GREENEVILLE, TN—Everette Spencer Barnett, 40, of Bristol, Tenn., pleaded guilty today in the U.S. District Court for the Eastern District of Tennessee at Greeneville, to transporting a minor from the Eastern District of Tennessee to the Western District of North Carolina to engage the minor in sexual intercourse. Sentencing has been set for August 29, 2011 at , in U.S. District Court in Greeneville.
Barnett faces a minimum term of five years in prison and a maximum term of 30 years in prison, a fine up to $250,000, lifetime supervised release, restitution as ordered by the court, and $100 mandatory assessment.
On October 14, 2010, a three-count indictment, which included the aforementioned charges, was returned against Barnett by a federal grand jury sitting in Greeneville. Barnett has remained in federal custody since his arraignment on the federal charges on October 27, 2010.
This indictment and today’s guilty plea, was the result of an ongoing investigation by the Bristol, Tennessee Police Department, District Attorney General for the Second Judicial District, and Federal Bureau of Investigation. Helen Smith, Assistant U.S. Attorney represented the United States.
This case was brought as part of Project Safe Childhood (PSC), a Department initiative launched in 2006 that aims to combat the proliferation of technology-facilitated sexual exploitation crimes against children. Led by U.S. Attorneys’ Offices and the Department of Justice Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, tribal, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information visit ProjectSafeChildhood.gov.
Calexico, Calif. – Yesterday, U.S. Border Patrol agents seized an estimated 132 pounds of marijuana at the Interstate 8 Checkpoint near Calexico, California.
At approximately , agents encountered a white Chevrolet Tahoe at the primary inspection area of the checkpoint. During a cursory inspection, a U.S. Border Patrol canine team alerted agents to the possible presence of narcotics within the vehicle. The driver, a 33-year-old male United States citizen, was referred to secondary inspection area where agents discovered several packages of marijuana concealed within the vehicle. The total value of the marijuana is estimated at more than $105,000.
The driver, contraband, and vehicle was turned over to the Drug Enforcement Administration.
U.S. Customs and Border Protection is the unified border agency within the Department of Homeland Security charged with the management, control and protection of our nation's borders at and between the official ports of entry. CBP is charged with keeping terrorists and terrorist weapons out of the country while enforcing hundreds of U.S. laws.
WASHINGTON – Sean W. Ragland, a former senior financial analyst at Taylor, Bean & Whitaker (TBW), pleaded guilty today to conspiring to commit bank and wire fraud for his role in a scheme that defrauded approximately $1.5 billion from financial investors in TBW’s mortgage lending facility, Ocala Funding.
The guilty plea was announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Acting Special Inspector General Christy Romero for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Inspector General of the Department of Housing and Urban Development (HUD OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC OIG); Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA OIG); and Victor F. O. Song, Chief of the Internal Revenue Service (IRS) Criminal Investigation.
Ragland, 37, of San Antonio, Texas, pleaded guilty before U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia.Ragland faces a maximum penalty of five years in prison when he is sentenced on June 21, 2011.
According to a statement of facts submitted with his plea agreement, in 2005 TBW established a wholly-owned lending facility called Ocala Funding.Ocala Funding raised money by selling asset-backed commercial paper to financial institutions, including Deutsche Bank and BNP Paribas , and used the money to purchase TBW mortgages. The facility was managed by TBW and had no employees of its own.
Ragland had tracking and reporting responsibilities with respect to Ocala Funding, and today he admitted that from 2006 through August 2009, he and other co-conspirators engaged in a scheme to mislead investors and auditors as to the financial health of the lending facility.According to court records, shortly after Ocala Funding was established, Ragland learned there were inadequate assets backing its commercial paper.Ragland tracked this deficiency, which was referred to internally at TBW as a “hole” in Ocala Funding.He reported the status of the “hole” to senior TBW executives, including its CEO and CFO.Ragland was also aware that TBW co-conspirators were improperly transferring hundreds of millions of dollars from Ocala Funding to TBW accounts.At the time that TBW ceased operations, the hole was approximately $1.5 billion.
Ragland admitted that, at the direction of other co-conspirators, he prepared documents that inaccurately and intentionally inflated figures representing the aggregate value of the loans held in Ocala Funding or under-reported the amount of outstanding commercial paper. He sent this false information to the financial institution investors, other third parties and an outside audit firm.
To date, four other individuals have pleaded guilty to charges for their roles in this and related fraud schemes.
The case is being prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Paul Nathanson of the Eastern District of Virginia.This case was investigated by SIGTARP, FBI’s Washington Field Office, FDIC OIG, HUD OIG, FHFA OIG and the IRS Criminal Investigation.The Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury also provided support in the investigation.
This prosecution was brought in coordination with 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. For more information about the task force visit: www.stopfraud.gov.
Preventative fire safety measures saved this home from a wildfire.
More and more people are making their homes in woodland settings, rural areas, or remote mountain sites.There, residents enjoy the beauty of the environment but face the very real danger of wildfire.Wildfires often begin unnoticed. They can be ignited by the careless tossing of a cigarette, an unattended campfire, or from natural causes like lightning.They spread quickly igniting brush, trees, and homes.
Each year fire burns millions of acres of woodland across the United States.
We can better live with the land by learning about the natural areas we inhabit and what we can do to reduce our risk of loss if wildfire occurs. Homes that survive almost always do so because their owners had prepared for the eventuality of fire. In a wildfire, every second counts!
At the beginning of each wildfire season, the National Interagency Fire Center (NIFC) releases important themes to educate the public on the dangers of wildfire. The 2011 National Fire Season themes are:
1. Safety of the public and firefighters is the top consideration in fire and aviation management.
•Firefighters always make safety their top concern.
•No structure, or natural or cultural resource, is worth taking an unneeded risk.
•Structures can be rebuilt and natural resources generally come back in time. A life cannot be replaced.
2. Firefighters count on you to do your part.
Thousands of communities are located in fire-prone areas. Residents must take action to adapt their communities to fire. These actions will protect their homes and improve the safety of the public and firefighters.
When preparing your property to withstand a wildfire, it's useful to think in terms of zones and consider the area as far as 200 feet from your home. In some cases this may require working with neighbors or other land owners, too.
