Leader of International Sex Trafficking Organization Pleads Guilty

SAVANNAH, GA—Joaquin Mendez-Hernandez, a/k/a “El Flaco,” 35, formerly of Mexico, pled guilty last week before Senior United States District Court Judge B. Avant Edenfield to his role in a sex trafficking organization that operated in Savannah, Georgia; parts of Florida, South Carolina, and North Carolina; and in Mexico. Mendez-Hernandez faces a possible life sentence for his role in the sex trafficking organization.
Each of the 23 defendants charged earlier this year in an operation dubbed Dark Night has pled guilty. Two additional defendants, Eugenio Prieto-Hernandez and Daniel Ribon-Gonzalez, remain fugitives. Operation Dark Night represents the largest sex trafficking investigation ever prosecuted in the Southern District of Georgia.
According to evidence presented during numerous guilty pleas, local and federal law enforcement agencies identified and dismantled an international sex trafficking enterprise that spread from Mexico to Savannah, Georgia. Members of the organization enticed women from Mexico, Nicaragua, and elsewhere to travel to the United States with false promises of the American dream. Once inside the United States, these women were threatened and forced to commit acts of prostitution at numerous locations in Savannah and throughout the southeast. Women were forced to engage in sexual activity with as many as 30-50 people a day. To make sure the women complied, members of the organization threatened the women, used violence against the women, and held children hostage in Mexico. Members of the organization would also trade their victims to other members who operated in other states.
United States Attorney Edward Tarver stated, “It is with great pride that I announce the convictions of all of the defendants who were indicted and arrested in connection with Operation Dark Night. This case serves as an example of how local and federal law enforcement can work together to rescue women, save lives, and prosecute criminals. In this case, justice was swift, and we expect the punishment to be severe.”
“The conviction of the monsters arrested in this heinous sex trafficking scheme marks the end of a life of misery inflicted on these innocent victims of human trafficking. The perpetrators, ranging from street-level customers to international sex traffickers, will be held accountable for their repeated victimization and exploitation of these vulnerable women,” said Brock D. Nicholson, Special Agent in Charge, Homeland Security Investigations (HSI) Atlanta. “We are deeply gratified by the significant support we received from our law enforcement partners, non-governmental service organizations, and the U.S. Attorney’s Office for the Southern District Georgia for bringing Operation Dark Night to a successful conclusion.”
The 23 defendants who pled guilty in Operation Dark Night are:

• Joaquin Mendez-Hernandez, a/k/a “El Flaco,” 35, Savannah, Georgia
• Juan Carlos Pena, 55, Bonaire, Georgia
• Luisa Capilla-Lancho, a/k/a “Marisol” 32, Savannah, Georgia
• Jorge Lira-Xochicale, a/k/a “Roger,” a/k/a “Juan De Dios,” a/k/a “Juan Diablo,” 35, Atlanta, Georgia
• Mayer Sanchez-Calderon, a/k/a “Maye,” 22, Charlotte, North Carolina
• Claudio Sanchez-Calderon, a/k/a “Borrego,” 43, Charlotte, North Carolina
• Omar Peralta-Rodriguez, a/k/a “Erick Peralta,” a/k/a “El Negro,” 42, Baxley, Georgia
• Neurby Celenia Diaz, a/k/a “Dona Rosa,” 48, Baxley, Georgia
• Antonio Ubaldo Mendez-Lopez, 46, Naples, Florida
• Cesar Aguilar-Rebollar, a/k/a “Cesar Nicholas Jaime,” 44, Tampa, Florida
• Sylvia Barrera, 30, Warner Robbins, Georgia
• David Reyes, 29, Savannah, Georgia
• Antonio Ramirez-Catalan, a/k/a “Joel,” 30, Monroe, North Carolina
• Jose Ricardo Vazquez-Garcia, 39, W. Columbia, South Carolina
• Marisol Ferreriras, 38, Marietta, Georgia
• Paresh Patel, 55, Savannah, Georgia
• Sergio Valazquez Martinez, 35, Savannah, Georgia
• Fernando Pelayo Silverio, 27, Savannah, Georgia
• Arturo Salquil- Gomez, 41, Savannah, Georgia
• Jose Hernandez-Trujillo, 29, Savannah, Georgia
• Silvstre Aguilar Sayago, a/k/a “Chucky,” 27, Savannah, Georgia
• Rodolfo Hernandez Guiterrez, 44, Savannah, Georgia
• Alex Martinez Monzon, 36, Savannah, Georgia

Many of these defendants are awaiting sentencing.
Twelve victims were rescued as part of Operation Dark Night. HSI provides relief to victims of human trafficking by allowing for their continued presence in the United States during criminal proceedings. Victims may also qualify for a T-visa, which is issued to victims of human trafficking who have complied with reasonable requests for assistance in investigations and prosecutions. Anyone who suspects instances of human trafficking is encouraged to call the HSI tip line at 1-866-DHS-2-ICE (866-347-2423) or the Human Trafficking Hotline at 1-888-373-7888. Anonymous calls are welcome.
Operation Dark Night was led by HSI, with assistance from the FBI, ATF, U.S. Customs and Border Protection (CBP), CBP Air and Marine Operations, IRS-Criminal Investigations, Coast Guard Investigative Services, Savannah-Chatham Metropolitan Police Department, Chatham County Sheriff’s Office, Garden City Police Department, and Chatham County Counter Narcotics Team. Assistant United States Attorneys Tania D. Groover and E. Greg Gilluly, Jr. are prosecuting the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.

New York Man Convicted of Sex Trafficking Females

PHILADELPHIA—Justin Williams, a/k/a “New York Ice," a/k/a “Pimp Juice," 39, of New York, New York, was convicted today of sex trafficking young women. Between November 2011 and January 2012, Williams recruited young females to work as prostitutes in his business who were advertised on the Internet for purchase, using locations such as Backpage, for purposes of prostitution. Williams engaged in acts of physical violence to force the victims to remain in his business. The advertisements featured pictures of the victims, scantily clad; the price; and a phone number to call to arrange a meeting with a female. Williams forced the victims to engage in sex acts with clients.
Williams exploited at least three females ranging in age from 18 to 27. He moved them between Philadelphia, New York, Atlantic City, and Washington, D.C., for purposes of prostitution. He was convicted on two counts of sex trafficking by force and one count of witness tampering for writing a letter to Victim #2 to retract her statement prior to trial.
Williams faces a 15-year mandatory minimum prison sentence on the sex trafficking counts with a maximum sentence of life. U.S. District Court Judge J. Curtis Joyner scheduled a sentencing hearing for January 23, 2014.
This case was investigated by the Federal Bureau of Investigation and Arlington (Virginia) County Police Department, with assistance from the Philadelphia First Judicial Court Warrant Unit and the New York City Police Department. It is being prosecuted by Assistant United States Attorney Michelle Morgan.

Harrisburg Man Charged Federally with Firearm Violation as Result of Drug Transaction Dispute

The United States Attorney’s Office for the Middle District Pennsylvania announced that a federal grand jury in Harrisburg returned an indictment Wednesday charging Anderson Ortiz, age 34, of Harrisburg, Pennsylvania, for possessing a firearm after being convicted of a felony.
According to United States Attorney Peter J. Smith, the charge resulted from a May 31, 2013 incident in Harrisburg in which weapons were fired during an alleged dispute over drugs.
The case was investigated by the FBI and the Harrisburg Police Department as part of an on-going coordinated effort to combat drug violence in Harrisburg.
Prosecution is assigned to Assistant United States Attorney Joseph J. Terz.
Indictments and criminal informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 10 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the judge is also required to consider and weigh a number of factors, including the nature, circumstances, and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public, and provide for the defendant’s educational, vocational, and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.

FBI Seeks Public Assistance in Locating Robert T. Rodriguez, Wanted on Federal Criminal Charges

FBI agents are looking for the public’s assistance in locating Robert T. Rodriguez. He has federal criminal charges against him from an investigation by FBI San Diego. Rodriguez was last known to be in the Suffolk County area on Long Island. He is believed to have family in Patchogue area of Long Island.
Rodriguez, pictured below, is 26 years old, 5'8" tall, and approximately 160 pounds. He has hazel eyes and is bald. He has a tattoo on his left forearm.

Rodriguez has ties to a Eurasian criminal organization that allegedly conducted a multi-million-dollar tax fraud. Rodriguez is one of 18 charged in a cross-country case. The charges against him include defrauding a financial institution. He is not considered to be violent in nature.
An indictment is out of the U.S. District Court for the Southern District of California. Rodriguez and his co-conspirators allegedly opened seed accounts under fictitious business at national banks and then funded a bust-out account at Bank of America (BoA) with funds from the seed accounts. They allegedly transferred funds between the accounts to induce BoA to reduce the length of hold placed on funds. With that, the co-conspirators wrote bad checks from the seed accounts to deposit in the bust-out account and withdrew the funds before the bank within minutes or hours after BoA lifted the hold on the check but before determining the issuing account had insufficient funds. They co-conspirators fraudulently withdrew the money at ATMS or at branch locations. Using more than 60 bust-out accounts, the co-conspirators defrauded BoA of more than $680,000.
Anyone with information as to the whereabouts to Rodriguez is urged to contact law enforcement immediately. The FBI can be reached 24 hours a day at 212-384-1000.

