A certified public accountant who was involved in the auditing process at a publicly traded company based in Chicago was indicted on federal fraud charges for allegedly engaging in insider trading of the company’s securities that made him an illegal profit of more than $286,000 in 2012. The defendant, Steven M. Dombrowski, who was the director of corporate audit for Allscripts Healthcare Solutions Inc., was charged with 16 counts of securities fraud in an indictment that was returned by a federal grand jury yesterday and announced today.
At the same time, the U.S. Securities and Exchange Commission announced that it filed a civil enforcement action involving the insider trading allegations against Dombrowski yesterday in U.S. District Court in Chicago. Dombrowski, 49, of Chicago, will be arraigned on the criminal charges on a date yet to be determined in Federal Court.
According to the indictment, Dombrowski misused material, non-public information he knew about Allscripts’ performance for the first quarter of 2012 and purchased put options and engaged in short sales of stock through a trading account in his wife’s maiden name that he controlled, which resulted in illegal profits of approximately $286,211. The indictment seeks forfeiture of that amount from Dombrowski.
Dombrowski and the employees he supervised were responsible for auditing and testing the processes and procedures Allscripts used to compute and report its financial performance. Allscripts provides information technology solutions to the health care industry, and its common stock is traded on the NASDAQ stock market under the symbol MDRX.
Between April 10 and April 28, 2012, a quarterly blackout period was in effect at Allscripts. The blackout prohibited certain employees, including Dombrowski, who were given written notice and who had access to material, non-public information, from engaging in insider trading 15 days before the end of a quarter and ending after the second full business day following the company’s quarterly earnings announcement.
Dombrowski allegedly learned in April 2012 through his employment that Allscripts’ first quarter financial results were going to be less favorable than market expectations when they were publicly announced on April 26, 2012. Throughout April, Dombrowski conducted securities transactions that he designed to be profitable if the price of Allscripts stock declined, including purchasing put options and short selling stock, which he knew was prohibited, the indictment alleges. Allscripts’ stock, in fact, declined when its 2012 first quarter announcement revealed lower sales, less revenue, and lower earnings per share than the first quarter of 2011.
After Allscripts stock declined on and after April 26, 2012, Dombrowski allegedly offset his Allscripts securities positions and profited approximately $286,211 from insider trading, the charges allege.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation. The SEC cooperated in the investigation.
The government is being represented by Assistant U.S. Attorneys Clifford C. Histed and Paul H. Tzur.
Each count of securities fraud carries a maximum penalty of 20 years in prison and a $5 million fine, and restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment 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.
Wednesday, January 29, 2014
How to Protect Yourself from #IdentityTheft
Tobechi Onwuhara led a multi-million-dollar home equity line of credit fraud scheme that involved hundreds of victims in the U.S. Often times, people didn’t even realize they had been victimized until they got calls from their financial institutions about a late payment on a home equity line of credit loan, until they applied for another kind of loan and were turned down, or until they checked their credit report.
Fortunately,
these victims—because their financial institutions were insured—were reimbursed for their financial losses. But for all victims of identity theft, there are long-term challenges to face, including credit rating damage, the time and effort to repair damaged credit, and financial hardship. Here are a few tips to help you protect yourself and your loved ones from identity thieves:
Fortunately,
these victims—because their financial institutions were insured—were reimbursed for their financial losses. But for all victims of identity theft, there are long-term challenges to face, including credit rating damage, the time and effort to repair damaged credit, and financial hardship. Here are a few tips to help you protect yourself and your loved ones from identity thieves:- Review your credit report at least once a year.
- Monitor your bank accounts and credit card accounts routinely and report any unauthorized or suspicious activity to your financial institution immediately.
- Use strong passwords for your online financial accounts.
- Make sure you have up-to-date security software on your computer and other devices.
- Limit sharing of personal information on social networking sites.
Tuesday, January 28, 2014
Fugitive Identity Thief Tobechi Onwuhara Led Global Criminal Enterprise #ScamOnTheRun
He made a living stealing other people’s identities…and then their money. And what a living it was—more than enough to bankroll luxury homes, fancy cars, expensive clothes and jewelry, and nights spent in clubs and casinos. When law enforcement was about to swoop in and arrest the thief, he managed to flee the country and continue his extravagant lifestyle abroad for about four years.
Eventually, thanks to investigators who wouldn’t give up and international partners who provided vital support, this man was found and returned to the U.S. to face justice.
Last month, Tobechi Onwuhara, of Dallas, Texas—the ringleader of a multi-million-dollar fraud scheme and a former FBI wanted cyber fugitive—was sentenced to federal prison. Seven additional co-conspirators have either pled guilty or been convicted.
There’s no shortage of schemes that identity thieves perpetrate to line their own pockets—from stealing credit card numbers and fraudulently applying for loans and refunds to breaking into online bank accounts. Onwuhara’s specialty? He targeted home equity line of credit accounts, a form of revolving credit in which your home serves as collateral.
How the scheme worked: Onwuhara and his co-conspirators identified potential victims—people who had home equity line of credit accounts with large balances—by accessing certain fee-based websites often used in the real estate for customer leads (one of Onwuhara’s associates was a real estate agent). After collecting bits of personally identifiable information from those websites—like names, addresses, dates of birth, and Social Security numbers—and then using other online sites to obtain personal information to help with passwords and security questions, they were able to access victims’ credit reports online, which contained loan balances and other financial and personal information.
Armed with this information, Onwuhara would either call a customer service representative at a victim’s financial institution while impersonating the victim—or gain access to the victim’s online account—and request a transfer of funds from the home equity line of credit account into the victim’s checking or savings account. From those accounts, he’d request that the money be wired to another bank account—usually overseas and always one that he controlled.
To help with the impersonation, Onwuhara would use caller ID spoofing services to display the customer’s legitimate phone number. And in case the financial institution needed to call the customer back for some reason before the money was wired, Onwuhara—again impersonating the victim—would call the victim’s telephone company and request call forwarding to another phone (which of course belonged to a member of his criminal group).
Once the money was transferred, Onwuhara paid money mules in several different countries to withdraw the money and get it back to Onwuhara’s criminal enterprise.
The FBI's investigation of Onwuhara’s scheme—which involved hundreds of victims nationwide, attempts to steal more than $38 million, and losses of $13 million—began in late 2007 after they received a complaint from a victim in the Washington, D.C. area. They were ultimately able to identify and gather evidence against Onwuhara and his crew, and federal charges were handed down in August 2008. After he fled the U.S., ongoing international law enforcement efforts continued until December 2012, when he was located in Sydney, arrested by the Australian National Police, and returned to this country.
Eventually, thanks to investigators who wouldn’t give up and international partners who provided vital support, this man was found and returned to the U.S. to face justice.
Last month, Tobechi Onwuhara, of Dallas, Texas—the ringleader of a multi-million-dollar fraud scheme and a former FBI wanted cyber fugitive—was sentenced to federal prison. Seven additional co-conspirators have either pled guilty or been convicted.There’s no shortage of schemes that identity thieves perpetrate to line their own pockets—from stealing credit card numbers and fraudulently applying for loans and refunds to breaking into online bank accounts. Onwuhara’s specialty? He targeted home equity line of credit accounts, a form of revolving credit in which your home serves as collateral.
How the scheme worked: Onwuhara and his co-conspirators identified potential victims—people who had home equity line of credit accounts with large balances—by accessing certain fee-based websites often used in the real estate for customer leads (one of Onwuhara’s associates was a real estate agent). After collecting bits of personally identifiable information from those websites—like names, addresses, dates of birth, and Social Security numbers—and then using other online sites to obtain personal information to help with passwords and security questions, they were able to access victims’ credit reports online, which contained loan balances and other financial and personal information.
Armed with this information, Onwuhara would either call a customer service representative at a victim’s financial institution while impersonating the victim—or gain access to the victim’s online account—and request a transfer of funds from the home equity line of credit account into the victim’s checking or savings account. From those accounts, he’d request that the money be wired to another bank account—usually overseas and always one that he controlled.
To help with the impersonation, Onwuhara would use caller ID spoofing services to display the customer’s legitimate phone number. And in case the financial institution needed to call the customer back for some reason before the money was wired, Onwuhara—again impersonating the victim—would call the victim’s telephone company and request call forwarding to another phone (which of course belonged to a member of his criminal group).
Once the money was transferred, Onwuhara paid money mules in several different countries to withdraw the money and get it back to Onwuhara’s criminal enterprise.
The FBI's investigation of Onwuhara’s scheme—which involved hundreds of victims nationwide, attempts to steal more than $38 million, and losses of $13 million—began in late 2007 after they received a complaint from a victim in the Washington, D.C. area. They were ultimately able to identify and gather evidence against Onwuhara and his crew, and federal charges were handed down in August 2008. After he fled the U.S., ongoing international law enforcement efforts continued until December 2012, when he was located in Sydney, arrested by the Australian National Police, and returned to this country.
Joseph "Uncle Joe" Ligambi Has Feds Dismiss Case After He Beats Gambling and Racketeering Charges Twice
Federal prosecutors abandoned their pursuit of a reputed Philadelphia mob boss on Monday after he twice beat charges in a gambling and racketeering case.
Joseph "Uncle Joe" Ligambi could have faced a third trial after jurors acquitted him last week of witness tampering while deadlocking on three other charges. But prosecutors filed a motion seeking to dismiss the remaining counts — a rare setback in their decades-long campaign against the Philadelphia mob.
Ligambi's attorney, Ed Jacobs, praised the decision and said he expects his client to be released from a federal detention center Tuesday. A judge still has to sign off. "They have properly exercised their discretion," Jacobs said. "They have failed twice in their efforts to convict Joe, and I don't think they think the third time's the charm."
A spokeswoman for U.S. Attorney Zane Memeger declined comment.
The Ligambi case largely involved the collection of small gambling debts and loans, and the operation of video poker machines at neighborhood bars.
Prosecutors won convictions against Ligambi's reputed underboss and enforcer — who were sentenced to 15 years and 11 years in prison respectively — and several associates. But two juries deadlocked on the main racketeering charge against Ligambi, 74, and he was acquitted of six of nine counts overall.
Authorities say Ligambi took over a weakened La Cosa Nostra after his predecessor, Joseph "Skinny Joey" Merlino, was convicted and sent to prison in 2001.
An indictment unsealed in 2011 said Ligambi and other reputed mobsters remained dangerous, using threats to kill or harm people who hadn't paid their debts to the Mafia.
Ligambi has spent nearly three years in prison following his arrest.
Jacobs, who has called the case a witch hunt, said Monday the government should "put all this time and effort and money to better use chasing somebody else."
Joseph "Uncle Joe" Ligambi could have faced a third trial after jurors acquitted him last week of witness tampering while deadlocking on three other charges. But prosecutors filed a motion seeking to dismiss the remaining counts — a rare setback in their decades-long campaign against the Philadelphia mob.
Ligambi's attorney, Ed Jacobs, praised the decision and said he expects his client to be released from a federal detention center Tuesday. A judge still has to sign off. "They have properly exercised their discretion," Jacobs said. "They have failed twice in their efforts to convict Joe, and I don't think they think the third time's the charm."
A spokeswoman for U.S. Attorney Zane Memeger declined comment.
The Ligambi case largely involved the collection of small gambling debts and loans, and the operation of video poker machines at neighborhood bars.
Prosecutors won convictions against Ligambi's reputed underboss and enforcer — who were sentenced to 15 years and 11 years in prison respectively — and several associates. But two juries deadlocked on the main racketeering charge against Ligambi, 74, and he was acquitted of six of nine counts overall.
Authorities say Ligambi took over a weakened La Cosa Nostra after his predecessor, Joseph "Skinny Joey" Merlino, was convicted and sent to prison in 2001.
An indictment unsealed in 2011 said Ligambi and other reputed mobsters remained dangerous, using threats to kill or harm people who hadn't paid their debts to the Mafia.
Ligambi has spent nearly three years in prison following his arrest.
Jacobs, who has called the case a witch hunt, said Monday the government should "put all this time and effort and money to better use chasing somebody else."
Monday, January 27, 2014
Adam Christopher Vega Arrested, Charged with Meth and Marijuana Trafficking Conspiracy
Adam Christopher Vega, 30, of Bakersfield, was arrested in Bakersfield after being charged in a seven-count federal indictment alleging that he and four co-conspirators trafficked in methamphetamine and marijuana, Drug Enforcement Administration Special Agent in Charge Jay Fitzpatrick and United States Attorney Benjamin B. Wagner announced.
The superseding indictment, returned by a federal grand jury in Fresno on January 16, 2014, charges Vega and co-defendants Baltazar Castaneda Garcia, 23; Jesus Manuel Peraza Ruiz, 54; and Robert Anthony Canchola, 26, all of Bakersfield, with conspiring to distribute methamphetamine. Those four persons and Eduardo Ortega Chavez, 32, of Oakland, are also charged with conspiring to manufacture and distribute marijuana.
According to court documents, Vega was the owner of the California’s Best Cooperative Inc., a medical marijuana dispensary in Bakersfield during the time he was allegedly trafficking in methamphetamine and marijuana. Court documents indicate that the defendants trafficked in marijuana and other controlled substances between Kern County and Oakland where defendant Chavez maintained a marijuana grow operation. In October 2013, Ruiz was stopped in Bakersfield with approximately six pounds of methamphetamine concealed in his vehicle as he was returning from Southern California. Garcia and Canchola are also charged with possession of methamphetamine and manufacturing marijuana in connection with substances that were seized during searches at three residences in Bakersfield on January 8, 2014, including two that contained indoor marijuana grow operations.
This case is the product of an investigation by the Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Bakersfield Police Department, Kern County Sheriff’s Office, and Kern County Probation Department. Assistant United States Attorney Laurel J. Montoya is prosecuting the case.
Vega will make his initial appearance before a U.S. Magistrate Judge in Bakersfield. Defendant Ruiz was previously ordered detained in this case. Defendants Garcia and Canchola are temporarily detained pending a detention hearing. An arrest warrant has been issued for defendant Chavez.
If convicted, Vega, Garcia, Ruiz and Canchola face a maximum statutory penalty of 10 years to life in prison and a $10 million fine. If convicted, Chavez faces a maximum statutory penalty of five to 40 years in prison and a $5 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The superseding indictment, returned by a federal grand jury in Fresno on January 16, 2014, charges Vega and co-defendants Baltazar Castaneda Garcia, 23; Jesus Manuel Peraza Ruiz, 54; and Robert Anthony Canchola, 26, all of Bakersfield, with conspiring to distribute methamphetamine. Those four persons and Eduardo Ortega Chavez, 32, of Oakland, are also charged with conspiring to manufacture and distribute marijuana.
According to court documents, Vega was the owner of the California’s Best Cooperative Inc., a medical marijuana dispensary in Bakersfield during the time he was allegedly trafficking in methamphetamine and marijuana. Court documents indicate that the defendants trafficked in marijuana and other controlled substances between Kern County and Oakland where defendant Chavez maintained a marijuana grow operation. In October 2013, Ruiz was stopped in Bakersfield with approximately six pounds of methamphetamine concealed in his vehicle as he was returning from Southern California. Garcia and Canchola are also charged with possession of methamphetamine and manufacturing marijuana in connection with substances that were seized during searches at three residences in Bakersfield on January 8, 2014, including two that contained indoor marijuana grow operations.
This case is the product of an investigation by the Drug Enforcement Administration, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Bakersfield Police Department, Kern County Sheriff’s Office, and Kern County Probation Department. Assistant United States Attorney Laurel J. Montoya is prosecuting the case.
Vega will make his initial appearance before a U.S. Magistrate Judge in Bakersfield. Defendant Ruiz was previously ordered detained in this case. Defendants Garcia and Canchola are temporarily detained pending a detention hearing. An arrest warrant has been issued for defendant Chavez.