Zone 1: Home Ignition Zone
The most critical area is your home ignition zone, which includes your home itself and the landscaping within 30 feet. Remember: windblown embers or firebrands can ignite a home while leaving the surrounding vegetation untouched or only charred. Some tips to better protect this zone include:
•Clear pine needles or other woody debris from rain gutters and off the roof.
•Clear all vegetation and debris from under decks and touching the foundation.
•Be sure all eaves and attic vents are screened with a small, ½-inch screen.
•Move stacks of firewood away from the structure.
•Keep vegetation in this area trimmed low, well-irrigated, and free of dead material and spaced apart to prevent a continuous path of fuel to your home.
Zone 2: Defensible Space Zone
This is the second most critical zone and includes the area from 30 to 100 feet from your home.
•Remove dead and dying grass, shrubs, and trees.
•Reduce the density of vegetation and ladder fuels by thinning and keeping them free of dead material.
•Replace hazardous vegetation with less flammable, irrigated landscaping, including lawn or low growing ground cover and flowering plants.
Zone 3: Wildland Fuel Reduction Zone
In this zone, from about 100 feet and beyond, remove dense undergrowth and thin out densely-crowded smaller trees. Experts recommend keeping 10 feet of space between trees and shrubs. Mature trees should be limbed up feet above the ground.
While there are many steps that can be taken to enhance the survivability of your home and property when wildfire occurs, it's important to remember that each step you take, no matter how small, can make a large difference. Multiple steps together can vastly improve the resistance to fire and subsequent losses.
3. Fires are managed in different ways.
Not all fires are managed the same way. Responding to a fire may include using multiple strategies. The response could range from monitoring a fire that is beneficial to the landscape to aggressively putting out a fire that threatens people, homes, or important natural or cultural resources.
Decisions are based on:
•safety for the public and firefighters,
•what is threatened by the fire,
•forecasted weather,
•fire behavior, and
•what the fire and land-use plans or objectives are for the area.
Firefighters provide the right response to a fire, for the right reasons, at the right time.
4. Fire seasons are expected to become longer and more difficult.
We are never really out of fire season. Fires can burn at any time of the year in different parts of the country. Several reasons contribute to longer fire seasons:
•an abundance of flammable plants and trees,
•climate change, and
•more homes and other buildings in fire-prone areas.
Even though the last two fire seasons have been mild in most of the country, firefighters expect future activity to increase.
5. Teamwork is essential in wildland fire.
Wildland fire knows no boundaries. Local, state, tribal and federal firefighters all work together to manage wildfires. Pooling our strengths and resources helps us to be more effective and keeps our costs down.
KANSAS CITY, MO—Beth Phillips, United States Attorney for the Western District of Missouri, announced today that the former president and CEO of Kansas City University of Medicine and Biosciences (KCUMB) has been indicted by a federal grand jury for embezzling more than $1.5 million from the university. The alleged fraud scheme included unauthorized compensation payments as well as reimbursements from the university for personal expenses and fraudulent charitable contributions. The indictment also charges her with tax violations and money laundering.
Karen L. Pletz, 63, of Kansas City, Mo., was charged in a 24-count indictment that was returned under seal by a federal grand jury in Kansas City, Mo., on Wednesday, March 30. Pletz was the president and CEO of KCUMB and was a member of the board of trustees of KCUMB from 1995 until December 2009. The federal indictment was unsealed and made public today following Pletz’s initial court appearance.
The federal indictment describes a scheme in which Pletz embezzled from KCUMB by wrongfully receiving $1,525,791 in payments from the osteopathic medicine and life sciences school.
The federal indictment charges Pletz with 16 counts of stealing from the university, one count of attempting to interfere with the administration of internal revenue, three counts of making false statements on tax returns, and four counts of money laundering.
Unauthorized Pay: $1,409,500
The federal indictment alleges that Pletz wrongfully obtained $1,409,500 from KCUMB in unauthorized additional pay for herself from October 2002 to December 2009. Pletz allegedly caused minutes of KCUMB executive committee meetings to be created when the meetings did not actually occur. Minutes for nine meetings were allegedly created, at which the only business ever reported was to purportedly authorize payments to Pletz. These payments were sometimes referred to as “leadership stipends” or “leadership compensation,” the indictment says, and were usually in the form of $65,000 lump sum payments.
Travel and Entertainment Reimbursements: $50,291
The federal indictment alleges that Pletz submitted numerous fraudulent vouchers to receive reimbursements from KCUMB. These vouchers allegedly claimed business purposes for expenditures, when in reality the expenditures were for her personal travel and entertainment.
The indictment alleges that in 2007 Pletz received reimbursements for personal travel to Harbor Beach Marriott Resort in Fort Lauderdale, Fla., to visit her parents; to Four Seasons Hotel in Jackson Hole, Wyo., to visit a friend; and to Wild Dunes Resort, Isle of Palms in Charleston, S.C., to visit high school friends. Pletz allegedly received an $11,846 reimbursement for items purchased at a Vera Wang boutique at Halekulani Hotel in Honolulu, Hawaii. Pletz allegedly did not declare the $50,291 total income she received from KCUMB as a result of these reimbursements on her federal income tax returns.
According to the indictment, Pletz received a total of $1,074,917 in unreported income from disallowed travel and entertainment claims, which led to a tax loss to the United States of at least $280,000.
Charitable Reimbursements: $65,000
The federal indictment alleges that Pletz signed and filed tax returns for 2003 through 2006 in which she falsely claimed itemized deductions for charitable contributions that she did not make. In reality, the indictment says, KCUMB—not Pletz—actually made the contributions. According to the indictment, Pletz claimed $565,628 worth of fraudulent charitable deductions to such organizations as the United Way, Lyric Opera, the Deron Cherry Foundation, Boys and Girls Clubs, and TrumanMedicalCenter.
Among those fraudulent charitable contributions, the indictment says, was $65,000 in contributions to BenedictineCollege in Atchinson, Kan., actually made by KCUMB. Pletz allegedly received reimbursements from KCUMB for those contributions over a three-year period, but failed to report the $65,000 as income.
