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

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

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


Joel Esquenazi and Carlos Rodriguez Convicted by a Federal Jury on All Counts for Their Involvement in the Scheme to Bribe Haiti Officials

August 7, 2011

The U.S. Attorney’s Office Southern District of Florida on August 5, 2011 released the following:

“TWO TELECOMMUNICATIONS EXECUTIVES CONVICTED BY MIAMI JURYON ALL COUNTS FOR THEIR INVOLVEMENT IN SCHEME TO BRIBE OFFICIALS AT STATE-OWNED TELECOMMUNICATIONS COMPANY IN HAITI

Joel Esquenazi and Carlos Rodriguez, former executives of Terra Telecommunications Corp., have been convicted by a federal jury on all counts for their roles in a scheme to pay bribes to Haitian government officials at Telecommunications D’Haiti S.A.M (Haiti Teleco), a state-owned telecommunications company. The jury reached its verdict yesterday after five hours of deliberations, following a two-and-a-half-week trial.

The convictions were announced by U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; and Special Agent in Charge Jose A. Gonzalez of Internal Revenue Service, Criminal Investigation Division (IRS-CID), Miami Field Office.

“These individuals conspired and made corrupt payments to foreign government officials for the purpose of securing business advantages for their company,” said U.S. Attorney Ferrer. “The FCPA helps to create a more level playing field in which businesses can compete fairly and sends the message that American businesses are simply not up for sale.”

“These defendants authorized more than $800,000 in illegal bribe payments to Haitian officials in exchange for business advantages – a clear violation of the FCPA,” said Assistant Attorney General Breuer. “This verdict is another powerful example that bribery of government officials – whether at home or abroad – has serious consequences. In finding the defendants guilty on all charged counts, the jury sent an unmistakable message that paying off foreign officials does not, in fact, pay off.”

“These convictions send a strong and clear message that we will aggressively pursue investigations on subjects that use shell companies to launder funds,” said IRS Special Agent in Charge Gonzalez. “IRS-CID will utilize its financial investigative expertise to unravel any complex money laundering scheme leaving no financial stones unturned.”

Joel Esquenazi, 52, of Miami, and Carlos Rodriguez, 55, of Davie, Fla., were convicted of one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and wire fraud; seven counts of FCPA violations; one count of money laundering conspiracy; and 12 counts of money laundering.

According to the evidence presented at trial, Esquenazi was the president and Rodriguez was the executive vice president of Terra, which was headquartered in Miami-Dade County, Fla. Haiti Teleco was the sole provider of land line telephone service in Haiti. Terra had a series of contracts with Teleco that allowed the company’s customers to place telephone calls to Haiti.

According to the evidence presented at trial, the defendants participated in a scheme to commit foreign bribery and money laundering from November 2001 through March 2005, during which time the telecommunications company paid more than $890,000 to shell companies to be used for bribes to Teleco officials. Esquenazi and Rodriguez authorized these bribe payments to successive directors of international relations at Teleco.

The purpose of these bribes, according to the evidence presented at trial, was to obtain various business advantages from the Haitian officials for Terra, including the issuance of preferred telecommunications rates, reductions in the number of minutes for which payment was owed, and the continuance of Terra’s telecommunications connection with Haiti. To conceal the bribe payments, the defendants used various shell companies to receive and forward the payments. In addition, they created false records claiming that the payments were for “consulting services,” which were never intended to be performed or actually performed.

Esquenazi was remanded to the custody of the U.S. Marshals. Rodriguez remains free on bond. Sentencing for both defendants currently is scheduled for Oct. 13, 2011.

On April 27, 2009, Antonio Perez, a former controller at Terra, pleaded guilty to one count of conspiracy to violate the FCPA and money laundering. On Jan. 12, 2010, he was sentenced to 24 months in prison, which he is currently serving.

