Formal Charges, New Allegations Announced After Investigation of Indiana Man in Sextortion Scheme

Defendant Now Charged with Exploiting at Least 12 Male and Female Children, Investigation Continues into Hundreds of Additional Potential Victims

INDIANAPOLIS—On April 6, 2012, Richard L. Finkbiner, 39, of Brazil, Indiana, was arrested by federal authorities after being charged with the sexual exploitation of two minors by inducing and coercing them into sexually explicit activity online. In serving the search warrant at Finkbiner’s Clay County, Indiana home, the FBI uncovered thousands of sexually explicit images and videos depicting hundreds of possible victims.

After three months of forensic analysis and investigation, U.S. Attorney Joseph H. Hogsett announced today that Finkbiner now faces additional charges related to his alleged “sextortion” scheme. In a formal information filed this morning, federal prosecutors allege that they have located and identified 10 additional male and female minor victims across the country, and Finkbiner now faces a total of 10 counts of sexual exploitation of children, two counts of extortion, and one count of possession of child pornography.

“These charges formalize allegations of a systematic scheme to victimize hundreds of children and teenagers all over the country,” said Hogsett. “Thanks to the tireless work of investigators, over the last three months we have been able to identify and contact many victims of these alleged acts. This process is ongoing, and we continue to do all we can to offer support after the nightmare they are alleged to have endured.”

The information charges Finkbiner with the sexual exploitation of nine boys and one girl. Victims were located in the following states: Colorado, Illinois, Indiana, Iowa, Michigan, New York, Ohio, West Virginia, and Wisconsin. The victims ranged in age from 12 to 17.

Finkbiner is charged with extorting two additional female victims: Jane Doe 2, 16 years old, of Anchorage, Alaska; and Jane Doe 3, 14 years old, of St. Peters, Minnesota. Finkbiner is alleged to have threatened them with the distribution of sexually suggestive and/or partially nude images. Finkbiner is also charged with possession of child pornography, both for possessing the images he captured from the charged sexual exploitation victims, as well as an alleged collection of child pornography gathered from the Internet.

The formal charges filed in federal court describe a complex and systematic criminal scheme. Finkbiner is alleged to have used the Internet to prey upon children and teens from across the country, including locations as widespread as Avon, Indiana, all the way to Anchorage. For more than a year, Finkbiner allegedly extorted and saved visual depictions of hundreds of individuals engaged in sexually explicit or sexually suggestive conduct, including the 12 minor victims named above.

The three-month forensic investigation has provided additional details into the scheme allegedly used by Finkbiner. According to the information, Finkbiner used Omegle.com, as well as other anonymous video chat websites, to locate children on the Internet. The information alleges that he then utilized “fake webcam” software to display pornographic videos of adults and of children to his victims, which Finkbiner claimed to be live feeds from his webcam.

While displaying these videos to his chat partners, Finkbiner would allegedly then induce these victims to engage in sexually explicit or suggestive activity themselves, which he secretly recorded. The information then alleges that Finkbiner would confront his chat partners with the videos of their activities, threatening to publish the videos to pornographic websites or send them to the victims’ friends, family, and school teachers unless they became his “cam slaves” and engaged in additional sexually explicit activity, which Finkbiner also recorded.

According to Assistant U.S. Attorneys Zachary A. Myers and A. Brant Cook, who are prosecuting the case for the government, investigators continue to process and examine the thousands of images and videos seized during the execution of the April search warrant. Finkbiner faces a maximum of 30 years in prison for each count of sexual exploitation of children, a maximum of two years in prison for each count of extortion, and a maximum of 10 years in prison for possession of child pornography. Finkbiner also faces a fine of up to $250,000 for each of the charged offenses.

An initial hearing will be scheduled in Terre Haute, before a U.S. Magistrate Judge. Finkbiner has been in the custody of the United States Marshals Service since his arrest on April 6, 2012, and the court has already ordered him to be detained until his trial.

These formal charges follow an extensive collaborative investigation by the Federal Bureau of Investigation; the Oakland County, Michigan Sheriff’s Department; and the Prince George’s County, Maryland Police Department; with significant assistance from the Indiana State Police, the Clay County Sheriff’s Department, the Terre Haute Police Department, and the Kokomo Police Department.

This case was brought as part of the U.S. Attorney’s 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 on Project Safe Childhood, visit www.projectsafechildhood.gov

An information is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

Indictment Returned in Hammond Federal Court

HAMMOND, IN—The United States Attorney’s Office announced that the following indictment was returned on June 6, 2012 and unsealed on June 11, 2012:

Francisco Rodriguez, 41, of Chicago, Illinois, was charged in an indictment with two counts of wire fraud. These charges were filed as the result of an investigation by the Federal Bureau of Investigation and the Indiana State Police. This case has been assigned to and will be prosecuted by Assistant United States Attorney Gary Bell.

The United States Attorney’s Office emphasized that an indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.

If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.

