Homebuilder Indicted in an Alleged $14.7 Million Construction Investment Scheme

March 2, 2012

The Federal Bureau of Investigation (FBI) on March 1, 2012 released the following:

“BALTIMORE—A federal grand jury indicted Patrick J. Belzner, a/k/a “Patrick McCloskey,” age 42, of Glen Arm, Maryland, yesterday for conspiring to commit wire fraud arising from an investment fraud scheme. The indictment was unsealed today upon the arrest of the defendant.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Acting Special Agent in Charge Eric C. Hylton of the Internal Revenue Service-Criminal Investigation, Washington, D.C. Field Office.

According to the indictment, from at least August 2009 to August 2011, Belzner, a homebuilder, and a co-conspirator also in the home building business, targeted individuals seeking investment opportunities or commercial real estate development lending. Belzner, who falsely presented himself as “Patrick McCloskey” with certain investors, instructed the victims that in order to obtain loans for commercial real estate projects, the purported lenders required that large sums of money be deposited in an escrow bank account to show “liquidity.”

The indictment alleges that in order to gain their victims’ confidence, Belzner and his co-conspirators caused victim investors and borrowers to enter into escrow agreements which stated that no person other than the victims had the ability to remove the escrowed funds without the victims’ permission. Belzner told the victims that a co-conspirator had to be the attorney assigned as the escrow agent.

The indictment alleges that Belzner and his co-conspirator fraudulently withdrew approximately $14,730,780 from the escrow accounts and used these stolen funds to satisfy their business and personal debts. To conceal their scheme, Belzner and his co-conspirators allegedly e-mailed fabricated bank statements to victims that misrepresented the escrow account balance and the date by when the investors’ money would be returned. Belzner and his co-conspirators also used funds fraudulently obtained from some victim investors to repay money owed to previous victim investors, or to other individuals to whom the conspirators owed debts.

The indictment seeks forfeiture at least $14,730,780, the amount of money stolen from victim investors.

Belzner faces a maximum sentence of 20 years in prison and a fine of $250,000 or twice the value of the gain or loss. Belzner had his initial appearance today in federal court in Baltimore.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

United States Attorney Rod J. Rosenstein thanked the FBI and IRS-CI for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorneys Sean O’Connell and Sujit Raman, who are prosecuting the case.”

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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.


Austin Galvan Indicted by a Omaha Federal Grand Jury Charging Him in a Two-Count Federal Indictment of Wire Fraud and Obstruction of Justice

August 29, 2011

The U.S. Department of Justice (DOJ) on August 29, 2011 released the following:

“Nebraska Man Arrested on Wire Fraud and Obstruction of Justice Charges

WASHINGTON – An Omaha, Neb., man was charged in an indictment unsealed today for allegedly trying to solicit corrupt payments from an individual in return for a promised reduction in the individual’s ultimate prison sentence, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

Austin Galvan, 29, was charged in a two-count indictment unsealed today in the District of Nebraska with one count of wire fraud and one count of obstruction of justice. He was arrested on Aug. 26, 2011, by FBI agents and made his initial appearance today before U.S. Magistrate Judge Thomas Thalken in federal court in Omaha.

According to the indictment, Galvan told an associate who was facing federal criminal charges in the District of Nebraska that he, Galvan, had a law enforcement contact in Nebraska who could secure a substantial reduction in his associate’s prison sentence in exchange for corrupt payments. Galvan, in fact, had no such contact.

According to the indictment, in conversations with his associate in May and June 2010, Galvan urged him not to cooperate with federal authorities. Galvan allegedly assured his associate that his contact was in a position to help secure a reduction in the associate’s prison sentence, provided that corrupt payments were made. Galvan also gave his associate what he claimed were official documents given to him by his purported law enforcement contact. According to the indictment, Galvan provided his associate with an audio recording of a court hearing that he claimed his purported law enforcement contact had given him. In fact, Galvan had downloaded the recording from the Public Access to Court Electronic Records system, or PACER. The indictment also alleges that Galvan provided his associate with what he claimed was the business card of a federal judge who would assist in securing the sentence reduction, when in fact no federal judge was involved.

Galvan’s associate was sentenced in March 2011 to 10 years in prison after pleading guilty to conspiracy to distribute methamphetamine and to being a felon in possession of a firearm.

