14 #BloodsStreetGang Members & #MacBallers Charged with Engaging in a Drug Trafficking Conspiracy

United States Attorney Richard S. Hartunian announced that 14 members and associates of the Bloods street gang known as the “MacBallers” were charged by way of a felony criminal complaint in federal court in Binghamton, New York, with engaging in a drug trafficking conspiracy, pursuant to Title 21, United States Code, Sections 841(a)(1) and 846. Federal, state, and local law enforcement teams executed arrest warrants in the greater Binghamton, New York area, as well as in New York City. Defendants made their appearances before a federal magistrate judge in federal court. Additionally, law enforcement also executed federal search warrants at nine locations in the Binghamton, New York area including at the nightclub called 17 East, located at 348 Clinton Street, Binghamton, New York, which was utilized and frequented by members of the MacBallers gang.

The investigation leading to today’s arrests and charges was conducted by members of a task force comprised of the U.S. Attorney’s Office, Binghamton, New York; FBI Albany Field Office and FBI New York Field Office; Broome County District Attorney’s Office; Binghamton Police Department; New York State Police; Broome County Sheriff’s Office; Johnson City Police Department; Endicott Police Department; and the U.S. Marshals Service.

The federal felony complaint charges that starting in September 2009 and continuing up to the present, members and associates of the MacBallers set of the Bloods street gang operated in Binghamton, New York and were responsible for distributing large quantities of controlled substances including cocaine base (crack cocaine), powder cocaine, heroin, and marijuana in the greater Binghamton area. The complaint also charges that MacBaller members utilized rental vehicles and rental apartments to facilitate their drug trafficking conspiracy in order to cook, package, store, and transport controlled substances; utilized prepaid cellular telephones to contact drug customers and gang associates, both affiliated and unaffiliated to the MacBallers, in order to distribute controlled substances; engaged in gang meetings at various locations in the Binghamton area; and utilized firearms including handguns to commit assaults and shootings and to threaten others in furtherance of the MacBallers’ drug trafficking conspiracy.

The federal felony complaint also charges as follows as to each defendant:

1. DEREK CARR, a/k/a “Jinx,” 29 years old, is affiliated to the Bloods street gang and believed to a member of the MacBallers. DEREK CARR is a close, personal associate of SAQUAN JOHNSON and supplied SAQUAN JOHNSON with controlled substances including crack cocaine and heroin. DEREK CARR communicated with SAQUAN JOHNSON regarding the cooking, packaging, acquisition, and distribution of controlled substances including crack cocaine and heroin.
2. COURTNEY DOUGLAS, a/k/a “Poppy,” 32 years old, is a member of the MacBallers who received supplies of crack cocaine and heroin from SAQUAN JOHNSON, as well as crack cocaine from CHAD EDWARDS, JUAN PENA, and REGINALD SIMMONS, JR. and then distributed those controlled substances to drug customers. COURTNEY DOUGLAS communicated with other members of the MacBallers’ drug trafficking conspiracy, including SAQUAN JOHNSON, CHAD EDWARDS, and JUAN PENA regarding the acquisition, distribution, and resale of controlled substances including crack cocaine and heroin.
3. LAMONT CLEMONS, a/k/a “Stime,” 39 years old, is believed to be a family relative (cousin) of CALVIN JOHNSON who transported supplies of controlled substances and distributed controlled substances on behalf of CALVIN JOHNSON. LAMONT CLEMONS also supplied SAQUAN JOHNSON with controlled substances including crack cocaine, heroin, powder cocaine, and marijuana. LAMONT CLEMONS communicated with SAQUAN JOHNSON regarding the acquisition, storage, transportation, distribution, and resale of controlled substances, including crack cocaine, powder cocaine, heroin, and marijuana.
4. CHAD EDWARDS, a/k/a “Chaddy O,” 31 years old, is a high-ranking member of the MacBallers who was responsible for distributing large quantities of crack cocaine in Binghamton, New York. CHAD EDWARDS worked closely with JUAN PENA AND REGINALD SIMMONS, JR. to distribute controlled substances and shared the same cellular telephones with these individuals. CHAD EDWARDS communicated with other members of the MacBallers’ drug trafficking conspiracy, including SAQUAN JOHNSON, JUAN PENA, REGINALD SIMMONS, JR., SHARELL HOLTON, and COURTNEY DOUGLAS regarding the acquisition, packaging, and distribution of controlled substances.
5. SHARELL HOLTON, a/k/a “Rell,” 35 years old, is a known controlled substances distributor in Binghamton, New York who is believed to have been supplied by members of the MacBallers’ drug trafficking conspiracy including JOHN MELVILLE, CHAD EDWARDS, JUAN PENA, and REGINALD SIMMONS, JR. She allowed members of the MacBallers’ drug trafficking conspiracy, including JOHN MELVILLE and BRIAN WEST, to utilize her residence in Endicott, New York and distribute controlled substances from her residence. SHARELL HOLTON communicated with other known members of the MacBallers’ drug trafficking conspiracy including SAQUAN JOHNSON, CHAD EDWARDS, and JUAN PENA regarding the acquisition, storage, and distribution of controlled substances as well as the collection of drug proceeds.
6. LESLIE HUGHES, a/k/a “Les,” 41 years old, is a Bloods Street Gang member and a known controlled substances distributor in Binghamton, New York who supplied SAQUAN JOHNSON with controlled substances including crack cocaine. LESLIE HUGHES worked for CALVIN JOHNSON and supplied SAQUAN JOHNSON with controlled substances to include crack cocaine. LESLIE HUGHES communicated with SAQUAN JOHNSON regarding the acquisition, cooking/mixing, packaging, and distribution of controlled substances, including crack cocaine, and the collection of drug proceeds.
7. CALVIN JOHNSON, a/k/a “Cal,” 38 years old, is a known controlled substances distributor in Binghamton, New York who operated the nightclub 17 East, which was utilized and frequented by members of the MacBallers’ drug trafficking conspiracy. He also supplied SAQUAN JOHNSON, LAMONT CLEMONS, LESLIE HUGHES, and others with controlled substances including crack cocaine, powder cocaine, and marijuana. CALVIN JOHNSON communicated with SAQUAN JOHNSON regarding the acquisition, distribution, and storage of controlled substances including crack cocaine, powder cocaine, and marijuana, as well as the acquisition of a handgun/firearm.
8. SAQUAN JOHNSON, a/k/a “Banga,” a/k/a “Sa,” 23 years old, is a member of the MacBallers gang and is known as an enforcer/shooter who was responsible for the distribution of large amounts of crack cocaine, powder cocaine, heroin, and marijuana to other members of the MacBallers’ drug trafficking conspiracy including GERALD NORFLEET and COURTNEY DOUGLAS. SAQUAN JOHNSON was supplied with controlled substances from CALVIN JOHNSON, LAMONT CLEMONS, DEREK CARR, CHAD EDWARDS, JUAN PENA, REGINALD SIMMONS, JR., and DAYNELL ROWLAND. SAQUAN JOHNSON also communicated with other members of the MacBallers’ drug trafficking conspiracy including DEREK CARR, COURTNEY DOUGLAS, LAMONT CLEMONS, CHAD EDWARDS, SHARELL HOLTON, LESLIE HUGHES, CALVIN JOHNSON, GERALD NORFLEET, JUAN PENA, DAYNELL ROWLAND, and REGINALD SIMMONS, JR. regarding the acquisition, distribution, transportation, and cooking/mixing of controlled substances including crack cocaine, powder cocaine, heroin, and marijuana, as well as robberies, assaults, and firearms violations.
9. JOHN MELVILLE, a/k/a “Flip,” a/k/a “Fat Boy,” 29 years old, is a high ranking member of the MacBallers gang. JOHN MELVILLE was known to traffic large quantities of controlled substances including crack cocaine and powder cocaine into Binghamton, New York, in order to distribute controlled substances and supply additional members of the MacBallers’ drug trafficking conspiracy including SHARELL HOLTON, CHAD EDWARDS, JUAN PENA, and REGINALD SIMMONS, JR.
10. GERALD NORFLEET, a/k/a “G,” 55 years old, purchased controlled substances from SAQUAN JOHNSON and distributed controlled substances including crack cocaine. Additionally, he collected drug proceeds derived from controlled substance sales on behalf of SAQUAN JOHNSON AND LAMONT CLEMONS. GERALD NORFLEET also provided transportation for SAQUAN JOHNSON in order to facilitate drug transactions in furtherance of the MacBallers’ drug trafficking conspiracy. GERALD NORFLEET communicated with SAQUAN JOHNSON regarding the acquisition, packaging, and distribution of controlled substances, and the collection of drug proceeds derived from the sales of controlled substance including crack cocaine.
11. JUAN PENA, a/k/a “John John,” 30 years old, is a high ranking member of the MacBallers who was responsible for distributing large quantities of crack cocaine. At one time, JUAN PENA also paid CALVIN JOHNSON an amount of United States currency to control and operate various illegal gambling games at CALVIN JOHNSON’S nightclub 17 East. JUAN PENA also communicated with other members of the MacBallers’ drug trafficking conspiracy including SAQUAN JOHNSON, CHAD EDWARDS, REGINALD SIMMONS, JR., SHARELL HOLTON, COURTNEY DOUGLAS, and others regarding the acquisition and distribution of controlled substances.
12. DAYNELL ROWLAND, a/k/a “Daylo,” 31 years old, is a suspected member of the MacBallers who resides in Syracuse, New York, and was responsible for supplying SAQUAN JOHNSON and others with large amounts of controlled substances including marijuana and heroin. DAYNELL ROWLAND introduced SAQUAN JOHNSON to his (DAYNELL ROWLAND’S) heroin supplier residing in the New York City area so SAQUAN JOHNSON could obtain large quantities of heroin directly from this individual. DAYNELL ROWLAND also expressed a desire for SAQUAN JOHNSON to become his main heroin distributor in Binghamton, New York. DAYNELL ROWLAND communicated with SAQUAN JOHNSON regarding the acquisition, cooking, packaging, and distribution of controlled substances and the collection of drug proceeds derived from the sales of controlled substances.
13. REGINALD SIMMONS, JR., a/k/a “Reg,” a/k/a “Moe,” 30 years old, is a member of the MacBallers who was responsible for distributing large quantities of crack cocaine. REGINALD SIMMONS, JR. worked with JUAN PENA AND CHAD EDWARDS to distribute controlled substances and shared the same cellular telephones with them for the purpose of distribution of controlled substances. REGINALD SIMMONS, JR. also communicated with other additional members of the MacBallers’ drug trafficking conspiracy including SAQUAN JOHNSON, JUAN PENA, CHAD EDWARDS, SHARELL HOLTON, and COURTNEY DOUGLAS regarding the demand, acquisition, packaging, and distribution of controlled substances.
14. BRIAN WEST, a/k/a “West,” 27 years old, is a member of the MacBallers who was responsible for distributing large quantities of crack cocaine. BRIAN WEST trafficked controlled substances into the Binghamton, New York area with JOHN MELVILLE and who supplied other members of the MacBallers’ drug trafficking conspiracy including SHARELL HOLTON, CHAD EDWARDS, JUAN PENA, and REGINALD SIMMONS, JR. BRIAN WEST also utilized SHARELL HOLTON’S residence to distribute controlled substances.

