“Prosecutors Expect More Arrests in Art-Fraud Scheme”

August 19, 2013

The New York Times on August 19, 2013 released the following:

By WILLIAM K. RASHBAUM

“Federal prosecutors handling the case against an obscure art dealer charged in one of the most audacious art frauds in recent memory told a judge on Monday that they expected more arrests in the continuing investigation. They also said they expected the case against the art dealer to be resolved soon.

The disclosures came at the arraignment of the dealer, Glafira Rosales, in United States District Court in Manhattan.

Ms. Rosales was arrested on money laundering and tax charges in connection with the scheme in May. She was arraigned Monday before Judge Katherine P. Failla on new charges contained in a superseding indictment that was handed up last week by a grand jury. She pleaded not guilty during the five-minute proceeding.

During the arraignment, Judge Failla asked one of the prosecutors, Jason P. Hernandez, an assistant United States attorney, if more arrests were expected.

“Yes,” he said.

Mr. Hernandez also said that the case against Ms. Rosales, which was the result of a lengthy F.B.I. investigation, was to be resolved in the coming weeks. He did not elaborate.

A lawyer for Ms. Rosales, Steven R. Kartagener, declined to comment on the new charges.

The charges issued last week revealed for the first time that all of the 63 phony art works at the heart of what prosecutors have described as a sweeping fraud scheme stretching over more than a decade were created by a single painter. The indictment identified him only as a painter who lives in Queens and said he had produced the canvases — purported to be by the hands of Modernist masters like Willem de Koonig, Jackson Pollock, Mark Rothko, Robert Motherwell and others — in his house and garage.

People briefed on the matter said he was Pei-Shen Qian, a struggling 73-year-old Chinese artist who came to the United States in 1981.

While he was paid a few thousand dollars for the canvases, they were later sold as works by Modernist masters for more than $80 million.

The indictment and other court papers said the painter who created the fake canvases was discovered selling his own art on the streets of Lower Manhattan in the early 1990s by Ms. Rosales’s boyfriend and business partner, an art dealer named Jose Carlos Bergantiños Diaz, who recruited him to make paintings in the style of celebrated Abstract Expressionists. The indictment does not name Mr. Bergantiños Diaz, but his identity is confirmed by other court records.

It is unclear whether Ms. Rosales has begun cooperating with the federal authorities since her arrest in May. But while the prosecutors handling her case initially argued then that she posed “a substantial flight risk” and that no bail conditions could assure her return to court, convincing a judge to detain her without bail, last week, after the new indictment was handed up, the prosecutors did not oppose her release on a $2.5 million bond.

Julie Bolcer, a spokeswoman for the office of Preet Bharara, the United States attorney in Manhattan, and an F.B.I. spokesman, James M. Margolin, declined to comment. Mr. Kartagener has refused to characterize his discussions with the prosecutors on the case, Mr. Hernandez and Daniel W. Levy.”

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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

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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.


Man Offers Guilty Plea, Upending Terror Case

June 14, 2012

The New York Times on June 13, 2012 released the following:

“By BENJAMIN WEISER

A terrorism case in Manhattan that raised key questions about government interrogation tactics ended abruptly on Wednesday after the defendant pleaded guilty to conspiring to support a Somali terrorist group.

The defendant, an Eritrean man named Mohamed Ibrahim Ahmed, admitted in Federal District Court that he trained in a camp run by the Somali group, Al Shabab, in 2009. The case had been seen as a potential test of the Obama administration’s strategy of interrogating terrorism suspects for both intelligence and law enforcement purposes.

Indeed, the plea came as the judge, P. Kevin Castel, was poised to rule on a motion by Mr. Ahmed’s lawyers seeking suppression of statements he had made to the Federal Bureau of Investigation while he was in custody in Nigeria; his lawyers argued that the statements had not been voluntary and, thus, were inadmissible.

