Georgia banker who allegedly embezzled $17 million captured after years on lam

A south Georgia banker accused of embezzling millions by defrauding scores of investors was captured Tuesday after one and a half years on the run, authorities said.

The FBI indicated online that 47-year-old Aubrey "Lee" Price -- whom it characterized as an investment adviser and former minister -- had been captured.

That agency website didn't provide further details, including how Price was detained or what he has been doing since June 2012.

Yet a Glynn County, Georgia, sheriff's office website showed that he was booked Tuesday and is being "held for federal authorities on a charge of giving a false name, address or birth date to a law enforcement officer." Officer Kay Jones said that Price was being held for federal marshals.

His capture ends a law enforcement saga that started in the town of Ailey, a community of about 430 people, and stretched to include parts of Florida, Latin America and the vast waters that separate them.

In late 2010, Price was being celebrated by his peers and written up in newspaper articles after a company that he controlled bought a controlling portion of the troubled Montgomery Bank & Trust in Ailey, which is located some 170 miles southeast of Atlanta.

He was supposed to invest the bank's capital. Instead, prosecutors say, Price used a New York-based "clearing firm" -- a dummy company set up to hide money -- to cover up fraudulent wire transfers and investments.

A complaint filed in federal court on July 2, 2012, claimed that Price and others "raised approximately $40 million from approximately 115 investors," mostly in Georgia and Florida, beginning in 2009, then committed fraud at the expense of those investors.

"The complaint alleges that, instead of investing the money as promised, Price fraudulently wired the bank's funds to accounts that he personally controlled at other financial institutions and provided bank management with altered documents to make it appear as if he had invested the bank's money in (U.S.) Treasury securities," the U.S. attorney's office for eastern New York said then.

In sum, the complaint alleges that Price hid the embezzlement by falsely stating that about $17 million had been deposited in the bank's name at a New York financial services firm.

By the time these charges came out, Price had been missing for several weeks, having told friends he had lost "a large sum of money through his trading activities," according to the complaint.

In the letter he'd purportedly written to acquaintances and business associates that June, Price indicated that he planned to kill himself by "jumping off a ferry boat" off Florida's coast, the complaint stated.

He was spotted -- alive -- in Key West, Florida, in the middle of that month, and the U.S. Coast Guard's subsequent search for his body found nothing.

By then, authorities hinted they believed Price was on the lam. He owns properties in Venezuela and Guatemala, and the FBI's wanted poster for him indicated that he also has a 17-foot boat. The federal agency offered a reward of up to $20,000 for information leading to his arrest; it wasn't immediately clear if anyone will recoup that reward, nor was it known how Price was taken into custody.

A federal grand jury in New York indicted him on wire fraud and securities fraud charges earlier this year. A conviction on the wire fraud charge carries a maximum prison sentence of 30 years, with a 25-year maximum for the other charge.

The bank Price took over -- which had been in operation for nearly 90 years -- was closed in summer 2012 by the state of Georgia, with the U.S. Federal Deposit Insurance Corporation named as its receiver.

Price's family members have been quiet publicly since news of the charges came out. And it was not immediately clear if he has legal representation following his detention.

Former Governor of State of Tamaulipas, Mexico Indicted in the Southern District of Texas

