“Nearly $1 million from charters went to firms named in FBI probe”

August 18, 2014

Chicago Sun-Times on August 18, 2014 released the following:

By: DAN MIHALOPOULOS

“Contractors facing scrutiny in an ongoing federal investigation of Concept Schools have been paid nearly $1 million over the past three years for work at three Chicago Public Schools-funded campuses run by the Des Plaines-based charter operator, records show.

In June, the FBI raided 19 Concept Schools locations in Illinois, Indiana and Ohio, including the group’s Des Plaines headquarters. Search warrants showed they were seeking records concerning Concept’s use of the federal “E-rate” program and companies hired under that program, which helps pay for high-tech upgrades.

The agents also were looking for records regarding top Concept officials, the Chicago Sun-Times reported last month.

No one has been charged. The FBI has said only that the investigation is a “white-collar criminal matter.”

The CPS-funded work done by the contractors named in the FBI search warrants has ranged from selling Concept computers and uniform polo shirts to organizing professional-development seminars.

Concept operates three schools in Chicago. All rely almost entirely on public funding.

Concept’s Chicago Math and Science Academy in Rogers Park — one of the schools the FBI raided June 4 — was approved by CPS officials 10 years ago.

The charter operator’s Horizon Science Academy McKinley Park at 2845 W. Pershing Rd. and Horizon Science Academy Belmont at 5035 W. North Ave. have been open for a year after being initially rejected by CPS because of questions regarding student performance at CMSA.

Concept appealed to the Illinois State Charter School Commission, which overrode CPS, ordering them to finance the two schools with tax dollars.

The three Chicago Concept schools have paid more than $283,000 since the start of 2011 to Advanced Solutions in Education of Schaumburg, records show. The company and its founder and former chief executive, Ozgur Balsoy, were named in FBI search warrants served at

Concept’s headquarters and at its schools in Rogers Park and Peoria.

ASE was a consultant for Concept on its applications for federal E-rate funding. The company also was hired to do other work for Concept, including organizing seminars for school administrators and teachers.

Balsoy previously was an administrator at a Concept school in Columbus, Ohio. He formed ASE in Ohio in 2009, expanding to Illinois in 2011. ASE listed him as “sole owner” until 2012. He’s now listed as vice president.

ASE’s president, Erdal Aycicek, formerly served was treasurer of the Niagara Foundation, based in downtown Chicago. Like Concept and many of its contractors, the foundation was founded and continues to be led by Turkish immigrants, many of them with ties to the global Gulenist movement led by Muslim cleric Fethullah Gulen, who now lives in Pennsylvania.

Two other ASE executives — Huseyin Alper Akyurek and Esat Albulut — also previously worked for Concept as administrators at schools in Ohio.

ASE executives did not return calls seeking comment.

Another company listed in the search warrants, Core Group Inc. of Mount Prospect, has been a major contractor for Concept’s schools in Chicago. The three schools have paid more than $550,000 to two Core subsidiaries for goods including computers and polo shirts with school logos on them.

Core’s president, Ertugrul Gurbuz, who was named in the search warrants, also founded Quality Builders of Midwest Inc., a Concept construction contractor whose work included building a gym addition at CMSA at 7212 N. Clark St.

Gurbuz referred questions to attorney Patrick Cotter, who said Friday the company is “in the process of complying” with a grand-jury subpoena it got as part of the FBI probe. Cotter declined to say what Core was asked to turn over.

A Core subsidiary was cited in a 2012 audit, done for Fulton County, Georgia, school officials, that questioned why a Gulen-affiliated charter school in that state bought polo shirts from Core Design & Production when “there were cheaper prices to be obtained.” The principal of the Georgia school told auditors he looked online for a polo shirt vendor and found Core — though the auditors said they found no mention of polo shirts on the company’s website.

Core was started in 2005 by Guclu Koseli, who was a founding board member for Concept in Illinois.

Another contractor named in the FBI search warrants — Signature Maker Inc. of Hoffman Estates — has been paid more than $112,000 by Concept’s Chicago schools, Concept records show.

Signature Maker owner Ergun Koyuncu, who was also named in the search warrants, would not comment.

Concept’s vice president, Salim Ucan, also declined to comment, citing the ongoing FBI investigation.

The federal E-rate program requires competitive bidding in hiring contractors in an effort to ensure taxpayer dollars are spent wisely. There’s no such requirement, though, imposed on charter schools by either CPS or the state charter commission, even though the privately run schools depend almost entirely on tax dollars and CPS requires competitive bidding for its own schools.

Nor do they require charter operators to report to officials who their vendors are or how much they are paid.

None of the deals that Concept’s Chicago schools made with Core or ASE was awarded via competitive bidding.”

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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

Federal Mail Fraud Crimes

Federal Crimes – Appeal

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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.


Prosecutors rest fraud case against alleged Indy financier

June 19, 2012

The Herald Bulletin on June 19, 2012 released the following:

“Associated Press

INDIANAPOLIS — Federal prosecutors wrapped up their case Monday against a prominent Indianapolis businessman who they say bilked investors out of $200 million, much of it life savings.

For the past week, prosecutors have presented evidence against Tim Durham, business partner James F. Cochran and accountant Rick D. Snow. The men are accused of raiding the Akron, Ohio-based Fair Finance Co. and allegedly used a Ponzi scheme to steal the savings from about 5,000 mostly elderly investors. They are charged with 12 felony counts of wire fraud, securities fraud and conspiracy to commit wire and securities fraud.

One of them, Donald Russell of Doylestown, Ohio, testified that he lost $350,000, and his 82-year-old mother lost $125,000 and died a month later. He said he believes the stress of losing her life savings pushed her over the edge.

“They have no hearts or souls,” Russell said of Durham and his partners.

