FBI’s Top Ten News Stories for the Week Ending May 18, 2012
| Washington, D.C. May 18, 2012 |
- Headquarters: FBI Releases 2011 Preliminary Statistics for Law Enforcement Officers Killed in the Line of Duty
The FBI announced that 72 of the nation’s law enforcement officers were feloniously killed in the line of duty during 2011. Full Story
- Seattle: Financial Advisor Indicted in $46 Million Investment Fraud Scheme
Mark F. Spangler, a long-time Seattle financial advisor, was charged with wire fraud, money laundering, and investment advisor fraud. Full Story
- Dallas: Reward for Information About the Recent Mailings of White Powder Letters in the North Texas Area Representatives from FBI Dallas and the U.S. Postal Inspection Service announced a reward of up to $150,000 for information leading to the identification, arrest, prosecution, and conviction of the person(s) responsible for the recent mailings of letters containing white powder in the Dallas/Fort Worth area. Full Story
- Phoenix: State Representative Charged in Bribery Scheme
Paul Ben Arredondo, a member of the Arizona House of Representatives, was charged with bribery, fraud, attempted extortion, and false statements in connection with receiving more than $6,000 in tickets to sporting and special events. Full Story - Birmingham: Former Organ Center Executive Sentenced for Fraud
Demosthenes Lalisan, the former director of the Alabama Organ Center, was sentenced to 13 months in prison for his role in a scheme to take kickbacks from a funeral home that did business with the organ center. Full Story
- Los Angeles: Manager of International Computer Hacking Ring Sentenced for Defrauding Banks
Nichole Michelle Merzi was sentenced to five years in prison for her role in an international phishing operation that used spam e-mails and bogus websites to collect personal information in an effort to defraud American banks. Full Story
- Washington: Former U.S. Army Corps of Engineers Manager Pleads Guilty in Alleged $30 Million Bribery and Kickback Scheme
Kerry F. Khan, a former program manager for the U.S. Army Corps of Engineers, pled guilty for his participation in a scheme that allegedly involved more than $30 million in bribes and kickback payments and the planned steering of a government contract potentially worth $1 billion. Full Story
- Jacksonville: Man Indicted for Sextortion and Cyberstalking
Christopher P. Gunn was indicted on multiple charges involving the online sextortion and cyberstalking of girls ranging in age from 13 to 17 years old. Full Story
- Baltimore: Chief Financial Officer Sentenced in $78 Million Dream Home Mortgage Fraud Scheme
Carole Nelson was sentenced to 29 months in prison for money laundering in connection with her participation in a massive mortgage fraud scheme that falsely promised to pay off homeowners’ mortgages on their “Dream Homes.” Full Story
- San Francisco: Mongols Motorcycle Gang Member Sentenced for Murder Christopher Bryan Ablett, a member of the Modesto Chapter of the Mongols outlaw motorcycle gang, was sentenced to life in prison for the murder of the president of the San Francisco chapter of Hells Angels. Full Story
Categories: FBI REPORTS Tags: fraud, Full Story, Los Angeles, San Francisco
Ruby Man Indicted for Chemical Weapons Offenses
| U.S. Attorney’s Office May 17, 2012 |
Richard S. Hartunian, United States Attorney for the Northern District of New York, announced today the indictment of Martin S. Kimber, 59, of Ruby, New York. Kimber is charged in three counts with violations of the chemical weapon statute (counts one and two), which prohibits individuals from possessing, stockpiling, or using a toxic chemical as a weapon; and with a violation of the consumer product tampering statute (count three).
The indictment alleges that in December 10, 2010 and December 23, 2010, Kimber received medical care at the Albany Medical Center and that on January 24, 2011, he wrote to complain about having to pay for his treatment. It further alleges that on February 22, 2011, the Albany Medical Center Associate Medical Director wrote back to explain why the bills were appropriate and discussed the outcome associated with the defendant having provided inaccurate information about his injury and his decision not to complete the care proscribed by his treating physician.
