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

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

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

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


Man charged in fatal ICE ambush

December 22, 2011

El Paso Times on December 22, 2011 released the following:

“By Diana Washington Valdez \ El Paso Times

A man accused of taking part in the Feb. 11 slaying of an Immigration and Customs Enforcement special agent that also left a second ICE agent wounded was charged on Wednesday in Washington, D.C., after Mexico extradited him to the United States.

Julian “Piolin” Zapata Espinoza faces charges for his alleged role in the murder of ICE Special Agent Jaime Zapata of Brownsville, and the attempted murder of ICE Special Agent Victor Avila of El Paso.

“The extradition and charges filed against Zapata Espinoza is an important step in bringing Jaime and Victor’s alleged shooters to justice,” ICE Director John Morton said. “All of us at ICE are encouraged by today’s action and appreciate the unwavering work and support of all our law enforcement partners in this case.”

“The indictment unsealed today and the successful extradition of ‘Piolin’ to the United States reflect the Justice Department’s vigorous and determined efforts to seek justice for Agents Zapata and Avila,” said Assistant Attorney General Lanny A. Breuer. “We will continue to work closely with our law enforcement partners in Mexico to hold violent criminals accountable.”

On April 19, a federal grand jury in the District of Columbia returned a four-count indictment against Zapata Espinoza, charging him with one count of murder of an officer or employee of the United States, for the murder of Jaime Zapata; one count of attempted murder of an officer or employee of the United States; and one count of attempted murder of an internationally protected person, both for the attempted murder of Avila; and one count of using, carrying, brandishing and discharging a firearm during and in relation to a crime of violence causing death.

Zapata Espinoza, who is being held without bond, appeared in U.S. District Judge Royce Lamberth’s court and pleaded not guilty. His next appearance in court is scheduled for Jan. 25.

In a statement, the Mexican National Defense Secretariat said Mexican soldiers captured Zapata Espinoza on Feb. 23, along with other alleged members of the Zetas drug cartel.

Military officials said Zapata Espinoza “stated he was in charge of the group of gunmen that shot the U.S. agent, (and that) he said that this event was a mistake because they thought that the people in the (U.S. agents’) vehicle were members of an antagonistic (rival) group.”

U.S. officials said the two U.S. agents were traveling from a meeting in San Luis Potosi to Mexico City the day they were ambushed by a group of armed men.

Zapata, who began his law enforcement career with the Border Patrol, was assigned to the U.S. Embassy in Mexico.

Avila, the ICE agent who was shot twice in the leg, recovered from his wounds.

One of the charges is that Zapata Espinoza participated in the attempted murder of an “internationally protected person,” according to the indictment against him.

“He was apparently a U.S. federal agent that pursuant to international law had special protection,” said Douglas C. McNabb, a lawyer and senior principal with McNabb Associates PC, a global criminal defense firm with a website at www.mcnabbassociates.com.

Sheldon Snook, a deputy court clerk in the U.S. District Court of Washington, D.C., said the U.S. Attorneys Manual defines “internationally protected persons” based on U.S. legislation and United Nations conventions, including the Vienna Convention.

Such persons can include heads of state, diplomats and others that in this case the U.S. State Department has determined holds the status.”

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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.


LaFrances Dudley O’Neal and Donald M. Ramsey Indicted in an Alleged Mortgage Fraud Scheme

December 11, 2011

The Federal Bureau of Investigation (FBI) on December 9, 2011 released the following:

“Two Indicted in Mortgage Fraud Scheme

D.C. Housing Authority was Among Targets of the Scam

WASHINGTON— LaFrances Dudley O’Neal, 47, of Clinton, Maryland, and Donald M. Ramsey, 44, of Alexandria, Virginia, have been indicted on charges that they took part in a mortgage fraud that cost lenders more than $700,000.

The indictments, unsealed today, were announced by U.S. Attorney Ronald C. Machen Jr., Daniel S. Cortez, Inspector in Charge, Washington Division, U.S. Postal Inspection Service, Kenneth R. Taylor, Special Agent in Charge of the Office of Inspector General of the U.S. Department of Housing and Urban Development, and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.

