“In New York counterterrorism sting, a setback for federal law enforcement”

August 15, 2014

The Washington Post on August 14, 2014 released the following:

“By Adam Goldman

When Ahmed Abassi arrived in the United States for the first time in March 2013, the Tunisian student settled into a historic, neo-Gothic apartment building in Manhattan’s Financial District.

Unknown to him, the apartment was wired with audio recording devices, and Abassi’s American host was an undercover FBI agent. Abassi, then 26 and suspected of terrorism ties, had landed in an FBI sting, part of an elaborate operation that stretched from New York to Quebec City to a small town in Tunisia.

Abassi was caught on tape discussing “the principle that America should be wiped off the face of the earth,” with people he believed to be co-conspirators, one of whom was the FBI agent, according to court records. At one point, Abassi suggested “putting bacteria in the air or in a water supply.”

But last month, Abassi, who declined to be interviewed, pleaded guilty to relatively minor charges that did not include any terrorism enhancements that could have sent him to prison for years, and he is not contesting a deportation order.

The case was a rare setback for the FBI and federal prosecutors, which have successfully targeted suspected terrorists using sting operations, typically ending with the defendants about to embark on what they believe is a terrorist attack with fake weapons or bombs supplied by the bureau. Guilty verdicts and long prison sentences follow.

According to a recent report by Human Rights Watch, nearly 50 percent of the more than 500 federal counterterrorism convictions since the Sept. 11, 2001, attacks have “resulted from informant-based cases; almost 30 percent of those cases were sting operations in which the informant played an active role in the underlying plot.”

Among the more prominent prosecutions, a Moroccan man was convicted for planning a suicide bombing at the Capitol. Amine Mohamed El Khalifi, an illegal immigrant who lived in Alexandria, was arrested wearing a suicide vest that he believed to be real and had been provided by undercover FBI agents. In Portland, a Somali-American was convicted of planning to remotely detonate an 1,800 pound bomb at a Christmas tree lighting ceremony. The device was, in fact, inert and had been supplied by the bureau. In one 2009 case, the FBI arrested a group of men in New York state — the “Newburgh Four” — and charged them with plotting to blow up a pair of synagogues in the Bronx with fake bombs provided by an informant.

Human rights groups allege that the government is making terrorists out of people who otherwise would not have the ability or the will to move forward with an attack. “The government pursues people with mental or intellectual disabilities or people who are desperately poor with an aggressive informant or undercover agent to get them to agree to commit terrorist acts,” said Andrea Prasow, deputy director of Human Rights Watch’s Washington office.

And the use of sting operations has also drawn some criticism from the bench. In the Newburgh case, the federal judge said the government “made them terrorists” and said the “buffoonery” of one of the defendants was “positively Shakespearean in scope.”

But no defendant, including in the Newburgh case, has successfully claimed in court that he was entrapped by overzealous investigators.

At a recent security forum in Aspen, Colo., former FBI director Robert Mueller defended the bureau’s tactics against charges of entrapment. Mueller said agents and prosecutors go to great lengths to make sure they do not cross that line.

“We know at the outset that anytime we do this that the defense is going to be entrapment and there has to be substantial predication to get over that hurdle,” he said. “It’s been the defense in probably dozens of terrorism cases that have been tried since Sept. 11. And I challenge you to find one of those cases in which the defendant has been acquitted asserting that defense. I don’t believe there is one out there.”

Abassi was arrested last year and charged with two counts of fraud and misuse of visas to facilitate an act of international terrorism. Federal prosectuors in the Southern District of New York withdrew the terrorism enhancements against Abassi before they could be adjudicated, and some activists said an entrapment defense might have tested the government’s winning record.

An FBI spokesman in New York declined to comment.

Abassi was more talker than terrorist and resisted attempts to move beyond words to direct action, according to his attorney, Sabrina P. Shroff, a federal public defender. She described the case against her client as a failed entrapment in which the government attempted to prey on Abassi’s “bad thoughts and bad speech.”

Fateful meeting

Abassi first came to the attention of the FBI in Canada, where he was studying for an engineering degree at Laval University in Quebec City, according to court records. His family said his sister followed him to Canada, where he also met and married a Tunisian woman.

