“Five Indicted in New Jersey for Largest Known Data Breach Conspiracy”

July 25, 2013

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

Hackers Targeted Major Payment Processors, Retailers and Financial Institutions Around the World

A federal indictment made public today in New Jersey charges five men with conspiring in a worldwide hacking and data breach scheme that targeted major corporate networks, stole more than 160 million credit card numbers and resulted in hundreds of millions of dollars in losses. It is the largest such scheme ever prosecuted in the United States.

The charges were announced today by U.S. Attorney Paul J. Fishman of the District of New Jersey; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; and Special Agent in Charge James Mottola of the U.S. Secret Service (USSS), Criminal Investigations, Newark, N.J., Division. The USSS led the investigation of the indicted conspiracy.

The defendants allegedly sought corporate victims engaged in financial transactions, retailers that received and transmitted financial data and other institutions with information they could exploit for profit. The defendants are charged with attacks on NASDAQ, 7-Eleven, Carrefour, JCP, Hannaford, Heartland, Wet Seal, Commidea, Dexia, JetBlue, Dow Jones, Euronet, Visa Jordan, Global Payment, Diners Singapore and Ingenicard. It is not alleged that the NASDAQ hack affected its trading platform.

According to the second superseding indictment unsealed today in Newark federal court and other court filings, the five men each served particular roles in the scheme. Vladimir Drinkman, 32, of Syktyykar and Moscow, Russia, and Alexandr Kalinin, 26, of St. Petersburg, Russia, each allegedly specialized in penetrating network security and gaining access to the corporate victims’ systems. Roman Kotov, 32, of Moscow, allegedly specialized in mining the networks Drinkman and Kalinin compromised to steal valuable data. Court documents allege that the defendants hid their activities using anonymous web-hosting services provided by Mikhail Rytikov, 26, of Odessa, Ukraine. Dmitriy Smilianets, 29, of Moscow, allegedly sold the information stolen by the other conspirators and distributed the proceeds of the scheme to the participants.

“This type of crime is the cutting edge,” said U.S. Attorney Fishman. “Those who have the expertise and the inclination to break into our computer networks threaten our economic well-being, our privacy, and our national security. And this case shows, there is a real practical cost because these types of frauds increase the costs of doing business for every American consumer, every day. We cannot be too vigilant and we cannot be too careful.”

“The defendants charged today were allegedly responsible for spearheading a worldwide hacking conspiracy that victimized a wide array of consumers and entities, causing hundreds of millions of dollars in losses,” said Acting Assistant Attorney General Raman. “Despite substantial efforts by the defendants to conceal their alleged crimes, the Department and its law enforcement counterparts have cracked this extensive scheme and are seeking justice for its many victims. Today’s indictment will no doubt serve as a serious warning to those who would utilize illegal and fraudulent means to steal sensitive information online.”

“As is evident by this indictment, the Secret Service will continue to apply innovative techniques to successfully investigate and arrest transnational cyber criminals,” said USSS Special Agent in Charge Mottola. “While the global nature of cybercrime continues to have a profound impact on our financial institutions, this case demonstrates the global investigative steps that U.S. Secret Service Special Agents are taking to ensure that criminals will be pursued and prosecuted no matter where they reside.”

Kalinin and Drinkman were previously charged in New Jersey as “Hacker 1” and “Hacker 2” in a 2009 indictment charging Albert Gonzalez, 32, of Miami, in connection with five corporate data breaches – including the breach of Heartland Payment Systems Inc., which at the time was the largest breach ever reported. Gonzalez is currently serving 20 years in federal prison for those offenses. The U.S. Attorney’s Office for the Southern District of New York today announced two additional indictments against Kalinin: one charges him in connection with hacking certain computer servers used by NASDAQ and a second indictment, unsealed today, charged Kalinin and another alleged Russian hacker, Nikolay Nasenkov, with an international scheme to steal bank account information by hacking U.S.-based financial institutions. Rytikov was previously charged in the Eastern District of Virginia with an unrelated scheme. Kotov and Smilianets have not previously been charged publicly in the United States.

