“Can federal charges be brought against Zimmerman?”

July 23, 2013

Reuters on July 23, 2013 released the following:

“By William Yeomans

Now that a Florida jury has found George Zimmerman not guilty of second degree murder and manslaughter, people across the nation are demanding federal prosecution. But this public debate has been clouded by misinformation about the possibility and scope of federal charges.

President Obama’s powerful comments on Friday helped put this matter in perspective. The state prosecution deserves a strong measure of deference. The federal government must, however, conduct a thorough investigation and undertake the rigorous analysis necessary to ensure that the federal interest in punishing civil rights violations is vindicated to the greatest extent possible.

The public outcry for federal involvement reveals the legitimate passions stirred by the killing of Trayvon Martin and drives home the importance of getting this right. The decision whether to prosecute, however, must be based on the evidence and the law as analyzed by professional civil rights prosecutors in the Justice Department.

Here are the essentials that the public needs to understand.

1. Federal charges are not barred by double jeopardy. While a state or the federal government cannot prosecute the same individual twice for the same crime, the state of Florida and the United States are separate sovereigns. Each has independent authority to prosecute individuals for violating their respective laws. The Supreme Court has ruled that a prosecution by the state does not pose a constitutional prohibition against prosecution by the federal government.

2. Though a federal prosecution is not barred by the Constitution, the federal government will pursue a successive prosecution based on the same conduct only when the state prosecution has left unvindicated a substantial federal interest and the government believes the evidence will be sufficient to obtain conviction of a federal crime by an unbiased jury. These requirements, sometimes referred to as the Petite policy, appear in the manual that guides United States attorneys.

The killing of this unarmed African-American teenager implicates the substantial federal interest in punishing racially motivated violence. For the limited purpose of identifying the interest, prosecutors will assume they can establish racial motivation. The more difficult elements to satisfy are whether the federal interest has been left unvindicated and whether the evidence is likely to lead to conviction.

In evaluating whether the interest has been left unvindicated, it is not enough that Zimmerman was acquitted. Rather, federal attorneys must examine factors such as whether the jury disregarded the evidence or law, significant evidence was unavailable, state law required proof of a fact that is not required by federal law, or there was some other element of the prosecution that left vindication of the federal interest incomplete.

3. Federal civil rights laws generally serve as a backstop for state criminal law enforcement. Federal civil rights laws date back to Reconstruction. They are usually based on the notion that states have primary responsibility for punishing violent acts, but there are federal interests of such importance that Washington must have independent authority to prosecute. The need for federal criminal civil rights laws lies in part in the failure of recalcitrant state and local officials — particularly in the South — to enforce the law and of Southern juries to return convictions. If the state is pursuing charges against a defendant that, if proven, would likely vindicate the federal interest, the federal government will generally step back to allow the state process to play out. Once that is complete, the federal government can then evaluate the adequacy of the state process and decide whether to pursue federal charges. It may decide further investigation is necessary or it may conclude all the evidence has been obtained.

4. While successive federal civil rights prosecutions are rare, they do happen. Perhaps the best known example was the prosecution of the Los Angeles police officers involved in the beating of Rodney King in 1991. After officers were acquitted of state charges, the federal government indicted four officers and obtained convictions of two. Similarly, the federal government prosecuted and obtained convictions of two men in the anti-Semitic killing of Yankel Rosenbaum in Crown Heights, New York in 1991 after they had been acquitted in state court.

5. Federal criminal law is limited, but there are several criminal civil rights statutes that serve as backstops to state law. Two such laws — 18 U.S.C. 241 and 242 — punish the deprivation of rights by state actors. These are the statutes used most often — as in the King case — to punish police officers who use excessive force. They appear unlikely to apply to Zimmerman, who was not cloaked in state authority, but was acting as a vigilante.

Two other laws — 18 U.S.C. 245 and 249 — prohibit racially motivated violence. Section 245 was enacted in 1968, as the first federal hate crime statute, along with the Fair Housing Act, which contains prohibitions against racially motivated violence associated with housing. Section 245 requires that the government show that the defendant used force because of race and because the victim was engaged in one of the six federally protected interests enumerated in the statute.

