Miami-Area Residents Mayelin Santoyo and Jose Martin Olivares Indicted by a Federal Grand Jury for Alleged Roles in $190 Million Medicare Fraud Scheme

October 1, 2013

The Federal Bureau of Investigation on September 27, 2013 released the following:

“WASHINGTON—Two Miami-area residents were indicted in connection with their alleged participation in a $190 million Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG) Office of Investigations, Miami Office, made the announcement after the indictment was unsealed.

Mayelin Santoyo, 28, and Jose Martin Olivares, 36, were each charged with one count of conspiracy to defraud the United States and to receive illegal health care kickbacks and two counts of receiving health care kickbacks. Each charge carries a maximum penalty of five years in prison upon conviction.

According to the indictment, the scheme that Santoyo and Olivares allegedly participated in lasted from approximately February 2006 to October 2010. The scheme was orchestrated by the owners and operators of American Therapeutic Corporation (ATC) and its management company, Medlink Professional Management Group Inc. (Medlink). ATC and Medlink were Florida corporations headquartered in Miami. ATC operated purported partial hospitalization programs (PHPs), a form of intensive treatment for severe mental illness, in seven different locations throughout South Florida and Orlando. Both corporations have been defunct since their owners were arrested in October 2010.

The indictment alleges that Santoyo and Olivares served as patient brokers who provided ineligible patients to ATC in exchange for kickbacks in the form of checks and cash. The amount of the kickback was based on the number of days each recruited patient spent at ATC. Throughout the course of the ATC conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services and who attended treatment programs that were not legitimate PHPs so that ATC could bill Medicare for the medically unnecessary services. According to court filings, to obtain the cash required to support the kickbacks, the co-conspirators laundered millions of dollars of payments from Medicare.

ATC, Medlink, and various owners, managers, doctors, therapists, patient brokers, and marketers of ATC and Medlink have pleaded guilty or have been convicted at trial. In September 2011, ATC owner Lawrence Duran was sentenced to 50 years in prison for his role in orchestrating and executing the scheme to defraud Medicare.

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

The case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case is being prosecuted by Trial Attorneys Anne P. McNamara and Robert A. Zink of the Fraud Section.

Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,500 defendants who collectively have falsely billed the Medicare program for more than $5 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”

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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.


“Key witness in ‘Whitey’ Bulger gangster trial found dead”

July 18, 2013

USA Today on July 18, 2013 released the following:

By: Kevin Johnson and Doug Stanglin , USA TODAY

“A friend says Stephen Rakes was looking forward to testifying against the South Boston gangster.

A body found near Lincoln, Mass., has been identified as Stephen “Stippo” Rakes, who was to be a key key witness in the trial of notorious South Boston gangster James “Whitey” Bulger.

Rakes was scheduled to testify that he was forced at gunpoint to turn over his liquor store to Bulger 29 years ago.

A law enforcement official confirming Rakes death to USA TODAY says authorities are investigating that he may have died of natural causes. The body of Rakes, 59, was found Wednesday afternoon.

The official said there is “no obvious sign” that he was murdered. ABC News reported that police told Rakes’ family that the death appeared to be a suicide. No phone or wallet was found on the body.

A close friend of Rakes, Steve Davis, tells ABC News, however, that he would not have killed himself and “was looking forward to taking the stand.” Davis said Rakes had planned to deliver a “big bombshell” on the witness stand.

Rakes has been attending Bulger’s federal racketeering trial in South Boston regularly over the past six weeks.

ABC says that Rakes was a particularly angry and determined victim of Bulger’s gangland tactics.

He was apparently supposed to testify that Bulger, 83, a member of his Winter Hill gang, Stephen “The Rifleman” Flemmi, threatened his daughter at gunpoint and forced him to turn over his South Boston liquor store. The building later became Bulger’s headquarters.

Bulger, a much-feared South Boston gangster for decades, fled the city in 1994 ahead of his arrest. He was captured in California two years ago after 16 years on the run.

