Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Ana Alliegro, 44, of Granada, Nicaragua, was arrested and brought back to the United States from Nicaragua, having been previously indicted for having violated the Federal Election Campaign Act in connection with the Democratic Party primary election for Florida’s 26th Congressional District. Alliegro’s initial appearance is scheduled for March 10, 2014 at 1:30 p.m. before U.S. Magistrate Judge Patrick White.
The indictment charges Alliegro with engaging in a conspiracy to make false statements to the Federal Election Commission and to violate the contribution limits of the Federal Election Campaign Act (Count 1); making a false statement (Count 2); and making illegal campaign contributions (Counts 3 & 4). If convicted, Alliegro faces a maximum term of up to five years in prison on each count and a fine of up to $250,000 on each count.
Mr. Ferrer commended the investigative efforts of the FBI’s Miami Area Corruption Task Force; the Legal Attaché Panama City, Panama; and Diplomatic Security Service. The case is being prosecuted by Senior Litigation Counsel Thomas J. Mulvihill.
An Indictment is only an accusation and a defendant is presumed innocent until proven guilty.
Showing posts with label false statements. Show all posts
Showing posts with label false statements. Show all posts
Tuesday, March 11, 2014
Wednesday, February 26, 2014
Former Oklahoma Jail Superintendents Convicted of Using Excessive Force Against Inmates
Today, a federal jury in the U.S. District Court for the Eastern District of Oklahoma in Muskogee, Oklahoma, convicted Raymond A. Barnes, 43, and Christopher A. Brown, 32, the former jail superintendent and assistant jail superintendent, respectively, of the Muskogee County Jail (MCJ) on multiple counts of civil rights offenses related to allegations of excessive force on inmates at MCJ on or between August 2009 and May 2011. Brown was also convicted of making material false statements to the FBI.
Both Barnes and Brown were found guilty of conspiring to violate the rights of inmates housed at MCJ by assaulting inmates themselves or by directing other jailers employed by MCJ to do so. Specifically, the defendants did or caused the following to be done: unjustifiably strike, assault, harm, and physically punish inmates at MCJ who were restrained, compliant, and not posing a physical threat; organize “meet and greets,” whereby jailers would scare, punish, and harm incoming inmates from neighboring counties by throwing and slamming the handcuffed inmates to the ground upon their arrival at MCJ; threaten to fire MCJ employees if they reported abusive behavior directly to the sheriff or to outside law enforcement authorities; require and encourage MCJ jailers to write incident reports that falsely justified uses of force and contained misleading or inaccurate accounts of what had occurred when force was used; and perpetuate an environment within MCJ that allowed unlawful beatings and assaults against inmates to continue indefinitely and without consequence.
Both defendants were also convicted of violating the rights of an inmate identified as J.R. when MCJ jailers slammed and threw J.R. head-first to the ground while he was handcuffed. Barnes was additionally convicted of violating the rights of a second inmate, G.T., for similar conduct. Brown was acquitted of violating the rights of G.T.
In addition, Brown was convicted of one count of making material false statements to the FBI. Brown falsely claimed that, during meet and greets, the incoming inmate was ordered out of the transport vehicle and then “gently placed” on the ground. But in fact, Brown knew at the time of his statement to the FBI that during these meet and greets the MCJ jailers routinely threw and slammed inmates to the ground even though the inmates were restrained and posed no physical threat.
“Our constitutional system of government requires this nation’s jailers to abide by the laws they enforce and to protect the constitutional rights of all persons in their custody,” said Acting Assistant Attorney General Jocelyn Samuels of the Civil Rights Division. “Today’s verdict demonstrates that the Department of Justice will vigorously prosecute anyone who abuses their official power to harm the people in their custody.”
The defendants face a statutory maximum penalty of 10 years for each of the civil rights convictions. Brown faces a statutory maximum penalty of five years for making material false statements to the FBI.
This case was investigated by the Muskogee Resident Agency of the Oklahoma City Division of the FBI and prosecuted by Trial Attorneys Fara Gold and Dana Mulhauser of the Civil Rights Division.
Both Barnes and Brown were found guilty of conspiring to violate the rights of inmates housed at MCJ by assaulting inmates themselves or by directing other jailers employed by MCJ to do so. Specifically, the defendants did or caused the following to be done: unjustifiably strike, assault, harm, and physically punish inmates at MCJ who were restrained, compliant, and not posing a physical threat; organize “meet and greets,” whereby jailers would scare, punish, and harm incoming inmates from neighboring counties by throwing and slamming the handcuffed inmates to the ground upon their arrival at MCJ; threaten to fire MCJ employees if they reported abusive behavior directly to the sheriff or to outside law enforcement authorities; require and encourage MCJ jailers to write incident reports that falsely justified uses of force and contained misleading or inaccurate accounts of what had occurred when force was used; and perpetuate an environment within MCJ that allowed unlawful beatings and assaults against inmates to continue indefinitely and without consequence.
Both defendants were also convicted of violating the rights of an inmate identified as J.R. when MCJ jailers slammed and threw J.R. head-first to the ground while he was handcuffed. Barnes was additionally convicted of violating the rights of a second inmate, G.T., for similar conduct. Brown was acquitted of violating the rights of G.T.
In addition, Brown was convicted of one count of making material false statements to the FBI. Brown falsely claimed that, during meet and greets, the incoming inmate was ordered out of the transport vehicle and then “gently placed” on the ground. But in fact, Brown knew at the time of his statement to the FBI that during these meet and greets the MCJ jailers routinely threw and slammed inmates to the ground even though the inmates were restrained and posed no physical threat.
“Our constitutional system of government requires this nation’s jailers to abide by the laws they enforce and to protect the constitutional rights of all persons in their custody,” said Acting Assistant Attorney General Jocelyn Samuels of the Civil Rights Division. “Today’s verdict demonstrates that the Department of Justice will vigorously prosecute anyone who abuses their official power to harm the people in their custody.”
The defendants face a statutory maximum penalty of 10 years for each of the civil rights convictions. Brown faces a statutory maximum penalty of five years for making material false statements to the FBI.
This case was investigated by the Muskogee Resident Agency of the Oklahoma City Division of the FBI and prosecuted by Trial Attorneys Fara Gold and Dana Mulhauser of the Civil Rights Division.