BROWNSVILLE, TX—A federal indictment charging Tomas Yarrington Ruvalcaba, the former governor of the state of Tamaulipas, Mexico, has been unsealed.
The unsealing was announced by United States Attorneys Kenneth Magidson and Robert L. Pitman, of the Southern and Western Districts of Texas, respectively, along with Janice Ayala, special agent in charge, Homeland Security Investigations (HSI); Javier Peña, special agent in charge, Drug Enforcement Administration (DEA); Bernard Butler, acting special agent in charge, Internal Revenue Service-Criminal Investigation (IRS-CI); and Armando Fernandez, special agent in charge, FBI.
Following an investigation that spanned several years, the sealed indictment was returned in May 2013 by a federal grand jury sitting in Brownsville. The indictment charges Yarrington, 56, and Fernando Alejandro Cano Martinez, 57, the owner of a Mexican construction firm, with conspiring to violate the provisions of the Racketeer Influenced and Corrupt Organization (RICO) statute. The two men are also charged with conspiracy to launder money, conspiracy to defraud, and conspiracy to make false statements to federally insured U.S. banks.
Yarrington is also separately charged with a conspiracy to violate the provisions of the Controlled Substances Act, two substantive bank fraud charges, and a conspiracy to structure currency transactions at a domestic financial institution, while Cano is separately charged with three counts of bank fraud.
Yarrington served as governor of Tamaulipas from 1999 to 2004. Tamaulipas lies along the southern border between the United States and Mexico directly across from Brownsville and Laredo.
According to the indictment, beginning in approximately 1998, Yarrington received large bribes from major drug traffickers operating in the Mexican state of Tamaulipas, including the Gulf Cartel. In return, Yarrington allegedly allowed them to operate their large scale, multi-ton enterprises freely, which included the smuggling of large quantities of drugs to the United States for distribution. From 2007 to 2009, Yarrington allegedly became involved in the smuggling of large amounts of cocaine through the Port of Veracruz into the United States.
Yarrington also allegedly collected bribes from commercial operations in Mexico, according to the indictment. Cano operated Materiales y Construcciones Villa de Aguayo, S.A. de C.V., a construction firm in Tamaulipas that received significant public works contracts during Yarrington’s term as governor. The indictment alleges Cano, in turn, paid bribes to Yarrington to include the acquisition of real estate in front names for him.
The indictment further alleges Yarrington also received control over stolen public funds in the latter part of 2004. Portions of those funds were allegedly used to buy a Sabreliner 60 airplane in January 2005. As part of that purchase, $300,000 was transferred to a bank account in the United States. Another portion of the allegedly stolen funds, $5 million Mexican pesos, was transferred to Cano in the spring of 2005, according to the indictment.
The indictment further alleges that starting in approximately 1998, Yarrington, and later to include Cano, became involved in the acquisition of valuable assets in the United States, using front names and business entities established starting in 2005 to disguise the true ownership of the assets. The assets allegedly included bank accounts, residences, airplanes, vehicles, and real estate in Bexar, Cameron, Hidalgo, and Hays Counties, many of which were acquired via allegedly fraudulent loans from banks in Texas. According to the indictment, bank accounts established in front names at Texas banks were used to receive and disburse money to carry the ongoing costs of the assets, such as loan costs and condo fees.
The indictment identifies numerous specific front entities involved in the scheme, each of which allegedly applied for multi-million-dollar fraudulent loans at Texas banks, which Cano allegedly personally guaranteed. The indictment details a total of more than $7 million in transfers into the U.S. accounts of the front entities.
Additional entities were created and used to apply for other loans to fund the purchase of still other assets, according to the indictment. Numerous currency transactions were allegedly conducted at First National Bank, headquartered in Edinburg, Texas, in a structured manner in amounts at or below $10,000 in order to evade the filing of Currency Transaction Reports by the bank.

Tomas Yarrington Ruvalcaba	Fernando Alejandro Cano Martinez

Neither Yarrington nor Cano is in the custody of the United States and warrants remain outstanding for their arrests. Anyone with information about their whereabouts is asked to contact Homeland Security Investigations at 956-542-5811. Persons calling from Mexico should call 001-800-010-5237.
The RICO and money laundering charges each carry sentences of up to 20 years in prison, while conspiracy to commit bank fraud carries as possible punishment up to 30 years. The drug conspiracy charges carry a term of imprisonment of at least 10 years. The currency structuring charges carry a possible five-year term of imprisonment.
The indictment also includes a notice of forfeiture. Some of the assets identified in the indictment already have been seized by the United States in civil forfeiture actions over the course of the investigation, to include approximately 46 acres in Bexar County, a condo on South Padre Island, a 2005 Pilatus airplane, and residences in Hidalgo and Hays counties.
The investigation leading to the indictment has been conducted by the Organized Crime Drug Enforcement Task Force in Brownsville, San Antonio, Houston, Corpus Christi, and New York and has included agents and officers with HSI, DEA, IRS-CI, FBI, and the Texas Attorney General’s Office. The United States government also acknowledges with gratitude the significant assistance received from the government of Mexico in the course of this investigation, including through sharing evidence and expertise.
The case is being prosecuted by Assistant United States Attorneys Charles Lewis, Julie K. Hampton, and Jody Young.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.

