Former Detroit Public Schools Accountant, Teacher Indicted on Fraud and Money Laundering Charges

February 2, 2012

The Federal Bureau of Investigation (FBI) on February 1, 2012 released the following:

“Sandra Campbell, a former Detroit Public Schools contract accountant and school board candidate, and her daughter, Domonique Campbell, a Detroit Public Schools teacher, were indicted by a federal grand jury in Detroit on charges of program fraud conspiracy, money laundering conspiracy, and tax charges, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Andrew Arena, Federal Bureau of Investigation, and Special Agent in Charge, Erick Martinez, Internal Revenue Service, Criminal Investigation.

The nine-count indictment charges that between 2004 and 2008, Sandra Campbell, 56, and Domonique Campbell, 37, obtained in excess of $530,000.00 from the Detroit Public Schools through a fraudulent scheme in which orders were placed with the Campbells’ sham company for books and educational materials never provided to the schools. The indictment further alleges that Sandra Campbell and Domonique Campbell conspired to defraud the Internal Revenue Service and failed to report the money they fraudulently obtained from the Detroit Public Schools as income on their tax returns.

Sandra Campbell is also charged in the indictment with wire fraud. This count alleges that Campbell obtained a $40,000 discount payoff of a $250,000 mortgage on her home through a fraudulent “short sale” of the property to her mother.

United States Attorney Barbara L. McQuade said, “Anyone who considers stealing from our school children should take note that we are scrutinizing records and conduct, and will prosecute wrongdoers. “

FBI Special Agent in Charge Andrew Arena stated, “The FBI would like to thank all of our partners who continue to assist us in battling corruption. In particular, I would like to note the continued support of DPS Inspector General Van Marsh and his team, The alleged actions of these subjects do nothing more than steal the opportunity for quality education from our children. Such actions can not be tolerated and will be pursued by the FBI and it’s partners.”

IRS Special Agent in Charge Erick Martinez stated, “”Those who profit at the expense of our children and steal from our community will be held accountable for their greedy actions.”

The case was investigated by special agents of the FBI, IRS, and Department of Education, Office of Inspector General, with the assistance of Detroit Public Schools, Office of Inspector General. The case is being investigated and prosecuted by Assistant United States Attorneys J. Michael Buckley and Pamela Thompson of the Public Corruption Unit.”

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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.


Federal Indictment Charges 15 Men from Albuquerque and Edgewood with Alleged Drug Trafficking and Financial Crimes

January 29, 2012

The Federal Bureau of Investigation (FBI) on January 27, 2012 released the following:

“ALBUQUERQUE—A 29—count federal indictment charging 15 men from Albuquerque and Edgewood, N.M., with drug trafficking, money laundering, and currency structuring charges was unsealed late yesterday afternoon, announced U.S. Attorney Kenneth J. Gonzales; Joseph M. Arabit, Special Agent in Charge of the El Paso Field Division of the Drug Enforcement Administration (DEA); Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the Federal Bureau of Investigation (FBI); and Dawn Mertz, Special Agent in Charge of the Phoenix Division of the Internal Revenue Service, Criminal Investigation (IRS).

The indictment is the result of a multi-agency investigation into a major drug trafficking and money laundering organization operating out of the Albuquerque metropolitan area that was designated as part of the Organized Crime Drug Enforcement Task Force (“OCDETF”) program. OCDETF is a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.

Yesterday, a team of federal, state, and local law enforcement officers arrested nine of the 15 defendants named in the indictment, and executed 10 search warrants at residences in Albuquerque and a ranch in Edgewood. Those arrested include Steve Chavez, 32, a fireman with the Albuquerque Fire Department. Two other defendants, Jesus Ramos Castillo, 29, and Gabriel Guerra-Gonzalez, 27, both Mexican nationals, are in state custody on pending local charges; they will be transferred to federal custody to face the charges in the indictment. The defendants arrested yesterday are scheduled to make their initial appearances in federal court in Albuquerque this morning.

Four defendants, Homero Varela, 29, Manuel Villa-Mayorquin, 23, and Procoro Noberto-Alvarez, 28, Mexican nationals, and Ramon Gonzalez, Jr., 25, of Edgewood, have yet to be arrested and are considered fugitives.

The indictment alleges that, between May 2011 and January 2012, all 15 defendants participated in a conspiracy to distribute controlled substances, including cocaine, methamphetamine and marijuana. Each defendant also is charged with using communication devices to facilitate drug trafficking crimes (sometimes referred to as “phone counts”), and Homero Varela is charged with distributing methamphetamine on three separate occasions over a three month period. The maximum penalties for a conviction on the conspiracy charge and each of the three methamphetamine distribution charges is a minimum 10 years’ to a maximum of life imprisonment and a $10 million fine, and the maximum penalty for a conviction on each of the phone counts is four years of imprisonment and a $250,000 fine.

