Two Area Contractors Charged with Fraud Involving Minority and Women Set-Asides for Government Construction Contracts

CHICAGO—Two owners of area construction businesses are facing federal charges for allegedly using companies they controlled to fraudulently obtain government contracts set aside for owners of minority, women, and disadvantaged business enterprises (M/W/DBEs). The charges in two separate cases made public today stem from an ongoing public corruption investigation by federal, state, and local authorities of alleged fraud by businesses falsely purporting to be minority- or women-owned, or by legitimate non-majority businesses being used as sham pass-through sub-contractors on public works projects.

In one case, the owner of two Lockport construction companies certified as woman-owned and/or disadvantaged businesses was charged with fraudulently using her companies as sham pass-through sub-contractors as part of a scheme to help prime contractors meet the City of Chicago and other local governments’ set-aside requirements for construction contracts. The defendant, Elizabeth Perino, owner of Perdel Contracting Company and Accurate Steel Installers, Inc., allegedly acted as a sham pass-through on contracts with Prime Contractor A, a construction firm with billions of dollars worth of government and private contracts, as well as with the owner of Prime Contractor B, who was cooperating with law enforcement.

As far back as 2006, Perdel Contracting, which specializes in concrete and carpentry, and Accurate Steel (ASI) allegedly acted as sham WBE sub-contractors for Prime Contractor A on Chicago’s North Avenue bridge reconstruction project. In addition, Perino’s companies allegedly acted as fraudulent pass-through WBE sub-contractors for Prime Contractor A on the Red Line and Brown Line projects for the Chicago Transit Authority, and Perdel Contracting is a DBE sub-contractor on Prime Contractor A’s Wacker Drive reconstruction project.

Perino, 57, of Willowbrook, was charged with mail fraud in a criminal complaint that was unsealed today. She was released on her own recognizance after appearing this morning before U.S. Magistrate Judge Maria Valdez in U.S. District Court. Both of her companies have been certified as a WBE and a DBE by government entities, including the City of Chicago and the Illinois Department of Transportation. Perino has served on IDOT’s Task Force for DBE Regulations.

In the second case, Anthony Cappello, 48, of Homer Glen, the owner of Diamond Coring, Inc., a Chicago concrete sawing and drilling company, was charged with one count of mail fraud in a criminal information filed today in Federal Court. Cappello allegedly obtained contracts worth more than $2.3 million by operating the Stealth Group, Inc., also known as SGI, as a fraudulently certified WBE and DBE. He will be arraigned at a later date in U.S. District Court. Cappello allegedly sought millions of dollars of sub-contracts, and fraudulently obtained more than $2.3 million, from the City of Chicago, Cook County, and the State of Illinois between 1999 and 2006.

“Illegally using companies to obtain work set aside for businesses owned by women or minorities cheats not only the governments that provide opportunities to bid on public contracts, but it also prevents legitimate minority- and women-owned businesses from competing to obtain work on such projects,” said Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois.

Mr. Fitzgerald announced the charges with Robert D. Grant, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; Michelle McVicker, Special Agent in Charge of the U.S. Department of Transportation Office of Inspector General in Chicago; James Vanderberg, Special Agent in Charge of the U.S. Department of Labor Office of Inspector General in Chicago; Joseph Ferguson, Inspector General for the City of Chicago; and Illinois Attorney General Lisa Madigan. The City of Chicago’s Department of Procurement Services assisted the investigation, which is continuing, the officials said.

United States v. Perino

The complaint alleges various instances in which Perino allegedly falsely represented to government entities that her companies were performing legitimate services on public works projects when, in fact, they were often acting only in a pass-through capacity, enabling prime and sub-contractors to secure large government contracts and avoid requirements intended to benefit women- or minority-owned and disadvantaged business enterprises.

According to the complaint affidavit, Perino acted as a pass-through on contracts with Prime Contractor A by billing for work that her companies did not perform, manage or supervise. In fact, Prime Contractor A negotiated prices with Perdel Contracting and ASI sub-contractors, determined quantity and quality of material, ordered the material, and installed the material. Perino and Prime Contractor A certified to the various government entities that Perino had performed work and Prime Contractor A took credit for pass-through payments made to Perino so that Prime Contractor A could meet its DBE goals.

The complaint charges that Perino engaged in a fraudulent scheme with an individual identified as CW1, who owns a company identified as Prime Contractor B that performs work for the City of Chicago and other government entities. CW1, who was cooperating with law enforcement at the time, had Prime Contractor B bid on a June 2011 city contract that required five percent WBE participation. At the direction of law enforcement, CW1 met with Perino to determine whether Perino would agree to use Perdel Contracting as a pass-through WBE for CW1 and Prime Contractor B’s bid on the June 2011 contract, which was worth $9 million the last time the city awarded a similar contract.

Perino and Individual A, an employee of her companies, allegedly agreed to have Perdel Contracting act as a pass-through WBE by performing street sweeping work normally done by Prime Contractor B by placing Prime Contractor B’s employees on its payroll to do the work; using Prime Contractor B’s equipment to perform the work; entering into a sham contract to “purchase” the street sweeping equipment from Prime Contractor B; titling the equipment in Perdel Contracting’s name; and having a side agreement to give the equipment back to Prime Contractor B for $1 when the contract ended. CW1 told Perino that he listed Perdel Contracting in his bid as $225,000 WBE sub-contractor. CW1 later told Perino that CW1 was the only bidder on the city contract.

In a conversation on June 27, 2011, CW1 told Perino that the city was conducting a compliance audit on a previous contract and that CW1 had to provide the city with information about MBE and WBE participation, stating that he had not met his goals. Two days later, CW1 met with Perino and her employee and told them that he needed to make-up approximately $140,000 in past WBE participation on the previous contract, dating back to January 2010. After further discussion, Perino allegedly said that CW1 would have to issue her a purchase order so Perdel Contracting could bill CW1 for past work that Perdel Contracting had never performed on the previous contract. Specifically, the complaint alleges that they agreed that Perdel Contracting would bill CW1 for work renting equipment to Prime Contractor B, which had never happened. After Prime Contractor B paid the false bill, Perino would return some of that money, creating a paper trail that would falsely show that the returned money was for the purchase of two of CW1’s street sweepers, thereby setting up the sham purchase contract that was part of the agreement to use Perdel Contracting as a pass-through WBE for Prime Contractor B’s bid on the June 2011 contract. The mail fraud charge alleges that on July 6 Perino sent CW1 false documents including a backdated estimate, a backdated letter of intent, a false invoice for $95,648, and a false certification of work so that Prime Contractor B could use the documents to falsely inform Chicago authorities that Perdel Contracting had provided $95,648 in equipment rentals to Prime Contractor B as of June 30, 2011, even though Perdel Contracting had not provided any such equipment.