Among Abassi’s new circle of friends was Chiheb Esseghaier, a doctoral student. The FBI and Canadian authorities began to suspect that Esseghaier and Abassi were part of a terrorist cell, according to court records.

Esseghaier introduced Abassi to a man from New York, Tamer El Noury, who said he was born in Egypt and had immigrated to the United States when he was a child. He looked like one of Abassi’s favorite performers, a Syrian singer named George Wassouf. The two got along famously. When in Quebec, Noury came to Abassi’s house to eat.

Neither Abassi nor his wife, Yousra, ever suspected that Noury was an FBI agent.

“We had no idea,” his wife said in an interview.

The New Yorker appeared wealthy and said he ran a successful real estate company in the city. As a wedding gift, he said he would pay for Abassi and Yousra to visit Manhattan, she said.

Abassi declined the invitation, and instead he and his wife flew to Tunisia in December 2012 to renew their wedding vows. “We danced, we invited all our relatives and friends and we enjoyed together,” his wife said.

The euphoria didn’t last. That month, the Canadians revoked Abassi’s visa without explanation. Officials decided to test Abassi’s willingness to conduct an act of terrorism.

Noury began what Abassi’s attorney described as an aggressive campaign to get her client to come to New York from Tunisia. Cut off from his wife, who was able to return to Canada to finish her education, Abassi seemed determined to secure a new visa so he could return to her side. He wanted to finish his master’s degree, and he had a job offer with a major mining company. But no Canadian visa was forthcoming.

Noury called Abassi’s wife in February 2013.

“We can get him in New York where he can stay with me in the apartment, or he will have his own apartment, and if, God willing, you can take some time off from work, we can bring you here to stay with him so that you can spend some time together,” said Noury, according to a transcript of the call.

Abassi agreed to fly to New York after U.S. law enforcement arranged a visa for the “sole purpose of advancing the investigation,” according to court records.

Move to New York

In March 2013, Abassi flew to John F. Kennedy International Airport, where he was briefly questioned by immigration authorities. Noury met him at the airport.

The two drove to the downtown apartment, where the call to prayer sounded electronically five times a day to highlight Noury’s piety. The undercover agent provided Abassi with a cellphone and laptop. The rent was free.

An unexpected visitor soon arrived: Esseghaier, who said he was attending a scientific conference in New York.

The three men met frequently. Authorities say Esseghaier told Abassi about his plans for a terrorist attack. But Abassi did not want any part of them, frustrating the conspirator, who urged Noury to throw him out of the apartment. Esseghaier called Abassi “useless” and not a “true brother.”

Abassi continued to make inflammatory statements, however. He argued that the Koran allowed “Muslims to attack Americans in the same ways Americans had attacked Muslims, including the killing of women and children,” according to court records.

On April 22, 2013, Abassi was questioned by the FBI. Prosecutors said he lied repeatedly about his relationship with Esseghaier and whether he knew the Tunisian planned to engage in terrorism. The FBI arrested Abassi. That same day, Canadian authorities took Esseghaier and another man into custody, charging them with conspiracy to attack an Amtrak train traveling from New York to Toronto.

U.S. prosecutors said Abassi acknowledged possibly radicalizing Esseghaier, and that the two had talked about committing terrorist acts, according to court records. They said Abassi did not want to participate in Esseghaier’s plans only because “the number of American casualties from such an operation would be too few.”

Shroff said her client did not radicalize Esseghaier.

“If you actually listen to the conversations between Chiheb [Esseghaier] and Ahmed, you’ll realize Ahmed is talking about words and verses from the Koran,” his attorney said. “He’s telling Chiheb what’s in the Koran. That is not radicalizing.”

Authorities also said the men had received guidance from members of al-Qaeda.

A U.S. law enforcement official, speaking on the condition of anonymity to discuss sensitive details of the case, said the FBI had to end the U.S. operation against Abassi prematurely because the Canadians were concerned about the threat Esseghaier posed and arrested him.

The official said more will come out about the men, including Abassi, when Esseghaier goes on trial in Canada. The official said the men were part of a cell and presented a serious threat, one the FBI helped eliminate.

“It was a good case,” the official said.