The indictment also charges Homero Varela, Roy Madrid, 21, of Albuquerque, and Manuel Villa-Mayorquin with conspiracy to launder money. Homero Varela is further charged with an additional count of money laundering involving drug proceeds. A conviction on the money laundering conspiracy carries a maximum penalty of 20 years of imprisonment, and a conviction on the substantive money laundering charge carries a maximum penalty of ten years of imprisonment and a $250,000 fine.

Ramon Gonzalez, Jr., is charged with seven counts of structuring financial transactions to avoid certain reporting requirements for an aggregate of $166,300 through 24 transactions between April 2009 and August 2011. Steve Chavez is charged with structuring an aggregate of $348,500 in 37 transactions between July 1, 2011 and August 25, 2011. The maximum penalty for a conviction on each of these counts is five years of imprisonment and a $250,000 fine.

The indictment also seeks forfeiture of property constituting, or derived from proceeds obtained directly, or indirectly, from the defendants’ illegal drug trafficking and financial crimes, including three Albuquerque residences owned, occupied or in the possession of Homero Varela, Ramon Gonzalez, Sr., and Steve Chavez, respectively, and a ranch in Edgewood owned by Ramon Gonzalez, Sr. It also seeks forfeiture of funds in numerous bank accounts in the names of Homero Varela, Ramon Gonzales, Sr., Ramon Gonzalez, Jr., Andres Gonzalez and Steve Chavez, as well as a money judgment of at least $15,000,000, the amount of money allegedly derived or involved in the offenses alleged in the indictment.

During yesterday’s law enforcement operation, officers seized a half kilogram of cocaine, more than 10 pounds of high grade marijuana, approximately $25,000 in cash, 20 vehicles, seven handguns, nine rifles, and two shotguns.

In announcing yesterday’s arrests, U.S. Attorney Gonzales said, “The charges in this indictment are some of the most significant drug and money laundering charges ever filed in the District of New Mexico. The investigation that led to this indictment exemplifies the law enforcement cooperation that we are fortunate to experience here in New Mexico. Federal, state and local officers worked long and hard and side-by-side in a coordinated effort to arrest numerous individuals charged in the indictment. We owe a debt of gratitude to everyone involved in the investigation. Their efforts have made our streets and communities much safer.”

“The Varela organization has been responsible for distributing multi-kilogram quantities of cocaine, marijuana, and methamphetamine in central and north central New Mexico,” said DEA Special Agent in Charge Arabit. “DEA and our federal, state, county, and municipal law enforcement partners have worked hand-in-hand to disrupt this organization from its roots, culminating in the indictment of 15 of its members of which 11 are in custody and the seizure of their drugs and assets, including 20 vehicles, 18 weapons, cash, and real property. Through these enforcement actions, we are making our communities safer.”

“These significant investigations and arrests would not have been possible without the joint efforts of the Organized Crime Drug Enforcement Task Force, led by the DEA, the FBI’s Safe Streets Task Forces in Albuquerque and Las Cruces, the U.S. Attorney’s Office and numerous other local, state and federal law enforcement agencies throughout the region, said FBI Special Agent in Charge Lee. “We all share the same goal: stop criminal enterprises that profit from the illegal trade of dangerous drugs and take away any financial benefit they receive from their crimes. The Albuquerque FBI will continue to collaborate with our law enforcement and community partners to rid our rural and urban areas of drug traffickers and other criminals and help make New Mexico and our nation a safer place to live.”

IRS Special Agent in Charge Mertz stated, “This indictment once again reflects the successful merging of law enforcement personnel, who work together through the task force, providing their specific skills, with the common purpose of ferreting out potential nefarious narcotics and related financial crimes. IRS Criminal Investigation will continue to work alongside our law enforcement partners to investigate those individuals who ignore the laws of our country for financial gain.”

The case is being prosecuted by Assistant U.S. Attorneys Reeve Swainston and Samuel L. Hurtado, and was investigated by DEA, FBI, and IRS with support from the New Mexico State Police, the Albuquerque Police Department, the El Paso County Sheriff’s Office, and the Corrales Police Department. Homeland Security Investigations, the U.S. Marshal’s Service, the U.S. Border Patrol, the Bernalillo County Sheriff’s Office, the Air Branch of U.S. Customs and Border Protection, the New Mexico Department of Public Safety Motor Transportation Police Division, and the Region II HIDTA Task Force participated in yesterday’s law enforcement operation.

Charges in indictments are only accusations. All criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.”

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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 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.


Eight Former Senior Executives and Agents of Siemens Charged in Alleged $100 Million Foreign Bribe Scheme

December 13, 2011

The Federal Bureau of Investigation (FBI) on December 13, 2011 released the following:

“WASHINGTON— Eight former executives and agents of Siemens AG and its subsidiaries have been charged for allegedly engaging in a decade-long scheme to bribe senior Argentine government officials to secure, implement and enforce a $1 billion contract with the Argentine government to produce national identity cards, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara for the Southern District of New York and Ronald T. Hosko, Special Agent in Charge of the FBI, Washington Field Office’s Criminal Division.

