“One of US FBI’s most wanted nabbed at Mexico beach resort”

June 19, 2013

The Washington Post on June 19, 2013 released the following:

By Associated Press

“CANCUN, Mexico — Mexican authorities have arrested a former university professor who was on the FBI’s Ten Most Wanted Fugitives list in the resort city of Playa del Carmen.

Prosecutor Gaspar Armando Garcia Torres said Walter Lee Williams, 64, is wanted on charges of sexual exploitation of children and traveling abroad for the purpose of engaging in sexual acts with children.

Garcia said Williams was captured late Tuesday while drinking coffee near a park in the Caribbean beach town.

“This person is wanted by the FBI because he is linked to the sexual exploitation of children,” Garcia told reporters.

He said it wasn’t clear how long Williams had been living in Playa del Carmen and that the fugitive also had an address in nearby Cancun, where he was taken and turned over to Mexican immigration officials.

Garcia did not say whether Williams is suspected of committing any crimes in Mexico.

A federal arrest warrant was issued for the former Palm Springs, California, resident in Los Angeles in April, according to the FBI website.

The indictment alleges Williams traveled from Los Angeles to the Philippines in January 2011 to engage in sex acts with two 14-year-old boys he met online in 2010, the U.S. Department of Justice said in a statement Monday.

While in the Philippines, Williams allegedly engaged in sex acts with both boys and produced sexually explicit photos of one of the boys. Williams fled the Los Angeles area approximately one week after returning from the Philippines, it added.

Until 2011, Williams was a tenured professor at the University of Southern California where his field of study was gender development. Williams was also affiliated with the Buddhist Universal Association of Los Angeles, California, according to the FBI.

“Williams has an extensive history of travel throughout the South East Asia region, specifically the Philippines,” the FBI said. “He has reportedly resided in Indonesia, Polynesia and Thailand.”

The FBI added Williams to its Ten Most Wanted Fugitives list on Monday.

“I analyzed the computers and the camera that belong to Williams and found child pornography,” said Special Agent Jeff Yesensky, in a video about Williams posted on the FBI’s website Monday to bring attention to the case.

“He preys on the most vulnerable children,” Yesensky added.”

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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.


Managing Partner of U.S. Broker-Dealer Charged in Manhattan Federal Court with Allegedly Participating in a Massive International Bribery Scheme

June 12, 2013

The U.S. Department of Justice on June 12, 2013 released the following press release:

Defendant Allegedly Participated in Scheme That Generated Broker-dealer More Than $60 Million in Fees for Business Directed by a Senior Venezuelan Banking Official Who Was Allegedly Paid Over $5 Million in Kickback Payments

A managing partner of a U.S. broker-dealer was arrested today on felony charges arising from a conspiracy to pay bribes to a senior official in Venezuela’s state economic development bank, Banco de Desarrollo Económico y Social de Venezuela (BANDES).

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara for the Southern District of New York, and Assistant Director-in-Charge George Venizelos of the FBI’s New York Office made the announcement.

Ernesto Lujan, 50, among others, allegedly arranged the bribe payments to Maria De Los Angeles Gonzalez De Hernandez at BANDES in exchange for her directing BANDES’s financial trading business to the Broker-Dealer. Lujan was arrested this morning in Wellington, Fla., where he resides, and was presented in federal court in West Palm Beach, Fla.

“The huge bribes Mr. Lujan and others allegedly paid funneled millions to his firm and into his own pockets,” said Acting Assistant Attorney General Raman. “Bribery corrupts markets, and this arrest – just the latest in the Department’s recent series of anti-corruption charges in various districts – is yet another demonstration that, at the end of the day, the real dividends bribe payers reap are criminal charges.”

“From his perch as managing partner Ernesto Lujan allegedly engaged in a bribery scheme designed to drum up foreign trading business for his firm,” said U.S. Attorney Bharara. “Along with his alleged cohorts, three of whom were arrested last month, he pocketed millions from the alleged scheme which was executed through kickbacks to a Venezuelan government official and through money laundering.”