Drinkman and Smilianets were arrested at the request of the United States while traveling in the Netherlands on June 28, 2012. Smilianets was extradited on Sept. 7, 2012, and remains in federal custody. He will appear in New Jersey federal court to be arraigned on the superseding indictment on a date to be determined. Kalinin, Kotov and Rytikov remain at large. All of the defendants are Russian nationals except for Rytikov, who is a citizen of Ukraine.

The Attacks

According to court documents, the five defendants allegedly conspired with others to penetrate the computer networks of several of the largest payment processing companies, retailers and financial institutions in the world, stealing the personal identifying information of individuals. They allegedly took user names and passwords, means of identification, credit and debit card numbers and other corresponding personal identification information of cardholders. The conspirators are alleged to have unlawfully acquired more than 160 million card numbers through hacking.

Court documents allege that the initial entry was often gained using a “SQL injection attack.” SQL, or Structured Query Language, is a type of programing language designed to manage data held in particular types of databases; the hackers identified vulnerabilities in SQL databases and used those vulnerabilities to infiltrate a computer network. Once the network was infiltrated, the defendants allegedly placed malicious code, or malware, on the system. This malware created a “back door,” leaving the system vulnerable and helping the defendants maintain access to the network. In some cases, the defendants lost access to the system due to companies’ security efforts, but they were able to regain access through persistent attacks.

Communications obtained by law enforcement reveal the defendants often targeted the victim companies for many months, waiting patiently as their efforts to bypass security were underway. The defendants allegedly had malware implanted in multiple companies’ servers for more than a year.

The defendants are alleged to have used their access to the networks to install “sniffers,” which were programs designed to identify, collect and steal data from the victims’ computer networks. The defendants then allegedly used an array of computers located around the world to store the stolen data and ultimately sell it to others.

Selling the Data

After acquiring the card numbers and associated data – which they referred to as “dumps” – the conspirators allegedly sold it to resellers around the world. The buyers then allegedly sold the dumps through online forums or directly to individuals and organizations. Smilianets was allegedly in charge of sales, vending the data only to trusted identity theft wholesalers. According to court documents, he charged approximately $10 for each stolen American credit card number and associated data, approximately $50 for each European credit card number and associated data and approximately $15 for each Canadian credit card number and associated data – offering discounted pricing to bulk and repeat customers. Ultimately, the end users encoded each dump onto the magnetic strip of a blank plastic card and cashed out the value of the dump by either withdrawing money from ATMs or making purchases with the cards.

Covering Their Tracks

The defendants used a number of methods to conceal the scheme. Unlike traditional Internet service providers, Rytikov allegedly allowed his clients to hack with the knowledge he would never keep records of their online activities or share information with law enforcement.

Over the course of the conspiracy, the defendants allegedly communicated through private and encrypted communications channels to avoid detection. Fearing law enforcement would intercept even those communications, some of the conspirators allegedly attempted to meet in person.

To protect against detection by the victim companies, the defendants allegedly altered the settings on victim company networks to disable security mechanisms from logging their actions. The defendants also worked to evade existing protections by security software.

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Court documents allege that as a result of the scheme, financial institutions, credit card companies and consumers suffered hundreds of millions in losses, including more than $300 million in losses reported by just three of the corporate victims and immeasurable losses to the identity theft victims in costs associated with stolen identities and false charges.

If convicted, the maximum penalties for the charged counts are: five years in prison for conspiracy to gain unauthorized access to computers; 30 years in prison for conspiracy to commit wire fraud; five years in prison for unauthorized access to computers; and 30 years in prison for wire fraud.

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

The case was investigated by the USSS Criminal Investigations Division and the USSS Newark Division. Significant assistance was provided by the Justice Department’s Office of International Affairs and the public prosecutors with the Dutch Ministry of Security and Justice and the National High Tech Crime Unit of the Dutch National Police.

