“FBI seized vendor records, hard drives from Horizon charter schools”

July 23, 2014

The Columbus Dispatch on July 23, 2014 released the following:

By Jennifer Smith Richards

“The FBI is examining the relationship between the Horizon Science Academy charter schools and several technology vendors, including some based in Ohio.

Court-ordered search warrants and evidence logs show that FBI investigators removed financial documents, including check stubs, invoices, bank records and travel-reimbursement receipts from the Concept Schools headquarters and Horizon Science Academy Middle School in Columbus. Agents also took external computer hard drives and copied more than a dozen hard drives.

The warrants from early June sought any records related to the federal E-rate program dating back to 2003. Agents served the warrants in Concept-operated buildings on June 4. A federal grand jury also issued a subpoena to the schools for the same information sought in the warrants.

The Chicago-based school group runs 30 public charter schools across the Midwest, 19 of them in Ohio. Four are in Columbus. The FBI served warrants in several Midwestern states, including Ohio, Indiana and Illinois. Agents searched individual schools, as well as main and regional headquarters and storage units.

The Dispatch obtained the warrants and FBI evidence logs through public-records requests to the schools. The logs don’t indicate the reason agents removed records or computer hardware, only a description of the evidence they seized.

Schools can use federal E-rate grants to purchase technology upgrades and discounted telecommunication services. Ohio’s Horizon schools, which are publicly funded but privately run, have been awarded about $7.4 million in E-rate grants since 2002.

An FBI spokeswoman in Cleveland said yesterday that she could not release more information about the FBI’s interest in the Horizon Science schools. The spokeswoman, Vicki Anderson, repeated that the FBI is conducting “an ongoing investigation that involves a white-collar type matter” and is working with the U.S. Department of Education and the Federal Communications Commission. The FCC distributes E-rate grants.

A spokeswoman for Concept Schools in Chicago said yesterday that there’s little the schools can say about the investigation, but that Concept is cooperating.

Investigators focused on a few technology vendors in seeking invoices and payment data from the Chicago Concept Schools headquarters and from the Columbus headquarters, which oversees half of Ohio’s Concept buildings. Some of those vendors are in Ohio and one is a former Concept Schools employee.

Schools that use E-rate funds have to select vendors through a competitive bidding process to get the most cost-effective rates.

Agents seized information related to Ozgur Balsoy, vice president of Advanced Solutions for Education. The company is based in Mentor, near Cleveland, and also has headquarters in Schaumburg, Ill., a suburb of Chicago. Records kept by the Ohio Department of Education list Balsoy as an administrator at Horizon Science Middle School in Columbus in 2007.

The FBI also removed financial information related to Core Group, Inc., which is based in suburban Chicago and run by Ertugrul Gurbuz; Cambridge Technologies based in Chesterland, Ohio, which is owned by Stephen Draviam; Sundance International, an IT company owned by Galip Kuyuk and based in Chicago and Istanbul; and the Metropolitan Educational Council in Columbus. The MEC is an education consortium that contracts to provide services to several central Ohio public school districts.

Concept Schools was founded by a group of Turkish scientists and continues to be managed by Turkish-Americans, including the three Horizon schools and Noble Academy in Columbus.

The owners of some of the companies whose financial relationships with Concept Schools are of interest to the FBI also are of Turkish heritage.

The warrant served at the Concept headquarters buildings also sought records about specific employees, including Concept Schools’ founder and the chief information officer.

This FBI’s work is separate from some state inquiries into Horizon Science. A handful of former teachers at a Horizon school in Dayton have made several allegations about that school, including unreported sexual activity in the school, unequal treatment of students and teachers, and standardized-test cheating. Both the Ohio Department of Education and the state auditor have said they will look into the matter.

Concept Schools officials called those allegations baseless but said they will look into them.”

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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.


“Study: US judges’ criminal caseloads vary widely”

November 12, 2012

The Associated Press on November 12, 2012 released the following:

“By FREDERIC J. FROMMER
Associated Press

WASHINGTON (AP) — Federal judges across the nation are shouldering criminal caseloads that vary widely in size, sometimes even among judges in the same courthouse, according to a new study.

The study by the Transactional Records Access Clearinghouse, or TRAC, at Syracuse University found three courthouses where the judge with the largest criminal caseload had sentenced more than twice the number of defendants as the judge with the smallest caseload from October 2006 through July 2012. They were Los Angeles; Beaumont, Texas; and Camden, N.J.

Overall, the study found 18 courthouses where the heaviest sentencing load was at least 1.4 times larger than the smallest.

The study, release Sunday, was made possible because the clearinghouse, which uses the Freedom of Information Act to collect criminal justice data, earlier this year assembled the first publicly available database of sentencing records, sortable by judge.