“As alleged, Lujan led a conspiracy to bribe a foreign government bank official to steer business to his firm,” said FBI Assistant Director-in-Charge Venizelos. “As previously alleged, much of this trading activity was conducted solely to generate fees for the firm. Lujan personally reaped millions in profits, and used Swiss bank accounts to conceal both the bribes and his own proceeds of the scheme.”

On May 3, 2013, Gonzalez, along with two employees of the Broker-Dealer, Tomas Alberto Clarke Bethancourt and Jose Alejandro Hurtado, were arrested on separate charges relating to this bribery scheme. On May 6, 2013, the government filed a civil forfeiture action in Manhattan federal court seeking the forfeiture of assets held in a number of bank accounts associated with the scheme, including several bank accounts located in Switzerland, and the forfeiture of several properties in the Miami area related to Hurtado that were purchased with his proceeds from the scheme. That same day, the court also issued seizure warrants for multiple bank accounts and a restraining order relating to those Miami properties.

In a separate action, the U.S. Securities and Exchange Commission (SEC) announced civil charges against Lujan.

According to the allegations in the criminal complaint unsealed today, and other documents filed in Manhattan federal court, Lujan, a managing partner of the Broker-Dealer, which was headquartered in New York City, was the branch manager of its Miami offices. In 2008, the Broker-Dealer established a group called the Global Markets Group, which included Lujan, Clarke and Hurtado, and which offered fixed income trading services to institutional clients. One of the Broker-Dealer’s clients was BANDES, which operated under the direction of the Venezuelan Ministry of Finance. The Venezuelan government had a majority ownership interest in BANDES and provided it with substantial funding. Gonzalez, a BANDES official, oversaw the development bank’s overseas trading activity. At her direction, BANDES conducted substantial trading through the Broker-Dealer. Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed income investments for which the Broker-Dealer charged the bank a mark-up on purchases and a mark-down on sales.

From December 2008 through October 2010, Lujan, along with Clarke, Hurtado and Gonzalez, allegedly participated in a bribery scheme in which Gonzalez directed trading business she controlled at BANDES to the Broker-Dealer, and in return, agents and employees of the Broker-Dealer, including Lujan, split the revenue the Broker-Dealer generated from this trading business with Gonzalez. During this time period, the Broker-Dealer generated over $60 million in mark-ups and mark-downs from trades with BANDES. Agents and employees of the Broker-Dealer, including Lujan, Clarke and Hurtado, allegedly devised a split with Gonzalez of the commissions paid by BANDES to the Broker-Dealer.

Court records allege that to further conceal the scheme, the kickbacks to Gonzalez were often paid using intermediary corporations and offshore accounts that she held in Switzerland, among other places. For example, at least $9.5 million was transferred from the Broker-Dealer to a Swiss bank account controlled by Clarke, who in turn transferred at least $6.5 million to a Swiss bank account controlled by Lujan. Lujan then allegedly transferred at least $1.5 million of these proceeds to a Swiss bank account controlled by Gonzalez.

Lujan was charged with one count each of conspiracy to violate the Foreign Corrupt Practices Act (FCPA), violation of the FCPA, conspiracy to violate the Travel Act and violation of the Travel Act, which each carry a maximum penalty of five years in prison. He is also charged with conspiracy to commit money laundering and money laundering, which each carry a maximum penalty of 20 years in prison.

This ongoing investigation is being conducted by the FBI, with assistance from the SEC and the Justice Department’s Office of International Affairs. Assistant Chief James Koukios and Trial Attorneys Maria Gonzalez Calvet and Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Harry A. Chernoff and Jason H. Cowley of the Southern District of New York’s Securities and Commodities Fraud Task Force are in charge of the prosecution.

Additional information about the Justice Department’s FCPA enforcement efforts can be
found at http://www.justice.gov/criminal/fraud/fcpa.

