Defense Contractor Employee Pleads Guilty To Selling Satellite Secrets To Undercover Agent Posing as Russian Spy

The U.S. Justice Department released the below information:

Today, Gregory Allen Justice, 49, of Culver City, California, pleaded guilty to federal charges of one count of attempting to commit economic espionage and one count of attempting to violate the Arms Export Control Act. The charges are related to Justice’s selling sensitive satellite information to a person he believed to be an agent of a Russian intelligence service. Justice was an engineer who worked for a cleared defense contractor. Specifically, he worked on military and commercial satellite programs.

The announcement was made by Acting Assistant Attorney General for National Security Dana J. Boente and Acting U.S. Attorney Sandra R. Brown for the Central District of California.

According to a plea agreement filed in this case, Justice stole proprietary trade secrets from his employer and provided them to a person he believed to be a Russian agent – but who in fact was an undercover FBI employee.

In addition to their proprietary nature, the documents contained technical data covered by the U.S. Munitions List and therefore were subject to controls restricting export from the U.S. under the International Traffic in Arms Regulations.

In exchange for providing these materials during a series of meeting between February and July of 2016, Justice sought and received thousands of dollars in cash payments. During one meeting, Justice and the undercover agent discussed developing a relationship like one depicted on the television show “The Americans,” and during their final meeting, Justice offered to take the undercover agent on a tour of his employer’s production facilities where Justice said all military spacecraft were built, according to the plea agreement.

Justice faces a maximum sentence of 35 years in prison. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Justice pleaded guilty before U.S. District Judge George Wu, who scheduled a sentencing hearing for September 18. Justice has been in custody since his arrest in July 2016.

This case was investigated by the FBI and the Air Force Office of Special Investigations.

Attorneys from the Terrorism and Export Crimes Section of the U.S. Attorney’s Office and the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case. 

Fat Leonard/U.S.Navy Bribery & Fraud Case: Two Former Executives of Foreign Defense Contractor Plead Guilty To Fraud In International Navy Corruption Scandal

The U.S. Justice Department released the below information:

Two former executives of a foreign defense contractor pleaded guilty in federal court today for participating in a conspiracy to submit bogus bids, claims and invoices to the U.S. Navy in an effort to steal tens of millions of dollars as part of a years-long corruption and fraud scheme.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Alana W. Robinson of the Southern District of California, Director Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS) and Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) made the announcement.

Neil Peterson, 39, and Linda Raja, 44, both Singaporean nationals, each pleaded guilty to one count of conspiracy to defraud the United States with respect to claims. Both defendants were arrested by authorities in Singapore at the request of the U.S. government and were extradited on Oct. 28, 2016. Sentencing for Peterson and Raja is set before the Honorable Janis L. Sammartino of the Southern District of California on Aug. 11, 2017.

Peterson and Raja worked for Singapore-based Glenn Defense Marine Asia (GDMA). Peterson served as the Vice President for Global Operations, and Raja served as General Manager for Singapore, Australia and the Pacific Isles. According to their pleas, Peterson and Raja conspired with Leonard Glenn Francis, the owner of GDMA, to defraud the U.S. Navy in order to financially benefit GDMA.

As part of their pleas, Peterson and Raja admitted that they and other members of GDMA’s management team created and submitted fraudulent bids. These bids were either entirely or partially fictitious. This ensured that GDMA’s quote would be selected by the U.S. Navy as the supposed lowest bidder. As a result, GDMA could control and inflate the prices charged to the U.S. Navy without engaging in any competitive bidding, as required.

Additionally, Peterson, Raja admitted that they and others knowingly created fictitious port authorities with fraudulently inflated tariff rates and approved the presentation of these fraudulent documents to the U.S. Navy. As a result, GDMA charged inflated prices to the U.S. Navy, rather than what GDMA actually paid to the port authorities. For example, in October 2012, Peterson and other members of GDMA’s core management team directed that false documents and inflated invoices be presented to the U.S. Navy for the U.S.S. Bonhomme Richard’s visit to Kota Kinabalu, Malaysia. The full amount billed to the U.S. Navy for this visit was $1,232,858, of which approximately $877,413 was fraudulently inflated.

Peterson and Raja admitted that the U.S. Navy suffered losses exceeding $34.8 million in total, as a result of the scheme.

Twenty U.S. Navy officials have been charged so far in the fraud and bribery investigation. Additionally, to date, five GDMA executives have been charged and pleaded guilty: (1) Alex Wisidagama, (2) Francis, (3) Edmund Aruffo, (4) Peterson and (5) Raja. Wisidagama was sentenced on March 18, 2016, to 63 months in prison and was ordered to pay $34.8 million in restitution to the U.S. Navy. Francis and Aruffo await sentencing.

A criminal complaint is merely an accusation, and the accused is presumed innocent unless proven guilty in a court of law.

The DCIS, NCIS and the Defense Contract Audit Agency are investigating this matter. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California are prosecuting the case. The Criminal Division’s Office of International Affairs provided substantial assistance in this matter.

Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.

Former Military Sealift Command Contractor Charged With Bribery And Fraud

The U.S. Justice Department released the below information:

A former contractor at the Military Sealift Command (MSC) was indicted for his role in a bribery and fraud conspiracy from approximately 1999 to 2014, in which he allegedly received almost $3 million dollars in bribes. Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and U.S. Attorney Dana J. Boente of the Eastern District of Virginia made the announcement.

Scott B. Miserendino Sr., 58, formerly of Stafford, Virginia, was charged in a five-count indictment with one count of conspiracy to commit bribery and honest services mail fraud, one count of bribery and three counts of honest services mail fraud. Miserendino’s arraignment will be scheduled at a later date.

According to allegations in the indictment, Miserendino was a government contractor at MSC, an entity of the U.S. Department of the Navy that provided support and specialized services to the Navy and other U.S. military forces. The indictment alleges that Miserendino and Joseph P. Allen, the owner of a government contracting company, conspired to use Miserendino’s position at MSC to enrich themselves through bribery.