On May 15, 2009, Juan Diaz, the president of J.D. Locator Services, pleaded guilty to one count of conspiracy to violate the FCPA and money laundering. He admitted to receiving more than $1 million in bribe money from telecommunications companies. On July 30, 2010, he was sentenced to 57 months in prison, which he is currently serving.

On Feb. 19, 2010, Jean Fourcand, the president and director of Fourcand Enterprises Inc., pleaded guilty to one count of money laundering for receiving and transmitting bribe monies in the scheme. On May 5, 2010, he was sentenced to six months in prison.

On March 12, 2010, Robert Antoine, a former director of international affairs for Haiti Teleco, pleaded guilty to one count of conspiracy to commit money laundering. He admitted to receiving more than $1 million in bribes from Miami-based telecommunications companies. On June 2, 2010, he was sentenced to 48 months in prison, which he is currently serving.

In a superseding indictment, Washington Vasconez Cruz, Amadeus Richers, Cinergy Telecommunications Inc., Patrick Joseph, Jean Rene Duperval and Marguerite Grandison are charged in a related scheme to commit foreign bribery and money laundering from December 2001 through January 2006. No trial date is currently set. An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

The conspiracy to commit violations of the FCPA and wire fraud count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost. The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The money laundering counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The indictment also seeks forfeiture which will determined by the court at a later date.

The government’s investigation is ongoing. The Department of Justice is grateful to the government of Haiti for continuing to provide substantial assistance in gathering evidence during this investigation. In particular, Haiti’s financial intelligence unit, the Unité Centrale de Renseignements Financiers (UCREF), the Bureau des Affaires Financières et Economiques (BAFE), which is a specialized component of the Haitian National Police, and the Ministry of Justice and Public Security provided significant cooperation and coordination in this ongoing investigation.”

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

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

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

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Attorney Sentenced to Prison for Wire Fraud and Money Laundering in a Multi-Million Dollar Mortgage Fraud Scheme

July 24, 2011

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

“HOUSTON – Vincent Wallace Aldridge, a former fee attorney for First Southwestern Title Company, has been sentenced to 63 months imprisonment for wire fraud and money laundering arising from a scheme to defraud residential mortgage lenders of more than $3.7 million in loans in connection with home purchases in the Houston area, United States Attorney José Angel Moreno announced today, along with acting FBI Special Agent in Charge Russell D. Robinson and Internal Revenue Service-Criminal Investigations (IRS-CI) Special Agent in Charge Rodney E. Clark.

Aldridge, 46, of Fresno, Texas, was found guilty by a jury at the end of January along with his wife Tori Aldridge, a former employee of First Southwestern Title Company, of 19 counts which included conspiracy to commit wire and mail fraud, wire fraud, conspiracy to commit money laundering and money laundering charges. Gilbert Isgar, a co-owner of Waterford Homes, was found guilty of 13 counts which included conspiracy to commit wire and mail fraud, wire fraud and conspiracy to commit money laundering.

United States District Judge Sim Lake sentenced Aldridge this afternoon to the 63-month term which is to be followed by three years of supervised release. He was also ordered to pay $891,000 in restitution and a special assessment of $1900. On June 29, 2011, Isgar was sentenced to 24 months imprisonment to be followed by three years of supervised release and ordered to pay restitution. Tori Aldridge’s sentencing is set for Nov. 19, 2011 before Judge Lake.

Both of the Aldridges and Isgar were convicted of conspiring to devise a scheme which they executed during 2004 and 2005 to receive proceeds from real estate transactions based upon materially fraudulent information that was intentionally supplied to at least four lending institutions as the basis for an agreement between the lending institutions and borrowers. Vincent Aldridge lured borrowers by representing the scheme as an investment opportunity. For the use of their credit to obtain mortgage loans, the borrowers were promised $10,000 after the closing of their respective property and that the property would be sold after a year for a profit. Once a borrower agreed to the deal, Vincent Aldridge and Tori Aldridge – acting as both an escrow officer and as a loan processor – met with the borrower to obtain the necessary personal identifying information to complete the borrower’s lending package. Prior to the Aldridges submitting the lending packages to the lending institutions, they modified the lending package to enhance the borrower’s ability to qualify for the requested loan. These enhancements included fraudulently overstating the borrower’s income, misrepresenting the borrower’s principal residence as rental property and misrepresenting the purchase property as the principal residence. The mortgage loans totaled approximately $3,700,000. Each property sold in amounts between $344,000 and $360,000 and were funded to First Southwestern Title Company by wire.