If convicted, Vega, Garcia, Ruiz and Canchola face a maximum statutory penalty of 10 years to life in prison and a $10 million fine. If convicted, Chavez faces a maximum statutory penalty of five to 40 years in prison and a $5 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Leonard "Juice" Coker, Wilkinsburg Shooting Suspect, Captured by US Marshals Fugitive Task Force
The U.S. Marshals Western Pennsylvania Fugitive Task Force (WPAFTF) arrested fugitive Leonard “Juice” Coker at approximately 12:30 pm this afternoon at a residence in Penn Hills. Coker, age 22, was charged by the Allegheny County Police on December 24, 2013 with Criminal Attempt - Criminal Homicide, Carrying a Firearm without a License, Aggravated Assault and Recklessly Endangering another Person. These charges arose out of an incident occurring at a Wilkinsburg barber shop on October 31, 2013. Coker is alleged to have entered the barber shop and shot the male victim multiple times as he sat in a chair getting his hair cut.
Coker was also wanted by the Penn Hills Police Department based on a December 19, 2013 arrest warrant charging him with Carrying a Firearm without a License, Carrying a Loaded Weapon, Resisting Arrest and Escape. Additionally, Coker was also wanted pursuant to an Allegheny County Court of Common Please probation violation arrest warrant issued December 19, 2013 for the underlying offense of Firearms not to be Carried without a License
.
Coker was last known to reside in the New Kensington area and was known to frequent the Penn Hills, New Kensington and Arnold areas. WPAFTF members arrested Coker this afternoon without incident in the first floor of a residence in the 100 block of Marose Drive, Penn Hills. Following his arrest, Coker was turned him over to the custody of Allegheny County Police Homicide Detectives.
The U.S. Marshals Fugitive Task Force is comprised of officers from the Pennsylvania State Police, Pennsylvania Board of Probation and Parole, Pittsburgh Bureau of Police, Allegheny County Sheriffs, and Westmoreland County Sheriff’s. These agencies, along with the United States Attorney’s Office, are participating members of the U.S. Marshals Western Pennsylvania Fugitive Task Force (WPAFTF.
Coker was also wanted by the Penn Hills Police Department based on a December 19, 2013 arrest warrant charging him with Carrying a Firearm without a License, Carrying a Loaded Weapon, Resisting Arrest and Escape. Additionally, Coker was also wanted pursuant to an Allegheny County Court of Common Please probation violation arrest warrant issued December 19, 2013 for the underlying offense of Firearms not to be Carried without a License
.
Coker was last known to reside in the New Kensington area and was known to frequent the Penn Hills, New Kensington and Arnold areas. WPAFTF members arrested Coker this afternoon without incident in the first floor of a residence in the 100 block of Marose Drive, Penn Hills. Following his arrest, Coker was turned him over to the custody of Allegheny County Police Homicide Detectives.
The U.S. Marshals Fugitive Task Force is comprised of officers from the Pennsylvania State Police, Pennsylvania Board of Probation and Parole, Pittsburgh Bureau of Police, Allegheny County Sheriffs, and Westmoreland County Sheriff’s. These agencies, along with the United States Attorney’s Office, are participating members of the U.S. Marshals Western Pennsylvania Fugitive Task Force (WPAFTF.
Jeffrey Leonard Wanted in Connection With Two Armed Robberies Arrested by U.S. Marshals Fugitive Task Force in New Hampshire
Members of the U.S. Marshals Fugitive Task Force from both New Hampshire and Massachusetts arrested fugitive Jeffrey Leonard, age 29. Leonard was being sought in connection with two armed robberies in MA.
Earlier this month, the U.S. Marshals Fugitive Task Force in Massachusetts had been requested to assist in the location and arrest of Jeffrey Leonard. Leonard was wanted by both the Yarmouth and Dennis, Massachusetts Police Departments on outstanding arrest warrants for armed robbery while masked with a firearm. Information developed by the Marshals Task Force in Massachusetts, led investigators to NH, where Leonard was originally from and had a previous conviction for another armed robbery.
Investigators narrowed their search to a residence in the 900 block of Union Street in Manchester, NH. After a period of surveillance, it was determined that Leonard was likely inside the residence. Officers initially checked the apartment that Leonard was believed to be in without finding him. A further search of the residence led investigators to the basement where Leonard was found hiding, and he was arrested without any further incident.
The Hillsborough County Sheriff’s Office has charged Leonard as a fugitive from justice on the two outstanding Massachusetts arrest warrants.
These arrests were made by members of the task force, including; Rockingham, Hillsborough, & Belknap County Deputy Sheriffs, deputy U.S. Marshals from MA and NH.
Since the inception of the New Hampshire Joint Fugitive Task Force in 2002, these partnerships have resulted in over 5,523 arrests. These arrests have ranged in seriousness from murder, assault, unregistered sex offenders, probation and parole violations and numerous other serious offenses.
Nationally the United States Marshals Service fugitive programs are carried out with local law enforcement in 94 district offices, 85 local fugitive task forces, 7 regional task forces, as well as a growing network of offices in foreign countries.
Earlier this month, the U.S. Marshals Fugitive Task Force in Massachusetts had been requested to assist in the location and arrest of Jeffrey Leonard. Leonard was wanted by both the Yarmouth and Dennis, Massachusetts Police Departments on outstanding arrest warrants for armed robbery while masked with a firearm. Information developed by the Marshals Task Force in Massachusetts, led investigators to NH, where Leonard was originally from and had a previous conviction for another armed robbery.
Investigators narrowed their search to a residence in the 900 block of Union Street in Manchester, NH. After a period of surveillance, it was determined that Leonard was likely inside the residence. Officers initially checked the apartment that Leonard was believed to be in without finding him. A further search of the residence led investigators to the basement where Leonard was found hiding, and he was arrested without any further incident.
The Hillsborough County Sheriff’s Office has charged Leonard as a fugitive from justice on the two outstanding Massachusetts arrest warrants.
These arrests were made by members of the task force, including; Rockingham, Hillsborough, & Belknap County Deputy Sheriffs, deputy U.S. Marshals from MA and NH.
Since the inception of the New Hampshire Joint Fugitive Task Force in 2002, these partnerships have resulted in over 5,523 arrests. These arrests have ranged in seriousness from murder, assault, unregistered sex offenders, probation and parole violations and numerous other serious offenses.
Nationally the United States Marshals Service fugitive programs are carried out with local law enforcement in 94 district offices, 85 local fugitive task forces, 7 regional task forces, as well as a growing network of offices in foreign countries.
Dr. Charles DeHaan of Housecall Physicians Group, Arrested on Charge of Health Care Fraud
A local physician whose license was suspended this month was arrested on a federal complaint alleging health care fraud. Charles S. DeHaan, 59, of Belvidere, Illinois, was charged with engaging in a scheme to defraud Medicare. The complaint alleges that as a part of the scheme, DeHaan operated Housecall Physicians Group of Rockford, S.C., located in Rockford. The charge alleges that DeHaan submitted false claims to Medicare in December 2013.
In support of the charge, the complaint alleges that between 2010 and 2013, DeHaan billed Medicare for medical services that he did not provide to at least five patients. Instead, DeHaan engaged in sexual misconduct with four of these patients, all women, and offered or provided prescriptions for controlled medications, according to the complaint affidavit.
DeHaan appeared before United States Magistrate Judge Iain D. Johnston, who ordered that he be held in custody until a detention hearing is conducted.
The charge of health care fraud carries a maximum potential penalty of up to 10 years in prison, a fine of up to $250,000, and full restitution.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent in Charge of the Chicago Office of Federal Bureau of Investigation; and Lamont Pugh, III, Special Agent in Charge of the Chicago Regional Office of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG)
The federal case was investigated by the FBI and HHS-OIG, with the assistance of the Illinois State Police Medicaid Fraud Control Unit. The government was represented in federal court by Assistant U.S. Attorney Jolm G. McKenzie.
The public is reminded that a complaint is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to indictment by a federal grand jury and, if indicted, to a fair trial at which the government has the burden of proving his guilt beyond a reasonable doubt.
In support of the charge, the complaint alleges that between 2010 and 2013, DeHaan billed Medicare for medical services that he did not provide to at least five patients. Instead, DeHaan engaged in sexual misconduct with four of these patients, all women, and offered or provided prescriptions for controlled medications, according to the complaint affidavit.
DeHaan appeared before United States Magistrate Judge Iain D. Johnston, who ordered that he be held in custody until a detention hearing is conducted.
The charge of health care fraud carries a maximum potential penalty of up to 10 years in prison, a fine of up to $250,000, and full restitution.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent in Charge of the Chicago Office of Federal Bureau of Investigation; and Lamont Pugh, III, Special Agent in Charge of the Chicago Regional Office of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG)
The federal case was investigated by the FBI and HHS-OIG, with the assistance of the Illinois State Police Medicaid Fraud Control Unit. The government was represented in federal court by Assistant U.S. Attorney Jolm G. McKenzie.
The public is reminded that a complaint is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to indictment by a federal grand jury and, if indicted, to a fair trial at which the government has the burden of proving his guilt beyond a reasonable doubt.
Waldyr Prado and Igor Cornelsen Charged with Insider Trading on @BurgerKing Stock
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (FBI), announced today the unsealing of a criminal complaint in Manhattan federal court charging Waldyr Prado, a former financial adviser at a large U.S. brokerage firm, and Igor Cornelsen, a director of a British Virgin Islands Investment Company that he owns and operates, with using inside information to trade on Burger King securities in advance of Burger King’s September 2010 acquisition by 3G Capital Partners (3G), a New York and Brazil based private equity firm. Prado and Cornelsen are nationals and residents of Brazil, and they have not yet been arrested on these charges.
Manhattan U.S. Attorney Preet Bharara said, “As alleged, when Waldyr Prado and Igor Cornelsen traded around a ‘sandwich deal,’ the defendants knew they were committing insider trading. They were illegally profiting from material non-public information to which they were not entitled.”
Assistant Director in Charge George Venizelos said, “Trading on inside information negatively impacts individual investors, puts companies at risk and threatens the public’s faith in our financial markets. As alleged, Mr. Prado and Mr. Cornelsen put their faith in a ‘sandwich deal’ and bit off more than they could chew. The FBI will continue to investigate this type of illegal conduct and prosecute those who violate our laws.”
According to the complaint unsealed today in Manhattan federal court:
In about February 2010, 3G initiated discussions with Burger King about a potential acquisition. As part of these discussions, Burger King and 3G executed a confidentiality agreement in April 2010, pursuant to which all aspects of their negotiations and due diligence were non-public.
In about early March 2010, a principal of 3G (3G Principal-1) contacted an investor of the firm (Client-1) and advised that 3G was in negotiations to acquire Burger King. Client-1, who was also a brokerage client of Prado’s, signed a confidentiality agreement with 3G relating to the potential Burger King acquisition. This agreement permitted Client-1 to share information concerning the potential acquisition with Client-1’s financial adviser, i.e. Prado, in order to facilitate Client-1’s decision to invest in the specific 3G fund that would acquire Burger King (the 3G Fund).
From about March 2010 through the September 2, 2010 announcement that 3G would purchase Burger King for $4 billion in stock and the assumption of debt (the September 2 announcement), Client-1 received periodic updates about the general progress of the deal from 3G’s principals. During this period, Client-1 evaluated whether to liquidate personal holdings for a $50 million commitment to the 3G Fund or to obtain separate financing. Client-1 discussed this issue with Prado and, in so doing, confided that the financing was for a commitment to a 3G fund seeking to acquire Burger King. Based on their professional relationship, Client-1 believed that Prado would maintain the confidentiality of this information. Over the next several months, Client-1 and Client-1’s assistant spoke with Prado about the progress of the Burger King transaction.
Notwithstanding the duties of trust and confidence owed to his brokerage firm employer and Client-1, Prado misappropriated information learned from Client-1 for his own benefit and to purchase Burger King stock and options. For example, on May 17, 2010, after Prado met with Client-1 in Brazil and learned of the potential 3G-Burger King acquisition, Prado sent an e-mail to an acquaintance in the financial industry (Witness-1) stating that Prado was “in Brazil with information that cannot be sent by e-mail. You can’t miss it.” After sending this e-mail, Prado and Witness-1 spoke by telephone, and Prado told Witness-1 that 3G was going to acquire Burger King. From May 17, 2010 through September 1, 2010, Prado purchased Burger King stock and call options. On September 2, 2010, following the announcement of 3G’s acquisition, Prado sold his Burger King holdings for a total profit of over approximately $175,000.
On May 17, 2010, and minutes after Prado sent the e-mail to Witness-1 referenced above, Prado sent a similar e-mail to Cornelsen. The e-mail stated that Prado had “some info that I cannot say over the phone....You have to hear this.” Within minutes, and after the market closed, Cornelsen called Prado. The next day, Cornelsen began trading out-of-the-money Burger King call options. From May 18, 2010 through late August 2010, Cornelsen purchased short-expiration call options and had frequent contact with Prado. For example, on August 18, 2010, Cornelsen sent Prado an e-mail asking if “the sandwich deal going to happen,” to which Prado replied, “it’s going to happen.” On the same day, Cornelsen sent Prado another e-mail asking again whether the “sandwich deal” was going to happen, and Prado responded that it was a “sure thing.” After the September 2 announcement, Cornelsen sold his options for a total profit of approximately $1.68 million and a net profit (including expired July 2010 options) of approximately $1.4 million.
In July 2012, in connection with an insider trading investigation, the Securities and Exchange Commission (SEC) deposed Prado. In his deposition, Prado denied any advance knowledge of the Burger King acquisition. Approximately one month after his deposition, Prado fled to Brazil, from where he told his U.S.-based supervisor that he would not be returning to the United States because he believed that he was going to be charged with perjury and because Brazil did not have “an extradition policy.”
Prado, 43, of Porto Seguro, Brazil, and Cornelsen, 65, of São Paolo, Brazil, have been charged in the complaint with conspiracy to commit securities fraud and fraud in connection with a tender offer (count one), securities fraud (count two), and fraud in connection with a tender offer (count three). The securities fraud and fraud in connection with a tender offer charges each carry a maximum term of 20 years in prison, and the conspiracy charge carries a maximum term of five years in prison.
Mr. Bharara praised the investigative work of the FBI and also thanked the Securities and Exchange Commission, which has brought civil actions against the defendants.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. 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 is 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. For more information on the task force, please visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys David I. Miller and Jason Cowley are in charge of the prosecution.
Manhattan U.S. Attorney Preet Bharara said, “As alleged, when Waldyr Prado and Igor Cornelsen traded around a ‘sandwich deal,’ the defendants knew they were committing insider trading. They were illegally profiting from material non-public information to which they were not entitled.”
Assistant Director in Charge George Venizelos said, “Trading on inside information negatively impacts individual investors, puts companies at risk and threatens the public’s faith in our financial markets. As alleged, Mr. Prado and Mr. Cornelsen put their faith in a ‘sandwich deal’ and bit off more than they could chew. The FBI will continue to investigate this type of illegal conduct and prosecute those who violate our laws.”
According to the complaint unsealed today in Manhattan federal court:
In about February 2010, 3G initiated discussions with Burger King about a potential acquisition. As part of these discussions, Burger King and 3G executed a confidentiality agreement in April 2010, pursuant to which all aspects of their negotiations and due diligence were non-public.
In about early March 2010, a principal of 3G (3G Principal-1) contacted an investor of the firm (Client-1) and advised that 3G was in negotiations to acquire Burger King. Client-1, who was also a brokerage client of Prado’s, signed a confidentiality agreement with 3G relating to the potential Burger King acquisition. This agreement permitted Client-1 to share information concerning the potential acquisition with Client-1’s financial adviser, i.e. Prado, in order to facilitate Client-1’s decision to invest in the specific 3G fund that would acquire Burger King (the 3G Fund).