If convicted, each defendant faces an imprisonment term of at least 10 years and up to life.

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Juan Elias Garcia, #MS13 Member, Named to FBI's Top 10 List

Juan Elias Garcia, wanted for the execution-style murder of a 19-year-old New York woman and her 2-year-old son, has been named to the FBI's Ten Most Wanted Fugitives list.



A reward of up to $100,000 is being offered for information leading directly to the arrest of Garcia, who is alleged to be a member of the violent Mara Salvatrucha gang—MS-13—and may be hiding in El Salvador.

“Garcia’s callous disregard for human life resulted in the senseless murder of a young mother and her helpless 2-year-old son,” said George Venizelos, assistant director in charge of our New York Field Office. “His appointment to the FBI’s Top Ten list illustrates not only the seriousness of his crimes but our commitment to seeking justice for his victims.”

The murders occurred in Central Islip, New York in 2010. At that time, Garcia—who is known by the nickname “Cruzito”—was 17 years old.

“MS-13 is the most violent gang here of any of the street gangs,” said Special Agent Reynaldo Tariche, who investigated the case with other members of the FBI’s Long Island Gang Task Force. While gang-related murders are not uncommon on Long Island, “the execution of a 2-year-old and his mother is a new low even for MS-13,” Tariche noted.

Garcia had a romantic relationship with the 19-year-old victim, Vanessa Argueta, who had ties to the 18th Street gang and the Latin Kings, two of MS-13’s rivals. After a falling out between Argueta and Garcia, rival gang members allegedly threatened Garcia. When he relayed that information to fellow MS-13 members—that he had been threatened because of information provided by Argueta—it was decided to retaliate against her.

“They were going to kill her for disrespecting the gang,” said Special Agent James Lopez, also a member of the task force. According to gang code, Lopez explained, “it is unacceptable for MS-13 members to have girls they associate with be involved with rival gang members.”

“Garcia was an enthusiastic murderer,” Tariche said. “He was the reason why this happened. He was the one who decided to get the gang involved. It wasn’t about a boyfriend-girlfriend dispute. This was about disrespecting the gang. And the penalty for that is death.”

On February 4, 2010, Garcia invited Argueta to dinner but instead lured her and her son into the woods. Along with two other MS-13 members, he executed her with two shots from a handgun while her son looked on. The gun was then turned on the child. The first shot knocked him to the ground but did not kill him. The boy got up and clutched at Garcia’s leg, but another gang member shot again and killed him

Garcia should be considered armed and dangerous. He is 5 feet 4 inches tall, weighs 125 pounds, and has black hair and brown eyes. He is known to speak Spanish and English and has ties to Santa Rosa de Lima in El Salvador as well as Nicaragua, Honduras, Guatemala, and Panama. His two co-conspirators have been convicted of murder and are awaiting sentencing. A fourth defendant charged in connection with the murders—Garcia’s MS-13 leader—has been sentenced to three terms of life in prison, plus 60 years.

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Details on Chicagoland Antique Advertising, Slot Machine & Jukebox Show

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#Yakuza Organized Crime Members Drop to Lowest Level since 1992

The number of people belonging to yakuza groups in Japan has declined to its lowest level since the anti-organized crime law took effect in 1992, a national police survey showed Thursday.

The survey, carried out by the National Police Agency, revealed that there were approximately 58,600 crime group members operating in Japan as of the end of 2013, down about 4,600 from a year earlier. These numbers continue a downward trend which may be the result of a strengthened police crackdown and measures taken by the government to limit crime syndicates’ means of financing.

Nevertheless, the survey revealed a notable increase in organized crimes in the western prefecture of Hiroshima. Of 23 cases of armed attacks by crime syndicates on corporations in Japan, 16 occurred in Hiroshima last year, the agency said. Police records showed no attacks on companies had occurred in 2011 and 2012.

Investigations of cases in Hiroshima Prefecture involving yakuza members suggest they are stepping up activities in commercial areas, an agency official said.

Police also investigated 27 cases related to rivalries between yakuza groups in 2013, none of which resulted in death or injury to civilians, the survey said.

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Specifics on William F. Boyland, Jr.'s Conviction on Bribery, Fraud, Extortion, Conspiracy, and Theft Charges

Sitting New York State Assemblyman William F. Boyland, Jr. was convicted by a jury at the federal courthouse in Brooklyn, New York, of 21 felony counts, including federal programs bribery, conspiracy to commit federal programs bribery, conspiracy to violate the Travel Act and commit federal programs bribery, extortion, extortion conspiracy, honest services wire fraud, conspiracy to commit honest services wire fraud, federal programs theft, and conspiracy to commit mail fraud. Boyland committed each of these offenses by corruptly exploiting his public position representing the 55th Assembly District in Brooklyn, which is composed of Ocean Hill, Brownsville, Bedford-Stuyvesant, Crown Heights, and Bushwick. Upon his convictions, Boyland was automatically expelled from the Assembly. When sentenced, Boyland faces prison terms of up to 20 years on each of the extortion, extortion conspiracy, honest services wire fraud, honest services wire fraud conspiracy, and mail fraud conspiracy counts; up to 10 years on each of the federal programs bribery and federal programs theft counts; and up to five years on each of the other conspiracy counts. Following his convictions, the Honorable Sandra L. Townes, who presided over the trial, ordered Boyland remanded into custody pending his sentencing on June 30, 2014. Boyland is also subject to up to at least $250,000 in fines on each of the counts of conviction, as well as criminal forfeiture and mandatory restitution.

The convictions were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office.

“The breadth and pervasiveness of the corruption exposed by this prosecution is staggering. Wherever there was an opportunity for William Boyland to corruptly line his own pockets, he took it. By soliciting bribes, by stealing funds intended to help the elderly, and by defrauding New York State and the Assembly, Boyland cravenly pursued his own interest at the expense of his constituents. In doing so, Boyland not only broke the law but broke faith with the public he was elected to serve. Today’s verdict ensures that Boyland will be held accountable for his corrupt actions,” stated United States Attorney Lynch. “When our elected officials engage in self-dealing, when they abdicate their responsibilities, when they succumb to greed, the average citizen pays for it dearly, and our democratic system suffers on so many levels. The verdict sends a clear message that we and our partners in the FBI will vigorously investigate and prosecute any public official who trades on a position of power to line his own pocket.” United States Attorney Lynch praised the hard work and dedication of the FBI agents who investigated the case and expressed her thanks to the New York State Comptroller’s Office, the New York State Office of the Aging, the Internal Revenue Service Criminal Investigation Division, the New York State Assembly Department of Finance, and the New York City Department of Investigation for their assistance with the investigation.

The evidence admitted at trial proved that, beginning in January 2007 and continuing through December 2011, Boyland engaged in four separate corrupt schemes, ranging from soliciting and accepting over $250,000 in bribe payments, to submitting false travel vouchers to New York State, to stealing state funds intended for the elderly:

Carnival Scheme

Boyland extorted and accepted over $14,000 in bribes in exchange for undertaking official action to benefit a carnival promoter (the “promoter”) and an undercover FBI agent. Specifically, in August 2010, Boyland met with the Promoter and this undercover FBI agent (UC1) on multiple occasions in New York City and discussed the desire of the promoter and UC1 to hold carnivals in Boyland’s district, for which they needed government approvals. During those meetings, Boyland requested payments in exchange for assisting the promoter and UC1, and the promoter and UC1 agreed. Boyland also described various ways in which the bribes could be disguised to hide their true purpose. After these meetings, Boyland directed his Assembly staff to assist the promoter and UC1 in their efforts to gain government approvals. Boyland then represented to the promoter and UC1 that he and his staff (i) engaged in discussions with government agencies to assist the Promoter in obtaining carnival-related leases and permits and (ii) arranged for a non-profit organization to sponsor the Promoter’s carnivals. Boyland also directed his staff to give the promoter letters of support, on Boyland’s Assembly letterhead, that the promoter needed in order to operate carnivals in Boyland’s district. In exchange, UC1 paid Boyland three separate bribes: $7,000 in cash; a $3,000 check with the “payee” line left blank; and $3,800 worth of money orders that were deposited into Boyland’s campaign bank account. As was shown to the jury during the trial, Boyland was captured on videotape personally accepting the $7,000 cash bribe at his district office.

Real Estate Scheme

Boyland also accepted the $7,000 cash bribe described above in exchange for undertaking official action to benefit UC1 and a second undercover FBI agent (UC2) in a purported real estate venture in Boyland’s district. Specifically, Boyland proposed a brazen scheme in which UC1 and UC2 would purchase the former St. Mary’s Hospital in Boyland’s district for $8 million, obtain state grant money to renovate the hospital, and resell it for $15 million to a non-profit organization that Boyland claimed to control. Boyland assured UC1 and UC2 that he would use his influence as an assemblyman to secure state grant money for the project and handle any zoning issues that arose. After accepting the $7,000 cash bribe described above, Boyland was later recorded demanding an additional $250,000 bribe payment from UC1 and UC2 as a condition of using his official position to realize the real estate scheme he had proposed.