Four More Defendants Plead Guilty in Indiana to Participating in International Child Pornography Distribution Ring

A Total of Nine Defendants Prosecuted in Indiana to Date as a Result of Operation Bulldog

WASHINGTON—Four men have pleaded guilty in the Southern District of Indiana for their participation in an international child pornography distribution ring, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and First Assistant U.S. Attorney Josh Minkler of the Southern District of Indiana announced today.

The guilty pleas were entered yesterday in U.S. District Court in Indianapolis and are the result of Operation Bulldog, a multi-jurisdictional effort to dismantle and prosecute the members of the international child pornography distribution ring. A total of nine defendants have been prosecuted in the Southern District of Indiana for their participation in the group.

“This operation uncovered a dangerous and depraved group of criminals who were devoted to trading sexually explicit images of children under the age of five,” said Assistant Attorney General Breuer. “As a result of our investigation and prosecution, seven members of the group—including three of the four men who pleaded guilty yesterday—are now serving lengthy prison terms, and two others are awaiting sentencing. Child pornography rings pose a threat to children around the world, and we will continue to aggressively pursue those who participate in such groups.”

“I applaud the work of the investigators and prosecutors on this case who took a search warrant in Bloomington and successfully brought to justice defendants from all over the world,” said First Assistant U.S. Attorney Minkler. “More importantly, as a result of this 18-month operation, more than two dozen children here in Indiana and across the globe have been rescued from their tormentors.”

Shaun Kuykendall, 32, of South Carolina; Richard Szulborski, 21, of Pennsylvania; Javahn Algere, 23, of Louisiana; and Jeremy Labrec, 22, of Texas, pleaded guilty yesterday before U.S. Judge Jane Magnus-Stinson. In addition, Kuykendall was sentenced to 25 years in prison, Szulborski was sentenced to 15 years in prison, and Algere was sentenced to 12 years in prison. Labrec will be sentenced at a later date.

On November 17, 2010, the FBI and state and local law enforcement partners executed a federal search warrant at David Bostic’s residence in Bloomington, Indiana. Investigators determined that Bostic, 26, possessed hundreds of images and videos depicting children engaged in sexually explicit acts and that he had actively distributed this child pornography to other individuals through various means. According to court documents, investigators also discovered that Bostic had produced child pornography on multiple occasions over the previous two years, creating sexually explicit images of four minor females, all of whom were between the ages of two months and three years, as well as a minor male who was four years old. Evidence gathered at the scene demonstrated that Bostic had distributed the images of child pornography he produced to multiple individuals.

Bostic was arrested November 17, 2010, and pleaded guilty to multiple charges in June 2011. He was sentenced on November 22, 2011, to 315 years in prison, one of the longest sentences in Southern District of Indiana.

Following Bostic’s arrest, a review of the evidence determined that Bostic was a member of a large group of individuals trading sexually explicit images of children, primarily focused on child pornography depicting children under five years of age.

According to court documents, some of the images produced by Bostic depicting Indiana children were distributed among the members of the group. Within days of Bostic’s arrest, Operation Bulldog was launched to identify and apprehend the members of the group. Since then, more than 20 members of the group have been apprehended in the United States and abroad.

In addition to Bostic, Kuykendall, Szulborski, Algere, and Labrec, the following defendants have pleaded guilty in the Southern District of Indiana: Danny L. Druck, 58, of Kentucky; Chris Reid, 37, of Michigan; and Todd King, 41, of California. Reid was sentenced to 35 years in prison and Druck and King were each sentenced to eight years in prison. A plea agreement for another charged defendant, Nicholas King, 28, of Washington, has been filed in the Southern District of Indiana.

Additional defendants were identified in the course of this investigation and have been referred to federal prosecutors and law enforcement agencies in other districts across the country and around the world, including Sweden, Serbia, the Netherlands, and the United Kingdom.

A total of more than two dozen children have been rescued as a result of Operation Bulldog. Efforts to identify additional defendants and victims in the United States and abroad are active and ongoing.

This case was investigated by the FBI, with local assistance from the Indiana State Police, the Kokomo, Indiana Police Department, and the Brownsburg, Indiana Police Department.

The case was prosecuted by Assistant U.S. Attorney A. Brant Cook of the Southern District of Indiana and Trial Attorney Michael Grant of the Child Exploitation and Obscenity Section in the Justice Department’s Criminal Division.

The defendants sentenced were ordered to register as sex offenders and were sentenced to supervised release at the end of their prison terms.

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 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 www.projectsafechildhood.gov.

Hogsett Announces Indictment of Eight on Charges of Operating an Illegal Gambling Ring

U.S. Attorney Says More Than $126,000, Silver Bars, and Multiple Cars Seized as Part of Investigation

NEW ALBANY—Joseph H. Hogsett, the United States Attorney, announced today the federal indictment of eight Louisville-area residents on charges that they operated an illegal interstate gambling business. Hogsett also announced that as a result of an 18-month federal investigation, agents have seized over $126,000 in suspected gambling proceeds, a number of pure silver bars, several different real properties, and numerous personal vehicles.

