A federal grand jury in Virginia indicted almost two dozen alleged members of a Mexico-based fraudulent document trafficking group, U.S. officials said Thursday.
The 22 individuals from 11 states, including Virginia, allegedly created high-quality fake identification cards for illegal immigrants. They are accused of committing murder, beatings, kidnappings and other criminal acts to keep competitors away and discipline group members. The organization usually sold the fake identification cards for between $150 and $200 and wired more than $1 million to Mexico from January 2008 to November 2010, according to the indictment.
U.S. Attorney Neil MacBride of the Eastern District of Virginia and Director John Morton of the Immigration and Customs Enforcement announced the indictment at a news conference in Richmond, Va.
“[T]his is a chilling indictment, accusing this criminal enterprise of using brutal violence to corner the fraudulent document business in 19 cities across 11 states, including cells in Richmond, Norfolk, Virginia Beach, and Manassas, Va.,” MacBride said in his prepared remarks.
The indictment includes allegations against Edy Olivarez-Jimenezin, who is accused of murdering a competitor in Little Rock, Ark., in July. The rival was allegedly lured into an abandoned trailer home and had his feet, hands, eyes and mouth bound with duct tape before he was beaten to death.
Allegations against group leader Israel Cruz Millan, who was known as “El Muerto” or “Death,” also are detailed in the indictment. He is accused of beating a member of his group who stole from him. Members of the organization on a conference call with Cruz Millan in October heard screams as the group leader beat the man, according to the indictment.
Assistant U.S. Attorneys Mike Gill of the Eastern District of Virginia and Angela Miller of the Middle District of North Carolina, along with Trial Attorney Addison Thompson of the Justice Department Criminal Division Human Rights and Special Prosecutions Section, are handling the prosecution.
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President Barack Obama on Wednesday nominated former Assistant U.S. Attorney Arenda L. Wright Allen to the U.S. District Court for the Eastern District of Virginia.
Wright Allen worked as a federal prosecutor in the Western District of Virginia from 1990 to 1991 and in the Eastern District of Virginia from 1991 to 2005. Since then she has been a supervisory assistant federal public defender in the Federal Public Defender’s Office for the Eastern District of Virginia.
She earned her law degree from from North Carolina Central University in 1985 and her bachelor’s degree from Kutztown State College in 1982.
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Eastern District of Virginia U.S. Attorney Neil MacBride named four prosecutors to coordinator posts in his district, his office announced Friday.
- Assistant U.S. Attorney Gerard Mene
- New post: Affirmative Civil Enforcement coordinator
- Old post: Health care civil fraud coordinator
- Assistant U.S. Attorney Marla Tusk
- New post: Health care fraud coordinator in Alexandria, Va.
- Old post: Narcotics and financial fraud prosecutor
- Assistant U.S. Attorney Jessica Aber Brumberg
- New post: Health care fraud coordinator in Richmond, Va.
- Old post: Prosecutor working on fraud, firearms, narcotics and child exploitation cases
- Assistant U.S. Attorney Katherine Lee Martin
- New post: Health care fraud coordinator in Norfolk, Va., and Newport News, Va.
- Old post: Fraud prosecutor
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Eastern District of Virginia U.S. Attorney Neil MacBride has tapped a federal prosecutor in Norfolk, Va., to lead the defense procurement fraud initiative along the commonwealth’s coast.
Assistant U.S. Attorney Stephen W. Haynie, who has served in the U.S. Attorney’s Norfolk office since 1999, will coordinate with local law enforcement officials to improve the veracity of the procurement system.
Eastern Virginia is attracting a growing number of contractors that supply services and goods to the Defense Department and other government agencies. Defense contracting behemoth Northrop Grumman is the latest high profile company to announce that it will move its headquarters to Eastern Virginia in 2011.
“Procurement fraud is an integral part of our financial fraud efforts, and I’ve asked Steve to help reinvigorate our efforts to bring these cases in Tidewater,” MacBride said in a statement announcing the appointment Thursday.