Nine Automobile Parts Manufacturers and Two Executives Agree to Plead Guilty to Fixing Prices on Automobile Parts Sold to U.S. Car Manufacturers and Installed in U.S. Cars

WASHINGTON—Nine Japan-based companies and two executives have agreed to plead guilty and to pay a total of more than $740 million in criminal fines for their roles in separate conspiracies to fix the prices of more than 30 different products sold to U.S. car manufacturers and installed in cars sold in the United States and elsewhere, the Department of Justice announced today. The department said that price-fixed automobile parts were sold to Chrysler, Ford, and General Motors, as well as to the U.S. subsidiaries of Honda, Mazda, Mitsubishi, Nissan, Toyota, and Fuji Heavy Industries—more commonly known by its brand name, Subaru.
“These international price-fixing conspiracies affected more than $5 billion in automobile parts sold to U.S. car manufacturers, and more than 25 million cars purchased by American consumers were affected by the illegal conduct,” said Attorney General Eric Holder. “The Department of Justice will continue to crack down on cartel behavior that causes American consumers and businesses to pay higher prices for the products and services they rely upon in their everyday lives.”
“Some of the price-fixing conspiracies lasted for a decade or longer, and many car models were fitted with multiple parts that were fixed by the auto parts suppliers,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “The Antitrust Division has worked hand in hand with its international competition colleagues who have provided invaluable assistance to the Justice Department in breaking up these worldwide price-fixing cartels.”
“Today’s charges should send a message to companies who believe they don’t need to follow the rules,” said Ronald Hosko, Assistant Director of the FBI’s Criminal Division. “If you violate the laws of this country, the FBI will investigate and put a stop to the threat you pose to our commercial system. The integrity of our markets is a part of the foundation of a free society.”
Including those announced today, 20 companies and 21 executives have been charged in the Antitrust Division’s ongoing investigation into price fixing and bid rigging in the auto parts industry. All 20 companies have either pleaded guilty or have agreed to plead guilty and have agreed to pay more than $1.6 billion in criminal fines. Seventeen of the 21 executives have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.
Each of the companies and executives charged today has agreed to cooperate with the department’s ongoing antitrust investigation. The plea agreements are subject to court approval. The companies’ and executives’ agreed-upon fines and sentences are:

• Hitachi Automotive Systems Ltd. to pay a $195 million criminal fine
• Jtekt Corporation to pay a $103.27 million criminal fine
• Mitsuba Corporation to pay a $135 million criminal fine
• Mitsubishi Electric Corporation (MELCO) to pay a $190 million criminal fine
• Mitsubishi Heavy Industries Ltd. to pay a $14.5 million criminal fine
• NSK Ltd. to pay a $68.2 million criminal fine
• T.RAD Co. Ltd. to pay a $13.75 criminal fine
• Valeo Japan Co. Ltd. to pay a $13.6 million criminal fine
• Yamashita Rubber Co. Ltd. to pay a $11 million criminal fine
• Tetsuya Kunida, a Japanese citizen and former executive of a U.S. subsidiary of a Japan-based automotive anti-vibration rubber products supplier, to serve 12 months and one day in a U.S. prison and to pay a $20,000 criminal fine
• Gary Walker, a U.S. citizen and former executive of a U.S. subsidiary of a Japan-based automotive products supplier, to serve 14 months in a U.S. prison and to pay a $20,000 criminal fine.

MELCO and Hitachi conspired with each other and other co-conspirator firms not charged today on sales of certain auto parts, including starter motors, alternators, and ignition coils, the department said. Mitsuba and Mitsubishi Electric conspired together and with other co-conspirators not charged today on certain sales of starter motors. Each of the other companies charged today colluded with other unnamed co-conspirators.
Generally, the companies, executives, and co-conspirators engaged in the various price-fixing schemes by attending meetings and communicating by telephone in the United States and Japan to reach collusive agreements to rig bids, set prices, and allocate the supply of auto parts sold to the car manufacturers. They took measures to keep their conduct secret by using code names and meeting in remote locations. Those charged also had further communications to monitor and enforce the collusive agreements.
The multiple conspiracies also harmed U.S. automobile plants in 14 states: Alabama; California; Georgia; Illinois; Indiana; Kansas; Kentucky; Michigan; Mississippi; Missouri; Ohio; Tennessee; Texas; and Wisconsin, the department said.
The department has coordinated its investigation with the Japanese Fair Trade Commission, the European Commission, Canadian Competition Bureau, Korean Fair Trade Commission, Mexican Federal Economic Competition Commission, and Australian Competition and Consumer Commission.
The following charges were filed today in U.S. District Court for the Eastern District of Michigan in Detroit:
Hitachi Automotive Systems Ltd.
According to a one-count felony charge, Hitachi and co-conspirators engaged in a conspiracy by agreeing during meetings and conversations to rig bids for and to fix, stabilize, and maintain the prices of auto parts it sold to Ford, General Motors, Honda, Nissan, and Toyota in the United States and elsewhere. The affected auto parts include starter motors, alternators, air flow meters, valve timing control devices, fuel injection systems, electronic throttle bodies, ignition coils, inverters, and motor generators. According to the charge, Hitachi and its co-conspirators carried out the conspiracy from at least as early as January 2000 until at least February 2010.
Hitachi manufactures and sells auto parts to automobile manufacturers throughout the world. The affected auto parts perform an array of functions in automobile engines, from regulating air and fuel flow to starting the engine to controlling the timing of engine valves.
Mitsuba Corporation
According to a two-count felony charge, Mitsuba and co-conspirators engaged in a conspiracy by agreeing during meetings and conversations to rig bids for and to fix, stabilize, and maintain the prices of windshield washer systems and components, windshield wiper systems and components, starter motors, power window motors, and fan motors it sold to Chrysler, Honda, Subaru, Nissan, and Toyota in the United States and elsewhere. According to the charge, Mitsuba and its co-conspirators carried out the conspiracy from January 2000 until February 2010. Mitsuba also agreed to plead guilty to one count of obstruction of justice, because of the company’s efforts to destroy evidence ordered by a high-level U.S.-based executive after learning of the U.S. investigation of collusion in the auto parts industry.
Mitsuba manufactures and sells numerous automotive parts to automobile manufacturers throughout the world. The affected auto parts perform an array of functions in automobiles. Windshield washer and wiper systems include a number of components and are designed to clear water or snow from vehicle windows. Starter motors are small electric motors used in starting internal combustion engines. Power window motors are small electric motors used to raise and lower vehicle windows. Fan motors are small electric motors used to turn radiator cooling fans.
Mitsubishi Electric Corporation (MELCO)
According to a one-count felony charge, MELCO and co-conspirators engaged in a conspiracy by agreeing during meetings and conversations to rig bids for and to fix, stabilize, and maintain the prices of automotive parts, including starter motors, alternators, and ignition coils, it sold to Chrysler, Ford, General Motors, Honda, Fuji Heavy Industries Ltd. (Subaru), Nissan, and certain of their subsidiaries in the United States and elsewhere. According to the charge, MELCO and its co-conspirators carried out the conspiracy from at least as early as January 2000 until at least February 2010.
MELCO manufactures and sells automotive parts, including starter motors, alternators, and ignition coils. Starter motors are small electric motors used in starting internal combustion engines. Alternators generate an electric current while the engine is in operation. Ignition coils are part of the fuel ignition system and release electric energy suddenly to ignite a fuel mixture.
Mitsubishi Heavy Industries Ltd.
According to a one-count felony charge, Mitsubishi Heavy Industries Ltd. (MHI) and co-conspirators engaged in a conspiracy by agreeing during meetings and conversations to rig bids for and to fix, stabilize, and maintain the prices of compressors and condensers it sold to General Motors and Mitsubishi Motors North America in the United States and elsewhere. According to the charge, MHI and its co-conspirators carried out the conspiracy from at least as early as January 2001 until at least February 2010.
MHI manufactures and sells compressors and condensers. A compressor produces and circulates highly pressurized refrigerant gas throughout the car air conditioning system. A condenser cools the engine by condensing the refrigerant gas into liquid and releasing heat.
T.RAD Co. Ltd.
According to a one-count felony charge, T.RAD Co. Ltd. and co-conspirators engaged in a conspiracy by agreeing during meetings and conversations to rig bids for and to fix, stabilize, and maintain the prices of radiators it sold to Toyota and Honda and the prices of automatic transmission fluid warmers (ATF warmers) sold to Toyota in the United States and elsewhere. According to the charge, T.RAD and its co-conspirators carried out the conspiracy from November 2002 until February 2010.
T.RAD manufactures and sells heat exchangers, including radiators and ATF Warmers. Radiators are devices located in the engine compartment of a vehicle that cool the engine. ATF warmers are devices located in the engine compartment of a vehicle that warm the automatic transmission fluid.
Valeo Japan Co. Ltd.
According to a one-count felony charge, Valeo Japan Co. Ltd. and co-conspirators engaged in a conspiracy by agreeing during meetings and conversations to allocate the supply of, rig bids for, and to fix, stabilize, and maintain the prices of air conditioning systems it sold to Nissan North America Inc., Suzuki Motor Corporation, and Subaru in the United States and elsewhere. According to the charge, Valeo and its co-conspirators carried out the conspiracy from April 2006 until February 2010.
Valeo was engaged in the manufacture and sale of automotive air conditioning systems, which are systems that cool the interior environment of a vehicle. Air conditioning systems, whether sold together or separately, are defined as automotive compressors, condensers, HVAC units (typically consisting of a blower motor, actuators, flaps, evaporator, heater core, and filter embedded in a plastic housing), control panels, sensors, and associated hoses and pipes.
Gary Walker
According to a one-count felony charge, Gary Walker, a U.S. citizen and former executive of a U.S. subsidiary of a Japan-based automotive products supplier, engaged in a conspiracy to rig bids for and to fix, stabilize, and maintain the prices of seatbelts sold to Honda, Mazda, Nissan, Subaru, and Toyota in the United States and elsewhere. According to the charge, Walker and his co-conspirators carried out the conspiracy from at least January 1, 2003 until at least February 2010.
The following charges were filed today in U.S. District Court for the Southern District of Ohio in Cincinnati:
Jtekt Corporation
According to a two-count felony charge, Jtekt and co-conspirators engaged in a conspiracy by agreeing during meetings and conversations to allocate markets, to rig bids for, and to fix, stabilize, and maintain the prices of bearings it sold to Toyota and electric powered steering assemblies it sold to Nissan in the United States and elsewhere. According to the charge, Jtekt and its co-conspirators carried out the bearings conspiracy from 2000 until July 2011 and the steering assemblies conspiracy from 2005 until October 2011.
Jtekt manufactures and sells bearings and steering assemblies. Bearings are widely used in industry in numerous applications for many products. Bearings reduce friction and help components to roll smoothly past on another. Electric powered steering assemblies provide electric power to help the driver more easily steer the automobile. Electric powered steering assemblies link the steering wheel to the tires, and include the column, intermediate shaft, and electronic control unit, among other parts, but do not include the steering wheel or tires.
NSK Ltd.
According to a one-count felony charge, NSK and co-conspirators engaged in a conspiracy by agreeing during meetings and conversations to allocate markets, to rig bids for, and to fix, stabilize, and maintain the prices of bearings it sold to Toyota in the United States and elsewhere. NSK manufactures and sells bearings. According to the charge, NSK and its co-conspirators carried out the conspiracy from 2000 until July 2011.
The following charges were filed today in U.S. District Court for the Northern District of Ohio in Toledo:
Yamashita Rubber Co. Ltd.
According to a one-count felony charge, Yamashita Rubber Co. Ltd. and co-conspirators engaged in a conspiracy by agreeing during meetings and conversations to rig bids for and to fix, raise, and maintain the prices of automotive anti-vibration rubber products it sold in the United States and elsewhere to Honda Motor Co. Ltd., American Honda Motor Company Inc. and Suzuki Motor Corporation. According to the charge, Yamashita Rubber Co. and its co-conspirators carried out the conspiracy from at least April 2003 until May 2012.
Automotive anti-vibration rubber products are composed primarily of rubber and metal and are installed in automobiles to reduce engine and road vibration.
Tetsuya Kunida
According to a one-count felony charge, Tetsuya Kunida, a former executive of a U.S. subsidiary of a Japan-based automotive anti-vibration rubber products supplier, engaged in a conspiracy by agreeing during meetings and conversations to rig bids for and to fix, raise, and maintain the prices of automotive anti-vibration rubber products. The conspiracy affected sales of automotive anti-vibration rubber products to Toyota Motor Corporation and other automakers in the United States and elsewhere. ccording to the charge, Kunida and his co-conspirators carried out the conspiracy from at least November 2001 until May 2012.
DENSO Corporation, Nippon Seiki Ltd., Tokai Rika Co. Ltd., Furukawa Electric Co. Ltd, Yazaki Corp., G.S. Electech Inc., Fujikura Ltd., Autoliv Inc., TRW Deutschland Holding GmbH, Diamond Electric Mfg. Co. Ltd., and Panasonic Corporation have already pleaded guilty. Fifteen individuals have been sentenced to pay criminal fines and to serve prison sentences ranging from a year and a day to two years each.
The companies and individuals are charged with price fixing in violation of the Sherman Act, which carries maximum penalties of a $100 million criminal fine for corporations and a $1 million criminal fine and 10 years in prison for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. Additionally, Mitsuba was also charged with obstruction of justice, which carries a maximum penalty of a $500,000 criminal fine.
The charges are the result of an ongoing federal antitrust investigation into price-fixing, bid rigging, and other anti-competitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s Chicago Office, New York Office, the National Criminal Enforcement Section; and the FBI’s Cincinnati, Cleveland, Detroit, New York, and Washington Field Offices, with the assistance of the FBI Headquarters’ International Corruption Unit. Anyone with information on price-fixing, bid rigging and other anti-competitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html. To report a crime to the FBI, go to www.fbi.gov and click on the “Report a Crime” tab.