United States v. Cappello

According to the charges, Cappello obtained certification for SGI as a WBE by falsely representing that Individual A controlled and owned SGI when she allegedly devoted only a minimal amount of time to SGI. In reality, the information alleges, the company was operated by Cappello and another individual. By fraudulently obtaining the certification and holding SGI out as a legitimate WBE, Cappello allegedly obtained business required by law to be set-aside for WBE businesses. Among the contracts that Cappello and SGI allegedly fraudulently obtained was a $1.1 million prime contract with the City of Chicago.

The charges allege that individuals on SGI’s payroll actually reported to Cappello and Diamond Coring. In addition, Diamond Coring employees were dispatched to perform work in Diamond Coring trucks bearing SGI logos to conceal the fact that SGI was not a legitimate WBE or DBE. As part of the scheme, Cappello allegedly caused SGI to represent that it had a business address at a location from which it never operated in order to conceal the fact that it was using Diamond Coring’s office space.

In both cases, the government is represented by Assistant U.S. Attorneys Brandon D. Fox and Margaret J. Schneider.

The mail fraud count in each case carries a maximum penalty of 20 years in prison and a $250,000 fine. As an alternative, the court may impose a maximum fine equal to twice the loss to any victim or twice the gain to any defendant, whichever is greater and restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The public is reminded that charging documents are not evidence of guilt. The defendants are presumed innocent and are entitled to fair trials at which the government has the burden of proving guilt beyond a reasonable doubt.

Former Public School Teacher Sentenced to More Than 19 Years in Prison for Collecting Child Pornography

ERIE, PA—A former teacher, coach, and referee has been sentenced in federal court to 235 months in prison and 30 years’ supervised release on his conviction of violating federal laws relating to the sexual exploitation of children, U.S. Attorney David J. Hickton announced today.

U.S. District Judge Sean J. McLaughlin imposed the sentence on David A. Rinke II, 40, of Erie.

According to information presented to the court, over the last 15 years Rinke amassed a collection of more than 50,000 images and movies depicting the sexual assault and rape of children, some as young as infants. Rinke, a former chemistry teacher at Collegiate Academy in Erie, also possessed on his computer groin shots of youths at what appeared to be high school sporting events. Rinke was caught when he distributed child pornography to an undercover FBI agent in Phoenix.

Prior to imposing sentence, Judge McLaughlin stated that Rinke was a predatory pedophile who represented a clear and present danger to the community.

Assistant U.S. Attorney Christian A. Trabold prosecuted this case on behalf of the government.

The FBI and the Pennsylvania State Police conducted the investigation leading to the successful prosecution of Rinke.

Stamford Mason Sentenced to Federal Prison for Structuring Cash Transactions to Evade Paying Taxes

David B. Fein, United States Attorney for the District of Connecticut, today announced that JOSEPH ROMANELLO, 46, of Stamford, was sentenced on Friday, February 10, by Chief United States District Judge Alvin W. Thompson in Hartford to 18 months of imprisonment, followed by three years of supervised release, for illegally structuring cash withdrawals to evade reporting income on his federal tax returns for the years 2003 and 2004. ROMANELLO pleaded guilty to offense on February 10, 2011.

Federal law requires all financial institutions to file a Currency Transaction Report (CTR) for currency transactions that exceed $10,000. To evade the filing of a CTR, individuals will often structure their currency transactions so that no single transaction exceeds $10,000. Structuring involves the repeated depositing or withdrawal of amounts of cash less than the $10,000 limit, or the splitting of a cash transaction that exceeds $10,000 into smaller cash transactions in an effort to avoid the reporting requirements. Even if the deposited funds are derived from a legitimate means, financial transactions conducted in this manner are still in violation of federal criminal law.

According to court documents and statements made in court, ROMANELLO earned income by providing masonry and landscaping services to Connecticut residents. Between approximately January 2003 and March 2005, ROMANELLO structured cash transactions of approximately $2 million by routinely withdrawing cash from various bank accounts he maintained in amounts at or slightly below $10,000 to prevent the financial institutions from filing CTRs. For the years 2003 and 2004, ROMANELLO did not file any federal income tax returns, and he failed to pay a total of more than $1 million in income taxes during those two years.

Today, Judge Thompson ordered ROMANELLO to file tax returns for the years 2003 and 2004, and to pay back taxes, penalties and interest in the amount of $2,736,885.69.

This matter was investigated by the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. The case was prosecuted by Senior Litigation Counsel Richard J. Schechter.

New Haven Man Sentenced to More Than Three Years in Federal Prison for Distributing Cocaine

David B. Fein, United States Attorney for the District of Connecticut, announced that VIRGIL JEFFERIES, 22, also known as “Mook” and “Murder Mook,” of New Haven, was sentenced today by Senior United States District Judge Ellen Bree Burns in New Haven to 41 months of imprisonment, followed by one year of supervised release, for distributing cocaine.

This matter stems from a joint law enforcement investigation conducted by the FBI New Haven Safe Streets Task Force, the DEA New Haven Task Force, the New Haven Police Department and the Hamden Police Department. Through the use of court-authorized wiretaps, investigating officers identified and dismantled a large drug trafficking organization that was centered in the Newhallville section of New Haven and Hamden, and was responsible for the distribution of crack cocaine and cocaine throughout the Greater New Haven area.

According to court documents and statements made in court, from June 2010 through October 2010, JEFFERIES was intercepted several times over a wiretap ordering distribution quantities of cocaine and crack cocaine from other members of the drug trafficking organization, which he then sold to his own customer base for profit.

On November 4, 2011, JEFFERIES pleaded guilty to one count of using a telephone to facilitate a narcotics trafficking felony.

Forty-seven individuals have been charged in federal court with various narcotics offenses as a result of this investigation.

U.S. Attorney Fein noted that federal prisoners are required to serve at least 85 percent of their sentenced term of imprisonment and are not eligible for parole.

This matter was investigated by the Federal Bureau of Investigation’s New Haven Safe Streets Task Force (composed of members of members of the New Haven, Ansonia, Milford, Hamden and East Haven Police Departments, the Connecticut State Police and the Connecticut Department of Correction), the Drug Enforcement Administration’s New Haven Task Force (composed of members of the New Haven, West Haven, Meriden, Ansonia, Hamden and Branford Police Departments), along with substantial participation by members of the New Haven and Hamden Police Departments. The United States Marshals Service also has assisted the investigation.

