Washington, D.C.
June 24, 2011 FBI National Press Office
(202) 324-3691
1. Boston: Top Ten Fugitive James “Whitey” Bulger Arrested
FBI agents arrested Top Ten Fugitive, James J. “Whitey” Bulger, and his companion, Catherine Greig, in California. Recent publicity produced a tip which led agents to Santa Monica, Calif., where they located the two.
FBI Agents have arrested Top Ten Fugitive, James J. "Whitey" Bulger, and his companion, Catherine Greig, in California.
Recent publicity produced a tip which led agents to Santa Monica, California, where they located both Bulger and Greig at a residence early this evening.
Bulger and Greig were arrested without incident. Both are currently scheduled for an initial appearance in U.S. District Court in the Central District of California (downtown Los Angeles) on Thursday.
2. Seattle: Two Men Charged in Plot to Attack Seattle Military Processing Center
Two men were arrested and charged by criminal complaint with terrorism and firearms related charges. The complaint alleges that Abu Khalid Abdul-Latif and Walli Mujahidh took possession of machine guns that they purchased and planned to use in an attack on the Military Entrance Processing Station.
SEATTLE—Two men were arrested late last night and are charged by criminal complaint with terrorism and firearms related charges. The complaint alleges that Abu Khalid Abdul-Latif, a/k/a Joseph Anthony Davis, 33, of Seattle, and Walli Mujahidh, a/k/a Frederick Domingue, Jr., 32, of Los Angeles, took possession of machine guns that they purchased and planned to use in an attack on the Military Entrance Processing Station (“MEPS”) located on East Marginal Way, Seattle. Law enforcement has been monitoring Abdul-Latif and Mujahidh, including the weapons transaction, to prevent the attack and protect the public. Unbeknownst to the defendants, the weapons were rendered inoperable and posed no risk to the public. The defendants initially planned an attack on Joint Base Lewis-McChord, but later changed targets. The defendants intended to carry out their attack with both grenades and machine guns.
“The complaint alleges these men intended to carry out a deadly attack against our military where they should be most safe, here at home,” said United States Attorney Jenny A. Durkan. “This is a sobering reminder of our need to be vigilant and that our first line of defense is the people who live in our community. We were able to disrupt the plot because someone stepped forward and reported it to authorities. I commend the joint efforts of the FBI, the Seattle Police Department, and the Joint Terrorism Task Force who quickly recognized the seriousness of the threat and ensured the safety of the community.”
Law enforcement first became aware of the potential threat when a citizen alerted them that he/she had been approached about participating in the attack and supplying firearms to the conspirators. The person then agreed to work with law enforcement, which began monitoring Abdul-Latif and Mujahidh. Since early June the conspirators were captured on audio and videotape discussing a violent assault on the Military Entrance Processing Station. The MEPS is where each branch of the military screens and processes enlistees. In addition to housing many civilian and military employees, the building houses a federal daycare center.
“Driven by a violent, extreme ideology, these two young Americans are charged with plotting to murder men and women who were enlisting in the Armed Forces to serve and protect our country. This is one of a number of recent plots targeting our military here at home,” said Todd Hinnen, Acting Assistant Attorney General for National Security. “The threat was averted by the combined efforts of the federal, state and local law enforcement officers that make up the FBI’s Joint Terrorism Task Force.”
“The FBI remains committed to utilizing intelligence-based investigations to thwart would-be terrorists,” said Laura Laughlin, Special Agent in Charge of the FBI Seattle Division. “This case epitomizes the value and capabilities of the FBI’s Joint Terrorism Task Force concept as a means of preventing acts of terrorism. But for the courage of the cooperating witness, and the efforts of multiple agencies working long and intense hours, the subjects might have been able to carry out their brutal plan.”
“This attack was foiled because of the trust and relationships the men and women of the Seattle Police Department enjoy with our community,” said Seattle Police Chief John Diaz. “The complainant felt safe approaching a Seattle Police Detective and, in doing so, ended the plot intended to take innocent lives. This cooperative investigation involving local, state, and federal partners worked exactly as intended.”
Abdul-Latif and Mujahidh are charged by complaint with conspiracy to murder officers and employees of the United States, conspiracy to use a weapon of mass destruction (grenades), and possession of firearms in furtherance of crimes of violence. Abdul-Latif is also charged with two counts of illegal possession of firearms. The defendants will make their initial appearance on the complaint at 2:30 p.m. in front of Magistrate Judge Mary Alice Theiler, on the 12th floor of the federal courthouse at 700 Stewart Street, Seattle. Both Abdul-Latif and Mujahidh face potential sentences of life in prison if convicted of the charges.
The case is being prosecuted by the U.S. Attorney’s Office for the Western District of Washington, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division. The investigation is being conducted by the FBI’s Joint Terrorism Task Force, which has investigators from federal, state and local law enforcement. The Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) contributed significant expertise to this investigation.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
3. Headquarters/Multiple Field Offices: Department of Justice Disrupts International Cyber Crime Rings Distributing Scareware
The Department of Justice and the FBI, along with international law enforcement partners, announced the indictment of two individuals from Latvia and the seizure of more than 40 computers, servers and bank accounts as part of Operation Trident Tribunal. The operation targeted international cyber crime rings that caused more than $74 million in total losses.
WASHINGTON—Today the Department of Justice and the FBI, along with international law enforcement partners, announced the indictment of two individuals from Latvia and the seizure of more than 40 computers, servers and bank accounts as part of Operation Trident Tribunal, an ongoing, coordinated enforcement action targeting international cyber crime. The operation targeted international cyber crime rings that caused more than $74 million in total losses to more than one million computer users through the sale of fraudulent computer security software known as “scareware.”