Specifically, beginning in 1999, Miserendino allegedly used his position and influence at MSC to assist Allen and his company in obtaining and expanding a commission agreement with a telecommunications company, which sold maritime satellite services to MSC, according to the indictment. For more than a decade, Miserendino allegedly used his influence at MSC to take official acts to benefit the telecommunications company, which through the commission agreement, also benefited Allen and his company. Among his actions, the indictment alleges that Miserendino: advised officials at MSC and on their ships about using the telecommunications company’s services; authorized Allen and his employees to perform services on MSC ships and ensure that the equipment on those ships defaulted to the telecommunications company’s services rather than that of an alternative provider; and facilitated payment to the telecommunications company for the services it rendered to MSC. Unknown to MSC or the telecommunications company, throughout the scheme, Allen paid half of the commissions he received from the telecommunications company to Miserendino as bribes, according to allegations in the indictment.

For his role in the scheme, Allen, 56, of Panama City, Florida, pleaded guilty to one count of conspiracy to commit bribery on April 19, 2017, before U.S. Magistrate Judge Lawrence R. Leonard, in Norfolk, Virginia. Sentencing is scheduled for July 28, 2017, before U.S. District Judge Arenda L. Wright Allen, in Norfolk.

The charges and allegations contained in an indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The Norfolk offices of the FBI, the Defense Criminal Investigative Service and the Naval Criminal Investigative Service investigated the case. Trial Attorneys Sean F. Mulryne and Molly Gaston of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Stephen W. Haynie of the Eastern District of Virginia are prosecuting the case.

Two Terrorists Charged In Connection With the 2010 Murder Of A U.S. National In Israel

The U.S. Justice Department released the below information:

A criminal complaint was filed today in the U.S. District Court for the District of Columbia charging Ayad Fatafta and Kifah Ghanimat, both approximately 39 years of age and from areas controlled by the Palestinian Authority, in connection with the Dec. 18, 2010, murder of Kristine Luken, a U.S. citizen, in Israel.

Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Channing D. Phillips for the District of Columbia, and Assistant Director in Charge Andrew Vale of the FBI’s Washington Field Office made the announcement.

The complaint charges Fatafta and Ghanimat with murder of a U.S. National Outside the U.S., in violation of Title 18 United States Code sections 2332(a)(1) and 2. Arrest warrants were also issued today for both defendants.

According to the affidavit in support of the criminal complaint and arrest warrants, Fatafta and Ghanimat stabbed to death Ms. Luken, a 44-year old U.S. national who was hiking near an archaeological site while visiting Israel. She died at the scene. Another individual who was with Ms. Luken, a citizen of the United Kingdom and Israel, was seriously wounded in the attack but survived. The affidavit states that in 2012, Fatafta and Ghanimat each were convicted in an Israeli court of murder and other offenses in connection with the abduction and stabbing of both women. Fatafta was sentenced to one life term of incarceration plus 20 years, while Ghanimat was sentenced to two life terms of incarceration plus 60 years, for this and another crime.

The charges in criminal complaints are merely allegations, and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. The maximum penalty for a person convicted of murdering a U.S. national outside the U.S. is a lifetime term of incarceration or death. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, a defendant’s sentence will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

The investigation into this matter was conducted by the FBI’s Washington Field Office.  The Office of International Affairs of the Department of Justice’s Criminal Division provided significant assistance. The case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the National Security Division’s Counterterrorism Section.

Drug Trafficking Charges Filed Against Alleged Members Of Violent Groups In Philadelphia Public Housing Facility

The U.S. Attorney’s Office District of Eastern Pennsylvania released the below information:

PHILADELPHIA – Two indictments[1] were unsealed today charging 24 people in violent drug trafficking groups that had operated out of the Norman Blumberg Apartment Complex, a public housing facility in Philadelphia, announced Acting United States Attorney Louis D. Lappen. The first indictment (Criminal No. 17-71) charges Edward Stinson, 27, Emmett Perkins, 29, Rondell Holloway, 27, Jamillah Bellamy, 35, Debra Baylor, 28, Jerry Lawrence, 27, Germel Perkins, 24, Carl Stinson, 21, Imere Stinson, 22, Daquian Brown, 22, Reginald Copper, 55, Terrance Jackson, 47, and Stephen Dawkins, Sr., 52, all of Philadelphia, with conspiracy to distribute 280 grams or more of crack cocaine, distribution of crack cocaine within 1,000 feet of public housing (a drug-free zone), and related crimes in 86 separate counts. The second indictment (Criminal No. 17-72) charges Juan Jarmon, 30, Damon Edwards, 31, Donta Edwards, 28, Raheen Butler, 33, Michael Ferrell, 25, Dottie Good, 30, Taft Harris, Jr., 27, Steven Thompson, 34, Derek Fernandes, 58, Anthony Staggers, 34, and Gene Wilson, Jr., 40, all of Philadelphia, as well as Edward Stinson and Dawkins, with conspiracy to distribute 280 grams or more of crack cocaine, distribution of crack cocaine within 1,000 feet of public housing (a drug-free zone), and related crimes in 48 separate counts.

It is alleged that members of these drug trafficking groups sold crack cocaine 24 hours a day, 7 days a week, in and around the public housing facility, employing a large network of supervisors, shift sellers, and lookouts, including juveniles. Members of these groups allegedly supplied millions of dollars of crack cocaine in the alleys, hallways, and residences of this public housing facility and to the streets of this neighborhood. It is further alleged that members of these groups used and carried firearms, robbed rival drug dealers, and used intimidation, threats, and violence to further the interests of the groups. For example, the second indictment (Criminal No. 17-72) alleges that when one female resident told others that the group sold drugs, Jarmon threatened her and then physically assaulted her, allowing the group to continue selling crack cocaine.

“These indictments charge the defendants with running large-scale, violent drug trafficking groups in a public housing facility that provided housing to low-income residents and families,” said Lappen. “Individuals who engage in drug trafficking, particularly those who prey on the financial weakness and vulnerability of persons, such as drug users and addicts, juveniles, and those living in poverty, should know that they will be prosecuted and held accountable for their crimes. We will continue to commit the federal resources necessary to combat these drug trafficking groups and give the many good residents in these areas an opportunity to reclaim their neighborhoods.”

“For years, this organization has maintained a stranglehold on the Blumberg Apartments complex and surrounding neighborhoods,” said FBI Special Agent in Charge Michael Harpster. “They’ve used intimidation and violence to maintain control of that area. The FBI and our law enforcement partners are determined to bring drug traffickers to justice, for the crimes committed and incalculable damage done to our communities.”