Abassi spent months in jail, part of that time in a segregated housing unit, before his attorney received transcripts of the FBI recordings. Shroff said it was apparent to her that Abassi had not provided the evidence the FBI needed to make its case, that he had not stepped over the line into active participation in a plot.

Prosecutors seemed to reach a similar conclusion. They told Shroff they would drop the terrorism enhancements if Abassi agreed to plead guilty to the charges that included putting false information on an application for a green card — the same one the undercover agent helped him complete — and making a false statement to immigration officials.

“Mr. Abassi would not be asked at the time of the plea, if he accepted this offer, to in any way admit that either of these crimes touched on a crime of international terrorism,” Assistant U.S. Attorney Michael Ferrara told the judge during a hearing in April.

Ferrara would not discuss the case, but another U.S. law enforcement official said there were considerations if the case went to trial, including revealing the true identity of the FBI undercover agent.

“There were strategic discussions,” the official said. “We had a good undercover who would then be exposed. Was it worth it to get a couple of extra years in prison? It’s not clear the judge would have given him more time.”

The official added that Abassi pleaded guilty to a felony and “will never again be in the U.S. That’s much better than letting him float around out there and never be charged at all.”

For Shroff, the reason prosecutors backed off is clear: “He was entrapped,” she said.

At sentencing, prosecutors called for a longer prison term than the six months suggested by the guidelines, arguing that Abassi was far more dangerous than “simply an immigration fraudster” and had “dangerous, extremist views.”

In a phone interview, his sister Amira Abassi said: “My brother is not a monster. That is the reality. He is not evil.”

On July 16, Judge Miriam Cedarbaum waved away government calls for a stern sentence. The 84-year-old judge told Abassi to stay clear of trouble.

“I hope that you will think very seriously about the events of the last year and will decide to always abide by the laws of the United States,” she said. “And if you do that, I wish you good luck.”

Abassi is being held in an immigration detention facility in New Jersey, where he awaits deportation to Tunisia.”

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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.


Christopher Tappin, extradition’s forgotten victim who is awaiting US trial, talks of his strange life in Texas

October 22, 2012

The Telegraph on October 21, 2012 released the following:

“By Philip Sherwell

As he strolled off the fairway with his scorecard at the 18th hole, the white-haired man in blue polo shirt and khaki shorts could have been just another relaxed late-afternoon golfer.

But a closer look revealed two pieces of extra “kit” not needed by his playing partners at the country club in the affluent leafy suburbia north of Houston.

Inside the white sock on his left foot was the bulge of an ankle bracelet, while a satellite GPS tracking device blinked in a holster on his belt.

For this was Christopher Tappin, the retired British businessman, former president of the Kent Golf Union and epitome of Home Counties respectability who will go on trial in two weeks [NOV 5] in a Texas courtroom charged with conspiring to supply batteries for Iranian missiles.

His case made headlines as he fought extradition from Britain for five years, under the lopsided treaty passed by the Labour government after the Sept 2001 terror attacks.

This requires evidence of “probable cause” before an American is extradited to Britain, a far higher standard of proof than the “reasonable suspicion” that suffices to send a Briton to trial in the US.

Mr Tappin, 65, who has consistently denied the charges, eventually lost that battle in February and was handed over to the US authorities. The next two months were spent in the hellish conditions of a federal prison in New Mexico, much of the time in solitary confinement.

In April, he was released under strict bail conditions – including wearing the ankle bracelet and GPS tracker to ensure that he does not leave the three Texas counties where he is allowed out before his overnight curfew.

And last week, he spoke for the first time about his life since then in a wide-ranging interview with The Sunday Telegraph.

As he finished the 18 holes in a brisk round of 75, the 65-year-old grandfather looked as calm as the new friends he has made among the businessmen and lawyers at the club.

There was no indication of the inner turmoil that he must feel as he prepares to face an agonising dilemma next month in a federal courtroom in El Paso.

If he pleads not guilty and loses in a country with one of the world’s highest conviction rates, then he could be jailed for up to 35 years in the US – effectively a life sentence away from his sick wife, two children and grandson.

But in a common US legal move, prosecutors are expected to offer him a plea bargain that would give him a much shorter prison term and to probably repatriation to a British jail – provided he admits at least some of the charges.

