Stephen E. Vogt Named Special Agent in Charge of Baltimore Division

Director Robert S. Mueller, III has named Stephen E. Vogt special agent in charge of the FBI’s Baltimore Division. Mr. Vogt most recently served as the legal attaché in Kabul, Afghanistan.

Mr. Vogt began his career as a special agent with the FBI in August 1989. He first reported to the Cleveland Division, where he investigated white-collar crime, public corruption, organized crime, and drug cases and was also a member of the SWAT team. While there, he received the FBI Director’s Award and the Attorney General’s Award for his work on a law enforcement corruption investigation. In 1999, Mr. Vogt was promoted to supervisory special agent of a drug task force/High Intensity Drug Trafficking Area Group (HIDTA) and was named the 2004 HIDTA Task Force Commander of the Year by the Office of National Drug Control Policy.

In 2005, Mr. Vogt was promoted to team leader in the Inspection Division at FBI Headquarters in Washington, D.C. In this capacity, he managed teams of supervisors over a 12-month period as they conducted on-site inspections of field offices throughout the United States.

Mr. Vogt reported to the U.S. Embassy in Baghdad, Iraq in 2006, where he served as an assistant legal attaché and investigated kidnappings, hostage matters, and general criminal activity.

In 2007, Mr. Vogt was promoted to an assistant special agent in charge of the Washington Field Office. He oversaw the cyber, gang/criminal enterprise, organized crime, and violent crime programs. During this time, he also worked with the Baltimore Division to establish a Cross Border Task Force in Prince George’s County, Maryland, aimed at combating violent gangs in the county.

Mr. Vogt reported to Kabul, Afghanistan as legal attaché in 2010. In this capacity, he was responsible for all FBI personnel and operations throughout the country.

Mr. Vogt earned a Bachelor of Arts degree in English Literature from Washington & Lee University and a Juris Doctorate degree from the University of Baltimore. He is married and has three children.

Wilmington Man Sentenced for Investment Fraud Schemes

RALEIGH—United States Attorney Thomas G. Walker announced that in federal court today Joseph A. Leonard, 44, was sentenced by United State District Judge Earl Britt to 210 months’ imprisonment; three years’ supervised release; and was ordered to pay a $100 special assessment and $996,984.80 in restitution. On May 7, 2012, Leonard pled guilty to securities fraud, in violation of Title 15, United States Code, Section 75j(b), and

Title 17, Code of Federal Regulations, Section 240.10-b5. Leonard, a former resident of Southport, North Carolina, was a financial advisor who owned and operated Coastal Investment Advisors and Leonard Capital Management. Additionally, he was the author of “Your Money, Your Rights, Your Retirement,” published in 2006, and the “Retirement Vault,” published in 2008.

An investigation by the Federal Bureau of Investigation (FBI) determined that Leonard forged stock certificates of a company known as Proton Therapies, USA (PT-USA). Subsequently, Terry Sanford without the prior knowledge or authorization of the CEO and board of directors of PT-USA, Leonard sold these forged stock certificates, purportedly worth $1,600,000, to 55 individuals—including members of his own family—in the Wilmington, North Carolina area and elsewhere. Leonard sold forged stock certificates to the 55 victims in this case and pocketed the cash for himself.

Additionally, Leonard committed a parallel investment fraud scheme, selling fake certificates of deposit (CDs), purportedly offering an annual interest rate of 4.05 percent. Leonard sold in excess of $996,000 in these fake CDs to 10 individuals in the Wilmington, North Carolina area and elsewhere. As part of this fraud scheme, Leonard sent these individuals false monthly account statements showing regular growth in these CDs. In fact in and in truth, these CDs did not exist and Leonard had pocketed the cash for himself.

Investigation of this case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney Evan Rikhye is serving as prosecutor for the government.

Former Mayor of Barceloneta Sentenced to 120 Months in Prison

SAN JUAN—Today, Sol Luis Fontanes-Olivo, former mayor of the municipality of Barceloneta, Puerto Rico, was sentenced to 120 months (10 years) in prison, a $150,000 fine, forfeiture of $60,000, and three years of supervised release, by United States District Court Judge José A. Fusté, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. Fontanes-Olivo was charged for bribery concerning programs receiving federal funds.

