Virginia Woman Charged with Alleged Theft of Public Funds

November 19, 2010

A Virginia woman was charged today in federal court with stealing annuity payments issued by the United States Office of Personnel Management.

Venus Valiery Hammack, 55, of Mount Jackson, Virginia, was charged in an Information with one count of theft of public funds.

The Information alleges that Hammack’s father received an annuity through the Civil Service Retirement System prior to his death in August 1999. Hammack, who was ineligible to receive survivor benefits from the federal government, allegedly never notified the United States Office of Personnel Management of her father’s death. Instead, Hammack allegedly caused a verification form to be completed, forging her father’s name, in order to continue receiving payments after his death. As a result, monthly annuity payments intended for Hammack’s father continued to be sent to an account Hammack controlled. The Information alleges that from September 1999 through September 2009, approximately 121 annuity payments totaling $314,744 were sent by electronic funds transfers into the account Hammack controlled.

If convicted, Hammack faces up to 10 years’ imprisonment, to be followed by three years of supervised release, and a $250,000 fine. The judge will look to the U.S. Sentencing Guidelines once the case goes to sentencing. The judge will be able to consider a variety of factors, such as Hammack’s age, prior offenses and Hammack’s likelihood of recidivism if released (meaning likelihood of committing another offense). Because Hammack is 55 and most likely has a low likelihood of recidivism, hopefully the judge will grant the lowest sentencing level possible.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

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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Seven Indicted in Virginia for Alleged Drug Trafficking Conspiracy

September 27, 2010

Seven men were charged in a 34-count indictment last Thursday for trafficking cocaine and firearms in Prince William County.

Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; Shawn Henry, Assistant Director in Charge of the FBI’s Washington Field Office; Edgar A. Domenech, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division; and Charlie T. Deane, Prince William County Chief of Police, made the announcement after the indictment was unsealed.

According to court records, Yasin Oriza Arreola, a/k/a Tony or El Diablo, 30, of Catlett, Va., is accused of being a significant source for distributing cocaine in Prince William County and is allegedly supplied by a Mexican drug trafficking organization. Court records allege that he has posed as a construction worker—including driving a white work van and wearing a reflective construction vest—to conduct drug transactions at various spots throughout the county. He and others in the conspiracy are alleged to have possessed firearms during drug negotiations and also agreed to sell firearms—including a machine gun—to drug customers.

In addition, the following six men were also charged in the indictment as conspiring with Arreola in running this cocaine trafficking ring:

Jose Salgado Lovo, 40, of Manassas, Va.; Isitro Liberato, a/k/a Joker, 20, of Manassas, Va.; Kelvin Martinez, a/k/a Solo, 25, of Manassas, Va.; Manuel Perez Castillo, a/k/a New York, 42, of Manassas, Va.; Jorge Isiais Fernandez, a/k/a Esquivel Madrazo Aquiles, Chesperito, or Picapiedra, 35, of Manassas, Va.; Angel Enrique Flores, a/k/a Don Angel, 44, of Manassas, Va.

In a conspiracy, each individual may be held accountable for every act that occurred in furtherance of the conspiracy, even if committed by others in the alleged conspiracy. If the government can prove that an individual has the requisite knowledge of the existence of the conspiracy, the individual will be held liable for every act committed. Unfortunately, this will result in a much longer sentence for the individual if convicted.

The defendants were previously charged by criminal complaint and arrested on August 25, 2010. They face mandatory minimum penalties ranging from 10 years in prison to 40 years in prison and a maximum penalty of life in prison.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

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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Three Executives Indicted for Alleged Role in $100 Million Fraud Scheme

September 13, 2010

Three principals of a group of businesses that acquired and marketed life settlements to investors were arrested and charged in an 18-count indictment for their alleged roles in a $100 million fraud scheme with more than 800 alleged victims across the United States and Canada.

The charges were announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Criminal Division.

An indictment unsealed today in U.S. District Court for the Eastern District of Virginia charges Christian M. Allmendinger, 39; Adley H. Abdulwahab, 35; and David C. White, 40, with one count of conspiracy to commit mail fraud, six counts of mail fraud, one count of conspiracy to commit money laundering, six counts of money laundering, and four counts of securities fraud. The indictment also seeks forfeiture of approximately $103 million from all three individuals.

According to the indictment, Allmendinger, Abdulwahab, White and their co-conspirators were principals with A&O Resource Management Ltd., and various related entities, which sold life settlement investments. The individuals allegedly engaged in a scheme to defraud investors by making misrepresentations about such things as A&O’s prior success, its size and office locations, its number of employees, the risks of its investment offerings, and its safekeeping and use of investor funds. The indictment further alleges that when state regulators began to scrutinize A&O’s investment products, Abdulwahab and his co-conspirators allegedly manufactured a pair of sham transactions in which A&O was “sold” to a shell corporate entity named Blue Dymond and later to another shell corporate entity named Physician’s Trust. It is alleged that following these sham transactions, White became the figurehead president of A&O and Physician’s Trust, but that A&O was still secretly controlled by Abdulwahab and other co-conspirators. The indictment also alleges that Allmendinger, Abdulwahab and their co-conspirators routinely used investor funds for personal enrichment.

If convicted of all the charges in the indictment, Allmendinger, Abdulwahab and White face up to 20 years in prison on each count except the four securities fraud counts, on which they face up to five years in prison per count.