Haynie, who is a Deputy Criminal Chief, has held several leadership posts in Norfolk, including oversight of the branch office’s violent crimes cases and the Tidewater Anti-Terrorism Advisory Council.
He previously served as an Assistant U.S. Attorney in the Southern District of West Virginia and as an Assistant Commonwealth Attorney for Arlington, Va., before joining the Eastern District of Virginia U.S. Attorney’s Office.
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The former chairman of a private mortgage lending company was arrested by federal agents Tuesday night in a case involving surreptitious Blackberry messages, a $1.9 billion fraud and the collapse of one of the 50 largest banks in the U.S.
Lee Bentley Farkas faces charges for conspiracy and bank, wire and securities fraud. The Justice Department announced the arrest on Wednesday morning.
According to the DOJ, Farkas and his co-conspirators made efforts to disguise their alleged fraud by communicating using a feature on their Blackberry phones that allowed them to send so-called “PIN messages,” which are similar to text messages but not routed through or saved on a computer server.
According to the indictment, Farkas and other employees of the mortgage lending company Taylor, Bean & Whitaker (TBW) overdrew from company accounts at Colonial Bank in Orlando, Fla., to cover cash shortfalls. They then moved money between the company’s accounts to disguise the overdrafts and shortfall. To make up for the losses, Farkas and others allegedly sold fake mortgage loan assets to Colonial Bank and then urged the bank to keep the assets on their books even though they were worthless.
Investigators began looking at Colonial BancGroup, the parent company of Colonial Bank, in February 2009, when the company applied for $550 million in funds from the Troubled Asset Relief Program (TARP). The Alabama State Banking Department later seized Colonial Bank, and the Federal Deposit Insurance Corporation was named as its receiver. Both Colonial BancGroup and TBW filed for bankruptcy in August 2009.
The scheme by Farkas and TBW also led Colonial BancGroup to make false representations to the Securities and Exchange Commission concerning the value of its assets. The company never received TARP funds, but it falsely claimed to have secured outside funding to meet the requirements of the conditional approval of its application for TARP funding.
Farkas and others also allegedly misappropriated several hundred million of dollars from Ocala Funding, a company that sold asset-backed commercial paper.
According to a DOJ court filing, on the day federal agents executed a search at TBW, Farkas allegedly sent Blackberry PIN messages to his co-conspirator saying the government “will figure out that the agency stuff was recycled if they get [another co-conspirator's] laptop.”
He also said that the government would continue to use all investigative tools to combat financial crimes.
“This arrest and these charges send a strong message to corporations and corporate executives alike that financial fraud will be found, and it will be prosecuted. And it will be pursued using every investigative tool at our disposal,” Breuer said. ”Indeed, this investigation benefited from the use of covert techniques – a tactic that has been seen in other recent white collar criminal prosecutions and one that will continue to be employed wherever feasible and appropriate.”
Breuer declined to elaborate on the “covert techniques” used. The indictment and the government’s motion for pre-trial detention cite e-mails, other electronic communications and recorded phone calls between Farkas and the other conspirators.
U.S. Attorney for the Eastern District of Virgina Neil MacBride said at the news conference that co-conspirators in the case internally referred to the fabricated assets as “crap.”
MacBride described the scheme as a “sophisticated shell game” and said they attempted to defraud the government of TARP funds through scheme they called “Project Squirrel.”
The government said it is seeking approximately $22 million in forfeitures from Farkas, which includes five properties in Florida and Georgia as well as nine vehicles — including a 1929 Ford Model A; a 1963 Rolls Royce; a 1961 Porsche CV; and a 1958 Mercedes Benz Cabriolet 220.
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The Eastern District of Virginia U.S. Attorney’s Office brought on two new prosecutors for positions in its Terrorism and National Security Unit and Major Crimes Unit, U.S. Attorney Neil MacBride announced Tuesday.