The defendants charged in the indictment returned late yesterday are:

  • Uriel Sharef, a former member of the central executive committee of Siemens AG;
  • Herbert Steffen, a former chief executive officer of Siemens Argentina;
  • Andres Truppel, a former chief financial officer of Siemens Argentina;
  • Ulrich Bock, Stephan Signer, and Eberhard Reichert, former senior executives of Siemens Business Services (SBS); and
  • Carlos Sergi and Miguel Czysch, who served as intermediaries and agents of Siemens in the bribe scheme.

The indictment charges the defendants and their co-conspirators with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and the wire fraud statute, money laundering conspiracy and wire fraud.

“Today’s indictment alleges a shocking level of deception and corruption,” said Assistant Attorney General Breuer. “The indictment charges Siemens executives, along with agents and conduits for the company, with committing to pay more than $100 million in bribes to high-level Argentine officials to win a $1 billion contract. Business should be won or lost on the merits of a company’s products and services, not the amount of bribes paid to government officials. This indictment reflects our commitment to holding individuals, as well as companies, accountable for violations of the FCPA.”

“As alleged, the defendants in this case bribed Argentine government officials in two successive administrations and paid off countless others in a successful effort to secure a billion dollar contract,” said U.S. Attorney Bharara. “When the project was terminated, they even sought to recover the profits they would have reaped from a contract that was awarded to them illegitimately in the first place. Bribery corrupts economic markets and creates an unfair playing field for law-abiding companies. It is critical that we hold individuals as well as corporations accountable for such corruption as we are doing today.”

“Backroom deals and corrupt payments to foreign officials to obtain business wear away public confidence in our global marketplace,” said FBI Special Agent in Charge Hosko of the Washington Field Office’s Criminal Division. “The investigation into this decades-long scheme serves as an example that the FBI is committed to curbing corruption and will investigate those who try to advance their businesses through foreign bribery.”

According to the indictment, the government of Argentina issued a tender for bids in 1994 to replace an existing system of manually created national identity booklets with state of the art national identity cards (the DNI project). The value of the DNI project was $1 billion. In 1998, the Argentine government awarded the DNI project to a special-purpose subsidiary of Siemens AG.

The indictment alleges that during the bidding and implementation phases of the project, the defendants and their co-conspirators caused Siemens to commit to paying nearly $100 million in bribes to sitting officials of the Argentine government, members of the opposition party and candidates for office who were likely to come to power during the performance of the project. According to the indictment, members of the conspiracy worked to conceal the illicit payments through various means. For instance, Bock made cash withdrawals from Siemens AG general-purpose accounts in Germany totaling approximately $10 million, transported the cash across the border into Switzerland and deposited the funds into Swiss bank accounts for transfer to officials. Bock, Truppel, Reichert, and other conspirators also allegedly caused Siemens to wire transfer more than $7 million in bribes to a bank account in New York disguised as a foreign exchange hedging contract relating to the DNI project. Over the duration of the conspiracy, the conspirators allegedly relied on at least 17 off-shore shell companies associated with Sergi, Czysch and other intermediaries to disguise and launder the funds, often documenting the payments through fake consulting contracts.

In May 1999, according to the indictment, the Argentine government suspended the DNI project, due in part to instability in the local economy and an impending presidential election. When a new government took power in Argentina, and in the hopes of getting the DNI project resumed, members of the conspiracy allegedly committed Siemens to paying additional bribes to the incoming officials and to satisfying existing obligations to officials of the outgoing administration, many of whom remained in influential positions within the government.

When the project was terminated in May 2001, members of the conspiracy allegedly responded with a multi-faceted strategy to overcome the termination. According to the indictment, the conspirators sought to recover the anticipated proceeds of the DNI project, notwithstanding the termination, by causing Siemens AG to file a fraudulent arbitration claim against the Republic of Argentina in Washington, D.C. The claim alleged wrongful termination of the contract for the DNI project and demanded nearly $500 million in lost profits and expenses. Members of the conspiracy allegedly caused Siemens to actively hide from the tribunal the fact that the contract for the DNI project had been secured by means of bribery and corruption, including tampered witness statements and pleadings that falsely denied the existence of corruption.

In related actions, the indictment also alleges that members of the conspiracy continued the bribe scheme, in part to prevent disclosure of the bribery in the arbitration and to ensure Siemens’ ability to secure future government contracts in Argentina and elsewhere in the region. In four installments between 2002 and 2007, members of the conspiracy allegedly caused Siemens to pay approximately $28 million in further satisfaction of the obligations. Conspirators continued to conceal these additional payments through various means. For example, Sharef, Truppel and other members of the conspiracy allegedly caused Siemens to transfer approximately $9.5 million through fictitious transactions involving a Siemens business division that had no role in the DNI project. They also caused Siemens to pay an additional $8.8 million in 2007 under the legal cover of a separate arbitration initiated in Switzerland by the intermediaries to enforce a sham $27 million contract from 2001 between SBS and Mfast Consulting, a company controlled by their co-conspirator intermediaries, which consolidated existing bribe commitments into one contract. The conspirators caused Siemens to quietly settle the arbitration, keeping all evidence of corruption out of the proceeding. The settlement agreement included a provision preventing Sergi, Czysch and another intermediary from testifying in, or providing information to, the Washington arbitration.