In this case, the government would likely have to show that Zimmerman attacked Martin because of his race and because he was using a public facility. The government would have to establish that the area where Martin was attacked was a public street or sidewalk, which could prove problematic since the attack occurred in a private, gated community.

In 2009, however, Congress enacted the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act, which made it a crime to cause bodily injury because of race — regardless of whether the victim was exercising a federally protected right. This statute — 18 U.S.C. 249 — provides the most likely basis for a federal prosecution.

6. The major challenge of a federal prosecution will be to establish beyond a reasonable doubt that Zimmerman was motivated by race when he shot Martin. Race plainly played a central role in Martin’s death. Few would contend seriously that if Martin had been white Zimmerman would have profiled him in the same way and would have initiated the contact that led to his death. The government’s challenge, however, would be to convince a jury beyond a reasonable doubt that race motivated Zimmerman’s infliction of bodily harm. Zimmerman, doubtless, will argue that he was never motivated by race and certainly when he pulled the trigger he was defending himself and trying to save his life.

Most important, however, the state charges did not require it to prove racial motivation. The FBI has the opportunity and the obligation to investigate further into Zimmerman’s motivation.

In the end, whether or not criminal law provides a response to this unspeakable tragedy, the death of Trayvon Martin should spur each of us to heed Obama’s call to examine our individual attitudes about race, crime and culture. We should combine that reexamination with the extraordinary energy produced by the massive peaceful demonstrations following the verdict to examine harmful stereotypes and ill-conceived laws as we continue our long, painfully slow march toward the promise of a just nation.”

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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.


“Feds take evidence related to Zimmerman trial, including gun”

July 23, 2013

CNN on July 23, 2013 released the following:

“By Faith Karimi, CNN

(CNN) — Florida authorities have delivered all evidence related to the George Zimmerman investigation to federal officials, who are weighing whether to pursue a civil rights case.

The Sanford Police Department said it turned over all evidence, including a gun, to the Department of Justice on Monday.

Justice officials are investigating whether Zimmerman violated Trayvon Martin’s civil rights when he shot the African-American teenager.

Zimmerman, a former neighborhood watch volunteer, was acquitted of second-degree murder and manslaughter charges on July 13 after claiming he fired in self-defense. The shooting occurred in February last year.

Attorney General Eric Holder has said the Justice Department will “act in a manner that is consistent with the facts and the law.” Holder described Martin’s shooting as ” tragic, unnecessary,” and said a thorough investigation will be conducted.

“Independent of the legal determination that will be made, I believe that this tragedy provides yet another opportunity for our nation to speak honestly about the complicated and emotionally charged issues that this case has raised,” Holder said last week. “We must not — as we have too often in the past — let this opportunity pass.”

Justice officials opened an investigation into the Zimmerman case last year and will include testimony from the Florida trial.

Various civil rights groups have protested nationwide to demand the Justice Department bring federal charges against Zimmerman.

A petition by the NAACP has reached 1.5 million signatures, the civil rights organization said on its website.”

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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.


Bank Employee, Edna Edith Sepulveda, Indicted by a Federal Grand Jury for Allegedly Committing Federal Bank Fraud Crimes

July 17, 2013

The Federal Bureau of Investigation (FBI) on July 15, 2013 released the following:

“Bank Employee Charged with Bank Fraud

MCALLEN, TX— Edna Edith Sepulveda, 39, of McAllen, has surrendered to federal authorities following the return of an indictment alleging she perpetrated more than $200,000 in bank fraud, United States Attorney Kenneth Magidson announced today.

The indictment was returned July 9, 2013, and she made her initial appearance today, at which time she was permitted release upon posting bond.

According to the indictment, Sepulveda was a former employee of Inter National Bank of McAllen. Beginning in January 10, 2006, she allegedly devised a scheme to take money from Inter National Bank by fraudulent means. She then placed the funds into the accounts of her parents allegedly intended for her own personal use, according to the allegations. The total amount of loss to Inter National Bank is $232,351.19.

If convicted, Sepulveda faces up to 30 years in federal prison, as well as a $1 million fine.