Andrew Peterson, a former attorney in the CIA general counsel’s office, will join the Terrorism and National Security Unit. Justin Fairfax will leave the law firm of Wilmer, Cutler, Pickering, Hale and Dorr LLP in D.C. to serve in the Major Crimes Unit, which handles violent crimes cases.
Read more about them here.
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Neil MacBride, the U.S. Attorney for the Eastern District of Virginia, announced on Friday the formation of a financial fraud task force that could to allow the district to use its reputation as a “rocket docket” to expedite fraud cases.
The Virginia Financial and Securities Fraud Task Force will consist of representatives from the U.S. Attorney’s office, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Virginia Attorney General’s office and the Virginia State Corporation Commission. The U.S. Attorney’s office also has an existing working group which consists of representatives from the FBI, U.S. Postal Inspection Service, and the Internal Revenue Service Criminal Investigation Division.
“Corporate fraud scandals have eroded public confidence in the nation’s financial markets,” MacBride said at a news conference in Richmond Friday. “White collar criminals have looted the pocketbooks and retirement accounts of working Americans. Crimes committed on Wall Street are felt on Main Streets everywhere.”
“The complex financial crimes we confront are national in scope,” MacBride said. “Criminal and civil authorities across the country must utilize every tool possible to prevent and punish fraud. That’s what this task force will do.”
MacBride said that Eastern Virginia has the ability to deal with nearly any fraud case, since nearly all official reports emerging from publicly traded companies are sent to the SEC’s EDGAR computer server in Alexandria, Va.. He also said that the Federal Reserve Bank in Richmond, Va. “is one of the primary hubs for U.S. wire transfers, which is an additional basis for venue in many fraud cases.”
Because of its proximity to Wall Street, the U.S. Attorney’s office in the Southern District of New York has taken the lead on most financial cases.
The new task force could put the Eastern District on the same level as SDNY, although SDNY because of its larger size will likely still occupy the primary role in financial fraud prosecutions. According to a November 2008 Inspector General’s report, SDNY had about 260 full-time attorneys in the office in fiscal 2007. By comparison, EDVA had 142.
As of April 2010, 23 U.S. Attorneys offices’ had task forces focusing on mortgage fraud, according to the DOJ.
MacBride said the task force was a step in implementing the goals of the President’s Financial Fraud Enforcement Task Force.
“We have the legal authority to prosecute cases of national significance in the Eastern District of Virginia, regardless of where the fraud occurs,” MacBride said.
Robert Khuzami, the Director of the SEC’s Division of Enforcement, attended the news conference in Richmond and praised the creation of the new task force.
“Financial fraud schemes can be sophisticated, difficult to detect, and span multiple jurisdictions,” Khuzami said. “Opportunities to coordinate civil and criminal law enforcement efforts, such as those provided by this task force, are vital to combating financial fraud.”
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After announcing that Khalid Sheikh Mohammed and four alleged 9/11 co-conspirators would be tried in federal court, Attorney General Eric Holder assembled a team of prosecutors from Alexandria, Va., and Manhattan — an elite squad for which “failure is not an option,” as Holder put it during a congressional hearing in November.
But as the possibility of a civilian trial grows more remote, the team’s participation in the trial of the century has become an open question. If President Barack Obama decides to place the defendants before a military commission, the Defense Department will have final say on the composition of the trial team. Moreover, several members of the original military trial team remain at the two agencies.
Holder and his national security adviser, Amy Jeffress, reportedly decided who would be part of the civilian trial team. Current and former Justice Department officials told Main Justice that team includes John Davis, Ray Patricco and James Trump of the U.S. Attorney’s Office for the Eastern District of Virginia; and Michael Farbiarz, David Miller and David Raskin of the U.S. Attorney’s Office for the Southern District of New York. The Justice Department’s National Security Division is supporting their efforts.
The offices declined to comment on the composition of the 9/11 prosecution team, as did a spokesman for the National Security Division.
