Criminal Justice News

Friday, December 31, 2010

Disappeared: Family of Four Vanishes in the Middle of the Night

According to the San Diego Sheriff’s Office, “Investigation Discovery’s “Disappeared” is featuring the case of the McStay family. Relatives of the McStays hope the show will uncover new leads on what happened to Joseph, Summer and their two young boys Gianni, 4 and Joey Jr., 3 since they vanished from their Fallbrook home in February.

The one hour program is called Mystery at the Border. It will air on Monday, January 3, 2011 at 7:00 p.m. It will re-air on the same day at 10:00 p.m. and on January 4, 2011 at 1:00 a.m. Investigation Discovery in San Diego can be found on the following channels: COX – 104, DIRECT TV – 285, Time Warner – 214 and DISH – 192.

Homicide Detective Troy Dugal will be appearing on morning shows on Monday to bring attention to the case and the cable program.

Det. Dugal will be on NBC7/39 at 5:40 and on CW6 at 8:25. He will be appearing with the mother and brother of Joseph McStay. “

To see a short clip of Mystery at the Border please click on the following link:

http://vimeo.com/18299846

Thursday, December 30, 2010

Odessa Murder Suspect Arrested

On Tuesday, December 28, 2010, the Odessa Police Department and Texas Rangers were working to locate murder suspect Christopher Antonio Redic who was accused of killing Freddie Hall III. The Rangers reached out to the U.S. Marshals Lone Star Fugitive Task Force of whom they are a member agency, along with the Odessa PD and several other area agencies. The Texas Rangers had developed information that Redic may be in Monahans, and the task force quickly set up surveillance on several possible locations. On Wednesday, task force agents learned that Redic and his girlfriend had caught a ride to the Killeen/Temple area the day before, prior to law enforcement focusing on Monahans.

The U.S. Marshals in Waco are also part of the Lone Star Fugitive Task Force in the Western District of Texas, and they were contacted to use their resources with the task force member agencies in the Killeen and Temple area to locate Redic. Within hours, Task Force agents in Waco were able to locate an apartment in Temple where Redic was reportedly hiding out with his girlfriend. U.S. Marshals and Texas Rangers, along with task force officers from the Texas Department of Criminal Justice and Waco PD, were joined by Bell County Sheriff’s deputies and Temple Police Department. Officers approached and surrounded the apartment where Redic was supposed to be. Officers first encountered Redic’s girlfriend, and when they made entry, located and arrested Redic without incident inside the apartment. Texas Rangers also located and seized a 9mm handgun, but it is undetermined at this point if it is the murder weapon.

Robert Almonte, U.S. Marshal for the Western District of Texas said, “This case exemplifies what the task force concept is all about. As a member of the Lone Star Fugitive Task Force, the Odessa Police Department essentially has investigators all over the country ready to respond at a moment’s notice. In this case, a murder suspect on the run, is captured quickly and safely, and will later return to Odessa to answer to these charges.”

Livingston County man arrested on child pornography charges

DETROIT - A 52-year-old Livingston county man was arrested at his home late yesterday on production, transportation and possession of child pornography charges following an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) in both Detroit and Dallas.

Marcus Wilson was arrested and charged in a criminal complaint with production, transportation and possession of child pornography. The complaint alleges that Wilson knowingly received and exchanged visual depictions of minors engaging in sexually explicit conduct, and knowingly possessed and produced visual depictions of minors engaging in sexually explicit conduct.

According to the criminal complaint, Wilson exchanged numerous electronic communications, to include video chats, emails and instant messages, with at least one other person located outside of Michigan. One of those individuals, Timothy Whitington of Dallas, Texas, who was arrested by HSI Dallas-based HSI special agents Monday on similar charges, identified Wilson as an individual aiding him in the production of child pornography.

Following up on the Texas lead, Detroit agents arrested Wilson at his home without incident last night. According to the investigation, Wilson and Whitington would pose their respective children in a sexually explicit manner during web-based video chat sessions so the other could observe.

A search of data storage devices confirmed the finding.

"All children have an absolute right to grow up free from the fear of sexual abuse and exploitation, and especially from those they trust" said Brian M. Moskowitz, special agent in charge of ICE HSI in Detroit. "Sadly, today's technology in the hands of a predator with access to children has put our children at greater risk than ever before. Despite the odds, HSI special agents and our support staff will continue to work tirelessly to protect our kids and brings their abusers to justice."

This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.projectsafechildhood.gov.

Assistant U.S. Attorney Matt Roth is prosecuting the case.

This investigation was also a part of Operation Predator, a nationwide ICE initiative to protect children from sexual predators, including those who travel overseas for sex with minors, Internet child pornographers, criminal alien sex offenders, and child sex traffickers.

ICE encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-DHS-2ICE. This hotline is staffed around the clock by investigators. Suspected child sexual exploitation or missing children may be reported to the National Center for Missing and Exploited Children, an Operation Predator partner, at 1-800-843-5678 or http://www.cybertipline.com.

Member of Opa-Locka Drug Gang Sentenced on Narcotics and Gun Charges

JAN 08 -- MIAMI - Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration, Miami Field Division, Jeffrey H. Sloman, United States Attorney for the Southern District of Florida, John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation, Miami Field Office, Hugo Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, James K. Loftus, Interim Director, Miami-Dade Police Department, and Rodney Ballentine, Chief, City of Opa-Locka Police Department, announced the sentencing of the final defendant in Operation Cold Turkey.  On January 5, 2010, U.S. District Court Judge Donald M. Middlebrooks sentenced defendant Erick Hinds to 248 months in prison, following his October 2009 trial on gun and drug charges in connection with a drug trafficking gang that operated in the City of Opa-Locka.  Hinds was arrested on December 17, 2008, after he violently resisted arrest, and was himself shot and wounded by Miami Dade Police Officers executing a search warrant.