“Crime almost always begets more crime, and under-the-table bookmaking like what has been alleged often acts as a magnet for other illegal activities,” Hogsett said. “Just as important, illegal gambling operations deny Hoosiers in southern Indiana the tax revenues they deserve.”

The indictment alleges that beginning at least in January 2009, eight area men operated an illegal gambling business out of various locations in Jeffersonville. It is alleged that the business, which involved an interstate network of sports bookmaking, was at times handling thousands of dollars a day in wagers. These activities were also in violation of state law.

An investigation into the alleged criminal activity was launched by the Federal Bureau of Investigation’s Safe Streets Task Force, in collaboration with the Indiana Gaming Commission, and the Indiana State Police and the Jeffersonville Police Department.

As part of this investigation, on May 23, 2012, eight search warrants and seven seizure warrants were executed on various properties in the Louisville and Jeffersonville area, resulting in the seizure of evidence relating to the alleged criminal acts.

As a result, the following individuals were charged by indictment today:

■Terry Crofford, a/k/a “TC,” age 60, of Jeffersonville, Indiana

■Jamie Duley, a/k/a “JD” or “J-Town,” age 54, of Jeffersonville, Indiana

■James Baker, a/k/a “Shake,” age 62, of Clarksville, Indiana

■George Blair, a/k/a “Mound,” age 53, of Jeffersonville, Indiana

■Steven Harkins, a/k/a “Hark,” age 55, of Louisville, Kentucky

■Jeffrey Hash, age 61, of Louisville, Kentucky

■James Payne, a/k/a “Jamie,” age 44, of Pleasureville, Kentucky

■Harold Joyce, a/k/a “Trey,” age 44, of Louisville, Kentucky

In the course of serving these warrants, federal prosecutors located roughly $126,000 in currency believed to be connected to the criminal allegations. They also seized a number of pure silver bars, the value of which is still being determined. The search warrants also revealed equipment that is alleged to have been part of the criminal operation, including business and financial records, gambling records, and personal computers.

The indictment also lists personal and business property that has been seized by the federal government as part of this investigation, all of which could be forfeited if the defendants are convicted. This includes multiple bank accounts in the name of Terry Crofford and TC Auto, property located in Jeffersonville and Utica, as well as a number of vehicles, including a 1967 Chevrolet Camaro, a 1972 Chevrolet Chevelle, and a 2005 Ford Mustang GT convertible.

According to Assistant U.S. Attorney Bradley P. Shepard, who is prosecuting the case for the government, all eight individuals could face up to five years in prison and a fine of up to $250,000 if they are found guilty.

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

Carmel Man Charged with Possession, Distribution of Child Pornography

U.S. Attorney Announces Arrest as Part of Ongoing Project Safe Childhood

INDIANAPOLIS—Joseph H. Hogsett, the United States Attorney, announced today that former FBI agent Donald J. Sachtleben, age 54, of Carmel, has been charged by criminal complaint with possessing and distributing child pornography.

“The mission of our Project Safe Childhood initiative is to investigate and prosecute anyone found to engaged in the sexual exploitation of children,” Hogsett said. “Today’s announcement underscores this serious commitment and should make clear that no matter who you are, you will be brought to justice if you are found guilty of such criminal behavior.”

According to the criminal complaint unsealed today, federal and state law enforcement became aware of an individual allegedly trading images of child pornography online in September 2010. An extensive investigation into that individual led to the arrest of a defendant in Illinois in January 2012. Upon arrest, a forensic search of that defendant’s computer equipment and e-mail accounts allegedly revealed that he had been actively trading such materials online with numerous other people.

Based on that information, law enforcement were then able to trace the alleged online activity of one of those other individuals to Sachtleben’s home in Carmel. After conducting surveillance over a period of days, a search warrant was obtained on May 3, 2012 and was subsequently executed by law enforcement officers from the Indiana State Police and the FBI Cyber Crime Task Force.

The complaint alleges that an initial forensic examination of Sachtleben’s laptop computer revealed the presence of approximately 30 images and video files containing child pornography. It is alleged that a number of files identified during this initial search matched those that had been found in the course of investigating the Illinois defendant. The complaint further alleges that the laptop’s hard drive contained references to other files known to have been in the possession of the Illinois defendant.

According to Assistant U.S. Attorney Stephen D. DeBrota, who is prosecuting the case for the government, Sachtleben could face up to 20 years in prison for the distribution charge and up to 10 years for the possession charge. Both charges also carry up to a $250,000 fine and lifetime supervised release if he is found to be guilty. A probable cause and detention hearing are scheduled before U.S. Magistrate Judge Kennard P. Foster on Thursday at 3:30 p.m. Sachtleben will remain in custody until that time.

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 on Project Safe Childhood, visit www.projectsafechildhood.gov

A criminal complaint is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.