Scareware is malicious software that poses as legitimate computer security software and purports to detect a variety of threats on the affected computer that do not actually exist. Users are then informed they must purchase what they are told is anti-virus software in order to repair their computers. The users are then barraged with aggressive and disruptive notifications until they supply their credit card number and pay for the worthless “anti-virus” product. The product is, in fact, fake.
Warrants obtained from the U.S. District Court for the Western District of Washington and elsewhere throughout the United States led to the seizure of 22 computers and servers in the United States that were involved in facilitating and operating a scareware scheme. In addition, 25 computers and servers located abroad were taken down as part of the operation, including equipment in the Netherlands, Latvia, Germany, France, Lithuania, Sweden and the United Kingdom.
The first of the international criminal groups disrupted by Operation Trident Tribunal infected hundreds of thousands of computers with scareware and sold more than $72 million of the fake antivirus product over a period of three years. The scareware scheme used a variety of ruses to trick consumers into infecting their computers with the malicious scareware products, including web pages featuring fake computer scans. Once the scareware was downloaded, victims were notified that their computers were infected with a range of malicious software, such as viruses and Trojans and badgered into purchasing the fake antivirus software to resolve the non-existent problem at a cost of up to $129. An estimated 960,000 users were victimized by this scareware scheme, leading to $72 million in actual losses. Latvian authorities also executed seizure warrants for at least five bank accounts that were alleged to have been used to funnel profits to the scam’s leadership.
A second international crime ring disrupted by Operation Trident Tribunal relied on online advertising to spread its scareware products, a tactic known as “malvertising.” An indictment unsealed today in U.S. District Court in Minneapolis charges the two operators of this scareware scheme with two counts of wire fraud, one count of conspiracy to commit wire fraud and computer fraud. The defendants, Peteris Sahurovs, 22, and Marina Maslobojeva, 23, were arrested yesterday in Rezekne, Latvia on the charges out of the District of Minnesota. According to the indictment, the defendants created a phony advertising agency and claimed that they represented a hotel chain that wanted to purchase online advertising space on the Minneapolis Star Tribune’s news website, startribune.com. The defendants provided an electronic version of the advertisement for the hotel chain to the Star Tribune, and technical staff at startribune.com tested the advertising and found it to operate normally.
According to court documents, after the advertisement began running on the website, the defendants changed the computer code in the ad so that the computers of visitors to the startribune.com were infected with a malicious software program that launched scareware on their systems. The scareware caused users’ computers to “freeze up” and then generate a series of pop-up warnings in an attempt to trick users into purchasing purported “antivirus” software, which was in fact fake. Users’ computers “unfroze” if the users paid the defendants for the fake antivirus software, but the malicious software remained hidden on their computers. Users who failed to purchase the fake antivirus software found that all information, data and files stored on the computer became inaccessible. The scam allegedly led to at least $2 million in losses. If convicted, the defendants face penalties of up to 20 years in prison and fines of up to $250,000 on the wire fraud and conspiracy charges, and up to 10 years in prison and fines of up to $250,000 on the computer fraud charge. The defendants also face restitution and forfeiture of their illegal profits. An indictment is merely a charge and defendants are presumed innocent until proven guilty.
“Today’s operation targets cybercrime rings that stole millions of dollars from unsuspecting computer users,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division. “These criminal enterprises infected the computers of innocent victims with malicious scareware, and then duped them into purchasing fake anti-virus software. Cyber crime is profitable, and can prey upon American consumers and companies from nearly any corner of the globe. We will continue to be aggressive and innovative in our approach to combating this international threat. At the same time, computer users must be vigilant in educating themselves about cyber security and taking the appropriate steps to prevent dangerous and costly intrusions.”
“This case shows that strong national and global partners can ensure there is no sanctuary for cyber-crooks,” said U.S. Attorney Jenny A. Durkan of the Western District of Washington. “We will continue to work with the public and the computer industry, to fortify our cyber defenses. A combination of safe on-line habits and smart technology will help reduce the threat posed by these organized criminal groups.”
“The global reach of the Internet makes every computer user in the world a potential victim of cyber crime,” said U.S. Attorney B. Todd Jones of the District of Minnesota. “Addressing cybercrime requires international cooperation; and in this case, the FBI, collaborating with our international law enforcement and prosecution partners, have worked tirelessly to disrupt two significant cybercriminal networks. Their efforts demonstrate that no matter the country, Internet criminals will be pursued, caught and prosecuted.”
Assistant Director Gordon M. Snow of the FBI’s Cyber Division said, “Scareware is just another tactic that cyber criminals are using to take money from citizens and businesses around the world. This operation targeted a sophisticated business enterprise that had the capacity to steal millions. Cyber threats are a global problem, and no single country working alone can be effective against these crimes. The FBI thanks the participating foreign law enforcement agencies for their ongoing partnership and commitment in disrupting this threat.”