Member of 10th Street Gang Pleads Guilty to Racketeering Charge

BUFFALO, NY—U.S. Attorney William J. Hochul, Jr. announced today that Sam Thurmond, 25, of Buffalo, New York, pleaded guilty before U.S. District Judge Richard J. Arcara to federal Racketeer Influenced Corrupt Organizations conspiracy (RICO conspiracy) before U.S. District Court Judge Richard J. Arcara. The charge carries a maximum penalty of life in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Joseph M. Tripi, who is handling the case, stated that between 2000 and 2011, Thurmond was a member of the 10th Street Gang. As a part of his involvement in the gang, the defendant participated in the murders of Brandon MacDonald and Darinell Young who were shot and killed on April 17, 2006.
On April 16, 2006, rival 7th Street Gang members were believed to have shot a 10th Street Gang member. In response, Thurmond and other 10th Street Gang members planned to retaliate. On April 17, the defendant and others obtained firearms including several shotguns, a .22 caliber rifle, a .22 caliber handgun, a .44 caliber handgun, and a .380 caliber handgun. The defendant and other 10th Street Gang members and associates then went to the area around 155 Pennsylvania Street where they believed rival 7th Street Gang members involved in the shooting were located. The 10th Street Gang members and associates, including Thurmond, began shooting at the individuals sitting on the porch, and standing near 155 Pennsylvania Street. Brandon MacDonald and Darinell Young, who were not members of the 7th Street Gang, were both shot, and both died as a result of injuries sustained during the shooting.
Thurmond is the 25th 10th Street Gang member or associate who has been convicted in connection with the investigation.
The plea is the culmination of an investigation on the part of investigators of the New York State Police, under the direction of Major Michael Cerretto; the Buffalo Police Department, under the direction of Commission Daniel Derenda; and special agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig.
Sentencing is scheduled for February 12, 2014, at 12:30 p.m. before Judge Arcara.

Loan Officer and Straw Purchaser Admit Roles in Multi-Million-Dollar Mortgage Fraud

CAMDEN, NJ—A loan officer and a straw purchaser today admitted they conspired to defraud financial institutions as part of a multi-million-dollar mortgage fraud scam to make illegal profits on over-developed condominiums in the Wildwood, New Jersey area, U.S. Attorney Paul J. Fishman announced.
Michelle Martinez, 49, of Brick, New Jersey, and Dana Rummerfield, 47, of Los Angeles, California, each pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court. Martinez pleaded guilty to an information charging her with conspiracy to commit wire fraud. Rummerfield pleaded guilty to an information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.
According to documents filed in this case and statements made in court:
Conspirators identified homes in Wildwood and Wildwood Crest, New Jersey, and recruited straw buyers to purchase those properties at inflated rates. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. Martinez created fraudulent loan applications that contained false information about the straw buyers’ employment, income, assets, and intended uses of the properties. Martinez’s actions were designed to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.
Martinez and her conspirators caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Martinez’s conspirators took a portion of the proceeds, having funds wired or checks deposited into various accounts they controlled from the fraudulent mortgage loans and/or lines of credit on several properties. They also distributed a portion of the proceeds to other members of the conspiracy for their respective roles.
Rummerfield and others falsified his loan application with respect to his employment, income, and assets in order to cause the lender to make a loan to Rummerfield for a property he was purchasing in Wildwood Crest, New Jersey. Rummerfield took a portion of the fraudulent mortgage proceeds by having a check totaling $100,000 deposited into an account for Hot House Properties, a company he controlled.
The wire fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Martinez and Rummerfield are scheduled to be sentenced on March 12, 2014.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, Newark Field Office, with the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.

FBI Conducts Explosives Training

The Newark Division of the FBI recently presented an improvised explosives demonstration at Middlesex County College located in Edison, New Jersey. The demonstration was part of a three-day National Improvised Explosive Familiarization (NIEF) training course offered by the FBI. This course was designed to train bomb technicians, first responders, and the chemical industry on the potential uses of common industrial and household chemicals in the manufacturing of improvised explosives.
The NIEF initiative supports the FBI’s top priority to protect the United States from terrorist attacks by training our investigators and law enforcement partners in regard to the emerging improvised explosive threat. The NIEF initiative is a partnership between the FBI Weapons of Mass Destruction Directorate, FBI Laboratory, and FBI Critical Incident Response Group, along with the 56 FBI field offices and the more than 100 Joint Terrorism Task Forces based out of those FBI field offices.
Participants in the training received in-depth instruction and course materials in accordance with their respective roles, responsibilities, and technical certifications. The goal of this training is to enhance awareness and outreach programs to first responders and to inform private sector wholesalers, distributors, and retailers of precursor chemicals that can be used by terrorists or experimenters to make improvised explosives.
“One of our best defenses against terrorists attack is a well-informed public capable of recognizing persons who pose a risk to our society,” said Aaron T. Ford, Special Agent in Charge of the FBI’s Newark Division. “This training is a valuable opportunity to exchange information and raise awareness with the general public.”
Attendees to the explosives demonstration witnessed over a dozen examples of improvised explosive and incendiary mixtures that have been used by terrorists around the world. Subject matter experts were on hand to discuss the threat posed by the readily available chemical precursors for these mixtures.
Photos from the day's events:

Manhattan U.S. Attorney Announces Charges Against Hudson County Corrections Officer and Other Alleged Members of an Armed Robbery Crew That Impersonated Police Officers

