Modesto Cruz Sentenced to Prison Drug & Firearm Charges, Plot to Kill a Police Officer Revealed During Investigation

A Lynn, MA man who discussed murdering a Lynn Police officer was sentenced to 188 months in prison.

U.S. District Judge Denise J. Casper sentenced Modesto Cruz, 37, to 188 months in prison, followed by four years of supervised release. In March, Cruz pleaded guilty to conspiracy to distribute more than 100 grams of heroin, distribution of heroin, and being a felon in possession of a firearm.

In 2012, while Cruz was on pretrial release from a 2010 Lynn gun arrest, a cooperating witness working with the FBI’s North Shore Gang Task Force made four controlled buys of over 100 grams of heroin from Cruz. During the course of those recorded buys, Cruz and the cooperating witness talked about Cruz’s plan to kill one of the Lynn Police officers that had arrested him on the gun charge. An undercover law enforcement officer, posing as a hitman, was ultimately introduced to Cruz by the cooperating witness. Cruz and the undercover talked about the price and logistics of the hit on the police officer. Cruz was arrested the next day.

United States Attorney Carmen M. Ortiz; Jeffrey S. Sallet, Acting Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Essex County District Attorney Jonathan Blodgett; Colonel Timothy Alben, Superintendent of the Massachusetts State Police; Lynn Police Chief Kevin Coppinger; and Essex County Sheriff Frank G. Cousins, Jr. made the announcement today.

The case was investigated by the FBI’s North Shore Gang Task Force, which consists of the FBI; the ATF; the Massachusetts State Police; the Lynn, Chelsea and Revere Police Departments; and the Essex County Sheriff’s Department. It was prosecuted by Assistant U.S. Attorneys in Ortiz’s Organized Crime and Gang Strike Force Unit.

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Book Signing and Presentation by Authors of “The Boston Mob Guide: Hit Men, Hoodlums & Hideouts”

On Fri., Aug. 16, and Sat., Aug. 17, Beverly Ford and Stephanie Schorow, veteran journalists and co-authors of “The Boston Mob Guide: Hit Men, Hoodlums and Hideouts” will sign copies of their book and present at The Mob Museum, the National Museum of Organized Crime and Law Enforcement. The book signing will take place at the Museum from 12 to 4 p.m. on Fri., Aug. 16 and their presentation will take place on Sat., Aug. 17, from 1 to 2 p.m.

They will discuss the stories behind their books: “The Boston Mob Guide: Hit Men, Hoodlums & Hideouts,” released by The History Press, Inc., is a primer about the wiles of Whitey Bulger, the murderous rages of Joe “The Animal” Barboza and the double dealings of Stephen “The Rifleman” Flemmi. Ford and Schorow profile Boston’s gangsters in crisp clear prose, with helpful cross-references. The Boston Mob Guide travels back to Prohibition with the story of bootlegger Charles “King” Solomon and the murderous standoff between the Irish Gustin Gang and the emerging North End Mafia. The guide unravels the complicated hits of the Winter Hill Gang and the Irish mob wars of the ‘60s and ‘70s.

Beverly Ford is the Boston-based journalist and author who has spent more than 20 years as a reporter and freelance writer for the Boston Herald, the New York Daily News, the London Times, the London Mirror, Access Magazine, Bloomberg News and other publications. She is currently following Bulger’s trial for the New York Daily News.

Stephanie Schorow is the author of “The Crime of the Century: How the Brink’s Robbers Stole Millions” and “The Hearts of Boston; East of Boston: Notes from the Harbor Islands” (The History Press, 2008); “Boston on Fire: A History of Fires and Firefighting in Boston” and “The Cocoanut Grove Fire.” She was the editor of “Boston’s Fire Trail: A Walk Through the City’s Fire and Firefighting History” (The History Press, 2007).

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"Vinny Gorgeous: The Ugly Rise and Fall of a New York Mobster" on Crime Beat Radio

On July 11th, journalist Robert Destafano discusses his new book, Vinny Gorgeous: The Ugly Rise and Fall of a New York Mobster. Also Margaret McClain, Special Correspondent, reports 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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The Money Noose: The Collapse Of MF Global Was No Accident

Jon Corzine and other leaders at MF Global walked into a disastrous situation with their eyes wide open. Now, respected Wall Street veteran Scott Skyrm offers a detailed account of what really happened, and why. The Money Noose: Jon Corzine and the Collapse of MF Global (Bricktower Press) is like a car wreck: it’s hard to look at, and at the same time, hard to look away.

“MF Global had the wrong business model and the wrong people, at precisely the wrong time….
We did not deal with our central problem of unprofitable core business operations and out-of-control overheads….” A senior member of the MF Fixed Income management team is just one of many sources insider Skyrm has uncovered to explain the self-inflicted collapse of MF Global.

The demise of MF Global is a chaotic story, one in which individual actions taken in and of themselves are relatively minor. But the sum of those individual actions equal the same end result. Skyrm goes further, exploring the question of how investors can protect themselves from this outcome in the future. The best answer, he says, is education. Concise and informed, The Money Noose is a must-read for anyone who takes investing seriously.

Scott E.D. Skyrm is a leading figure in the repo and securities finance markets today, and regularly quoted in The Wall Street Journal, The Financial Times, Bloomberg News Service, Reuters, Market News, and Dow Jones. He is highly regarded as a former salesman, trader, trading desk manager, and global business head in fixed-income, securities finance, and securities clearing and settlement.