Another co-conspirator involved in this bribery scheme was Francisco A. Pumarejo-Rodríguez, former planning director for the municipality of Barceloneta since 1993. Among Pumarejo-Rodríguez’s duties was the coordination of planning and budget matters on behalf of Barceloneta. He was sentenced on August 17, 2012, to time served and five years of probation.

Juan Antonio San Miguel and Developer A were contractors who were doing business with the municipality of Barceloneta. According to the indictment, defendants Fontanes-Olivo and Pumarejo-Rodríguez, aiding and abetting each other, being agents of the municipality of Barceloneta, did knowingly accept and agree to accept a thing of value from a person, approximately $50,000 from Developer A and $40,000 from San Miguel, both intending to be rewarded in connection with a business. The sentence for San Miguel is scheduled for October 10, 2012, at 9:30 a.m.

During previous hearings held in court, the U.S. Attorney’s Office showed audio and video recordings of Fontanes-Olivo making arrangements for payments and receiving the same. The bribe payments were picked up by Pumarejo-Rodríguez who in turn delivered the payments to Fontanes-Olivo. The payments were kickbacks corruptly solicited by the mayor in relation to the sale of properties in the municipality. The payments received by the mayor exceeded $50,000.

“This sentence reflects the serious nature of the offenses charged in this corruption case. Dishonest public officials who request illegal payments from contractors as a regular course of business do not serve the interests of their constituents,” said U.S. Attorney Rosa Emilia Rodríguez-Vélez. “We hope that this tough sentence sends a clear message that this conduct is reprehensible and carries serious consequences”.

“Public corruption is unacceptable because it undermines the faith citizens should have in their government officials, and it severely weakens the image of public service,” said Joseph Campbell, Special Agent in Charge of the FBI-San Juan Field Office. “The FBI has always encouraged individuals with information about any public corruption scheme to assist us in the fight against such an insidious threat.”

This case was investigated by the FBI and is being prosecuted by AUSA Charles Walsh.

Philadelphia Foreclosure Rescue Scammers Sentenced to Serve Time in Prison

PHILADELPHIA—Anthony J. DeMarco III, 33, of Conshohocken, Pennsylvania, was sentenced today to serve 25 years in prison for conspiracy and fraud charges in connection with a mortgage fraud scheme involving more than $30 million in loans. Between 2006 and 2009, DeMarco owned and operated DeMarco REI Inc., a foreclosure rescue company. In addition to DeMarco, three others charged in the conspiracy pleaded guilty and were also sentenced today. Michael Richard Roberts, 30, of Swedesboro, New Jersey, was sentenced to 10 years in prison; Sean Ryan McBride, 38, of Pittsburgh, was sentenced to 63 months in prison; and Eric Bascove, 39, of Blue Bell, Pennsylvania, was sentenced to 41 months in prison. DeMarco pleaded guilty March 20, 2012, to a 15-count indictment charging conspiracy, mail fraud, wire fraud, bank fraud, and money laundering. U.S. District Court Judge Michael M. Baylson presided over the sentencing hearings. Fines and restitution are pending.

DeMarco REI was headquartered in Philadelphia and employed Roberts and Bascove, among others. Roberts was the vice president of sales. DeMarco’s business claimed to be able to assist homeowners facing imminent foreclosure. Between June and December 2008, the defendants would scour public records filings to find homeowners in financial distress and pitch a “sale-leaseback” arrangement to them. The pitch was that DeMarco REI would buy the homeowner’s house, the homeowner would remain in the house and pay rent to DeMarco REI, and when the homeowner got back on his or her feet financially, the homeowner could buy back the house. The defendants solicited straw buyers for properties, used fraudulent documents to obtain mortgage loans from lenders, stole the sellers’ equity in the homes at closing, and eventually failed to make the monthly mortgage payments. DeMarco used the sellers’ equity to run his company and to pay lavish personal expenses. The houses went into foreclosure with the straw buyers listed on the mortgage, the original homeowners facing eviction from their homes, and the mortgage lenders stuck with loans in default. Only one couple ever acquired the means to repurchase their home, but after they wired approximately $245,000 to DeMarco at his direction and for that purpose, DeMarco instead used their money to purchase a Ferrari for himself and jewelry for his girlfriend and to pay miscellaneous expenses.

