“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.


Gupta to Urge Probation From Judge Who Once Defended Insiders

October 22, 2012

San Francisco Chronicle on October 22, 2012 released the following:

“Patricia Hurtado and David Glovin, ©2012 Bloomberg News

Oct. 22 (Bloomberg) — As a lawyer, Jed Rakoff once persuaded a judge to give probation to a client convicted at an insider-trading trial alongside former Wall Street Journal reporter R. Foster Winans. Now a federal judge himself, Rakoff must weigh Rajat Gupta’s similar request to stay out of prison.

Gupta, a former Goldman Sachs Group Inc. director, will come before Rakoff in Manhattan federal court on Oct. 24 to be sentenced for leaking stock tips to Galleon Group LLC co-founder Raj Rajaratnam. Prosecutors say Gupta, convicted by a jury in June, deserves as long as 10 years in prison. Gupta seeks probation.

Gary Naftalis, a lawyer for Gupta, argued his client’s crime was an “aberrational” event in a “lifetime of good works” that merited a punishment for a man who has suffered an extraordinary fall from grace. He asked Rakoff to impose a term of community service, suggesting Gupta work with troubled youth in New York or with the poor in Rwanda.

“Good works help, but on their own they are rarely a ‘Get out of jail free card,’” said Gordon Mehler, a former federal prosecutor who’s now in private practice in New York. “So, it seems as if probation, even in Rwanda, is unlikely.”

Gupta, 63, is the most prominent of 70 people convicted since a nationwide insider-trading crackdown by U.S. prosecutors began four years ago. Gupta also served as managing partner of McKinsey & Co. from 1994 to 2003 and on the board of Procter & Gamble Co. from 2007 to March 2011, when he also resigned from the boards of Goldman Sachs, AMR Corp. and two other companies.

Buffett’s Berkshire

After a four-week trial in June, jurors found Gupta guilty of tipping Rajaratnam about dealings at New York-based Goldman Sachs, including a $5 billion investment by Warren Buffett’s Berkshire Hathaway Inc. Rajaratnam, 55, is serving 11 years in prison for trading on tips from Gupta and others.

In his 17 years as a judge, Rakoff has sentenced at least nine defendants for insider trading, including seven who pleaded guilty and two whom he jailed after they were found guilty by juries. Rakoff has a track record of imposing a sentence that is half what the government recommends.

“If there is any judge who’s sensitive to the draconian impact of the sentencing guidelines with respect to white-collar offenders, it’s Judge Rakoff,” said J. Bruce Maffeo, a former federal prosecutor now in private practice. “That being said, he’s equally sensitive to the need to fashion a sentence that takes into account both the defendant’s personal background and the need to deter others in the financial world, where this kind of activity appears to be more prevalent than previously assumed.”

Winning Leniency

Rakoff, a former federal prosecutor in New York who headed the office’s securities-fraud unit, was a white-collar criminal- defense lawyer before taking the bench.

As a defense lawyer, Rakoff won leniency for a client convicted of insider trading who was also facing prison.

Rakofff’s client, David Carpenter, went on trial in 1985 with his lover, journalist R. Foster Winans, and broker Kenneth Felis. Prosecutors said Winans leaked tips to Felis about forthcoming market-moving articles in his “Heard on the Street” column, Felis traded on the news and Carpenter allowed Winans to place trades through his account. All were convicted. Carpenter died in 1991.

Wife, Husband

At the sentencing, Rakoff compared Carpenter’s relationship with Winans to that of wife-and-husband and said Carpenter merely acquiesced to Winans’ trades, according to Winans’s lawyer, Don Buchwald. Carpenter got probation while Winans was given an 18-month prison term.

“He was following Foster,” Buchwald said in a phone interview last week. “Carpenter was a very sympathetic figure.”

This week, Gupta will be seeking sympathy of a different sort from Rakoff. Gupta’s lawyer, Naftalis, said in a court filing that Gupta deserves probation because his crime was an aberration in a life “defined by helping others.”

Naftalis cited Gupta’s work as chairman of the Global Fund, an initiative to fight AIDS, tuberculosis and malaria, as well as his work with the United Nations to improve world health. Naftalis declined to comment on a comparison of the Gupta and Carpenter cases. The defense submitted more than 400 letters to the judge describing Gupta’s accomplishments.