From about March 2010 through the September 2, 2010 announcement that 3G would purchase Burger King for $4 billion in stock and the assumption of debt (the September 2 announcement), Client-1 received periodic updates about the general progress of the deal from 3G’s principals. During this period, Client-1 evaluated whether to liquidate personal holdings for a $50 million commitment to the 3G Fund or to obtain separate financing. Client-1 discussed this issue with Prado and, in so doing, confided that the financing was for a commitment to a 3G fund seeking to acquire Burger King. Based on their professional relationship, Client-1 believed that Prado would maintain the confidentiality of this information. Over the next several months, Client-1 and Client-1’s assistant spoke with Prado about the progress of the Burger King transaction.
Notwithstanding the duties of trust and confidence owed to his brokerage firm employer and Client-1, Prado misappropriated information learned from Client-1 for his own benefit and to purchase Burger King stock and options. For example, on May 17, 2010, after Prado met with Client-1 in Brazil and learned of the potential 3G-Burger King acquisition, Prado sent an e-mail to an acquaintance in the financial industry (Witness-1) stating that Prado was “in Brazil with information that cannot be sent by e-mail. You can’t miss it.” After sending this e-mail, Prado and Witness-1 spoke by telephone, and Prado told Witness-1 that 3G was going to acquire Burger King. From May 17, 2010 through September 1, 2010, Prado purchased Burger King stock and call options. On September 2, 2010, following the announcement of 3G’s acquisition, Prado sold his Burger King holdings for a total profit of over approximately $175,000.
On May 17, 2010, and minutes after Prado sent the e-mail to Witness-1 referenced above, Prado sent a similar e-mail to Cornelsen. The e-mail stated that Prado had “some info that I cannot say over the phone....You have to hear this.” Within minutes, and after the market closed, Cornelsen called Prado. The next day, Cornelsen began trading out-of-the-money Burger King call options. From May 18, 2010 through late August 2010, Cornelsen purchased short-expiration call options and had frequent contact with Prado. For example, on August 18, 2010, Cornelsen sent Prado an e-mail asking if “the sandwich deal going to happen,” to which Prado replied, “it’s going to happen.” On the same day, Cornelsen sent Prado another e-mail asking again whether the “sandwich deal” was going to happen, and Prado responded that it was a “sure thing.” After the September 2 announcement, Cornelsen sold his options for a total profit of approximately $1.68 million and a net profit (including expired July 2010 options) of approximately $1.4 million.
In July 2012, in connection with an insider trading investigation, the Securities and Exchange Commission (SEC) deposed Prado. In his deposition, Prado denied any advance knowledge of the Burger King acquisition. Approximately one month after his deposition, Prado fled to Brazil, from where he told his U.S.-based supervisor that he would not be returning to the United States because he believed that he was going to be charged with perjury and because Brazil did not have “an extradition policy.”
Prado, 43, of Porto Seguro, Brazil, and Cornelsen, 65, of São Paolo, Brazil, have been charged in the complaint with conspiracy to commit securities fraud and fraud in connection with a tender offer (count one), securities fraud (count two), and fraud in connection with a tender offer (count three). The securities fraud and fraud in connection with a tender offer charges each carry a maximum term of 20 years in prison, and the conspiracy charge carries a maximum term of five years in prison.
Mr. Bharara praised the investigative work of the FBI and also thanked the Securities and Exchange Commission, which has brought civil actions against the defendants.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. 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 is 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. For more information on the task force, please visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys David I. Miller and Jason Cowley are in charge of the prosecution.
DEA Charges Bitcoin Exchange Companies for Laundering #SilkRoad Drug Money
The DEA and other federal law enforcement partners today Bitcoin exchangers, including a CEO, were charged with money laundering related to drug proceeds from users of the Silk Road website. James J. Hunt, the DEA Acting Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), Preet Bharara, the United States Attorney for the Southern District of New York, and Toni Weirauch, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the unsealing of criminal charges in Manhattan federal court.
Charges are against ROBERT M. FAIELLA, a/k/a “BTCKing,” an underground Bitcoin exchanger, and CHARLIE SHREM, the Chief Executive Officer and Compliance Officer of a Bitcoin exchange company, for engaging in a scheme to sell over $1 million in Bitcoins to users of “Silk Road,” the underground website that enabled its users to buy and sell illegal drugs anonymously and beyond the reach of law enforcement. Each defendant is charged with conspiring to commit money laundering, and operating an unlicensed money transmitting business. SHREM is also charged with willfully failing to file any suspicious activity report regarding FAIELLA’s illegal transactions through the Company, in violation of the Bank Secrecy Act. SCHREM was arrested yesterday at John F. Kennedy International Airport in New York, and is expected to be presented in Manhattan federal court later today before U.S. Magistrate Judge Henry Pitman. FAIELLA was arrested today at his residence in Cape Coral, Florida, and is expected to be presented in federal court in the Middle District of Florida.
DEA Acting Special-Agent-in-Charge James J. Hunt said: “The charges announced today depict law enforcement's commitment to identifying those who promote the sale of illegal drugs throughout the world. Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way. Drug law enforcement’s job is to investigate and identify those who abet the illicit drug trade at all levels of production and distribution including those lining their own pockets by feigning ignorance of any wrong doing and turning a blind eye.”
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Robert Faiella and Charlie Shrem schemed to sell over $1 million in Bitcoins to criminals bent on trafficking narcotics on the dark web drug site, Silk Road. Truly innovative business models don’t need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act. We will aggressively pursue those who would coopt new forms of currency for illicit purposes.”
IRS Special-Agent-in-Charge Toni Weirauch said: “The government has been successful in swiftly identifying those responsible for the design and operation of the ‘Silk Road’ website, as well as those who helped ‘Silk Road’ customers conduct their illegal transactions by facilitating the conversion of their dollars into Bitcoins. This is yet another example of the New York Organized Crime Drug Enforcement Strike Force’s proficiency in applying financial investigative resources to the fight against illegal drugs.”
According to the allegations contained in the Criminal Complaint unsealed today in Manhattan federal court:
From about December 2011 to October 2013, FAIELLA ran an underground Bitcoin exchange on the Silk Road website, a website that served as a sprawling and anonymous black market bazaar where illegal drugs of virtually every variety were bought and sold regularly by the site’s users. Operating under the username “BTCKing,” FAIELLA sold Bitcoins – the only form of payment accepted on Silk Road – to users seeking to buy illegal drugs on the site. Upon receiving orders for Bitcoins from Silk Road users, he filled the orders through a company based in New York, New York (the “Company”). The Company was designed to enable customers to exchange cash for Bitcoins anonymously, that is, without providing any personal identifying information, and it charged a fee for its service. FAIELLA obtained Bitcoins with the Company’s assistance, and then sold the Bitcoins to Silk Road users at a markup.
SHREM is the Chief Executive Officer of the Company, and from about August 2011 until about July 2013, when the Company ceased operating, he was also its Compliance Officer, in charge of ensuring the Company’s compliance with federal and other anti-money laundering (“AML”) laws. SHREM is also the Vice Chairman of a foundation dedicated to promoting the Bitcoin virtual currency system.
SHREM, who personally bought drugs on Silk Road, was fully aware that Silk Road was a drug-trafficking website, and through his communications with FAIELLA, SHREM also knew that FAIELLA was operating a Bitcoin exchange service for Silk Road users. Nevertheless, SHREM knowingly facilitated FAIELLA’s business with the Company in order to maintain FAIELLA’s business as a lucrative source of Company revenue. SHREM knowingly allowed FAIELLA to use the Company’s services to buy Bitcoins for his Silk Road customers; personally processed FAIELLA’s orders; gave FAIELLA discounts on his high-volume transactions; failed to file a single suspicious activity report with the United States Treasury Department about FAIELLA’s illicit activity, as he was otherwise required to do in his role as the Company’s Compliance Officer; and deliberately helped FAIELLA circumvent the Company’s AML restrictions, even though it was SHREM’s job to enforce them and even though the Company had registered with the Treasury Department as a money services business.
Working together, SHREM and FAIELLA exchanged over $1 million in cash for Bitcoins for the benefit of Silk Road users, so that the users could, in turn, make illegal purchases on Silk Road.
In late 2012, when the Company stopped accepting cash payments, FAIELLA ceased doing business with the Company and temporarily shut down his illegal Bitcoin exchange service on Silk Road. FAIELLA resumed operating on Silk Road in April 2013 without the Company’s assistance, and continued to exchange tens of thousands of dollars a week in Bitcoins until the Silk Road website was shut down by law enforcement in October 2013.
FAIELLA, 52, of Cape Coral, Florida, and SHREM, 24, of New York, New York, are each charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of operating an unlicensed money transmitting business, which carries a maximum sentence of five years in prison. SHREM is also charged with one count of willful failure to file a suspicious activity report, which carries a maximum sentence of five years in prison.
Mr. Bharara praised the outstanding investigative work of the DEA’s New York Organized Crime Drug Enforcement Strike Force, which is comprised of agents and officers of the U. S. Drug Enforcement Administration, the New York City Police Department, Immigration and Customs Enforcement - Homeland Security Investigations, the New York State Police, the U. S. Internal Revenue Service Criminal Investigation Division, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Secret Service, the U.S. Marshal Service, New York National Guard, Office of Foreign Assets Control and the New York Department of Taxation and Finance. Mr. Bharara also thanked the FBI’s New York Field Office. Mr. Bharara also noted that the investigation remains ongoing.
The prosecution of this case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorney Serrin Turner is in charge of the prosecution, and Assistant United States Attorney Andrew Adams of the Asset Forfeiture Unit is in charge of the forfeiture aspects of the case.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Charges are against ROBERT M. FAIELLA, a/k/a “BTCKing,” an underground Bitcoin exchanger, and CHARLIE SHREM, the Chief Executive Officer and Compliance Officer of a Bitcoin exchange company, for engaging in a scheme to sell over $1 million in Bitcoins to users of “Silk Road,” the underground website that enabled its users to buy and sell illegal drugs anonymously and beyond the reach of law enforcement. Each defendant is charged with conspiring to commit money laundering, and operating an unlicensed money transmitting business. SHREM is also charged with willfully failing to file any suspicious activity report regarding FAIELLA’s illegal transactions through the Company, in violation of the Bank Secrecy Act. SCHREM was arrested yesterday at John F. Kennedy International Airport in New York, and is expected to be presented in Manhattan federal court later today before U.S. Magistrate Judge Henry Pitman. FAIELLA was arrested today at his residence in Cape Coral, Florida, and is expected to be presented in federal court in the Middle District of Florida.
DEA Acting Special-Agent-in-Charge James J. Hunt said: “The charges announced today depict law enforcement's commitment to identifying those who promote the sale of illegal drugs throughout the world. Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way. Drug law enforcement’s job is to investigate and identify those who abet the illicit drug trade at all levels of production and distribution including those lining their own pockets by feigning ignorance of any wrong doing and turning a blind eye.”
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Robert Faiella and Charlie Shrem schemed to sell over $1 million in Bitcoins to criminals bent on trafficking narcotics on the dark web drug site, Silk Road. Truly innovative business models don’t need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act. We will aggressively pursue those who would coopt new forms of currency for illicit purposes.”
IRS Special-Agent-in-Charge Toni Weirauch said: “The government has been successful in swiftly identifying those responsible for the design and operation of the ‘Silk Road’ website, as well as those who helped ‘Silk Road’ customers conduct their illegal transactions by facilitating the conversion of their dollars into Bitcoins. This is yet another example of the New York Organized Crime Drug Enforcement Strike Force’s proficiency in applying financial investigative resources to the fight against illegal drugs.”
According to the allegations contained in the Criminal Complaint unsealed today in Manhattan federal court:
From about December 2011 to October 2013, FAIELLA ran an underground Bitcoin exchange on the Silk Road website, a website that served as a sprawling and anonymous black market bazaar where illegal drugs of virtually every variety were bought and sold regularly by the site’s users. Operating under the username “BTCKing,” FAIELLA sold Bitcoins – the only form of payment accepted on Silk Road – to users seeking to buy illegal drugs on the site. Upon receiving orders for Bitcoins from Silk Road users, he filled the orders through a company based in New York, New York (the “Company”). The Company was designed to enable customers to exchange cash for Bitcoins anonymously, that is, without providing any personal identifying information, and it charged a fee for its service. FAIELLA obtained Bitcoins with the Company’s assistance, and then sold the Bitcoins to Silk Road users at a markup.
SHREM is the Chief Executive Officer of the Company, and from about August 2011 until about July 2013, when the Company ceased operating, he was also its Compliance Officer, in charge of ensuring the Company’s compliance with federal and other anti-money laundering (“AML”) laws. SHREM is also the Vice Chairman of a foundation dedicated to promoting the Bitcoin virtual currency system.
SHREM, who personally bought drugs on Silk Road, was fully aware that Silk Road was a drug-trafficking website, and through his communications with FAIELLA, SHREM also knew that FAIELLA was operating a Bitcoin exchange service for Silk Road users. Nevertheless, SHREM knowingly facilitated FAIELLA’s business with the Company in order to maintain FAIELLA’s business as a lucrative source of Company revenue. SHREM knowingly allowed FAIELLA to use the Company’s services to buy Bitcoins for his Silk Road customers; personally processed FAIELLA’s orders; gave FAIELLA discounts on his high-volume transactions; failed to file a single suspicious activity report with the United States Treasury Department about FAIELLA’s illicit activity, as he was otherwise required to do in his role as the Company’s Compliance Officer; and deliberately helped FAIELLA circumvent the Company’s AML restrictions, even though it was SHREM’s job to enforce them and even though the Company had registered with the Treasury Department as a money services business.
Working together, SHREM and FAIELLA exchanged over $1 million in cash for Bitcoins for the benefit of Silk Road users, so that the users could, in turn, make illegal purchases on Silk Road.
In late 2012, when the Company stopped accepting cash payments, FAIELLA ceased doing business with the Company and temporarily shut down his illegal Bitcoin exchange service on Silk Road. FAIELLA resumed operating on Silk Road in April 2013 without the Company’s assistance, and continued to exchange tens of thousands of dollars a week in Bitcoins until the Silk Road website was shut down by law enforcement in October 2013.
FAIELLA, 52, of Cape Coral, Florida, and SHREM, 24, of New York, New York, are each charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of operating an unlicensed money transmitting business, which carries a maximum sentence of five years in prison. SHREM is also charged with one count of willful failure to file a suspicious activity report, which carries a maximum sentence of five years in prison.
Mr. Bharara praised the outstanding investigative work of the DEA’s New York Organized Crime Drug Enforcement Strike Force, which is comprised of agents and officers of the U. S. Drug Enforcement Administration, the New York City Police Department, Immigration and Customs Enforcement - Homeland Security Investigations, the New York State Police, the U. S. Internal Revenue Service Criminal Investigation Division, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Secret Service, the U.S. Marshal Service, New York National Guard, Office of Foreign Assets Control and the New York Department of Taxation and Finance. Mr. Bharara also thanked the FBI’s New York Field Office. Mr. Bharara also noted that the investigation remains ongoing.
The prosecution of this case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorney Serrin Turner is in charge of the prosecution, and Assistant United States Attorney Andrew Adams of the Asset Forfeiture Unit is in charge of the forfeiture aspects of the case.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Seth Gillman Charged with Federal Health Care Fraud for Allegedly Falsely Elevating Level of Patients’ Care
An owner of an Illinois hospice company was charged with federal health care fraud for allegedly engaging in an extensive scheme to obtain higher Medicare and Medicaid payments by fraudulently elevating the level of hospice care for patients, many of whom resided at nursing homes he also controlled across the state. In many instances, the level of hospice care allegedly exceeded what was medically necessary or actually provided, including for some patients who did not have terminal illnesses or who were enrolled far longer―sometimes for several years―than the required life expectancy of six months or less.