Friday, February 7, 2014
Elma Man Indicted on Gun Charges and for Making False Statements
BUFFALO, NY—U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned an indictment charging Bernard T. Grucza, 38, of Elma, New York, with making false statements during a firearm purchase, possession of a firearm by a person subject to as domestic violence order of protection, and making false statements. The charges carry a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Timothy C. Lynch, who is handling the case, stated that according to the indictment, the defendant made false oral and written statements to South Georgia Outdoors in an effort to obtain a Beretta 9mm pistol. In addition, Grucza made false written statements to Big Daddy Guns in order to obtain a Ruger .380 caliber pistol.
The indictment also states that between July 13, 2013 and October 16, 2013, the defendant possessed a Ruger .380 caliber pistol despite being the subject of a restraining order issued by Elma Town Court. The indictment further states that Grucza made false statements to special agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives that he had destroyed the Ruger .380 caliber pistol and thrown out the parts when in fact he had not.
The defendant will be arraigned on February 10, 2014, at 2:00 p.m. before U.S. Magistrate Judge H. Kenneth Schroeder, Jr.
The indictment is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon; the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig; the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard; and the Hamburg Police Department, under the direction of Michael Williams.
The fact that a defendant has been charged with a crime is merely an accusation, and the defendant is presumed innocent until and unless proven guilty
Assistant U.S. Attorney Timothy C. Lynch, who is handling the case, stated that according to the indictment, the defendant made false oral and written statements to South Georgia Outdoors in an effort to obtain a Beretta 9mm pistol. In addition, Grucza made false written statements to Big Daddy Guns in order to obtain a Ruger .380 caliber pistol.
The indictment also states that between July 13, 2013 and October 16, 2013, the defendant possessed a Ruger .380 caliber pistol despite being the subject of a restraining order issued by Elma Town Court. The indictment further states that Grucza made false statements to special agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives that he had destroyed the Ruger .380 caliber pistol and thrown out the parts when in fact he had not.
The defendant will be arraigned on February 10, 2014, at 2:00 p.m. before U.S. Magistrate Judge H. Kenneth Schroeder, Jr.
The indictment is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge Thomas J. Cannon; the Federal Bureau of Investigation, under the direction of Special Agent in Charge Brian P. Boetig; the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard; and the Hamburg Police Department, under the direction of Michael Williams.
The fact that a defendant has been charged with a crime is merely an accusation, and the defendant is presumed innocent until and unless proven guilty
Naples Man Pleads Guilty to Making False Statements to the FBI
ROCHESTER, NY—U.S. Attorney William J. Hochul, Jr. announced today that Brandon Todd, 20, of Naples, New York, pleaded guilty before U.S. District Judge Frank P. Geraci, Jr. to making false statements to the Federal Bureau of Investigation. The charge carries a maximum penalty of five years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Jennifer M. Noto, who is handling the case, stated that the defendant called the FBI in April and early May 2013 claiming to have information about sex trafficking. Todd also claimed to be involved in sex trafficking and to have connections to a group involved in sex trafficking. Following the defendant’s calls, the FBI began an investigation into Todd’s claims. On July 10, 2013, the defendant made false statements to an FBI special agent that he had recruited approximately 49 girls for a sex trafficking ring and that he was a member of a gang. At the time, Todd knew that these statements were false. These false statements—concerning the nature of the defendant’s involvement in a sex trafficking ring and his affiliation with a gang—were material to the FBI’s investigation.
The plea is the culmination of an investigation on the part of special agents of the Federal Bureau of Investigation, under the direction of Special Agent In Charge Brian Boetig.
Sentencing is scheduled for May 15, 2014, at 3:30 p.m. before Judge Geraci.
Assistant U.S. Attorney Jennifer M. Noto, who is handling the case, stated that the defendant called the FBI in April and early May 2013 claiming to have information about sex trafficking. Todd also claimed to be involved in sex trafficking and to have connections to a group involved in sex trafficking. Following the defendant’s calls, the FBI began an investigation into Todd’s claims. On July 10, 2013, the defendant made false statements to an FBI special agent that he had recruited approximately 49 girls for a sex trafficking ring and that he was a member of a gang. At the time, Todd knew that these statements were false. These false statements—concerning the nature of the defendant’s involvement in a sex trafficking ring and his affiliation with a gang—were material to the FBI’s investigation.
The plea is the culmination of an investigation on the part of special agents of the Federal Bureau of Investigation, under the direction of Special Agent In Charge Brian Boetig.
Sentencing is scheduled for May 15, 2014, at 3:30 p.m. before Judge Geraci.
Wednesday, January 29, 2014
Former Virginia Governor and Former First Lady Indicted on Public Corruption and Related Charges
RICHMOND—A federal grand today returned a 14-count indictment against former Virginia Governor Robert F. McDonnell and former First Lady Maureen G. McDonnell for allegedly participating in a scheme to violate federal public corruption laws.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Mythili Raman, Acting Assistant Attorney General for the Justice Department’s Criminal Division; Jeffrey C. Mazanec, Special Agent in Charge of the FBI’s Richmond Field Office; Richard Weber, Chief of the Internal Revenue Service-Criminal Investigation (IRS-CI); and Colonel W. Steven Flaherty, Virginia State Police Superintendent, made the announcement.
The indictment, returned in the Eastern District of Virginia, charges Robert McDonnell and Maureen McDonnell, both 59 and of Glen Allen, Virginia, with one count of conspiracy to commit honest-services wire fraud; three counts of honest-services wire fraud; one count of conspiracy to obtain property under color of official right; six counts of obtaining property under color of official right; and one count of making false statements to a federal credit union. Robert McDonnell is also charged with an additional count of making a false statement to a financial institution, and Maureen McDonnell is charged with one count of obstruction of an official proceeding.
“I thank the Assistant U.S. Attorneys, FBI, Virginia State Police, and the Internal Revenue Service-Criminal Investigation for their exceptional efforts in the investigation of this case,” said Acting U.S. Attorney Boente. “We will continue to work tirelessly with our law enforcement partners to investigate and prosecute public corruption.”
“Today’s charges represent the Justice Department’s continued commitment to rooting out public corruption at all levels of government,” said Acting Assistant Attorney General Raman. “Ensuring that elected officials uphold the public’s trust is one of our most critical responsibilities.”
“One of the most important investigative responsibilities with which the FBI is tasked is ensuring that the integrity of our elected public officials has not been compromised,” said FBI SAC Mazanec. “The Richmond Division of the FBI and our law enforcement partners have diligently worked this lengthy, detailed, and sensitive matter. I want to thank all those who have worked very hard and with great care on this investigation.”