An indictment is merely an allegation, and a defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.

If convicted, Galvan faces up to 20 years in prison on the wire fraud charge and up to 10 years in prison on the obstruction charge. He also faces maximum fines of $250,000 for each count.

The case is being prosecuted by Trial Attorneys Kevin Driscoll, Barak Cohen and Brian Lichter of the Criminal Division’s Public Integrity Section. The case is being investigated by the FBI.”

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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Theresa Neubauer and Frank Scaccia Indicted by a Chicago Federal Grand Jury

August 11, 2011

The Chicago Tribune on August 11, 2011 released the following:

“Feds Indict 2 Over Tainted Crestwood Well

By Michael Hawthorne
Tribune reporter

The police chief and former top water official in south suburban Crestwood were indicted today on federal criminal charges related to the secret use of a well contaminated with cancer-causing chemicals, a scheme revealed by a 2009 Tribune investigation.

Theresa Neubauer, the village’s police chief and former water department supervisor, and Frank Scaccia, Crestwood’s former certified water operator, were charged in a 23-count indictment handed down by a federal grand jury meeting in Chicago.

They are accused of repeatedly lying in official documents about the longtime use of the contaminated well to supplement Lake Michigan water purchased from neighboring Alsip. According to the indictment, village officials failed to fix its network of leaky water pipes, so they needed the well water to meet demand.

Former Mayor Chester Stranczek, who ran the village for nearly 40 years, was not mentioned by name in the indictment. Nor was his son, Robert, who took over as mayor in 2007.

Based on a Tribune review of records mentioned in the indictment, Chester Stranczek is identified as “Public Official A,” the person who signed federally mandated Consumer Confidence Reports between 1999 and 2007 that stated the village’s only source of drinking water was the Lake Michigan water purchased from Alsip. Village records show that Stranczek had ordered his lieutenants to keep using the contaminated well, even though the Illinois EPA had told them in 1985 that it was contaminated with toxic chemicals related to a common dry cleaning solvent.

During the past two years, Crestwood has paid criminal and civil defense attorneys more than $3.3 million to defend the Stranczeks and other village officials, according to a tally provided by the village’s attorney. Some of the most expensive bills were to prepare a defense for Chester Stranczek, whose attorneys hired experts who concluded the former mayor has “mild to moderate” dementia.

“He is not in a position to assist in his defense on any charges,” said Chris Gair, Stranczek’s attorney.

In a 2009 interview with the Tribune, Robert Stranczek said he had known about the routine use of the well since at least 1997, when he became a village trustee. He was appointed mayor in 2007 when his father retired.

Agents from the U.S. Environmental Protection Agency’s criminal division raided Crestwood Village Hall in April 2009 after the Tribune first revealed that the village had used its contaminated well for more than two decades. What the agents found prompted a criminal probe by U.S. Attorney Patrick Fitzgerald’s office.

In April, shortly before municipal elections, village officials sent a newsletter to residents calling the water scandal a “manufactured issue” fueled by a “media frenzy” and “exploitive legal and political actions.” They issued a statement today insisting that people never were at risk from drinking the contaminated water, which at times accounted for at least 20 percent of the village’s supply.

“The government’s investigation … confirms that there is not now and never has been any concern with the safety or quality of the drinking water in Crestwood and the health of our citizens has never been compromised or threatened,” the statement read. “Our citizens’ well-being has always been and will always continue to be our top priority.”

It is unclear if anyone got sick from drinking water from the well, which was contaminated with vinyl chloride and dichloroethylene, two chemicals related to the dry cleaning solvent perchloroethylene, or perc. But a 2010 study by the Illinois Department of Public Health found that cancer rates in Crestwood are “significantly elevated.”

Researchers determined it was possible that toxic chemicals in the drinking water caused the extra cancer cases, but they could not make a definite link.

The well was shut off for good in 2007.”

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 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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Former Dekalb Police Officer Donald Bristol Pleads Guilty To Federal Criminal Charges in Atlanta’s Federal Court

July 25, 2011

The U.S. Attorney’s Office Northern District of Georgia on July 22, 2011 released the following:

Bristol Helped Conceal a Stolen Vehicle, Used His Police Computer for Criminal Purposes & Lied to Federal Agents

ATLANTA, GA – DONALD BRISTOL, 41, of Lilburn, Georgia, pleaded guilty today in federal district court on charges that, while he was employed as a DeKalb County police officer, he helped others possess and hide a stolen vehicle, unlawfully accessed governmental information, and lied to federal agents.

