FROM: U.S. DEPARTMENT OF JUSTICE
Monday, March 25, 2013
Self-Proclaimed "President" of Sovereign Citizen Nation Convicted in Alabama of Federal Tax Crimes
A federal jury in Montgomery, Ala., found James Timothy Turner, also known as Tim Turner, guilty late Friday of conspiracy to defraud the United States, attempting to pay taxes with fictitious financial instruments, attempting to obstruct and impede the Internal Revenue Service (IRS), failing to file a 2009 federal income tax return and falsely testifying under oath in a bankruptcy proceeding, the Justice Department, the IRS and the FBI announced today.
Based on the evidence introduced at trial and court filings, Turner, the self-proclaimed "president" of the so-called sovereign citizen group "Republic for the United States of America" (RuSA), traveled the country in 2008 and 2009 conducting seminars teaching attendees how to defraud the IRS by preparing and submitting fictitious "bonds" to the United States government in payment of federal taxes. Although the evidence at trial revealed the bonds are fictitious and worthless, witnesses testified that Turner used special paper, financial terminology and elaborate borders in an effort to make them look "real" and more likely to succeed in defrauding the recipient. Turner was convicted of sending a $300 million "bond" in his own name and of aiding and abetting others in sending fifteen other "bonds" to the Treasury Department to pay taxes and other debts.
The evidence at trial also established that Turner taught people how to file retaliatory liens against government officials who interfered with the processing of fictitious "bonds." Turner filed a purported $17.6 billion maritime lien in Montgomery County, Ala., Probate Court against another individual. Finally, evidence presented at trial demonstrated that the FBI began an investigation after Turner and three other individuals sent demands to all 50 governors in the United States in March 2010 ordering each governor to resign within three days or be "removed."
"The jury’s verdict in this case sends a message that defrauding the government and others through the use of bogus financial documents will not be tolerated," said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. "Disagreement with the law is no excuse for the real harm caused by these self-interested tax defiers."
"These sovereign citizen groups use these retaliatory tax liens and fraudulent tax schemes as weapons against the United States and its citizens," stated Acting U.S. Attorney Sandra J. Stewart. "It is only the hard work of law enforcement that can stop these criminals from using these financial weapons. I would like to thank the law enforcement officers who worked vigilantly on this case to bring this criminal to justice."
"Those who create elaborate schemes and fraudulent tax elimination tactics run a high risk of prosecution," stated Richard Weber, Chief, IRS Criminal Investigation. "Mr. Turner’s attempts to thwart the IRS, as well as the assistance and training he provided to others, was not tax planning, it was criminal activity. IRS-Criminal Investigation is committed to vigorously pursuing those who promote illegal financial transactions designed to evade the payment of taxes. For those who would consider similar behavior, let this case be a strong warning that there is no secret formula for evading the payment of taxes and no one is above the law."
Turner remains in federal custody pending sentencing. Turner faces a potential maximum prison term of 164 years, a maximum potential fine of $2,350,000 and mandatory restitution.
"The prosecution of individuals who intentionally impede the IRS by submitting fictitious and frivolous documents, in an attempt to avoid paying federal taxes, is a vital element in maintaining public confidence in our tax system," stated Veronica Hyman-Pillot, Special Agent in Charge of IRS Criminal Investigation. "Hopefully the verdict will send a message to other individuals like Turner, that this conduct will not be tolerated."
"This joint investigation exemplifies the government’s commitment to investigate and prosecute those, who through tax schemes, attempt to cheat and steal from the government," stated Stephen Richardson, Special Agent in Charge of the FBI, Mobile Division.
This case was investigated by special agents of the FBI and IRS-Criminal Investigation, and is being prosecuted by Tax Division Trial Attorney Justin Gelfand and Middle District of Alabama Assistant U.S. Attorney Gray Borden.
Sunday, March 31, 2013
Friday, March 29, 2013
INMATE SENTENCED FOR FILING FALSE TAX RETURNS
FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, March 27, 2013
Inmate Sentenced for Filing False Tax Returns While in Alabama Federal Prison
David Marrero, a federal inmate in the custody of the Bureau of Prisons, was sentenced today to 46 months in prison for tax fraud committed while in prison, the Justice Department and the Internal Revenue Service (IRS) announced. Twenty-four months of the sentence imposed will run concurrent with Marrero’s current 10 year federal sentence, and 22 months will run consecutive to his 10 year sentence. Marrero had pleaded guilty in December 2012 to filing false claims.
According to court documents, while serving his federal sentence in Montgomery County, Ala., Marrero began sending various false documents to the IRS and to the federal judge who had presided over his case in Florida. Among the documents Marrero sent were fictitious money orders and false tax returns making claims for refunds, including one tax return claiming a $2,719,438 refund—the amount of restitution Marrero had been ordered to pay following his conviction in Florida. The fraudulent tax returns were based upon false IRS Forms 1099-OID on which Marrero had fraudulently claimed that various companies withheld a substantial amount of federal taxes from him when, in fact, the companies had withheld nothing. Marrero also used financial documents he had obtained from other people, without their knowledge or consent, as supporting documentation for his fraudulent claims.
Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally commended the efforts of special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason Poole and Justin Gelfand, who prosecuted the case.
Wednesday, March 27, 2013
Inmate Sentenced for Filing False Tax Returns While in Alabama Federal Prison
David Marrero, a federal inmate in the custody of the Bureau of Prisons, was sentenced today to 46 months in prison for tax fraud committed while in prison, the Justice Department and the Internal Revenue Service (IRS) announced. Twenty-four months of the sentence imposed will run concurrent with Marrero’s current 10 year federal sentence, and 22 months will run consecutive to his 10 year sentence. Marrero had pleaded guilty in December 2012 to filing false claims.
According to court documents, while serving his federal sentence in Montgomery County, Ala., Marrero began sending various false documents to the IRS and to the federal judge who had presided over his case in Florida. Among the documents Marrero sent were fictitious money orders and false tax returns making claims for refunds, including one tax return claiming a $2,719,438 refund—the amount of restitution Marrero had been ordered to pay following his conviction in Florida. The fraudulent tax returns were based upon false IRS Forms 1099-OID on which Marrero had fraudulently claimed that various companies withheld a substantial amount of federal taxes from him when, in fact, the companies had withheld nothing. Marrero also used financial documents he had obtained from other people, without their knowledge or consent, as supporting documentation for his fraudulent claims.
Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally commended the efforts of special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason Poole and Justin Gelfand, who prosecuted the case.
Thursday, March 28, 2013
MAN FACES PRISON FOR 2009 MASS SHOOTING
FROM: U.S. JUSTICE DEPARTMENT
Monday, March 25, 2013
Puerto Rico Man Faces Life in Prison for Mass Shooting in 2009
Alexis Candelario-Santana, 41, faces life in prison following his conviction of murdering eight people and an unborn child and attempting to murder 19 others during a mass shooting at a Puerto Rico pub in 2009, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney for the District of Puerto Rico Rosa Emilia Rodríguez-Vélez.
On March 8, 2013, Candelari-Santana was convicted of 28 counts of violent crime in aid of racketeering activity, one count of racketeering conspiracy, nine counts of using a firearm in relation to a crime of violence, one count of conspiracy to possess with intent to distribute a controlled substance and one count of possession of a firearm with a prior conviction. These offenses occurred on Oct. 17, 2009, in what became known as the "La Tombola Massacre."
The counts of conviction on capital murder charges necessitated a separate penalty phase of the trial. That phase began on Monday, March 15, 2003. On Saturday, March 23, 2013, the jury announced it was unable to reach a unanimous sentencing verdict. As a result, a sentence of life in prison will be imposed. There is no parole in the federal system.
According to the evidence presented at trial, from approximately 1993 through 2003, Candelario-Santana was the leader of the drug trafficking organization that operated principally in Sabana Seca, Toa Baja, Puerto Rico. The organization purchased its drugs in bulk, processed and packaged the drugs and sold them at Sabana Seca through numerous sellers, runners and enforcers under Candelario-Santana’s control. The organization sold crack, cocaine, heroin and marijuana, and members of the organization routinely possessed firearms in order to protect the drug points. In addition, the evidence introduced at trial established that, between 1995 and 2001, Mr. Candelario-Santana either personally killed, or ordered others to kill, 13 individuals whom he viewed as threats to his drug trafficking organization or as being disloyal members of his drug trafficking organization.
In approximately 2002, Candelario-Santana was arrested and charged in the Commonwealth of Puerto Rico with numerous murders. Sometime after Candelario-Santana’s arrest, co-defendant Carmelo Rondón-Feliciano took charge of the organization. Candelario-Santana ran the drug trafficking organization from prison until approximately 2006, when he was marginalized by co-conspirator Wilfredo Semprit-Santana and Rondón-Feliciano. According to evidence presented at trial, Candelario-Santana was infuriated at being removed from power within the drug trafficking organization.
On Sept. 25, 2006, Rondón-Feliciano was arrested and charged in the District of Puerto Rico with federal drug trafficking crimes. These charges stemmed, in part, from Rondón-Feliciano’s distribution of narcotics in Sabana Seca. After Rondón-Feliciano’s arrest, co-conspirator Semprit-Santana took charge of the organization.
In February 2009, Candelario-Santana was released from prison.
On Oct. 17, 2009, Semprit-Santana held the grand opening of a pub he rented called La Tómbola, located in Toa Baja, Puerto Rico. The event was heavily attended, with people congregating inside and outside the establishment. At approximately 11:50 p.m., Candelario-Santana, co-defendant David Oquendo-Rivas, and others, drove to La Tómbola. When they arrived, they immediately opened fire on the patrons located outside. Candelario-Santana and Oquendo-Rivas entered La Tómbola and opened fire on the people inside. Nine people and an 8-month unborn child were killed as a result of the gunfire, and 19 other victims were shot and injured. The individuals killed included Candelario-Santana’s godson, Rondón-Feliciano’s stepson and Candelario-Santana’s cousin. The evidence introduced at trial demonstrated that 335 expended shell-casings were recovered from the La Tombola crime scene. The ballistics evidence established that eight .9 mm semi-automatic pistols, three 40 caliber semi-automatic pistols, two 45 caliber semi-automatic pistols, three AK-47-type assault rifles and one AR-15-type assault rifle, were used at the La Tombola crime scene.
Candelario Santana will be formally sentenced on June 21, 2013.
The case was investigated by FBI and the Puerto Rico Police Department, with the collaboration of U.S. Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Postal Inspection Service; Instituto de Ciencias Forenses; and the Puerto Rico Department of Justice. The case is being prosecuted by First Assistant U.S. Attorney María Dominguez-Victoriano and Assistant U.S. Attorney Marcela Mateo of the U.S. Attorney’s Office for the District of Puerto Rico, and Trial Attorney Bruce R. Hegyi of the Criminal Division’s Capital Case Unit.
Monday, March 25, 2013
Puerto Rico Man Faces Life in Prison for Mass Shooting in 2009
Alexis Candelario-Santana, 41, faces life in prison following his conviction of murdering eight people and an unborn child and attempting to murder 19 others during a mass shooting at a Puerto Rico pub in 2009, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney for the District of Puerto Rico Rosa Emilia Rodríguez-Vélez.
On March 8, 2013, Candelari-Santana was convicted of 28 counts of violent crime in aid of racketeering activity, one count of racketeering conspiracy, nine counts of using a firearm in relation to a crime of violence, one count of conspiracy to possess with intent to distribute a controlled substance and one count of possession of a firearm with a prior conviction. These offenses occurred on Oct. 17, 2009, in what became known as the "La Tombola Massacre."
The counts of conviction on capital murder charges necessitated a separate penalty phase of the trial. That phase began on Monday, March 15, 2003. On Saturday, March 23, 2013, the jury announced it was unable to reach a unanimous sentencing verdict. As a result, a sentence of life in prison will be imposed. There is no parole in the federal system.
According to the evidence presented at trial, from approximately 1993 through 2003, Candelario-Santana was the leader of the drug trafficking organization that operated principally in Sabana Seca, Toa Baja, Puerto Rico. The organization purchased its drugs in bulk, processed and packaged the drugs and sold them at Sabana Seca through numerous sellers, runners and enforcers under Candelario-Santana’s control. The organization sold crack, cocaine, heroin and marijuana, and members of the organization routinely possessed firearms in order to protect the drug points. In addition, the evidence introduced at trial established that, between 1995 and 2001, Mr. Candelario-Santana either personally killed, or ordered others to kill, 13 individuals whom he viewed as threats to his drug trafficking organization or as being disloyal members of his drug trafficking organization.
In approximately 2002, Candelario-Santana was arrested and charged in the Commonwealth of Puerto Rico with numerous murders. Sometime after Candelario-Santana’s arrest, co-defendant Carmelo Rondón-Feliciano took charge of the organization. Candelario-Santana ran the drug trafficking organization from prison until approximately 2006, when he was marginalized by co-conspirator Wilfredo Semprit-Santana and Rondón-Feliciano. According to evidence presented at trial, Candelario-Santana was infuriated at being removed from power within the drug trafficking organization.
On Sept. 25, 2006, Rondón-Feliciano was arrested and charged in the District of Puerto Rico with federal drug trafficking crimes. These charges stemmed, in part, from Rondón-Feliciano’s distribution of narcotics in Sabana Seca. After Rondón-Feliciano’s arrest, co-conspirator Semprit-Santana took charge of the organization.
In February 2009, Candelario-Santana was released from prison.
On Oct. 17, 2009, Semprit-Santana held the grand opening of a pub he rented called La Tómbola, located in Toa Baja, Puerto Rico. The event was heavily attended, with people congregating inside and outside the establishment. At approximately 11:50 p.m., Candelario-Santana, co-defendant David Oquendo-Rivas, and others, drove to La Tómbola. When they arrived, they immediately opened fire on the patrons located outside. Candelario-Santana and Oquendo-Rivas entered La Tómbola and opened fire on the people inside. Nine people and an 8-month unborn child were killed as a result of the gunfire, and 19 other victims were shot and injured. The individuals killed included Candelario-Santana’s godson, Rondón-Feliciano’s stepson and Candelario-Santana’s cousin. The evidence introduced at trial demonstrated that 335 expended shell-casings were recovered from the La Tombola crime scene. The ballistics evidence established that eight .9 mm semi-automatic pistols, three 40 caliber semi-automatic pistols, two 45 caliber semi-automatic pistols, three AK-47-type assault rifles and one AR-15-type assault rifle, were used at the La Tombola crime scene.
Candelario Santana will be formally sentenced on June 21, 2013.
The case was investigated by FBI and the Puerto Rico Police Department, with the collaboration of U.S. Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Postal Inspection Service; Instituto de Ciencias Forenses; and the Puerto Rico Department of Justice. The case is being prosecuted by First Assistant U.S. Attorney María Dominguez-Victoriano and Assistant U.S. Attorney Marcela Mateo of the U.S. Attorney’s Office for the District of Puerto Rico, and Trial Attorney Bruce R. Hegyi of the Criminal Division’s Capital Case Unit.
Wednesday, March 27, 2013
FINANCIAL FRAUD TASK FORCE EXECUTIVE SPEAKS AT EXCHEQUER CLUB OF WASHINGTON, D.S.
FROM: U.S. DEPARTMENT OF JUSTICE
Financial Fraud Enforcement Task Force Executive Director Michael J. Bresnick at the Exchequer Club of Washington, D.C.
Washington, D.C. ~ Wednesday, March 20, 2013
Good afternoon. Thank you for that kind introduction, and thank you all for having me here today. I’d especially like to thank John Ryan, my friend and President and Chief Executive Officer of the Conference of State Bank Supervisors, for inviting me to speak.
As you heard, I am the Executive Director of President Barack Obama’s Financial Fraud Enforcement Task Force. It has been my great pleasure to lead this Task Force for the past year and a half, and to work closely with Attorney General Eric Holder, Deputy Attorney General James Cole, Acting Associate Attorney General Tony West, and so many others throughout government. The Task Force was created in 2009 with the understanding that no matter the office or agency -- federal, state, or local; law enforcement or regulatory -- all of us within government share a common desire and have a core obligation to do everything that we can to protect the American public from the often devastating effects of financial fraud, whether it be mortgage fraud or investment fraud, grant or procurement fraud, consumer fraud or fraud in lending. And we know that we can accomplish so much more by working together than by working in isolated, compartmentalized silos. Through the efforts of the Financial Fraud Enforcement Task Force, that’s exactly what we’ve done.
Today I’m going to start by telling you about some of our recent accomplishments -- which were only made possible by our working together -- and then move on to a few priorities we will be focusing on in the coming year.