“This is still a Justice Department case,” said Joe DellaVedova, military commissions spokesman. ”Whatever decision the administration comes to, we will fully support and stand behind it.”
Davis and Raskin were named in January as likely candidates to lead the team. Davis, head of EDVA’s Criminal Division, has worked on several high-profile terrorism cases, including the prosecution of John Walker Lindh, who was convicted in 2002 of aiding the Taliban. He was an Associate Deputy Attorney General from 2004 to 2006.
Raskin stepped down as chief of SDNY’s terrorism unit last year — presumably, to work on the 9/11 cases full time — and is now the office’s Senior Trial Counsel. He was one of the prosecutors in the death penalty trial of Zacarias Moussaoui, the only defendant convicted in connection with the 9/11 attacks. More recently, Raskin has been overseeing the prosecution of Ahmed Khalfan Ghailani, the first Guantanamo Bay detainee transferred into the criminal justice system.
Of the others on the team, Patricco is Deputy Chief of the EDVA’s Criminal Division, and Trump is the office’s Senior Litigation Counsel. Farbiarz is co-chief of SDNY’s new Terrorism and International Narcotics Unit, and Miller is a line prosecutor in the General Crimes Unit and a former lawyer in the Justice Department’s Counterterrorism Section.
As the White House reviews Holder’s decision to try the alleged 9/11 conspirators in federal court, it has signaled its intent to invigorate the military tribunals. Last week, the Pentagon tapped Bruce MacDonald, a retired three-star admiral with national security and international law bona fides, to run the war court.
And now that the health care bill has been signed into law, Obama’s advisers are turning their attention to shuttering the Guantanamo detention center. Obama appears open to a deal that would see Mohammed prosecuted in a military tribunal in exchange for Republican support for the prison’s closure, but negotiations are ongoing — and could be for some time.
In the meantime, lawyers in both agencies are waiting to find out whether and to what extent they’ll be a part of history.
The Defense Department and the Justice Department work closely on the military commissions, and several military prosecutors double as federal prosecutors. The chief war crimes prosecutor, Navy Capt. John Murphy, is an Assistant U.S. Attorney from New Orleans. He would decide the makeup of the prosecution team if Obama chooses a military tribunal over a civilian trial.
Before it disbanded in November when Holder decided to prosecute the accused 9/11 plotters in federal court, the military prosecution team reflected the inter-agency partnership. Justice Department lawyers accounted for four of the trial team’s seven members and included George Toscas, now a Deputy Assistant Attorney General in the National Security Division, and Ed Ryan, now the acting U.S. Attorney for the Western District of North Carolina. The top military prosecutor on the team, retired Army Col. Robert Swann, remains in the military commissions office.
“Could that team be reassembled? It’s possible,” said a Defense Department official. “But right now, we’re waiting for information like everybody else.”
Eric Bruce, a former federal prosecutor who worked on military prosecutions of high-value detainees in the Bush administration, said each side brought strengths to the 9/11 team. Military prosecutors had a firm grasp of the structure of the commissions and the rules, while Justice Department prosecutors brought a keen sense of how the case should be assembled and presented to the panel of jurors, said Bruce, who later served as Attorney General Michael Mukasey’s national security adviser.
The Justice Department provided “a wealth of historical knowledge” because the FBI, Joint Terrorism Task Force and federal prosecutors from the Southern District of New York had investigated Mohammed for several years, added Bruce, now a partner at Kobre & Kim LLP.
“If you’re a DOJ prosecutor, and you’ve never stepped foot in a military commission, of course it’s natural to rely on military prosecutors who’ve done 45 courts martial,” he said. “But they probably haven’t spent the last nine years tracking KSM’s movements around the world.”
Military prosecutors, several of whom have experience prosecuting complex drug and violent-crime cases, bristle at the notion that the 9/11 cases are beyond their talents. But few would disagree that Raskin and Davis, the leaders of the Justice Department team, are at the top of the list of a select group of experienced counterterrorism prosecutors. One Justice Department official said there’s no doubt they’d assist in a military prosecution — if they’re willing.
