Chinese National Indicted for Allegedly Smuggling Counterfeit Tobacco Products into the U.S.

PROVIDENCE, R.I. — A federal grand jury in Providence, R.I., on Wednesday returned a two-count indictment charging a Chinese national with selling and importing counterfeit tobacco products into the United States from China, earmarked for Rhode Island. Lin Xiao Wei, 31, has been detained since his arrest in Miami on June 4, 2012, by the FDA-OCI Task Force from Rhode Island.

The arrest and indictment of Wei was announced by Peter F. Neronha, United States Attorney for the District of Rhode Island; Mark Dragonetti, Special Agent in Charge of the FDA-OCI; and Guy N. Thomas, Special Agent in Charge of the ATF Boston Field Office.

According to an affidavit in support of a criminal complaint and arrest warrant filed with the U.S. District Court in Providence, in February 2012, FDA-OCI task force agents in Rhode Island coordinated with agents from ATF to investigate the alleged importation of counterfeit cigarettes, prescription drugs and other items by Wei.

According to the affidavit, with the assistance of a confidential informant who had previously communicated and met with Wei on several occasions, federal agents arranged for the purchase and shipment from China to the United States of a 20-foot cargo container containing 17 pallets of alleged counterfeit Marlboro cigarettes, worth in excess of one million dollars. The container, which shipping documentation claimed contained 696 cartons of leather products, was shipped from a port in China on March 27, 2012.

Between the time Wei allegedly agreed to ship the alleged fraudulent tobacco products to the U.S., and the arrival of the cargo container through a port in Miami on April 27, 2012, several wire transactions were sent to Wei for the cost of the product and associated shipping fees. Upon arrival in Miami, FDA-OCI and Homeland Security Investigations agents seized the container.

According to the affidavit, CBP database records indicated that Wei entered the United States through New York on May 28, 2012. On June 3, 2012, Wei met with the confidential informant and an undercover FDA-OCI Task Force agent from Rhode Island at a Miami hotel. Wei allegedly discussed the shipment of the alleged fraudulent tobacco products shipped from China to Miami, as well as previous shipments of counterfeit pharmaceutical products, such as Viagra, and the availability of other fraudulent products.

An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.

U.S. Attorney Peter Neronha thanked Wifredo A. Ferrer, United States Attorney for the District of Southern Florida, and his staff, for their assistance in this matter.

U.S. Attorney Neronha commended FDA-OCI Rhode Island Task Force members from the FDA-OCI, Rhode Island State Police, East Providence Police and North Providence Police for their efforts in this multi-jurisdictional investigation.

The case is being prosecuted by Assistant U.S. Attorneys Adi Goldstein and Richard B. Myrus.

Investment Broker Sentenced in $5 Million Ponzi Scheme

PROVIDENCE, RI—Martin B. Feibish, 81, of Providence, R.I., an independent insurance agent and investment broker, was sentenced in U.S. District Court in Providence today to five years’ probation, the 12 months to be served in home confinement, for defrauding a Florida investor of approximately $5 million by perpetrating a self-contained Ponzi scheme and for filing a false tax return, announced United States Attorney Peter F. Neronha.

Feibish was also sentenced by U.S. District Court Judge John J. McConnell, Jr. to pay a combined restitution to the victim and Massachusetts Mutual Insurance in the amount of $10,106,209.97. Feibish pleaded guilty on April 11, 2012, to one count each of mail fraud and filing a false tax return.

Feibish admitted to the court that between 2001 and February 2011, he induced an investor to invest with him more than $5 million by creating false and fictitious investment schemes. Feibish admitted that he returned only a portion of the funds to the investor, and falsely represented that the funds were returns on the investor’s investments. Feibish admitted that the funds he provided were actually the result of a Ponzi scheme that he perpetrated with the investor’s own money. Feibish admitted to the court that he used the investor’s funds for his own benefit.

Feibish also admitted to the court that he filed a false tax return for tax year 2009, claiming income in the negative amount of $94,699. Feibish admitted that he had received income substantially more than the amount he reported.

The case was prosecuted by Assistant U.S. Attorney Dulce Donovan. The matter was investigated by agents from the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. The President 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, inspector generals 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.

Admitted New England La Cosa Nostra Leader Sentenced to 108 Months in Federal Prison

WASHINGTON – Edward “Eddy” Lato, 65, of Providence, R.I., an admitted capo regime in the New England La Cosa Nostra (NELCN), was sentenced in U.S. District Court in Providence today to 108 months in federal prison for participating in racketeering extortion conspiracies of several Rhode Island adult entertainment businesses and of a car salesman and his wife.

 U.S. District Court Judge William E. Smith also ordered Lato to serve three years of supervised release upon completion of his prison term.  Lato pleaded guilty on March 13, 2012, to conspiracy to participate in a racketeering enterprise.

 Lato’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Peter F. Neronha, U.S. Attorney for the District of Rhode Island; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; and Providence Public Safety Commissioner Steven M. Pare.

 At the time of his guilty plea, Lato admitted to the court that he participated in a racketeering and extortion conspiracy that demanded and received between $800,000 and $1.5 million in “protection” payments from several adult entertainment businesses in Rhode Island from 1995 to 2009.  He also admitted his participation in a conspiracy to extort $25,000 from a Rhode Island car salesman and his wife by using implied threats of violence.  The wife ultimately withdrew $25,000 from a retirement account to satisfy the demand for payment.