This sentencing effectively concludes Operation Cold Turkey, a two-year investigation that resulted in charges against 17 defendants in connection with drug trafficking.  The investigation and prosecution resulted in the seizure of approximately 40 firearms, including assault weapons and machine guns, and a ballistics vest.  Others charged and convicted were:

Vashawn I. Young: 135 months in prison, followed by 5 years of supervised release;
Delvin Robinson: 135 months in prison, followed by 5 years of supervised release;
Audrei Butler: 4 years’ probation, with 18 months’ home detention;
Luther Boykin: 96 months in prison, followed by 5 years of supervised release;
Anthony Smith: 120 months in prison, followed by 5 years of supervised release;
Quinton McGhee: 120 months in prison, followed by 5 years of supervised release;
Marcus Carroll: 180 months in prison, followed by 5 years of supervised release;
Vance Williams: 120 months in prison, followed by 5 years of supervised release;
Tavaris Hall: 72 months in prison, followed by 5 years of supervised release;
Montcello Cooper, Jr.: 126 months in prison, followed by 5 years of supervised release;
Hollis K. Oliver: 84 months in prison, followed by 2 years of supervised release;
Pernell D. Scott: 120 months in prison, followed by 2 years of supervised release;
Jonathan Daniels:  120 months in prison, followed by 3 years of supervised release;
Shane Ricardo Brown:  180 months in prison, followed by 3 years of supervised release;
Maurice Williams:  84 months in prison, followed by 3 years of supervised release; and
Patrick McKinnon: 92 months in prison, followed by 3 years of supervised release.

According to statements made in court in the Hinds trial and in various guilty pleas, it is estimated that this gang trafficked in approximately 8,200 grams of marijuana, 560 grams of crack cocaine, 700 grams of powder cocaine, and 500 MDMA in just a one month period.

DEA Special Agent in Charge Mark R. Trouville stated, "Unfortunately, drugs and gangs go hand in hand.  DEA will continue to stand up with our federal, state, and local counterparts to attack these violent drug trafficking organizations.

“Gangs and the guns and drugs that they bring are not welcome in Miami, and our prosecutions make that clear.  If you are in a gang, if you sell drugs, and if you have a gun, you will face federal charges and a lengthy prison sentence,” stated U.S. Attorney Jeffrey H. Sloman.

FBI Special Agent in Charge John Gillies added, “Through the combined efforts of local, state and federal law enforcement and prosecutors, this violent gang has been dismantled.  Drugs and guns have a devastating effect on our communities and we will continue to work with our partners to make South Florida a safer place.” 

“These gangs prey on our communities without regard to the damage they do or the lives they ruin.  As residents of this community, we must reject this way of life,” said ATF Special Agent in Charge Hugo Barrera. “We will not tolerate gang behavior, or that of anyone who uses firearms to wreak violence on law enforcement and on our community. Our message is simple. We will not go away; we will continue to investigate and prosecute gang members and felons who commit acts of violence using guns.”

James K. Loftus, Interim Director for the Miami-Dade Police Department stated, “This should be a wake-up call to gang members and criminals that their actions will not go unnoticed.  We will not rest until people such as Mr. Hinds are held responsible and brought to justice.  With our continued partnership with our law enforcement allies, we are accomplishing this goal.”

Citizen of Dominican Republic sentenced to 25 months for illegally reentering the US after deportation

HARTFORD, Conn. - A man from the Dominican Republic was sentenced Wednesday to 25 months in prison for illegally reentering the United States after deportation. This sentenced was announced by David B. Fein, U.S. Attorney for the District of Connecticut. The case was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

Marino Avalo, 47, also known as "Jose Ventura" and "Carlos Irizarry," a citizen of the Dominican Republic, was sentenced by U.S. District Judge Robert N. Chatigny in Hartford.

According to court documents and statements made in court, Avalo was deported to the Dominican Republic in January 1993 and again in March 1995, both times after having been convicted of an aggravated felony involving the distribution of cocaine. Avalo again illegally reentered the United States and was found in Connecticut on June 16, 2010, after he was arrested for using someone else's name to apply for a driver's license.

Avalo has been in custody since June 16, 2010.

On Oct. 5, 2010, Avalo pleaded guilty to one count of unlawful presence in the United States following deportation.

Avalo again faces deportation after he completes the sentence imposed today.

This case was prosecuted by Assistant U.S. Attorneys Robert M. Spector and Jonathan S. Freimann.

Detroit Medical Center Pays U.S. $30 Million to Settle False Claims Act Allegations

Allegedly Engaged in Improper Financial Relationship with Referring Physicians

WASHINGTONDetroit Medical Center, a non-profit company that owns and operates hospitals and outpatient facilities in Detroit, has agreed to pay the United States $30 million to settle allegations that it violated the False Claims Act, the Anti-Kickback Statute and the Stark Statute, by engaging in improper financial relationships with referring physicians, the Justice Department announced today.

The Stark Statute and the Anti-Kickback Statute restrict the financial relationships that hospitals may have with doctors who refer patients to them. Most of the relationships at issue in this matter involved office lease agreements and independent contractor relationships that were either inconsistent with fair market value or not memorialized in writing.

"Improper financial relationships between health care providers and their referral sources can corrupt a physician's judgment about the patient's true healthcare needs," said Tony West, Assistant Attorney General for the Department’s Civil Division. "In addition to yielding a substantial recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable for patients."

The government learned of the statutory violations from Detroit Medical Center, itself, which discovered improper financial relationships with a number of physicians as it prepared for the sale to Vanguard. "We applaud the hospital leadership’s decision to come forward voluntarily to disclose these issues to the government," said U.S. Attorney Barbara McQuade.

Detroit Medical Center is in the process of selling its facilities to Vanguard Health Systems Inc., a company headquartered in Nashville, Tenn., that owns and operates healthcare facilities in five states. Vanguard also signed today’s settlement.

The case was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Michigan, the Office of Inspector General of the Department of Health and Human Services and the Centers for Medicare and Medicaid Services.

FBI Responds to Relocation of CODIS Server from the City of Albuquerque to Santa Fe

The actions of the FBI Laboratory, with regard to today’s move of the Combined DNA Index System (CODIS) server from the City of Albuquerque, Albuquerque Police Criminalistics Laboratory to the New Mexico Department of Public Safety in Santa Fe, continue to be misinterpreted by some media outlets.

The FBI has no role in determining the location of each state’s DNA database. The decision to change the location of the New Mexico DNA Administrative Center belongs to the state of New Mexico.

Today’s move of the CODIS server from Albuquerque to Santa Fe is being conducted in accordance with NDIS Procedures. The FBI Laboratory is acting in compliance with all protocols and standard practices, to include the back up of data and the transportation of the server. The relocation includes the server and associated data. The FBI is not relocating evidence.

CODIS operations, and the integrity of the system, will not be affected by the relocation of the server.