“These defendants terrorized the residents of the Norman Blumberg Apartment complex with their drug trafficking activities alleged in these indictments as well as the violence associated with their illegal trade,” said Gary Tuggle, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “The DEA, working with its law enforcement partners such as the FBI, PPD, Philadelphia Housing Authority Police Department, and the Philadelphia District Attorney’s Office will remain vigilant in pursuing cases against drug trafficking organizations that seek to hold residents of public housing communities hostage with their criminal activities.”

According to the indictments, Edward Stinson was a leader of both drug trafficking groups and conducted drug trafficking activities from both inside and outside of prison. As charged in the first indictment (Criminal No. 17-71), Edward Stinson and Emmett Perkins controlled drug sales in various areas of the public housing facility from 2010 to 2015. As charged in the second indictment (Criminal No. 17-72), Jarmon, Damon Edwards, and Edward Stinson controlled drug sales in various areas of the public housing facility from 2012 to 2014. These leaders allegedly obtained bulk crack and cocaine, cooked and packaged crack cocaine into bundles, hired, fired, and supervised shift sellers and lookouts, levied taxes on members and customers, and provided protection from other drug trafficking groups. It is alleged that the shift sellers were the daily workers employed by the leaders to sell crack cocaine in the locations controlled by the groups, while the lookouts assisted other members of the groups by alerting them to the presence of law enforcement and directing customers to the shift sellers.

If convicted of all charges, each defendant faces a maximum possible sentence of life in prison and a mandatory minimum of 10 years in prison.

This case was investigated by the United States Attorney’s Office, Federal Bureau of Investigation, and Drug Enforcement Administration in collaboration with the Philadelphia Police Department, the Philadelphia District Attorney’s Office and the Philadelphia Housing Authority Police. It is being prosecuted by Assistant United States Attorneys Jerome Maiatico and Katayoun Copeland.

Naval Officer Pleads Guilty In Massive "Fat Leonard" U.S. Navy Fraud And Corruption Scandal

The U.S. Justice Department released the below information:

A retired Navy Captain pleaded guilty today for his role in a massive bribery and fraud scheme involving a foreign defense contractor for the U.S. Navy. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Acting Director Dermot O’Reilly of the Department of Defense’s Defense Criminal Investigative Service (DCIS), Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) and Director Anita Bales of Defense Contract Audit Agency (DCAA) made the announcement.

Michael Brooks, 57, of Fairfax Station, Virginia, pleaded guilty to one count of conspiracy to commit bribery before U.S. Magistrate Judge Karen Crawford of the Southern District of California.  In May 2016, Brooks was charged in connection with his  interactions with Leonard Glenn Francis, the former CEO of Glenn Defense Marine Asia (GDMA), a defense contracting firm based in Singapore.  Brooks is scheduled to be sentenced on Feb. 17, 2017.

According to admissions made in connection with the plea agreement, from June 2006 to July 2008, Brooks served as the U.S. Naval Attaché at the U.S. Embassy in Manila, Philippines.  In exchange for travel and entertainment expenses, hotel rooms and the services of prostitutes, Brooks used his office to benefit GDMA and Francis, including by securing quarterly diplomatic clearances for GDMA vessels, which allowed GDMA vessels to transit into and out of the Philippines under the diplomatic clearance of the U.S. Embassy.  Brooks also allowed Francis to ghostwrite official U.S. Navy documents and correspondence, which Brooks submitted as his own.  In addition, Brooks provided Francis with sensitive, internal U.S. Navy information, including billing information belonging to a GDMA competitor and U.S. Navy ship schedules.   

So far, a total of 16 individuals have been charged in connection with the GDMA corruption and fraud investigation.  Including Brooks, 11 of those are current or former U.S. Navy officials, including Admiral Robert Gilbeau, Lt. Commander Gentry Debord, Commander Bobby Pitts, Captain Daniel Dusek, Commander Michael Misiewicz, Lt. Commander Todd Malaki, Commander Jose Luis Sanchez, former NCIS Supervisory Special Agent John Beliveau II, Petty Officer First Class Daniel Layug and Paul Simpkins, a former DoD civilian employee who oversaw contracting in Singapore.

Gilbeau, Debord, Dusek, Misiewicz, Malaki, Beliveau, Sanchez, Layug and Simpkins have also pleaded guilty.  On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine; on March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; on April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy; and on Oct. 14, 2015, Beliveau was sentenced to serve 144 months in prison and ordered to pay $20 million in restitution to the Navy.  Gilbeau, Sanchez and Simpkins await sentencing.  Pitts was charged in May 2016 and his case remains pending.

Also charged are five GDMA executives: Francis, Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja.  Wisidagama has pleaded guilty and was sentenced on March 18, 2016, to 63 months in prison and $34.8 million in restitution to the Navy.  Francis and Aruffo have pleaded guilty and await sentencing; Peterson’s and Raja’s cases are pending.

The NCIS, DCIS and DCAA are conducting the ongoing investigation.  Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California are prosecuting the case. 

Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DoD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.

Philadelphia Congressman Chaka Fattah Sr. And Associates Convicted In Corruption Case

The U.S. Justice Department released the below information:

A federal jury sitting in Philadelphia found Congressman Chaka Fattah Sr., 59, guilty of all charges against him.  Fattah and three of his four associates were found guilty of taking part in a racketeering conspiracy involving several schemes that were intended to further their political and financial interests by misappropriating federal, charitable and campaign funds, among other schemes. 

Fattah, Robert Brand, 70, of Philadelphia; Karen Nicholas, 58, of Williamstown, New Jersey; and Herbert Vederman, 70, of Palm Beach, Florida, were found guilty of participating in a racketeering conspiracy.  Fattah was also found guilty of conspiracy to commit bribery, bribery, conspiracy to commit wire fraud, conspiracy to commit honest services fraud, mail fraud, money laundering conspiracy, money laundering, bank fraud, false statements to a financial institution, six counts of mail fraud and five counts of falsification of records.

Vederman was also convicted of conspiracy to commit bribery, bribery, bank fraud, making false statements to the Credit Union Mortgage Association, falsification of records and two counts of money laundering.

Brand was also convicted of conspiracy to commit wire fraud.

