“Less Pay? The Shutdown Message FBI Agents Didn’t Want to Read”

October 3, 2013

ABC News on October 2, 2013 released the following:

“By Mike Levine

For FBI agents who’ve devoted their careers to protecting the U.S. homeland or rooting out major crime across the country, this certainly was not the message they wanted to read at 5:49 p.m. on Wednesday, the second day of the government shutdown: “Unfortunately, whether you are in an ‘Excepted’ or ‘Non Excepted’ status, there may be a financial impact to your paycheck.”

In other words, if you’re furloughed or not, your salary this year may be different than you planned.

“Only if congressional action is taken to pass legislation which allows for the retroactive payment of compensation for the time period encompassing the government shutdown, then all employees will be compensated for that time period,” said the email to FBI employees, obtained by ABC News.

In many ways, the impact of lawmakers’ failure to keep the federal government running seems theoretical. But it’s not theoretical to the scores of FBI agents now in terrorist-torn Kenya who aren’t being paid as they try to figure out if the group that launched a deadly assault in a Nairobi mall last month could strike the U.S. homeland.

Nor is it theoretical to the FBI agents, CIA operatives, Border Patrol agents, homeland security investigators, airport screeners, firearms agents, U.S. marshals and other intelligence and law enforcement officials who reported for duty across the country this morning without knowing if they’ll ever see a paycheck for their current efforts to protect the nation.

“I wonder why all the fat cats in Washington are getting paid to argue about [the federal budget], and why are we getting caught up in it,” said one frustrated FBI agent, a 15-year veteran who works counterterrorism cases in an unusually expensive U.S. city. “This is horrific.”

At FBI headquarters in Washington, half of the staff – the “non excepted” workers – have been told to stay home, according to one official.

“Life as an FBI agent is pretty tough” even without furloughs, forcing many agents to commute 50 miles or more each day because they can’t afford to live any closer to the city they work to protect, the FBI agent told ABC News.

Those in the agency accept the job and do the work knowing they are serving the public. One of the only things they ask for in return is “a steady paycheck,” the agent said, speaking to ABC News on the condition of anonymity.

“Now one of those things is being taken away,” the agent said, adding that getting compensated sometime later “does not help agents in [an expensive] city who live paycheck to paycheck.”

What’s more, FBI agents and other federal workers currently on the job who require medical attention during the government shutdown are considered furloughed if they leave for a doctor’s appointment. They may never be paid for that time seeking medical help.

“During a government shutdown, by law, there is no paid leave (annual, sick, court, military leave, restored annual leave, comp, or leave for bone marrow or organ donation), no matter when it was approved,” the email to FBI agents late Wednesday said. “Unfortunately, there are no exceptions. … In other words, excepted employees can go to a doctor’s appointment but will be considered furloughed for the hours they are absent.”

The FBI agent who spoke to ABC News had a significant surgery scheduled for next week but felt compelled to cancel the surgery in the wake of the government shutdown.

“Now this is affecting my physical well-being,” the agent said.

ABC News has chosen not to describe the surgery to help protect the FBI agent. FBI officials have directed agents not to speak to the media about how the government shutdown is impacting them.

In addition, because of the government shutdown, the agent who spoke to ABC News was also adjusting plans for the long-term future.

“I’m going to be putting less into my retirement so that I get more take-home and can pay my bills,” the agent said. “That’s really sad.”

Still, the FBI brass concluded its message to employees with this: “[T]hank you for your patience and dedication to the FBI during this difficult time.””

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

Federal Crimes – Appeal

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


“End Of The Silk Road: FBI Says It’s Busted The Web’s Biggest Anonymous Drug Black Market”

October 3, 2013
Ross William Ulbricht
“Ross William Ulbricht, alleged to be the “Dread Pirate Roberts” behind Silk Road’s drug black market.”

Forbes on October 2, 2013 released the following:

By: Andy Greenberg, Forbes Staff

“After two and a half years running the booming anonymous narcotics bazaar known as the Silk Road, the drug kingpin who called himself the Dread Pirate Roberts has allegedly been unmasked.

