Thursday, January 31, 2013

Warren Ballentine, Host of National Talk Radio Show, Indicted in $9.7 Million Mortgage Fraud Scheme

A suburban Chicago lawyer who hosts a national radio talk show was indicted on federal charges for allegedly engaging in two mortgage fraud schemes that defrauded lenders of a total of approximately $9.7 million. The defendant, Warren Ballentine, allegedly schemed with others to obtain more than two dozen fraudulent mortgage loans and represented buyers at multiple closings, knowing that they were fraudulently qualified for loans to purchase homes in Chicago and various southern suburbs.

Ballentine, 41, of Durham, North Carolina, and formerly of Country Club Hills, owns the Law Office of Warren Ballentine LLC in Country Club Hills. He was charged with two counts of bank fraud, two counts of making false statements to lenders, and one count each of mail fraud and wire fraud in a six-count indictment returned last Thursday by a federal grand jury. The indictment also seeks forfeiture of approximately $9,775,000 in alleged fraud proceeds.

Ballentine is scheduled to be arraigned at 9:30 a.m. on February 5 before U.S. District Judge Matthew Kennelly in Federal Court in Chicago.

The indictment was announced today by Gary S. Shapiro, United States Attorney for the Northern District of Illinois; Cory B. Nelson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; and Thomas P. Brady, Inspector in Charge of the U.S. Postal Inspection Service in Chicago.

According to the indictment, between December 2004 and February 2005, Ballentine schemed with others to fraudulently cause various lenders to make at least eight loans totaling approximately $3.6 million by making false statements in loan documents, including applications, HUD-1 settlement statements, and occupancy statements concerning the buyers’ intention to occupy the homes they purchased as a primary residence. Ballentine then represented buyers recruited by others at real estate closings, knowing that they had signed and submitted false documents and had been fraudulently qualified to purchase the properties in Chicago, Monee, Woodridge, and Mokena.

Between February 2005 and May 2006, Ballentine allegedly engaged in a similar, separate scheme with others to fraudulently cause various lenders to make at least 20 loans totaling approximately $6.1 million by making false statements in mortgage documents, including the buyers’ intention to occupy the homes as a primary residence. Ballentine also represented these buyers at closings, knowing that they had been fraudulently qualified for the loans based on false documents, including some that Ballentine advised them to sign at closings. These homes were scattered throughout Chicago and other suburbs, including Country Club Hills, Richton Park, and Markham.

Each count of the indictment carries a maximum penalty of 30 years in prison and a $1 million fine or, as an alternative, the court may impose a fine of twice the gross gain or twice the loss, whichever is greater, and restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The government is being represented by Assistant U.S. Attorney Jason Yonan.

The Financial Fraud Enforcement 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 on the task force, visit

Wednesday, January 30, 2013

Former Chicago Police Officer, Ali Haleem, Charged with Attempted Extortion of Tow Truck Driver and Selling Guns to Felon

A former Chicago Police officer was charged today with attempting to extort a cash bribe to steer business to a tow truck owner and also with selling three firearms to the same towing operator, who is also a convicted felon. The defendant, Ali Haleem, was charged as part of Operation Tow Scam, a federal investigation of past bribery and extortion involving police officers and towing operators in several Chicago Police districts.

Haleem is the 11th Chicago Police officer to be charged in the corruption probe since 2008. So far, seven officers and three civilians, including two tow truck drivers, have been convicted. Charges are pending against three other officers who were charged last fall.

Haleem, 45, of Chicago, a police officer from 1994 to 2012, was assigned to the 8th District, also known as Chicago Lawn. He was assigned to desk duty after being confronted by law enforcement authorities in 2008 until he resigned last September. He was charged with one count of attempted extortion and two counts of selling firearms to a convicted felon in a criminal information that was filed today. No date has been set yet for his arraignment in U.S. District Court.

The charges were announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois; Cory B. Nelson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; and Garry McCarthy, Superintendent of the Chicago Police Department.

According to the charges, between March 13 and 20, 2008, Haleem attempted to extort Individual A, who owned a towing business, and who unbeknownst to Haleem was cooperating with law enforcement at the time.

On December 11, 2007, Haleem allegedly sold a .32 caliber semi-automatic pistol and a .25 caliber semi-automatic pistol to Individual A, knowing that Individual A was a convicted felon. On March 13, 2008, Haleem allegedly sold a 9mm semi-automatic pistol to Individual A, knowing that Individual A was a convicted felon. The indictment seeks forfeiture of the three firearms.

The government is being represented by Assistant U.S. Attorney Michael Donovan.

Attempted extortion carries a maximum penalty of 20 years in prison, while each count of delivering a firearm to a convicted felon carries a maximum of 10 years in prison, and all three counts carry a $250,000 maximum fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

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

Honor Student who Marched in Inaugural Band Killed in Gun Cross-Fire after Hanging Out Near Gangsters

A 15-year-old Chicago honor student who participated in inaugural events celebrating President Obama's re-election was fatally shot Tuesday just blocks from her school.

Hadiya Pendleton was among approximately a dozen teens taking cover from the rain in a local park at 2:30 p.m. when a gunman jumped a fence and opened fire, according to reports. Pendleton and other King College Prep students had been dismissed from school early due to exams.The gunshots sent the entire group running out of the park in a panic, authorities say. Pendleton and a 16-year-old boy were both hit and collapsed about one block away.