In their pre-sentencing court filings, prosecutors gave a different portrait of Gupta and asked Rakoff to consider the personal relationship between Gupta and Rajaratnam.

‘Very Close Friend’

In asking for a term of 97 months to 121 months, which they say are called for by U.S. sentencing guidelines, prosecutors say Gupta violated confidences and breached his duty as a senior corporate official by leaking news to his “very close friend” and business partner.

“Gupta’s interests often were aligned with those of Rajaratnam and Galleon such that Gupta stood to benefit if Galleon was successful,” prosecutors wrote in a filing, citing Gupta’s investment in Galleon and their partnership in another investment fund.

Richard Holwell, the former federal judge who presided over Rajaratnam’s trial and sentenced the fund manager, said judges consider “general deterrence,” or whether the sentence they impose will deter others from committing similar crimes.

“The nature and circumstances of the crime weigh in the government’s favor, because insider trading is a serious white- collar crime that undermines the integrity of the markets” said Holwell, who is now in private practice.

Deterrence

“The government will lean on general deterrence because insider trading has to be eradicated and one way to do that is by taking highly visible cases and making examples of them,” Holwell said. “That will weigh heavily on Rakoff.”

Other criminal defense lawyers said Gupta’s fall from grace may work in his favor. Kevin O’Brien, a former federal prosecutor in New York, said the judge must weigh Gupta’s achievements against his crimes.

“There is human drama there,” O’Brien said. “You can make the argument that for a guy like this who was on top of the world to have fallen so low and to have been so humiliated and exposed by a lengthy public trial, that is punishment enough.”

“What is smart about the Rwanda option is that it makes vivid Gupta’s commitment to public service and brings out with some clarity his history of good deeds,” he said. “It’s a creative approach.”

‘Mirage’ Guidelines

Federal sentencing guidelines are advisory. Rakoff’s history has been one of imposing sentences well below the recommended federal guidelines, which he has called a “mirage of something that can be obtained with arithmetic certainty.”

Last year, he sentenced James Fleishman, a former executive at expert-networking firm Primary Global Research LLC, to 2 1/2 years in prison for passing tips to fund managers while the guidelines called for more than seven years. He also ordered Primary Global consultant Winifred Jiau to serve 48 months for selling information. Her guidelines suggested a term of 78 months to 97 months in prison.

Still, Rakoff has rarely been silent about the contempt he has for insider traders, often expressing his sentiments in open court. In Fleishman’s case, he said insider prosecutions over “the last 30 or 40 years” have not “done enough to deter this serious and sophisticated crime.”

With Jiau, whose scheme ran for two years, he said the leaks undermined “the integrity of the financial markets” and demanded a “meaningful sentence.”

Maffeo said he believes Rakoff will impose some term of incarceration upon Gupta.

Love Families

Rakoff has demanded prison in cases in which, unlike Gupta, the defendants have admitted trafficking in illicit information. He sentenced ex-SAC Capital Advisors LP manager Donald Longueuil to 30 months instead of the 46 months to 57 months urged by the guidelines. He ordered a former Taiwan Semiconductor Manufacturing Co. manager to spend 18 months behind bars.

“Why is it that defendants always remember how much they love their families after they’ve committed the crimes that place that relationship in jeopardy?” Rakoff said at the sentencing of former Galleon trader Adam Smith, who won probation largely because he cooperated with prosecutors and testified against Rajaratnam.

Rakoff imposed an 18-month prison term on Manosha Karunatilaka, a former Taiwan Semiconductor Manufacturing Co. manager who pleaded guilty to passing nonpublic information about his company’s orders to fund managers as part of an insider-trading scheme. Karunatilaka cooperated with the U.S. and accepted responsibility for his crimes.

Crying Infant

As Karunatilaka’s infant child cried in the courtroom, Rakoff rejected a bid by defense lawyer Brad Bailey to impose a term of six months’ in prison and six months of home confinement.

Gupta, after two days of deliberations by a jury, was found guilty of three counts of securities fraud and one count of conspiracy. The tips came in September and October 2008 and concerned Buffett’s $5 billion investment in Goldman Sachs and the bank’s losses in the fourth quarter of 2008.

Jurors acquitted Gupta of charges that he leaked information that Cincinnati-based P&G’s organic sales growth would fall below estimates and that he tipped Rajaratnam about Goldman Sachs’s earnings in the first quarter of 2007.

