Attorney General Holder Announces New Federal Bureau of Prisons Director

December 21, 2011

The U.S. Department of Justice on December 21, 2011 released the following:

“Attorney General Eric Holder today announced the appointment of Charles E. Samuels Jr. as the director of the Federal Bureau of Prisons (BOP).

“I am pleased that Charles will continue to build upon 23 years of distinguished service at the department,” said Attorney General Holder. “I am confident that Charles will provide the kind of effective and innovative leadership that will increase efficiency, further expand prisoner development and reentry programs, and allow for transparency and accountability at the Federal Bureau of Prisons – while remaining true to the BOP’s core mission of protecting public safety.”

“I am very honored to be appointed by Attorney General Holder to serve as the director for the Federal Bureau of Prisons and will continue to work with the great staff at every level of the BOP to meet our mission to protect society and provide meaningful life skills and reentry programs for our inmate population,” said Samuels. “I also look forward to working with the leadership and others in the Department of Justice, throughout the federal government and in states and local communities to further the department’s goals and objectives.”

In his current position as assistant director of the Correctional Programs Division for the BOP, which he has held since January 2011, Samuels oversees all inmate management and program functions, including intelligence and counterterrorism initiatives; security and emergency planning; inmate transportation; case management; mental health and religious services; private prisons; and community corrections. Samuels is also responsible for inmate skills development and reentry initiatives, and shares the attorney general’s commitment to reduce recidivism by preparing incarcerated people to return to their communities and become productive members of society.

Samuels began his career with the BOP as a correctional officer in 1988. He was promoted to a number of positions within the BOP including correctional programs administrator and executive assistant for the Northeast Regional Office. Samuels has served as associate warden at the Federal Correctional Institutions at Otisville, N.Y. and Beckley, W.Va.; ombudsman in the BOP’s Central Office; warden at the Federal Correctional Institutions at Manchester, Ky. and Fort Dix, N.J.; and senior deputy assistant director of the Correctional Programs Division.

Samuels is a native of Birmingham, Ala. He received his Bachelor of Science in Social and Behavioral Sciences from the University of Alabama in Birmingham. Samuels is a graduate of the Harvard University Executive Education Program.

The mission of the Federal Bureau of Prisons is to protect society by confining offenders in the controlled environments of prisons and community-based facilities that are safe, humane, cost-efficient and appropriately secure, while providing work and other self-improvement opportunities to assist offenders in becoming law-abiding citizens.”

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To find additional federal criminal news, please read Federal Crimes Watch 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 and OFAC SDN Sanctions Removal.

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


Judge recommends Colorado low-security prison for Blagojevich

December 13, 2011

Chicago Tribune on December 13, 2011 released the following:

“By Cynthia Dizikes
Tribune reporter

A federal judge today agreed to recommend that Rod Blagojevich serve his 14-year prison sentence at a low-security federal prison in Littleton, Colo.

U.S. District Judge James Zagel also agreed to extend Blagojevich’s surrender date to March 15 unless the former governor is able to sell his Ravenswood Manor residence before then. Last week, the judge had ordered Blagojevich to report to prison on Feb. 16.

Although Blagojevich would rather have been sent to a minimum-security prison camp, the U.S. Bureau of Prisons will not usually consider that option for defendants sentenced to 10 or more years in prison, said Blagojevich’s attorney, Sheldon Sorosky.

“It’s kind of like applying to school,” Sorosky said of deciding to request a low-security facility instead of a camp. “If the kid who’s got all C’s asks to go to Harvard, he’s probably not going to get in.”

Prison camps are the lowest security in the federal prison system and generally feature unsecured perimeters and dormitory-style living. The nearest prison camp to Chicago is in Oxford, Wis.

Low-security facilities, meanwhile, have secured perimeters, but instead of prison cells, they usually have dormitory living facilities, according to the Bureau of Prisons. The low-security facility in Littleton – officially known as the Federal Correctional Institution Englewood — is located 15 miles southwest of Denver, according to the Bureau of Prisons web site.

In sentencing Blagojevich last week, Zagel agreed to recommend that Blagojevich serve his time at a low-security prison and asked his attorneys to suggest a location.

The U.S. Bureau of Prisons will make any final decision on where Blagojevich will be incarcerated.”