“The state police and FBI agents assigned to this case have devoted an extensive amount of time and effort to this matter,” said Colonel Flaherty. “They are to be commended for their professionalism, objectivity, and dedication to duty in conducting this highly complex and sensitive investigation.”
“Public officials hold positions of trust and must accept the transparency and accountability that our laws require and their constituents expect,” said IRS-CI Chief Weber. “IRS-CI stands committed to investigating those officials. This case should serve as a strong warning to those who might consider similar behavior. No one is above the law, and everyone is accountable for their misdeeds.”
According to the indictment, from April 2011 through March 2013, the McDonnells participated in a scheme to use the former governor’s official position to enrich themselves and their family members by soliciting and obtaining payments, loans, gifts, and other things of value from Star Scientific, a Virginia-based corporation, and “JW,” then Star Scientific’s chief executive officer. The McDonnells obtained the things of value in exchange for the former governor performing official actions on an as-needed basis to legitimize, promote, and obtain research studies for Star’s products, including the dietary supplement Anatabloc®.
As alleged in the indictment, the McDonnells obtained from JW more than $135,000 in direct payments as gifts and loans, thousands of dollars in golf outings, and numerous other things of value. As part of the alleged scheme, the official actions that Robert McDonnell performed included arranging meetings for JW with Virginia government officials, hosting and attending events at the Governor’s Mansion designed to encourage Virginia university researchers to initiate studies of Star’s products and to promote Star’s products to doctors for referral to their patients, contacting other Virginia government officials as part of an effort to encourage Virginia state research universities to initiate studies of Star’s products, and promoting Star’s products and facilitating its relationships with Virginia government officials.
The indictment further alleges that the McDonnells attempted to conceal the things of value received from JW and Star to hide the nature and scope of their dealings with JW from the citizens of Virginia by, for example, routing things of value through family members and corporate entities controlled by the former governor to avoid annual disclosure requirements. Moreover, the indictment alleges that on October 3, 2012, Robert McDonnell sent loan paperwork to a lender that did not disclose the loans from JW, and, on February 1, 2013, the McDonnells signed loan paperwork submitted to another lender that did not disclose the loans. Similarly, the indictment alleges that on February 15, 2013, Maureen McDonnell was questioned by law enforcement about the loans and made false and misleading statements regarding the defendants’ relationship with JW. Three days later, on February 18, 2013, Robert McDonnell is alleged to have sent loan paperwork to one of the previously mentioned lenders disclosing the loans from JW. Additionally, after her interview with law enforcement, Maureen McDonnell allegedly wrote a handwritten note to JW in which she falsely attempted to make it appear that she and JW had previously discussed and agreed that she would return certain designer luxury goods rather than keep them permanently, all as part of an effort to obstruct, influence, and impede the investigation.
An indictment is merely an accusation, and the defendants are presumed innocent unless and until proven guilty.
If convicted, the McDonnells could each face a maximum statutory sentence of 20 years in prison and a fine of the greater of $250,000 or twice the gross gain or loss on the conspiracy to commit honest-services wire fraud count, the honest-services wire fraud counts, the conspiracy to obtain property under color of official right count, and the obtaining property under color of official right counts; a maximum statutory sentence of 30 years in prison and a fine of the greater of $1,000,000 or twice the gross gain or loss on the false statement counts; and a maximum statutory sentence of 20 years in prison and a fine of the greater of $250,000 or twice the gross gain or loss on the obstruction of an official proceeding count.
The case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry, Jessica D. Aber, and Ryan S. Faulconer of the U.S. Attorney’s Office for the Eastern District of Virginia and Deputy Chief David V. Harbach, II of the Criminal Division’s Public Integrity Section. The case is being investigated by the FBI, IRS-CI and the Virginia State Police.
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.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Mythili Raman, Acting Assistant Attorney General for the Justice Department’s Criminal Division; Jeffrey C. Mazanec, Special Agent in Charge of the FBI’s Richmond Field Office; Richard Weber, Chief of the Internal Revenue Service-Criminal Investigation (IRS-CI); and Colonel W. Steven Flaherty, Virginia State Police Superintendent, made the announcement.
The indictment, returned in the Eastern District of Virginia, charges Robert McDonnell and Maureen McDonnell, both 59 and of Glen Allen, Virginia, with one count of conspiracy to commit honest-services wire fraud; three counts of honest-services wire fraud; one count of conspiracy to obtain property under color of official right; six counts of obtaining property under color of official right; and one count of making false statements to a federal credit union. Robert McDonnell is also charged with an additional count of making a false statement to a financial institution, and Maureen McDonnell is charged with one count of obstruction of an official proceeding.
“I thank the Assistant U.S. Attorneys, FBI, Virginia State Police, and the Internal Revenue Service-Criminal Investigation for their exceptional efforts in the investigation of this case,” said Acting U.S. Attorney Boente. “We will continue to work tirelessly with our law enforcement partners to investigate and prosecute public corruption.”
“Today’s charges represent the Justice Department’s continued commitment to rooting out public corruption at all levels of government,” said Acting Assistant Attorney General Raman. “Ensuring that elected officials uphold the public’s trust is one of our most critical responsibilities.”
“One of the most important investigative responsibilities with which the FBI is tasked is ensuring that the integrity of our elected public officials has not been compromised,” said FBI SAC Mazanec. “The Richmond Division of the FBI and our law enforcement partners have diligently worked this lengthy, detailed, and sensitive matter. I want to thank all those who have worked very hard and with great care on this investigation.”
“The state police and FBI agents assigned to this case have devoted an extensive amount of time and effort to this matter,” said Colonel Flaherty. “They are to be commended for their professionalism, objectivity, and dedication to duty in conducting this highly complex and sensitive investigation.”
“Public officials hold positions of trust and must accept the transparency and accountability that our laws require and their constituents expect,” said IRS-CI Chief Weber. “IRS-CI stands committed to investigating those officials. This case should serve as a strong warning to those who might consider similar behavior. No one is above the law, and everyone is accountable for their misdeeds.”
According to the indictment, from April 2011 through March 2013, the McDonnells participated in a scheme to use the former governor’s official position to enrich themselves and their family members by soliciting and obtaining payments, loans, gifts, and other things of value from Star Scientific, a Virginia-based corporation, and “JW,” then Star Scientific’s chief executive officer. The McDonnells obtained the things of value in exchange for the former governor performing official actions on an as-needed basis to legitimize, promote, and obtain research studies for Star’s products, including the dietary supplement Anatabloc®.