In February 2004, the indictment says, Pletz pledged $20,000 to Benedictine, and requested that Benedictine use her home address for all correspondence regarding the gift. In March 2004, Pletz allegedly submitted to KCUMB a claim for reimbursement for $20,000, attaching to the claim a copy of her personal check in the amount of $20,000, made payable to BenedictineCollege. KCUMB paid Pletz $20,000. However, according to the indictment, Benedictine never received Pletz’s personal check and the check never cleared her bank account. In June 2004, at Pletz’s direction, Benedictine charged Pletz’s KCUMB credit card $10,000 in two installments. Pletz allegedly claimed this $20,000 donation as a charitable contribution deduction on her 2004 tax return, but did not claim the $20,000 income she received from the fraudulent reimbursement. This scheme was repeated in 2005 with another $20,000 fraudulent claim for reimbursement for KCUMB’s contribution to Benedictine, the indictment says, and in 2006 with a $25,000 fraudulent claim for reimbursement for KCUMB’s contribution to the college.
Money Laundering
The indictment charges Pletz with four counts of money laundering related to monetary transactions in criminally derived property, with the funds having been derived from an unlawful activity. On four separate occasions, Pletz allegedly transferred funds obtained by theft from her bank account to American Express or, on one occasion, to an individual for the purchase of antiques.
Forfeiture
The indictment also contains a forfeiture allegation, which would require Pletz to forfeit to the government any property derived from the proceeds of the alleged offenses, including a 2002 Lexus convertible and $39,337 from her bank account, which were seized by federal agents on Oct. 7, 2010, when they executed seizure warrants under a federal civil forfeiture, as well as an $830,000 money judgment and Pletz’s condominium on the Plaza.
Phillips cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorneys Kate Mahoney and Linda Parker Marshall. It was investigated by the Federal Bureau of Investigation, IRS-Criminal Investigation, and the U.S. Department of Education, Office of Inspector General -Investigations.
NEW ORLEANS, LA—MICHAEL SYDNEY WOOTON, age 46, a resident of Metairie, Louisiana, pled guilty today in federal court before U.S. District Judge Martin L.C. Feldman to one count of mail fraud, announced U.S. Attorney Jim Letten.
According to court documents, WOOTON admitted that from 2006 until 2010, while he was employed as a stock broker for Western International Securities, he falsely represented to his clients that their investments would yield a high rate of return. The defendant further admitted he did not invest into high yielding bonds but directed his clients’ investment proceeds to accounts he controlled and used the accounts for his personal benefit. In order to hide this fact, he created and mailed fraudulent statements to his clients. According to the factual basis, WOOTON stole approximately $913,773 from 14 clients.
WOOTON faces a possible maximum sentence of 20 years' imprisonment, a $250,000 fine, restitution, and three years' supervised release. Sentencing has been scheduled for July 27, 2011.
The case was investigated by the Federal Bureau of Investigation. The prosecution is being handled by Assistant U.S. Attorney Carter K.D. Guice, Jr. of the Financial Crimes Unit.
OXFORD, MS—John Marshall Alexander, United States Attorney for the Northern District of Mississippi; Daniel McMullen, Special Agent in Charge of the FBI in Mississippi; and Jeff Woodfin, Acting United States Marshal for the Northern District of Mississippi, announce that:
Thomas Lowell Ketchum, 53, of Saltillo, Mississippi, a fugitive who has been hiding out in Romania since he was investigated by the FBI in 2005, has been arrested and extradited to the United States to face charges stemming from an indictment that was returned against him by a grand jury in March of 2006.
Ketchum, who appeared before United States Magistrate Judge David A. Sanders in Oxford yesterday, faces charges of possession of firearms by a convicted felon, possession with the intent to defraud of more than 15 unauthorized credit cards, and possession of a United States passport and Social Security number without lawful authority. He was remanded to the temporary custody of the U.S. Marshals pending an arraignment and detention hearing on March 31, 2011.
Following a diligent search by U.S. authorities, and in coordination with the Romanian authorities and the U.S. State Department, Ketchum was arrested in Romania in September 2010. He has been in Romanian custody since that time, fighting extradition. Following the exhaustion of all appeals, Romanian officials agreed to extradition, and Deputy U.S. Marshals traveled to Romania last week to return Ketchum to the United States.
Daniel McMullen, Special Agent in Charge of the FBI in Mississippi, stated: "Those accused of criminal conduct should not fool themselves into thinking they can flee the United States to avoid prosecution. Nor should they believe that the passage of time will protect them from apprehension. The FBI's role is not to determine guilt or innocence. Our role in fugitive matters is to bring the accused before the appropriate court and allow the judicial process to take its course. For over five years, special agents and task force agents of the FBI and deputy U.S. Marshals persevered in their efforts to locate and apprehend this subject. Ketchum's arrest and return to the United States is the result of cooperation and coordination between the Romanian authorities, the United States Department of State, and federal law enforcement in the state of Mississippi."
According to the indictment, Ketchum used the name and Social Security number of his deceased brother to obtain multiple credit cards and a United States passport, all without lawful authority, in violation of 18 U.S.C. Sections 1028(a)(6) and 1029(a)(3). It is also alleged in the indictment that Ketchum was a previously-convicted felon in possession of four firearms, in violation of 18 U.S.C. Section 922(g)(1).
United States Attorney John Marshall Alexander stated: "The successful apprehension and return of Mr. Ketchum to the United States is a prime example of how diligence and cooperation among law enforcement entities can bring about desired results. The U.S. Attorney's Office is grateful to the FBI and the U.S. Marshals for their persistence in discovering the whereabouts of this individual, and thus ensuring that this important case, involving multiple instances of fraud, is brought to completion."
If convicted on all counts, Ketchum faces up to 35 years in prison, up to $750,000 in fines, and up to nine years' supervised release.
An indictment is merely a charge and the defendant is presumed innocent until proven guilty.
This case is being investigated by special agents and task force agents of the Federal Bureau of Investigation and the United States Marshal Service and is being prosecuted by Assistant United States Attorney Paul Roberts.
WASHINGTON—A former bank employee pleaded guilty today for his participation in a conspiracy related to contracts for the investment of municipal bond proceeds and other municipal finance contracts, the Department of Justice announced.
According to charges filed today in U.S. District Court in New York City, Brian Scott Zwerner, a resident of Atlanta, engaged in a conspiracy to falsify bank records related to the marketing profits for a type of contract, known as an investment agreement, and other municipal finance contracts, including derivative contracts. Public entities throughout the United States, such as state, county and local governments and agencies, invested the proceeds of bonds issued in these contracts. According to the plea agreement, Zwerner has agreed to cooperate with the department’s ongoing investigation.