Mr Tappin, from Orpington, owned a freight shipping company and is accused of trying to buy 50 oxide batteries to power Iranian Hawk missiles after a colleague made contact with a front company set up by the Department of Homeland Security.

He has, however, always insisted he was the unwitting victim of an FBI sting operation and believed the batteries were for commercial use in the Netherlands.

For Mr Tappin, the rounds of his beloved golf that he plays most days are a solace and escape. “Without the golf, I’d go raving mad,” he said. “It keeps me from thinking too much about the case, but it’s tough, it’s very tough.”

His failed battle against extradition was one among a series involving Britons accused in the US of alleged crimes that took place on UK soil.

Last week, he heard some bittersweet news about the most high-profile of all such cases during his daily telephone call from his wife [] Elaine, who is in Britain and unable to visit him because she suffers Churg-Strauss syndrome, a severe allergic condition that endangers the body’s vital organs.

She told him that Theresa May, the Home Secretary, had ruled that the Briton, Gary McKinnon, accused of hacking into US military computers and causing 300 of them to crash, would not be handed to the US authorities for trial. Her last-minute decision to block his extradition frustrated US officials, who said publicly that they were “disappointed” but were privately furious.

Mrs May took the decision on medical grounds – Mr McKinnon suffers from Asperger’s, a form of autism and his family had argued that he would not survive life inside an US jail, even awaiting trial.

But she also announced plans to introduce a so-called “forum bar” under which judges would decide whether alleged offences should be tried in Britain rather than in the US. If such a law had already been in place, Mr Tappin might have been tried in Britain rather than in America – and as key evidence was collected from a sting operation, the case could have been thrown out before reaching court.

“I’m delighted for Gary and his mother Janis,” he said. “I’ve met them several times and this is great news.

“Gary would never have survived the prison they slung me into, not in his condition. It was the psychotic screaming throughout the night that got me. And the head-banging. And God help him if he’d had to go through solitary like I did, with the lights on 24 hours and the only human contact when they give you a meal three times a day. He couldn’t have coped.

“I desperately hope this presages a change to the system. Something has to be done with that treaty and we’ve been advocating for a ‘forum bar’ for a long time. It’s got to be changed.

“I hope I am the final Brit to be extradited under this treaty as it stands. My case should never be being tried here in the US, I was living in the UK when these alleged offences took place, the crimes were allegedly committed in Britain and the evidence against me comes from the UK, so why am I not being tried in the UK?”

As Mr Tappin awaits that trial, he is trapped in a “gilded cage” existence, and one that is eating up the money he made running his freight business.

After his release on bail, he initially lived at his lawyer’s $2 million home in an upmarket neighbourhood that is built around a Jack Nicklaus-designed golf course and protected by private guards and security barriers.

He is now renting his own one-bedroom apartment in a nearby gated community in the wealthy suburban belt north of Houston called Woodlands. “There’s a gym and a swimming pool that I use and I try and keep myself physically fit, though mentally is a whole different challenge,” he said.

“It a very nice area with some lovely people, but you pay a heavy price for life in a paradise,” he noted wrily. “I miss my family and friends and home deeply. Life is boring, to be honest. Each day is deja deja deja déjà vu.”

He is not allowed access to email or the internet under the terms of his bail, but talks each day with his wife and friends and also spends several hours writing and answering letters in longhand.

And he does of course have his golf, playing with his own clubs after they were brought out on a visit by his son Neil, the deputy editor of Golf Monthly magazine. “I’m playing well and happy to get my game back after his two months in jail,” he said. “But these are hardly the circumstances in which I’d want to sharpen my game.”

Pointing to his ankle bracelet and GPS device he added: “And of course, I have to wear these things. It’s not comfortable, but you get used to it. The court charges me a $9 fee a day for the honour of wearing them.”

He has to be home each night from 10pm to 6am under a curfew, and most evenings he cooks for himself. So one big plus, he said, was the discovery of Goodwood’s British Market, a nearby store that specialises in foods from Britain. “They’ve got it all, bangers, fish and chips, Heinz baked beans, HP sauce, Robinson marmalade and the like,” he said.

But he is lonely and desperately pines for home. “It’s nice to hear an English accent,” he said during the interview. “At least the heat of summer has relented. This is the only place where I know where they have to chill the outdoor pools with ice.”