The government is represented by Erez Liebermann, Deputy Chief of the New Jersey U.S. Attorney’s Office Criminal Division, Assistant U.S. Attorney Gurbir Grewal of the Computer Hacking and Intellectual Property Section of the office’s Economic Crimes Unit and Trial Attorney James Silver of the Criminal Division’s Computer Crime and Intellectual Property Section. The U.S. Attorney’s Offices in the District of Kansas and the Northern District of Georgia provided valuable contributions in the development of the prosecution.”

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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.


FBI: “Woman Who Allegedly Mailed Threatening Letters to U.S. Supreme Court and Throughout New Jersey Arrested on Federal Charge”

July 9, 2013

The Federal Bureau of Investigation (FBI) on July 9, 2013 released the following:

“NEWARK, NJ—An Irvington, New Jersey woman was arrested at her home this morning by members of the FBI Joint Terrorism Task Force (JTTF) for allegedly mailing letters threatening bodily harm to the U.S. Supreme Court and recipients throughout New Jersey, U.S. Attorney Paul J. Fishman announced.

Karen Waller, 50, is charged in a federal criminal complaint with one count of mailing threatening communications. She is expected to appear to face the charge this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.

According to the criminal complaint unsealed today, Waller mailed more than 50 threatening letters in May and June 2013 to multiple entities and individuals, including a number in New Jersey. The recipients of those letters included the U.S. Supreme Court; the town hall in Woodbridge Township, New Jersey; Rutgers University; an insurance company; and the Millburn Township, New Jersey Police Department. The letters threatened to injure and kill unspecified individuals.

The charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents, detectives, and investigators assigned to the JTTF, under the direction of FBI Special Agent in Charge Aaron T. Ford in Newark, with the investigation. The JTTF comprises law enforcement officers from numerous federal, state, and local agencies throughout New Jersey.

The government is represented by Andrew Kogan, chief of the U.S. Attorney’s Office National Security Unit.

The charge and allegations contained in the complaint are merely accusations, and the defendant is 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

————————————————————–

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.


Gerardo Blasi, Former New Jersey Turnpike Authority Manager, Charged with Allegedly Stealing More Than $120,000

July 1, 2013

The Federal Bureau of Investigation (FBI) on July 1, 2013 released the following:

“NEWARK, NJ—A former claims manager for the New Jersey Turnpike Authority was arrested today for allegedly stealing more than $120,000 from the authority, U.S. Attorney Paul J. Fishman announced.

Gerardo Blasi, 54, of Clifton, New Jersey, was arrested by special agents of the FBI and charged by complaint with mail fraud and defrauding a state agency that receives federal funds. He is scheduled to make his initial appearance later today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to the complaint:

Blasi was a claims manager at the New Jersey Turnpike Authority, responsible for negotiating and collecting payments from insurance companies whose insured drivers caused damage to the Turnpike. From April 2011 to June 2013, Blasi allegedly stole more than $120,000 from the authority in several ways, including instructing insurance companies to issue checks payable to fraudulent repair companies. When the checks were mailed to Blasi at the authority, he would arrange to have them cashed and keep a portion of the money for himself.

The fraud count with which Blasi is charged carries a maximum potential penalty of up to 20 years in prison and a $250,000 fine. The theft from a state agency count is punishable by a maximum potential penalty of up to 10 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s charges. He also thanked the New Jersey Turnpike Authority for its cooperation in the investigation.

The government is represented by Assistant U.S. Attorney David L. Foster of the office’s Special Prosecutions Division in Newark.

The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.”

Federal Mail Fraud Crimes – 18 U.S.C. § 1341

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

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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

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

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


Alleged Child Porn Distributor Charged in US

June 11, 2012

ABC News on June 11, 2012 released the following:

“By SAMANTHA HENRY Associated Press

A Ukrainian man charged by federal authorities with running a worldwide child pornography distribution network has made his first appearance in a New Jersey courtroom.

The U.S. Attorney’s office says Maksym Shynkarenko (max-SEEM’ shank-AH’-rank-oh) from Kharkov, Ukraine, founded and operated a Ukraine-based child pornography website that had customers around the world and has resulted in 560 convictions of customers in the U.S.

