“End Of The Silk Road: FBI Says It’s Busted The Web’s Biggest Anonymous Drug Black Market”

October 3, 2013
Ross William Ulbricht
“Ross William Ulbricht, alleged to be the “Dread Pirate Roberts” behind Silk Road’s drug black market.”

Forbes on October 2, 2013 released the following:

By: Andy Greenberg, Forbes Staff

“After two and a half years running the booming anonymous narcotics bazaar known as the Silk Road, the drug kingpin who called himself the Dread Pirate Roberts has allegedly been unmasked.

On Wednesday, the FBI announced that they arrested 29-year-old Ross William Ulbricht, the Silk Road’s accused administrator, in the Glen Park branch of the San Francisco Public Library at 3:15 Pacific time on Tuesday. Ulbricht has been charged with engaging in a money laundering and narcotics trafficking conspiracy as well as computer hacking. The Department of Justice has seized the website of the Silk Road’s as well as somewhere between $3.5 to 4 million in bitcoins, the cryptographic currency used to buy drugs on the Silk Road.

Earlier this summer, the Silk Road’s administrator calling himself by the Dread Pirate Roberts pseudonym gave his first extended interview to Forbes over the same Tor anonymity network that has hosted the Silk Road and its users since the site’s creation in early 2011.

Forbes estimated at the time that the Silk Road was earning between $30 and $45 million in annual revenue. In fact, the number may have been far larger: The criminal complaint against Ulbricht states that the Silk Road turned over $1.2 billion in revenue since its creation, and generated $80 million commissions for its operator or operators.

“This is supposed to be some invisible black market bazaar. We made it visible,” says an FBI spokesperson, who asked not to be named. “When you interviewed [Ulbricht], he said he would never be arrested. But no one is beyond the reach of the FBI. We will find you.”

The FBI hasn’t yet revealed how it managed to track down Ulbricht in spite of his seemingly careful use of encryption and anonymity tools to protect his identity and those of his customers and vendors who visited Silk Road as often as 60,000 times per day. The FBI spokesperson declined to offer details about the investigation, but told me that “basically he made a simple mistake and we were able to identify him.”

One clue mentioned in the criminal complaint against Ulbricht was a package seized from the mail by U.S. Customs and Border Patrol as it crossed the Canadian border, containing nine seemingly counterfeit identification documents, each of which used a different name but featured Ulbricht’s photograph. The address on the package was on 15th street in San Francisco, where police found Ulbricht and matched his face to the one on the fake IDs.

The complaint also mentions security mistakes, including an IP address for a VPN server used by Ulbricht listed in the code on the Silk Road, mentions of time in the Dread Pirate Roberts’ posts on the site that identified his time zone, and postings on the Bitcoin Talk forum under the handle “altoid,” which was tied to Ulbricht’s Gmail address.

In his conversation with me, which took place on July 4th, the Silk Road administrator calling himself the Dread Pirate Roberts espoused Libertarian ideals and claimed that the use of Bitcoin in combination with Tor had stymied law enforcement and “won the State’s War on Drugs.”

He also said he intended to bring his marketplace into mainstream awareness, and had recently launched the first non-Tor website for the Silk Road known as SilkRoadlink, which remains online. “Up until now I’ve done my best to keep Silk Road as low profile as possible … letting people discover [it] through word of mouth,” Roberts says. “At the same time, Silk Road has been around two and a half years. We’ve withstood a lot, and it’s not like our enemies are unaware any longer.”

One remaining mystery in Ulbricht’s criminal complaint is whether he was in fact the only–or the original–Dread Pirate Roberts. In his July interview with me, Roberts said that he had in fact inherited the Dread Pirate title from the site’s creator, who may have also used the same pseudonym.

As of around noon Wednesday, the Silk Road’s forum for users also remained online, and the site’s loyal users were grieving over the Silk Road takedown and mourning the arrest of Ulbricht, whose apparent persona as the Dread Pirate Roberts was a widely respected figure in the online drug community.

“jesus christ this is TERRIBLE!!” wrote one user named danceandsing. Others suggested that users migrate to other, smaller but similar anonymous black markets such as Black Market Reloaded–another popular alternative to the Silk Road known as Atlantis went offline last week, with its administrators saying only that they shut down the business for “security reasons.”