Media reports that suggest that the move is “outside of standard protocol” are inaccurate.

In accordance with the National DNA Index System (NDIS) Operational Procedures, each State designates one criminal justice agency to be responsible for ensuring that all conditions and standards for NDIS participation are met within that State. Further, to participate in NDIS, a NDIS Laboratory appoints a CODIS Administrator to serve as the central point of contact with the FBI. The CODIS Administrator is responsible for the use of the CODIS software within that State as well as submission of DNA records to the National DNA Index. The State CODIS Administrator is the authorized party to sign all correspondence to the FBI and NDIS Custodian relating to the use of CODIS equipment or software within that State.

The designated State CODIS Administrator for New Mexico, and the signatory to the FBI/New Mexico Memorandum of Understanding (MOU), is the New Mexico Department of Public Safety. Modifications to the FBI/New Mexico MOU had to be submitted in writing and signed by both the FBI and the New Mexico Department of Public Safety.

The FBI Laboratory has an obligation to comply with the terms of the MOUs and requirements outlined in the NDIS Operational Procedures prior to authorizing a move of a CODIS server within a state.

“Granddad Bandit” Indicted for Bank Robberies

BIRMINGHAM—A federal grand jury today indicted a Louisiana man, suspected as “The Granddad Bandit” for two Alabama bank robberies, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Patrick Maley.

The indictment filed in U.S. District Court charges MICHAEL FRANCIS MARA, 53, of Baton Rouge, with a 2009 bank robbery in Birmingham and a 2010 bank robbery in Huntsville.

The FBI arrested MARA on Aug. 12 in Baton Rouge for a bank robbery outside of Alabama. The arrest came soon after the FBI began using electronic billboards across the country as it sought “The Granddad Bandit” who was suspected in a string of robberies. MARA currently is in custody in Virginia, where it is expected that all bank robbery charges pending against him will be resolved.

“The FBI’s appeal to the public paid off with information that led to MARA’s arrest,” Vance said. “‘The Granddad Bandit’ intimidated employees at numerous banks across 13 states as he committed one robbery after another. The FBI, the media and the public came together to put this man behind bars, where he belongs,” she said.

The indictment in Birmingham charges MARA with robbing the Servis 1st Bank in downtown Birmingham on Aug. 21, 2009, and the Compass Bank on Governor’s Drive in Huntsville on Feb. 24, 2010. In both robberies, MARA presented a demand note to tellers, who each handed about $5,000 to the robber, according to the indictment.

The maximum sentence for each bank robbery is 20 years in prison and a $250,000 fine.

The FBI investigated this case. Assistant U.S. Attorney Mary Stuart Burrell is prosecuting the case.

Members of the public are reminded that the indictment contains only charges. A defendant is presumed innocent of the charges and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.

Wednesday, December 29, 2010

Justice Department Settles Allegations of Immigration-Related Unfair Employment Practices in Oregon and North Carolina

WASHINGTON – The Justice Department today announced that it has reached a settlement agreement with Collins Management Corporation, a forestry products company in Oregon, to resolve allegations that it unlawfully fired and later refused to rehire a lawful permanent resident in violation of the anti-discrimination provision of the Immigration and Nationality Act (INA).

According to the department’s findings, Collins insisted that a lawful permanent resident present an unexpired permanent resident card (also known as a "green card") for Form I-9 purposes, even though the individual had already presented his driver’s license and unrestricted Social Security card to the employer. The department further found that the company fired the individual when he was unable to present an unexpired green card and refused to consider him for re-hire two months later because the company believed he did not possess proper documentation.

As part of the settlement agreement, Collins agreed to pay $15,000 in back pay to the former employee and a $600 civil penalty to the federal government. The company also agreed to train its managers and human resources representatives regarding compliance with the anti-discrimination provision of the INA.

In addition, earlier this month, the department entered into a settlement agreement with Oakwood Healthcare Inc. to settle allegations that its Ashville, N.C., facility unlawfully discriminated against a lawful permanent resident by rejecting her employment eligibility verification documents and rescinding an offer of employment. As part of the settlement, Oakwood agreed to compensate the individual for lost wages totaling $732, pay a $1,100 civil penalty and train its human resources employees regarding compliance with the anti-discrimination provision.

"The INA’s anti-discrimination provision protects all authorized workers from unfair documentary requests during the Form I-9 process," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Justice Department is committed to stopping workplace discrimination against citizens and work-authorized non-citizens alike."

The Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices is responsible for enforcing the INA anti-discrimination provision. For more information about protections against employment discrimination under federal immigration law, call 1-800-255-7688 (OSC’s worker hotline) (1-800-237-2525, TDD for hearing impaired); 1-800-255-8255 (OSC’s employer hotline) (1-800-362-2735, TDD for hearing impaired); 202-616-5594; email osccrt@usdoj.gov; or visit www.usdoj/gov/crt/osc .

Schenectady Man Sentenced to 27 Months in Prision for Role In Mortgage Fraud Scheme

Richard S. Hartunian, United States Attorney for the Northern District of New York, Rene Febles, Special Agent in Charge of the Office of Inspector General, U.S. Department of Housing and Urban Development in New York, John F. Pikus, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation, and Lt. John D. Durling of the New York State Police Special Investigations Unit announced that Michael Cassadei was sentenced today by Senior United States District Judge Thomas J. McAvoy in Albany to twenty-seven (27) months in prison, to be followed by three years’ supervised release, for his role as organizer of a local mortgage fraud scheme. Cassadei also was ordered to make full restitution, due immediately, in the total amount of $135,148.45.

Cassadei, age 54, of Schenectady, owned, operated and/or did business in the name of, or using a number of entities, including AAA Allstate Appraisal Services. He pled guilty on February 17, 2010, at which time he admitted that, through the use of fraudulent loan applications, settlement statements, appraisals and other false statements and documents, he and the other participants in the scheme were able to fraudulently cause First Union National Bank of Delaware to finance the sale of Capital Region residential properties in amounts well in excess of their actual value, and that he and other participants then used the proceeds of the loans to purchase the properties in much lower amounts and retained the bulk of the funds. In furtherance of this scheme, Cassadei and the other participants coordinated two closings on the properties – in the first, the financial institution wired proceeds for the purchase of the properties for an amount substantially in excess of their true values. The mortgage amounts were inflated by, among other things, false seller-second mortgages and cash down payments or other payments or credits for the end buyers that did not, in truth and fact, exist. After paying the costs and fees associated with the initial closing, Cassadei then caused the remaining proceeds to be transferred to him or others acting under his direction. Thereafter, the deeds were recorded in reverse chronological order from that in which the sales actually occurred in order to create the appearance that the prior owners of the properties had conveyed them to the defendant and/or his nominees before sale to the end buyers, whereas the opposite was, in fact, what happened. As a result, the defendant was able to cause the bank, without its knowledge, to fund the purchase of the properties with the proceeds from their prior sale, with the bulk of the remaining funds going to the defendant or others at his direction.