Adding to the strain is the deterioration in his wife’s health. Mrs Tappin visited him in June, but is now no longer allowed to fly on doctor’s orders and is awaiting an operation.

“Elaine is very unwell and this whole situation is really aggravating her condition,” he said. “It used to be me who cared for her. That’s now fallen to my daughter Georgina, but it’s a real strain for her.”

No family will be in El Paso on Nov 5 when appears in court – quite possibly in the manacles and jumpsuit that he had to wear for earlier hearings. “It really wouldn’t serve any purpose to have them there,” he said with resignation. “I just need to get home to them.” As the trial date approaches, the strain is taking its toll. “I used to feel OK, that I have a strong case and didn’t worry too much about it. But the nearer it gets the more I worry.”

He has lost weight and runs his hand through his thinning hair as he spoke, sighing and blowing out air as he talks about his exasperation at his plight.

“It’s utterly devastating to be in this situation at my stage in life,” he said. “I should be spending my retirement looking after my wife, enjoying my new grandchild and playing some golf. Extradition was a very bitter pill to swallow.”

He is not only dealing with the enormity of his legal challenge. He is also undergoing a crash course in American culture, and in particular that of its biggest state, as he finds himself living in a country that he only ever visited as an occasional tourist, the last time 10 years ago.

“Texas is a funny old pace and everything’s just so very different from Kent,” he mused. “They go on about road deaths here but there are guns everywhere and they don’t seem to care. There’s even a Gun Channel on the TV, for heaven’s sake.

“I have made some good friends playing golf, but it is difficult to reconcile how nice some of the people are and how harsh the system is. It’s not just me of course. They’re just as harsh on their own people. They don’t call it ‘Incarceration Nation’ for nothing. There is a huge prison population and the prison industry is a big business.”

Mr Tappin talks regularly to David Bermingham, one of the “NatWest Three”, the British bankers who were also controversially extradited to the US for financial crimes allegedly committed in the UK. The men were jailed in the US after admitting a single offence and sent home to serve out their sentences.

“It’s good to talk to someone who has been in this situation,” he said. And he hopes that a change in the extradition treaty will come in time to help Richard O’Dwyer, a 24-year student in Sheffield, who faces jail in the US for hosting a television download website from his bedsit.

Meanwhile, Mr Tappin is tangling with another immediate headache. His passport has been removed so he cannot board a flight. But his bail conditions restrict his movements to two counties in and around Houston, as his lawyer is based there, and El Paso, where he faces trial – but not the swath of Texas through which he would have to drive between them.

“I’m not quite how I’m even going to get to court,” he said. “What a situation.””

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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 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 considered a sting aimed at Newt Gingrich in 1997

December 16, 2011
Newt Gingrich
(Photo: Washington Post)

Washington Post on December 15, 2011 released the following:

“By James V. Grimaldi

It is a curious case in the annals of the FBI: The bureau considered a sting operation against then-House Speaker Newt Gingrich after sifting through allegations from a notorious arms dealer that a $10 million bribe might get Congress to lift the Iraqi arms embargo.

The FBI ended up calling off the operation in June 1997. It decided there was no evidence that Gingrich knew anything about the conversations the arms dealer was secretly recording with a man who said he was acting on behalf of Gingrich’s then-wife, Marianne, according to people with knowledge of the investigation.

But details of the case, which became public this week in an article and documents posted online by a nonprofit journalist, show how a series of second- and third-hand conversations alleging that the top man in Congress might be for sale caught the attention of federal investigators.

“There are so many falsehoods,” Marianne Gingrich said Thursday. “The FBI, they should have been protecting me, not going after me. This is scary stuff.”

Her lawyer, Victoria Toensing, said: “There was no basis whatsoever for an investigation. These were people puffing, which means they were making up access to a high-level goverment person.”

Gingrich’s presidential campaign did not provide immediate comment when asked for response Thursday.

The investigation began after the arms dealer, Sarkis Soghanalian, told federal prosecutors and FBI agents in Miami that Marianne Gingrich said during a meeting in Paris in 1995 that she could provide legislative favors through her husband. The case progressed to the point that it was deemed a major investigation requiring approval in Washington.

