U.S. Attorney Announces Largest Federal Organized Crime Prosecution in Indianapolis History

Earlier this week, more than 300 federal, state, and local law enforcement officers, including 11 different SWAT teams, simultaneously converged on more than a dozen locations across Indianapolis. In a matter of hours, 42 arrest warrants and 17 search warrants were successfully executed without incident or serious injury. It was the largest combined federal-local operation in Indianapolis history.

This afternoon, joined by these law enforcement partners, United States Attorney Joseph H. Hogsett announced the arrest and federal indictment of 42 Indianapolis-based members of the Outlaws Motorcycle Club (OMC), an international criminal organization alleged to have operated out of a clubhouse located at 305 Jefferson Avenue, on the near-eastside of Indianapolis.

“If you are operating an organized criminal gang in this city, the clock is ticking,” Hogsett said. “It might be tomorrow, it might be weeks from now, but it is only a matter of time before you wake up to the sound of law enforcement at your door.”

In the seventy page, 37-count charging document unsealed this morning, it is alleged that beginning in May 2009, members of Indianapolis OMC engaged in organized criminal activity in Indianapolis and across the state. The indictment charges the 42 alleged gang members with a wide variety of offenses, including racketeering, mail fraud, money laundering, extortion, drug charges, wire fraud, witness tampering, and operating an illegal gambling operation.

“For more than three years, a volatile mixture of guns, drugs, and motorcycles allegedly fueled a dangerous criminal organization in Indianapolis as sophisticated as any business in this city,” Hogsett added. “This morning, we closed down that business for good.”

“This enterprise-based investigation and today’s takedown focused on disrupting and dismantling what the indictment alleges to be a violent, criminal outlaw motorcycle gang by targeting its senior leaders and key members,” said FBI Special Agent in Charge Robert Allan Jones. “The U.S. Attorney’s Office, FBI Safe Streets Task Force, and our partner agencies are committed to making the streets of Indiana safer by the disruption and dismantlement of gangs like the Outlaws Motorcycle Club.”

Examples of alleged criminal activities include numerous instances in which OMC members used violence and the threat of force to collect personal debts from individuals in Indianapolis and elsewhere. The members are also alleged to have operated an illegal lottery scheme in Indianapolis that trafficked in thousands of dollars a day.

Additionally, the indictment describes an alleged March 2010 scheme in which members of OMC allegedly recruited and paid an individual to purposely drive a U-Haul truck into the rear of a vehicle containing numerous OMC members, all of whom then filed insurance claims totaling tens of thousands of dollars. In other instances, OMC members are alleged to have hidden the vehicles of other OMC members so as to allow them to collect auto insurance claims for their supposedly stolen vehicles.

Defendants named within the indictment include:

Joshua N. Bowser, age 32
Kent D. Whitinger, age 49
James W. Bain, age 50
Dominic R. Mangine, age 71
Michael A. Schlicher, age 38
Stephen M. Whitinger, age 57
Lawrence Gregory, age 47
Stephen D. Duff, age 22
Steve A. Reynolds, age 37
Joseph Alarcon, age 32
David L. Whitinger, age 54
Ronald P. Taylor, Jr., age 43
Jose Diaz, age 36
Justo Rojas, age 43
Hector Nava-Arrendondo, age 29
Jorge Sedeno-Callejas, age 27
James Stonebraker, age 58
Norvel Terry, age 45
Thomas Swan, age TBD
Michael A. Knoll, age 47
Michael E. Hamilton, age 53
Edward J. Bolen, age 47
Michael Medlin, age 68
Jamie A. Bolinger, age 34
Vance Canner, 43
Bryan E. Glaze, age 20
Richard C. DeMarco, Jr., age TBD
Mark A. Bisel, age 49
Charles N. Ernstes, II, age 52
Joseph Maio, age 59
Pamela K. Cummins, age 44
Rigo Rocha-Lopez, age 34
Carlos Mena, age 47
Jorge Daniel Ledezma-Cruz, age 26
Cesar Granados, age 31
Brian T. Peacock, age 60
Russell Pryor, age TBD
Steven Lecclier, age TBD
Anthony Leach, age 44
William Anderson, age 42
Terrell Adams, age 28
Scharme L. Bolinger, age 34

The indictment further describes the structure and hierarchy of local OMC chapters. Each chapter has a president, vice-president, treasurer, and enforcer. OMC maintained chapters in Indianapolis and Fort Wayne. These local chapters answer to a regional chapter—in this case, the “Black Region”—and finally are under the umbrella of a national leadership body, which coordinates the activities of the numerous regions within OMC.