United States Attorney Hartunian observed that "it is important that those who engage in mortgage fraud understand that they face significant penalties, and that such fraudulent schemes will be pursued aggressively in this District."

The investigation in this matter was conducted by the Office of the Inspector General of the United States Department of Housing and Urban Development, the Albany Division of the Federal Bureau of Investigation, the New York State Police Special Investigations Unit, with the assistance of the Internal Revenue Service, Criminal Investigation Division, the United States Postal Inspection Service, and the New York State Banking Commission. It is being prosecuted by the United States Attorney's Office for the Northern District of New York.
FBI and San Diego Sheriff’s Department Seek Public’s Assistance to identify the “Drywaller Bandit”

The FBI, Oceanside Police Department, and San Diego Sheriff’s Department are seeking the public’s assistance to identify a serial bank robber dubbed the “Drywaller Bandit” believed to be responsible for robbing six banks in Encinitas and Oceanside, California, since September 24, 2010.

The “Drywaller Bandit” is known to verbally demand money from victim tellers while pointing a black semi-automatic pistol at the victim tellers. He is believed to have robbed two banks a total of four times. He is believed to have robbed the US Bank branch, located at 1074 North El Camino Real, Encinitas, CA. on Friday, September 24, 2010, and Tuesday, December 21, 2010. He is believed to have robbed the Citibank branch, located at 113 North El Camino Real, Encinitas, CA. on Friday, November 19, 2010, and Monday, December 27, 2010.

09/24/10
Friday
US Bank 1074 North El Camino Real
Encinitas, CA.

10/25/10
Monday
Wells Fargo Bank, 276 North El Camino Real
Encinitas, CA.

11/19/10
Friday
Citibank, 113 North El Camino Real
Encinitas, CA.

12/8/10
Wednesday
Chase Bank,
615 College Blvd.
Oceanside, CA.

12/21/10
Tuesday
US Bank, 1074 North El Camino Real
Encinitas, CA.

12/27/10
Monday
Citibank, 113 North El Camino Real
Encinitas, CA.

The “Drywaller Bandit” robber is described as follows:
Race: White
Sex: Male
Age: Late 20’s to early 40’s
Height: Approximately 5’8” to 5’10’ tall
Weight: Approximately 160 to 190 lbs.
Build: Medium
Hair: Brown
Clothing: Known to wear dark baseball caps, sunglasses, gloves, black ski mask, dark hooded jacket with fleece lining, gloves, blue jeans and dust mask
Weapon: Black semi-automatic pistol

Anyone with information concerning the “Drywaller Bandit” is asked to contact the FBI at telephone number (858) 565-1255, or CrimeStoppers at (888) 580-8477. A combined reward of $20,000 is being offered for information leading to the arrest and conviction of the “Drywaller Bandit.” The “Drywaller Bandit” should be considered armed and dangerous.

NYPD: Nothing to Report

Retired NYPD Police Officer John Moran joins www.Police-Writers.com with his book  U.F.16 AKA Nothing to Report.  Police-Writers.com is a website that lists 1109 State or Local US Police Officers, from 471 departments, who have authored 2421 books.

John Moran retired after twenty-seven years in the NYCPD with eleven years in the communications division and rest on patrol. His oldest daughter was appointed to the PD in 1986 and received his shield until she was promoted to detective. John Moran is the author of U.F. 16 A.K.A. Nothing to Report.

According to the book description of U.F. 16 A.K.A. Nothing to Report, “U.F. 16 is the official name for a police officer’s memo book. It is carried by patrol officers and used to record their assignment and any action taken during their tour. Some officers felt that the less they wrote is the way to go so that they would not be questioned about an entry they made. Others would write more to make it easier to recall or cover their rear end in case there is a controversy.

In this fascinating book, Moran reveals his past assignments taken from a total of sixty-seven memo books both old and new where entries were made. It covers sixteen years, including eleven years in communications division when memo entries were not required. Browse through the intriguing pages of U.F. 16 and experience exciting days as well as quiet times when there was nothing to report!”

Tuesday, December 28, 2010

Anne Arundel County to benefit from ICE strategy to use biometrics to identify and remove aliens convicted of a crime

GLEN BURNIE, Md. - On Tuesday, U.S. Immigration and Customs Enforcement (ICE) began using a federal information sharing capability in Anne Arundel County that helps federal immigration officials use biometrics to identify aliens, both lawfully and unlawfully present in the United States, who are booked into local law enforcement's custody for a crime. This capability is part of Secure Communities-ICE's comprehensive strategy to improve and modernize the identification and removal of aliens convicted of a crime from the United States.

Previously, biometrics-fingerprints-taken of individuals charged with a crime and booked into custody were checked for criminal history information against the Department of Justice's (DOJ) Integrated Automated Fingerprint Identification System (IAFIS). Now, through enhanced information sharing between DOJ and the Department of Homeland Security (DHS), biometrics submitted through the state to the FBI will be automatically checked against both the FBI criminal history records in IAFIS and the biometrics-based immigration records in DHS's Automated Biometric Identification System (IDENT).

If fingerprints match those of someone in DHS' biometric system, the new automated process notifies ICE. ICE evaluates each case to determine the individual's immigration status and takes appropriate enforcement action. This includes aliens who are in lawful status and those who are present without lawful authority. Once identified through fingerprint matching, ICE will respond with a priority placed on aliens convicted of the most serious crimes first-such as those with convictions for major drug offenses, murder, rape and kidnapping.

"The Secure Communities strategy provides ICE with an effective tool to identify criminal aliens in local custody," said Secure Communities Assistant Director David Venturella. "Enhancing public safety is at the core of ICE's mission. Our goal is to use biometric information sharing to remove criminal aliens, preventing them from being released back into the community, with little or no additional burden on our law enforcement partners."

