Hereford House defendant rejected plea deals

October 22, 2012

The Kansas City Star on October 22, 2012 released the following:

“BY MARK MORRIS
The Kansas City Star

Kansas City restaurateur Rodney J. Anderson rejected three possible plea bargains before going to trial this morning on fraud and arson conspiracy charges in the Hereford House fire.

Federal prosecutors made the plea disclosures at an 8 a.m. hearing held by U.S. District Judge Greg Kays before jury selection began.

Anderson, who is on trial with Vincent Pisciotta and Mark A. Sorrentino, rejected two offers that would have had prosecutors recommending sentences of five years in prison, one with an agreement to cooperate with prosecutors and one without. The most recent offer, made last month, would have had a binding seven-year sentence with a cooperation agreement.

Anderson’s lawyer, J.R. Hobbs, confirmed that those were the terms of the offers.

Lawyers representing Pisciotta and Sorrentino said their clients were never interested in plea negotiations so no formal offers were ever made.

Jury selection was underway Monday morning, to be followed by opening statements from prosecutors and defense lawyers.

Anderson is accused of hiring Pisciotta and Sorrentino to burn his restaurant in Oct. 2008 so he could collect insurance money. Those funds, prosecutors have alleged, would have paid for renovations to make the Hereford House, once located at 2 E. 20th St., more competitive with new restaurants in the Power & Light District.

Anderson’s lawyer is expected to argue that his client’s ownership interest in the restaurant was too small for him to have expected any significant recovery from insurance funds.

Lawyers representing Pisciotta and Sorrentino confirmed in court Monday that their cases hinge on undermining the identification of their clients as the arsonists, who can be seen on surveillance video bringing containers of gasoline into the restaurant late the evening of Oct. 19, 2008.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

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


Husband and Wife, Aaron Michael Hymas and Tiffany Kim Hymas, Plead Guilty to Wire Fraud

October 19, 2012

The Federal Bureau of Investigation (FBI) on October 18, 2012 released the following:

Part of Ongoing Crestwood Mortgage Fraud

BOISE— Aaron Michael Hymas, 38, and Tiffany Kim Hymas, 37, former Treasure Valley residents now living in Bountiful, Utah, pled guilty today in United States District Court in Boise to one count of wire fraud, U.S. Attorney Wendy J. Olson announced.

According to the plea agreements, the defendants admitted that on March 28, 2007, they schemed to defraud a lender by having Tiffany Hymas submit a residential loan application for $295,600, wherein she misrepresented that she was employed by OPM Enterprises with 2.6 years on the job; that she had income and commissions of $72,500 per month; and that she had gross rental income of $14,600 per month from four properties located in Meridian, Nampa, and Boise. Based on these misrepresentations, the loan was funded by Taylor, Bean, and Whitaker Mortgage Corporation. The defendants admitted that Tiffany Hymas’ statements were false and material to the loan application and that they knew the statements were false at the time she made them.

The defendants face up to 20 years in prison, a maximum fine of $250,000, and up to three years of supervised release. Sentencing is set for January 14, 2013, before U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.

“False statements to banks and lenders in order to obtain home loans have undermined the integrity of our nation’s housing financing system,” said Olson. “These pleas move us closer to the conclusion of the long term investigation into the mortgage activities of those associated with Crestwood Homes. Federal and state law enforcement agencies and prosecutors in the District of Idaho are committed to working together to ensure that those who fraudulently obtain home loans for personal gain are punished.”

In a related case, sentencing is set for October 25-26, 2012, for Travis Richard Hymas, 29, of Cedar Hills, Utah, formerly of Meridian, Idaho. A federal jury convicted Hymas on June 22 on five counts of wire fraud related to mortgage fraud. During the eight-day trial, the jury heard evidence that between November 2006 and March 2007, Hymas defrauded five lenders on nine residential loans valued at approximately $1.7 million. According to court documents, Travis and his wife Season filed a bankruptcy petition on July 17, 2008, in United States Bankruptcy Court for the District of Idaho. On March 19, 2009, a substantial amount of the debt they owed on the fraudulent loans was discharged by the bankruptcy proceeding. Season Hymas is set for trial in Boise on November 13.