Nicholas was also convicted of conspiracy to commit wire fraud, two counts of wire fraud and two counts of falsification of records.

Bonnie Bowser, 60, of Philadelphia, was acquitted of racketeering conspiracy but convicted of conspiracy to commit bribery, bank fraud, making false statements to the Credit Union Mortgage Association, falsification of records and money laundering.

U.S. District Court Judge Harvey Bartle III of the Eastern District of Pennsylvania scheduled sentencing hearings for Oct. 4, 2016, for Fattah, Vederman and Brand; and Oct. 5, 2016, for Nicholas and Bowser.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania, Special Agent in Charge William F. Sweeney Jr. of the FBI’s Philadelphia Division and Special Agent in Charge Akeia Conner of the Internal Revenue Service-Criminal Investigation (IRS-CI) Philadelphia Field Office announced today’s verdict.

“Congressman Fattah corruptly abused his office for his own personal and political gain,” said Assistant Attorney General Caldwell.  “He took bribes, committed fraud and even stole money from his own campaigns.  In short, Congressman Fattah and his co-defendants deprived the people of eastern Pennsylvania of their right to the honest services of their elected representative.  Today’s convictions should send a message that the Justice Department will vigorously investigate and prosecute political corruption wherever it takes place, and uphold the principles of honesty and integrity that are the foundation of our government.”

“Chaka Fattah Sr. and his co-defendants betrayed the public trust and undermined our faith in government,” said U.S. Attorney Memeger.  “Today’s verdict makes clear that the citizens of the Eastern District of Pennsylvania expect their public officials to act with honesty and integrity, and to not sell their office for personal gain.  Hopefully, our elected officials in Philadelphia and elsewhere hear today’s message loud and clear.”

“The corruption demonstrated by Congressman Fattah and his co-defendants is yet another sad example of the type of behavior that corrodes citizens’ faith in their government,” said Special Agent in Charge Sweeney.  “The FBI is firmly committed to ensuring that public officials and their co-conspirators who choose to use their positions for personal gain rather than provide the honest services the community rightly expects will be investigated and brought to justice.  The community deserves nothing less.”

“Convictions, like the one returned against these five defendants today, send a loud and clear message that people who willfully defy the law will be fully investigated, prosecuted and subjected to the full punishment of the law for their actions,” said Special Agent in Charge Conner.

According to the evidence presented at trial, Fattah and certain associates borrowed $1 million from a wealthy supporter for his failed 2007 campaign for mayor of Philadelphia, and disguised the funds as a loan to a consulting company.  After he lost the election, Fattah returned to the donor $400,000 that the campaign had not used and arranged for Educational Advancement Alliance (EAA), a non-profit entity that Fattah founded and controlled, to repay the remaining $600,000 using charitable and federal grant funds that passed through two other companies, including one run by Brand.  To conceal the contribution and repayment scheme, the defendants and others created sham contracts and made false entries in accounting records, tax returns and campaign finance disclosure statements. 

Following his defeat, Fattah also sought to extinguish approximately $130,000 in campaign debt owed to a political consultant by agreeing to arrange for the award of federal grant funds to the consultant.  Fattah directed the consultant to apply for a $15 million grant (which ultimately he did not receive) on behalf of a then-non-existent non-profit entity.  In exchange for Fattah’s efforts to arrange the award, the consultant agreed to forgive the campaign debt. 

In addition, Fattah misappropriated funds from his mayoral and congressional campaigns to repay his son’s student loan debt.  To execute the scheme, Fattah arranged for his campaigns to make payments to a political consulting company, which funds the company then used to lessen Fattah’s son’s student loan debt.  Between 2007 and 2011, the consultant made 34 successful loan payments on behalf of Fattah’s son, totaling approximately $23,000. 

Beginning in 2008, Fattah communicated with individuals in the legislative and executive branches in an effort to secure for Vederman an ambassadorship or an appointment to the U.S. Trade Commission.  In exchange, Vederman provided money and other items of value to Fattah.  As part of this scheme, the defendants sought to conceal an $18,000 bribe payment from Vederman to Fattah by disguising it as a payment for a sham car sale.

Nicholas was found guilty of obtaining $50,000 in federal grant funds that she falsely claimed would be used by EAA to support a conference on higher education.  Instead, Nicholas used the grant funds to pay $20,000 to a political consultant, $10,000 to her attorney and write several checks to herself from EAA’s operating account.

The FBI and IRS-CI investigated the case.  The Justice Department’s Office of the Inspector General, the NASA Office of Inspector General and the Department of Commerce’s Office of Inspector General.  Assistant U.S. Attorney Paul L. Gray of the Eastern District of Pennsylvania and Trial Attorneys Eric L. Gibson and Jonathan Kravis of the Criminal Division’s Public Integrity Section are prosecuting the case.  

ISIL-Linked Hacker Pleads Guilty To Providing Material Support

The U.S. Justice Department released the below information:

Ardit Ferizi, aka Th3Dir3ctorY, 20, a citizen of Kosovo, pleaded guilty today before U.S. District Judge Leonie M. Brinkemaof the Eastern District of Virginia to providing material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, and accessing a protected computer without authorization and obtaining information.

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office and Special Agent in Charge Michelle S. Klimt of the FBI’s Jacksonville, Florida, Division made the announcement.

“Ferizi admitted to stealing the personally identifiable information of over 1,000 U.S. servicemembers and federal employees, and providing it to ISIL with the understanding that they would incite terrorist attacks against those individuals,” said Assistant Attorney General Carlin.  “The case against Ferizi is the first of its kind, representing the nexus of the terror and cyber threats.  The National Security Division will continue to use an all-tools approach to combat this ever-evolving blended threat, and we will identify, disrupt and prosecute any individual who provides material support to ISIL, no matter how they do so.”

“Ferizi endangered the lives of over 1,000 Americans,” said U.S. Attorney Boente.   “Cyber terrorism has become an increasingly prevalent and serious threat here in America, both to individuals and businesses. However, cyber terrorist are no different from other terrorists: No matter where they hide, we will track them down and seek to bring them to the United States to face justice.”