Pendleton was shot once in the back and later died at the University of Chicago Comer Children’s Hospital. The wounded boy was in serious condition Tuesday night, according to the Chicago Tribune.

 Many of the teens with Pendleton at the time of the shooting were believed to be gang members and left the scene, according to reports.

Pendleton was an honor student, volleyball player, and majorette at King College Prep, according to CBS 2 in Chicago. She was a member of the school's marching band that traveled to Washington for the inauguration festivities last week."She was awesome," one friend told the Chicago Tribune at the hospital.

Thanks to David Boroff.

Fraud Concerns Rise with Granting Illegals Right to Drive in Illinois

As Illinois becomes the fourth and most populous state to give illegal immigrants permission to drive, nagging concerns remain about whether there are enough safeguards to avoid the identity fraud and other pitfalls other states faced.

Democratic Gov. Pat Quinn signed Illinois' measure into law Sunday in Chicago. Backers, including Quinn, Chicago Mayor Rahm Emanuel and some of the state's top Republicans, tout it as a public-safety measure. They argue that required facial recognition technology is reliable enough to prevent fraud.

They hailed it as an important step for immigrant rights in Illinois, which approved its own Dream Act in 2010 to create a privately-funded scholarship program for immigrant students. President Barack Obama plans to discuss his plan to overhaul the immigration system during a trip to Las Vegas on Tuesday.

"This was a bipartisan effort to pass an important law," Quinn said. "When the president speaks on Tuesday, he can say about his home state of Illinois ... we not only passed the Dream Act last year, we passed driver's licenses for those who are undocumented ."However, the law's opponents have pointed to hundreds of fraudulent cases in New Mexico, Washington and Utah after those states began giving illegal immigrants permission to drive. Illinois will not require applicants to be fingerprinted, for fear that would discourage immigrants from applying.

"How many people would apply for this document knowing that fingerprints will be going to (federal authorities)? Probably not all that many," said Fred Tsao, policy director of the Illinois Coalition for Immigrant and Refugee Rights, a driving-force behind the measure.

Proponents say it will allow an estimated 250,000 people unlawfully residing in the state to apply for a three-year temporary driver's license and require them to get training and insurance. The Illinois secretary of state's office said the licenses will be available starting in October.

Those ready for the change include 45-year-old Victoria Chavez. "I need to get my driver's license because I have two kids," the Chicago woman said. "They need my support. This is a victory for all of us in the immigrant community."

The licenses will be like those already issued to certain foreign-born, legal visitors. Applicants will be photographed, and their photo will be entered into the state's facial recognition database - like the rest of Illinois' licensed drivers- to verify their identity. But other states' driving programs for illegal immigrants have been abused. New Mexico and Washington both issue licenses, while Utah issues a permit.

An Associated Press investigation last year found a striking pattern in New Mexico, suggesting immigrants tried to game the system to obtain a license. In one instance, 48 foreign-born individuals claimed to live at a smoke shop in Albuquerque to fulfill a residency condition.

Authorities also busted a fraud ring last year that forged documents for illegal immigrants to use after driving from as far as Illinois and North Carolina to obtain a New Mexico license. Republican Gov. Susana Martinez has vowed for years to repeal the decade-old measure, but the Legislature has rejected such efforts.

Washington's requirements attracted national attention when Jose Antonio Vargas, a Pulitzer Prize-winning journalist, revealed his illegal immigration status in an essay for the New York Times Magazine in 2011. Vargas chronicled how he obtained his Washington license. State authorities conducted an investigation that revealed Vargas did not reside at the address he stated in his application and canceled his license.

Utah's permit is not valid for identification. Illinois' law follows suit.

Utah's Republican-controlled Legislature amended the state's law in 2011 to require illegal immigrants to be fingerprinted, and mandates that the state notify U.S. Immigration and Customs Enforcement if an applicant's fingerprint check yields a felony on record. If the applicant has a misdemeanor warrant outstanding, the state must notify the agency that is seeking the person's arrest.

That kind of information-sharing between state and immigration authorities worries Illinois' immigrant-rights advocates, such as Tsao, who pushed for the legislation without a fingerprinting requirement. They say fingerprinting could deter potential licensees from applying for fear of being identified and deported.

Local law enforcement officials argue in favor of fingerprinting. "We could see if they have committed a crime; it could be a crime in another state or it could be a crime in their home country," said John Kennedy, executive director of the Illinois Association of Chiefs of Police.

The Illinois secretary of state's office says its facial recognition database is highly sophisticated and accurate. The program uses an algorithm to match more than a dozen facial features that are not easy to alter, such as eye sockets and sides of the mouth. "The integrity of our driver's license system is a priority," said Henry Haupt, a spokesman for the office.

The bill's sponsor, Rep. Edward Acevedo, a Chicago Democrat, said state roads will be safer because illegal immigrants will receive training and be tested before obtaining a license. They also will be required to purchase insurance, Acevedo said.

Tsao's organization estimates uninsured illegal immigrant drivers cause $64 million in damage claims each year, an expense currently covered by increased premiums.

Thanks to Regina Garcia Cano and Michelle Jayane Nealy.

Monday, January 28, 2013

Andrew Vale Named FBI's Special Agent in Charge for Albany Division

Director Robert S. Mueller, III has named Andrew W. Vale special agent in charge of the FBI’s Albany Division. Mr. Vale most recently served as special assistant to the deputy director at FBI Headquarters in Washington, D.C.