Bulger has pleaded not guilty to 48 charges, including 19 counts of murder, extortion, money laundering, obstruction of justice, perjury, narcotics distribution, and weapons violations.”

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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

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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.


Defense Contractor Benjamin Pierce Bishop Charged in Federal Criminal Complaint with Allegedly Communicating Classified Information to Person Not Entitled to Receive Such Information

March 19, 2013

The Federal Bureau of Investigation (FBI) on March 18, 2013 released the following:

“Defense Contractor Charged in Hawaii with Communicating Classified Information to Person Not Entitled to Receive Such Information

HONOLULU— Benjamin Pierce Bishop, 59, a former U.S. Army officer who works as a civilian employee of a defense contractor at U.S. Pacific Command (USPACOM) in Hawaii, has been arrested on charges of communicating classified national defense information to a person not entitled to receive such information.

The arrest and charges were announced by Florence T. Nakakuni, U.S. Attorney for the District of Hawaii; John Carlin, Acting Assistant Attorney General for National Security; Vida G. Bottom, Special Agent in Charge of the FBI Honolulu Division; Dwight Clayton, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Hawaii Field Office; and U.S. Navy Captain Patrick McCarthy of USPACOM.

Bishop, a resident of Hawaii, was arrested Friday without incident at his workspace at USPACOM in Hawaii and made his initial appearance on Monday in federal court in Honolulu. The criminal complaint filed in the District of Hawaii charges him with one count of willfully communicating national defense information to a person not entitled to receive such information and one count of unlawfully retaining documents related to the national defense. If convicted, he faces a maximum potential sentence of 20 years in prison.

According to an affidavit filed in support of the criminal complaint, Bishop currently works as an employee of a defense contractor that has a contract with USPACOM, whose command is based in Oahu, Hawaii. Bishop has held a top secret security clearance since July 2002 and held access to Secure Compartmented Information from November 2002 to April 2012. As a person holding a top secret security clearance, Bishop has been subject to multiple security briefings on restrictions regarding the disclosure of classified national defense information, as well as the handling, marking, and storage of such information.

According to the affidavit, between May 2011 through December 2012, Bishop willfully communicated classified national defense information on multiple occasions to Person 1, an individual not entitled to receive such information. The affidavit alleges that Person 1 is a 27-year-old female citizen of the People’s Republic of China who is residing in the United States on a visa and who does not possess, nor has ever possessed, a U.S. security clearance, and thus is not entitled to receive U.S. classified information.

According to the affidavit, Bishop and Person 1 originally met in Hawaii during a conference regarding international military defense issues. Since June 2011, Bishop and Person 1 have allegedly been involved in a romantic relationship. Despite a Defense Department directive requiring personnel, like Bishop, who maintain a U.S. security clearance to report to the U.S. government any contacts with foreign persons, Bishop has affirmatively hidden his relationship with Person 1 from U.S. government officials, the affidavit alleges.

The affidavit alleges that Bishop communicated information classified at the secret level to Person 1 on several instances. According to the affidavit, the national defense information that Bishop passed to Person 1 included information relating to nuclear weapons; information on planned deployment of U.S. strategic nuclear systems; information on the ability of the United States to detect low- and medium-range ballistic missiles of foreign governments; and information on the deployment of U.S. early warning radar systems in the Pacific Rim.

The affidavit further alleges that a court-authorized search of Bishop’s residence in November 2012 revealed approximately 12 individual documents each with classification markings at the secret level. Bishop’s residence is not an authorized location for the storage of classified information, and Bishop was not authorized to remove and retain those documents.

This case is being investigated by the FBI Honolulu Division and the NCIS Hawaii Field Office in coordination with USPACOM and the U.S. Army. The prosecution is being handled by Kenneth Sorenson, Assistant U.S. Attorney in the U.S. Attorney’s Office for the District of Hawaii, and Robert E. Wallace, Jr., Senior Trial Attorney in the Counterespionage Section of the Justice Department’s National Security Division.