On Wednesday, the FBI announced that they arrested 29-year-old Ross William Ulbricht, the Silk Road’s accused administrator, in the Glen Park branch of the San Francisco Public Library at 3:15 Pacific time on Tuesday. Ulbricht has been charged with engaging in a money laundering and narcotics trafficking conspiracy as well as computer hacking. The Department of Justice has seized the website of the Silk Road’s as well as somewhere between $3.5 to 4 million in bitcoins, the cryptographic currency used to buy drugs on the Silk Road.

Earlier this summer, the Silk Road’s administrator calling himself by the Dread Pirate Roberts pseudonym gave his first extended interview to Forbes over the same Tor anonymity network that has hosted the Silk Road and its users since the site’s creation in early 2011.

Forbes estimated at the time that the Silk Road was earning between $30 and $45 million in annual revenue. In fact, the number may have been far larger: The criminal complaint against Ulbricht states that the Silk Road turned over $1.2 billion in revenue since its creation, and generated $80 million commissions for its operator or operators.

“This is supposed to be some invisible black market bazaar. We made it visible,” says an FBI spokesperson, who asked not to be named. “When you interviewed [Ulbricht], he said he would never be arrested. But no one is beyond the reach of the FBI. We will find you.”

The FBI hasn’t yet revealed how it managed to track down Ulbricht in spite of his seemingly careful use of encryption and anonymity tools to protect his identity and those of his customers and vendors who visited Silk Road as often as 60,000 times per day. The FBI spokesperson declined to offer details about the investigation, but told me that “basically he made a simple mistake and we were able to identify him.”

One clue mentioned in the criminal complaint against Ulbricht was a package seized from the mail by U.S. Customs and Border Patrol as it crossed the Canadian border, containing nine seemingly counterfeit identification documents, each of which used a different name but featured Ulbricht’s photograph. The address on the package was on 15th street in San Francisco, where police found Ulbricht and matched his face to the one on the fake IDs.

The complaint also mentions security mistakes, including an IP address for a VPN server used by Ulbricht listed in the code on the Silk Road, mentions of time in the Dread Pirate Roberts’ posts on the site that identified his time zone, and postings on the Bitcoin Talk forum under the handle “altoid,” which was tied to Ulbricht’s Gmail address.

In his conversation with me, which took place on July 4th, the Silk Road administrator calling himself the Dread Pirate Roberts espoused Libertarian ideals and claimed that the use of Bitcoin in combination with Tor had stymied law enforcement and “won the State’s War on Drugs.”

He also said he intended to bring his marketplace into mainstream awareness, and had recently launched the first non-Tor website for the Silk Road known as SilkRoadlink, which remains online. “Up until now I’ve done my best to keep Silk Road as low profile as possible … letting people discover [it] through word of mouth,” Roberts says. “At the same time, Silk Road has been around two and a half years. We’ve withstood a lot, and it’s not like our enemies are unaware any longer.”

One remaining mystery in Ulbricht’s criminal complaint is whether he was in fact the only–or the original–Dread Pirate Roberts. In his July interview with me, Roberts said that he had in fact inherited the Dread Pirate title from the site’s creator, who may have also used the same pseudonym.

As of around noon Wednesday, the Silk Road’s forum for users also remained online, and the site’s loyal users were grieving over the Silk Road takedown and mourning the arrest of Ulbricht, whose apparent persona as the Dread Pirate Roberts was a widely respected figure in the online drug community.

“jesus christ this is TERRIBLE!!” wrote one user named danceandsing. Others suggested that users migrate to other, smaller but similar anonymous black markets such as Black Market Reloaded–another popular alternative to the Silk Road known as Atlantis went offline last week, with its administrators saying only that they shut down the business for “security reasons.”

Another user blamed the Dread Pirate Roberts’ carelessness, including his decision to raise his profile by giving an interview to Forbes. “Sorry, but when he gave the fucking Forbes interview I imagined this would be coming,” wrote a user calling himself Dontek. “Should have kept all this shit on the down low rather than publicly bragging about it.”

Ulbricht’s LinkedIn profile describes his background as a graduate researcher in materials science at Pennsylvania State University, as well as an undergrad degree in physics from the University of Texas at Dallas.

According to Ulbricht’s grandmother, Martha Ulbricht, who was reached by phone, the younger Ulbricht received a full scholarship to UT Dallas. “Ross has always been an upstanding person as far as we know and a rather outstanding person,” she said.