The charges 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

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.


“Oregon Man Indicted for Alleged Role in $50 Million Securities Fraud Scheme”

May 16, 2013

The U.S. Department of Justice Office of Public Affairs on May 16, 2013 released the following:

“An Oregon man has been charged with allegedly orchestrating a $50 million securities fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Laura E. Duffy of the Southern District of California.

Bradley Holcom, 55, of Canby, Ore., was arrested Tuesday following his indictment in U.S. District Court for the Southern District of California. The indictment, which was filed on May 9, 2013, and unsealed late yesterday, charges Holcom with eight counts of mail fraud, four counts of wire fraud and one count of securities fraud.

According to the indictment, Holcom made false statements to investors in connection with the sale of approximately $50 million worth of promissory notes that he sold to more than 150 investors located throughout the United States from at least 2004 through 2010. The indictment alleges that Holcom solicited investors to provide funds for the development of raw land for commercial and residential purposes through an investment program he operated called the Trust Deed Investment Program. Holcom allegedly falsely told investors who purchased notes through the Trust Deed Investment Program that they would receive a lien on a specific piece of property he was developing and that the lien would be in first position, which would allow investors to directly foreclose on the underlying development property if Holcom was unable to repay the principal due under the notes.

Despite his statements to investors, Holcom allegedly never provided investors with a lien on the property he was purportedly developing and instead conveyed to investors a lesser interest that did not allow investors to directly foreclose on the property to protect their investment. In addition, the indictment alleges that while Holcom promised investors that their purported lien would be in first position, Holcom solicited investments for properties that he knew were already encumbered by first position liens.

According to the indictment, Holcom also allegedly sold properties that were supposedly serving as the security for investors without informing investors that the property they had financed for development was gone.

The indictment alleges that by approximately 2008, Holcom’s financial condition had seriously deteriorated, but he continued to solicit investors for new funds by making misrepresentations about his true financial condition and the manner in which he was using investor money.

The maximum penalty for each wire fraud and mail fraud count is 20 years in prison. The count of securities fraud carries a maximum penalty of 25 years in prison.

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

This case was brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit http://www.StopFraud.gov .

This case was investigated by the FBI’s Phoenix Division – Yuma Resident Agency. The case is being prosecuted by Trial Attorney Henry P. Van Dyck and Deputy Chief Daniel Braun of the Criminal Division’s Fraud Section, and by Assistant U.S. Attorney Stephen Clark of the U.S. Attorney’s Office for the Southern District of California. The department recognizes the substantial assistance of the U.S. Securities and Exchange Commission.”

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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.


Federal grand jury indicts former FBI agent

October 19, 2012

The Wall Street Journal on October 18, 2012 released the following:

“Associated Press

SALT LAKE CITY — A federal grand jury indicted a former FBI special agent and a defense contractor Thursday in a federal fraud case involving U.S. Army contracts, marking the latest turn in what prosecutors have called a multimillion-dollar scheme to win military contracts in Afghanistan.

The indictment alleges that the defense contractor, 51-year-old Michael Taylor of Harvard, Mass., offered the FBI agent a $200,000 cash payment, additional money for medical expenses for the agent’s child, and a share in the proceeds of several anticipated contracts worth millions of dollars in exchange for using his position to try to impede a criminal investigation into contract awards.

Robert G. Lustyik, 50, of Sleepy Hollow, N.Y., was an FBI special agent until September 2012, assigned to counterintelligence work.

A third person, Johannes W. Thaler, 49, of New Fairfield, Conn., is accused of acting as a conduit between the two men. Thaler is a childhood friend of Lustyik, according to the indictment.

Each was charged with 11 counts of conspiracy, wire fraud, obstructing justice and obstructing an agency proceeding, the U.S. Department of Justice announced in a statement Thursday.