Recordings of meetings in hotel rooms in Atlantic City and New York City where Boyland discussed the real estate scheme revealed that he recognized the scheme’s corrupt and illegal nature and sought to conceal his own involvement. At the meeting in the hotel in Atlantic City, Boyland stated, “I got a middle guy by the way...I gotta stay clean...I got a bag man....” Boyland further explained that he did not want to talk on the telephone and preferred in-person meetings: “I stopped talking on the phone a while ago...I’m just saying there is no real conversation that you can have...especially with what we’re talking about.”

At the meeting in the hotel room in New York City, Boyland reiterated that he wanted UC1 and UC2 to pay him a $250,000 bribe in exchange for the St. Mary’s Hospital project. When UC2 instead countered Boyland’s demand by offering to pay Boyland $5,000 for introductions to other government officials who would be involved in the project, Boyland rejected the counter-proposal, stating that the people whom Boyland could introduce to UC1 and UC2 were worth more than $5,000: “I’m not talking about $5,000 folks. I’m talking about...people that can actually get these projects done.”

False Voucher Scheme

From January 2007 to December 2011, Boyland stole New York State funds by submitting false New York State Assembly Member Travel Vouchers (vouchers). Boyland submitted over two hundred fraudulent vouchers where he falsely claimed to be in Albany on legislative business when he in fact was not in Albany, including days when Boyland was in New York City meeting with the undercover FBI agents and demanding $250,000 in bribes; days when he was in North Carolina and Virginia visiting with family and friends; and for days when he was in Istanbul, Turkey. In reliance on Boyland’s false Vouchers, New York State paid Boyland more than $70,000 in fraudulent mileage expense reimbursements and per diem payments.

Theft of State Funds for the Elderly

From July 2007 to September 2010, Boyland conspired to defraud New York State and the New York State Office of the Aging (NYSOA). Boyland, a member of the Assembly’s Committee on the Aging, steered $200,000 of New York State “member item” funds to a Brooklyn-based non-profit organization whose mission, as described on its website, was to provide a “social setting that enable[s] elderly individuals to maintain their independence and remain at home in the community.” Notwithstanding his certification, in writing to the NYSOA that these state funds would not be used for any partisan or political purpose, Boyland directed that the majority of these $200,000 in state funds be used for the benefit of Boyland and his political campaigns by paying for community events that promoted Boyland such as a Senior Lunch Cruise on the Spirit of New York Cruise Line, a fireworks show, and a large end of the summer picnic held at a park in his district, as well as goods that promoted Boyland, such as “Team Boyland” T-shirts distributed at those community events.

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Full Details of Grand Larceny Charges on Dewey & Leboeuf's Historic Collapse, Thousands Unemployed, Creditors Owed Hundreds of Millions

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the indictments of Steven Davis, 60; Stephen DiCarmine, 57; Joel Sanders, 55; and Zachary Warren, 29. The first three defendants were, respectively, the chairman, the executive director, and the chief financial officer at the now-bankrupt law firm Dewey & LeBoeuf LLP; the fourth defendant was a client relations manager at the firm. The indictment alleges that the defendants defrauded and stole from the firm’s lenders, investors, and others. This case is the result of a nearly two-year investigation by the DA’s Major Economic Crimes Bureau and the Federal Bureau of Investigation. The Securities and Exchange Commission conducted its own parallel investigation and also is bringing charges today.

Davis, DiCarmine, and Sanders are charged with grand larceny in the first degree, scheme to defraud in the first degree, Martin Act securities fraud, falsifying business records in the first degree, and conspiracy in the fifth degree. Warren is charged in two indictments with scheme to defraud in the first degree, falsifying business records in the first degree, and conspiracy in the fifth degree.

“Fraud is not an acceptable accounting practice,” said District Attorney Vance. “The defendants are accused of concocting and overseeing a massive effort to cook the books at Dewey & LeBoeuf. Their wrongdoing contributed to the collapse of a prestigious international law firm, which forced thousands of people out of jobs and left creditors holding the bag on hundreds of millions of dollars owed to them. Those at the top of the firm directed employees to hide the firm’s true financial condition from creditors, investors, auditors, and even partners of the firm, until the scheme unraveled and resulted in the largest law firm bankruptcy in history. Seven of the firm’s employees have already pled guilty to crimes related to their roles in the scheme. My office’s Major Economic Crimes Bureau will continue to work with our law enforcement partners to prosecute accounting fraud and other economic crimes—regardless of the target company’s size or status.”

FBI Assistant Director in Charge George Venizelos said, “As alleged, rather than speaking openly with creditors about mounting debt and shrinking revenue, the defendants deliberately manipulated the firm’s financial statements. In the height of the crisis, the defendants used every trick in the book in an elaborate attempt to cover-up the increasingly dire situation. But as bad went to worse, the defendants doubled down and continued to exaggerate, manipulate, and downright lie in a vain attempt to right a sinking ship. It is incumbent on people and the institutions where they work to do the right thing, to follow the law—and not just when the FBI is watching.”

SEC Division of Enforcement Director Andrew J. Ceresney said, “Investors were led to believe they were purchasing bonds issued by a prestigious law firm that had weathered the financial crisis and was poised for growth. Dewey & LeBoeuf’s senior-most finance personnel used a grab bag of accounting gimmicks to create that illusion, and top executives green-lighted the decision to sell $150 million in bonds to investors as a desperate grasp for cash on the basis of blatantly falsified financial results.”

Background

Dewey & LeBoeuf LLP (Dewey), an international law firm headquartered in New York City, was formed in October 2007 through the combination of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene, & MacRae LLP. At its height, approximately 1,300 partners and employees worked in Dewey’s Manhattan office, and nearly 3,000 partners and employees worked for the firm worldwide. In May 2012, Dewey collapsed, resulting in the largest law firm bankruptcy in history.

From Dewey’s formation through its bankruptcy, Davis was the firm’s chairman and later member of the office of the chair; Sanders was the firm’s chief financial officer; and DiCarmine was the firm’s executive director. Warren was the firm’s client relations manager in 2008 and 2009, when he left the firm.

From Dewey’s formation to early 2010, the firm had both term and revolving debt. By the end of 2008, Dewey had more than $100 million in term debt outstanding and available lines of credit of more than $130 million. In April 2010, Dewey refinanced its debt with a $150 million private placement with 13 insurance companies and a $100 million revolving line of credit with a syndicate of banks.

Overview of the Fraudulent Scheme

Dewey’s various credit agreements with financial institutions, and later the note purchase agreement governing the private placement, contained a cash flow covenant (the cash flow covenant) that required the firm to maintain a minimum year-end cash flow. Because of its poor financial performance, Dewey was unable to meet this covenant in 2008. The defendants and others at the firm feared that the failure to meet the cash flow covenant during the 2008 credit crisis could be harmful to Dewey.

According to the indictment and other documents filed in court, from approximately November 3, 2008 to approximately March 7, 2012, the defendants engaged in a scheme to defraud the firm’s lenders, and later investors, by, among other things, falsely reporting compliance with the cash flow covenant in 2008 and falsely reporting compliance with the cash flow covenant and other covenants in future years. To conceal and advance their fraudulent scheme, the defendants, directly and through others, lied to, withheld information from, and otherwise misled the firm’s auditors and partners, including members of the firm’s Executive Committee. Davis, DiCarmine, and Sanders are also alleged to have stolen nearly $200 million from 13 insurance companies and 2 financial institutions.

To make it appear that Dewey had complied with its covenant requirements, Davis, DiCarmine, and Sanders caused others at the firm to make tens of millions of dollars of fraudulent accounting entries beginning in late 2008. This conduct continued into 2012. Warren helped plan the fraudulent entries and took part in covering them up while he was at the firm.

In addition, at the direction of Davis, DiCarmine, and Sanders, individuals at the firm made intentional misrepresentations to investors and financial institutions involved in Dewey’s 2010 refinance. Among other things, they provided these investors and financial institutions with intentionally falsified financial statements; falsely represented that Dewey had complied with its prior debt covenants; and lied about Dewey’s policies for returning capital, its total outstanding debt, the compensation owed to partners, and about certain payments owed to retired partners.

The Fraudulent Methods

The indictment alleges that near the end of 2008, Sanders, Warren, and an individual working under Sanders’ direction identified fraudulent adjustments that could be made to Dewey’s accounting records falsely to demonstrate compliance with the cash flow covenant. These adjustments were memorialized in a document named the “master plan.” These fraudulent adjustments, as well as others, were employed from year-end 2008 to 2012 to make it appear that Dewey had either increased revenue, decreased expenses, or limited distributions to partners.

Some of the fraudulent adjustments and acts included the following, as described in the indictment:

• Reversing disbursement write-offs: From 2008 through 2011, individuals at the firm improperly reversed millions of dollars of write-offs of client disbursements, that is, costs the firm had incurred on behalf of clients, that Dewey had no intention or reasonable expectation of collecting. This fraudulently made it appear that expenses were lower than they actually were.
• Reclassifying disbursement payments: From 2008 through 2011, individuals at the firm improperly reclassified as fee payments millions of dollars of payments that had originally and properly been applied to client disbursements. When Sanders first devised this adjustment in late 2008, he told DiCarmine, “We came up with a big one. Reclass the disbursements.” DiCarmine responded, “You always do in the last hours. That’s why we get the extra 10 or 20 percent bonus.” This fraudulently made it appear that revenue was higher than it actually was.
• Reclassifying of counsel payments: From 2008 through 2011, individuals at the firm improperly reclassified as “equity partner compensation,” millions of dollars of compensation to “of counsel” lawyers. Historically, of counsel compensation had been treated as an expense in Dewey’s financial statements. This fraudulently made it appear that expenses were lower than they actually were.
• Reversing credit card write-offs: In 2008, Dewey initially and properly wrote off more than $2.4 million in charges from an American Express card associated with Sanders. The charges were not chargeable to clients. For year-end 2008, however, individuals at the firm fraudulently reversed the write-off and recorded the charges as an unbilled client disbursement receivable. Each subsequent year, they wrote this amount off during the year but fraudulently reversed the write-off at year-end. The amount remained on Dewey’s books as an unbilled client disbursement receivable at the time of the bankruptcy. This fraudulently made it appear that expenses were lower than they actually were.
• Reclassifying salaried partner expenses: In 2008, individuals at the firm improperly reclassified as equity partner compensation millions of dollars in compensation paid to and amortization of benefits related to two salaried, non-equity partners. Similar amounts had previously been treated as expenses on Dewey’s financial statements, so the reclassification had the effect of reducing the firm’s expenses. This fraudulently made it appear that expenses were lower than they actually were.
• Seeking backdated checks: During at least two year-ends from 2008 through 2011, individuals at the firm sought backdated checks from clients to post to the prior year. At the end of each year, they tried to hide the date on which checks had been received, so that Dewey’s auditors would not discover that December checks received in January, including backdated checks, were being posted to the prior year. Applying backdated checks to the prior year would fraudulently make it appear that revenue was higher than it actually was.
• Applying partner capital as fee revenue: For year-end 2009, more than $1 million that had been contributed by a partner to satisfy the firm’s requirement that partners contribute capital to the firm was applied as a fee payment for the client of a different partner. This amount was backed out of fees and applied to the partner’s capital account during 2010, but for year-end 2010, it was again fraudulently applied as a fee payment for the same client. This fraudulently made it appear that revenue was higher than it actually was.
• Applying loan repayments as revenue: In 2008, pursuant to Davis’s authorization, Dewey took on $2.4 million in bank loans that benefitted DiCarmine and Sanders. In early 2012, DiCarmine and Sanders repaid Dewey the final $1.2 million owed under the loans but structured the transaction so the loan repayment would fraudulently make it appear that revenue was higher than it actually was.