Soghanalian, a convicted felon who is now dead, said he wanted the speaker’s help in getting the arms embargo lifted so he could collect an $80 million debt from Iraqi leader Saddam Hussein, according to an FBI document filed to obtain continuing wiretap authorization for the case. The facts in the document were “developed through a cooperating witness,” whom The Washington Post has confirmed was Soghanalian.

Soghanalian said Marianne Gingrich assured him “she would be able to do anything [Soghanalian] requested of her ‘as long as they had an understanding,’ ” the document states.

Several months after the meeting in Paris, a man who had been on the trip with Gingrich and Soghanalian told the arms dealer that the embargo could be lifted for the right price. In conversations recorded by Soghanalian, the man, a Miami car salesman named Morty Bennett, stated that Marianne “wanted 10 million dollars to get the job done, five million of which would go directly to Marianne Gingrich,” the document states.

Bennett said in an interview Thursday, “I knew somebody and introduced them to somebody and that was it. Thank you for calling, and don’t call me back.”

The document and the existence of the aborted sting was first revealed this week in a 6,400-word story by Joseph Trento, who operates a Web site called DC Bureau (www.dcbureau.org). Trento interviewed Soghanalian several times before his death in October at 82.

The investigation foundered because there was no evidence against Newt Gingrich to establish “predication” — a basis to believe the target was engaging in or about to engage in criminal activity — according to people familiar with the investigation who spoke on the condition of anonymity because of the sensitivity of the case. FBI policy requires predication before significant undercover operations are initiated.

“There wasn’t any direct evidence that he knew anything,” said a source who spoke on the condition of anonymity. “The rules are you just can’t go in there and do an integrity check on someone.”

Bruce Udolph, the former chief federal corruption prosecutor in Miami, said he could not confirm the existence of the investigation but added, “With respect to Speaker Gingrich, I am not aware of any direct, credible evidence linking him to any conspiracy to receive a bribe from anyone.”

The Justice Department referred calls to the FBI, which declined to comment on the case.

The Armenian-born Soghanalian was a high-volume arms dealer nicknamed “the Merchant of Death” who was indicted by federal authorities in South Florida for conspiring to sell U.S. helicopters to Iraq in violation of a U.S. ban. His 61 / 2-year sentence was reduced to two years in 1993 because of his cooperation with federal authorities.

He was already a federal informant when he met with Marianne Gingrich in Paris in July 1995. Also in attendance at those meetings were Bennett and Howard Ash, who had earlier worked with Marianne Gingrich at the Israel Export Development Corp., a company that advocated for a free-trade zone in the Gaza Strip.

Marianne Gingrich, who had left her position as vice president of marketing at IEDC, said she went to Paris at the request of her former boss to help get an investment from Soghanalian in IEDC.

The FBI document states that Soghanalian, Marianne Gingrich, Ash and Bennett spent several days together in Paris. Gingrich said “her relationship with her husband was purely a relationship of convenience,” the document states. “She told [Soghanalian] that she needed her husband for economic reasons, and that he needed to keep her close because she knew of all his ‘skeletons.’ ”

“She also told [Soghanalian], ‘It’s time for me to make money using my husband, and after we get started doing this, it will be easy,” the document says.

In January 1996, the document states, Soghanalian said he received a call from Bennett, who said he was acting on behalf of Marianne Gingrich and asked for $10 million to get the embargo lifted. Bennett wanted more than $1 million in advance, $300,000 in cash. The rest of the money was to be wired into Bennett’s bank account so that it could be transferred to the Institute for Advanced Strategic and Political Studies, an Israeli-based think tank with offices in Washington where Ash was a fundraiser, according to the document.

“Bennett stated that the way they had the deal structured nobody would ever be able to prove it was anything illegal,” the document states. “Bennett stated that it would be handled like a campaign payment and ensured the source that [Marianne] Gingrich knew what she was doing. Bennett stated that the money was for Gingrich and her husband and that they needed buffers to protect them.”

Marianne Gingrich said Thursday, “All that’s hogwash.”

Soghanalian asked for a telephone call with Marianne. Bennett said that “would spook Gingrich” but that he would try to arrange it “for small talk about their Paris trip,” the document states.

