Greenville Gang Members Sentenced for Drug Distribution

RALEIGH—United States Attorney George E.B. Holding announced that in federal court today, Senior United States District Judge W. Earl Britt sentenced four gang members for their participation in an illegal drug distribution conspiracy. TYREE BARKSDALE, 24, received 60 months’ imprisonment followed by five years’ supervised release. KEYONTA LANGLEY, 23, received 27 months’ imprisonment followed by three years’ supervised release, and restitution of $260 was ordered. STEVEN WOOTEN, 24, received 37 months’ imprisonment followed by three years’ supervised release, and a fine of $2,300 was imposed. Finally, ANTONIO DEMETRIUS BELL, 27, received 57 months’ imprisonment followed by three years' supervised release, and restitution of $1,452 was imposed. All four defendants are from Greenville, North Carolina.

“The sentences, which were at the high end of the guideline range, will serve as a deterrent. This case demonstrates how local and federal authorities work together to clean up this area of Greenville that has become ridden with crime,” stated Mr. Holding.

A federal grand jury returned four separate criminal indictments on August 11, 2010, charging each of the defendants. On December 6, 2010, BARKSDALE pled guilty to conspiring to distribute and possession with intent to distribute more than five grams of cocaine base (crack) and a quantity of cocaine and aiding and abetting the distribution of more than five grams of cocaine base (crack). On October 6, 2010, WOOTEN pled guilty to five counts of distribution of a quantity of cocaine (crack) and one count of aiding and abetting the distribution of a quantity of cocaine base (crack). On January 4, 2011, BELL and LANGLEY pled guilty; BELL to one count of distribution of a quantity of cocaine base (crack) and LANGLEY to one count of aiding and abetting the distribution of a quantity of cocaine base (crack).

“Gangs look for smaller communities to build their criminal networks because they think they can operate under the radar—that does not hold true in Greenville. The Greenville Police Department and the FBI worked together diligently to dismantle the West 5th Street Boys’ hierarchy. The sentences these gang members received in federal court should serve as a message to others in the community who think to replace the leadership; we won’t give up our pursuit,” said Acting Special Agent in Charge Mark A. Morgan, head of the FBI in North Carolina.

William Anderson, Chief of Police for the Greenville Police Department stated, “I am pleased with the collaborative efforts of local and federal agencies during these cases. The ability to prosecute such cases at the federal level allows for stronger sentences. We look forward to working with them in the future.”

This case resulted from a joint Federal Bureau of Investigation/Greenville Police Department operation targeting gang related drug trafficking in West Greenville.

Two other defendants in the operation are awaiting trial. They are Charles Lindberg Bell and Jarrku Natu Bennett.

Frederick Andrews, a seventh defendant associated with these cases, is awaiting sentencing.

Assistant United States Attorney John Bennett represented the government.

CBP Officers Make Large Marijuana Bust and Find Meth/PCP in Purse

El Paso, Texas – U.S. Customs and Border Protection (CBP) officers working at the El Paso port of entry made a 388.26 pound marijuana seizure Saturday morning. The drugs were concealed on a passenger bus. They also made a seizure of amphetamine and PCP pills seizure Sunday morning.

“Smuggling organizations will use every imaginable concealment method to try to get the narcotics through our international ports of entry,” said CBP El Paso assistant port director Barry Miller.

The marijuana seizure was made at approximately 5:00 a.m. when a 1996 Viggio Mercedes passenger bus arrived at the Bridge of the Americas port of entry. CBP officers initiated an examination of the bus during which CBP drug sniffing dog “Rabbi” alerted to the vehicle. CBP officers x-rayed the bus and spotted an anomaly in the rear cargo area. CBP officers drilled into the wall of the false compartment producing a green substance that tested positive for marijuana. CBP officers removed a total of 335 marijuana-filled bundles from the bus.

The driver, 46-year-old Florencio Mendoza Romero, was turned over to Homeland Security Investigations (HSI) special agents after federal prosecution was accepted. Hernandez Loya is a Mexican National who resides in Durango, Mexico. He remains in the El Paso County jail without bond.

CBP officers working at the Bridge of the Americas international crossing seized 388.26 pounds of marijuana concealed in a compartment in the cargo area of a 1996 Viggio Mercedes passenger bus on Saturday, April 2.

The amphetamine and PCP seizure was made at approximately 8:00 am when 37-year-old Elena Ortega de Padilla applied for entry at the Bridge of the Americas pedestrian inspection area from Mexico. The CBP primary officer referred her for an intensive interview and exam during which CBP drug sniffing dog “Rici” alerted to her purse where a white powdery substance and 24 pills were found wrapped in a plastic bag inside an empty mayonnaise jar. The white powder tested positive for amphetamines and the pills for PCP.

The subject, Ortega De Padilla, was turned over to HSI special agents after federal prosecution was accepted. Ortega de Padilla is a Mexican National who resides in Encenada, Baja California, Mexico. She remains in the El Paso County jail without bond.

CBP Field Operations is responsible for securing our borders at the ports of entry. U.S. Customs and Border Protection officers’ primary mission is anti-terrorism; they screen all people, vehicles, and goods entering the United States, while facilitating the flow of legitimate trade and travel into and out of the United States. Their mission also includes carrying out traditional border-related responsibilities, including narcotics interdiction, enforcing immigration law, protecting the nation’s food supply and agriculture industry from pests and diseases, and enforcing trade laws.

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.

Christian Thriller Makes it 2433 Cop Books

With the additon of Former Chicago Police Department officer and FBI Agent John Wills third book, Police-Writers.com now lists 1114 State or Local Police Officers from more than 470 police departments and their 2433 books.

More Information on Police Writers

John M. Wills “was born and raised on the South Side of Chicago. After spending two years in the Army, he returned home to join the Chicago Police Department. During his 12 years on the force he received numerous awards and commendations, including the Award of Valor and The Blue Star Award.  He left the Chicago Police Department to join the Federal Bureau of Investigation.  After a long career with the FBI, Wills has authored 3 Christian themed thrillers.  His latest book is Targeted.