The investigation was funded in significant part by the United States Attorney’s Office Organized Crime Drug Enforcement Task Force and supported by the Office’s Project Safe Neighborhoods and Anti-Gang programs.

This matter is being prosecuted by Assistant United States Attorneys Christopher M. Mattei and Robert M. Spector.

Former U.S. Army Corps of Engineers Manager Pleads Guilty in Alleged $20 Million Bribery and Kickback Scheme

Scam Involved Steering of Government Contracts; Contractor Also Pleads Guilty to Charges Today

WASHINGTON—Michael A. Alexander, 55, a former program manager for the U.S. Army Corps of Engineers, pled guilty today to federal charges of bribery and conspiracy to commit money laundering in a scheme that allegedly involved more than $20 million in bribes and kickback payments and the planned steering of a $780 million government contract.

The plea was announced by U.S. Attorney Ronald C. Machen Jr.; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; Peggy E. Gustafson, Inspector General for the Small Business Administration (SBA); Robert E. Craig, Special Agent in Charge of the Mid-Atlantic Field Office of the Defense Criminal Investigative Service (DCIS); Eric Hylton, Acting Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI), and James K. Podolak, Director of the U.S. Army Criminal Investigation Command’s (CID) Major Procurement Fraud Unit (MPFU).

Alexander, of Woodbridge, Va., pled guilty before the Honorable Emmet G. Sullivan in the U.S. District Court for the District of Columbia. A sentencing date has not been set. The bribery charge carries a statutory maximum of 15 years in prison and the conspiracy charge carries up to 20 years of incarceration. The charges also carry potential fines, an order of restitution, and forfeiture of a money judgment for $1.25 million and specific property including cash, real property, bank account funds, and jewelry. As part of his plea agreement, Alexander agreed to cooperate in the government’s ongoing investigation.

At a separate and related hearing earlier today, also before Judge Sullivan, Robert L. McKinney, 51, pled guilty to bribery. McKinney was the president of Alpha Technology Group, one of the companies involved in the contracting scam. Alpha Technology Group was not one of the companies referenced in the original indictment returned against Alexander and others on September 16, 2011. A sentencing date for McKinney also has not been set.

As part of his plea agreement, McKinney agreed to forfeit about $245,000, representing the illegal proceeds he retained from the crime. He also agreed to cooperate in the government’s ongoing investigation.

***

“Today’s bribery and money laundering pleas relate to one of the largest procurement fraud scandals in our nation’s history and demonstrate this office’s steadfast commitment to holding accountable unscrupulous government officials, as well as the contractors who entice them with bribes and kickbacks,” said U.S. Attorney Machen. “Protecting the American taxpayer is one of our highest priorities and we will remain vigilant in the pursuit of those both inside and outside of the government who attempt to cheat the system and loot the public treasury.”

“Bribery and kickbacks have no place in government contracting,” said Assistant Director in Charge McJunkin. “The FBI and our partner agencies will continue to pursue those who engage in such criminal activity, as we work to protect federal funds and American taxpayers. We ask anyone with information about government fraud to contact the FBI.”

“Today’s announcement demonstrates the resolve of law enforcement to aggressively identify and prosecute individuals considering defrauding the federal government by deceit and bribery,” said SBA Inspector General Gustafson. “There are severe consequences associated with this form of criminal conduct, as this case uniquely demonstrates. The SBA OIG will relentlessly pursue fraud in government contracting programs to eliminate corruption, promote fair competition, and serve the American taxpayer.”

“Corruption of this nature recklessly deprives the hard-working men and women of the Defense Department of critical resources,” said Special Agent in Charge Craig. “Moreover, it undermines the public’s trust and confidence in Government. DCIS will continue to work tirelessly with our law enforcement partners to combat fraud and corruption within the procurement process and seek to ensure that those who engage in this type of criminal behavior are brought to justice.”

“The United States Army will not tolerate fraud or corruption or tolerate those who do,” said Director Podolak. “We will continue to diligently root out anyone involved in this type of illegal activity and our commitment to working shoulder to shoulder with other law enforcement agencies and the Department of Justice in this endeavor is stronger than ever. During the last 10 years alone, Army CID Special Agents have been instrumental in recovering and returning $2.1 billion dollars to the United States Treasury and the Army from fraudulent practices involving contractors.”

***

Alexander worked for the Army Corps of Engineers from 1979 until the time of his arrest, in October 2011. According to a statement of offense signed by Alexander, he was a program manager with the Directorate of Contingency Operations. In that position, Alexander had authority, among other things, to obtain funding for Army Corps of Engineers projects, including money for projects and programs placed through federal government contracts. He also was responsible for developing requirements for projects and programs. Alexander produced and actively managed a $54 million budget.

The scheme involved the Army Corps of Engineers and two contracts: the Technology for Infrastructure, Geospatial, and Environmental Requirements (TIGER) contract and the Contingency Operations Readiness Engineering & Support (CORES) contract.

The TIGER contract was used by authorized federal government agencies and departments to purchase products and services. It is what is known as an Indefinite Delivery/Indefinite Quantity contract. Authorized agencies and departments are not required to obtain three separate bids or to compare the TIGER contract to another contract before submitting an invoice for products and services through the TIGER contract.

The CORES contract was a planned contract, envisioned as an alternative or potential replacement to the TIGER contract. As planned, the CORES contract would be a five-year contract with an award potential for all contracts placed under it of up to $780 million. The CORES contract has not been issued for solicitation to potential prime contractors.

In his guilty plea, Alexander admitted to carrying out a bribery scheme with others. They included Kerry F. Khan, a colleague, who was then a program manager with the Army Corps of Engineers; Harold F. Babb, the former director of contracts at Eyak Technology LLC (EyakTek), an Alaska Native-owned small business; Alex N. Cho, the former chief technology officer of Nova Datacom, LLC, a provider of information assurance and security services to federal agencies and commercial companies, and McKinney, the president of Alpha Technology Group, Inc., a provider of program management services.

According to the statement of offense, in or around 2006, Alexander and Khan agreed to work together to obtain government contracts for corrupt contractors who would reward them with bribes. Khan had authority, among other things, to place orders for products and services for the Army Corps of Engineers through government contracts, including the TIGER contract, and to certify that the work on the contracts had been completed.