The defendant, Seth Gillman, 46, of Lincolnwood, was charged with one count each of health care fraud and obstructing a federal audit in a criminal complaint that was filed late Friday in U.S. District Court. He is scheduled to appear at 3 p.m. today before Magistrate Judge Geraldine Soat Brown in federal court.
Gillman, an attorney, is the corporate agent, administrator, and one-fourth owner of Passages Hospice LLC, based in west suburban Lisle, and is also the agent and secretary of Asta Healthcare Company Inc., which operates Asta Care Center nursing homes in Bloomington, Colfax, Elgin, Ford County, Pontiac, Rockford, and Toluca, Illinois. Passages did not have its own inpatient facility but instead deployed nurses to visit hospice patients in nursing homes and private residences. As Passages grew, it divided its operations into geographic regions covering Chicago and the western suburbs, Rockford, Bloomington, and Belleville, with different nurses, nursing directors, and medical directors for each region.
The charges allege that between August 2008 and January 2012, Gillman trained and caused to be trained Passages nurses to look for signs that allegedly would qualify a hospice patient for general inpatient care (GIP), resulting in higher payments per day, compared to routine care. Gillman allegedly knew that many of Passages’ patients were improperly being placed on GIP, in part as a result of a 2009 review of patient files, a 2009 report by an outside consultant, and a 2010 internal audit. Gillman also knew that some patients were placed on GIP without a medical director’s approval.
In fiscal year 2012, Medicare’s daily reimbursement for GIP was $671.84, while the daily payment for routine care was $151.23. According to claims data, from January 2006 to late 2011, Passages submitted claims for approximately 4,769 patients to Medicare and/or Medicaid and was paid approximately $95 million from Medicare and approximately $30 million from Medicaid. Between July 2008 and late 2011, Passages was paid approximately $23 million by Medicare for claimed GIP services, in addition to Medicaid payments for claimed GIP services submitted on behalf of more than 200 patients.
According to a 69-page affidavit in support of the charges, federal agents have interviewed patients, family members, and more than 30 former and current employees of Passages, including several who reported allegedly fraudulent billing and marketing practices to Medicare and/or law enforcement before they were contacted by agents. Investigators have also reviewed e-mails, documents, and patient files that were obtained in response to a 2011 civil investigative demand, a January 2012 search warrant, and subpoenas issued in 2013, as well as claims data from Medicare and Medicaid.
Medicare claims data revealed that approximately 22 percent of Passages’ patients between 2006 and late 2011 had more than six months of hospice care, with 28 patients receiving more than 1,000 days of hospice care in that period. By contrast, according to the National Hospice and Palliative Care Organization, only 11.8 percent of all hospice patients in 2009 were on hospice care for longer than six months.
For example, the complaint affidavit cites Patient JW, who was admitted to an Asta nursing home in 2003 following a major stroke, and Passages billed for more than 2,000 days of hospice services. In another example, Passages submitted bills for 1,443 days of hospice care for Patient LJ, who was admitted to an Asta nursing home in 2001. Patient LJ’s son told investigators that his mother appeared in no danger of dying until the last month of her life.
The charges also cite Medicare claims data showing that Passages’ billing for GIP services grew significantly. In 2010, Passages billed approximately 1,161 GIP patient days to Medicare monthly, and the figure rose to 1,430 GIP patient days a month through the first nine months of 2011. The average GIP payments that Passages received per month was $4,437 in the period from mid-2006 to mid-2008, and the monthly payments increased to $946,743 in 2011.
A hospice physician retained by the government reviewed files for 13 Passages patients, 10 of whose admissions exceed six months and extended to as many as 1,598 days over two admission periods. The government’s expert found that nine of the 13 patients were not eligible for Medicare hospice benefits for part or all of their admission and that all the 503 days of GIP submitted for those patients were improper and excessive.
A woman, identified as Individual E in the affidavit, who helped Gillman and his father start Passages and served as its clinical director for several years until she was fired told agents that Gillman said if a patient was under Passages’ care, they were sick enough to warrant GIP care. When Individual E confronted Gillman over the GIP eligibility of Patient DB, Gillman allegedly told her to mind her own business because he needed the money, the affidavit states.
The charges further allege that in the fall of 2008, Gillman began paying bonuses, sometimes well in excess of their salary, to Passages’ directors overseeing nurses and certified nursing assistants based on the amount of GIP under their supervision. Gillman also authorized large bonuses to himself and a co-administrator, Individual A, based on the number of patients per day at certain nursing homes in the Belleville region, including $833,375 to himself between March 2009 and April 2011. The bonuses increased as the number of patients on GIP increased and as the number of facilities counted for the bonuses increased, according to the affidavit.
Passages also allegedly had arrangements with approximately eight nursing homes in 2010 in which it paid the nursing homes $250 for every patient who was on GIP per day.
The obstructing a federal audit count alleges that in August and September 2009, Gillman, Individual A, and others oversaw and conducted an effort to alter patient files that had been requested by TrustSolutions, which contracted with the Centers for Medicare and Medicaid Services to audit providers for fraud and abuse. Several former Passages employees have admitted to agents their involvement in the altering of patient files in the summer of 2009 as well as in another session in 2010, the affidavit states.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Lamont Pugh, III, Special Agent in Charge of the Chicago Regional Office of the HHS-OIG; and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation. The Illinois Attorney General’s Office is also participating in the investigation.
The government is being represented by Assistant U.S. Attorney Stephen C. Lee.
Health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine, and obstructing a federal audit carries a maximum of five years in prison and a $250,000 fine, and restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that a complaint 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.
The defendant, Seth Gillman, 46, of Lincolnwood, was charged with one count each of health care fraud and obstructing a federal audit in a criminal complaint that was filed late Friday in U.S. District Court. He is scheduled to appear at 3 p.m. today before Magistrate Judge Geraldine Soat Brown in federal court.
Gillman, an attorney, is the corporate agent, administrator, and one-fourth owner of Passages Hospice LLC, based in west suburban Lisle, and is also the agent and secretary of Asta Healthcare Company Inc., which operates Asta Care Center nursing homes in Bloomington, Colfax, Elgin, Ford County, Pontiac, Rockford, and Toluca, Illinois. Passages did not have its own inpatient facility but instead deployed nurses to visit hospice patients in nursing homes and private residences. As Passages grew, it divided its operations into geographic regions covering Chicago and the western suburbs, Rockford, Bloomington, and Belleville, with different nurses, nursing directors, and medical directors for each region.
The charges allege that between August 2008 and January 2012, Gillman trained and caused to be trained Passages nurses to look for signs that allegedly would qualify a hospice patient for general inpatient care (GIP), resulting in higher payments per day, compared to routine care. Gillman allegedly knew that many of Passages’ patients were improperly being placed on GIP, in part as a result of a 2009 review of patient files, a 2009 report by an outside consultant, and a 2010 internal audit. Gillman also knew that some patients were placed on GIP without a medical director’s approval.
In fiscal year 2012, Medicare’s daily reimbursement for GIP was $671.84, while the daily payment for routine care was $151.23. According to claims data, from January 2006 to late 2011, Passages submitted claims for approximately 4,769 patients to Medicare and/or Medicaid and was paid approximately $95 million from Medicare and approximately $30 million from Medicaid. Between July 2008 and late 2011, Passages was paid approximately $23 million by Medicare for claimed GIP services, in addition to Medicaid payments for claimed GIP services submitted on behalf of more than 200 patients.
According to a 69-page affidavit in support of the charges, federal agents have interviewed patients, family members, and more than 30 former and current employees of Passages, including several who reported allegedly fraudulent billing and marketing practices to Medicare and/or law enforcement before they were contacted by agents. Investigators have also reviewed e-mails, documents, and patient files that were obtained in response to a 2011 civil investigative demand, a January 2012 search warrant, and subpoenas issued in 2013, as well as claims data from Medicare and Medicaid.
Medicare claims data revealed that approximately 22 percent of Passages’ patients between 2006 and late 2011 had more than six months of hospice care, with 28 patients receiving more than 1,000 days of hospice care in that period. By contrast, according to the National Hospice and Palliative Care Organization, only 11.8 percent of all hospice patients in 2009 were on hospice care for longer than six months.
For example, the complaint affidavit cites Patient JW, who was admitted to an Asta nursing home in 2003 following a major stroke, and Passages billed for more than 2,000 days of hospice services. In another example, Passages submitted bills for 1,443 days of hospice care for Patient LJ, who was admitted to an Asta nursing home in 2001. Patient LJ’s son told investigators that his mother appeared in no danger of dying until the last month of her life.
The charges also cite Medicare claims data showing that Passages’ billing for GIP services grew significantly. In 2010, Passages billed approximately 1,161 GIP patient days to Medicare monthly, and the figure rose to 1,430 GIP patient days a month through the first nine months of 2011. The average GIP payments that Passages received per month was $4,437 in the period from mid-2006 to mid-2008, and the monthly payments increased to $946,743 in 2011.
A hospice physician retained by the government reviewed files for 13 Passages patients, 10 of whose admissions exceed six months and extended to as many as 1,598 days over two admission periods. The government’s expert found that nine of the 13 patients were not eligible for Medicare hospice benefits for part or all of their admission and that all the 503 days of GIP submitted for those patients were improper and excessive.
A woman, identified as Individual E in the affidavit, who helped Gillman and his father start Passages and served as its clinical director for several years until she was fired told agents that Gillman said if a patient was under Passages’ care, they were sick enough to warrant GIP care. When Individual E confronted Gillman over the GIP eligibility of Patient DB, Gillman allegedly told her to mind her own business because he needed the money, the affidavit states.
The charges further allege that in the fall of 2008, Gillman began paying bonuses, sometimes well in excess of their salary, to Passages’ directors overseeing nurses and certified nursing assistants based on the amount of GIP under their supervision. Gillman also authorized large bonuses to himself and a co-administrator, Individual A, based on the number of patients per day at certain nursing homes in the Belleville region, including $833,375 to himself between March 2009 and April 2011. The bonuses increased as the number of patients on GIP increased and as the number of facilities counted for the bonuses increased, according to the affidavit.
Passages also allegedly had arrangements with approximately eight nursing homes in 2010 in which it paid the nursing homes $250 for every patient who was on GIP per day.
The obstructing a federal audit count alleges that in August and September 2009, Gillman, Individual A, and others oversaw and conducted an effort to alter patient files that had been requested by TrustSolutions, which contracted with the Centers for Medicare and Medicaid Services to audit providers for fraud and abuse. Several former Passages employees have admitted to agents their involvement in the altering of patient files in the summer of 2009 as well as in another session in 2010, the affidavit states.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Lamont Pugh, III, Special Agent in Charge of the Chicago Regional Office of the HHS-OIG; and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation. The Illinois Attorney General’s Office is also participating in the investigation.
The government is being represented by Assistant U.S. Attorney Stephen C. Lee.
Health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine, and obstructing a federal audit carries a maximum of five years in prison and a $250,000 fine, and restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that a complaint 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.
Angelo Turner Sentenced to 57 Months in Federal Prison on Drug Charges
A Rockford, Illinois man was sentenced in federal court before U.S. District Judge Frederick J. Kapala as the last of seven defendants to be sentenced on related drug trafficking charges. Angelo Turner, 30, was sentenced to 57 months in prison without parole, to be followed by three years of supervised release, for conspiracy to possess with intent to distribute and distribution of cocaine. Turner pleaded guilty to the charge on October 25, 2013, admitting that as early as May 2012 through December 20, 2012, he conspired with others to distribute cocaine in the Rockford area.
Also charged were Angelo Turner’s brother, John Turner, 32, and Marquice Fields, 28, both of Rockford. John Turner pleaded guilty to the conspiracy and was sentenced on October 24, 2013, to 51 months’ imprisonment, to be followed by three years’ supervised release. Fields pleaded guilty to using a mobile telephone to facilitate the drug conspiracy and was sentenced on January 13, 2014, to three years’ probation.
In a related case, Nicholas Clark, 32; Richard Clark, 40; Steven Keenan, 26; and Richard Rill, 48, all of Rockford, were charged and pleaded guilty to conspiracy to possess with intent to distribute and distribution of cocaine from early 2012 through December 2012. Nicholas Clark was sentenced on August 14, 2013, to 120 months’ imprisonment, to be followed by eight years’ supervised release. Richard Clark was sentenced on November 14, 2013, to 60 months’ imprisonment, to be followed by four years’ supervised release. Keenan was sentenced on September 10, 2013, to 60 months’ imprisonment, to be followed by four years’ supervised release. Rill was sentenced on August 14, 2013, to 60 months’ imprisonment, to be followed by five years’ supervised release. None of the defendants will be eligible for parole.
Also charged were Angelo Turner’s brother, John Turner, 32, and Marquice Fields, 28, both of Rockford. John Turner pleaded guilty to the conspiracy and was sentenced on October 24, 2013, to 51 months’ imprisonment, to be followed by three years’ supervised release. Fields pleaded guilty to using a mobile telephone to facilitate the drug conspiracy and was sentenced on January 13, 2014, to three years’ probation.
In a related case, Nicholas Clark, 32; Richard Clark, 40; Steven Keenan, 26; and Richard Rill, 48, all of Rockford, were charged and pleaded guilty to conspiracy to possess with intent to distribute and distribution of cocaine from early 2012 through December 2012. Nicholas Clark was sentenced on August 14, 2013, to 120 months’ imprisonment, to be followed by eight years’ supervised release. Richard Clark was sentenced on November 14, 2013, to 60 months’ imprisonment, to be followed by four years’ supervised release. Keenan was sentenced on September 10, 2013, to 60 months’ imprisonment, to be followed by four years’ supervised release. Rill was sentenced on August 14, 2013, to 60 months’ imprisonment, to be followed by five years’ supervised release. None of the defendants will be eligible for parole.
Joseph Romano Convicted of Conspiring to Murder Federal Judge and Federal Prosecutor
U.S. Attorney William J. Hochul, Jr. announced that a federal jury convicted Joseph Romano, 51, of Levittown, New York, of conspiring to murder the Assistant United States Attorney who prosecuted him for engaging in an eight-year, multi-million-dollar fraud involving the telemarketing of coins. The jury also convicted the defendant of conspiring to murder the United States District Judge who sentenced him to 15 years in prison for that fraud. The defendant faces a maximum penalty of life in prison, a fine of $250,000, or both, in addition to forfeiture of more than $200,000 when he is sentenced in March.
“A threat against a member of the criminal justice system, such as a Judge or an attorney, is nothing less than an attempt to subvert the system, and as such will not be tolerated,” said U.S. Attorney Hochul.
According to the government’s trial evidence, the defendant agreed to pay $40,000 to an undercover police officer, whom he thought was a hitman, to kill the federal judge and prosecutor. The defendant also requested that the hitman cut off their heads in exchange for a “bonus.” Law enforcement authorities learned of the plot in August 2012 from another inmate at the Nassau County Correctional Center where Romano was being held. During the subsequent investigation, two undercover law enforcement officers, posing as hitmen, met with Romano and co-conspirator Dejvid Mirkovic numerous times at locations on Long Island, including the Correctional Center.
At the first meeting, Romano offered to pay one of the undercover officers $3,000 to assault an individual with whom he had a financial dispute. Co-conspirator Mirkovic then met with one of the undercover officers and paid him $1,500 as a down payment for the assault. After one of the undercover officers showed proof of the purported assault of the intended victim—in fact, a staged photograph and an identification card—Mirkovic paid the undercover officer the $1,500 balance.