According to the book description of Targeted, “Chicago Police Detectives Pete Shannon and Marilyn Benson are thrust into a homicide investigation, taking them away from the Violent Crimes Unit where they are normally assigned. A crazed gunman has been targeting cops, killing them for no apparent reason, other than for his own deranged satisfaction. The duo find themselves teamed with a pair of tough talking, abrasive, seasoned cops who do their best to interfere with the young detectives at every juncture, making their lives miserable. The hunt for the serial killer becomes a life-altering experience for the partners as they face individual challenges that threaten to destroy them.”

Santa Barbara County Man Sentenced to Six Years in Federal Prison for Running $6 Million Job Scam

LOS ANGELES—A Santa Ynez man who falsely promised bartending and “mystery shopper” jobs to people around the country has been sentenced to serve six years in federal prison for operating the scheme that took more than $6 million from thousands of victims across the United States.

Stevan P. Todorovic, 40, was sentenced yesterday afternoon by United States District Judge Terry J. Hatter Jr.

In sentencing Todorovic, Judge Hatter noted that, while the case involved a substantial loss amount and involved a large number of victims, Todorovic caused a “loss of hope, a loss of opportunity.”

Last July, a federal jury convicted Todorovic of seven counts of wire fraud and three counts of mail fraud for making false promises to people seeking work.

The evidence presented at trial showed that Todorovic set up companies in Santa Barbara—American Bartending Institute and Consumer Response Group—to market and sell bogus training programs, “certifications,” and job referrals. Todorovic placed advertisements in newspapers across the country offering bartending and “mystery shopping” positions. Those who inquired about the jobs were then misled into thinking they had to purchase Todorovic’s certification programs in order to receive referrals to bars and retail establishments that wanted to hire bartenders or mystery shoppers. The certifications, however, were worthless, and Todorovic had no jobs to offer.

The evidence at trial showed that approximately 87,400 victims across the United States were defrauded by the scheme, which ran from 2001 through 2004 and caused nearly $6.2 million in losses.

The case against Todorovic was investigated by the United States Postal Inspection Service and the Federal Bureau of Investigation. The matter was referred by the Federal Trade Commission, which had filed a civil lawsuit against Todorovic.

CBP in Nogales Implements “Ready Lane”

RFID-enabled document users to get dedicated lane

Nogales, Ariz. - U.S. Customs and Border Protection announced today the opening of a

Ready Lane

at the Nogales Port of Entry for travelers with approved Western Hemisphere Travel Initiative (WHTI) Radio Frequency Identification (RFID) technology-enabled travel documents. CBP also announced plans to implement Ready Lanes at the Lukeville, Douglas, and San Luis ports of entry over the next few months.

Starting Monday, April 11, the

Ready Lane

will be open to the traveling public from 6 a.m. until 10 p.m. daily on lane 7 at the Dennis DeConcini crossing. The

Ready Lane

is a primary vehicle lane that only accepts RFID-enabled cards.

“RFID-enabled cards allow our officers to screen travelers quicker,” said Port Director Guadalupe Ramirez. “By having a lane designated just for travelers with these cards, we can reduce the time spent waiting to enter the country, which facilitates and encourages legitimate cross-border business and tourism.”

Since the implementation of the Western Hemisphere Travel Initiative, June 1, 2009, U.S. and Canadian citizens entering the United States by land or sea from Mexico, Canada and the Caribbean, are required to present a valid, WHTI-compliant document. Using a WHTI-compliant document that is an RFID-enabled travel now shortens the time it takes to process travelers at the border.

In order to use this dedicated lane, all adult passengers, over the age of 16, must present an approved travel card. The U.S. Passport card, SENTRI card, the new Legal Permanent Resident “green card” and the new Border Crossing Card are all RFID-enabled WHTI-compliant documents.

Travelers using the

Ready Lane

should follow these three simple steps as they approach a U.S. land port of entry with their RFID-enabled travel card:

Stop at the beginning of the lane and make sure each passenger has their card out

When it is your turn, drive slowly through the lane and hold all cards up on the driver’s side of the vehicle

Stop at the officer’s booth

CBP continues to strongly encourage travelers to obtain RFID-enabled card to expedite their entry and to help make the borders more efficient.

WHTI is the joint Department of State-Department of Homeland Security plan that implemented a key 9/11 Commission recommendation to establish document requirements for travelers entering the United States who were previously exempt, including citizens of the U.S., Canada and Bermuda.

For more information, please visit the following websites. ( www.GetYouHome.gov ) ( CBP HomePage )

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.

Virginia Contractor Pleads Guilty to Kickback Scheme and Failure to File Tax Return

WASHINGTON — A Virginia contractor pleaded guilty to participating in a scheme to steer contracts to him for repair, maintenance and renovation work at healthcare and nursing home facilities owned by Medical Facilities of America Inc. (MFA), the Department of Justice announced today.  

Edward T. Fodrey, a resident of Norfolk, Va., pleaded guilty in U.S. District Court in Norfolk to conspiring with other individuals to steer contracts for repair, maintenance and renovation at MFA healthcare and nursing home facilities.   According to the two-count felony charge filed on March 30, 2011, from about May 2006 until at least December 2006, Fodrey conspired with an MFA employee who oversaw the bidding process for repair, maintenance and renovation contracts at MFA facilities in North Carolina and Virginia.   That MFA employee steered contracts to Fodrey in return for kickbacks.  

According to the court document, the MFA employee created fictitious competitor bids that were higher than the quotes submitted by Fodrey and other co-conspirator venders, to create the appearance of competition.   The MFA employee directed subordinates to solicit quotes only from Fodrey or other conspiring vendors.   The MFA employee specified the amount Fodrey should quote to MFA as well as the amount of the kickback on each of the contracts.   Fodrey paid more than $200,000 in kickbacks to the MFA employee and received contracts totaling more than $750,000.   The court document states that as a result of the kickback scheme, MFA was deprived of competitive pricing to its financial detriment.   Fodrey was also charged with failing to file a tax return for 2006, which is the year in which Fodrey received payment on the MFA contracts.   According to the plea agreement, Fodrey has agreed to cooperate with the department’s ongoing investigation.