According the indictment, members are admitted to the OMC after a lengthy, phased process designed to measure a potential member’s commitment to the organization and to guard against law enforcement infiltration. After associating with OMC for a period of time, an individual may become known as a “hangaround,” and, after one year, a hangaround may be sponsored as a “probate,” or prospective member. At all times during this process, it is alleged that these individuals must follow orders by OMC members, often including criminal activity.

After at least six months of acting as a probate, individuals are eligible to become a full member of the OMC by unanimous vote, at which point they may be “patched” and wear identification associated with the gang. This OMC identification involves a leather vest and often includes numerous symbolic patches, including “MC” (motorcycle club), “AOA” (American Outlaws Association), and “1%er” (meant to describe a non-law-abiding motorcycle rider). Other patches and tattoos identified within the indictment include “Snitches are a Dying Breed,” as well as “GFOD,” which stands for “God Forgives, Outlaws Don’t.”

Today’s arrests are the culmination of a lengthy investigation as part of the U.S. Attorney’s Violent Crime Initiative involving the Federal Bureau of Investigation, the Internal Revenue Service, FBI Safe Streets Task Force, the Indiana State Police, the Marion County Sheriff’s Department, as well as the Indianapolis Metropolitan Police Department.

According to Senior Litigation Counsel Bradley A. Blackington, who is prosecuting the case for the government, all 42 defendants face up to decades in prison and substantial fines if they are found guilty. Blackington also noted that, if convicted, many of the assets gained through the alleged criminal activity would be eligible for federal forfeiture. A large portion of those proceeds would be reinvested in local law enforcement efforts.

An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

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Nora Schweihs of Mob Wives Chicago, Tries to Move On

Nora Schweihs is looking beyond all the screaming, name calling and hair pulling that has characterized the first few episodes of "Mob Wives Chicago." But mostly, she's trying to get past the past.

Schweihs, the daughter of Frank "The German" Schweihs, said she's on the show to get closure following the 2008 death of her father, whose body was recently exhumed at the request of his family. As soon as a blood test confirms the body is her father, Schweihs plans to bring his ashes to Florida, where she lived with him, but place some of his remains in a necklace she has made.

Schweihs said she is also honoring him by creating a pinot noir called "The German," which she hopes will bring positive spin to the nickname given to her father, an alleged mob enforcer. In a one-on-one interview with RedEye, she dismissed the murder charges against her father as "hearsay."

"Now you won't ever hear 'The German' as 'Oh, he was a hitman,'" she told RedEye outside the Bebe store in Water Tower Place.

Schweihs is very defensive of her father, who has become a hot-button issue on "Mob Wives Chicago," which began airing last month on VH1. The show features Schweihs and four other local women with ties to the "Chicago Outfit" who bicker about whose father did what and who is the least classy.

Schweihs is often in the middle of the drama, which she calls 100 percent real. In one recent episode, she becomes upset when another cast member shows up late to a memorial for her father. The confrontation turns violent.

"It is our life and it really is real," said Schweihs, wearing a sheer purple top and white jeans. "For me, the whole point of the show is for my father and nothing else and I am thisclose to getting closure."

Part of the premise of the show is Schweihs' return to Chicago after living in Florida with her father, who she calls her best friend. Schweihs, 49, said she now lives in Bridgeport and recently celebrated finishing her business master's degree at Robert Morris University.