Ulbricht’s half-brother Travis Ulbricht, also reached by phone in Sacramento, described him as an “exceptionally bright, smart kid” who had no criminal history to his knowledge.

Asked what he did for a living before moving to San Francisco, Ulbricht’s grandmother said, “Something on the computer…a little technical for me. He was good with computers.””

Federal Criminal Case 1: New York Federal Criminal Complaint
Northern District of California, Case No.: 3:13-mj-71218-JCS-1 (Proceedings on Out-of-District Criminal Charges Pursuant to Rules 5(c)(2) and (3)) and lists the following case on the docket sheet: Southern District of New York, Case No.: 13-mj-2328

21 U.S.C. 846 – Drug Conspiracy
18 U.S.C. 1030(a)(2) – Computer Hacking Conspiracy
18 U.S.C. 1956(a)(1)(A)(i) and (B)(i) – Money Laundering Conspiracy

Ross William Ulbricht New York Criminal Complaint

Federal Criminal Case 2: Maryland Federal Indictment
District of Maryland, Case No.: 1:13-cr-00222-CCB-1

21 U.S.C. 846 – Conspiracy to Distribute a Controlled Substance
18 U.S.C. 1512(a)(1)(C) – Attempted Witness Murder; 18 U.S.C. 2 – Aiding and Abetting
18 U.S.C. 1958(a) – Use of Interstate Commerce Facilities in Commission of a Murder-for-hire; 18 U.S.C. 2 – Aiding and Abetting

Ross William Ulbricht Maryland Superseding Indictment

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


FBI Los Angeles: “$11 Million Boiler Room Mail and Wire Fraud Indictment Unsealed Today”

October 2, 2013

The Federal Bureau of Investigation on October 1, 2013 released the following:

Owner, Manager, and Salesperson at Fraudulent Investment Venture Taken into Custody for Mail and Wire Fraud in Connection with $11 Million Fraudulent Oil and Gas Well Investment Scheme.

LOS ANGELES—Two men were taken into custody today by special agents of the FBI for their alleged involvement in an Orange County boiler room operation that defrauded investors by falsely claiming high returns from oil and gas wells and by failing to disclose high sales commissions on investments, announced Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office and André Birotte Jr., United States Attorney for the Central District of California. A third defendant charged in this indictment is already in custody on unrelated charges.

Jerry Aubrey, 51, already in custody, his brother Timothy Aubrey, 53, of Moreno Valley, who self surrendered to the FBI’s Riverside Resident Agency, and Aaron Glasser, 30, of Mission Viejo, who was arrested without incident, are all in custody today after a federal grand jury indictment that charges them with mail and wire fraud was unsealed.

The indictment alleges Jerry Aubrey founded, managed, and operated the telemarketing investment scheme (also known as a “boiler room”) located in Costa Mesa, CA, doing business as Progressive Energy Partners, LLC (PEP). Timothy Aubrey worked as a PEP manager and salesperson, in addition to preparing, with Aaron Glasser, the sales scripts read to potential investors. Finally, Aaron Glasser was a PEP salesperson who worked as both a sales “fronter” and “closer,” making cold calls and closing deals. In his work as a salesperson, the indictment alleges Glasser raised around a quarter of the total amount of investments.

PEP allegedly employed salespersons called “fronters” and “closers” to raise over $11 million in five unregistered securities offerings for the purported purpose of developing and supporting oil and gas wells. In reality, most of the money was used to pay for the Aubrey brothers’ personal expenses, to pay up to 30% commissions to salespersons, and to make Ponzi-like payments to previous investors.

The defendants directed salespersons to cold call potential investors from purchased lead lists and solicit investments using scripts touting the profitability of investing in PEP. Fronters would pass the names of those who were potentially interested to closers, who could conclude the sale.

As alleged in the indictment, the defendants caused the salespersons to make material misrepresentations and conceal material facts when speaking to investors about, among other things, the percentage of investor money that would be spent on the development and operation of oil and gas wells, the anticipated amount and timing of returns to investors, and the payment of sales commissions to PEP salespersons, i.e., the fronters and closers.

Some of the false and deceptive statements indicated that investors would receive a greater than 50% annual rate of return on their investments; that almost half of the investor funds would be spent on oil and gas wells, and that the remainder of the investor funds would be spent on other business expenses; that salespersons would only receive a sales commission in the form of a share of the investment profits; and that PEP would use the assistance of an “independent CPA firm” to make distributions to investors.