This case is being investigated by the FBI with the cooperation of Inter National Bank. Assistant United States Attorney Jason C. Honeycutt is prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.”

Federal Bank Fraud Crimes – 18 U.S.C. § 1344

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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.


FBI: “Former Kinloch Mayor Indicted for Lying on Employment Records”

July 11, 2013

The Federal Bureau of Investigation (FBI) on July 10, 2013 released the following:

“ST. LOUIS, MO— Former Kinloch Mayor Keith Conway was indicted on federal charges of falsifying employment records while completing his original sentence at a St. Louis halfway house, the Dismas House.

According to the indictment, on May 1, 2013, the United States Bureau of Prisons transferred Conway from its prison facility at Marion, Illinois, to the Dismas House residential re-entry center in St. Louis. The Bureau of Prisons contracts with Dismas House for the housing and supervision of inmates and retains jurisdiction and responsibility over those inmates until their ultimate release from Bureau of Prisons’ custody upon completion of their sentences. As a resident of Dismas House, Conway was required to seek and obtain full-time employment and to submit paycheck stubs to verify that employment to the Dismas House Program Director. While a resident at Dismas House awaiting final release from the Bureau of Prisons, Conway falsely represented that he had obtained full-time employment and was permitted to leave the Dismas House premises during his purported work hours.

Conway was originally sentenced to 21 months in prison in November 2011 on charges of using Kinloch city funds to pay personal expenses, fund personal travel, and purchase a Florida vacation condominium timeshare; and attempting to influence Kinloch City Officials to provide false information to federal law enforcement about the criminal charges pending against him.

Conway, 49, was indicted by a federal grand jury on four felony counts of filing false documents.

If convicted, each count carries a maximum penalty of five years and/or fines up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.

This case was investigated by the Federal Bureau of Investigation Public Corruption Unit, including officers of the St. Louis County Police Department. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney’s Office.

As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.”

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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.


“Edward Snowden Charged With Espionage Over NSA Leaks”

June 22, 2013

The Huffington Post on June 21, 2013 released the following:

Reuters

“By Tabassum Zakaria and Mark Hosenball

WASHINGTON, June 21 (Reuters) – The United States has filed espionage charges against Edward Snowden, a former U.S. National Security Agency contractor who admitted revealing secret surveillance programs to media outlets, according to a court document made public on Friday.

Snowden, who is believed to be in hiding in Hong Kong, was charged with theft of government property, unauthorized communication of national defense information and willful communication of classified communications intelligence information to an unauthorized person, said the criminal complaint, which was dated June 14.

The latter two offenses fall under the U.S. Espionage Act and carry penalties of fines and up to 10 years in prison.

A single page of the complaint was unsealed on Friday. An accompanying affidavit remained under seal.

The charges are the government’s first step in what could be a long legal battle to return Snowden from Hong Kong and try him in a U.S. court.

Two U.S. sources, speaking on condition of anonymity, said the United States was preparing to seek Snowden’s extradition from Hong Kong, which is part of China but has wide-ranging autonomy, including an independent judiciary.

The Washington Post, which first reported the criminal complaint earlier on Friday, said the United States had asked Hong Kong to detain Snowden on a provisional arrest warrant.

There was no immediate response to requests for comment from Hong Kong’s security bureau.

Snowden earlier this month admitted leaking secrets about classified U.S. surveillance programs, creating a public uproar. Supporters say he is a whistleblower, while critics call him a criminal and perhaps even a traitor.

He disclosed documents detailing U.S. telephone and Internet surveillance efforts to the Washington Post and Britain’s Guardian newspaper.

The criminal complaint was filed in the Eastern District of Virginia, where Snowden’s former employer, Booz Allen Hamilton, is located.

That judicial district has seen a number of high-profile prosecutions, including the spy case against former FBI agent Robert Hanssen and the case of al Qaeda operative Zacarias Moussaoui. Both were convicted.

‘ACTIVE EXTRADITION RELATIONSHIP’

Documents leaked by Snowden revealed that the NSA has access to vast amounts of Internet data such as emails, chat rooms and video from large companies such as Facebook and Google, under a government program known as Prism.