Fodrey is charged with conspiracy to commit mail fraud for the kickback scheme, which carries a maximum penalty of 20 years in prison and a $250,000 criminal fine.   Fodrey is also charged with failure to file an income tax return, which carries a maximum penalty of one year in prison and a $100,000 criminal fine.   The maximum fines for each of these charges 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 maximums.

The charge is the first to arise out of the department’s ongoing fraud investigation into the award of repair, maintenance and renovation contracts at facilities owned by MFA being conducted by the Antitrust Division’s Philadelphia Field Office, the U.S. Attorney’s Offices for the Eastern District of Virginia and the Western District of Virginia, the FBI in Roanoke, Va., and the Internal Revenue Service-Criminal Investigation in Roanoke, Va.   Anyone with information concerning fraudulent behavior relating to the award of contracts by MFA should contact the Antitrust Division’s Philadelphia Field Office at 215-597-7405 or visit justice.gov/atr/contact/newcase.htm.

Bucks County Doctor Pleads Guilty to Running Northeast Philadelphia Pill Mill

PHILADELPHIA—Christopher Vassalluzzo, D.O., 47, of New Hope, Pennsylvania, pleaded guilty today to participating in a conspiracy to operate an office that was, in fact, a “pill mill” that distributed millions of prescription controlled substance diet drugs outside a professional practice. Vassalluzzo’s office, where he had others operate the pill mill while he worked at local hospitals, was located at

3000 Holme Avenue

in Northeast Philadelphia.

In addition to the conspiracy to distribute controlled substances charge, Vassalluzzo pleaded guilty to mail fraud and conspiracy to commit mail fraud, structuring, aggravated structuring, conspiracy to commit tax evasion, and tax evasion. Vassalluzzo was distributing prescription controlled substance diet drugs outside a professional practice. This illegal enterprise generated more than five million dollars in cash. In addition to admitting his guilt, Vassalluzzo has agreed to forfeit a beach home in New Jersey, a timeshare in Florida, and a portion of the proceeds from the sale of his home in Bucks County, Pennsylvania.

Vassalluzzo will be formally sentenced on July 12, 2011 by U.S. District Court Judge Anita Brody and faces 34 months in prison.

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, and the Drug Enforcement Administration. It is being prosecuted by Assistant United States Attorney Pamela Foa.

Brookings Man Sentenced to Prison and Over $5 Million in Victim Reimbursement

SIOUX FALLS, SD—U.S. Attorney Brendan V. Johnson announced that a Brookings man charged with mail fraud was sentenced on April 1, 2011, by U.S. District Judge Roberto A. Lange. David Beulke, age 63, was sentenced to 51 months in prison, three years of supervised release, and ordered to pay $5,610,563 in restitution.

The court ordered Beulke’s attorney to remit over $1,222,500 currently held on behalf of Beulke in an attorney trust account. The government previously had seized $2,479,690 from a variety of retirement and investment accounts. Together, the amounts represent over $3,700,000 which can be paid toward his restitution judgment.

From approximately February 1, 1993 through September 30, 2008 Beulke was employed by 3M Corporation as an engineer. He created shell companies and held them out to 3M as legitimate vendors of specialized parts. Beulke caused 3M to place orders for supposed parts from his shell companies, knowing that those orders were fraudulent. He kept the money 3M sent for the supposed parts for his own personal use. He initially deposited the money into various accounts, spent some on purchases and other personal expenses, and transferred a large amount of those funds into a variety of investment and retirement accounts. Through this scheme, Beulke unlawfully received approximately $5,610,563.

“This was a large-scale scheme that was highly orchestrated and went undetected for many years,” U.S. Attorney Johnson said. “I am encouraged by our ability to recover a large sum of the stolen money, and I'm grateful for the skilled efforts of the FBI and our office."

Beulke waived indictment and was charged by information with mail fraud on November 29, 2010. Beulke pled guilty on December 10, 2010.

This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Kevin Koliner prosecuted the case. Beulke was immediately turned over to the custody of the U.S. Marshal.

Restaurant Owner Pleads Guilty in Extortion Scheme Involving Prince George’s County Police Officers

First Defendant in the Scheme to Plead Guilty

GREENBELT, MD—Chun Chen, aka Eddy Chen, age 34, of Bowie, Maryland, pleaded guilty today to conspiring with others, including a public official, to commit extortion in connection with a scheme involving the transport and distribution of untaxed cigarettes.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Special Agent in Charge Rebecca Sparkman of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.

According to his plea agreement, Chen owned a carry-out restaurant in Maryland. Between July 2009 and January 2010, Chen bought untaxed cigarettes from two conspirators, one of whom was a Prince George’s County police officer. The conspirators, along with another Prince George’s County police officer, had obtained the untaxed cigarettes in Virginia from an undercover agent and transported, or arranged for the transport of the cigarettes into Maryland. Under applicable state law Virginia imposes a $0.30 sales tax on each pack of cigarettes and Maryland imposes a $2 sales tax per pack. Chen in turn sold the contraband cigarettes to persons in New York where local taxes on cigarettes exceed $8 per pack. The conspirators paid Prince George’s County Police officers to use their official authority to ensure the safe transport and distribution of the untaxed cigarettes in Maryland and Virginia.

Chen was involved in all but one of the conspirators’ illicit transactions with the undercover agent involving the sale of contraband cigarette. Altogether, Chen and others paid the undercover agent $1,770,230 for 1,420 master cases of contraband cigarettes, for a total of more than 17 million contraband cigarettes. The lost state tax revenue attributable to Chen is $2,661,240.