O’Neal and Ramsey were indicted on December 7, 2011 in the U.S. District Court for the District of Columbia on charges of bank fraud, mail fraud, and conspiracy to commit bank/mail fraud. The indictment also includes a forfeiture count seeking all proceeds from the defendants’ crimes. In addition, O’Neal was charged with one count of fraud under District of Columbia law. If convicted, under the federal sentencing guidelines, O’Neal and Ramsey face potential sentences of 37 to 46 months in prison. Both have pleaded not guilty to the charges.

According to the indictment, O’Neal, Ramsey and others identified homes in the Washington, D.C. area, as well as straw buyers to obtain mortgages through false loan applications, forged documents, and fraudulent settlements. According to the indictment, Ramsey acted as a mortgage broker. He and others are accused of providing false documentation to the lenders, such as false verifications of deposit, forged Uniform Residential Loan Applications, and false rental agreements, causing the lenders to believe that the straw buyers had the means and the willingness to pay the mortgages.

The indictment alleges that every one of the mortgages fell into default and the lenders were forced to foreclose, with an aggregate loss to the lenders in excess of $700,000.

The indictment further alleges that settlement companies paid both O’Neal and Ramsey money from the fraudulently obtained loan proceeds, at times using fraudulent “invoices” which falsely stated that renovation work had recently been completed or consulting services had been provided and that money was due at settlement. As a result of these false invoices and inaccurate settlement statements, settlement agents turned over more than $437,000 of fraudulent loan proceeds to O’Neal and Ramsey.

With respect to the fraud count under D.C. law, the indictment charges that O’Neal arranged for four of the houses, which were obtained through the mortgage fraud scheme, to be placed in the District of Columbia Housing Authority’s Section 8 Tenant-Based Assistance Housing Choice Voucher program. Using, at times, forged management agreements, O’Neal received money from the D.C. Housing Authority through Section 8 payments through her management company. She also received emergency rental payments or security deposits from charities or governmental agencies on behalf of the needy tenants.

However, she failed to maintain the Section 8 houses in decent, safe, and sanitary conditions, in spite of payments by the D.C. Housing Authority and the tenants. And, despite promising the straw buyers that she would pay the mortgages and even though she received Section 8 money from the D.C. Housing Authority and their client tenants, O’Neal failed to pay the mortgages on all four properties and the lenders foreclosed on them.

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

The case was investigated by the U.S. Postal Inspection Service, the Office of the Inspector General of the U.S. Department of Housing and Urban Development, the FBI’s Washington Field Office, the Metropolitan Police Department, and the District of Columbia Department of Insurance Securities and Banking. It is being prosecuted by Assistant U.S. Attorney Virginia Cheatham, with assistance from the U.S. Attorney’s Office’s Asset Forfeiture and Money Laundering Section, paralegal specialist Sarah Reis, forensic accountant Crystal Boodoo, and legal assistant Krishawn Graham.”

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

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

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


Roger Clemens’ Federal Criminal Case Update

August 20, 2011
Roger Clemens

Main Justice on August 19, 2011 released the following:

Prosecutors Say Clemens Trying To Gain From Unintended Mistakes

Barring a retrial for Roger Clemens would hand the former baseball star “an unwarranted windfall” from inadvertent mistakes made during the first case against him, federal prosecutors argued in a brief filed Friday.

The brief came in response to a motion filed by Clemens’ attorneys seeking to prevent a retrial by arguing the government intentionally violated rules imposed by District Judge Reggie Walton, who declared a mistrial July 14 after prosecutors played a video that contained evidence Walton had previously ruled inadmissible.

That evidence included testimony from the wife of former pitcher Andy Pettitte, which suggested that Clemens had talked with Pettitte about using steroids. The video shown by prosecutors – a recording of Clemens’ 2008 testimony before Congress – showed Rep. Elijah E. Cummings (D-Md.) making a reference to the conversation.

The video was strike two for the prosecution, which had also alluded to the conversation during opening statements.