Another user blamed the Dread Pirate Roberts’ carelessness, including his decision to raise his profile by giving an interview to Forbes. “Sorry, but when he gave the fucking Forbes interview I imagined this would be coming,” wrote a user calling himself Dontek. “Should have kept all this shit on the down low rather than publicly bragging about it.”

Ulbricht’s LinkedIn profile describes his background as a graduate researcher in materials science at Pennsylvania State University, as well as an undergrad degree in physics from the University of Texas at Dallas.

According to Ulbricht’s grandmother, Martha Ulbricht, who was reached by phone, the younger Ulbricht received a full scholarship to UT Dallas. “Ross has always been an upstanding person as far as we know and a rather outstanding person,” she said.

Ulbricht’s half-brother Travis Ulbricht, also reached by phone in Sacramento, described him as an “exceptionally bright, smart kid” who had no criminal history to his knowledge.

Asked what he did for a living before moving to San Francisco, Ulbricht’s grandmother said, “Something on the computer…a little technical for me. He was good with computers.””

Federal Criminal Case 1: New York Federal Criminal Complaint
Northern District of California, Case No.: 3:13-mj-71218-JCS-1 (Proceedings on Out-of-District Criminal Charges Pursuant to Rules 5(c)(2) and (3)) and lists the following case on the docket sheet: Southern District of New York, Case No.: 13-mj-2328

21 U.S.C. 846 – Drug Conspiracy
18 U.S.C. 1030(a)(2) – Computer Hacking Conspiracy
18 U.S.C. 1956(a)(1)(A)(i) and (B)(i) – Money Laundering Conspiracy

Ross William Ulbricht New York Criminal Complaint

Federal Criminal Case 2: Maryland Federal Indictment
District of Maryland, Case No.: 1:13-cr-00222-CCB-1

21 U.S.C. 846 – Conspiracy to Distribute a Controlled Substance
18 U.S.C. 1512(a)(1)(C) – Attempted Witness Murder; 18 U.S.C. 2 – Aiding and Abetting
18 U.S.C. 1958(a) – Use of Interstate Commerce Facilities in Commission of a Murder-for-hire; 18 U.S.C. 2 – Aiding and Abetting

Ross William Ulbricht Maryland Superseding Indictment

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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.


Suspended West Virigina Judge Michael Thornsbury Due in Federal Court for a Plea Hearing on a Federal Conspiracy Charge

October 2, 2013

San Francisco Chronicle on October 2, 2013 released the following:

“CHARLESTON, W.Va. (AP) — A suspended Mingo County judge is due in court for a plea hearing on a federal conspiracy charge.

Prosecutors say Circuit Judge Michael Thornsbury is expected to plead guilty Wednesday in U.S. District Court in Charleston.

Thornsbury is accused of participating in a scheme to protect the reputation of Mingo County Sheriff Eugene Crum from revelations he’d bought drugs from a campaign sign-maker.

Prosecutors allege Thornsbury and others offered a lighter sentence if the man fired his lawyer and hired one they preferred.

Crum died in April in an unrelated shooting.

In exchange for a guilty plea, prosecutors say they would dismiss charges against Thornsbury in a separate federal case. Prosecutors say Thornsbury repeatedly tried to frame his secretary’s husband for false crimes to eliminate him as a romantic rival.”

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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.


“Sentencing Commission in sweeping review of prison terms for drug dealers”

August 16, 2013

The Guardian on August 15, 2013 released the following:

By: Dan Roberts in Washington

“The US Sentencing Commission has voted unanimously to begin a sweeping review of federal sentences for drug dealers in a move that could herald long-awaited reductions in America’s prison population.

Just days after attorney general Eric Holder called for a new approach to the so-called “war on drugs”, the commission met in Washington to agree a new policy priority that potentially goes far further than the Department of Justice can in lowering sentences.

As anticipated, the independent government agency, which issues sentencing guidelines to federal judges, will now spend the next few weeks reviewing its “drug quantity table” – the grid that determines prison lengths for dozens of different categories of offence – before publishing new recommendations in January.