Preet Bharara, the United States Attorney for the Southern District of New York; Brian R. Crowell, the Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration (DEA), Aaron Ford, the Special Agent in Charge of the Newark Office of the Federal Bureau of Investigation (FBI); Raymond W. Kelly, the Commissioner of the New York City Police Department (NYPD); Joseph A. D’Amico, the Superintendent of the New York State Police (NYSP); and Gaetano T. Gregory, the Acting Prosecutor of Hudson County, today announced the filing of a superseding indictment (the “S2 indictment”) in Manhattan federal court charging Benny Lisojo and Wilfredo Suarez, two additional alleged members of an armed robbery crew who impersonated police officers, with robbery conspiracy and firearms offenses. Lisojo is a Hudson County Corrections Officer. A third defendant named in the S2 indictment, Anthony Serrano, was arrested on August 1, 2013. Lisojo and Suarez were taken into custody today and will be presented this afternoon before Magistrate Judge Debra Freeman.
Manhattan U.S. Attorney Preet Bharara said, “As alleged, these defendants committed armed robberies while pretending to be police officers. In doing so, as charged, the defendants—one of whom sadly was a law enforcement officer—both endangered the public and added to the workload of the real police. This office and our partners will continue our efforts to pursue and prosecute those who perpetrate alleged violent crime.”
DEA Special Agent in Charge Brian R. Crowell said, “This nine-month investigation has culminated in the announcement of three additional arrests of a home invasion crew that posed as police officers, carrying loaded weapons and committing robberies in New York and New Jersey. One crew member did not have to pretend he was a police officer—because Benny Lisojo was a Hudson County Corrections Officer while committing these alleged crimes. Law enforcement efforts on all levels have successfully identified, investigated, and arrested 20 members of this brutal crew to rid the streets of this public menace.”
FBI Special Agent in Charge Aaron Ford said, “These alleged actions are an erosion of the public’s ability to trust the law enforcement personnel who have taken oath to protect against such egregious, criminal activity. The FBI will continue to support this ongoing investigation so the members of the public can continue to trust in the vast majority of law enforcement officials who respect their oath and are committed to public service.”
NYPD Commissioner Raymond W. Kelly said, “These brazen criminals were allegedly responsible for multiple violent crimes, including car jackings and robberies at gunpoint. I commend the members of the New York Drug Enforcement Task Force, including NYPD detectives, and the prosecutors in the U.S. Attorney’s office for their work in bringing to justice these violent robbers who even posed as law enforcement in the commission of their crimes.”
NYSP Superintendent Joseph A. D’Amico said, “Once again, the hard work of law enforcement partners working together has resulted in getting allegedly dangerous individuals off of our streets. Not only did these suspects allegedly commit these violent acts, but they posed as law enforcement, making traffic stops to pull off their robberies. The alleged actions of these crews will never be tolerated, especially those impersonating officers. I commend and thank the U.S. Attorney’s Office, the Drug Enforcement Administration, the Federal Bureau of Investigation, the New York City Police Department, and Hudson County Prosecutor’s Office for their continued partnerships.”
According to the allegations contained in the superseding indictment unsealed today:
On October 14, 2012, Serrano and other co-conspirators, while pretending to be police officers, stopped two victims who were traveling in a vehicle in New York, New York, and robbed the victims at gunpoint.
On November 22, 2012, Lisojo and Suarez and other co-conspirators, while pretending to be police officers, stopped five victims who were traveling in a vehicle in New Jersey after departing from New York, New York, restrained four of the victims, and robbed them at gunpoint.

* * *

Serrano, 39, of Jersey City, New Jersey; Lisojo, 31, of Newark, New Jersey; and Suarez, 31, of Jersey City, New Jersey, are each charged with one count of robbery conspiracy and one count of brandishing a firearm in connection with a robbery conspiracy. They each face up to 20 years in prison on the robbery charge and life in prison on the firearms charge.
The arrests and charges are part of an ongoing investigation of an armed robbery crew that impersonated police officers and targeted individuals believed to be engaged in narcotics trafficking and/or engaged in businesses that affected interstate and international commerce. Seventeen other members of the same robbery crew were arrested in January 2013, in possession of, among other things, six loaded guns, shirts bearing the word “Police,” a hydraulic ram similar to those used by law enforcement to break down doors, handcuffs, walkie-talkies, a purported law enforcement shield, a baseball bat, ski masks, and GPS units similar to those used by law enforcement to track suspects. Sixteen of these 17 defendants have pleaded guilty.
Mr. Bharara praised the DEA, the FBI, the NYPD, the NYSP, and the Hudson County Prosecutor’s Office for their work in the investigation.
The case is being prosecuted by the Office’s Narcotics Unit. Assistant United States Attorneys Rachel Maimin and Rahul Mukhi are in charge of the prosecution.
The charges contained in the S2 indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

New Jersey-Based Financial Adviser Sentenced to 27 Months in Prison for Defrauding Elderly Investors

TRENTON, N.J. – A Somerset County, New Jersey-based financial adviser was sentenced today to 27 months in prison for stealing $138,000 from two elderly investors and funding his lavish lifestyle with money he claimed to be investing in conservative securities and his business, U.S. Attorney Paul J. Fishman announced.
Ralph A. Saviano, 72, of Bridgewater, New Jersey, previously pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with wire fraud.
According to documents filed in this case and statements made in court:
Saviano, an investment adviser who had worked in the financial industry for more than 40 years, targeted clients through his association with Centaurus Financial Inc. and later through Saviano Financial Group (SFG), from as early as July 2007 through October 2012.
During this time, Saviano had approximately 300 clients, many of whom were unsophisticated investors between the ages of 60 and 85, whom he had known for many years and who trusted his financial experience and advice. Saviano admitted he targeted clients he knew were about to receive significant amounts of cash, such as maturing certificates of deposit (CDs), and proposed that they invest those funds in low-risk investments or in his business, SFG. Saviano said he would use these “business loans” solely for business expenses.
Saviano admitted that in May 2012, an 85-year-old client gave him approximately $63,000 from a mature CD that she was told would be invested in two investment funds. Saviano accompanied the client to her bank to redeem the CD and instructed her make the proceeds from the CD payable to him. In June 2012, another of Saviano’s clients—80 years old and suffering from cancer—gave Saviano approximately $75,000 she inherited from a recently deceased relative, making the check payable to “Cash” with the words “financial investment” in the memo field.
Instead of doing as he claimed, Saviano used the funds to repay prior “loans” from other clients in Ponzi-scheme fashion and to pay for various personal expenses, including at least $33,000 for granite countertops and other home improvements, $18,000 in cash payments to himself and family members, $10,000 in personal mortgage and rent payments, and thousands more in jewelry, clothing, a family vacation to Aruba, and a theater donation.
At the plea hearing on June 5, 2013, Judge Wolfson entered a consent judgment and order of forfeiture in the amount of $699,926.51, which constitutes the proceeds Saviano obtained from his known investor victims as a result of his offense.
In addition to the prison term, Judge Wolfson sentenced Saviano to three years of supervised release and ordered restitution of $699,926.51.
In a parallel investigation, the U.S. Securities and Exchange Commission on September 6, 2013, issued an order instituting settled administrative proceedings against Saviano. In its order, the SEC barred Saviano from association with any broker, dealer, investment adviser, municipal securities dealer, municipal adviser, transfer agent, or nationally recognized statistical rating organization. It also barred him from participating in any offering of a penny stock, including acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer, or issuer for purposes of the issuance or trading in any penny stock or inducing or attempting to induce the purchase or sale of any penny stock.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Aaron T. Ford in Newark, for the investigation leading to today’s sentence. He also thanked the SEC’s New York office for its assistance with the investigation.
The government is represented by Assistant U.S. Attorney Aaron Mendelsohn of the U.S. Attorney’s Office Economic Crimes Unit and Evan Weitz of the office’s Asset Forfeiture and Money Laundering Unit in Newark.
If you believe you are a victim of or otherwise have information concerning this alleged scheme, you are encouraged to contact the FBI at 973-792-3000.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established 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 nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.

Newark Man Charged in 19-Count Indictment with Multiple Armed Robberies of New Jersey Stores

NEWARK, NJ—A federal grand jury today returned a 19-count indictment against a Newark, New Jersey man this morning in connection with a series of commercial establishment robberies in Union, Essex, and Bergen Counties, U.S. Attorney Paul J. Fishman announced.
Jamar Darby (a/k/a Rhino), 26, is charged with one count of conspiring to commit a Hobbs Act robbery, nine substantive counts of Hobbs Act robbery, and nine counts of using a firearm during a crime of violence.
Darby was previously arrested on a criminal complaint charging him with committing a Hobbs Act robbery and using a firearm during a crime of violence in connection with the robbery of a Subway Restaurant in Verona.
According to the indictment and other documents filed in this case:
On May 20, 2013, Darby and two other individuals allegedly entered a Subway Restaurant in Verona wearing dark hoodies, face masks, and gloves. Darby and another individual each brandished a handgun. After Darby and another robber restrained a Subway employee with plastic zipties, Darby and his co-conspirators emptied the cash registers and fled.
The indictment also charges Darby in connection with the following robberies between December 2012 and May 2013:

• Linden Stationary, Linden, on February 1, 2013
• Delta Gas Station, Newark, February 1, 2013
• Shoppers Express, Belleville, February 2, 2013
• Krauszers, Bloomfield, February 13, 2013
• Pat's Deli, Newark, February 19, 2013
• Smashburger, Paramus, March 16, 2013
• Krauszers, Bloomfield, March 29, 2013
• South Wood Discount Liquor, Linden, April 17, 2013

Darby allegedly brandished a handgun in all the robberies, and he and his conspirators stole cash, cigarettes, and other items from their victims.
The Hobbs Act charges each carry a maximum penalty of 20 years in prison. The charge of brandishing a firearm during a crime of violence carries a maximum penalty of life in prison and a mandatory minimum sentence of seven years in prison for the first offense, which must run consecutively to any other prison term. For each subsequent offense, the charge of brandishing a firearm during a crime of violence carries a mandatory minimum sentence of 25 years in prison, which must run consecutively to any other prison term. Each count also carries a maximum fine of $250,000 or twice the gross gain or loss arising out of the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s indictment. He also thanked the Belleville, Bloomfield, Kearny, Linden, Maplewood, Newark, Paramus, Verona, and West Orange Police Departments, along with the New Jersey State Police and the Essex County Prosecutor’s Office for their work on this case.
The government is represented by Assistant U.S. Attorneys Jamari Buxton and Rahul Agarwal of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations contained in the indictment are merely accusations, and each defendant is considered innocent unless and until proven guilty.

