Five Individuals Charged in Alleged Connection with Death of a Customs and Border Protection Border Patrol Agent; $1 Million FBI Reward Announced

July 9, 2012

The Federal Bureau of Investigation (FBI) on July 9, 2012 released the following:

Individuals Charged Are Allegedly Responsible for Death of Agent Brian Terry

TUCSON, AZ— The indictment charging five individuals involved in the death of United States Border Patrol Agent Brian Terry was unsealed today in Tucson, Arizona, and a reward of up to $1 million for information leading to the arrest of four fugitives was announced by Department of Justice officials.

According to the indictment, Manuel Osorio-Arellanes, Jesus Rosario Favela-Astorga, Ivan Soto-Barraza, Heraclio Osorio-Arellanes, and Lionel Portillo-Meza are charged with crimes including first-degree murder, second-degree murder, conspiracy to interfere with commerce by robbery, attempted interference with commerce by robbery, use and carrying a firearm during a crime of violence, assault on a federal officer, and possession of a firearm by a prohibited person. A sixth defendant, Rito Osorio-Arellanes, is charged only with conspiracy to interfere with commerce by robbery.

The 11-count third superseding indictment (Case Number: CR-11-0150-TUC-DCB-BPV), which was handed up by a federal grand jury in the District of Arizona on November 7, 2011, alleges that on December 14, 2010, five of the defendants (Manuel Osorio-Arellanes, Jesus Rosario Favela-Astorga, Ivan Soto-Barraza, Heraclio Osorio-Arellanes, and Lionel Portillo-Meza) engaged in a firefight with Border Patrol agents. During the exchange of gunfire, Agent Terry was shot and killed. The indictment alleges that the defendants had illegally entered the United States from Mexico for the purpose of robbing drug traffickers of their contraband. In addition to the murder of Agent Terry, the indictment also alleges that the five defendants assaulted Border Patrol Agents William Castano, Gabriel Fragoza, and Timothy Keller, who were with Agent Terry during the firefight.

United States Attorney Laura E. Duffy said, “Agent Terry died in the line of duty while protecting his country. But he was more than a federal agent—he was a son, a brother, a co-worker, and a friend to many. The indictment unsealed today reflects the progress our dedicated law enforcement team has made piecing together this complex murder case. But there is more work to be done and we will not rest until we bring justice to the family of Brian Terry.”

“United States Border Patrol Agent Brian Terry made the ultimate sacrifice in December of 2010, while protecting our border,” stated James L. Turgal Jr., FBI Special Agent in Charge, Phoenix Division. “Today’s announcement is an important step forward in the pursuit of justice for Border Patrol Agent Terry and his family. It is our hope that the publicity surrounding this case will lead to information concerning the whereabouts of the remaining four fugitives. The FBI and our law enforcement partners will continue to pursue those individuals responsible for the murder of Border Patrol Agent Brian Terry.”

Manuel Osorio-Arellanes has been in custody since his arrest the night of the shooting. Rito Osorio-Arellanes has been in custody since December 12, 2010, when he was arrested by Border Patrol agents on immigration charges. The indictment is being unsealed today in order to seek the public’s assistance in locating the fugitive defendants.

This case is being prosecuted in federal court in Tucson by attorneys from the Southern District of California, Special Attorneys Todd W. Robinson, David D. Leshner, and Fred A. Sheppard. The U.S. Attorney’s Office for the District of Arizona is recused. This case is being investigated by the Federal Bureau of Investigation.

An indictment is a formal charging document and defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.

Wanted Posters
Ivan Soto-Barraza
Heraclio Osorio-Arellanes
Jesus Rosario Favela-Astorga
Lionel Portillo-Meza”

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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

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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 BP Engineer Arrested for Alleged Obstruction of Justice in Connection with the Deepwater Horizon Criminal Investigation

April 24, 2012

The U.S. Department of Justice (DOJ) on April 24, 2012 released the following:

First Criminal Charges to Result from the Deepwater Horizon Task Force Investigation

WASHINGTON – Kurt Mix, a former engineer for BP plc, was arrested today on charges of intentionally destroying evidence requested by federal criminal authorities investigating the April 20, 2010, Deepwater Horizon disaster, announced Attorney General Eric Holder, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Jim Letten of the Eastern District of Louisiana and Kevin Perkins, Acting Executive Assistant Director for the FBI’s Criminal Cyber Response and Services Branch.

Mix, 50, of Katy, Texas, was charged with two counts of obstruction of justice in a criminal complaint filed in the Eastern District of Louisiana and unsealed today.