Just recently Task Force members announced the filing of parallel civil complaints -- by the Department of Justice and more than ten states -- against the ratings agency Standard and Poor’s, shedding a powerful light on conduct that went to the heart of the recent financial crisis. The Department alleged that from at least 2004 to 2007, S&P lied about its objectivity and independence. The evidence revealed that S&P promised investors and the public that their ratings were based on data and analytical models reflecting the company’s true credit judgment. In fact, internal S&P documents made clear that the company regularly altered, or delayed altering, its ratings models to suit the company’s own business interests. We also alleged that from at least March 2007 to October 2007, S&P issued ratings for certain CDOs that it knew were inflated at the time it issued them. By working closely with the states, and coordinating our collective efforts, we have never been more strategic, or effective.
Moreover, in Fiscal Year 2012, the Department, in close partnership with the U.S. Department of Housing and Urban Development and its Office of Inspector General, sued for or settled claims with banks for losses related to the mortgage crisis totaling over $2 billion, including recovering nearly $500 million from settlements with Deutsche Bank AG, CitiMortgage and Flagstar Bank.
Through the Task Force’s Non-Discrimination Working Group, in coordination with our partners at the OCC, Federal Reserve, and many others, our enforcement of fair lending laws has never been more robust. Since 2010 the Civil Rights Division’s Fair Lending Unit has filed or resolved 24 lending matters under the Fair Housing Act, the Equal Credit Opportunity Act, and the Servicemembers Civil Relief Act. The resolutions in these matters provide for a minimum of $660 million in monetary relief for impacted communities and for more than 300,000 individual borrowers.
The Residential Mortgage-Backed Securities Working Group is actively investigating fraud in the securitization and sale of residential mortgage-backed securities -- conduct that contributed to the financial crisis. Already we have seen significant action from Working Group members, including complaints filed against Credit Suisse and J.P. Morgan by the New York Attorney General’s Office, with the Department of Justice having offered substantial assistance by interviewing witnesses, reviewing documents, and providing additional investigative support. And the Securities and Exchange Commission entered into settlements with both J.P. Morgan and Credit Suisse totaling more than $400 million. Many more investigations are ongoing.
Mortgage Fraud Working Group members are creating training sessions for federal and state prosecutors and civil attorneys, as well as arming distressed homeowners with the information they need to avoid becoming victims of fraud. And efforts by the Consumer Protection Working Group to protect servicemembers and their families from predators targeting them as vulnerable marks includes recently creating and disseminating enforcement tool-kits to state attorneys general, U.S. Attorneys’ Offices, and JAG legal assistance officers that provide an overview of common scams targeting members of the military, available federal and state laws to address these schemes, opportunities for support from federal and state partners, and sample legal materials.
As you can see, the Task Force, through its spirited and energetic members, is tackling financial fraud on many fronts, with a focus on enforcement, prevention, and victim assistance. And by working together, we are able to identify fraud trends occurring throughout the country, develop priorities and national fraud enforcement strategies, create and coordinate national initiatives, and establish training events and guidance for our nation’s criminal prosecutors and civil attorneys. It is an example of what we can accomplish when we eliminate unnecessary boundaries and work together towards a common goal.
While the Task Force has done, and continues to do, much in these and other areas, I’d now like to discuss a few additional issues that we have prioritized, among others.
First, Task Force members have been focused on the government’s ability to protect its interests and ensure that it does business only with ethical and responsible parties. According to a recent GAO report, in Fiscal Year 2010 government spending on contracted goods and services was more than $535 billion. Accordingly, we are encouraging greater cooperation with government agencies involved in the suspension and debarment process, actions taken to exclude businesses or individuals who are not behaving in an ethical and lawful manner from receiving contracts.
Second, the Non-Discrimination Working Group has placed an increased focus on enforcement of discrimination by auto lenders. Currently, the law does not require auto lenders to give consumers the best interest rate they qualify for, and does not prohibit lenders from basing compensation on the ability to charge higher interest rates. As we found in the mortgage context, however, this practice may violate the fair lending laws if it causes minorities to be charged more than similarly qualified white borrowers. The Department’s Civil Rights Division is working closely with Consumer Financial Protection Bureau on this issue.
And third, the Consumer Protection Working Group has prioritized the role of financial institutions in mass marketing fraud schemes -- including deceptive payday loans, false offers of debt relief, fraudulent health care discount cards, and phony government grants, among other things -- that cause billions of dollars in consumer losses and financially destroy some of our most vulnerable citizens. The Working Group also is investigating the businesses that process payments on behalf of the fraudulent merchants -- financial intermediaries referred to as third-party payment processors. It’s this third priority that I’d like to discuss in a little more detail.
The reason that we are focused on financial institutions and payment processors is because they are the so-called bottlenecks, or choke-points, in the fraud committed by so many merchants that victimize consumers and launder their illegal proceeds. For example, third-party payment processors are frequently the means by which fraudulent merchants are able to get paid. They provide the scammers with access to the national banking system and facilitate the movement of money from the victim of the fraud to the scam artist. And financial institutions through which these fraudulent proceeds flow, we have seen, are not always blind to the fraud. In fact, we have observed that some financial institutions actually have been complicit in these schemes, ignoring their BSA/AML obligations, and either know about -- or are willfully blind to -- the fraudulent proceeds flowing through their institutions.
Our prioritization of this issue is based on this principle: If we can eliminate the mass-marketing fraudsters’ access to the U.S. financial system -- that is, if we can stop the scammers from accessing consumers’ bank accounts -- then we can protect the consumers and starve the scammers. This will significantly reduce the frequency of and harm caused by this type of fraud. We hope to close the access to the banking system that mass marketing fraudsters enjoy -- effectively putting a chokehold on it -- and put a stop to this billion dollar problem that has harmed so many American consumers, including many of our senior citizens.
Sadly, what we’ve seen is that too many banks allow payment processors to continue to maintain accounts within their institutions, despite the presence of glaring red flags indicative of fraud, such as high return rates on the processors’ accounts. High return rates trigger a duty by the bank and the third-party payment processor to inquire into the reasons for the high rate of returns, in particular whether the merchant is engaged in fraud.
Nevertheless, we have actually seen instances where the return rates on processors’ accounts have exceeded 30%, 40%, 50%, and, even 85%. Just to put this in perspective, the industry average return rate for ACH transactions is less than 1.5%, and the industry average for all bank checks processed through the check clearing system is less than one-half of one percent. Return rates at the levels we have seen are more than red flags. They are ambulance sirens, screaming out for attention.
A perfect example of the type of activity I’m talking about is the recent complaint against the First Bank of Delaware filed by the Department in the Eastern District of Pennsylvania, in Philadelphia. There, investigators found that in just an eleven-month period from 2010 to 2011, the First Bank of Delaware permitted four payment processors to process more than $123 million in transactions. Amazingly, more than half of the withdrawal transactions that the bank originated during this time were rejected, either because the consumer complained that the transaction was unauthorized, there were insufficient funds to complete the transaction, or the account was closed, each of which may indicate potential fraud and trigger the need for further inquiry. But the bank did nothing. Nothing, but continue to collect its fees per transaction, while consumers continued to get gouged by unscrupulous scam artists. Ultimately, the government alleged that the bank was engaged in a scheme to defraud under the Financial Institutions Reform, Recovery, and Enforcement Act and the bank agreed to pay a civil money penalty before surrendering its charter and closing its doors.
Underscoring the importance of this case, in the press release announcing a parallel action with the Financial Crimes Enforcement Network, the Acting Chairman of the FDIC, Martin Gruenberg, said, "Effective Bank Secrecy Act and anti-money laundering programs that are commensurate with the risk profile of the institution are vital to protecting our financial system." He added that "[t]he significant penalty assessed in this case emphasizes the importance of having strong internal controls to assure compliance with anti-money laundering regulations and to detect and report potential money laundering or other illicit financial activities."
So, the First Bank of Delaware is a model of irresponsible behavior by a bank.
Of course, this conduct is completely unacceptable. And it is receiving significant attention from the Department of Justice. In fact, right now within the Civil Division there are attorneys and investigators who are investigating similar unlawful conduct, and they will not hesitate to act when they see evidence of wrongdoing. Our message to banks is this: Maintaining robust BSA/AML policies and procedures is not merely optional or a polite suggestion. It is absolutely necessary, and required by law. Failure to do so can result in significant civil, or even criminal, penalties under the Bank Secrecy Act, FIRREA, and other statutes.
Consequently, banks should endeavor not only to know their customers, but also to know their customers’ customers. Before they agree to do business with a third-party payment processor, banks should strive to learn more about the processors’ merchant-clients, including the names of the principals, the location of the business, and the products being sold, among other things. If they are going to allow their institutions to be used by others as a gateway to access the bank accounts of our nation’s consumers, banks need to know for whom they are processing payments. Because if they don’t, they might be allowing some unscrupulous scam artist to be taking the last dollars of a senior citizen who fell prey to another fraud scheme, and hundreds of millions of dollars of additional proceeds of fraud to flow through their institutions. And in that case, they might later find themselves in the unfortunate position of the First Bank of Delaware.
In addition, as part of our focus on the role of financial institutions and third-party payment processors in mass-marketing fraud schemes, we naturally also are examining banks’ relationship with the payday lending industry, known widely as a subprime and high-risk business. We are aware, for instance, that some payday lending businesses operating on the Internet have been making loans to consumers in violation of the state laws where the borrowers reside. And, as discussed earlier, these payday lending companies are able to take the consumers’ money primarily because banks are originating debit transactions against consumers’ bank accounts. This practice raises some questions.
As you know, the Bank Secrecy Act demands that banks have effective compliance programs to prevent illegal use of the banking system by the banks’ clients. Bank regulatory guidance exhorts banks to collect information sufficient to determine whether a client poses a threat of criminal or other unlawful conduct.
Banks, therefore, should consider whether originating debit transactions on behalf of Internet payday lenders -- particularly where the loans may violate state laws -- is consistent with their BSA obligations.
Understandably, it may not be so simple a task for a bank to determine whether the loans being processed through it are in violation of the state law where the borrower resides. The ACH routing information, for example, may not indicate to the bank in which state the consumer lives, and variations in state laws could preclude blanket conclusions. Yet, at a minimum, banks might consider determining the states where the payday lender makes loans, as well as what types of loans it offers, the APR of the loans, and whether it make loans to consumers in violation of state, as well as federal, laws. By asking these questions, a bank may become aware of certain red flags, inviting further scrutiny and further action. The bury-your-head-in-the-sand approach, to the contrary, is certain to result in no action, even where some might be warranted, and is fraught with danger to consumers.
It comes down to this: When a bank allows its customers, and even its customers’ customers, access to the national banking system, it should endeavor to understand the true nature of the business that it will allow to access the payment system, and the risks posed to consumers and society regarding criminal or other unlawful conduct.
As I said at the outset, we in government share a unity of purpose and a common resolve to tackle the most pressing financial fraud issues of our time, and know that we must work together if we are to be successful in protecting the American public from harm. We are committed to doing so, and are approaching these issues in a smart, systematic, and coordinated way.
It has been a pleasure to address this distinguished group today. I thank you, again, for the opportunity, and now look forward to addressing any questions you may have.
Financial Fraud Enforcement Task Force Executive Director Michael J. Bresnick at the Exchequer Club of Washington, D.C.
Washington, D.C. ~ Wednesday, March 20, 2013
Good afternoon. Thank you for that kind introduction, and thank you all for having me here today. I’d especially like to thank John Ryan, my friend and President and Chief Executive Officer of the Conference of State Bank Supervisors, for inviting me to speak.
As you heard, I am the Executive Director of President Barack Obama’s Financial Fraud Enforcement Task Force. It has been my great pleasure to lead this Task Force for the past year and a half, and to work closely with Attorney General Eric Holder, Deputy Attorney General James Cole, Acting Associate Attorney General Tony West, and so many others throughout government. The Task Force was created in 2009 with the understanding that no matter the office or agency -- federal, state, or local; law enforcement or regulatory -- all of us within government share a common desire and have a core obligation to do everything that we can to protect the American public from the often devastating effects of financial fraud, whether it be mortgage fraud or investment fraud, grant or procurement fraud, consumer fraud or fraud in lending. And we know that we can accomplish so much more by working together than by working in isolated, compartmentalized silos. Through the efforts of the Financial Fraud Enforcement Task Force, that’s exactly what we’ve done.
Today I’m going to start by telling you about some of our recent accomplishments -- which were only made possible by our working together -- and then move on to a few priorities we will be focusing on in the coming year.
Just recently Task Force members announced the filing of parallel civil complaints -- by the Department of Justice and more than ten states -- against the ratings agency Standard and Poor’s, shedding a powerful light on conduct that went to the heart of the recent financial crisis. The Department alleged that from at least 2004 to 2007, S&P lied about its objectivity and independence. The evidence revealed that S&P promised investors and the public that their ratings were based on data and analytical models reflecting the company’s true credit judgment. In fact, internal S&P documents made clear that the company regularly altered, or delayed altering, its ratings models to suit the company’s own business interests. We also alleged that from at least March 2007 to October 2007, S&P issued ratings for certain CDOs that it knew were inflated at the time it issued them. By working closely with the states, and coordinating our collective efforts, we have never been more strategic, or effective.
Moreover, in Fiscal Year 2012, the Department, in close partnership with the U.S. Department of Housing and Urban Development and its Office of Inspector General, sued for or settled claims with banks for losses related to the mortgage crisis totaling over $2 billion, including recovering nearly $500 million from settlements with Deutsche Bank AG, CitiMortgage and Flagstar Bank.
Through the Task Force’s Non-Discrimination Working Group, in coordination with our partners at the OCC, Federal Reserve, and many others, our enforcement of fair lending laws has never been more robust. Since 2010 the Civil Rights Division’s Fair Lending Unit has filed or resolved 24 lending matters under the Fair Housing Act, the Equal Credit Opportunity Act, and the Servicemembers Civil Relief Act. The resolutions in these matters provide for a minimum of $660 million in monetary relief for impacted communities and for more than 300,000 individual borrowers.
The Residential Mortgage-Backed Securities Working Group is actively investigating fraud in the securitization and sale of residential mortgage-backed securities -- conduct that contributed to the financial crisis. Already we have seen significant action from Working Group members, including complaints filed against Credit Suisse and J.P. Morgan by the New York Attorney General’s Office, with the Department of Justice having offered substantial assistance by interviewing witnesses, reviewing documents, and providing additional investigative support. And the Securities and Exchange Commission entered into settlements with both J.P. Morgan and Credit Suisse totaling more than $400 million. Many more investigations are ongoing.
Mortgage Fraud Working Group members are creating training sessions for federal and state prosecutors and civil attorneys, as well as arming distressed homeowners with the information they need to avoid becoming victims of fraud. And efforts by the Consumer Protection Working Group to protect servicemembers and their families from predators targeting them as vulnerable marks includes recently creating and disseminating enforcement tool-kits to state attorneys general, U.S. Attorneys’ Offices, and JAG legal assistance officers that provide an overview of common scams targeting members of the military, available federal and state laws to address these schemes, opportunities for support from federal and state partners, and sample legal materials.
As you can see, the Task Force, through its spirited and energetic members, is tackling financial fraud on many fronts, with a focus on enforcement, prevention, and victim assistance. And by working together, we are able to identify fraud trends occurring throughout the country, develop priorities and national fraud enforcement strategies, create and coordinate national initiatives, and establish training events and guidance for our nation’s criminal prosecutors and civil attorneys. It is an example of what we can accomplish when we eliminate unnecessary boundaries and work together towards a common goal.
While the Task Force has done, and continues to do, much in these and other areas, I’d now like to discuss a few additional issues that we have prioritized, among others.
First, Task Force members have been focused on the government’s ability to protect its interests and ensure that it does business only with ethical and responsible parties. According to a recent GAO report, in Fiscal Year 2010 government spending on contracted goods and services was more than $535 billion. Accordingly, we are encouraging greater cooperation with government agencies involved in the suspension and debarment process, actions taken to exclude businesses or individuals who are not behaving in an ethical and lawful manner from receiving contracts.
Second, the Non-Discrimination Working Group has placed an increased focus on enforcement of discrimination by auto lenders. Currently, the law does not require auto lenders to give consumers the best interest rate they qualify for, and does not prohibit lenders from basing compensation on the ability to charge higher interest rates. As we found in the mortgage context, however, this practice may violate the fair lending laws if it causes minorities to be charged more than similarly qualified white borrowers. The Department’s Civil Rights Division is working closely with Consumer Financial Protection Bureau on this issue.
And third, the Consumer Protection Working Group has prioritized the role of financial institutions in mass marketing fraud schemes -- including deceptive payday loans, false offers of debt relief, fraudulent health care discount cards, and phony government grants, among other things -- that cause billions of dollars in consumer losses and financially destroy some of our most vulnerable citizens. The Working Group also is investigating the businesses that process payments on behalf of the fraudulent merchants -- financial intermediaries referred to as third-party payment processors. It’s this third priority that I’d like to discuss in a little more detail.