In his filing, Naftalis argued that Gupta deserves leniency because his crimes were limited to a two-month period in 2008.

Peter Henning, a professor at Wayne State University Law School in Detroit, said Rakoff will focus on the nature of the crime and Gupta’s background. Henning predicted that the former Goldman Sachs director will get a prison term of two years to three years.

“That’s not a deleterious prison term, but it is prison and it doesn’t mean he will get a free pass,” Henning said in a phone interview. “It has to be a term to get everyone’s attention, and by everyone, I mean Wall Street.”

The case is U.S. v. Gupta, 11-cr-00907, U.S. District Court, Southern District of New York (Manhattan).”

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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.


Federal indictment charges 7 people in alleged $17 million multistate mortgage scams, Ponzi schemes

September 15, 2012

OregonLive.com on September 14, 2012 released the following:

“By The Associated Press

A federal indictment unsealed Friday charged seven people with running a multistate Ponzi scheme and related mortgage fraud scams that prosecutors said cost investors and lenders a combined $17 million.

The years-long investigation resulted in the arrest of 55-year-old Lawrence Leland Loomis. He and his father-in-law, John Hagener, 76, were charged with operating a fraudulent California-based investment fund that cost more than 100 investors more than $7 million.

Both men are from Granite Bay, a wealthy Sacramento suburb.

Hagener’s attorney, William Portanova, said his client would plead not guilty in federal court in Sacramento. It was not immediately clear if the others had retained attorneys.

Loomis and five other defendants are also charged in a 50-count indictment with costing lenders $10 million in losses through two mortgage fraud schemes.

Prosecutors said all three frauds were operated through Loomis Wealth Solutions, which was based in California and also worked with investors in Illinois, Washington and elsewhere from 2006 through 2008.

“We are bringing to justice some of those who are responsible for the mortgage crisis in this district and elsewhere,” U.S. Attorney Benjamin Wagner said in a statement announcing the indictments.

Portanova said the investigation was under way for at least four years before his client was charged.

“We’re looking forward to a resolution of this matter. It’s been a long investigation and we’re all ready to move forward,” Portanova said. “Large-scale, long-term white collar investigations are by their nature measured by calendars, not stopwatches.”

Loomis and Hagener were charged with bilking investors through a program called Naras Funds in 2007 and 2008. The indictment said Loomis encouraged investors to tap their home equity and retirement accounts to buy shares in the funds and to help purchase residential real estate.

He called the investments “simply the best financial plan ever created,” according to prosecutors.

He and his father-in-law allegedly promised 12 percent annual returns and said the funds were guaranteed, but the indictment claims the men used investors’ money to pay themselves, their companies’ operating expenses, and to prop up the scheme by paying later investors with money from earlier victims.

Loomis and Hagener had court appearances Friday, while the others were to appear later.

Loomis and a real estate appraiser, Darren Fehst, 44, of Halifax, Nova Scotia, are also charged in connection with a mortgage fraud scheme in which Loomis is accused of paying Fehst thousands of dollars to overstate appraisals so properties could be sold for inflated prices.

Loomis and four others also are charged with buying about 200 properties in Arizona, California, Florida and elsewhere while falsifying the sales prices and costing lenders about $10 million.

The others are Michael Llamas, 27, of Tracy; Peter Woodard, 54, of Ventura; Joseph A. Gekko, 43, of Yorba Linda; and Dawn C. Powers, 42, of Lincoln.

All are charged with mail and wire fraud. Each fraud charge carries a maximum possible sentence of 20 years in federal prison.”

Federal Mail Fraud Crimes – 18 U.S.C. § 1341

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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 Prosecutor Stanley Boone Named Federal Magistrate Judge

September 4, 2012

The Fresno Bee on September 2, 2012 released the following:

“By John Ellis

Longtime federal prosecutor Stanley Boone soon will ascend to the bench in the same courthouse where he has worked for more than a decade, taking a post as a magistrate judge.

Boone, 46, will replace Dennis Beck, who is retiring. His hiring also ensures that the overworked federal court in Fresno maintains its full contingent of six magistrate judges.

This is especially important now, several in the local legal community say, because there are just two district judges in Fresno’s federal courthouse who handle one of the largest caseloads in the nation.