“Ardit Ferizi launched a cyberattack to gain access to the identities of U.S. military personnel, which he shared with members of ISIL in an attempt to incite terror attacks,” said Assistant Director in Charge Abbate.  “No matter how a person supports a terrorist group like ISIL, whether on the battlefield or in the cyber world, the FBI will identify, disrupt and bring them to justice for placing lives at risk.”

“This case demonstrates the importance of strong partnerships with law enforcement agencies worldwide,” said Special Agent in Charge Michelle S. Klimt.  “Cybercrime knows no boundaries and our efforts to dismantle these operations would be impossible without international collaboration.  The FBI will continue to vigorously investigate these crimes and work with our international partners to track down and arrest those who steal from our nation and citizens.”

Ferizi, who was detained by Malaysian authorities on a provisional arrest warrant on behalf of the United States, was charged by criminal complaint on Oct. 6, 2015.  The criminal complaint was unsealed on Oct. 15, 2015.  Ferizi subsequently waived extradition.

Ferizi admitted that on or about June 13, 2015, he gained administrator-level access to a server that maintained the website of a victim company located in the United States, which also contained databases with personally identifiable information (PII) belonging to tens of thousands of the victim company’s customers.  Between June and August 2015, Ferizi provided unlawfully-obtained PII to ISIL member Junaid Hussain, aka Abu Hussain al-Britani, he admitted.  According to the statement of facts, on Aug. 11, 2015, in the name of the Islamic State Hacking Division (ISHD), Hussain posted a tweet that contained a document with the PII of approximately 1,300 U.S. military and other personnel that Ferizi had taken from the victim company and provided to Hussain.  The document stated, in part, that “we are in your emails and computer systems, watching and recording your every move, we have your names and addresses, we are in your emails and social media accounts, we are extracting confidential data and passing on your personal information to the soldiers of the khilafah, who soon with the permission of Allah will strike at your necks in your own lands!”  Ferizi admitted that he provided the PII to ISIL with the understanding that ISIL would use the PII to “hit them hard.”

At sentencing on Sept. 16, 2016, Ferizi faces a maximum sentence of 20 years in prison for providing material support to ISIL and a maximum sentence of five years for accessing a protected computer without authorization and obtaining information.  The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  As part of the plea, Ferizi also agreed to a stipulated order of removal to Kosovo, his country of citizenship, upon completion of his criminal sentence. 

The FBI’s Washington Field Office and Jacksonville Division investigated the case.  The case is being prosecuted by Special Assistant U.S. Attorney Brandon Van Grack of the Eastern District of Virginia and Trial Attorney Gregory Gonzalez of the National Security Division’s (NSD) Counterterrorism Section, with assistance from Trial Attorney Vincent A. Citro of NSD’s Counterterrorism Section and Trial Attorney Matthew Walczewski of NSD’s Counterintelligence and Export Control Section.  The Malaysian authorities and the Justice Department’s Office of International Affairs also provided significant assistance.

Pennsylvania Man Charged With Additional ISIL-Related Offenses

The U.S. Justice Department released the below information:

Jalil Ibn Ameer Aziz, 19, a U.S. citizen and resident of Harrisburg, Pennsylvania, was charged in a superseding indictment with solicitation to commit a crime of violence and transmitting a communication containing a threat to injure.

The additional charges were announced by Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Peter J. Smith of the Middle District of Pennsylvania.

On Dec. 22, 2015, Aziz was charged in an indictment with conspiring and attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.  The following day, Aziz appeared before U.S. Chief Magistrate Judge Martin C. Carlson of the Middle District of Pennsylvania and entered a plea of not guilty.

According to the indictment, from July 2014 to Dec. 17, 2015, Aziz knowingly conspired to provide, provided and attempted to provide material support, including personnel and services, to ISIL.  The superseding indictment alleges that during the same time period, Aziz solicited, commanded, induced and endeavored to persuade others to kill and attempt to kill officers and employees of the United States.  The superseding indictment further alleges that he knowingly tweeted the names, addresses, photographs and military branches of approximately 100 U.S. servicemembers to followers and viewers of his Twitter account.  The communication also contained threats to injure the servicemembers, stating “kill them in their own lands, behead them in their own homes, stab them to death as they walk their street thinking that they are safe.”

Aziz was initially charged with conspiring and attempting to provide material support to ISIL in a complaint that was unsealed on Dec. 17, 2015, following his arrest.  According to the complaint, Aziz used at least 57 different Twitter accounts to advocate violence against the United States and its citizens, to disseminate ISIL propaganda and to espouse pro-ISIL views.  On at least three occasions, Aziz allegedly used his Twitter accounts and other electronic communication services to assist persons seeking to travel to and fight for ISIL.  In one instance, Aziz allegedly acted as an intermediary between a person in Turkey and several well-known members of ISIL.

According to the allegations in the complaint, Aziz passed location information, including maps and a telephone number, between these ISIL supporters.  A search of a backpack located in Aziz’s closet identified five loaded M4-style high-capacity magazines, a modified kitchen knife, a thumb drive, medication and a ski mask.

The charges contained in an indictment are only allegations, and the defendant is presumed to be innocent unless and until found guilty.  The maximum sentence for both conspiring and attempting to provide material support is 20 years in prison and a $250,000 fine.  The maximum sentence for the solicitation count is 20 years in prison, a $250,000 fine, a term of supervised release of five years and a $100 special assessment.  The maximum sentence for the transmitting a threat to injure count is five years’ in prison, a $250,000 fine, a term of supervised release of three years and a $100 special assessment.

If convicted, the defendant’s sentence will be determined by the court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, and the defendant’s role in the offense and the characteristics of the violation.  In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

The case is being investigated by the FBI’s Joint Terrorism Task Force (JTTF), which includes the Pentagon Force Protection Agency and the Pennsylvania State Police, with assistance from the Harrisburg Bureau of Police.  This case is being prosecuted by Trial Attorneys Robert Sander and Adam L. Small of the National Security Division’s Counterterrorism Section and Assistant U.S. Attorney Daryl F. Bloom of the Middle District of Pennsylvania.

Defense Contractor Armorsource LLC Agrees To Pay $3 Million To Settle False Claims Act Allegations

The U.S. Justice Department released the below information:

ArmorSource, LLC has agreed to pay $3 million to resolve False Claims Act allegations in connection with a contract to provide combat helmets to the U.S. Army, the Department of Justice announced today.  ArmorSource, a Delaware Limited Liability Company headquartered in Hebron, Ohio, designs, develops and manufactures ballistic helmets for military and law enforcement personnel worldwide.