The reason that we are focused on financial institutions and payment processors is because they are the so-called bottlenecks, or choke-points, in the fraud committed by so many merchants that victimize consumers and launder their illegal proceeds. For example, third-party payment processors are frequently the means by which fraudulent merchants are able to get paid. They provide the scammers with access to the national banking system and facilitate the movement of money from the victim of the fraud to the scam artist. And financial institutions through which these fraudulent proceeds flow, we have seen, are not always blind to the fraud. In fact, we have observed that some financial institutions actually have been complicit in these schemes, ignoring their BSA/AML obligations, and either know about -- or are willfully blind to -- the fraudulent proceeds flowing through their institutions.
Our prioritization of this issue is based on this principle: If we can eliminate the mass-marketing fraudsters’ access to the U.S. financial system -- that is, if we can stop the scammers from accessing consumers’ bank accounts -- then we can protect the consumers and starve the scammers. This will significantly reduce the frequency of and harm caused by this type of fraud. We hope to close the access to the banking system that mass marketing fraudsters enjoy -- effectively putting a chokehold on it -- and put a stop to this billion dollar problem that has harmed so many American consumers, including many of our senior citizens.
Sadly, what we’ve seen is that too many banks allow payment processors to continue to maintain accounts within their institutions, despite the presence of glaring red flags indicative of fraud, such as high return rates on the processors’ accounts. High return rates trigger a duty by the bank and the third-party payment processor to inquire into the reasons for the high rate of returns, in particular whether the merchant is engaged in fraud.
Nevertheless, we have actually seen instances where the return rates on processors’ accounts have exceeded 30%, 40%, 50%, and, even 85%. Just to put this in perspective, the industry average return rate for ACH transactions is less than 1.5%, and the industry average for all bank checks processed through the check clearing system is less than one-half of one percent. Return rates at the levels we have seen are more than red flags. They are ambulance sirens, screaming out for attention.
A perfect example of the type of activity I’m talking about is the recent complaint against the First Bank of Delaware filed by the Department in the Eastern District of Pennsylvania, in Philadelphia. There, investigators found that in just an eleven-month period from 2010 to 2011, the First Bank of Delaware permitted four payment processors to process more than $123 million in transactions. Amazingly, more than half of the withdrawal transactions that the bank originated during this time were rejected, either because the consumer complained that the transaction was unauthorized, there were insufficient funds to complete the transaction, or the account was closed, each of which may indicate potential fraud and trigger the need for further inquiry. But the bank did nothing. Nothing, but continue to collect its fees per transaction, while consumers continued to get gouged by unscrupulous scam artists. Ultimately, the government alleged that the bank was engaged in a scheme to defraud under the Financial Institutions Reform, Recovery, and Enforcement Act and the bank agreed to pay a civil money penalty before surrendering its charter and closing its doors.
Underscoring the importance of this case, in the press release announcing a parallel action with the Financial Crimes Enforcement Network, the Acting Chairman of the FDIC, Martin Gruenberg, said, "Effective Bank Secrecy Act and anti-money laundering programs that are commensurate with the risk profile of the institution are vital to protecting our financial system." He added that "[t]he significant penalty assessed in this case emphasizes the importance of having strong internal controls to assure compliance with anti-money laundering regulations and to detect and report potential money laundering or other illicit financial activities."
So, the First Bank of Delaware is a model of irresponsible behavior by a bank.
Of course, this conduct is completely unacceptable. And it is receiving significant attention from the Department of Justice. In fact, right now within the Civil Division there are attorneys and investigators who are investigating similar unlawful conduct, and they will not hesitate to act when they see evidence of wrongdoing. Our message to banks is this: Maintaining robust BSA/AML policies and procedures is not merely optional or a polite suggestion. It is absolutely necessary, and required by law. Failure to do so can result in significant civil, or even criminal, penalties under the Bank Secrecy Act, FIRREA, and other statutes.
Consequently, banks should endeavor not only to know their customers, but also to know their customers’ customers. Before they agree to do business with a third-party payment processor, banks should strive to learn more about the processors’ merchant-clients, including the names of the principals, the location of the business, and the products being sold, among other things. If they are going to allow their institutions to be used by others as a gateway to access the bank accounts of our nation’s consumers, banks need to know for whom they are processing payments. Because if they don’t, they might be allowing some unscrupulous scam artist to be taking the last dollars of a senior citizen who fell prey to another fraud scheme, and hundreds of millions of dollars of additional proceeds of fraud to flow through their institutions. And in that case, they might later find themselves in the unfortunate position of the First Bank of Delaware.
In addition, as part of our focus on the role of financial institutions and third-party payment processors in mass-marketing fraud schemes, we naturally also are examining banks’ relationship with the payday lending industry, known widely as a subprime and high-risk business. We are aware, for instance, that some payday lending businesses operating on the Internet have been making loans to consumers in violation of the state laws where the borrowers reside. And, as discussed earlier, these payday lending companies are able to take the consumers’ money primarily because banks are originating debit transactions against consumers’ bank accounts. This practice raises some questions.
As you know, the Bank Secrecy Act demands that banks have effective compliance programs to prevent illegal use of the banking system by the banks’ clients. Bank regulatory guidance exhorts banks to collect information sufficient to determine whether a client poses a threat of criminal or other unlawful conduct.
Banks, therefore, should consider whether originating debit transactions on behalf of Internet payday lenders -- particularly where the loans may violate state laws -- is consistent with their BSA obligations.
Understandably, it may not be so simple a task for a bank to determine whether the loans being processed through it are in violation of the state law where the borrower resides. The ACH routing information, for example, may not indicate to the bank in which state the consumer lives, and variations in state laws could preclude blanket conclusions. Yet, at a minimum, banks might consider determining the states where the payday lender makes loans, as well as what types of loans it offers, the APR of the loans, and whether it make loans to consumers in violation of state, as well as federal, laws. By asking these questions, a bank may become aware of certain red flags, inviting further scrutiny and further action. The bury-your-head-in-the-sand approach, to the contrary, is certain to result in no action, even where some might be warranted, and is fraught with danger to consumers.
It comes down to this: When a bank allows its customers, and even its customers’ customers, access to the national banking system, it should endeavor to understand the true nature of the business that it will allow to access the payment system, and the risks posed to consumers and society regarding criminal or other unlawful conduct.
As I said at the outset, we in government share a unity of purpose and a common resolve to tackle the most pressing financial fraud issues of our time, and know that we must work together if we are to be successful in protecting the American public from harm. We are committed to doing so, and are approaching these issues in a smart, systematic, and coordinated way.
It has been a pleasure to address this distinguished group today. I thank you, again, for the opportunity, and now look forward to addressing any questions you may have.
Monday, March 25, 2013
MOST WANTED SUSPECTED KILLER ARRESTED IN ITALY
FROM: U.S. MARSHALS SERVICE
U.S. Marshals 'Most Wanted', Suspected Killer, Arrested in Italy
Washington – A suspected wife killer who had been added to the U.S. Marshals 15 Most Wanted fugitive list in June 2011 was arrested today in Bologna, Italy, by Italian authorities based on information provided by the Marshals Service investigators. Miguel Torres, 42, had been charged with 1st degree murder in Reading, Pa., following the September 2005 execution-style murder of his estranged wife Barbara.
Torres’ wife had received a protective order against her husband after she moved out of their home. Torres was served a restraining order Sept. 9, 2005. Four days later, he allegedly used a spare key to enter his wife’s vehicle, hiding in the backseat until she left work that day.
When his wife approached her vehicle, she spotted Torres and attempted to flee. He exited the vehicle and allegedly shot her in the back near a county building, walking up to her and shooting her in the head.
Torres fled the scene in his wife’s vehicle, later found at a nearby parking garage. He allegedly switched to a rented van, recovered a year later at LaGuardia Airport.
Investigators from the U.S. Marshals Service recently developed information with the assistance of the Diplomatic Security Service and Italian authorities that Torres was using the alias Rene Rondon and residing in Italy. The arrest occurred at his residence there.
The defendant is presumed innocent until proven guilty in a court of law.
U.S. Marshals 'Most Wanted', Suspected Killer, Arrested in Italy
Washington – A suspected wife killer who had been added to the U.S. Marshals 15 Most Wanted fugitive list in June 2011 was arrested today in Bologna, Italy, by Italian authorities based on information provided by the Marshals Service investigators. Miguel Torres, 42, had been charged with 1st degree murder in Reading, Pa., following the September 2005 execution-style murder of his estranged wife Barbara.
Torres’ wife had received a protective order against her husband after she moved out of their home. Torres was served a restraining order Sept. 9, 2005. Four days later, he allegedly used a spare key to enter his wife’s vehicle, hiding in the backseat until she left work that day.
When his wife approached her vehicle, she spotted Torres and attempted to flee. He exited the vehicle and allegedly shot her in the back near a county building, walking up to her and shooting her in the head.
Torres fled the scene in his wife’s vehicle, later found at a nearby parking garage. He allegedly switched to a rented van, recovered a year later at LaGuardia Airport.
Investigators from the U.S. Marshals Service recently developed information with the assistance of the Diplomatic Security Service and Italian authorities that Torres was using the alias Rene Rondon and residing in Italy. The arrest occurred at his residence there.
The defendant is presumed innocent until proven guilty in a court of law.
Sunday, March 24, 2013
FOUR MEMBERS OF THE POLICE OF PUERTO RICO INDICTED
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, March 22, 2013
Four Police of Puerto Rico Officers Indicted on Federal Civil Rights, Obstruction of Justice and Perjury Charges
A superseding indictment against four Police of Puerto Rico (POPR) officers was announced today by Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division; Rosa Emilia Rodriguez-Velez, U.S. Attorney for the District of Puerto Rico; and Carlos Cases, Special Agent in Charge of the FBI San Juan Field Office.
POPR Lieutenant Erick Rivera Nazario and Officer David Colon Martinez were indicted on civil rights charges alleging that they violated the constitutional rights of Jose Irizarry Perez while he was celebrating the local election results at the Las Colinas housing development in Yauco, Puerto Rico, on Nov. 5, 2008. Rivera was also charged with violating the civil rights of Irizarry Perez’s father, Jose Irizarry Muniz. In addition, Rivera, Colon, Officer Miguel Negron Vazquez and Sergeant Antonio Rodriguez Caraballo were indicted for obstruction of justice and making false statements to the FBI and a federal grand jury.
According to the 18 count superseding indictment, while Colon held and restrained Irizarry Perez, Rivera and another POPR officer assaulted Irizarry Perez with their hands and a police baton, which resulted in bodily injury to Irizarry Perez. The superseding indictment alleges that Irizarry Perez was thereby deprived of his right to be free from unreasonable seizures by those acting under color of law. Although Irizarry Perez died as a result of injuries he sustained on Nov. 5, 2008, the superseding indictment does not include charges that his death resulted from the defendants’ conduct. Rivera, who was a supervisor at the time of the incident, was also charged with failing to intervene and failing to keep Irizarry Perez and his father from harm when an officer whom Rivera supervised assaulted the victims in Rivera’s presence.
In addition, the superseding indictment alleges that all four of the charged officers made false statements concerning the incident to the FBI and to the federal grand jury which had been investigating the incident. Colon and Negron were also charged with obstruction of justice for submitting false police reports and for providing misleading information to the Puerto Rico prosecutor that initially investigated the matter. Rivera was additionally charged with obstruction of justice for submitting a false police report, and Rodriguez was charged with obstruction of justice for providing misleading information to the Puerto Rico prosecutor.
If convicted, Rivera faces a maximum penalty of 10 years in prison for each of three charged counts of civil rights violations; a maximum of 20 years in prison for one charged count of obstruction of justice by submitting a false police report; and a maximum penalty of five years in prison for one charged count of making a false statement to the FBI and one charged count of making a false declaration to the grand jury.
If convicted, Colon faces a maximum penalty of 10 years in prison for one charged count of a civil rights violation; a maximum of 20 years in prison for one charged count of obstruction of justice by submitting a false police report and two charged counts of providing misleading information to the local prosecutor; and a maximum penalty of five years in prison for one charged count of making a false statement to the FBI and one charged count of making a false declaration to the grand jury.
If convicted, Negron faces a maximum penalty of 20 years in prison for one charged count of obstruction of justice by submitting a false police report and one charged count of providing misleading information to the local prosecutor; and a maximum penalty of five years in prison for one charged count of making a false statement to the FBI and one charged count of making a false declaration to the grand jury.
If convicted, Rodriguez faces a maximum penalty of 20 years in prison for one charged count of obstruction of justice by providing misleading information to the local prosecutor; and a maximum penalty of five years in prison for one charged count of making a false statement to the FBI and one charged count of making a false declaration to the grand jury.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
This case is being investigated by the San Juan Division of the FBI and is being prosecuted by Assistant U.S. Attorney Jose A. Contreras from the U.S. Attorney’s Office for the District of Puerto Rico and Senior Litigation Counsel Gerard Hogan and Trial Attorney Shan Patel from the Civil Rights Division of the U.S. Department of Justice.
Friday, March 22, 2013
Four Police of Puerto Rico Officers Indicted on Federal Civil Rights, Obstruction of Justice and Perjury Charges
A superseding indictment against four Police of Puerto Rico (POPR) officers was announced today by Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division; Rosa Emilia Rodriguez-Velez, U.S. Attorney for the District of Puerto Rico; and Carlos Cases, Special Agent in Charge of the FBI San Juan Field Office.
POPR Lieutenant Erick Rivera Nazario and Officer David Colon Martinez were indicted on civil rights charges alleging that they violated the constitutional rights of Jose Irizarry Perez while he was celebrating the local election results at the Las Colinas housing development in Yauco, Puerto Rico, on Nov. 5, 2008. Rivera was also charged with violating the civil rights of Irizarry Perez’s father, Jose Irizarry Muniz. In addition, Rivera, Colon, Officer Miguel Negron Vazquez and Sergeant Antonio Rodriguez Caraballo were indicted for obstruction of justice and making false statements to the FBI and a federal grand jury.
According to the 18 count superseding indictment, while Colon held and restrained Irizarry Perez, Rivera and another POPR officer assaulted Irizarry Perez with their hands and a police baton, which resulted in bodily injury to Irizarry Perez. The superseding indictment alleges that Irizarry Perez was thereby deprived of his right to be free from unreasonable seizures by those acting under color of law. Although Irizarry Perez died as a result of injuries he sustained on Nov. 5, 2008, the superseding indictment does not include charges that his death resulted from the defendants’ conduct. Rivera, who was a supervisor at the time of the incident, was also charged with failing to intervene and failing to keep Irizarry Perez and his father from harm when an officer whom Rivera supervised assaulted the victims in Rivera’s presence.
In addition, the superseding indictment alleges that all four of the charged officers made false statements concerning the incident to the FBI and to the federal grand jury which had been investigating the incident. Colon and Negron were also charged with obstruction of justice for submitting false police reports and for providing misleading information to the Puerto Rico prosecutor that initially investigated the matter. Rivera was additionally charged with obstruction of justice for submitting a false police report, and Rodriguez was charged with obstruction of justice for providing misleading information to the Puerto Rico prosecutor.
If convicted, Rivera faces a maximum penalty of 10 years in prison for each of three charged counts of civil rights violations; a maximum of 20 years in prison for one charged count of obstruction of justice by submitting a false police report; and a maximum penalty of five years in prison for one charged count of making a false statement to the FBI and one charged count of making a false declaration to the grand jury.
If convicted, Colon faces a maximum penalty of 10 years in prison for one charged count of a civil rights violation; a maximum of 20 years in prison for one charged count of obstruction of justice by submitting a false police report and two charged counts of providing misleading information to the local prosecutor; and a maximum penalty of five years in prison for one charged count of making a false statement to the FBI and one charged count of making a false declaration to the grand jury.
If convicted, Negron faces a maximum penalty of 20 years in prison for one charged count of obstruction of justice by submitting a false police report and one charged count of providing misleading information to the local prosecutor; and a maximum penalty of five years in prison for one charged count of making a false statement to the FBI and one charged count of making a false declaration to the grand jury.
If convicted, Rodriguez faces a maximum penalty of 20 years in prison for one charged count of obstruction of justice by providing misleading information to the local prosecutor; and a maximum penalty of five years in prison for one charged count of making a false statement to the FBI and one charged count of making a false declaration to the grand jury.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
This case is being investigated by the San Juan Division of the FBI and is being prosecuted by Assistant U.S. Attorney Jose A. Contreras from the U.S. Attorney’s Office for the District of Puerto Rico and Senior Litigation Counsel Gerard Hogan and Trial Attorney Shan Patel from the Civil Rights Division of the U.S. Department of Justice.
Saturday, March 23, 2013
TERRORIST DESIGNATIONS
FROM: U.S. DEPARTMENT OF STATE
Terrorist Designations of Ansar al-Dine
Media Note
Office of the Spokesperson
Washington, DC
March 21, 2013
The Department of State has designated Ansar al-Dine (AAD) as a Foreign Terrorist Organization (FTO) under Section 219 of the Immigration and Nationality Act and as a Specially Designated Global Terrorist entity under Executive Order (E.O.) 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. As a result of the designation, U.S. persons are prohibited from knowingly providing material support or resources to AAD, and all property subject to U.S. jurisdiction in which AAD has any interest is blocked and U.S. persons are generally prohibited from engaging in transactions with the organization or to its benefit.