“It’s a pretty big request to ask people to give up their lives to move to Cuba for a trial in a system that they are not intimately familiar with,” said Christopher Morvillo, a former prosecutor in the Southern District of New York.
Added Morvillo, now counsel at Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer P.C.: “It would be above and beyond the call of duty — but it’s also the case of a lifetime.”
Said Bruce: ”It would be tough, but I think they have made a lot of sacrifices so far, and they’re dedicated prosecutors. I would think that if they could do it, they would do it.”
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Eastern District of Virginia U.S. Attorney Neil MacBride is giving his fraud unit a face lift.
The U.S. Attorney promoted two people in the Fraud Unit, which is now called the Financial Crimes and Public Corruption Unit, the office announced Friday.
- Assistant U.S. Attorney Michael Dry
- New post: Corporate and securities fraud coordinator
- Old post: Trial attorney
- Assistant U.S. Attorney Brian Samuels
- New post: Tidewater fraud coordinator (new position)
- Old post: Trial attorney
The newly renamed unit is led by Assistant U.S. Attorney Jack Hanly and his deputy, Charles Connolly, who was promoted from the corporate and securities fraud coordinator post last month.
MacBride said in a statement that the changes will help bolster his office’s efforts to combat financial fraud. The Justice Department under Attorney General Eric Holder has made fighting economic crimes a top priority.
Although Attorney General Eric Holder has reconsidered his decision to hold the trial of Khalid Sheikh Mohammed in Manhattan, some continue to voice support for the location, The Los Angeles Times reported Tuesday.
In November, Holder announced that KSM, the self-described “mastermind” of the Sept. 11, 2001 terrorist attacks, would be tried in the Southern District of New York. The office is headed by U.S. Attorney Preet Bharara. Holder quickly came under fire for the decision and in February decided to move the trial out of SDNY.
One of the locations under consideration from the start was the Eastern District of Virginia, which hosted the spring 2006 trial of Zacarias Moussaoui. The Alexandria, Va.,-based district is the only place to date that has held a Sept. 11, 2001-related trial. The LA Times reports that as Justice Department officials, aided by Holder and President Barack Obama, continue to look for a trial location, they remain steadfast that the trial should be conducted where one of the attacks occurred, meaning New York City, Northern Virginia or western Pennsylvania.
However, those outside the DOJ remain divided on where the trial should take place.
Ron Kuby, a New York City criminal defense lawyer who has represented terrorism defendants for three decades said, KSM “has said repeatedly and publicly, ‘I did it. Kill me.’ And the government has said repeatedly and publicly, ‘He did it. We want to kill him.’” He added, “It sounds like a plan. Not a lot can go wrong.”
However, Larry Homenick and Tina Rowe — the two top U.S. marshals who coordinated security in Denver for the 1997 trial of Oklahoma City bomber Timothy McVeigh — said the world has dramatically changed in the past decade. When McVeigh was tried, the concern was that anti-government militias might create trouble. Now, the concerns include suicide bombers and airplane attacks, the U.S. marshals told The LA Times.
Both said the trial should not take place in the crowded borough of Manhattan. “That case in New York would be like the McVeigh trial on steroids,” Homenick told The LA Times.
Another concern is that having New York host the trial would make the city a target for another attack. But Bernard V. Kleinman, a lawyer who represented Ramzi Ahmed Yousef in the 1993 World Trade Center attack disagrees. “New York has been a target for years,” he told The LA Times. Kleinman added that KSM and his co-defendants might plead guilty, which would mean short sentencing hearings. He also told The LA Times, ” It’s important they hold the trial right there” because of what happened there.
Defense attorney James J. Brosnahan — who represented John Walker Lindh who was tried in Alexandria, Va., for fighting with the Taliban — told The LA Times neither he nor his client felt they were in any danger. “Courts today are built to deal with all kinds of problems.”
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