In addition to these and other adjustments, and as part of the scheme, individuals at Dewey intentionally failed to write off amounts that they knew should have been written off. For example, in 2011, a Dewey lawyer notified Sanders and DiCarmine that the firm had failed to write off millions of dollars in receivables on a client that was in receivership. The lawyer notified Sanders and DiCarmine that Dewey had represented to a federal district court judge that these amounts had been written off. Maintaining these invalid receivables, however, helped support Dewey’s borrowing base on its debt and the private placement. Sanders wrote to two employees, “We need to hide this [without] actually writing it off.”

The Cash Fow Covenant Misstatements

According to court documents, in February 2009, Dewey reported to its lenders that it had satisfied its cash flow covenant at year-end 2008 by a little more than $4 million. In fact, Dewey was able to achieve this result only by making tens of millions of dollars worth of fraudulent accounting entries, including, among others, some of those described above.

Dewey’s fortunes did not improve in future years. To misrepresent compliance with the cash flow covenant and other covenants, individuals at the firm, at the direction of Davis, DiCarmine, and Sanders, continued to make fraudulent accounting entries like those described above, as well as other fraudulent entries.

In fact, Dewey’s financial condition was so poor in 2009 that Davis, DiCarmine, and Sanders realized that, despite planning millions of dollars in fraudulent adjustments for that year, they would be unable to come up with enough fraudulent adjustments by year-end to show compliance with the cash flow covenant. As a result, Sanders sought a waiver of the covenant from the banks. The cash flow covenant floor was reduced, but the banks placed additional conditions on Dewey, which caused additional financial pressure.

When Dewey was unable to meet even the reduced cash flow covenant level in 2009, individuals at the firm, under the direction of Davis, DiCarmine, and Sanders, again made fraudulent adjustments to Dewey’s accounting records falsely to show compliance with this and another covenant. In 2010 and 2011, they continued making additional fraudulent adjustments falsely to show compliance with covenants, to reduce the impact of a covenant breach, and to hide Dewey’s true financial condition.

The April 2010 Private Placement and Revolving Line of Credit

In April 2010, Dewey refinanced its debt with a $150 million private placement of securities with insurance companies and a $100 million revolving line of credit with banks. To obtain this financing, individuals at the firm, including Davis, DiCarmine, Sanders, and others acting at their direction misrepresented Dewey’s financial condition to potential investors and lenders. Among other things, they provided potential investors and lenders with financial statements that falsely represented that the firm had complied with its covenants.

Additionally, as part of the private placement process, individuals at Dewey provided potential investors with an offering memorandum that contained numerous misstatements, including:

• The offering memorandum purported to disclose all Dewey’s debt. It did not.
• The offering memorandum stated, in substance, that departing partners received their capital during the three years following their departure from Dewey. But in fact, individuals at the firm fraudulently reclassified draws and distributions paid to departing partners during their final year of employment as returns of capital, in order to enable Dewey to appear to meet another of its covenants.
• The offering memorandum stated that “[c]lient disbursement receivables are written-off when deemed uncollectible.” In fact, as described above, millions of dollars in client disbursement receivables that had been deemed uncollectible and written-off during 2008 were fraudulently reversed and put back on Dewey’s balance sheet in order to reduce 2008 expenses. These amounts were budgeted to be written off in 2009 instead, but millions of dollars’ worth of client disbursement receivable write-offs were reversed for year-end 2009.

Defendant Information

Charges Steven Davis, dob May 17, 1953

• grand larceny in the first degree, a class B felony, 15 counts
• scheme to defraud in the first degree, a class E felony, one count
• securities fraud, NYS Martin Act, a class E felony, one count
• falsifying business records in the first degree, a class E felony, 47 counts
• conspiracy in the fifth degree, a class A misdemeanor, one count

Charges Stephen DiCarmine, dob October 19, 1956

• grand larceny in the first degree, a class B felony, 15 counts
• scheme to defraud in the first degree, a class E felony, one count
• securities fraud, NYS Martin Act, a class E felony, one count
• falsifying business records in the first degree, a class E felony, 44 counts
• conspiracy in the fifth degree, a class A misdemeanor, one count

Charges Joel Sanders, dob March 10, 1958

• grand larceny in the first degree, a class B felony, 15 counts
• scheme to defraud in the first degree, a class E felony, one count
• securities fraud, NYS Martin Act, a class E felony, one count
• falsifying business records in the first degree, a class E felony, 88 counts
• conspiracy in the fifth degree, a class A misdemeanor, one count

Charges Zachary Warren, dob October 5, 1984

• scheme to defraud in the first degree, a class E felony, one count
• falsifying business records in the first degree, a class E felony, six counts
• conspiracy in the fifth degree, a class A misdemeanor, one count

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Press and Political Elites Blistered by NRA's CEO Wayne LaPierre at @ACUConservative Conference

National Rifle Association CEO Wayne LaPierre delivered a blistering campaign-style speech Thursday, blaming the media and gun-control proponents for a decline in American economic standing and for threatening "God-given" gun rights.

"You feel it in your heart, you know it in your gut: Something has gone wrong" in America, LaPierre told a packed audience at the Conservative Political Action Conference. "Neighborhood streets once filled with skateboards ... and laughter in the air are now filled with silence."

LaPierre, who received the loudest applause of any speakers so far at the conference, put the blame squarely on the media and "political elites," saying that Americans feel their freedoms "slipping away."

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Evans #Easy Lewis Pleads Guilty to Drug-Related Murder

Evans Lewis, a/k/a “Easy,” 22, a resident of New Orleans, pleaded guilty to the murder of Gregory Keys and shooting of Kendrick Smothers during the course of a drug trafficking crime, announced U.S. Kenneth Allen Polite, Jr. In December 2011, Lewis and co-defendant Gregory Stewart, a/k/a “Rabbit,” a/k/a “D-Nice,” 22, were charged with participating in the homicide of Keys and the shooting of Smothers. Stewart’s trial is scheduled for July 14, 2014.

Lewis’s guilty plea resulted from a multi-year investigation of a heroin trafficking organization that operated in an area known as the “G-Strip” in New Orleans. The G-Strip is an area encompassing the 1300 block of Gallier Street in the Ninth Ward of New Orleans. Many of the members of the G-Strip were also affiliated with a gang known as the 39ers, an alliance of heroin traffickers in the Third and Ninth Wards of New Orleans. To date, 11 individuals related to the G-Strip organization have pleaded guilty to drug trafficking-related offenses.

According to Court records, on or about May 24, 2011, Lewis and Stewart knowingly carried and used two firearms, a 40-caliber semi-automatic handgun and a 7.62-caliber assault rifle, during and in relation to the commission of a drug trafficking crime and, in the course of this violation, caused the death of Keys through the use of a firearm.

Lewis will be sentenced on July 17, 2014, at 10:00 a.m. He faces a maximum penalty of life imprisonment, a $250,000 fine, and a period of supervised release of not more than five years.

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Transnational #OrganizedCrime Groups Target US-based Attorneys with Debt Collection Wire Fraud Scheme

Organized crime groups are using a sophisticated debt collection scheme to defraud attorneys in the United States, according to a recent FBI report.

The FBI has issued an advisory describing the scam and urging fraud victims to report crimes to a local FBI office or the Internet Crime Complaint Center.

The advisory says transnational organized crime (TOC) groups “hire unwitting attorneys to represent them for a fraudulent legal scenario, solicit them to deposit large counterfeit checks into their client trust accounts, and then persuade them to immediately wire the deposited amount to a foreign bank account controlled by members of the TOC group.”

According to the advisory, the FBI has received numerous complaints from victims nationwide. Members of the TOC group contacted the attorneys misrepresenting themselves as German of English companies in a loan dispute with a U.S. company. Initial contact is often made using email or social networking sites, such as LinkedIn.

“The perpetrator informs the victim that the foreign company is looking for a US-based attorney to help settle debt litigation with a US business,” the advisory states. “The reason for the alleged dispute may relate to defaulted loan repayment or an attempt to recoup losses for a purchase in which the item was never received.”

The perpetrator then informs the attorney that the U.S. business has contacted the foreign business and will immediately make a partial or full payment directly to the victim. The scammer then sends a fake cashier’s check to the lawyer.

The scammer directs the attorney to deposit the check into the lawyer’s trust account and take a retainer fee from the funds. If the attorney deposits the check, the bank may make funds available before the check fully clears.

The perpetrator will then send instructions to quickly wire the deposited money to a foreign bank account, such as accounts in Japan, hoping the transaction will take place before the check clears.

If the scam is successful, the bank will later notify the victimized attorney that the cashier’s check was counterfeit and the lawyer’s trust account suffers the loss.

Lawyers who encounter situations like this should verify a check’s authenticity from bank officials before depositing a check. Lawyers should also independently contact the U.S. business from which the perpetrator purports to be collecting money.