With the expansion of the biometric information sharing capability to Anne Arundel County, ICE is using this capability in seven Maryland jurisdictions, including Baltimore County, Carroll, Frederick, Prince George's, Queen Anne and Saint Mary's counties. Across the country, ICE is using this capability in 891 jurisdictions in 35 states. By 2013, ICE plans to be able to respond nationwide to all fingerprint matches generated through IDENT/IAFIS interoperability.

"A fingerprint does not lie," said Anne Arundel County Executive John R. Leopold. "Secure Communities is another way local governments can partner with federal law enforcement to identify those who are in this country illegally. This is a valuable tool that eliminates the possibility of racial profiling in identifying illegal immigrants at the point of arrest. Anne Arundel County is proud to be a strong partner with the U.S. Department of Homeland Security and Immigration and Customs Enforcement."

Since ICE began using this enhanced information sharing capability in October 2008, immigration officers have removed from the United States more than 54,500 aliens convicted of a crime. ICE does not regard aliens charged with, but not yet convicted of crimes, as "criminal aliens." Instead, a "criminal alien" is an alien convicted of a crime. In accordance with the Immigration and Nationality Act, ICE continues to take action on aliens subject to removal as resources permit.

The IDENT system is maintained by DHS's US-VISIT program and IAFIS is maintained by the FBI's Criminal Justice Information Services (CJIS).

"US VISIT is proud to support ICE, helping provide decision makers with comprehensive, reliable information when and where they need it," said US-VISIT Director Robert Mocny. "By enhancing the interoperability of DHS's and the FBI's biometric systems, we are able to give federal, state and local decision makers information that helps them better protect our communities and our nation."

"Under this plan, ICE will be utilizing FBI system enhancements that allow improved information sharing at the state and local law enforcement level based on positive identification of incarcerated criminal aliens," said Daniel D. Roberts, assistant director of the FBI's CJIS Division. "Additionally, ICE and the FBI are working together to take advantage of the strong relationships already forged between the FBI and state and local law enforcement necessary to assist ICE in achieving its goals."

Safety Tips New Year's Eve

If you are hosting a New Year's Eve party, following a few simple rules could prevent a tragedy:

•Plan ahead by naming a "designated driver." Make this your responsibility as the host.
•Contact a local cab company to provide rides for your guests.
•Serve non-alcoholic beverages as an option to your guests.
•Stop serving alcohol to your guests several hours before the party ends.
•Provide your guests with a place to stay overnight in your home.
If you are attending New Year's Eve parties and celebrations:

•If you drink, don't drive.
•Plan ahead and always designate a sober driver before the party or celebration begins.
•If you are impaired, call a taxi, use mass transit, or get a sober friend or family member to come pick you up.
•Or, stay where you are until you are sober.
•Take the keys from someone if you think he/she is too impaired to drive.

The tragedies and costs from drinking and driving impaired don't just end with the potential death, disfigurement, disability and injury caused by impaired drivers. Driving impaired or riding with someone who is impaired isn't worth the risk. The consequences are serious and real. Not only do you risk killing yourself or someone else, but the trauma and financial costs of a crash or an arrest for driving while impaired can be significant.

Former Indiana middle school teacher sentenced to 30 years for child pornography

HAMMOND, Ind. - A former band teacher at a local middle school was sentenced on Tuesday to 30 years in federal prison for enticing a minor and manufacturing child pornography. The sentence resulted from an investigation conducted by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the Hammond Police Department.

James Allen Ciammetti, 43, of Oak Lawn, Ill., was sentenced Dec. 28 by U.S. District Judge James Moody, Northern District of Indiana, to 30 years imprisonment and 20 years of supervised release. Ciammetti pleaded guilty to coercing and enticing a minor and manufacturing child pornography. As part of the plea agreement, Ciammetti also relinquished the balance of his teacher's retirement account, to be paid as restitution in this case. Ciammetti was a band teacher at George Rogers Clark Middle School in Hammond.

"Today's sentencing should put all types of child predators on notice that serious consequences await those who sexually exploit innocent children," said Gary Hartwig, special agent in charge of ICE HSI in Chicago. "This case was particularly troubling because of Mr. Ciammetti's position of public trust as an educator. HSI will continue to work closely with its law enforcement partners to protect our children and ensure that sexual predators feel the full weight of the law."

This case was prosecuted by Assistant U.S. Attorneys for the Northern District of Indiana Philip Benson and Jill Trumbull Harris.

This investigation was part of Operation Predator, a nationwide ICE initiative to protect children from sexual predators, including those who travel overseas for sex with minors, Internet child pornographers, criminal alien sex offenders, and child sex traffickers. ICE encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-DHS-2ICE. This hotline is staffed around the clock by investigators.

Suspected child sexual exploitation or missing children may be reported to the National Center for Missing and Exploited Children, an Operation Predator partner, at 1-800-843-5678 or http://www.cybertipline.com.

Odem Resident Pleads Guilty to Weapons Charges

(CORPUS CHRISTI, Texas) — Jeremy Charles Davenport has pleaded guilty to two counts involving federal weapons charges, United States Attorney José Angel Moreno announced today. Davenport, 35, of Odem, Texas, pleaded guilty yesterday before U.S. District Judge Janis Graham Jack. Yesterday, Davenport pleaded guilty to being in possession of an I.E.D., or Improvised Explosive Device, on Sept. 29, 2010, as well as being a drug user in possession of 19 firearms including a machine gun. It is against federal law to possess firearms while being an unlawful user of a controlled substance. Davenport admitted that he was illegally using cocaine at the time of the offense.

Davenport was arrested by Corpus Christi Police Officers on Sept. 29, 2010, at a Corpus Christi HEB. Corpus Christi Police Department (CCPD) officers were responding to a domestic disturbance in which Davenport was allegedly involved. CCPD officers along with agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) found unregistered destructive devices in his vehicle as well as in his home in Odem. At another residence, ATF agents found various firearms, including a machine gun. In addition to pleading guilty to the two counts, Davenport agreed to forfeit any and all interest in the firearms and explosives, as well as other items, including a grenade launcher and 11,450 rounds of ammunition.

Sentencing for Davenport is scheduled before Judge Jack on March 9, 2011. Both of the charges carries a maximum punishment of 10 years imprisonment upon conviction, as well as a maximum fine of up to $250,000 and up to three years of supervised release. Davenport has been in custody since his arrest where he will remain pending his sentencing hearing.