The cases are part of an investigation of mortgage fraud activity related to Crestwood, which involved multiple defendants who bought and sold real estate in order to “flip” it, or gain profits from the sales. The financial institutions and mortgage lenders incurred substantial losses on the loan transactions.

To date, nine people have been sentenced in related cases, including Michael J. Hymas, Shauntee K. Ferguson, Christopher R. Georgeson, Stanley J. Ferguson, Brent Bethers, Shane Merlin Hymas, Laurie Krechelle Hymas, Melody C. Redondo, and Paul Redondo.

The cases were investigated by the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation, with assistance provided by the Office of the United States Trustee and the Idaho Department of Insurance. The case is being prosecuted by the U.S. Attorney’s Office for the District of Idaho and the State of Idaho, Office of the Attorney General.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit http://www.stopfraud.gov.”

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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 grand jury indicts former FBI agent

October 19, 2012

The Wall Street Journal on October 18, 2012 released the following:

“Associated Press

SALT LAKE CITY — A federal grand jury indicted a former FBI special agent and a defense contractor Thursday in a federal fraud case involving U.S. Army contracts, marking the latest turn in what prosecutors have called a multimillion-dollar scheme to win military contracts in Afghanistan.

The indictment alleges that the defense contractor, 51-year-old Michael Taylor of Harvard, Mass., offered the FBI agent a $200,000 cash payment, additional money for medical expenses for the agent’s child, and a share in the proceeds of several anticipated contracts worth millions of dollars in exchange for using his position to try to impede a criminal investigation into contract awards.

Robert G. Lustyik, 50, of Sleepy Hollow, N.Y., was an FBI special agent until September 2012, assigned to counterintelligence work.

A third person, Johannes W. Thaler, 49, of New Fairfield, Conn., is accused of acting as a conduit between the two men. Thaler is a childhood friend of Lustyik, according to the indictment.

Each was charged with 11 counts of conspiracy, wire fraud, obstructing justice and obstructing an agency proceeding, the U.S. Department of Justice announced in a statement Thursday.

Lustyik acted through Thaler to secure promises of cash, purported medical expenses and business proceeds in exchange for abusing his position as an FBI agent, Assistant Attorney General Lanny Breuer said.

“The alleged conduct is outrageous, and we will do everything we can to ensure that justice is done in this case.”

According to the indictment, the three men had a business relationship to pursue contracts for security services, electric power and energy development in the Middle East, Africa and elsewhere.

But in September 2011, Taylor learned a federal criminal investigation had been launched in Utah in 2010 into whether he and others had committed fraud in the awarding of defense contracts, according to the indictment.

Taylor had formed the Boston-based firm American International Security Corp., which was awarded the military contracts.

Taylor allegedly gave Lustyik, through Thaler, cash and other benefits to impede the investigation. In return, Lustyik designated Taylor as an FBI confidential source, contacting Utah officials to dissuade them from charging Taylor and attempting to interview potential witnesses and targets of the investigation, the indictment claims.

Taylor had already been charged criminally in the case. In addition, an active Army Reservist who was a procurement official is accused of leaking bid information that allowed Taylor’s company to win $54 million in contracts to supply Afghan troops with weapons and training.

The case broke in Utah when yet another business associate made a series of cash withdrawals from a St. George credit union just under the federal reporting limit of $10,000. Christopher Harris earlier pleaded not guilty to charges in the bid scheme.”

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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.


ICEgate? High ranking intel officials linked to Palestinian money laundering

May 15, 2012

Examiner.com on May 7, 2012 released the following:

By Jim Kouri

“What at first appeared to be government officials involved in embezzlement to the tune of more than a half-billion dollars now appears to be also connected to a Palestinian money-laundering operation, according to several Law Enforcement Examiner sources.

