“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.


Eric Holder appoints 2 US attorneys to lead leaks probe

June 9, 2012

Boston Herald on June 9, 2012 released the following:

“By Associated Press

WASHINGTON — Two U.S. attorneys are taking over separate FBI investigations into leaks of national security information that critics have accused the White House of orchestrating to improve President Barack Obama’s re-election chances, a claim Obama calls “offensive” and “wrong.”

Recent news articles contained details of U.S. involvement in a partially successful computer virus attack on Iran’s nuclear program and on the selection of targets for counterterrorism assassination plots. The leaked information generally painted Obama as a decisive and hands-on commander in chief.

“The notion that my White House would purposely release classified national security information is offensive. It’s wrong,” Obama told reporters at a news conference Friday. “And people I think need to have a better sense of how I approach this office and how the people around me here approach this office.”

Obama promised investigations into the source of leaks about U.S. involvement in cyberattacks on Iran and drone strikes on suspected terrorists.

“We’re dealing with issues that can touch on the safety and security of the American people, our families or our military personnel or our allies, and so we don’t play with that,” he said.

Hours later, Attorney General Eric Holder announced that two U.S. attorneys will lead a pair of criminal investigations already under way into possible unauthorized disclosures of classified information within the executive and legislative branches of government.

Holder said he was confident the prosecutors would follow the facts and evidence wherever they led.

“The unauthorized disclosure of classified information can compromise the security of this country and all Americans, and it will not be tolerated,” he said.

Holder assigned Ronald Machen, the U.S. attorney for the District of Columbia, and Rod Rosenstein, the U.S. attorney for the District of Maryland, to direct separate probes that are already being conducted by the FBI.

Three weeks ago, FBI Director Robert Mueller said the bureau had launched an investigation into who leaked information about an al-Qaida plot to place an explosive device aboard a U.S.-bound airline flight. Separately, calls from Capitol Hill have mounted urging a leak probe into a New York Times [NYT] story a week ago about U.S. involvement in cyberattacks on Iran.

Obama said his administration has “zero tolerance” for such leaks and that there would be an internal administration probe.

“We have mechanisms in place where if we can root out folks who have leaked, they will suffer consequences,” the president said. “In some cases, it’s criminal. These are criminal acts when they release information like this. And we will conduct thorough investigations, as we have in the past.”

Leaders of the Senate and House intelligence committees said Thursday they were drafting legislation to further limit access to highly classified information and possibly impose new penalties for revealing it. The chairman of the House Intelligence Committee said he will investigate recent leaks.

Lawmakers have pointed to recent stories by The New York Times, The Associated Press and other news organizations that contain previously secret information and cite anonymous U.S. officials.

The strongest claims came Tuesday from Obama’s 2008 election opponent, Sen. John McCain, R-Ariz.

“They’re intentionally leaking information to enhance President Obama’s image as a tough guy for the elections,” McCain said after taking to the Senate floor to list some of the alleged breaches. “That is unconscionable.”

McCain called on the administration to appoint an outside special counsel to investigate.

In a statement Friday, McCain and Sen. Lindsey Graham, R-S.C., said Holder’s decision “falls far short of what is needed” and repeated McCain’s call for a special counsel.

The House Intelligence Committee chairman, Rep. Mike Rogers, R-Mich., said his committee would formally investigate the leaks but that he was concerned about the level of cooperation he would get from two government agencies.

“Just today, the CIA informed the (committee) that it cannot respond to our request for information regarding the leaks, a very troubling event indeed,” Rogers said.

The CIA has come under fire for allegedly sharing with Hollywood filmmakers classified details of last year’s U.S. raid into Pakistan that killed Osama bin Laden.

A Justice Department official, who spoke on condition of anonymity to discuss sensitive information, said that some officials in the department’s national security division recused themselves from one of the leak probes but that the department overall was investigating.

There are at least three investigations ongoing into disclosures of classified information.

Before becoming U.S. attorney, Machen helped lead the white-collar and internal investigation practices at the prominent Washington law firm of WilmerHale. He served as an assistant U.S. attorney from 1997 to 2001.

Machen is leading a high-profile political corruption probe of officials in the District of Columbia. The latest development in that investigation came this week when District of Columbia Council chairman Kwame Brown resigned after being charged with lying about his income on bank loan applications and violating a city campaign law.

Brown pleaded guilty Friday.

Rosenstein was an associate independent counsel who worked for Whitewater prosecutor Ken Starr from 1995 to 1997. He was co-counsel in the fraud trial of Jim and Susan McDougal, the former real estate partners of Bill and Hillary Rodham Clinton. Both of the McDougals were convicted in a trial that also resulted in the conviction of then-Arkansas Gov. Jim Guy Tucker.

The chairman of the House Judiciary Committee, Rep. Lamar Smith, R-Texas, said he hopes that the Justice Department brings “the full force of the law against these criminals.”

“We need to send a clear message to anyone who considers leaking sensitive information and putting Americans at risk: If you leak classified information, you will face jail time,” Smith said in a statement.

The chairman of the Senate Judiciary Committee, Sen. Patrick Leahy, D-Vt., called Machen and Rosenstein “strong, capable, independent prosecutors” and said the Justice Department’s consultation with the Judiciary and Intelligence committees was an aid to congressional oversight.”

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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.