The charges contained in the criminal complaint are merely allegations, 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

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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.


Counterfeit sneaker defendant acquitted

October 20, 2012

The Buffalo News on October 19, 2012 released the following:

“BY: PHIL FAIRBANKS

By the time the predawn raids were over, 24 people were rounded up and charged, each one accused of taking part in a multimillion-dollar counterfeit sneaker ring stretching from China to Buffalo.

Five years later, one of the 24 rolled the dice and went to trial, well aware that each of his co-defendants had been convicted.

A federal court jury helped Greg Smiley beat the odds Thursday by finding him not guilty.

“He’s very happy and glad to be heading home to see his family,” said David R. Addelman, Smiley’s defense lawyer.

In understanding why Smiley went to trial – and ultimately got off – while 23 others did not, Addelman believes it is important to understand the defendants’ varying degrees of involvement in the counterfeit sneaker case.

He says Smiley was a relatively small player in the conspiracy, a network that started with manufacturers in China and stretched all the way to two New York City warehouses and ultimately to distribution points in Buffalo and Niagara Falls.

“I don’t think we can read too much into it,” Addelman said of his client’s acquittal. “He was way out there in Atlanta all by himself.”

Prosecutors dismiss the notion that Smiley was anything but a major player in the conspiracy or that the case against him was weaker than against other defendants.

“We certainly felt the case was a strong one,” said U.S. Attorney William J. Hochul Jr. “We charged 24 men and women and 23 were convicted.”

As the owner of Top of the Line Fashions, a small neighborhood clothing store, Smiley stood accused of buying and selling counterfeit Nike sneakers.

From the start, he argued that, yes, he bought the sneakers but no, he had no idea they were fakes.

“The prosecution was, he must have known,” said Addelman. “And the defense was, that’s no way to convict someone.”

The jury seemed to agree even though the prosecution, eager to prove Smiley knew what he was buying, played taped recordings of his conversations with one of the alleged ring leaders, Malik Bazzi.

“He’ll tell you how the whole operation ran,” Assistant U.S. Attorney John E. Rogowski said of Bazzi early on in the trial. “He’ll tell you how he found suppliers. He’ll tell you how he found customers. And most important, he’ll tell you how he knew Greg Smiley.”

Federal agents also testified against Smiley, noting the taped conversations with Bazzi and the repeated delivery of counterfeit sneakers to Smiley’s store in Georgia.

Addelman countered by suggesting the recordings proved very little and that Smiley was nothing more than another victim of the conspiracy.”

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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

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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.


Houston-Area Men Charged in an Alleged $68 Million Bank Fraud

June 18, 2012

The Federal Bureau of Investigation (FBI) on June 15, 2012 released the following:

“MONTGOMERY, AL— George L. Beck, Jr., United States Attorney for the Middle District of Alabama, and Lanny Breuer, Assistant Attorney General, Criminal Division, U.S. Department of Justice, announced today:

  • The indictment on June 6, 2012 of three Houston, Texas-area men: Paul Hulse, Sr., age 64, of Kingwood, Texas; Steven P. Mock, age 68, of Houston, Texas; and Frank J. Teers, age 49, of Montgomery, Texas, on federal conspiracy, wire fraud, and bank fraud charges.
  • The guilty plea on June 5, 2012 of Paul Hulse, Jr., age 42, of Kingwood, Texas, to an information charging conspiracy to make a false statement to a bank.