They also showed that the government had worked through the secret Foreign Intelligence Surveillance Court to gather so-called metadata – such as the time, duration and telephone numbers called – on all calls carried by service providers such as Verizon.

President Barack Obama and his intelligence chiefs have vigorously defended the programs, saying they are regulated by law and that Congress was notified. They say the programs have been used to thwart militant plots and do not target Americans’ personal lives, they say.

U.S. federal prosecutors, by filing a criminal complaint, lay claim to a legal basis to make an extradition request of the authorities in Hong Kong, the Post reported. The prosecutors now have 60 days to file an indictment and can then take steps to secure Snowden’s extradition from Hong Kong for a criminal trial in the United States, the newspaper reported.

The United States and Hong Kong have “excellent cooperation” and as a result of agreements, “there is an active extradition relationship between Hong Kong and the United States,” a U.S. law enforcement official told Reuters.

An Icelandic businessman linked to the anti-secrecy group WikiLeaks said on Thursday he had readied a private plane in China to fly Snowden to Iceland if Iceland’s government would grant asylum.

Iceland refused on Friday to say whether it would grant asylum to Snowden.”

As Federal Criminal Lawyer Douglas McNabb predicted, the U.S. has charged Mr. Snowden in a Federal Criminal Complaint. He was charged on June 14, 2013 with the following federal criminal violations:

  • 18 USC 641 – Theft of Government Property
  • 18 USC 793(d) – Unauthorized Communication of National Defense Information
  • 18 USC 798(a)(3) – Willful Communication of Classified Communications Intelligence Information to an Unauthorized Person

A copy of the Snowden Federal Criminal Complaint may be found here.

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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

————————————————————–

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.


U.S. v. Edward J. Snowden – Federal Criminal Complaint

June 21, 2013

As Mr. McNabb predicted, the U.S. has charged Mr. Snowden in a Federal Criminal Complaint. He was charged on June 14, 2013 with the following federal criminal violations:

  • 18 USC 641 – Theft of Government Property
  • 18 USC 793(d) – Unauthorized Communication of National Defense Information
  • 18 USC 798(a)(3) – Willful Communication of Classified Communications Intelligence Information to an Unauthorized Person

A copy of the Snowden Federal Criminal Complaint may be found here.

“U.S. charges Snowden with espionage”

The Washington Post on June 21, 2013 released the following:

By Peter Finn and Sari Horwitz,

“Federal prosecutors have filed a criminal complaint against Edward Snowden, the former National Security Agency contractor who leaked a trove of documents about top-secret surveillance programs, and the United States has asked Hong Kong to detain him on a provisional arrest warrant, according to U.S. officials.

Snowden was charged with theft, “unauthorized communication of national defense information” and “willful communication of classified communications intelligence information to an unauthorized person,” according to the complaint. The last two charges were brought under the 1917 Espionage Act.

The complaint, which initially was sealed, was filed in the Eastern District of Virginia, a jurisdiction where Snowden’s former employer, Booz Allen Hamilton, is headquartered and a district with a long track record of prosecuting cases with national security implications. After The Washington Post reported the charges, senior administration officials said late Friday that the Justice Department was barraged with calls from lawmakers and reporters and decided to unseal the criminal complaint.

A Justice Department spokeswoman declined to comment.

Snowden flew to Hong Kong last month after leaving his job at an NSA facility in Hawaii with a collection of highly classified documents that he acquired while working at the agency as a systems analyst.

The documents, some of which have been published in The Post and Britain’s Guardian newspaper, detailed some of the most-
secret surveillance operations undertaken by the United States and Britain , as well as classified legal memos and court orders underpinning the programs in the United States.

The 30-year-old intelligence analyst revealed himself June 9 as the leaker in an interview with the Guardian and said he went to Hong Kong because it provided the “cultural and legal framework to allow me to work without being immediately detained.”

Snowden subsequently disappeared from public view; it is thought that he is still in the Chinese territory. Hong Kong has its own legislative and legal systems but ultimately answers to Beijing, under the “one country, two systems” arrangement.