He recently left Newedge, where he was their Global Head of Repo, Money Markets, and Fixed Income Clearing. He is now writing commentaries on the repo market, the short-end of the Treasury market, Federal Reserve policy and general Wall Street topics. He has worked on Wall Street for over 22 years and has taken billion dollar risks on the trading floor, managed a multi-billion dollar balance sheet, and consistently ran one of the most profitable trading groups at every firm where he worked. Prior to Newedge, he managed the repo desk at ING Barings, worked summers at Shearson Lehman/American Express and started his full-time career at The Bank of Tokyo.

For more, please visit the website: www.scottskyrm.com.

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Abdul Walji and Reniero Francisco, CEO and President of Investment Fund, Plead Guilty in Federal Court to Orchestrating Nearly $10 Million Fraud Scheme

Abdul Walji and Reniero Francisco, the chief executive officer and president, respectively, of Arista LLC (Arista), a California investment fund, pleaded guilty in New York federal court to defrauding and misappropriating nearly $10 million from more than 35 investors by misrepresenting the nature and performance of the fund and issuing fraudulent account statements to investors to cover up massive losses, announced Preet Bharara, the U.S. Attorney for the Southern District of New York. Walji also pleaded guilty to perpetrating a multi-million-dollar fraudulent scheme with pension plan funds that he managed through three California-based trusts: Allied Benefits Inc., Allied Benefits Trust, and Stone Lamm Trust (collectively, the Trusts). Both defendants were charged in December 2012 and pleaded guilty today before U.S. District Judge Denise Cote.

“Abdul Walji and Reniero Francisco told one lie after another in order to squeeze millions of dollars out of their investors, even as they misappropriated nearly $10 million, including at least $2.7 million solely for their own personal benefit,” said U.S. Attorney Bharara. “Walji even went a step further and orchestrated a second scheme that ultimately cost his victims another approximately $9.5 million. With today’s guilty pleas, they will begin to be held responsible for their actions and repay those wronged by their unlawful conduct.”

According to the three-count superseding information to which Walji pleaded guilty, the indictment to which Francisco pleaded guilty, the defendants’ plea agreements, and other documents in the public record:

The Arista Fraudulent Scheme

Arista began operations as an investment firm in February 2010, with its principal place of business in Newport Coast, California. In April 2011, Arista became a registered commodity pool operator with the U.S. Commodity Futures Trading Commission and a National Futures Association member.

In early 2010, Walji and Francisco began to solicit individuals to invest in Arista. From 2010 through 2011, the defendants carried out their fraudulent scheme through three methods. First, Walji and Francisco misrepresented to several Arista investors the nature of the company’s investments and the returns that investors would receive from investing in Arista. For example, Walji and Francisco falsely told investors that their money would be invested in safe, risk-free securities, when in fact, much of the money was invested in options and futures. Second, Walji and Francisco sent fraudulent account performance statements to Arista investors that misrepresented the value of their investments. In an effort to secure additional contributions, the defendants also concealed Arista’s trading losses and told investors that they were profiting from their investments when they were actually losing money. Finally, Walji and Francisco misappropriated at least $2.7 million from Arista’s investors through fees to which they were not entitled and which Walji and Francisco diverted for their own personal benefit. Based on their false representations, Walji and Francisco collected nearly $10 million from over 35 investors, and they ultimately misappropriated a large portion of the money.

From early 2008 through June 2013, Walji also perpetrated a separate fraudulent scheme using pension plan funds that he administered. Similar to the scheme set forth above, Walji executed his fraudulent scheme through three principal methods. First, Walji made oral misrepresentations to existing and potential clients of the Trusts concerning: (i) the nature of the Trusts’ pension plan investments; (ii) the investment value and past performance of the pension plans; and (iii) the source of funds distributed to plan participants who had reached retirement and/or who had requested distributions. Second, Walji distributed fraudulent statements to clients concerning the value of their accounts and the prior performance of their pension plans in order to forestall redemption requests, induce new clients to contribute to the plans, and induce existing clients to make additional contributions. As selected clients reached retirement age or requested disbursements, Walji sent those clients money that he represented to be proceeds of their individual pensions, when in fact, he knew that the purported disbursements were often funds contributed by other clients. Third, Walji misappropriated approximately $300,000 of client funds for his personal use. In total, this scheme caused losses to approximately 35 additional victims in an aggregate amount of approximately $9.5 million.

Walji, 60, of San Juan Capistrano, California, pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud, one count of commodities fraud, and one count of securities fraud. The securities fraud charge carries a maximum sentence of 20 years in prison; the commodities fraud charge carries a maximum sentencing of 10 years in prison; and the conspiracy charge carries a maximum sentence of five years in prison. Francisco, 57, of Newport Coast, California, pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud and one count of securities fraud.

In connection with their guilty pleas, Walji consented to forfeit $13.6 million and Francisco consented to forfeit $4.1 million. The defendants also agreed to forfeit the proceeds of several bank and trading accounts.

U.S. Attorney Bharara praised the investigative work of the FBI and also thanked the U.S. Commodities Futures Trading Commission for its assistance.

This case is being handled by the U.S. Attorney’s Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys David I. Miller and Christopher D. Frey are in charge of the prosecution. Assistant U.S. Attorney Paul Monteleoni is in charge of the asset forfeiture related to the prosecution.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which U.S. Attorney Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.

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