In 2006, the Army contracted with ArmorSource to manufacture the Advanced Combat Helmet or ACH for use by soldiers in combat.  ACH helmets are made of Kevlar, an armored material, and are worn to provide ballistic protection for the soldier.  The United States alleged that from 2006 to 2009, ArmorSource delivered ACH helmets to the Army that were manufactured and tested using methods that did not conform to contract requirements and that failed to meet contract performance standards.  In May 2010, the Army began recalling the helmets after several lots failed ballistic safety tests.    

“The U.S. government relies on contractors to manufacture equipment that is critical to the safety of our men and women in uniform, and equipment that fails to meet performance standards not only cheats taxpayers, but can put lives at risk,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Today’s settlement demonstrates our commitment to ensuring our military receives products that meet its requirements and for which it has paid.”

“Today’s settlement in this important case is a reminder to all government contractors that they must deliver on their promises, especially when the safety and security of our troops is on the line,” said Special Agent in Charge Monte A. Cason of the Department of Justice Office of the Inspector General’s Dallas Field Office.

“Not conforming to contract requirements, failing to meet performance standards, and failing to pass ballistic safety tests for the helmets that protect the very heads and lives of our young men and women who serve this nation is incredibly unconscionable,” said Director Frank Robey of the U.S. Army Criminal Investigation Commands Major Procurement.  “Thanks to the efforts of our special agents and our other law enforcement partners, today’s settlement is possible.”

ArmorSource subcontracted the manufacturing to Federal Prison Industries, Inc., which operates under the trade name UNICOR.  This settlement resolves a lawsuit filed by whistleblowers Melessa Ponzio and Sharon Clubb, FPI employees, under the qui tam or whistleblower provisions of the False Claims Act.  The Act permits private individuals to sue on behalf of the government those who falsely claim federal funds and to receive a share of any recovery.  Ms. Ponzio and Ms. Clubb will receive $450,000.

This settlement was the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Eastern District of Texas. The investigation was conducted by the Department of Justice Office of the Inspector General, the Department of Defense Office of Inspector General’s Defense Criminal Investigative Service and the U.S. Army Criminal Investigation Command, Major Procurement Fraud Unit. 

The case is captioned U.S. ex rel. Ponzio, et al. v. Rabintex Industries Ltd., et al., Case No. 1:10-CV-588 (E.D. Tex.).  The claims resolved by the settlement are allegations only; there has been no determination of liability.  

American Citizen Charged With Conspiring To Murder U.S. Nationals And Conspiring To Use A Weapon Of Mass Destruction In Attack Against U.S. Military Base In Afghanistan

The U.S. Justice Department released the below information:

A superseding indictment was obtained today in federal court in the Eastern District of New York, adding charges against Muhanad Mahmoud Al Farekh, 30, an American citizen, for conspiracy to murder U.S. nationals, use of explosives, conspiracy to use a weapon of mass destruction and conspiracy to bomb a government facility.  These new charges arise out of Farekh’s participation in an attack on a U.S. military base in Afghanistan in January 2009.  As set forth in the superseding indictment and in other publicly available information, Farekh assisted in the preparation of a vehicle-borne improvised explosive device (VBIED) for use in the attack.  On or about Jan. 19, 2009, two co-conspirators drove vehicles to the U.S. military base in Afghanistan.  The first co-conspirator detonated the VBIED in his vehicle during the attack on the military base.  The second co-conspirator drove a truck containing a second VBIED to the military base, but did not detonate that device.  Farekh’s fingerprints were subsequently recovered from packing tape on the VBIED that did not detonate.

The superseding indictment also charges that, between December 2006 and September 2009, Farekh provided, attempted to provide and conspired to provide material support to al-Qaeda.  The superseding indictment includes the charges from the original indictment, unsealed on May 28, 2015, that Farekh provided, attempted to provide and conspired to provide material support to terrorists.  The defendant is scheduled to be arraigned on the new charges on Jan. 7, 2016, at 12 p.m. EST at the U.S. District Court for the Eastern District of New York, before U.S. District Judge Brian M. Cogan of the Eastern District of New York.

The superseding indictment was announced today by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York City Police Department (NYPD).

“Muhanad Mahmoud Al Farekh is charged with conspiring to kill Americans overseas for his role in a VBIED attack on a U.S. military installation in Afghanistan,” said Assistant Attorney General Carlin.  “Counterterrorism is the highest priority of the National Security Division, and we will continue to use all tools available to bring to justice those who seek to harm American servicemen and women who bravely risk their lives in defense of our nation.”

“Farekh, a citizen of the United States, allegedly turned his back on our country and tried to kill U.S. soldiers in the course of executing their sworn duty to keep us safe,” said U.S. Attorney Capers.  “Today’s charges demonstrate that the patriotism and service of the members of our armed forces will never be forgotten and that we will make every effort to prosecute those who would harm our country and our armed forces to the full extent of the law.”

“This indictment demonstrates justice has no bounds and the United States government will seek to investigate and prosecute crimes against Americans, no matter where they take place,” said Assistant Director in Charge Rodriguez.  “The FBI stands alongside our military and law enforcement partners to hold criminals accountable for their actions.  Special thanks to the FBI agents and NYPD detectives on our JTTF, who have conducted a thorough global investigation.”

“This superseding indictment demonstrates the NYPD and FBI's commitment to arrest those who commit acts of terror--from Arthur Avenue to Afghanistan,” said Commissioner Bratton.  “This thwarted plot is strikingly familiar ‎to the attack that killed Detective Lemm last week in Afghanistan. We will continue working on every corner of the globe to arrest and charge those who attack our men and women in uniform.”