“I have in my hand a 60-page draft of the decision on the motion to suppress,” Judge Castel, holding up a thick document, said in court before accepting Mr. Ahmed’s plea. The judge did not reveal how he would have ruled on the motion, but said that the ruling itself would “now be suppressed.”

Mr. Ahmed, 38, who had lived in Sweden, was scheduled for trial on July 9. He had been accused of providing material support to a terrorist group, receiving training and bomb-making instruction in Shabab military camps in Somalia in 2009 and using a firearm in a crime of violence. The firearm count alone carried a mandatory minimum sentence of 30 years and a maximum sentence of life in prison. As a result of Mr. Ahmed’s plea — to two conspiracy counts — he faces a maximum sentence of 10 years when he is sentenced on Nov. 2, the judge said in court.

Mr. Ahmed’s lawyer, Sabrina Shroff, said after the proceeding, “I’m sure Mr. Ahmed would have liked to have challenged the actions of the United States.” But, she added, given the difference between a maximum 10-year sentence and what could have resulted from a guilty verdict, it would have been a “humongous risk” to go to trial.

Preet Bharara, the United States attorney in Manhattan, said Mr. Ahmed had “traveled a long way from his home in Sweden to Somalia, where he took up the cause of Al Shabab, a deadly terrorist organization and sworn enemy of the United States and its people.”

Mr. Ahmed told the judge that in Somalia, he contributed 2,000 euros to Al Shabab and trained in one of its military camps, knowing that the United States considered it a terrorist organization.

Mr. Ahmed was taken into custody by Nigeria in 2009 under suspicion of being an agent for Al Qaeda. He was later interrogated by separate groups of American officials, known colloquially as “dirty” and “clean” teams.

The first team questioned him for intelligence purposes, without advising him of his rights, prosecutors have said. About a week later, a second team, of F.B.I. agents, read him his rights, which he waived, and he began to make incriminating statements, the government says. An issue before the judge had been how separate the American officials kept the two interrogations.

A prosecutor, Benjamin Naftalis, told Judge Castel that had the case gone to trial, the evidence would have included Mr. Ahmed’s statements and testimony from cooperating witnesses. Prosecutors have said a former Shabab military commander has been cooperating; although he has not been identified, his description resembles that of Ahmed Abdulkadir Warsame, a Somali captured by the United States military last year and questioned aboard a naval vessel for about two months.”

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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.


Manhattan U.S. Attorney Announces Arrests of Two Individuals in Alleged Multi-Million-Dollar Scam Involving Elderly Woman

May 3, 2012

The Federal Bureau of Investigation (FBI) on May 2, 2012 released the following:

“Preet Bharara, the United States Attorney for the Southern District of New York; Eric T. Schneiderman, the New York State Attorney General; and Janice K. Fedarcyk, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced charges today against IFEANYICHUKWU ERIC ABAKPORO and LATANYA PIERCE for allegedly swindling an elderly woman out of her multi-million-dollar property in Harlem that she had owned for more than 40 years and then deceiving a bank into giving them a $1.8 million mortgage loan secured by the property. ABAKPORO was arrested Monday in Queens, New York, and PIERCE was arrested yesterday after voluntarily surrendering to the FBI.

Manhattan U.S. Attorney Preet Bharara stated: “As alleged, these two defendants preyed on an elderly woman, using false documents and fraudulent representations to essentially steal her property out from under her. They then allegedly took their brazen scheme one step further, using the property to deceive a bank into lending them more than a million dollars. Sadly, this type of mortgage fraud scheme and exploitation of vulnerable victims have become all too familiar, but as these charges make clear, we are committed to bringing those who perpetrate these types of harmful schemes to justice.”

New York State Attorney General Eric Schneiderman stated: “Through lies and deception, these individuals abused the trust of an elderly woman in order to perpetrate a multi-million-dollar fraud. Now that their despicable scheme has been exposed, they will face justice.”