AAD has also been listed by the United Nations 1267/1989 al-Qa’ida Sanctions Committee. The UN listing requires all member states to implement an assets freeze, a travel ban, and an arms embargo against AAD. The UN action demonstrates international resolve to eliminate AAD’s violent activities in Mali and the surrounding region.
Ansar al-Dine is an organization operating in Mali which cooperates closely with al-Qa’ida in the Islamic Maghreb (AQIM), a designated Foreign Terrorist Organization. AAD was created in late 2011 after AAD’s leader, Iyad ag Ghali, failed in an attempt to take over a secular Tuareg organization due to his extremist views. Ghali was designated by the Department of State under E.O. 13224 on February 26, 2013.
AAD has received support from AQIM since its inception in late 2011, and continues to maintain close ties to the group. AAD has received backing from AQIM in its fight against Malian and French forces, most notably in the capture of the Malian towns of Agulhok, Tessalit, Kidal, Gao, and Timbuktu, between January and April 2012. In AAD’s March 2012 attack against the town of Aguelhok, the group executed 82 Malian soldiers and kidnapped 30 more. Before the French intervention in January 2013, Malian citizens in towns under AAD’s control who did not comply with AAD’s laws faced harassment, torture, or execution.
Terrorist Designations of Ansar al-Dine
Media Note
Office of the Spokesperson
Washington, DC
March 21, 2013
The Department of State has designated Ansar al-Dine (AAD) as a Foreign Terrorist Organization (FTO) under Section 219 of the Immigration and Nationality Act and as a Specially Designated Global Terrorist entity under Executive Order (E.O.) 13224, which targets terrorists and those providing support to terrorists or acts of terrorism. As a result of the designation, U.S. persons are prohibited from knowingly providing material support or resources to AAD, and all property subject to U.S. jurisdiction in which AAD has any interest is blocked and U.S. persons are generally prohibited from engaging in transactions with the organization or to its benefit.
AAD has also been listed by the United Nations 1267/1989 al-Qa’ida Sanctions Committee. The UN listing requires all member states to implement an assets freeze, a travel ban, and an arms embargo against AAD. The UN action demonstrates international resolve to eliminate AAD’s violent activities in Mali and the surrounding region.
Ansar al-Dine is an organization operating in Mali which cooperates closely with al-Qa’ida in the Islamic Maghreb (AQIM), a designated Foreign Terrorist Organization. AAD was created in late 2011 after AAD’s leader, Iyad ag Ghali, failed in an attempt to take over a secular Tuareg organization due to his extremist views. Ghali was designated by the Department of State under E.O. 13224 on February 26, 2013.
AAD has received support from AQIM since its inception in late 2011, and continues to maintain close ties to the group. AAD has received backing from AQIM in its fight against Malian and French forces, most notably in the capture of the Malian towns of Agulhok, Tessalit, Kidal, Gao, and Timbuktu, between January and April 2012. In AAD’s March 2012 attack against the town of Aguelhok, the group executed 82 Malian soldiers and kidnapped 30 more. Before the French intervention in January 2013, Malian citizens in towns under AAD’s control who did not comply with AAD’s laws faced harassment, torture, or execution.
Friday, March 22, 2013
TWO HUMAN SMUGGLERS SENTENCED IN MIAMI TO PRISON
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, March 21, 2013
Brazilian Husband and Wife Sentenced in Florida for Alien Smuggling
Brazilian nationals Juliana Rose Tome-Froes and her husband, Fabio Rodrigues Froes, were sentenced today in Miami to 60 months and 46 months in prison, respectively, for smuggling undocumented migrants to the United States for profit, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.
Tome-Froes, 36, and Froes, 49, were sentenced by U.S. District Court Judge Federico A. Moreno in the Southern District of Florida. In addition to the prison sentences, Judge Moreno ordered each defendant to forfeit $150,000 in illegal proceeds and ordered the removal of both defendants to Brazil after the completion of their sentences.
On Jan. 16, 2013, Tome-Froes and Froes pleaded guilty to charges arising from their involvement in human smuggling. According to court documents, from at least October 2008 until approximately September 2010, the defendants organized, operated and managed a human smuggling network that spanned from Brazil to France, England, The Bahamas and the United States. The defendants met with undocumented migrants and negotiated forms of payment to be smuggled into the United States. Before the undocumented migrants departed Brazil, the defendants instructed them to act like tourists and explained that the itinerary through Europe would support a tourist cover story. In exchange for approximately $16,000, Tome-Froes, with assistance from Froes, arranged air transportation from Brazil to Paris, then London and Nassau, Bahamas. Tome-Froes arranged the undocumented migrants’ lodging in Paris and Nassau, and then instructed them to fly to Freeport, Bahamas, where they waited for a boat to transport them to the United States. For the final leg into the United States, Tome-Froes coordinated with various individuals in South Florida to pilot a small boat to Freeport, which picked up the undocumented migrants and transported them to the United States. According to court documents, the defendants knew the undocumented migrants did not have authorization to enter the United States.
The case was prosecuted by Trial Attorney Jay Bauer of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Marton Gyires of the Southern District of Florida. The investigation was conducted by ICE Homeland Security Investigations in Miami.
Thursday, March 21, 2013
Brazilian Husband and Wife Sentenced in Florida for Alien Smuggling
Brazilian nationals Juliana Rose Tome-Froes and her husband, Fabio Rodrigues Froes, were sentenced today in Miami to 60 months and 46 months in prison, respectively, for smuggling undocumented migrants to the United States for profit, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.
Tome-Froes, 36, and Froes, 49, were sentenced by U.S. District Court Judge Federico A. Moreno in the Southern District of Florida. In addition to the prison sentences, Judge Moreno ordered each defendant to forfeit $150,000 in illegal proceeds and ordered the removal of both defendants to Brazil after the completion of their sentences.
On Jan. 16, 2013, Tome-Froes and Froes pleaded guilty to charges arising from their involvement in human smuggling. According to court documents, from at least October 2008 until approximately September 2010, the defendants organized, operated and managed a human smuggling network that spanned from Brazil to France, England, The Bahamas and the United States. The defendants met with undocumented migrants and negotiated forms of payment to be smuggled into the United States. Before the undocumented migrants departed Brazil, the defendants instructed them to act like tourists and explained that the itinerary through Europe would support a tourist cover story. In exchange for approximately $16,000, Tome-Froes, with assistance from Froes, arranged air transportation from Brazil to Paris, then London and Nassau, Bahamas. Tome-Froes arranged the undocumented migrants’ lodging in Paris and Nassau, and then instructed them to fly to Freeport, Bahamas, where they waited for a boat to transport them to the United States. For the final leg into the United States, Tome-Froes coordinated with various individuals in South Florida to pilot a small boat to Freeport, which picked up the undocumented migrants and transported them to the United States. According to court documents, the defendants knew the undocumented migrants did not have authorization to enter the United States.
The case was prosecuted by Trial Attorney Jay Bauer of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Marton Gyires of the Southern District of Florida. The investigation was conducted by ICE Homeland Security Investigations in Miami.
Thursday, March 21, 2013
JUDGEMENT ENTERED AGAINST DEFENDANTS WHO ALLEGEDLY PROMOTED FICTICIOUS INVESTMENTS
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Massachusetts Federal Court Enters Judgments Against Two Defendants Charged in Investment Frauds
The Commission announced that on March 13, 2013, a Massachusetts federal court entered final judgments by default against 211 Ventures, LLC ("211 Ventures"), based in Billerica, Massachusetts, and against Robert S. Anderson, of Madison, Indiana. The two were defendants in a fraud action involving the promotion and sale of fictitious financial instruments and trading programs filed by the Commission on September 19, 2011. The default judgments entered by the Honorable Mark L. Wolf require the two defendants to pay a total of more than $2.3 million in disgorgement of ill-gotten gains, prejudgment interest, and civil penalties, and permanently enjoin them both from future violations of the antifraud and other provisions of the federal securities laws. The Commission's action against three other defendants remains pending.
The Commission's complaint alleged that 211 Ventures purported to offer direct investments in fraudulent and non-existent trading programs, promising high returns and guarantees against loss. The Court ordered 211 Ventures to pay $1,074,000 in disgorgement, $206,502.91 in prejudgment interest, and a civil penalty in the amount of $650,000. The Commission alleged that Anderson offered investors fictitious trading programs through an entity called E-Trust, based on gold or precious metals, medium term notes, or other assets, and received investor funds that he used for his personal gain. The final judgment against Anderson requires him to pay $252,719.53 in disgorgement, $34,574.13 in prejudgment interest, and a civil penalty in the amount of $150,000. The Court also permanently enjoined both Anderson and 211 Ventures from committing further violations of Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 5 of the Securities Act.
The Commission's complaint also charged Diane Glatfelter, of Billerica, MA, and Robert Rice of Tallahassee, Florida, who together own 211 Ventures, and K2 Unlimited, Inc., based in Billerica Massachusetts, of which Glatfelter is sole shareholder. The Commission's case against Glatfelter, Rice and K2 Unlimited, Inc. will continue.
Massachusetts Federal Court Enters Judgments Against Two Defendants Charged in Investment Frauds
The Commission announced that on March 13, 2013, a Massachusetts federal court entered final judgments by default against 211 Ventures, LLC ("211 Ventures"), based in Billerica, Massachusetts, and against Robert S. Anderson, of Madison, Indiana. The two were defendants in a fraud action involving the promotion and sale of fictitious financial instruments and trading programs filed by the Commission on September 19, 2011. The default judgments entered by the Honorable Mark L. Wolf require the two defendants to pay a total of more than $2.3 million in disgorgement of ill-gotten gains, prejudgment interest, and civil penalties, and permanently enjoin them both from future violations of the antifraud and other provisions of the federal securities laws. The Commission's action against three other defendants remains pending.
The Commission's complaint alleged that 211 Ventures purported to offer direct investments in fraudulent and non-existent trading programs, promising high returns and guarantees against loss. The Court ordered 211 Ventures to pay $1,074,000 in disgorgement, $206,502.91 in prejudgment interest, and a civil penalty in the amount of $650,000. The Commission alleged that Anderson offered investors fictitious trading programs through an entity called E-Trust, based on gold or precious metals, medium term notes, or other assets, and received investor funds that he used for his personal gain. The final judgment against Anderson requires him to pay $252,719.53 in disgorgement, $34,574.13 in prejudgment interest, and a civil penalty in the amount of $150,000. The Court also permanently enjoined both Anderson and 211 Ventures from committing further violations of Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 5 of the Securities Act.
The Commission's complaint also charged Diane Glatfelter, of Billerica, MA, and Robert Rice of Tallahassee, Florida, who together own 211 Ventures, and K2 Unlimited, Inc., based in Billerica Massachusetts, of which Glatfelter is sole shareholder. The Commission's case against Glatfelter, Rice and K2 Unlimited, Inc. will continue.
Monday, March 18, 2013
DEFENSE ATTORNEY SENTENCED TO PRISON FOR OBSTRUCTION OF JUSTICE
FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, March 12, 2013
Veteran D.C. Defense Attorney Charles F. Daum Sentenced to Serve 63 Months in Prison for Obstruction of Justice
Veteran District of Columbia defense attorney Charles F. Daum was sentenced today to serve 63 months in prison on three counts of obstructing justice in a federal drug trafficking case, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Chief Cathy L. Lanier of the Washington, D.C., Metropolitan Police Department; and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office.
Daum, 66, of Arnold, Md., was sentenced before Senior U.S. District Judge Gladys Kessler in the District of Columbia. In addition to Daum’s prison sentence for obstruction of justice, he was sentenced to a concurrent term of 60 months in prison on one count of conspiracy to obstruct justice and two counts of subornation of perjury. Daum was also sentenced to serve one year of supervised release.
"Daum went to extraordinary lengths to purposefully subvert the legal process in his client’s case," said Acting Assistant Attorney General Raman. "He fabricated evidence and knowingly presented perjured testimony, betraying his profession and our system of justice. Today’s significant prison sentence is appropriate punishment for his crimes."
"Through a scheme of his own design, Mr. Daum purposefully concocted false evidence and submitted it to the court," said Assistant Director in Charge Parlave. "Today’s sentence demonstrates our diligence in protecting our judicial system from those individuals who attempt to violate its integrity."
The charges resulted from Daum’s representation of Delante White, who was indicted in March 2008 by the U.S. Attorney’s Office for the District of Columbia on federal drug trafficking charges following the execution of a search warrant on Feb. 23, 2008, at the home of White’s grandmother. After a six-week bench trial, Judge Kessler found beyond a reasonable doubt that after entering his notice of appearance in the case, Daum devised a plan to obtain and produce false evidence designed to convince the jury that the drugs seized by the police on Feb. 23, 2008, did not belong to White. Daum enlisted the help of co-conspirators Daaiyah and Iman Pasha, whom Daum had hired as investigators, and others to help carry out his scheme. Following Daum’s directions, the co-conspirators obtained duplicates of several items that were seized as evidence during the execution of the search warrant, including a digital scale, a razor blade, plates, an Adidas shoe box and a pair of Gucci boots. Once those items were obtained, Daaiyah and Iman Pasha made arrangements to take staged photographs of White’s brother depicted with the items, while apparently "cutting" "rock cocaine" in order to make it appear as though the seized drugs actually belonged to the brother. Daum later submitted the staged photographs, as well as other fabricated items, as evidence during White’s criminal trial. Judge Kessler also found that Daum solicited and presented the perjured testimony of two witnesses, in order to further obstruct and impede the administration of justice.
Private investigators Daaiyah Pasha, 62, of Washington, D.C., and Iman Pasha, 33, of Springfield, Va., were also sentenced today by Judge Kessler. Daaiyah Pasha was sentenced to serve three months in prison and three years of supervised release. Iman Pasha was sentenced to serve three months probation.
The case was prosecuted by Trial Attorneys Darrin L. McCullough, Donnell Turner and Tritia Yuen of the Criminal Division’s Narcotic and Dangerous Drug Section. The case was investigated by the Washington, D.C., Metropolitan Police Department, the FBI and the U.S. Attorney’s Office for the District of Columbia.
Tuesday, March 12, 2013
Veteran D.C. Defense Attorney Charles F. Daum Sentenced to Serve 63 Months in Prison for Obstruction of Justice
Veteran District of Columbia defense attorney Charles F. Daum was sentenced today to serve 63 months in prison on three counts of obstructing justice in a federal drug trafficking case, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Chief Cathy L. Lanier of the Washington, D.C., Metropolitan Police Department; and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office.
Daum, 66, of Arnold, Md., was sentenced before Senior U.S. District Judge Gladys Kessler in the District of Columbia. In addition to Daum’s prison sentence for obstruction of justice, he was sentenced to a concurrent term of 60 months in prison on one count of conspiracy to obstruct justice and two counts of subornation of perjury. Daum was also sentenced to serve one year of supervised release.
"Daum went to extraordinary lengths to purposefully subvert the legal process in his client’s case," said Acting Assistant Attorney General Raman. "He fabricated evidence and knowingly presented perjured testimony, betraying his profession and our system of justice. Today’s significant prison sentence is appropriate punishment for his crimes."
"Through a scheme of his own design, Mr. Daum purposefully concocted false evidence and submitted it to the court," said Assistant Director in Charge Parlave. "Today’s sentence demonstrates our diligence in protecting our judicial system from those individuals who attempt to violate its integrity."
The charges resulted from Daum’s representation of Delante White, who was indicted in March 2008 by the U.S. Attorney’s Office for the District of Columbia on federal drug trafficking charges following the execution of a search warrant on Feb. 23, 2008, at the home of White’s grandmother. After a six-week bench trial, Judge Kessler found beyond a reasonable doubt that after entering his notice of appearance in the case, Daum devised a plan to obtain and produce false evidence designed to convince the jury that the drugs seized by the police on Feb. 23, 2008, did not belong to White. Daum enlisted the help of co-conspirators Daaiyah and Iman Pasha, whom Daum had hired as investigators, and others to help carry out his scheme. Following Daum’s directions, the co-conspirators obtained duplicates of several items that were seized as evidence during the execution of the search warrant, including a digital scale, a razor blade, plates, an Adidas shoe box and a pair of Gucci boots. Once those items were obtained, Daaiyah and Iman Pasha made arrangements to take staged photographs of White’s brother depicted with the items, while apparently "cutting" "rock cocaine" in order to make it appear as though the seized drugs actually belonged to the brother. Daum later submitted the staged photographs, as well as other fabricated items, as evidence during White’s criminal trial. Judge Kessler also found that Daum solicited and presented the perjured testimony of two witnesses, in order to further obstruct and impede the administration of justice.