Later that same day, Mirkovic again met with the undercover officer, relayed Romano’s instructions to murder the federal judge and prosecutor, and offered $40,000 for the commission of the two murders. In addition, Mirkovic indicated that Romano wanted the federal judge and prosecutor beheaded and the body of the prosecutor mutilated and that he was willing to pay extra for those services. Over the following weeks, the undercover officer received $22,000 in cash down payments for the murders and was promised payment of the final $18,000 when the murders were completed. At the time of the arrests of Romano and Mirkovic on October 9, 2012, law enforcement officers recovered $18,000 in cash and a loaded 9mm semi-automatic handgun at Mirkovic’s residence in Lake Worth, Florida.
In March 2013, Dejvid Mirkovic pleaded guilty to conspiracy to murder and was sentenced to 24 years in prison in August 2013.
“A threat against a member of the criminal justice system, such as a Judge or an attorney, is nothing less than an attempt to subvert the system, and as such will not be tolerated,” said U.S. Attorney Hochul.
According to the government’s trial evidence, the defendant agreed to pay $40,000 to an undercover police officer, whom he thought was a hitman, to kill the federal judge and prosecutor. The defendant also requested that the hitman cut off their heads in exchange for a “bonus.” Law enforcement authorities learned of the plot in August 2012 from another inmate at the Nassau County Correctional Center where Romano was being held. During the subsequent investigation, two undercover law enforcement officers, posing as hitmen, met with Romano and co-conspirator Dejvid Mirkovic numerous times at locations on Long Island, including the Correctional Center.
At the first meeting, Romano offered to pay one of the undercover officers $3,000 to assault an individual with whom he had a financial dispute. Co-conspirator Mirkovic then met with one of the undercover officers and paid him $1,500 as a down payment for the assault. After one of the undercover officers showed proof of the purported assault of the intended victim—in fact, a staged photograph and an identification card—Mirkovic paid the undercover officer the $1,500 balance.
Later that same day, Mirkovic again met with the undercover officer, relayed Romano’s instructions to murder the federal judge and prosecutor, and offered $40,000 for the commission of the two murders. In addition, Mirkovic indicated that Romano wanted the federal judge and prosecutor beheaded and the body of the prosecutor mutilated and that he was willing to pay extra for those services. Over the following weeks, the undercover officer received $22,000 in cash down payments for the murders and was promised payment of the final $18,000 when the murders were completed. At the time of the arrests of Romano and Mirkovic on October 9, 2012, law enforcement officers recovered $18,000 in cash and a loaded 9mm semi-automatic handgun at Mirkovic’s residence in Lake Worth, Florida.
In March 2013, Dejvid Mirkovic pleaded guilty to conspiracy to murder and was sentenced to 24 years in prison in August 2013.
Friday, January 24, 2014
Despite Accusations of #ElderAbuse, Joey "The Clown" Lombardo to Remain in "The Hole"
Imprisoned Chicago hit man and 84-year-old mob boss Joey Lombardo will remain in solitary confinement.
In Wednesday's ruling, US District Judge James Zagel denied Lombardo's request to get out of what is commonly known as "the hole" saying "this court has no jurisdiction" to make that decision. In Judge Zagel's order, he suggests Lombardo file a lawsuit in North Carolina where he is currently locked up.
His attorneys accuse the government of "elder abuse."
For decades, Joey Lombardo has been known in mob circles as "the clown." But on Monday, his courthouse hijinks and comedic banter with the media have given way to a tear-jerking motion for mercy. Or at least that is what Mr. Lombardo might like you to believe. Attorneys for the aged Chicago outfit boss say he is just a sick old man in a wheelchair and should be removed from solitary confinement, where he has been locked up 24 hours a day as a violent menace.
Long gone are the days when Joey the Clown wore a newspaper mask to court, or led news crews on a sprint through downtown. Since Lombardo was sentenced to life in prison during the landmark Family Secrets mob murders case, he has been locked up at the Butner North Carolina penitentiary under what are known as "special administrative measures" -- shorthand for solitary confinement.
Lombardo's lawyers say the lockdown was meant to keep international terrorists from plotting attacks.
In their motion to release Lombardo from solitary, they say "the imposition of these draconian conditions against an 84-year-old, chronically ill, wheelchair-user can only be an attempt to appear 'tough on crime' by engaging in 'elder abuse' against a man who once had a reputation (deserved or not) as a major player in the Chicago 'Mob.'"
Lombardo was convicted of personally murdering those who crossed the outfit even while overseeing the Chicago mob. He is a career hoodlum having risen through the ranks from syndicate soldier. But at 84, his lawyers say keeping his on lockdown is "unduly restrictive on Petitioner's physical well-being and his mental health, especially given his advanced age." And they contend "punitive confinement for more than 30 days constitutes "cruel and unusual punishment."
In the government's response on file Monday, they pay homage to Lombardo's moniker "the clown" then ridicule his effort to escape lockdown, stating: "defendant does not even properly allege that this matter is ripe for federal court review in any forum, let alone this one. In addition to the obvious jurisdictional problem noted above, the defendant does not contend that he has exhausted his administrative remedies."
Prosecutors say Lombardo has already been denied a similar request once before. These special administrative measures are generally imposed by the Bureau of Prisons and have been used on terror suspects, but other Chicago mob bosses have been put in solitary as well.
Thanks to Chuck Goudie.
In Wednesday's ruling, US District Judge James Zagel denied Lombardo's request to get out of what is commonly known as "the hole" saying "this court has no jurisdiction" to make that decision. In Judge Zagel's order, he suggests Lombardo file a lawsuit in North Carolina where he is currently locked up.
His attorneys accuse the government of "elder abuse."
For decades, Joey Lombardo has been known in mob circles as "the clown." But on Monday, his courthouse hijinks and comedic banter with the media have given way to a tear-jerking motion for mercy. Or at least that is what Mr. Lombardo might like you to believe. Attorneys for the aged Chicago outfit boss say he is just a sick old man in a wheelchair and should be removed from solitary confinement, where he has been locked up 24 hours a day as a violent menace.
Long gone are the days when Joey the Clown wore a newspaper mask to court, or led news crews on a sprint through downtown. Since Lombardo was sentenced to life in prison during the landmark Family Secrets mob murders case, he has been locked up at the Butner North Carolina penitentiary under what are known as "special administrative measures" -- shorthand for solitary confinement.
Lombardo's lawyers say the lockdown was meant to keep international terrorists from plotting attacks.
In their motion to release Lombardo from solitary, they say "the imposition of these draconian conditions against an 84-year-old, chronically ill, wheelchair-user can only be an attempt to appear 'tough on crime' by engaging in 'elder abuse' against a man who once had a reputation (deserved or not) as a major player in the Chicago 'Mob.'"
Lombardo was convicted of personally murdering those who crossed the outfit even while overseeing the Chicago mob. He is a career hoodlum having risen through the ranks from syndicate soldier. But at 84, his lawyers say keeping his on lockdown is "unduly restrictive on Petitioner's physical well-being and his mental health, especially given his advanced age." And they contend "punitive confinement for more than 30 days constitutes "cruel and unusual punishment."
In the government's response on file Monday, they pay homage to Lombardo's moniker "the clown" then ridicule his effort to escape lockdown, stating: "defendant does not even properly allege that this matter is ripe for federal court review in any forum, let alone this one. In addition to the obvious jurisdictional problem noted above, the defendant does not contend that he has exhausted his administrative remedies."
Prosecutors say Lombardo has already been denied a similar request once before. These special administrative measures are generally imposed by the Bureau of Prisons and have been used on terror suspects, but other Chicago mob bosses have been put in solitary as well.
Thanks to Chuck Goudie.
Thursday, January 23, 2014
Details on Bonanno Family Captain Vincent Asaro Indictment for Participating in the 1978 Lufthansa #Goodfellas Heist Plus Murder
Earlier today, an indictment was unsealed charging five members of the Bonanno organized crime family of La Cosa Nostra (the Bonanno family) variously with racketeering conspiracy, including predicate acts of murder, conspiracy to commit murder, solicitation to murder, robbery and extortion, and other crimes. Bonanno family administration members and captains Vincent Asaro and Thomas Di Fiore; Bonanno family captain Jerome Asaro; Bonanno family acting captain Jack Bonventre; and Bonanno family soldier John Ragano were arrested earlier today and are scheduled to be arraigned this afternoon before U.S. Magistrate Judge Marilyn D. Go at the federal courthouse in Brooklyn.
The charges and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office.
“As alleged, Vincent Asaro devoted his adult life to the Bonanno crime family, with a criminal career that spanned decades. Far from a code of honor, theirs was a code of violence and brute force. Those suspected of cooperating with law enforcement paid with their lives. Asaro helped pull off the 1978 Lufthansa robbery—still the largest bank robbery in New York history. Neither age nor time dimmed Asaro’s ruthless ways, as he continued to order violence to carry out mob business in recent months. The arrests and charges announced today are a testament to the relentless pursuit of justice by law enforcement,” stated United States Attorney Lynch. Ms. Lynch extended her grateful appreciation to the FBI for its extraordinary work in bringing these defendants to account for the charged crimes.
“These ‘goodfellas’ thought they had a license to steal, a license to kill, and a license to do whatever they wanted. However, today’s arrests of the five members of the Bonanno crime family brings an end to their violent and ruthless ways. As alleged in the indictment, Vincent Asaro and his co-conspirators were not only involved in typical mob activities of extortion and murder, but Asaro himself was in on one of the most notorious heists—the Lufthansa robbery in 1978. It may be decades later, but the FBI’s determination to investigate and bring wiseguys to justice will never waver,” stated FBI Assistant Director in Charge Venizelos.
As alleged in the indictment and a detention memorandum filed by the government, over the last 45 years, Vincent Asaro and various co-conspirators, including his son Jerome Asaro, engaged in a pattern of violence and threats of violence in order to profit from their illegal activity and evade prosecution. The indictment announced today is the result of a long-term investigation by the Federal Bureau of Investigation that utilized, among other law enforcement techniques, consensual recordings, cooperating witnesses and confidential sources, and electronic and visual surveillance.
1978 Lufthansa Heist
Vincent Asaro is charged for his participation in the 1978 robbery at the Lufthansa Terminal at John F. Kennedy Airport of more than $5 million in United States currency and approximately $1 million in jewelry. Asaro, Lucchese crime family associate James “Jimmy the Gent” Burke, and their co-conspirators each expected to receive approximately $750,000 in cash and large quantities of gold jewelry from the proceeds of the robbery.
Murder of Paul Katz
Vincent Asaro is charged with the murder of Paul Katz, who disappeared in 1969, and Asaro and his son Jerome are also charged with accessory after the fact for their roles in moving Katz’s body to prevent its discovery by law enforcement. Vincent Asaro and Burke allegedly strangled Katz with a dog chain because they believed he was cooperating with law enforcement. They then buried his body in the basement of a vacant home in Queens, New York, where it remained until the mid-1980s when, alerted to a state law enforcement investigation into Katz’s murder, Vincent Asaro directed Jerome Asaro and another individual to dig up Katz’s body and move it. Almost 35 years later, in June 2013, the FBI executed a search warrant at the Queens residence, which was still owned by the Burke family, and recovered remnants of Katz’s remains buried in the basement. Katz’s identity was confirmed through DNA testing.
Solicitation to Murder
Vincent Asaro and Jerome Asaro are charged with solicitation to murder their cousin, identified in the indictment as John Doe #1, because he was perceived to be a “rat” for testifying against another family member in a federal trial on fraud charges.
Armed Robberies
Vincent Asaro and Jerome Asaro are charged variously with participating in additional armed robberies and armed robbery conspiracies, including the robbery of approximately $1 million in gold salts.
Extortion
All five defendants, including Thomas Di Fiore, the highest ranking member of the Bonanno family at liberty, are charged with using and conspiring to use extortionate means to collect an extension of credit from a Bonanno family associate. During an April 26, 2013 consensual recording of Vincent Asaro and John Ragano, Ragano asked Asaro, “When do we stab this guy...in the neck? That’s what I want to know.” Asaro responded, “Stab him today.” Asaro continued, “I told you to give him a...beating. Give him a...beating, I told you that. Listen, I sent three guys there to give him a beating already, so it won’t be the first time he got a beating from me.”
The case has been assigned to United States Senior District Judge Allyne R. Ross. If convicted, Vincent Asaro faces life imprisonment, and each of his co-defendants faces a statutory maximum sentence of 20 years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorneys Nicole M. Argentieri and Alicyn Cooley.
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Defendants:
Vincent Asaro
Age: 78
Howard Beach, New York
Jerome Asaro
Age: 55
Bethpage, New York
Jack Bonventre
Age: 45
Campbell Hall, New York
Thomas Di Fiore, also known as “Tommy D”
Age: 70
Commack, New York
John Ragano, also known as “Bazoo”
Age: 52
Rockaway, New York
The charges and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office.
“As alleged, Vincent Asaro devoted his adult life to the Bonanno crime family, with a criminal career that spanned decades. Far from a code of honor, theirs was a code of violence and brute force. Those suspected of cooperating with law enforcement paid with their lives. Asaro helped pull off the 1978 Lufthansa robbery—still the largest bank robbery in New York history. Neither age nor time dimmed Asaro’s ruthless ways, as he continued to order violence to carry out mob business in recent months. The arrests and charges announced today are a testament to the relentless pursuit of justice by law enforcement,” stated United States Attorney Lynch. Ms. Lynch extended her grateful appreciation to the FBI for its extraordinary work in bringing these defendants to account for the charged crimes.
“These ‘goodfellas’ thought they had a license to steal, a license to kill, and a license to do whatever they wanted. However, today’s arrests of the five members of the Bonanno crime family brings an end to their violent and ruthless ways. As alleged in the indictment, Vincent Asaro and his co-conspirators were not only involved in typical mob activities of extortion and murder, but Asaro himself was in on one of the most notorious heists—the Lufthansa robbery in 1978. It may be decades later, but the FBI’s determination to investigate and bring wiseguys to justice will never waver,” stated FBI Assistant Director in Charge Venizelos.
As alleged in the indictment and a detention memorandum filed by the government, over the last 45 years, Vincent Asaro and various co-conspirators, including his son Jerome Asaro, engaged in a pattern of violence and threats of violence in order to profit from their illegal activity and evade prosecution. The indictment announced today is the result of a long-term investigation by the Federal Bureau of Investigation that utilized, among other law enforcement techniques, consensual recordings, cooperating witnesses and confidential sources, and electronic and visual surveillance.
1978 Lufthansa Heist
Vincent Asaro is charged for his participation in the 1978 robbery at the Lufthansa Terminal at John F. Kennedy Airport of more than $5 million in United States currency and approximately $1 million in jewelry. Asaro, Lucchese crime family associate James “Jimmy the Gent” Burke, and their co-conspirators each expected to receive approximately $750,000 in cash and large quantities of gold jewelry from the proceeds of the robbery.
Murder of Paul Katz
Vincent Asaro is charged with the murder of Paul Katz, who disappeared in 1969, and Asaro and his son Jerome are also charged with accessory after the fact for their roles in moving Katz’s body to prevent its discovery by law enforcement. Vincent Asaro and Burke allegedly strangled Katz with a dog chain because they believed he was cooperating with law enforcement. They then buried his body in the basement of a vacant home in Queens, New York, where it remained until the mid-1980s when, alerted to a state law enforcement investigation into Katz’s murder, Vincent Asaro directed Jerome Asaro and another individual to dig up Katz’s body and move it. Almost 35 years later, in June 2013, the FBI executed a search warrant at the Queens residence, which was still owned by the Burke family, and recovered remnants of Katz’s remains buried in the basement. Katz’s identity was confirmed through DNA testing.