Former Merrill Lynch Stock Broker Pleads Guilty in Connection with Qualcomm Insider Trading Scheme

Former Merrill Lynch stock broker Gary Yin pled guilty today and admitted obstructing justice and laundering money for former Qualcomm Executive Vice President and President of Global Business Operations, Jing Wang (charged elsewhere).
According to his plea agreement, Yin agreed to assist Jing Wang in concealing Wang’s illegal insider trading using a secret, nominee brokerage account at Merrill Lynch. Yin also agreed to Wang’s request that he obstruct an ongoing SEC investigation into Wang’s activities and to launder the proceeds of Wang’s insider trading. Among other things, Yin agreed to conceal evidence that Wang had engaged in insider trading by setting up a shell company in the British Virgin Islands, opening a brokerage account in the name of the shell company (but actually controlled by Wang), and laundering the illegal insider trading profits by moving them into the British Virgin Islands account.
At Wang’s direction, Yin also obstructed justice by removing account documents (subject to an SEC subpoena) from the United States and taking them to China. In China, Yin delivered the documents to Jing Wang’s brother, Bing Wang. Once delivered, Yin rehearsed a false cover story with Bing, concocted by his brother. In order to make the cover story credible, Yin also reviewed the trading history in the offshore account with Bing Wang to enable him to lie successfully to the authorities in the United States.
Finally, in order to hide the proceeds of Wang’s illegal trades, and to distance Wang from the trades, Yin transferred money from one shell company’s brokerage account to another. All told, Yin transferred approximately $525,000 from accounts related to shell companies in the British Virgin Islands.
Yin entered his guilty plea before U.S. Magistrate Judge Nita Stormes, and is next expected in court on December 16 at 9 a.m. for his sentencing before U.S. District Court Judge William Q. Hayes.
Criminal Case No. 13cr3488-WQH
Defendant
Gary Yin
Age: 54
San Diego, CA
Summary of Charges
Title 18 U.S.C. Section 371—Conspiracy to commit offenses against the United States. Maximum Penalty: five years custody, a maximum $250,000 fine, three years’ supervised release and $100 special assessment.
Criminal Case No. 13CR3487-H
Defendants
Jing Wang
Age: 51
Del Mar, CA
Bing Wang
Age: 53
China
Summary of Charges
Title 15 U.S.C. Sections 78j(b), 78ff and 17 C.F.R. § 240.10b-5—Securities Fraud (Insider Trading). Maximum Penalty: 20 years custody, a maximum fine of $5 million, five years’ supervised release, and $100 special assessment.
Title 18 U.S.C. Section 371—Conspiracy (Obstruction of Justice and Money Laundering). Maximum Penalty: five years custody, a maximum $250,000 fine, three years’ supervised release and $100 special assessment.
Title 18 U.S.C. Section 1512(c)(1) and (c)(2) -- Obstruction of Official Proceedings. Maximum Penalty: 20 years custody, a maximum fine of $250,000 years’ supervised release, and $100 special assessment.
Title 18 U.S.C. 1956—Money Laundering. Maximum Penalty: 20 years custody, a maximum fine of $250,000 years’ supervised release, and $100 special assessment.
Title 18 U.S.C. 1028A—Aggravated Identity Theft. Maximum Penalty: Mandatory two years custody consecutive to any other sentence.
Criminal Case No. 13CR3487-H
Defendant
Bing Wang
Age: 53
China
Summary of Charges
Title 18 U.S.C. Section 371—Conspiracy (Obstruction of Justice and Money Laundering). Maximum Penalty: five years custody, a maximum $250,000 fine, three years’ supervised release and $100 special assessment.
Investigating Agencies

• Federal Bureau of Investigation
• Internal Revenue Service-Criminal Investigation

Operation Smokin’ Aces Targets Mexican Mafia Operations in Orange County

SANTA ANA, CA—Hundreds of law enforcement officials this morning fanned out across Southern California to conclude Operation Smokin’ Aces, an investigation conducted by the Santa Ana Gang Task Force that targeted the Orange County wing of the Mexican Mafia, which allegedly exercises control over Latino street gangs and is a powerful force in the local jail system.
A total of 129 defendants have been named in indictments issued by county and federal grand juries. Each of the defendants is linked to an Orange County street gang that claims allegiance to the Mexican Mafia, which is also called the Eme. Some of the federal defendants also are associates of the prison gang who allegedly worked directly with one of the two Mexican Mafia members who oversee the Orange County wing of the criminal enterprise.
During the course of the investigation, task force members made undercover purchases of 67 weapons (38 handguns and 29 rifles). They also seized 22 pounds of methamphetamine, 1.5 pounds of heroin, and three pounds of cocaine.
Over the past three months, a federal grand jury in Orange County has returned 26 indictments that charge a total of 86 defendants. The indictments allege a wide range of criminal conduct, including murder and assault, extortion and “tax” collection, and the street-level distribution of narcotics.
As part of Smokin’ Aces, the Orange County District Attorney has also obtained indictments that charge a total of 43 defendants.
At the center of Smokin’ Aces is a federal racketeering indictment that focuses on the operations of the Mexican Mafia in Orange County, a criminal organization that for many years has been headed by Peter Ojeda, who allegedly ordered murders and assaults on behalf of the Mexican Mafia. (Ojeda is not formally charged in the indictment unsealed today, but he is currently pending trial in another racketeering case that was filed in 2011 in relation to Operation Black Flag.)
The racketeering indictment alleges a conspiracy to violate RICO, the federal Racketeer Influenced and Corrupt Organizations Act. The RICO indictment unsealed today charges 26 defendants associated with the Orange County branch of the Mexican Mafia, including those who implemented orders given by Eme leaders, gang members who collected and delivered “tax payments,” and women associated with the organization who serve the “crucial” function of moving messages from incarcerated Mexican Mafia operatives to their minions on the streets.
The Mexican Mafia is a powerful and violent prison gang that controls drug distribution and other illegal activities within the California penal system and on the streets of Southern California by organizing Latino street gang members for the purpose of establishing a larger network for the Mexican Mafia’s illegal activities. If a street gang does not comply with the demands of the Mexican Mafia, the prison gang will order the assault or murder the offending gang’s members, whether they are in custody or on the streets.
The majority of the federal indictments target gang members who allegedly trafficked in significant quantities of narcotics and firearms. Two of the indictments outline large drug trafficking conspiracies, one of which focuses on the Santa Ana-based Delhi gang. The gang members and their associates were paying “taxes” or “rent” to the Mexican Mafia, and this revenue stream fortified the control the Mexican Mafia has over members of gangs, whether they are on the street or in custody.
The first large drug distribution indictment charges 15 people and outlines the activities of an organization allegedly run by George “Monk” Martinez and John Terrones, who are alleged leaders of the Santa Ana-based Delhi gang and who are also named in the RICO indictment. The narcotics indictment alleges a conspiracy to distribute methamphetamine and heroin.
The second narcotics trafficking indictment charges a dozen individuals with participating in a methamphetamine distribution organization headed by Mario Franco, a member of a Santa Ana-based gang who also is named in the RICO indictment.
Operation Smoking Aces is the latest action by the Santa Ana Gang Task Force to target the Mexican Mafia and its control over Latino street gangs in Orange County. In July 2011, authorities announced Operation Black Flag, which led to charges against 99 defendants, including Peter Ojeda (see: http://www.fbi.gov/losangeles/press-releases/2011/ninety-nine-members-and-associates-of-mexican-mafia-affiliated-gangs-charged-in-operation-black-flag).
Smokin’ Aces was an investigation conducted by the Santa Ana Gang Task Force, which consists of agents and officers with the Federal Bureau of Investigation; the Santa Ana Police Department; the Orange County Sheriff’s Department; the Bureau of Alcohol, Tobacco and Firearms and Explosives; and the California Department of Corrections and Rehabilitation-Special Service Unit. Special agents with IRS-Criminal Investigation also participated in Operation Smoking Aces.
Multiple agencies assisted during today’s operation, including personnel with the United States Marshals Service; the Anaheim Police Department; the Newport Beach Police Department; the Fountain Valley Police Department; the Huntington Beach Police Department; the Brea Police Department; the Irvine Police Department; the Buena Park Police Department; and the Garden Grove Police Department.

Real Estate Agent and Developer/Loan Officer Both Sentenced to Prison for Mortgage Fraud

TUCSON, AZ—William Michael Naponelli, 69, and Bryan Atwood, 52, both from Tucson, Arizona, were sentenced to federal prison by U.S. District Court Judge Cindy K. Jorgenson for their roles in a mortgage fraud scheme. Naponelli was sentenced to 24 months in prison on September 23, 2013. Atwood was sentenced to 15 months in prison on September 20, 2013. Naponelli previously pleaded guilty to the felony offenses of conspiracy to commit bank fraud and conspiracy to commit transactional money laundering on December 20, 2012. Atwood previously pleaded guilty on February 25, 2013, to conspiracy to commit wire fraud, also a felony.
As part of his guilty plea, Naponelli, a former real estate developer and loan officer, admitted his participation in a scheme to obtain various loans between July 2006 and May 2007. Naponelli and another co-conspirator real estate developer purchased several properties using various business entities with which they were associated. Thereafter, Naponelli and his fellow co-conspirator sold these properties to straw buyers.
As part of the loan approval process, Naponelli knowingly caused to be submitted documents with knowledge that they contained material false statements including representations that the borrowers would provide the down payment or cash to close the real estate transactions. After the fraudulently obtained loan proceeds were received, portions of these proceeds were wired or deposited into bank accounts controlled by Naponelli or another co-conspirator.
Atwood, who at the time of this conspiracy was a licensed real estate agent, admitted as part of his guilty plea that he obtained three properties through fraudulently obtained loans. He admitted that he knew that documents provided to the lenders on his behalf relating to these properties contained one or more material false representations.
The properties obtained as result of this mortgage fraud scheme went into foreclosure resulting in significant losses to the lenders. As part of Naponelli’s sentence, he was ordered to pay restitution totaling approximately $3.1 million. Atwood was ordered to pay approximately $585,000.
Naponelli and Atwood are the third and fourth co-defendants to be sentenced in this case. Previously, co-defendants Walter Scott Fruit and Sandra Jackson were each sentenced to federal prison for their involvement in the conspiracy. Fruit, who was also a licensed real estate agent, received a 30-month prison sentence. Jackson, a former escrow agent, received six months in prison.
The investigation in this case was conducted by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation. The prosecution was handled by Jonathan B. Granoff, Assistant U.S. Attorney, District of Arizona, Tucson.

