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

August 15, 2014

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

“By Adam Goldman

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

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

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

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

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

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

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

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

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

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

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

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

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

An FBI spokesman in New York declined to comment.

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

Fateful meeting

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

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

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

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

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

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

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

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

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

Noury called Abassi’s wife in February 2013.

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

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

Move to New York

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

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

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

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

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

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

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

Shroff said her client did not radicalize Esseghaier.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

Federal Crimes – Appeal

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

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

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


Two Florida Residents Indicted on Charges of Allegedly Scheming to Defraud and Threaten Spanish-Speaking Consumers

July 25, 2013

The U.S. Department of Justice’s Office of Public Affairs on July 25, 2013 released the following:

“A grand jury in the Southern District of Florida issued an indictment for two individuals on charges of conspiracy, fraud and extortion alleging they operated a series of fraudulent businesses targeting Spanish-speaking consumers, the Justice Department and the U.S. Postal Inspection Service (USPIS) announced today. The indictment charges Daniel Carrasco, 54, and Federico Martin Gioja, 45, both of Miramar, Fla., with incorporating, owning and operating Florida companies that used telemarketers in a phone room in Argentina to extract money from consumers, using lies and extortion.

Carrasco and Gioja were charged by criminal complaint and arrested on June 26, 2013. They have remained incarcerated since that time. Carrasco and Gioja, and a third individual, Romino Tasso, also were named in a civil suit filed by the Justice Department. In the civil case, the Justice Department requested that the court issue an injunction, and, subsequently, Judge Cecilia Altonaga issued a temporary restraining order barring further lies to consumers and freezing the assets of Carrasco, Gioja, Tasso and companies under their control.

“We will use every tool at our disposal, including asset freezes, injunctive relief and criminal prosecution, against companies that lie to, extort, threaten and defraud consumers,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Protecting Americans from fraud continues to be a top priority for the Department of Justice.”

According to the civil complaint and the affidavit filed in support of the criminal complaint, the case resulted from a referral by Spanish-language television station, Univision. Companies belonging to Carrasco and Gioja are alleged to have falsely claimed an affiliation with Univision and purported to sell products such as vitamins, lotions, medical insurance and English-language training products. However, the companies frequently did not deliver products ordered by consumers. Since the companies allegedly did not have many of the products they promised to send to consumers, consumers received other products instead. Then, according to the indictment, after consumers refused delivery of the companies’ shipments, the Argentinian phone room telemarketers called and falsely threatened consumers with arrest, deportation or fines on their gas and electric bills.

U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer stated, “These defendants specifically targeted Spanish-speaking victims, pretending to be affiliated with Univision, to sell their products from their phone room in Argentina, when in fact, they had absolutely no connection to Univision, and their companies did not deliver the products consumers ordered. “We are committed to investigating and prosecuting such fraudsters, both domestic and international, whose schemes defraud consumers.”

According to the criminal and civil complaints, Carrasco and Gioja routinely changed the names of the companies under which they did business to evade consumer complaints, regulators and law enforcement. Allegedly, a variety of state agencies contacted the businesses regarding their illicit practices. Those working with Carrasco and Gioja, in emails cited in the affidavit in support of arrest, referred to these companies tainted by complaints as “burnt.” Rather than changing the “burnt” companies’ practices, Carrasco and Gioja allegedly incorporated new companies and started the same illegal practices again.

The alleged fraud first came to light when the Spanish language network Univision informed the USPIS that they believed a company was involved in a fraud scheme in which it misrepresented its affiliation with the network. Subsequently, the USPIS investigated the case, submitted the affidavit in support of the criminal complaint and arrested the defendants.

“Postal inspectors will continue to investigate cases involving fraud against consumers and will vigorously pursue those individuals who use the mail to further their criminal schemes,” said Ronald Verrochio, U.S. Postal Inspector in Charge in Miami.