From May 2007 through October 2008, the Army Corps of Engineers awarded contracts and sub-contracts to Alpha Technology, totaling about $1,877,000. McKinney paid Khan a portion of the money that was received, and Khan provided Alexander with $99,100.

From May 2007 through October 2011, the Army Corps of Engineers awarded contracts and sub-contracts to Nova Datacom totaling more than $45 million.

All told, Alexander admitted receiving directly and indirectly about $1,150,000 of money and things of value from Nova Datacom and Cho. This included nearly $300,000 in checks and cash; $750,000 in wire transfers to an associate of Alexander’s in South Korea for the purchase of, among other things, a coffee shop called Seven Monkeys in Seoul; about $27,000 for the purchase of two designer watches for a member of Alexander’s family; employment of a family member at Nova Datacom, and other miscellaneous payments. Cho also promised Alexander future employment at Nova Datacom and $320,000 in additional payments. Indeed, on the morning of October 4, 2011, the date of his arrest, Alexander was expecting Cho to deliver a $20,000 payment to him.

In addition to these activities involving the TIGER contract, according to the statement of offense, Khan, Alexander, Babb and Cho agreed to steer the award of the CORES contract to Nova Datacom. This scheme was thwarted by the arrests of Alexander and others last fall.

Khan, 54, formerly of Alexandria, Va., Khan’s son, Lee Khan, 31, formerly of Fairfax, Va., and Babb, 60, formerly of Sterling, Va., were indicted along with Alexander on one count of conspiracy to commit bribery and wire fraud and aiding and abetting and causing an illegal act to be done, as well as one count of conspiracy to commit money laundering. Khan and Alexander also were indicted on one count of receipt of a bribe by a public official, and Babb was indicted on one count of unlawful kickbacks. Khan, Khan’s son, and Babb have pleaded not guilty to all charges in the case and are awaiting trial. Khan, Lee Khan, Babb, and Alexander have been in custody since their arrests in October.

Cho, 40, of Great Falls, Va., pled guilty in September 2011 to one count of conspiracy to commit bribery, money laundering, and wire fraud, and to defraud the United States, and one count of bribery. Another former Nova Datacom employee, Theodoros Hallas, 40, of Potomac, Md., the company’s former executive vice president, pled guilty to one count of conspiracy to commit wire fraud in October 2011. No sentencing date has been set for Cho or Hallas.

As part of his guilty plea today, McKinney signed a separate statement of offense that admitted that Alpha Technology had submitted fictitious and fraudulently inflated invoices that led to more than $1.8 million of payments to the firm. Some materials and services were provided, but, McKinney admitted, more than $850,000 of the expenses were fraudulent. Of this, he said, Alpha Technology kept about $245,395, and the rest allegedly was passed on to Khan directly and through a company controlled by another one of Khan’s family members.

To date, the United States has seized for forfeiture or recovered approximately $7.2 million in bank account funds, cash, and repayments, 16 real properties, five luxury cars, and multiple pieces of fine jewelry.

***

In announcing today’s developments, U.S. Attorney Machen, Assistant Director McJunkin, Inspector General Gustafson, Special Agent in Charge Craig, Acting Special Agent in Charge Hylton, and Director Podolak thanked those who investigated the case from the FBI’s Washington Field Office; the Office of the Inspector General for the Small Business Administration; the Department of Defense’s Defense Criminal Investigative Service; the Defense Contract Audit Agency; the Washington Field Office of the Internal Revenue Service-Criminal Investigation; and the Army Criminal Investigation Command. They also expressed thanks to the U.S. Marshals Service for its assistance on the forfeiture matter.

They also praised the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Michael K. Atkinson and Bryan Seeley of the Fraud and Public Corruption Section and Assistant U.S. Attorney Anthony Saler of the Asset Forfeiture and Money Laundering Section. Finally, they expressed thanks for assistance provided by former Special Assistant U.S. Attorney Christopher Dana; Forensic Accountant Maria Boodoo; Paralegal Specialists Tasha Harris, Shanna Hays, Taryn McLaughlin, Sarah Reis, Christopher Samson, and Nicole Wattelet, and Legal Assistants Jared Forney and Krishawn Graham.

CBP Officers and Border Patrol Agents at the Hidalgo Port of Entry Seize AK47 Style Rifle and Magazine During an Outbound Enforcement Operation

Hidalgo, Texas – U.S. Customs and Border Protection (CBP) officers and Border Patrol agents conducting outbound enforcement operations at the Hidalgo Port of Entry seized an AK-47-style rifle and magazine.

CBP officers and Border Patrol agents conducting outbound enforcement operations at the Hidalgo Port of Entry seized an AK-47-style rifle and magazine. 

On February 10, 2012, CBP officers and Border Patrol agents working outbound enforcement operations at the Hidalgo International Bridge came in contact with a maroon Ford Crown Victoria as it attempted to exit the United States and enter Mexico. The vehicle driver, identified as a 23-year-old Mexican citizen from Reynosa, Tamaulipas, Mexico was referred to secondary for further inspection. During the examination the driver attempted to flee toward Mexico but was quickly subdued by CBP officers and agents. In secondary, a search of the Ford resulted in the discovery of an AK-47 assault-type rifle and magazine hidden within the vehicle.

CBP officers seized the weapon and vehicle. The case has been referred to U.S. Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI) special agents for further investigation.

“Hidalgo CBP officers and Border Patrol agents working together on outbound enforcement prevented this assault rifle from being exported out of the U.S. and imported into Mexico in violation of federal law. I commend our officers and agents for their outstanding contribution to the seizure of this weapon and high capacity magazine,” said Efrain Solis, Port Director, Hidalgo/Pharr/Anzalduas 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.

Bogus “FBI Funds Notifications” E-Mails

The Baltimore FBI office is receiving a large number of telephone calls concerning e-mails supposedly from the FBI Director, the Baltimore Special Agent in Charge, or other top Bureau officials. These e-mails claim that you are the “rightful beneficiary” of large sums of money wired from the Central Bank of Nigeria but intercepted by the FBI and that you can release the funds by obtaining your “Diplomatic Immunity Seal of Transfer” through the Baltimore FBI office. The e-mails also threaten legal action against you, including arrest and detention, if you do not comply.

These e-mails are not from the FBI and entirely fraudulent. Please do not respond to them or contact our office. Instead, please report this scam to the Internet Crime Complaint Center at www.ic3.gov.