As a part of the scheme, Isgar, co-owner of Waterford Custom Homes, inflated the sales price of the properties to be purchased by the aforementioned recruited borrowers. As a part of the agreement between the Aldridges and Isgar, disbursement authorizations for attorney’s fees and additional contractor fees on brand new homes for amounts of $60,000 to more than $80,000 were signed by Isgar. These documents were provided to First Southwestern Title, which was controlled by the Aldridges. These disbursement authorizations were not provided to the lender and were not listed on the HUD settlement statement. The disbursements for additional attorney’s fees were in addition to the attorney’s fees stated on the attorney fee line in HUD settlement statement.

Once the loans were funded to the title company, the Aldridges caused several checks to be drawn on the account of the title company, each totaling amounts of $60,000 to more than $80,000, to Aldridge & Associates IOLTA bank account. The checks totaled approximately $442,089 and represented a portion of the illicit proceeds obtained through the mortgage fraud scheme. On one occasion, Isgar wired approximately $81,000 back to Vincent Aldridge’s account after he received the funds from the closing. The total amount of the money laundering was more than $500,000.

Both Vincent Aldridge and Gilbert Barry Isgar were allowed to remain on bond and voluntarily surrender to the Bureau of Prisons. Tori Aldridge remains on bond conditions until her sentencing.

The investigation leading to the charges was conducted by the FBI and IRS-CI. Assistant United States Attorneys Jennifer Lowery and Andrew Leuchtman are prosecuting the case.”

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

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

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

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Ernest Edward Wampler Convicted by a Federal Jury of Two Counts of Traveling Interstate and Failing to Register as a Sex Offender

July 8, 2011

The U.S. Attorney’s Office Western District of Texas on July 7, 2011 released the following:

“FEDERAL JURY IN MIDLAND CONVICTS MAN FOR FAILING TO REGISTER AS A SEX OFFENDER

United States Attorney John E. Murphy announced that this morning in Midland, a federal jury convicted 50-year-old Ernest Edward Wampler of two counts of traveling interstate and failing to register as sex offender.

Testimony and evidence at trial established that Wampler was convicted of sexual assault of a child in Midland County in 2001. When Wampler was released from prison in 2007, state officials explained to him his responsibilities to register as a sex offender and Wampler signed paperwork acknowledging that he understood those responsibilities. Furthermore, exhibits admitted at trial established that Wampler did register as a sex offender in Midland on two occasions in 2007, first upon his release from prison, and then when he changed his address.

Thereafter, however, Wampler moved out of state and claimed North Carolina residence to obtain a state identification card in Jacksonville, North Carolina in March 2009, but failed to register as a sex offender in that state. In March 2011, Wampler returned to Midland and worked for approximately a month without registering as a sex offender. Federal law requires that sex offender registration be accomplished within three days following any change in an offender’s address or employment.

United States Marshals arrested Wampler in Magnolia, Texas, in April 2011. When he was arrested, Wampler was in possession of identification cards, under an assumed name, from two carnival amusement companies that had employed him.

Wampler faces up to ten years in federal prison and a lifetime of supervised release per count. He is scheduled to be sentenced on September 29, 2011.

Assistant United States Attorney John S. Klassen prosecuted the matter on behalf of the Government. The case was investigated by agents with the United States Marshals Service, the Midland Police Department and the North Carolina Department of Justice.”

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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