She said she was taking multiple courses when she was filming "Mob Wives Chicago," which added to her stress level. Some of friendships she had going into the show have been strained, but she said she has gotten closer to fellow castmates Christina Scoleri and Leah Desimone.

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Brendolyn Hart-Glover Charged with Scheming to Falsify Documents for State Review of Federally Funded Jobs Program

The former acting director of a Cook County job-training program was arrested today on federal charges for allegedly engaging in a scheme to falsify documents related to a state review of the county’s 2009 Summer Youth Program, which was funded by a federal grant. The defendant, Brendolyn Hart-Glover, was field operations manager and, during 2010, served as acting director of the Cook County President’s Office of Employment Training, or POET, which last year was renamed Cook County Works. POET received federal grants through the Illinois Department of Commerce and Economic Opportunity (DCEO), which allocated approximately $5.67 million to POET for summer youth jobs in 2009 and 2010, with POET enrolling approximately 1,400 participants in the 2009 program.

Hart-Glover, 42, of Chicago, who supervised POET’s field offices in Oak Forest, Cicero, Maywood, and Chicago Heights, was charged with engaging in a scheme to falsify documents in a criminal complaint that was unsealed today following her arrest. She was scheduled to appear at 4 p.m. today before U.S. Magistrate Judge Jeffrey Gilbert in Federal Court.

According to the complaint, in October 2009, DCEO sent POET a letter identifying problems with hundreds of participant files, including approximately 70 files that were missing entirely. In July 2010, DCEO informed POET that it would not reimburse approximately $1.4 million in questioned costs based on the documentation that POET had produced to that point, and DCEO gave POET another month to provide additional documentation.

According to several cooperating witnesses, including POET employees at the time, Hart-Glover instructed them to “reproduce” or “recreate” the files that were needed to maintain the funding. “Let me make something clear. It is not an option for you to not have the Summer Youth files,” she allegedly told a small group of employees in the summer of 2010. In August 2010, Hart-Glover wrote a letter that POET sent to DCEO along with two boxes containing allegedly recreated files and documents. The letter stated that 56 six of the approximately 70 missing files were located and submitted.

However, the charges allege that POET employees did not “locate” the files that POET produced to DCEO and, instead, POET employees recreated those files by forging, altering, and backdating documents. Also, contrary to statements in the letter, POET staff did not verify an applicant’s compliance with the Selective Service Act or check an applicant’s low-income status at the intake site because POET employees did not have access to computers at those locations, the complaint states.

In March 2011, federal agents interviewed Hart-Glover. The complaint alleges that she denied knowing the following: that POET employees falsified documents provided to the state agency; that some birth certificates were missing from the summer youth files; that birth certificates were being recreated by POET employees; and that anyone fabricated the public aid printouts so that the print date appeared to be the date of the application.

The arrest and charge were announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois; James Vanderberg, Special Agent in Charge of the U.S. Department of Labor Office of Inspector General in Chicago; Robert D. Grant, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; and Thomas P. Brady, Inspector in Charge of the U.S. Postal Inspection Service in Chicago. The Cook County Inspector General and the current administration of Cook County Works cooperated with the investigation.

The government is being represented by Assistant U.S. Attorney Greg Deis.

Making false statements carries a maximum penalty of five years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

A complaint contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

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If It’s Too Good To Be True, It Might be a Ponzi Scheme

If a respected member of your community offered you an investment opportunity, you might consider it. Especially if it’s a man of the cloth.

For nearly a decade, Martin Sigillito—a bishop in the American Anglican Convocation and a St. Louis attorney—convinced 200-plus people to do more than just consider it: they actually entrusted him with their money to invest in a financial venture. But this venture turned out to be an old-fashioned Ponzi scheme, and in April of this year, Sigillito was convicted of leading a conspiracy that swindled $52 million from victim investors.

How the scam began. In late 2000, Sigillito opened a law office but didn’t actually practice law—instead, he advertised his “international business consulting services.” One of the “services” he offered was participation in the British Lending Program (BLP), transformed by Sigillito into a Ponzi scheme. Through the BLP, investors could “loan” money to a real estate developer in the United Kingdom for short periods of time, mostly one year, at high rates of return—between 10 and 48 percent.