Shynkarenko was extradited from Thailand over the weekend to face a 32-charge indictment.

A federal judge in Newark on Monday ordered him to remain in custody pending his arraignment Wednesday.

The 33-year-old Shynkarenko, wearing green prison scrubs, close-cropped hair and glasses answered a judge’s questions in English that he did understand his rights.

He has been assigned a court-appointed attorney.”

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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

————————————————————–

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

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

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


Two Taiwanese Nationals Charged in New Jersey with Allegedly Conspiring to Export Sensitive U.S. Military Technology to China

April 25, 2012

The Federal Bureau of Investigation (FBI) on April 25, 2012 released the following:

Alleged Conspiracy Uncovered Through Investigations into Large-Scale, International Schemes to Import Counterfeit Goods and Drugs Through Port Newark

NEWARK—Two Taiwanese nationals are charged for allegedly seeking to export sensitive U.S. military technology to China after federal agents investigating counterfeit goods smuggling uncovered plots to smuggle drugs into and sensitive defense articles out of the United States, Paul J. Fishman, U.S. Attorney for the District of New Jersey; and Michael B. Ward, Special Agent in Charge for the FBI Newark Division, announced today.

Hui Sheng Shen, aka “Charlie,” 45; and Huan Ling Chang, aka “Alice,” 41, were previously charged in connection with an alleged scheme to import 50 kilograms of crystal methamphetamine, or “meth,” from Taiwan into the United States. Those charges arose as a result of parallel international investigations that also disrupted conspiracies to import hundreds of millions of dollars in counterfeit goods from China.

Federal agents arrested Shen and Chang on February 25, 2012 in New York. The pair was charged in a criminal complaint unsealed March 2, 2012, with one count of conspiracy to import and one count of importation of meth. The amended complaint unsealed today also charges Shen and Chang with conspiracy to violate the Arms Export Control Act.

According to the amended complaint, approximately one kilogram of nearly pure crystal meth was purchased from Shen and Chang as part of an undercover law enforcement operation, which stopped the importation of dozens of additional kilograms of the drug. Based on relationships undercover law enforcement agents built with Shen and Chang, the two defendants allegedly provided a list of sensitive defense articles they sought to buy and planned to return to connections in China. The articles included unmanned aerial vehicles (commonly known as drones), E-2C Hawkeye surveillance airplanes, and stealth technology relating to F-22 fighter planes.

Shen and Chang are scheduled to appear before U.S. Magistrate Judge Cathy L. Waldor this afternoon in Newark federal court.

“Initial investigations into counterfeit goods importation led federal law enforcement to a meth trafficking operation and an alleged plot to export some of America’s most sensitive weapons and related technology to China,” said U.S. Attorney Fishman. “The charges against Shen and Chang illustrate starkly why we do this work, and what is at stake when the security of our ports is breached for any reason. National security isn’t an a la carte enterprise. The same conduits that bring knockoff sneakers flood our communities with illegal drugs and establish dangerous criminal relationships.”

According to documents filed in this and related cases and the amended criminal complaint unsealed today:

Soon Ah Kow, 72, of Hong Kong, was charged by indictment with drug importation, smuggling, and counterfeit goods trafficking offenses by a Newark federal grand jury on January 6, 2012 and arrested on February 25, 2012 in Manila, the Philippines. Ah Kow was in the business of brokering international transactions of illegal goods. Operating out of Southeast Asia, he met with and introduced his co-conspirators to undercover federal agents (FBI UCs) for the purpose of importing counterfeit goods and narcotics from Asia to the United States.

In late 2010, Ah Kow began discussions with FBI UCs about narcotics importation, meeting in February 2011 with FBI UCs in Manila where he introduced them to his associates, Shen and Chang. In Manila, Ah Kow told the FBI UCs that Shen and Chang represented the interests of Ah Kow’s associates, wealthy narcotics dealers who had been trafficking drugs for more than 25 years. Ah Kow and Shen arranged for the delivery of a sample of crystal meth to the FBI UCs’ hotel lobby, which arrived within hours of a call Ah Kow placed to an associate.