Below is an example of one of these e-mails (and note the many grammatical errors):

ATTENTION BENEFICIARY:

This is to officially inform you that it has come to our notice; the Federal Bureau Investigation (FBI) that the sum of $8.3 Million U.S Dollars is here in the United State of America in your name wired to you from the Central Bank of Nigeria but was intercepted by the Federal Bureau of Investigations (FBI) in Baltimore (Maryland) U.S.A. That is why we have decided to contact you directly to acquire the proper verifications and proof from you to show that you are the rightful owner of the fund, because the above mentioned amount is a huge amount of money, we want to make sure that money you are about to receive is legal and we need to verify that you are not involved in any terrorist movement and money laundry.

It has already been confirmed in your name, your funds and all other legal documents are right now in our custody in WASHINGTON D.C UNITED STATES OF AMERICA, waiting to be released to you, we have verified and Investigated that you are the rightful beneficiary to claim the funds, all we need from you is verification and proof by providing to this office the Hard Copy of your Diplomatic Immunity Seal of Transfer (DIST) due to the huge amount of money.

As a matter of national security, we are to serve and to protect the UNITED STATES OF AMERICA. The only advice we can give to you as at this time is to provide the required document so that your funds will be release to you, this funds are rightfully yours. If you do not have this documents in your possession, which I don’t think you do not have, You can obtain it from the FBI Special Agent in Charge in Baltimore (Maryland) here in the United States, using the following information:

Richard A. McFeely

FBI SPECIAL AGENT IN CHARGE

INVESTIGATIONS DEPARTMENT

BALTIMORE (MARYLAND) U.S.A

E-mail: investigationsunit@usa.com

PHONE: 410-265-8080 (Voice)

410-277-6677 (Fax)

We have done our verification on your FBI Identification Record and checked your criminal records, the only documents remaining now is the Diplomatic Immunity Seal Of Transfer(DIST) to “certisy” to us that the money you are about to receive is free from Terrorism and Money Laundry act and it is rightfuly yours.

You are to scan and forward the documents to us immediately if you have it with you, but if you don’t have it, you can get it from the FBI Special Agent in charge in Baltimore (Maryland) here in the States, you are to contact the Federal Bureau of Investigation (FBI) in Baltimore (Maryland) to obtain the above required document.

An FBI Identification Record and Diplomatic Immunity Seal of Transfer (DIST) are often referred to as a Criminal History Record or Rap Sheet, is a listing of certain information taken from fingerprint submissions retained by the FBI in connection with arrests and, in some instances, federal employment, citizenship, or military service.

An individual may request a copy of his or her own FBI Identification Record for personal review or to challenge information on the Record. Other reasons an individual may request a copy of his or her own Identification Record may include international adoption or to certify a requirement to live or work in a foreign country ( i.e., Diplomatic Immunity Seal Of Transfer, letter of good conduct, criminal history background, etc.).

NOTE: We have asked for the above documents to be made available the most complete and up-to date records possible for no criminal justice purposes before your fund could be released to you. You are here by advice to Contact the FBI in Baltimore (Maryland), through the e-mail address above to inquire from them on how you are going to get the required document if not in your possession at present.

You are to do this immediately if you really want your fund to be released to you and also if you do not want any legal action to be taken on you. We have already informed the FBI in Baltimore (Maryland) about the present situation, so go ahead and contact the FBI Special Agent in charge immediately.

Your fund is now in our custody and will only be released to you upon the confirmation of your Diplomatic Immunity Seal of Transfer (DIST) documents, after that the fund will be released to you immediately without any delay.

WARNING: Failure to produce the above requirement in the next 48 hours, legal action will be taken immediately by arresting and detaining you, justificatory and if found guilty, you will be jailed for ancillary support to terrorist, drug trafficker and money launderer. I believe you know this is a serious offense in the United States of America today. The F.B.I will not stop at any length in tracking down and persecuting any criminal who indulges in this criminal acts.

CONTACT HIM IMMEDIATELY FOR HIS ASSISTANCE IN GETTING YOU A DIPLOMATIC IMMUNITY SEAL OF TRANSFER (DIST) AND GET BACK TO US, SO THAT YOUR FUNDS CAN BE AUTHORIZED FOR FINAL RELEASED TO YOU.

FBI DIRECTOR

ROBERT S. MULLER

Man Who Received Child Pornography Sentenced

Defendant Who Received and Possessed Thousands of Child Pornography Images Sentenced to 120 Months in Prison

ALBANY, NY—United States Attorney Richard S. Hartunian, Clifford C. Holly, Special Agent in Charge, Federal Bureau of Investigation, Albany Division, and Joseph D’Amico, Superintendent of New York State Police, announced that LOGAN KLOTZ, age 30, of Troy, New York, was sentenced by United States District Court Judge Thomas J. McAvoy, in Federal District Court in Albany, on his guilty plea to one count of receiving child pornography. KLOTZ was sentenced to 120 months of imprisonment. Following his term of imprisonment, KLOTZ will be placed on supervised release for 15 years. KLOTZ was also ordered to: (1) have no unsupervised contact with minors; and (2) register with the New York State Sex Offender Registry Program.

In December 2010, investigators received information that KLOTZ was using a peer-to-peer computer file-sharing program to obtain child pornography. On December 15, 2010, investigators executed a search warrant at KLOTZ’s residence in Troy, New York and seized a computer and a hard drive that were used by KLOTZ to obtain, download, and save child pornography images. KLOTZ pled guilty on July 26, 2011, to receiving child pornography via the Internet.

This case was investigated by the Federal Bureau of Investigation and the New York State Police.

Strong and Thriving Partnerships

By Tracy Russo

The following post appears courtesy Laurie Robinson, Assistant Attorney General for the Office of Justice Programs (OJP).

Last week at the National District Attorneys Association (NDAA) Capital Conference, I was honored to receive the prestigious NDAA President’s Award and to deliver one of my last speeches as Assistant Attorney General.  The occasion provided me the opportunity to reflect on the Department of Justice’s productive partnership with state and local prosecutors.

The elected prosecutor plays an indispensable leadership role, embodying the will of the community to address its most pressing crime and justice problems.  In an era of diminishing resources and growing public safety responsibilities, that role is more important than ever.  I am proud that the Office of Justice Programs (OJP) continues to provide these professionals with the tools they need to do their jobs more effectively and efficiently.

Through our Bureau of Justice Assistance (BJA), we have awarded almost $18.5 million to state and local prosecutors’ offices to support mortgage fraud investigation and prosecution, joining our work to a Department- and Administration-wide effort to fight this crime.  NDAA has been a key training and technical assistance partner and is helping to develop a mortgage fraud training curriculum for prosecutors.