“Today’s guilty plea demonstrates the Antitrust Division’s commitment to vigorously pursue and prosecute crimes in the financial services industry that harm competition,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
According to the court document, the Charlotte, N.C.-based bank that employed Zwerner was a provider of investment agreements and other municipal finance contracts to public entities. Public entities seek to invest money from a variety of sources, primarily the proceeds of municipal bonds that they issued, to raise money for, among other things, public projects. Public entities typically hire a broker to conduct a competitive bidding process for the award of the investment agreements. Competitive bidding for these agreements is the subject of regulations issued by the Department of the Treasury and is related to the tax-exempt status of the bonds .
The department said in the court document that Zwerner was the manager of the Municipal Derivatives Trading Desk at the bank. According to the court document, Zwerner engaged in the conspiracy from at least as early as January 1999 until approximately May 2002. Among other objectives, Zwerner and co-conspirators falsified bank records related to marketing profits so that the bank could pay kickbacks to brokers, including Rubin/Chambers, Dunhill Insurance Services Inc., also known as CDR Financial Products, a Beverly Hills, Calif.-based financial products and services firm. Specifically, Zwerner understated the marketing profits on trade tickets for certain investment agreements or other municipal finance contracts so that money could be held back and accumulated in an off-the-books account in order to pay the kickbacks. According to the court document, trade tickets are reports that record the essential terms of investment agreements. The department said that the kickbacks were in exchange for brokers, including CDR, manipulating the competitive bidding process so that the bank would be the winning bidder for certain investment agreements and other municipal finance contracts.
The false bank records conspiracy for which Zwerner is charged carries a maximum penalty of five years in prison and a $250,000 fine. The maximum fine for this offense may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
This is the ninth guilty plea to arise from an ongoing investigation into the municipal bonds industry, which is being conducted by the Antitrust Division’s New York and Cleveland Field Offices, the FBI and Internal Revenue Service-Criminal Investigation. The department is coordinating its investigation with the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.
Three former employees of CDR have pleaded guilty to bid-rigging and fraud conspiracies in relation to the ongoing investigation. Five other individuals have pleaded guilty to charges related to the ongoing investigation. In October 2009, CDR, two of its employees and one former employee were charged for participating in bid-rigging and fraud conspiracies and related crimes. The CDR trial is scheduled to begin on Jan. 9, 2012. In addition, six other former executives at financial service companies or financial institutions have been indicted as a result of this investigation and are awaiting trial.
Today’s guilty plea is part of efforts underway by 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. For more information on the task force, visit www.StopFraud.gov.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-264-0390 or the FBI at 212-384-5000, or visit justice.gov/atr/contact/newcase.htm.
Miami – A U.S. Customs and Border Protection agriculture specialist from MiamiInternationalAirport stopped a destructive pest, on Feb. 24 during the inspection process of an air cargo shipping container of fresh basil that arrived from Colombia.
The CBP agriculture specialist sent the pest to the U.S. Department of Agriculture for identification. The Plant Protection and Quarantine division of USDA’s Animal and Plant Health Inspection Service identified the pest as Scaphytopius oinomaoss Linnavuori, (Hemiptera: Cicadellidae); commonly known as a leafhopper and confirmed that this is the first time this species has been intercepted nationwide.
According to information provided by the USDA, little is known about the biology of this species, but in the U.S. other species Scaphytopius are vectors of plant disease agents.
In this instance, when a container of produce is found with a pest that requires the shipper to take action, they are given the option to: return the shipment to the country of origin, treat the produce to ensure that there are no pests, or destroy the shipment. In this case, the company chose to fumigate the shipment.
“South Florida serves as a potential pathway for the entry of devastating exotic agricultural pests and diseases,” said Greg McCann, acting CBP director of field operations for the Miami field office. “CBP agriculture specialists work diligently to safeguard American agriculture by preventing the introduction of harmful pest, plant and animal diseases from entering our country.”
U.S. Customs and Border Protection is the unified border agency within the Department of Homeland Security charged with the management, control and protection of U.S. borders at and between official ports of entry. CBP is charged with keeping terrorists and terrorist weapons out of the country while enforcing hundreds of U.S. laws.
Defendants Paid Bribes to a Bank Employee to Obtain $2.45 Million in Loans
PREET BHARARA, the United States Attorney for the Southern District of New York, JANICE FEDARCYK, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and CHARLES PINE, Special Agent in Charge of the New York Field Office of the Internal Revenue Service (“IRS”), announced the filing of charges against CHRISTOPHER CAVOUNIS and JAGDESH COOMA for orchestrating a scheme to defraud several banks of at least $10 million by obtaining commercial loans and lines of credit using false and fraudulent documents. As part of the scheme, CAVOUNIS and COOMA allegedly submitted applications for loans in the names of shell companies with no assets, and with straw owners, using fraudulent documents created to trick the banks into believing those entities were real. The defendants also paid bribes totaling over $135,000 to an employee of Citibank to obtain $2.45 million worth of loans.
Manhattan U.S. Attorney PREET BHARARA stated: “The defendants engaged in a breathtaking array of elaborate financial schemes, obtaining millions of dollars from banks using fraudulent documents and misappropriated identity information. These charges should send a message that, along with our partners at the FBI and IRS, we will vigorously pursue those who make it harder for law-abiding companies to obtain credit during these difficult economic times.”
FBI Assistant Director in Charge JANICE K. FEDARCYK stated: “The defendants concocted an intricate scheme using false documents and identity theft to fraudulently obtain $10 million in bank loans. By further using bribery and threats of violence, the defendants showed that their only objective was to make a profit themselves. Committing financial crimes of this magnitude undermines the integrity of the financial process created to help American businesses succeed.”
IRS Special Agent in Charge CHARLES PINE stated: “Bank fraud, like all financial crimes, adds to the underground economy, erodes the integrity of our tax system and threatens the financial health of our communities. IRS-Criminal Investigation is always ready to work with our law enforcement partners and lend its financial investigative expertise to investigations like this one.”
According to the indictment and the complaint previously filed in Manhattan federal court:
From at least 2009 to November 2010, CAVOUNIS and COOMA allegedly obtained, through fraud, at least 16 commercial loans and/or lines of credit, totaling at least $10 million, from eight different lenders—Capital One Bank, N.A.; Citibank, N.A. (“Citibank”); First Republic Bank; Herald National Bank; New York Commercial Bank; Signature Bank; Sovereign Bank; and TD Bank, N.A. (collectively, the “Lenders”). All of these loans are presently in default. To trick the Lenders into providing the loans, CAVOUNIS and COOMA engaged in an elaborate scheme in which they prepared and then submitted applications and supporting documentation for commercial loans that contained false and misleading information on behalf of empty shell companies with no existing business or assets.