The indictment alleges that on March 2, 2012, Kimber spread mercury, a known toxic substance, throughout various areas of the Albany Medical Center cafeteria, including in and around food served to customers, and on and around heating elements use in food preparation. It further describes three previous instances, March 28, 2011, April 11, 2011, June 23, 2011, where mercury was spread around the hospital on days when New York State toll records establish the defendant traveled from his home in Ruby, New York and exited at the get-off for the Albany Medical Center. The indictment alleges that on March 2, 2012, Kimber’s activities were captured on hospital video surveillance cameras in the Albany Medical Center cafeteria— where mercury was subsequently found —including on food consumed by at least one patron. Canisters of mercury were subsequently found by law enforcement officers in Kimber’s home and car. The person who ate the contaminated food was subsequently treated in the hospital’s emergency room. An emergency chemical response team at the Albany Medical Center responded promptly to the mercury contamination on each occasion and removed it from the premises.
The defendant was arrested on April 25, 2012 and is in jail, being held in pretrial detention. On March 2, 2012, following a detention hearing, United States Magistrate Judge Andrew T. Baxter determined that Kimber poses a serious danger to the community and that no combination of release conditions could be established to permit him to be released without continuing to pose a danger to the community.
A complaint filed in support of an arrest warrant was unsealed on April 26, 2012. It alleged that a search warrant was executed at Kimber’s house and automobile. Besides the seizure of two canisters of mercury, the complaint further alleged that approximately 21 guns were removed from Kimber’s residence. Literature reflecting sympathy for domestic terrorism (The Turner Diaries) was observed during the search, which states on the cover page, “This book contains racist propagnda” and “The FBI said it was the blueprint for the Oklahoma City bombing. Searching officers further observed a Nazi swastika on a wall of Kimber’s home.
The two chemical weapons counts each contain a maximum possible term of life in jail and a fine of $250,000 or twice the gross loss to any victim. The consumer product tampering charge contains a maximum possible penalty of 10 years in jail and a fine of $250,000 or twice the gross loss to any victim.
Mercury is a known hazardous substance that has been very well-studied. Among other things, mercury is a human neurotoxin that kills nerve cells, can result in brain and lung damage, respiratory failure, ataxia, speech impairment, constriction of the visual field, hearing loss, and somatosensory change. Mercury is readily absorbed through unbroken skin, by intestinal absorption after ingestion, and by inhalation of vapors. It accumulates in the body and can cause damage to internal organs including kidneys.
The allegations in the Indictment and criminal complaint are mere accusations and all persons are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by special agents of the Environmental Protection Agency, Food and Drug Administration-Office of Criminal Investigations, and Federal Bureau of Investigation. Assistance has been provided by the Towns of Albany and Ulster Police Departments. The case is being prosecuted by Assistant United States Attorney Craig Benedict. Questions may be directed to AUSA Benedict at 315-448-0672.
Categories: Albany, Schenectady, Troy, FBI REPORTS, NY CAPITOL REGION Tags: albany medical center, defendant, indictment, mercury
Albany Man Pleads Guilty to Distributing Approximately 100 Images of Child Pornography
| U.S. Attorney’s Office May 16, 2012 |
ALBANY—United States Attorney Richard S. Hartunian and Clifford C. Holly, Special Agent in Charge, Federal Bureau of Investigation, Albany Division, announced that Leonard M. Gaines, age 55, of Albany, New York, pled guilty today in United States District Court in Albany before District Judge Mae A. D’Agostino to one count of distributing child pornography.
Pursuant to a written plea agreement, Gaines admitted that on December 19, 2011, while using a file sharing program, he distributed, via the Internet, multiple still images containing child pornography. Gaines also admitted that following the March 2, 2012 execution of a federal search warrant at his Albany residence, investigators recovered additional electronic still images and videos of child pornography.