Siemens’s corrupt procurement of the DNI project was not exposed during the lifespan of the conspiracy, and, in February 2007, the arbitral tribunal in Washington sided with Siemens AG, awarding the company nearly $220 million on its DNI claims, plus interest. On Aug. 12, 2009, following Siemens’ corporate resolutions with the U.S. and German authorities—new management of Siemens caused Siemens AG to forego its right to receive the award and, as a result, the company never claimed the award money.

The indictment charges the defendants with conspiracy to violate the anti-bribery, books and records and internal control provisions of the FCPA; conspiracy to commit wire fraud; conspiracy to commit money laundering; and substantive wire fraud.

The charges announced today follow the Dec. 15, 2008, guilty pleas by Siemens AG and its subsidiary, Siemens S.A. (Siemens Argentina), to criminal violations of the FCPA. As part of the plea agreement, Siemens AG and Siemens Argentina agreed to pay fines of $448.5 million and $500,000, respectively.

In a parallel civil action, the Securities and Exchange Commission (SEC) announced charges against executives and agents of Siemens. The department acknowledges and expresses its appreciation of the significant assistance provided by the staff of the SEC during the course of these parallel investigations.

Today’s charges follow, in large part, the laudable actions of Siemens AG and its audit committee in disclosing potential FCPA violations to the department after the Munich Public Prosecutor’s Office initiated an investigation. Siemens AG and its subsidiaries disclosed these violations after initiating an internal FCPA investigation of unprecedented scope; shared the results of that investigation; cooperated extensively and authentically with the department in its ongoing investigation; and took remedial action, including the complete restructuring of Siemens AG and the implementation of a sophisticated compliance program and organization.

The department and the SEC closely collaborated with the Munich Public Prosecutor’s Office in bringing this case. The high level of cooperation, including sharing information and evidence, was made possible by the use of mutual legal assistance provisions of the 1997 Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

The case is being prosecuted by Principal Deputy Chief Jeffrey H. Knox of the Criminal Division’s Fraud Section, and by Assistant U.S. Attorneys Jason P. Hernandez and Sarah McCallum of the U.S. Attorney’s Office for the Southern District of New York. The Fraud Section of the Justice Department’s Criminal Division and the Complex Frauds Unit of the U.S. Attorney’s Office for the Southern District of New York are handling the case. The case was investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad. The Criminal Division’s Office of International Affairs provided significant assistance in this matter.”

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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.


Philip R. Lochmiller, Sr. Found Guilty by a Federal Jury in Denver’s Federal Court for Conspiracy, Money Laundering Conspiracy, Money Laundering, and Mail Fraud

July 22, 2011

The U.S. Attorney’s Office District of Colorado on July 21, 2011 released the following:

“PHILIP R. LOCHMILLER, SR. FOUND GUILTY OF CONSPIRACY, MONEY LAUNDERING CONSPIRACY, MONEY LAUNDERING AND MAIL FRAUD

LOCHMILLER DEFRAUDED OVER 400 VICTIMS OF MORE THAN $30,000,000

DENVER – A jury this morning found Philip R. Lochmiller, Sr. guilty of conspiracy, money laundering conspiracy, money laundering, and mail fraud, U.S. Attorney John Walsh, FBI Special Agent in Charge James Yacone, and IRS-Criminal Investigation Special Agent in Charge Christopher Sigerson announced. The guilty verdict was the result of a 10 day trial before U.S. District Court Judge Philip A. Brimmer. The jury deliberated for three hours before returning their verdicts. No sentencing date has yet been set, although that hearing will take place in Grand Junction. Lochmiller is scheduled to be back in U.S. District Court in Denver on October 27, 2011, for a hearing on victim losses and restitution. He remains free on bond pending sentencing. Two other co-defendants, Philip Lochmiller, II and Shawnee Carver had earlier pled guilty and await sentencing, which is scheduled for October 14, 2011.

Philip Lochmiller, Sr., Philip Lochmiller, Jr., and Shawnee Carver were indicted by a federal grand jury in Denver on December 15, 2009. A superseding indictment was returned on October 18, 2010. Lochmiller, Jr. pled guilty on November 16, 2010. Carver pled guilty on December 9, 2010. Both testified during the Lochmiller, Sr. trial.

According to evidence presented at trial, the superseding indictment, and other documents from the prosecution, Valley Mortgage, Inc. was incorporated in Colorado in September 1994 by Philip Lochmiller, Sr. The company originally engaged in the business or originating or brokering home mortgages. Lochmiller, Jr. owed 100 percent of Valley Mortgage’s stock and was principal, officer and director. Lochmiller, Sr.’s stepson, Philip Lochmiller, Jr., joined Valley Mortgage in 1999 as a mortgage officer. Lochmiller, Sr. later added the name Valley Investments as a does business as for Valley Mortgage. Lochmiller, Jr. eventually worked his way to become responsible for day-to-day operations of the company. Beginning in 2000, Valley Mortgage entered into the “affordable housing” real estate market by buying vacant land or existing mobile home parks, entitling the land so residential subdivisions could be built, and then selling lots with either a mobile home or a manufactured home on it.