The leaks have sparked national and international debates about the secret powers of the NSA to infringe on the privacy of Americans and foreigners. Officials from President Obama on down have said they welcome the opportunity to explain the importance of the programs and the safeguards they say are built into them. Skeptics, including some in Congress, have said the NSA has assumed the power to soak up data about Americans that was never intended under the law.

There was never any doubt that the Justice Department would seek to prosecute Snowden for one of the most significant national security leaks in the country’s history. The Obama administration has shown a particular propensity to go after leakers and has launched more investigations than any previous administration. This White House is responsible for bringing six of the nine total indictments ever brought under the 1917 Espionage Act. Snowden will be the seventh individual when he is formally indicted.

Justice Department officials had already said that a criminal investigation of Snowden was underway and was being run out of the FBI’s Washington field office in conjunction with lawyers from the department’s National Security Division.

By filing a criminal complaint, prosecutors have a legal basis to make the detention request of the authorities in Hong Kong. Prosecutors now have 60 days to file an indictment, probably under seal, and can then move to have Snowden extradited from Hong Kong for trial in the United States.

Snowden, however, can fight the extradition effort in the courts in Hong Kong. Any battle is likely to reach Hong Kong’s highest court and could last many months, lawyers in the United States and Hong Kong said.

The United States has an extradition treaty with Hong Kong, and U.S. officials said cooperation with the Chinese territory, which enjoys some autonomy from Beijing, has been good in previous cases.

The treaty, however, has an exception for political offenses, and espionage has traditionally been treated as a political offense. Snowden’s defense team in Hong Kong is likely to invoke part of the extradition treaty with the United States, which states that suspects will not be turned over to face criminal trial for offenses of a “political character.”

Typically in such cases, Hong Kong’s chief executive must first decide whether to issue a warrant for the accused’s arrest. But the extradition treaty also says that in exceptional cases a provisional warrant can be issued by a Hong Kong judge without the chief executive’s approval. The judge must give the chief executive notice, however, that he has issued the warrant.

A spokesperson at the office of Hong Kong chief executive Leung Chun-ying said there was no information on Snowden’s case. The police department did not respond to calls or e-mails. At the police station for Central District in Hong Kong Island, police officers on duty said they had not heard anything about Snowden.

If Snowden is arrested, he would appear before a judge. Bail would be unlikely and, instead, Snowden would be sent to the Lai Chi Kok maximum-security facility in Kowloon, a short drive from the high-end Mira Hotel, where he is last known to have stayed in Hong Kong.

Snowden could also remain in Hong Kong if the Chinese government decides that it is not in the defense or foreign policy interests of the government in Beijing to have him sent back to the United States for trial.

Another option would be for Snowden to apply for asylum with the United Nations High Commission for Refugees, which handles most asylum requests in Hong Kong. The UNHCR was closed Saturday morning and did not immediately respond to requests for comment via e-mail and phone. The asylum application process can take months or even years because Hong Kong has a severe backlog. The Hong Kong government cannot formally surrender individuals until their asylum applications have been processed.

Snowden also could attempt to reach another jurisdiction and seek asylum there before the authorities in Hong Kong act.”

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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

————————————————————–

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.


“Charges filed in Pilot Flying J case, 2 sales executives who worked for Jimmy Haslam plead guilty”

May 29, 2013

Cleveland.com on May 29, 2013 released the following:

By John Caniglia, The Plain Dealer

“Two Pilot Flying J sales executives pleaded guilty today to federal charges of conspiracy to commit mail fraud for their role in sending fraudulent rebate checks “to certain targeted Pilot customers,” the charges said.

Arnold Ralenkotter, a regional sales director in Hebron, Ky., and Ashley Judd, an account executive in Knoxville, entered their pleas in U.S. District Court in Knoxville, Tenn. No dates have been set for their sentencing.

They became the first people charged in the two-year investigation of Pilot Flying, the company owned by Cleveland Browns owner Jimmy Haslam.

The charges said the primary purpose of the conspiracy was to increase the commissions of Pilot’s direct sales staff and increase the company’s profits. Ralenkotter’s home was one of several sites searched by federal agents in April. The main sites of the raid took place at Pilot Flying J’s main offices.