Fresno has four magistrate judges, plus one in Bakersfield and another in Yosemite, both of whom answer to the federal judges here.

Boone is the third straight magistrate judge picked from inside Fresno’s federal courthouse.

Barbara McAuliffe, who served more than a decade as a staff attorney at the courthouse, was appointed last October as a replacement for retiring magistrate judge Sandra Snyder. Before that, prosecutor Sheila Oberto was picked for a newly created magistrate judge post in late 2009.

U.S. District Judge Lawrence J. O’Neill — himself a former magistrate judge — called Boone “the entire package.

“He brings civil, criminal and administrative experience to the federal bench,” he said. “At a time when our judicial demands far exceed our judicial resources, we need a person who will enter on the fast track.”

Magistrate judges are less powerful than district judges, but they carry a heavy workload on Social Security appeals, prisoner civil rights cases and other prisoner-related cases.

They also have broad authority in cases up until trial and oversee criminal arraignments, set bail and handle much of the initial work in civil trials.

Boone, a hard-nosed litigator who seemed to revel in the courtroom battlefield, said he is ready to move from the more active prosecutorial role to what is more of a referee.

“I’m going to retool my system,” he said. “That energy will be in applying the law and being fair.”

Boone already was well known to the jurists who hired him. The University of California at Berkeley graduate — who earned his law degree from University of the Pacific’s McGeorge School of Law in Sacramento — has been a federal prosecutor in Fresno since 1996.

Before that, he was a law clerk for U.S. Magistrate Judge Peter A. Nowinski in Sacramento.

During his time as a prosecutor, Boone has specialized in white collar crime and terrorism cases. He has also acted as the office’s bankruptcy fraud coordinator. In addition, he spent a year as the White Collar Crime Coordinator at the Justice Department in Washington, D.C.

Beck, the outgoing U.S. magistrate judge, plans to retire Dec. 12. Boone said he likely will start the job by mid- to late December.

Boone’s only regret is that his grandfather — who always wanted him to become a judge — died before seeing him don the black robe.”

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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

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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.


FBI probes Foothills Regional Airport

June 13, 2012

Winston-Salem Journal on June 13, 2012 released the following:

“By: Sharon McBrayer and Julie N. Chang | Media General News Service

MORGANTON —
The FBI is investigating Foothills Regional Airport and two of its employees have been suspended without pay.

A news release Tuesday from Foothills Regional Airport Authority said a federal criminal investigation involves two employees of the airport, Alex Nelson and Brad Adkins. Nelson was the airport manager but Adkins did not hold a management position, according to airport officials.

“The Airport continues normal operations without interruption,” the statement said. “Brent Brinkley, a long time employee, has been appointed as acting administrator.”

FBI Public Affairs Specialist Shelley Lynch said, “As a matter of Department of Justice policy, the FBI can neither confirm nor deny the existence of investigations.”

According to the FBI’s website, it investigates public corruption, major white-collar crime, significant violent crime, civil rights violations and transnational/national criminal organizations and enterprises and cyber-based attacks and high-technology crimes, along with national security threats.

Airport Authority Chairman and Burke County Commissioner Chair Wayne Abele said Tuesday no one has been charged with anything and federal investigators haven’t given them any information about the investigation.

“All I know is it’s an ongoing investigation,” Abele said.

Abele said about 10 FBI personnel showed up at the airport last Tuesday, accompanied by Caldwell County Sheriff’s deputies, and seized records and computers.

“The FBI, they don’t charge people unless they have a concrete case,” Abele said.

The public airport, located on NC 18, receives funding from Burke and Caldwell counties and the cities of Morganton and Lenoir. The funding the airport received in the 2011-12 budgets of the two counties and two cities were:

  • Caldwell County — $48,254, which includes money for capital improvements; and $30,017 in property taxes the county collects on planes, said Stan Kiser, Caldwell County manager.
  • Burke County — $36,246 for operating expenses; $4,166 in capital improvement money; and $4,100 from property taxes paid on planes, said Paul Ijames, Burke County finance director and assistant county manager. He said more planes are kept on the Caldwell County side. He said even though $4,100 was budgeted for taxes, only $3,300 has been collected so far in property taxes on the 20 planes listed for the Burke County side.
  • City of Morganton — $38,088 for operating expenses and $4,166 in capital funding, said City Manager Sally Sandy.
  • City of Lenoir — $42,320 total for operating and capital expenses, said Kaye Reynolds, communications and resource director for the city of Lenoir.