As alleged in the indictment, the McDonnells obtained from JW more than $135,000 in direct payments as gifts and loans, thousands of dollars in golf outings, and numerous other things of value. As part of the alleged scheme, the official actions that Robert McDonnell performed included arranging meetings for JW with Virginia government officials, hosting and attending events at the Governor’s Mansion designed to encourage Virginia university researchers to initiate studies of Star’s products and to promote Star’s products to doctors for referral to their patients, contacting other Virginia government officials as part of an effort to encourage Virginia state research universities to initiate studies of Star’s products, and promoting Star’s products and facilitating its relationships with Virginia government officials.
The indictment further alleges that the McDonnells attempted to conceal the things of value received from JW and Star to hide the nature and scope of their dealings with JW from the citizens of Virginia by, for example, routing things of value through family members and corporate entities controlled by the former governor to avoid annual disclosure requirements. Moreover, the indictment alleges that on October 3, 2012, Robert McDonnell sent loan paperwork to a lender that did not disclose the loans from JW, and, on February 1, 2013, the McDonnells signed loan paperwork submitted to another lender that did not disclose the loans. Similarly, the indictment alleges that on February 15, 2013, Maureen McDonnell was questioned by law enforcement about the loans and made false and misleading statements regarding the defendants’ relationship with JW. Three days later, on February 18, 2013, Robert McDonnell is alleged to have sent loan paperwork to one of the previously mentioned lenders disclosing the loans from JW. Additionally, after her interview with law enforcement, Maureen McDonnell allegedly wrote a handwritten note to JW in which she falsely attempted to make it appear that she and JW had previously discussed and agreed that she would return certain designer luxury goods rather than keep them permanently, all as part of an effort to obstruct, influence, and impede the investigation.
An indictment is merely an accusation, and the defendants are presumed innocent unless and until proven guilty.
If convicted, the McDonnells could each face a maximum statutory sentence of 20 years in prison and a fine of the greater of $250,000 or twice the gross gain or loss on the conspiracy to commit honest-services wire fraud count, the honest-services wire fraud counts, the conspiracy to obtain property under color of official right count, and the obtaining property under color of official right counts; a maximum statutory sentence of 30 years in prison and a fine of the greater of $1,000,000 or twice the gross gain or loss on the false statement counts; and a maximum statutory sentence of 20 years in prison and a fine of the greater of $250,000 or twice the gross gain or loss on the obstruction of an official proceeding count.
The case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry, Jessica D. Aber, and Ryan S. Faulconer of the U.S. Attorney’s Office for the Eastern District of Virginia and Deputy Chief David V. Harbach, II of the Criminal Division’s Public Integrity Section. The case is being investigated by the FBI, IRS-CI and the Virginia State Police.
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.
Monday, January 13, 2014
Treasurer of Charitable Organization Pleads Guilty to Making False Statements
ALEXANDRIA, VA—Sheikh Javed Rehmat, a pharmacist in Little Neck, New York, pleaded guilty today to one count of making false statements relating to a government investigation into violations of the International Emergency Economic Powers Act, the Foreign Agents Registration Act, and a conspiracy to defraud the United States.
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; and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation (IRS-CI) Field Office in Washington, D.C., made the announcement after the plea was accepted by United States District Judge Liam O’Grady.
Rehmat 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, Rehmat, a treasurer and member of the Board of Directors of the Society for International Help (SIH), a 501(c)(3) tax-exempt charity based in New York, admitted to making false statements surrounding financial transactions concerning SIH, as well as another charity—the Kashmiri American Council (KAC). Syed Ghulam Nabi Fai, the director of the KAC, was sentenced to serve two years in prison on March 30, 2012, for his role in a conspiracy to conceal that the KAC was funded between 1990 and 2011 with at least $3,500,000 from the government of Pakistan, including the Inter-Services Intelligence Agency (Pakistan’s military intelligence service).
Rehmat also admitted to making false statements surrounding the purchase of over $8,000,000 of shares of stock from Yasin Kadi and/or Muwaffaq Limited—over $3,330,000 of which had been purchased with money that Rehmat had wired from SIH’s accounts to those of another charitable organization in Pakistan. Yasin Kadi has been designated as a Specially Designated Global Terrorist by the U.S. Department of Treasury, Office of Foreign Assets Control, since 2001. Yasin Kadi held these shares through Muwaffaq Limited, which was registered in the Isle of Man.
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.
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; and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation (IRS-CI) Field Office in Washington, D.C., made the announcement after the plea was accepted by United States District Judge Liam O’Grady.
Rehmat 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, Rehmat, a treasurer and member of the Board of Directors of the Society for International Help (SIH), a 501(c)(3) tax-exempt charity based in New York, admitted to making false statements surrounding financial transactions concerning SIH, as well as another charity—the Kashmiri American Council (KAC). Syed Ghulam Nabi Fai, the director of the KAC, was sentenced to serve two years in prison on March 30, 2012, for his role in a conspiracy to conceal that the KAC was funded between 1990 and 2011 with at least $3,500,000 from the government of Pakistan, including the Inter-Services Intelligence Agency (Pakistan’s military intelligence service).
Rehmat also admitted to making false statements surrounding the purchase of over $8,000,000 of shares of stock from Yasin Kadi and/or Muwaffaq Limited—over $3,330,000 of which had been purchased with money that Rehmat had wired from SIH’s accounts to those of another charitable organization in Pakistan. Yasin Kadi has been designated as a Specially Designated Global Terrorist by the U.S. Department of Treasury, Office of Foreign Assets Control, since 2001. Yasin Kadi held these shares through Muwaffaq Limited, which was registered in the Isle of Man.
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.
Thursday, September 19, 2013
U.S. Attorney Joseph Hogsett Announces Charges Against Seven Individuals and Three Corporations in Indiana-Based Biofuels Fraud Scheme
INDIANAPOLIS—U.S. Attorney Joseph H. Hogsett, along with Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, announced today the return of two indictments against six individuals and three companies for offenses involving federal renewable fuel programs, allegedly creating losses to victims totaling more than $100 million. An additional defendant was charged today by federal information and has petitioned the court to enter a plea of guilty and cooperate with investigators. The 88 counts included in the three charging documents include allegations of conspiracy, wire fraud, false tax claims, false statements under the Clean Air Act, obstruction of justice, money laundering, and securities fraud.