United States Attorney Sally Quillian Yates said, “This defendant was a criminal in a police officer’s uniform. The evidence showed that during his tenure as a police officer, he violated the very laws that he had sworn to enforce – and then lied about it to federal agents.”

According to United States Attorney Yates, the charges, and other information presented in court: Starting in April 2010, BRISTOL used his position as a DeKalb County Police Officer to help two separately-charged defendants hide the fact that the car they were using was stolen. BRISTOL also misused his access to a sensitive law enforcement database to provide his associates with information. When questioned about some of his activities, BRISTOL made numerous false statements to federal agents.

On May 25, 2011, BRISTOL was charged in a 10-count indictment. Today, BRISTOL pleaded guilty to aiding others to possess and hide a stolen vehicle, to unlawfully accessing governmental information, and to lying to federal agents. The most serious of the charges carries a maximum sentence of 10 years in prison and a fine of up to $250,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders

Sentencing is scheduled for October 18, 2011 at 11:00 a.m.., before United States District Judge Timothy C. Batten, Sr.

This case is being investigated by Special Agents of the Federal Bureau of Investigation, the DeKalb County Police Department, and Special Agents of the Drug Enforcement Administration.

Assistant United States Attorney Jeffrey W. Davis is prosecuting the case.”

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

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

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

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Eugene Klein, Former Federal Prison Chaplain, Indicted on Federal Criminal Charges for Conspiracy (18 U.S.C. 371) and Destruction or Removal of Property to Prevent Seizure (18 U.S.C. 2232(a))

June 10, 2011

Northern District of Illinois, Chicago Divison, U.S. Attorney’s Office on June 9, 2011 released the following press release:

Eugene Klein

“CHICAGO — A former federal prison chaplain who ministered to convicted killer Frank Calabrese, Sr., was indicted for allegedly illegally passing messages from Calabrese and plotting with him and others to recover a hidden violin from a residence Calabrese once owned in Williams Bay, Wis., federal law enforcement officials announced today. The defendant, Eugene Klein, was charged with one count of conspiracy to defraud the United States and one count of attempting to transfer Calabrese’s personal property to prevent its seizure by the government in a two-count indictment returned late yesterday by a federal grand jury. Klein allegedly obstructed enforcement of Special Administrative Measures (“SAMs”), first imposed on Calabrese in November 2008, to prevent him from further participating in illegal activities while incarcerated by restricting Calabrese’s contacts with others. Klein also allegedly attempted to transfer property, which Calabrese told Klein was a valuable Stradivarius violin, from the Wisconsin residence in an effort to prevent the government from seizing the instrument and applying the proceeds toward a $4.4 million restitution judgment that Calabrese owes to his victims, including the families of those he killed.

Klein, 62, of Springfield, Mo., a Roman Catholic priest, was employed as a chaplain at the U.S. Bureau of Prisons Medical Center for Federal Prisoners in Springfield, Mo., where Calabrese is serving a life sentence. As chaplain, Klein was permitted to meet with Calabrese on a regular basis to provide religious ministry, such as the sacrament of Holy Communion. Because of the position of trust he occupied, Klein was able to have close and frequent communication with Calabrese, the indictment alleges.

Klein will be ordered to appear for arraignment in U.S. District Court in Chicago.

The indictment was announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and John F. Oleskowicz, Special Agent-in-Charge of the Chicago Office of the Justice Department’s Office of Inspector General.

According to the indictment, Klein knew that prison rules prohibited him from taking letters and messages into and out of the prison. He was also informed of the SAMs and understood they prohibited the passing of any information or messages to or from Calabrese. The SAMs, which have been renewed annually and remain in effect, restrict Calabrese’s privileges in prison, including his access to the mail, media, telephone and visitors. Under the SAMs, Calabrese is prohibited from having contact with anyone outside the prison, except his attorney and certain immediate family members. Except for communications with his attorney, all oral and written communications with immediate family members, including mail and visits, are subject to review and/or observation to ensure that Calabrese does not pass any messages to anyone that could be used to further criminal activity.