Mr. Vale began his career as a special agent with the FBI in September 1991. He first reported to the Newark Division, where he investigated terrorism, background, and civil rights matters. In October 1998, Mr. Vale was promoted to supervisor of the Joint Terrorism Task Force to oversee domestic and international terrorism investigations.

In November 2001, he transferred to the Domestic Terrorism Operations Unit at FBI Headquarters and provided program management oversight for all domestic terrorism investigations in the Northeast region of the United States. He was promoted to chief of the unit in August 2003. In January 2005, Mr. Vale was appointed unit chief of the Director’s Research Group, where he reviewed, edited, and approved briefing materials for Director Mueller’s congressional testimony, domestic and international travel, and meetings.

Mr. Vale transferred to the Albany Division in August 2006 as the assistant special agent in charge of the National Security Branch. In this capacity, he provided program management oversight for the Counterterrorism, Counterintelligence, and Intelligence programs. Mr. Vale returned to FBI Headquarters in September 2011 as the special assistant to the deputy director.

Prior to his appointment with the FBI, Mr. Vale spent four years with the Buffalo District of the United States Immigration and Naturalization Service as an immigration inspector and immigration detention officer.

Saturday, January 26, 2013

John Burke, Gambino Organized Crime Family Associate, Sentenced to Life Imprisonment for Racketeering and Murder

John Burke, a longtime associate of the Gambino organized crime family of La Cosa Nostra (the “Gambino family”), was sentenced today to life imprisonment without parole plus 10 years for the murder of a rival drug dealer in aid of racketeering, racketeering conspiracy, and other charges. On June 8, 2012, following a four-week trial before United States District Judge Sterling Johnson, Jr. in Brooklyn federal court, Burke was convicted of all charges in the superseding indictment. The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.

As established at trial, Burke was a trusted Gambino family enforcer and drug dealer for nearly three decades. As part of the racketeering conspiracy, Burke participated in numerous acts of violence, including fatal shootings and home-invasion robberies, as well as drug trafficking involving cocaine and marijuana. Burke was convicted of two murder predicate acts, including the 1991 murder of Bruce Gotterup, who was shot in the back of the head on the boardwalk in the Rockaways, and the 1996 murder of John Gebert, who was slain under a pool table in a Woodhaven bar. The jury also found Burke guilty of the murder of John Gebert in aid of racketeering, murdering John Gebert as part of a continuing criminal enterprise, and a firearms charge.

Ms. Lynch expressed her appreciation to the Federal Bureau of Investigation, the New York State Department of Corrections and Community Supervision, the Queens County District Attorney’s Office, the United States Marshals Service, and the other members of the law enforcement community for their efforts in the investigation and prosecution of this case.

The government’s case was prosecuted by Assistant United States Attorneys Jacquelyn M. Kasulis, Evan M. Norris, and Whitman G.S. Knapp.

Wednesday, January 23, 2013

Is the Russian Mob Dead?

One of the last mafia kingpins from Russia’s wild 1990s has died. Rather than marking the end of an era, the event is reminding Russians just how much their government has occupied the role once played by organized crime.

Grandpa Hassan, as the mafia don was known, spent his last day holding court in the downtown Moscow cafe that served as his headquarters. At 2:30 p.m., he emerged to catch two bullets in the head and back, from a sniper on a roof across the street. Within hours, “GrandpaHassan” was a trending topic on Twitter. In the very act of dying, a figure from a freer, more lawless era thrust the nation into an examination of its criminal past and present.

Grandpa, whose passport identified him as Aslan Usoyan, 75, was a legend in his own time. An ethnic Kurd, he was “crowned” in 1966 as a “vor v zakone” -- a Russian crime boss of the highest rank. He survived at least three assassination attempts, outliving most of the ranking mobsters of his generation and staying on in Russia as others left for warmer shores in Spain or Bulgaria. His livelihood involved mediating mob conflicts and running a network of shadowy interests, primarily in the south of Russia.

“Only one remained in Russia, one who was known to all without exception,” journalist Maxim Kononenko eulogized in the newspaper Izvestia. “A figure from an earlier time, a Loch Ness monster, a yeti, a real fossil -- someone who connected us to our past.”

As if in recognition of Usoyan’s importance, police immediately posted guards at the Botkin Hospital morgue where his body was delivered after doctors failed to revive him. “They should have called in the honorary guard from Lenin’s tomb,” wrote blogger Sergei Averin on Twitter.

Versions of why Usoyan finally met a violent death abounded. He was reported to be skimming off the multibillion- dollar budgets earmarked for the 2014 Winter Olympics to be held on his home turf, in the Black Sea resort town of Sochi. Some said his old enemy Tariel Oniani, an opponent in gangland wars since the 1980s, must have been involved in the killing. Others suggested that he had been selling weapons to Kurdish separatists in Turkey, and the hit was punishment from the Turkish special services. Still others blamed younger mobsters fed up with Hassan’s old-school methods and abnormally long reign.

“I’m sick of this Hassan already,” blogger Sergei Nikolaev commented on Twitter. “It’s as if half the country has just got out of jail.”

Since the early 2000s, mobsters had faded from public view in Russia. Stories of the “Russian mafia” were for naive foreigners. In that context, some commentators portrayed Usoyan’s demise as a benefit of Putin’s authoritarian rule.