“This morning, federal agents brought into custody individuals who allegedly operated the largest tax and securities fraud scheme in Indiana history,” Hogsett said. “This case represents a collaborative effort on the part of law enforcement to hold fully accountable those who seek personal profit at the taxpayer’s expense.”
“Congress enacted incentives for the production of biofuels to make the United States stronger and more energy independent,” said Dreher. “Fraud by parties claiming such incentives threatens these important public policies. The Justice Department will vigorously prosecute those seeking to line their pockets using scams like those alleged in this indictment.”
The Law
The Energy Independence and Security Act of 2007 created a number of federally funded programs that provided monetary incentives for the production of biodiesel. A dollar-per-gallon tax credit was available only to the first person to blend the pure biodiesel (known as B100) with petroleum diesel. After the biodiesel was blended and the tax credit claimed, the resulting product was generally known in the industry as B99, meaning that it was approximately 99 percent biodiesel and one percent petroleum diesel. Additionally, biodiesel producers could generate and attach credits known as “renewable identification numbers” or RINs to biodiesel they produced. Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value. These two incentives were available only once for any given volume of biodiesel. For these reasons, a gallon of B100 with RINs and an available tax credit was worth much more than a gallon of RIN-stripped B99. At times during the conspiracy, a gallon of B100 with RINs was worth up to $2 more than an equivalent gallon of B99, effectively doubling its value.
The Defendants
Four of the defendants—Craig Ducey, Chad Ducey, Chris Ducey, and Brian Carmichael—operated E-Biofuels, a Middletown, Indiana company that held itself out as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. The government alleges that these defendants conspired with Joseph Furando and Evelyn Katirina Pattison—two executives with a pair of related New Jersey-based companies that operated under the names Caravan Trading Company and CIMA Green—to purchase RIN-stripped B99 from third parties, pretend that E-Biofuels had produced that fuel at its Middletown facility, and fraudulently resell that fuel to customers as B100 with RINs and an available tax credit. While the E-Biofuels facility was capable of producing B100, at times during the conspiracy it was producing no fuel of its own but instead was simply acting as a pass-through facility for fuel purchased elsewhere.
The Alleged Conspiracy
The indictment alleges that beginning in July 2009 and continuing until May 2012, these defendants fraudulently sold more than 35 million gallons of RIN-stripped B99 to unwitting customers who paid an inflated price, thinking they were purchasing B100 with RINs and an available tax credit. All told, the customers were allegedly defrauded of more than $55 million as a result of these activities, and the Internal Revenue Service was exposed to as much as $35 million in false claims.
The government alleges that the defendants delivered the fraudulently mislabeled fuel to the victims in one of three ways. In some cases, the biodiesel was transported from fuel terminals to the E-Biofuels facility in Middletown where it was unloaded into a holding tank. A short time later, the biodiesel would be reloaded into tanker trucks and delivered to unsuspecting customers along with fraudulent paperwork that misidentified it as B100 with RINs produced by E-Biofuels. On other occasions, the truck drivers did not unload the fuel when they arrived at Middletown plant. Instead, they simply picked up paperwork falsely stating that the truck contained a load of B100 with RINs that originated at the E-Biofuels facility. The truck drivers referred to this procedure as “flipping a load.”
Finally, in the most egregious instances, the truck drivers hauled RIN-stripped B99 from fuel terminals directly to customers. Because these loads never went to the E-Biofuels facility, they were known as “ghost loads” or “phantom loads.” In those cases, the defendants faxed or e-mailed the false paperwork to the truck drivers along their routes between the fuel terminals and the customer locations.
In an information filed today in federal court, Brian Carmichael was charged with one count of conspiracy to defraud the United States. Carmichael has filed a petition with the court indicating his willingness to plead guilty to this charge. Carmichael faces up to five years in federal prison if convicted.
The Alleged Securities Fraud
In May 2010, E-Biofuels was purchased by Imperial Petroleum, a publicly traded company based in Evansville. After the acquisition, E-Biofuels accounted for more than 97 percent of Imperial Petroleum’s operating income. Defendant Jeffrey Wilson was the president and chief executive officer of Imperial Petroleum.
The government alleges that Jeffrey Wilson and Craig Ducey knew that E-Biofuels was purchasing biodiesel from third parties instead of making its own biodiesel. They hid this fact from Imperial’s investors, shareholders, and outside auditors by falsely stating that E-Biofuels produced biodiesel from chicken fat and other feedstocks. They made these and other related false statements and omissions in Imperial Petroleum’s annual and quarterly reports filed with the Securities and Exchange Commission and in written and oral communications with Imperial Petroleum’s investors and outside auditors.
The Process
If found guilty, the six individuals charged by indictment face up to 20 years in federal prison on some counts, as well as significant fines. The three companies indicted today also face significant fines and other regulatory action. The defendants will have initial appearances before a federal magistrate judge today at 1:30 p.m.
The case is being prosecuted by Senior Litigation Counsel Steven D. DeBrota of the U.S. Attorney’s Office, along with Senior Counsel Thomas Ballantine of the Environmental Crimes Section in the Department of Justice’s Environment and Natural Resources Division, and Jake Schmidt, a Special Assistant U.S. Attorney at the U.S. Attorney’s Office and Senior Attorney for the Securities and Exchange Commission.
An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Law Enforcement Partners
The collaborative investigation that led to today’s arrests was the result of work by the Environmental Protection Agency’s Criminal Investigation Division, the Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation, and the Securities and Exchange Commission, as well as the U.S. Department of Agriculture and the Indiana Department of Environmental Management.
In response to the federal grand jury indictments, the following law enforcement partners issued statements:
Cynthia Giles, Assistant Administrator for Enforcement and Compliance Assurance, Environmental Protection Agency:
“The Renewable Fuel Standard Program was designed to achieve greenhouse gas emission reductions, promote energy independence, and expand our nation’s renewable fuels sector. Today’s action supports these goals by protecting the integrity of the biofuel market. Those that cheat the system are breaking the law and undermine our commitment to protect public health and the environment.”
Robert A. Jones, Special Agent in Charge, Federal Bureau of Investigation:
“We are proud to work with our federal partners to identify and investigate groups that manipulate and utilize federal government programs to line their pockets by fraud. In doing so, they deceive their customers, their shareholders, and the American public. The FBI will continue the fight against this dishonest and fraudulent behavior which harms the American people and the American economy.”