A top U.S. intelligence chief pleaded guilty last week as a result of a far-reaching federal fraud investigation that nabbed a total of five members of the Department of Homeland Security and may be connected to funnel money to a Palestinian ring, according to a report obtained by the National Association of Chiefs of Police and the Law Enforcement Examiner.

James M. Woosley, the acting director of intelligence for DHS’s Immigration and Customs Enforcement (ICE) pleaded guilty to defrauding the government of more than $180,000 in a scheme involving fraudulent travel vouchers, and time and attendance claims, according to court documents.

The 48-year old former resident of Tucson, Arizona, pleaded guilty in the U.S. District Court for the District of Columbia to a charge of conversion of government money, according to the Department of Justice.

Four other suspects pleaded guilty to charges related to the Woosley case: Ahmed Adil Abdallat, 64, an ICE supervisory intelligence research specialist, pleaded guilty in October 2011; William J. Korn, 53, an ICE intelligence research specialist, pleaded guilty in December 2011; Stephen E. Henderson, 61, a former contractor doing work for ICE, pleaded guilty in January 2012; and Lateisha M. Rollerson, 38, an assistant to Woosley, pleaded guilty in March 2012. Abdallat pleaded guilty in the Western District of Texas, and the others pleaded guilty in the District of Columbia.

Between February 2009 and September 2010, ICE Supervisory Intelligence Research Specialist Ahmed Adil Abdallat also traveled from El Paso, Texas to Washington, D.C. more than ten times, according to records submitted to DHS. Abdallat did so at the recommendation of the ICE Supervisor, and Abdallat submitted fraudulent travel vouchers for expenses that he did not incur, so that he could kick back money to the ICE Supervisor, according to former U.S. Congressman Tom Trancredo, who remains active in monitoring U.S. immigration policy and agencies in the United States.

As a result of the fraudulent travel vouchers, ICE reimbursed Abdallat a total of approximately $116,392.84. Abdallat kept some of the money, but kicked back approximately $58,550 to the ICE Supervisor, Rollerson and another individual, according to court records.

Ahmed Adil Abdallat was sentenced to a mere 12 months in prison for illegal use of a diplomatic passport and submitting fake travel receipts to ICE. According to federal sentencing guidelines, he should have received up to 10 years in federal prison for his unlawful use of a diplomatic passport.

All told, the actions of the various defendants cost taxpayers upwards of $600,000.

“[On May 2] James Woosley became the fifth – and highest-ranking – individual to plead guilty as part of a series of fraud schemes among rogue employees and contractors at ICE,” said U.S. Attorney Ronald C. Machen Jr., District of Columbia.

“He abused his sensitive position of trust to fleece the government by submitting phony paperwork for and taking kickbacks from subordinates who were also on the take. This ongoing investigation demonstrates our dedication to protecting the taxpayer from corrupt government employees and contractors,” Machen added.

According to the government’s evidence, with which Woosley agreed, between May 2008 and January 2011, Woosley participated in fraudulent activity involving travel vouchers, and time and attendance claims. In addition, from June 2008 until February 2011, Woosley was aware of or willfully overlooked fraudulent activity of ICE employees or contract employees under his supervision, such as Palestinian Ahmed Adil Abdallat, a supervisory intelligence specialist.

The other employees included Rollerson, who he met in or about 2007, while he was deputy director for ICE’s Office of Intelligence. Woosley and Rollerson developed a close, personal relationship. In or about May 2008, Rollerson was hired as an intelligence reports writer for a company that did contract work for ICE. Later that year, she was hired by ICE as an intelligence research specialist.

This placed her first in the chain of command under Woosley, and she later became Woosley’s personal assistant. Rollerson’s official duty station was in Washington, D.C., and she lived in Virginia, with Woosley.

Rollerson helped Woosley and the other participants with the paperwork to support the fraudulent payments they later received.

A Palestinian Connection?

According to investigative journalist and radio commentator Debbie Schlussel, suspect Ahmed Adil Abdallat, a Palestinian, served as an intelligence analyst for ICE. And his boss Woosley, the ICE Intelligence chief, could not say anything about it because he is a co-conspirator with Abdallat in submitting phony expense documents to ICE for reimbursement.