“The murder of Grandpa Hassan has put a full stop at the end of the ’accursed ’90’s’ story, unless he somehow manages to rise from the dead,” Vladimir Novikov wrote on the state- controlled site

“Such murders and a well-developed criminal underworld are features of market democracies such as the U.S. or Italy,” Alexei Pushkov, head of the Russian parliament’s Foreign Policy Committee, commented in his microblog.

Others, though, see less difference between the current regime and the organized crime of old. Under Putin’s tight clique of former KGB officers, law enforcement agencies have become more powerful than any mafia. Extortion and racketeering are now largely the turf of tax inspectors and economic-crime police.

“Private business is still deprived of effective protection on the part of the law enforcement system and the courts,” wrote journalist Mikhail Kozyrev on the opinion website “If there is demand for fair solutions to problems, there will also be supply” from bureaucrats, police, special services and even crime bosses. “Quite law-abiding businessmen reach out to them for protection.”

In short, the mobsters are not really gone. They have merely been forced to share the market with other protection peddlers. Albeit less visible, they are just as wealthy and well-connected.

“I have met some mobster-businessmen with close ties” to state-owned companies, bureaucrats and special services, investigative journalist Irina Reznik wrote in a Facebook comment. “Very often these businessmen have run errands too shady for government-appointed managers and officials.”

Grandpa Hassan’s cafe office, after all, was just a mile from the Kremlin.

(Leonid Bershidsky, an editor and novelist, is Moscow and Kiev correspondent for World View. Opinions expressed are his own.)

To contact the writer of this column:

Tuesday, January 22, 2013

The Mob Museum Offers Opportunity to Take a Blood Oath

WHAT: As part of the upcoming celebration to mark its first anniversary this February, The Mob Museum, The National Museum of Organized Crime and Law Enforcement is teaming up with the United Blood Services to encourage guests to take the blood oath… by donating.

Donors are encouraged to make an appointment for the Museum’s anniversary blood drive online at or by calling (877) 827-4376. Sponsor code: MobMuseum.

As part of its commitment to the community, the Museum is pleased to offer two complimentary tickets to everyone who registers at this event.

FACT: The “blood oath” originated with the Mafia. To become a full member of La Cosa Nostra, aspiring members had to pass initiation rituals, which included pricking the finger with a needle by an officiating member with a few drops of blood spilled onto a card bearing the likeness of a saint. The card was then set on fire and while it burned, the oath of loyalty was taken.

Inside The Mob Museum, visitors can witness a “blood oath” ceremony for themselves. The video representation of the ceremony on view in the exhibition was created based upon court testimony and legal evidence.

WHO: Marking its first anniversary this Valentine’s Day, The Mob Museum, The National Museum of Organized Crime and Law Enforcement, is a world-class destination in downtown Las Vegas dedicated to the thrilling story of organized crime and law enforcement. It presents an exciting and authentic view of the mob’s impact on Las Vegas history and its unique imprint on the world. True stories of mob history are brought to life in a bold and contemporary style via engaging exhibits, high-tech theater presentations and more than 600 artifacts, the largest collection of Mob and related law enforcement memorabilia under one roof.

Founded in 1963, United Blood Services of Las Vegas, a non-profit, 501 (c)(3) organization, provides blood and blood products for hospitals in Southern Nevada, California and Northern Arizona. Its programs exist to make a difference in people’s lives by inspiring individuals to donate blood, producing a safe and ample blood supply, advancing cutting-edge research and embracing continuous quality improvement. The United Blood Services network is one of the nation’s oldest and largest non-profit blood service organizations and is a founding member of America's Blood Centers and the American Association of Blood Banks. Nationally, United Blood Services serves more than 500 hospitals in 18 states, contributing to more than 25 million people.

WHEN: Saturday, Feb. 9 from 10 a.m. to 4 p.m.

WHERE: The Mob Museum’s multi-purpose room
300 East Stewart Avenue
Las Vegas, NV 89101

Wednesday, January 16, 2013

Preliminary Crime Reports Show Violent Crimes Up 1.9% and Property Crimes Up 1.5%

According to statistics from our Preliminary Semiannual Uniform Crime Report, January-June 2012, the number of violent crimes reported by law enforcement for the first six months of 2012 increased 1.9 percent over figures from the same period in 2011. Property crimes also rose 1.5 percent overall.

Violent Crime.

Two of the four offenses in the violent crime category actually showed overall decreases when compared with data from the first six months of 2011—murders dropped 1.7 percent and forcible rapes fell 1.4 percent. But the number of robberies increased 2.0 percent and aggravated assaults 2.3 percent.

At a regional level, the West saw the largest overall jump in violent crime—up 3.1 percent—followed by a rise of 2.5 percent in the Midwest and 1.1 each percent in the South and the Northeast. Despite these increases, the number of murders fell 4.8 percent in the South and 2.4 percent in the Northeast.

The only violent crime offense category that showed increases in all four regions of the country was aggravated assault, which was up 4.4 percent in the Midwest, 2.4 percent in the West, 1.7 percent in the South, and 0.8 percent in the Northeast.

Property crime.

On the property crime front, all three offense categories showed overall increases—1.9 percent for larceny-theft, 1.7 percent for motor vehicle theft, and 0.1 percent for burglary.