According to court filings, Paul Hulse, Sr. (Hulse) was a director of H&H Worldwide Financial Service Inc.; Paul Hulse, Jr. (Hulse, Jr.) was H&H’s president; Steven P. Mock was an attorney in the Houston area; and Frank J. Teers was a stockbroker employed by Tri-Star Financial Services in Houston. Beginning in 2003, Hulse began soliciting various persons and businesses for loans based on the false representation that he controlled a large portfolio of bonds—the amount ranged from tens to hundreds of millions of dollars—that could be used as collateral for the loans. Mock and Teers made false statements to the prospective lenders that supported Hulse’s claim that he owned a substantial bond portfolio. In fact, Hulse did not have a bond portfolio. None of the solicited institutions, which included Western National Bank of Midland, Texas, MetLife, UBS Securities, and Jefferies and Co. agreed to make a loan to Hulse or H&H.

According to the indictment, in February 2005, Hulse began soliciting loans from the Federal Land Bank of South Alabama (the bank) in Montgomery, Alabama. During the course of the discussions:

Hulse falsely represented that he had a large bond portfolio that could serve as collateral for the loans to H&H and submitted documents that concealed Hulse’s plan to use approximately half the loan proceeds to purchase the bonds that were going to serve as collateral for the loans.

Mock falsely claimed that he was Hulse’s “senior trust officer” and that the “trust agreements” permitted the use of $15 million of trust bonds in connection with the proposed loan.

Teers falsely represented that he managed a significant bond portfolio for Hulse, provided documents to Hulse that Hulse used to support his claim of ownership, signed documents that represented that bonds were on account at Tri-Star and failed to disclose to the bank and to Tri-Star that he had been interviewed by IRS criminal investigators about Hulse’s fraudulent activities.

According to the indictment, the bank made two loans to H&H totaling $68.5 million in August and December 2005. H&H used more than half the money to buy the bonds that were to serve as collateral for the loan. A significant amount of the loan proceeds were used for the personal benefits of Mock, Hulse, and members of the Hulse family. Teers made more than $600,000 in commissions from the buying and sale of bonds on behalf of H&H. By spring 2007, the relationship between H&H and the bank had deteriorated. In an effort to convince the bank to allow the principal of the bonds to be used to make the quarterly loan payment, on June 28, 2007, Mock, Hulse, and Hulse, Jr. sent a letter to the bank that (a) falsely claimed that H&H was on the “doorstep” of obtaining a loan from Wells Fargo that would allow the bank to be paid in full and (b) described how the loan proceeds had been used without disclosing the fact that more than half the loan proceeds had been used to buy the bond collateral.

Each count of the 10-count indictment carries a statutory maximum sentence of 30 years’ imprisonment. The conspiracy charge to which Hulse, Jr. pled guilty carries a statutory maximum sentence of five years’ imprisonment.

Hulse and Mock were arraigned yesterday before United States Magistrate Judge Terry F. Moorer. Teers had his arraignment before Judge Moorer on June 13, 2012. Each defendant pled not guilty, and each was released on a $25,000 unsecured bond. Trial is set for February 11, 2013 before United States District Judge Myron H. Thompson.

Hulse, Jr. pled guilty before Chief United States Magistrate Judge Susan R. Walker, who released him on a $25,000 unsecured bond. Hulse, Jr. is scheduled to be sentenced on September 19, 2012 before Chief United States District Judge William Keith Watkins.

The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Andrew O. Schiff and Fraud Section Trial Attorney Ryan S. Faulconer.”

Federal Bank Fraud Crimes – 18 U.S.C. 1344

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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.


Former Council Chairman Kwame R. Brown Pleads Guilty to Bank Fraud and Campaign Finance Violation

June 11, 2012

7thSpace.com on June 9, 2012 released the following:

“WASHINGTON— Kwame R Brown, the former Chairman of the Council of the District of Columbia, pled guilty today to a federal charge of bank fraud and a second criminal charge involving a violation of the District of Columbia’s campaign finance laws.

The guilty pleas were announced by United States Attorney Ronald C Machen Jr; Ronald T Hosko, Special Agent in Charge of the FBI Washington Field Office’s Criminal Division; and Rick A Raven, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI).