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Enforcers @Chicago_Police Football Team Kick Off Party at @115Bourbon

The Chicago Police Football Team the “Enforcers” are entering their ninth season. The Enforcers participate in the National Public Safety Football League, which is made up of nineteen teams from all over the country. Head coach Greg Zaragoza welcomes several new and exciting players to the team. The Enforcers are made up primarily of sworn members of the Chicago Police Department and also have players who are Cook County Sheriff Officers and other local agencies. The Enforcers play to raise money for various local charities.

The NPSFL plays full contact football following NCAA rules. The Chicago Police Enforcers are a recognized 501c3 organization.

The Enforcers start the season with their annual Kick-Off party Sunday March 2nd at 115 Bourbon St. 3359 W. 115th St from 3-8 pm. The Enforcers are coming off a 2-2 season in 2013. The Enforcers 5th annual "First Responders Memorial Game" is June 7th, at Brother Rice High School. The First Responders Memorial game is between the Enforcers and the Chicago Fire Department team the Blaze. The First Responders game is always exciting with the Enforcers triumphant in 2 of those games. The game will honor members of both departments who paid the ultimate sacrifice, and also this year the game will honor the 1st Responders from Washington Illinois. The Enforcers are looking forward to making a run at another National Championship. Media members welcome.

Season Schedule 

March 29th, 2014 at Columbus Marauders @ 1pm 
 Canal Winchester High School
Canal Winchester, Ohio

April 12th, 2014 Cleveland Warriors @ 3pm
 St. Rita High School
 7740 S. Western Ave. Chicago IL

May 3rd, 2014 NYDOC Boldest @ 5pm "Gold Star Game" 
 Lane Tech High School
 2501 W. Addison Ave. Chicago, IL

May 17th, 2014 at Philadelphia Blue Flame 
 Northeast High School
 Philadelphia PA.

June 7th, 2014 CFD Blaze @ 3pm "First Responders Game" 
 Brother Rice High School
 10001 S. Pulaski, Chicago, IL

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Hakim Lowery, Fugitive Member of Bloods Street Gang, Arrested

Aaron T. Ford, the Special Agent in Charge of the FBI’s Newark Field Office; William Fraher, the Acting Chief of Police of the Paterson Police Department; and Gary F. Giardina, the Chief of Police of the Clifton Police Department, announced the arrest of Hakim Lowery, 35, a fugitive and alleged ranking member of the Fruit Town Brims set of the Bloods street gang operating in Passaic County, principally in the town of Paterson, New Jersey.

Lowery is one of 28 members and associates of the Paterson Bloods named in a superseding indictment superseding indictment charges Lowery and others with distribution and possession with the intent to distribute heroin, “crack” cocaine, and powder cocaine. Three of the defendants were also charged with brandishing firearms in furtherance of drug trafficking activity and with being felons unlawfully in possession of firearms.

A number of the defendants were arrested in a weekend sweep in Paterson. As of Monday, Lowery was the only defendant who remained at large. The FBI, Paterson Police Department, and Clifton Police Departments continued their investigation and were able to locate and arrest Lowery on Tuesday evening in Paterson, New Jersey.

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Scott McLean and John A. Vassen Sentenced to Prison for Tax Sale Scheme in Exchange for Campaign Contributions to County Treasurer

The United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced that Scott McLean, 51, of Belleville, Illinois, and John A. Vassen, 56, of O’Fallon, Illinois, were sentenced in the United States District Court in East St. Louis, Illinois, for violating the Sherman Antitrust Act.

Evidence presented at the sentencing hearing established that McLean and Vassen participated in a price fixing scheme orchestrated by former Madison County Treasurer Fred Bathon. Bathon structured the Madison County tax sale to permit the tax buyers to charge distressed homeowners inflated interest rates from 2005 to 2008 in exchange for campaign contributions.

“These tax buyers repeatedly gouged financially distressed homeowners with confiscatory interest rates enabled by a corrupt treasurer. This crime was a toxic combination of public corruption fueled by private greed. The people of Southern Illinois deserve better,” said United States Attorney Wigginton. U.S. Attorney Wigginton praised the work of the Metro East Public Corruption Task Force, including agents from the IRS and the FBI. “These dedicated men and women work long hours for little pay to keep the citizens of our district safe from those who seek only to enrich themselves at our expense.”

McLean was sentenced to 18 months in prison, to serve three years’ supervised release, pay a $25,000 fine, and a special assessment of $100. Vassen was sentenced to 24 months in prison, to serve three years’ supervised release, pay a $25,000 fine and a special assessment of $100. Both sentences were in excess of the recommendation from the United States Sentencing Guidelines. A third tax buyer, Barrett R. Rochman, 70, of Makonda, Illinois, also pled guilty to participating in noncompetitive tax sales on October 17, 2013. Rochman is scheduled to be sentenced on March 25, 2014.

The former treasurer of Madison County, Illinois, Fred Bathon pled guilty to antitrust charges on February 5, 2013. Bathon was sentenced on December 6, 2013, to 30 months in prison, two years’ supervised release, a fine of $20,000, and a special assessment of $100.

The charges allege that at Illinois tax lien auctions, investors bid to purchase tax lien certificates issued against delinquent tax payers. Investors are supposed to compete to purchase these tax liens by bidding on the interest rate the property owner will be required to pay prior to redeeming the tax lien attached to the owner’s property. The bid opens at no more than the statutory maximum of 18 percent and through a competitive bidding process can be driven as low as zero percent. The bidder offering the least penalty percentage rate, i.e., the bidder who is willing to allow the owner to redeem his property for the smallest penalty, is allowed to purchase the tax lien. As such, competitive bidding benefits financially distressed homeowners by reducing the amount of money that they have to pay to save their home from foreclosure; however, that same system reduces the profit made by tax buyers. Tax buyers prefer to receive high interest rates, which corresponds to higher profits.

For the tax sales conducted in 2005 to 2008, Fred Bathon structured the tax sales in a way that eliminated competitive bidding and allowed the tax buyers to engage in price fixing by only bidding the statutory maximum interest rate of 18 percent. The tax buyers who pled guilty today were charged with making campaign donations to Bathon in exchange for receiving property tax liens at non-competitive interest rates.

By 2007 and 2008, the bid rigging and price fixing was so pervasive that distressed homeowners were charged the statutory maximum interest rate on nearly every property tax lien sold. During the tax auction occurring November 14 to 15, 2007, 2,549 out of 2,574 property tax liens were awarded to bidders for the statutory maximum interest rate of 18 percent, which represented 99.03 percent of the property tax liens auctioned. During the tax auction occurring November 13 to 14, 2008, 2,290 out of 2,364 property tax liens were awarded to bidders for the statutory maximum interest rate of 18 percent, which represented 96.86 percent of the property tax liens auctioned.

The investigation was conducted through the Metro East Public Corruption Task Force by agents from the Internal Revenue Service, and the Federal Bureau of Investigation. The case is being prosecuted by U.S. Attorney Stephen R. Wigginton and Assistant United States Attorney Steven D. Weinhoeft.

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Former Police Officer Convicted of Striking and Kneeing Handcuffed Arrestee in the Head and Body

A former Plymouth police sergeant was convicted of using excessive force on an arrestee and covering up his actions by falsifying police reports related to the incident.

After three hours of deliberation, a jury convicted Shawn Coughlin, 47, of deprivation of constitutional rights under color of law and falsifying a record to impede a federal investigation.

On November 19, 2011, at the Plymouth police station, Coughlin assaulted an arrestee who was in a holding cell and handcuffed behind his back. Coughlin struck the arrestee in the head and kneed him in the body, resulting in bodily injury. Evidence at trial also established that Coughlin falsified the official police incident reports regarding the incident.

“A critical component of effective law enforcement is trust,” said U.S. Attorney Carmen M. Ortiz. “Quality policing cannot exist if citizens can’t trust that the police who are sworn to protect them use excessive force and lie about their actions. It is very important to our entire system of justice that individuals who violate that trust are held accountable.”

“This investigation shows that the FBI, Plymouth Police, and the United States Attorney’s Office place a high priority on investigating civil rights violations including violations by those sworn to protect and serve. The FBI was proud to work with the Plymouth Police Department and the United States Attorney’s Office on this investigation to ensure that justice was served. Nothing justifies or excuses Mr. Couglin’s actions because it is never acceptable to break the law in order to enforce it,” said Vince Lisi, Special Agent in Charge of the FBI.

Sentencing is scheduled for May 20, 2014. Coughlin faces up to 10 years in prison, to be followed by three years of supervised release, and a $250,000 fine on the civil rights conviction. Coughlin faces up to 20 years in prison, to be followed by three years of supervised release, and a $250,000 fine on the obstruction conviction.

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Details on Former Cook County Commissioner Joseph Moreno's Federal Prison Sentence

Former Cook County Commissioner Joseph Mario Moreno was sentenced to 11 years in federal prison for engaging in a series of public and personal corruption schemes over a span of three years. Moreno pleaded guilty on July 1, 2013, to conspiracy to commit extortion after he was initially charged in late June 2012, about 18 months after he left public office.

Moreno, 61, of Chicago, a lawyer who served more than 16 years as an elected county commissioner until December 2010, was sentenced to 132 months in prison, and he was ordered to forfeit $100,000 and pay a total of more than $138,000 in restitution by U.S. District Judge Gary Feinerman. Moreno was ordered to begin serving his sentence on April 21.

“Mr. Moreno was not a reluctant participant in these schemes; he was an eager participant,” Judge Feinerman said, adding that Moreno “embraced them with gusto and pursued them with vigor.”

Moreno “repeatedly pursued his own interests at the expense of those he was supposed to serve. . . . [H]e extorted a reputable business and corrupted the highest levels of Cook County government, the Town of Cicero, and a private hospital. He also evaded taxes and suborned perjury so he could reduce his child support obligations. And when he was confronted about his crimes, he obstructed justice by providing the government with false invoices in an effort to conceal his criminal conduct,” Assistant U.S. Attorneys Christopher J. Stetler and Megan C. Church wrote in a government sentencing memo.

Notably, they argued, Moreno conceived a motto of governing that captured his corrupt approach to public office: “I don’t want to be a hog. I just want to be a pig. Hogs get slaughtered. Pigs get fat.”