Chen faces a maximum sentence of 20 years in prison and a $250,000 fine. As part of his plea agreement, Chen has agreed to the entry of an order of forfeiture of $2,661,240. Chief U.S. District Judge Deborah K. Chasanow scheduled sentencing for July 13, 2011 at 9:30 a.m. before U.S. District Judge Peter J. Messitte.

United States Attorney Rod J. Rosenstein praised the FBI and IRS for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys James A. Crowell IV, A. David Copperthite and Sujit Raman, who are prosecuting the case.

Mr. Rosenstein, Mr. McFeely, and Ms. Sparkman expressed their appreciation to Interim Chief Mark Magaw of the Prince George’s County Police Department for the assistance that he and his department provided.

Former TBW CEO Pleads Guilty in $1.5 Billion Fraud Scheme

WASHINGTON—Paul Allen, the former chief executive officer (CEO) at Taylor, Bean & Whitaker (TBW), pleaded guilty today to making false statements and conspiring to commit bank and wire fraud for his role in a $1.5 billion fraud scheme that contributed to the failure of TBW.

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.

Allen, 55, of Oakton, Va., pleaded guilty to a two-count criminal information before U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. Allen faces a maximum penalty of five years in prison for each count when he is sentenced on June 21, 2011.

According to a statement of facts submitted with his plea agreement, Allen joined TBW in 2003 as its CEO and reported directly to its chairman. He admitted in court that from 2005 through August 2009, he and other co-conspirators engaged in a scheme to defraud financial institutions that had invested in 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.

According to court records, shortly after Ocala Funding was established, Allen learned there were inadequate assets backing its commercial paper, a deficiency referred to internally at TBW as a "hole" in Ocala Funding. Allen admitted that in an effort to cover up the hole and to mislead investors, he told a co-conspirator to produce reports that concealed the hole. He also admitted that he knew that these misleading reports were sent to Ocala Funding investors and other third parties.

Allen also admitted in court that he kept the chairman of TBW informed of the collateral shortfall, and that in the fall of 2008, Allen was told that the hole had been moved from Ocala Funding to Colonial Bank. At the time that TBW ceased operations, the hole was approximately $1.5 billion. According to court documents, as a result of the Ocala Funding fraud scheme, Freddie Mac, Colonial Bank, and Ocala Funding investors believed they had an undivided ownership interest in thousands of the same mortgage loans.

Court records state that in March 2009, Allen was directed to approach a private equity investor to secure capital to meet a $300 million private capital requirement the U.S. Department of Treasury set for Colonial Bank to receive $553 million from the Troubled Assets Relief Program (TARP). Although Allen failed to secure the funding from the investor, he admitted in court that the TBW chairman represented to others that the investor was a $50 million participant and that the chairman diverted $5 million from Ocala Funding to an escrow account in the investor's name. This deception caused Colonial Bank to falsely announce publicly it had met its $300 million capital raise contingency and to send a letter to the FDIC that all investors had met a 10 percent escrow deposit requirement. Colonial Bank never received any TARP funds.

In court today, Allen also admitted to making false statements in a letter he sent to the U.S. Department of Housing and Urban Development, through Ginnie Mae, regarding TBW's audited financial statements for the fiscal year ending on March 31, 2009. In this letter, Allen omitted that the delay in submitting the financial data was attributed to concerns its independent auditor had raised about the financing relationship between TBW and Colonial Bank. Instead, Allen falsely attributed the delay to a new acquisition and TBW's switch to a compressed 11-month fiscal year.

To date, five other individuals have pleaded guilty 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, the 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.

Local Man Charged with Wire Fraud Involving 404th District Court

BROWNSVILLE, TX—A San Benito resident has been arrested following the filing of a criminal complaint accusing him of wire fraud arising from a scheme to defraud the state of Texas and its citizens of their right to the honest services of a state district judge performed free from deceit, favoritism, bias, self-enrichment, and self-dealing, United States Attorney Jose Angel Moreno announced today.

Jose Manuel Longoria, 52, a resident alien from Mexico residing in San Benito, Texas, was arrested on Thursday, March 31, 2011, by agents of the FBI, the Drug Enforcement Administration (DEA), and officers of the Brownsville Police Department (BPD) as a result of a warrant which issued following the filing of a criminal complaint under seal on March 30, 2011.

Longoria appeared today before U.S. Magistrate Judge Felix Recio who ordered the defendant to remain in custody without bond pending a preliminary examination and detention hearing set for Tuesday, April 5, 2011.

The criminal complaint, unsealed today following Longoria's court appearance, charges Longoria with wire fraud arising from "a scheme and artifice to defraud and deprive the state of Texas of the right to the honest services of a state district judge, performed free from deceit, favoritism, bias, self-enrichment and self-dealing." The offense is alleged to have occurred on April 24, 2008.

According to allegations in the criminal complaint Longoria was involved in a scheme with former 404th District Judge Abel Corral Limas to allow a state probationer to report by mail rather than in person in return for payment of money. The probationer had been convicted of aggravated assault in 2006 and was under court-ordered supervision. The complaint alleges the probationer left Texas for Arkansas without authorization from the probation officer in violation of the terms of his probation. Longoria allegedly was wired $1,800 from Arkansas as part of the scheme to pay Judge Limas to enter an order authorizing the probationer to report by mail. The complaint alleges 404th court records indicate that on April 23, 2008, Limas contacted the state probation officer ordering that the probationer be permitted to report by mail.

A conviction for wire fraud carries a maximum punishment of up to 20 years' imprisonment and a $250,000.00 fine, upon conviction.

The charges are the result of an ongoing criminal investigation being conducted by the FBI, DEA, and the BPD. Assistant U.S. Attorneys Oscar Ponce and Michael Wynne are prosecuting the case.

A criminal complaint is an accusation of criminal conduct, not evidence.  A defendant is presumed innocent unless convicted through due process of law.

State Business Development Consortium Director Charged in Fraud and Money Laundering Conspiracy

BIRMINGHAM—A federal fraud, money laundering, and conspiracy indictment was unsealed today against the former state director of a college consortium of business development centers, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Pat Maley, and IRS Criminal Investigation Special Agent In Charge Reginael D. McDaniel.