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

Federal Crimes – Appeal

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To find additional federal criminal news, please read Federal Crimes Watch 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 and OFAC SDN Sanctions Removal.

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


Raj Rajaratnam Checked into Devens Federal Medical Center (FMC Devens)

December 6, 2011
Devens Federal Medical Center
Photo By Elise Amendola
Devens Federal Medical Center

Business Insider on December 6, 2011 released the following:

“Raj Rajaratnam’s New Neighbors In Prison Are A Bunch Of High-Level Sex Offenders

By: Julia La Roche

Disgraced Galleon chief Raj Rajaratnam vacated his luxury Sutton Place apartment in Manhattan yesterday and checked into federal prison that houses high-level sex offenders.

Rajaratnam’s new abode at the Devens Federal Medical Center houses nearly 1,000 inmates. A significant portion of those inmates are sex offenders who require intensive, therapeutic treatment, while others suffer from severe substance abuse, according to Bureau of Prison’s website[].

The hedge fund manager, who was convicted of orchestrating the largest insider trading scheme in history, will at least begin his 11 year prison sentence at Devens.

That’s because Rajaratnam, a diabetic who requires dialysis, will need a facility to suit his health needs. Devens has its own dialysis treatment center on site.

According to Ed Bales, a managing director for Federal Prison Consultants, Rajaratnam probably won’t have to do any manual labor right away because of his health and he may never have to work during his sentence.

“He’s going to be reviewed because of his medical conditions,” Bale told Business Insider. “They won’t put him to work right away. He’s going to be sitting around loafing.”

For entertainment at Devens, there are recreational rooms, but no individual televisions in the cells, Bale said. There are gym facilities the inmates can use, but they are limited with equipment choices because they aren’t suppose to bulk up, he added.

“It’s a very mundane lifestyle — not too much excitement.””

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To find additional federal criminal news, please read Federal Crimes Watch 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 and OFAC SDN Sanctions Removal.

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


Houston Doctor Sentenced in Federal Court to 11+ Years in Health Care Fraud Scheme

October 31, 2011

The U.S. Attorney’s Office Southern District of Texas on October 28, 2011 released the following:

“HOUSTON – Houston doctor Christina Joy Clardy, 61, has been sentenced to 135 months in federal prison for her role in a massive health care fraud conspiracy that billed the federal Medicare and Texas Medicaid programs for $45,039,230 over a 2 ½-year-period, United States Attorney Kenneth Magidson announced today. Clardy was sentenced just a short while ago in federal court in Houston.

Clardy is the third defendant to be sentenced in this matter. Last week Umawa Oke Imo, the owner of City Nursing Services of Texas, Inc., was sentenced to 327 months for his role in the conspiracy and health care fraud. Clardy, who was found guilty of one count of conspiracy to commit health care fraud, 14 counts of health care fraud and three counts of mail fraud on May 27, 2011, after an 18-day trial in front of U.S. District Judge Melinda Harmon, was also ordered to pay $15,626,084.01 in restitution to Medicare and Medicaid. In arriving at Clardy’s sentence today, Judge Harmon considered the pivotal role Clardy played in abusing the trust of the Medicare and Medicaid programs by allowing the fraudulent billing under her provider numbers.

City Nursing billed more than $25 million worth of physical therapy services under Clardy’s physician provider numbers between January 2007 and August 2008. The United States introduced a letter at trial, sent by Clardy to Imo in July of 2007 – a year before she left the clinic, showing her knowledge of the fraudulent activities at the clinic, ordering Imo to immediately cease billing Medicare under her provider number, to notify Medicare of the prior fraudulent billing and threatening to notify Medicare of the fraud if he did not. Clardy testified at trial that after Imo received her letter they had a private meeting at her house and after that she never contacted Medicare about the fraud and never asked Imo if he contacted Medicare or stopped the fraudulent billing. Other evidence introduced by the United States showed that beginning in August 2007, a few weeks after Clardy’s letter, Imo began making large cash payments to Clardy and continued to bill approximately $21 million worth of false and fraudulent physical therapy services.