Judges in the courthouses with the widest disparities cited unique local circumstances to explain the differences.

David Sellers, a spokesman for the administrative office of U.S. courts, said he wasn’t surprised or concerned with these findings. He noted, however, that the judiciary needs more judges, particularly along the Southwest border.

That appeal for more judges was buttressed by another finding of the study that documented a more widely known disparity in criminal caseloads between districts in different regions. These regional differences are driven by the large number of immigration cases along the Southwest border where judges have long complained they handle too many cases to give each one proper consideration.

The clearinghouse study analyzed the criminal caseloads of 430 federal district judges who were all active for the entire study period, almost six years. It measured workload by sentencings and excluded acquittals because “acquittals are exceedingly rare,” said Susan Long, a co-director of TRAC and co-author of the report, along with former New York Times investigative reporter David Burnham, TRAC’s other co-director.

Atop the list of districts with internal disparities were the two federal courthouses in Los Angeles. One judge there had sentenced 305 people, while another had sentenced 134.

George H. King, chief judge of the U.S. District Court in the Central District of California, said he had not had an opportunity to review the study or its methodology and declined to comment. But officials in other jurisdictions with the widest disparities provided explanations.

Second in internal disparity was Beaumont, Texas, which has just two judges: Marcia A. Crone, who sentenced 1,288 people during the period, and Ron Clark, who sentenced around 618. Both judges called that divide a reflection of how they divide the work in other courthouses they must travel to as part of their responsibilities, with Clark handling more civil cases and Crone more criminal cases.

The third greatest internal disparity was in Camden, N.J. Jerome Simandle, the chief judge of the U.S. District Court for New Jersey, said two of Camden’s four judges took no part in many criminal cases early in their tenure because of their former jobs as prosecutors. They both joined the court in 2006, which was coincidentally the beginning of the study period.

In addition, experienced judges tend to get cases that are related to cases they are already working on, Simandle said. “So experienced judges tend to get more cases,” Simandle said.

TRAC contacted clerks in a sample of districts. The clerks who agreed to be interviewed “uniformly indicated that while judges were randomly assigned by the court’s computerized software system, adjustments were allowed in the `odds of selection’ when directed by the chief judge in a district (or sometimes by an individual judge),” the report stated.

TRAC’s comparison of caseloads between regions confirmed that courthouses on the Southwest border had by far the highest number of sentences. Atop the list was the courthouse in Las Cruces, N.M., where Judge Robert C. Brack is the only district judge, with 7,020 defendants sentenced. The next four were other Texas courthouses in McAllen, Midland, El Paso and Del Rio. Each of the judges in those courthouses averaged more than 4,600 sentences. The 11 courthouses with the highest caseloads were all on the border, “because of the government’s sharply increased emphasis on the criminal enforcement of immigration matters,” the report stated.

On the opposite end, the courthouse in the nation’s capital had the lowest average number of criminal defendants sentenced per judge – 147 over the nearly six years in the study.

“We have many more complex cases than most of the districts listed in the report,” said Washington’s chief judge, Royce Lamberth. He noted that the court handles public corruption cases, white-collar cases and any prosecution for obstruction of Congress, which can be time-consuming. Just this year, the court tried former baseball pitcher Roger Clemens on charges of perjury, making false statements and obstructing Congress for denying he had used performance-enhancing drugs. A jury acquitted Clemens of all charges after a trial that lasted more than nine weeks.

“So comparing a case in which there’s a one-hour, at most, guilty plea in an immigration violation, and probably one hour spent on sentencing, can’t really compare to the kinds of cases we’re doing,” Lamberth said Sellers, spokesman for the office that provides administrative support to federal courts, said that differences in caseloads have “been a reality of judging – not just in federal courts – for more than two centuries.”

“I would liken this to a study that concludes that cars traveling on the same road, or different roads, travel at different speeds,” Sellers said.

That doesn’t mean things can’t be improved, he added. “There are courts that have tremendous needs for new judgeships, particularly on the Southwest border. There are longstanding judicial vacancies.” But the judiciary doesn’t control the number of judges.

The report acknowledged that Congress, which funds the courts, and the executive branch, which brings prosecutions, both have a responsibility for helping to manage criminal caseloads.”

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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

Federal Crimes – Appeal

————————————————————–

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.


Appeal in Insider Trading Case Centers on Wiretap

October 24, 2012

The New York Times on October 23, 2012 released the following:

“BY PETER LATTMAN

In March 2008, the Justice Department made an extraordinary request: It asked a judge for permission to record secretly the phone conversations of Raj Rajaratnam, a billionaire hedge fund manager.

The request, which was granted, was the first time the government had asked for a wiretap to investigate insider trading. Federal agents eavesdropped on Mr. Rajaratnam for nine months, leading to his indictment — along with charges against 22 others — and the biggest insider trading case in a generation.