Sentencing was scheduled by Judge D’Agostino for September 6, 2012 at 11:00 a.m. in U.S. District Court in Albany, New York. Gaines faces a mandatory minimum sentence of at least five years’ imprisonment, up to a maximum of 20 years’ imprisonment. Gaines was released pending his sentencing.
This case was investigated by the Federal Bureau of Investigation.
Categories: Albany, Schenectady, Troy, FBI REPORTS, NY CAPITOL REGION Tags: child pornography, images, imprisonment, New York
FBI: Reward Offered in White Powder Letters Case
FBI and U.S. Postal Inspection Service Announce Reward for Information Leading to the Arrest and Conviction of the Person(s) Responsible for the Recent Mailings of White Powder Letters in the North Texas Area
| FBI Dallas May 16, 2012 |
Kevin F. Kolbye, Acting Special Agent in Charge, Dallas, Federal Bureau of Investigation (FBI), and Randall C. Till, Inspector in Charge, Fort Worth Division, U.S. Postal Inspection Service (USPIS), announce a reward of up to $150,000 for information leading to the identification, arrest, prosecution, and conviction of the person(s) responsible for the recent mailings of letters containing white powder in the Dallas/Fort Worth area. The reward flyer is posted below.
During the week of May 7, 2012, over 20 letters containing white powder were received by early childhood development centers, elementary schools, and an aerospace-related business. These letters were received in Texas and several other states. The FBI, USPIS, local law enforcement, and local fire department hazardous materials teams responded to each location and field screened the letters for the presence of toxins or poisons. To date, none of the mailings have contained hazardous materials.
Each letter was sent through the U.S. mail and featured a postmark from North Texas. It is highly likely these letters were sent by the same person responsible for mailing over 380 letters, beginning in late 2008, each of which contained a non-hazardous substance. This person has sent letters to elementary, middle, and high schools; day care centers; churches; government offices; U.S. Embassies abroad; restaurants; and other private businesses. A sample letter is posted below.
The author has and continues to reference subjects such as al Qaeda and the Nazi SS, which is believed to have been included for shock value rather than to express any sincere sympathy or affiliation. In a recent letter, he used the terms “Scooby Doo” and “triple dealer spy” and made reference to CIA counterintelligence and FBI internal affairs.
The sender has taken steps to conceal his activities and prevent law enforcement from finding physical evidence of his crimes, including his fingerprints. A flyer announcing the reward along with possible details about the subject has been posted on the Dallas FBI website (www.fbi.gov/dallas) and on the USPIS website (postalinspectors.uspis.gov).
Although mail is screened for toxic substances prior to delivery, the public is reminded to take the following precautions should they open a piece of mail with a powdery substance in it.
- Leave the immediate area where the powder was spilled but keep yourself separated from individuals who have not been exposed to the powder. Do not attempt to clean up the powder and do not move the letter. Isolate the area where the spill has occurred.
- Wash hands immediately.
- Call 911 and advise them of the receipt of the mailing.
- Remember, all instances of white powder in this matter have tested negative for a toxic substance. The white powder, however, should still be handled with caution until verification of its lack of toxicity is received.
Anyone with information concerning these letters should contact the FBI at 1-800-CALL FBI (1-800-225-5324) or by visiting https://tips.fbi.gov.
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| View printable pdf of reward flyer |
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| View high res image of sample letter |
Former New York State Senate Majority Leader Convicted of Stealing from Non-Profit Medical Clinics
| U.S. Attorney’s Office May 14, 2012 |
Earlier today, a federal jury in Brooklyn, New York, returned guilty verdicts against Pedro Espada, Jr. (Espada), on four counts of stealing from non-profit medical clinics that received federal funding. The jury was unable to reach a unanimous verdict as to the remaining counts against Espada. Espada is a former New York State Senator for the Bronx and served as the New York State Senate Majority Leader from 2009 to 2010. When sentenced, Espada faces up to 10 years’ imprisonment on each count of conviction. The jury deadlocked as to all counts in the indictment against Espada’s son, Pedro Gautier Espada (Gautier Espada), who previously served in the New York State Assembly and the New York City Council.