Haslam has said he had no knowledge of the scheme, which is contradicted by a FBI affidavit used to obtain a judge’s permission to search Pilot Flying J, Ralenkotter’s home and other sites.

The charges say that Pilot Flying J had a mandatory sales meeting in Knoxville in November. Ralenkotter attended a breakout session in which a top Pilot sales official “encouraged and taught Pilot direct sales personnel how to defraud, without detection, some of Pilot’s customers who chose to receive their discounts in the form of a rebate check.”

The charges said Ralenkotter told a subordinate that if he wasn’t willing to reduce a customer’s rebate, then Ralenkotter would take the customer’s account over. Ralenkotter’s attorney said his client is cooperating with authorities in the investigation.

In March, Judd told an employee of Pilot Flying J who was cooperating with investigators that she kept a file in her desk drawer related to the rebate reductions. Judd told the informant that “if anyone ever came in the office that that file would be the first one that Judd would burn,” according to the FBI affidavit. Her attorney could not be reached.

The company declined to comment.

It was last month when FBI and IRS agents raided the company’s headquarters in Knoxville.

In an affidavit, an FBI agent said some sales employees withheld fuel price rebates and discounts from certain companies to boost the company’s profits and their commissions. The document also says Haslam knew about the scheme, as he had been in sales meetings where the scheme was discussed.

But Haslam on May 16 told hundreds of trucking company officials in Indianapolis that he was “absolutely not aware of” the scheme.

Until today, no one had been charged in the investigation.

But several civil lawsuits have piggybacked on the FBI affidavit.

A spokesman for Haslam has said that class-action lawsuits are predictable in cases where allegations of wrongdoing take place, and he said the company will defend the cases appropriately.”

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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

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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.


“Taiwanese Father and Son Arrested for Allegedly Violating U.S. Laws to Prevent Proliferation of Weapons of Mass Destruction”

May 7, 2013

The Federal Bureau of Investigation (FBI) on May 6, 2013 released the following:

“CHICAGO— A resident of Taiwan whom the U.S. government has linked to the supply of weapons machinery to North Korea, and his son, who resides in suburban Chicago, are facing federal charges here for allegedly conspiring to violate U.S. laws designed to thwart the proliferation of weapons of mass destruction, federal law enforcement officials announced today.

Hsien Tai Tsai, also known as “Alex Tsai,” who is believed to reside in Taiwan, was arrested last Wednesday in Tallinn, Estonia, while his son, Yueh-Hsun Tsai, also known as “Gary Tsai,” who is from Taiwan and is a legal permanent resident in the United States, was arrested the same day at his home in Glenview, Illinios.

Gary Tsai, 36, was ordered held in custody pending a detention hearing at 1:30 p.m. today before Magistrate Judge Susan Cox in U.S. District Court in Chicago. Alex Tsai, 67, remains in custody in Estonia pending proceedings to extradite him to the United States.

Both men were charged in federal court in Chicago with three identical offenses in separate complaints that were filed previously and unsealed following their arrests. Each was charged with one count of conspiring to defraud the United States in its enforcement of laws and regulations prohibiting the proliferation of weapons of mass destruction, one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA) by conspiring to evade the restrictions imposed on Alex Tsai and two of his companies by the U.S. Treasury Department, and one count of money laundering.

The arrests and charges were announced by Gary S. Shapiro, U.S. Attorney for the Northern District of Illinois; Cory B. Nelson, Special Agent in Charge of the Chicago Office of the FBI; Gary Hartwig, Special Agent in Charge of Homeland Security Investigations in Chicago; and Ronald B. Orzel, Special Agent in Charge of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, Chicago Field Office. The Justice Department’s National Security Division and Office of International Affairs assisted with the investigation. U.S. officials thanked the Estonian Internal Security Service and the Estonian Prosecutor’s Office for their cooperation.

According to both complaint affidavits, agents have been investigating Alex and Gary Tsai, as well as Individual A (a Taiwanese associate of Alex Tsai) and a network of companies engaged in the export of U.S. origin goods and machinery that could be used to produce weapons of mass destruction. The investigation has revealed that Alex and Gary Tsai and Individual A are associated with at least three companies based in Taiwan—Global Interface Company Inc., Trans Merits Co. Ltd., and Trans Multi Mechanics Co. Ltd.—that have purchased and then exported, and attempted to purchase and then export, from the United States machinery used to fabricate metals and other materials with a high degree of precision.