This real estate developer, according to Sigillito, had a knack for spotting undervalued properties he could flip for a profit, had options on land that would become valuable when re-zoned, and had inside connections with British authorities. It sounded like a win-win for investors.

Unfortunately, this British developer was not the wunderkind Sigillito made him out to be—he was just another link in the criminal conspiracy.

How did Sigillito convince his investors to part with their money? He exploited his personal ties to people and particular groups he was affiliated with—like his church, social clubs, professional acquaintances, family, and neighbors—in a technique known as affinity fraud. He also held himself up as an expert in international law and finance and claimed he was a lecturer at Oxford University in England (when in reality he had simply taken part in a summer legal program at Oxford).

Sigillito, who also conspired with another American attorney, insisted that his investors’ funds initially be placed into his trust account, from which he would take exorbitant fees for himself and his co-conspirators. Even though he told investors he would then transmit the money to the U.K., Sigillito actually kept most of the funds in one or more American bank accounts he controlled.

For a while, the scam was self-sustaining: Many investors let their interest payments accrue and rolled their loans over every year, plus Sigillito brought in enough new investors to make interest and principal payments to any previous investor who asked for payment. And all the while, he made enough in “fees” to support his affluent lifestyle: exclusive club memberships, expensive vacations, a country home, a chauffeur, private school for his kids, and collections of rare and antique books, maps, prints, coins, jewelry, and liquor.

How the scam ended. Eventually, an increasing number of investors meant increasing payout requirements, which resulted in the BLP making late interest payments or missing interest payments all together. Then investors began clamoring to withdraw their funds. And finally, Sigillito’s own assistant became suspicious of his activities and contacted the FBI.

The takeaway from this case? Fully investigate any investment opportunity before handing over your hard-earned money.

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Chicago Mob Attacks and Crime Hurting Tourism?

Mayor Rahm Emanuel’s office swung into full damage-control mode Wednesday after Chicago’s convention and tourism chief was quoted as saying that a 38 percent spike in the city’s homicide rate and a troubling return to mob attacks downtown was hurting efforts to promote the city.

Don Welsh, president and CEO of Choose Chicago, told the Chicago Tribune’s editorial board that he’s gotten five or six calls from meeting planners in recent weeks concerned about whether Chicago is still a safe place to hold their meetings.

So far, nobody’s cancelling any meetings just yet. But, that’s a possibility if the Chicago Police Department does not get a quick handle on the problem, Welsh was quoted as saying.“We hope this sunsets quickly because all the good work we’re doing regionally, nationally and internationally, if this is not contained in a reasonable period of time, it will have an impact,” the Tribune’s website quoted Welsh as saying.“There are inquiries that are coming in from meeting planners that are saying, ‘Hey, I’m reading about what’s taken place in your city. Is your city safe?’”

In a follow-up interview with the Chicago Sun-Times a short time later Wednesday, Welsh insisted that his remarks had been “misinterpreted” and “taken out of context.”

He acknowledged that Choose Chicago has gotten “five or six calls over the last five or six weeks” from skittish meeting planners who had read or heard about Chicago’s surging homicide rate and about mob attacks in the downtown area.But, Welsh said, he has an answer for those inquiries.“They’re asking if these issues are taking place in the downtown area or near McCormick Place and the answer we’ve given them is an emphatic, ‘No,’” Welsh said.

“There has never been a second thought about how we position Chicago as the safest big city in the world. The only issue we’ve run into is this isolated gang activity that the mayor has been aggressively dealing with. [Overall] crime continues to be down. The shootings we have seen have been almost 100 percent isolated to neighborhoods outside the downtown core of Chicago where tourists and visitors from around the world frequent.”

Reminded that there was a shooting right off Michigan Avenue that police attributed to “gang-related road rage,” Welsh said, “An isolated incident could take place in any city in the world. But crime is down and continues to be down.”