McBride was a title agent and chief financial officer at Settlement Engine Inc. in Pittsburgh. Settlement Engine closed approximately 30 loans for DeMarco REI from June 2008 to early December 2008. McBride pleaded guilty to conspiracy, wire fraud, and bank fraud; Roberts pleaded guilty to conspiracy, wire fraud, and bank fraud; Bascove pleaded guilty to conspiracy and bank fraud.

At the time of indictment, the U.S. Attorney’s Office for the Eastern District of Pennsylvania’s Civil Division filed a verified complaint and temporary restraining order to help the original homeowners save their homes. The complaint and temporary restraining order sought novel relief that would bring all the individuals and entities that have a stake in the homes before the court in an orderly process by which the damage caused by the defendants’ alleged fraud could be mitigated. In 2011, U.S. District Court Judge Michael Baylson approved conversion of the temporary restraining order into an injunction that stopped foreclosures and evictions that were related to the alleged fraud and that set forth the details of the mediation process. Currently, the majority of the banks and the original homeowners are still in the process of attempting to reach resolutions.

The case was investigated by the Pennsylvania Department of Banking, the FBI, and the U.S. Postal Inspection Service. The criminal case is being prosecuted by Assistant U.S. Attorney Karen L. Grigsby. The civil case is being handled by Assistant U.S. Attorney Stacey L. B. Smith.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

Quincy Man Admits to Running Illegal Gambling Business in Boston’s Chinatown, Using Violence to Collect Debts

BOSTON—As part of an ongoing investigation into extortion and illegal gaming in Boston’s Chinatown, a Quincy man pleaded guilty late Friday to running an illegal gambling business. The investigation included a court-authorized wiretap on the defendant’s phone and a series of consensual video-recordings made inside gambling dens.

Minh Cam Luong, a/k/a “Ming Jai,” 48, pleaded guilty to an 11-count indictment charging him with running an illegal gambling business and using threats of violence and actual violence to collect debts from gamblers and others who borrowed money. United States District Judge Patti B. Saris set sentencing for January 14, 2013.

Luong admitted that he managed the illegal gambling business and that numerous people were victims of his extortionate collections scheme. Luong’s business ran a series of three illegal gambling dens, on Edinboro Street, Harrison Avenue, and Beach Street in Chinatown, from early July 2009 through June 2011. The gambling dens offered high-stakes gambling on Chinese table games. The most lucrative game was “pai gau,” in which the gamblers play against each other, not against the “house.” The “house” collects a five percent commission on every winning hand, and the winnings on each hand could range from hundreds to tens of thousands of dollars.

Luong and his company lent large amounts of money to gamblers and others. When debtors did not pay, Luong and his associates threatened to come after them and beat them up. Others, including the operators of other Chinatown gambling dens, were beaten up in order to maintain Luong’s “face” and his ability to collect debts from frightened debtors.

During one of the intercepted conversations, Luong told a criminal associate that he had opened his illegal gambling business in Boston rather than in New York, because Boston was “like the countryside,” but “quite wealthy,” and “these country folks don’t know anything.” Luong said that his Beach Street gambling den had made $100,000 during a three-day period around Chinese New Year 2011 and that normally, the gambling den generated $60,000 or $70,000 per week in profits.

In several other intercepted conversations and voicemail messages, Luong threatened debtors with dire consequences if they did not pay up. Luong told one debtor that the debtor’s whole family would “go to hell” if he did not pay. Luong told the debtor about someone else whom Luong had beaten up the previous night and warned the debtor that the same could happen to him. Luong told another debtor that she should not think that her being a woman would prevent Luong from beating her up if she did not pay.

Luong faces up to 20 years in prison on each of the 10 extortionate collections counts and up to five years in prison on the illegal gambling business count. Luong also faces up to three years of supervised release and a fine of up to $250,000 per count.

To date, nine of the 10 defendants charged in the initial indictment have pleaded guilty to illegal gambling business or extortionate collections conspiracy charges. The case is still pending against Hin Pau, a/k/a “Ah-Bo,” a/ka/ “Bao,” who was charged, along with two additional defendants, in a superseding indictment returned by the grand jury on August 16, 2012.

United States Attorney Carmen M. Ortiz; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation-Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Services-Criminal Investigation in Boston made the announcement. The cases are being prosecuted by Assistant U.S. Attorneys Richard L. Hoffman and Timothy E. Moran of the Organized Crime Strike Force Unit.