Assistant Director in Charge Janice K. Fedarcyk stated: “These defendants are charged with spinning a web of lies to steal the victim’s property. Cases like this are rightly a priority for the FBI: fraudulent schemes that victimize the vulnerable and enrich the unscrupulous.”

As alleged in the indictment unsealed yesterday in Manhattan federal court:

Beginning in March 2006, ABAKPORO, a lawyer with an office in Brooklyn, New York, and PIERCE, who worked for ABAKPORO, cultivated a relationship with an elderly woman (“the Victim”) who owned a residential apartment building worth millions of dollars located at 1070 St. Nicholas Avenue in Harlem (the “Property”). As part of the fraud scheme, ABAKPORO and PIERCE earned the Victim’s trust by, among other things, offering to help her manage the Property. This included collecting rent from its tenants on her behalf. However, instead of providing the Victim with the renters’ money, ABAKPORO and PIERCE pocketed it.

ABAKPORO and PIERCE then convinced the Victim to sell her property to them for $3.1 million. While they contracted to buy the property for that amount, at the closing, they presented the Victim with multiple fake and fraudulent checks to make it appear as if they had paid the contracted sale amount, when in fact they had not. Moreover, after the Victim’s attorney had left the closing, ABAKPORO and PIERCE fraudulently induced her to return all of the checks to them by representing that they would safeguard her money and give her a “private mortgage” in the Property, which they explained would include monthly payments made to her based on the money she had effectively loaned them. As part of the scheme, ABAKPORO and PIERCE signed and provided the Victim with a written agreement representing that she had loaned them approximately $1.9 million and in return held a “private mortgage” in the Property. Unbeknownst to the Victim, ABAKPORO and PIERCE never recorded the private mortgage and subsequently submitted a fraudulent application to Washington Mutual Bank seeking a $1.8 mortgage loan secured by the Property. ABAKPORO and PIERCE never disclosed to the bank that the Victim already held a private mortgage on the Property. Instead, ABAKPORO and PIERCE falsely represented to the bank that they had purchased the Property for $3.1 million and owned it “free and clear.” Based on those, and other, fraudulent representations, ABAKPORO and PIERCE obtained a $1.8 million mortgage loan from the bank, which they failed to repay.

As a result of the alleged fraud, the defendants obtained substantially all of the Victim’s assets, and $1.8 million in fraudulently obtained mortgage proceeds. The Property went into default.

***

ABAKPORO, 52, a Nigerian citizen, is a resident of Queens, and PIERCE, 43, is a resident of Brooklyn. They are each charged with wire fraud, bank fraud, wire fraud conspiracy, and bank fraud conspiracy. The wire fraud and wire fraud conspiracy charges each carry a maximum prison term of 20 years. The bank fraud and bank fraud conspiracy charges each carry a maximum prison term of 30 years.

ABAKPORO is currently detained pending his satisfaction of court-ordered bail conditions: a $1 million bond secured by an interest in property and co-signed by three individuals. PIERCE was released on a $500,000 bond to be co-signed by three individuals and secured by two properties.

Mr. Bharara praised the New York State Attorney General’s Office investigative staff and the FBI for their excellent work on the investigation of this matter. He also thanked the New York State Department of Financial Services for its assistance.

The case is being handled by the Office’s Complex Frauds Unit. Southern District of New York Assistant U.S. Attorneys Ryan Poscablo and Michael Lockard, along with Assistant Attorney General Meryl Lutsky, who has been designated a Special Assistant U.S. Attorney, and Assistant Attorney General Rhonda Greenstein, are in charge of the prosecution.

The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.”

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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.


Hearing on Terror Suspect Explores Miranda Warning

December 13, 2011

The New York Times on December 12, 2011 released the following:

“By BENJAMIN WEISER

Almost two years ago, a Federal Bureau of Investigation agent was in Nigeria to question an Eritrean man who was in custody on suspicion of supporting terrorism. The suspect, Mohamed Ibrahim Ahmed, had already been interrogated by other American officials for intelligence-gathering purposes, without having been read his rights.