Following negotiations over recorded telephone calls and intercepted e-mails, the FBI UCs arranged payment to cover the price of one kilogram of crystal meth, shipping costs, and a broker’s fee for Ah Kow. In July 2011, the FBI UCs received a bill of lading for the container that included the meth, which arrived at the port on August 9, 2011. The drugs were discovered secreted within the container in the exact location described by Shen and Chang.

During negotiations for the one kilogram meth deal, Shen and Chang made clear they usually did larger transactions, but agreed to do a smaller transaction to establish trust among the parties. They discussed shipping more than 50 kilograms of meth to the United States.

In September 2011, Shen and Chang asked whether the FBI UCs could obtain and pass along highly sensitive military technology, specifically, a Hawkeye reconnaissance aircraft, which the defendants instructed should be referred to as the “big toy.”

During other recorded conversations, the defendants indicated their clients were interested in a range of American military technology. Shen, Chang, and an FBI UC met in October 2011 in Las Vegas, where they discussed narcotics and the export of the technology. Chang provided the FBI UC with a list of specific military technology items they sought.

At a Las Vegas meeting, FBI UCs asked what purposes Shen and Chang had for any military technology they were seeking to obtain. When an FBI UC stated, “I would prefer not to make money on something that would hurt the United States,” Shen replied, “I think that all items would hurt America.”

During a series of recorded phone conversations and in-person meetings, the defendants told FBI UCs that their associates were connected to the Chinese government, worked for a Chinese intelligence company like the CIA, and would be using government money to make the purchases.

Describing their associates in one call, Chang said, “Their status is a bit special, so in order to travel to U.K. or United States, all developed countries, for them it’s hard for them to…” Shen interrupted, “They are spies. They, they, they are very hard to get a visa. They cannot go to U.S. or U.K.”

Shen and Chang returned to the United States in February 2012 to finalize negotiations for a series of larger drug transactions and to look at and photograph certain military technology that the FBI UCs said they had acquired. Shen and Chang met with FBI UCs in New York to see a small drone, used by the U.S. military, as well as manuals associated with other drones. Shen and Chang had purchased cameras for the explicit purpose of taking photographs of the defense technology. The pair planned to avoid law enforcement detection by taking photographs, deleting those photographs, and bringing the memory cards back to China, where a contact had the ability to recover deleted items. The defendants took the photos, but FBI agents were there to arrest them before the photos could be deleted.

The conspiracy to violate the Arms Export Control Act charge carries a maximum potential penalty of five years in prison and a $250,000 fine. The meth importation conspiracy and meth importation charges each carry a mandatory minimum penalty of 10 years in prison and a maximum penalty of life in prison and a $4 million fine.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Ward in Newark, for the investigation leading to the export violation conspiracy charge, as well as ICE Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees, for its work in the parallel investigation. He also thanked Customs and Border Protection, under the direction of Robert E. Perez, Director, New York Field Operations, for its important role. U.S. Attorney Fishman also credited the U.S. Air Force Office of Investigations; FBI special agents in Manila, Beijing, Hong Kong, and Taiwan; the Philippine authorities; and the Department of Justice’s Organized Crime and Gangs Section, National Security Division, Office of Enforcement Operation, and Office of International Affairs for their contributions.

The government is represented by Assistant U.S. Attorney Zach Intrater and Chief Erez Liebermann of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit and Assistant U.S. Attorney Andrew Pak of the Office’s General Crimes Unit in Newark.

The charges and allegations contained in the amended complaint charging Shen and Chang and the indictment charging Ah Kow are merely accusations, and the defendants are considered 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

————————————————————–

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.


Florida Man Arrested, Charged with Bankruptcy Fraud

February 29, 2012

The Federal Bureau of Investigation (FBI) on February 28, 2012 released the following:

“Allegedly Concealed More Than $1.5 Million in Personal Assets

NEWARK, NJ—A former Ocean County, N.J., resident was arrested today and charged with hiding hundreds of thousands of dollars in assets in connection with his November 2008 personal bankruptcy petition, U.S. Attorney Paul J. Fishman announced.