Valley Investments purchased land with financing provided by the sellers in a “owner-carry” arrangement. Valley Investments then began to advertise in local newspapers and solicit investment funds from the public. The company promised returns from 10 percent to 16 percent, and in some instances, as high as 18 percent. In exchange, investors were promised a promissory note and a recorded first “Deed of Trust” on individual lots. The advertisements and verbal representations by both of the Lochmillers characterized the investment as a “solid security” secured and recorded by a Deed of Trust in the investor’s name. Both of the Lochmillers represented to investors that Valley Investments used investor funds exclusively to acquire property and finance the development of the subdivisions Valley Investments owned. Both the Lochmillers further represented that Valley Investments generated large profits by selling manufactured homes together with lots within the subdivisions. Investors were not told that Lochmiller Sr. had a prior felony conviction and a bankruptcy.

Between 2000 and 2005, Valley Investments acquired five properties purportedly to develop “affordable housing” subdivisions. Between 2000 and 2009, Valley Investments received over $30,000,000 from approximately 400 investor contracts. The Government’s expert forensic accountants shows that this influx of investor funds kept Valley Investments operating, particularly in its later years, and without investor funding, Valley Investments would have failed. The Government accounting analysis also determined that investor funds were used by both of the Lochmillers for purposes other than what investors were told. Further, incoming investor funds were used to make interest and principal payments to existing investors. Once investor money started coming into Valley Investments, the funds went to personal expenses, family expenses and other non-business expenditures. Both Lochmillers then engaged in monetary transactions involving more than $10,000 of the proceeds of the fraud.

Valley Investments did not own sufficient property or assets to secure the investments as represented. Unbeknownst to investors, the amount of investment funds, which were supposed to be secured by real property, far exceeded the value of the encumbered property and the business assets. Valley Investments failed to file all of the Trust Deeds and behalf of investors as promised, and many of the filed Trust Deeds were not the first encumbrances on the properties named and were thus worthless. Despite these facts, the Lochmillers and Valley Investment employee Shawnee Carver continued to misrepresent to investors that the business was thriving, and never disclosed to new investors how their money was being used.

“Thanks to the entire trial team, including prosecutors and staff from the U.S. Attorney’s Office, the FBI and the IRS-Criminal Investigations, a jury found Philip Lochmiller, Sr. guilty of conspiracy, money laundering conspiracy, money laundering, and mail fraud. Today’s guilty verdict demonstrates that those who steal other’s hard earned money will be prosecuted to the fullest extent of the law,” said U.S. Attorney John Walsh. “Today’s guilty verdict is a victory for the over 400 victims in this case, many of whom are from the Grand Junction area.”

“Today’s sentencing reflects the tremendous dedication of our agents and the cumulative commitment of the FBI, U.S. Attorney’s Office, and IRS – Criminal Investigation to aggressively investigate and prosecute white collar criminals that prey on innocent victims,” said FBI Special Agent in Charge James Yacone. “Our efforts focused on seeking justice on behalf of the more than 400 victims throughout Colorado that have experienced financial devastation as a result of their involvement with Valley Investments.”

“Defrauding innocent investors by peddling sham investment schemes is a serious and far too common offense,” said Sean Sowards, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. “IRS Criminal Investigation will work with our law enforcement partners to vigorously pursue and hold accountable those who perpetrate these schemes to get rich quick at the expense of honest Americans.”

Lockmiller, Sr. faces not more than 5 years imprisonment, and up to a $250,000 fine for one count of conspiracy. He faces not more than 20 years in federal prison, and up to a $500,000 fine, or twice the amount of the criminally derived property, for one count of money laundering conspiracy. He also faces not more than 10 years in prison, and up to a $250,000 fine, for each of 19 counts for money laundering, and not more than 20 years in prison, and up to a $250,000 fine for each of 10 counts of mail fraud.

This case was investigated by the Federal Bureau of Investigation and the IRS Criminal Investigation and prosecuted by Assistant U.S. Attorneys Michelle Heldmyer, Pegeen Rhyne, and Tim Neff.

This prosecution is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.”