Lustyik acted through Thaler to secure promises of cash, purported medical expenses and business proceeds in exchange for abusing his position as an FBI agent, Assistant Attorney General Lanny Breuer said.

“The alleged conduct is outrageous, and we will do everything we can to ensure that justice is done in this case.”

According to the indictment, the three men had a business relationship to pursue contracts for security services, electric power and energy development in the Middle East, Africa and elsewhere.

But in September 2011, Taylor learned a federal criminal investigation had been launched in Utah in 2010 into whether he and others had committed fraud in the awarding of defense contracts, according to the indictment.

Taylor had formed the Boston-based firm American International Security Corp., which was awarded the military contracts.

Taylor allegedly gave Lustyik, through Thaler, cash and other benefits to impede the investigation. In return, Lustyik designated Taylor as an FBI confidential source, contacting Utah officials to dissuade them from charging Taylor and attempting to interview potential witnesses and targets of the investigation, the indictment claims.

Taylor had already been charged criminally in the case. In addition, an active Army Reservist who was a procurement official is accused of leaking bid information that allowed Taylor’s company to win $54 million in contracts to supply Afghan troops with weapons and training.

The case broke in Utah when yet another business associate made a series of cash withdrawals from a St. George credit union just under the federal reporting limit of $10,000. Christopher Harris earlier pleaded not guilty to charges in the bid scheme.”

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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.


Bulger lawyers due in court to update judge

September 4, 2012

Boston.com on September 3, 2012 released the following:

“BOSTON (AP) — Federal prosecutors and lawyers for mobster James ‘‘Whitey’’ Bulger are due in court this week to update a judge on the exchange of evidence in the case.

Bulger is the former leader of the notorious Winter Hill Gang and was also an FBI informant against the Mafia. He’s accused of participating in 19 murders.

The 82-year-old Bulger was a fugitive for 16 years before being captured in California last year.

His lawyers said in court last month that Bulger plans to take the stand in his own defense at his trial. They say he’ll testify about his claim that he was given immunity by someone within the U.S. Department of Justice for any crimes he committed while he was an informant.

Bulger’s lawyers and prosecutors are due in federal court for a status hearing Friday.”

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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.


Prosecutors also have stake in Edwards’ trial verdict

May 22, 2012

Myrtle Beach Online on May 21, 2012 released the following:

“By Anne Blythe

GREENSBORO — John Edwards might be the one with the most to win or lose with the jury deliberating his fate, but the U.S. Department of Justice has a lot riding on his case, too.

When the eight men and four women return to the federal courthouse in downtown Greensboro Tuesday morning, they will begin their third day of deliberations in a case that also has put the Justice Department’s small public-integrity section under scrutiny.

Edwards’ trial came almost four years after the unit’s federal prosecutors bungled a corruption case against Ted Stevens, the U.S. senator from Alaska accused of failing to properly report more than $250,000 in gifts.

Stevens was convicted, , but the verdict was appealed and later vacated after it was revealed prosecutors and FBI agents had conspired to conceal and withhold evidence from the defense.

An investigation was launched into the integrity and professional practices of prosecutors in the public-integrity division. A scathing report from that investigation was released earlier this year, showing that prosecutors had “repeatedly ignored the law” and the ethical standards of their profession.

The Public Integrity Section was set up to root out corruption through the prosecution of elected and appointed public officials at all levels of government.

The section has exclusive jurisdiction over allegations of criminal misconduct on the part of federal judges and also supervises the nationwide investigation and prosecution of election crimes.

New chief for federal unit

Since the Stevens case, the unit has a new chief, former New York-based federal prosecutor Jack Smith. The Justice Department also has ordered training to make sure prosecutors disclose key evidence to defense attorneys.

Attorneys who have attended Edwards’ trial have commented throughout that the prosecution as well as the defense has a lot at stake in the case.