As alleged in other publicly-filed documents, in approximately 2007, Farekh and two co-conspirators departed Canada for Pakistan with the intention of fighting against American forces.  They did not inform their families of their plan before departing, but called a friend in Canada upon arrival to let him know that he should not expect to hear from them again because they intended to become martyrs.  One of Farekh’s co-conspirators – Ferid Imam – subsequently provided weapons and other military-type training at an al-Qaeda training camp in Pakistan in approximately September 2008, according to public testimony in previous EDNY criminal trials.  Among Imam’s trainees were three individuals – Najibullah Zazi, Zarein Ahmedzay and Adis Medunjanin – who intended to return to the United States to conduct a suicide attack on the New York City subway system.  Zazi and Ahmedzay pleaded guilty pursuant to cooperation agreements and have yet to be sentenced; Medunjanin was convicted after trial and sentenced to life in prison.  Ferid Imam has also been indicted for his role in the plot.

If convicted, the defendant faces a mandatory minimum sentence of seven years in prison and a maximum sentence of life imprisonment.  Any potential sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal history, if any, the defendant’s role in the offense and the characteristics of the violation.

The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

Assistant Attorney General Carlin joined U.S. Attorney Capers in extending his grateful appreciation to the FBI’s Joint Terrorism Task Force.  The case is being prosecuted by Assistant U.S. Attorneys Zainab Ahmad, Richard M. Tucker and Douglas M. Pravda of the Eastern District of New York, with assistance provided by Trial Attorney Kiersten Korczynski of the National Security Division’s Counterterrorism Section.

International Fugitive Arrested For Role In Multi-Million Dollar Health Care Fraud Scheme

The U.S. Justice Department released the below information:

A Cuban national who had been wanted since 2013 on charges relating to a multi-million dollar health care fraud scheme was arrested on Friday, Oct. 9, 2015, when he arrived in Miami on a flight from Cuba.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney A. Lee Bentley III of the Middle District of Florida, Special Agent in Charge Paul Wysopal of the FBI’s Tampa Division and Special Agent in Charge Shimon Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.

Ubert Guillermo Rodriguez, aka Ubert Guillermo Rodriguez Sigler, 47, of Cuba, was charged by indictment, returned on July 31, 2013, with 14 counts of health care fraud.  The indictment was unsealed today following his initial appearance in the Southern District of Florida.

According to the indictment, Rodriguez was the president and owner of G.R. Services Equipment & Supplies Inc. (G.R. Services), a Largo, Florida, company that purported to provide durable medical equipment to Medicare beneficiaries.  The indictment alleges that, between May and July 2013, Rodriguez caused G.R. Services to submit to Medicare approximately $2,579,695 in false and fraudulent claims seeking reimbursement for durable medical equipment that was not prescribed by doctors and not provided to beneficiaries.  For example, according to the indictment, G.R. Services sought thousands of dollars in reimbursement for wound therapy electrical pumps and sterile collagen dressings purportedly provided in 2013 to Medicare beneficiaries who had died in 2010.

Federal law enforcement agents previously seized from the bank account for G.R. Services approximately $243,339 in proceeds from the health care fraud scheme.

The charges and allegations contained in an indictment are merely accusations.  The defendant is presumed innocent until and unless proven guilty.

This case is being investigated by HHS-OIG and the FBI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and U.S. Attorney’s Office of the Middle District of Florida.  This case is being prosecuted by Senior Trial Attorney Christopher J. Hunter of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Team, go to: www.stopmedicarefraud.gov. 

Defense Contractor L-3 Agrees To Pay $4.63 Million To Settle Overcharging Allegations

The U.S. Justice Department released the below information:

L-3 Communications Corporation, Vertex Aerospace LLC and L-3 Communications Integrated Systems LP (collectively L-3) have agreed to pay $4.63 million to resolve allegations that they inflated labor hours for time spent by independent contractors at the military’s Continental U.S. Replacement Centers (CRC) in Fort Benning, Georgia, and Fort Bliss, Texas, preparing to deploy to overseas posts to support U.S. military operations abroad.  The CRCs prepare individuals for deployment by providing orientation briefings, training, health screenings, payroll processing and addressing other administrative matters.   

“The Justice Department is committed to vigorously pursuing all those who knowingly submit false claims under government contracts,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Contractors that seek taxpayer funds must be scrupulous in their billing, and invoice only for work and amounts permitted by their contracts.” 

L-3 performed rotary aviation maintenance and support services for the U.S. Army in Afghanistan, Iraq, Egypt and Kuwait under contracts with the U.S. Air Force.  The United States alleges that from 2006 through November 2011, L-3 knowingly overcharged the government for time their independent contractors spent at the CRCs by billing for each individual not based on the actual time that individual spent at the CRC, but based instead on the earliest arrival or latest departure time of any other individual who also processed through the center that same day. 

“Contractors owe a duty to the taxpayers to accurately bill the United States for the actual work performed,” said U.S. Attorney John Horn of the Northern District of Georgia.  “This settlement demonstrates our commitment to hold contractors accountable for false billing and restore wrongfully taken funds to the military.”

“This collaborative investigative effort reflects the Defense Criminal Investigative Service’s commitment to protecting American taxpayers’ interests by ensuring integrity and accountability throughout the Defense contracting system,” said Special Agent in Charge John F. Khin of the Defense Criminal Investigative Service (DCIS) Southeast Field Office.

“Today’s settlement is a testament to the hard work of our special agents and also highlights the importance of the whistleblower provision of the False Claims Act,” said Director Frank Robey of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit.  “In this particular case, a concerned citizen wasn’t afraid to speak up, alerted the proper authorities, and helped save the U.S. government millions of dollars.”

The allegations settled today arose from a lawsuit filed by a whistleblower, Robert A. Martin, a former L-3 independent contractor, under the qui tam provisions of the False Claims Act.  Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.  Mr. Martin will receive $798,675 from the recovery announced today.

This case was handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Northern District of Georgia, with the assistance of DCIS, the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit and the Defense Contract Audit Agency.

The lawsuit is captioned United States ex rel. Martin v. L-3 Communications Corp., et al., 1:10-CV-1622-CAP (N.D. Ga.).  The claims resolved by the settlement are allegations only; there has been no determination of liability. 

Former Army Contracting Official Sentenced In Pentagon Bribery Scheme

The U.S. Justice Department released the below information:

ALEXANDRIA, VA—James Glenn Warner, 44, of Manassas, Virginia, was sentenced today to 42 months in prison, followed by three years of supervised release, for soliciting a $500,000 bribe from executives working for a private company on a contract that Warner managed out of the Pentagon. Warner was also ordered to pay $50,000 in forfeiture.