Bryan Young, 39, formerly of Toms River, N.J., and now living in Venice, Fla., turned himself in to agents of the FBI in Newark. He is charged by complaint with two counts of bankruptcy fraud and is scheduled to make his initial appearance today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to the criminal complaint unsealed today:

On Nov. 5, 2008, Young, who was then living in New Jersey, filed for individual Chapter 7 bankruptcy protection with the U.S. Bankruptcy Court for the District of New Jersey. In his petition, Young concealed more than $1.5 million in personal assets, failing to disclose the existence of four financial accounts—or that any of these accounts were closed as of the date of the filing of his petition—with total balances of more than $650,000. Young failed to disclose the purchase of approximately $13,000 worth of furniture or the sale of a 2003 Ford truck, worth approximately $10,000, within months of the filing. He listed no income other than from employment or the operation of a business. However, according to documents obtained from eBay Inc., Young had eBay sales totaling more than $250,000 in 2007 and 2008. Young failed to disclose transfers of more than $250,000 into a bank account in the name of his son, and approximately $248,000 into an account controlled by Young himself.

Young also made numerous materially false statements under oath in relation to his bankruptcy petition. On Dec. 12, 2008, Young testified that he did not own any stocks, bonds, or mutual funds. However, at the time of the filing of his petition, one of Young’s financial account investment statements showed investments in stocks, bonds, and mutual funds that were worth approximately $100,000 within months of the filing. On Feb. 13, 2009, Young claimed he had only one bank account, but at the time of his filing had at least four bank accounts. Young claimed that he owned only one motor vehicle, a 2006 Ford F-350, but N.J. Department of Motor Vehicle records show he also owned a 1993 Mitsubishi GT and a 2003 Ford truck. Young claimed he had no assets over and above the amount listed in his petition, but had at least $13,000 worth of furniture that was not disclosed in his petition.

The bankruptcy fraud charge carries a maximum potential penalty of five years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark; IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge JoAnn Zuniga, and Region 3 U.S. Trustee Roberta DeAngelis and the Newark office of the U.S. Trustee, with the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorney Aaron Mendelsohn of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement 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.”

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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.


Two New York Men Charged with Allegedly Selling Fraudulent Oxycodone Prescriptions

February 21, 2012

The Federal Bureau of Investigation (FBI) on February 17, 2012 released the following:

“NEWARK, NJ—Two New York men made their initial court appearances today after being arrested by federal agents last night for allegedly operating an oxycodone distribution network using counterfeit medical prescriptions, U.S. Attorney Paul J. Fishman announced.

Jack E. Polo, (a/k/a “Spank”), 42, of Queens, N.Y., and Roland M. Sartori, 32, of Bellerose, N.Y., are each charged by complaint with one count of conspiring to distribute oxycodone. They were arrested last night at Sartori’s home by agents of the FBI. Both men made their initial appearances before U.S. Magistrate Judge Mark Falk in Newark federal court and were released on $50,000 unsecured bond, with their travel restricted to New York and New Jersey.

According to the criminal complaints:

Since at least November 2010, the defendants had access to blank prescription paper that was sent to a New York State medical facility. Using specialized printing equipment, they created oxycodone prescriptions in the names of fictitious patients. The defendants printed several different telephone numbers on the phony prescriptions and used a network of co-conspirators, posing as employees of various doctors’ offices, to answer calls to those numbers in case any pharmacies attempted to verify the prescriptions.

The conspiracy charge carries a maximum potential penalty of 20 years in prison and up to a $1 million fine.

U.S. Attorney Fishman credited special agents with the FBI under the direction of Special Agent in Charge Michael B. Ward, and the New York Police Department, for the investigation leading to today’s arrests.

The case is being prosecuted by Assistant U.S. Attorney Shana W. Chen of the Organized Crime/Gangs Unit in Newark.

The charges and allegations contained in the Complaint 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

————————————————————–

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.