Solicitation to Murder
Vincent Asaro and Jerome Asaro are charged with solicitation to murder their cousin, identified in the indictment as John Doe #1, because he was perceived to be a “rat” for testifying against another family member in a federal trial on fraud charges.
Armed Robberies
Vincent Asaro and Jerome Asaro are charged variously with participating in additional armed robberies and armed robbery conspiracies, including the robbery of approximately $1 million in gold salts.
Extortion
All five defendants, including Thomas Di Fiore, the highest ranking member of the Bonanno family at liberty, are charged with using and conspiring to use extortionate means to collect an extension of credit from a Bonanno family associate. During an April 26, 2013 consensual recording of Vincent Asaro and John Ragano, Ragano asked Asaro, “When do we stab this guy...in the neck? That’s what I want to know.” Asaro responded, “Stab him today.” Asaro continued, “I told you to give him a...beating. Give him a...beating, I told you that. Listen, I sent three guys there to give him a beating already, so it won’t be the first time he got a beating from me.”
The case has been assigned to United States Senior District Judge Allyne R. Ross. If convicted, Vincent Asaro faces life imprisonment, and each of his co-defendants faces a statutory maximum sentence of 20 years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorneys Nicole M. Argentieri and Alicyn Cooley.
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Defendants:
Vincent Asaro
Age: 78
Howard Beach, New York
Jerome Asaro
Age: 55
Bethpage, New York
Jack Bonventre
Age: 45
Campbell Hall, New York
Thomas Di Fiore, also known as “Tommy D”
Age: 70
Commack, New York
John Ragano, also known as “Bazoo”
Age: 52
Rockaway, New York
Simon Abou Raad Sentenced for Extortion and Mail Fraud
An automobile service station owner who conspired with a Massachusetts Registry of Motor Vehicle (RMV) project manager to extort other service station owners who wanted to obtain a license to conduct vehicle safety inspections was sentenced yesterday.
Simon Abou Raad, 51, of Tyngsborough, was sentenced by U.S. District Court Judge George A. O’Toole to three years in prison, two years of supervised release, and a $10,000 fine and was ordered to forfeit $360,000 in illegal proceeds. In December 2013, Abou Raad pleaded guilty to mail fraud and conspiracy to extort money under color of official right.
Abou Raad owned service stations in Tewksbury and Tyngsboro. His co-defendant, Mark LaFrance, project manager for Vehicle Safety and Compliance Services at the RMV, had oversight responsibilities for the entire motor vehicle inspection program within Massachusetts. In Massachusetts, applications to obtain a license to conduct motor vehicle safety inspections are intended to be granted off a waiting list with consideration given to geographic location. An applicant for a vehicle inspection license must pay a $100 fee, and the actual equipment costs about $2,500. The inspection network was at its capacity; therefore, the RMV was not granting new licenses off the waiting list.
LaFrance and Abou Raad operated what was essentially “a black market” for such licenses through the use of LaFrance’s official position. LaFrance provided to Abou Raad a list of vehicle inspection stations that had a low volume of inspections and/or were planning to surrender their license and sell the inspection equipment. Abou Raad then contacted the service station owner and offered to buy the inspection license and equipment for prices usually in the range of $5,000 to $6,000. Abou Raad offered for sale such licenses and equipment to service station owners desirous of acquiring a license for prices between $50,000 to $75,000. Abou Raad then arranged the transaction to appear as if the service station owners selling and buying the license were merging as a new business entity or with a change in ownership. Although he was aware that these purported mergers were not bona fide, LaFrance either approved the issuing of a new license or permitted others in the RMV to approve the new license. After the fraudulent transaction resulting in the issuance of a vehicle inspection licenses was completed and payment was made to Abou Raad, he split the illegal proceeds with LaFrance. Through this illegal scheme, Abou Raad sold at least 10 inspection licenses and/or machines for approximately $657,000 in total.
In November 2013, LaFrance was sentenced to three years in prison.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys S. Theodore Merritt and Robert Fisher of Ortiz’s Public Corruption Unit.
Simon Abou Raad, 51, of Tyngsborough, was sentenced by U.S. District Court Judge George A. O’Toole to three years in prison, two years of supervised release, and a $10,000 fine and was ordered to forfeit $360,000 in illegal proceeds. In December 2013, Abou Raad pleaded guilty to mail fraud and conspiracy to extort money under color of official right.
Abou Raad owned service stations in Tewksbury and Tyngsboro. His co-defendant, Mark LaFrance, project manager for Vehicle Safety and Compliance Services at the RMV, had oversight responsibilities for the entire motor vehicle inspection program within Massachusetts. In Massachusetts, applications to obtain a license to conduct motor vehicle safety inspections are intended to be granted off a waiting list with consideration given to geographic location. An applicant for a vehicle inspection license must pay a $100 fee, and the actual equipment costs about $2,500. The inspection network was at its capacity; therefore, the RMV was not granting new licenses off the waiting list.
LaFrance and Abou Raad operated what was essentially “a black market” for such licenses through the use of LaFrance’s official position. LaFrance provided to Abou Raad a list of vehicle inspection stations that had a low volume of inspections and/or were planning to surrender their license and sell the inspection equipment. Abou Raad then contacted the service station owner and offered to buy the inspection license and equipment for prices usually in the range of $5,000 to $6,000. Abou Raad offered for sale such licenses and equipment to service station owners desirous of acquiring a license for prices between $50,000 to $75,000. Abou Raad then arranged the transaction to appear as if the service station owners selling and buying the license were merging as a new business entity or with a change in ownership. Although he was aware that these purported mergers were not bona fide, LaFrance either approved the issuing of a new license or permitted others in the RMV to approve the new license. After the fraudulent transaction resulting in the issuance of a vehicle inspection licenses was completed and payment was made to Abou Raad, he split the illegal proceeds with LaFrance. Through this illegal scheme, Abou Raad sold at least 10 inspection licenses and/or machines for approximately $657,000 in total.
In November 2013, LaFrance was sentenced to three years in prison.
United States Attorney Carmen M. Ortiz and Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys S. Theodore Merritt and Robert Fisher of Ortiz’s Public Corruption Unit.
Stolen Hurricane Sandy Disaster Funds Results in Arrest of 4 in @FEMA Fraud Scheme
A joint investigation between the Federal Bureau of Investigation (FBI) and the Federal Emergency Management Agency (FEMA) resulted in the arrest of four individuals earlier this morning for allegedly submitting false and fraudulent applications to obtain Hurricane Sandy Disaster Relief funds. Darnell Ellis, Diana Shkolnik, Robert Gesuele, and Edward Valentin (the defendants) independently submitted fraudulent disaster relief applications and received benefits from the federal government, which they would not otherwise be entitled.
The arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director in Charge, FBI, New York Field Office; and FEMA Regional Administrator Jerome Hatfield.
Disaster relief assistance
is made available after the president of the United States declares that a major disaster has occurred in a specified area. Assistance to individuals is available under the Individuals and Household Assistance Program (IHP), which provides grants funded by the United States government to people in the affected area when losses are not covered by insurance and property has been damaged or destroyed. To qualify for disaster assistance, in addition to registering with FEMA, the applicant must provide basic personal data and the location of the damaged dwelling. The applicant is also asked to verify that the damaged dwelling was in fact his or her primary residence and that he or she was unable to live in his or her primary residence due to disaster-related conditions.
As detailed in their respective complaints, each defendant claimed in their FEMA relief applications that their primary residences were affected by Hurricane Sandy, and as a result, they were seeking financial assistance. Contrary to their claims, the investigation identified that at the time they submitted their FEMA applications, defendants Ellis, Shkolnik, and Valentin were not living in the storm-affected residences identified in their paperwork. The fourth defendant, Gesuele, submitted a FEMA application for a residence he was illegally occupying and did not rent or own. In total, the defendants received tens of thousands of dollars in disaster relief funding to which they were not entitled.
FBI Assistant Director in Charge George Venizelos stated, “At a time when individuals were displaced from their primary residences and businesses due to the affects of Hurricane Sandy, the defendants saw an opportunity to make money. They submitted false claims to FEMA and lined their pockets with money intended to help those who legally qualified for assistance under the IHP. The FBI, along with its law enforcement partners, to include FEMA, will continue to investigate and bring to justice those who defraud the government for their own personal gain.”
“In the aftermath of Hurricane Sandy, FEMA Region 2 responded to those affected and provided both material and financial support. Relief funds meant to assist individuals, businesses, and communities are essential in order to restore normalcy. This process is hampered by those few who wish to defraud and siphon relief and disaster funds away from those who were most at need. FEMA R2 will continue to work with our close federal partners, including the FBI and the Department of Homeland Security-Office of the Inspector General, to identify fraud and misuse of disaster relief funds and to leverage each such violation as a clear message of deterrence to anyone considering the misuse of relief and disaster funds,” said FEMA Regional Administrator Jerome Hatfield.
The arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director in Charge, FBI, New York Field Office; and FEMA Regional Administrator Jerome Hatfield.
Disaster relief assistance
is made available after the president of the United States declares that a major disaster has occurred in a specified area. Assistance to individuals is available under the Individuals and Household Assistance Program (IHP), which provides grants funded by the United States government to people in the affected area when losses are not covered by insurance and property has been damaged or destroyed. To qualify for disaster assistance, in addition to registering with FEMA, the applicant must provide basic personal data and the location of the damaged dwelling. The applicant is also asked to verify that the damaged dwelling was in fact his or her primary residence and that he or she was unable to live in his or her primary residence due to disaster-related conditions.As detailed in their respective complaints, each defendant claimed in their FEMA relief applications that their primary residences were affected by Hurricane Sandy, and as a result, they were seeking financial assistance. Contrary to their claims, the investigation identified that at the time they submitted their FEMA applications, defendants Ellis, Shkolnik, and Valentin were not living in the storm-affected residences identified in their paperwork. The fourth defendant, Gesuele, submitted a FEMA application for a residence he was illegally occupying and did not rent or own. In total, the defendants received tens of thousands of dollars in disaster relief funding to which they were not entitled.
FBI Assistant Director in Charge George Venizelos stated, “At a time when individuals were displaced from their primary residences and businesses due to the affects of Hurricane Sandy, the defendants saw an opportunity to make money. They submitted false claims to FEMA and lined their pockets with money intended to help those who legally qualified for assistance under the IHP. The FBI, along with its law enforcement partners, to include FEMA, will continue to investigate and bring to justice those who defraud the government for their own personal gain.”
“In the aftermath of Hurricane Sandy, FEMA Region 2 responded to those affected and provided both material and financial support. Relief funds meant to assist individuals, businesses, and communities are essential in order to restore normalcy. This process is hampered by those few who wish to defraud and siphon relief and disaster funds away from those who were most at need. FEMA R2 will continue to work with our close federal partners, including the FBI and the Department of Homeland Security-Office of the Inspector General, to identify fraud and misuse of disaster relief funds and to leverage each such violation as a clear message of deterrence to anyone considering the misuse of relief and disaster funds,” said FEMA Regional Administrator Jerome Hatfield.
Top Ten Highlights of The Chris Christie Press Conference
Top Ten Highlights of The Chris Christie Press Conference
10. Shocking revelation of corruption in New Jersey?
9. Blamed the whole thing on getting drunk with Dennis Rodman
8. More profanity than "The Wolf of Wall Street"
7. Claimed his heart was broken, but acknowledged it might be obesity-related
6. Said he wasn't a bully, then put Chris Matthews in a headlock
5. Christie's claim he had no idea a bridge connected New Jersey and New York
4. An appearance by the fake sign language guy
3. Boldly took responsibility by blaming everyone but himself
2. Announced plans to execute his uncle
1. Interrupted press conference to smoke crack
10. Shocking revelation of corruption in New Jersey?
9. Blamed the whole thing on getting drunk with Dennis Rodman
8. More profanity than "The Wolf of Wall Street"
7. Claimed his heart was broken, but acknowledged it might be obesity-related
6. Said he wasn't a bully, then put Chris Matthews in a headlock
5. Christie's claim he had no idea a bridge connected New Jersey and New York
4. An appearance by the fake sign language guy
3. Boldly took responsibility by blaming everyone but himself
2. Announced plans to execute his uncle
1. Interrupted press conference to smoke crack
"Women in Gaming" A Courtroom Conversation to be Hosted by @TheMobMuseum
On Wednesday, February 19, The Mob Museum, The National Museum of Organized Crime and Law Enforcement, will host “Women in Gaming” in its historic courtroom. Part of the Museum’s ongoing Courtroom Conversation educational programming series, the event will take place at 7 p.m. and feature a panel discussion among three of the top women in the global gaming industry: Patricia Becker, president, Patricia Becker & Associates and former executive director, UNLV’s International Gaming Institute as well as first and only woman to be appointed to the Nevada Gaming Control Board; Jan Jones Blackhurst, executive vice president, communications and government relations, Caesars Entertainment; and Elaine Wynn, director, Wynn Resorts, and president, Nevada State Board of Education. Moderating the discussion will be Marybel Batjer, secretary, California Government Operations and past vice president, public policy, Caesars Entertainment.
Community partners helping present the event include Global Gaming Women and the Women’s Research Institute of Nevada (WRIN). In addition, the University of Nevada, Las Vegas, Lied Library Special Collections will display archival material relevant to the topic and Vegas PBS will record the event for future broadcast consideration.
These women will come together for one evening at The Mob Museum to discuss the world of gaming from their own unique perspectives. Sure to be among the topics that evening: the highs and lows, challenges and successes of operating as prominent figures in a largely male-dominated gaming industry.
Patricia Becker is the President of Patricia Becker & Associates, a gaming consulting firm that specializes in compliance and regulatory issues. In addition, she currently serves as chair of the compliance committee at Bally Technologies, Inc. She previously served as executive director of UNLV International Gaming Institute, and was the first woman to be appointed to the Nevada Gaming Control Board. Previously, Becker held numerous executive positions including roles with Aladdin Gaming and Harrah’s. She also served as chief of staff to Nevada Gov. Bob Miller from 1993 to 1995 and on the board of directors for Cash Systems Inc., Fitzgerald’s Gaming Corp. and Powerhouse Technologies. In 2004, Becker was the first woman to be inducted into the International Association of Gaming Advisors and has served as the organization’s president.
Jan Jones Blackhurst is Executive Vice President of Communications and Government Relations for Caesars Entertainment, Corp. In that capacity, she oversees all worldwide government affairs, corporate communications, community relations and corporate-social responsibility programs for the $9 billion corporation. Those programs include Caesars industry-leading responsible-gaming systems and its various initiatives aimed at enhancing diversity and promoting environmental stewardship companywide.
Prior to joining Caesars in November 1999, Jones Blackhurst served two terms as Mayor of the City of Las Vegas. She was the city’s first woman chief executive, and among the most popular mayors in its history, having won reelection in 1995 by a 72 percent margin. While in office, Jones Blackhurst presided over an unprecedented period of economic, social and cultural expansion, one in which the city’s population increased 66 percent, making Las Vegas the fastest-growing major metropolitan area in America throughout much of the 1990s.
In 2011, Jones Blackhurst was the first woman to be honored with the Lifetime Achievement Award in Gaming Communications by the American Gaming Association. She was also honored by the Women’s Research Institute of Nevada as a mentor and leader in Las Vegas and honored by the Women’s Chamber of Commerce of Nevada for the ATHENA International Award for leadership. In 2012 Jones Blackhurst received the Americanism Award from the Anti-Defamation League in recognition of her outstanding leadership, dedication to diversity, and commitment to her community. In 2013, she was awarded the Free Enterprise Award by the Nevada Taxpayers Association, Employers Association of Southern Nevada, and the Metro Chamber as a distinguished community leader who has made a significant and lasting impact on the Southern Nevada economy. She also received the William Andrews Clark – Lifetime Achievement Award honoring her extraordinary distinction in lifetime success and a tribute to her years of commitment, dedication, and service to the Southern Nevada community.