Operation Trident Tribunal was conducted by the FBI’s Cyber Division, Seattle Field Office and Minneapolis Field Office; the Computer Crime and Intellectual Property Section and the Asset Forfeiture and Money Laundering Section of the Justice Department’s Criminal Division; the U.S. Attorney’s Office for the District of Minnesota; and the U.S. Attorney’s Office for the Western District of Washington. Operation Trident Tribunal was the result of significant international cooperation and substantial assistance from the Criminal Division’s Office of International Affairs. Multiple foreign law enforcement partners provided invaluable assistance in this operation, including the Cyprus National Police in cooperation with its Unit for Combating Money Laundering (MOKAS); German Federal Criminal Police (BKA); Latvian State Police; Security Service of Ukraine; Lithuanian Criminal Police Bureau; French Police Judiciare; the Netherlands’ National High-Tech Crime Unit; the Cyber Unit of the Swedish National Police; London Metropolitan Police; Romania’s Directorate for Combating Organized Crime; and the Royal Canadian Mounted Police.
To avoid falling victim to a scareware scheme, computer users should avoid purchasing computer security products that use unsolicited “free computer scans” to sell their products. It is also important for users to protect their computers by maintaining an updated operating system and using legitimate, up-to-date antivirus software, which can detect and remove fraudulent scareware products.
Additional tips on how to spot a scareware scam include:
■Scareware advertising is difficult to dismiss. Scareware purveyors employ aggressive techniques and badger users with pop-up messages into purchasing their products. These fake alerts are often difficult to close and quickly reappear.
■Fake anti-virus products are designed to appear legitimate, and can use names such as Virus Shield, Antivirus or VirusRemover. Only install software from trusted sources that you seek out. Internet service providers often make name-brand anti-virus products available to their customers for free.
■Become familiar with the brand, look and functionality of the legitimate anti-virus software that is installed on your computer. This will assist you in identifying scareware.
Computer users who think they have been victimized by scareware should file a complaint with the FBI’s Internet Crime Complaint Center, www.ic3.gov.
4. New York: Man Charged with Murdering Members of U.S. Air Force in Germany.
Arid Uka, aka “Abu Reyyan,” was charged with murdering and attempting to murder United States Air Force personnel in Frankfurt, Germany, on March 2, 2011.
PREET BHARARA, the United States Attorney for the Southern District of New York, JANICE K. FEDARCYK, the Assistant Director-In-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and RAYMOND W. KELLY, the Police Commissioner of the City of New York, announced today the filing of a criminal Complaint against ARID UKA, a/k/a “Abu Reyyan,” charging UKA with murdering and attempting to murder United States Air Force (“USAF”) personnel in Frankfurt, Germany, on March 2, 2011. The Complaint charges UKA with two counts of murdering officers of the United States Government, one count of attempting to murder officers of the United States Government, one count of using a firearm during a crime of violence resulting in death, and one count of committing an act of violence at an international civil airport resulting in the death of another person. UKA, 21, is currently in custody in Germany.
According to the Complaint filed today in Manhattan federal court:
On March 2, 2011, UKA approached a bus used to transport USAF personnel parked outside of Frankfurt International Airport. After confirming that the bus was used to transport United States military personnel, UKA approached Nicholas Alden, a member of the USAF, from behind and shot and killed him. After murdering Alden, UKA boarded the bus, in which approximately fifteen other USAF personnel were seated. Once on board the bus, UKA shot and killed the driver of the bus, Zachary Ryan Cuddeback, another member of the USAF. UKA then repeatedly fired his gun inside the bus at other USAF members, shooting and badly injuring two other USAF members on the bus. As UKA fired his gun, he repeated aloud an Arabic expression that means, “God is great,” and continued shooting until his gun did not fire. UKA then ran off the bus, pursued by a USAF member, and was ultimately apprehended by German law enforcement officers in the airport terminal.
Mr. BHARARA praised the investigative efforts of the Joint Terrorism Task Force (“JTTF”) in New York, especially those JTTF members from the FBI and the New York City Police Department; the Air Force Office of Special Investigations; and the FBI’s Legal Attaché offices in Germany. He also thanked the Department of Justice’s National Security Division and Office of International Affairs for their assistance in this case, and thanked German law enforcement officials and prosecutors, who are conducting their own investigation of this case under German law.
Assistant U.S. Attorneys JOHN P. CRONAN, EDWARD Y. KIM, and ANNA M. SKOTKO from the Office’s Terrorism and International Narcotics Unit are in charge of the prosecution.
The charges and allegations contained in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
5. Washington Field: Alexandria Man Charged with Shooting at Military Buildings in Northern Virginia
Yonathan Melaku was charged with destruction of property and firearm violations involving five separate shootings at military installations in Northern Virginia between October and November 2010.
ALEXANDRIA, VA—Yonathan Melaku, 22, of Alexandria, Va., has been charged with destruction of property and firearm violations involving five separate shootings at military installations in Northern Virginia between October and November 2010.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement.
If convicted, Melaku faces a maximum penalty of 10 years in prison on each of the two willfully injuring the property of the United States charges and a total mandatory minimum of 35 years and a maximum of life in prison if he is convicted of both use of a firearm during a crime of violence charges.
“Today’s charges allege a long-term pattern of violent behavior against the U.S. military that escalated until his detention last Friday,” said U.S. Attorney MacBride. “The affidavit states that what began as a drive-by shooting at the National Museum of the Marine Corps grew to a series of armed attacks targeting multiple military installations seeking to shut them down. It culminated with Mr. Melaku’s apprehension near the Pentagon in possession of a backpack containing ammonium nitrate, one of the components used in the 1995 Oklahoma City bombing.”