This case was investigated by the ATF and CCPD. The case is being prosecuted by Assistant United States Attorney Michael Hess.

Drug Dealers Who Attempted to Trade Machine Gun and Assault Weapons for Drugs Sentenced in Federal Court

Defendants Each Sentenced to Over 35 Years in Prison

ATLANTA, GA — MARK ANTHONY BECKFORD, 43, and RANDY VANA HAILE, JR., 29, both of Atlanta, Georgia, were sentenced today by United States District Court Judge Thomas W. Thrash, Jr. on federal drug and firearms charges for attempting to provide who they thought were Mexican cartel traffickers with assault weapons, including a machine gun, in exchange for kilograms of cocaine and marijuana.

United States Attorney Sally Quillian Yates said of today’s sentence, “These defendants tried to give assault rifles and a machine gun to purported Mexican drug cartel members in exchange for kilograms of cocaine and marijuana. They are a danger to this community and are deserving of their lengthy sentences. We are aggressively pursuing both the high-level suppliers of drugs in Atlanta as well as those who supply them with deadly weapons.”

Rodney G. Benson, Special Agent in Charge of the Drug Enforcement Administration, Atlanta Field Division said, “Drug dealing breeds violence because dangerous criminals take extreme measures to protect their ill-gotten gains, as was the case in this investigation. DEA and the entire law enforcement community are committed to making our society safer by removing such criminals from the streets. This verdict and ensuing sentence was possible because of the concerted investigative efforts of our federal, state and local law enforcement counterparts.”

“These men arrived armed to the teeth to conduct a major drug deal on the streets of metro Atlanta,” said Special Agent in Charge Gregory Gant of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). “What’s more, they callously supplied guns to an undercover ATF agent, who led them to believe that the firearms would be delivered to members of a Mexican drug cartel. The potential for violence was clear. Today’s sentence demonstrates the success that can be accomplished when agencies join together to address armed drug violators in our midst.”

BECKFORD was sentenced to 36 years, 6 months in federal prison, to be followed by 5 years of supervised release.

HAILE was sentenced to 39 years in federal prison, to be followed by 5 years of supervised release.

On September 14, 2010, a federal jury convicted the two defendants after a week-long trial. They were convicted of conspiring to possess with intent to distribute cocaine and marijuana and attempting to do the same; possession of a firearm, including a machine gun, in furtherance of a drug trafficking crime; possession of a firearm with an obliterated serial number; and possession of an unregistered machine gun. HAILE was also convicted of being a felon in possession of a firearm.

According to United States Attorney Yates, the indictment, evidence at trial, and other information presented in court: In April 2009, agents of the Drug Enforcement Administration (“DEA”) working for Atlanta’s High Intensity Drug Task Force Area (“HIDTA”), and agents for the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), initiated an investigation of the defendants using a confidential informant. On April 15, 2009, BECKFORD traveled to San Antonio and met with the confidential informant and an undercover DEA agent posing as a source of supply for large quantities of cocaine and marijuana. The undercover DEA agent and BECKFORD negotiated for the purchase of marijuana and cocaine that the agent said he would deliver to Atlanta.

On April 22, 2009, in Atlanta, an undercover ATF agent met with BECKFORD, who was accompanied by HAILE, to further discuss the drug transaction. It was agreed at this meeting that BECKFORD and HAILE would provide an up-front payment of $25,000 in cash for transportation of the drugs to Atlanta. The following day BECKFORD and HAILE traveled to San Antonio, met with the San Antonio undercover agent, and delivered to him $25,000, which had been concealed in a secret compartment in their luggage. BECKFORD and HAILE agreed that they would initially take delivery of approximately three kilograms of cocaine and 500 pounds of marijuana, with more to follow if the drugs were of good quality. BECKFORD and HAILE agreed to pay for the drugs with a combination of money and firearms, including a machine gun and "AK"-style assault rifles.

On May 5, 2009, the day of the scheduled delivery, the undercover DEA agent and the undercover ATF agent met with BECKFORD and HAILE at a hotel parking lot in Smyrna, Georgia. In the parking lot, the undercover agents showed the defendants approximately 1,000 pounds of marijuana and 5 kilograms of cocaine contained in a U-Haul trailer. After inquiring about the cost of the entire load, BECKFORD and HAILE told the undercover agents that they could provide approximately $70,000 and numerous firearms to pay or trade for the marijuana and cocaine. The undercover DEA agent advised the defendants that they had 2 hours to return to the parking lot to conduct the transaction.

Later that day, DEA, ATF, and HIDTA agents and officers arrested BECKFORD and HAILE, who were driving a black Chevy Avalanche near the hotel parking lot. During a search of the Avalanche, agents discovered the following items: $70,000 in cash, a loaded .40-caliber Taurus handgun, two Norinco 7.62-caliber SK assault rifles, and a 9-millimeter, fully automatic M-11 machine gun, among other things. A search of the defendants revealed a Glock .45-caliber pistol in HAILE'S waistband.

After the arrest, agents and officers executed a search warrant at Jamaica Flava, a restaurant associated with the defendants. The search revealed two loaded 7.62-caliber assault rifles, a 12-gauge shotgun, a loaded .25-caliber handgun, and three plastic bags containing marijuana, among other evidence of drug trafficking.

This case was investigated by Special Agents of the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, and the High Intensity Drug Task Force Area.

Assistant United States Attorneys Rodney D. Bullard and Bret R. Williams prosecuted the case.

For further information please contact Sally Quillian Yates, United States Attorney, or John Horn, First Assistant United States Attorney at 404-581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.

Odem Resident Pleads Guilty to Weapons Charges

(CORPUS CHRISTI, Texas) — Jeremy Charles Davenport has pleaded guilty to two counts involving federal weapons charges, United States Attorney José Angel Moreno announced today. Davenport, 35, of Odem, Texas, pleaded guilty yesterday before U.S. District Judge Janis Graham Jack. Yesterday, Davenport pleaded guilty to being in possession of an I.E.D., or Improvised Explosive Device, on Sept. 29, 2010, as well as being a drug user in possession of 19 firearms including a machine gun. It is against federal law to possess firearms while being an unlawful user of a controlled substance. Davenport admitted that he was illegally using cocaine at the time of the offense.

