Pedro Gautier Espada, Former Councilman, Sentenced to Six Months’ Imprisonment

Yesterday, Pedro Gautier Espada was sentenced before Judge Frederic Block in U.S. District Court in Brooklyn, New York, to six months’ imprisonment, to be followed by six months’ home confinement and one year of supervised release, for theft of federal funds from Bronx-based non-profit healthcare clinics, Soundview Healthcare Network (“Soundview”) and for failing to file a tax return for tax year 2009. As part of that sentence, Judge Block ordered Gautier Espada to serve 100 hours of community service, restitution to the Internal Revenue Service in the amount of $15,628, and additional restitution to the victims of his thefts in an amount to be determined by the court. Gautier Espada served the South Bronx as a New York City Councilman from 1997 to 2001 and as a New York State Assemblyman in 1996.

On June 14, 2013, Judge Block sentenced Gautier Espada’s father, former New York State Senate Majority Leader Pedro Espada, Jr. to five years’ imprisonment, to be followed by three years of supervised release, for theft of federal funds from Soundview and lying on his 2005 personal tax return. As part of that sentence, Judge Block ordered Espada to serve 100 hours of community service, restitution to the Internal Revenue Service in the amount of $118,531, restitution to the victims of his thefts in an amount to be determined, and forfeiture of $368,088. The court remanded Espada to the custody of the Bureau of Prisons.

The sentence was 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 Toni Weirauch, Special Agent in Charge, Internal Revenue Service-Criminal Investigation, New York (IRS).

On October 12, 2012, Gautier Espada pled guilty to one count of stealing federal funding from Soundview and one count of failing to file a tax return for 2009. Gautier Espada was Soundview’s Director of Environmental Care and headed Soundview’s Compliance Committee.

The government’s case was prosecuted by Assistant United States Attorneys Todd Kaminsky, Carolyn Pokorny, and Claire Kedeshian.

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Carl Fiorentin, Former President of TigerDirect, Indicted for Executing Fraud and Money Laundering Scheme Involving More Than $230 Million in Purchases

An indictment was unsealed this morning in federal court in the Eastern District of New York charging Carl Fiorentino, the former president of computer and electronics seller TigerDirect, with mail fraud, wire fraud, and money laundering in connection with a scheme to defraud TigerDirect and its parent company, Systemax Inc. (“Systemax”). Systemax is a publicly traded company with headquarters in Port Washington, New York. According to the indictment, the defendant personally took more than $7 million in commercial bribes and kickbacks in return for steering more than $230 million in business to the Taiwanese and California companies that paid the bribes and kickbacks.

The defendant was arrested by federal agents earlier today in Coral Gables, Florida, and a search warrant was executed at his $8 million residence, purchased with fraud proceeds. Later today, the defendant will appear for arraignment before United States Magistrate Judge Edwin Torres in the Southern District of Florida. The criminal case has been assigned to the Honorable Sandra J. Feuerstein, United States District Judge for the Eastern District of New York, in Central Islip, New York.

The arrest and 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; and Michael DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Miami, Florida.

“As alleged in the indictment and court papers, Carl Fiorentino abused his position of trust, employing fraud and deceit to line his own pockets at the expense of his employer and its public shareholders. Fiorentino had it all—a lucrative job and a high-flying lifestyle. But as alleged in the indictment and court papers, his loyalties were neither to his employer nor its public shareholders but solely to himself. Fiorentino’s greed spanned the Pacific Ocean to pull companies from California to Taiwan into his bribery and kickback scheme,” stated United States Attorney Lynch. “We and our law enforcement partners will vigorously pursue and prosecute to the fullest extent of the law those who seek to profit by such fraud.” Ms. Lynch expressed her grateful appreciation to the FBI and IRS for their work on the investigation.

“As alleged, Fiorentino exploited his position to engage in blatant self-dealing. He accepted bribes to abuse his purchasing power and direct company business to specific suppliers. The suppliers’ lavish kickbacks helped finance Fiorentino’s multi-million-dollar home. The FBI will continue to police the kind of insider fraud that victimizes companies and their shareholders,” stated FBI Assistant Director in Charge Venizelos.