James C. Lee, Special Agent in Charge, IRS-Criminal Investigation:
“The indictments returned today send a loud message that IRS-Criminal Investigation operates year-round to protect the integrity of our tax system and today is a victory for the American people. Together with the cooperative efforts of our law enforcement partners, we were able to identify and vigorously investigate the fraud involved in this scheme.”
“This morning, federal agents brought into custody individuals who allegedly operated the largest tax and securities fraud scheme in Indiana history,” Hogsett said. “This case represents a collaborative effort on the part of law enforcement to hold fully accountable those who seek personal profit at the taxpayer’s expense.”
“Congress enacted incentives for the production of biofuels to make the United States stronger and more energy independent,” said Dreher. “Fraud by parties claiming such incentives threatens these important public policies. The Justice Department will vigorously prosecute those seeking to line their pockets using scams like those alleged in this indictment.”
The Law
The Energy Independence and Security Act of 2007 created a number of federally funded programs that provided monetary incentives for the production of biodiesel. A dollar-per-gallon tax credit was available only to the first person to blend the pure biodiesel (known as B100) with petroleum diesel. After the biodiesel was blended and the tax credit claimed, the resulting product was generally known in the industry as B99, meaning that it was approximately 99 percent biodiesel and one percent petroleum diesel. Additionally, biodiesel producers could generate and attach credits known as “renewable identification numbers” or RINs to biodiesel they produced. Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value. These two incentives were available only once for any given volume of biodiesel. For these reasons, a gallon of B100 with RINs and an available tax credit was worth much more than a gallon of RIN-stripped B99. At times during the conspiracy, a gallon of B100 with RINs was worth up to $2 more than an equivalent gallon of B99, effectively doubling its value.
The Defendants
Four of the defendants—Craig Ducey, Chad Ducey, Chris Ducey, and Brian Carmichael—operated E-Biofuels, a Middletown, Indiana company that held itself out as a producer of biodiesel from “feedstocks” such as animal fat and vegetable oils. The government alleges that these defendants conspired with Joseph Furando and Evelyn Katirina Pattison—two executives with a pair of related New Jersey-based companies that operated under the names Caravan Trading Company and CIMA Green—to purchase RIN-stripped B99 from third parties, pretend that E-Biofuels had produced that fuel at its Middletown facility, and fraudulently resell that fuel to customers as B100 with RINs and an available tax credit. While the E-Biofuels facility was capable of producing B100, at times during the conspiracy it was producing no fuel of its own but instead was simply acting as a pass-through facility for fuel purchased elsewhere.
The Alleged Conspiracy
The indictment alleges that beginning in July 2009 and continuing until May 2012, these defendants fraudulently sold more than 35 million gallons of RIN-stripped B99 to unwitting customers who paid an inflated price, thinking they were purchasing B100 with RINs and an available tax credit. All told, the customers were allegedly defrauded of more than $55 million as a result of these activities, and the Internal Revenue Service was exposed to as much as $35 million in false claims.
The government alleges that the defendants delivered the fraudulently mislabeled fuel to the victims in one of three ways. In some cases, the biodiesel was transported from fuel terminals to the E-Biofuels facility in Middletown where it was unloaded into a holding tank. A short time later, the biodiesel would be reloaded into tanker trucks and delivered to unsuspecting customers along with fraudulent paperwork that misidentified it as B100 with RINs produced by E-Biofuels. On other occasions, the truck drivers did not unload the fuel when they arrived at Middletown plant. Instead, they simply picked up paperwork falsely stating that the truck contained a load of B100 with RINs that originated at the E-Biofuels facility. The truck drivers referred to this procedure as “flipping a load.”
Finally, in the most egregious instances, the truck drivers hauled RIN-stripped B99 from fuel terminals directly to customers. Because these loads never went to the E-Biofuels facility, they were known as “ghost loads” or “phantom loads.” In those cases, the defendants faxed or e-mailed the false paperwork to the truck drivers along their routes between the fuel terminals and the customer locations.
In an information filed today in federal court, Brian Carmichael was charged with one count of conspiracy to defraud the United States. Carmichael has filed a petition with the court indicating his willingness to plead guilty to this charge. Carmichael faces up to five years in federal prison if convicted.
The Alleged Securities Fraud
In May 2010, E-Biofuels was purchased by Imperial Petroleum, a publicly traded company based in Evansville. After the acquisition, E-Biofuels accounted for more than 97 percent of Imperial Petroleum’s operating income. Defendant Jeffrey Wilson was the president and chief executive officer of Imperial Petroleum.
The government alleges that Jeffrey Wilson and Craig Ducey knew that E-Biofuels was purchasing biodiesel from third parties instead of making its own biodiesel. They hid this fact from Imperial’s investors, shareholders, and outside auditors by falsely stating that E-Biofuels produced biodiesel from chicken fat and other feedstocks. They made these and other related false statements and omissions in Imperial Petroleum’s annual and quarterly reports filed with the Securities and Exchange Commission and in written and oral communications with Imperial Petroleum’s investors and outside auditors.
The Process
If found guilty, the six individuals charged by indictment face up to 20 years in federal prison on some counts, as well as significant fines. The three companies indicted today also face significant fines and other regulatory action. The defendants will have initial appearances before a federal magistrate judge today at 1:30 p.m.
The case is being prosecuted by Senior Litigation Counsel Steven D. DeBrota of the U.S. Attorney’s Office, along with Senior Counsel Thomas Ballantine of the Environmental Crimes Section in the Department of Justice’s Environment and Natural Resources Division, and Jake Schmidt, a Special Assistant U.S. Attorney at the U.S. Attorney’s Office and Senior Attorney for the Securities and Exchange Commission.
An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Law Enforcement Partners
The collaborative investigation that led to today’s arrests was the result of work by the Environmental Protection Agency’s Criminal Investigation Division, the Internal Revenue Service Criminal Investigation, the Federal Bureau of Investigation, and the Securities and Exchange Commission, as well as the U.S. Department of Agriculture and the Indiana Department of Environmental Management.
In response to the federal grand jury indictments, the following law enforcement partners issued statements:
Cynthia Giles, Assistant Administrator for Enforcement and Compliance Assurance, Environmental Protection Agency:
“The Renewable Fuel Standard Program was designed to achieve greenhouse gas emission reductions, promote energy independence, and expand our nation’s renewable fuels sector. Today’s action supports these goals by protecting the integrity of the biofuel market. Those that cheat the system are breaking the law and undermine our commitment to protect public health and the environment.”