“Great investigative and intelligence analysis on this case has brought us to where we are today,” said James McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office. “The permanent partnership shared in the FBI’s Joint Terrorism Task Force has allowed investigators to follow up on every lead and continue to pursue so many matters in this case, leaving no stone unturned. This was an eight-month investigation involving hundreds of hours of interviews, evidence collection and analysis by investigators from Prince William County Police, Virginia State Police, Pentagon Force Protection Agency, Fairfax and Arlington Police, the Naval Criminal Investigative Service, U.S. Park Police and the United States Marine Corps. This is a shining example of how together we work tirelessly to keep Northern Virginia residents safe.”
According to an affidavit filed in court, Melaku is accused of engaging in a series of five shootings from Oct. 17, 2010, through Nov. 2, 2010, at the following locations: the National Museum of the Marine Corps (twice), the Pentagon, a Marine Corps recruiting sub-station in Chantilly, Va., and a U.S. Coast Guard recruiting office in Woodbridge, Va. Each shooting allegedly took place late at night or early in the morning and involved multiple 9mm rounds fired at each building. The cost for repairs at the facilities exceeded $100,000.
The affidavit states that Mr. Melaku attempted to flee law enforcement after he was spotted on the property of Ft. Myer in Arlington, Va., at approximately 1:30 a.m. on June 17, 2011. During the pursuit, he dropped a backpack that allegedly contained numerous spent 9mm shell casings; four bags containing ammonium nitrate, and a spiral notebook with numerous Arabic statements referencing the Taliban, Al Qaeda, Osama bin Laden, “The Path to Jihad,” as well as a list of several other individuals associated with foreign terrorist organizations.
Later on June 17, 2011, the affidavit states, law enforcement recovered a typed list in Melaku’s bedroom closet titled “Timer” that included nine items that are consistent with the requirements for a time power unit and firing mechanism of an Improvised Explosive Device (IED). Combined with ammonium nitrate, these items would make up several significant components needed for an IED.
The affidavit alleges that law enforcement also found a videotape in Melaku’s bedroom that shows Melaku in an automobile driving near what appears to be the U.S. Marine Corps Heritage Museum and repeatedly firing a handgun out the passenger-side window. Melaku allegedly made numerous statements on the video, including “That’s my target. That’s the military building. It’s going to be attacked” and at the conclusion of multiple shots exclaiming “Allahu Akbar.”
According to the affidavit, an analysis of the shootings determined that a brand of ammunition, based on class characteristics consistent with bullets loaded into cartridges, were manufactured by Prvi Partizan, and some of the shell casings allegedly found in Melaku’s backpack when he was taken into custody were also Prvi Partizan. The affidavit states that the bullets and fragments recovered from all five shooting incidents were fired from the same firearm.
The United States Marine Corps reports that Melaku joined the Marine Corps Reserve on Sept. 4, 2007, and is currently listed as a Marine Corps reservist Lance Cpl and a motor vehicle operator with Combat Engineer Support Company, 4th Combat Engineer Battalion, 4th Marine Division, Marine Forces Reserve. He has previously been awarded the National Defense Service Medal and the Selected Marine Corps Reserve Medal. He has not deployed overseas.
The investigation was conducted by the FBI Washington Field Office’s Joint Terrorism Task Force, including the police departments of Arlington County, Fairfax County and Prince William County; the Pentagon Force Protection Agency; the Virginia State Police; the Naval Criminal Investigative Service; the Coast Guard Investigative Service; the U.S. Park Police; U.S. Marine Corps Base Quantico; and the Military District of Washington Provost Marshal Office. Assistant United States Attorneys Daniel Grooms, Neil Hammerstrom, and Lynn Haaland of the National Security and International Crime Unit are prosecuting the case on behalf of the United States.
Criminal complaints are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
6. Atlanta: Seven Indicted for Supplying Iran with U.S. Military Aircraft Components
Seven individuals and five corporate entities based in the United States, France, the United Arab Emirates and Iran were indicted for their alleged roles in a conspiracy to illegally export military components for fighter jets and attack helicopters from the United States to Iran.
MACON, GA—Seven individuals and five corporate entities based in the United States, France, the United Arab Emirates (U.A.E.) and Iran have been indicted in the Middle District of Georgia for their alleged roles in a conspiracy to illegally export military components for fighter jets and attack helicopters from the United States to Iran. One of the defendants and his company were sentenced yesterday, with the individual receiving nearly five years in prison. Another defendant and his company have admitted their illegal conduct and also pleaded guilty in the investigation.
Federal prosecutors today unsealed a superseding indictment in Macon, Ga., charging eight of the defendants with conspiring to violate and violating the Arms Export Control Act (AECA), the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions Regulations, as well as conspiracy to defraud the United States, money laundering and false statement violations. Charges against the four other defendants, who have pleaded guilty in the case, are contained in the original indictment in the investigation that was filed previously.
The indictment and other enforcement actions were announced by Todd Hinnen, Acting Assistant Attorney General for National Security; Michael J. Moore, U.S. Attorney for the Middle District of Georgia; Brock Nicholson, Special Agent-in-Charge of the U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI) office in Atlanta; Brian D. Lamkin, Special Agent-in-Charge of the FBI’s Atlanta Field Division; and Robert Luzzi, Special Agent-in-Charge of the Commerce Department, Office of Export Enforcement (OEE) Miami Field Office.
The Defendants
Thus far, four defendants based in the United States have been charged as part of the investigation. They are The Parts Guys LLC, a company in Port Orange, Fla., that maintains a warehouse at the Middle Georgia Municipal Airport in Macon, as well as the president of The Parts Guys, Michael Edward Todd, who is a U.S. national. In addition, Galaxy Aviation Services, a company in St. Charles, Ill., and its president, Hamid Seifi, also known as Hank Seifi, an Iranian-born U.S. national, have been charged.