The 96-count indictment, returned March 30, charges MAURICE WILLIAM CAMPBELL  JR., 59, of Rainbow City, with using his position as state director of the Alabama Small Business Development Consortium to obtain more than $7 million from the State of Alabama.

The indictment charges Campbell with conspiracy to defraud the state and a private non-profit institute he incorporated, and to make financial transactions intended to conceal the proceeds of the fraud. The indictment also charges Campbell with three counts of mail fraud, 56 counts of wire fraud, and 36 counts of money laundering. It also provides notice that the United States will seek forfeiture of $7,326,569.

“Fraud that results in a multi-million-dollar loss to the state is an egregious violation of the public trust,” Vance said. “The use of a charity to execute a scheme to defraud is a loss to those who might have benefitted from the charity’s mission. This office will continue to vigorously prosecute those individuals who use their official position for personal gain,” she said.

“Financial fraud schemes are often described as a house of cards,” McDaniel said. “The underlying structure can fall apart at any time and expose the individuals responsible for the alleged fraud. IRS Criminal Investigation will do its part to follow the money trail and pursue the evidence wherever it leads, leaving no financial stone unturned,” he said.

According to the indictment, Campbell’s position with the state and his conduct of the fraud were as follows:

In January 2003, Campbell was hired as state director of the Alabama Small Business Development Consortium. The consortium was composed of four-year universities in the state—each with its own small business development center—as well as a procurement technical center and an international trade center. The consortium’s purposes were to enhance economic growth, to provide management and technical assistance to small businesses, and to develop Alabama’s workforce.

About February 2005, Campbell incorporated the Alabama Small Business Institute of Commerce. Campbell was the president, a director, the initial registered agent, and the incorporator of the institute. The stated purpose of the institute was to enhance economic development, increase employment, and reduce business failure in Alabama through business education and workforce training.

The institute was formed as a nonprofit, with the representation that the corporation would not be operated for private profit, nor its assets at any time be used to benefit any shareholder, member, director, trustee, officer or other private person. The institute was expressly organized as a private, non-profit, charitable organization.

The institute received nearly all of its funding from the state through grants, contracts, and appropriations in the education budget. From 2005 through 2010, the private nonprofit Institute received more than $7.3 million in public funds to, among other services, provide education and training to Alabama workers.

The indictment charges that Campbell and others used the state funds provided to the Institute for personal gain through a variety of means, including the use of the mails and wires. The indictment further charges that Campbell and others created a number of other entities—into which state funds provided to the Institute were deposited and later spent—in order to conceal the source, ownership, and control of those funds.

Campbell faces a maximum of five years in prison on the conspiracy count, a maximum of 20 years on the mail and wire fraud counts, and a maximum of 20 years on the money laundering counts.

The investigation of this matter was conducted by investigators from the FBI and IRS-Criminal Investigation. Assistant U.S. Attorneys Tamarra Matthews Johnson and George A. Martin are prosecuting the matter on behalf of the United States.

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.

Maryland Man Sentenced to Two-Year Prison Term in Identity Theft Scheme

Twenty-Five Victims and More Than 40 Accounts Compromised

WASHINGTON—Oladayo Oladokun, 37, was sentenced today to two years of imprisonment for carrying out a scheme in which he took over financial accounts belonging to about 25 victims. In total, more than 40 financial accounts were taken over, fraudulently used, possessed, or opened without the victims’ authorization, causing more than $300,000 in losses.

Oladokun, most recently of Lanham, Md., pled guilty in February 2011 to a charge of aggravated identity theft. He was sentenced today by the Honorable Ellen S. Huvelle in the U.S. District Court for the District of Columbia. In addition to the prison term, the judge ordered Oladokun to pay restitution of $269,304. He will be on one year of supervised release upon completion of the prison term.

The sentence was announced by U.S. Attorney Ronald C. Machen Jr.; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; Daniel S. Cortez, Inspector in Charge, Washington Division, U.S. Postal Inspection Service; and David Beach, Special Agent in Charge, Washington Field Office, U.S. Secret Service.

According to the government’s evidence, Oladokun and others engaged in a scheme to defraud bank and credit card companies through an account takeover scheme. An account takeover occurs when individuals obtain names and identifying information of victims, and then using this information, call the victims’ banks and credit card companies pretending to be the real account holders.

Once in possession of the victims’ checks and/or credit cards, Oladokun and others engaged in financial transactions such as buying goods and services, depositing the bank checks into accounts opened in the names of other victims, cashing checks, and purchasing money orders.

>From July 2008 to August 2010, the defendant was involved with account takeovers of numerous financial accounts. Banks, credit card companies, and others suffered losses with respect to these accounts in the approximate total amount of $301,431, although some money was later recovered.

Oladokun admitted in court that he engaged in identity theft, knowing that the victims were actual persons.

In announcing today’s sentence, U.S. Attorney Machen, Assistant Director in Charge McJunkin, Inspector in Charge Cortez, and Special Agent in Charge Beach commended the work of those who investigated the matter for the FBI’s Washington Field Office, the U.S. Postal Inspection Service, and the U.S. Secret Service. They also commended the staff of the U.S. Attorney’s Office, including Paralegal Specialists Diane Hayes and Sarah Reis, and Assistant U.S. Attorney Virginia Cheatham, who prosecuted the case.

Mount Vernon Man Indicted for Wire Fraud, Mail Fraud, and Making a False Tax Return

INDIANAPOLIS—Joseph H. Hogsett, United States Attorney, announced that Richard E. Brown, 53, of Mt. Vernon, Ind., was charged by a federal grand jury sitting in Evansville, Wednesday, March 30, 2011, with multiple counts of wire fraud, mail fraud, and making a false tax return. Following a return of indictment, federal agents arrested Brown. The indictment is the result of a lengthy investigation by special agents of the Internal Revenue Service, Criminal Investigation Division, and the Federal Bureau of Investigation.