As part of the alleged scheme, CAVOUNIS and COOMA recruited straw borrowers who provided personal identifying information to the defendants in exchange for future payment. With the information in hand, the defendants represented these individuals to be the owners or executives of various companies in applications for loans from the Lenders. In addition, CAVOUNIS and COOMA provided the Lenders with fraudulent documentation in support of those applications, which they had created, and which purported to accurately reflect the personal and financial information of each straw owner, and/or corresponding company. This documentation included falsified tax returns, identification documents, and bank or other financial statements. Unbeknownst to the Lenders, however, the straw borrowers were in no way affiliated with those companies, which were themselves complete shams with neither existing businesses nor actual earnings and income. CAVOUNIS, in connection with certain applications, also assumed the identity of another individual himself and provided financial institutions with a fraudulent driver’s license in the name of that individual.
Furthermore, to help obtain the loans, over the course of an approximately four month period in 2010, CAVOUNIS paid a Citibank employee in excess of $135,000 in bribes to secure approval for several lines of credit, in the total approximate amount of $2.45 million, which were issued to empty shell companies he controlled.
When one of the banks froze a line of credit obtained through the scheme, CAVOUNIS allegedly resorted to threats in an attempt to obtain the loan. For example, in October 2010, after Citibank approved a $450,000 line of credit but subsequently froze funding when CAVOUNIS attempted to withdraw that entire amount within mere days of approval, he threatened two Citibank bankers with physical violence unless the loan proceeds were made immediately available to him.
CAVOUNIS, 30, of Fresh Meadows, New York, and COOMA, 27, of Fresh Meadows, New York, are each charged with one count of conspiracy to commit bank fraud and four substantive counts of bank fraud, each of which carry a maximum sentence of 30 years in prison, as well as one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison which must run consecutively to any other sentence imposed. CAVOUNIS and COOMA were previously charged in a complaint and were arrested on November 26, 2010. The case is assigned to U.S. District Judge ROBERT P. PATTERSON.
Mr. BHARARA praised the work of the Federal Bureau of Investigation and the Internal Revenue Service.
This case is being prosecuted by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys ZACHARY FEINGOLD and CHRISTOPHER D. FREY are in charge of the prosecution.
The charges contained in the indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
CHATTANOOGA, TN—-Roy Walsh, 39, formerly of Jasper, Tenn., now residing in Lenoir City, was sentenced today in U.S. District Court, Chattanooga, by the Honorable Harry S. Mattrice, Jr., to serve 200 months in prison and pay $3 million in restitution to two victims. Additionally, Walsh will serve 15 years' supervised release upon his release from prison. Today's sentence was the result of a guilty plea entered by Walsh on April 5, 2010.
In February 2008, prosecution of an individual in Connecticut disclosed that the defendant, Roy Walsh, had been sending and receiving images of child pornography over the Internet. Roy Walsh is the former band director for the South Pittsburg High School Band. Chat logs involving Roy Walsh and images sent and received by him were recovered in the investigation. Among the images of child pornography recovered in forensic analysis of a seized computer was that charged in the information, which was sent in interstate commerce on February 19, 2008, from Roy Walsh in the Eastern District of Tennessee, to the individual in Connecticut via computer. A search warrant was executed at Walsh's residence in Jasper, Tennessee, on October 10, 2008, and two computer hard drives were seized and forensically examined. The seized items were found to contain numerous images of child pornography.
The indictment and subsequent guilty plea was the result of an investigation conducted by Immigration and Customs Enforcement, assisted by the Federal Bureau of Investigation and the Tennessee Highway Patrol, Criminal Investigative Division. Assistant U.S. Attorney John MacCoon represented the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), 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 to identify and rescue victims. For more information about Project Safe Childhood, please visit projectsafechildhood.gov.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Barry Minkow, 44, of San Diego, California, pled guilty to conspiring with others to manipulate the stock price of Lennar Corporation by making false and misleading statements about Lennar Corporation's business operations and management.
According to the charging document and the plea agreement filed with the Court today, Minkow operated Fraud Discovery Institute, a for-profit fraud investigation firm based in California. In this way, Minkow developed ties with federal law enforcement agencies as a purported fraud-finder. As part of the plea, Minkow admitted making false and misleading statements alleging wide-spread improprieties in Lennar Corporation's financial reporting and business structure, and attacking the personal character of Lennar's management.
According to the charges and the plea agreement filed with the court, Minkow was hired to put economic pressure on Lennar to pay money demanded by a business partner in a prior land deal. To this end, beginning in January 2009, Minkow used the Internet, press releases, e-mail communications, Youtube.com videos, and the U.S. mail to broadcast false and misleading statements about Lennar, with the intent of artificially depressing Lennar's stock price.
In today’s plea, Minkow admitted that he abused his relationship with federal law enforcement agencies to report false allegations of criminal conduct purportedly committed by Lennar and its management. Once Minkow confirmed that his allegations had successfully induced law enforcement to open a criminal investigation, Minkow allegedly used that knowledge and information to trade Lennar securities for his own benefit.
Mr. Ferrer commended the investigative efforts of the FBI and the cooperative efforts of the Miami Regional Office and the Washington, D.C. Office of the Securities and Exchange Commission. This case is being handled by Assistant United States Attorneys Ryan Dwight O'Quinn and Cristina Perez Soto.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the United States District Court for the Southern District of Florida at www.flsd.uscourts.gov or pacer.flsd.uscourts.gov.
DALLAS—Monte Melugin, 24, of Dallas, was sentenced today by U.S. District Judge Ed Kinkeade to 12 years in federal prison following his guilty plea in November 2010 to an information charging one count of receiving child pornography, announced U.S. Attorney James T. Jacks of the Northern District of Texas. In addition, Judge Kinkeade ordered Melugin to serve a lifetime of supervised release following his release from prison. He must surrender to the Bureau of Prisons on April 27, 2011.