Orthopedic Surgeon Pleads Guilty to Conspiracy to Take Fraudulent Tax Deductions for Money Transfers That Helped Conceal Lobbying Efforts Funded by Pakistan Government

ALEXANDRIA, VA—Abdul Razaq, an orthopedic surgeon in La Plata, Maryland, pleaded guilty today to conspiring to defraud the United States Department of Treasury by taking fraudulent tax deductions as part of a decades-long scheme to conceal the transfer of at least $3.5 million from the government of Pakistan to fund lobbying efforts in America related to Kashmir.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; John P. Carlin, Acting Assistant Attorney General for National Security; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division; and Thomas J. Kelly, Special Agent in Charge, IRS-Criminal Investigation, Washington D.C. Field Office, made the announcement after the plea was accepted by United States District Judge Liam O’Grady.
Razaq faces a maximum penalty of five years in prison when he is sentenced on July 18, 2014.
In a statement of facts filed with the plea agreement, Razaq, a member of the Board of Directors of the Society for International Help, a 501(c)(3) tax-exempt charity based in New York, admitted to taking charitable deductions for money that he routed through the Society for International Help, as well as another charity—the Kashmiri American Council (KAC)—even though he was reimbursed at least in part for these deductions in Pakistan. Razaq also admitted to being part of Syed Ghulam Nabi Fai’s financial network of donors, which Fai used to conceal that the KAC was funded with at least $3,500,000 from the Inter-Services Intelligence Directorate, Pakistan’s military intelligence service. Fai was sentenced to serve two years in prison on March 30, 2012.
This investigation is being conducted by the FBI’s Washington Field Office and the IRS-Criminal Investigation’s Washington Field Office. The prosecution is being handled by Assistant U.S. Attorney Gordon Kromberg, Trial Attorney John Gibbs of the Counterterrorism Section of the Justice Department’s National Security Division, and Special Assistant U.S. Attorney Allison Ickovic from the Justice Department’s Tax Division.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.

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.