The F.B.I. agent was there for a different purpose: a “clean” interrogation. He would apprise Mr. Ahmed of his Miranda rights — including the right to remain silent and to have counsel — and then interview him, in hopes of winning a confession that could be used in a prosecution in civilian court.

But suppose the suspect, who was also known as Talha, refused to waive his rights and answer questions? The agent proposed an idea in an e-mail to his colleagues and to prosecutors.

“We’ve planned that in the event that T does not waive his rights, we could continue as another ‘dirty’ interview,” the agent wrote in an e-mail at 11:54 a.m. on Jan. 3, 2010.

In the debate over using civilian trials for terrorists, one of the key issues — the ability to first question a suspect to gain critical intelligence on terrorist cells or plots and still pursue a criminal prosecution — is getting an early test in Mr. Ahmed’s case in Federal District Court in Manhattan.

Lawyers for Mr. Ahmed have asked a judge to suppress statements that the United States government has said he made after waiving his Miranda rights and being interrogated by the F.B.I. in Nigeria. They claim that any such waiver was not voluntary and thus any statements he made are inadmissible.

The hearing on the defense motion, which began on Thursday, has provided an unusually revealing look at how American officials are carefully navigating through a kind of hybrid version of Miranda, first trying to get intelligence through “dirty,” or un-Mirandized, interviews and then having different “clean team” interrogators read the same suspects their rights in the hopes that they will waive them and continue to talk.

One issue is how much distance American officials kept between the “dirty” and “clean” interviews, and whether the line between the two was blurred, possibly tainting any waiver of his rights.

Mr. Ahmed, 37, who has been living in Sweden, has since been indicted in Manhattan on charges that include providing material support to Al Shabab, a terrorist group based in Somalia. The indictment says that Mr. Ahmed received jihad training and bomb-making instruction in Shabab military camps in Somalia in 2009, and that when he was taken into custody in Nigeria in November 2009 on an immigration violation, he was found with bomb-making documents.

His interrogations, first by the Nigerians, then by unspecified American officials for intelligence purposes, and finally by the F.B.I. “clean team” agents, took place over the next few months, according to court testimony and statements by a prosecutor.

He was finally sent to Manhattan for arraignment in March 2010.

The agent’s e-mail referring to a “dirty” interview is not public. But as the suppression hearing began last Thursday, the judge, P. Kevin Castel, directed that a prosecutor read parts of the e-mail into the record during a discussion about how much of it could be made available to Mr. Ahmed’s defense lawyers.

The prosecutor, Jocelyn E. Strauber, said that by “dirty,” the F.B.I. agent was simply referring to an un-Mirandized interview.

In describing the Jan. 3, 2010, e-mail, Ms. Strauber explained to the judge that its author, Special Agent Maged Sidaros, was engaging in an internal discussion with other F.B.I. personnel and federal prosecutors, presumably in Manhattan, about “the possibility of a different kind of interview should his interview not proceed as planned.”

She also read briefly from an earlier e-mail from the agent, in which there appear to be questions about whether he is to participate in a Mirandized or un-Mirandized interview.

“We discussed the fact that Jim and I were of the impression that we were the ‘dirty’ team,” he wrote, according to what Ms. Strauber read in court. Then subsequent clean team interviews “would be conducted by others,” the agent added.

Ms. Strauber noted that when Agent Sidaros arrived in Nigeria, he received a summary of the statements Mr. Ahmed had made to Nigerian officials, but was given only scant information about the un-Mirandized interview of Mr. Ahmed by the Americans, which occurred on Dec. 31, 2009.

“Just the fact that it occurred, that it took about three hours, and who participated in it, at least on the U.S. side,” Ms. Strauber said.

The agent would testify, she said, that he specifically requested that the Mirandized interviews be conducted “in a different place, involve different people, and be spaced apart in time from the Dec. 31 interview.”