Defense attorney John Tompkins said Durham is innocent, but told The Indianapolis Star that he feels sorry for Russell.

“I don’t think that there are any words that could begin to address the situation that he faces,” Tompkins said. “He had a horrible circumstance, and words cannot console him.”

Prosecutors presented analyses of forensic accountants that showed money from Fair Finance being used to help pay for an expensive Playboy party, Durham’s classic cars and trips to luxury resorts and casinos.

Donald Fair, who sold his company to Durham and Cochran in 2002, testified that the men loaned investors’ money to themselves and their businesses and never repaid it.

Prosecutors played recorded phone calls in which Durham and Cochran allegedly made up excuses to give investors about why their interest checks had stopped and they couldn’t cash in. The men tried to persuade Ohio regulators to allow them to sell another $250 million in investment certificates, prosecutors said, and took cash deposits from investors to whom they promised to issue more investment certificates later.

Cochran doubted regulators would shut down the company, according to recordings played in court.

“If they’re gonna blow us up, we’re gonna blow them up,” Cochran allegedly said in a phone call with Durham on Nov. 13, 2009. “I mean nobody wins and everybody loses, but we lose the worst. … I mean it would be a catastrophic event in the state of Ohio. And I’m sure they don’t want that kind of headline.”

Prosecutors presented emails and recordings in which the men discussed layoffs, selling off assets and other ways to cut costs or conceal the loans, yet Cochran also asked to raise his salary to $1 million a year.

In the weeks before an FBI raid shut down Fair Finance in November 2009, prosecutors said Monday, Durham and his partners transferred $85 million from the parent company, DC Investments, to Fair’s books to show more assets on the company’s balance sheet, the Indianapolis Business Journal reported.

Defense attorneys are expected to present their case Tuesday morning, and closing arguments are scheduled for Tuesday afternoon. Jury deliberations are expected to begin Wednesday.

Attorneys for Cochran and Snow have declined to talk about the trial, and Tompkins refused to discuss his defense strategy. He said he didn’t know if Durham would testify in his own defense.

“That will be his decision, but I will advise him,” Tompkins said. “We haven’t had our discussion.””

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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

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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.


FBI arrests 20 people in alleged $3M heroin bust on Long Island

March 14, 2012

The New York Post on March 13, 2012 released the following:

“By KIERAN CROWLEY and MITCHEL MADDUX

The FBI staged raids on homes across Long Island this morning in a major operation aimed at taking down a heroin trafficking ring, and among those charged are a former Suffolk County police officer and the spouse of a NYPD cop, officials said.

Agents took 20 people into custody — a group that allegedly had drugs estimated to have a street value of at least $2.75 million.

Among those being charged are a retired Suffolk County police officer and his daughter, authorities said.

The spouse of an NYPD officer was also rounded up in the bust.

Authorities say the ringleader is Jose Perez, 26, who oversaw a heroin distribution scheme that focused on suburban customers living on Long Island.

The FBI, aided by Nassau County police and other law enforcement agencies, were making arrests in Nassau and Suffolk Counties, as well as in Brooklyn and Queens in New York City, officials said.

Those arrested will be arraigned later today before judges in Central Islip federal court.”

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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 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.


FBI raids wrong apartment in Fitchburg, Massachusetts

February 1, 2012

KSDK.com on January 31, 2012 released the following:

“By Victoria Block

Fitchburg, MA (WHDH/CNN) – An FBI raid called Operation Red Wolf has the agency slightly red-faced.

The two-year investigation into drugs and weapons led them to the second floor of a building in Massachusetts, but to the wrong apartment.

“I took two steps, face the second door, and I heard the click of a gun, and saying, ‘FBI, get down,’ so I laid down on my living room floor,” said Judy Sanchez.

Sanchez describes how she was terrorized during an early morning FBI raid in Fitchburg.

“I was screaming, ‘You have the wrong apartment, you have the wrong apartment,’ over fifty times. And then I seen the big blade coming down my door,” she said.

The feds chain-sawed their way into her second floor apartment before realizing they had hit the wrong spot. Their suspect was next door, and they eventually got him. But not before humiliating Sanchez, scaring the daylights out of her 3-year-old daughter, Ji’anni, who was left alone and screaming in another room.

“I was… 35 minutes, just holding my puppy, she was just shaking as much as I was, it was very cold, doors were open, they didn’t let me get my jacket or even so much as get my daughter. It was horrible,” said Sanchez.

The FBI says the agent repeatedly apologized for the mistake and Sanchez was reimbursed for the broken door. But it was hardly enough to appease her anger or lessen her fear. She’s taken to sleeping with a baseball bat ever since the raid, and her daughter continues acting out.

“Anytime anybody knocks, she freezes up. A two-year investigation and you still knock down the wrong door? That’s crazy,” said Sanchez.

As for the real suspect, Luis Vasquez faces up to 40 years in prison, if he’s convicted.

WHDH/CNN”

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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.


FBI Raids Wagner Chiropractic Clinic in Daytona Beach

August 4, 2011

The Daytona Beach News Journal on August 4, 2011 released the following:

“DAYTONA BEACH — FBI agents teamed up with the Volusia Bureau of Investigation this morning to serve a search warrant on the Wagner Chiropractic Clinic, 542 N. Ridgewood Ave.

That information was confirmed by Gary Davidson, spokesman for the Volusia County Sheriff’s Office, who said units have been on-scene since about 7:54 a.m.

“Since the search is pursuant to an ongoing federal investigation and VBI is merely assisting and not the lead agency, I’m unable to comment further or provide any additional information,” he said in an e-mail.

Joseph Wagner, a chiropractic physician and licensed acupuncturist, is the owner of the clinic, according to Volusia County Property Appraiser’s records.”

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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