Regionally, the West saw the largest rise in property crime—up 4.7 percent, followed closely by the Northeast at 4.0 percent. The Midwest was up 1.3 percent, but the South actually showed a decrease of 1.4 percent.

For individual property crime offense categories, statistics indicate that the West had the largest increase in the number of burglaries (up 6.7 percent) and motor vehicle thefts (up 8.1 percent). And the Northeast had the largest rise in the number of larceny-thefts, which were up 4.5 percent.

The statistics for arson, collected separately from other property crimes because of varying degrees of reporting among law enforcement agencies, showed an overall jump of 3.2 percent during the first six months of 2012. Three of the four regions of the country reported increases—up 11.0 percent in the Midwest, 6.4 percent in the West, and 5.7 percent in the Northeast. The South saw a 5.6 decrease in arson offenses.

New offense categories.

On the heels of National Slavery and Human Trafficking Awareness Month this January, our UCR program will begin collecting human trafficking data this year in two categories—commercial sex acts and involuntary servitude. The William Wilberforce Trafficking Victims Protection Reauthorization Act of 2008 requires the data collection, and with input from our law enforcement partners, the UCR program began developing specific definitions and data collection guidelines for these offenses. Stay tuned for more details on implementation.

Preliminary crime stats for the full year—contained in UCR’s Preliminary Annual Uniform Crime Report, January-December 2012—should be available in six months, and final figures are scheduled to be released by the end of the year.

Tuesday, January 15, 2013

Jimmy Hoffa Buried in Detroit Suburbs According to Reputed Mafia Capo Tony Zerilli

A man convicted of crimes as a reputed Mafia captain is claiming missing Teamsters boss Jimmy Hoffa was buried in suburban Detroit.

Tony Zerilli was in prison when Hoffa disappeared from a Detroit-area restaurant in 1975, but tells New York TV station WNBC he was informed about Hoffa's whereabouts after his release. The ailing 85-year-old took a reporter to a field near Rochester, north of Detroit, but no exact location was disclosed. The report was also aired on Detroit's WDIV.

"The master plan was ... they were going to put him in a shallow grave here," Zerilli said. "Then, they were going to take him from here to Rogers City upstate. There was a hunting lodge and they were going to bury in a shallow grave, then take him up there for final burial. Then, I understand, that it just fell through."

Zerilli did not say during the aired interview why he chose to make his claims now. WNBC reported he is promoting an upcoming book titled "Hoffa Found," the website for which promises to reveal details about Hoffa's death.

No listed phone number for Zerilli could be found Monday by The Associated Press.

The FBI declined to comment when asked if Zerilli's claims were credible. Former Detroit FBI head Andrew Arena said the remarks deserve serious consideration."Anthony Zerilli was reputed to be the underboss of the Detroit organized crime family, so he would have been in the know," Arena said.

Zerilli's criminal record includes a 2002 conviction for conspiracy and extortion. He was sentenced to six years in prison.

Hoffa, Teamsters president from 1957-71, was an acquaintance of mobsters and adversary to federal officials. The day he disappeared, he was supposed to meet with a New Jersey Teamsters boss and a Detroit Mafia captain.

In September, police took soil from a suburban backyard after a tip Hoffa had been buried there. It was just one of many fruitless searches. Previous tips led police to a horse farm northwest of Detroit in 2006, a Detroit home in 2004 and a backyard pool two hours north of the city in 2003.

Monday, January 14, 2013

David Tresch and Nicholas Demars Indicted in $4.8 Million Billing Fraud and Kickback Scheme

The former chief information officer of a Chicago-based international law firm who was charged previously and the president of a company that provided contract technology workers who was charged for the first time and arrested were indicted for allegedly engaging in a fraudulent billing and kickback scheme that netted each of them more than $2 million. Nicholas Demars, the president of NS Mater, a defunct firm that provided contract employees and technology to assist in office automation, web and database development, and general information technology, was arrested and indicted with David Tresch, the former law firm officer who supervised the work and billing related to the contract employees.

For the first six years of the scheme that began in 2004, Demars allegedly paid Tresch a portion of the profits that NS Mater made from work its contract employees performed at the victim law firm. During the last two years and ending in June 2012, Tresch allegedly received kickbacks totaling nearly all of the false billings that the law firm paid NS Mater for work that was not performed.

Tresch, 51, and Demars, 57, both of Itasca, were each charged with 10 counts of mail fraud in an indictment that was returned by a federal grand jury and unsealed after Demars was arrested. Demars was released on bond after appearing this morning before U.S. Magistrate Judge Sidney Schenkier in U.S. District Court. Tresch, who was released on bond after he was arrested in August, will be arraigned at a later date in federal court.

The indictment also seeks forfeiture of $4,819,253 representing the combined net proceeds that both men allegedly obtained from the scheme, as well as their respective homes; Demars’ condominium in Chicago; a residence in Lake Geneva, Wisconsin; and more than $225,000 that was seized from Tresch along with his camping trailer, a van, and a luxury automobile.

The charges were announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, and Thomas R. Trautmann, Acting Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.

According to the initial complaint, the victim law firm, which was not identified by name, reported Tresch’s alleged criminal activity and cooperated in the investigation. The firm, which has offices worldwide, hired Tresch in May 2004, and he held several positions in the information technology department before he was promoted in July 2011 to chief information officer.