The indictment alleges that Brown, while serving as office manager and bookkeeper of an Evansville family business, used credit cards from that business to pay his own personal expenses without authorization. Allegedly, Brown also used checks of his former employer to pay the expenses of his church where he had also served as bookkeeper. Following these thefts, Brown filed false federal income tax returns which omitted the embezzled funds. As a result, the government lost thousands of dollars in taxes due by Brown. The loss to the family business is alleged to be over $100,000.

According to Assistant U.S. Attorney James M. Warden, who is prosecuting the case for the government, Brown faces a maximum of 20 years in prison and a $250,000 fine on each fraud count, and three years in prison and a $250,000 fine on each tax count. Brown was released following an initial hearing held in Evansville this morning before Judge Young. A jury trial is scheduled for May 31, 2011.

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.

Former Senate President Pro Tem Mike Morgan and Two Others Charged with Conspiracy, Extortion, and Bribery

OKLAHOMA CITY—Sanford C. Coats, United States Attorney for the Western District of Oklahoma, and James Finch, Special Agent in Charge of the Federal Bureau of Investigation, jointly announce that a federal grand jury has returned a 63-count indictment against former Oklahoma Senate President Pro Tem MICHAEL STEVEN MORGAN, 56, of Stillwater, Oklahoma; attorney N. MARTIN STRINGER, 70, of Oklahoma City, Oklahoma; and lobbyist WILLIAM ANDREW SKEITH, 52, of Edmond, Oklahoma, that includes charges of conspiracy, extortion, bribery, and mail fraud. According to the indictment, these individuals had businesses pay Senator Morgan for favorable treatment in the legislature and with state officials. The indictment also alleges that these payments were disguised as fees for Senator Morgan's services as an attorney.

"The crimes charged in this indictment go to the heart of our republic and how our system of government operates," said U.S. Attorney Coats. "When elected officials decide public policy based on secret payments, they abandon this country's core principle that government should be of the people, by the people, and for the people."

"It is unfortunate when some politicians choose to betray the trust of the very people who expect and deserve their elected officials to represent the constituents' best interest and not the politicians' self-serving financial interest," said FBI Special Agent in Charge Finch. "The FBI will continue to ensure this type of corruption does not go unaddressed."

First Scheme—Company A

One of Mr. Stringer's clients was a business identified in the indictment as "Company A." Company A also hired Mr. Skeith as its lobbyist. The indictment explains that during the spring of 2005, this business was trying to get state and local approval for a new landfill. It is alleged that when Company A was faced with opposition to the landfill in the legislature and among county commissioners, Mr. Stringer and Mr. Skeith had Company A place Senator Morgan on a legal retainer of a flat $50,000 per year. In exchange, the indictment alleges, Senator Morgan used his position as an elected official to keep harmful legislation from passing and to push for bills that would cut back the power of county commissioners to regulate landfills. All told, the indictment alleges that Company A paid Senator Morgan $141,664.52 from 2005 until 2008, when he left the Senate. These allegations form the basis for charges of conspiracy, extortion, and mail fraud.

Second Scheme—Company B

The indictment further alleges that Mr. Stringer and Mr. Skeith shared another client, identified as "Company B." This business was hoping to build a power plant in northeastern Oklahoma with the Grand River Dam Authority. Starting at the end of 2004, Company B began paying Senator Morgan at a rate of $5,000 per month. The indictment states that by the time Senator Morgan left the legislature, he had received $250,000 from Company B, supposedly for serving as one of its attorneys. But, according to the indictment, Senator Morgan was taking money in exchange for official acts. Before Company B could build a power plant with the Grand River Dam Authority, it needed to change state law on public competitive bidding and bonding for public construction which, the indictment alleges, Company B accomplished in the 2005 legislative session. The indictment also alleges that Mr. Stringer and Mr. Skeith included Senator Morgan in meetings with public officials to suggest that he supported Company B's new power plant in his capacity as a leader in the Senate. These allegations form the basis for charges of conspiracy and mail fraud.

Third Scheme—Company C

Finally, the indictment charges Senator Morgan with taking 12 $1,000 bribe payments in 2006 and 2007 from a business that owned assisted-living centers, identified as Company C. It is alleged this business had been at odds with the Oklahoma Department of Health, which was attempting to impose regulations on assisted-living facilities. It is further alleged that in exchange for payments disguised as legal fees, Senator Morgan authored Senate Bill 738, which became law at the end of the 2007 session and helped Company C by lifting some of its regulatory burdens. These allegations form the basis for a bribery charge. They do not involve Mr. Stringer or Mr. Skeith.

On each of the conspiracy, extortion, and wire fraud counts, each defendant faces a potential penalty of 20 years in prison and a fine of $250,000. With respect to the bribery count, former Senator Morgan faces a potential penalty of 10 years in prison and a fine of $250,000. Furthermore, the indictment seeks forfeiture from each of the defendants in the amount of the proceeds of the crimes.

The public is reminded that the indictment is merely an accusation and that the defendants are presumed innocent unless and until proven guilty.

These charges are the result of an investigation conducted by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorneys Scott E. Williams and Vicki Zemp Behenna.

Reference is made to the indictment for further information.

Founder and Treasurer of Washington D.C. Labor Union Charged with Stealing Pension Funds for Personal Use, Violating a Court Order and Obstructing Investigation

WASHINGTON – The founder and treasurer of the National Association of Special Police and Security Officers (NASPSO) was charged today in a superseding indictment with mail fraud, theft from a labor organization, obstruction of justice, criminal contempt and various recordkeeping offenses related to his operation of a pension plan for NASPSO members.   NASPSO is a labor union representing private security guards assigned to protect federal buildings in the Washington, D.C., metro area.  