A reduction in sentencing guidelines could still be blocked by Congress, but Holder’s speech on Monday has coincided with a new mood of reform in Washington that reverses decades of political pressure to increase penalties for drug dealers. His comments were welcomed by Senate judiciary committee chair Patrick Leahy and leading Republicans such as senator Rand Paul.

Currently the guidelines in the commission’s drug quantity table can result in first-time offenders facing sentences of 19 to 24 years, with no parole, for possession of the maximum quantities of heroin, crack or methamphetamine. Even dealers caught with 100g of cocaine can face between 27 and 33 months, according to the table.

A number of specific offences are also subject to mandatory minimum sentences prescribed by Congress, although Holder instructed US prosecutors on Monday to begin circumventing such automatic terms by changing the way they bring charges.

The seven commissioners who voted on the sentencing panel, including five senior judges, are now thought likely to go much further than this by formulating across-the-board changes to the recommended sentences.

Speaking afterwards, Dabney Friedrich, a former associate counsel in the Bush White House who sits on the commission, told the Guardian she thought that pressure in Congress to control the cost of the US prison system would be a key factor in ensuring political support for such a move.

The Department of Justice also issued a supportive statement on Thursday, which welcomed the commission’s progress.

“As the attorney general expressed earlier this week, we think there is much to be done to improve federal sentencing and corrections,” said DOJ official Jonathan Wroblewski. “Moreover, we think the US Sentencing Commission has a very big role to play in shaping that reform.”

In a statement issued after its meeting, the commission noted that drug offenders account for nearly half of all federal inmates, and that “an adjustment to the drug quantity tables in the sentencing guidelines could have a significant impact on sentence lengths and prison populations.”

“With a growing crisis in federal prison populations and budgets, it is timely and important for us to examine mandatory minimum penalties and drug sentences, which contribute significantly to the federal prison population,” added Judge Patti Saris, chair of the commission.

“The Commission is looking forward to a serious and thoughtful reconsideration of some of the sentencing guidelines which most strongly impact the federal criminal justice system,” she said. “I am glad that members of Congress from both parties and the Attorney General are
engaged in similar efforts.”

The Commission also pledged to work with Congress to reduce the “severity and scope of mandatory minimum penalties and consider expanding the ‘safety valve’ statute which exempts certain low-level non-violent
offenders from mandatory minimum penalties”. It will pass its final amendments to Congress in May.

Political reaction to the recent sentencing developments has been broadly positive. Senator Leahy said was pleased at Holder’s call for a review of mandatory minimum sentences.

Although he believes long sentences are appropriate in some cases, but the veteran Democrat said it believes judges should be given more flexibility rather than relying on mandatory requirements.

Others have expressed concern however at the new mood sweeping Washington.

William Otis, a former federal prosecutor at Georgetown University, said stiffer sentences in recent decades had contributed to lower crime rates.

“Two generations ago, in the 1960s and 1970s, our country had the wholly discretionary sentencing system Holder admires. For our trouble, we got a national crime wave,” he wrote in a USA Today op-ed.

“We have every right to instruct judges that some offenses are just too awful to allow an overly sympathetic jurist to burst through a congressionally established floor.””

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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.


Man Allegedly Claiming to be the Son of the President of the Congo Indicted for Federal Wire Fraud Crimes

May 10, 2013

The Federal Bureau of Investigation (FBI) on May 9, 2013 released the following:

“SAN FRANCISCO— Earlier this week, a federal grand jury in San Francisco indicted Blessed Marvelous Herve, a/k/a Rodrigue Herve Ngandou, a/k/a Herve Rodrigue Ngandou, a/k/a Blessed Roll Herve, of San Francisco, for wire fraud, United States Attorney Melina Haag announced.

According to the indictment, Herve, 41, devised and executed a scheme to defraud victims of approximately $1.6 million. Herve claimed that his father was the president of the Congo and a multi-billionaire, but that the United States government had seized Herve’s assets, in excess of $43,000,000. Herve promised to pay bonus sums of more than $1,500,000 to victims in exchange for the victims’ financial support of Herve’s quest to obtain the $43,000,000 that the government purportedly had seized.