Acting Assistant Attorney General Delery commended the Postal Inspection Service for their investigative efforts and thanked the U.S. Attorney’s Office for the Southern District of Florida for their contributions to the civil case. The criminal case is being prosecuted by Assistant Director Richard Goldberg with the Department of Justice’s Consumer Protection Branch.”

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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.


“Enron’s Jeff Skilling Could Get Early Release From Prison”

April 4, 2013

CNBC on April 4, 2013 released the following:

“By: Scott Cohn
CNBC Senior Correspondent

Former Enron CEO Jeffrey Skilling, who is serving a 24-year prison term for his role in the energy giant’s epic collapse, could get out of prison early under an agreement being discussed by his attorneys and the Justice Department, CNBC has learned.

Skilling, who was convicted in 2006 of conspiracy, fraud and insider trading, has served just over six years. It is not clear how much his sentence would be shortened under the deal.

A federal appeals panel ruled in 2009 that the original sentence imposed by U.S. District Judge Sim Lake was too harsh, but a re-sentencing for the 59-year-old Skilling has repeatedly been delayed, first as the appeals process played out, and then as the negotiations for a deal progressed.

Those talks had been a closely guarded secret, but Thursday the Justice Department quietly issued a notice to victims required under federal law:

“The Department of Justice is considering entering into a sentencing agreement with the defendant in this matter,” the notice reads. “Such a sentencing agreement could restrict the parties and the Court from recommending, arguing for, or imposing certain sentences or conditions of confinement. It could also restrict the parties from challenging certain issues on appeal, including the sentence ultimately imposed by the Court at a future sentencing hearing.”

(Read More: Flush With Crime: Study Shows Prison a Career Booster)

A Justice Department spokesman declined to comment. Skilling’s longtime defense attorney, Daniel Petrocelli, could not immediately be reached for comment.

Lake, who imposed the original sentence, would have the final say in the sentence. The posting of the notice, however, suggests the parties have some indication he will go along. Lake held a private conference call with attorneys for both sides last month.

For Skilling, who has consistently maintained his innocence, an agreement would end a long ordeal, although his conviction on 19 criminal counts would likely stand. The government, meanwhile, would avoid a potentially messy court battle over alleged misconduct by the Justice Department’s elite Enron Task Force appointed in the wake of the company’s sudden failure in 2001.

Skilling’s attorneys had planned to move for a new trial based on that alleged misconduct. Under a sentencing agreement, that motion would likely be dropped.

Skilling, who developed Enron’s business model as an “asset-light” energy trading company, rose to CEO in early 2001, only to resign six months later. Soon after that, Enron began its sudden plunge into what was at the time the largest bankruptcy in U.S. history.”

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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 – 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.


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.


A Rosebud couple and their son have been indicted by a federal grand jury for alleged fraud

October 19, 2012

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

“Family Members Indicted for Fraud

U.S. Attorney Brendan V. Johnson announced that a Rosebud couple and their son have been indicted by a federal grand jury for fraud.

Shannon Running, age 53; Norman Running, Sr., age 54; and Norman Running, Jr., age 34, all of Rosebud, were indicted by a federal grand jury on October 10, 2012, for conspiracy to commit wire fraud. Shannon Running was also charged with six counts of wire fraud, and Norman Running, Jr. was also charged with structuring currency transactions.

All three appeared before U.S. Magistrate Judge Mark A. Moreno on October 17, 2012, at Pierre and pled not guilty to the indictment.

The conspiracy count and each wire fraud count carry a maximum penalty upon conviction of 20 years in prison and/or a $250,000 fine, plus restitution. The structuring currency transactions count carries a maximum penalty upon conviction of five years in prison and/or a $250,000 fine. If the structuring currency transactions count is found to be part of a pattern of illegal activity involving more than $100,000 in a 12-month period, upon conviction the maximum penalty of imprisonment and fine will double to 10 years and $500,000, respectively. The charges are merely accusations, and the defendants are presumed innocent until and unless proven guilty.