  The charges were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; Mabel Capolongo, Director of the Philadelphia Regional Office of the Employee Benefits Security Administration of the Department of Labor; Robert L. Panella, Special Agent in Charge of the Office of Inspector General, Office of Labor Racketeering and Fraud Investigations of the Washington, D.C. Regional Office, and Mark Wheeler, Director of the Washington District Office of the Office of Labor Management Standards.

Caleb Gray-Burriss, 60, of Washington, D.C., will be arraigned on April 4, 2011, in U.S. District Court for the District of Columbia.  Gray-Burriss originally was charged in June 2010 with four counts of mail fraud.

According to the superseding indictment, from approximately June 2004 through February 2011, Gray-Burriss wrote numerous checks to himself or to other third parties from the checking account where he had placed funds intended for the NASPSO pension plan.  The superseding indictment alleges that Gray-Burriss spent more than $100,000 of the pension plan funds in this way, while at the same time falsely maintaining that it was an operational fund that he was properly administering and that was providing benefits to the beneficiaries.   Gray-Burriss previously settled a civil suit which, in part, addressed his unlawful conduct with respect to NASPSO-sponsored health and benefit plans.  

The superseding indictment charges Gray-Burriss with criminal contempt of a court order after he allegedly stole money from the NASPSO treasury to pay his personal fines due in the civil settlement.   The superseding indictment also alleges that Gray-Burriss resumed his involvement with NASPSO-sponsored health and pension plans after the civil lawsuit was settled, even though he was prohibited by court order from doing so.

In addition, the superseding indictment charges that Gary-Burriss, while an officer and employee of NASPSO, stole more than $115,000 in NASPSO funds through unauthorized salary increases and bonuses to himself, cash withdrawals from ATMs, reimbursement for unauthorized vacations and trips to casinos, personal dental work, and other goods and services.   Gray-Burriss also allegedly unlawfully used NASPSO funds to pay his parking tickets and personal fines in a civil lawsuit.   Finally, the superseding indictment charges Gray-Burriss with two counts of obstructive of justice for concealing and/or destroying NASPSO records and attempting to induce a witness to withhold testimony and records during the grand jury investigation.

An indictment is merely an allegation, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Gray-Burriss faces a maximum penalty of 20 years in prison and a $250,000 fine on each of the mail fraud and obstruction of justice charges.   The theft from a labor organization charge carries a maximum penalty of five years in prison and a $250,000 fine.   Gray-Burriss also faces additional penalties if convicted of the criminal contempt and recordkeeping charges.

The investigation leading to the superseding indictment of Gray-Burriss was conducted by investigators from three agencies of the U.S. Department of Labor – the Employee Benefits Security Administration, the Office of Labor Management Standards and the Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.   The case is being prosecuted by Trial Attorney Vincent Falvo of the Criminal Division’s Organized Crime and Racketeering Section.

Ten Graduate from CBP Field Operations First Citizen's Academy Hosted by Brownsville Port of Entry

Brownsville, Texas – Michael Freeman, Port Director, U.S. Customs and Border Protection (CBP) Brownsville Port of Entry announced that the inaugural class of the first CBP Field Operations Brownsville Citizens Academy has graduated.

The CBP Field Operations Brownsville Citizens Academy (BCA) is part of an aggressive plan by Port Director Freeman to foster a better working relationship with the communities in which we live and work. The eight-week course provides class participants with a better working knowledge and understanding of CBP.

The academy consists of a series of classroom discussions and several hands-on scenarios. The citizens’ academy is a field training that was held once a week on Tuesday evenings for eight weeks. The Brownsville Port of Entry plans to hold four to five academy classes each year with each class consisting of approximately 12 student participants. There is no registration or attendance cost to anyone who enrolls in the academy.

The goal of the BCA was to create a better understanding, improve communication, and partnership between the citizen academy participants and CBP through education. Community involvement plays an important role in travelers’ entry document compliance and in reducing crime in any community. The first graduates of the Brownville Citizens’ Academy have assisted us in identifying potential problems and solutions to the border issues that are affecting our community.

The first graduating class consisted of members from throughout our community. Represented in this Brownsville’s First Citizens’ Academy were members from the following organizations:

U.S. Consulate, Matamoros: U.S. Consul Michael Barkin, Assistant Consul Chinwe Obianwu

Mexico Consulate, Brownsville: Mexican Consul Rodolfo Quilantan, Assistant Consul Ramiro Ballesteros

Brownsville Chamber of Commerce CEO Angela Burton

San Benito Chamber of Commerce CEO Zeke Padilla

B&M Bridge Co. Manager John Hopkins, Assistant Manager Juan Sepulveda

Cameron County Bridge Manager Jesus Pena, Assistant Manager David Silva

“This inaugural class is a first of many for the Brownsville Port of Entry. I congratulate and applaud each participant for volunteering to attend our First Citizens’ Academy and for their receptiveness as we continue to grow our partnership with our community,” said Michael Freeman, CBP Port Director, Brownsville Port of Entry

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.

La Jolla, California Lawyer Pleads Guilty to Defrauding New Mexico Investor

ALBUQUERQUE—United States Attorney Kenneth J. Gonzales announced that, this morning in federal court in Albuquerque, Paul Conrad Ward, Jr., 63, entered a guilty plea to Count 1 of a six-count indictment charging him with wire fraud under a plea agreement with the United States Attorney’s Office. Under the terms of the plea agreement, Ward will be sentenced to a 21-month term of imprisonment to be followed by a three-year term of supervised release. Ward, a lawyer who resides in La Jolla, California, remains on release under pretrial supervision pending his sentencing hearing, which has yet to be scheduled.

Ward was indicted on August 10, 2010 and charged with devising a scheme to defraud an investor in New Mexico (the Victim) under false pretenses. According to the indictment, which was superseded on February 24, 2011, Ward perpetrated his fraudulent activity between December 11, 2006 through August 20, 2008 by inducing the Victim to give $500,000 to a business entity controlled by Ward, purportedly to be invested in an overseas trading program. However, instead of investing the money as promised, Ward used the $500,000.00 for his own personal use and that of others.