Private investigators Daaiyah Pasha, 62, of Washington, D.C., and Iman Pasha, 33, of Springfield, Va., were also sentenced today by Judge Kessler. Daaiyah Pasha was sentenced to serve three months in prison and three years of supervised release. Iman Pasha was sentenced to serve three months probation.
The case was prosecuted by Trial Attorneys Darrin L. McCullough, Donnell Turner and Tritia Yuen of the Criminal Division’s Narcotic and Dangerous Drug Section. The case was investigated by the Washington, D.C., Metropolitan Police Department, the FBI and the U.S. Attorney’s Office for the District of Columbia.
CONGRESIONAL CANDIDATE PLEADS GUILTY TO VIOLATING FEDERAL ELECTION CAMPAIGN ACT
FROM: U.S. DEPARTMENT OF JUSTICE,
Friday, March 15, 2013
Congressional Candidate Pleads Guilty to Violation of the Federal Election Campaign Act
Former Congressional candidate Justin Lamar Sternad pleaded guilty today in Miami to violating the Federal Election Campaign Act during his 2012 campaign, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer and Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office.
Sternad, 35, of Miami, pleaded guilty before U.S. District Court Judge Robin S. Rosenbaum in the Southern District of Florida. Sternad pleaded guilty to all counts of a criminal information that charged him with one count of conspiracy to make false statements to the Federal Election Commission (FEC), one count of making false statements to the FEC and one count of accepting illegal campaign contributions.
Sternad was a candidate in the 2012 Democratic Party primary election for Florida’s 26th Congressional District. According to court documents, Sternad engaged in a conspiracy to accept illegal campaign contributions and file false statements with the FEC in order to conceal the true source, amount and nature of the funds used by his campaign.
Sternad admitted that his campaign accepted cash and checks in excess of Federal Election Campaign Act limits and that he filed statements that intentionally misled the FEC about his campaign’s activities. During the campaign, illegal cash contributions from co-conspirators were used to pay for a rental car and the design, printing and distribution of campaign flyers.
According to court documents, Sternad reported to the FEC that he made loans to his campaign in the amount of $63,801, when he knew that he had actually loaned fewer than $300. In total, Sternad accepted over $70,000 in misreported campaign contributions.
At sentencing, scheduled for May 31, 2013, Sternad faces a maximum penalty of five years in prison and a fine up to $250,000 on each count.
The case is being prosecuted by Senior Litigation Counsel Thomas J. Mulvihill of the U.S. Attorney’s Office for the Southern District of Florida and Richard C. Pilger, Director of the Election Crimes Branch of the Criminal Division’s Public Integrity Section.
Friday, March 15, 2013
Congressional Candidate Pleads Guilty to Violation of the Federal Election Campaign Act
Former Congressional candidate Justin Lamar Sternad pleaded guilty today in Miami to violating the Federal Election Campaign Act during his 2012 campaign, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer and Michael B. Steinbach, Special Agent in Charge of the FBI’s Miami Field Office.
Sternad, 35, of Miami, pleaded guilty before U.S. District Court Judge Robin S. Rosenbaum in the Southern District of Florida. Sternad pleaded guilty to all counts of a criminal information that charged him with one count of conspiracy to make false statements to the Federal Election Commission (FEC), one count of making false statements to the FEC and one count of accepting illegal campaign contributions.
Sternad was a candidate in the 2012 Democratic Party primary election for Florida’s 26th Congressional District. According to court documents, Sternad engaged in a conspiracy to accept illegal campaign contributions and file false statements with the FEC in order to conceal the true source, amount and nature of the funds used by his campaign.
Sternad admitted that his campaign accepted cash and checks in excess of Federal Election Campaign Act limits and that he filed statements that intentionally misled the FEC about his campaign’s activities. During the campaign, illegal cash contributions from co-conspirators were used to pay for a rental car and the design, printing and distribution of campaign flyers.
According to court documents, Sternad reported to the FEC that he made loans to his campaign in the amount of $63,801, when he knew that he had actually loaned fewer than $300. In total, Sternad accepted over $70,000 in misreported campaign contributions.
At sentencing, scheduled for May 31, 2013, Sternad faces a maximum penalty of five years in prison and a fine up to $250,000 on each count.
The case is being prosecuted by Senior Litigation Counsel Thomas J. Mulvihill of the U.S. Attorney’s Office for the Southern District of Florida and Richard C. Pilger, Director of the Election Crimes Branch of the Criminal Division’s Public Integrity Section.
Saturday, March 16, 2013
U.S. MARSHALS ANNOUNCE RECOVERY OF 2 ABDUCTED CHILDREN IN MEXICO
FROM: U.S. MARSHALS SERVIE
TUCSON, Ariz. – U.S. Marshals Service investigators along with detectives with the Pima County Sheriff’s Department worked with law enforcement in Mexico to recover two girls, ages 1 and 2, Thursday in Hermosillo, Sonora, Mexico, who had been abducted by their non-custodial parents.
This investigation stems from suspicious circumstances that surround an investigation involving Child Protective Services in Pima County due to injuries sustained by one of the girls. It is alleged that in November 2012 Luis Fernando Palacio, 26, fled to Sonora, Mexico, with his 2-year-old daughter after being ordered to return the child to the mother. In January, Danielle Nicole Lovemore, 22, allegedly kidnapped her 1-year-old daughter, who was in CPS custody.
Based on the Marana Police Department investigation into this incident, a felony arrest warrant was issued on Lovemore, charging her with custodial interference. It was believed Lovemore fled to Mexico in an attempt to reunite with Palacios. At that time, assistance from the U.S. Marshals Service was requested. U.S. Marshals Service investigators began to work around the clock with Mexican law enforcement to locate Lovemore in an attempt to recover the missing children.
Lovemore and the two children were located Thursday at a residence in Hermosillo after being tracked there by Mexican law enforcement. The U.S. State Department’s American Citizens Services are currently caring for the children pending their safe return to the United States. Lovemore was deported to the U.S. Thursday night through the Nogales Port of Entry where Deputy U.S. Marshals took her into custody and transported her to the Pima County Jail.
"International child abduction cases are the most difficult to execute due to conflicting parental agendas and international jurisdictions," said U.S. Marshal for the District of Arizona David Gonzales. "The quick and safe return of these two children was paramount to all of the American and Mexican agencies that worked diligently on this case. Child abduction cases continue to rise and have increased nearly 70 percent since 2009. This increase is primarily attributed to more international couples."
Tuesday, March 12, 2013
AG HOLDER SPEAKS AT NATIONAL ASSOCIATION OF COUNTIES LEGISLATIVE CONFERENCE
FROM: U.S. JUSTICE DEPARTMENT,
Attorney General Eric Holder Speaks at the National Association of Counties Legislative Conference
Washington, D.C. ~ Monday, March 4, 2013
Thank you, President Rodgers, for those kind words; for your exemplary service as Commissioner of Douglas County, Nebraska; and for your leadership as President of the National Association of Counties since taking office last year. It’s apleasure to stand with you today, and a privilege to join you – along with NACo’s Board of Directors and entire leadership team – for this important annual conference. And it’s an honor to help welcome this distinguished group back to Washington this week.
Each year, this event brings together some of our nation’s best and brightest public servants for a series of wide-ranging policy discussions. It presents a chance to explore cutting-edge strategies for addressing shared concerns, exchanging ideas and information, and strengthening the vital relationships that will help take our collective efforts to a new level.
I’m pleased to add my voice to this critical dialogue once again this year. I’m proud to join so many essential leaders in confronting some of the most pressing issues – and urgent public safety challenges – that our communities face. And I’m eager to stand with each of you in building on the impressive work that’s underway in counties across America – particularly through innovative programs like NACo’s Smart Justice Initiative.
I know President Rodgers – and many of his colleagues – have long championed the kinds of proven, data-driven solutions that Smart Justice is helping to identify and promote. And I would be remiss if I didn’t note that, when it comes to criminal justice reform, NACo’s members are leading the way in implementing evidence-based decision-making processes, drawing on rigorous scientific research, and seeking opportunities to leverage scarce resources to improve the strength and integrity of local justice systems – and broaden the impact of the prevention, intervention, enforcement, and reentry programs that so many of you have helped to build.
As you know – and as your public safety subcommittee heard over the weekend from Director Denise O’Donnell, of the Bureau of Justice Assistance, and Senior Advisor Amy Solomon, of the Office of Justice Programs – this type of approach has been fully embraced at every level of today’s Justice Department. And we’re not merely raising awareness about the benefits that evidence-based solutions can hold for other criminal justice professionals and public servants. We’re leading by example.
Over the last four years, an emphasis on becoming smarter and tougher on crime has infused – and informed – the Department’s work on a range of policy questions. And it’s driving current efforts to partner with NACo members, and an array of other government and private sector leaders, to develop comprehensive solutions to even the most complex and intractable challenges.
Nowhere is this clearer than in the work of the Federal Interagency Reentry Council – a group I first convened in 2011, which brings together leaders from 20 federal agencies to address reentry as more than just a criminal justice issue. After all, we know reentry is not just a matter of public safety – it’s also an issue of housing and health care policy; a question of education and employment; and a fatherhood and family challenge that affects millions across the country every year.
The reality is that – in America today – 1 in 28 children has a parent behind bars. For African American children, this ratio is roughly 1 in 9. In total, approximately 700,000 people are released from state and federal prisons every year. And another 9 to 10 million cycle through local jails.
At any given time, the sheer number of individuals and families dealing with the challenges associated with reentry is staggering. But thanks to the Reentry Council’s leaders and partners, we’re fighting to remove barriers that too often prevent formerly incarcerated individuals from smoothly rejoining their communities – and becoming responsible, law-abiding members of society. We’re helping call attention to successful programs, striving to dispel myths about reentry, strengthening our policies, and engaging with an expanding group of allies to advance this comprehensive work.
Despite the significant threat posed by sequestration – and the budgetary limitations we’ve all been forced to contend with in recent years – we are leveraging federal justice resources as never before, so we can ensure that the Department can keep supporting county leaders like you. To date, under the landmark Second Chance Act, the Justice Department has awarded over 400 grants totaling more than $250 million to support adult and juvenile reentry programs. Thanks to the advocacy of NACo and its partners, counties were included in this legislation. They now make up almost half of all Second Chance Act demonstration programs. And the results they’re achieving are nothing short of remarkable.
For example, one innovative partnership in Pennsylvania – known as the Allegheny County Jail Collaborative – has brought together jail and court officials with the county health department and the county department of human services. Together, these agencies have devised a screening and treatment initiative that has not only reduced the recidivism rate by half – when comparing participants to a control group – they have also secured a return-on-investment of roughly six dollars saved for every dollar spent on the program.
Under the banner of Justice Reinvestment, the Justice Department is also helping to bring about big-picture criminal justice system reforms – thanks to the leadership of state and county officials in states like North Carolina – by reducing corrections spending and reinvesting in public safety strategies. And they are doing so in a way that’s beneficial for both the state and its counties.
Of course, I recognize that there will never be a simple, one-size-fits-all solution for addressing our criminal justice challenges. But we can all be encouraged by the promising work– and the progress – that some jurisdictions are seeing when it comes to reentry. And we must not allow the size or complexity of any problem to deter us from taking action – particularly as we strive to protect the safety, and ensure the future, of America’s most vulnerable citizens: our children.
Last December’s horrific events in Newtown, Connecticut brought into sharp focus the need to reinforce our public safety efforts – and seek new ways to address the epidemic of gun violence that afflicts communities across the country, and touches every city and town represented here. In response, my colleagues and I have renewed our commitment to working with NACo members and other allies to reduce gun violence and prevent future tragedies.
Earlier this year, under the leadership of Vice President Biden, I worked with a number of my fellow Cabinet members to assemble a series of common-sense recommendations for keeping guns from falling into the wrong hands, keeping our young people safe, and keeping our neighborhoods and schools more secure. This comprehensive plan – which President Obama announced in January – is founded on a consensus that emerged from the discussions we convened with representatives from more than 200 groups. And it has led the Administration to call on Congress to adopt legislation requiring "universal" background checks, so that a full background check is performed every time someone attempts to buy a gun; imposing tough new penalties on gun traffickers; and banning high-capacity magazines and military-style assault weapons, updated and stronger than the bill enacted in 1994.
In addition to advocating for Congressional action, agencies across the Administration are working to implement the 23 executive actions that President Obama announced in order to provide federal officials – and local leaders like you – with the resources and information we need to keep our citizens safe. For instance, we reaffirmed our encouragement to licensed gun dealers to process transactions for private sellers using the NICS background system. We’re moving to strengthen this critical tool by addressing gaps, making certain that the information included in the system is complete and accurate, and ensuring that our laws are effective when it comes to identifying those who should not have access to firearms.
Beyond this work, the President has taken steps to end what had essentially become a "freeze" on rigorous, non-partisan research into gun violence – and effective strategies for its prevention – by the Centers for Disease Control. He has instructed relevant agencies to issue guidance making clear that, under current law, doctors are not prohibited from reporting threats of violence to law enforcement. He’s directed agencies to finalize regulations, under the Affordable Care Act, that will increase access to mental health services for those who need them. And he has asked Administration leaders to work alongside school districts and community officials to develop plans to make schools, institutions of higher learning, and houses of worship safer.
But all of this is only the beginning. The Justice Department is also working in a variety of ways to reinforce existing anti-violence programs – and to boost the capacity of proven allies like you. Since 2009, this commitment has led us to award more than $3.5 billion to state and local partners under Byrne-JAG – a grant program that helps agencies and departments across the country close budgetary gaps and gain access to the resources they need. Last year alone, we distributed over $14.5 million in local Justice Assistance Grants to 245 counties. Additional funding streams have been made available through the COPS Hiring Program – which, over the last four years, has awarded more than $1.5 billion to create or protect over 8,000 jobs in local law enforcement. And I’m pleased to note that the President’s plan to reduce gun violence calls for an additional $4 billion in COPS Hiring Grants funding to support over 15,000 law enforcement officers.
Of course, our ability to continue providing this support – and keep building on the progress that so many of you are leading – will soon be severely hampered unless Congress adopts a balanced deficit reduction plan and ends the untenable budget cuts that went into effect on Friday.
If allowed to persist, this so-called "sequester" – which will cut over $1.6 billion from the Justice Department’s budget over just seven months – will undoubtedly have a negative impact on programs affecting the safety of Americans across the country. It will curtail our ability to respond to crimes and other threats, and to investigate wrongdoing. And it will reduce our capacity to offer assistance and provide grants to partners like you – by eliminating over $100 million in grant money for awards like the ones I’ve just mentioned.
That’s why I’ve urged Congressional leaders to act swiftly in ensuring that the Department will have the funding we need to keep fulfilling our missions – and keep everyone in this country safe. And it’s why I’m proud to stand with NACo today in renewing my commitment to cooperation and collaboration in the face of any challenge; reaffirming my strong support for the vital work that’s underway in cities and towns across America; and refocusing our common efforts to build the kinds of safe, thriving communities where our citizens – and especially our young people – can grow and thrive.
In advancing this work, I am proud to count you as colleagues and partners. And I look forward to all that we must – and will – achieve together in the days ahead.
Thank you.
Attorney General Eric Holder Speaks at the National Association of Counties Legislative Conference
Washington, D.C. ~ Monday, March 4, 2013
Thank you, President Rodgers, for those kind words; for your exemplary service as Commissioner of Douglas County, Nebraska; and for your leadership as President of the National Association of Counties since taking office last year. It’s apleasure to stand with you today, and a privilege to join you – along with NACo’s Board of Directors and entire leadership team – for this important annual conference. And it’s an honor to help welcome this distinguished group back to Washington this week.
Each year, this event brings together some of our nation’s best and brightest public servants for a series of wide-ranging policy discussions. It presents a chance to explore cutting-edge strategies for addressing shared concerns, exchanging ideas and information, and strengthening the vital relationships that will help take our collective efforts to a new level.
I’m pleased to add my voice to this critical dialogue once again this year. I’m proud to join so many essential leaders in confronting some of the most pressing issues – and urgent public safety challenges – that our communities face. And I’m eager to stand with each of you in building on the impressive work that’s underway in counties across America – particularly through innovative programs like NACo’s Smart Justice Initiative.
I know President Rodgers – and many of his colleagues – have long championed the kinds of proven, data-driven solutions that Smart Justice is helping to identify and promote. And I would be remiss if I didn’t note that, when it comes to criminal justice reform, NACo’s members are leading the way in implementing evidence-based decision-making processes, drawing on rigorous scientific research, and seeking opportunities to leverage scarce resources to improve the strength and integrity of local justice systems – and broaden the impact of the prevention, intervention, enforcement, and reentry programs that so many of you have helped to build.
As you know – and as your public safety subcommittee heard over the weekend from Director Denise O’Donnell, of the Bureau of Justice Assistance, and Senior Advisor Amy Solomon, of the Office of Justice Programs – this type of approach has been fully embraced at every level of today’s Justice Department. And we’re not merely raising awareness about the benefits that evidence-based solutions can hold for other criminal justice professionals and public servants. We’re leading by example.