City Nursing employee Joann Michelle White, who played a minor role in the health care fraud conspiracy, pleaded guilty to conspiracy in February 2010 and testified for the United States during the trial. She was sentenced to 46 months on Oct. 14, 2011. The last convicted defendant, Kenneth Anokam, will be sentenced later next month.

The investigation into City Nursing was the result of the joint efforts by special agents of the FBI, Internal Revenue Service-Criminal Investigations, the Department of Health and Human Services-Office of Inspector General and the Texas Attorney General’s Office-Medicare Fraud Control Unit. Assistant United States Attorneys Julie Redlinger and Mark Donnelly prosecuted the case. Assistant United States Attorney Kristine Rollinson assisted with forfeiture and restitution.”

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

Federal Crimes – Appeal

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To find additional federal criminal news, please read Federal Crimes Watch 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 and OFAC SDN Sanctions Removal.

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


Martin Antonio Montoya Sentenced by U.S. District Judge Hilda Tagle to 50 months in Federal Prison for Bank Robbery

September 2, 2011

The U.S. Attorney’s Office Southern District of Texas on September 1, 2011 released the following:

“Bank Robber Sentenced to 50 Months

BROWNSVILLE, Texas – Martin Antonio Montoya, 22, has been sentenced to 50 months in prison and ordered to pay restitution to the Bank of America in the amount of $1,174.58, United States Attorney José Angel Moreno announced today. U.S. District Judge Hilda Tagle handed down the sentence today and also ordered him to serve a three-year-term of supervised release following his release from prison.

On Dec. 13, 2010, Montoya, of Brownsville, Texas, wearing a hooded sweatshirt and a black baseball cap, entered the Bank of America in Brownsville, Texas, and waited in line to speak to a bank teller. After approaching the counter, Montoya handed the bank teller a note demanding she give him all her money or else he was going to hurt her as well as everyone in the bank. A total of $1,610 was handed over to Montoya, who then fled the bank.

Montoya’s mother turned him in after video footage from the bank was shown in the local news. Montoya was subsequently arrested at the Red Roof Inn in Brownsville, Texas. A search of Montoya’s residence resulted in the recovery of $435.42 that was taken from the bank.

Montoya pleaded guilty on March 3, 2011. He has been in custody since his arrest where he will remain pending transfer to a Bureau of Prisons facility to be determined in the near future.

The FBI and Brownsville Police Department led the investigation leading to the arrest of Montoya. The case was prosecuted by Jose A. Esquivel, Jr.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

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

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Texas Syndicate Gang Members and Associates Sentenced to Prison

August 31, 2011

U.S. Attorneys Office Southern District of Texas on August 30, 2011 released the following:

“McALLEN, Texas – Six Texas Syndicate members and associates have been sentenced to prison for racketeering, violent crimes in aid of racketeering, kidnapping and possession with intent distribute cocaine, United States Attorney Jose Angel Moreno announced today.

At a hearing on Monday, Aug. 29, 2011, Chief U.S. District Judge Ricardo Hinojosa sentenced the chairman of the Texas Syndicate in the Rio Grande Valley, Jose Ismael Salas, 40 of Edinburg, Texas, to 20 years in federal prison without parole for drug trafficking offenses in violation of the racketeering statute. Salas pleaded guilty on April 2, 2009, admitting to committing two acts of racketeering, namely two separate acts of possession with intent to distribute a controlled substance – six kilograms of cocaine on Aug. 12, 2004, and 39 kilograms of marijuana on March 28, 2003, intending to further the goals of the gang.

Five other members or associates of the gang were also sentenced yesterday by Judge Hinojosa including Fidel Valle, 45 of Donna, Texas – the source of drug supply to the gang who employed gang members to assist in his drug distribution business. He received 126 months imprisonment for possession with intent to distribute six kilograms of cocaine. On July 28, 2009,Valle pleaded guilty to the federal felony drug charge acknowledging that on Aug. 12, 2004, upon being contacted by Salas, Valle agreed to sell approximately six kilograms (approximately 13 pounds) of cocaine to Salas’s associates. That drug load was found and seized by law enforcement officers during a traffic stop of a Ford pickup seen leaving Valle’s residence in Donna on Aug. 12, 2004.