The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Ann M. Hendrickson is prosecuting the case. All three defendants were released pending trial. A trial date has been set for December 18, 2012.”

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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.


Grand Jury Indicts 11 Allegedly Linked to an Inland Empire Loan Modification Scam That Targeted Financially Distressed Homeowners

September 13, 2012

The Federal Bureau of Investigation (FBI) on September 12, 2012 released the following:

“LOS ANGELES— Federal agents this morning arrested 10 defendants who worked at a Rancho Cucamonga-based business that allegedly offered bogus loan modification programs to financially distressed homeowners. As a result of the scheme allegedly run out of 21st Century Real Estate Investment Corp. and several related companies, more than 4,000 financially distressed homeowners lost at least $7 million in fees they paid to the company, and many homeowners lost their homes to foreclosure.

Those taken into custody this morning were among 11 defendants named in a federal indictment unsealed today following an investigation by the Federal Bureau of Investigation, IRS-Criminal Investigation, the United States Postal Inspection Service, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Federal Housing Finance Agency, Office of Inspector General.

According to the indictment, during an 18-month period that began in June 2008, a Rancho Cucamonga woman, Andrea Ramirez, operated 21st Century and several other companies. According to the indictment, 21st Century “defrauded financially distressed homeowners by making false promises and guarantees regarding 21st Century’s ability to negotiate loan modifications from the homeowners’ mortgage lenders, falsely representing that 21st Century was operating a loan modification program sponsored by the United States government, instructing homeowners to cease communication with their mortgage lenders and to cease making their mortgage payments.”

“The housing crisis provided fraud artists a new avenue to exploit people in financial distress,” said United States Attorney André Birotte Jr. “Many of the victims in this alleged scheme were in desperate financial straits, and shameless financial predators promised relief they could not deliver. As a result, many homeowners went into foreclosure and now have to deal with the ramifications of losing their homes.”

Ramirez and the other 21st Century employees contacted distressed homeowners through cold calls, newspaper ads and mailings, and various 21st Century-controlled websites that advertised loan modification services. Once they contacted the distressed homeowners, according to the indictment, Ramirez and other 21st Century employees often falsely told clients that the company was operating through a federal government program, that they would be able to obtain new mortgages with specific interest rates and reduced payments, and that attorneys would negotiate loan modifications with their lenders. Ramirez and other 21st Century employees regularly instructed financially distressed homeowners to cease making mortgage payments to their lenders and to cut off all contact with their lenders because they were being represented by 21st Century. On some occasions, Ramirez and other 21st Century employees would tell homeowners that 21st Century was using the fees paid by the homeowner to make mortgage payments, when in fact Ramirez and 21st Century simply were keeping the homeowner’s money.

Christy Romero, Special Inspector General at SIGTARP, stated: “Ramirez and her co-conspirators are charged with fraudulently operating 21st Century to exploit the hardships of homeowners fighting to keep a roof over their head. As alleged, these con artists swindled distressed homeowners by lying about their affiliation with federal housing programs and giving money-back guarantees that the homeowners would get a lower mortgage payment if they paid an advance fee. SIGTARP and our law enforcement partners are committed to shutting down schemes that prey on those who can least afford it by falsely claiming an affiliation with TARP’s housing programs.”

Leslie P. DeMarco, Special Agent in Charge of the IRS-Criminal Investigation’s Los Angeles Field Office, said: “Using the guise of a federally sponsored loan modification program and the assurance of a qualified legal team, the defendants preyed on financially distressed homeowners allegedly depriving them of much needed money and property. Those who find ways to fraudulently benefit from government programs meant to help struggling homeowners keep their homes will be brought to justice.”