Over the last four years, an emphasis on becoming smarter and tougher on crime has infused – and informed – the Department’s work on a range of policy questions. And it’s driving current efforts to partner with NACo members, and an array of other government and private sector leaders, to develop comprehensive solutions to even the most complex and intractable challenges.
Nowhere is this clearer than in the work of the Federal Interagency Reentry Council – a group I first convened in 2011, which brings together leaders from 20 federal agencies to address reentry as more than just a criminal justice issue. After all, we know reentry is not just a matter of public safety – it’s also an issue of housing and health care policy; a question of education and employment; and a fatherhood and family challenge that affects millions across the country every year.
The reality is that – in America today – 1 in 28 children has a parent behind bars. For African American children, this ratio is roughly 1 in 9. In total, approximately 700,000 people are released from state and federal prisons every year. And another 9 to 10 million cycle through local jails.
At any given time, the sheer number of individuals and families dealing with the challenges associated with reentry is staggering. But thanks to the Reentry Council’s leaders and partners, we’re fighting to remove barriers that too often prevent formerly incarcerated individuals from smoothly rejoining their communities – and becoming responsible, law-abiding members of society. We’re helping call attention to successful programs, striving to dispel myths about reentry, strengthening our policies, and engaging with an expanding group of allies to advance this comprehensive work.
Despite the significant threat posed by sequestration – and the budgetary limitations we’ve all been forced to contend with in recent years – we are leveraging federal justice resources as never before, so we can ensure that the Department can keep supporting county leaders like you. To date, under the landmark Second Chance Act, the Justice Department has awarded over 400 grants totaling more than $250 million to support adult and juvenile reentry programs. Thanks to the advocacy of NACo and its partners, counties were included in this legislation. They now make up almost half of all Second Chance Act demonstration programs. And the results they’re achieving are nothing short of remarkable.
For example, one innovative partnership in Pennsylvania – known as the Allegheny County Jail Collaborative – has brought together jail and court officials with the county health department and the county department of human services. Together, these agencies have devised a screening and treatment initiative that has not only reduced the recidivism rate by half – when comparing participants to a control group – they have also secured a return-on-investment of roughly six dollars saved for every dollar spent on the program.
Under the banner of Justice Reinvestment, the Justice Department is also helping to bring about big-picture criminal justice system reforms – thanks to the leadership of state and county officials in states like North Carolina – by reducing corrections spending and reinvesting in public safety strategies. And they are doing so in a way that’s beneficial for both the state and its counties.
Of course, I recognize that there will never be a simple, one-size-fits-all solution for addressing our criminal justice challenges. But we can all be encouraged by the promising work– and the progress – that some jurisdictions are seeing when it comes to reentry. And we must not allow the size or complexity of any problem to deter us from taking action – particularly as we strive to protect the safety, and ensure the future, of America’s most vulnerable citizens: our children.
Last December’s horrific events in Newtown, Connecticut brought into sharp focus the need to reinforce our public safety efforts – and seek new ways to address the epidemic of gun violence that afflicts communities across the country, and touches every city and town represented here. In response, my colleagues and I have renewed our commitment to working with NACo members and other allies to reduce gun violence and prevent future tragedies.
Earlier this year, under the leadership of Vice President Biden, I worked with a number of my fellow Cabinet members to assemble a series of common-sense recommendations for keeping guns from falling into the wrong hands, keeping our young people safe, and keeping our neighborhoods and schools more secure. This comprehensive plan – which President Obama announced in January – is founded on a consensus that emerged from the discussions we convened with representatives from more than 200 groups. And it has led the Administration to call on Congress to adopt legislation requiring "universal" background checks, so that a full background check is performed every time someone attempts to buy a gun; imposing tough new penalties on gun traffickers; and banning high-capacity magazines and military-style assault weapons, updated and stronger than the bill enacted in 1994.
In addition to advocating for Congressional action, agencies across the Administration are working to implement the 23 executive actions that President Obama announced in order to provide federal officials – and local leaders like you – with the resources and information we need to keep our citizens safe. For instance, we reaffirmed our encouragement to licensed gun dealers to process transactions for private sellers using the NICS background system. We’re moving to strengthen this critical tool by addressing gaps, making certain that the information included in the system is complete and accurate, and ensuring that our laws are effective when it comes to identifying those who should not have access to firearms.
Beyond this work, the President has taken steps to end what had essentially become a "freeze" on rigorous, non-partisan research into gun violence – and effective strategies for its prevention – by the Centers for Disease Control. He has instructed relevant agencies to issue guidance making clear that, under current law, doctors are not prohibited from reporting threats of violence to law enforcement. He’s directed agencies to finalize regulations, under the Affordable Care Act, that will increase access to mental health services for those who need them. And he has asked Administration leaders to work alongside school districts and community officials to develop plans to make schools, institutions of higher learning, and houses of worship safer.
But all of this is only the beginning. The Justice Department is also working in a variety of ways to reinforce existing anti-violence programs – and to boost the capacity of proven allies like you. Since 2009, this commitment has led us to award more than $3.5 billion to state and local partners under Byrne-JAG – a grant program that helps agencies and departments across the country close budgetary gaps and gain access to the resources they need. Last year alone, we distributed over $14.5 million in local Justice Assistance Grants to 245 counties. Additional funding streams have been made available through the COPS Hiring Program – which, over the last four years, has awarded more than $1.5 billion to create or protect over 8,000 jobs in local law enforcement. And I’m pleased to note that the President’s plan to reduce gun violence calls for an additional $4 billion in COPS Hiring Grants funding to support over 15,000 law enforcement officers.
Of course, our ability to continue providing this support – and keep building on the progress that so many of you are leading – will soon be severely hampered unless Congress adopts a balanced deficit reduction plan and ends the untenable budget cuts that went into effect on Friday.
If allowed to persist, this so-called "sequester" – which will cut over $1.6 billion from the Justice Department’s budget over just seven months – will undoubtedly have a negative impact on programs affecting the safety of Americans across the country. It will curtail our ability to respond to crimes and other threats, and to investigate wrongdoing. And it will reduce our capacity to offer assistance and provide grants to partners like you – by eliminating over $100 million in grant money for awards like the ones I’ve just mentioned.
That’s why I’ve urged Congressional leaders to act swiftly in ensuring that the Department will have the funding we need to keep fulfilling our missions – and keep everyone in this country safe. And it’s why I’m proud to stand with NACo today in renewing my commitment to cooperation and collaboration in the face of any challenge; reaffirming my strong support for the vital work that’s underway in cities and towns across America; and refocusing our common efforts to build the kinds of safe, thriving communities where our citizens – and especially our young people – can grow and thrive.
In advancing this work, I am proud to count you as colleagues and partners. And I look forward to all that we must – and will – achieve together in the days ahead.
Thank you.
Monday, March 11, 2013
REAL ESTAE AUCTION BIDRIGGERS PLEAD GUILTY
FROM: U.S. DEPARTMENT OF JUSTICE
TWO NORTHERN CALIFORNIA REAL ESTATE INVESTORS AGREE TO PLEAD
GUILTY TO BID RIGGING AT PUBLIC FORECLOSURE AUCTIONS
29 Individuals Have Agreed to Plead Guilty to Date
WASHINGTON — Two Northern California real estate investors have agreed to plead guilty for their role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland against Peter McDonough of Pleasanton, Calif., and Michael Renquist of Livermore, Calif.
Including today’s pleas, 29 individuals have pleaded guilty or agreed to plead guilty as a result of the department’s ongoing antitrust investigation into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
According to court documents, for various lengths of time between November 2008 and January 2011, McDonough and Renquist conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County, Calif. McDonough and Renquist were also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Alameda County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held. Renquist was also charged with additional counts for his involvement in similar conduct in Contra Costa County, Calif.
"The conspirators suppressed competition and lined their pockets through fraudulent and collusive conduct at the expense of lenders and distressed homeowners," said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "The Antitrust Division and its law enforcement partners at the FBI will continue to hold accountable individuals who subvert the competitive process at foreclosure auctions around the country."
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda and Contra Costa County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, the conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
"The FBI and the Antitrust Division continue to bring to justice those individuals who engage in fraudulent anticompetitive practices at foreclosure actions," said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. "The foundation of our real estate market depends on fairness and transparency of all participants, and we are committed to working with our local and federal partners to ensure that conspirators are held accountable."
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
The charges today are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco office.
Today’s case was done in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.
TWO NORTHERN CALIFORNIA REAL ESTATE INVESTORS AGREE TO PLEAD
GUILTY TO BID RIGGING AT PUBLIC FORECLOSURE AUCTIONS
29 Individuals Have Agreed to Plead Guilty to Date
WASHINGTON — Two Northern California real estate investors have agreed to plead guilty for their role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland against Peter McDonough of Pleasanton, Calif., and Michael Renquist of Livermore, Calif.
Including today’s pleas, 29 individuals have pleaded guilty or agreed to plead guilty as a result of the department’s ongoing antitrust investigation into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
According to court documents, for various lengths of time between November 2008 and January 2011, McDonough and Renquist conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County, Calif. McDonough and Renquist were also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Alameda County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held. Renquist was also charged with additional counts for his involvement in similar conduct in Contra Costa County, Calif.
"The conspirators suppressed competition and lined their pockets through fraudulent and collusive conduct at the expense of lenders and distressed homeowners," said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "The Antitrust Division and its law enforcement partners at the FBI will continue to hold accountable individuals who subvert the competitive process at foreclosure auctions around the country."
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda and Contra Costa County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, the conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
"The FBI and the Antitrust Division continue to bring to justice those individuals who engage in fraudulent anticompetitive practices at foreclosure actions," said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. "The foundation of our real estate market depends on fairness and transparency of all participants, and we are committed to working with our local and federal partners to ensure that conspirators are held accountable."
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
The charges today are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco office.
Today’s case was done in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.
Sunday, March 10, 2013
CORRECTIONS OFFICER INDICTED FOR STOLEN IDENTITY TAX REFUND FRAUD
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, March 8, 2013
Alabama Corrections Officer and Former Corrections Officer Indicted for Stolen Identity Tax Refund Fraud
A 29-count indictment was unsealed today in Montgomery, Ala., charging Bryant Thompson, an Alabama corrections officer, and Quincy Walton, a former Alabama corrections officer, with federal tax crimes, the Justice Department and the Internal Revenue Service (IRS) announced. Thompson and Walton are both charged with one count of conspiracy to defraud the United States; Thompson is additionally charged with 10 counts of wire fraud and 10 counts of aggravated identity theft, and Walton is additionally charged with four counts of theft of government money and four counts of aggravated identity theft.
According to the indictment, Thompson, a corrections officer at the Alabama Department of Corrections, unlawfully obtained the names and Social Security numbers of inmates in the custody of the state of Alabama and caused to be filed false tax returns in the names of those inmates. The IRS issued tax refund checks in the names of inmates whose identities Thompson unlawfully obtained and Walton cashed those checks.
An indictment is merely a formal charge by the grand jury. The defendants are presumed innocent unless and until proven guilty.
If convicted, Thompson and Walton face a maximum sentence of five years in federal prison for the conspiracy count, a maximum of 20 years for each wire fraud count, a maximum of 10 years for each theft of government money count and a minimum of two years for aggravated identity theft. In addition to prison time, Thompson and Walton also face the possibility of fines and restitution to the IRS and other victims.
The case was investigated by IRS Criminal Investigation and is being prosecuted by Trial Attorneys Alexander R. Effendi and Justin K. Gelfand of the Justice Department’s Tax Division.
Friday, March 8, 2013
Alabama Corrections Officer and Former Corrections Officer Indicted for Stolen Identity Tax Refund Fraud
A 29-count indictment was unsealed today in Montgomery, Ala., charging Bryant Thompson, an Alabama corrections officer, and Quincy Walton, a former Alabama corrections officer, with federal tax crimes, the Justice Department and the Internal Revenue Service (IRS) announced. Thompson and Walton are both charged with one count of conspiracy to defraud the United States; Thompson is additionally charged with 10 counts of wire fraud and 10 counts of aggravated identity theft, and Walton is additionally charged with four counts of theft of government money and four counts of aggravated identity theft.
According to the indictment, Thompson, a corrections officer at the Alabama Department of Corrections, unlawfully obtained the names and Social Security numbers of inmates in the custody of the state of Alabama and caused to be filed false tax returns in the names of those inmates. The IRS issued tax refund checks in the names of inmates whose identities Thompson unlawfully obtained and Walton cashed those checks.
An indictment is merely a formal charge by the grand jury. The defendants are presumed innocent unless and until proven guilty.
If convicted, Thompson and Walton face a maximum sentence of five years in federal prison for the conspiracy count, a maximum of 20 years for each wire fraud count, a maximum of 10 years for each theft of government money count and a minimum of two years for aggravated identity theft. In addition to prison time, Thompson and Walton also face the possibility of fines and restitution to the IRS and other victims.
The case was investigated by IRS Criminal Investigation and is being prosecuted by Trial Attorneys Alexander R. Effendi and Justin K. Gelfand of the Justice Department’s Tax Division.
Saturday, March 9, 2013
TWO HUNGARIAN NATIONALS SENTENCED IN INTERNATIONAL FRAUD SCHEME
FROM: U.S. JUSTICE DEPARTMENT
Friday, March 8, 2013
Two Hungarian Nationals Sentenced in Tennessee for Roles in International Fraud Scheme Involving Online Marketplace Websites
Hungarian nationals Beatrix Boka and Aleksandar Kunkin were sentenced today to serve 36 months and 48 months in prison, respectively, for their roles in moving approximately $550,000 in illicit proceeds derived from an international online marketplace fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Jerry E. Martin for the Middle District of Tennessee.
Boka, 34, and Kunkin, 40, were sentenced by U.S. District Judge Aleta A. Trauger in the Middle District of Tennessee. In addition to their prison terms, Boka and Kunkin were each sentenced to serve two years of supervised release and ordered to pay $464,581 in restitution.
Boka and Kunkin each pleaded guilty in November 2012 to one count of conspiracy to commit bank and wire fraud.
According to testimony at Boka and Kunkin’s plea hearings, members of the conspiracy fraudulently listed vehicles for sale at online marketplaces such as eBay. When victims expressed interest in purchasing the vehicles, co-conspirators sent emails that directed the victims to wire payments to certain bank accounts, and victims never received the vehicles for which they paid. From May to June 2012, Boka and Kunkin visited Bank of America branches in North Carolina and South Carolina and opened bank accounts under false identities, which were supported by fraudulent identity documents including counterfeit Hungarian passports. In total, 36 victims sent approximately $550,102 to accounts opened by Boka and Kunkin. Boka and Kunkin subsequently sent the bulk of the money to co-conspirators located abroad.
The case is being prosecuted by Assistant U.S. Attorney Byron M. Jones of the Middle District of Tennessee and Trial Attorney Mysti Degani of the Criminal Division’s Computer Crime and Intellectual Property Section. The case is being investigated by the FBI, the Tennessee Bureau of Investigation, the Metropolitan Nashville Police Department and the Cobb County, Ga., Sheriff’s Department.
Friday, March 8, 2013
Two Hungarian Nationals Sentenced in Tennessee for Roles in International Fraud Scheme Involving Online Marketplace Websites
Hungarian nationals Beatrix Boka and Aleksandar Kunkin were sentenced today to serve 36 months and 48 months in prison, respectively, for their roles in moving approximately $550,000 in illicit proceeds derived from an international online marketplace fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Jerry E. Martin for the Middle District of Tennessee.
Boka, 34, and Kunkin, 40, were sentenced by U.S. District Judge Aleta A. Trauger in the Middle District of Tennessee. In addition to their prison terms, Boka and Kunkin were each sentenced to serve two years of supervised release and ordered to pay $464,581 in restitution.
Boka and Kunkin each pleaded guilty in November 2012 to one count of conspiracy to commit bank and wire fraud.
According to testimony at Boka and Kunkin’s plea hearings, members of the conspiracy fraudulently listed vehicles for sale at online marketplaces such as eBay. When victims expressed interest in purchasing the vehicles, co-conspirators sent emails that directed the victims to wire payments to certain bank accounts, and victims never received the vehicles for which they paid. From May to June 2012, Boka and Kunkin visited Bank of America branches in North Carolina and South Carolina and opened bank accounts under false identities, which were supported by fraudulent identity documents including counterfeit Hungarian passports. In total, 36 victims sent approximately $550,102 to accounts opened by Boka and Kunkin. Boka and Kunkin subsequently sent the bulk of the money to co-conspirators located abroad.
The case is being prosecuted by Assistant U.S. Attorney Byron M. Jones of the Middle District of Tennessee and Trial Attorney Mysti Degani of the Criminal Division’s Computer Crime and Intellectual Property Section. The case is being investigated by the FBI, the Tennessee Bureau of Investigation, the Metropolitan Nashville Police Department and the Cobb County, Ga., Sheriff’s Department.