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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Nineteen Charged in Nationwide Drug Trafficking and Money Laundering Conspiracy

July 21, 2011

The U.S. Attorneys Office Middle District of Florida on July 20, 2011 released the following:

“Tampa, Florida – United States Attorney Robert E. O’Neill, Special Agent in Charge Susan McCormick, US Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division announce the unsealing of indictments charging the following individuals for their involvement in a nationwide drug trafficking and money laundering conspiracy:

Victor Yanez Gutierrez (35, Madera, California);
Jorge Luis Yanez Gutierrez (36, address unknown);
Maria L. Aguilar (29, Madera, California);
Jose Jorge Monteon Delfin (42, Los Angeles, California);
Edgar Yanez Gutierrez (25, address unknown);
Robert Hayes (35, Tampa, Florida);
Noemi Monteon (37, Los Angeles, California);
Gabriel Salazar Pena (43, Manteca, California);
Enrique Hernandez Ramirez (41, Dade City, Florida);
Jabulani Bendar Seay (34, Tampa, Florida);
Gwendolyn Shank (54, Tampa, Florida);
Carlos Byron Smith (32, Tampa Florida);
Alejandro Arias Perez (40, Dade City, Florida);
Jennifer Lynn Thomas (32, Dade City, Florida);
Ronald Lee Carrick (50, Zephyrhills, Florida);
Chester John Floyd (48, Lithia, Florida);
Luis Manuel Garcia (38, Plant City, Florida);
Pedro Lazaro Rodriguez (27, Seffner, Florida); and
Jerry Lloyd Nichols (54, Lakeland, Florida).

If convicted on all counts, each faces a mandatory minimum term of ten years in federal prison and a maximum penalty of life imprisonment. The indictments also notify the charged individuals that the United States is seeking to forfeit any proceeds or assets which were acquired as a result of their drug trafficking activities.

According to the indictments, beginning in at least 2009 through June of this year, the defendants knowingly and willfully agreed with each other and others to possess with intent to distribute and distribute cocaine, methamphetamine, and marijuana. During the same time period, they also agreed with each other and others to launder their drug proceeds by: (1) knowingly conducting and attempting to conduct financial transactions, with monies earned from drug trafficking; (2) knowingly conducting and attempting to conduct financial transactions with drug proceeds, in a manner designed to conceal the fact that the funds were drug proceeds; and (3) knowingly engaging in and attempting to engage in financial transactions with drug proceeds of more than $10,000.00.

An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.

These cases are being investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), the Drug Enforcement Administration, the Tampa Police Department and other federal, state, and local agencies as part of an on-going Organized Crime Drug Enforcement Task Forces Investigation. They will be prosecuted by Assistant United States Attorneys Josephine W. Thomas and Christopher F. Murray.”

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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Law Enforcement Dismantles Alleged Major Cocaine and Heroin Drug Trafficking Organizations Operating in the DFW Metroplex

July 13, 2011

The U.S. Attorney’s Office Northern District of Texas on July 13, 2011 released the following press release:

U.S. Attorney Says Arrests Will Severely Disrupt the Supply Network for Cocaine and Heroin Throughout North Texas

FORT WORTH, Texas — Numerous defendants, charged in four federal criminal complaints with various offenses related to their operation of a massive cocaine and heroin distribution conspiracy since May 2005 in the Dallas-Fort Worth (DFW) metroplex and throughout North Texas and elsewhere, were arrested yesterday, announced U.S. Attorney James T. Jacks, of the Northern District of Texas, Special Agent in Charge Robert E. Casey, Jr., of the FBI, Special Agent in Charge James Capra of the Drug Enforcement Administration (DEA) and Special Agent in Charge Andrea D. Whelan, of the Internal Revenue Service – Criminal Investigation (IRS-CI).

During the course of executing the arrest and search warrants in this Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, law enforcement seized heroin, cocaine, firearms, vehicles and cash.

U.S. Attorney Jacks said, “As a direct result of yesterday’s major enforcement action, the supply network for cocaine and heroin in the DFW metroplex and elsewhere has been severely disrupted. I applaud the hard work, innovation and teamwork exhibited by the FBI, DEA, IRS-CI and the Fort Worth and Arlington Police Departments who once again demonstrated the importance of combining the strengths, resources and expertise of federal and local agencies to fight these drug trafficking networks.”

These four related complaints have been partially unsealed as to the defendants arrested. All those arrested locally are expected to appear before U.S. Magistrate Judge Jeffrey L. Cureton beginning at 1:30 this afternoon, at the Parker County Jail in Weatherford, Texas. Some defendants have been charged in more than one complaint.

The first complaint charges numerous individuals with conspiring to possess with intent to distribute and to distribute more than 500 grams of cocaine. Individuals charged and in custody on this complaint include:

Hugo Cordoba, aka “Hugo Alberto Guadalupe Cordova De La Cruz and “Grenas”
Cristian Ocana, aka “Cri Cri” and “Chilango,”36, of Grand Prairie, Texas
Arturo Hernandez Guadarrama, aka “Gerardo Guadarrama” and “Gordo,” 31, Mesquite, Texas
Oscar Ocana, 42, of Dallas, Texas
Roberto Torres Martinez, aka “Roberto Torres,” 58, of Dallas, Texas
Monica Ann Saenz, aka “Bebe,” 32, of Dallas, Texas
Tiffany Taber, 29, of Dallas, Texas
Cesar Enrique Mireles, in custody in Minnesota
Jose Juvenal Quezada, aka “Juve,” 23, of Fort Worth, Texas
Christopher George Chavez, aka “Chris,” 31, of Dallas, Texas
First Name Unknown Last Name Unknown, aka “Apolonio Longinos” and “Polo”
Jasinto Ramirez, 34, of Dallas or Grand Prairie, Texas
Miguel Angel Gonzalez, 39, of Dallas or Grand Prairie, Texas
Oscar Morales Ramirez, 31, of Dallas or Grand Prairie, Texas
First Name Unknown Last Name Unknown, believed to be “Jose Alfredo Lagunas,” aka “Champion” and “Champi,” 39, of Balch Springs, Texas
Aracely Caballero, aka “Cely,” 35 of Dallas, Texas