The indictment alleges that, through the scheme, the defendants concealed from investors the material facts that approximately 30% of the investor funds would be spent on the Aubreys’ personal expenditures; that almost 20% of the investor funds would be used to make investor distributions and to return investor principal; that less than 10% of investor funds was spent on oil and gas wells; that investors would not, in fact, earn an annual rate of return of over 50%; and that defendant Jerry Aubrey, rather than an “independent CPA firm,” would determine the distributions to investors. The indictment alleges that by devising, executing, and participating in the above scheme, the defendants induced more than 200 investors to distribute to PEP over $11 million between 2005 and 2010.

In 2011, the Securities and Exchange Commission (SEC) obtained summary judgment against these defendants in connection with the PEP investment scheme. Additionally, Jerry Aubrey was charged in 1998 by the SEC with violating the broker-dealer registration provisions of the Securities Exchange Act of 1934 in connection with an offering fraud in which he sold securities in a fictitious cruise ship. The following year, he was permanently enjoined from future violations of Section 15(a)(1) of the Exchange Act (failure to register as a broker dealer), a permanent injunction he has violated through his alleged activities in PEP.

If convicted on all eight counts of Mail Fraud and two counts of Wire Fraud, the defendants face a maximum statutory penalty of 200 years in federal prison.

The criminal investigation was conducted by the FBI. The Securities and Exchange Commission conducted the civil investigation.

An indictment itself is not evidence that the defendants committed the crimes charged. Every defendant is presumed to be innocent until and unless proven guilty in court.”

More Information on Federal Mail Fraud Statutes, Jury Instructions, and Crimes
Federal Mail Fraud Crimes – 18 U.S.C. § 1341

Video on Federal Mail Fraud Crimes

More Information on Federal Wire Fraud Statutes, Jury Instructions, and Crimes
Federal Wire Fraud Crimes – 18 U.S.C. § 1343

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


FBI: Fourteen Charged with Alleged Heroin and Cocaine Trafficking in the Bronx and Across the Hudson Valley

October 2, 2013

The Federal Bureau of Investigation on October 1, 2013 released the following:

“Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, Assistant Director-In-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Brian R. Crowell, the Special Agent-in-Charge of the New York Division of the Drug Enforcement Administration (“DEA”), and Joseph A. D’Amico, the Superintendent of the New York State Police, announced the arrest of 14 defendants and the unsealing of an Indictment today charging conspiracies to distribute kilogram quantities of heroin and cocaine in Beacon, the Bronx, the City of Middletown, the City of Newburgh, and New Windsor, New York.

U.S. Attorney Preet Bharara stated: “Drug traffickers long ago discovered opportunities to peddle their venom way beyond city limits, and fortunately the law enforcement community is there to intercept them. Today’s arrests exemplify our unrelenting efforts to remove drug dealers from our streets and make them safe for law-abiding citizens, city and country.”

FBI Assistant Director-in-Charge George Venizelos stated: “Heroin and cocaine are a scourge on society, often victimizing our cities’ most vulnerable. Today’s arrest and subsequent charges bring us one step closer to cleaning up our streets.”

DEA Special Agent in Charge Brian R. Crowell stated: “Drug abuse claims more young people’s lives annually today than suicides, firearm deaths or school violence and unintentional drug overdose is the leading cause of injury death in 17 states, even more than automobile accidents. This case is a fine example of state, local and federal law enforcement to keep our neighborhoods safe from drug traffickers. I commend our law enforcement partners and our men and women who worked shoulder to shoulder on this investigation to make the streets safer for the residents and youth in the Newburgh area.”

NY State Police Superintendent Joseph A. D’Amico stated: “A significant amount of drugs will not make it into our communities as a result of the dedication and due diligence of investigators and prosecutors working collaboratively to wipe out these types of drug operations. It is through this cooperative effort among our partners in law enforcement that we will continue to target, and remove from our streets those who choose to engage in this type of illegal and dangerous activity.”