Friday, March 8, 2013
ASSOCIATE OF USAMA BIN LADEN ARRESTED
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, March 7, 2013
Sulaiman Abu Ghayth, Associate of Usama Bin Laden, Arrested for Conspiring to Kill Americans
"Abu Ghayth" Allegedly Appeared with Usama Bin Laden and Ayman Al-Zawahiri After September 11, 2001, Threatening Additional Attacks Against the United States
Sulaiman Abu Ghayth, aka "Suleiman Abu Gayth", a former associate of Usama Bin Laden, has been arrested and charged in an indictment unsealed today in New York City with conspiracy to kill U.S. nationals, announced Attorney General Eric Holder, Assistant Attorney General for National Security Lisa Monaco, U.S. Attorney for the Southern District of New York Preet Bharara, the Assistant Director-in-Charge of the FBI’s New York Field Office George Venizelos, and the Police Commissioner of the City of New York (NYPD) Raymond W. Kelly. Abu Ghayth is expected to be presented and arraigned tomorrow, March 8, 2013, at 10:00 a.m. before U.S. District Judge Lewis A. Kaplan.
"No amount of distance or time will weaken our resolve to bring America's enemies to justice," said Attorney General Holder. "To violent extremists who threaten the American people and seek to undermine our way of life, this arrest sends an unmistakable message: There is no corner of the world where you can escape from justice because we will do everything in our power to hold you accountable to the fullest extent of the law."
"The arrest of Abu Ghayth is an important milestone in our ongoing counterterrorism efforts. I applaud the many agents, analysts and prosecutors responsible for bringing about this significant case and arrest," said Assistant Attorney General Monaco.
"It has been 13 years since Abu Ghayth allegedly worked alongside Usama Bin Laden in his campaign of terror, and 13 years since he allegedly took to the public airwaves, exhorting others to embrace al Qaeda’s cause and warning of more terrorist attacks like the mass murder of 9/11," said U.S. Attorney Bharara. "The memory of those attacks is indelibly etched on the American psyche, and today’s action is the latest example of our commitment to capturing and punishing enemies of the United States, no matter how long it takes."
"Sulaiman Abu Ghayth held a key position in al Qaeda, comparable to the consigliere in a mob family or propaganda minister in a totalitarian regime," said FBI Assistant Director-in-Charge Venizelos. "He used his position to persuade others to swear loyalty to al Qaeda’s murderous cause. He used his position to threaten the United States and incite its enemies. His apprehension is another important step in the campaign to limit the reach of al Qaeda and enhance our national and international security."
"While New York City must remain vigilant to continued terrorist threats against it, Abu Ghayth's apprehension and prosecution promises to close another chapter in al Qaeda's notoriously violent history of killing Americans," said NYPD Commissioner Kelly. "This case also represents another success in the ongoing partnership between Federal agents and NYPD detectives through the JTTF."
As alleged in the superseding indictment that has been filed against Abu Ghayth in federal court:
Since around 1989, al Qaeda has been an international terrorist organization, dedicated to opposing non-Islamic governments with force and violence. Usama Bin Laden served as the leader or "emir" of al Qaeda until his death on or about May 2, 2011. Members of al Qaeda typically have pledged an oath of allegiance, called bayat, to Bin Laden and to al Qaeda.
The core purpose of al Qaeda, as stated by Bin Laden and other leaders, is to support violent attacks against property and nationals, both military and civilian, of the United States and other countries. Between 1989 and 2001, al Qaeda established training camps, guest houses, and business operations in Afghanistan, Pakistan, and other countries for the purpose of training and supporting its agenda of violence and murder. Members and associates of al Qaeda have executed a number of terrorist attacks, all in furtherance of the organization’s stated conspiracy to kill Americans, including the attacks on the United States on September 11, 2001 in New York, Virginia, and Pennsylvania, which killed approximately 2,976 people.
From at least May 2001 up to around 2002, Abu Ghayth served alongside Usama Bin Laden, appearing with Bin Laden and his then-deputy Ayman al-Zawahiri, speaking on behalf of the terrorist organization and in support of its mission, and warning that attacks similar to those of September 11, 2001 would continue.
In particular, around May 2001, Abu Ghayth urged individuals at a guest house in Kandahar, Afghanistan, to swear bayat to Bin Laden. On the evening of Sept. 11, 2001, after the terrorist attacks on the United States, Bin Laden summoned Abu Gayth and asked for his assistance and he agreed to provide it. On the morning of Sept. 12, 2001, Abu Ghayth, appeared with Bin Laden and Zawahiri, and spoke on behalf of al Qaeda, warning the United States and its allies that "[a] great army is gathering against you" and called upon "the nation of Islam" to do battle against "the Jews, the Christians and the Americans." Also, after the September 11, 2001 terrorist attacks, Abu Ghayth delivered a speech in which he addressed the then-U.S. Secretary of State and warned that "the storms shall not stop, especially the Airplanes Storm," and advised Muslims, children, and opponents of the United States "not to board any aircraft and not to live in high rises."
Abu Gayth arranged to be, and was, successfully smuggled from Afghanistan into Iran in 2002.
The indictment charges Abu Ghayth with participating in a conspiracy to kill United States nationals. The offense carries a maximum term of imprisonment of life. No trial date has yet been set in the case.
The charges and arrest of Abu Ghayth are the result of the close cooperative efforts of the U.S. Attorney’s Office for the Southern District of New York, the Joint Terrorism Task Force – which principally consists of agents and detectives of the FBI and the New York City Police Department – the United States Marshals Service and the National Security Division of the U.S. Department of Justice. The Justice Department’s Office of International Affairs and the U.S. Department of State also provided assistance.
The prosecution is being handled by Assistant United States Attorneys John P. Cronan and Michael Ferrara of the Terrorism and International Narcotics Unit of the U.S. Attorney’s Office for the Southern District of New York, with assistance from Trial Attorney Jolie Zimmerman of the National Security Division’s Counterterrorism Section.
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Thursday, March 7, 2013
Sulaiman Abu Ghayth, Associate of Usama Bin Laden, Arrested for Conspiring to Kill Americans
"Abu Ghayth" Allegedly Appeared with Usama Bin Laden and Ayman Al-Zawahiri After September 11, 2001, Threatening Additional Attacks Against the United States
Sulaiman Abu Ghayth, aka "Suleiman Abu Gayth", a former associate of Usama Bin Laden, has been arrested and charged in an indictment unsealed today in New York City with conspiracy to kill U.S. nationals, announced Attorney General Eric Holder, Assistant Attorney General for National Security Lisa Monaco, U.S. Attorney for the Southern District of New York Preet Bharara, the Assistant Director-in-Charge of the FBI’s New York Field Office George Venizelos, and the Police Commissioner of the City of New York (NYPD) Raymond W. Kelly. Abu Ghayth is expected to be presented and arraigned tomorrow, March 8, 2013, at 10:00 a.m. before U.S. District Judge Lewis A. Kaplan.
"No amount of distance or time will weaken our resolve to bring America's enemies to justice," said Attorney General Holder. "To violent extremists who threaten the American people and seek to undermine our way of life, this arrest sends an unmistakable message: There is no corner of the world where you can escape from justice because we will do everything in our power to hold you accountable to the fullest extent of the law."
"The arrest of Abu Ghayth is an important milestone in our ongoing counterterrorism efforts. I applaud the many agents, analysts and prosecutors responsible for bringing about this significant case and arrest," said Assistant Attorney General Monaco.
"It has been 13 years since Abu Ghayth allegedly worked alongside Usama Bin Laden in his campaign of terror, and 13 years since he allegedly took to the public airwaves, exhorting others to embrace al Qaeda’s cause and warning of more terrorist attacks like the mass murder of 9/11," said U.S. Attorney Bharara. "The memory of those attacks is indelibly etched on the American psyche, and today’s action is the latest example of our commitment to capturing and punishing enemies of the United States, no matter how long it takes."
"Sulaiman Abu Ghayth held a key position in al Qaeda, comparable to the consigliere in a mob family or propaganda minister in a totalitarian regime," said FBI Assistant Director-in-Charge Venizelos. "He used his position to persuade others to swear loyalty to al Qaeda’s murderous cause. He used his position to threaten the United States and incite its enemies. His apprehension is another important step in the campaign to limit the reach of al Qaeda and enhance our national and international security."
"While New York City must remain vigilant to continued terrorist threats against it, Abu Ghayth's apprehension and prosecution promises to close another chapter in al Qaeda's notoriously violent history of killing Americans," said NYPD Commissioner Kelly. "This case also represents another success in the ongoing partnership between Federal agents and NYPD detectives through the JTTF."
As alleged in the superseding indictment that has been filed against Abu Ghayth in federal court:
Since around 1989, al Qaeda has been an international terrorist organization, dedicated to opposing non-Islamic governments with force and violence. Usama Bin Laden served as the leader or "emir" of al Qaeda until his death on or about May 2, 2011. Members of al Qaeda typically have pledged an oath of allegiance, called bayat, to Bin Laden and to al Qaeda.
The core purpose of al Qaeda, as stated by Bin Laden and other leaders, is to support violent attacks against property and nationals, both military and civilian, of the United States and other countries. Between 1989 and 2001, al Qaeda established training camps, guest houses, and business operations in Afghanistan, Pakistan, and other countries for the purpose of training and supporting its agenda of violence and murder. Members and associates of al Qaeda have executed a number of terrorist attacks, all in furtherance of the organization’s stated conspiracy to kill Americans, including the attacks on the United States on September 11, 2001 in New York, Virginia, and Pennsylvania, which killed approximately 2,976 people.
From at least May 2001 up to around 2002, Abu Ghayth served alongside Usama Bin Laden, appearing with Bin Laden and his then-deputy Ayman al-Zawahiri, speaking on behalf of the terrorist organization and in support of its mission, and warning that attacks similar to those of September 11, 2001 would continue.
In particular, around May 2001, Abu Ghayth urged individuals at a guest house in Kandahar, Afghanistan, to swear bayat to Bin Laden. On the evening of Sept. 11, 2001, after the terrorist attacks on the United States, Bin Laden summoned Abu Gayth and asked for his assistance and he agreed to provide it. On the morning of Sept. 12, 2001, Abu Ghayth, appeared with Bin Laden and Zawahiri, and spoke on behalf of al Qaeda, warning the United States and its allies that "[a] great army is gathering against you" and called upon "the nation of Islam" to do battle against "the Jews, the Christians and the Americans." Also, after the September 11, 2001 terrorist attacks, Abu Ghayth delivered a speech in which he addressed the then-U.S. Secretary of State and warned that "the storms shall not stop, especially the Airplanes Storm," and advised Muslims, children, and opponents of the United States "not to board any aircraft and not to live in high rises."
Abu Gayth arranged to be, and was, successfully smuggled from Afghanistan into Iran in 2002.
The indictment charges Abu Ghayth with participating in a conspiracy to kill United States nationals. The offense carries a maximum term of imprisonment of life. No trial date has yet been set in the case.
The charges and arrest of Abu Ghayth are the result of the close cooperative efforts of the U.S. Attorney’s Office for the Southern District of New York, the Joint Terrorism Task Force – which principally consists of agents and detectives of the FBI and the New York City Police Department – the United States Marshals Service and the National Security Division of the U.S. Department of Justice. The Justice Department’s Office of International Affairs and the U.S. Department of State also provided assistance.
The prosecution is being handled by Assistant United States Attorneys John P. Cronan and Michael Ferrara of the Terrorism and International Narcotics Unit of the U.S. Attorney’s Office for the Southern District of New York, with assistance from Trial Attorney Jolie Zimmerman of the National Security Division’s Counterterrorism Section.
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Thursday, March 7, 2013
ATTORNEY GENERAL HOLDER TESTIFIES BEFORE U.S. SENATE COMMITTEE ON THE JUDICIARY
FROM: U.S. DEPARTMENT OF JUSTICE
Attorney General Eric Holder Testifies Before the U.S. Senate Committee on the Judiciary
Washington, D.C. ~ Wednesday, March 6, 2013
Chairman Leahy, Ranking Member Grassley, and distinguished members of the Committee: I appreciate this opportunity to provide an overview of the Justice Department’s recent achievements, and the accomplishments that my colleagues – the 116,000 dedicated men and women who serve in offices around the world – have made possible. I look forward to working with you to take our critical efforts to a new level.
But before we begin this discussion, I must acknowledge the debt our nation owes to three Correctional Workers – employed by the Federal Bureau of Prisons – who, over the last week and a half, have made the ultimate sacrifice: Officer Eric Williams, Officer Gregory Vineski, and Lieutenant Osvaldo Albarati. As Attorney General, and as the brother of a retired police officer, I am determined to ensure that those responsible for the acts that led to their deaths are brought to justice. And my colleagues and I are committed to honoring the service of these and all other fallen officers by doing everything in our power to keep the women and men in law enforcement safe – and to continue the work that became the cause of their lives.
In this regard, I’m proud to report that the Department has made tremendous progress in combating violent crime, battling financial fraud, upholding the civil rights of all, safeguarding the most vulnerable members of society, and protecting the American people from terrorism and other national security threats. Particularly since last December’s horrific tragedy in Newtown, Connecticut, the urgency of our public safety efforts has come into sharp focus. Earlier this year, I joined Vice President Biden and a number of my fellow Cabinet members to develop common-sense recommendations to reduce gun violence, keep deadly weapons out of the hands of those prohibited from having them, and make our neighborhoods and schools more secure. In January, President Obama announced a comprehensive plan that includes a series of 23 executive actions that the Justice Department and other agencies are working to implement, and a range of common-sense legislative proposals.
This morning, I’m pleased to join the President, the Vice President, and countless Americans in calling on Congress to enact legislation addressing gun violence – including measures to require universal background checks, impose tough penalties on gun traffickers, protect law enforcement officers by addressing armor-piercing ammunition, ban high-capacity magazines and military-style assault weapons, and eliminate misguided restrictions that require federal agents to allow the importation of dangerous weapons simply because of their age. I’m also pleased to echo the President’s call for the Senate to confirm Todd Jones as Director of the Bureau of Alcohol, Tobacco, Firearms, and Explosives – a critical Justice Department component that’s been without a Senate-confirmed leader for six years.
Of course, in addition to the Administration’s efforts to reduce gun violence, we remain focused on preventing gun-, gang-, and drug-fueled violence in all its forms. And we’re determined to combat domestic violence. In strengthening this work, I applaud Congress for passing a bipartisan reauthorization of the Violence Against Women Act – a landmark law that has transformed the way we respond to domestic violence – and I’m pleased that this bill will finally close a loophole that left many Native American women without adequate protection. The Justice Department looks forward to implementing this historic legislation. And we’re committed to moving in a range of ways to become both smarter and tougher on crime, and to remain aggressive and fair in our enforcement of federal laws.
Thanks to countless Department employees and partners, we’ve achieved extraordinary results. And nowhere is this clearer than in our work to protect America’s national security. Since 2009, the Department has brought cases – and secured convictions – against numerous terrorists. We have identified and disrupted multiple plots by foreign terrorist groups as well as homegrown extremists. And we’ve worked to combat emerging national security threats, such as cyber intrusions and cyber attacks directed against our systems and infrastructure by nation states and non-state actors, including terrorist groups. Last summer, the Department created the National Security Cyber Specialists network to spearhead these efforts. The network is comprised of prosecutors and other cyber specialists across the country who will work closely with the FBI and other partners to investigate malicious cyber activity, seek any necessary cooperation, and, where appropriate, bring criminal prosecutions as part of our government-wide effort to deter and disrupt cyber threats to our national security.
Beyond this work, the Department has taken significant steps to ensure robust enforcement of antitrust laws, protect the environment, crack down on tax fraud schemes, and address financial and health care fraud crimes. In cooperation with the Department of Health and Human Services and others, over the last fiscal year alone, we secured a record $4.2 billion in recoveries related to health care fraud and abuse. As a result of our commitment to achieve justice on behalf of the victims of the 2010 Deepwater Horizon oil spill, in January we secured a guilty plea and a record $4 billion in criminal fines and penalties from BP, and in February, the court approved a settlement requiring Transocean to pay $1.4 billion in fines and penalties. On February 25, we commenced trial of our civil claims against BP and others. And through the President’s Financial Fraud Enforcement Task Force, we’re working closely with federal, state, and local authorities to take our fight against fraud targeting consumers, investors, and homeowners to new heights.
Over the last three fiscal years – thanks to Task Force leaders and our partners – we have filed nearly 10,000 financial fraud cases against nearly 15,000 defendants – including more than 2,900 mortgage fraud defendants. Last month, the Department filed a civil suit against the credit rating agency Standard & Poor’s, seeking at least $5 billion in damages for alleged conduct that goes to the heart of the recent economic crisis.