Prosecutors are also on the front line in our fight against child abuse and exploitation.  OJP’s Office of Juvenile Justice and Delinquency Prevention and NDAA’s National Center for Prosecution of Child Abuse have worked closely together to train and assist thousands of professionals who investigate and prosecute these cases.  Last year alone, we provided training to more than 12,500 people.

And prosecutors are central to reducing the influence of gangs.  With support from BJA, NDAA published a guide for prosecutors on the use of civil gang injunctions and has disseminated several thousand copies to jurisdictions across the nation.  As a result of a site visit to Ogden, Utah conducted under the auspices of this project, prosecutors won an injunction against the Ogden Trece gang that resulted in a 40 percent decline in gang graffiti and a drop in overall gang crime of 10 percent from the previous year.

These are among the many areas in which OJP is supporting the work of state and local prosecutors.  As I depart OJP at the end of February and hand over leadership to my Principal Deputy Assistant Attorney General, Mary Lou Leary – herself a former prosecutor – I am satisfied that, thanks to strong partnerships with organizations such as NDAA, we will continue to make important gains in public safety.

CBP Launches Border Radio Pilot

AM Radio System Installed to Inform Land Border Crossers

Washington– U.S. Customs and Border Protection today announced the installation of a pilot AM radio broadcast system, aimed to better inform the border crossing public. CBP has installed AM radio frequency transmitters at two ports of entry on the southwest border, Ysleta in El Paso, Texas and Lincoln-Juarez in Laredo, Texas in order to communicate important border crossing information to travelers.

CBP has transformed the way it does business at land ports of entry over the last few years and one of the key elements is the concept of active lane management. This concept allows infrastructure enhancements such as improved license plate readers and radio frequency identification (RFID) technology coupled with new Ready Lanes, light emitting diode (LED) signage and Trusted Traveler lanes (NEXUS, SENTRI, FAST) to facilitate the entry process for travelers.

Furthering this concept CBP believes an informed and educated traveler is an efficient traveler.

CBP is always looking for new and effective ways to communicate with the traveling public and the model of the AM transmitter, used by many highway and traffic authorities, hopes to prove an effective tool for CBP.

Information broadcast will include reminders of document requirements and how to use high-tech travel cards, information about CBP’s Trusted Traveler Programs, basic border crossing rules and regulations, and will allow the ability for each port of entry to update with emergency travel information or updates.

While in a pilot phase, CBP will monitor the effectiveness of this new tool in a few locations on the northern and southern borders. Analysis of the pilot will inform further system installations and messaging.

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.

Massachusetts Man Sentenced to 60 Months in Prison for Participating in International Child Pornography Ring

WASHINGTON – A Massachusetts man was sentenced today in Los Angeles to 60 months in prison, followed by 20 years of supervised release, for conspiracy to distribute child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California and Assistant Director in Charge Steve Martinez of the FBI’s Los Angeles Field Office.

Joseph Tierney, 24, of Wellesley, Mass., was sentenced by U.S. District Judge Virginia A. Phillips.  Tierney pleaded guilty in August 2011 to one count of conspiracy to distribute child pornography. 

Today’s sentencing is the result of an international investigation into the “Lost Boy” online bulletin board.  The Lost Boy bulletin board, according to court documents and proceedings, was dedicated to men who have a sexual interest in young boys and was established to provide a forum to trade child pornography.

Federal authorities, working in conjunction with a coalition of international law enforcement agencies, shut down the Lost Boy bulletin board approximately three years ago.  As a result of the investigation, 16 named defendants were charged in the United States and arrested for their roles in the bulletin board.  To date, 15 defendants have pleaded guilty or have been convicted at trial and one defendant passed away.  Six additional men have been charged with child molestation as a result of the investigation, which also led to the identification of 27 domestic victims of child abuse, some of whom were portrayed in images posted to the Lost Boy bulletin board.

According to court documents and proceedings, law enforcement authorities discovered the Lost Boy bulletin board after receiving information from Eurojust, the judicial cooperation arm of the European Union.  Eurojust provided U.S. law enforcement with leads obtained from Norwegian and Italian authorities indicating that a North Hollywood, Calif., man was communicating with an Italian national about child pornography and how to engage in child sex tourism in Romania.  Acting on the information from Europe, the FBI executed search warrants that led to the discovery of the Lost Boy network.  Further investigation revealed that Lost Boy had 35 members, 16 of whom were U.S. nationals.  Other members of the network were located in countries around the world, including Belgium, Brazil, Canada, France, Germany, New Zealand and the United Kingdom. 

According to court documents, Lost Boy had a thorough vetting process for new members, who were required to post child pornography to join the organization.  Once accepted, members were required to continue posting child pornography to remain in good standing and to avoid removal from the board.  According to court documents, Lost Boy members advised each other on techniques to evade detection by law enforcement, which included using screen names to mask identities and encrypting computer data.

International law enforcement efforts involving European law enforcement, the Brazilian Federal Police and other agencies have identified child molestation suspects in South America, Europe and New Zealand.  Three suspects in Romania, one in France and another in Brazil have been charged, and offenders have been convicted in Norway and the United Kingdom.  Law enforcement efforts have also identified dozens of child victims located in Norway, Romania, Brazil and other nations.

The investigation into the Lost Boy bulletin board was led by the FBI and the U.S. Postal Inspection Service, in conjunction with the Los Angeles-based Sexual Assault Felony Enforcement (SAFE) Team.  The High Technology Investigative Unit of the Child Exploitation and Obscenity Section (CEOS) in the Justice Department’s Criminal Division, along with Eurojust, have provided invaluable assistance during the investigation. 

The case is being prosecuted by Assistant U.S. Attorneys Joey L. Blanch and Yvonne Garcia of the Central District of California and CEOS Trial Attorney Andrew McCormack.

North Charleston Man Sentenced on Drugs and Gun Charges

Columbia, South Carolina — United States Attorney Bill Nettles stated today that Willie Mitchell, age 35, of North Charleston, South Carolina, was sentenced in federal court in Charleston for being a felon in possession of a firearm and possessing with intent to distribute crack cocaine. United States District David C. Norton sentenced Mitchell to 188 months imprisonment, followed by 6 years of supervised release.

Evidence presented at the change of plea hearing established that on December 21, 2009, the North Charleston Police Department executed a search warrant at Mitchell’s residence, where they found approximately six grams of cocaine base and a loaded handgun. Mitchell’s criminal history includes numerous prior convictions for drug and weapons offenses.