Romeo Rosales, 41 of Raymondville, Texas – an admitted Texas Syndicate gang member who was convicted of kidnapping Amancio Pinales-Garcia – was sentenced to 151 months imprisonment. Reyes, son-in-law of the kidnapping victim, sought a monetary reward to turn over Pinales-Garcia to unknown subjects in Mexico. Pinales-Garcia was shot several times in the low torso during the struggle and subsequently died in Mexico. Rosales pleaded guilty to kidnapping Pinales-Garcia on March 3, 2009.

Noel De Los Santos, 33, of Donna, Texas was sentenced to 240 months imprisonment for violent crimes in aid of racketeering, that is, for the murder of Crisantos Moran on March 20, 2003. According to trial testimony, Moran had been ordered by the Texas Syndicate to kill a rival gang member who lived near Penitas, Texas. De Los Santos and Jose Armando Garcia, both Texas Syndicate gang members, agreed to accompany Moran to commit the murder. However, Moran failed to carry out the order as given. Instead, De Los Santos and Garcia shot and killed Moran for failing to carry out the order. On Aug. 10, 2010, Garcia was convicted of racketeering and violent crimes in aid of racketeering and was sentenced to life in prison on Jan. 5, 2011.

Cristobal Hernandez, 31, and Arturo Rodriguez, 28, both of Brownsville, Texas, were sentenced to 120 and 240 months imprisonment, respectively, for violent crimes in aid of racketeering arising from the murder of Marcelino Rodriguez in June 2007. After members of the Texas Syndicate obtained a copy of a sealed court document from an employee of a McAllen area law firm which represented Marcelino Rodriguez in a federal case, the murder of Marcelino Rodriguez was approved by the leadership of the Texas Syndicate. Hernandez and Arturo Rodriguez were recruited by Raul Galindo to commit the murder. Galindo shot Marcelino Rodriguez in the back of the head while Arturo Rodriguez set the vehicle on fire with gasoline. On Aug. 10, 2010, Galindo was convicted of violent crimes in aid of racketeering and tampering with a witness, victim or an informant. On Jan. 5, 2011, Galindo was sentenced to life imprisonment.

All six of the defendants sentenced yesterday are in federal custody and will remain in custody pending transfer to Bureau of Prisons facilities to be designated in the near future.

All 13 charged in this case have been convicted and sentenced to prison. Juan Pablo Hinojosa, who was convicted by a federal jury of racketeering and violent crimes in aid of racketeering, was sentenced to life imprisonment on Jan. 5, 2011. On Jan. 28, 2010, Benjamin Piedra pleaded guilty to violent crimes in aid of racketeering and was sentenced to 120 months confinement and three years of supervised release on Feb. 22, 2011. Adan Roberto Ruiz pleaded guilty to criminal information charging him with conspiracy to possess with intent to distribute less than 50 kilograms of marijuana, while Jorge Puga pleaded to a criminal information charging him with possession with intent to distribute 39 kilograms of marijuana. Ruiz and Puga received 52 and 37 months, respectively. Joel Carcano Jr. pleaded guilty providing false statements – admitting he lied to Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) agents when he falsely stated he did not provide a copy of downward departure motion to Texas Syndicate members. This document was used as the basis to order the murder of the government’s informant. On Feb. 22, 2011, Carcano was sentenced to 52 months custody and a three-year-term of supervised release.

The investigation leading to the federal charges and subsequent conviction of these admitted Texas Syndicate gang members was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Texas Department of Public Safety and the Hidalgo County Sheriff’s Office. Assistant United States Attorney Robert Wells, Jr. prosecuted the case.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

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

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Nevin Shapiro is Apparently Not Returning to Miami

August 29, 2011

The Associated Press (AP) on August 29, 2011 released the following:

“Attorney: Shapiro not coming to South Florida

By TIM REYNOLDS

CORAL GABLES, Fla. (AP) — Nevin Shapiro is apparently not returning to Miami anytime soon.

Maria Elena Perez, the attorney for the former Miami booster and convicted Ponzi scheme architect whose claims of rampant rule breaking sparked an investigation into the Hurricanes’ football program, said in an email to The Associated Press that her client will not be transferred to a South Florida prison after all.

“Mr. Shapiro is no longer coming to Miami and we are now awaiting his re-designation, which could take some time,” Perez wrote.