According to documents filed in the case, the investigation involving Melugin began in Miami, Florida, where an FBI agent, working in an undercover capacity, queried a peer-to-peer network and observed an individual using a particular username was logged on to the network; it was later determined that this particular username belonged to Melugin. When the undercover agent browsed Melugin’s shared folders, he observed approximately 1250 image and video files with names indicative of child pornography. The agent downloaded 18 of those files and all 18 depicted child pornography.
At today’s sentencing hearing, an FBI agent testified that further investigation revealed that Melugin had 1830 images and 68 videos of child pornography, with 80 percent of it of very young boys. Melugin admitted that he received and possessed images that included bondage and other sadistic acts involving minors.
This matter was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), 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 to identify and rescue victims. For more information about Project Safe Childhood, please visit projectsafechildhood.gov
The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Camille Sparks.
Earlier today in federal court in St. Paul, a 57-year-old St. Paul man was sentenced in connection with the August 4, 2010, armed robbery of the Park Midway Bank, on Como Avenue, in St. Paul. United States District Court Judge Richard H. Kyle sentenced Robert Lee Russell, Jr., to 151 months in prison on one count of armed bank robbery. Moreover, Russell was ordered to serve an additional 36 months for violating the terms of federal supervised release relative to a previous crime when he committed this robbery. Russell was indicted on September 9, 2010, and pleaded guilty on January 10, 2011. In his plea agreement, Russell admitted stealing $1,457 from the bank and putting the life of another person in jeopardy by using a firearm during the robbery.
According to a law enforcement affidavit filed in the case, the bank was robbed at on August 4. The robber, later identified as Russell, walked into the building while pulling a mask down over his face and waving a handgun. After demanding and receiving money, he ordered a teller to leave with him. The teller complied, but once outside, the robber fled alone. Immediately, a bank security guard checked on the teller and then pursued the robber, who fired his gun at least one time at the guard.
Two nearby Xcel Energy employees in a company truck observed the chase and saw the robber get into a Dodge Caravan. As they pulled along side the van, they also saw that the robber was holding a handgun. The van, however, then sped away.
A short time later, police spoke with the owner of the van, who reported that Russell had borrowed it earlier in the day. Officers also learned that Russell had purchased some clothes and a backpack at a Stillwater Wal-Mart right after the robbery. The officers subsequently recovered from that store two bait bills obtained by the robber during the heist.
Just after on August 5, the Wisconsin State Patrol reported responding to a motor vehicle crash involving the same Dodge Caravan. At the scene of the accident, Russell was found and arrested for bank robbery. An initial search of the vehicle yielded $1,361 in cash inside the recently purchased backpack.
This case was the result of an investigation by the St. Paul Police Department, the Minnesota Bureau of Criminal Apprehension, the Minnesota State Patrol, the Ramsey County Sheriff’s Office, the Wisconsin State Patrol, and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Andrew Dunne.
BIRMINGHAM—A federal grand jury today indicted an Odenville man and former employee of First Financial Bank for bank fraud, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Patrick Maley, FDIC Office of Inspector General Special Agent in Charge Jason Moran, and Postal Inspector/Domicile Coordinator Frank Dyer.
The one-count indictment charges MARC COREY MITCHELL, 41, a former manager of the First Financial Bank branch in McCalla, with bank fraud related to his solicitation of money from a bank customer while the customer was attempting to conduct bank business.
“While most bank employees are honest and helpful, those who aren’t must be held to account,” Vance said. “My office will continue to prosecute these individuals,” she said.
“The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join the United States Attorney’s Office and our law enforcement colleagues from the FBI in announcing this indictment,” said FDIC Inspector General Jon T. Rymer. “We are particularly concerned when former senior bank officials, who have held positions of trust within their institutions, are alleged to have been involved in criminal activity. We will continue to aggressively pursue bank officials and others who victimize financial institutions,” Rymer said.
Upon conviction, Mitchell faces a maximum sentence of 30 years in prison and a $1 million fine.
This case was investigated by the FBI, the Inspector General’s Office of the Federal Deposit Insurance Corporation, and the U.S. Postal Inspection Service. Assistant U.S. Attorney Melissa K. Atwood 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.
BIRMINGHAM—A federal indictment unsealed today charges a Tuscumbia man with a 2009 armed robbery of a Colbert County bank, and a separate indictment returned today charges him and a Tuscumbia woman in a federal tax fraud conspiracy, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Reginael D. McDaniel, FBI Special Agent in Charge Patrick Maley, and Colbert County Sheriff Ronnie May.
The grand jury indictment filed today in U.S. District Court charges RICKY WALTER DENTON, 46, and JOANN SMITH CHOAT, 55, with conspiring to obtain $148,685 in false federal income tax refunds through a three-year scheme that involved taking other people’s Social Security numbers and birth dates and filing false returns.
The indictment, returned earlier this month and unsealed today, charges Denton with robbing the First Southern Bank in ColbertCounty in December 2009 and with brandishing a handgun during the crime. Denton assaulted and “put in jeopardy the life of another person” by using a handgun, according to the indictment.
“Law enforcement agencies are to be commended for their cooperative work in these cases, which closed the trail on someone who threatened another person’s life to steal from a bank, and who stole the identities of people around him so that he and his co-conspirator could steal money from taxpayers,” Vance said.
“At the IRS, protecting taxpayer money is a matter we take very seriously. An integral part of the IRS mission involves detecting and stopping fraudulent tax refund claims,” McDaniel said. “Thanks to the resolve of our law enforcement partners, we were able to accomplish our mission.”
The conspiracy count in today’s tax fraud indictment charges that, from January 2007 to May 2010, Denton obtained the identifying information of others, used that information to create false tax forms, and mailed those forms to Post Office boxes in Tuscumbia that Choat had opened at his request.
Choat submitted the false tax forms to the IRS, and when she received refunds on them, deposited the $148,685 in U.S. Treasury checks into her personal credit union account, according to the indictment.
The indictment also charges Denton with five counts of making false claims against the government for creating and causing false tax returns to be submitted. It charges Denton with five counts of aggravated identity fraud for using the Social Security number of another person to commit mail fraud and conspiracy to commit mail fraud.
The indictment charges Denton and Choat with five counts of mail fraud for fraudulently causing the U.S. Treasury to mail refund checks, and with one count of conspiracy to commit mail fraud against the Treasury Department.