Elaine Wynn has served as Director of Wynn Resorts since 2000 and has helped guide the company’s expansion from the opening of Wynn Las Vegas in April 2005 and Wynn Macau in September 2006 to the unveiling of Encore in December 2008.
In her role, Wynn has overseen a multitude of details that have contributed to the creation of the “Wynn lifestyle.” These range from the selection of staff uniforms, luxury shops and spa amenities to playing a key role in special events and the company’s charitable involvement. Prior to her current position, Wynn served in a similar capacity as Director of Mirage Resorts from 1976 to 2000.
Wynn is personally and actively involved in a variety of community organizations and civic bodies dedicated to the enrichment of children, including serving as president of the Nevada Board of Education, chairman of the national board of the Communities In Schools drop-out prevention organization and co-chair of the Greater Las Vegas After-School All Stars, among others.
Wynn has also been a strong supporter of the arts. Her role as a business leader in Nevada led to her appointments to the Kennedy Center for the Performing Arts Board of Trustees and the Library of Congress Trust Fund Board. In 2011 she established the Elaine Wynn Studio for Arts Education at the Smith Center for the Performing Arts in Las Vegas. The Elaine Wynn Studio includes classrooms, conference rooms and offices for education program staff, interns, and artists in residence. The building’s two performance spaces, a “black box” theater and cabaret theater, are also used for children’s theater and educational programming.
Her dedication to the community has garnered numerous awards and accolades including the Governor’s Philanthropist of the Year in 2005 and an Honorary Doctorate from the University of Nevada Las Vegas in 1986. She was awarded one of seven National Promise of America Founder’s Awards for improving children’s lives at a ceremony at the White House. She is especially proud of the dedication of the Elaine Wynn Elementary School in 1991.
Seating for this once-in-a-lifetime event is extremely limited. VIP tickets are $250; preferred seating tickets are $125 and include a private reception prior to the event. General admission entry is $40. Dessert and refreshments will be available following the event for all attendees.
Community partners helping present the event include Global Gaming Women and the Women’s Research Institute of Nevada (WRIN). In addition, the University of Nevada, Las Vegas, Lied Library Special Collections will display archival material relevant to the topic and Vegas PBS will record the event for future broadcast consideration.
These women will come together for one evening at The Mob Museum to discuss the world of gaming from their own unique perspectives. Sure to be among the topics that evening: the highs and lows, challenges and successes of operating as prominent figures in a largely male-dominated gaming industry.
Patricia Becker is the President of Patricia Becker & Associates, a gaming consulting firm that specializes in compliance and regulatory issues. In addition, she currently serves as chair of the compliance committee at Bally Technologies, Inc. She previously served as executive director of UNLV International Gaming Institute, and was the first woman to be appointed to the Nevada Gaming Control Board. Previously, Becker held numerous executive positions including roles with Aladdin Gaming and Harrah’s. She also served as chief of staff to Nevada Gov. Bob Miller from 1993 to 1995 and on the board of directors for Cash Systems Inc., Fitzgerald’s Gaming Corp. and Powerhouse Technologies. In 2004, Becker was the first woman to be inducted into the International Association of Gaming Advisors and has served as the organization’s president.
Jan Jones Blackhurst is Executive Vice President of Communications and Government Relations for Caesars Entertainment, Corp. In that capacity, she oversees all worldwide government affairs, corporate communications, community relations and corporate-social responsibility programs for the $9 billion corporation. Those programs include Caesars industry-leading responsible-gaming systems and its various initiatives aimed at enhancing diversity and promoting environmental stewardship companywide.
Prior to joining Caesars in November 1999, Jones Blackhurst served two terms as Mayor of the City of Las Vegas. She was the city’s first woman chief executive, and among the most popular mayors in its history, having won reelection in 1995 by a 72 percent margin. While in office, Jones Blackhurst presided over an unprecedented period of economic, social and cultural expansion, one in which the city’s population increased 66 percent, making Las Vegas the fastest-growing major metropolitan area in America throughout much of the 1990s.
In 2011, Jones Blackhurst was the first woman to be honored with the Lifetime Achievement Award in Gaming Communications by the American Gaming Association. She was also honored by the Women’s Research Institute of Nevada as a mentor and leader in Las Vegas and honored by the Women’s Chamber of Commerce of Nevada for the ATHENA International Award for leadership. In 2012 Jones Blackhurst received the Americanism Award from the Anti-Defamation League in recognition of her outstanding leadership, dedication to diversity, and commitment to her community. In 2013, she was awarded the Free Enterprise Award by the Nevada Taxpayers Association, Employers Association of Southern Nevada, and the Metro Chamber as a distinguished community leader who has made a significant and lasting impact on the Southern Nevada economy. She also received the William Andrews Clark – Lifetime Achievement Award honoring her extraordinary distinction in lifetime success and a tribute to her years of commitment, dedication, and service to the Southern Nevada community.
Elaine Wynn has served as Director of Wynn Resorts since 2000 and has helped guide the company’s expansion from the opening of Wynn Las Vegas in April 2005 and Wynn Macau in September 2006 to the unveiling of Encore in December 2008.
In her role, Wynn has overseen a multitude of details that have contributed to the creation of the “Wynn lifestyle.” These range from the selection of staff uniforms, luxury shops and spa amenities to playing a key role in special events and the company’s charitable involvement. Prior to her current position, Wynn served in a similar capacity as Director of Mirage Resorts from 1976 to 2000.
Wynn is personally and actively involved in a variety of community organizations and civic bodies dedicated to the enrichment of children, including serving as president of the Nevada Board of Education, chairman of the national board of the Communities In Schools drop-out prevention organization and co-chair of the Greater Las Vegas After-School All Stars, among others.
Wynn has also been a strong supporter of the arts. Her role as a business leader in Nevada led to her appointments to the Kennedy Center for the Performing Arts Board of Trustees and the Library of Congress Trust Fund Board. In 2011 she established the Elaine Wynn Studio for Arts Education at the Smith Center for the Performing Arts in Las Vegas. The Elaine Wynn Studio includes classrooms, conference rooms and offices for education program staff, interns, and artists in residence. The building’s two performance spaces, a “black box” theater and cabaret theater, are also used for children’s theater and educational programming.
Her dedication to the community has garnered numerous awards and accolades including the Governor’s Philanthropist of the Year in 2005 and an Honorary Doctorate from the University of Nevada Las Vegas in 1986. She was awarded one of seven National Promise of America Founder’s Awards for improving children’s lives at a ceremony at the White House. She is especially proud of the dedication of the Elaine Wynn Elementary School in 1991.
Seating for this once-in-a-lifetime event is extremely limited. VIP tickets are $250; preferred seating tickets are $125 and include a private reception prior to the event. General admission entry is $40. Dessert and refreshments will be available following the event for all attendees.
Precious House, Brian Huges, Michael Turner, and Keith Foster Indicted in Alleged $1.4 Million Automobile Loan Fraud Scheme
Four Chicago and area defendants were indicted on federal bank fraud charges for allegedly engaging in a scheme to fraudulently obtain 46 automobile loans totaling approximately $1.4 million without ever intending that the borrowers would purchase the high-end luxury cars that they claimed to be buying. As a result, various credit union lenders, Including Great Lakes Credit Union, Pentagon Federal Credit Union, and Sherwin-Williams Credit Union, incurred losses totaling at least $914,000, the charges allege.
One defendant, Precious W. House, 47, of Chicago, the president of Rolling Auto Inc., a Plymouth, Indiana wholesale auto dealership that purported to be selling many of the autos, was arrested yesterday. He pleaded not guilty to five counts of bank fraud and one count making false statements on a loan application and is scheduled to have a detention hearing at 9:15 a.m. next Tuesday before Magistrate Judge Sidney I. Schenkier in U.S. District Court.
Another defendant, Brian K. Huges, 41, of Homewood, was arrested January 9 and was ordered detained in federal custody. He was charged with four counts of bank fraud and one count of making false statements on a loan application.
Co-defendants Michael O. Turner, 44, of Richton Park, who was charged with one count of bank fraud, and Keith B. Foster, 46, of Harvey, who was charged with one count each of bank fraud and making false statements on a loan application, were not arrested and will be arraigned next Tuesday in U.S. District Court.
The six-count indictment was returned by a federal grand jury. The indictment also seeks forfeiture of approximately $914,511 from all four defendants.
According to the indictment, between February and November 2013, the defendants fraudulently obtained at least 28 automobile loans of the 46 they fraudulently applied for and obtained approximately $914,000 of $1.4 million they sought in loan proceeds. They made and caused others to make false representations in documents submitted to lenders, including loan applications, vehicle purchase orders, and verifications of employment, concerning the individuals’ income, employment, credit history, intent to use the loan proceeds to purchase automobiles, and the existence of contracts obligating the borrowers to purchase vehicles from House and Rolling Auto.
House, Hughes, and Turner allegedly recruited individuals seeking auto and personal loans and agreed to find loans for them in exchange for a fee of 20 to 30 percent of the loan. Then, they submitted false information in the borrowers’ loan applications, their income, employment, and credit history, as well as their intent to use the loan proceeds to purchase autos from Rolling Auto and other dealerships, and the existence of contracts obligating them to purchase luxury automobiles made by BMW, Chevrolet, Jaguar, Lexus, Mercedes-Benz, Nissan, and Porsche, the indictment alleges.
If the individual borrowers refused to cash checks obtained as part of the scheme, Hughes allegedly threatened them with civil lawsuits and criminal prosecutions. House allegedly deposited the loan proceeds into bank accounts he controlled in Illinois, California, and Georgia.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorney Christopher R. McFadden.
Each count of bank fraud and making false statements on loan applications carries a maximum penalty of 30 years in prison and a $1 million fine, and restitution is mandatory. The court may impose an alternate fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
One defendant, Precious W. House, 47, of Chicago, the president of Rolling Auto Inc., a Plymouth, Indiana wholesale auto dealership that purported to be selling many of the autos, was arrested yesterday. He pleaded not guilty to five counts of bank fraud and one count making false statements on a loan application and is scheduled to have a detention hearing at 9:15 a.m. next Tuesday before Magistrate Judge Sidney I. Schenkier in U.S. District Court.
Another defendant, Brian K. Huges, 41, of Homewood, was arrested January 9 and was ordered detained in federal custody. He was charged with four counts of bank fraud and one count of making false statements on a loan application.
Co-defendants Michael O. Turner, 44, of Richton Park, who was charged with one count of bank fraud, and Keith B. Foster, 46, of Harvey, who was charged with one count each of bank fraud and making false statements on a loan application, were not arrested and will be arraigned next Tuesday in U.S. District Court.
The six-count indictment was returned by a federal grand jury. The indictment also seeks forfeiture of approximately $914,511 from all four defendants.
According to the indictment, between February and November 2013, the defendants fraudulently obtained at least 28 automobile loans of the 46 they fraudulently applied for and obtained approximately $914,000 of $1.4 million they sought in loan proceeds. They made and caused others to make false representations in documents submitted to lenders, including loan applications, vehicle purchase orders, and verifications of employment, concerning the individuals’ income, employment, credit history, intent to use the loan proceeds to purchase automobiles, and the existence of contracts obligating the borrowers to purchase vehicles from House and Rolling Auto.
House, Hughes, and Turner allegedly recruited individuals seeking auto and personal loans and agreed to find loans for them in exchange for a fee of 20 to 30 percent of the loan. Then, they submitted false information in the borrowers’ loan applications, their income, employment, and credit history, as well as their intent to use the loan proceeds to purchase autos from Rolling Auto and other dealerships, and the existence of contracts obligating them to purchase luxury automobiles made by BMW, Chevrolet, Jaguar, Lexus, Mercedes-Benz, Nissan, and Porsche, the indictment alleges.
If the individual borrowers refused to cash checks obtained as part of the scheme, Hughes allegedly threatened them with civil lawsuits and criminal prosecutions. House allegedly deposited the loan proceeds into bank accounts he controlled in Illinois, California, and Georgia.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorney Christopher R. McFadden.
Each count of bank fraud and making false statements on loan applications carries a maximum penalty of 30 years in prison and a $1 million fine, and restitution is mandatory. The court may impose an alternate fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Details on Conrad Ulz's Indictment in Alleged $3.2 Million Mortgage Fraud Scheme Involving Properties in Chicago’s Englewood Community
A Lake County man who operated two real estate–related firms was indicted on federal mortgage fraud charges. The defendant, Conrad Ulz, allegedly engaged in a scheme to fraudulently obtain 13 residential mortgage loans, totaling approximately $3.2 million, from lenders to purchase properties in Chicago’s Englewood neighborhood. The indictment alleges that Ulz paid buyers to purchase the properties and promised them no out-of-pockets costs and then made false statements to lenders on their behalf. As a result, the lenders incurred losses totaling more than $3.1 million because the amount of the mortgage loans was not fully recovered through subsequent sale or foreclosure.
Ulz, 73, of Libertyville, who operated Citywide Financial Group and Metro Realty Services, was charged with five counts of wire fraud and three counts of making false statements to financial institutions in an indictment that was returned by a federal grand jury. The indictment also seeks forfeiture of at least $3.1 million. Ulz will be arraigned on a date to be determined in U.S. District Court.
According to the indictment, between August 2007 and May 2009, Ulz caused buyers to fraudulently obtain 13 mortgage loans from various lenders for properties on South Sangamon, South Carpenter, South Morgan, South May, and South Ada streets, among others, in Englewood on the city’s south side. The alleged fraud involved false representations in documents, including loan applications and HUD-1 settlement statements concerning sales prices and the buyers’ employment, assets, income, and intention to occupy the property.
Ulz allegedly recruited buyers with good credit, promising to pay them for purchasing the properties and promising that they would not have to pay any of their own money toward the purchases, including down payments and mortgage payments.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorney Renai Rodney.
Each count of wire fraud affecting a financial institution and making false statements on loan applications carries a maximum penalty of 30 years in prison and a $1 million fine, and restitution is mandatory. The court may impose an alternate fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment 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.
Ulz, 73, of Libertyville, who operated Citywide Financial Group and Metro Realty Services, was charged with five counts of wire fraud and three counts of making false statements to financial institutions in an indictment that was returned by a federal grand jury. The indictment also seeks forfeiture of at least $3.1 million. Ulz will be arraigned on a date to be determined in U.S. District Court.
According to the indictment, between August 2007 and May 2009, Ulz caused buyers to fraudulently obtain 13 mortgage loans from various lenders for properties on South Sangamon, South Carpenter, South Morgan, South May, and South Ada streets, among others, in Englewood on the city’s south side. The alleged fraud involved false representations in documents, including loan applications and HUD-1 settlement statements concerning sales prices and the buyers’ employment, assets, income, and intention to occupy the property.
Ulz allegedly recruited buyers with good credit, promising to pay them for purchasing the properties and promising that they would not have to pay any of their own money toward the purchases, including down payments and mortgage payments.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorney Renai Rodney.
Each count of wire fraud affecting a financial institution and making false statements on loan applications carries a maximum penalty of 30 years in prison and a $1 million fine, and restitution is mandatory. The court may impose an alternate fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment 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.
Wednesday, January 22, 2014
Kamalu Gonzales Sentenced to More Than Six Years in Prison for Investment Fraud Scheme
A former loan officer from Henderson, Nevada, who convinced at least 16 victims to give him money for a high-yield investment scheme involving the foreign currency exchange market was sentenced today to six-and-a-half years in prison, five years of supervised release, and ordered to pay over $830,000 in restitution for his guilty pleas to federal fraud and money laundering charges, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Kamalu Gonzales, 47, was sentenced by U.S. District Judge Gloria M. Navarro and was permitted to self-report to federal prison by April 17, 2014. Gonzales pleaded guilty in August 2013 to two counts of mail fraud, six counts of wire fraud, and two counts of money laundering.
