Reports: Prosecutions going up for war zone crime

October 30, 2011

The Associated Press (AP) on October 30, 2011 released the following:

“By PAULINE JELINEK
Associated Press

WASHINGTON (AP) — A Marine in Iraq sent home $43,000 in stolen cash by hiding it in a footlocker among American flags. A soldier shipped thousands more concealed in a toy stuffed animal, and an embassy employee tricked the State Department into wiring $240,000 into his foreign bank account.

As the wars in Iraq and Afghanistan wind down, the number of people indicted and convicted by the U.S. for bribery, theft and other reconstruction-related crimes in both countries is rapidly rising, according to two government reports released Sunday.

“This is a boom industry for us,” Stuart Bowen, Special Inspector General for Iraq Reconstruction, or SIGIR, said in an interview.

“Investigators and auditors had a productive quarter,” said a report on the theft of Afghanistan aid by Steven Trent, Special Inspector General for Afghanistan Reconstruction, or SIGAR. The report covered August through October.

In the last 13 months U.S. investigators in Iraq secured the indictments of 22 people for alleged aid-related offenses, bringing to 69 the total since the SIGIR office was created in 2004. Convictions stand at 57. Several hundred more suspects are under scrutiny in 102 open investigations and those numbers are expected to climb.

The rise in caseloads derives partly from spinoff investigations, where suspects facing prosecution lead investigators to other suspects, said Jon Novak, SIGIR’s assistant inspector general for investigations.

“More and more people are ratting out their associates,” he said, turning in conspirators who helped launder money after it was stolen, others who were aware of it and others implicated in the crimes.

As investigators gain experience, they’re received better information from a growing network of sources in Iraq, said Dan Willkens, Novak’s deputy. Development of an automated data-mining system for investigations has helped, he said, as did a decision two years ago to speed prosecutions by hiring three former assistant U.S. attorneys and detailing them to the Department of Justice.

At the inspector general’s office for Afghan reconstruction, created in 2008, officials report only nine indictments and seven convictions so far. They say they’re trying to ramp up after years of upheaval and charges the office was mismanaged. Trent was named acting inspector general after his predecessor left in August and is the third person to hold the job.

Still, Trent reported that during the last quarter a SIGAR-initiated investigation netted the largest bribery case in Afghanistan’s 10-year war. Former army reserve captain Sidharth “Tony” Handa of Charlotte, N.C., was convicted, sentenced to prison and fined for soliciting $1.3 million in bribes from contractors working on reconstruction projects.

Most crimes uncovered by U.S. investigators in the two war zones include bribery, kickbacks and theft, inspired in part by the deep and pervasive cultures of corruption indigenous to the countries themselves.

Among some of the cases listed in the reports were those of:

Gunnery Sgt. Eric Hamilton, who pleaded guilty to conspiracy in what prosecutors say was a scheme to help Iraqi contractors steal 70 generators that were meant to supply electricity for fellow Marines. He sent some of their payments home in a footlocker and had other money wired, the report said.

Several U.S. government employees, who received kickbacks for steering contracts to local conspirators and providing inside information to people competing for contracts. A former army sergeant, who was not identified, is charged with pocketing more than $12,000 in cash that a contractor never picked up after the money was allegedly stolen by another army sergeant and mailed to California inside a stuffed animal.

Jordanian national and U.S. embassy employee Osama Esam Saleem Ayesh, who was convicted in April for stealing nearly $240,000 intended to cover shipping and customs charges the State Department incurs when it moves household goods of its employees. The money wound up in Ayesh’s bank in Jordan.

Money stolen from reconstruction projects also has been shipped off of U.S. battlefields tucked into letters home and stuffed in a military vest. Tens of thousands of dollars were once sewn into a Santa Claus suit.

Prosecutors have retrieved some of the money. More than $83 million will be returned to the U.S. from Iraq cases completed in the budget year that ended Sept. 30, bringing the total recovered over the last seven years to nearly $155 million, Bowen’s office said.

As well as stolen cash, the total includes court-ordered restitution, fines and proceeds from the sale of merchandise seized from those convicted, including Rolex watches, luxury cars, plasma TVs and houses.

SIGAR prosecutions recovered $51 million over the past year, Trent’s report said.