Edwards, a former two-time Democratic presidential candidate and U.S. senator who branched into politics after achieving success as a trial lawyer, was indicted last June on six counts related to violations of campaign-finance laws. The violations allegedly occured during Edwards’ campaign for the 2008 nomination, when two wealthy Edwards’ supporters gave more then $900,000 used to help hide Edwards’ extramarital affair with Rielle Hunter and her pregnancy.

Each of the six counts Edwards faces carries a penalty of up to five years in prison and a $250,000 fine. However, Kieran Shanahan, a former federal prosecutor from Raleigh who sat through the trial, said Edwards – if convicted and unable to successfully appeal – would likely recieve a concurrent sentence and serve no more than five years.

Peter Henning, a law professor at Wayne State University in Detroit and co-author of “The Prosecution and Defense of Public Corruption,” said Monday that a not-guilty verdict would be “a black eye” for the justice department.

“It would call into question their decision even to pursue the case,” Henning added.

But he added that he had seen no surprises from the prosecution, and that ultimately the questions that arise from the trial might be those raised by rulings made outside the jury’s presence by Judge Catherine Eagles, who was appointed to the federal bench in 2010 by President Barack Obama.

Eagles prohibited a former Federal Election Commission chairman from offering his opinion to the jury on whether the money from billionaires Rachel “Bunny” Mellon and Fred Baron would typically be classified as a campaign contribution or gift. Scott Thomas, who had more than 30 years with the FEC, testified while the jury was out of the courtroom that he thought the money that went from Mellon and Baron to other people was used for personal expenses that did not need to be publicly reported or subject to campaign limits.

The jury, during its first two days of deliberations, has asked for many exhibits related to testimony about the $925,000 in checks issued by Mellon in 2007 and 2008.

Though only the 12 people on the jury know what is being discussed behind closed doors, the first two counts on the jury verdict sheet are related to the Mellon money.

Toward the end of the trial, the jurors sounded as if they were a collegial group, laughing and talking as they walked into and out of the jury box.

On Monday, the second day of deliberations, the jurors were quieter and somber-looking, barely looking at prosecutors or Edwards as they waited for the judge to answer questions or release them for lunch or the evening break.

As many await the verdict inside the federal courthouse in downtown Greensboro, national political organizations are seeking answers and raising questions outside the tense atmosphere.

Objections to judge’s instructions

On Monday, the Center for Competitive Politics, a conservative group that promotes the deregulation of U.S. elections, harshly criticized the final juror instructions issued last week in the trial, particularly sections about the definition of “influencing an election.”

“If Edwards goes to prison, we will have an Alice in Wonderland world where conduct that would not be punished by a civil fine can result in jail time,” Allison Hayward, vice president for policy of CCP, said in a prepared statement.

The organization’s spokeswoman pointed to a U.S. Supreme Court case decided in 1976, the landmark Buckley v. Valeo case, which states that under “due process” a person of ordinary intelligence must understand that his actions could be considered illegal.

“There is no legislative history to guide us in determining the scope of the critical phrase ‘for the purpose of … influencing,’ ” Hayward further stated.

“The Supreme Court said the phrase ‘for the purpose of influencing’ is so vague and broad that it cannot be constitutionally applied to define campaign spending.””

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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.


Former BP Engineer Arrested for Alleged Obstruction of Justice in Connection with the Deepwater Horizon Criminal Investigation

April 24, 2012

The U.S. Department of Justice (DOJ) on April 24, 2012 released the following:

First Criminal Charges to Result from the Deepwater Horizon Task Force Investigation

WASHINGTON – Kurt Mix, a former engineer for BP plc, was arrested today on charges of intentionally destroying evidence requested by federal criminal authorities investigating the April 20, 2010, Deepwater Horizon disaster, announced Attorney General Eric Holder, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Jim Letten of the Eastern District of Louisiana and Kevin Perkins, Acting Executive Assistant Director for the FBI’s Criminal Cyber Response and Services Branch.

Mix, 50, of Katy, Texas, was charged with two counts of obstruction of justice in a criminal complaint filed in the Eastern District of Louisiana and unsealed today.