None of the boards of the four governments has voted on their individual budgets for next year.

Each one of the four has a representative on the Airport Authority, which alerted the two counties and two cities about the investigation, according to the release from city of Morganton Attorney Louis Vinay. Vinay also is acting as the authority’s attorney after its previous one retired, Kiser said.

Cuts to the airport’s budget from the four member entities resulted in a $42,000 revenue shortfall on the operations side, Nelson recently told the Burke County Board of Commissioners. The airport made internal cuts, shortened operational hours and skipped on mowing to cut that amount down to about $24,000, Nelson said at the time.

The airport planned on asking each entity for additional money for this fiscal year, Nelson said.

During that recent meeting, Burke County Commissioner Maynard Taylor questioned why the airport needed more money and why it isn’t self-supporting. He also questioned what the average county resident received from the airport.

“We’re spending more money than we have every year to keep this thing above ground so to speak, but the average citizen in Burke – what are they getting for that,” Taylor said in previous reports.

The airport’s condition has improved since the authority took over, Abele said at the meeting.

At the time, Nelson said the airport is a “tourism magnet,” adding that area colleges recruiting athletes use the airport.

Burke County commissioners have put off the funding request.”

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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 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 Gunnison County Man Charged in Alleged Scheme to Defraud Investors in NASCAR Business

June 6, 2012

The Federal Bureau of Investigation (FBI) on June 5, 2012 released the following:

“DENVER— Michael Patrick Corrigan, age 57, formerly of Gunnison County, Colorado, was arrested early this morning without incident in Tuscaloosa, Alabama for mail and wire fraud offenses related to his fraudulent actions involving the sale of investment opportunities in a NASCAR memorabilia company, U.S. Attorney John Walsh and FBI Special Agent in Charge James Yacone announced today. Corrigan appeared in U.S. District Court in Birmingham, Alabama, where he was advised of the charged pending against him and the penalties related to those charges. A detention hearing is scheduled to take place later this week in Birmingham. He will eventually come to Colorado so that he can face the charges here, where he was indicted.

According to the indictment, Racezing Mania Corporation (RZM) was incorporated in Colorado in April 2006. Michael Patrick Corrigan was the registered agent. The purpose of RZM was to be a distributor of NASCAR memorabilia, specifically, die-cast cars and apparel. The business was registered to an address in Crested Butte. There was also a P.O. box in Clarksville, Indiana. NascarMania LLC was the parent company of RZM. NascarMania was incorporated under the laws of the Nevada in 2005. This company was also controlled by Corrigan. In addition, Markettron Holdings LLC was also controlled by Corrigan. From the companies’ inceptions, until the latter part of 2007, Corrigan was president of NascarMania and treasurer of RZM. Corrigan maintained his position as treasurer of RZM, and he and his wife had sole control of RZM finances of RZM.

The stated purpose of RZM was to specialize in racecar team sponsorships, custom-die cast car sales, and Internet marketing sales. RZM also offered “investment opportunity and value to both current and potential investors.” Between 2005 and 2008, Corrigan, using material misrepresentations and omissions, fraudulently solicited investors into his NASCAR memorabilia business. To create an appearance of credibility, the defendant created a RZM board of directors, which included several investors of RZM.

Corrigan solicited and interacted with investors through e-mail, telephone calls, mailings, and Internet websites. He also initiated a “club concept” in which investors contributed $500 for a membership position. Corrigan promised every investor a percentage of the sales of the NASCAR-related merchandise. He also sold membership to “affiliate sites,” or websites available for purchase by investors, for $1,250. The purpose of these sites was to sell NASCAR memorabilia through “spam” e-mails sent by RZM, which directed potential customers to the affiliate’s website. Corrigan guaranteed investors would receive a minimum of $100 weekly net profit, as well as 10,000 leads per week a $250 commissions for every affiliate site sale. An “E-Commerce” club offered membership positions for $5,000. Investors involved in this club were promised a percentage of the company’s returns from the Internet sales of NASCAR-related merchandise.