The case was investigated by agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the North Charleston Police Department, and was prosecuted as part of the joint federal, state and local Project CeaseFire initiative, which aggressively prosecutes firearm cases. Assistant United States Attorney Nick Bianchi of the Charleston office handled the prosecution of the case.

CBP Highlights Recent Trade Successes

Washington— U.S. Customs and Border Protection’s (CBP) commitment to streamlining and modernizing trade practices to benefit trade partners around the world has resulted in many successful accomplishments in the past year. CBP plays a unique role in securing and facilitating international trade today and this responsibility is crucial to maintaining U.S. economic competitiveness.

“CBP is fully committed to facilitating and modernizing the trade process,” said David V. Aguilar, CBP acting commissioner. “We can and will be a force for increased economic competitiveness for our nation.”

CBP remains committed to working with the trade community in partnership to further the successes and opportunities of the trade process. CBP has, in conjunction with the trade industry, worked to devise and test programs and processes that streamline work in ways that will benefit security and regulatory functions while strengthening the economic vitality of our nation, businesses and workers.

Programs such as the Customs and Trade Partnership Against Terrorism (C-TPAT) have grown from seven participating partners to more than 10,200 Certified Partners worldwide, showcasing how the greater efficiency that accompanies the increased predictability of moving goods can provide major cost savings for businesses. In addition to C-TPAT, ongoing efforts to protect America from the trade in counterfeit and pirated goods during fiscal year 2011 resulted in 24,792 seizures, a 24 percent increase over 2010.

CBP is continuing efforts to strengthen trade facilitation. For example, in the near future a notice of proposed rulemaking for the in-bond process will be published in the Federal Register. This rule proposes various changes to in-bond regulations enhancing CBP’s relationship with trade partners and building on its already successful trade processes. The public will have 60 days from publication to submit comments.

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.

FBI and San Diego Police Seek Public’s Assistance to Identify Chase Bank Robber

The FBI and the San Diego Police Department are seeking the public’s assistance to identify the unknown male responsible for robbing the Chase Bank, located at 4415 Imperial Avenue, San Diego, California, on Monday, February 6, 2012.

On Monday, February 6, 2012, at approximately 4:10 p.m., the Chase Bank, located at 4415 Imperial Avenue, San Diego, California, was robbed by an unknown male using a demand note. The robber threatened to be armed with a weapon, but a weapon was not observed. After receiving a sum of money the robber exited the bank and was last seen getting into the driver side of silver PT Cruiser.

Witnesses describe the robber as follows:

Sex:  Male

Race:  White
Age: Late 40s to early 50s
Height: Approximately 5’8” to 5’9” tall
Weight: Approximately 160-170 lbs.
Build: Slim
Hair/Coloring: Small beard patch under bottom lip
Clothing: “Stussy” brand beanie cap, green hooded zip up sweat jacket, eyeglasses with plastic rectangular shaped lenses and blue jean shorts

Anyone with information concerning this robbery is asked to contact the FBI at telephone number (858) 565-1255 (san.diego@ic.fbi.gov) or Crime Stoppers at (888) 580-TIPS (8477). You may remain anonymous by calling the FBI or Crime Stoppers.

CBP Stops Three Juvenile Drug Smugglers This Week

El Paso, Texas – U.S. Customs and Border Protection (CBP) officers working at El Paso area ports of entry made 17 drug busts this week, seizing 1,648 pounds of marijuana and small amounts of cocaine and heroin. Three of the marijuana busts involved people age 17 or younger.

“The number of juvenile drug smugglers we apprehended this week is greater than we typically see. Usually we average about three to four cases per month,” said Christopher Saindon, Acting CBP El Paso Director of Field Operations. “Parents should take note and talk to their children about the criminal consequences and dangers associated with drug smuggling.”

The most recent case occurred at the Ysleta port of entry on Wednesday when CBP officers discovered 22 pounds of marijuana hidden in a vehicle driven by a 16-year-old El Paso boy. He was arrested by El Paso County constables.

CBP officers working at the Columbus port of entry found two pounds of marijuana hidden in the back pack of a 14-year-old boy from Palomas, Mexico, on February 7. He was arrested by Border Operations Task Force officers.

On February 4, CBP officers working at the Bridge of the Americas located a little more than three pounds of marijuana attached to the body of a 17-year-old El Paso boy. No arrests have been made in that case.

CBP officers working in the El Paso area routinely recorded between 100-150 juvenile drug-smuggling apprehensions a decade ago. During fiscal year 2010 the number dropped to 40. A number of CBP outreach efforts including “Operation Detour” have helped reduce the incidence of juvenile drug-smuggling activity.

While anti-terrorism is the primary mission of U.S. Customs and Border Protection, the inspection process at the ports of entry associated with this mission results in impressive numbers of enforcement actions in all categories.

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.

CBP, ICE Release Report on 2011 Counterfeit Seizures

Washington – Theft of American intellectual property is a serious crime, and U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement announced today that their vigorous, ongoing efforts to protect America from the trade in counterfeit and pirated goods during fiscal year 2011 resulted in 24,792 seizures, a 24 percent increase over 2010.

Many fake goods seriously threaten the health and safety of American consumers and our national security. With this in mind, CBP and ICE continued to step up enforcement against these dangerous products resulting in a 44 percent increase in the number of seizures of health and safety products that could have harmed Americans. The value of these seizures soared to more than $60 million due to increases in pharmaceutical and perfume seizures.

Despite the significant increase in the number of seizures, the domestic value for seizures in fiscal year 2011 decreased by five percent to $178.9 million and the manufacturer’s suggested retail price declined slightly to $1.1 billion. This is primarily due to a shift toward using international mail, express courier and consolidated shipping services to import counterfeit and pirated goods.

“The growth of websites selling counterfeit goods directly to consumers is one reason why CBP and ICE have seen a significant increase in the number of seizures at mail and express courier facilities,” said Acting CBP Commissioner David V. Aguilar. “Although these websites may have low prices, what they do not tell consumers is that the true costs to our nation and consumers include lost jobs, stolen business profits, threats to our national security, and a serious risk of injury to consumers.”