“IRS-Criminal Investigation is committed to unraveling elaborate and complex money laundering schemes leaving no financial stones unturned,” stated Michael J. De Palma, Acting Special Agent in Charge of IRS-Criminal Investigation, Miami Field Office. “Those who abuse their position of trust to illegally enrich themselves will be held accountable for their actions.”

Beginning in January 2003 and continuing until April 2011, Fiorentino was the president of TigerDirect, a subsidiary of Systemax Inc. that sold brand-name computers and its own line of Ultra computers in its retail stores and via mail-order catalogs and the Internet. In 2010 Systemax reported $3.5 billion in net sales according to its 2010 SEC 10K filing. Among his duties as company president, Fiorentino was responsible for selecting suppliers to provide computer components, peripherals, and other products to TigerDirect. As alleged in the indictment, beginning in 2003, Fiorentino entered into an illegal agreement with the owner of a Taiwanese company to steer TigerDirect business to his company by directing TigerDirect to purchase the Taiwanese company’s computer components in exchange for bribes and kickbacks that totaled $6.5 million dollars over the course of the conspiracy. In addition, between 2003 and 2007, Fiorentino received another $570,000 in bribes and kickbacks from a California-based company that sold computer memory modules and flash memory products. Fiorentino received the bribes and kickbacks through checks and wire transfers payable to third party individuals and entities that he controlled. Fiorentino used the proceeds of the fraud scheme to buy, among other things, an $8 million home in Coral Gables, Florida.

As a result of the scheme, TigerDirect is alleged to have paid over $157,000,000 for the Taiwanese company’s products and $80,000,000 for the California company’s products. Fiorentino concealed the scheme and kickback payments by submitting false conflict of interest forms to Systemax and using a complex web of wire transfers and shell companies.

The charges announced today are merely allegations, and the defendant is presumed innocent unless and until proven guilty. The indictment charges Fiorentino with mail fraud, wire fraud, conspiracy to commit mail and wire fraud, and money laundering conspiracy. If convicted, he faces a maximum sentence of 20 years’ imprisonment on each of those charges, forfeiture of the $8 million Coral Gables residence and over $7 million dollars, and a $250,000 fine.

The government’s case is being prosecuted by Assistant United States Attorney Demetri Jones.

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$65,000 Reward Offered for Information in Search for #BikeBomber in Times Square Attack

Today, the Federal Bureau of Investigation and the New York City Police Department announced a reward of up to $65,000 for information leading to the identification, arrest, and conviction of the suspect or suspects involved in the unsolved 2008 bombing of the United States Armed Forces Recruiting Station in Times Square. Also released today are never-before-seen video of the suspect(s) and a picture of the explosive device. The suspect(s) may be connected to two other unsolved bombings in New York City—one at the British Consulate in 2005 and the other at the Mexican Consulate in 2007.

Early on the morning of Thursday, March 6, 2008, a bomb exploded in New York’s Times Square at the Armed Forces Recruiting Station. The suspect rode a blue Ross bicycle west on 37th Street, took a right up Sixth Avenue, and made a left on 47th Street before turning left down Seventh Avenue. The suspect got off his bike near the recruiting station at West 43rd Street and Seventh Avenue, placed the explosive device at the recruiting station, lit a fuse, and fled the scene on the bicycle. Although the suspect appears to be working alone, he or she may have had a lookout or surveillance team of as many as five other individuals in Times Square at the time of the attack. The suspect then rode his or her bike south on Broadway before turning left on 38th Street. The bike was later recovered in a dumpster near Madison Avenue and 38th Street.

The explosive device was built using an ammunition can commonly found on the battlefields in Iraq and Afghanistan. It was filled halfway with black powder and detonated using a time fuse. Although no one was wounded, the device could have caused significant casualties if people had been close to the blast.

Details of this bombing are similar to those of two other unsolved bombings that occurred in New York City—one at the British Consulate in May 2005 and the other at the Mexican Consulate in October 2007. All of the devices were delivered by an individual on a bicycle and were detonated between 3 a.m. and 4 a.m. The incidents may be connected.