Robert A. Jones, Special Agent in Charge, Federal Bureau of Investigation:
“We are proud to work with our federal partners to identify and investigate groups that manipulate and utilize federal government programs to line their pockets by fraud. In doing so, they deceive their customers, their shareholders, and the American public. The FBI will continue the fight against this dishonest and fraudulent behavior which harms the American people and the American economy.”
James C. Lee, Special Agent in Charge, IRS-Criminal Investigation:
“The indictments returned today send a loud message that IRS-Criminal Investigation operates year-round to protect the integrity of our tax system and today is a victory for the American people. Together with the cooperative efforts of our law enforcement partners, we were able to identify and vigorously investigate the fraud involved in this scheme.”
Thursday, September 12, 2013
Dallas Residents Affiliated with Bridgemark Investment Group Sentenced
DALLAS—Eric Damon Johnson, 51, and Tracie Elaine Stenson, 50, both of Dallas, were sentenced this morning by U.S. District Judge David C. Godbey to 48 months and 57 months, respectively, following their guilty pleas earlier this year to their roles in a mortgage fraud conspiracy. In addition, Judge Godbey ordered that they pay, jointly and severally, $3,753,539 in restitution. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Johnson pleaded guilty to a superseding information charging one count of conspiracy to commit wire fraud affecting a financial institution. Johnson was a licensed loan officer and mortgage broker and the president of Bridgemark Investment Group (BIG), which had offices on Hampton Road in Desoto, Texas. BIG’s motto was “Bridging the Gap between the Poor and the Wealthy.”
Stenson pleaded guilty to one count of conspiracy to commit wire fraud, as charged in the indictment returned by a federal grand jury in Dallas in October 2011. As the chief of operations at BIG, Stenson worked as a loan officer and processor.
According to documents filed in the case, Johnson and Stenson conspired to fraudulently obtain mortgage loans in excess of the true sales price of residential real estate properties by making false statements on loan applications and submitting fake invoices for construction upgrades or repairs that were never performed. The conspiracy resulted in more than $10 million in fraudulently obtained loan proceeds.
BIG recruited individuals to purchase residential real estate as “investors,” and Johnson and Stenson promised investors that BIG would find tenants to rent the property and make the mortgage payments. Johnson and Stenson agreed to make payments to the “investors” when the loan closed that were not disclosed to the mortgage lender on the HUD-1 Settlement Statement. Stenson prepared false loan applications for the investors that included, among other things, material misrepresentations regarding the borrower’s monthly income, intention to occupy the property, assets, and liabilities. The loan applications were submitted to residential mortgage lenders, who on the basis of the false statements in the loan applications, agreed to fund primary and secondary mortgages for residential real estate properties.
This case was prosecuted in connection with the President’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. attorney’s 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.
The investigation was conducted by the FBI and Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorneys J. Nicholas Bunch and P.J. Meitl prosecuted.
Johnson pleaded guilty to a superseding information charging one count of conspiracy to commit wire fraud affecting a financial institution. Johnson was a licensed loan officer and mortgage broker and the president of Bridgemark Investment Group (BIG), which had offices on Hampton Road in Desoto, Texas. BIG’s motto was “Bridging the Gap between the Poor and the Wealthy.”
Stenson pleaded guilty to one count of conspiracy to commit wire fraud, as charged in the indictment returned by a federal grand jury in Dallas in October 2011. As the chief of operations at BIG, Stenson worked as a loan officer and processor.
According to documents filed in the case, Johnson and Stenson conspired to fraudulently obtain mortgage loans in excess of the true sales price of residential real estate properties by making false statements on loan applications and submitting fake invoices for construction upgrades or repairs that were never performed. The conspiracy resulted in more than $10 million in fraudulently obtained loan proceeds.
BIG recruited individuals to purchase residential real estate as “investors,” and Johnson and Stenson promised investors that BIG would find tenants to rent the property and make the mortgage payments. Johnson and Stenson agreed to make payments to the “investors” when the loan closed that were not disclosed to the mortgage lender on the HUD-1 Settlement Statement. Stenson prepared false loan applications for the investors that included, among other things, material misrepresentations regarding the borrower’s monthly income, intention to occupy the property, assets, and liabilities. The loan applications were submitted to residential mortgage lenders, who on the basis of the false statements in the loan applications, agreed to fund primary and secondary mortgages for residential real estate properties.
This case was prosecuted in connection with the President’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. attorney’s 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.
The investigation was conducted by the FBI and Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorneys J. Nicholas Bunch and P.J. Meitl prosecuted.
Tuesday, June 4, 2013
Governor Martinez’s Former Campaign Manager Indicted on Computer Intrusion and False Statement Charges
ALBUQUERQUE—U.S. Attorney Kenneth J. Gonzales and Carol
K.O. Lee, Special Agent in Charge of the Albuquerque Division of the
FBI, announced that a federal grand jury has indicted Jamie Estrada, 40,
of Los Lunas, New Mexico, on computer intrusion and false statement
charges. The charges against Estrada arise out of the interception of
wire communications intended for others, including New Mexico Governor
Susana Martinez and members of her staff.
Counts one through 12 of the 14-count indictment allege that Estrada unlawfully intercepted wire communication intended for individuals who had e-mail accounts on an Internet domain owned by the governor’s political organization. According to the indictment, the unlawful interceptions occurred between July 2011 and June 2012. Counts 13 and 14 charge Estrada with making false statements to the FBI in September 2012, in which he allegedly denied taking certain actions to unlawfully intercept wire communications as charged in counts one through 12 of the indictment. Estrada’s arraignment hearing has yet to be scheduled.
In announcing the indictment, U.S. Attorney Gonzales said, “This indictment reflects the high value that my office places on preserving the integrity of our electronic communications in a digital age. In a time when so much of our personal, professional, and financial information is repeatedly transmitted on a daily basis over e-mail and other means of wire communication, it is of paramount importance that we protect electronic information from being diverted, stolen, or otherwise misappropriated.”
Special Agent in Charge Lee added, “Thousands of intrusions into corporate networks, personal computers, and government systems occur daily, threatening our privacy, business secrets, and even national security. The Albuquerque FBI Division has devoted considerable resources into confronting this growing cyber threat, which is why this indictment today is so important to us. I would like to congratulate the FBI special agents and professional staff for their hard work on this case, as well as the U.S. Attorney’s Office. The FBI will continue to aggressively pursue individuals who would violate other people’s privacy not by breaking into homes and offices but by sneaking into computers and wireless devices.”