On Thursday, lawyers for Mr. Rajaratnam, who is serving an 11-year prison term after being found guilty at trial, will ask a federal appeals court to reverse his conviction. They contend that the government improperly obtained a wiretap in violation of Mr. Rajaratnam’s constitutional privacy rights and federal laws governing electronic surveillance.

Such a ruling is considered a long shot, but a reversal would have broad implications. Not only would it upend Mr. Rajaratnam’s conviction but also affect the prosecution of Rajat K. Gupta, the former Goldman Sachs director who was convicted of leaking boardroom secrets to Mr. Rajaratnam. Mr. Gupta is scheduled to be sentenced on Wednesday.

A decision curbing the use of wiretaps would also affect the government’s ability to police Wall Street trading floors, as insider trading cases and other securities fraud crimes are notoriously difficult to build without direct evidence like incriminating telephone conversations.

“Wiretaps traditionally have been used in narcotics and organized crime cases,” said Harlan J. Protass, a criminal defense lawyer in New York who is not involved in the Rajaratnam case. “Their use today in insider trading investigations indicates that the government thinks there may be no bounds to the types of white-collar cases in which they can be used.”

More broadly, Mr. Rajaratnam’s appeal is being closely watched for its effect on the privacy protections of defendants regarding wiretap use. Three parties have filed “friend-of-the-court” briefs siding with Mr. Rajaratnam. Eight former federal judges warned that allowing the court’s ruling to stand “would pose a grave threat to the integrity of the warrant process.” A group of defense lawyers said that upholding the use of wiretaps in this case would “eviscerate the integrity of the criminal justice system.”

To safeguard privacy protections, federal law permits the government’s use of wiretaps only under narrowly prescribed conditions. Among the conditions are that a judge, before authorizing a wiretap, must find that conventional investigative techniques have been tried and failed. Mr. Rajaratnam’s lawyers said the government misled the judge who authorized the wiretap, Gerard E. Lynch, in this regard.

They say that the government omitted that the Securities and Exchange Commission had already been building its case against Mr. Rajaratnam for more than a year using typical investigative means like interviewing witnesses and reviewing trading records. Had the judge known about the S.E.C.’s investigation, he would not have allowed the government to use a wiretap, Mr. Rajaratnam’s lawyers argue.

Before Mr. Rajaratnam’s trial, the presiding judge, Richard J. Holwell, held a four-day hearing on the legality of the wiretaps. Judge Holwell criticized the government, calling its decision to leave out information about its more conventional investigation a “glaring omission” that demonstrated “a reckless disregard for the truth.”

Nevertheless, Judge Holwell refused to suppress the wiretaps, in part, he said, because they were necessary to uncover Mr. Rajartanam’s insider trading scheme. “It appears that the S.E.C., and by inference the criminal authorities, had hit a wall of sorts,” Judge Holwell wrote.

On appeal, Mr. Rajaratnam lawyers argued that the government’s lack of candor should not be tolerated. They described the government’s wiretap application as full of “misleading assertions” and “outright falsity” that made it impossible for Judge Lynch to do his job.

“The government’s self-chosen reckless disregard of the truth and of the critical role of independent judicial review breached that trust and desolated the warrant’s basis,” wrote Mr. Rajaratnam’s lawyers at the law firm Akin Gump Strauss Hauer & Feld.

In their brief to the appeals court, federal prosecutors dispute that they acted with a “reckless disregard for the truth.” Instead, they argue that omitting details of the S.E.C.’s investigation was at most “an innocent mistake rising to the level of negligence.” In addition, they said that the S.E.C.’s inquiry failed to yield sufficient evidence for a criminal case, necessitating the use of a wiretap.

Once Judge Lynch signed off on the wiretap application, the government’s investigation into Mr. Rajaratnam accelerated. The wiretapping of Mr. Rajaratnam’s phone, along with the subsequent recording of his supposed accomplices, yielded about 2,400 conversations. In many of them, Mr. Rajaratnam could be heard exchanging confidential information about technology stocks like Google and Advanced Micro Devices.

Three years ago this month, federal authorities arrested Mr. Rajaratnam and charged him with orchestrating a seven-year insider trading conspiracy. The sprawling case has produced 23 arrests of traders and tipsters, many of them caught swapping secrets with Mr. Rajaratnam about publicly traded companies.

Among the thousands of calls were four that implicated Mr. Gupta, a former head of the consulting firm McKinsey & Company who served as a director at Goldman Sachs and Procter & Gamble. On one call in July 2008, the only wiretapped conversation between the two men, Mr. Gupta freely shared Goldman’s confidential board discussions with Mr. Rajaratnam. On another, Mr. Rajaratnam told a colleague at his hedge fund, the Galleon Group, “I heard yesterday from somebody who’s on the board of Goldman Sachs that they are going to lose $2 per share.”