The guilty verdicts were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Janice K. Fedarcyk, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office; and Victor Lessoff, Acting Special Agent in Charge, Internal Revenue Service-Criminal Investigation, New York.
Espada was, until recently, the CEO and president of Soundview Healthcare Center (Soundview), a network of health care clinics that served the underprivileged in the Bronx. Gautier Espada was Soundview’s director of environmental care. Espada founded Soundview in 1978 as a charitable not-for-profit organization under the Internal Revenue Code. Soundview received more than $1 million per year in federal grant money from the United States Department of Health and Human Services, and millions more annually in Medicare and Medicaid reimbursements, and New York State funding.
The government’s evidence at trial established that Espada abused his leadership position at Soundview through a number of schemes designed to steal Soundview funds for his personal use and for the benefit of favored family members and friends, including the following:
- Espada used the charity’s credit card to pay for over $100,000 in personal expenses, including more than $10,000 in home renovations, $60,000 in weekend restaurant bills, spa treatments for his wife and other family members, and a four-day trip to Puerto Rico that tallied $20,000.
- Espada caused Soundview to pay for his wife’s $60,000 SUV, a GMC Yukon, and to make a $20,000 down-payment on a Mercedes Benz automobile for himself.
- Espada submitted fraudulent receipts for reimbursement, totaling thousands of dollars, as legitimate business expenses, including weekend meals that he falsely claimed were work meetings, expenses that Soundview had charged on its credit card and already had paid, and invoices for work that a Soundview employee had performed at no additional charge.
- As the leaseholder at various properties, Soundview subleased conference rooms and other facilities to medical professionals, Weight Watchers, and other subtenants. Espada caused these subtenants to make rent and other payments to his privately owned janitorial companies, rather than to Soundview. Between 2005 and 2009, the subtenant rent payments Espada caused to be diverted from Soundview exceeded $200,000.
Through the various schemes, Espada stole more than $500,000 from Soundview.
“Pedro Espada, Jr. embezzled funds to finance his personal lifestyle and lavish gifts on friends and family members at the expense of taxpayers and underprivileged members of the Bronx community who were deprived of needed health services and medical equipment. The people of the Bronx trusted Pedro Espada to have their best interests at heart. Instead, he abused that trust to the tune of more than half a million dollars. Under obligation to use the funds he received for the benefit of people sorely in need of quality health care, he chose instead to benefit himself and his family at their expense,” stated United States Attorney Lynch. “The defendant will now be held to account for his crimes.” Ms. Lynch expressed her grateful appreciation to the Federal Bureau of Investigation and the Internal Revenue Service, the agencies responsible for leading the government’s investigation, and thanked the office of New York State Attorney General Eric T. Schneiderman for its assistance.
The government’s case is being prosecuted by Assistant United States Attorneys Carolyn Pokorny, Roger Burlingame, and Todd Kaminsky.
Categories: Big Apple, DOWNSTATE, FBI REPORTS Tags: family members, Investigation, Pedro Espada, use
Fitness Club Owner Convicted of Obstruction of Justice Murder Conspiracy
In a Retrial, Defendant Found Guilty of Conspiracy in Third Murder
| U.S. Attorney’s Office May 14, 2012 |
Following a three-week trial, a federal jury in Central Islip today returned a verdict convicting Christian Gerold Tarantino, a part-owner of Synergy Fitness Clubs located in Farmingdale, Levittown, Franklin Square, Massapequa, and Long Beach, of conspiracy to commit the August 2003 obstruction of justice murder of Vincent Gargiulo, a former associate who threatened to reveal evidence of the defendant’s participation in two 1994 murders on Long Island. The jury found the defendant not guilty of aiding and abetting in the murder. The conviction was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Janice K. Fedarcyk, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office.
