Drug Enforcement Administration and Wisconsin Department of Justice, Division of Criminal Investigation. The prosecution of this case has been assigned to Assistant U.S. Attorney Munish Sharda.

Four Charged with Illegally Re-Entering United States

In separate indictments, four individuals have been charged with reentering the United States after previously being deported. The persons charged are:

1. Arturo Gomez-Maturin, 41, a citizen of Mexico, found in Dane County on June 14, 2012;

2. Alvaro Cano-Oyarzabal, 31, a citizen of Mexico, found in Clark County on June 14, 2012;

3. Isaac Gutierrez-Blandon, 33, a citizen of Nicaragua, found in Dane County on July 2, 2012; and

4. Rafael Carrera-Flores, 39, a citizen of Mexico, found in Juneau County on May 4, 2012.

If convicted, each person faces a maximum penalty of 20 years in federal prison. The charges against them are the result of investigations by U.S. Immigration and Customs Enforcement. The prosecution of these cases will be handled by Assistant U.S. Attorney Timothy M. O’Shea.

Mafia Takedown: Philadelphia Boss Charged

Philadelphia Special Agent in Charge George Venizelos, at podium, announces indictments.

On Monday, a superseding federal grand jury indictment was announced charging 13 members and associates of the Philadelphia La Cosa Nostra (LCN) family with racketeering, extortion, loan sharking, illegal gambling, and witness tampering.

Eleven of the 13—including the reputed boss and underboss of the criminal enterprise—were arrested earlier that day in Philadelphia and New Jersey. Two of the subjects were already serving time in federal prison for previous convictions but managed to continue their racketeering activities from behind bars.

Alleged mob boss Joseph Ligambi rose through the ranks of the Philadelphia LCN crime family and took over at the helm after the 2001 incarceration of previous boss Joseph “Skinny Joey” Merlino on racketeering charges.

The indictment alleges that for more than a decade, Ligambi, underboss Joseph Massimino, and the others conspired to generate money through various crimes. For example, they reportedly operated illegal gambling businesses involving sports bookmaking and electronic gambling devices in places like bars, restaurants, convenience stories, and coffee shops…and pocketed the proceeds. Mafia families like the one in Philadelphia often make millions of dollars and traditionally use gambling proceeds as seed money for other crimes.

The defendants also offered “loans”—at exorbitant interest rates—to victims who knew there would be dire consequences if they failed to repay them within a certain time frame. 

To carry out their crimes, the defendants often used actual or implied threats of violence against their victims. According to the indictment, some of the defendants used phrases like, “I’ll put a bullet in your head,” and, “Chop him up,” to threaten victims who weren’t repaying their loans. The defendants used their reputation for violence to intimidate and prevent victims and witnesses from cooperating with law enforcement.

The defendants also actively worked to conceal their illegal operations from law enforcement. For example, they used coded language over the phone, such as calling the electronic gambling devices “coffee machines.” They often took “walk and talks” where they would conduct covert conversations with each other while walking to and from a particular destination because they thought they couldn’t be intercepted. They also established companies that appeared to be legitimate but were actually created to launder money and conceal the illegal nature of their activities. 

To collect the evidence needed for these indictments, this long-term investigation included undercover scenarios, court-authorized electronic surveillances, consensual recordings, and many hours of physical surveillance.

This particular case was a good example of law enforcement cooperation at its best—the Philadelphia Police Department, the Pennsylvania and New Jersey State Police, the Criminal Division of the Internal Revenue Service, and the Department of Labor all worked alongside the Philadelphia FBI, with additional assistance from the New Jersey Department of Corrections and the Pennsylvania Attorney General’s Office.  Prosecutors from the Pennsylvania Attorney General’s Office and the Department of Justice’s Organized Crime and Racketeering Section are assisting the U.S. Attorney’s Office in the Eastern District of Pennsylvania as well.

This arrest of the reputed leadership of the Philadelphia LCN comes on the heels of the large mafia takedown in New York  earlier this year. And law enforcement efforts against the LCN, as well as other types of organized crime—international and domestic—will continue unabated.

Loan Fraud

Real Estate Investor Pleads Guilty in $6.2 Million Loan Fraud Scheme


March 12, 2010 - DETROIT—Paul Bashi, 27, of Royal Oak, and formerly of Washington Township, Michigan, pleaded guilty before U.S. Chief District Judge Arthur J. Tarnow this afternoon to a federal information that charges him with conspiracy to commit wire fraud, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Andrew G. Arena, Special Agent-In-Charge of the Federal Bureau of Investigation in Detroit and William Callahan, Special Agent-In-Charge of the United States Secret Service in Detroit.

During today's plea hearing Bashi admitted that, from September 2006 to March 2008, he recruited straw borrowers and assisted them in applying for loans to purchase residential property based on false information and fraudulent documentation with regard to employment, income, and/or assets, among other things. Bashi, who was mostly doing business as JP Land Development Inc., was responsible for completing the loan applications and gathering the necessary supporting documentation. Mortgages totaling almost $6 million were issued on 10 properties by various financial institutions. All of the loans resulted in foreclosure.

In addition, Bashi facilitated several individuals in obtaining other types of loans including vehicle, personal line of credit, and installment loans based on similarly false information. Loans totaling $480,000 were issued by area banks and credit unions, which were never paid back.

Under the terms the plea agreement, Mr. Bashi is facing a sentence ranging from 92 months to 115 months. A sentencing date will be set by the court. The case is being prosecuted by Assistant U.S. Attorney Frances Lee Carlson.