Those conversations set off an investigation of Mr. Gupta. He was arrested in October 2011 and charged with leaking boardroom secrets about Goldman and P.& G. to Mr. Rajaratnam. A jury convicted him in May after a monthlong trial.

On Wednesday at Federal District Court in Manhattan, Judge Jed S. Rakoff will sentence Mr. Gupta. Federal prosecutors are seeking a prison term of up to 10 years. Mr. Gupta’s lawyers have asked Judge Rakoff for a nonprison sentence of probation and community service. One proposal by the defense would have Mr. Gupta living in Rwanda and working on global health issues.

Regardless of his sentence, Mr. Gupta plans to appeal. And because prosecutors used wiretap evidence in his trial, Mr. Gupta would benefit from a reversal of Mr. Rajaratnam’s conviction.

Yet a reversal would not affect the convictions of the defendants in the conspiracy who have pleaded guilty. As part of their pleas, those defendants waived their rights to an appeal.”

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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 – Appeal

————————————————————–

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.


Feds Demand Convicted Con Man Serve 30 Years

April 30, 2012

ABC News on April 30, 2012 released the following:

“By PAUL ELIAS Associated Press

Federal prosecutors are demanding that a man they call a “congenital liar and serial fraudster” serve 30 years in prison and pay a $60 million fine after a jury convicted him of defrauding actors Danny Glover, Harry Belafonte and others out of more than $35 million.

If U.S. District Judge Charles Breyer agrees to the sentence on Monday, it would represent one of the harshest penalties ever meted out in a white collar case. Not even Jeff Skilling, the architect of Enron Corp.’s criminal collapse, was sentenced to that much prison time. Skilling is currently serving a 24-year, four-month sentence.

Assistant U.S. attorneys W. Douglas Sprague and Hallie Mitchell argue in court papers that the harsh sentence is warranted because of the financial and emotional toll the fraud had on the victims, the extent Samuel “Mouli” Cohen went to cover up his scam and his refusal to accept responsibility.

“This unrepentant con man with a militant lack of responsibility has blamed everyone—the victims, the Court, his attorneys, the government, the Probation Officer, and the Court reporter—for his actions and their consequences except the person responsible for it,” prosecutors write in a court filing.

Most notably, Cohen’s fraud caused the collapse of the Vanguard Public Foundation, a nonprofit launched in 1972 that awarded grants to a vast array of social causes. Many of Cohen’s victims, including Glover and Belafonte, were associated with the foundation, which supported anti-war causes, environmental groups and other politically liberal issues. Prosecutors said Cohen even preyed on his father-in-law, looting his retirement account.

A federal jury in November convicted Cohen of 15 counts of wire fraud, 11 counts of money laundering and three counts of tax evasion after a three week trial in San Francisco federal court. His lawyer said Cohen will appeal the conviction.

Cohen, 53, is a son of Russian immigrants who was raised in Jerusalem. He moved to the United States in 1987 and became a United States citizen, though prosecutors allege he falsely told victims that the first President Bush personally granted him citizenship.

Cohen was convicted of falsely telling investors beginning in 2002 that a company he launched called Ecast that made electronic jukeboxes for bars was about to be acquired by Microsoft Corp. Prosecutors said Cohen kept the scheme going by soliciting more money from victims with complaints that U.S. and then European regulators were holding up the deal, which required additional investments to pay nonexistent fees and bonds needed to push the deal to approval.

Prosecutors say none of that was true. Instead, they said Cohen used the millions to fund an “absurd lifestyle” that included helping his wife publish a cookbook called “The Kosher Billionaire’s Secret Recipe.”

Prosecutors allege that he jetted around the country in a rented private jet that he to claim to have owned, giving rides to the likes of singer Elton John and actress Jennifer Lopez, neither of which are included on the victims list.

Prosecutors say that Cohen rented a mansion in the wealthy enclave of Belvedere just north of San Francisco and decorated the house with copies of famous paintings from Picasso, Miro and Matisse and other noted artists. But prosecutors said he solicited investments during parties at his house, which he told victims he owned while showing them the artwork he deemed were originals. Prosecutors said that was all part of a ruse to portray himself as a wealthy and savvy businessman.

Cohen’s attorney is asking for a sentence of less than nine years.

“A 30 year sentence is excessive for a 53-year old first-time offender, who has a long history of selfless acts and entrepreneurial innovation,” Cohen’s attorney Marcus S. Topel wrote in a court filing, pointing out that his client has donated at least $2 million to charity.”

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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 Mail Fraud Crimes

Federal Crimes – Appeal

————————————————————–

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.