In March of this year, Calabrese told Klein that he had hidden a Stradivarius violin, which Calabrese claimed was worth millions of dollars, within the Wisconsin residence, the indictment alleges. However, paperwork found in March 2010 during a search of Calabrese’s residence in west suburban Oak Brook included a certificate for a violin made in 1764 by Giuseppe Antonio Artalli, not Antonius Stradivarius, the indictment further alleges.

On March 6, Klein allegedly spoke by phone with unnamed Individual A and asked about Calabrese’s Wisconsin residence, as well as three questions that Calabrese had given to Klein to ask Individual A. The next day, Klein met with Calabrese and allegedly took possession of a handwritten note that Calabrese secretly passed to Klein through the food slot in his prison cell. The note contained additional questions Klein was to ask Individual A for Calabrese, and also disclosed the location of a violin hidden within the Wisconsin residence. On March 26, Klein again met with Calabrese and allegedly took possession of a document that Calabrese secretly passed through the food slot of his cell.

As part of the conspiracy, the indictment alleges that Klein and Calabrese agreed that Klein would travel from Missouri to Illinois to meet with Individual A. Klein was to advise Individual A of certain questions Calabrese wished to ask Individual A; advise Individual A of the information Calabrese had told Klein about the violin; and formulate a plan with Individual A to remove the violin from the Wisconsin residence. On April 3, Klein drove to Illinois and met with Individual A at a restaurant in Barrington, where Klein allegedly divulged the contents of a handwritten note that Calabrese had secretly passed to him. During the meeting, Individual A told Klein that the government had seized the Wisconsin residence and was attempting to sell it through a realtor. On April 5 and 6, Klein met with Individuals A and B and, together, they allegedly devised a plan to 3 prevent the government from locating and seizing the violin by posing as potential buyers of the home. On April 7, Klein called the realtor handling the Wisconsin home to arrange a time for the trio to enter the home and search for the violin. Once inside, Klein and Individuals A and B agreed that Individual B would distract the realtor while Klein and Individual A searched for the violin using the directions that Calabrese had provided to Klein, according to the indictment.

The government conducted a subsequent search of the Wisconsin residence but the violin has not been recovered.

After Calabrese was held responsible for 13 murders by a judge and jury and sentenced on Jan. 28, 2009, to life imprisonment and ordered to pay restitution totaling $4,422,572, law enforcement authorities began efforts to locate and seize Calabrese’s assets to satisfy the judgment he owed to the families of his murder victims. In March 2010, agents searched Calabrese’s Oak Brook residence, as well as his home in Williams Bay. At the Oak Brook home, agents seized cash, jewelry and other valuables hidden in a secret compartment in the basement. The total value of the seized items was estimated to exceed $1 million.

The government is being represented by Assistant U.S. Attorney Amarjeet Bhachu.

Each count of the indictment carries a maximum penalty of five years in prison and a $250,000 fine. If convicted, the Court must determine a reasonable sentence to impose under the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.”

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

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

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

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Jared Lee Loughner Case May Take Years

January 25, 2011

The man accused of carrying out the mass shooting in Tucson pleaded not guilty Monday afternoon in a Phoenix courtroom — an initial step in a case against Jared Loughner that could take years to wind its way through the criminal justice system.

Both federal and state authorities intend to prosecute Loughner in the January 8 shootings. There will also likely be proceedings over whether to move the case to a different venue, a possible insanity defense, and prosecutors’ push for the death penalty.

The Tucson man is charged with the attempted assassination of Rep. Gabrielle Giffords and the attempted murder of two of her aides. He is accused of opening fire on a Giffords political event that wounded 13 people and killed six others, including a federal judge and a 9-year-old girl who was born on Sept. 11, 2001.

Loughner will later face state charges dealing with the other victims following the outcome of the federal case.

The case was moved to Phoenix because one of the six dead, U.S. District Judge John Roll, was based in Tucson and federal judges there recused themselves. All the federal judges in the rest of the state soon joined them, and a San Diego-based judge is now assigned to the case.

Now that Loughner has entered a plea of not guilty, the question arises whether he will claim an insanity defense.

Before the case even gets to trial, the court would have to decide whether Loughner is mentally competent to stand trial. If he isn’t, he would be sent to a federal facility for a minimum of four months to see if they can restore his competency. It could be up to a two-month wait just to get him into one of those facilities.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

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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