“The money, stolen from American taxpayers who paid it to fund this country’s national security, is probably going to fund Islamic terrorism and is definitely going to a multi-million dollar Palestinian money-laundering ring and its bank accounts in Jordan. The Muslim ICE official [had] a US-government-issued diplomatic passport, which he misuse[d] for eight personal trips to Jordan to see Muslim brothers” wrote Schlussel.

“Homeland Security and the Justice Department are minimizing these parts of the story and are succeeding. But the truth is that this is a major national security breach and a gargantuan example of the failure of political correctness and pan-Muslim affirmative action in federal law enforcement agencies” Schlussel stated.

U.S. District Judge Amy Berman Jackson, appointed to the court in 2011 by President Barack Obama, scheduled sentencing of Woosley for July 13, 2012. Under federal guidelines, Woosley faces a likely sentence of 18 to 27 months in prison as well as a potential fine.

In addition, as part of his plea agreement, he agreed to forfeiture of the money he wrongfully obtained. This case was investigated by the DHS Office of Inspector General, the FBI’s Washington Field Office and the ICE’s Office of Professional Responsibility.

“The fact that the investigation was handled by the Homeland Security Department and its components instead of by the FBI or other federal investigators is highly suspicious to me. These were high-ranking U.S. intelligence officials who were stealing larges sums of money without the slightest hesitation. Could not these same officials compromise national security or worse?” asks former military intelligence officer and police detective Sid Franes.

“Are Americans getting the whole story? Or are we once again facing yet another political agenda?” he asks.”

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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

————————————————————–

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.


Documents provide rare insight into FBI’s terrorism stings

April 16, 2012

The Washington Post on April 13, 2012 released the following:

“By Peter Finn

Days before his arrest in Pittsburgh last month, Khalifa Ali al-Akili posted a remarkable message on his Facebook page: A mysterious man who spoke often of jihad had tried to interest Akili in buying a gun, then later introduced him to a second man, whom Akili was assured was “all about the struggle.”

It smelled, Akili wrote on Facebook, like a setup.

“I had a feeling that I had just played out a part in some Hollywood movie where I had just been introduced to the leader of a ‘terrorist’ sleeper cell,” Akili wrote.

When he googled a phone number provided by the second man, it turned out to be to Shahed Hussain, one of the FBI’s most prolific and controversial informants for terrorism cases. Soon the sting was off; Akili was subsequently arrested on gun — not terrorism — charges, which he has denied.

It was a rare miss for Hussain, 55, who has played a wealthy, dapper member of a Pakistani terrorist group in several FBI operations over nearly a decade.

This role has inflamed Muslim and civil rights activists, who describe Hussain as an “agent provocateur,” and prompted harsh comments from the presiding judge in a 2010 case, who questioned his honesty and the aggressiveness of the FBI’s tactics.

“I believe beyond a shadow of a doubt that there would have been no crime here except the government instigated it, planned it and brought it to fruition,” said U.S. District Judge Colleen McMahon at the sentencing of four men from Newburgh, N.Y., convicted on terrorism charges. She added, “That does not mean there was no crime.”

Hussain declined to speak about his work for the FBI, saying in a brief phone interview, “I can’t say anything for security reasons.” The FBI declined to discuss Hussain or McMahon’s comments.

But the blown Pittsburgh sting and the voluminous court records from the 2010 case have provided rare insight into a tactic used increasingly by the FBI since the Sept. 11, 2001, attacks in which suspects are monitored almost from the beginning of plots and provided with means to help them carry them out. The targets in such stings have included Washington’s Metro subway system, the Pentagon and the U.S. Capitol.

There have been 138 terrorism or national security cases involving informants since 2001, and 51 of those have come over the past three years, according to the Center on National Security at Fordham Law School in New York. The center said the government secured convictions in 91 percent of those cases.