Former Tuscaloosa Police Sergeant Sentenced to 10 Years for Sexually Assaulting Woman in Custody

WASHINGTON—Jason Glenn Thomas, 35, a former City of Tuscaloosa Police sergeant in Tuscaloosa, Alabama, was sentenced today to serve 10 years in federal prison followed by three years of supervised release for sexually assaulting a Tuscaloosa woman in violation of federal civil rights laws. A special assessment of $100 was also imposed.
Thomas pleaded guilty on April 18, 2013 to willfully violating the civil rights of a woman in his custody. According to court documents filed in connection with his guilty plea, Thomas admitted that shortly after midnight on May 28, 2011, he stopped and detained a female pedestrian without placing her under arrest. Thomas then transported the woman in a department issued patrol vehicle to a remote area and sexually assaulted her.
“Officers who sexually assault individuals in their custody defy the public trust bestowed upon law enforcement officials, and their actions will not be tolerated,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to investigate and prosecute law enforcement officials that violate their oath to protect their communities.”
“Although most police officers serve and protect the public with integrity, we remain deeply committed to prosecuting those few who, as defendant Thomas did, dishonor their badge by using it to take advantage of those they are sworn to protect” said Joyce White Vance, U.S. Attorney for the Northern District of Alabama.
This case was investigated by the Tuscaloosa Resident Agency of the FBI’s Birmingham Field Office and was prosecuted by Trial Attorney D.W. Tunnage of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney George Martin for the Northern District of Alabama.

Telemarketer Sentenced in Manhattan Federal Court to 75 Months in Prison for Sweepstakes Fraud That Targeted Elderly Victims

Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (FBI), announced that WARREN STELMAN, a/k/a “Dave Ford,” was sentenced today to 75 months in prison for his participation in a Dominican-based telemarketing fraud scheme that targeted elderly victims throughout the United States and defrauded those victims of nearly $1 million. STELMAN was arrested in the Dominican Republic in August 2012 and was subsequently extradited to the United States. He pled guilty in January 2013 to one count of wire fraud. Today’s sentence was imposed by U.S. District Judge Lewis A. Kaplan.
Manhattan U.S. Attorney Preet Bharara said: “Warren Stelman admitted scheming in the Dominican Republic to fleece elderly people in the U.S. His pitch, dangling fictitious sweepstakes winnings, was persuasive enough to victimize many of these people repeatedly. Today he has been ordered to pay for his crime against these vulnerable victims in money and time.”
FBI Assistant Director in Charge George Venizelos said: “The defendant hid behind his telephone to prey upon his victims, many of whom were elderly, with promises of money and prizes. Although the victims never met the defendant, they relied upon his representations of wealth and in exchange, turned over their hard earned money. This case should be a reminder to the public to be cautious of get-rich-quick opportunities, many of which are merely schemes to defraud and take advantage of our unsuspecting community.”
According to the indictment and other documents filed in Manhattan federal court, as well as statements made in court proceedings:
STELMAN and his co-conspirators, including his wife Lana Stelman, operated boiler rooms in the Dominican Republic, from which they telephoned victims in the United States, most of whom were elderly. They informed the victims falsely that they had won substantial amounts of cash through a sweepstakes or some other type of promotion, but that in order to claim their prize, they first needed to wire thousands of dollars in “fees” to the Dominican Republic. In reality, however, there were no cash prizes, neither STELMAN nor his co-conspirators worked in connection with a sweepstakes or other promotion, and none of the victims ever received any money in exchange for their fees.
The victims were typically told to send the money for the purported fees by, among other means, Western Union or Money Gram. After victims sent money to cover the supposed fees, STELMAN and his co-conspirators typically contacted them again and, using further fraudulent representations, persuaded them to send more money to pay for other costs. In some instances, when victims said that they had run out of money to pay additional fees, STELMAN and his associates urged the victims to come up with more money by borrowing from friends and relatives, taking cash advances on credit cards, and obtaining loans against their homes and vehicles.
The fraudulent scheme targeted U.S. residents who had previously subscribed to sweepstakes. STELMAN and his co-conspirators identified these victims by purchasing from U.S.-based brokers copies of sweepstakes entry forms the victims had previously filled out. These entry forms, which the conspirators referred to as “leads,” were typically written on narrow slips of paper that included the names, addresses, and telephone numbers for sweepstakes entrants. The conspirators used various Internet-based phone methods to mask their locations and identities, and communicated with the victims through numbers assigned to voice-mail boxes located in Manhattan. In total, 78 victims—54 of whom were over the age of 70—were defrauded out of nearly $1 million.

***

In addition to the prison term, Judge Kaplan sentenced STELMAN, 54, of the Dominican Republic, to three years of supervised release. STELMAN was also ordered to forfeit $996,659.30 and to pay a total of $996,659.30 in restitution to 78 victims.
Four other defendants—Lana Stelman, Romeo Rawlins, Juana Santana, and Lickenson Brooks—were also charged for their participation in the scheme. Lana Stelman and Brooks pled guilty and are awaiting sentencing. Charges remain pending against Rawlins and Santana, and they are presumed innocent until and unless they are proven guilty.
In related cases, Janice Pemberton, Peter Gruman, Randy Ortzman, and Avraham Fried were charged with participating in similar telemarketing fraud schemes from the Dominican Republic. All of these defendants have pled guilty. Fried was sentenced on September 10, 2013 by U.S. District Judge William H. Pauley to 44 months in prison. Pemberton, Gruman, and Ortzman are awaiting sentencing.
Mr. Bharara praised the outstanding investigative work of the FBI.
The prosecution of this case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorneys Thomas G.A. Brown and Rosemary Nidiry are in charge of the prosecution.

New Jersey Lawyer Sentenced in Manhattan Federal Court in Connection with Multiple Investment Fraud Schemes

Preet Bharara, the United States Attorney for the Southern District of New York, announced that EVERETTE L. SCOTT, JR., a New Jersey attorney, was sentenced today in Manhattan federal court to 30 months in prison for engaging in securities and wire fraud in connection with two separate schemes. In the larger of the two schemes, SCOTT and co- efendant Tyrone L. Gilliams, Jr., solicited and misappropriated $5 million in investments in a bogus U.S. Treasury Strips investment program. In the other scheme, the defendants solicited and misappropriated a $450,000 investment in a Utah coal mine. In addition to buying luxury cars, jewelry, and other items, Gilliams spent hundreds of thousands of dollars of investor money organizing and promoting a multi-day festival in Philadelphia that headlined Sean “Diddy” Combs. SCOTT and Gilliams were found guilty following a jury trial in February 2013, and Scott was sentenced today by U.S. District Judge Deborah A. Batts.
Manhattan U.S. Attorney Preet Bharara said: “With his sentence today, Everette Scott meets the just punishment that befalls an attorney who uses a law license as a vehicle for fraud—time in federal prison. This office will continue make sure the perpetrators of fraud are brought to justice and pay the price for their crimes.”
According to the indictment and the evidence presented at trial:
In 2009 and 2010, Gilliams was the owner of TL Gilliams, LLC, which purported to engage in transactions in commodities like oil and gold. SCOTT was an attorney at a small law firm in New Jersey and acted as TL Gilliams’s general counsel.
In the summer of 2010, Gilliams solicited $5 million from two investors for purposes of trading in U.S. Treasury Strips, which are a derivative of U.S. Treasury Bonds. Gilliams and SCOTT arranged for the investors to make their investments by wiring them into an attorney trust account maintained by SCOTT’s law firm. Upon receiving the money, SCOTT—at Gilliams’s direction—misappropriated more than $700,000 to satisfy expenses stemming from an unrelated and failed venture to buy a coal mine in Utah. SCOTT also claimed $50,000 of the investment money for himself as purported fees. At Gilliams’s direction, SCOTT transferred most of the remainder to bank and brokerage accounts that Gilliams controlled.
At most, Gilliams purchased $250,000 worth of Treasury Strips with the more than $4 million in investment money transferred by SCOTT. Over a span of less than six months, Gilliams spent more than $1.6 million on an unrelated gold investment; more than $200,000 to purchase a commercial warehouse in Denver; at least $100,000 to buy or lease luxury cars; at least $50,000 for construction work on his home; at least $100,000 on luxury hotel and travel expenses; and more than $500,000 promoting two events—“Joy to the World,” involving an album release party with Jamie Foxx at the Vault nightclub in Philadelphia, and culminating in a red carpet, black tie gala at the Philadelphia Ritz-Carlton, headlined for a $120,000 fee by Sean “Diddy” Combs; and the “Gatta Be Jokin’ Comedy Jam,” a December 2010 comedy performance in Nassau, Bahamas.
Gilliams did not engage in any trading of Treasury Strips and, as a result, did not derive any profits. Nonetheless, during the period when he was spending investor money, Gilliams provided investors with false reports of trades and profits, and made occasional, nominal payments that he falsely claimed represented profits from Treasury Strips trading. Other than these purported profit payments, which totaled approximately $100,000, neither investor received any of his combined $5 million investment back.
In a separate scheme, Gilliams and SCOTT arranged in late 2009 for an investor to transfer $450,000 to SCOTT’s attorney trust account, to be held in escrow until used in connection with a venture to purchase the assets of a bankrupt Utah coal mine. Once the money was in SCOTT’s account, he secretly misappropriated approximately $112,000 by claiming it as purported fees, and transferred the rest to Gilliams or other individuals and entities at Gilliams’s direction. Until August 2010, Gilliams and SCOTT falsely assured the victim that his $450,000 remained safely in escrow, long after SCOTT’s escrow account had been emptied. Although the victim repeatedly demanded the return of his funds, Gilliams and SCOTT pacified him by producing forged bank documents and a false attorney attestation letter written by SCOTT purporting to show that Gilliams was in possession of the millions of dollars necessary to purchase and operate the Utah coal mine. In August 2010, after an attorney for the victim threatened SCOTT with professional discipline for his failure to return the escrowed funds, Gilliams and SCOTT paid the victim $450,000 using funds they raised for investment in Treasury Strips.

***

In addition to the prison term, Judge Batts sentenced SCOTT, 52, of Sewell, New Jersey, to three years of probation. He was also ordered to make restitution in the amount of $1,005,000, and pay a $300 special assessment fee.
Gilliams is scheduled to be sentenced by Judge Batts on October 31, 2013, at 10:30 a.m.
Mr. Bharara praised the work of the criminal onvestigators of the United States Attorney’s Office and the Federal Bureau of Investigation, which jointly investigated this case. He also thanked the U.S. Securities and Exchange Commission.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which U.S. Attorney Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. The task force was established 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 nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Michael A. Levy and David B. Massey are in charge of the prosecution.