But in their motion, Justice Department attorneys said the video had already been prepared when Walton made his ruling on admissibility, and that they hadn’t looked to see whether a reference might be buried in a question from the congressman.

“The government’s error was a mistake, not misconduct, and certainly not misconduct intended to provoke a mistrial,” prosecutors wrote. “As government counsel informed this court when the video clip mistake occurred: ‘There was no intention to run afoul of any court ruling.'”

A motion hearing on the issue is scheduled for Sept. 2.”

Attached is Roger Clemens’ filing on 7/29/2011 with its exhibits:

Attached is the government’s response on 8/19/2011:

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 extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

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

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Stewart Chase, Former Background Investigator For Federal Government, Pleads Guilty to Making a False Statement

July 22, 2011

The U.S. Attorneys Office District of Columbia on July 21, 2011 released the following:

“WASHINGTON – Stewart Chase, 53, a former background investigator who did work under contract for the U.S. Office of Personnel Management (OPM), pled guilty today to a charge stemming from his falsification of work on background investigations of federal employees and contractors, announced U.S. Attorney Ronald C. Machen Jr. and Patrick E. McFarland, Inspector General for the Office of Personnel Management.

Chase, of Sterling, Virginia, pled guilty in the U.S. District Court for the District of Columbia to a charge of making a false statement. The Honorable James E. Boasberg scheduled sentencing for October 6, 2011. The charge carries a statutory penalty of up to five years in prison and a fine of up to $250,000. As part of the guilty plea, Chase has agreed to pay $131,101 in restitution to the federal government.

According to a statement of offense submitted to the Court, Chase was employed by United States Investigations Services and CACI International Inc. as an investigator under contract to conduct background investigations on behalf of OPM’s Federal Investigative Services.

Between July 2006 and December 2007, in more than four dozen Reports of Investigations on background investigations, Chase represented that he had interviewed a source or reviewed a record regarding the subject of the background investigation when, in fact, he had not conducted the interview or obtained the record. These reports were utilized and relied upon by the agencies requesting the background investigations to determine whether the subjects were suitable for positions having access to classified information, for positions impacting national security, or for receiving or retaining security clearances.

Chase’s false representations have required OPM’s Federal Investigative Services to reopen and rework numerous background investigations that were assigned to him during the time period of his falsifications, at an estimated cost of $131,101 to the U.S. government. The restitution in this case will be paid to Federal Investigative Services.

This is one of several cases prosecuted by the U.S. Attorney’s Office for the District of Columbia in the last three years involving false representations by background investigators and record checkers working on federal background investigations. Eight background investigatorsand two record checkers previously were convicted of charges.

Federal Investigative Services, formerly known as the Center for Federal Investigative Services or the Federal Investigative Services Division, through its workforce of approximately 7,300 investigators, is responsible for conducting background investigations for numerous federal agencies and their contractors, on individuals either employed by or seeking employment with those agencies or contractors. Federal Investigative Services processed approximately 2 million investigations in the 2010 fiscal year.

In conducting background investigations, the investigators conduct interviews of individuals who have information about the person who is the subject of the review. In addition, the investigators seek out, obtain, and review documentary evidence, such as employment records, to verify and corroborate information provided by either the subject of the background investigation or by persons interviewed during the investigation. After conducting interviews and obtaining documentary evidence, the investigators prepare a Report of Investigation containing the results of the interviews and document reviews, and electronically submit the material to OPM in Washington, D.C. OPM then provides a copy of the investigative file to the requesting agency, which can use the information to determine an individual’s eligibility for employment or a security clearance.

In announcing the guilty plea, U.S. Attorney Machen and Inspector General McFarland praised the efforts of Special Agent Christopher Sulhoff, OPM, Office of the Inspector General, and Philip Kroop, Chief of Quality and Integrity Assurance, OPM-Federal Investigative Services. Mr. Machen and Mr. McFarland also acknowledged the work of Assistant U.S. Attorneys Ellen Chubin Epstein, Mary Chris Dobbie and Seth B. Waxman, who investigated and prosecuted this matter.”