Apparently concerned that his earlier remarks might land him in Emanuel’s doghouse, Welsh then talked about all of the “positive trends” he has seen lately in the drive to meet the mayor’s ambitious goal of attracting 10 million more visitors by 2020.“We just wrapped up what is probably the best June in the history of the city. We’ve announced the retention of over $3 billion in convention business. Last week alone, we opened international sales offices in Brazil and Japan,” he said.“All the metrics we look at — from hotel occupancy to bookings and editorial support domestically and internationally — are all up with positive information about our city. … Chicago is an incredibly safe and clean city that’s got any amenity that visitors, convention and leisure visitors want. The hallmark of the city has always been clean, safe streets and that had not changed.”

Emanuel’s communications director Sarah Hamilton said Welsh’s earlier claim that crime and the perception of it is hurting tourism is “simply false.”

“More and more people are coming to Chicago. Our visitors rates are up and hotel occupancy was over 90 percent last month,” Hamilton wrote, “one of the most outstanding months the city has had in recent history.”

The occupancy rate in June was 91.8 percent, up from 87.7 percent last year, even though the average daily rate per room, nearly $224 was up 1.9 percent compared to last year.“We expect the numbers to get better and better,” she said.And she noted that despite the spike in homicides, “overall crime” is down 10 percent across the city.

McPier CEO Jim Reilly was asked whether he shares Welsh’s view about Chicago’s crime problem and the impact it could have on conventions and tourism.“It certainly isn’t helping, but I don’t know that I would say it’s killing us,” Reilly said.“Part of it is reality. Part of it is the way the story sometimes gets played. But, I don’t know that I would go as far as Don. It’s clearly not helping. That’s what I would say.”

Reilly said he has not gotten any calls from convention and trade show planners concerned about whether it’s safe to come to Chicago.“In terms of our job conventions and trade shows — I don’t think it’s had much impact. Choose Chicago is the sales arm. He deals with tourists. We don’t. We aren’t directly getting any calls. If there are calls, they’d be going to Choose Chicago — not us,” Reilly said.

“The concern is that the perception would be that it’s not safe. I don’t know that it has thus far been a huge issue. But with the coverage, it has the potential to be that. To the extent there is a problem in terms of tourism, it is a perception problem. Clearly, there is a reality behind it and the mayor and the superintendent are working on that.”

Earlier this year, Emanuel merged Chicago’s two major tourism organizations to free up $1.3 million to market Chicago nationwide and overseas and set a goal of attracting 10 million more visitors by 2020.

At the mayor’s behest, the Chicago Convention & Tourism Bureau joined forces with the Chicago Office of Tourism and Culture. The new organization is now run by Welsh.

Choose Chicago subsequently opened international sales offices in Brazil, Germany and Japan bringing the city’s international sales efforts to eight offices on four continents.

Even with the expansion, Chicago spends the “least of any major U.S. city” on international marketing, officials said. Las Vegas has 22 overseas offices. New York (18), Los Angeles (15) and San Francisco (13) also run circles around Chicago.

As a result, Chicago claimed just 4.3 percent of the 27 million overseas travelers to the U.S. in 2010, compared to 32 percent for New York.

“We’re the third largest city in America and we’re 10th on foreign tourists. … And I do not believe that the best kept secret of America should be the city of Chicago,” the mayor told the Chicago Convention and Tourism Bureau at the time.

“We’ve consolidated three offices here in the city that deal with the tourism and convention business and we’re gonna open three offices around the world where the tourists exists. It doesn’t take a lot of geniuses to do that, but it took years of study to come up with that conclusion.”

Chicago currently attracts 40 million annual visitors, but only 1.2 million of them come from overseas.

Emanuel’s goal is to raise it to 50 million visitors by 2020 and to move into the top five cities for international tourists. Chicago currently ranks tenth among U.S. cities.

A 25 percent increase could raise visitor spending by $3.6 billion-a-year and boost annual tax revenue by up to $300 million.

“We have lagged in the tourism business. And it shows..”

Thanks to Fran Spielman

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