The 11 defendants named in the indictment are:

  • Andrea Ramirez, who also used the names Andrea Parker and Lisa Evans, 44, of Rancho Cucamonga;
  • Christopher Paul George, 42, Rancho Cucamonga, who surrendered this morning to authorities;
  • Michael Bruce Bates, who also used the names Michael Bruce Myers and Robert Allen Castro, 61, of Moreno Valley;
  • Crystal Taiwana Buck, 37, of Long Beach;
  • Michael Lewis Parker, 34, of Pomona, who is currently a fugitive being sought by federal authorities;
  • Catalina Deleon, 35, of Glendora;
  • Hamid Reza Shalviri, 50, Montebello, who self-surrendered this morning after being contacted by federal agents;
  • Yadira Garcia Padilla, 35, of Rancho Cucamonga;
  • Mindy Sue Holt, 53, of San Bernardino;
  • Iris Melissa Pelayo, 42, of Upland; and
  • Albert DiRoberto, 59, of Fullerton.

The defendants arrested this morning are expected to be arraigned this afternoon during their initial court appearances in United States District Court in Riverside.

“Fraudulent loan modification scams affect consumers at the most basic level, jeopardizing their ability to retain ownership of their homes,” said B. Bernard Ferguson, Inspector in Charge of the U.S. Postal Inspection Service-Los Angeles Division. “The U.S. Postal Inspection Service will investigate these crimes to protect consumers and when the nation’s mail system is used for illegal or dangerous use.”

Steve Linick, the Federal Housing Finance Agency Inspector General, stated: “The government created programs intended to assist homeowners by allowing them to remain in their homes during these troubling financial times. Anyone attempting to engage in schemes designed to exploit struggling homeowners and the government programs created to help those same homeowners will ultimately be brought to justice.”

All 11 defendants are charged with nine felony counts—five counts of mail fraud, three counts of wire fraud, and one count of conspiracy. Each count in the indictment carries a statutory maximum penalty of 20 years’ imprisonment.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

This prosecution is part of efforts 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 United States Attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. 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

————————————————————–

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 Indictment Alleges That Peregrine CEO, Russell Wasendorf Sr., Lied To Regulators Every Month Since Jan 2010

August 14, 2012
Russell Wasendorf Sr.
“Prosecutors say Wasendorf lied to regulators about the value of customer funds on a monthly basis in reports from January 2010 through May 2012.”

Forbes on August 14, 2012 released the following:

By: Halah Touryalai, Forbes Staff

“Russell Wasendorf Sr., the CEO of the now bankrupt Peregrine Financial Group, has been formally charged by a federal grand jury on 31 counts of misleading regulators.

Wasendorf lied to the U.S. Commodity Futures Trading Commission 31 times about the value of customer funds the firm held. Wasendorf, who’s been held in custody since being arrested in July, faces 155 years in prison and a fine of $7.75 million if convicted on all counts.

According to the indictment Wasendorf submitted false information for his U.S. futures and currency brokerage firm in its 2010 and 2011 financial statements.

Wasendorf “overstated the value of PFG’s customer segregated funds by at least tens of millions of dollars, well knowing and believing the actual value of PFG’s customer segregate funds was at least tens of millions of dollars less than stated in the financial documents,” the indictment says. []

The CEO’s false statements didn’t stop there, according to prosecutors in the U.S. Attorney’s Office for the Northern District of Iowa. Wasendorf lied to regulators about the value of customer funds on a monthly basis in reports from January 2010 through May 2012, prosecutors says.

Last month Wasendorf was arrested after regulators accused PFG of fraud, misusing of client money, violating customer fund segregation laws and making false statements about its finances. Peregrine file for bankruptcy and roughly $215 million in client assets are missing amid the mess.

Wasendorf’s arrest came just days after he attempted to take his own life outside his Iowa-based office building. According to police reports, the CEO attempted suicide and left a note stating that he had been stealing from the firm.

According to reports, the CEO attempted the suicide after a regulator pushed him to allow its auditors to electronically verify customer balances actually exist at its custodian bank–in this case, U.S. Bank.”

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