In May 2011, a jury convicted Tarantino of the two 1994 murders but failed to reach a verdict on the Gargiulo murder. Those earlier murders, however, provided the motive for Gargiulo’s killing and played a prominent role in the re-trial. On June 23, 1994, Tarantino and others committed the armed robbery of a Mid-Island Check Cashing armored van in Syosset, New York, which ended in the fatal shooting of a guard, Julius Baumgardt. Subsequently, in August 1994, Tarantino murdered one of the Baumgardt murder coconspirators, Louis Dorval, because he feared Dorval was about to cooperate with federal authorities. After shooting Dorval in the head, Tarantino and a third associate, fellow Synergy gym partner Scott Mulligan, dumped Dorval’s body—concealed inside a trunk—into the Atlantic Ocean several miles off the coast of Fire Island. On August 16, 1994, United States Coast Guard personnel found the trunk and Dorval’s body floating in the ocean.
During the re-trial, the government’s evidence established that in September 2000, Gargiulo had secretly recorded a conversation with Tarantino, in which Tarantino admitted his involvement in the armored van robbery and the Baumgardt and Dorval murders. In 2003, Gargiulo unsuccessfully attempted to use the recording to extort money from Tarantino by threatening to provide the tape and other evidence relating to Tarantino’s crimes to law enforcement authorities. After the failed extortion, Tarantino hired a Synergy Fitness employee, Justin Bressman, and offered to pay him $35,000 to kill Vincent Gargiulo. On August 18, 2003, as Gargiulo walked to work at a construction site in mid-town Manhattan, Bressman greeted the victim and then fired a single shot at near point-blank range between Gargiulo’s eyes. Bressman was reported missing by his parents approximately one month after Gargiulo’s murder and has never been found.
“The investigation and prosecution of this case reflects the commitment of the government to seek justice for the victims of crimes no matter how long the road,” stated United States Attorney Lynch. “We can only hope that these verdicts bring some measure of closure to the families of the three victims.” Ms. Lynch extended her grateful appreciation to the Nassau County Police Department, the New York City Police Department, the New York County District Attorney’s Office, and the New York State Department of Corrections, Office of the Inspector General, for their assistance.
FBI Assistant Director in Charge Fedarcyk stated, “The guilty verdict returned today marks the culmination of a long-term quest for justice. In the long run, the defendant failed in his depraved scheme to conceal two murders by participating in a conspiracy to commit one more.”
When sentenced by United States District Judge Joanna Seybert, the defendant faces mandatory sentences of life imprisonment on each of the first two murder convictions, as well as the obstruction of justice murder conspiracy. Sentencing is scheduled for August 17, 2012.
The government’s case was prosecuted by Assistant United States Attorneys James M. Miskiewicz, Sean C. Flynn and Carrie N. Capwell.
Categories: Big Apple, DOWNSTATE, FBI REPORTS, Long Island Tags: conspiracy, defendant, murder, Obstruction
Economic Espionage How to Spot a Possible Insider Threat
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| American industry and private sector businesses are the choice target of foreign intelligence agencies, criminals, and industry spies. The above image on the cost of economic espionage to the U.S. can currently be seen on digital billboards—courtesy of Clear Channel and Adams Outdoor Advertising—in several regions of the country with a concentration of high-tech research and development companies, laboratories, major industries, and national defense contractors. If you suspect economic espionage, report it to the FBI at tips.fbi.gov. | |
05/11/12
This past February, five individuals and five companies were charged with economic espionage and theft of trade secrets for their roles in a long-running effort to obtain information for the benefit of companies controlled by the government of the People’s Republic of China.
 What Do They Want From Us?