Brown, 41, pled guilty to the bank fraud charge in the United States District Court for the District of Columbia. In a separate proceeding, he pled guilty in the Superior Court of the District of Columbia to the campaign finance violation. As part of the plea agreement, he agreed to submit his immediate resignation from the District of Columbia Council. Brown also has agreed to cooperate as the investigation continues.

The Honorable Richard J Leon scheduled sentencing in the federal case for 11 AM on September 20, 2012.

The Honorable Juliet McKenna scheduled sentencing in the campaign finance case for 2:30 PM on the same date.

The bank fraud charge carries up to 30 years in prison. Under federal sentencing guidelines, the parties have agreed that the applicable range for this offense would be up to six months in prison and a possible fine of up to $5,000. The campaign finance charge carries a maximum of six months of incarceration and a possible fine of up to $5,000.

Brown is the second member of the Council of the District of Columbia to plead guilty to criminal charges this year. In January, in a separate and unrelated case, Harry L Thomas, Jr pled guilty to federal theft and tax charges.

Thomas, who resigned as part of his plea agreement, has since been sentenced to a prison term of 38 months. Thomas was the first sitting member of the DC. Council to be charged with and convicted of a felony.

The charges against Kwame Brown involve two separate matters. In one case, Brown admitted providing false documentation to secure two personal loans, totaling more than $220,000.

In the other, Brown admitted aiding and abetting another individual, a relative, to make a cash payment of $1,500 to a campaign worker for the 2008 council campaign. The relative was a signatory on the campaign’s bank accounts; Brown also admitted failing to disclose the relative’s identity to the District of Columbia Office of Campaign Finance.

“For the second time this year, a member of the DC. Council has pled guilty to a felony offense and been forced to resign,” said United States Attorney Machen. “While sitting on the council, Kwame Brown repeatedly falsified and forged documents to deceive the bank into giving him money, even faxing one of the fraudulent documents from his council office.

Brown also gave a family member free license to make illegal and untraceable cash expenditures from his 2008 campaign in violation of DC. law. The people of the District of Columbia deserve better from their elected officials. Today’s pleas take us one step closer to a culture of integrity and accountability that will not tolerate politicians engaging in dishonesty and self dealing.”

“This week, Mr Brown admitted to forging bank documents and withholding information about his re-election campaign finances,” said Special Agent in Charge Hosko.

“This investigation and today’s guilty pleas demonstrate that the FBI and our law enforcement partners will pursue all allegations of illegal conduct that clouds the judgment of our elected officials and deprives our citizens of the honest government to which they are entitled.”

“No matter what your position, it is unacceptable to submit false information to a financial institution in an effort to secure a loan,” said Special Agent in Charge Raven. “IRS-Criminal Investigation will make every effort to aggressively investigate financial fraud of any kind and not give a free pass to anyone who blatantly fails to comply with the law.”

Brown was elected as an at-large member of the District of Columbia Council in 2004 and took office in January 2005. He was re-elected in 2008, and then, in 2010, he was elected chairman. He took office in that position in January 2011.

According to a statement of offense signed by the government as well as the defendant, Brown submitted false information in securing a $166,000 home equity loan, as well as a $55,335 loan that he used to purchase a boat.

Both loans were issued by Industrial Bank, NA.

In paperwork for the home equity loan, which Brown sent by facsimile from his council office on September 26, 2005, Brown provided a Verification of Employment Form. In it, he falsely wrote that he held the position of “Vice President of Strategy” in an unnamed company; that he earned $3,000 per month; that his probability of continued employment was “great”; that he was projected to earn a $10,000 pay increase on January 3, 2006; and that he was a full-time employee. At the bottom of this form, Brown forged the name and signature of a friend from college who was purportedly the president of the company. In fact, Brown did not have his friend’s permission to sign this form, and his friend was never Brown’s employer.

Brown filed and submitted this form to overstate his annual income in an effort to win approval of his loan application, believing that, without artificially inflating his income, his request would be rejected.