Ward was indicted on August 10, 2010 and charged with devising a scheme to defraud an investor in New Mexico (the Victim) under false pretenses. According to the indictment, which was superseded in February 24, 2011, Ward perpetrated his fraudulent between December 11, 2006 through August 20, 2008 by forming two business entities and using those entities to solicit $500,000.00 from the Victim. Although Ward promised the Victim that he would invest her money in a trading program, he instead used the $500,000.00 for his own personal use and that of others.

In his plea agreement, Ward admitted soliciting and accepting $500,000.00 from the Victim under false pretenses. He further admitted that he did not invest the money as promised, but instead in less than three weeks spent almost all of the money for his own personal use and the use of others. Under the terms of the plea agreement, Ward is required to pay restitution in the amount of $500,000.00, plus applicable interest to his Victim, within a year of his release from prison. Ward also is required to pay $30,000.00 to his Victim to cover the costs of civil attorneys retained by the Victim to assist her in recouping her money; the $30,000.00 also must be paid within a year of Ward’s release from prison. Under the terms of the plea agreement, the remaining counts of the indictment will be dismissed after Ward is sentenced.

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney George C. Kraehe.

Employment Agency Owner Sentenced in Scheme to Recruit Undocumented Workers in Atlanta, Southeast States

ATLANTA—CHUN YAN LIN, 44, of Doraville, Georgia, was sentenced today by United States District Judge William S. Duffey on a charge of conspiring to transport and harbor illegal aliens.

United States Attorney Sally Quillian Yates said, “Many of the workers in this case were underpaid for long work weeks and lived in substandard conditions, after being placed in locations in Atlanta and around the Southeast. Employment agencies that take advantage of the illegal employment trade will pay the price.”

“The recruitment, harboring, and transportation of illegal aliens are very serious crimes,” said Brock Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Atlanta. “Those who put our nation’s security at risk to pocket a profit can expect to face similar serious consequences.”

Brian D. Lamkin, Special Agent in Charge, FBI Atlanta, said, “Exploiting others for profit while many of these individuals were vulnerable because they were in a country they were unfamiliar with is despicable. The FBI will continue to work with its law enforcement partners in eradicating such businesses that disregard the law and disregard the dignity and rights of others.”

LIN was sentenced to two years in prison to be followed by three years of supervised release, and was ordered to forfeit $5,200 to the United States. LIN pleaded guilty to the charges on October 20, 2010. LIN is expected to be deported upon completion of her sentence.

According to United States Attorney Yates, the charges and other information presented in court: From June 2009, through June 2010, CHUN YAN LIN owned an employment agency called Lucky in Chamblee, Georgia, and conspired with others to transport and provide jobs to illegal aliens. LIN and other employment agency owners primarily placed the illegal aliens in restaurant jobs in South Carolina, Pennsylvania, Tennessee, Mississippi, and Georgia. The Lucky employment agency did not require or request any proof that the aliens had permission to be or work in the United States. The Lucky employment agency also advertised in Asian language newspapers and on the Internet. LIN charged the undocumented aliens a commission and transportation fee to place them in a restaurant or other job site and to drive them there, or in some cases charged the restaurant owners, who deducted the fees from their illegal workers’ modest pay.

The Lucky employment agency used paid drivers to minimize contact between the undocumented aliens and the outside world, including law enforcement. Restaurant owners XIANG MEI KE and HUANG ZHENG, of Hong Kong Super Buffet in Buford, Georgia, and JING XING JIANG, the owner of Fuji Buffet in Lawrenceville, Georgia, all previously pleaded guilty to hiring illegal workers and were sentenced on January 25, 2011. In addition to employing the illegal workers, ZHENG and KE housed four of them in their home while JIANG housed seven illegal workers. KE received eight months of home confinement and 30 months of probation. ZHENG received three months in custody and a year of supervised release. JIANG received five months in home confinement and three years of probation.

A co-defendant in this case, Lucky employment agency driver SHU XIAN JIA, 54, of Doraville, Georgia, is scheduled to be sentenced on April 26, 2011, on a charge of transporting illegal aliens.

This case was the result of a joint investigation by special agents from U.S. Immigration and Customs Enforcement, Department of Homeland Security, and the Federal Bureau of Investigation. A total of 10 cases has resulted in 23 defendants being sentenced and 10 employment agencies being shut down.

Assistant United States Attorney Susan Coppedge and Phyllis Clerk prosecuted this case.

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

New Public Corruption Initiatives Announced

Public corruption undermines our nation’s security and the people’s trust in their government while wasting billions of tax dollars.

The FBI in Albuquerque and its law enforcement partners are announcing several initiatives designed to make it easier for residents in New Mexico to report public corruption and for the FBI and its partners to work more effectively together.

Public corruption includes corrupt public officials, border corruption, economic stimulus fraud, abuse of government contracting authority, and many other examples.

A new hotline will be available starting Thursday (March 31) for anyone wanting to report public corruption to the FBI in Albuquerque. The number is 505-889-1580.

The Albuquerque FBI also has created a series of online questionnaires people can use to identify public corruption. Go to http://www.fbi.gov/albuquerque/priorities and scroll down to item No. 4 to find the links.

Finally, residents of New Mexico can electronically send a report of public corruption to the FBI. Go to https://tips.fbi.gov, or e-mail AQ.FBI@ic.fbi.gov.

A newly formed Regional Public Corruption Working Group will hold its first meeting at the FBI office in Albuquerque on Thursday (March 31).

The group is composed of representatives of the FBI, U.S. Attorney’s Office, U.S. Housing and Urban Development, U.S. Department of Homeland Security, New Mexico Law Enforcement Academy, New Mexico Judicial Standards Board, New Mexico Attorney General, District Attorneys from Santa Fe and Albuquerque, New Mexico State Auditor, New Mexico State Police, Governor’s Office, and New Mexico Department of Public Safety.

Former TBW Financial Analyst Pleads Guilty in $1.5 Billion Fraud Scheme

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: stopfraud.gov .