UBS Securities Japan Co. Ltd. Sentenced for Long-Running Manipulation of LIBOR

WASHINGTON—UBS Securities Japan Co. Ltd. (UBS Securities Japan), an investment bank, financial advisory securities firm, and wholly owned subsidiary of UBS AG, was sentenced today for its role in manipulating the London Interbank Offered Rate (LIBOR), a leading benchmark used in financial products and transactions around the world, the Justice Department announced.
UBS Securities Japan was sentenced by U.S. District Judge Robert N. Chatigny in the District of Connecticut. UBS Securities Japan pleaded guilty on December 19, 2012, to one count of engaging in a scheme to defraud counterparties to interest rate derivative trades by secretly manipulating LIBOR benchmark interest rates. UBS Securities Japan signed a plea agreement with the government in which it admitted its criminal conduct and agreed to pay a $100 million fine, which the court accepted in imposing sentence. In addition, UBS AG, the Zurich-based parent company of UBS Securities Japan, entered into a non-prosecution agreement (NPA) with the government requiring UBS AG to pay an additional $400 million penalty, to admit and accept responsibility for its misconduct as set forth in an extensive statement of facts, and to continue cooperating with the Justice Department in its ongoing investigation. The NPA reflects UBS AG’s substantial cooperation in discovering and disclosing LIBOR misconduct within the financial institution and recognizes the significant remedial measures undertaken by new management to enhance internal controls.
Together with approximately $1 billion in regulatory penalties and disgorgement—$700 million as a result of a Commodity Futures Trading Commission (CFTC) action; $259.2 million as a result of a U.K. Financial Conduct Authority (FCA) action; and $64.3 million as a result of a Swiss Financial Market Supervisory Authority (FINMA) action—the Justice Department’s criminal penalties bring the total amount of the resolution to more than $1.5 billion.
“This action and the resulting sentence prove that no individual or firm is above the law—no matter what,” said Attorney General Eric Holder. “The Department of Justice will continue to stand vigilant against corporations or individuals who threaten the integrity of our financial markets, undermine the stability of our economy, or jeopardize the well-being of our citizens. And, when supported by the facts and the law, we will never hesitate to use every tool and authority available to us to hold accountable those who illegally take advantage of others for their own financial gain.”
“Through its guilty plea and sentence, UBS has been held to account for deliberately manipulating LIBOR, one of the cornerstone interest rates in our global financial system,” said Acting Assistant Attorney General Mythili Raman of the Criminal Division. “The $1.5 billion global resolution against UBS—of which this guilty plea and sentence are a critical element—is just one of several actions we have taken against financial firms throughout the world that sought to illegally influence LIBOR. As we continue our active and ongoing investigation of the manipulation of LIBOR, our prosecutors and agents will continue to tenaciously follow the evidence wherever it leads. Neither UBS nor the individual UBS defendants we have charged in connection with this sophisticated scheme nor any other bank or individual, is above the law.”
According to documents filed in these cases, LIBOR is an average interest rate calculated based on submissions from leading banks around the world and reflecting the rates those banks believe they would be charged if borrowing from other banks. LIBOR serves as the primary benchmark for short-term interest rates globally and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans, and other consumer lending products. The Bank of International Settlements estimated that as of the second half of 2009, outstanding interest rate contracts were estimated at approximately $450 trillion.
LIBOR, published by the British Bankers’ Association (BBA), a trade association based in London, is calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year. The LIBOR for a given currency at a specific maturity is the result of a calculation based upon submissions from a panel of banks.
Beginning in September 2006, UBS Securities Japan and a senior trader employed in the Tokyo office of UBS Securities Japan orchestrated a sustained, wide-ranging, and systematic scheme to move yen LIBOR in a direction favorable to the trader’s trading positions, defrauding UBS’s counterparties, and harming others with financial products referencing yen LIBOR who were unaware of the manipulation. Between November 2006 and August 2009, the senior trader or a colleague of the senior trader endeavored to manipulate yen LIBOR on at least 335 of the 738 trading days in that period and during some periods on almost a daily basis. Because of the large size of the senior trader’s positions, even slight moves of a fraction of a percent in yen LIBOR could generate large profits. For example, the senior trader once estimated that a 0.01 percent movement in the final yen LIBOR fixing on a specific date could result in a $2 million profit for UBS.
According to the charging documents, UBS Securities Japan and the senior trader employed three strategies to execute the scheme: causing UBS to make false and misleading yen LIBOR submissions to the BBA; causing cash brokerage firms, which purported to provide market information regarding LIBOR to panel banks, to disseminate false and misleading information about short-term interest rates for yen, which those banks could and did rely upon in formulating their own LIBOR submissions to the BBA; and communicating with interest rate derivatives traders employed at three other yen LIBOR panel banks in an effort to cause them to make false and misleading yen LIBOR submissions to the BBA.
In entering into the NPA with UBS AG, the Justice Department considered information from UBS and from regulatory agencies in Switzerland and Japan demonstrating that in the last two years UBS has made important and positive changes in its management, compliance, and training to ensure adherence to the law. The department received favorable reports from the FINMA and the Japan Financial Services Authority (JFSA) describing, respectively, progress that UBS has made in its approach to compliance and enforcement and UBS Securities Japan’s effective implementation of the remedial measures the JFSA imposed based on findings relating to the attempted manipulation of yen benchmarks.
The investigation was conducted by the FBI’s Washington Field Office. The prosecution is being handled by Deputy Chiefs Daniel Braun and William Stellmach and Trial Attorneys Thomas B.W. Hall and Sandra L. Moser, along with former Trial Attorney Luke Marsh, of the Criminal Division’s Fraud Section. Assistant U.S. Attorneys Eric Glover and Liam Brennan of the U.S. Attorney’s Office for the District of Connecticut have provided valuable assistance. The Criminal Division’s Office of International Affairs also provided assistance in this matter.
The investigation leading to these cases has required, and has greatly benefited from, a diligent and wide-ranging cooperative effort among various enforcement agencies both in the United States and abroad. The Justice Department acknowledges and expresses its deep appreciation for this assistance. In particular, the CFTC’s Division of Enforcement referred this matter to the Department and, along with the FCA, has played a major role in the investigation. The SEC has also played a significant role in the LIBOR series of investigations and, among other efforts, has made an invaluable contribution to the investigation relating to UBS. The Department of Justice also wishes to acknowledge and thank FINMA, the Japanese Ministry of Justice, and the JFSA. Various agencies and enforcement authorities from other nations also have participated in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the Department is grateful for their cooperation and assistance.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.