Moreno pleaded guilty to conspiracy to extort an unnamed company that was awarded a contract to help improve Cook County Hospital’s revenue cycle into using his friend and co-defendant, Ron Garcia, and his business, Chicago Medical Equipment & Supply, Inc., as a minority subcontractor in return for a $100,000 bribe. Garcia forgave a $100,000 mortgage loan to Moreno in exchange for Moreno’s efforts to steer the lucrative sub-contract to Garcia’s company, and Moreno tried to disguise the bribe by claiming that he had repaid the purported loan.

In pleading guilty, Moreno also agreed that he sought to obtain orders of Dermafill bandages from Cook County in return for kickbacks while he and his staffer, co-defendant and former Chicago Alderman Ambrosio Medrano, were Cook County officials; sought to obtain approval for a waste-transfer station in return for kickbacks while a Town of Cicero official; and evaded his federal income taxes between 2007 and 2010 by misreporting the income from his law office.

According to sentencing documents, between 2008 and 2010, Moreno engaged in those schemes, as well as five other schemes to:

• enrich himself through kickbacks in return for passing a “green” resolution while a Cook County Commissioner;
• obtain medical transcription business from Cook County in return for kickbacks concealed as legal fees;
• obtain orders of Dermafill bandages from a private hospital by bribing a hospital official; enrich himself through kickbacks while a Town of Cicero official;
• reduce his child-support obligations by suborning perjury during a court hearing.

Medrano, 60, of Chicago, the former alderman who later worked on Moreno’s countystaff, was sentenced last month to a total of 13 years in federal prison after pleading guilty in one case involving Moreno and being convicted at trial last year in a separate corruption case that stemmed from the same FBI undercover investigation.

Garcia, 54, of Homer Glen, and two other co-defendants, Gerald W. Lombardi, 61, of Darien, and his son, Jerry A. Lombardi, 34, of Downers Grove, who were agents of Chasing Lions, LLC, a disabled-veterans-owned business in Lisle that sold the Dermafill bandages, pleaded guilty to their roles in the scheme and are awaiting sentencing. A sixth co-defendant, Stanley Wozniak, 51, of Chicago, is awaiting the disposition of charges.

The Moreno sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; and James C. Lee, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division.

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Was the copyright to "Breakshot: A Life in the 21st Century American Mafia" Stolen?

A mobster turned snitch claims in court that Simon & Schuster stole rights to his 2009 autobiography by registering the copyright under his co-author's and former publisher's name.

Kenny "Kenji" Gallo, who claims to be a former member of the Colombo Crime Family, says Simon & Schuster in 2010 registered the copyright to "Breakshot: A Life in the 21st Century American Mafia," by Gallo and Matthew Randazzo.

Randazzo wrote the book with Gallo after reading the reformed mobster's blog Hollywoodmafia, written while Gallo was in the witness protection program.

The Japanese-Italian-American says he already had a first draft of the book and 1,000 blog posts to draw upon by the time Randazzo entered the picture.

Gallo sued the book's first publisher, Phoenix Books, claiming it released the book without paying him and then sold reprint rights to Simon & Schuster for $10,000. They settled that one, according to the new complaint.

Randazzo assigned his copyright in the work to Gallo in November 2010, but Simon & Schuster's paperback credits Randazzo and Phoenix as copyright holders, according to the lawsuit.

He accuses the publisher of trading on his "celebrity status and notoriety as a former high-ranking mobster."

A blurb on the back cover calls the book "The explosive true story of one of the most controversial, violent and unlikely gangsters in American history ... and how he flipped to help the FBI bring the mob down."

Gallo estimates that Simon & Schuster has sold thousands of copies of the paperback through its division Pocket Star. He claims the publisher blew off his complaints that he owns rights to the book.

"To date, Gallo has absolutely no control over the paperback book sales of his autobiography (which took him four years to write) or any way to earn money from said sales - or even any way to profit from the paperback edition's rights - because Simon & Schuster refuses to communicate with him," the lawsuit states. (Parentheses in complaint.)

Gallo claims that Hollywood won't touch a screenplay he wrote based on his life story because of uncertainty over who owns the copyright. "Because of this 'limbo' status, Gallo is also unable to seek republication of the paperback with other publishers, much less for a sequel based on the book, despite expressed interest to that end. Nor is he willing to risk self-publishing the book through Amazon.com or though his own popular blog website until those matters are formally resolved," the lawsuit states.

He seeks an injunction and damages for copyright infringement.

Gallo is represented by Abraham Labbad of Pasadena.

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Oil Services Company Former CEO Pleads Guilty to Foreign Bribery Charges

A former chief executive officer of PetroTiger Ltd.—a British Virgin Islands oil and gas company with operations in Colombia and offices in New Jersey—admitted his role in a scheme to pay bribes to foreign government officials and defraud PetroTiger.

U.S. Attorney Paul J. Fishman of the District of New Jersey, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, and Special Agent in Charge Aaron T. Ford of the FBI’s Newark Division made the announcement.

Knut Hammarskjold, 42, of Greenville, South Carolina, a former co-CEO of PetroTiger, pleaded guilty before U.S. District Judge Joseph E. Irenas in Camden federal court to an information charging him with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and to commit wire fraud. Gregory Weisman, 42, of Moorestown, New Jersey, the former general counsel of PetroTiger, pleaded guilty to the same charges on November 8, 2013. Charges remain pending against Joseph Sigelman, 42, of Miami, Florida, and the Philippines, the other former co-CEO of PetroTiger, for conspiracy to commit wire fraud, conspiracy to violate the FCPA, conspiracy to launder money, and substantive violations of the FCPA.

According to the charges, the defendants allegedly paid bribes to an official in Colombia in exchange for the official’s assistance in securing approval for an oil services contract worth roughly $39 million. To conceal the bribes, the defendants first attempted to make the payments to a bank account in the name of the foreign official’s wife for purported consulting services she did not perform. The charges allege that Sigelman and Hammarskjold provided Weisman invoices including her bank account information. The defendants made the payments directly to the official’s bank account when attempts to transfer the money to his wife’s account failed.

In addition, court documents allege that the defendants attempted to secure kickback payments at the expense of PetroTiger’s board members. According to the criminal charges, the defendants were negotiating an acquisition of another company on behalf of PetroTiger, including on behalf of several members of PetroTiger’s board of directors who were helping to fund the acquisition. In exchange for negotiating a higher purchase price for the acquisition, two of the owners of the target company agreed to kick back to the defendants a portion of the increased purchase price. According to the charges, to conceal the kickback payments, the defendants had the payments deposited into Sigelman’s bank account in the Philippines, created a “side letter” to falsely justify the payments, and used the code name “Manila Split” to refer to the payments amongst themselves.

Sigelman and Hammarskjold were charged by sealed complaints filed in the District of New Jersey on November 8, 2013. Hammarskjold was arrested November 20, 2013, at Newark Liberty International Airport. Sigelman was arrested on January 3, 2014, in the Philippines. The charges against Sigelman, Hammarskjold, and Weisman were unsealed on January 6, 2014.

The conspiracy to commit violations of the FCPA count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The conspiracy to commit wire fraud count carries a maximum penalty of 20 years in prison and a fine of the greater of $250,000 or twice the value gained or lost. Sentencing for Hammarskjold is scheduled for May 16, 2014.

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More than $37 Million in Fake Merchandise Netted in #OperationTeamPlayer

Federal officials announced the final record-breaking results of Operation Team Player, the nationwide law enforcement effort aimed at combatting counterfeit sports merchandise.

Special agents from U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) teamed with officers from U.S. Customs and Border Protection (CBP) to target, seize and investigate criminal businesses smuggling international shipments of counterfeit merchandise as it entered the United States. Agents also targeted warehouses, stores, flea markets, online stores and street vendors. The operation, which began in June, netted 397,140 items including fake jerseys, ball caps, T-shirts, jackets and other souvenirs. The items had a manufacturer's suggested retail price (MSRP) of more than $37.8 million – more than the previous six Super Bowl enforcement efforts combined.

HSI and CBP also teamed with the U.S. Postal Inspection Service (USPIS), and state and local police departments around the country – all in partnership with the NFL and other major sports leagues. The operation was coordinated by the National Intellectual Property Rights Coordination Center (IPR Center) in Washington, D.C.

"The incredible results this year are a tribute to the teamwork displayed between our agencies working together at the IPR Center," said HSI Executive Associate Director James Dinkins. "But it is also an eye-opening reminder of the breadth of this significant problem that we face. Counterfeiters are crippling the U.S. economy, robbing small businesses of much-needed income during tough economic times."

Following the Super Bowl, in addition to the items seized, law enforcement officers made 76 arrests in relation to Operation Team Player: three at the federal level and 73 at the state and local level. Additionally, 163 counterfeit tickets with an estimated value of $169,200 were also seized. During a one-week blitz at various shipping facilities, CBP officers were able to seize more than 73,000 items with an MSRP of more than $7 million. HSI special agents also conducted enforcement operations at the victory parade in Seattle seizing an additional 1,300 items.

"The continued coordination of the federal partners is integral to the success of Intellectual Property Rights enforcement," said CBP Assistant Commissioner Susan T. Mitchell. "Together with partners like ICE HSI, USPIS, and the IPR Center we are able to protect American businesses from criminal activities that affect their bottom line."

For the first time, Mexico's Servicio de Administracion Tributaria (SAT) also conducted operations related to sports merchandise seizures during Super Bowl week. Working with the IPR Center, SAT conducted "Operation Fumble" in some of the largest cities of Mexico, seizing more than 3,000 items worth more than 1.5 million pesos.

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As result of #OperationTresCiudades, Eddi Ramirez Convicted of Running Large-Scale Cocaine Trafficking Network in Central Illinois

A jury has found a Paxton, Illinois man, Eddi Ramirez, 32, guilty of running a cocaine trafficking network that regularly distributed large quantities of cocaine throughout central Illinois including Decatur, Springfield, and Champaign. The jury deliberated approximately one and one-half hours before finding Ramirez, aka “Migo,” guilty of conspiring with others to distribute cocaine and distribution of cocaine.