Newburgh Latin Kings Leader Jose Lagos Sentenced to 40 Years in Prison for Three Murders

Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOSE LAGOS, a leader of the Latin Kings gang in Newburgh, New York (the “Newburgh Latin Kings”), was sentenced today by U.S. District Judge Cathy Seibel in White Plains federal court to 40 years in prison. LAGOS’ criminal conduct, for which he was sentenced, included three murders, shootings, brandishing firearms, assaults, drug distribution, and other acts of racketeering. LAGOS, 23, is one of 35 members and associates of the gang who were charged in the case, all of whom have been convicted, 26 of whom have been sentenced. The remaining top two leaders of the gang, Wilson Pagan and Christian Sanchez, were convicted at trial of murder, racketeering, firearms, and narcotics offenses, and each faces a mandatory life sentence.
U.S. Attorney Preet Bharara stated: “With this sentencing, and the pending sentencing of Lagos’s two key accomplices, the leadership of the gang that deprived the citizens of Newburgh of their well-being has been decapitated. This result was only accomplished by the unflagging efforts of the federal, state, and local law enforcement personnel and the prosecution team. Today, Newburgh is a safer place but we are not relenting in our efforts to lift the shadow that gangs cast over its streets.”
According to the indictment to which LAGOS pled guilty, statements made during the plea and sentencing proceedings, other court documents, and evidence presented during related trials:
On May 6, 2008, LAGOS, then a leader of the Newburgh Latin Kings, ordered two others to shoot a member of a rival gang, the Bloods. The subordinates followed LAGOS’s orders, but mistakenly shot and killed Jeffrey Zachary, a 15-year-old boy, who had nothing to do with the gang dispute.
On March 11, 2010, LAGOS, then still a leader of the Newburgh Latin Kings, ordered, along with others, two others to shoot a member of the Bloods. The subordinates followed LAGOS’ and the other leaders’ orders, but one of the subordinates, Jerome Scarlett, was instead mistakenly shot and killed.
On March 12, 2010, LAGOS, along with other leaders of the Newburgh Latin Kings, ordered the killing of John Maldonado, whom they suspected had killed Scarlett. LAGOS helped to obtain a gun while other members of the gang plotted the murder. Another member of the gang shot Maldonado, unsuspecting, in the back, killing him.
LAGOS carried out the murders as part of his participation in the criminal affairs of the Newburgh Latin Kings. Among the gang’s criminal objectives was selling drugs, including by controlling corners in the city of Newburgh where they regularly met with drug customers to sell crack, cocaine, heroin, and marijuana. Gang members, and leaders such as LAGOS, conspired together to protect their drug turf, and to attempt to expand the gang’s drug turf, including by using violence to kill, hurt, or intimidate the gang’s rivals or other enemies of the gang.

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Mr. Bharara thanked the Hudson Valley Safe Streets Task Force for their work on the Latin Kings investigation. The Task Force is led by the Federal Bureau of Investigation (FBI), and combines the resources of dozens of law enforcement officers from federal, state, and local agencies and departments, including agents and officers of the FBI; the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; the City of Newburgh Police Department; the U.S. Department of Homeland Security, Homeland Security Investigations; the Middletown Police Department, the Orange County Sheriff’s Office; and the New York State Police.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Benjamin Allee, Abigail S. Kurland and Nicholas McQuaid are in charge of the prosecution.

West Orange Woman Admits Stealing Nearly $100,000 from an Elderly Woman Living on Social Security

A West Orange, New Jersey woman who defrauded an elderly victim of almost $100,000—by taking the victim’s Social Security payments and secretly applying for a reverse mortgage on the victim’s home—admitted her crimes today in Trenton federal court, U.S. Attorney Paul J. Fishman announced.
Shawn L. Craig, 47, pleaded guilty to two counts of an information: mail fraud and filing false personal federal income tax return for 2011 by not disclosing income including money fraudulently obtained from her victim. Craig entered her guilty plea before U.S. District Judge Michael A. Shipp.
According to documents in this case and statements made in court:
In November 2010, Craig entered into a general power of attorney with the victim, an elderly woman, to serve as her attorney-in-fact. In that position, Craig was trusted to act in the victim’s best interest and to arrange for the payment of the victim’s living expenses.
After gaining access to the victim’s bank accounts, Craig diverted a portion of the victim’s funds for her own benefit and the benefit of her family, including to pay her automobile insurance; purchase a bar and bar stools; make a tuition payment; and pay for entertainment at the Wachovia Center in Philadelphia. At the time Craig made those purchases, the funds in the victim’s accounts consisted primarily of the victim’s Social Security benefits.
In December 2010, Craig submitted an application in the victim’s name to a commercial lender for a reverse mortgage on the victim’s residence in East Orange. When the victim refused to sign a specific power of attorney permitting the closing of the reverse mortgage to go forward, Craig forged the victim’s signature on the document and presented it to the title agent at the title agent’s office in Morristown, New Jersey.
Craig used the money from the reverse mortgage to purchase items at retail establishments including Gucci, Coach, Nike, Apple, Footlocker, and various other shoe stores; pay for meals and entertainment at restaurants, liquor stores, and other establishments, including the Taj Mahal in Atlantic City, New Jersey, the Staples Center in Los Angeles, and Amazing LA Tours in Santa Monica, California; fund travel to and stays at hotels in New Jersey, California, and Florida; and pay personal bills, including automobile insurance, gas and electric, cell phone, and cable bills.
In June 2011, Craig was notified that the general power of attorney had been revoked, so she transferred the victim’s funds to a new bank account. In all, Craig misused approximately $99,000 of the victim’s funds.
Craig also admitted that she caused a tax preparer to prepare and electronically file with the IRS a false and fraudulent personal income tax return for tax year 2011, by not disclosing as income the funds that she had fraudulently obtained from the victim.
The mail fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The tax charge carries a maximum potential penalty of three years in prison and a $250,000 fine. In addition, the plea agreement requires Craig to make restitution to the victim. Sentencing is scheduled for January 2, 2014.
U.S. Attorney Fishman credited special agents of the United States Department of Housing and Urban Development, Office of Inspector General, Northeast Region; the FBI, under the direction of Special Agent in Charge Aaron T. Ford; IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge Edward J. Ryan.
Defense counsel: Thomas R. Ashley Esq., Newark, N.J.

Two North Jersey Women Admit Roles in Scheme to Defraud Banks and Credit Card Companies Out of Millions of Dollars

Two members of a large-scale and sophisticated identity theft scheme today admitted their roles in defrauding banks and credit card companies out of millions of dollars, U.S. Attorney Paul J. Fishman announced.
Rita S. Kim, 49, of Fort Lee, New Jersey, and Hyon-Suk Chung, a/k/a “Clara,” 50, of North Bergen, New Jersey, each pleaded guilty before U.S. District Judge Katharine S. Hayden to count one of a second superseding indictment charging them with conspiracy to commit mail and wire fraud.
According to documents filed in this case and statements made in court:
Kim and Chung conspired with Sang-Hyun Park, a/k/a “Jimmy,” and others to defraud banks and credit card companies. Park obtained Social Security cards beginning with the prefix “586,” which were issued by the United States to individuals, usually from China, who were employed in American territories, such as Guam. The individuals from China who were issued these Social Security numbers never established credit files or scores in the United States—these Chinese identities were essentially blank slates with no corresponding credit files or scores. Kim and Chung engaged in the fraudulent build-up of credit scores associated with these Chinese identities by adding them as authorized users to their credit card accounts in exchange for a fee from Park and his associates.
Kim and Chung admitted they received information related to the Chinese identities necessary for the credit build-up from Park’s associates, such as Sung-Sil Joh, a/k/a “Jenny,” and Young-Hee Ju, a/k/a “Stephanie.” Joh and Ju have pleaded guilty in connection with their roles in the scheme and await sentencing.
By attaching the Chinese identities to their credit card accounts, Kim and Chung increased the credit scores associated with the Chinese identities to between 700 and 800. Kim and Chung each admitted that they created credit scores for approximately 100 Chinese identities. They also acknowledged that their criminal conduct caused credit card companies and other lenders $2,047,651 in losses.
Kim and Chung each face a maximum potential penalty of up to 60 months in prison and will be ordered to pay restitution and forfeiture of more than $2 million. Sentencing for both Kim and Chung is scheduled for January 8, 2014.
Park, Kim, Chung, and more than 50 other individuals were charged in this scheme on September 16, 2010. To date, more than 50 defendants have pleaded guilty and two remain at large. Park pleaded guilty on January 9, 2012, related to his role in the enterprise and is awaiting sentencing.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen; and the U.S. Department of Homeland Security’s Immigration and Customs Enforcement Homeland Security Investigations, under the direction of Special Agent in Charge Andrew M. McLees; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli and the Office’s Chief of Detectives, Steven Cucciniello, for their work leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Anthony Moscato of the U.S. Attorney’s Office Organized Crime/Gangs Unit and Jane Yoon of the Criminal Division in Newark.
As for other members of the Park Criminal Enterprise, the charges and allegations contained in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Lee County Commissioner Agrees to Plead Guilty to Wire Fraud

FORT MYERS, FL—Acting United States Attorney A. Lee Bentley, III announces the filing of an information and signed plea agreement in United States District Court against Lee County Commissioner Tammara Ann Hall, a/k/a Tammy Hall (53, Cape Coral). The information charges Hall with one count of wire fraud. She faces a maximum penalty of 20 years in federal prison. An initial appearance and acceptance of plea hearing is set for October 3, 2013, at 1:30 p.m. before U.S. Magistrate Judge Douglas Frazier.
According to the plea agreement, Hall was a Lee County Commissioner running for re-election in the November 2010 general election. From November 2009 to November 2010, Hall diverted and embezzled approximately $33,756 of donor contributions to the Tammy Hall campaign fund and used the money for personal expenditures unrelated to the campaign. Hall completed Florida Department of State campaign fund quarterly reports and failed to disclose that she had diverted campaign contributions to pay for personal expenses. She falsely represented the nature of the expenditures, which she made for personal purposes, or omitted certain campaign contribution checks from the quarterly reports. Hall stole from her campaign fund by transferring funds electronically from the campaign bank account to her personal bank account, by writing checks from the campaign bank account and depositing the checks to her personal bank account, and by depositing certain donor campaign contribution checks directly into her personal bank account. Hall used interstate wires to accomplish the electronic transfer of funds from her campaign account to her personal account at Wachovia Bank.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Jeffrey F. Michelland.