But the amount recovered is believed to be a tiny fraction of what’s been stolen in the two war zones, a figure that will probably never be known for certain. Far more money is believed to have been lost through waste and abuse that resulted from poor management and the often-questioned U.S. strategy of trying to rebuild nations that are still at war.

The U.S. has committed $62 billion to rebuilding Iraq and $72 billion for the reconstruction of Afghanistan.

The independent Commission on Wartime Contracting estimated in August that at least $31 billion has been lost to waste and fraud in Iraq and Afghanistan, adding that the total could be as high as $60 billion. It studied not just reconstruction spending, but $206 billion for the logistical support of coalition forces and the performance of security functions.

The commission found that from 10 to 20 percent of the $206 billion in spending was wasted, while fraud accounted for the loss of another 5 to 9 percent.

Bowen called the cost of fraud “egregious.”

“This is open crime occurring in a war zone,” he said. “And the purpose of a lot of these expenditures is to win hearts and minds. Obviously we lose hearts and minds” when local populations see foreigners steal money meant to help rebuild their country.

SIGIR and SIGAR are only two of the U.S. government offices looking into fraud, waste and abuse. Others include State Department inspectors and Army criminal investigators.”

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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 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.


Wong Yuh Lan, Lim Yong Nam, Lim Kow Seng, Hia Soo Gan Benson, and Hossein Larijani Indicted in an Alleged Fraud Conspiracy Involving Exports to Iran of U.S. Components Later Found in Bombs in Iraq

October 25, 2011

The Federal Bureau of Investigation (FBI) on October 25, 2011 released the following:

“Five Individuals Indicted in a Fraud Conspiracy Involving Exports to Iran of U.S. Components Later Found in Bombs in Iraq

Indictment Also Alleges Fraud Conspiracy Involving Illegal Exports of Military Antennas to Singapore and Hong Kong

WASHINGTON—Five individuals and four of their companies have been indicted as part of a conspiracy to defraud the United States that allegedly caused thousands of radio frequency modules to be illegally exported from the United States to Iran, at least 16 of which were later found in unexploded improvised explosive devices (IEDs) in Iraq. Some of the defendants are also charged in a fraud conspiracy involving exports of military antennas to Singapore and Hong Kong.

Yesterday, authorities in Singapore arrested Wong Yuh Lan (Wong), Lim Yong Nam (Nam), Lim Kow Seng (Seng), and Hia Soo Gan Benson (Hia), all citizens of Singapore, in connection with a U.S. request for extradition. The United States is seeking their extradition to stand trial in the District of Columbia. The remaining individual defendant, Hossein Larijani, is a citizen and resident of Iran who remains at large.

The arrests and the indictment were announced by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; John Morton, Director of the Department of Homeland Security’s U.S. Immigration and Customs Enforcement (ICE); Mark Giuliano, Executive Assistant Director of the FBI’s National Security Branch; Eric L. Hirschhorn, Under Secretary of Commerce; and David Adelman, U.S. Ambassador to Singapore.

“Today’s charges allege that the defendants conspired to defraud the United States and defeat our export controls by sending U.S.-origin components to Iran rather than to their stated final destination of Singapore. Ultimately, several of these components were found in unexploded improvised explosive devices in Iraq,” said Assistant Attorney General Monaco. “This case underscores the continuing threat posed by Iranian procurement networks seeking to obtain U.S. technology through fraud and the importance of safeguarding that technology. I applaud the many agents, analysts and prosecutors who worked on this extensive investigation.”

“These defendants misled U.S. companies in buying parts that they shipped to Iran and that ended up in IEDs on the battlefield in Iraq,” said U.S. Attorney Machen. “This prosecution demonstrates why the U.S. Attorney’s Office takes cases involving misrepresentations regarding the intended use of sensitive technology so seriously. We hope for a swift response from Singapore to our request for extradition.”

“One of Homeland Security Investigations’ (HSI) top enforcement priorities is preventing sensitive technology from falling into the hands of those who might seek to harm American personnel or interests—whether at home or abroad,” said ICE Director Morton. “This international investigation conducted by ICE’s HSI and our law enforcement partners demonstrates the importance of preventing U.S. technology from falling into the wrong hands, where it could potentially be used to kill or injure our military members and our allies. Our agency will continue to work closely through our attachés to identify these criminals, dismantle their networks, and ensure they are fully prosecuted.”