Todd was arrested last year in Atlanta based on the original indictment in the case. Todd and his company, The Parts Guys, pleaded guilty to conspiracy to violate the AECA on May 9, 2011, and have yet to be sentenced. Federal agents arrested Seifi in Atlanta earlier this year, also based on the original indictment. Seifi and his company, Galaxy Aviation, pleaded guilty on Feb. 24, 2011, to conspiracy to violate the AECA and violating the IEEPA. Yesterday, Seifi was sentenced to 56 months in prison followed by three years of supervised release, a fine of $12,500 and forfeiture of $153,950, while Galaxy Aviation, which is now defunct, received a $400 special assessment.
Three defendants based in France have also been indicted as part of the investigation. They are Aerotechnic, a company in Pinsaguel, France, and its president, Philippe Sanchez, a French national, as well as Luc Teuly, a French national and the sales manager of Aerotechnic. Each of these defendants remains a fugitive.
Two defendants based in the U.A.E. have also been indicted in the case. They are Aletra General Trading, a company in Dubai doing business as “Erman & Sultan Trading Co,” and Syed Amir Ahmed Najfi, an Iranian national and purchaser for Aletra. Najfi remains a fugitive.
Three defendants based in Iran have also been charged in the case. They are Sabanican Company, a company in Tehran, and its president, Hassan Seifi, an Iranian national, as well as Reza Seifi, an Iranian national and the managing director of Sabanican Company. Each of these defendants remains at large.
As part of the U.S. government’s coordinated action against this procurement network, the Commerce Department announced today that it will add the eight defendants in France, Iran and the U.A.E. to its “Entity List.” The Entity List provides notice to the public that certain exports, re-exports and transfers (in-country) to parties identified on the Entity List require a license from the Commerce Department, and that availability of license exceptions in such transactions is limited. All eight parties will be added to the Entity List with a licensing requirement for all items subject to the Commerce Department export regulations and with a presumption of denial.
The Charges
According to the charges, the defendants conspired to export components for attack helicopters and fighter jets to Iran without obtaining the required U.S. export licenses. These components included military parts for the Bell AH-1 attack helicopter, the UH-1 Huey attack helicopter, as well as the F-5 and F-4 fighter jets.
Defendant Najfi and his firm in the U.A.E. are alleged to have placed orders and purchased military aircraft parts, including those for the Bell AH-1 attack helicopter, from Todd and his company, The Parts Guys, in the United States. Todd and other conspirators then attempted to and did cause the export of the aircraft parts to the U.A.E.
Defendant Hank Seifi and his firm in Illinois also allegedly placed orders and purchased U.S. aircraft parts from Todd and his company in Georgia -- on behalf of Hassan Seifi, Reza Seifi and their company in Iran. According to the charges, Todd and other conspirators then caused these aircraft parts to be exported to Iran via the defendants in France: Sanchez, Teuly and their company, Aerotechnic.
The charge of conspiracy carries a maximum penalty of five years in prison, while violating the AECA carries a maximum penalty of 20 years in prison, and violating IEEPA carries a maximum penalty of 20 years in prison. Money laundering carries a maximum 20 years in prison, while making false statements carries a maximum of five years in prison.
“The defendants in this case are alleged to have conspired to defraud the United States by illegally acquiring and exporting fighter jet and attack helicopter components. Keeping such advanced weaponry, which is designed to protect the men and women of our Armed Forces and to defend our national interests, from falling into the hands of state sponsors of terror has never been more important,” said Todd Hinnen, Acting Assistant Attorney General for National Security.
“Through coordinated law enforcement efforts, we have cut off more than a branch of this illegal supply tree; we have cut off the tree at its trunk. These parts have a military purpose, and I am determined to see that they are not used to harm the United States, its soldiers, citizens or friends. This type of criminal activity should remind each of us that we must be ever vigilant in our efforts to protect our national security. The threat is very real, and comes from even the least suspected places, including middle Georgia,” said U.S. Attorney Michael Moore.
“The illegal export of U.S. weapons and military technology presents a direct threat to our national security,” said Brock Nicholson, Special Agent-in-Charge of ICE-HSI in Atlanta. “This investigation demonstrates the importance of preventing our military equipment from falling into the wrong hands, where it could potentially be used against our military members, our homeland and our allies. Enforcing U.S. export laws is one of our top priorities, and we will continue working with our law enforcement partners to ensure that those who put our country at risk are discovered and brought forward for prosecution.”
Brian D. Lamkin, Special Agent-in-Charge, FBI Atlanta, stated: “The cooperative efforts among the FBI, ICE and U.S. Commerce was critical in bringing this case forward for prosecution by the U.S. Department of Justice. The enforcement of U.S. laws that prohibit the acquisition of specified defense related items is paramount to national security and is a daunting task when back dropped against the vast movement of legitimate international trade that occurs every day in the U.S. The FBI is pleased with the role that it has played in this multi-agency enforcement effort.”
“ The Commerce Department’s Office of Export Enforcement (OEE) dedicates one hundred percent of its resources to enforcing export laws, and today’s case is the result of ongoing cooperation with Immigration and Customs Enforcement and the FBI to protect our national security,” said Robert Luzzi, Special Agent-in-Charge of OEE’s Miami Field Office. “Parties who export to embargoed destinations such as Iran will be pursued and prosecuted to the fullest extent of the law.”