A call placed to the Federal Bureau of Prisons late Monday afternoon was not immediately returned. The 42-year-old Shapiro, a longtime resident of the Miami area, has been held for the past couple weeks at a facility in Tallahassee, Fla.

He was expecting a transfer to a prison in the Miami area to serve the bulk of his 20-year prison sentence for bilking investors out of what federal prosecutors say was $930 million. Of that, Shapiro has been ordered to repay nearly $83 million, and he plans to raise at least some of that money by writing a tell-all book about his experiences with the Hurricanes.

Shapiro began making allegations about the Miami program around a year ago, and his claims became widely known earlier this month after Yahoo Sports published what he described as a “tsunami” of violations that could adversely affect the Hurricanes for years to come. He claimed to have provided 72 football players – 65 of whom suited up for the Hurricanes – with cars, money, gifts and even prostitutes between 2002 and 2010.

Shapiro’s claims also implicate 10 Miami football and basketball coaches, none of whom are still employed by the university.

On Monday, Miami President Donna Shalala reaffirmed the school’s commitment to the investigation into Shapiro’s claims and compliance practices at the university, saying that “you don’t time that process with a stopwatch.”

The NCAA is expected to rule early this week, possibly Tuesday, on the status of Miami football players already declared ineligible by the university. The NCAA has been asked to reinstate those players, though it’s certainly possible that the college sports governing body will, at the very least, decree that some players have to miss games because of their interactions with Shapiro.

“This guy is not going to deter the University of Miami from moving forward, and nor our football program,” coach Al Golden said Monday in his weekly appearance on WQAM radio.

Miami opens its season at Maryland on Sept. 5. The NCAA decisions will play a major role in deciding which Hurricanes actually take the field for that game.

Perez said Shapiro is being held at a special housing unit in Tallahassee, in solitary confinement, in part because of the media attention his case and story have generated in recent weeks. Prison officials, Perez said, are erring on a cautious side given Shapiro’s high profile right now.

“It may create a safety concern for him if he is placed in general population,” Perez wrote.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

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

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Michael Holm Sentenced by Chief United States District Judge Alvin W. Thompson in Hartford For Possessing Child Pornography

August 29, 2011

The Federal Bureau of Investigation (FBI) on August 26, 2011 released the following:

“Branford Resident Sentenced to Federal Prison Term for Possessing Child Pornography

David B. Fein, United States Attorney for the District of Connecticut, announced that MICHAEL HOLM, 32, of Oak Street, Branford, was sentenced today by Chief United States District Judge Alvin W. Thompson in Hartford to three months of imprisonment, followed by three months of home confinement and five years of supervised release, for possessing child pornography.

According to court documents and statements made in court, on May 29, 2008, agents assigned to the Connecticut Computer Crimes Task Force conducted a court-authorized search at HOLM’s residence and seized a computer. Subsequent forensic analysis of the computer revealed between 150 and 300 images of child pornography.

On December 9, 2010, HOLM pleaded guilty to one count of possession of child pornography.

Following his release from prison, HOLM will be required to register as a sex offender. As special conditions of his five-year-term of supervised release, the United States Probation Office is authorized to monitor HOLM’s computer use and conduct random searches of his residence, automobile and workplace. Also, HOLM must not have any unsupervised contact with children who are under the age of 18, other than his own children, without the express permission of the U.S. Probation Office and his mental health treatment provider.

This case was investigated by the United States Secret Service and the Connecticut Computer Crimes Task Force, which includes federal, state and local law enforcement agencies. The case was prosecuted by Assistant United States Attorney Ray Miller and Special Assistant United States Attorney Neeraj Patel.

The Connecticut Computer Crimes Task Force, which is housed at the main FBI office in New Haven, investigates crimes occurring over the Internet, including on-line crimes against children, and provides computer forensic review services for participating agencies. For more information about the Task Force, or to report child exploitation crimes, please contact the FBI at 203-777-6311.