Based on Brown’s purported income, Industrial Bank issued a loan to Brown on October 12, 2005, in the amount of $166,000.

Brown submitted the second loan application on July 25, 2007, this time seeking money for the purpose of purchasing a boat. As part of the application, he submitted an Internal Revenue Service form, purporting to be from a company for which he had worked as a consultant. The form that Brown submitted showed his 2006 income from the company to be $85,000. In fact, Brown’s income from the firm that year totaled $35,000.

Before submitting the form, Brown had altered the “3” on the document to an “8,” so that it appeared he earned $85,000, not $35,000.

As with the 2005 loan, Brown believed that this loan would not be approved without artificially inflating his income. Based on Brown’s purported income, Industrial Bank issued a loan to Brown on August 30, 2007, in the amount of $55,335.

In the campaign finance case, Brown admitted aiding and abetting an unlawful cash campaign expenditure, in excess of the $50 limit imposed on individual cash transactions. According to a statement of offense in that matter, signed by the government as well as the defendant, the “Committee to Re-Elect Kwame Brown” was formed for Brown’s 2008 re-election campaign for the at-large seat on the council.

In or around April 2007, Brown allowed a relative to be a signatory on the committee’s bank account, which was held at Industrial Bank. The relative and the committee’s treasurer jointly opened the account.

In his Statement of Candidacy, filed with the Office of Campaign Finance, Brown listed this account as the committee’s sole bank account. He failed, however, to disclose that his relative was a signatory on the account.

In August 2008, with Brown’s knowledge and permission, the relative opened a second bank account at Industrial Bank, called the “side account,” purportedly to pay for “get-out-the-vote” campaign activities. Brown authorized the relative to make withdrawals on behalf of the committee from the side account. However, he failed to amend his Statement of Candidacy to disclose the existence of the second account.

Later, on or about September 11, 2009, Brown’s relative paid an expense in the amount of $1,500 related to the 2008 re-election campaign, using cash withdrawn from the side account.

This case was investigated by the FBI’s Washington Field Office and the Washington Field Office of IRS-Criminal Investigation.

In announcing the guilty pleas, United States Attorney Machen, Special Agent in Charge Hosko, and Special Agent in Charge Raven commended those who investigated the case for the FBI and IRS-CI.

They also acknowledged the efforts of Assistant United States Attorneys David S Johnson, Maia L Miller, Matt Graves, Ellen Chubin Epstein, and Daniel Butler of the Fraud and Public Corruption Section of the United States Attorney’s Office; Assistant United States Attorney Anthony Saler of the Asset Forfeiture and Money Laundering Section of the United States Attorney’s Office; and Trial Attorney Peter Mason of the Public Integrity Section of the Department of Justice’s Criminal Division, who have prosecuted the case.

Finally, they expressed appreciation to Forensic Accountant Crystal Boodoo; Paralegal Specialists Diane Hayes, Lenisse Edloe, Tasha Harris, Shanna Hays, and Sarah Reis; Legal Assistants Krishawn Graham, Nicole Wattelet, and Christopher Samson; former Legal Assistant Jared Forney; Criminal Investigators Matthew Kutz and Duncan Templeton; Litigation Support Services Specialist Thomas Royal; Information Technology Specialist Kimberly Austin; Victim-Witness Coordinator Dawn Tolson-Hightower; former Student Law Clerks Carl Barnes, Iris Postelnicu, and Danielle Rosborough; and Intelligence Specialist Lawrence Grasso, all of the United States Attorney’s Office for the District of Columbia.

Reported by: FBI”

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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.


Nevada Lobbyist Harvey Whittemore Indicted for Allegedly Making Unlawful Campaign Contributions and Lying to Investigators

June 7, 2012

The Federal Bureau of Investigation (FBI) on June 6, 2012 released the following:

“WASHINGTON— Nevada lobbyist and lawyer Harvey Whittemore was indicted today in the District of Nevada by a federal grand jury on charges that he made unlawful campaign contributions to an elected member of Congress, caused false statements to be made to the Federal Election Commission (FEC), and lied to the FBI, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Daniel G. Bogden, U.S. Attorney for the District of Nevada.