“I'm very proud of the unrelenting efforts of the ICE-led National Intellectual Property Rights Coordination Center and our law enforcement partners," said ICE Director John Morton. "IP enforcement is a high priority for ICE and CBP because the trade in counterfeit and pirated goods robs Americans of jobs and puts their safety at risk, costs legitimate businesses billions of dollars in revenue, and fuels criminal activity. In fiscal year 2012, ICE and CBP will continue to focus on keeping these goods off the streets and bring those responsible for producing and distributing them to justice."

China continues to be the number one source country for counterfeit and pirated goods seized, accounting for 62 percent or $124.7 million of the total domestic value of seizures.

For the first time since FY 2005, footwear was not the top commodity seized in fiscal year 2011. Consumer electronics were the top commodity seized, and approximately one-third of this category was represented by IPR infringing cellular phones.

The top 10 categories of IPR-infringing products seized were pharmaceuticals, health/personal care, eyewear/parts, critical technology components, electronic articles, cigarettes, perfumes/colognes, batteries, exercise equipment and transportation/parts.

As the federal agency responsible for the management, control and protection of U.S. borders, CBP is on the frontline of IPR enforcement. The men and women of CBP protect our nation’s economy, the safety of its people, and our national security against harm from counterfeit and pirated goods. The continued vigilance of CBP personnel protects U.S. citizens and businesses every day.

As the largest investigative arm of the Department of Homeland Security, ICE Homeland Security Investigations plays a leading role in targeting criminal organizations responsible for producing, smuggling, and distributing counterfeit products. ICE HSI focuses not only on keeping counterfeit products off our streets, but also on dismantling the criminal organizations behind such illicit activity.

The National Intellectual Property Rights Coordination Center is one of the U.S. government's key weapons in the fight against criminal counterfeiting and piracy. The IPR Center uses the expertise of its 19 member agencies to share information, develop initiatives, coordinate enforcement actions, and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and the war fighters.

FBI, San Diego Police, and San Diego Sheriff’s Department Seek Public’s Assistance to Identify Serial Bank Robber

Latest Robbery: Home Bank of California Bank

The FBI, San Diego Police, and San Diego Sheriff’s Department are seeking the public’s assistance to identify the unknown male believed responsible for three bank robberies dating back to January 17, 2012. The latest robbery was on Monday, February 6, 2012, with the robbery of the Home Bank of California, 875 Garnet Avenue, San Diego, California.

On Monday, February 6, 2012, at approximately 9:10 a.m., the Home Bank of California, located at 875 Garnet Avenue, San Diego, California, was robbed by an unknown male who threatened to be armed with a weapon. The robber made a verbal demand for cash and simulated he had a weapon by lifting his shirt. After receiving a sum of money the robber walked out of the bank. No weapon was observed and no injuries reported.

This same individual is believed to be responsible for robbing the Pacific Western Bank, located at 9955 Mission Gorge Road, San Diego, California, on Tuesday, January 17, 2012 and Monday, January 23, 2012.

Witnesses describe the robber as follows:

Sex: Male

Race: White
Age: Approximately 40 years old
Height: Approximately 6’0””tall
Weight: Approximately 180 lbs.
Build: Medium
Eyes: Unknown
Hair/Coloring: Grey scruffy beard
Clothing: White tee shirt, blue jeans, navy blue jacket with zipper, and baseball hat

Anyone with information concerning this robbery is asked to contact the FBI at telephone number (858) 565-1255 (san.diego@ic.fbi.gov) or Crime Stoppers at (888) 580-TIPS (8477).You may remain anonymous by calling the FBI or Crime Stoppers.

Brockton Man Sentenced on Narcotics Offense

BOSTON—A Brockton man was sentenced today in federal court on a distribution of cocaine base charge.

Frank Miranda, 33, was sentenced today by U.S. District Court Judge George A. O’Toole, Jr., to 92 months in prison to be followed by six years of supervised release after Miranda pled guilty on Sep. 14, 2011, to one count of distribution of over five grams of cocaine base. Had the case proceeded to trial, the evidence would have proven that on or about July 9, 2009 Miranda sold six grams of crack cocaine in Brockton to an undercover cooperating witness in exchange for $350.

United States Attorney Carmen M. Ortiz; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation-Boston Field Division; Plymouth County District Attorney Timothy J. Cruz; Colonel Marian McGovern, Superintendent of the Massachusetts State Police; and Chief William K. Conlon of the Brockton Police Department made the announcement today. The case was being prosecuted by Assistant U.S. Attorney Suzanne Sullivan of Ortiz’s Major Crimes Unit.

Toy Company Owner Sentenced for Defrauding Bank and Investors Out of Approximately $9 Million

MINNEAPOLIS—Earlier today in federal court in St. Paul, the owner of a toy company was sentenced for defrauding a bank and 42 investors out of approximately $9 million. United States District Court Judge Paul A. Magnuson sentenced Sandra Lee Calkins, age 67, formerly of Eden Prairie, to 66 months in prison on one count of bank fraud in connection to her crime. Calkins, the owner of Princess Soft Toys, Inc., was charged on April 29, 2011, and pleaded guilty on May 26, 2011.

In her plea agreement, Calkins admitted that between January of 2008 and March 5 of 2010, she falsified financial statements regarding her company in order to renew a $3.25 million line of credit at Central Bank. Calkins, who handled the financial affairs for the company, admittedly included in those statements false information relative to revenue and net assets. As a consequence of the fraud, the credit line was renewed, and Calkins made multiple draws against it totaling $3,575,000. Central Bank suffered a loss of approximately $1.6 million.

Calkins also admitted that between January of 2008 and 2010, she defrauded individuals into investing or loaning money to Princess Soft Toys through false financial statements or other misrepresentations. The total losses to individual investors exceeded $7 million.

This case was the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division. It was prosecuted by Assistant U.S. Attorney Tim Rank.

New Orleans Man Sentenced to Three Years in Prison for Crimes Involving the Sexual Exploitation of Children

NEW ORLEANS—MICHAEL T. DRURY, age 55, a resident of New Orleans, was sentenced today by U.S. Judge Martin L.C. Feldman to a term of 36 months in prison, followed by a 10-year period of supervised release and a $5,000 fine, after previously pleading guilty to felony crimes involving the sexual exploitation of children, announced United States Attorney Jim Letten.

According to court documents, DRURY was found to be in possession of computers that contained dozens of images depicting the sexual victimization of minor children. The images depicted children less than 18 years of age, some of whom were less than 12 years of age, engaged in sexually explicit conduct.

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 www.projectsafechildhood.gov.

This case was investigated by special agents from the Federal Bureau of Investigation. The prosecution of this case was handled by Assistant United States Attorney Jordan Ginsberg.