The Indictment charges 14 people, ESMERALDO HERNANDEZ, a/k/a “Esmo,” 32, ABNER ALVAREZ, JR., 30, ABNER ALVAREZ, SR., 47, JAMES L. CANELLI III, 36, EMILIO CASTILLO, a/k/a “E,” 28, ANTHONY CESPEDES, a/k/a “Anth,” 27, MICHAEL FIGUEROA, a/k/a “Scooby,” 36, BRADLEY FRIEDLANDER, 30, DARRELL LOPEZ, a/k/a “D,” 32, CARLOS MARTINEZ, 30, RAUL OQUENDO, 32, NYGEL RIVERA, 22, RAMON URIBE, a/k/a “Polo,” 38, and BERNARDO VALENTIN, a/k/a “Chickie,” 42, with conspiring to distribute, and possess with intent to distribute kilogram quantities of cocaine and/or heroin. The charges against each defendant and the corresponding maximum potential penalties are outlined in the chart attached to this press release.

Thirteen of the defendants charged in the Indictment unsealed today were arrested today or have previously been taken into custody. One, Darrell Lopez, remains at large as a fugitive. The defendants in custody are to be presented in White Plains federal court this afternoon before U.S. Magistrate Judge George A. Yanthis.

Mr. Bharara praised the outstanding investigative work of the FBI, the DEA, the New York State Police, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Immigration and Customs Enforcement’s (“ICE”) Homeland Security Investigations (“HSI”), the United States Postal Inspection Service, the Beacon Police Department, the City of Middletown Police Department, the City of Newburgh Police Department, the Town of Newburgh Police Department, and the Orange County Sheriff’s Office. . The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Michael Gerber and Ilan Graff are in charge of the prosecution.

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

UNT CHARGE DEFENDANTS MAXIMUM PENALTIES
1 Narcotics conspiracy (Conspiracy to distribute and possess with intent to distribute five kilograms and more of cocaine.) ESMERALDO HERNANDEZ, a/k/a “Esmo,” ABNER ALVAREZ, JR., MICHAEL FIGUEROA, a/k/a “Scooby,” BRADLEY FRIEDLANDER, CARLOS MARTINEZ, RAUL OQUENDO, NYGEL RIVERA, RAMON URIBE, a/k/a “Polo,” BERNARDO VALENTIN, a/k/a “Chickie” Life in prison Mandatory minimum: 10 years in prison
2 Narcotics conspiracy (Conspiracy to distribute and possess with intent to distribute one kilogram and more of heroin.) ESMERALDO HERNANDEZ, a/k/a “Esmo,” JAMES L. CANELLI III, EMILIO CASTILLO, a/k/a “E,” ANTHONY CESPEDES, a/k/a “Anth,” MICHAEL FIGUEROA, a/k/a “Scooby,” DARRELL LOPEZ, a/k/a “D,” a RAMON URIBE, a/k/a “Polo” Life in prison Mandatory minimum: 10 years in prison
3 Narcotics conspiracy (Conspiracy to distribute and possess with intent to distribute five kilograms and more of cocaine.) ABNER ALVAREZ, SR.
ABNER ALVAREZ, JR.
Life in prison Mandatory minimum: 10 years in prison

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


FBI: “Former NBA Player and CEO of the George Group Convicted on all Counts in $2 Million Ponzi Scheme”

October 2, 2013

The Federal Bureau of Investigation on September 30, 2013 released the following:

“TRENTON, NJ— C. Tate George, former NBA basketball player and the CEO of purported real estate development firm The George Group, was convicted today on all counts on which he was indicted in connection with his role in orchestrating a $2 million investment fraud scheme, U.S. Attorney Paul J. Fishman announced.

The jury deliberated four hours before convicting George, 45, of Newark, of four counts of wire fraud after a three-week trial before U.S. District Judge Mary L. Cooper. George was immediately remanded into federal custody to await sentencing, which is scheduled for Jan. 16, 2014.

According to documents filed in this case and evidence presented at trial:

George, a former player for the New Jersey Nets and Milwaukee Bucks professional basketball teams, held himself out as the CEO of The George Group and claimed to have more than $500 million in assets under management. He pitched prospective investors, including several former professional athletes, to invest with the firm and told them their money would be used to fund The George Group’s purchase and development of real estate development projects, including projects in Connecticut and New Jersey. George represented to some prospective investors that their funds would be held in an attorney trust account and personally guaranteed the return of their investments, with interest.