F. Harvey Whittemore, 55, of Reno, Nevada, was charged with one count of making excessive campaign contributions, one count of making contributions in the name of others, and two counts of making a false statement to a federal agency. If convicted, Whittemore faces up to five years in prison and a $250,000 fine on each count.

“Mr. Whittemore allegedly used his family members and employees as conduits to make illegal contributions to the campaign committee of an elected member of Congress,” said Assistant Attorney General Breuer. “Furthermore, according to today’s indictment, he attempted to conceal his crimes by lying to the FBI. Our campaign finance laws establish maximum limits on individual contributions, and failure to adhere to those rules jeopardizes the integrity of our elections. We will continue to pursue those who engage in such conduct.”

“We remain committed to investigating and prosecuting illegal behavior that jeopardizes the integrity of our elections and corrupts our political process,” said U.S. Attorney Bogden. “Campaign finance laws exist to protect that process and criminal violations of those laws will be vigorously prosecuted by this office.”

Under federal law, it is illegal to contribute to a federal political campaign using a conduit in order to hide the identity of the true contributor. Federal law also sets limits on the amount that an individual can contribute to a campaign. In 2007, the maximum individual contribution was $2,300 for a primary election and $2,300 for a general election; thus, the maximum for one candidate was $4,600.

The indictment states that Whittemore was the chief executive of Company A. On about February 21, 2007, Whittemore allegedly met with an elected member of Congress (identified in the indictment as Federal Elected Official 1) and agreed to try to collect $150,000 in contributions for the elected official’s campaign committee by March 31, 2007, which marked the end of a legally required quarterly reporting period. Aware of the strict limits on individual federal campaign contributions, Whittemore allegedly devised a scheme and plan whereby he used family members, employees of Company A, and their respective spouses as prohibited conduits through which to funnel his own money to the federal elected official’s campaign committee under the guise of lawful campaign contributions. This scheme allowed Whittemore to make an individual campaign donation to the federal elected official in excess of the limits established by federal law. Whittemore allegedly concealed the scheme from the FEC, the elected official, and the elected official’s campaign committee.

In March 2007, Whittemore allegedly solicited the employees, family members, and their respective spouses to make the maximum campaign donations to the federal elected official and reimbursed the contributors with personal checks and wire transfers. The indictment alleges that Whittemore attempted to conceal some of the reimbursements he made to the contributors by telling the employees that they were bonuses. Whittemore also allegedly paid the contributors additional money on top of the reimbursements. If a conduit contributed $4,600, Whittemore reimbursed the individual $5,000; likewise if a couple contributed $9,200, he paid the couple $10,000.

On about March 28, 2007, Whittemore allegedly caused a Company A employee to transmit $138,000 in contributions to the federal elected official’s campaign committee, the vast majority of which were conduit contributions that Whittemore had personally funded in order to satisfy his pledge to the federal elected official. On April 15, 2007, the campaign committee then unknowingly filed false reports with the FEC stating that the conduits had made the contributions, when in fact, Whittemore had made them.

On about February 9, 2012, Whittemore allegedly made false statements during an interview with FBI agents by claiming that he never made a request for campaign contributions; never asked employees of Company A to contribute to the elected official’s campaign; never provided payments to anyone with the expectation that they would serve as reimbursements for campaign contributions; never spoke to any candidate about raising money for the candidate; and never gave money to family members to make political contributions.

The case is being investigated by the FBI and is being prosecuted by First Assistant U.S. Attorney Steven W. Myhre, Assistant U.S. Attorney Sue Fahami, and Trial Attorney Eric G. Olshan of the Public Integrity Section in the Justice Department’s Criminal Division.

An indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.”

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Douglas McNabb – McNabb Associates, P.C.’s
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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.