“The department has filed initial charges in its investigation into the Deepwater Horizon disaster against an individual for allegedly deleting records relating to the amount of oil flowing from the Macondo well after the explosion that led to the devastating tragedy in the Gulf of Mexico,” said Attorney General Holder. “The Deepwater Horizon Task Force is continuing its investigation into the explosion and will hold accountable those who violated the law in connection with the largest environmental disaster in U.S. history.”

According to the affidavit in support of a criminal complaint and arrest warrant, on April 20, 2010, the Deepwater Horizon rig experienced an uncontrolled blowout and related explosions while finishing the Macondo well. The catastrophe killed 11 men on board and resulted in the largest environmental disaster in U.S. history.

According to court documents, Mix was a drilling and completions project engineer for BP. Following the blowout, Mix worked on internal BP efforts to estimate the amount of oil leaking from the well and was involved in various efforts to stop the leak. Those efforts included, among others, Top Kill, the failed BP effort to pump heavy mud into the blown out wellhead to try to stop the oil flow. BP sent numerous notices to Mix requiring him to retain all information concerning Macondo, including his text messages.

On or about Oct. 4, 2010, after Mix learned that his electronic files were to be collected by a vendor working for BP’s lawyers, Mix allegedly deleted on his iPhone a text string containing more than 200 text messages with a BP supervisor. The deleted texts, some of which were recovered forensically, included sensitive internal BP information collected in real-time as the Top Kill operation was occurring, which indicated that Top Kill was failing. Court documents allege that, among other things, Mix deleted a text he had sent on the evening of May 26, 2010, at the end of the first day of Top Kill. In the text, Mix stated, among other things, “Too much flowrate – over 15,000.” Before Top Kill commenced, Mix and other engineers had concluded internally that Top Kill was unlikely to succeed if the flow rate was greater than 15,000 barrels of oil per day (BOPD). At the time, BP’s public estimate of the flow rate was 5,000 BOPD – three times lower than the minimum flow rate indicated in Mix’s text.

In addition, on or about Aug. 19, 2011, after learning that his iPhone was about to be imaged by a vendor working for BP’s outside counsel, Mix allegedly deleted a text string containing more than 100 text messages with a BP contractor with whom Mix had worked on various issues concerning how much oil was flowing from the Macondo well after the blowout. By the time Mix deleted those texts, he had received numerous legal hold notices requiring him to preserve such data and had been communicating with a criminal defense lawyer in connection with the pending grand jury investigation of the Deepwater Horizon disaster.

A complaint is merely a charge and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

If convicted, Mix faces a maximum penalty of 20 years in prison and a fine of up to $250,000 as to each count.

The Deepwater Horizon Task Force, based in New Orleans, is supervised by Assistant Attorney General Breuer and led by Deputy Assistant Attorney General John D. Buretta, who serves as the Director of the task force. The task force includes prosecutors from the Criminal Division and the Environment and Natural Resources Division of the Department of Justice, the U.S. Attorney’s Office for the Eastern District of Louisiana and other U.S. Attorney’s Offices, and investigating agents from the FBI, Environmental Protection Agency, Department of Interior, U.S. Coast Guard, U.S. Fish and Wildlife Service and other federal law enforcement agencies.

The task force’s investigation of this and other matters concerning the Deepwater Horizon disaster is ongoing.

The case is being prosecuted by task force Deputy Directors Derek Cohen and Avi Gesser of the Justice Department’s Criminal Division, and task force prosecutors Assistant U.S. Attorney Richard Pickens II of the Eastern District of Louisiana and Assistant U.S. Attorney Scott Cullen of the Eastern District of Pennsylvania.”

18 U.S.C. § 1512

US v. Kurt E. Mix – Federal Criminal Complaint

US v. Kurt E. Mix – Affidavit supporting the Federal Criminal Complaint

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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

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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 and OFAC SDN Sanctions Removal.

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.


Weighing the Legal Ramifications of the Wal-Mart Bribery Case

April 24, 2012

The New York Times on April 23, 2012 released the following:

“BY PETER J. HENNING

The United States government puts a premium on corporate cooperation in foreign bribery cases, relying on companies to conduct thorough internal investigations and voluntarily disclose any wrongdoing.

Indications that Wal-Mart Stores may have taken steps to keep an internal investigation from digging deeper into $24 million in questionable payments — and later promoting an executive who may have been implicated in them — may affect how the government decides to proceed against the giant retailer.

Wal-Mart first disclosed in December that it had started “a voluntary internal review of its policies, procedures and internal controls pertaining to its global anticorruption compliance program.” That review was the result of reporting by The New York Times about bribery by Wal-Mart de México to secure permits and approvals to build new stores.