This case was investigated by ICE Homeland Security Investigations in Atlanta, FBI Atlanta Field Division and the Department of Commerce’s OEE.
The prosecution is being handled by Assistant U.S. Attorneys Jennifer Kolman and Danial E. Bennett from the U.S. Attorney’s Office for the Middle District of Georgia and Trial Attorneys Ryan P. Fayhee and Brandon L. Van Grack from the Counterespionage Section of the Justice Department’s National Security Division.
The public is reminded that an indictment contains mere allegations and that defendants are presumed innocent unless and until proven guilty.
7. Detroit: Former Police Officer Pleads Guilty to Divulging Federal Wiretap
A former Hamtramck police officer, and federal DEA task force officer, Randall Hutchinson pled guilty to one count of providing notice of a federal wiretap to the former Downriver Chapter President of the Highwaymen Motorcycle Club during the FBI’s investigation into that organization. He is one of 91 indicted as part of the United States Attorney’s Office’s case against the Detroit Highwaymen.
A former Hamtramck police officer, and federal Drug Enforcement Administration (DEA) task force officer, Randall Hutchinson pleaded guilty yesterday to one count of providing notice of a federal wiretap to the former Downriver Chapter President of the Highwaymen Motorcycle Club during the Federal Bureau of Investigation’s (FBI) investigation into that organization in 2005 - 2006, United States Attorney Barbara L. McQuade announced. Hutchinson, 45, is one of ninety-one individuals indicted as part of the United States Attorney’s Office’s case against the Detroit Highwaymen.
“Disclosing a wiretap investigation not only violates the law, it also betrays an officer’s duty to the mission of seeking justice.” McQuade said. “We have no tolerance for that sort of betrayal.“
The Highwaymen Motorcycle Club was Detroit’s largest, and most violent, motorcycle club with upwards of 100 members, and was seen by many as a rogue club. Numerous of its leaders, members, and associates have been successfully prosecuted over the last year for a variety of criminal offense including racketeering, violent acts, narcotics trafficking, and stolen vehicles.
During the fall of 2005, while working as a task force officer for the DEA, Hutchinson learned that the FBI was conducting a wiretap investigation that involved a large scale marijuana dealer who was a member of the Highwaymen Motorcycle Club. Shortly after learning about this wiretap, Hutchinson saw Phil McDonald, the Downriver Chapter President of the Highwaymen, in the gym where they both worked out. Hutchinson told McDonald about the FBI’s investigation into the marijuana dealer within the Highwaymen and told McDonald that he had to be careful.
Later in May 2006, the FBI and the Brownstown Township Police Department executed a search warrant at Phil McDonald’s house in which illegal steroids and growth hormones were found. After the search warrant was executed, McDonald called and spoke with Hutchinson several times about the search and his legal troubles. On May 10, 2006, during a phone conversation with McDonald, Hutchinson told him that if the trouble was bad, then “they” were on his phones.
On June 19, 2006, Hutchinson and McDonald met again in the gym. Hutchinson stated that he had “been thinking” and that McDonald needed to see if his “phone was hot.” McDonald understood this mean that he needed to check to see if his phone was being tapped by law enforcement. McDonald then stated that Hutchinson should know whether he was a target of a wiretap, to which Hutchinson replied, “not necessarily, if your phone is hot it would be the FBI.” Hutchinson then formulated a plan for McDonald to figure out whether the FBI was intercepting his phone calls.
The case against Hutchinson was investigated by the Federal Bureau of Investigation and the Brownstown Township Police Department. FBI Special Agent Ted Brzezinski was the lead case agent responsible for handling and coordinating the multiyear investigative effort into the Highwaymen and Mr. Hutchinson.
Mr. Hutchinson faces a maximum of 5 years’ imprisonment and a $250,000 fine. The case was prosecuted by Assistant U.S. Attorney’s Diane Marion and Christopher Graveline.
8. Newark: Hacker Pleads Guilty to Infiltrating AT&T Servers, iPad Data Breach
Daniel Spitler, a computer hacker who helped write the malicious code behind a breach of AT&T’s computer servers admitted to conspiring to hack into the servers, steal information regarding iPad subscribers and publicize the crime.
NEWARK, NJ—A computer hacker who helped write the malicious code behind a breach of AT&T’s computer servers admitted today to conspiring to hack into the servers, steal information regarding iPad subscribers, and publicize the crime, U.S. Attorney Paul J. Fishman announced.
Daniel Spitler, 26, of San Francisco, Calif., pleaded guilty to an Information charging him with one count of conspiracy to gain unauthorized access to computers connected to the Internet and one count of identity theft. Spitler surrendered to FBI agents on January 18, 2011, and was originally charged by Complaint with the conspiracy. Spitler entered his guilty plea before U.S. District Judge Susan D. Wigenton this afternoon in Newark federal court.
“Computer hackers are exacting an increasing toll on our society, damaging individuals and organizations to gain notoriety for themselves,” said U.S. Attorney Fishman. “Hacks have serious implications – from the personal devastation of a stolen identity to danger to our national security. In the wake of other recent hacking attacks by loose-knit organizations like Anonymous and LulzSec, Daniel Spitler’s guilty plea is a timely reminder of the consequences of treating criminal activity as a competitive sport.”