The indictment alleges that between November 2004 and March 2011, the law firm issued checks totaling approximately $7.68 million to NS Mater, and Demars, in turn, kicked back $1.14 million to Tresch. In 2004 and 2005, Demars allegedly paid kickbacks directly to Tresch after paying legitimate NS Mater contract employees and payroll administrators for work they had performed for the law firm. Beginning in April 2006, allegedly to conceal the kickbacks, Demars began paying Tresch by issuing checks to Tresch’s wife and treating her as an employee of NS Mater, even though both defendants knew that she was not an employee and had not performed any work, according to the indictment. Tresch’s wife is not a defendant.

Subsequently, in late 2010, Tresch learned that that the law firm would soon stop using NS Mater contract employees, and, in February 2011, the firm directed Tresch to no longer permit NS Mater to provide personnel for the information technology department. Between November 2011 and June 2012, Demars allegedly continued submitting invoices to Tresch totaling more than $1.1 million, falsely representing that NS Mater performed work that both defendants knew was not performed. Tresch submitted the false invoices, which the firm paid, and of the $1.1 million paid during this period, Demars kicked back approximately $970,000 to Tresch, while retaining the remainder for himself, the indictment alleges.

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

The government is being represented by Assistant U.S. Attorney Terra Reynolds.

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

Carl Brandon "Moo" Smith Pleads Guilty to Bringing Minor to Illinois for Prostitution; Admits Forced Sex Trafficking of 4 Victims

A Chicago man is facing a mandatory minimum of 10 years and a maximum sentence of life in prison after pleading guilty to transporting a minor from Wisconsin to Illinois for prostitution. The defendant, Carl Brandon Smith, also admitted that he engaged in forced sex trafficking of the victim, as well as of a second minor and two young adult women. Between 2010 and early 2012, Smith forced his victims to engage in commercial sex acts, used physical violence, and threatened to kill them if they ever left him. The guilty plea was announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, and Thomas R. Trautmann, Acting Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.

Smith, also known as “Moo,” 25, of Chicago, is scheduled to be sentenced on April 5 by U.S. District Judge Amy St. Eve. Smith has remained in federal custody since he was arrested last April last and charged with two counts of sex trafficking of a minor and by force, two counts of sex trafficking by force, and one count of transporting a minor across state lines to engage in prostitution.

According to a plea agreement, Smith met Victim B in December 2010 and began contacting her via phone, text, and social media, asking her to move to Chicago, intending that she be his “girlfriend” and also engage in prostitution. In February 2011, Smith drove from Chicago to Victim B’s residence in Wisconsin and then drove her from Wisconsin to his apartment in Chicago, acknowledging that she was under 18 at the time.

Once in Chicago, Smith “dated” Victim B for approximately a week before Victim B began working as a prostitute under his employ. Between February and July 2011, Victim B engaged in commercial sex acts at Smith’s direction. Smith acted as Victim B’s pimp, advertised her for commercial sex on Internet sites, and instructed her to have sex with customers in his apartment and in area motels. Victim B had sex with numerous men per week and gave a portion of the money she earned to Smith.

As part of the guilty plea, Smith stipulated that he acted as a pimp for Victim A, also a minor, and forced her to engage in prostitution during 2010. Smith inflicted physical violence on Victim A when she gave him “attitude” or when she indicated that she no longer wanted to work as a prostitute. On one occasion, Smith beat Victim A so severely that one eye swelled shut.

Similarly, Smith stipulated to using and threatening violence against both Victims C and D, both adults, while acting as their pimp and forcing them to engage in commercial sex acts in 2011 and early 2012.

The Cook County Human Trafficking Task Force assisted in the investigation. The government is being represented by Assistant U.S. Attorney Christopher Grohman and Felicia Manno Alesia.

Friday, January 11, 2013

Human Trafficking Awareness Targeting Traffickers, Helping Victims

Last month, a Kentucky cardiologist and his ex-wife pled guilty to recruiting a Bolivian woman to work as their domestic servant and holding her unlawfully for nearly 15 years. The couple took her passport, threatened her with deportation, and falsely promised that her wages were being put in a bank account.

Trafficking in persons is a widespread form of modern-day slavery, and as we observe National Slavery and Human Trafficking Prevention Month, we’d like to update you on what the FBI—with its partners—is doing to go after the traffickers and help the victims.

Human trafficking is a top investigative priority of the Bureau’s civil rights program.

During fiscal year 2012, they opened 306 human trafficking investigations around the nation involving forced labor or forced household service as well as sex trafficking of international victims (young and old) and adult U.S. citizen victims.

Along the same lines, the sex trafficking of U.S. children is also a priority within their crimes against children program. During fiscal year 2012, they opened 363 investigations into the commercial sexploitation of domestic minors. Fortunately, they were also able to locate more than 500 young victims of sex traffickers.

They participate in 88 human trafficking task forces and working groups around the country. Their efforts include not only investigating cases where they find them, but also proactively using intelligence to drive and support these cases, looking at known areas of human trafficking activities, and developing liaison relationships within communities to promote awareness of these crimes.

Help for victims.

The Bureau also has a robust assistance program in place for victims of human trafficking—as well as other federal crimes investigated by the FBI. Their Office for Victim Assistance (OVA) oversees the work of victim specialists located throughout our 56 field offices.