The company’s disclosures did not give any information about where the foreign bribery issues had arisen, only that the focus was on whether “permitting, licensing and inspections were in compliance with the U.S. Foreign Corrupt Practices Act.” Wal-Mart said it had informed the Justice Department and the Securities and Exchange Commission about the internal investigation, and the company issued a statement in response to the Times article that its outside advisers “have and will continue to meet with the D.O.J. and S.E.C. to report on the progress of the investigation.”

Companies caught up in investigations of foreign bribery often seek to exert a measure of control over the flow of information by meeting early and often with government investigators in an effort to establish credibility regarding the scope and integrity of the investigation, usually sharing the results as quickly as possible. If corporate counsel can demonstrate its reliability, then the Justice Department and the S.E.C. are more likely to accept the findings of the internal investigation without conducting an independent review.

Cooperation is also important because it is a significant factor for prosecutors in deciding how to resolve a case. The Justice Department has allowed companies to pay reduced fines and avoid a guilty plea to criminal charges by entering into deferred or nonprosecution agreements because they came forward voluntarily and readily provided information.

While Wal-Mart may be angling for the same type of resolution, it is questionable whether being prodded by The Times’s reporting to start an internal investigation shows that it took affirmative steps to address a problem. The company had dropped its earlier investigation, and likely would have let that sleeping dog lie if not for potential media scrutiny.

The Times article also raises two significant red flags for investigators that may cause them to take a more aggressive approach in the case. First, the Mexican bribery involved senior management at the subsidiary, not just low-level employees operating on their own. One factor cited in the Justice Department guidelines for deciding whether to charge a business organization is the “pervasiveness of wrongdoing within the corporation,” and the most important consideration “is the role and conduct of management.”

Second, Wal-Mart’s own investigators raised questions about $16 million in “contributions” and “donations” to local governments, but there was no further review of those payments. Simply ignoring these types of transfers is sure to raise questions for the government about whether the company can claim it had an effective compliance program back in 2005 when these issue first came to light, another important consideration in determining whether to file charges.

Wal-Mart also pointed out twice in its statement that the payments in Mexico took place more than six years ago. That may be an effort to explain why it may be unable to conduct a complete investigation. Whether the excuse will fly with the Justice Department and the S.E.C. remains to be seen.

The time lag may present a problem if the Justice Department wants to prosecute any individuals for bribery of Mexican officials. The statute of limitations for a violation of the Foreign Corrupt Practices Act is five years. The limitations period can be extended if the government was seeking evidence from a foreign country, but that does not appear to be the case because Wal-Mart only disclosed the issue in late 2011. So charges related to conduct before 2007 may be lost due to the passage of time.

One way the government can try to avoid the statute of limitations is to charge a conspiracy, which only requires that one act in furtherance of the criminal agreement take place within the last five years. If active steps by Wal-Mart executives to cover up payments to foreign officials occurred in 2007 or later, then prosecutors might be able to pursue that charge.

The statute of limitations will not work as much in Wal-Mart’s favor, however, because the company is required to annually file financial statements covering the previous five years. It is likely that questionable payments were not properly reflected on the company’s books and records. So even if no charges can be brought for any foreign bribery, at a minimum it could be charged with violating the accounting provisions of federal securities law for not properly disclosing the payments made by Wal-Mart de México.

Another potential avenue that prosecutors are likely to investigate is obstruction of justice under 18 U.S.C. § 1519, which was added by the Sarbanes-Oxley Act. If there is evidence that anyone at the company covered up or destroyed records “with the intent to impede, obstruct, or influence” a future investigation, that could be grounds for a criminal charge.

One factor working against Wal-Mart is that the Justice Department may be looking for a prominent case to demonstrate the need for vigorous enforcement of the Foreign Corrupt Practices Act as a response to recent criticisms of the law. The Chamber of Commerce, which hired a former attorney general, Michael B. Mukasey, to lobby for changes to the statute, has argued that aggressive application of the law has caused companies to shy away from overseas investments for fear of being scrutinized.

The Times article makes it clear that Wal-Mart appeared to be more concerned with protecting its fast-growing Mexican operation than with thoroughly investigating allegations that corruption helped fuel its success. Prosecutors can make an example of Wal-Mart to show that the Justice Department will not tolerate foreign bribery, even by a leading American company. That would bolster the argument that revising the statute would send the wrong message to the rest of the world.

The payments at issue are comparatively paltry, perhaps totaling less than $50 million, although that number could increase as the internal investigation moves forward. The ultimate cost to Wal-Mart for the legal and accounting fees for the investigation, along with any monetary penalties the Justice Department and the S.E.C. may seek, will probably far exceed the bribes.”

18 U.S.C. § 1519

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

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

————————————————————–

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 and OFAC SDN Sanctions Removal.

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.