“Someone, somewhere knows something about a bomber who’s still on the run,” said FBI Assistant Director in Charge George Venizelos. “Today, we’re asking for the public’s assistance in finding those responsible and encouraging the public to look closely at these photos and video, which could be the key to breaking the case.”

“While published reports have repeatedly cited the early morning time of the attack and the lack of casualties, the fact is the bomber narrowly missed killing or injuring passers-by who can be seen clearly in the vicinity moments before the blast,” said New York City Police Department Commissioner Raymond W. Kelly. “The distance between polemics by bombing and the murdering of innocents is short, indeed.”

The suspect on the bicycle was last seen wearing a gray sweatshirt and pants of an unknown color. The height, weight, age, sex, and race of the suspect are unknown.

A reward of up to $65,000 is being offered for information leading to the identification, arrest, and conviction of the person(s) responsible for the 2008 bombing of the U.S. Armed Forces Recruiting Station. Any information about the suspect(s), the bicycle, or any other details could be pertinent. Anyone with information on any of the three bombings is encouraged to call the FBI at 212-384-1000. Tipsters may remain anonymous.

The investigation is being counducted by the FBI’s Joint Terrorism Task Force in Manhattan, which is composed of FBI agents, NYPD detectives, and members of more than 50 local, state, and federal agencies. The FBI’s Joint Terrorism Task Force is being assisted by prosecutors from the United States Attorney’s Office for the Southern District of New York.

The FBI and the NYPD will be using the hash tag #BikeBomber to disseminate information about the attacks and to solicit information.

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#JimmyHoffa Remains to be Found in Shallow Michigan Grave Today?

The FBI is planning to dig in a Detroit-area field Monday in a hunt for the remains of former Teamsters boss Jimmy Hoffa, according to a law enforcement source with direct knowledge of the investigation.

Agents on Monday morning were executing a search warrant for a field in Oakland Township, north of Detroit, based in part on information provided by Tony Zerilli, a man alleged to have been a mobster.

Earlier this year, Zerilli told New York's NBC 4 that Hoffa was buried in a Michigan field about 20 miles north of where he was last seen in 1975.

The FBI has spent months looking into Zerilli's claims before seeking court authorization to excavate the field and look for evidence of a shallow grave, according to the source.

Hoffa, then 62, was last seen on July 30, 1975, outside a Detroit-area restaurant. The FBI said at the time that the disappearance could have been linked to Hoffa's efforts to regain power in the Teamsters and to the mob's influence over the union's pension funds.

Hoffa's disappearance and presumed death has vexed investigators for almost four decades. As recently as October, soil samples were taken from a home in the suburban Detroit community after a tipster claimed he saw a body buried in the yard a day after Hoffa disappeared in 1975.

The soil samples were tested, and showed no evidence of human remains or decomposition.

Zerilli, freed in 2008 after his last prison sentence, was convicted of crimes in connection with organized crime in Detroit. Keith Corbett, a former U.S. attorney, told CNN earlier this year that Zerilli headed a Detroit organized crime family from 1970 to 1975, but was in prison when Hoffa disappeared.

Zerilli told CNN affiliate WDIV-TV that a "Mafia enforcer" informed him that Hoffa was buried in the Oakland Township field as a temporary measure, and that the remains were to be moved to another spot near a hunting lodge after the heat died down from a massive police attempt to find Hoffa.

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Secret Life Inside the Dirty Banks of Pablo Escobar's Medellin Cartel

On June 20th, Robert Mazur discusses his book, Infiltrator: My Secret Life inside the Dirty Banks behind Pablo Escobar’s Medellin Cartel, which is being made into a movie. Margaret McClain, Special Correspondent will report on the Bulger trial.

Crime Beat is a weekly hour-long radio program that airs every Thursday at 8 p.m. EST. Crime Beat presents fascinating topics that bring listeners closer to the dynamic underbelly of the world of crime. Guests have included ex-mobsters, undercover law enforcement agents, sports officials, informants, prisoners, drug dealers and investigative journalists, who have provided insights and fresh information about the world’s most fascinating subject: crime.

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