These specialists—experienced in crisis intervention, social services, and victim assistance—work closely with agents to ensure that potential victims of trafficking are rescued, transferred to safe locations, and provided with referrals for medical, mental health, housing, legal, and other necessary services. And this past year, representatives from OVA and their civil rights program developed a protocol for human trafficking investigations that was implemented in all FBI field offices. The protocol highlights a victim-centered approach and the need for collaboration between the investigating agent, the local victim specialist, non-governmental agencies, and other law enforcement partners.

OVA oversees their child/adolescent forensic interviewers who work with Crimes Against Children task forces and provide training for agents and task force officers working human trafficking cases. These interviewers also collaborated with partner agencies to develop an interview protocol for minor victims of sexploitation for use by professionals working against human trafficking.

Their training and awareness efforts were significant.

During fiscal year 2012, they conducted training around the country focused on defining, detecting, and investigating human trafficking cases. The audiences included law enforcement—both U.S. and international—along with government employees, religious and civic organizations, ethnic advocacy groups, schools, social service agencies, medical personnel, legal aid agencies, domestic violence services, etc.—in short, anyone in a position to make a difference in the life of a trafficking victim.

Multi-agency investigations, intelligence, victim assistance, training - the FBI's putting their tools and capabilities to work to help combat the scourge of human trafficking.

Sunday, January 06, 2013

The Dollar Cost of a Single Gun Death

Gun violence takes an economic toll as well as an emotional one. The Pacific Institute for Research and Evaluation used 2010 data from the U.S. Centers for Disease Control and Prevention to estimate the dollar cost of a single gun death. The amount exceeded $5.1 Million dollars!

  • $3,100,000 in relatives pain and suffering
  • $1,600,000 in lost wages
  • $395,000 in criminal justice expenses
  • $29,000 in medical care for the victim
  • $11,000 in mental health treatment for relatives
  • $9,000 in losses to the victim's employers

Saturday, January 05, 2013

Mob Kingpin Mickey Cohen Played by Sean Penn in Gangster Squad

Public enemy number one, Mickey Cohen, is brought to life on the big screen by two-time Oscar-winner Sean Penn in Warner Bros.’ epic, action-thriller, “Gangster Squad.”

“I thought it would be a fun old-school gangster picture with a cast I have great admiration for,” Penn says on what drew him to the film. “And upon meeting director Ruben Fleischer, I was sold.”

Set in Los Angeles, 1949, “Gangster Squad” revolves around ruthless, Brooklyn-born mob king Mickey Cohen who runs the show in this town, reaping the ill-gotten gains from the drugs, the guns, the prostitutes and—if he has his way—every wire bet placed west of Chicago. And he does it all with the protection of not only his own paid goons, but also the police and the politicians he has under his thumb. It’s enough to intimidate even the bravest, street-hardened cop…except, perhaps, for the small, secret crew of LAPD outsiders led by Sgt. John O’Mara (Josh Brolin) and Sgt. Jerry Wooters (Ryan Gosling), who come together to try to tear Cohen’s world apart.

Mickey Cohen may be an underworld figure, but his very public image and commanding presence make him a man not to be crossed…in business or pleasure. He goes beyond merciless; any breach is a betrayal for which one pays the ultimate price. But he also has the undeniable charisma that comes with great power.

According to producer Dan Lin, “Cohen, in real life, was over the top. He was a gangster, but a Hollywood gangster. He was funny, he loved talking to reporters and, in public, he really wanted to entertain people, as if he were one of the movie stars he was always trying to woo. Of course, in private, he was doing dark, evil things.”

Fleischer cites, “When I imagined bringing the movie to the screen, the one character that everything seemed to hinge on was Cohen, the villain, this larger-than-life personality. I immediately thought of Sean Penn, so having him in the role was huge. Mickey is such a dynamic, memorable, menacing character and Sean has the gravitas, the intensity and the humor to pull it off.”

Though only remotely familiar with the real man, Penn says that for his interpretation of the character, “I tried to ignore the literal. The real Mickey Cohen so resembled Al Capone, who I thought De Niro had done so indelibly in ‘The Untouchables,’ that I felt, for a wide audience who largely would not have been aware of Mickey Cohen, mimicking Cohen in looks or behavior would have been unnecessarily burdened with baggage. I thought it was interesting to approach it and let it grow from just a few pieces of Cohen’s background. He was a prize fighter, but the style of fighting was more primitive than today, and Cohen was more primitive in many ways.”

“Sean really brought to life this guy who, in reality and in our somewhat fictionalized account of him, has a huge ego and is very colorful,” producer Kevin McCormick relates. “Cohen had his own publicists, spreads in Life Magazine, owned his own haberdashery and never wore the same suit twice, and had a collection of beautiful, statuesque ladies on his arm all the time. Sean’s interpretation of the man is fascinating. In the heyday of gangster movies, those guys were always such seductive characters, and I think Sean has that same ability to mesmerize us.”

“There’s something very appealing about the way Sean plays Mickey Cohen,” co-star Josh Brolin echoes. “Watching him during a scene, I couldn’t help but like him, even though my character despises him and everything he stands for. Sean really brought out the charm in him, even when he was doing something deadly.”

“Gangster Squad” is distributed by Warner Bros. Pictures, a Warner Bros. Entertainment Company.

Friday, January 04, 2013

HBO's Profugos - Fugitives from the Law and Mafia

A FAILED drug trafficking operation that sparks a frantic pursuit of four men in Chile as they flee both the Mafia and the law is the gripping premise of new 13-episode actioner Profugos which will premiere on Astro’s Cinemax channel 412 on Jan 4 at 11pm.