Based on George’s representations, investors invested more than $2 million in The George Group between 2005 and 2011, which he deposited in both the firm’s and his personal bank account. Instead of using investments to fund real estate development projects as promised, George used the money from new investors to pay existing investors in Ponzi-scheme fashion, as well as paying for his daughter’s Sweet 16, extensive renovations on his New Jersey home (that has since been foreclosed), the mortgage on a New Jersey home, the mortgage on a Florida home, taxes to the IRS, and traffic tickets. The defendant gave money to family members and friends. He also spent $2,905 for a reality video about himself (a “sizzle reel” for “The Tate Show,” is available on YouTube). The George Group had virtually no income-generating operations.

Each of the wire fraud counts on which he was convicted is punishable by a maximum potential 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 Aaron T. Ford; postal inspectors of the USPIS, under the direction of Postal Inspector in Charge Maria L. Kelokates; and criminal investigators with the U.S. Attorney’s Office, with the investigation leading to today’s conviction.

The government is represented by Assistant U.S. Attorneys Joseph B. Shumofsky and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit http://www.stopfraud.gov.”;

Federal Wire Fraud Crimes – 18 U.S.C. § 1343

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Kenmore Financial Advisor Edward H. Kahler Arrested for Allegedly Committing Mail Fraud

October 2, 2013

The Federal Bureau of Investigation on September 30, 2013 released the following:

Allegedly Liquidated $125,000 Client Account Without Permission

A long-time financial advisor who was stripped of his insurance producers license in 2012, was arrested today on a federal charge of mail fraud for liquidating a client account without authorization, announced U.S. Attorney Jenny A. Durkan. EDWARD H. KAHLER, 64, is the owner of Key Resources, a Kenmore, Washington retirement consultation company which sells annuities and life insurance. The charge alleges that KAHLER used proprietary information from the company he used to represent to access customer accounts. KAHLER allegedly used that information to liquidate the customer account and use the money for his own benefit. KAHLER will make his first appearance in U.S. District Court in Seattle at 2:00 p.m. tomorrow, October 1, 2013.

According to the criminal complaint, from 1983 to 2007 KAHLER was a financial advisor for Variable Annuity Life Insurance Company (VALIC), and was appointed by VALIC to sell its annuities. VALIC terminated KAHLER in 2007 when it discovered he was promoting competing annuities. Using information that he had in his files, KAHLER allegedly created profiles for former clients using the VALIC on-line system, and fraudulently caused VALIC to liquidate the clients’ accounts and send the proceeds to him for his personal use and benefit. In the instance described in the complaint, on Christmas Eve 2012, KAHLER liquidated the account of a client who had died in 1984, and used the $125,000 to fund a trip to Las Vegas, the payment on a BMW and other personal expenses. He also paid business expenses with the money.

Mail fraud is punishable by up to 20 years in prison.

The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by the FBI, U.S. Postal Inspection Service (USPIS) and the Social Security Administration Office of Inspector General (SSA-OIG). The case is being prosecuted by Assistant United States Attorney Justin Arnold.”

Federal Mail Fraud Crimes – 18 U.S.C. § 1341

Video on Federal Mail Fraud Crimes

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Miami-Area Residents Mayelin Santoyo and Jose Martin Olivares Indicted by a Federal Grand Jury for Alleged Roles in $190 Million Medicare Fraud Scheme

October 1, 2013

The Federal Bureau of Investigation on September 27, 2013 released the following:

“WASHINGTON—Two Miami-area residents were indicted in connection with their alleged participation in a $190 million Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG) Office of Investigations, Miami Office, made the announcement after the indictment was unsealed.

Mayelin Santoyo, 28, and Jose Martin Olivares, 36, were each charged with one count of conspiracy to defraud the United States and to receive illegal health care kickbacks and two counts of receiving health care kickbacks. Each charge carries a maximum penalty of five years in prison upon conviction.

According to the indictment, the scheme that Santoyo and Olivares allegedly participated in lasted from approximately February 2006 to October 2010. The scheme was orchestrated by the owners and operators of American Therapeutic Corporation (ATC) and its management company, Medlink Professional Management Group Inc. (Medlink). ATC and Medlink were Florida corporations headquartered in Miami. ATC operated purported partial hospitalization programs (PHPs), a form of intensive treatment for severe mental illness, in seven different locations throughout South Florida and Orlando. Both corporations have been defunct since their owners were arrested in October 2010.