The second complaint also charges numerous individuals with conspiring to possess with intent to distribute and to distribute more than 500 grams of cocaine. Individuals charged and in custody in this complaint include:

Cristian Ocana, aka “Cri Cri,” 36, of Grand Prairie, Texas
Rigoberto Orozco, aka “Rigo,” 34, of Mansfield, Texas
William Glenn Jones, aka “Unc,” 59, of Fort Worth, Texas
Wheattina Goodman, aka “Wheat,” 34, of Wilmington, Delaware
Daveon McCulloch, 37, of Fort Worth, Texas
Ledell Derrick Shaw, aka “Derrick Shaw,” 40, of Atlanta, Georgia
Kenya White, aka “Block,” of Wilmington, Delaware
Margarita Orozco, nee Monrreal, 31, of Mansfield, Texas

The third complaint charges numerous individuals with conspiring to possess with intent to distribute and to distribute more than 100 grams of heroin. Individuals charged and in custody on this complaint include:

Rigoberto Orozco, aka “Rigo,” 34, of Mansfield, Texas
Eric Orozco, aka “Eddie,” 23, of Atlanta, Georgia
Hector Ramos, aka “John Gotti,” in custody in East Texas
Harold Grubbs, aka “Big D,” 30, of Fort Worth, Texas
Jo Ann Henry, 51, of Fort Worth, Texas
Ivan Cano, 24, of Fort Worth, Texas
Sarah Reyes, aka “Sarah Murillo,” 32, of Fort Worth, Texas

The fourth complaint charges several individuals with conspiring to engage in a monetary transaction in criminally derived property (drug proceeds) and conspiring to commit money laundering by transferring funds (drug proceeds) from the U.S. to a place outside the U.S. to avoid transaction reporting requirements. Individuals charged and in custody on this complaint include:

Rigoberto Orozco, aka “Rigo,” 34, of Mansfield, Texas
Margrita Monrreal, aka “Margarita Orozco” 31, of Mansfield, Texas
Araseli Orozco, 34, of Fort Worth, Texas
Jo Ann Henry, 51, of Fort Worth, Texas

Since 2002, according to this complaint, brothers Rigoberto and Ramon Orozco made substantial money from distributing cocaine, heroin and marijuana in the DFW area as well as in the Atlanta and Philadelphia areas. One cooperating individual who assisted Rigoberto in shipping drug proceeds, stated that he/she was once in a hotel in Philadelphia with more than $3 million in drug proceeds. The complaint further states that on July 10, 2005, Rigoberto and Margarita Monrreal used drug proceeds to purchase a home on Meadow Crest Lane in Mansfield, Texas and that from January 2007 through mid-November 2009, four of the defendants made at least 64 wire transfers from Fort Worth to locations in Mexico to purchase heroin.

Another related complaint, filed on May 10, 2011, and partially unsealed after some arrests were made shortly thereafter, also charges several individuals with conspiring to posses with intent to distribute more than 500 grams of cocaine. Individuals charged and in custody on this complaint include:

Leonardo Gonzalez, aka “Casper,”
Alfredo Gonzalez, aka “Gator,”
Miguel Banda, aka “Churro,”
Gabriel Arredondo

According to the complaints filed, some or all of the defendants were involved in running large scale drug trafficking organizations by transporting the drugs from Mexico into the metroplex, and throughout North Texas and elsewhere, including Atlanta, Baltimore, Philadelphia and Nashville.

Some of the defendants used stash houses, known as “traps,” to receive and store the drugs and cash proceeds. One such location was a warehouse on Northhaven Road in Dallas. On April 21, 2011, some of the defendants listed in the above-referenced complaint filed on May 10, 2011, committed the armed robbery of that warehouse, holding two men at gunpoint. The robbers left and divided the stolen drugs and cash among themselves.

A federal criminal complaint is a written statement of the essential facts of the offenses charged, and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The maximum statutory penalty, however, for each of the drug offenses is not less than five or more than 40 years in prison. The maximum statutory sentence for conspiracy to commit money laundering is 20 years in prison. All carry substantial fines. The U.S. Attorney’s office has 30 days to present the matters to a grand jury for indictment.

Assistant U.S. Attorneys Joshua T. Burgess and Steve Jumes are in charge of the prosecution.”