During the seven days of trial, the evidence the government presented included that obtained from a court-authorized wiretap of seven of Ramirez’s telephones, the seizure of approximately $855,716 in cash; nearly nine kilograms (nearly 20 pounds) of cocaine seized in Springfield and Elgin and Houston, Texas; and approximately three kilograms (six pounds) of heroin. That evidence established that Ramirez led a drug organization from 2011 to September 2012 that was responsible for the importation of more than 200 pounds of cocaine from Mexico.

Evidence further established that Ramirez used multiple sources in Texas, Arizona, and Chicago, various couriers to transport the cocaine to central Illinois and then provided the cocaine, valued at more than $3 million, to dealers in central Illinois. Government evidence also established that Ramirez used a house at 76 E. Court Drive, in Decatur, Illionis, as a “stash” house to store and package cocaine and to move drug money.

Sentencing for Ramirez is scheduled for May 21, 2014. Ramirez faces a statutory mandatory minimum penalty of 20 years to life in prison because the government has filed notice that Ramirez has a prior felony drug conviction. Ramirez has remained in law enforcement custody since his arrest in September 2012.

In total, 19 defendants have been charged for their ties to Rameriz and his operation. All the defendants, except three who remain fugitives, have previously entered pleas of guilty for their respective roles in the trafficking network or their relation to it.

Known as Operation Tres Ciudades (Three Cities) the Organized Crime Drug Enforcement Task Force (OCDETF) was led by the Drug Enforcement Administration, Springfield Resident Office. Law enforcement agencies participating in this investigation include the FBI, Springfield Division; Decatur Police Department; Springfield Police Department; the Illinois State Police, the Central Illinois Enforcement Group; the Illinois Attorney General’s Office; and the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives. The U.S. Immigration and Customs Enforcement Homeland Security Investigations also provided assistance in the investigation. Assistant U.S. Attorney Timothy A. Bass is prosecuting the cases in the Central District of Illinois, Springfield and Urbana Divisions.

“Law enforcement, especially DEA, FBI, the Illinois Attorney General’s Office, and the Decatur Police Department, devoted significant resources and tireless work toward this successful prosecution,” said Jim Lewis, U.S. Attorney for the Central District of Illinois. “Their hard work and teamwork over the past few years has shut down a major pipeline that pumped volumes of illegal drugs into our community. They truly served the community.”

Special Agent in Charge Jack Riley, DEA, Chicago Division, praised the hard work and dedication of all the law enforcement officers and prosecutors who worked tirelessly to bring this case to a successful conclusion. “The conviction of Eddi Ramirez sends a clear message that the law enforcement community will use every legal means available to bring those who traffic narcotics to justice. Our top priority is dismantling these drug trafficking organizations who peddle their poison in our communities. Our joint efforts in this investigation have made a real impact on the supply of drugs in Central Illinois,” he added.

Decatur Police Chief Todd Walker said, “The conviction of Eddi Ramirez demonstrates yet again the importance and value of local and federal law enforcement authorities working together. I appreciate the work of the investigators and the prosecutor who worked diligently to expose and shut down a major narcotics trafficking organization. This was a complex investigation that transcended state lines into Decatur and Central Illinois. As a result of these efforts, the local drug trade in our region was disrupted and the quality of life improved for those jurisdictions impacted by this substantial drug organization.”

David A. Ford, Special Agent in Charge, FBI Springfield, stated, “The Organized Crime Drug Enforcement Task Force (OCDETF) program was established to mount a comprehensive attack against organized drug trafficking. The guilty verdict in this international drug trafficking case demonstrates the strong working partnership between federal and local law enforcement agencies and shows the effectiveness of working together on the same team. We are committed to pursuing violent drug traffickers in order to keep our neighborhoods safe for our citizens.”

“This successful prosecution has significantly slowed the flow of these illegal drugs into Illinois,” said Illinois Attorney General Lisa Madigan. “My office’s investigators will continue to work closely with our federal law enforcement partners to crack down on the drug trade in our communities.”

In addition to Ramirez, defendants charged as a result of, or related to Operation Tres Ciudades (Three Cities), include the following:

• Felipe Quionones, Jr., 33, of Houston, Texas, pled guilty November 15, 2013, to conspiracy to possess with intent to distribute cocaine; sentencing scheduled April 3.
• Juan H. Vorrath, 56, of Houston, Texas, pled guilty June 27, 2013, to conspiracy to possess with intent to distribute cocaine; sentencing scheduled March 5, 2014.
• Gabriel Lopez Saucedo, aka “Cuz,” 28, of Elgin, Illinois, pled guilty July 10, 2013, to conspiracy to possess with intent to distribute cocaine; sentencing scheduled April 4, 2014.
• Leonardo Aldape Hernandez, 24, of Calumet City, Illinois, pled guilty July 10, 2013, to conspiracy to possess with intent to distribute cocaine; was sentenced on January 24, 2014, to 10 years in federal prison.
• Erica Kulak, 25, of Elgin, Illinois, pled guilty February 7, 2013, to conspiracy to possess with intent to distribute cocaine, and two counts distribution of cocaine; sentencing April 4, 2014.
• Teravena Kapraun, aka “Tera,” “Jen,” 23, of Decatur, Illinois, pled guilty on May 14, 2013, to conspiracy to possess with intent to distribute cocaine; sentencing scheduled April 4, 2014.
• Jourdan Hullinger, 22, of Springfield, Illinois, pled guilty on December 11, 2013, to conspiracy to possess with intent to distribute cocaine; sentencing scheduled April 30, 2014.
• Doris Morel Del-Rosario, 37, of Houston, Texas, pled guilty May 31, 2013, to conspiracy to possess with intent to distribute cocaine, sentencing scheduled April 4, 2014.
• Jose Aguilar Mendez, 22, last known address Decatur, Illinois, is a fugitive.
• Juan Alvarado, 32, last known address Decatur, Illinois, was charged with conspiracy to possess with intent to distribute cocaine, a fugitive.
• Geraro Gamboa, 22, last known address Rantoul, Illinois, was charged with conspiracy to possess with intent to distribute cocaine, a fugitive.

In addition to the defendants charged with Ramirez, another seven defendants charged had ties to Ramirez:

• James Lampley, 56, of Decatur, pled guilty March 13, 2013, to one count each of conspiracy to distribute cocaine, and possession of cocaine and heroin with intent to distribute; sentencing scheduled March 4, 2014;
• Guadalupe Onate Herrera, 29, of Calumet City, Illinois, charged with re-entry of a deported alien, pled guilty April 4, 2013; sentenced April 25, 2013, to time served;
• Alex Gardner, 30, of Springfield, Illinois, pled guilty March 13, 2013, to possession with intent to distribute cocaine; sentencing scheduled March 10, 2014;
• Anthony Cunningham, aka “Tone,” 27, of Springfield, Illinois, pled guilty February 28, 2013, to distribution of 28 grams or more of crack cocaine; sentenced September 9, 2013, to 150 months (12 ½ years) in prison;
• Orlandon L. Roberson, 38, of Springfield, Illinois, pled guilty February 28, 2013 to possession with intent to distribute 28 grams or more of crack cocaine; sentenced August 5, 2013, to 130 months (10 years, 10 months) in federal prison;
• Bernardo Shanklin, 32, of Springfield, pled guilty May 30, 2012, to two counts of distribution of cocaine; one count of possession with intent to distribute cocaine; sentenced March 8, 2013, to 108 months (nine years) in federal prison;
• Michael A. Gant, 34, of Springfield; pled guilty May 31, 2012, to possession with intent to distribute cocaine and possession of a firearm in furtherance of a drug trafficking crime; sentenced October 5, 2012, to 66 months (five-and-a-half years) in federal prison.

At sentencing, the offense of conspiracy to distribute five or more kilograms of cocaine carries a statutory mandatory minimum penalty of 10 years to life in prison. If a defendant has one or more prior felony drug convictions, the mandatory minimum penalty is 20 years to life in prison. With two or more prior felony drug convictions, the statutory penalty is life in prison.

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Navy Seal Imposter Arrested

The U.S. Marshals Service, Bureau of Alcohol, Tobacco and Firearms and the Benton County Sheriff’s Office arrested Arthur James (AJ) Dicken of Garfield, Arkansas on charges stemming from firearm violations. Dicken was wanted by the Carson City, Nevada Sheriff's Office for Possession of a Firearm by a Person Convicted of a Felony.

Dicken is alleged to have passed himself off as a highly decorated Navy SEAL, who had served in dozens of covert combat missions from the jungles of Vietnam to the caves of Afghanistan. Dicken, as it was later confirmed, had never served in the military. Dicken often wore the Navy SEAL trident insignia and loved to show off his numerous awards to include two Congressional Medal of Honor awards.

The charges stemmed from when Dicken operated a military style self-defense school in Carson City, Nevada. The training he provided included firearms and self-defense tactics. Dicken was exposed after he was profiled on both 20/20 and Inside Edition as the result of alleged criminal acts. Additional allegations include embezzlement and fraud where Dicken bilked investors out of more than $850,000 for a proposed new international security firm.

U.S. Marshals in Reno, Nevada, working closely with the Carson City, Nevada Sheriff’s Office, adopted the case and determined Dicken was likely in the Northwest Arkansas area. Deputy U.S. Marshals in Western Arkansas began working the case and determined Dicken was residing on Slate Gap Road in Garfield, Arkansas. After careful coordination with the Benton County Sheriff’s Office, Dicken was arrested without incident in the early morning hours of February 14, 2014, where he was found residing in small recreational vehicle. Dicken was transported to the Benton County Sheriff’s Office, where he awaits extradition to Nevada to face his pending charges.

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Getaway Driver Sentenced to 40 Years in Prison in Murder of Gas Station Manager

Jose A. Santiago, 36, of Springfield, Massachusetts, was sentenced in Providence, Rhode Island, to serve 40 years in prison for his role in the September 2010 armed robbery and murder of Woonsocket, Rhode Island gas station manager David D. Main.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, United States Attorney Peter F. Neronha of the District of Rhode Island, Special Agent in Charge Vincent B. Lisi of the FBI’s Boston Field Office, Colonel Steven G. O’Donnell of the Rhode Island State Police and Chief Thomas S. Carey of the Woonsocket Police Department made the announcement.