 Seven of the nine defendants named in superseding indictments and charged with participating in the racketeering and extortion conspiracy, including admitted longtime former NELCN underboss and boss Luigi Manocchio, have pleaded guilty.  Manocchio was sentenced on May 11, 2012, to 66 months in federal prison.

 The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland for the District of Rhode Island and Trial Attorney Sam Nazzaro of the Criminal Division’s Organized Crime and Gang Section.

 The matter was investigated by the FBI, Rhode Island State Police and the Providence Police Department.

Former Attorney Pleads Guilty to Fraud and Money Laundering

Former Mortgage Attorney’s Ponzi Scheme Defrauded Banks and Customers of More Than $600,000

PROVIDENCE, RI—A former Rhode Island and Massachusetts mortgage attorney pleaded guilty in U.S. District Court in Providence today to defrauding mortgage holders and lending institutions of more than $600,000. David L. Spector, 52, of Needham, Massachusetts, admitted that he used the funds to operate a Ponzi scheme. Spector’s guilty plea was announced United States Attorney Peter F. Neronha.

Spector pleaded guilty to three counts of wire fraud and one count of money laundering. He faces up to 70 years in federal prison, followed by up to three years of supervised release, and a fine of up to $1,000,000 when he sentenced by U.S. District Court Judge John J. McConnell, Jr. on August 8, 2012.

Spector admitted to the court that between April and October 2007, he conducted real estate mortgage refinance closings for properties in Plymouth and Lawrence, Massachusetts and Westerly, Rhode Isladn. As part of the closing process, Spector had the proceeds of the mortgages obtained by his clients transferred to his attorney escrow account for the purpose of redistributing the funds to pay off existing mortgages and other costs associated with the closings.

Spector admitted that rather than properly distribute the funds, he used $601,962 to run a Ponzi scheme to pay his personal expenses and to pay off previous mortgages the he had failed to pay off. Spector admitted that in order to keep his victims from learning of his scheme, he filed change of address forms with the mortgage companies that had not been paid off so that the bills would go to a post office box that he controlled.

The case is being prosecuted by Assistant U.S. Attorney Luis M. Matos.

The matter was investigated by Rhode Island State Police, Federal Bureau of Investigation, and Internal Revenue Service, Criminal Investigation.

Former Real Estate Attorney Sentenced to Federal Prison in $1 Million Mortgage Fraud Scheme

PROVIDENCE, RI—A disbarred real estate attorney from Pawtucket, Rhode Island was sentenced in U.S. District Court in Providence today to 12 months and one day in prison and fined $25,000 for his role in a $1.1 million mortgage fraud scheme. James D. Levitt, 66, was also sentenced by U.S. District Court Judge John J. McConnell, Jr. to serve three years of supervised release upon completion of his prison sentence and to pay $610,500 in restitution.

Levitt pleaded guilty on February 1, 2012, to three counts of bank fraud and two counts of filing false tax returns.

Levitt’s sentence was announced by United States Attorney Peter F. Neronha; Cortez Richardson, Special Agent in Charge of the HUD Office of Inspector General; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; and William P. Offord, Special Agent in Charge of the Boston office of the Internal Revenue Service, Criminal Investigation.

At the time of his guilty plea, Levitt admitted to the court that between July 2006 and November 2007 he applied for and received, based on fraudulent information, three mortgages totaling more than $1.1 million for two properties in Providence and one in East Providence. He used two of the mortgages to buy the Providence properties from an acquaintance that was experiencing financial problems and was facing foreclosure on the properties. Levitt admitted that he falsely purported to obtain a buyer for the properties who was qualified to obtain financing to purchase the properties.

In order to finance the purchases, Levitt admitted that he induced a business associate to apply for the mortgages by representing to the investor that they would be partners, would refurbish the properties as condominiums, and sell them at a profit. Levitt admitted that the mortgage applications and settlement statements contained false information, including failing to identify the true purchaser of the property and falsely stating that the buyer was putting a down payment in excess of $100,000 for each property.

Levitt admitted to the court that he conducted the closings on the properties despite his financial interest and despite the fact that he was a disbarred attorney. After the closings, Levitt deposited the majority of the proceeds of the sale of the properties, approximately $270,000, into bank accounts which he controlled. He provided $25,000 of the proceeds to the seller of the properties shortly after the closing, and he later made periodic payments. Levitt admitted, however, that he used the majority of the proceeds for his business and for personal expenses. The two properties eventually went into foreclosure.

Levitt admitted to the court that he used the third mortgage to buy a property from another company he controlled. He applied for the mortgage in his own name. The application also contained false statements and omissions, including an affirmation by Levitt that there were no outstanding judgments against him. Levitt admitted that he knew that there was an outstanding judgment against him of approximately $432,728 by the state of Rhode Island, which represented restitution owed to the state on a prior criminal conviction.

Levitt also admitted to the court that he failed to disclose to the Internal Revenue Service in tax filings in October 2007 and October 2008 derived income from the ventures as well as from other sources.

The case was prosecuted by Assistant U.S. Attorney Luis M. Matos.

The matter was investigated by the U.S. Department of Housing and Urban Development-Office of Inspector General, Federal Bureau of Investigation, and Internal Revenue Service-Criminal Investigation.