“This multi-year investigation highlights that acquiring property by deceit has ramifications that resonate beyond the bottom line and affects our national security and the safety of Americans worldwide,” said FBI Executive Assistant Director Giuliano. “We continue to work side-by-side with our many partners in a coordinated effort to bring justice to those who have sought to harm Americans. We consider this investigation as the model of how we work cases—jointly with the Department of Homeland Security/Immigration and Customs Enforcement and the Department of Commerce/Office of Export Enforcement and collectively with our foreign partners to address the threats posed by Iranian procurement networks to the national security interests of the United States both here and abroad.”

“These cases are the product of vigorous, cooperative law enforcement focused on denying to Iran items that endanger our coalition forces on the battlefield in Iraq,” said Under Secretary of Commerce Hirschhorn. “We will continue aggressively to go after such perpetrators—no matter where they operate—to guard against these types of threats.”

U.S. Ambassador to Singapore, David Adelman, praised the cooperation within the U.S. executive branch agencies and with the Singaporean authorities. “Twenty-first century law enforcement is most effective when countries work collaboratively as evidenced by this strong, cooperative effort between the U.S. and Singapore. Congratulations to all the officials in both our countries who made this happen,” he said.

The Charges

The indictment, which was returned in the District of Columbia on Sept. 15, 2010, and unsealed today, includes charges of conspiracy to defraud the United States, smuggling, illegal export of goods from the United States to Iran, illegal export of defense articles from the United States, false statements and obstruction of justice.

The charged defendants are Iranian national Larijani, 47, and his companies Paya Electronics Complex, based in Iran, and Opto Electronics Pte, Ltd., based in Singapore. Also charged is Wong, 39, an agent of Opto Electronics who was allegedly supervised by Larijani from Iran. The indictment also charges NEL Electronics Pte. Ltd., a company in Singapore, along with NEL’s owner and director, Nam, 37. Finally, the indictment charges Corezing International Pte. Ltd., a company in Singapore that maintained offices in China, as well as Seng, 42, an agent of Corezing, and Hia, 44, a manager, director and agent of Corezing.

Wong, Nam, Seng and Hia allegedly conspired to defraud the United States by impeding U.S. export controls relating to the shipment of 6,000 radio frequency modules from a Minnesota company through Singapore to Iran, some of which were later found in unexploded IEDs in Iraq. Seng and Hia are also accused of conspiring to defraud the United States relating to the shipment of military antennas from a Massachusetts company to Singapore and Hong Kong. Singapore has agreed to seek extradition for Wong and Nam on the charge of conspiracy to defraud the United States relating to the components shipped to Iran, and to seek extradition for Seng and Hia on the charge of conspiracy to defraud the United States relating to the military antenna exports.

In coordination with the criminal actions announced today, the Commerce Department announced the addition of 15 persons located in China, Hong Kong, Iran and Singapore to the Commerce Department’s Entity List. In addition to the five individual defendants in this case, the Commerce Department named additional companies and individuals associated with this conspiracy. In placing these parties on the Entity List, the Commerce Department is imposing a licensing requirement for any item subject to Commerce regulation with a presumption that such a license would be denied.

Exports of U.S. Components Later Found in IEDs

According to the indictment, IEDs caused roughly 60 percent of all American combat casualties in Iraq between 2001 and 2007. The first conspiracy alleged in the indictment involved radio frequency modules that have several commercial applications, including in wireless local area networks connecting printers and computers in office settings. These modules include encryption capabilities and have a range allowing them to transmit data wirelessly as far as 40 miles when configured with a high-gain antenna. These same modules also have potentially lethal applications. Notably, during 2008 and 2009, coalition forces in Iraq recovered numerous modules made by the Minnesota firm that had been utilized as part of the remote detonation system for IEDs.

The indictment alleges that, between June 2007 and February 2008, the defendants fraudulently purchased and caused 6,000 modules to be illegally exported from the Minnesota company through Singapore, and later to Iran, in five shipments, knowing that the export of U.S.-origin goods to Iran was a violation of U.S. law. In each transaction, the defendants allegedly told the Minnesota firm that Singapore was the final destination of the goods. The defendants also caused false documents to be filed with the U.S. government, in which they claimed that a telecommunications project in Singapore was the final end-use for the modules. In reality, each of the five shipments was routed from Singapore to Iran via air cargo. The alleged recipient of all 6,000 modules in Iran was Larijani, who had directed Wong, his employee in Singapore, to order them.