According to court documents, Main, 49, was chased, shot to death at close range, and robbed by Jason Wayne Pleau, 36, of Providence, as he approached the doorstep of a Woonsocket bank where he was preparing to deposit thousands of dollars in cash belonging to the gas station. Santiago was the getaway driver of a box truck parked a block away from the bank in which Pleau fled moments after he robbed and fatally shot Main.

Pleau, who pleaded guilty on July 31, 2013, to conspiracy to commit Hobbs Act robbery; Hobbs Act robbery; and carrying, using, and discharging a firearm during and in relation to a federal crime of violence resulting in death, was sentenced in October 2013 to serve life in prison.

Santiago pleaded guilty on September 5, 2013, to conspiracy to commit Hobbs Act robbery; Hobbs Act robbery; and carrying, using, and discharging a firearm during and in relation to a federal crime of violence resulting in death. No plea agreement was filed in this matter. At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Santiago to serve five years of supervised release upon completion of his prison term.

Co-defendant Kelly Marie Lajoie, 36, of Springfield, pleaded guilty on December 9, 2011, to Hobbs Act conspiracy, aiding and abetting a Hobbs Act robbery, and use of a firearm during a federal crime of violence. Lajoie is scheduled to be sentenced on February 19, 2014.

The matter was investigated by the Woonsocket Police Department, Rhode Island State Police, and the FBI, with the assistance of the U.S. Marshals Service and the Rhode Island National Guard.

The case was prosecuted by Assistant U.S. Attorneys Adi Goldstein and William J. Ferland of the District of Rhode Island and Trial Attorney Jacabed Rodriguez-Coss of the Criminal Division’s Capital Case Section.

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Guilty Plea in Golf Course Scheme that Swindled Millions from Investors

A man who fraudulently convinced 11 persons to loan him a total of $3.6 million for the purchase of a golf course near Gardnerville, Nevada, pleaded guilty to 24 federal felony charges, announced Daniel G. Bogden, United States Attorney for the District of Nevada.

Scott H. Summerhays, 55, formerly of the South Lake Tahoe area, but currently in custody in Reno, pleaded guilty during the first day of trial to 14 counts of wire fraud, seven counts of money laundering, two counts of identity theft, and one count of aggravated identity theft. Summerhays, who was indicted in February 2012, faces over 30 years in prison and fines of up to $5.7 million and is scheduled to be sentenced on May 29, 2014, at 10:00 a.m. by U.S. District Judge Larry R. Hicks.

“This is the second person to be convicted or sentenced of federal investment fraud charges in the northern Nevada area this week,” said U.S. Attorney Bogden. “In both cases, the defendants led their victims to believe that they were legitimate businessmen and used fraudulent documents to support their scheme. If you are considering a financial arrangement with someone, be sure to check the veracity of any documents they provide you, as fraudulent documents are common and easy to create.”

According to the court records, during 2008 to 2010, Summerhays represented to potential investors that he was purchasing the Genoa Lakes Golf Club located west of Gardnerville, Nevada, for $17 million and needed a short-term loan to complete the deal because his own money was tied up in a trust. Summerhays also represented to the potential investors that he solicited funds for oil and gas investments in Texas and owned more than $30 million in Berkshire, Las Vegas Sands, and MGM stocks. Summerhays showed some of the investors a fraudulent investment account statement. Summerhays also claimed that he was in partnership with Las Vegas Sands owner Sheldon Aldelson and showed potential investors a partnership agreement containing the forged signature of Adelson. In reality, Summerhays had no investment portfolio, and Adelson never heard of Summerhays or had any partnerships with him. Using this scheme, Summerhays was able to convince 11 persons to loan him money for the golf course, totaling approximately $3.6 million. None of the investors were repaid, and they lost all of the money they loaned Summerhays.

The case was investigated by the FBI and IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorneys Ronald C. Rachow and Megan Rachow.

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Attorney Christina M. Kitterman Convicted in Connection with Rothstein Ponzi Scheme

A federal jury in West Palm Beach convicted Christina M. Kitterman, 38, of Deerfield Beach, on three counts of wire fraud after a week-long trial before U.S. District Judge Daniel T. K. Hurley. A sentencing date has not been set.

Kitterman was charged with three counts of wire fraud, in violation of Title 18, United States Code, Section 1343. The acts set forth in the charging document were all in furtherance of a Ponzi scheme involving the sale of purported confidential settlement agreements in sexual harassment and/or whistle blower cases that were purportedly handled by attorneys at the former Ft. Lauderdale law firm of Rothstein, Rosenfeldt, and Adler P.A. (RRA).

Evidence introduced at trial established that, during the course of the Ponzi scheme and while she was employed as an attorney at RRA, Kitterman falsely posed as the head of the Ft. Lauderdale office of the Florida Bar Association during a meeting with certain investors in order to explain to the investors the reason why certain payments due to them had not been made.

At sentencing, Kitterman faces up to 20 years in prison and a fine of $250,000.

U.S. Attorney Wifredo A. Ferrer stated, “The verdict rendered by the jury today is another step toward bringing Rothstein’s criminal associates to justice. As I have previously stated, the success of Rothstein’s complex scheme to deceive and defraud depended on the complicity of individuals like Christina Kitterman. Kitterman, an attorney, was the 15th individual to face criminal charges in connection with this complex financial fraud.”

IRS-CI Special Agent in Charge Jose A. Gonzalez stated, “The jury has validated the government’s case sending a strong message that those who knowingly assist in perpetrating investment scams will be held accountable for their actions. Together with our law enforcement partners, we will continue to aggressively investigate and bring to justice those who aided Rothstein in perpetrating this massive fraud.”

“Although Scott Rothstein was the ringleader in a massive Ponzi scheme, he needed help. A jury of her peers has determined Christina Kitterman gave him that help and needs to be held accountable,” said Michael B. Steinbach, Special Agent in Charge, FBI Miami. “Regardless of one’s role, the FBI and its partners are committed to investigate those who swindle investors.”

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Convicted Felon William Benjamin Mejias Pleads Guilty to Impersonating a DEA Agent at Nightclubs and Unlawful Possession of a Firearm

William Benjamin Mejias (41, Orlando) pleaded guilty to impersonating a Drug Enforcement Administration agent and possession of a firearm by a convicted felon. Mejias faces a maximum penalty of 13 years in federal prison. A sentencing date has not yet been set.

According to the plea agreement and court documents, Mejias appeared at nightclubs, in Orlando, dressed in clothes that identified him as an agent with the Drug Enforcement Administration (DEA). Mejias wore authentic-looking DEA badges, carried a firearm, and reportedly told several people that he was a DEA agent. He also posted photos of himself on social media websites wearing DEA clothes, a DEA badge, and a firearm. In September 2013, local police officers conducted a traffic stop on Mejias and he displayed a DEA badge and credentials to get out of the ticket. During a later search of Mejias’s residence, agents found a loaded semi-automatic firearm.

Mejias was convicted of three separate felony burglaries in 1994, 1995, and 1996 and was therefore prohibited from possessing a firearm or ammunition under federal law.

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Christian Keston John, Marvin Johnson, and Shaquan Jones Indicted on Racketeering Charges, Including Six Murders

A superseding indictment was returned last Friday charging defendants Christian Keston John, Marvin Johnson, and Shaquan Jones, who were members of a violent criminal enterprise, with racketeering, consisting of 23 predicate acts, including six murders, two attempted murders, three armed robberies, kidnapping, murder-for-hire, and gambling on dog fighting, among other crimes, all of which occurred in the Bushwick, Bedford-Stuyvesant, and East New York areas of Brooklyn. Johnson was arraigned earlier today at federal court in Brooklyn before U.S. Magistrate Judge Robert M. Levy, and the defendants Christian John and Shaquan Jones will be arraigned on Friday, also before Magistrate Judge Levy.

The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); and William J. Bratton, Commissioner, New York City Police Department.

According to court papers, the enterprise, known as the Hull Street Crew, began its violent conduct in 2000 with the murder of Charlemagne Lormand, followed by the 2005 murder of Shamell Etienne and the 2008 murder of Daquane Shelton. In 2006, the defendants allegedly murdered Earle Kevin Obermuller when they bound his entire head with duct tape, dragged him down to a basement, tied him to a chair on a bed of charcoals, and then set him on fire. The indictment also charges the 2011 murders of Jason Bostic and Aaron Formey, who were murdered in a similar manner when they were bound with duct tape, pushed down the stairs to a basement, and shot multiple times. The Hull Street Crew enriched its members through drug trafficking and gambling on dog fights and committed these violent acts to enhance the enterprise’s prestige and to protect it from rival criminal organizations.

“As set forth in the indictment, the Hull Street Crew rained down brutal violence onto the streets of Brooklyn for over a decade. The defendants pledged their allegiance to the Crew and its violent methods, committing a brutal murder and other senseless acts of violence. This indictment brings to a halt the Hull Street Crew’s reign of terror over the streets of Brooklyn,” stated United States Attorney Lynch. “Working together with the FBI and the NYPD, we stand committed to ending the scourge of violence in our communities and bringing to justice those who commit such violent acts. We hope that this prosecution will bring some measure of closure to the families of the victims who have suffered not only because of the loss of loved ones but also by not knowing who was responsible for these crimes.”

FBI Assistant Director in Charge Venizelos stated, “Violence is the rule, not the exception, in the Hull Street Crew. As alleged, this criminal enterprise used illegal means, including murder and kidnapping, to intimidate rivals and instill fear in the innocent public. Today’s indictment illustrates the FBI’s continued effort to work with our law enforcement partners to disrupt and dismantle violent criminal enterprises that terrorize our communities.”

Police Commissioner Bratton stated, “Members of this violent and vicious crew operated on the streets of Brooklyn for more than a decade, but with this investigation and indictment, we send a message to those who choose to operate within a ruthless criminal operation—you will be brought to justice and eradicated from our communities. The Hull Street Crew was shut down thanks to the tireless efforts of the investigators from the NYPD Detective Bureau, the Federal Bureau of Investigation, and the United States Attorney’s Office, Eastern District of New York.”

The case has been assigned to U.S. District Judge Frederic Block. If convicted of murder, the defendants face a maximum sentence of life imprisonment, or possibly the death penalty.

The government’s case is being prosecuted by Celia A. Cohen, Gina M. Parlovecchio, and Robert T. Polemeni.

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