During the course of the scheme, Corrigan claimed to have the ability to generate income and profits through his three business units. He claimed to be expecting first-year sales totaling $38,500,000, netting $15,409.688 in profit. By 2011, Corrigan projected sales totaling $308,336,426, netting $135,852,298 in profit. Corrigan also informed investors and potential investors that RZM stock would be publicly traded, and, as a result, depending on the amount of the initial investment with RZM, several investors would become millionaires. The defendant was never authorized to use investor funds for his or his family’s personal use. Between 2005 and 2008, he obtained approximately $950,000.

“Combating investment fraud is one of this office’s top priorities: scamming investors out of their hard-earned dollars has criminal consequences, including potential prison time,” said U.S. Attorney John Walsh.

“The FBI does not take white-collar crime lightly and will aggressively pursue those that take advantage of hard working Americans,” said FBI Special Agent in Charge James Yacone. “The FBI will continue to protect the financial wealth of individuals enabling our economy to continue to grow safely and securely.”

Corrigan faces four counts of mail fraud and four counts of wire fraud. If convicted, he faces not more than 20 years in federal prison and up to a $250,000 fine, per count. He could also be ordered to pay restitution.

This case was investigated by the Federal Bureau of Investigation.

Corrigan is being prosecuted by Assistant U.S. Attorney Michelle Heldmyer.

The charges contained in the indictment are allegations, and the defendant is 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.


FBI sees more hedge fund trading probe informants

February 27, 2012

The Baltimore Sun on February 27, 2012 released the following:

“Grant McCool
Reuters

NEW YORK (Reuters) – The FBI says it has enough informants lined up to keep its investigations of suspected illegal insider trading at hedge funds going for at least five more years.

In a briefing on Monday with reporters at the New York office of the Federal Bureau of Investigation just blocks away from Wall Street, agents who manage squads of investigators likened the probes to penetrating a secret society.

The investigations are building on a mission dubbed “Perfect Hedge” that have led to the prosecutions of multimillionaire Galleon Group hedge fund founder Raj Rajaratnam and dozens of traders, executives and research consultants since late 2009.

“We have cooperators set up for years to come,” said David Chaves, a supervisory special agent for securities and commodities fraud investigations.

He told reporters that the informants include cooperating witnesses — people who have been identified as conducting illegal trading but who have agreed to assist authorities to catch others in the hopes of receiving a lighter sentence — and sources within hedge funds.

“I don’t want to say it’s infinite, but clearly in five years we think we will be working it,” Chaves said.

The Galleon prosecution and other recent insider-trading cases have used secretly-recorded telephone conversations to gather evidence, an investigatory tool traditionally used in organized crime or narcotics cases.

The use of wiretaps sent a chill through the hedge fund industry closed to outsiders and what the FBI calls “undercover resistant.”

Investigators have tracked mobile phone calls, instant messaging and social media to collect evidence.

The FBI says it is alert to new ways in which people may try to exchange information on publicly traded companies to gain an illegal edge.

“We will go to whatever lengths we have to keep up with changes in technology,” said Richard Jacobs, another FBI supervisory special agent for white-collar crime cases.

Both officials emphasized that law enforcement believes that the overwhelming majority of hedge funds and their traders are law-abiding and run their firms responsibly.

A similar briefing was given to reporters in Washington on Monday, where officials discussed the agency’s shift in focus of the past 10 years to financial fraud cases involving larger amounts of money than in the past.

For example, out of the 2,600 mortgage fraud investigations open nationally, 70 percent involve more than $1 million, compared with smaller bank frauds under $25,000 that were previously typical of the caseload.

In New York, the FBI said that to date, out of 64 arrests made in “Perfect Hedge,” 59 people have been convicted or have pleaded guilty. These prosecutions, in partnership with the office of the Manhattan U.S. Attorney and the U.S. Securities and Exchange Commission, have been an important deterrent, the agents said.

Another tool for deterrence is the publicity the cases have generated in the United States and abroad.

To that end, Michael Douglas, the Academy Award-winning star of the 1987 movie “Wall Street,” agreed to a request from the FBI to record a public service announcement.

“In the movie ‘Wall Street’ I played Gordon Gekko, who cheated to profit while innocent investors lost their savings,” Douglas, 67, says in the video recording released on Monday.

“The movie was fiction but the problem is real,” Douglas says in the video. “Our economy is increasingly dependent on the success and integrity of the financial markets. If a deal looks too good to be true, it probably is.””

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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.