Law enforcement officials say stings are a vital tactic for heading off terrorism. But civil rights activists and others say the FBI has been identifying individuals with radical views who, despite brash talk, might have little ability to launch attacks without the government’s help.

“It almost seems like the government is creating a theatrical event that produces more fear in the community,” said Michael German, a senior policy counsel at the American Civil Liberties Union and a former FBI agent who worked undercover.

Yet in these terrorism stings, every attempted defense that has alleged entrapment by the government has failed, according to Fordham’s Center on National Security. The FBI said that record speaks volumes and rejected any suggestion that it has invented terrorist plots. “They present the idea,” FBI spokesman Kathleen Wright said of the targets of investigations. “It is not us coming up with these ideas.”

Officials said the subjects of these stings are the ones who first generate suspicion — by contacting terrorists overseas, attempting to secure weapons or speaking of a desire to commit violence.

One of the prosecutors in the 2010 case, Assistant U.S. Attorney Jason Halperin, said in court that confidential informants such as Hussain are an “important tool” for the FBI. “Mr. Hussain is Pakistani. He speaks Urdu. He speaks Pashto. He’s Muslim. He can read Arabic,” Halperin said. “All of these things make Mr. Hussain a very valuable asset for the FBI.”

The birth of an asset

In testimony for the 2010 terrorism case, for which Hussain appeared as a witness for the prosecution, he described himself as a member of a politically connected family in Pakistan who fled to the United States with his wife and children after he was falsely accused of murder during a government crackdown against the secular MQM party. He arrived on a fake British passport in 1994, Hussain testified.

In the years since, his relatives in Pakistan have transferred hundreds of thousands of dollars to him, allowing him and his family to acquire gas stations, a beverage center and a motel in Upstate New York, according to financial records produced in court. He also testified that former Pakistan prime minister Benazir Bhutto, during a trip to New York, gave his son $40,000 to buy a new car, but the judge, McMahon, questioned the veracity of the claim.

It was not the only time McMahon expressed doubts about Hussain’s honesty.

“By the end of the trial, the jury knew that Hussain had lied about his finances to at least two courts (the Northern District of New York and the Northern District Bankruptcy Court), lied to the Immigration and Naturalization Service, lied to the Town of Colonie and its school district about his residence, lied to potential customers of his motel, and lied to the IRS about his income at tax time,” wrote McMahon.

In late 2001, Hussain was arrested on federal fraud charges of helping immigrants illegally secure driver’s licenses. Hussain, who had been working as a translator for the Department of Motor Vehicles, faced a possible prison term and deportation to Pakistan. He pleaded guilty and, as part of his agreement with the government, cooperated with the FBI by going undercover to secure evidence against several former associates in the scheme, including his mistress.

Hussain excelled in this new role — a fact grudgingly accepted even by his detractors.

“Both his physical and emotional presence seemed impervious to chastisement, to exposure, to anything — nothing seemed to throw his casual defiance off course,” said Karen Greenberg, the director of Fordham’s Center on National Security, who has observed Hussain in court.

The bureau also has sent Hussain to London and Pakistan, where he infiltrated a terrorist training camp, according to court testimony.

In the summer of 2003, Hussain first adopted the persona of the suave, moneyed terrorist at the direction of the FBI. The object of the sting was Yassin Aref, an Iraqi Kurd and the spiritual leader of an Albany mosque.

Aref was convicted of participating in a plot to launder funds from the sale of a shoulder-fired missile. Aref’s attorneys said he simply saw what he thought was a loan between Hussain and the owner of a struggling pizza parlor who was also convicted. Aref and the owner of the pizza parlor were sentenced to 15 years in prison.

The informant at work

On another assignment for the FBI, Hussain went to Newburgh’s Masjid al-Ikhlas mosque 12 times before he met James Cromitie, a convert to Islam and a stocker at a Wal-Mart, in June 2008.

In a poor community, Hussain struck an odd figure, driving Hummers and BMWs and wearing designer clothes.