This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, and the District of Connecticut’s “Operation Constant Vigilance,” which are aimed at protecting children from sexual abuse and exploitation.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

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

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Former Alabama Mayor Sentenced to Two Years in Federal Prison for Filing False Tax Returns

July 17, 2011

The U.S. Attorney’s Office Middle District of Alabama on July 15, 2011 released the following:

“WASHINGTON — John Jackson, the former mayor of White Hall, Ala., was sentenced to two years in prison today, the Department of Justice and the Internal Revenue Service (IRS) announced. According to court documents, Jackson filed false joint 2004, 2005 and 2006 U.S. Individual Income Tax Returns (IRS Forms 1040) that did not report all of the total income earned by Jackson and his spouse. Jackson did not report as income money he took from the city of White Hall and money he diverted from non-profit companies who handled the gaming license for White Hall.

Jackson was also sentenced to one year of supervised release, and ordered to pay a $25,000 fine and restitution in the amount of $11,065.

John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division and George Beck, U.S. Attorney for the Middle District of Alabama, commended the IRS special agents who investigated this case and Trial Attorney Michael Boteler of the Justice Department’s Tax Division, Southern Criminal Enforcement Section and Assistant U.S. Attorney Todd Brown who prosecuted the case.”

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

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

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Edward Louis Molz, III Sentenced to Eight Years in Federal Prison for Running Fraudulent Advance Fee Scheme

July 8, 2011

The U.S. Attorney’s Office Northern District of Texas on July 7, 2011 released the following:

“PLANO, TEXAS, MAN SENTENCED TO EIGHT YEARS IN FEDERAL PRISON FOR RUNNING FRAUDULENT ADVANCE FEE SCHEME

DALLAS — Edward Louis Molz, III, aka “Frank Sullivan,” 29, of Plano, Texas, was sentenced by U.S. District Judge Sam A. Lindsay to 96 months in federal prison and ordered to pay $1,074,725 in restitution following his guilty plea in January to one count of wire fraud in connection with a fraudulent advance fee scheme he ran. The announcement was made today by U.S. Attorney James T. Jacks of the Northern District of Texas.

In addition, according to the plea agreement, Molz will be ordered to forfeit property that was derived from proceeds traceable to his offense, including funds seized on September 7, 2010, from the 3rd Street Financial LLC account at JPMorgan Chase, as well as a 2007 BMW 650, a 2005 Maserati and real estate located on Cartwright Street in Irving, Texas.

Molz was arrested in September 2010 at his home by FBI agents on wire fraud and mail fraud charges outlined in a federal criminal complaint, and was released on a personal recognizance bond. A federal grand jury returned a six-count indictment the following month charging Molz with four counts of wire fraud and two counts of mail fraud. In March 2011, Molz’s bond was revoked.

According to the factual resume filed in the case, from November 2009 through May 2010, Molz ran a scheme in which he induced small business owners, who were seeking alternative means of financing, to pay a fee to purchase an “aged” corporations. These “aged” corporations purportedly had access to lines of credit that were available to the purchaser.

To carry out his scheme, Molz established 3rd Street Financial, LLC, and, using the assumed name of “Frank Sullivan,” held himself out as its chief financial officer. He marketed 3rd Street Financial through a website and a loose association of financial brokers. He represented to potential purchasers that he had established and maintained a number of “aged” corporations which had been in existence for four to five years and had access to lines of credit between $250,000 and $400,000. For a $3250 acquisition fee, a purchaser could acquire a “Tier 1″ corporation with a minimum line of credit of $150,000. However, for a $6500 acquisition fee, a purchaser could acquire a “Tier 2″ corporation with a $250,000 minimum line of credit.

Molz represented that upon payment of the fees, he could deliver the aged corporation to a purchaser within nine to 12 weeks. He also represented that each “aged” corporation had additional benefits, including established “business trade lines,” a complete financial and business plan, a Dun & Bradstreet listing and three years of valid tax returns. He furnished potential purchasers with false and fictitious documents, including service agreements, testimonials from satisfied purchasers and letters from financial institutions confirming the issuance of lines of credit.

During the time frame mentioned above, approximately 247 individuals mailed or wired money to Molz and he deposited those funds into JPMorgan Chase and Compass Bank accounts. Molz did not deliver any “aged” corporations as promised. Instead, he used the money almost exclusively for his personal benefit, including the acquisition of personal assets and real estate.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: http://www.stopfraud.gov

The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Christopher Stokes. The forfeiture is being handled by Assistant U.S. Attorney John J. de la Garza.”

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

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

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