“The magnitude of this crime affected everyone from high ranking members of the White House staff to the average American citizen,” said Michael B. Ward, Special Agent In Charge of the FBI’s Newark Division. “It’s important to note that it wasn't just the hacking itself that was criminal, but what could potentially occur utilizing the pilfered information. Because of the popularity and widespread use of the new and emerging technology of the iPad and devices like it, it was absolutely critical that emerging threats to it were addressed promptly and aggressively. The FBI’s Cyber Crimes Task Force did so by remaining on the cutting edge of computer forensics, quickly zeroing in on the perpetrators who mistakenly believed they were hidden behind a cloak of cyberspace, ultimately exposing them to justice and the world.”
According to documents filed in this case and statements made in Newark federal court:
Spitler admitted that he was a member of an organization known as Goatse Security, which, according to its website, is a loose association of Internet hackers and self-professed Internet “trolls” – people who intentionally, and without authorization, disrupt services and content on the Internet.
Prior to mid-June 2010, AT&T automatically linked an iPad 3G user’s e-mail address to the Integrated Circuit Card Identifier (“ICC-ID”), a number unique to the user’s iPad, when the user registered. As a result, every time a user accessed the AT&T website, his or her ICC-ID was recognized and his or her e-mail address was automatically populated for faster, user-friendly access to the site. AT&T kept the ICC-IDs and associated e-mail addresses confidential.
Seeing this, and discovering that each ICC-ID was connected to an iPad 3G user e-mail address, hackers, including Spitler, wrote a script termed the “iPad 3G Account Slurper"and deployed it against AT&T’s servers.
The Account Slurper attacked AT&T’s servers for several days in early June 2010, and was designed to harvest as many ICC-ID/e-mail address pairings as possible. It worked by mimicking the behavior of an iPad 3G so that AT&T’s servers would be fooled into granting the Account Slurper access. Once deployed, the Account Slurper used a process known as a “brute force” attack – an iterative process used to obtain information from a computer system – against the servers, randomly guessing at ranges of ICC-IDs. An incorrect guess was met with no additional information, while a correct guess was rewarded with an ICC-ID/e-mail pairing for a specific, identifiable iPad 3G user.
Spitler admitted to communicating during the data breach with his co-defendant, Andrew Auernheimer, 25, who was arrested January 18, 2011, in Fayetteville, Ark., while appearing in state court on unrelated drug charges. The two wrote each other during the breach using Internet Relay Chat, an Internet instant messaging program. Those chats included discussions between Spitler, Auernheimer, and other Goatse Security members about the best way to take advantage of the breach and associated theft.
Immediately following the theft, the hacker-authors of the Account Slurper provided the stolen e-mail addresses and ICC-IDs to the website Gawker, which published the stolen information in redacted form, along with an article concerning the breach. The article indicated that the breach “exposed the most exclusive e-mail list on the planet,"and named a number of famous individuals whose e-mails had been compromised, including Diane Sawyer, Harvey Weinstein, Mayor Michael Bloomberg, and Rahm Emanuel. The article also stated that iPad users could be vulnerable to spam marketing and malicious hacking.
On June 10, 2010, immediately after publicizing the breach, Spitler and Auernheimer discussed destroying evidence of their crime.
The charges to which Spitler pleaded guilty each carry a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is currently scheduled for September 28, 2011.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Cyber Crimes Task Force, under the direction of Special Agent in Charge Michael B. Ward in Newark, with the investigation leading to the charges; as well the forensic examiners of the New Jersey Regional Computer Forensics Laboratory and the New Jersey Division of Criminal Justice. He also thanked special agents of the FBI’s Little Rock, Arkansas Divison, Fayetteville Resident Agency, under the direction of Special Agent in Charge Valerie Parlave; and the San Francsiso Division, under the direction of Special Agent In Charge Stephanie Douglas. U.S. Attorney Fishman also recognized the U.S. Attorney’s Office for the Western District of Arkansas, under the direction of U.S. Attorney William Conner Eldridge.
The government is represented by Assistant U.S. Attorney Zach Intrater of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
As for Auernheimer, the charges and allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Susan C. Cassell Esq., Ridgewood, N.J.
9. Phoenix: Real Estate Investor Pleads Guilty to $50 Million Mortgage Fraud Scheme
Brett Matheson pleaded guilty to conspiracy to commit wire fraud in a $50 million mortgage fraud scheme based in Phoenix.
PHOENIX—Brett Matheson, 46, pleaded guilty on Monday in federal court to conspiracy to commit wire fraud in a $50 million mortgage fraud scheme based in Phoenix. Two others have also entered guilty pleas and are awaiting sentencing.
The case against Matheson and his co-conspirators is based on an investigation conducted by the Internal Revenue Service’s Criminal Investigation Division and the Federal Bureau of Investigation. Matheson acknowledged in his guilty plea that as President and CEO of Maricopa Property Investment Solutions, Inc., he recruited straw buyers in real estate seminars. From about January 2005 through September 2006, he facilitated the submission of mortgage loan applications for these unqualified straw buyers containing false information regarding employment, income, assets and the intent to occupy homes as their primary residence. In some cases, the loan application packages contained altered pay stubs, false bank statements, and bogus verifications of employment and deposit. Matheson personally obtained financing for the purchase of two properties using altered pay stubs and bogus verifications of employment. At closing, a portion of the seller proceeds were kicked back to an entity controlled by Matheson and his co-conspirators. The arrangement between Matheson’s company and the “straw” buyers was concealed from the lenders. The kickbacks were often used on Matheson’s personal expenses or to make down payments to qualify additional “straw" buyers for financing on other properties. In total, 52 properties were involved in the scheme with nearly $50 million in fraudulent loans. The losses to lenders approached $20 million.