In addition to Allmendinger, Abdulwahab, and White, four other individuals have been charged with criminal offenses in connection with the A&O fraud scheme. Brent Oncale, 36, of Houston, was charged in a two-count criminal information with conspiracy to commit mail fraud and conspiracy to commit money laundering for his role as vice president of A&O. Russell E. Mackert, 51, of Spring, Texas, was charged in a two-count criminal information with conspiracy to commit mail fraud and bulk cash smuggling for his role as an attorney in the A&O scheme. Eric M. Kurz, 46, of The Woodlands, Texas, was charged in a one-count criminal information with conspiracy to commit mail fraud and money laundering for his actions as a wholesaler of A&O investment products. Tomme Bromseth, 68, of Blackstone, Va., was charged in a two-count criminal information with mail fraud and structuring financial transactions to evade reporting requirements for his role as an A&O sales agent in the Richmond area. In addition to the charging documents, signed plea agreements for Mackert, Oncale, Kurz and Bromseth were filed in U.S. District Court for the Eastern District of Virginia. Related court hearings have yet to be scheduled.

The correlation between the filing of plea documents and these three indictments is no mistake. Typically, when the government is able to bring charges against additional individuals that are allegedly involved in the same scheme, it is because one or all of those already indicted have decided to enter into plea agreements in which they name others that were allegedly involved. The fact that four plea agreements were filed the same day that Allmendinger, Abdulwahab and White were charged with their alleged participation demonstrates that the only evidence the government has against these individuals is most likely derived from the information of those that have signed a plea agreement. Otherwise, the government would have indicted them originally, but clearly did not for a lack of evidence.

Once an individual makes a plea arrangement, they typically receive a reduced sentence for their cooperation against other individuals. The motivation of a reduced sentence is very enticing to someone that has been indicted, especially when they have the opportunity to blame others.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

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 Army Contracting Official Sentenced to Prison for Bribery Scheme

July 19, 2010

A former U.S. Army contracting official was sentenced today to 42 months in prison in connection with two schemes to solicit more than $30,000 in bribes and other payments from an Egyptian businessman in Kuwait, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Neil H. MacBride of the Eastern District of Virginia.

William Rondell Collins, 46, of Bartlett, Tenn., was also ordered by U.S. District Court Judge Liam O’Grady to forfeit $5,775, to pay a fine of $1,725 and to serve three years of supervised release following his prison term. Collins pleaded guilty on April 21, 2010, to one count of bribery and one count of unlawful salary supplementation. Collins was originally charged in an indictment filed on Feb. 18, 2010.

Collins was employed by the U.S. Army Area Support Group-Kuwait (ASG-KU). The ASG-KU is responsible for maintaining Camp Arifjan, a U.S. military installation providing support for operations in Afghanistan, Iraq and other locations in the Southwest Asian Theater. As part of those responsibilities, the ASG-KU maintains an off-post housing office, located in downtown Kuwait City, which procures, leases and supervises off-post housing for government employees and military service members stationed at Camp Arifjan. According to court documents, Collins worked in the ASG-KU’s off-post housing office as a housing specialist responsible for supervising private contractors and procuring off-post apartment rentals.

According to court documents, Collins agreed to submit an inflated off-post apartment lease to the United States for approval and then split with an Egyptian businessman more than $23,100 that resulted from the inflated lease payments. According to sentencing documents, Collins also solicited approximately $8,400 from the Egyptian businessman between July and December 2009 and agreed in return to provide advice and preferential treatment in connection with a fixed-price U.S. government contract awarded to the Egyptian businessman’s company. The contract was for maintenance services for off-post housing supervised by Collins and the ASG-KU off-post housing office.

The investigation was conducted by the Defense Criminal Investigative Service, the FBI, the U.S. Army Criminal Investigative Division, and members of the National Procurement Fraud Task Force (NPFTF) and the International Contract Corruption Task Force (ICCTF).

The NPFTF, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate, and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations worldwide, including in Kuwait, Afghanistan and Iraq.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

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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Virginia Woman Arrested on Embezzlement Charges

March 8, 2010

Susan Thanh Litwin has been arrested on allegations of stealing approximately $279,000 from a Fairfax County magnet school. According to the U.S. Attorney’s Office, “These are difficult financial times for many public institutions, and an employee who breaks that trust needs to be held accountable.”

It was alleged, in a court-filed affidavit, that Litwin served as a finance technician for the school since January 2007 and was responsible for receiving and depositing funds from various sources. These funds were to support student athletics, classes, clubs, and other school activities. Litwin is accused of using the signature authority bestowed upon her to steal funds by writing checks to herself without authorization and by making counter-withdrawals from various  bank accounts and depositing the funds into her personal bank accounts. Litwin is accused of stealing more than $279,000 from March 2008 through January 2010, by writing herself checks or taking out deposits of anywhere from $2,000 to $35,000.

According to court records, Litwin allegedly told law enforcement that the money was used to support a gambling habit that included trips to Las Vegas, Nev., and Atlantic City, N.J. In addition, she allegedly stated that she engaged in this activity as a result of extensive credit card debt and large mortgage payments on her home.

Litwin was formally charged with 18 U.S.C. 666(a)(1)(a), theft or bribery concerning programs receiving federal funds. Under that statute it is a crime to be an agent of an organization that embezzles, steals, or obtains by fraud, or otherwise without authority knowingly converts to the use of any person other than the rightful owner or intentionally misapplies, property that is valued at more than $5,000.00 and is owned or under the care of such an organization. Punishment includes fines or not more than ten years imprisonment, or both.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

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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