Paul Wysopal Named Special Agent in Charge of Tampa Division

Outgoing Director Robert S. Mueller, III named Paul Wysopal special agent in charge of the FBI’s Tampa Division. Mr. Wysopal most recently served as section chief in the Criminal Justice Information Services Division, overseeing the National Instant Criminal Background Check System in Clarksburg, West Virginia.
Mr. Wysopal began his career as a special agent with the FBI in February 1997. He first reported to the Minneapolis Division, where he investigated financial institution and securities fraud. He also assisted the Bemidji Resident Agency before transferring there to work violent crimes committed on the Red Lake Indian Reservation.
In 2002, Mr. Wysopal was promoted to supervisory special agent in the Office of Congressional Affairs at FBI Headquarters in Washington, D.C. and was a liaison with members of Congress, their staff, and oversight committees. The next year, he was assigned to the Counterterrorism Division, detailed to a CIA-led working group. He was then promoted to the Los Angeles Division to supervise the al Qaeda squad in 2004.
In 2007, Mr. Wysopal was promoted to assistant special agent in charge of the National Security Branch at the El Paso Division. Two years later, he was promoted to inspector in charge at the Criminal Investigative Division, assigned to the El Paso Intelligence Center. He served as the ranking FBI employee and performed the roles of associate deputy director and acting deputy director for the center, which consisted of 500 employees from 26 federal, state, and local agencies.
Prior to his appointment with the FBI, Mr. Wysopal was a military lawyer in the U.S. Army Judge Advocate General’s Corps for three years and a civilian attorney for three years.

Former President of Qualcomm’s Global Business Operations Indicted for Insider Trading

WASHINGTON—Jing Wang, 51, of Del Mar, California, a former executive vice president and president of Global Business Operations for Qualcomm Inc., was charged with insider trading in shares of both Qualcomm and Atheros Communications Inc. using a secret brokerage account and an offshore shell company in the British Virgin Islands. Wang was also charged with conspiring with his brother, co-defendant Bing Wang, 53, and his former stock broker to obstruct an ongoing U.S. Securities and Exchange Commission (SEC) investigation and laundering the proceeds of his insider trading using a second offshore shell company and secret brokerage account.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Laura E. Duffy of the Southern District of California made the announcement.
“Insider trading is an insidious crime. It undermines ordinary investors’ faith in our financial markets, and the Justice Department has zero tolerance for it,” said Acting Assistant Attorney General Raman. “Today’s charges show that you cannot trade on inside information, pocket the profit, and expect to get away with it. The Criminal Division has had a terrific partnership with the U.S. Attorney’s Office for the Southern District of California in this important investigation, and through partnerships like these throughout the country, we will continue to root out fraud in our markets at every level.”
“When there are two sets of rules—one for the powerful insiders and one for everybody else—the public quickly loses confidence in the stock market,” said U.S. Attorney Duffy. “We intend to restore confidence in our markets by making sure that everyone is playing by the same rules.”
Jing Wang was taken into custody by the FBI earlier today on these charges and is expected to make his initial appearance in federal court in the Southern District of California this afternoon. A warrant has been issued for the arrest of Bing Wang, who is believed to be a citizen and resident of China. Both men are charged in an indictment with conspiracy, which carries a maximum penalty of five years in prison. Jing Wang was also charged with securities fraud, money laundering, and obstruction of official proceedings, which each carry a maximum penalty of 20 years in prison, and aggravated identity theft, which carries a mandatory two years in prison, consecutive to any other sentence.
The former stock broker, Gary Yin, was charged with conspiracy in a criminal information filed today in the Southern District of California and is expected to make his initial appearance on September 24, 2013, at 10:00 a.m. in federal court in San Diego.
According to the indictment, Jing Wang used his Merrill Lynch broker, Yin, to create an offshore entity, Unicorn Global Enterprises, in the British Virgin Islands and to open a brokerage account for Unicorn at Merrill Lynch. Jing Wang provided documents to Yin to create the false impression that his brother, Bing Wang, controlled the account, when in fact Jing Wang was the true owner of the account. This allowed Jing Wang to conceal his true ownership and control of the assets in the account and to avoid reporting to U.S. tax authorities. Significantly, it also allowed Jing Wang to disguise his involvement secreting tens of thousands of dollars for use in China.
The indictment alleges that after the creation of the Unicorn account, Jing Wang was named an executive vice president of Qualcomm and fell within the company’s insider trading restrictions for officers. As an officer, Wang was exposed to Qualcomm’s confidential business information and was repeatedly notified that he was not permitted to use material, non-public information to engage in stock transactions.
Among the inside information learned by Jing Wang because of his senior position was the fact that in the first quarter of 2010, Qualcomm was poised to announce an increased quarterly dividend and a stock repurchase program. On March 1, 2010, Jing Wang allegedly acted on this material, non-public information and directed Yin to purchase as much Qualcomm stock as possible in the Unicorn account before the information became public. After the close of trading on March 1, 2010, Qualcomm issued a press release announcing the dividend increase and stock repurchase program, and the company’s stock appreciated approximately 10 percent in value.
According to the indictment, Jing Wang next allegedly engaged in insider trading when he learned that Qualcomm was interested in purchasing Atheros. On December 1, 2010, acting on this information, Jing Wang met with Yin and instructed him to sell all Qualcomm shares in the Unicorn account. Jing Wang then told Yin to make preparations to purchase Atheros with the funds in the account but to wait for further confirmation. Jing Wang’s broker proceeded to liquidate all of the illegally held Qualcomm stock in the Unicorn account, resulting in ill-gotten gains of approximately $94,709 from the earlier insider trading.
On December 6, 2010, while attending a meeting of Qualcomm’s Board of Directors in Hong Kong, Jing Wang learned that the board had authorized Qualcomm to make a non-public offer to purchase Atheros for $45 per share. Later that same day, Jing Wang allegedly called Yin in San Diego and instructed him to use all available funds in the secret Unicorn account to purchase Atheros stock. The broker followed Jing Wang’s instructions and purchased 10,800 shares at approximately $34 per share, for a total of $366,766.
Qualcomm’s offer to purchase Atheros remained confidential until an article appeared in the Dealbook section of the New York Times’ website on January 4, 2011, and Qualcomm made an official announcement of the deal on January 5, 2011. Between the close of trading on January 3, 2011, and the close of trading on January5, 2011, the price of Atheros stock jumped from approximately $37 to $44.50—an increase of approximately 20 percent.
The indictment alleges that Jing Wang engaged in a third incident of insider trading on January 25, 2011, when he learned that Qualcomm was about to release record financial results. Immediately prior to announcement of those earnings, Jing Wang directed Yin to sell all the Atheros stock in the Unicorn account and purchase Qualcomm stock. The broker sold all Jing Wang’s illegally purchased Atheros stock for $44.60 per share and used all the proceeds to purchase Qualcomm stock at $50.87 per share. The following day, after Qualcomm announced the record earnings results, Qualcomm’s stock price increased by approximately $4 per share. All told, Jing Wang illegally gained approximately a quarter of a million dollars from these three illegal transactions.
The indictment and criminal information further allege that in order to conceal his insider trading, Jing Wang conspired with Yin and his brother, Bing Wang, to conceal Jing Wang’s control of the Unicorn account and his illegal purchases of Qualcomm and Atheros stock. Yin and Bing Wang agreed to assist Jing Wang, and the three defendants engaged in a number of activities to obstruct any investigation of the trades, as well as to conceal Jing Wang’s control of the Unicorn account. These obstructive acts included concocting a false cover story that would blame Bing Wang for the illegal trades in Qualcomm and Atheros, concealing Jing Wang’s actual control of the Unicorn account from Merrill Lynch, and transferring the proceeds of Jing Wang’s insider trading to another offshore entity nominally owned by Jing Wang’s mother.
For example, in carrying out the obstruction, the indictment alleges that in January 2012, Jing Wang forged the signature of his mother and used her identification documents to create another British Virgin Islands entity called Clearview Resources Ltd. At Jing Wang’s instruction, Yin created a Merrill Lynch account for Clearview and attempted to further distance Jing Wang from the transactions by transferring all the money in the Unicorn account to the Clearview account in a series of structured transactions.
Another example of obstructive conduct alleged in the indictment took place in March 2012, when Jing Wang met with Yin and explained that the SEC was investigating Qualcomm. At that time, Jing Wang told Yin he was worried that his control of the Unicorn account and insider trading would be discovered. By that time, the SEC had already issued a subpoena to Jing Wang calling for him to produce information about any brokerage accounts he controlled. Jing Wang pressed Yin to stick to the false cover story he had created earlier—that his brother, Bing Wang, had made the illegal trades. Soon afterwards, Jing Wang gave Yin a number of Merrill Lynch documents related to his Unicorn account and directed Yin to take the documents to China, give them to Bing Wang, and help his brother use them to corroborate the false cover story. Yin agreed, and during two trips to China in 2012, Yin met with Bing Wang, provided him with Unicorn documents removed from the United States, and rehearsed the false cover story. The indictment further alleges that after these meetings, Bing Wang and Yin sent e-mails to each other containing false and misleading statements in order to make it appear that Bing Wang actually controlled the Unicorn and Clearview accounts.
This case was investigated by the FBI and the Internal Revenue Service–Criminal Investigation. The SEC’s Los Angeles Regional Office also provided assistance, and the SEC today filed a civil complaint against Jing Wang and Yin in federal court in San Diego.
This case is being prosecuted by Trial Attorney James McDonald of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Eric J. Beste, John Parmley, and Timothy Perry of the Southern District of California.