Herve also claimed that as a result the federal court case involving his seized funds, he was sent to federal prison from 2009 through 2012. During this time, Herve solicited funds from victims to assist with his alleged ongoing court proceedings and his incarceration. Herve again promised full repayment of victims’ money plus large bonuses upon the completion of his federal case and release of his funds. Specifically, in October 2012, Herve solicited and received $47,000 from a victim by falsely claiming that he needed the money to pay the Internal Revenue Service to satisfy the final judgment entered against him.

According to a criminal complaint filed in the same matter further, one of the victims was a real estate agent to whom Herve promised that his father, the multi-billionaire president of the Congo, would purchase tens of millions of dollars in real estate. That victim gave Herve tens of thousands of dollars to assist in the purported father’s real estate tours, such as the rental of bulletproof limousines. The criminal complaint alleges that to lure in the victims and bolster his credibility, Herve showed various documents, such as a letter written to him from a United States Senator, copies of awards of recognition he received from the City and County of San Francisco, and a certificate of Special Congressional Recognition from a Member of Congress. When the victims ran out of money, Herve claimed that he was being deported to Puerto Rico and was not heard from again.

Herve, born in the Republic of Congo, was granted asylum in the United States in 1999 and became a United States citizen earlier this year.

Herve was arrested on a criminal complaint on April 24, 2013, in San Francisco, and he made his initial appearance in federal court in San Francisco the following day. He is currently being held in custody. The defendant’s next scheduled appearance is May 22, 2013, at 11:00 a.m. for further detention proceedings before Magistrate Judge Nathanael Cousins. Herve’s first appearance in district court is scheduled before Judge John Tigar on May 31, 2013 at 9:30 a.m.

The maximum statutory penalty for wire fraud, in violation of 18 U.S.C. § 1343, is 20 years’ imprisonment and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Hallie Hoffman is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Elizabeth Garcia. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the United States Department of Homeland Security.

Please note, an indictment contains only allegations against an individual and, as with all defendants, Herve must be presumed innocent unless and until proven guilty.”

Federal Wire Fraud Crimes – 18 U.S.C. 1343

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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.


Rothstein Associate Charged with Alleged Conspiracy to Violate the Federal Election Campaign Act, Defraud the United States, and Defraud a Financial Institution

April 10, 2012

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

“Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), announced the filing of charges against Steven N. Lippman, 49, of Plantation, for conspiring to commit crimes through the operation of the former Fort Lauderdale law firm of Scott W. Rothstein, called Rothstein, Rosenfeldt, and Adler, P.A. (RRA). The defendant was an attorney admitted to practice law in Florida and, in early 2005, was designated as a shareholder of RRA, but had no equity interest in the firm.

The one-count information, which was filed earlier today, charges Lippman with conspiracy to violate the Federal Election Campaign Act, to defraud the United States, and to defraud a financial institution, in violation of 18 U.S.C. §371. If convicted, the defendant faces a maximum statutory sentence of up to five years in prison.

According to the information, Lippman violated the Federal Election Campaign Act in that he was unlawfully reimbursed by RRA for certain contributions that he made to the presidential campaign of John McCain. More specifically, the information alleges that co-conspirator Rothstein and others, including defendant Lippman, attempted to dramatically increase the stature and political power of RRA on the federal, state, and local levels by making substantial political contributions to political candidates. However, since many of the attorneys and administrative personnel of RRA either had insufficient funds to contribute to the political campaigns and/or lacked the desire to contribute to the various political candidates selected by Rothstein, co-conspirator Rothstein enlisted Lippman and others to contribute to the McCain campaign by agreeing that RRA unlawfully would provide them with the funds to make the political contributions. For example, in one instance, Lippman made a $67,800 contribution to McCain-Palin Victory 2008. Lippman, in turn, received a check from RRA in the amount of $77,500, which constituted reimbursement of the funds he used to make the contribution. The check was fraudulently backdated to reflect that it was issued six days prior to the date of the actual contribution, and the memo section of the check stated “bonus.”