But Bennett never produced Marianne Gingrich. He reestablished contact with Soghanalian in February 1997, and the FBI asked for approval from headquarters to keep recording the conversations “to develop evidence of possible Hobbs Act, Conspiracy, and Bribery violations by Bennett, Ash, Marianne Gingrich, and as yet unidentified federal officials,” the document states. Ash did not return calls seeking comment.

In June 1997, Soghanalian was planning to meet Gingrich and his wife at a fundraiser in Miami arranged by Ben Waldman, a Reagan administration official who later was lobbyist Jack Abramoff’s business partner in the controversial purchase of a casino cruise line in Florida. Waldman did not return calls for comment.

FBI agents began preparing to bug the meeting, but Neil Gallagher, then deputy chief of the FBI’s criminal division, ordered the investigation closed prior to the fundraiser, people familar with the case said. They said local agents were upset by Gallagher’s move.

“I’d have to refer any comment back to the FBI,” Gallagher said Thursday.

The FBI special agent in charge in Miami at the time, Paul Philip, who signed the document, said he could not recall the case. After reviewing the document, he said he could understand why the case did not progress.

“When you’re dealing with elected officials, you have to be real careful,” he said. “Not that they can do anything to us. But their reputations are so fragile, if you don’t really, truly try to do the right thing, you could really shaft somebody.””

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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 sting nabs 13 in alleged kickback scheme

December 2, 2011

The Boston Globe on December 1, 2011 released the following:

“By Todd Wallack

The US government yesterday charged 13 corporate executives, lawyers, and penny stock promoters with agreeing to pay illegal kickbacks, the result of a yearlong FBI sting operation run out of Massachusetts.

As part of the sting, an undercover FBI agent pretended to work for a local office of a New York hedge fund in an unnamed Boston suburb, according to government documents. The agent then approached both companies and intermediaries, offering to arrange for his fund to invest up to $5 million in the firms – under the condition that the companies secretly kick much of the money back to him.

Authorities said the agent met with about 30 individuals in the Boston area office from October 2010 through August 2011.

The government filed criminal charges against executives of two Massachusetts companies: Michael Lee, 51, of Hingham, chief executive of ZipGlobal Holdings Inc., a former telecommunications firm in Hingham now focused on lighting products; and Paul Desjourdy, 50, of Medfield, chief executive of Symbollon Corp./Symbollon Pharmaceuticals Inc., a specialty biotechnology firm in Medfield. Both were charged with mail fraud and conspiracy to commit securities fraud.

Eleven other defendants from across the country were charged with fraud, including Edward Henderson, 69, of Lincoln, R.I. Henderson, who helps firms obtain financing, allegedly arranged for the agent posing as a hedge fund representative to meet Desjourdy in hopes of receiving a portion of the kickback.

The Securities and Exchange Commission also filed civil charges against Lee, Desjourdy, and Henderson, alleging they manipulated trading in microcap stocks – shares of companies with a small market value that are typically traded over the counter, rather than on better-known exchanges such as Nasdaq Stock Market or the New York Stock Exchange.

Lee’s attorney, Thomas Brant, said his client was “shocked and devastated’’ by the charges, but declined to comment further. Desjourdy’s lawyer declined to comment. Henderson’s attorney could not be reached.

As result of the investigation, the SEC suspended trading of Symbollon, ZipGlobal, and five other thinly traded public companies. ZipGlobal last traded at 3 cents a share before being suspended. Symbollon last traded for less than a penny a share.

David Bergers, director of the SEC’s Boston office, said it is important to thwart kickback schemes – even involving small companies – because they can hurt investors. A tainted hedge fund investment could artificially drive up a firm’s stock price, forcing other investors to pay more for shares or misleading them about the company’s potential.

“Although the stock price for these companies may be low, the damage can be very high,’’ Bergers said.

US Attorney Carmen Ortiz said the case was novel because FBI agents were able to partner with the SEC to use undercover strategies more common to drug and public corruption cases than securities.

“It’s really important that the markets operate in a fair and honest fashion,’’ Ortiz said. “We hope it serves a deterrent factor so that others will not engage in this kind of criminal activity.’’”

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Douglas McNabb – McNabb Associates, P.C.’s
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