According to the indictment, in summer 2009, Governor Martinez, who was then the District Attorney in Dona Ana County, New Mexico, began assembling a political campaign as she prepared to enter the November 2010 gubernatorial race. In July 2009, one of the governor’s early political supporters registered an Internet domain that was designated as www.susana2010.com (the domain) for a two-year period through an online service. The supporter then donated the domain, including its username and password, to the governor’s political organization. The username and password were required for making administrative changes to the domain, including posting content to the domain’s website and creating e-mail accounts associated with the domain. The username and password also were required to renew the registration for the domain, which was scheduled to expire on July 18, 2011. As the owner of the domain, the governor’s political organization had the exclusive right to renew the registration before it expired and during a 42-day grace period following the expiration date.
The indictment alleges that, during the gubernatorial campaign, the domain became an important tool for the governor’s political organization. Members of the campaign staff, including Governor Martinez, maintained e-mail accounts on the domain, which they used to communicate with each other as well with the governor’s political supporters and the media. Estrada allegedly joined the governor’s political organization as the campaign manager in July 2009, and, in that capacity, was provided with the username and password for the domain. Estrada allegedly left the campaign in December 2009. Before his departure, the governor allegedly sent Estrada an e-mail requesting that he return all information belonging to the campaign, including any usernames and passwords to any accounts.
After Governor Martinez was inaugurated in January 2011, the governor, members of her staff, and others continued to use the e-mail accounts associated with the domain. In July 2011, individuals who had e-mail accounts on the domain began receiving reports that e-mails sent to those accounts were bouncing back to the senders and soon determined that the e-mails were not getting delivered because the domain had expired. Their efforts to re-register the domain were unsuccessful because they could not locate or recall the domain’s username and password. In July 2011 and as part of their efforts to locate the username and password, the governor’s staff allegedly asked Estrada to provide this information, and Estrada allegedly refused to comply with the request.
According to the indictment, in late July 2011, Estrada allegedly used the username and password to renew the domain and to change the domain’s settings so that, instead of going to their intended recipients, incoming e-mail communications were directed to an e-mail account on a different domain that was controlled by Estrada. As a result, between late July 2011 and June 2012, Estrada allegedly received e-mail communications intended for recipients, including Governor Martinez and members of her staff, who had e-mail accounts associated with the domain.
An indictment merely alleges that crimes have been committed, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorneys John C. Anderson and Fred J. Federici.
Counts one through 12 of the 14-count indictment allege that Estrada unlawfully intercepted wire communication intended for individuals who had e-mail accounts on an Internet domain owned by the governor’s political organization. According to the indictment, the unlawful interceptions occurred between July 2011 and June 2012. Counts 13 and 14 charge Estrada with making false statements to the FBI in September 2012, in which he allegedly denied taking certain actions to unlawfully intercept wire communications as charged in counts one through 12 of the indictment. Estrada’s arraignment hearing has yet to be scheduled.
In announcing the indictment, U.S. Attorney Gonzales said, “This indictment reflects the high value that my office places on preserving the integrity of our electronic communications in a digital age. In a time when so much of our personal, professional, and financial information is repeatedly transmitted on a daily basis over e-mail and other means of wire communication, it is of paramount importance that we protect electronic information from being diverted, stolen, or otherwise misappropriated.”
Special Agent in Charge Lee added, “Thousands of intrusions into corporate networks, personal computers, and government systems occur daily, threatening our privacy, business secrets, and even national security. The Albuquerque FBI Division has devoted considerable resources into confronting this growing cyber threat, which is why this indictment today is so important to us. I would like to congratulate the FBI special agents and professional staff for their hard work on this case, as well as the U.S. Attorney’s Office. The FBI will continue to aggressively pursue individuals who would violate other people’s privacy not by breaking into homes and offices but by sneaking into computers and wireless devices.”
According to the indictment, in summer 2009, Governor Martinez, who was then the District Attorney in Dona Ana County, New Mexico, began assembling a political campaign as she prepared to enter the November 2010 gubernatorial race. In July 2009, one of the governor’s early political supporters registered an Internet domain that was designated as www.susana2010.com (the domain) for a two-year period through an online service. The supporter then donated the domain, including its username and password, to the governor’s political organization. The username and password were required for making administrative changes to the domain, including posting content to the domain’s website and creating e-mail accounts associated with the domain. The username and password also were required to renew the registration for the domain, which was scheduled to expire on July 18, 2011. As the owner of the domain, the governor’s political organization had the exclusive right to renew the registration before it expired and during a 42-day grace period following the expiration date.
The indictment alleges that, during the gubernatorial campaign, the domain became an important tool for the governor’s political organization. Members of the campaign staff, including Governor Martinez, maintained e-mail accounts on the domain, which they used to communicate with each other as well with the governor’s political supporters and the media. Estrada allegedly joined the governor’s political organization as the campaign manager in July 2009, and, in that capacity, was provided with the username and password for the domain. Estrada allegedly left the campaign in December 2009. Before his departure, the governor allegedly sent Estrada an e-mail requesting that he return all information belonging to the campaign, including any usernames and passwords to any accounts.
After Governor Martinez was inaugurated in January 2011, the governor, members of her staff, and others continued to use the e-mail accounts associated with the domain. In July 2011, individuals who had e-mail accounts on the domain began receiving reports that e-mails sent to those accounts were bouncing back to the senders and soon determined that the e-mails were not getting delivered because the domain had expired. Their efforts to re-register the domain were unsuccessful because they could not locate or recall the domain’s username and password. In July 2011 and as part of their efforts to locate the username and password, the governor’s staff allegedly asked Estrada to provide this information, and Estrada allegedly refused to comply with the request.
According to the indictment, in late July 2011, Estrada allegedly used the username and password to renew the domain and to change the domain’s settings so that, instead of going to their intended recipients, incoming e-mail communications were directed to an e-mail account on a different domain that was controlled by Estrada. As a result, between late July 2011 and June 2012, Estrada allegedly received e-mail communications intended for recipients, including Governor Martinez and members of her staff, who had e-mail accounts associated with the domain.
An indictment merely alleges that crimes have been committed, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorneys John C. Anderson and Fred J. Federici.
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