Salahuddin Muhammad, imam of the mosque, said in an interview that some people suspected that Hussain was an FBI informant. He was too eager to engage people in conversation about jihad, Muhammad said.

Cromitie, who attended the mosque infrequently, either didn’t hear of the suspicions of others or didn’t care.

Hussain later told the FBI that Cromitie said: “Look, brother, I might have done a lot of sin, but to die like a shaded (martyr), I will go to paradise . . . I want to do something to America.”

By July, Hussain had told Cromitie he was part of a Pakistani terrorist group. Cromitie, who had multiple drug convictions but no history of violence, said he wanted to join, according to the FBI’s debriefing of the informant.

During a November 2008 trip to Philadelphia with Hussain, which coincided with the terrorist attacks on several locations in Mumbai, India, Cromitie made some of his most incendiary statements.

Cromitie hadn’t heard of the attacks, but Hussain pointed out that one of the targets in Mumbai was a Jewish center, according to transcripts of conversations that were secretly recorded and later played in court.

“I’d like to get a synagogue,” Cromitie said.

The judge later noted in a finding of fact that “whenever Hussain asked Cromitie to act on those sentiments — make a plan, pick a target, find recruits, introduce the [confidential informant] to like-minded brothers, procure guns and conduct surveillance — Cromitie did none of the above.”

McMahon said that at this point Hussain began to add “more worldly inducements” to the “offer of paradise” beginning with a BMW “but only after Cromitie had completed a mission.”

Closing the net

Hussain left for Pakistan on Dec. 18, 2008, and didn’t return to the United States for two months. While he was away, the FBI briefed officials at Stewart International Airport in New York on the investigation but assured them that “Cromitie was unlikely to commit an act without the support of the FBI source.”

Indeed, Cromitie said, “I just dropped everything,” according to the transcript of the conversation. But when Hussain returned, Cromitie’s enthusiasm was rekindled.

McMahon later wrote that “the court believes and specifically finds that it was about this time when Hussain offered Cromitie as much as a quarter million dollars to participate in a mission.”

Such an offer was not authorized by the FBI, the prosecutor told the court. Hussain denied making it, saying the reference to a specific amount of money was not intended to be literal. McMahon, in her sentencing, said she did not believe him.

After a surveillance drive around Stewart Air National Guard Base on Feb. 24, 2009, Cromitie cut off communication with Hussain for six weeks, he later testified. Cromitie pretended to have left town, although he was still in Newburgh.

On April 5, Cromitie called Hussain. “I have to try to make some money, brother,” Cromitie said.

“I told you. I can make you $250,000, but you don’t want it, brother. What can I tell you,” Hussain said.

Cromitie soon was back in.

On May 20, 2009, Hussain, Cromitie and three associates drove south from Newburgh carrying three duffel bags, each stuffed with nearly 40 pounds of explosives and 500 steel ball bearings to maximize casualties at a synagogue and a Jewish community center in the Bronx. After bombing them, the men planned to double back north to Stewart Air National Guard base near Newburgh to launch a stinger missile at parked military planes.

But the FBI had provided the bombs and the missile and had rendered them harmless.

All four Newburgh men were later convicted on terrorism charges in a jury trial and sentenced to 25 years in prison. They have appealed.

On the final drive to the Bronx, Hussain tried to get Cromitie to prime the bombs by following his instructions on which wires to connect, Hussain testified. But Cromitie and the others couldn’t figure it out, and Hussain had to stop the car and do it himself.

When they got to the Bronx, Hussain had to explain how to operate a car key fob so Cromitie could open the first of the pre-parked cars and plant the bomb.

Afterward, Hussain asked him if he had turned the bomb on. “I forgot,” Cromitie replied.

Hussain told him not to worry, it could still be detonated.

Cromitie then set off to plant the other two bombs, but he couldn’t open the trunk of the next car. Hussain told Cromitie by walkie-talkie to just put them in the back seat.

Hussain then signaled for the FBI to move in.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

————————————————————–

To find additional federal criminal news, please read Federal 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.