The information also alleges that Lippman engaged in a bank fraud scheme with Rothstein. According to the allegations in the charging document, RRA was experiencing financial difficulties and required a source of funds to maintain the law firm’s operations. Lippman maintained a bank account from a prior law firm where he had been a partner (the LVS account). Around February 2006, co-conspirator Rothstein requested that Lippman use the LVS account to float checks between and among certain bank accounts maintained by RRA, a practice commonly known as “check-kiting.” By simultaneously issuing and depositing checks between the LVS account and the RRA accounts, co-conspirator Rothstein and defendant Lippman would artificially inflate posted balances in each of the checking accounts, which allowed them to unlawfully obtain beneficial financing for RRA from financial institutions during the “float” period, i.e., the time that it took for the checks to clear. For example, the information alleges that from February 2006 through February 2008, Lippman issued checks in amounts ranging from $4,000 to $400,000, totaling approximately $10,311,688, from the LVS account. At the time many of the checks were written, there were insufficient funds in the account of LVS to cover those checks. Defendant Lippman also deposited into the LVS account checks issued from RRA accounts in amounts ranging from $37,500 to $330,000, totaling approximately $10,664,987. Lippman and other co-conspirators engaged in this fraudulent conduct to create the appearance that RRA was an affluent and successful law firm and to gain additional time to meet the financial obligations of RRA.

Lastly, the information alleges that Lippman defrauded the IRS by failing to report as income certain expense reimbursements and other reportable income he received from RRA. Among other things, the information alleges that defendant Lippman and co-conspirator Rothstein agreed that Lippman would be paid a base salary and be given an expense account for which he would be fraudulently reimbursed for personal expenditures disguised as deductible business expenses. This was done so that Lippman and RRA could avoid paying additional federal income and employment taxes. In addition, Lippman was paid from both the operating account and the payroll account of RRA but would only receive an IRS Form W-2 reflecting the money paid to him through the payroll account. Lippman would not report to the Internal Revenue Service the money paid to him by RRA for expenses.

U.S. Attorney Wifredo A. Ferrer stated, “The breadth, scope, and sheer complexity of Rothstein’s $1.2 billion Ponzi scheme is mind-boggling. Its success depended, in no small part, on the complicity of his colleagues and associates, like Steven Lippman. Lippman, an attorney, is now the ninth person to face criminal charges in connection with this scheme. As this investigation continues, I am sure that more will follow.”

“The charges against Steven Lippman show our resolve to unravel all the schemes in this complex financial fraud perpetrated by convicted Ponzi schemer Scott Rothstein and his co-conspirators,” said John V. Gillies Special Agent in Charge of the FBI’s Miami Office. “It is disappointing that the number of people who chose wrong over right and participated with Rothstein in this massive fraud is at nine and rising.”

“With the April 15 tax deadline fast approaching, it is important for people to have confidence that when they file accurate, honest, and timely income tax returns, their neighbors will do the same,” said José A. Gonzalez, Special Agent in Charge of the IRS-Criminal Investigation, Miami Field Office. “Defendant Lippman attempted to skirt his tax obligations but got caught. IRS–CI will continue to aggressively pursue those who attempt to defraud America’s tax system.”

Mr. Ferrer commended the investigative efforts of the FBI and the IRS-CID. This case is being prosecuted by Assistant U.S. Attorneys Lawrence D. LaVecchio, Paul F. Schwartz, and Jeffrey N. Kaplan.

An information is only an accusation and a defendant is presumed innocent unless and until proven guilty.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls.”

18 U.S.C. § 371

US v. Steven N Lippman – Federal Criminal Information

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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 C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


McKenzie J. Carson is Charged in a Federal Criminal Complaint in the U.S. District Court in Chicago

January 4, 2012

The Federal Bureau of Investigation (FBI) on January 3, 2012 released the following:

“Bolingbrook Man Arrested for Sex Trafficking of Minor

A 39-year-old Bolingbrook man was arrested earlier today on charges he recruited and forced a minor female to engage in prostitution. The arrest was announced by Robert D. Grant, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation (FBI), and Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois.

MCKENZIE J. CARSON, also known as “Casino,” whose last known address was 200 Campbell Drive in the western suburb, was arrested early this morning at his residence by FBI special agents and local police, without incident. CARSON was charged in a criminal complaint filed last week in U.S. District Court in Chicago with one count of sexual trafficking of children by force, fraud, or coercion, which is a felony offense.