Davenport was arrested by Corpus Christi Police Officers on Sept. 29, 2010, at a Corpus Christi HEB. Corpus Christi Police Department (CCPD) officers were responding to a domestic disturbance in which Davenport was allegedly involved. CCPD officers along with agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) found unregistered destructive devices in his vehicle as well as in his home in Odem. At another residence, ATF agents found various firearms, including a machine gun. In addition to pleading guilty to the two counts, Davenport agreed to forfeit any and all interest in the firearms and explosives, as well as other items, including a grenade launcher and 11,450 rounds of ammunition.

Sentencing for Davenport is scheduled before Judge Jack on March 9, 2011. Both of the charges carries a maximum punishment of 10 years imprisonment upon conviction, as well as a maximum fine of up to $250,000 and up to three years of supervised release. Davenport has been in custody since his arrest where he will remain pending his sentencing hearing.

This case was investigated by the ATF and CCPD. The case is being prosecuted by Assistant United States Attorney Michael Hess.

Monday, December 27, 2010

Alcatel-Lucent S.A. and Three Subsidiaries Agree to Pay $92 Million to Resolve Foreign Corrupt Practices Act Investigation

Coordinated Enforcement Actions by Department of Justice and SEC Result in Penalties of more than $137 Million

WASHINGTON – Alcatel-Lucent S.A. and three of its subsidiaries have agreed to pay a combined $92 million penalty to resolve a Foreign Corrupt Practices Act (FCPA) investigation into the worldwide sales practices of Alcatel S.A. prior to its 2006 merger with Lucent Technologies Inc., the Department of Justice announced.

As part of the agreed resolution, the department today filed a criminal information in U.S. District Court for the Southern District of Florida charging Alcatel-Lucent with one count of violating the internal control provisions of the FCPA, and one count of violating the books and records provisions of the FCPA. The department and Alcatel-Lucent agreed to resolve the charges by entering into a deferred prosecution agreement for a term of three years.

The department also filed a criminal information charging three subsidiaries: Alcatel-Lucent France S.A., formerly known as Alcatel CIT S.A.; Alcatel-Lucent Trade International A.G., formerly known as Alcatel Standard A.G.; and Alcatel Centroamerica S.A., formerly known as Alcatel de Costa Rica S.A. The three subsidiaries were each charged with conspiring to violate the anti-bribery, books and records, and internal controls provisions of the FCPA. Each of the three subsidiaries has agreed to plead guilty to the charges.

"Foreign bribery weakens economic development, erodes confidence in the marketplace and distorts competition," said Mythili Raman, Principal Deputy Assistant Attorney General of the Criminal Division.  "The resolutions announced today and our related prosecutions of corporate executives demonstrate our sustained commitment to combating such conduct wherever we find it."

In addition to the $92 million penalty, Alcatel-Lucent and its three subsidiaries agreed to implement rigorous compliance enhancements. Alcatel-Lucent also agreed to retain an independent compliance monitor for a three-year period to oversee the company’s implementation and maintenance of an enhanced FCPA compliance program and to submit yearly reports to the Department of Justice. The charging documents and penalty reflect, among other things, that there was limited and inadequate cooperation by the company for a substantial period of time, but that after the merger, Alcatel-Lucent substantially improved its cooperation with the department’s investigation. In addition, the charging documents also credit Alcatel-Lucent for, on its own initiative and at a substantial financial cost, making an unprecedented pledge to stop using third-party sales and marketing agents in conducting its worldwide business.

According to court documents, Alcatel-Lucent was formed in late 2006 after Lucent Technologies merged with Alcatel, a French telecommunications equipment and services company. Starting in the 1990s and continuing through late 2006, Alcatel pursued many of its business opportunities around the world through subsidiaries like Alcatel CIT and Alcatel de Costa Rica using third-party agents and consultants who were retained by Alcatel Standard. This business model was shown to be prone to corruption, as consultants were repeatedly used as conduits for bribe payments to foreign officials and business executives of private customers to obtain or retain business in many countries.

Alcatel-Lucent’s three subsidiaries paid millions of dollars in improper payments to foreign officials for the purpose of obtaining and retaining business in Costa Rica, Honduras, Malaysia and Taiwan. In addition to the improper payments, Alcatel-Lucent also admitted that it violated the internal controls and books and records provisions of the FCPA related to the hiring of third-party agents in Kenya, Nigeria, Bangladesh, Ecuador, Nicaragua, Angola, Ivory Coast, Uganda and Mali. Overall, Alcatel-Lucent admitted that the company earned approximately $48.1 million in profits as a result of these improper payments.

Specifically, Alcatel CIT won three contracts in Costa Rica worth a combined total of more than $300 million as a result of corrupt payments to government officials and from which Alcatel reaped a profit of more than $23 million, according to court documents. Alcatel CIT wired more than $18 million to two consultants in Costa Rica, which had been retained by Alcatel Standard, in connection with obtaining business in that country. According to court documents, more than half of this money was then passed on by the consultants to various Costa Rican government officials for assisting Alcatel CIT and Alcatel de Costa Rica in obtaining and retaining business. As part of the scheme, the consultants created phony invoices that they then submitted to Alcatel CIT. According to court documents, senior Alcatel executives approved the retention of and payments to the consultants despite obvious indications that the consultants were performing little or no legitimate work.

In addition, according to court documents, Alcatel Standard hired a consultant in Honduras who was a perfume distributor with no experience in telecommunications. The consultant was retained after being personally selected by the brother of a senior Honduran government official. Alcatel CIT executives knew that a significant portion of the money paid to the consultant would be paid to the family of the senior Honduran government official in exchange for favorable treatment of Alcatel CIT. As a result of these payments, Alcatel CIT was able to retain contracts worth approximately $47 million and from which Alcatel earned $870,000.

In addition, according to court documents, Alcatel Standard retained two consultants on behalf of another Alcatel subsidiary in Taiwan to assist in obtaining an axle counting contract worth approximately $19.2 million. Alcatel and its joint venture paid these two consultants more than $950,000 despite the fact that neither consultant had telecommunications experience. In fact, according to court documents, Alcatel Standard’s purpose for hiring the consultants was so that Alcatel SEL could funnel payments through the consultants to Taiwanese legislators who had influence in the award of the contract. Alcatel earned approximately $4.34 million from this contract.