“This guilty plea reminds us of the destructive role mortgage fraudsters played in the financial crisis that has impacted every Arizonian and the entire country,” said U.S. Attorney Dennis K. Burke. “Schemes like this have destroyed property values, crippled lending institutions, and ruined entire neighborhoods in our community. It has resulted in the loss of tax revenues and jobs. We will continue to investigate and prosecute those who have profited from mortgage fraud.”
“Mortgage fraud threatens the financial health of our communities. IRS Criminal Investigation and our law enforcement partners are committed to following the money trail to ensure those who engage in illegal activities such as Matheson are brought to justice," said Dawn Mertz, Special Agent in Charge, Phoenix Field Office, Internal Revenue Service, Criminal Investigation Division.
A conviction for a single count of conspiracy to commit wire fraud is punishable by a maximum fine of $1 million a maximum term of imprisonment of 30 years, or both, and a term of supervised release of five years. In determining an actual sentence, Federal District Judge Neil V. Wake will consult the U.S. Sentencing Guidelines, which provide appropriate sentencing ranges. The judge, however, is not bound by those guidelines in determining a sentence.
Matheson’s prosecution is part of an initiative called “Operation Stolen Dreams" in which dozens of defendants — including many real estate professionals — were indicted in the summer of 2010. To date, 27 of those indicted have been convicted through guilty pleas.
The investigation in this case was conducted by the Internal Revenue Service, Criminal Investigations Division and the FBI. The prosecution is being handled by Kevin M. Rapp and Monica B. Klapper, Assistant U.S. Attorneys, District of Arizona, Phoenix.
10. Portland: Three Defendants, Including a CPA and an Attorney, Charged with Conspiracy to Commit Wire Fraud and Conspiracy to Commit Money Laundering Related to Summit Accommodators
Three individuals were indicted on charges of conspiring to defraud customers of their former business, Summit Accommodators, Inc. The fraud scheme took place from 1999 through 2008, and allegedly involved the misuse of over $44 million of customer funds, causing 91 customers to lose $13.7 million.
PORTLAND, OR—Mark A. Neuman, 56, Lane D. Lyons, 40, both of Bend, Oregon, and Timothy D. Larkin, 52, of Redmond, Oregon, were indicted yesterday on charges of conspiring to defraud customers of their former business, Summit Accommodators, Inc., headquartered in Bend. The fraud scheme took place from 1999 through 2008, and allegedly involved the misuse of over $44 million of customer funds, causing 91 customers to lose $13.7 million. Neuman, Lyons, and Larkin are also charged with conspiring to commit money laundering violations with the proceeds of the fraud scheme. Alleged co-conspirator, Brian D. Stevens, a certified public accountant from Bend, Oregon, pled guilty to similar charges on April 7, 2011.
“This indictment is another important step in our commitment to vigorously investigate and prosecute those who cheat others to enrich themselves,” said U.S. Attorney Holton.
The indictment alleges that Neuman, a certified public accountant, and Stevens created Summit Accommodators, Inc., to help customers take advantage of lawful federal income tax deferral transactions. In a typical transaction, a customer sells income-producing property, allows Summit to hold the proceeds of the sale, and then buys another income-producing property within 180 days. Federal income tax laws allow the customer to defer paying taxes on the profits from the sale of the first property. The defendants opened Summit affiliate offices in Texas, Washington, Utah, Montana, Wyoming, Nevada, and Lake Oswego, Oregon.
The indictment further alleges that Lyons, an attorney, performed legal work for Summit beginning in 2002, became Summit’s in-house counsel in mid-2005, and became part-owner of Summit in early 2006. In addition, Larkin was Summit’s director of operations from 2002 through 2008, and became part-owner of Summit in early 2006.
Newman, Lyons, Larkin, and Stevens promised Summit’s customers their money would be deposited in a bank where it would remain for the 180-day period until used to purchase another income-producing property. From 2004 through October 2008, Summit held between $49 million and $109 million of its customers’ money in a typical month.
Contrary to their promises to Summit’s customers, Newman, Lyons, Larkin, and Stevens allegedly used their customers’ money to invest in over 100 real estate projects. The defendants had direct personal interests in most of these projects. They also loaned a small portion of this money to other individuals and businesses, and to themselves. Between June 2005 and December 2008, the co-conspirators allegedly misused more than $44 million of Summit customer money in this manner.
The indictment charges that the defendants concealed this fraudulent activity, in part, by creating a company called Inland Capital Corporation, loaning Summit customer money to Inland Capital, then causing Inland Capital to loan the money to small corporations they created to own each real estate investment.
The defendants and their co-conspirators further hid the alleged fraud scheme by concealing from most of Summit’s employees, and most of the owner-operators of Summit’s affiliates, that they were using Summit customer money to invest in real estate and to loan to themselves and others. When Summit’s customers and affiliate owner-operators began to express concern about the safety of Summit customer money, the conspirators allegedly used statements in e-mails and other media to convey the false impression that all Summit customer money was deposited and maintained in financial institutions.
The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
This case is being investigated by the Federal Bureau of Investigation, the Criminal Investigation Division of the Internal Revenue Service, the United States Postal Inspectors, and the Oregon Division of Finance and Corporate Securities. Assistant U.S. Attorney Seth Uram and Special Assistant U.S. Attorney Helen Cooper, as part of a partnership venture between the Seattle Region, Social Security Administration, Office of the General Counsel and the United States Attorney’s Office in Portland, Oregon, are prosecuting the case.
U.S. Federal Government, U.S. Department of Justice