“The department has filed initial charges in its investigation into the Deepwater Horizon disaster against an individual for allegedly deleting records relating to the amount of oil flowing from the Macondo well after the explosion that led to the devastating tragedy in the Gulf of Mexico,” said Attorney General Holder. “The Deepwater Horizon Task Force is continuing its investigation into the explosion and will hold accountable those who violated the law in connection with the largest environmental disaster in U.S. history.”

According to the affidavit in support of a criminal complaint and arrest warrant, on April 20, 2010, the Deepwater Horizon rig experienced an uncontrolled blowout and related explosions while finishing the Macondo well. The catastrophe killed 11 men on board and resulted in the largest environmental disaster in U.S. history.

According to court documents, Mix was a drilling and completions project engineer for BP. Following the blowout, Mix worked on internal BP efforts to estimate the amount of oil leaking from the well and was involved in various efforts to stop the leak. Those efforts included, among others, Top Kill, the failed BP effort to pump heavy mud into the blown out wellhead to try to stop the oil flow. BP sent numerous notices to Mix requiring him to retain all information concerning Macondo, including his text messages.

On or about Oct. 4, 2010, after Mix learned that his electronic files were to be collected by a vendor working for BP’s lawyers, Mix allegedly deleted on his iPhone a text string containing more than 200 text messages with a BP supervisor. The deleted texts, some of which were recovered forensically, included sensitive internal BP information collected in real-time as the Top Kill operation was occurring, which indicated that Top Kill was failing. Court documents allege that, among other things, Mix deleted a text he had sent on the evening of May 26, 2010, at the end of the first day of Top Kill. In the text, Mix stated, among other things, “Too much flowrate – over 15,000.” Before Top Kill commenced, Mix and other engineers had concluded internally that Top Kill was unlikely to succeed if the flow rate was greater than 15,000 barrels of oil per day (BOPD). At the time, BP’s public estimate of the flow rate was 5,000 BOPD – three times lower than the minimum flow rate indicated in Mix’s text.

In addition, on or about Aug. 19, 2011, after learning that his iPhone was about to be imaged by a vendor working for BP’s outside counsel, Mix allegedly deleted a text string containing more than 100 text messages with a BP contractor with whom Mix had worked on various issues concerning how much oil was flowing from the Macondo well after the blowout. By the time Mix deleted those texts, he had received numerous legal hold notices requiring him to preserve such data and had been communicating with a criminal defense lawyer in connection with the pending grand jury investigation of the Deepwater Horizon disaster.

A complaint is merely a charge and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

If convicted, Mix faces a maximum penalty of 20 years in prison and a fine of up to $250,000 as to each count.

The Deepwater Horizon Task Force, based in New Orleans, is supervised by Assistant Attorney General Breuer and led by Deputy Assistant Attorney General John D. Buretta, who serves as the Director of the task force. The task force includes prosecutors from the Criminal Division and the Environment and Natural Resources Division of the Department of Justice, the U.S. Attorney’s Office for the Eastern District of Louisiana and other U.S. Attorney’s Offices, and investigating agents from the FBI, Environmental Protection Agency, Department of Interior, U.S. Coast Guard, U.S. Fish and Wildlife Service and other federal law enforcement agencies.

The task force’s investigation of this and other matters concerning the Deepwater Horizon disaster is ongoing.

The case is being prosecuted by task force Deputy Directors Derek Cohen and Avi Gesser of the Justice Department’s Criminal Division, and task force prosecutors Assistant U.S. Attorney Richard Pickens II of the Eastern District of Louisiana and Assistant U.S. Attorney Scott Cullen of the Eastern District of Pennsylvania.”

18 U.S.C. § 1512

US v. Kurt E. Mix – Federal Criminal Complaint

US v. Kurt E. Mix – Affidavit supporting the Federal Criminal Complaint

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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 and OFAC SDN Sanctions Removal.

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