According to the complaint, CARSON has been actively recruiting young females, including minors under the age of 18, to work for him as prostitutes in and around the Chicago area since at least 2010. CARSON advertised their services over the Internet and used cellular telephones to schedule and book “dates” for the girls. CARSON is believed to have employed others to assist him with running his prostitution operation, driving the girls to motels, hotels, and other locations to meet with customers.

It is also alleged that CARSON used violence and threats of violence, including sexual assault, to force the women and young girls to work for him. One of the victims, a then-17-year-old female, was allegedly raped by CARSON and forced to perform oral sex the first time they met. Afterwards, CARSON then sent the victim out that same night to engage in prostitution.

A second victim, who was 20 years old at the time, claimed that she was beaten and raped by CARSON on numerous occasions, including once when she told CARSON that she no longer wanted to work for him.

CARSON appeared before Magistrate Judge Young B. Kim this afternoon, at which time he was formally charged. CARSON was ordered held without bond pending his next court appearance, which is scheduled for Friday at 1:30 p.m.. Until then, CARSON will be held at the Metropolitan Correctional Center (MCC) in Chicago. If convicted of the charge filed against him, CARSON faces a mandatory minimum sentence of 15 years’ incarceration to a maximum of life in prison and a fine of up to $250,000.

This case was investigated by a multi-agency task force, led by the Chicago FBI, and assisted by the Cook County Sheriff’s Department, the DuPage Metropolitan Enforcement Group, and the Bolingbrook, Channahon, Downers Grove, Joliet, Marseilles, Naperville, Oswego, Romeoville, Shorewood, and Westmont Police Departments.

The public is reminded that a complaint is not evidence of guilt and that all defendants in a criminal case are presumed innocent until proven guilty in a court of law.”

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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.


Federal Trial Juror Charged for Allegedly Soliciting Bribe

October 10, 2011

The Federal Bureau of Investigation (FBI) on October 7, 2011 released the following:

“Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Miami Field Office, announced today that Italo Campagna, 55, a juror in an ongoing federal criminal trial, has been charged for soliciting a bribe in exchange for convincing fellow jurors to vote not guilty in a pending criminal case.

According to the complaint filed in federal court today, Campagna was a sworn trial juror in the federal criminal case of United States v. Arturo Marrero, pending in the United States District Court for the Southern District of Florida, Case No. 10-60244-CR-COOKE. Campagna allegedly approached the father of the defendant outside the U.S. Courthouse in Miami, Florida and stated that he had information about the case. Campagna gave the father a piece of paper with a telephone number on it, but did not identify himself by name or explain that he was a juror.

The complaint further alleges that later that afternoon, the defendant’s brother called Campagna and arranged to meet with him in Miami Beach to discuss the case. At that meeting, Campagna revealed to the brother that he was a juror in the case and that some of his fellow jurors were inclined to convict. Campagna offered to persuade other jurors to vote not guilty in exchange for a payment of between $50,000 and $100,000. The brother expressed skepticism at Campagna’s claims, and added that money was tight, that he would think about Campagna’s offer, and that he would get back to him the next day.

On October 5, 2011, the brother began to cooperate with the FBI and made a recorded telephone call to Campagna to follow up on his discussions of the day before. The brother asked whether Campagna was still willing to help influence the outcome of the case, and Campagna answered yes. The brother then proposed a meeting at the same time and place to discuss money and other details. Campagna agreed. The brother stated that he had been able to get some money together but wanted to negotiate a final price.

Later that day, the brother participated in a recorded meeting with Campagna near the same Miami Beach location. Campagna reiterated that he could influence the jury and prevent a guilty verdict. The brother and Campagna then began to negotiate over price, and eventually settled on $20,000, which is the amount the brother said that he had brought with him. Campagna followed the brother to his vehicle to obtain the cash payment. The brother then handed Campagna what appeared to be a bundle of cash in a brown paper bag. At that point, Campagna was arrested.