Fort Lauderdale Police Officer Charged with Alleged Wire Fraud

January 5, 2012

The Federal Bureau of Investigation (FBI) on January 4, 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 Franklin Adderley, Chief of Police, Fort Lauderdale Police Department, announced the filing of a criminal information charging defendant David Michael McElligott, 47, of Warner Robins, GA and currently stationed at Robins Air Force Base, GA, with one count of wire fraud, in violation of 18 U.S.C. §1343. If convicted, the defendant faces a statutory maximum of 20 years in prison.

The information alleges that McElligott, a Fort Lauderdale police officer since 1991, has been on extended military leave, serving in the U.S. Air Force since 2001. Since September 2003, he allegedly submitted falsified Military Leave and Earnings Statements and military orders to the Fort Lauderdale Police Department and the City of Fort Lauderdale. According to the information, the defendant submitted the falsified Leave and Earnings Statements to increase the supplemental pay he received from the City of Fort Lauderdale pursuant to the City’s Supplemental Pay Policy. The information further alleges that the defendant submitted the falsified military orders so that he could falsely assert his entitlement to extend his rights under federal law to return to his job as a police officer. According to the Information, McElligott transmitted the falsified documents via facsimile and/or e-mail to an employee in the payroll department of the Fort Lauderdale Police Department.

This investigation began as a result of information discovered by the Fort Lauderdale Police Department during an internal review. The Fort Lauderdale Police Department immediately contacted the FBI Public Corruption Task Force, and continued to assist in the investigation that resulted in today’s charges.

Mr. Ferrer commended the investigative efforts of the FBI’s Broward County Public Corruption Task Force and the Fort Lauderdale Police Department. The case is being prosecuted by Assistant U.S. Attorney Richard P. Murad.

An information is only an accusation and a defendant is presumed innocent 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. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.”

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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 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.


Chicago Federal Grand Jury Indicted Five Chicago Individuals on Federal Fraud Charges for Allegedly Receiving Kickbacks totaling at least $800,000

July 15, 2011

The U.S. Attorney’s Office Northern District of Illinois on July 14, 2011 released the following:

“FORMER NORTH CHICAGO SCHOOL BOARD MEMBER AND TRANSPORTATION DIRECTOR AMONG FIVE DEFENDANTS INDICTED FOR ALLEGED ROLES IN $800,000 KICKBACK SCHEME INVOLVING STUDENT BUSING CONTRACTS

CHICAGO — A former North Chicago school board member and the district’s former transportation director were indicted on federal fraud charges for allegedly receiving kickbacks totaling at least $800,000 from three co-defendants who controlled several different companies that received at least $21 million in student bus contracts over nearly a decade. All five defendants were charged in a 26-count indictment alleging that, between 2001 and August 2010, they schemed to defraud and deprive the citizens of North Chicago, located in Lake County, and the approximately 4,000-student North Chicago Community Unit School District 187 (NCSD) of the honest services of former school board member Gloria Harper and former transportation director Alice Sherrod. The indictment was returned by a federal grand jury late yesterday and announced today 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 Alvin Patton, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The North Chicago School District cooperated with the investigation.

Harper, 59, of North Chicago, who was a member of the NCSD board from 1999 to May 2009, and Sherrod, 59, of Gurnee, who was District 187’s transportation director from 2001 to July 2010, allegedly used their positions to enrich themselves secretly by soliciting and accepting gifts and cash from their three co-defendants in exchange for favorable official action regarding student transportation contracts. Initially, Harper and Sherrod allegedly received kickbacks of approximately $4,000 to $5,000 a month but, by 2003, they were collecting approximately $20,000 a month, the indictment alleges.

Also indicted were: Derrick Eubanks, 47, of Lake Villa; Tommie Boddie, 66, of Wadsworth; and Barrett White, 52, of Matteson. All five defendants were each charged with six counts of wire fraud and various counts of soliciting or paying bribes. All but White were also charged with multiple counts of filing false federal income tax returns. All five defendants will be arraigned on dates still to be determined in U.S. District Court.