In a related case, two former Alcatel executives, Christian Sapsizian, a French citizen and Alcatel CIT executive, and Edgar Valverde Acosta, a Costa Rican citizen and president of Alcatel de Costa Rica, were charged in March 2007 with conspiring to violate the FCPA, making corrupt payments in violation of the FCPA, and laundering the bribe payments through a third-party. Sapsizian was arrested in Miami in late 2006 and pleaded guilty on June 6, 2007, to FCPA violations. He was sentenced on Sept. 23, 2008, in the U.S. District Court for the Southern District of Florida to 30 months in prison. Sapsizian admitted that from February 2000 through September 2004, he conspired with Valverde and others to make millions of dollars in bribe payments to Costa Rican officials in order to obtain a telecommunications contract on behalf of Alcatel. Valverde remains a fugitive, and is considered innocent until proven guilty in a court of law.

In a related matter, the U.S. Securities and Exchange Commission (SEC) reached a settlement filed today in which Alcatel-Lucent consented to the entry of a permanent injunction against FCPA violations and agreed to pay $45,372,000 in disgorgement and prejudgment interest. Alcatel-Lucent also agreed with the SEC to comply with certain undertakings regarding its FCPA compliance program.

In January 2010, Alcatel-Lucent also agreed to pay $10 million to settle a corruption case brought by the government of Costa Rica arising out of the bribery of Costa Rican officials by the company.  The settlement marked the first time in Costa Rica’s history that a foreign corporation agreed to pay the government damages for corruption.

The case is being prosecuted by Deputy Chief Charles E. Duross and Trial Attorney Andrew Gentin of the Criminal Division’s Fraud Section. The department also acknowledges the significant contributions to this investigation by Assistant U.S. Attorney Mary K. Dimke, formerly of the Fraud Section. Significant assistance was provided by the SEC’s Miami Regional Office, the Criminal Division’s Office of International Affairs, the U.S. Attorney’s Office for the Southern District of Florida, the FBI, U.S. Immigration and Customs Enforcement, the Office of the Attorney General in Costa Rica, the Fiscalia de Delitos Economicos, Corrupcion y Tributarios in Costa Rica, the French Ministry of Justice, the Tribunal de Grande Instance de Paris, and Service Central de Prévention de la Corruption.

Principals of Defunct Hedge Fund Indicted for $30 Million International Fraud Scheme

ATLANTA, GA—THOMAS REPKE, 57, of Salt Lake City, Utah, was arraigned today before a U.S. Magistrate Judge in Atlanta on multiple counts of mail fraud, wire fraud and conspiracy, relating to his operation of the Utah-based investment company, “Coadum Capital.” REPKE was indicted on December 15, 2010, along with an alleged accomplice, JAMES JEFFERY, 58, of Belleville, Ontario, Canada. JEFFERY has not yet made his initial appearance on these charges.

United States Attorney Sally Quillian Yates said, “This indictment alleges a major international investment fraud scheme that defrauded over 100 victims around the country out of tens of millions of dollars, most of which has been transferred to overseas accounts. Those who prey on the investing public in this way will continue to find themselves facing federal felony charges.”

According to United States Attorney Yates, the charges and other information presented in court: REPKE and JEFFERY operated Coadum Capital in 2006 and 2007, which at its height attracted over 100 investors and over $30 million in investments. Coadum offered shares in hedge funds and advertised monthly returns of 5 percent. Part of the sales pitch that Coadum made to investors was that their funds would remain protected in an escrow account and would therefore not be at risk. For example, several investors were provided marketing materials which read, “Cash Deposit ALWAYS remains in escrow in your name,” and “Cash Depositor's principal deposit NEVER at risk.”

REPKE and JEFFERY also allegedly described the investments in monthly account statements sent to investors as “Principal Preserved Alternative Investments for Growth Oriented Clients,” and these account statements reported the investors’ “Ending Principal Balance in Escrow Account.” The monthly account statements also stated a purported rate of interest or earnings that had been earned by the fund that month, which was generally between 3-5 percent.

The indictment in this case alleges that, in fact, although investors were instructed to and did transmit much of their funds to one or more supposed “escrow” accounts, including one in Atlanta, the money did not stay in any such account. Rather, unbeknownst to investors, REPKE and JEFFERY transferred over $20 million overseas to accounts in Switzerland and the Mediterranean island of Malta. This money was supposedly invested in a series of hedge funds or other investments operated by a supposed Malta-based trader. The indictment alleges that these investments produced no earnings at all, and, in fact, by the end of 2007 only a fraction of the transferred funds remained deposited in these European accounts.

The indictment alleges that REPKE and JEFFERY continued to send account statements every month to investors continuing to represent that their funds remained intact, preserved in escrow accounts, and that monthly earnings of 3-5 percent continued to accrue. REPKE and JEFFERY knew these statements were false, because they knew the funds were not protected in escrow accounts, and to the contrary, had been transferred overseas to accounts over which REPKE and JEFFERY had no control and about which they received little or no information. REPKE and JEFFERY received no information from the supposed European trader to suggest that returns of 3-5 percent a month were being achieved. To the contrary, the defendants’ correspondence shows that they were frustrated in their repeated requests to obtain information about where the funds were being held, how they were being used by the trader, and whether and to what extent earnings were being generated.

The indictment alleges that through 2007, REPKE and JEFFERY generally honored requests by investors for distributions of supposed earnings that the investors had been told existed. This was one of the methods the defendants allegedly used to give Coadum the appearance of a legitimate, profitable fund. However, because Coadum had received little or no earnings from its investments during this period, REPKE and JEFFERY were only able to make these payments by diverting newly invested funds from other investors. The investors were not told that newly-invested monies, and not actual “earnings,” were a principal source of the distributions they received.

The indictment alleges that investors lost approximately $30 million with Coadum.

The indictment charges 22 counts of mail fraud, wire fraud and conspiracy. The charges carry a maximum sentence of 20 years in prison and a fine of up to $250,000 each. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.

This law enforcement action has been undertaken as part of President Barack Obama's Financial Fraud Enforcement Task Force.

President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

This case is being investigated by Special Agents of the Federal Bureau of Investigation. United States Attorney Yates also thanked the staff of the Atlanta Division Office of the Securities and Exchange Commission (“SEC”), which referred the matter for criminal investigation.

Assistant United States Attorneys Justin S. Anand and Alana R. Black are prosecuting the case.

For further information please contact Sally Q. Yates, United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.justice.gov/usao/gan.