U.S. Attorney Wifredo A. Ferrer stated, “The credibility and public confidence in our criminal justice system hinge on the integrity of individuals serving as jurors. If that integrity is compromised, then so are our efforts to bring criminals to justice. This case should serve as a stern reminder of the consequences that follow a breach of a juror’s sworn duty to follow the law. We will prosecute these cases swiftly and vigorously.”

“Mr. Campagna put himself on the defendant’s seat by soliciting a bribe as a juror to fix the outcome of a trial,” said FBI Special Agent in Charge John Gillies. “He not only blatantly violated his oath, his actions put the integrity of our justice system in jeopardy.”

This case was investigated by the FBI-led Miami Area Corruption Task Force, which includes the City of Miami Police Department and the Hialeah Police Department and will be prosecuted by Assistant U.S. Attorney Brian K. Frazier of the Public Integrity, National Security, and Civil Rights Section of the United States Attorney’s Office.

A criminal complaint is only an accusation, and a defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.”

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.

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Bernard Joseph Tully, a Former Massachusetts State Senator, Pleads Guilty to Wire Fraud

September 1, 2011

The Federal Bureau of Investigation (FBI) on August 31, 2011 released the following:

“WASHINGTON— Bernard Joseph Tully, a former Massachusetts state senator, has pleaded guilty for devising a scheme to defraud a Boston-area businessman out of approximately $18,000 by falsely representing that Tully and his co-conspirator were using the funds to bribe public officials. Unbeknownst to Tully, the businessman reported Tully’s overtures to the FBI.

The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz for the District of Massachusetts and Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office.

Tully, 84, of Dracut, Mass., pleaded guilty yesterday before U.S. District Judge Patti B. Saris to one count of wire fraud. According to court documents, Tully formerly served as the city manager for Lowell, Mass., from approximately 1979 to 1987. Prior to serving as city manager, Tully was a state senator representing Lowell and other areas.

According to information presented at the plea hearing and in court documents, the Massachusetts Registry of Motor Vehicles (RMV) determined in early 2009 that it needed to discontinue its lease for the Lowell RMV, due to lack of funds. According to court documents, Tully became aware of the possible closure of the Lowell RMV and contacted the Boston-area businessman who owned the space where the Lowell RMV was housed. Tully told the businessman that if he paid Tully, Tully would ensure a state senator would find money in order to keep the RMV in the space owned by the businessman. Later, according to court documents, Tully again contacted the businessman and told him that he need to pay Tully so that Tully could pay the public official, otherwise the RMV would have to move out of the space.

On July 3, 2009, the RMV announced it was closing the Lowell office as well as other RMV offices on July 23, 2009. Tully and a co-conspirator subsequently visited the businessman and told him that he would need to pay $20,000 to keep the RMV in Lowell. The businessman agreed that he wanted the RMV to stay, and Tully said he would start making telephone calls while his co-conspirator said he would talk to the public official.

On July 15, 2009, the businessman gave the co-conspirator a $5,000 check, which the co-conspirator cashed and gave a portion of the funds to Tully. On July 17, 2009, the businessman received a 90-day extension on the lease from the RMV to Oct. 31, 2009.

Thereafter, according to court documents, the businessman had a series of meetings and telephone conversations with Tully and his co-conspirator about securing another lease extension from the RMV. During these conversations, Tully and his co-conspirator falsely represented to the businessman that they needed additional money to make payments to various public officials in exchange for their official acts to secure the RMV’s continued presence in the businessman’s building. Between November 2009 and March 2010, the businessman, while cooperating with the FBI, paid Tully and the co-conspirator approximately $18,000 as bribe payments designed to secure the official assistance of various public officials.

In fact, Tully and his co-conspirator never paid any money to any public officials. According to court documents, Tully admitted in a May 2010 interview with FBI agents that he received approximately $12,000 in cash and checks from the businessman, and that he split the money with his co-conspirator. Tully also admitted that he had heard about the RMV’s plan to move the Lowell office out of the businessman’s office building from people who worked in the office, and that the businessman had contacted him for assistance. Tully admitted that he spoke with friends of friends of the Lowell legislative delegation about obtaining a lease extension and preventing the move of the Lowell RMV.

Tully admitted that he told the businessman that he was “throwing money around” at elected officials, but in actuality he did not. He admitted that he did this to give the businessman the impression that he, Tully, was influencing the legislative delegation.