“Prosecuting persons who commit financial fraud crimes is a top priority of the U.S. Attorney’s Office in Nevada,” said U.S. Attorney Bogden. “Many of these persons target elderly and other vulnerable victims. If someone promises you an investment opportunity with unusually high rates of return, it is likely that the opportunity is fraudulent and that you will lose your money.”
During 2007, Gonzales worked as a loan officer for Meridias Capital in Henderson. Gonzales helped persons refinance their homes and placed false information in the loan applications so the individuals could obtain refinancing and cash to which they would not have otherwise been entitled. Gonzales also told individuals that he was a successful investor and trader in the foreign currency exchange market. Gonzales recruited individuals to invest with him in the market, telling them that they could earn high rates of return on their investments in a short period of time. Some of the victims wired money to Gonzales, and others borrowed money from their retirement funds or lines of credit. Gonzales also convinced some of the persons who refinanced their houses to give him some of the cash they received from refinancing for his investment fraud scheme. None of the victims agreed to pay Gonzales any commissions or fees or agreed that he could use their investments for personal or business expenses or to pay other investors.
In order to continue the scheme and to keep victims from discovering the crime, Gonzales lied to the victims repeatedly and told them their investments were doing well. As a result of the lies, some victims gave Gonzales more money to invest. Gonzales also made payments to some of the victims using money he received from other victims.
Gonzales received approximately $1 million total from at least 16 victims in 2007 and 2008. Gonzales did not invest the victims’ funds as promised and diverted approximately $410,000 for his own personal purposes.
The case was investigated by the FBI, IRS-Criminal Investigation, and the Henderson Police Department and prosecuted by Assistant U.S. Attorneys Kathryn C. Newman and Kimberly M. Frayn.
Kamalu Gonzales, 47, was sentenced by U.S. District Judge Gloria M. Navarro and was permitted to self-report to federal prison by April 17, 2014. Gonzales pleaded guilty in August 2013 to two counts of mail fraud, six counts of wire fraud, and two counts of money laundering.
“Prosecuting persons who commit financial fraud crimes is a top priority of the U.S. Attorney’s Office in Nevada,” said U.S. Attorney Bogden. “Many of these persons target elderly and other vulnerable victims. If someone promises you an investment opportunity with unusually high rates of return, it is likely that the opportunity is fraudulent and that you will lose your money.”
During 2007, Gonzales worked as a loan officer for Meridias Capital in Henderson. Gonzales helped persons refinance their homes and placed false information in the loan applications so the individuals could obtain refinancing and cash to which they would not have otherwise been entitled. Gonzales also told individuals that he was a successful investor and trader in the foreign currency exchange market. Gonzales recruited individuals to invest with him in the market, telling them that they could earn high rates of return on their investments in a short period of time. Some of the victims wired money to Gonzales, and others borrowed money from their retirement funds or lines of credit. Gonzales also convinced some of the persons who refinanced their houses to give him some of the cash they received from refinancing for his investment fraud scheme. None of the victims agreed to pay Gonzales any commissions or fees or agreed that he could use their investments for personal or business expenses or to pay other investors.
In order to continue the scheme and to keep victims from discovering the crime, Gonzales lied to the victims repeatedly and told them their investments were doing well. As a result of the lies, some victims gave Gonzales more money to invest. Gonzales also made payments to some of the victims using money he received from other victims.
Gonzales received approximately $1 million total from at least 16 victims in 2007 and 2008. Gonzales did not invest the victims’ funds as promised and diverted approximately $410,000 for his own personal purposes.
The case was investigated by the FBI, IRS-Criminal Investigation, and the Henderson Police Department and prosecuted by Assistant U.S. Attorneys Kathryn C. Newman and Kimberly M. Frayn.
Tuesday, January 21, 2014
U.S. Department of the Treasury's Office of Foreign Assets Control Continues to Target #SinaloaCartel with Support from DEA
Drug Enforcement Administration (DEA) Special Agent in Charge Doug Coleman announced that the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) reported the designation of Jose Guadalupe Tapia Quintero, a Culiacan, Sinaloa, Mexico based senior lieutenant of the Sinaloa Cartel. Jose Guadalupe Tapia Quintero was designated for his role in the drug trafficking activities of Ismael "Mayo" Zambada Garcia and for playing a significant role in international drug trafficking.
"DEA and its OFAC partners will not allow these dangerous cartels and their associates to exploit the U.S. financial system," said DEA Special Agent in Charge Doug Coleman. "We're relentlessly following the financial trail to deprive these traffickers of their assets, draining the lifeblood from their criminal enterprises."
Tapia Quintero oversees the transportation of cocaine and marijuana for the Zambada Garcia drug trafficking organization and is responsible for coordinating the purchase and transportation of cocaine and methamphetamine from Sinaloa into the U.S., specifically Arizona and California, on a monthly basis. Tapia Quintero also transports methamphetamine on behalf of a drug trafficking cell affiliated with Joaquin "Chapo" Guzman Loera from Sinaloa to Tijuana, Baja California via tractor trailers. The President identified Joaquin Guzman Loera, Ismael Zambada Garcia, and the Sinaloa Cartel as significant foreign narcotics traffickers pursuant to the Kingpin Act in 2001, 2002 and 2009, respectively.
Pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act), this designation generally prohibits U.S. persons from conducting financial or commercial transactions with Tapia Quintero, and also freezes any assets he may have under U.S. jurisdiction.
"We will continue to target all aspects of the narcotics trade," said Treasury's Director of the Office of Foreign Assets Control (OFAC) Adam J. Szubin. "Our actions will focus on their financial nerve points as well as the underlying logistics which are essential to their day to day operations such as the transportation network that we are taking action against today."
This action would not have been possible without the support of the Drug Enforcement Administration (DEA), specifically the Phoenix Field Division, and the multi-agency OCDETF Strike Force.
Since June 2000, the President has identified 103 drug kingpins, and OFAC has designated more than 1300 entities and individuals, pursuant to the Kingpin Act. Penalties for violations of the Kingpin Act range from civil penalties of up to $1.075 million per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals could face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act.
"DEA and its OFAC partners will not allow these dangerous cartels and their associates to exploit the U.S. financial system," said DEA Special Agent in Charge Doug Coleman. "We're relentlessly following the financial trail to deprive these traffickers of their assets, draining the lifeblood from their criminal enterprises."
Tapia Quintero oversees the transportation of cocaine and marijuana for the Zambada Garcia drug trafficking organization and is responsible for coordinating the purchase and transportation of cocaine and methamphetamine from Sinaloa into the U.S., specifically Arizona and California, on a monthly basis. Tapia Quintero also transports methamphetamine on behalf of a drug trafficking cell affiliated with Joaquin "Chapo" Guzman Loera from Sinaloa to Tijuana, Baja California via tractor trailers. The President identified Joaquin Guzman Loera, Ismael Zambada Garcia, and the Sinaloa Cartel as significant foreign narcotics traffickers pursuant to the Kingpin Act in 2001, 2002 and 2009, respectively.
Pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act), this designation generally prohibits U.S. persons from conducting financial or commercial transactions with Tapia Quintero, and also freezes any assets he may have under U.S. jurisdiction.
"We will continue to target all aspects of the narcotics trade," said Treasury's Director of the Office of Foreign Assets Control (OFAC) Adam J. Szubin. "Our actions will focus on their financial nerve points as well as the underlying logistics which are essential to their day to day operations such as the transportation network that we are taking action against today."
This action would not have been possible without the support of the Drug Enforcement Administration (DEA), specifically the Phoenix Field Division, and the multi-agency OCDETF Strike Force.
Since June 2000, the President has identified 103 drug kingpins, and OFAC has designated more than 1300 entities and individuals, pursuant to the Kingpin Act. Penalties for violations of the Kingpin Act range from civil penalties of up to $1.075 million per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals could face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act.
Considering Realities Before Passing More #GunControl Laws
The new year has brought yet more gun-control regulations. President Obama announced new executive orders on background checks. Connecticut citizens stood in long lines to register their guns, and, next door in New York City, registration lists are used to confiscate them.
While the research by criminologists and economists keeps showing that gun control doesn't work, technological advances and practical problems mean the laws are increasingly likely only to disarm the law-abiding.
In the era of 3D printing, you won't be able to ban guns and it will be even more difficult to stop unapproved people from obtaining them. A part metal/part plastic gun printed from a 3D printer will be completely indistinguishable from a traditionally made gun, even down to whatever serial number you want.
3D printers have consequences for the gun-control laws Obama and other Democrats are pushing. If AR-15s are banned, anyone could borrow a 3D printer and make one. If magazines holding more than 10 rounds are banned, and you don't have access to a very simple set of tools, print one off.
Can the government stop 3D-printed guns? Unfortunately, no. Even if the government registered every printer, criminals could simply steal one. How about requiring prior government permission for every item printed? That seems unenforceable, especially since printers will soon become ubiquitous.
Software is also impossible to control. When Cody Wilson, the 25-year-old founder of Defense Distributed, announced his design of a virtually all-plastic gun in May, the software blueprint from his website was quickly downloaded around the world. In just two days, 100,000 downloads were made, with most coming from Spain, followed by the United States and heavily regulated Brazil and Germany. Within two weeks, the software could be downloaded from more than 4,000 servers around the world.
There is also a practical problem in stopping these attacks. As Interpol Secretary General Ron Noble noted in November, there are two ways to protect people: "One is to say we want an armed citizenry; you can see the reason for that. Another is to say the enclaves are so secure that in order to get into the soft target you're going to have to pass through extraordinary security."
Noble points to the real problem: "How do you protect soft [civilian] targets? That's really the challenge. You can't have armed police forces everywhere. . . . It makes citizens question their views on gun control. You have to ask yourself, 'Is an armed citizenry more necessary now than it was in the past with an evolving threat of terrorism?' "
Noble's comments came shortly after the terrorist attack at the Westgate Mall in Nairobi, Kenya, where 68 people were killed. Kenya bans both open and concealed carrying of firearms by civilians. Yet, obviously, those bans didn't stop the terrorists.
In the United States, the vast majority of mass public shootings have been extensively planned beforehand - often many months or even years in advance. An example is Adam Lanza, the Sandy Hook Elementary School killer, who spent more than two years studying everything about previous mass shootings: the weapons used, the number of people killed, and even how much media coverage each attack received. Some police even likened his careful study to a doctoral dissertation.
Another careful planner was James Holmes, who is charged with the Aurora, Colo., massacre. According to police, he started buying items 21/2 months in advance. He visited neighboring theaters, buying his ticket almost two weeks before his attack. To help himself prepare, he photographed the layout of the theater.
Holmes appears to have carefully selected the theater. There were seven movie theaters within a 20-minute drive of his apartment showing the premiere of The Dark Knight Rises. He didn't choose the one closest to his apartment or the one prominently advertising the largest auditoriums in Colorado. He chose the only one with signs saying permitted concealed guns were banned.
The decision to pick the one theater that posted a gun ban would not surprise Noble. He notes: "Where would you have wanted to be? In a city where there was gun control and no citizens armed if you're in a Westgate Mall, or in a place [with lots of people armed]?"
The importance of armed citizens was demonstrated just days before the Sandy Hook attack, at the Clackamas Town Center Mall in Portland, Ore. In the crowded mall, a likely mass shooting was halted after two people were killed. It ended because one brave person, Nick Meli, a concealed-permit holder, stopped the attack simply by pointing his gun at the shooter. Alas, as is all too typical, the national news media all but ignored how an armed citizen prevented a large-scale killing spree.
Noble's statements and the ruckus over 3D printing show the frustration in stopping criminals and terrorists from getting guns. Before more gun-control measures are enacted, policymakers and the public need to understand that so-called gun-free zones shouldn't be places where only victims are disarmed.
Thanks to John R. Lott Jr., president of the Crime Prevention Research Center and the author of "More Guns, Less Crime".
While the research by criminologists and economists keeps showing that gun control doesn't work, technological advances and practical problems mean the laws are increasingly likely only to disarm the law-abiding.
In the era of 3D printing, you won't be able to ban guns and it will be even more difficult to stop unapproved people from obtaining them. A part metal/part plastic gun printed from a 3D printer will be completely indistinguishable from a traditionally made gun, even down to whatever serial number you want.
3D printers have consequences for the gun-control laws Obama and other Democrats are pushing. If AR-15s are banned, anyone could borrow a 3D printer and make one. If magazines holding more than 10 rounds are banned, and you don't have access to a very simple set of tools, print one off.
Can the government stop 3D-printed guns? Unfortunately, no. Even if the government registered every printer, criminals could simply steal one. How about requiring prior government permission for every item printed? That seems unenforceable, especially since printers will soon become ubiquitous.
Software is also impossible to control. When Cody Wilson, the 25-year-old founder of Defense Distributed, announced his design of a virtually all-plastic gun in May, the software blueprint from his website was quickly downloaded around the world. In just two days, 100,000 downloads were made, with most coming from Spain, followed by the United States and heavily regulated Brazil and Germany. Within two weeks, the software could be downloaded from more than 4,000 servers around the world.
There is also a practical problem in stopping these attacks. As Interpol Secretary General Ron Noble noted in November, there are two ways to protect people: "One is to say we want an armed citizenry; you can see the reason for that. Another is to say the enclaves are so secure that in order to get into the soft target you're going to have to pass through extraordinary security."
Noble points to the real problem: "How do you protect soft [civilian] targets? That's really the challenge. You can't have armed police forces everywhere. . . . It makes citizens question their views on gun control. You have to ask yourself, 'Is an armed citizenry more necessary now than it was in the past with an evolving threat of terrorism?' "
Noble's comments came shortly after the terrorist attack at the Westgate Mall in Nairobi, Kenya, where 68 people were killed. Kenya bans both open and concealed carrying of firearms by civilians. Yet, obviously, those bans didn't stop the terrorists.
In the United States, the vast majority of mass public shootings have been extensively planned beforehand - often many months or even years in advance. An example is Adam Lanza, the Sandy Hook Elementary School killer, who spent more than two years studying everything about previous mass shootings: the weapons used, the number of people killed, and even how much media coverage each attack received. Some police even likened his careful study to a doctoral dissertation.
Another careful planner was James Holmes, who is charged with the Aurora, Colo., massacre. According to police, he started buying items 21/2 months in advance. He visited neighboring theaters, buying his ticket almost two weeks before his attack. To help himself prepare, he photographed the layout of the theater.
Holmes appears to have carefully selected the theater. There were seven movie theaters within a 20-minute drive of his apartment showing the premiere of The Dark Knight Rises. He didn't choose the one closest to his apartment or the one prominently advertising the largest auditoriums in Colorado. He chose the only one with signs saying permitted concealed guns were banned.
The decision to pick the one theater that posted a gun ban would not surprise Noble. He notes: "Where would you have wanted to be? In a city where there was gun control and no citizens armed if you're in a Westgate Mall, or in a place [with lots of people armed]?"
The importance of armed citizens was demonstrated just days before the Sandy Hook attack, at the Clackamas Town Center Mall in Portland, Ore. In the crowded mall, a likely mass shooting was halted after two people were killed. It ended because one brave person, Nick Meli, a concealed-permit holder, stopped the attack simply by pointing his gun at the shooter. Alas, as is all too typical, the national news media all but ignored how an armed citizen prevented a large-scale killing spree.
Noble's statements and the ruckus over 3D printing show the frustration in stopping criminals and terrorists from getting guns. Before more gun-control measures are enacted, policymakers and the public need to understand that so-called gun-free zones shouldn't be places where only victims are disarmed.
Thanks to John R. Lott Jr., president of the Crime Prevention Research Center and the author of "More Guns, Less Crime".
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