The indictment alleges that Santoyo and Olivares served as patient brokers who provided ineligible patients to ATC in exchange for kickbacks in the form of checks and cash. The amount of the kickback was based on the number of days each recruited patient spent at ATC. Throughout the course of the ATC conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services and who attended treatment programs that were not legitimate PHPs so that ATC could bill Medicare for the medically unnecessary services. According to court filings, to obtain the cash required to support the kickbacks, the co-conspirators laundered millions of dollars of payments from Medicare.

ATC, Medlink, and various owners, managers, doctors, therapists, patient brokers, and marketers of ATC and Medlink have pleaded guilty or have been convicted at trial. In September 2011, ATC owner Lawrence Duran was sentenced to 50 years in prison for his role in orchestrating and executing the scheme to defraud Medicare.

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

The case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case is being prosecuted by Trial Attorneys Anne P. McNamara and Robert A. Zink of the Fraud Section.

Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,500 defendants who collectively have falsely billed the Medicare program for more than $5 billion. In addition, the HHS 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.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Former Owner of Los Angeles Medical Clinic Management Company Mikran “Mike” Meguerian Indicted by a Federal Grand Jury Alleging a $13 Million Medicare Fraud Scheme

October 1, 2013

The Federal Bureau of Investigation on September 30, 2013 released the following:

“WASHINGTON—The former owner of a Los Angeles medical clinic management company has been indicted for his role in a $13 million scheme to defraud Medicare.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney André Birotte, Jr. of the Central District of California, and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.

Mikran “Mike” Meguerian, 36, of Glendale, California, was indicted in the Central District of California on one count of conspiracy to commit health care fraud and five counts of health care fraud, each of which carries a maximum penalty of 10 years in prison upon conviction. Meguerian was arrested on September 26, 2013, and the indictment was unsealed following his initial appearance in federal court on September 27, 2013.

According to court documents, Meguerian owned Med Serve Management, a medical clinic management company located in Van Nuys, California. From approximately 2006 through February 2009, he allegedly engaged in a conspiracy to commit health care fraud, in part through the operation of Med Serve. According to court documents, Meguerian oversaw several medical clinics that generated prescriptions and other medical documents for medically unnecessary power wheelchairs and other durable medical equipment (DME). Meguerian and his co-conspirators then sold the prescriptions to DME supply companies, knowing that the prescriptions were fraudulent. Court documents allege that, based on these fraudulent prescriptions, the DME supply companies then submitted false and fraudulent claims to Medicare.

Court documents allege that fraudulent prescriptions from Meguerian’s clinics were instrumental in generating approximately $13.6 million in fraudulent claims to Medicare, and Medicare paid approximately $7.6 on those claims.

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

The case was investigated by the FBI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. This case is being prosecuted by Trial Attorneys Fred Medick and Blanca Quintero of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Former Owner of Los Angeles Equipment Supply Company Valery Bogomolny Indicted by a Federal Grand Jury Alleging a $4 Million Medicare Fraud Scheme

October 1, 2013

The Federal Bureau of Investigation on September 30, 2013 released the following:

“WASHINGTON—A former owner of a Los Angeles medical equipment supply company has been indicted for allegedly engaging in a $4 million Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney André Birotte, Jr. of the Central District of California, Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.

Valery Bogomolny, 41, of Los Angeles, California, was indicted in the Central District of California on six counts of health care fraud, each of which carries a maximum penalty of 10 years in prison upon conviction. Bogomolny was taken into custody on September 27, 2013, and the indictment was unsealed following his initial appearance in federal court that afternoon.

According to court documents, Bogomolny was the owner and president of Royal Medical Supply, a durable medical equipment (DME) supply company located in Los Angeles. From approximately January 2006 through October 2009, he allegedly engaged in a scheme to commit health care fraud through the operation of Royal by providing medically unnecessary power wheelchairs and other DME to Medicare beneficiaries and submitting false and fraudulent claims to Medicare. Court documents allege that Bogomolny knew the prescriptions and medical documents were fraudulent and that some of the beneficiaries did not receive the DME, yet he certified to Medicare with the submission of each claim that the DME was received and was medically necessary.