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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Leader of International Money Laundering Organization Sentenced in Manhattan Federal Court to Nine Years in Prison

July 12, 2011

Drug Enforcement Administration (DEA) on July 11, 2011 released the following press release:

“JUL 11 – MANHATTAN — John P. Gilbride, the Special Agent-in-Charge of the New York Field Division of the Drug Enforcement Administration (DEA) and Preet Bharara, the United States Attorney for the Southern District of New York, announced that David Eduardo Helmut Murcia Guzmán, the founder of the Colombian marketing giant D.M.G. Group (“DMG”), was sentenced Friday, July 8, 2011 to nine years in prison for his participation in a scheme to launder millions of dollars’ worth of illicit funds, including narcotics proceeds, through DMG. Murcia Guzmán was sentenced in Manhattan federal court by U.S. District Judge William H. Pauley. Judge Pauley previously ordered Guzman to forfeit ten properties located in southern Florida and California, and $7 million.

Manhattan U.S. Attorney Preet Bharara stated: “Murcia Guzmán wove an intricate web of deception across continents to disguise his dirty drug money and support his lavish lifestyle. But his web has been untangled and his lifestyle dramatically curtailed by this sentence.”

According to the Superseding Indictment to which Murcia Guzmán pled guilty, and statements made in court:

The DMG Organization

David Eduardo Helmut Murcia Guzmán created DMG in 2003 as a vehicle for a multi-level marketing scheme, through which customers could buy pre-paid debit cards. DMG sold these pre-paid debit cards to customers in Latin America, who could use them to purchase electronics and other items at retail stores operated by DMG. By 2008, DMG had approximately 400,000 customers. DMG ceased its operations by January 2009.

The Money Laundering Conspiracy

Murcia Guzmán and five co-defendants — employees and affiliates of DMG –- laundered narcotics proceeds through DMG and DMG’s affiliated companies. They used the Colombian Black Market Peso Exchange, an informal value transfer system commonly used to launder illicitly-obtained dollars in the United States, in exchange for pesos taken in for “legitimate” purchases in Colombia.

For example, in the fall of 2007, Murcia Guzmán and co-defendant Margarita Leonor Pabon Castro approached another individual in Colombia and said that they had cash – apparently in U.S. dollars — that they could not deposit into the Colombian banking system. They asked the individual to set up an account in the United States where these funds could be deposited.

Thereafter, the individual opened an account at Merrill Lynch in the United States, under the name “Blackstone International Development” (the “Blackstone Account”). Neither Murcia Guzmán nor Pabon Castro was listed as owners of the Blackstone Account.

In March 2008, Murcia Guzmán and Pabon Castro told the same individual that they had provided $2.2 million worth of Colombian Pesos to co-defendant German Enrique Serrano-Reyes in Colombia, and, in exchange, Serrano-Reyes had caused the nearly $2.2 million to be wired into the Blackstone Account through eighteen separate wire transfers. In May 2008, the U.S. Government seized about $2.2 million from the Blackstone Account pursuant to a court order. When Murcia Guzmán was informed of the seizure of the Blackstone Account, he told the individual who set it up that he should not attempt to retrieve its contents, and should not, under any circumstances inform the authorities of Murcia Guzmán’s or Pabon Castro’s interest in the Blackstone Account.

Co-defendant William Suárez-Suárez headed DMG’s Colombian security and cash transportation operations, including overseeing the delivery of cash to money laundering agents and attempts to pay bribes to Colombian officials. Co-defendant Luis Fernando Cediel Rozo supervised wire transfers and bulk cash transfers of millions of dollars of DMG money out of Colombia through the Black Market Peso Exchange. Co-defendant Santiago Baranchuk-Rueda received black market transfers of DMG money, including transfers overseen by cediel rozo, to U.S. bank and brokerage accounts.

On November 23, 2010, Murcia Guzmán pled guilty to conspiracy to launder the proceeds of narcotics trafficking. Suárez-Suárez, Pabon Castro, Cediel Rozo, Baranchuk-Rueda, and Serrano-Reyes have each previously pled guilty to the same charge. On January 26, 2011, Serrano-Reyes was sentenced to a period of time already served.

In addition to the prison term, Judge Pauley sentenced Murcia Guzmán, 30, of Colombia, to three years of supervised release. Murcia Guzmán was also ordered to pay a $100 special assessment and forfeit $7 million and all right, title, and interest in 10 properties located in Florida and California.

Mr. Bharara praised the outstanding investigative work of the DEA’s New York Drug Enforcement Task Force — which is comprised of agents and officers of the DEA, the New York City Police Department, and the New York State Police — DEA’s Bogota Country Office, DEA’s Caracas Country Office, DEA’s Caribbean Division, U.S. Department of Homeland Security’s Immigration and Customs Enforcement (ICE), and ICE’s Caracas Country Office. Mr. Bharara also thanked the Department of Justice’s Office of International Affairs for their ongoing assistance in the investigation.

The prosecution is being handled by the Office’s Terrorism and International Narcotics Unit, with the assistance of the Asset Forfeiture Unit. Assistant U.S. Attorneys Benjamin A. Naftalis, Telemachus P. Kasulis, and Michael D. Lockard are in charge of the prosecution.”

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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