On January 16, 2009, under Executive Order 13382, which sanctions proliferators of weapons of mass destruction and their supporters, the Treasury Department’s Office of Foreign Assets Control (OFAC) designated Alex Tsai, Global Interface, and Trans Merits as proliferators of weapons of mass destruction, isolating them from the U.S. financial and commercial systems and prohibiting any person or company in the United States from knowingly engaging in any transaction or dealing with Alex Tsai and the two Taiwanese companies.

In announcing the January 2009 OFAC order, the Treasury Department said that Alex Tsai was designated for providing, or attempting to provide, financial, technological, or other support for, or goods or services in support of the Korea Mining Development Trading Corporation (KOMID), which was designated as a proliferator by President George W. Bush in June 2005. The Treasury Department asserted that Alex Tsai “has been supplying goods with weapons production capabilities to KOMID and its subordinates since the late 1990s, and he has been involved in shipping items to North Korea that could be used to support North Korea’s advanced weapons program.” The Treasury Department further said that Global Interface was designated “for being owned or controlled by Tsai,” who is a shareholder of the company and acts as its president. Tsai is also the general manager of Trans Merits Co. Ltd., which was designated for being a subsidiary owned or controlled by Global Interface Company Inc.

After the OFAC designations, Alex and Gary Tsai and Individual A allegedly continued to conduct business together but attempted to hide Alex Tsai’s and Trans Merit’s involvement in those transactions by conducting business under different company names, including Trans Multi Mechanics. For example, by August 2009—approximately eight months after the OFAC designations—Alex and Gary Tsai, Individual A, and others allegedly began using Trans Multi Mechanics to purchase and export machinery on behalf of Trans Merits and Alex Tsai. Specifically, the charges allege that in September 2009, they purchased a Bryant center hole grinder from a U.S. company based in suburban Chicago and exported it to Taiwan using the company Trans Multi Mechanics. A Bryant center hole grinder is a machine tool used to grind a center hole, with precisely smooth sides, through the length of a material.

The charges further allege that by at least September 2009, Gary Tsai had formed a machine tool company named Factory Direct Machine Tools in Glenview, Illinois, which was in the business of importing and exporting machine tools, parts, and other items to and from the United States. However, the charges allege that Alex Tsai and Trans Merits were active partners in Factory Direct Machine Tools, in some instances procuring the goods for import to the United States for Factory Direct Machine Tool customers.

Violating IEEPA carries a maximum penalty of 20 years in prison and a $1 million fine; money laundering carries a maximum penalty of 20 years in prison and a $500,000 fine; and conspiracy to defraud the United States carries a maximum penalty of five years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines. The government is being represented by Assistant U.S. Attorneys Patrick Pope and Brian Hayes.

The public is reminded that a complaint is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.”

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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

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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.


“Federal prosecutors charge IRS workers with theft of government benefits”

April 18, 2013

Fox News on April 18, 2013 released the following:

Associated Press

“MEMPHIS, Tenn. – Twenty-four current and former Internal Revenue Service employees have been charged with stealing government benefits, federal prosecutors said Wednesday.

The IRS employees were indicted on charges that they illegally received more than $250,000 in benefits including unemployment insurance payments, food stamps, welfare, and housing vouchers, the U.S. attorney’s office in Memphis said in a news release.

Prosecutors say 13 of the IRS employees face federal charges of lying about being unemployed while applying for or recertifying their government benefits. They each face up to five years in prison if convicted of making false statements to receive the benefits.

Eleven others face state charges of theft of property over $1,000, a felony that can carry a sentence of probation up to 12 years in prison if they are convicted.

“While these IRS employees were supposed to be serving the public, they were instead brazenly stealing from law-abiding American taxpayers,” U.S. Attorney Edward Stanton said in a statement

Those charged range in ages from 28 to 64. They include residents of Memphis, Jackson, Tenn., and Southaven, Miss.