The spacing had been about five days, she added, and Judge Castel indicated that he wanted an even more precise time. “I may need to know what time on Dec. 31 it ended,” he said.

Prosecutors declined to comment, as did Mr. Ahmed’s lawyers and the F.B.I.”

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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.


Theodore L. Freedman, a Lawyer, Indicted in Manhattan Federal Court with Four Counts of Tax Fraud in Connection with Alleged False and Fraudulent Statements to the IRS

July 15, 2011

The U.S. Attorney’s Office Southern District of New York on July 14, 2011 released the following:

“FORMER PARTNER AT MAJOR INTERNATIONAL LAW FIRM CHARGED IN MANHATTAN FEDERAL COURT WITH TAX FRAUD VIOLATIONS

PREET BHARARA, the United States Attorney for the Southern District of New York, and CHARLES R. PINE, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal investigation Division (“IRS-CID”), announced that THEODORE L. FREEDMAN, a former senior partner at a major international law firm (the “Law Firm”), was charged yesterday in Manhattan Federal Court with four counts of tax fraud in connection with false and fraudulent statements he allegedly made on his tax returns that resulted in more than $1 million in losses to the IRS. Among other things, FREEDMAN, 63, misrepresented his partnership income at the Law Firm by approximately $2 million, and fraudulently claimed over $500,000 in expenses for a sole proprietorship law practice that did not exist. FREEDMAN voluntarily surrendered to authorities this morning, and will be arraigned before U.S. Magistrate Judge JAMES C. FRANCIS IV later today.

Manhattan U.S. ATTORNEY PREET BHARARA stated: “As alleged, Theodore Freedman, an accomplished and well-compensated attorney, abdicated his legal and ethical responsibilities by cheating on his taxes. Just like every ordinary citizen, privileged professionals have to pay their taxes too, and we will continue working with our partners at the IRS to ensure that they do.”

IRS Special Agent-in-Charge CHARLES R. PINE said: “To build faith in our nation’s tax system, honest taxpayers need to be reassured that everyone is paying their fair share. The IRS-Criminal Investigation Division, together with the Department of Justice will investigate and prosecute those who violate our tax system.”

According to the Indictment filed yesterday:

FREEDMAN was a senior partner in the New York office of a major United States law firm, where he was a member of the Law Firm’s restructuring group. In that capacity, FREEDMAN received income that was calculated as a percentage of the Law Firm’s partnership income for a given year. The Law Firm issued FREEDMAN, the IRS form that reports an individual partner’s share of income or loss from the partnership. According to the form, FREEDMAN’s aggregate income for calendar years 2001 through 2004 was approximately $5,388,699.

As charged in the Indictment, FREEDMAN self-prepared, signed, and filed tax returns for calendar years 2001 through 2004. Rather than reporting the true and correct amount of partnership income he received from the Law Firm for the years in question, FREEDMAN falsely and fraudulently under-reported his income in the aggregate amount of approximately $2,097,211.

In addition, FREEDMAN also attached to each of his tax returns for those same years a Schedule C, which is supposed to report the amounts of income and expenses, and the resulting net profit or loss, for a taxpayer’s self-owned business. On each of the Schedules C for these tax years, he falsely and fraudulently claimed to have sustained significant losses for a fictitious sole proprietorship — a legal practice — in the total aggregate amount of approximately $542,358. That sole proprietorship was fictitious.

In total, FREEDMAN’s false statements on his self-prepared returns resulted in a tax loss to the IRS of more than $1 million.

FREEDMAN faces a maximum sentence of three years in prison on each of the tax fraud counts, for a total maximum of 12 years in prison.

Mr. BHARARA praised the work of the Internal Revenue Service, Criminal Investigation Division.

This case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorney E. DANYA PERRY is in charge of the prosecution.

The charges contained in the Indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.”

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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