The four ‘profugos’, which means fugitive, had been contracted to transport a liquid cocaine shipment from the border of Bolivia to the Chilean port of Iquique but in the midst of the final delivery, a shot rings out from a nearby terrace, unleashing a violent ambush.

This brand new original series produced by HBO Latin America, was filmed over six months entirely in Chile, and heading the cast as the four fugitives are Nestor Cantillana, Benjamin Vicuna, Francisco Reyes and Luis Gnecco.

A complex web of ambitions, interests and corruption move the threads of this story where no one is who they appear to be, everyone hides a past and sheer desperation unites the foursome who flee without knowing exactly who’s pursuing them while doing everything possible to protect their loved ones.

Scenic locations in Chile serving as backdrop include Iquique, Valparaiso, Santiago, Farellones, Puerto Montt and desert regions bordering Bolivia.

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Thursday, January 03, 2013

46 Years Ago Today - Jack Ruby Dies of Cancer

On January 3, 1967, Jack Ruby, the Dallas nightclub owner who killed the alleged assassin of President John F. Kennedy, dies of cancer in a Dallas hospital. The Texas Court of Appeals had recently overturned his death sentence for the murder of Lee Harvey Oswald and was scheduled to grant him a new trial.

On November 24, 1963, two days after Kennedy's assassination, Lee Harvey Oswald was brought to the basement of the Dallas police headquarters on his way to a more secure county jail. A crowd of police and press with live television cameras rolling gathered to witness his departure. As Oswald came into the room, Jack Ruby emerged from the crowd and fatally wounded him with a single shot from a concealed .38 revolver. Ruby, who was immediately detained, claimed he was distraught over the president's assassination. Some called him a hero, but he was nonetheless charged with first-degree murder.

Jack Ruby, originally known as Jacob Rubenstein, operated strip joints and dance halls in Dallas and had minor connections to organized crime. He also had a relationship with a number of Dallas policemen, which amounted to various favors in exchange for leniency in their monitoring of his establishments. He features prominently in Kennedy assassination theories, and many believe he killed Oswald to keep him from revealing a larger conspiracy. In his trial, Ruby denied the charge, maintaining that he was acting out of patriotism. In March 1964, he was found guilty and sentenced to death.

The official The Warren Commission Report: The Official Report of the President's Commission on the Assassination of President John F. Kennedy of 1964 concluded that neither Oswald nor Ruby were part of a larger conspiracy, either domestic or international, to assassinate President Kennedy. Despite its seemingly firm conclusions, the report failed to silence conspiracy theories surrounding the event, and in 1978 the House Select Committee on Assassinations concluded in a preliminary report that Kennedy was "probably assassinated as a result of a conspiracy" that may have involved multiple shooters and organized crime. The committee's findings, as with the findings of the Warren Commission, continue to be widely disputed.

Thanks to The History Channel.

Wednesday, January 02, 2013

Urgent International Action Deemed Required to Combat Unprecedented Levels of Transnational Organized Crime

From Central America’s drug cartels and human trafficking in Australia to money laundering and financial fraud in Switzerland, organized crime has “embraced globalization” and is causing national security issues around the world. But why are multilateral, global governance bodies and international leaders not taking more action?

A new conference report from The Centre for International Governance Innovation (CIGI) looks at how the constructive powers initiative (CPI) can play a greater role in addressing the security and institutional challenges that organized crime inflicts upon regional and global security.

“The current geographical breadth, level of sophistication and broad array of markets and activities that transnational organized criminals are involved in is unprecedented,” the report says. “[Organized crime] is constantly on the lookout for new markets, new routes to smuggle its products and weak states where it can set up operations.” Moreover, the dimensions and impact of transnational organized crime are not exclusive to law enforcement; contrary to what many governments believe, this type of crime undermines national institutions more broadly.

The report points out that member states of universal organizations such as the United Nations do not treat the issue with the urgency it requires, which inhibits progress on policy coordination. In addition, policy advisers, who are responsible for anticipating items for their national leaders, are challenged by the speed at which transnational issues are emerging and evolving in a post-Cold War world. The report calls for greater leadership and partnerships in policy coordination and capacity-building to tackle these challenges and transnational organized crime.

The report notes that, to tackle transnational organized crime, countries with shared interests will need to generate momentum with “the strategic decision to make coordinating their crime policies a priority.” Hence, there is functional role for the CPI, which is made up of government and non-government representatives from Australia, Brazil, Canada, Germany, Indonesia, Japan, the Republic of Korea, Mexico, South Africa, Switzerland and Turkey: countries that are “democratic, politically influential, economically significant, non-nuclear-armed … with a proven track record of active and creative diplomacy at both the regional and global levels.” The CPI, with its independence of thought and research, combined with its composition, allows for it to identify emerging security issues, and also influence and play a useful role in global governance bodies such as the G20, the report states.

To access a free, online copy of "Global Governance and the Challenge of Transnational Organized Crime: The Role of the Constructive Powers," please click here. The report is based on workshop discussions held in Mexico City, during September 2012, organized by the Centro de Investigación y Docencia Económicas, A.C., the Mexican Council on Foreign Relations (COMEXI), and CIGI, with the support of the Friedrich Ebert Stiftung. This was the second CPI workshop, following up on an event held in Istanbul, Turkey, in June 2011.

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