Sentencing is scheduled for Dec. 1, 2011, at 3:00 p.m. According to the plea agreement, the government has agreed not to seek punishment beyond home confinement, 36 months of supervised release, a fine to be calculated under the U.S. Sentencing Guidelines and restitution of $18,000.

The case was investigated by the FBI, with assistance from the Massachusetts Inspector General’s Office and the Lowell Police Department. It is being prosecuted by Senior Litigation Counsel William M. Welch II and Kevin Driscoll of the Criminal Division’s Public Integrity Section, with assistance from the U.S. Attorney’s Office, Public Corruption Unit.”

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

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

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

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Solomon Hobbs, Jr. Pleaded Guilty in Austin Federal Court to Wire Fraud, Student Assistance Program Fraud, and Aggravated Identity Theft

August 25, 2011

The U.S. Attorney’s Office Western District of Texas on August 24, 2011 released the following:

“DALLAS MAN PLEADS GUILTY TO DEFRAUDING FEDERAL STUDENT LOAN PROGRAM

United States Attorney John E. Murphy announced that in Austin this morning, 47-year-old Solomon Hobbs, Jr., (a.k.a. Virgil Clinton Powell) of Dallas, Texas, pleaded guilty to federal charges in connection with a scheme to fraudulently obtain over $37,000 in student loans.

In all, Hobbs pleaded guilty to three counts of wire fraud, three counts of student assistance program fraud and one count of aggravated identity theft. By pleading guilty, Hobbs admitted that since 2004, he developed a scheme to fraudulently obtain $37,395.05 in federal student financial aid, including $6,573.50 by using another individual’s name and identifying information, from five universities in Texas including: University of Texas at Tyler, University of Texas at El Paso, University of Texas at Arlington, Midwestern State University (Wichita Falls) and Texas State University. Hobbs further admitted that he had no intent of using the financial aid for educational expenses after repeatedly obtaining funds, then failing out of the institutions due to his lack of attendance.

Hobbs faces up to 30 years imprisonment per wire fraud charge; up to five years imprisonment per student assistance program fraud charge; and, a mandatory two years in federal prison on the aggravated identity theft charge.

Hobbs remains on bond pending sentencing before United States District Judge Lee Yeakel. No sentencing date has been scheduled.

This case was investigated by the U.S. Department of Education Office of Inspector General. Assistant United States Attorney Jennifer Freel is prosecuting this case on behalf of the Government.”

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

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

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

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Roger Clemens’ Federal Criminal Case Update

August 20, 2011
Roger Clemens

Main Justice on August 19, 2011 released the following:

Prosecutors Say Clemens Trying To Gain From Unintended Mistakes

Barring a retrial for Roger Clemens would hand the former baseball star “an unwarranted windfall” from inadvertent mistakes made during the first case against him, federal prosecutors argued in a brief filed Friday.

The brief came in response to a motion filed by Clemens’ attorneys seeking to prevent a retrial by arguing the government intentionally violated rules imposed by District Judge Reggie Walton, who declared a mistrial July 14 after prosecutors played a video that contained evidence Walton had previously ruled inadmissible.

That evidence included testimony from the wife of former pitcher Andy Pettitte, which suggested that Clemens had talked with Pettitte about using steroids. The video shown by prosecutors – a recording of Clemens’ 2008 testimony before Congress – showed Rep. Elijah E. Cummings (D-Md.) making a reference to the conversation.

The video was strike two for the prosecution, which had also alluded to the conversation during opening statements.

But in their motion, Justice Department attorneys said the video had already been prepared when Walton made his ruling on admissibility, and that they hadn’t looked to see whether a reference might be buried in a question from the congressman.

“The government’s error was a mistake, not misconduct, and certainly not misconduct intended to provoke a mistrial,” prosecutors wrote. “As government counsel informed this court when the video clip mistake occurred: ‘There was no intention to run afoul of any court ruling.'”

A motion hearing on the issue is scheduled for Sept. 2.”

Attached is Roger Clemens’ filing on 7/29/2011 with its exhibits:

Attached is the government’s response on 8/19/2011:

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

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

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

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