Fifth Adams Produce Official Charged in Scheme to Defraud U.S. Government

BIRMINGHAM—A fifth Adams Produce Company official now faces federal charges in a scheme to defraud the federal government, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein, Jr.
A federal grand jury today indicted Michael John O'Brien, 50, of Navarre, Florida, who was general manager of the Adams Produce distribution center in Pensacola, Florida. O'Brien’s duties included determining the prices Adams Produce charged the United States under contracts it had with the government.
The 37-count indictment filed in U.S. District Court charges O'Brien with conspiracy to defraud the U.S. Department of Defense and its Defense Logistics Agency of hundreds of thousands of dollars. The indictment also charges O'Brien with 32 counts of wire fraud or aiding and abetting wire fraud and with four counts of false claims or aiding and abetting false claims in order to carry out the conspiracy.
Four other Adams Produce officials—Scott David Grinstead, David Andrew Kirkland, Christopher Alan Pfahl, and Stanley Joel Butler, II—have pleaded guilty to charges in connection with defrauding the government.
Adams Produce was a Birmingham-based company that had been a leading distributor of fresh fruits and vegetables across the Southeast for many years. It was founded more than 100 years ago as a family-owned business. The family sold the company to executives and a private equity firm in 2010. Adams Produce closed abruptly and filed for bankruptcy in 2012.
The Department of Defense, through DLA, contracted with Adams Produce and other distributers to supply fresh fruits and vegetables to military bases, public school systems, junior colleges, and universities. Adams Produce had contracts worth millions of dollars with the U.S. government, according to O'Brien’s indictment. Under the contracts, the price the government paid Adams depended largely on what Adams had to pay its produce suppliers.
Each week, Adams Produce electronically submitted pricing information to DLA and was required, periodically, to submit purchase orders to DLA proving its costs, according to the indictment.
Adams bought from TLC, one of the largest distributors of fresh produce in the United States, with offices located across the country. Between August 2011 and November 2011, according to the indictment, O'Brien and other Adams employees arranged and conducted transactions with TLC in Marietta, Georgia, designed to create purchase orders and invoices that reflected inflated costs to Adams Produce.
According to O'Brien’s indictment, he and others continued the conspiracy as follows:
O'Brien communicated instructions, often by e-mail, to other Adams' employees concerning the inflated prices to show on the false purchase orders. Adams' employees and officers used the false purchase orders to support false pricing information the company submitted to DLA for payment. The transactions with TLC to produce false purchase orders and the false information submitted to DLA "were intended to increase Adams Produce’s profit margins and inflate the income reported on Adams Produce’s financial statements."
The maximum penalty for the conspiracy count is 10 years in prison and a $250,000 fine. The maximum penalty for each wire fraud count is 20 years in prison and a $250,000 fine, and the maximum penalty for each false claim count is five years in prison and a $250,000 fine.
The FBI investigated the case, which Assistant U.S. Attorney George A. Martin, Jr. is prosecuting.
The public is reminded that an indictment contains only charges. A defendant is presumed innocent, and it is the government’s responsibility to prove guilt beyond a reasonable doubt at trial.