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

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

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Former Managing Director of PPG Paints Trading (Shanghai) Co., Ltd., Charged with Illegally Exporting High-Performance Coatings To Nuclear Reactor in Pakistan

July 10, 2011

The U.S. Attorney’s Office District of Columbia on July 8, 2011 released the following:

“WASHINGTON – Xun Wang, a former Managing Director of PPG Paints Trading (Shanghai) Co., Ltd., a wholly-owned Chinese subsidiary of United States-based PPG Industries, Inc., has been indicted on a charge of conspiring to violate the International Emergency Economic Powers Act and the Export Administration Regulations, and other related offenses, announced Ronald C. Machen Jr., U.S. Attorney for the District of Columbia, and Eric L. Hirschhorn, U.S. Department of Commerce Under Secretary for Industry and Security.

Wang, 51 made her initial appearance on July 7, 2011 in the U.S. District Court for the District of Columbia. On June 7, 2011, a federal grand jury in the District of Columbia returned a sealed indictment charging her with one count of conspiracy and three counts of violating export laws under the International Emergency Economic Powers Act (IEEPA). The indictment was unsealed following Wang’s arrest.

She is accused of conspiring to export and reexport, and exporting and reexporting specially designed, high-performance epoxy coatings to the Chashma 2 Nuclear Power Plant (Chashma II) in Pakistan, a nuclear reactor owned and/or operated by the Pakistan Atomic Energy Commission, an entity on the Department of Commerce’s Entity List.

Wang was arrested on the indictment on June 16, 2011, at Atlanta Hartsfield-Jackson Airport and transferred to the District of Columbia on July 6, 2011. Wang remains in custody pending a detention hearing on July 12, 2011 before United States Magistrate Judge Deborah A. Robinson. She is a Chinese national and lawful permanent resident of the United States. The United States is seeking to have her held without bond pending trial.

The indictment is related to the December 21, 2010, guilty plea of PPG Paints Trading (Shanghai) Co., Ltd. (“PPG Paints Trading”), to a four-count information in the U.S. District Court for the District of Columbia. Together, PPG Paints Trading and its parent company, PPG Industries, Inc., paid $3.75 million in criminal and administrative fines and over $32,000 in restitution. The combined amount of criminal and civil fines represented one of the largest monetary penalties for export violations in the history of the U.S. Department of Commerce’s Bureau of Industry and Security.

The Pakistan Atomic Energy Commission is the science and technology organization in Pakistan responsible for Pakistan’s nuclear program, including the development and operation of nuclear power plants in Pakistan. In November 1998, following Pakistan’s first successful detonation of a nuclear device, the Commerce Department’s Bureau of Industry and Security added the Pakistan Atomic Energy Commission, as well as its subordinate nuclear reactors and power plants, to the list of prohibited end users under the Export Administration Regulations.

As a restricted end-user, a United States manufacturer seeking to export or reexport any items subject to the Export Administration Regulations to the Pakistan Atomic Energy Commission, or its nuclear power plants or reactors, would first need to obtain a license from the Department of Commerce in the District of Columbia.

According to the indictment against Wang, in January 2006, PPG Industries sought an export license for the shipments of coatings to Chashma II. In June 2006, the Department of Commerce denied that license application. Following that denial, Wang and her co-conspirators agreed upon a scheme to export and reexport the high-performance epoxy coatings from the United States to Chashma II, via a third-party distributor in People’s Republic of China, without first having obtained the required export license from the Department of Commerce.

The indictment further alleges that from around June 2006 through around March 2007, Wang and other co-conspirators intentionally concealed from PPG Industries that the paint would be delivered to Chashma II. Specifically, they falsely stated that the coatings were to be used at a nuclear power plant in China, the export of goods to which would not require a license from the Department of Commerce. The indictment alleges that, through these means, Wang and her coconspirators took part in three shipments of coatings from the United States to Chashma 2 without the required Department of Commerce license.

An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.

This case is being investigated by the Department of Commerce’s Bureau of Industry and Security, Office of Export Enforcement, New York Field Office, and prosecuted by Assistant U.S. Attorneys G. Michael Harvey and John Borchert.”

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

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

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