Denton could face a maximum sentence of 20 years in prison and a $250,000 fine on the conspiracy and fraud charges, and a mandatory two-year sentence for aggravated identity theft, which must be served consecutive to any sentence on the mail fraud and conspiracy to commit mail fraud charges. On the robbery charge, Denton could face a maximum sentence of 25 years in prison and a $250,000 fine. The separate charge for brandishing a weapon during the robbery carries a maximum seven-year sentence that must be served consecutive to any robbery sentence.
Choat could face a maximum sentence of 20 years in prison and a $250,000 fine on the conspiracy and fraud charges.
The IRS, FBI and the Colbert County Sheriff’s Office investigated the cases. Assistant U.S. Attorneys Russell Penfield and Mary Stuart Burrell are prosecuting them.
Members of the public are reminded that an 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.
The United States Attorney's Office for the Middle District of Pennsylvania announced today that a federal grand jury sitting in Scranton has returned a 41-count second superseding indictment charging former Lackawanna County Majority Commissioners Robert C. Cordaro, age 50, of Dunmore, Pennsylvania, and Anthony J. Munchak, age 64, of Scranton, Pennsylvania, with racketeering and related charges in connection with alleged improper actions of the former majority commissioners in accepting payments and other benefits from individuals and entities doing business with Lackawanna County.
The original Indictment was filed on March 16, 2010. A previous superseding indictment was filed on October 4, 2010 after the Supreme Court decision in Skilling v. United States, U.S., 130 S. Ct. 2896 (2010) clarified the element of honest services mail fraud (Title 18 United States Code, Sections 1341 and 1346).
The second superseding indictment alleges that both defendants engaged in racketeering, fraud, extortion, bribery, and federal tax violations and that they received hundreds of thousands of dollars of illegal payments and other benefits.
The second superceding indictment also seeks forfeiture of all proceeds of the charged criminal activity from both defendants.
Trial of this matter is currently scheduled to commence before the Honorable A. Richard Caputo on June 6, 2011.
Anyone with information concerning the case on alleged official corruption is asked to contact the fraud hotline at (855) 789-1868.
This Indictment is the result of a joint investigation conducted by the Federal Bureau of Investigation and criminal investigators of the Internal Revenue Service. Prosecution has been assigned to Assistant United States Attorneys Lorna N. Graham, William S. Houser and Bruce D. Brandler.
An indictment or information is not evidence of guilt but simply a description of the charge made by the grand jury and/or United States Attorney against a defendant. A charged defendant is presumed innocent until a jury returns a unanimous finding that the United States has proven the defendant's guilt beyond a reasonable doubt or until the defendant has pled guilty to the charges.
PETER J. SMITH, U.S. Attorney for the Middle District of Pennsylvania, and GEORGE C. VENIZELOS, Special Agent in Charge, Federal Bureau of Investigation, announced today a former YorkCounty woman has been charged with defrauding 14 mortgage lenders, 35 homeowners and five individual investors in Cumberland, Dauphin, York, and AdamsCounties out of approximately $2,700,000 between 2006 and 2008.
JOANNE M. SEELEY, age 40, formerly of East Berlin, Pennsylvania, appeared yesterday afternoon before U.S. Magistrate Judge J. Andrew Smyser in Harrisburg on a 10-count indictment charging her with five counts of wire fraud and five counts of unlawful monetary transactions. Each count is punishable by a maximum of 20 years' incarceration and a $250,000 fine.
Seeley, who now lives in Texas, was a Pennsylvania licensed real estate agent until November 9, 2006, when she surrendered her license in lieu of disciplinary action. Between 2006 and 2008 Seeley was the primary owner and operator of an East Berlin, Pennsylvania-based real estate business known as S&D Property Solutions (S&D).
According to the indictment, Seeley devised and perpetrated a scheme to defraud the victims through the use of false real estate sales contracts, inflated property appraisals, bogus employment verifications, and fictional leases. Seeley would identify a residence scheduled for Sheriff's Sale and advise the homeowner he/she could avoid foreclosure by selling the home to her or one of her buyers, who would then lease the property back to the homeowner after the sale. Seeley assured the homeowner the sale would allow him to pay off his personal debts, rebuild his credit rating, and allow him to qualify for a new mortgage when he bought back the home, usually one or two years later.
Seeley would tell the buyers of the properties they would be reimbursed for all out-of-pocket expenses, including their down payment, plus a "fee" for engaging in the transaction, at the closing. Seeley also promised the buyers they would receive a monthly rent that would cover most, if not all, of their mortgage payments. Some buyers also received an up front payment designed to make up the difference between their mortgage payment and the rent they received.
Seeley allegedly submitted a plethora of false documents and inflated appraisals to the lenders in order to induce them into making the loans, which eventually caused 14 mortgage lenders to lose approximately $2,500,000. Seeley submitted redacted sales contracts concealing the fact the buyer and seller had entered into buy-back agreements and that the down payment was refunded to the buyer from the loan proceeds. Seeley also submitted false leases to the lenders listing fictitious tenant names and rents.
The Indictment alleges Seeley converted a significant portion of the financing to her own use. When Seeley would purchase the property in her name or the name of a family member,1 she would charge an inflated commission, with the fee ranging anywhere between 17 percent and 57 percent. When Seeley employed a third party to purchase the property, she would simply have the homeowner surrender his sale proceeds check to S&D.
The Indictment also alleges Seeley defrauded five individual investors by selling them real estate “franchises” and promising high rates of return on real estate investments. Instead, Seeley employed a significant portion of the funds to avoid the foreclosure of her personal residence. Together the five investors lost approximately $200,000. Moreover, none of the defrauded homeowners were ever able to buy back their homes.
Judge Smyser released Seeley on supervised release pending trial, which was scheduled for May 2, 2011, before Senior U.S. District Court Judge Sylvia Rambo. The case was investigated by the Harrisburg Office of the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Kim Douglas Daniel.
An indictment or information is not evidence of guilt but simply a description of the charge made by the grand jury and/or United States Attorney against a defendant. A charged defendant is presumed innocent until a jury returns a unanimous finding that the United States has proven the defendant’s guilt beyond a reasonable doubt or until the defendant has pled guilty to the charges.
Seeley purchased 11 of the properties under her name.
ALBUQUERQUE—This morning in federal court in Albuquerque, Johnny Eldrid Ortiz, 34, entered a guilty plea to an indictment charging him with bank robbery under a plea agreement with the United States Attorney’s Office. At sentencing, Ortiz, an Albuquerque resident, faces up to 20 years’ imprisonment and a maximum $250,000 fine. Ortiz has been in federal custody since November 12, 2010 and will remain detained pending his sentencing hearing, which has yet to be scheduled.