“The taxes that we pay are supposed to support our nation and assist individuals in need, not free-loaders who are gaming the system,” said Amy Weirich, the district attorney for Shelby County.

Prosecutors scheduled, then canceled, a news conference to announce the indictments. U.S. attorney’s office spokesman Rodney King said the cancellation was due to “unforeseen events,” without elaborating.

King would not say whether the cancellation was related to the investigation into two letters sent to President Barack Obama and a Mississippi senator that indicated they contained poisonous ricin.

The FBI says the letters were postmarked Memphis.”

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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

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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.


“SAC Capital portfolio manager pleads not guilty in NYC insider trading case”

March 29, 2013

The Washington Post on March 29, 2013 released the following:

“By Associated Press

NEW YORK — A portfolio manager for the hedge fund operator SAC Capital Advisors has pleaded not guilty to federal charges in an insider trading probe.

The FBI arrested Michael Steinberg at 6 a.m. Friday at his home in New York City.

His attorney says in a statement that Steinberg “did absolutely nothing wrong.”

Attorney Barry H. Berke says Steinberg was “caught in the crossfire of aggressive investigations” into other people’s activities.

At least four other people associated with the Stamford, Conn.-based firm have been arrested over a period of about four years.

On March 15, the Securities and Exchange Commission said that two affiliates of SAC Capital Advisors would pay more than $614 million in what federal regulators called the largest insider trading settlement ever. The settlement is subject to court approval.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

A senior portfolio manager for one of the nation’s largest hedge funds was arrested Friday, accused of making $1.4 million illegally in a widening insider trading probe involving an investment company founded by billionaire businessman Steven A. Cohen.

Michael Steinberg, 41, was arrested at 6 a.m. at his Manhattan home on insider trading charges lodged in an indictment unsealed in U.S. District Court in New York City. A senior portfolio manager at SAC Capital Advisors, he was scheduled to appear in court Friday.

His attorney, Barry Berke, said in a statement that Steinberg “did absolutely nothing wrong.” He said Steinberg’s trading decisions were based on detailed analysis along with other information he properly obtained.

“Caught in the crossfire of aggressive investigations of others, there is no basis for even the slightest blemish on his spotless reputation,” he said.

In a statement, SAC Capital said Steinberg “has conducted himself professionally and ethically during his long tenure at the firm. We believe him to be a man of integrity.”

U.S. Attorney Preet Bharara said in a statement that Steinberg “was another Wall Street insider who fed off a corrupt grapevine of proprietary and confidential information cultivated by other professionals who made their own rules to make money. With lightning speed in at least one case, Mr. Steinberg seized on the opportunity to cash in and tried to keep his crime quiet, as charged in the indictment.”

George Venizelos, head of the FBI’s New York office, said the arrest was the latest in an FBI probe that has resulted in more than 70 arrests.

“Mr. Steinberg was at the center of an elite criminal club, where cheating and corruption were rewarded,” he said. “Research was nothing more than well-timed tips from an extensive network of well-sourced analysts.”

At least four other people associated with the Stamford, Conn.-based firm have been arrested over a period of about four years.

The arrest of Steinberg and the January arrest of a former hedge fund portfolio manager for an affiliate of Cohen’s firm has increased speculation that the government is taking a hard look at the practices of the billionaire hedge fund owner. In the January case, Cohen is repeatedly referenced as a “Hedge Fund Owner” in a criminal complaint. He has not been charged in the case and SAC spokesman Jonathan Gasthalter has said the company and Cohen are cooperating with the inquiry and “are confident that they have acted appropriately.”

In the latest case, Steinberg is charged with conspiracy to commit securities fraud and four counts of securities fraud, accused of using inside information as he made trades involving Dell Inc. and Nvidia Corp. securities. If convicted, he could face up to 85 years in prison.

Civil charges against Steinberg also were filed by the Securities and Exchange Commission.

On March 15, the SEC said that two affiliates of SAC Capital Advisors would pay more than $614 million in what federal regulators called the largest insider trading settlement ever. The settlement is subject to court approval.”

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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

————————————————————–

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.