Bogomolny, through Royal, allegedly submitted approximately $4 million in fraudulent claims to Medicare for power wheelchairs and related services, and Medicare paid Royal approximately $2.7 million on those claims.

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

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. This case is being prosecuted by Trial Attorney Fred Medick of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Feds Charge W.Va. Judge in an Alleged Drug-Related Conspiracy

September 19, 2013

ABC News on September 19, 2013 released the following:

“By VICKI SMITH Associated Press

A West Virginia judge already facing corruption allegations was charged Thursday in a conspiracy that federal prosecutors say was cooked up to protect a now-deceased sheriff from revelations that he’d bought drugs.

The complex conspiracy laid out in court documents also involves a local prosecutor and a commissioner in Mingo County, a coalfields community along the Kentucky border that’s long been plagued by corruption.

U.S. Attorney Booth Goodwin said the goal of the plot was to stop a confidential informant from telling the FBI about his drug deals with late Sheriff Eugene Crum by putting the dealer behind bars.

Suspended Mingo County Circuit Judge Michael Thornsbury was charged with one count of conspiracy in a document called an information, signaling he is cooperating with federal prosecutors and may plead guilty.

The charge carries a maximum sentence of 10 years in prison.

Thornsbury’s attorney, Stephen Jory, did not immediately comment.

The U.S. attorney’s office declined to say whether prosecutor Michael Sparks or County Commissioner Dave Baisden will be charged. Sparks did not immediately return a message.

The sheriff, meanwhile, died in an April shooting apparently unrelated to the conspiracy. His widow, Rosie Crum, did not immediately respond to a message left at her home.

Rodney Miller, executive director of the West Virginia Sheriffs Association, called the revelations about Crum “disheartening” and a “a black eye” for all 55 county departments. Miller said his organization would never condone the kind of activity alleged by prosecutors.

“It flies in the face of what we do and what we stand for … and we don’t like that,” he said.

The judge was indicted last month, accused of abusing his power in a separate case. Prosecutors say Thornsbury had an affair with his secretary and tried to frame her husband repeatedly between 2008 and 2012 after she broke things off.

He is accused of enlisting the help of a state trooper and commandeering the grand jury and was set to stand trial next month. Prosecutors didn’t say how the new case will affect those charges.

The new charges against the judge paint a picture of a tightknit team of Mingo County officials ganging up on a local sign maker identified only as G.W. in the court documents.

The slain sheriff, who was also a longtime magistrate, was elected last fall on a campaign to clean up a pervasive drug problem. While campaigning, he bought signs and other materials from G.W. and still owed him $3,000 when he took office in January, the court document says.

When G.W. demanded payment, prosecutors say, Crum sent a confidential informant to buy the prescription painkiller oxycodone from him. Prosecutors say G.W. was arrested Feb. 1.

G.W. then hired an attorney and met with FBI agents. Prosecutors say he told agents he had sold narcotics to Crum “on multiple occasions” while he was the magistrate.

Crum and Sparks then went to the judge, prosecutors say, and told him that G.W. had incriminated the sheriff. Prosecutors say the group let G.W. know that if he fired his attorney and replaced him with one preferred by the judge, he could get a light sentence.

G.W. did, though the court filing does not identify either the new attorney or say what sentence he ultimately got. It says only that Sparks “arranged for a more favorable sentence … as a reward.”

Prosecutors say that after G.W. complied, Crum directed one of his deputies to have G.W. obtain a statement claiming he’d never sold the sheriff drugs.

Crum, 59, died in a downtown Williamson parking lot as he ate lunch in his car.

Tennis Melvin Maynard, a onetime boxing student of Crum’s, is charged with first-degree murder and awaiting trial. Maynard’s family claims the former sheriff had molested him and that the prosecutor’s office ignored his reports. Sparks has denied those claims.

On Wednesday, Sparks recused himself from Maynard’s case, citing only “an emerging conflict of interest.”

Crum was hired last summer as a special investigator in Sparks’ office while he campaigned for sheriff.

The day he was killed, Crum was keeping watch on a former “pill mill,” a place that had been shut down for illegally dispensing prescription drugs, to be sure it didn’t reopen.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Follow

Get every new post delivered to your Inbox.

Join 9,045 other followers