United States Attorney Kenneth J. Gonzales said that Ortiz pled guilty to robbing the Wells Fargo Bank located at 6000 Menaul Blvd. NE in Albuquerque (bank) on January 4, 2010. According to the criminal complaint filed in the case, the bank was robbed at approximately by a man who presented a demand note to a teller. After obtaining money from the teller, the bank robber fled from the bank on foot. After the Federal Bureau of Investigation (FBI) and Albuquerque Police Department (APD) received a number of tips identifying Ortiz as the bank robber, two witnesses identified Ortiz as the robber from a photo array. Also, on September 1, 2010, the FBI received a tip from a person who reported that Ortiz had confessed to robbing the bank. Based on this information, the FBI obtained an arrest warrant for Ortiz.
During this morning’s hearing, Ortiz admitted robbing the bank. Under the terms of his plea agreement, Ortiz is required to pay full restitution to the bank.
The case was investigated by the FBI and APD and is being prosecuted by Assistant United States Attorney Louis E. Valencia.
EUGENE, OR—Today, Louis J. Borstelmann, 68, of Thousand Oaks, California, pleaded guilty to mail fraud and money laundering in connection with a Ponzi scheme that reached Florence, Oregon.
The defendant admitted to soliciting approximately 100 individuals, a majority of whom are residents of Florence, Oregon, to invest in real estate through his company, Sunburst Associates, Inc., a California corporation, bilking them out of more than $18 million.
The defendant claimed to offer hard-money loans through his company that were secured by real estate deeds of trust. To entice individuals to invest, the defendant falsely promised high rates of return and a security interest in the property allegedly pledged to secure the investment. Additionally, the defendant sent investors fraudulent investment materials, including the supposed deeds of trust.
As part of his plea, the defendant admitted that the alleged investments never existed and that it was all a Ponzi scheme—he used new investor money to pay existing investment obligations. The defendant further admitted to spending investor money on personal items, including a car and a home.
“The citizens that are defrauded in schemes like this are quite often left financially and emotionally devastated,” said Marcus Williams, Special Agent in Charge of the Seattle Field Office of Internal Revenue Service - Criminal Investigation. “The talents of investigators from IRS-Criminal Investigation, the FBI, and the state of Oregon were utilized in this case to ensure this man was held accountable for his actions.”
"This scheme targeted vulnerable families who put their money and trust behind a man who promised them a bright future," said Arthur Balizan, Special Agent in Charge of the FBI in Oregon. "They now face a future of hardship because of these lies."
Sentencing is set for June 14, 2011, at before U.S. District Judge Michael R. Hogan. The maximum penalty for mail fraud is 20 years in prison and a $250,000 fine, and the maximum penalty for money laundering is 10 years in prison and a $250,000 fine.
This case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service - Criminal Investigation, and the Oregon Division of Finance and Corporate Securities. The case is being prosecuted by Assistant U.S. Attorney Scott E. Bradford.
Reno, Nev., March 30, 2011 - Today, the Ready, Set, Go! program was launched nationally at Wildland Urban Interface (WUI) 2011. Ready, Set, Go! offers tools and resources for local responders to teach individuals who live in high-risk areas how to best prepare themselves and their properties against wildland fire threats.
Today’s launch also unveiled the program’s online portal, www.wildlandfireRSG.org, which offers local program participants educational resources, tools to manage the program, news and connections with other program participants and partners.
“Ready, Set, Go! is a dynamic program which was embraced by the firefighters and the citizens of Pigeon Forge,” said Chief Tony Watson of the Pigeon Forge (Tenn.) Fire Department, one of nine fire departments that have spent the last year piloting the program. “Through public-service announcements, informational packets and community outreach, we prepared the public for the threat of wildland fire. Through wildland training with state and federal resources, we prepared our firefighters to be the ambassadors of this program. Community stakeholders have partnered with fire department resources, and their involvement continues to shape the structure of our area.”
Ready, Set, Go! provides fire departments and other public-safety agencies with the tools, resources and guidance necessary to deliver the wildland fire safety message to individuals at the local level. The program is a three-step process that teaches homeowners to create their own action plan of preparedness, have situational awareness and leave early in the event of a fire—all with the goal of significantly increasing the safety of residents and firefighters.
The three-step process is easy to remember and implement:
Ready – Take personal responsibility and prepare long before the threat of a wildland fire so your home is ready in case of a fire. Create defensible space by clearing brush away from your home. Use fire-resistant landscaping and harden your home with fire-safe construction measures. Assemble emergency supplies and belongings in a safe spot. Plan escapes routes. Make sure all those residing within the home know the plan of action.
Set – Act immediately. Pack your vehicle with your emergency items. Stay aware of the latest news and information on the fire from local media and your local fire department.
Go – Leave early! Follow your personal action plan. Doing so will not only support your safety, but will allow firefighters to best maneuver resources to combat the fire.
“While this program can be implemented by any local response agency, we are encouraging fire departments to step up and lead this effort in their communities,” said Chief Jack Parow, president and chairman of the board of the International Association of Fire Chiefs (IAFC). “The fire service is uniquely positioned to understand the fire-risk environment and is typically a trusted voice that resonates with community members.”
Ready, Set, Go! was developed for national rollout by the IAFC with support from the U.S. Forest Service, U.S. Fire Administration, U.S. Department of the Interior, Firewise and the Insurance Institute for Business & Home Safety (IBHS). The program works in complimentary and collaborative fashion with Firewise and other existing wildland fire public education efforts. It amplifies their messages to individuals to better achieve the common goal we all share of fire-adapted communities.
About the International Association of Fire Chiefs
The IAFC represents the leadership of firefighters and emergency responders worldwide. IAFC members are the world's leading experts in firefighting, emergency medical services, terrorism response, hazardous materials spills, natural disasters, search and rescue, and public safety legislation. Since 1873, the IAFC has provided a forum for its members to exchange ideas, develop professionally and uncover the latest products and services available to first responders.
About Wildland Urban Interface (WUI) 2011
The WUI 2011 conference brings together the many stakeholders that are involved in combating the challenges of wildland fire. The most influential people in firefighting join with representatives from state and local governments and community planners to discuss the problems each group is facing and how collectively, new strategies can be implemented.
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