We’re also striving to boost the capacity of our law enforcement allies and provide access to the tools, training, and equipment they need to do their jobs as safely and effectively as possible. And we’re working with them to promote the highest standards of integrity across every agency, department, and sheriff’s office.
This commitment – to integrity and equal justice under law – has also driven the Department’s Civil Rights Division in its efforts to address bias, intimidation, and discrimination – from America’s housing and lending markets, to our schools, workplaces, border areas, and voting booths. Since 2009, the Division has filed more criminal civil rights cases than ever before – including record numbers of human trafficking and police misconduct cases. We’ve led efforts to implement the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act – which improved our ability to achieve justice on behalf of Americans who are targeted because of their gender, sexual orientation, gender identity, or disability. We are fighting to preserve the principles of equality, opportunity, and justice that have always shaped our nation’s past – and must continue to determine our future.
In the days ahead, as Congress considers ways to make fair and effective changes to America’s immigration system, these same principles must guide efforts to strengthen our borders. These principles must continue to inform our actions, as we fairly adjudicate immigration cases, enforce existing laws, and hold accountable employers who knowingly hire undocumented workers or engage in illegal and discriminatory business practices that undermine competitiveness and the well-being of those who seek refuge on our shores.
This morning, my colleagues and I stand ready to work with leaders from both parties to help achieve lasting reform; to strengthen our ability to keep everyone in this country – especially our young people – safe; and to move forward in protecting the American people and achieving the priorities we share. But I must note that our ability to complete this work – and continue building upon the progress I’ve just outlined – will be severely hampered unless Congress adopts a balanced deficit reduction plan and ends the untenable reductions that last week set in motion a move to cut over $1.6 billion from the Department’s budget in just seven months’ time.
As we speak, these cuts are already having a significant negative impact not just on Department employees, but on programs that could directly impact the safety of Americans across the country. Important law enforcement and litigation programs are being disrupted. Our capacity – to respond to crimes, investigate wrongdoing, and hold criminals accountable – has been reduced. And, despite our best efforts to limit the impact of sequestration, unless Congress quickly passes a balanced deficit reduction plan, the effects of these cuts – on our entire justice system, and on the American people – may be profound.
I urge Congressional leaders to act swiftly to restore the funding that the Department needs to fulfill its critical mission and keep our citizens safe. And I would be happy to answer any questions you may have.
Attorney General Eric Holder Testifies Before the U.S. Senate Committee on the Judiciary
Washington, D.C. ~ Wednesday, March 6, 2013
Chairman Leahy, Ranking Member Grassley, and distinguished members of the Committee: I appreciate this opportunity to provide an overview of the Justice Department’s recent achievements, and the accomplishments that my colleagues – the 116,000 dedicated men and women who serve in offices around the world – have made possible. I look forward to working with you to take our critical efforts to a new level.
But before we begin this discussion, I must acknowledge the debt our nation owes to three Correctional Workers – employed by the Federal Bureau of Prisons – who, over the last week and a half, have made the ultimate sacrifice: Officer Eric Williams, Officer Gregory Vineski, and Lieutenant Osvaldo Albarati. As Attorney General, and as the brother of a retired police officer, I am determined to ensure that those responsible for the acts that led to their deaths are brought to justice. And my colleagues and I are committed to honoring the service of these and all other fallen officers by doing everything in our power to keep the women and men in law enforcement safe – and to continue the work that became the cause of their lives.
In this regard, I’m proud to report that the Department has made tremendous progress in combating violent crime, battling financial fraud, upholding the civil rights of all, safeguarding the most vulnerable members of society, and protecting the American people from terrorism and other national security threats. Particularly since last December’s horrific tragedy in Newtown, Connecticut, the urgency of our public safety efforts has come into sharp focus. Earlier this year, I joined Vice President Biden and a number of my fellow Cabinet members to develop common-sense recommendations to reduce gun violence, keep deadly weapons out of the hands of those prohibited from having them, and make our neighborhoods and schools more secure. In January, President Obama announced a comprehensive plan that includes a series of 23 executive actions that the Justice Department and other agencies are working to implement, and a range of common-sense legislative proposals.
This morning, I’m pleased to join the President, the Vice President, and countless Americans in calling on Congress to enact legislation addressing gun violence – including measures to require universal background checks, impose tough penalties on gun traffickers, protect law enforcement officers by addressing armor-piercing ammunition, ban high-capacity magazines and military-style assault weapons, and eliminate misguided restrictions that require federal agents to allow the importation of dangerous weapons simply because of their age. I’m also pleased to echo the President’s call for the Senate to confirm Todd Jones as Director of the Bureau of Alcohol, Tobacco, Firearms, and Explosives – a critical Justice Department component that’s been without a Senate-confirmed leader for six years.
Of course, in addition to the Administration’s efforts to reduce gun violence, we remain focused on preventing gun-, gang-, and drug-fueled violence in all its forms. And we’re determined to combat domestic violence. In strengthening this work, I applaud Congress for passing a bipartisan reauthorization of the Violence Against Women Act – a landmark law that has transformed the way we respond to domestic violence – and I’m pleased that this bill will finally close a loophole that left many Native American women without adequate protection. The Justice Department looks forward to implementing this historic legislation. And we’re committed to moving in a range of ways to become both smarter and tougher on crime, and to remain aggressive and fair in our enforcement of federal laws.
Thanks to countless Department employees and partners, we’ve achieved extraordinary results. And nowhere is this clearer than in our work to protect America’s national security. Since 2009, the Department has brought cases – and secured convictions – against numerous terrorists. We have identified and disrupted multiple plots by foreign terrorist groups as well as homegrown extremists. And we’ve worked to combat emerging national security threats, such as cyber intrusions and cyber attacks directed against our systems and infrastructure by nation states and non-state actors, including terrorist groups. Last summer, the Department created the National Security Cyber Specialists network to spearhead these efforts. The network is comprised of prosecutors and other cyber specialists across the country who will work closely with the FBI and other partners to investigate malicious cyber activity, seek any necessary cooperation, and, where appropriate, bring criminal prosecutions as part of our government-wide effort to deter and disrupt cyber threats to our national security.
Beyond this work, the Department has taken significant steps to ensure robust enforcement of antitrust laws, protect the environment, crack down on tax fraud schemes, and address financial and health care fraud crimes. In cooperation with the Department of Health and Human Services and others, over the last fiscal year alone, we secured a record $4.2 billion in recoveries related to health care fraud and abuse. As a result of our commitment to achieve justice on behalf of the victims of the 2010 Deepwater Horizon oil spill, in January we secured a guilty plea and a record $4 billion in criminal fines and penalties from BP, and in February, the court approved a settlement requiring Transocean to pay $1.4 billion in fines and penalties. On February 25, we commenced trial of our civil claims against BP and others. And through the President’s Financial Fraud Enforcement Task Force, we’re working closely with federal, state, and local authorities to take our fight against fraud targeting consumers, investors, and homeowners to new heights.
Over the last three fiscal years – thanks to Task Force leaders and our partners – we have filed nearly 10,000 financial fraud cases against nearly 15,000 defendants – including more than 2,900 mortgage fraud defendants. Last month, the Department filed a civil suit against the credit rating agency Standard & Poor’s, seeking at least $5 billion in damages for alleged conduct that goes to the heart of the recent economic crisis.
We’re also striving to boost the capacity of our law enforcement allies and provide access to the tools, training, and equipment they need to do their jobs as safely and effectively as possible. And we’re working with them to promote the highest standards of integrity across every agency, department, and sheriff’s office.
This commitment – to integrity and equal justice under law – has also driven the Department’s Civil Rights Division in its efforts to address bias, intimidation, and discrimination – from America’s housing and lending markets, to our schools, workplaces, border areas, and voting booths. Since 2009, the Division has filed more criminal civil rights cases than ever before – including record numbers of human trafficking and police misconduct cases. We’ve led efforts to implement the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act – which improved our ability to achieve justice on behalf of Americans who are targeted because of their gender, sexual orientation, gender identity, or disability. We are fighting to preserve the principles of equality, opportunity, and justice that have always shaped our nation’s past – and must continue to determine our future.
In the days ahead, as Congress considers ways to make fair and effective changes to America’s immigration system, these same principles must guide efforts to strengthen our borders. These principles must continue to inform our actions, as we fairly adjudicate immigration cases, enforce existing laws, and hold accountable employers who knowingly hire undocumented workers or engage in illegal and discriminatory business practices that undermine competitiveness and the well-being of those who seek refuge on our shores.
This morning, my colleagues and I stand ready to work with leaders from both parties to help achieve lasting reform; to strengthen our ability to keep everyone in this country – especially our young people – safe; and to move forward in protecting the American people and achieving the priorities we share. But I must note that our ability to complete this work – and continue building upon the progress I’ve just outlined – will be severely hampered unless Congress adopts a balanced deficit reduction plan and ends the untenable reductions that last week set in motion a move to cut over $1.6 billion from the Department’s budget in just seven months’ time.
As we speak, these cuts are already having a significant negative impact not just on Department employees, but on programs that could directly impact the safety of Americans across the country. Important law enforcement and litigation programs are being disrupted. Our capacity – to respond to crimes, investigate wrongdoing, and hold criminals accountable – has been reduced. And, despite our best efforts to limit the impact of sequestration, unless Congress quickly passes a balanced deficit reduction plan, the effects of these cuts – on our entire justice system, and on the American people – may be profound.
I urge Congressional leaders to act swiftly to restore the funding that the Department needs to fulfill its critical mission and keep our citizens safe. And I would be happy to answer any questions you may have.
Wednesday, March 6, 2013
TWO FORMER CORRECTIONAL OFFICERS CHARGED IN INMATE ASSAULT CASE
FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, March 5, 2013
Indictment Charges Two Former Maryland Correctional Officers in Relation to an Assault of an Inmate
A third indictment, this time charging two former officers at Roxbury Correctional Institution (RCI), was returned today, in relation to assaults of an inmate, identified as K.D., and subsequent obstruction of justice, announced Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. On Feb. 26, 2013, a grand jury returned two indictments charging a total of nine current or former RCI officers with two subsequent assaults of the same inmate, K.D.
In the indictment returned today, former RCI Lieutenant Robert Harvey and former Correctional Officer Keith Morris are charged with a civil rights offense for their alleged assault on K.D., an inmate, during the 3 p.m. to 11 p.m. shift on March 8, 2013. Harvey also faces an obstruction of justice charge for allegedly filing a false report related to the assault.
Harvey faces a maximum sentence of 30 years in prison, and Morris faces a maximum term of 10 years in prison.
These indictments bring the total number of individuals charged in relation to this case to 14. Including today’s charges, seven current or former RCI officers have been charged with a civil rights offense for their alleged involvement in a series of assaults on K.D. Two former RCI officers, Dustin Norris and Philip Mayo, recently entered guilty pleas acknowledging that they conspired with other officers to assault K.D. Ten current or former RCI officers have been charged with conspiracy or obstruction offenses for their alleged efforts to cover up staff involvement in the assaults on K.D. Ryan Lohr, a former RCI officer, previously entered a guilty plea admitting that he conspired with other officers to obstruct the investigation into an assault on K.D.
These three cases, which are ongoing, are being investigated by the Frederick Resident Agency of the FBI, and are being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Sanjay Patel of the Justice Department’s Civil Rights Division, with the assistance of P. Michael Cunningham of the U.S. Attorney’s Office for the District of Maryland.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
Tuesday, March 5, 2013
Indictment Charges Two Former Maryland Correctional Officers in Relation to an Assault of an Inmate
A third indictment, this time charging two former officers at Roxbury Correctional Institution (RCI), was returned today, in relation to assaults of an inmate, identified as K.D., and subsequent obstruction of justice, announced Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. On Feb. 26, 2013, a grand jury returned two indictments charging a total of nine current or former RCI officers with two subsequent assaults of the same inmate, K.D.
In the indictment returned today, former RCI Lieutenant Robert Harvey and former Correctional Officer Keith Morris are charged with a civil rights offense for their alleged assault on K.D., an inmate, during the 3 p.m. to 11 p.m. shift on March 8, 2013. Harvey also faces an obstruction of justice charge for allegedly filing a false report related to the assault.
Harvey faces a maximum sentence of 30 years in prison, and Morris faces a maximum term of 10 years in prison.
These indictments bring the total number of individuals charged in relation to this case to 14. Including today’s charges, seven current or former RCI officers have been charged with a civil rights offense for their alleged involvement in a series of assaults on K.D. Two former RCI officers, Dustin Norris and Philip Mayo, recently entered guilty pleas acknowledging that they conspired with other officers to assault K.D. Ten current or former RCI officers have been charged with conspiracy or obstruction offenses for their alleged efforts to cover up staff involvement in the assaults on K.D. Ryan Lohr, a former RCI officer, previously entered a guilty plea admitting that he conspired with other officers to obstruct the investigation into an assault on K.D.
These three cases, which are ongoing, are being investigated by the Frederick Resident Agency of the FBI, and are being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Sanjay Patel of the Justice Department’s Civil Rights Division, with the assistance of P. Michael Cunningham of the U.S. Attorney’s Office for the District of Maryland.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
Tuesday, March 5, 2013
COURT BARS TAX PREPARER FROM DOING BUSINESS
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, March 4, 2013
Federal Court Bars Nashville, Tenn., Mo’ Money Taxes Licensee from Preparing Tax Returns
Tax Preparers Claimed Improper Tax Credits and Engaged in Fraudulent Conduct
A federal court permanently barred Toney Fields and Trumekia Shaw, who do business as Fields Mo’ Money Taxes in Nashville, Tenn., from preparing federal tax returns, the Justice Department announced today. The civil injunction order was signed by Judge Kevin H. Sharp of the U.S. District Court for the Middle District of Tennessee. It found that the defendants engaged repeatedly in fraudulent conduct that interfered with enforcement of federal tax laws.
The government complaint in the civil injunction lawsuit alleged that Fields is a licensee of Mo’ Money Taxes LLC and MoneyCo USA LLC, both located in Memphis, Tenn. According to the complaint Fields and Shaw get an improper jump on their competition by opening Mo’ Money Taxes in Nashville immediately after Christmas, before the tax year ends. According to the complaint, Fields and Shaw use customers’ end-of-year pay stubs to prepare tax returns, before employers have issued Internal Revenue Service (IRS) W-2 wage-statement forms to employees. Preparing tax returns based on pay stubs rather than proper W-2 Forms violates IRS rules. Fields and Shaw allegedly use the pay stubs to create fake W-2 Forms to include with the returns. End-of-year pay stubs frequently omit income and distributions that are shown on employer-issued W-2 Forms. This inevitably results in errors on federal tax returns.
The complaint alleged that Fields and Shaw inflate or claim false tax credits on customers’ tax returns. According to the complaint, Fields and Shaw frequently claim improper dependent exemptions in order to claim inflated earned-income credits or child tax credits for their customers. The complaint also alleged that the defendants include false filing statuses and bogus claims for charitable contributions on customers’ returns. The complaint says the government estimates that the defendants’ misconduct may have caused revenue losses of over $5 million from the more than 1,100 tax returns they prepared in 2011.
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Monday, March 4, 2013
Federal Court Bars Nashville, Tenn., Mo’ Money Taxes Licensee from Preparing Tax Returns
Tax Preparers Claimed Improper Tax Credits and Engaged in Fraudulent Conduct
A federal court permanently barred Toney Fields and Trumekia Shaw, who do business as Fields Mo’ Money Taxes in Nashville, Tenn., from preparing federal tax returns, the Justice Department announced today. The civil injunction order was signed by Judge Kevin H. Sharp of the U.S. District Court for the Middle District of Tennessee. It found that the defendants engaged repeatedly in fraudulent conduct that interfered with enforcement of federal tax laws.
The government complaint in the civil injunction lawsuit alleged that Fields is a licensee of Mo’ Money Taxes LLC and MoneyCo USA LLC, both located in Memphis, Tenn. According to the complaint Fields and Shaw get an improper jump on their competition by opening Mo’ Money Taxes in Nashville immediately after Christmas, before the tax year ends. According to the complaint, Fields and Shaw use customers’ end-of-year pay stubs to prepare tax returns, before employers have issued Internal Revenue Service (IRS) W-2 wage-statement forms to employees. Preparing tax returns based on pay stubs rather than proper W-2 Forms violates IRS rules. Fields and Shaw allegedly use the pay stubs to create fake W-2 Forms to include with the returns. End-of-year pay stubs frequently omit income and distributions that are shown on employer-issued W-2 Forms. This inevitably results in errors on federal tax returns.
The complaint alleged that Fields and Shaw inflate or claim false tax credits on customers’ tax returns. According to the complaint, Fields and Shaw frequently claim improper dependent exemptions in order to claim inflated earned-income credits or child tax credits for their customers. The complaint also alleged that the defendants include false filing statuses and bogus claims for charitable contributions on customers’ returns. The complaint says the government estimates that the defendants’ misconduct may have caused revenue losses of over $5 million from the more than 1,100 tax returns they prepared in 2011.
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