The indictment seeks forfeiture of more than $9.67 million, as well as 48 buses and vans and seven personal automobiles.

According to the indictment, from the late 1990s until mid-2003, the NCSD contracted with various companies to provide student transportation, including T&M Transportation, which was owned at least in part and controlled by Boddie, and Eubanks Transportation, which was owned at least in part and controlled by Eubanks. In approximately 2001, Harper and Sherrod met with Boddie and told him they would arrange for the NCSD to increase the number of students that T&M transported if Boddie agreed to pay them in return, and Boddie agreed. At Harper’s request, White began acting as an intermediary, or “bagman,” receiving cash from Boddie, keeping some for himself, and providing the bulk to Harper, who, in turn, shared the money with Sherrod, the indictment alleges.

To facilitate his role as the scheme’s bagman, White established D’Amoto Transportation, which he used to funnel money from Boddie’s T&M company to Harper and Sherrod. Sometime in 2002 or 2003, White established BWT Transportation to replace D’Amoto. In approximately May 2003, Harper allegedly suggested to Boddie and Eubanks that they join together to form one company to bid on NCSD transportation contracts. Both Harper and Sherrod told Boddie and Eubanks that if they won the contract they would have to split the profits with the two school officials, and the two men agreed to do so, the charges allege. As a result, Boddie and Eubanks created Safety First Transportation, Inc., which won the NCSD’s transportation contract in 2003. Once Safety First began to receive school district payments, White allegedly converted Safety First’s funds into cash to pay Harper for her to share with Sherrod, while White kept a portion for himself. Neither White nor his company, BWT, did any work for Safety First and their sole role was to funnel cash to Harper
and Sherrod, according to the indictment.

As a result of an IRS audit of Safety First in 2006-2007, Safety First began providing funds to White as an employee, as well as continuing to provide him with funds as a contractor, in late 2006, even though he continued to provide no service other than paying kickbacks as an intermediary.

Also as a result of the audit, Harper allegedly agreed that White’s portion of the proceeds should be increased to compensate him for the tax debt White owed the IRS. All five defendants agreed that an amount of Safety First’s revenues from the NCSD would be excluded from the profits to be split with Harper and Sherrod and instead would be used to repay tax debts owed by Boddie, Eubanks and White, the charges allege.

The fraud scheme and individual tax counts allege that Boddie and Eubanks filed false federal tax returns for Safety First claiming that they paid White hundreds of thousands of dollars in consulting fees and wages for assisting them in obtaining the transportation contract with NCSD. In fact, the indictment alleges that money paid to White was intended solely to fund the kickbacks to Harper and Sherrod in exchange for helping them win and maintain the transportation contract.

In April 2008, the defendants allegedly agreed to set up a new company, Quality Trans, LLC, to replace Safety First and to assume its contracts with the school district. All five allegedly agreed to split among them Quality Trans’s profits, and Boddie, Eubanks and White continued to make cash payments to Harper and Sherrod. In June 2009, Quality Trans won a five-year contract to provide NCSD with transportation services.

Various tax counts allege that Boddie and Eubanks took false deductions for the money that Safety First paid to White and which White then funneled as kickbacks to Harper and Sherrod. Other tax counts allege that Harper and Sherrod filed false individual tax returns failing to report the kickbacks they received as income.

The government is being represented by Assistant U.S. Attorneys Matthew Getter and Greg Deis.

Each count of wire fraud carries a maximum penalty of 20 years in prison, and each count of soliciting or paying bribes carries a maximum of 10 years in prison, as well as a $250,000 fine. As an alternative, the Court may impose a maximum fine totaling twice the loss to any victim or twice the gain to any defendant, whichever is greater, and restitution is mandatory. Filing a false federal income tax return carries a maximum penalty of three years in prison and a $250,000 fine. In addition, a defendant convicted of tax offenses faces mandatory costs of prosecution and remains civilly liable to the Government for any and all back taxes, as well as a civil fraud penalty of 75 percent of the underpayment plus interest. 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 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.”

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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