According to the indictment, the defendants profited considerably from their illegal trade. The defendants allegedly made tens of thousands of dollars for arranging these illegal exports from the United States through Singapore to Iran.

The indictment alleges that several of the 6,000 modules the defendants routed from Minnesota to Iran were later discovered by coalition forces in Iraq, where they were being used as part of the remote detonation systems of IEDs. In May 2008, December 2008, April 2009, and July 2010, coalition forces found no less than 16 of these modules in unexploded IEDs recovered in Iraq, the indictment alleges.

During this period, some of the defendants were allegedly communicating with one another about U.S. laws prohibiting the export of U.S.-origin goods to Iran. For example, between October 2007 and June 2009, Nam contacted Larijani in Iran at least six times and discussed the Iran prohibitions and U.S. prosecutions for violation of these laws. Nam later told U.S. authorities that he had never participated in illicit exports to Iran, even though he had participated in five such shipments, according to the indictment.

Exports of Military Antennas

The indictment further charges Seng, Hia, and Corezing with a separate fraud conspiracy involving the illegal export of two types of military antenna from the United States. The indictment alleges that these defendants conspired to defraud the United States by causing a total of 55 cavity-backed spiral antennas and biconical antennas to be illegally exported from a Massachusetts company to Singapore and Hong Kong without the required State Department license.

These military antennas are controlled for export as U.S. munitions and are used in airborne and shipboard environments. The indictment states that the biconical antenna, for example, is used in military aircraft such as the F-4 Phantom, the F-15, the F-111, the A-10 Thunderbolt II and the F-16 combat jets.

Seng, Hia and Corezing are alleged to have, among other things, conspired to undervalue the antennas to circumvent U.S. regulations on the filing of shipper’s export declarations to the U.S. government. They also allegedly used false names and front companies to obtain the antennas illegally from the United States.

Additional Misrepresentations

The indictment further alleges that Larijani, based in Iran, made false statements about doing business with an accused Iranian procurement agent and that he attempted to obstruct an official proceeding by the U.S. Department of Commerce.

In January 2010, the Department of Commerce placed Larijani’s company, Opto Electronics, on the Entity List, which is a list of companies to which U.S. businesses cannot export controlled dual-use items without obtaining U.S. government licenses. In response, Larijani repeatedly contacted Commerce Department officials in Washington, D.C., from Iran, requesting that his company be removed from the Entity List, according to the indictment. Commerce officials advised Larijani that, in considering whether his firm should be removed from the list, he needed to disclose whether he or his firm had any involvement with Majid Kakavand or Evertop Services Sdn Bhd.

Kakavand is an accused Iranian procurement agent who has been indicted in the United States, along with his Malaysian company Evertop Services, for illegally exporting U.S. goods to Iran, including to military entities in Iran involved in that nation’s nuclear and ballistic missile programs. Kakavand remains a fugitive and is believed to be in Iran.

According to the indictment, Larijani denied to Commerce officials on three occasions that he or his company, Opto Electronics, had done any business with Kakavand or Evertop Services. In fact, the indictment alleges that Larijani had been in communication with others about his business dealings with Kakavand on at least five occasions from 2006 through 2009.

This investigation was jointly conducted by ICE agents in Boston and Los Angeles; FBI agents in Minneapolis; and Department of Commerce, Bureau of Industry and Security agents in Chicago and Boston. Substantial assistance was provided by the U.S. Department of Defense, U.S. Customs and Border Protection, the State Department’s Directorate of Defense Trade Controls, the Treasury Department’s Office of Foreign Assets Control, and the Office of International Affairs in the Justice Department’s Criminal Division, particularly the Justice Department Attaché in the Philippines, as well as the FBI and ICE Attachés in Singapore.

U.S. law enforcement authorities thanked the government of Singapore for the substantial assistance that was provided in the investigation of this matter.

The prosecution is being handled by Assistant U.S. Attorneys Anthony Asuncion and John W. Borchert of the U.S. Attorney’s Office for the District of Columbia; and Trial Attorneys Jonathan C. Poling and Richard S. Scott of the Counterespionage Section of the Justice Department’s National Security Division.

The public is reminded that an indictment contains mere allegations. Defendants are presumed innocent unless and until proven guilty in a court of law.”

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

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

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.