According to the latest economic espionage report to Congress from the Office of the National Counterintelligence Executive, although foreign collectors will remain interested in all aspects of U.S. economic activity and technology, they’re probably most interested in the following areas: - Information and communications technology, which form the backbone of nearly every other technology; - Business information that pertains to supplies of scarce natural resources or that provides global actors an edge in negotiations with U.S. businesses or the U.S. government; - Military technologies, particularly marine systems, unmanned aerial vehicles, and other aerospace/aeronautic technologies; and - Civilian and dual-use technologies in fast-growing sectors like clean energy, health care/pharmaceuticals, and agricultural technology. |
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According to the superseding indictment, the PRC government was after information on chloride-route titanium dioxide (TiO2) production capabilities. TiO2 is a commercially valuable white pigment with numerous uses, including coloring paints, plastics, and paper. DuPont, a company based in Wilmington, Delaware, invented the chloride-route process for manufacturing TiO2 and invested heavily in research and development to improve the process over the years. In 2011, the company reported that its TiO2 trade secrets had been stolen.
Among the individuals charged in the case? Two long-time DuPont employees…one of whom pled guilty in fairly short order.
Foreign economic espionage against the U.S. is a significant and growing threat to our country’s economic health and security…and so is the threat from corporate insiders willing to carry it out.
And because we’re now in the digital age, insiders—who not so many years ago had to photocopy and smuggle mountains of documents out of their offices—can now share documents via e-mail or download them electronically on easy-to-hide portable devices.
Why do insiders do it? Lots of reasons, including greed or financial need, unhappiness at work, allegiance to another company or another country, vulnerability to blackmail, the promise of a better job, and/or drug or alcohol abuse.
How to stop them? Obviously, a strong organizational emphasis on personnel and computer security is key, and the FBI conducts outreach efforts with industry partners—like InfraGard—that offer a variety of security and counterintelligence training sessions, awareness seminars, and information.
| Successful Investigation of ‘Insiders’- In Detroit, a car company employee copied proprietary documents, including some on sensitive designs, to an external hard drive…shortly before reporting for a new job with a competing firm in China. Details
- In Indianapolis, an employee of an international agricultural business stole trade secrets on organic pesticides from his employer and shared them with individuals in China and Germany. Details In Boston, a technology company employee e-mailed an international consulate in that city and offered proprietary business information. He later provided pricing and contract data, customer lists, and names of other employees…to what turned out to be a federal undercover agent. Details All three subjects pled guilty. But in two of the three cases, the stolen secrets probably ended up in the hands of global businesses that will use them to attempt to gain an unfair competitive edge over the United States.
Podcasts Gotcha: Special agent discusses 2010 economic espionage case. FBI, This Week: The FBI is seeing an increase in cases involving spying from foreign intelligence agencies, criminals, and others who wish America harm. |
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You can help as well. In our experience, those who purloin trade secrets and other sensitive information from their own companies and sell them overseas exhibit certain behaviors that co-workers could have picked up on ahead of time, possibly preventing the information breaches in the first place. Many co-workers came forward only after the criminal was arrested. Had they reported those suspicions earlier, the company’s secrets may have been kept safe.
Here are some warning signs that MAY indicate that employees are spying and/or stealing secrets from their company:
- They work odd hours without authorization.
- Without need or authorization, they take proprietary or other information home in hard copy form and/or on thumb drives, computer disks, or e-mail.
- They unnecessarily copy material, especially if it’s proprietary or classified.
- They disregard company policies about installing personal software or hardware, accessing restricted websites, conducting unauthorized searches, or downloading confidential material.
- They take short trips to foreign countries for unexplained reasons.
- They engage in suspicious personal contacts with competitors, business partners, or other unauthorized individuals.
- They buy things they can’t afford.
- They are overwhelmed by life crises or career disappointments.
- They are concerned about being investigated, leaving traps to detect searches of their home or office or looking for listening devices or cameras.
If you suspect someone in your office may be committing economic espionage, report it to your corporate security officer and to your local FBI office, or submit a tip online at https://tips.fbi.gov/.
Resource:
- More on the FBI’s economic espionage efforts
Categories: FBI REPORTS, FEATURE Tags: fbi, information, security, stop