According to court documents, in October 2014, Warner made arrangements to meet with two executives of Company A, a Virginia-based company which held a five-year contract with the Department of the Army worth up to $120 million. At the meeting, which took place at a restaurant located in the Pentagon Centre in Arlington, Virginia, Warner instructed the two executives to communicate with him by typing messages into his cell phone, which was passed around the table.

Warner then passed a menu to the two executives. Inside the plastic covering for the center section of the menu was a piece of paper which outlined a bribe and extortion solicitation, suggesting that if Company A paid $500,000 it would secure a contract renewal from the Department of the Army and that alleged damaging information about Company A would be destroyed.

The Company A executives declined Warner’s solicitation, reported the conduct and began cooperating with law enforcement agents. Acting at the direction of law enforcement, a Company A executive then met with Warner on five subsequent occasions, paying Warner a total of $150,000 cash bribes out of the total $500,000 solicited by Warner. On Jan. 28, 2015, at the last of these meetings, Warner was arrested while in possession of $100,000 in bribe payments.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office; Robert E. Craig, Special Agent in Charge, Mid Atlantic Field Office, Defense Criminal Investigative Service; and Frank Robey, Director, Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command, made the announcement after the plea was accepted by U.S. District Judge Leonie M. Brinkema.

This case was investigated by the FBI’s Washington Field Office, the Defense Criminal Investigative Service, and the U.S. Army Criminal Investigative Command. Assistant U.S. Attorneys Kosta S. Stojilkovic and Mark D. Lytle are prosecuting the case.

Any person who believes they may have information regarding public corruption or fraud in the Northern Virginia area is encouraged to call the FBI’s Northern Virginia Public Corruption Hotline at 703-686-6225, or the Defense Criminal Investigative Service Hotline at 800-424-9098, or the U.S. Army Criminal Investigative Command Hotline at 844-276-9243.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-77.

Seventy-Two Linked to Broadway Crips Criminal Street Gang Charged in Federal Racketeering Indictment That Alleges Murders, Robberies, and Drug Sales in South Los Angeles

The U.S. Attorney's Office, Central District of California, released the below information yesterday:

LOS ANGELES—More than 1,300 FBI agents and LAPD officers this morning arrested 50 people associated with the Five Deuce Broadway Gangster Crips, a street gang that claims control of a South Los Angeles neighborhood and drug sales in an area just west of the Skid Row district of Los Angeles. Those taken into custody are among 72 defendants named in a 213-page racketeering indictment that outlines two decades of criminal conduct, including murders, robberies, extortion, witness intimidation, and narcotics trafficking.

The investigation into the Broadway Crips was called Operation Gremlin Riderz, because authorities focused on a particularly violent clique—or subset of the gang—called the Gremlin Riderz.

According to the 112-count indictment that was unsealed this morning, the Broadway Crips, which has an estimated 200 members, operated as a criminal enterprise that used violence and intimidation to control an area centering on the intersection of 52nd Street and South Broadway in South Los Angeles. The gang was formed in the 1970s to confront other African-American street gangs,
according to the indictment, which alleges that the enterprise has grown into a violent and criminal enterprise that conducts annual meetings and enforces a strict set of rules.

“Criminal street gangs make their livelihood by ruthlessly preying on the innocent people that live in the neighborhoods they claim as territory,” said United States Attorney André Birotte, Jr. “What makes the conduct of this gang particularly insidious is not only the violent crimes alleged but also the exploitation of Skid Row drug users who are already living in difficult circumstances.”

The defendants named in the federal indictment face various charges, including conspiracy to engage in racketeering activity in violation of the federal Racketeer Influenced and Corrupt Organizations Act; violent crimes in aid of racketeering; conspiracy to interfere with commerce by conducting a series of robberies that targeted bank customers; weapons offenses; and various drug trafficking activities involving crack cocaine, cocaine, methamphetamine, phencyclidine (PCP), Ecstasy, marijuana, and codeine.

The indictment specifically alleges that members of the gang:

• committed four murders, dating back to 1987, that include fatal shootings of unarmed men with no gang affiliations in 2003 and 2012;
• threatened a surviving victim of the 2003 shooting, which followed a concert at the House of Blues on the Sunset Strip;
• conspired to murder a fellow gang member who had provided a statement to law enforcement in relation to the 2012 murder incident in which a total of four people with no gang ties were shot, including a 10-year-old girl on a bicycle;
• fired shots at California Highway Patrol Officers who were pursuing gang members two years ago;
• engaged in a series of violent, “follow-home” robberies that targeted customers of South Bay banks; and
• participated in numerous narcotics sales near schools and playgrounds.

In addition to committing crimes in its claimed territory east of the Harbor Freeway, the indictment alleges that the Broadway Crips sell drugs near the Skid Row section of downtown Los Angeles.

“This area is desirable to the gang because it is close to Skid Row, where there is a large and vulnerable customer base of drug addicts and mentally ill persons,” according to the indictment.

Out of 72 defendants named in the federal indictment, 48 were arrested this morning. Two more people were arrested on local charges, meaning that a total of 50 were arrested today. Seventeen defendants named in the grand jury indictment were already in custody on unrelated charges.

Authorities are continuing to search for eight defendants, including one who faces local charges.
All 72 defendants named in the racketeering indictment face mandatory minimum sentences of 10 years in federal prison if they are convicted. Many of the defendants face potential sentences of life without parole.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.

The investigation into the Broadway Crips was conducted by agents and officers with the Federal Bureau of Investigation and the Los Angeles Police Department. Considerable assistance was provided during this investigation by the California Department of Corrections and Rehabilitation, the Torrance Police Department, the Buena Park Police Department, the El Segundo Police
Department, the San Bernardino Police Department, and the Los Angeles City Attorney’s Office.

Additionally, several agencies provided substantial assistance during this morning’s takedown, including the Los Angeles Sheriff’s Department, the Hawthorne Police Department, the Pasadena Police Department, the Inglewood Police Department, and the Los Angeles Fire Department.

Operation Gremlin Riderz is a result of a partnership between the FBI and the Los Angeles Police Department under the auspices of the FBI’s Task Force on Violent Crime in the city of Los Angeles.
This task force is one of dozens of such partnerships throughout the United States, known as Safe Streets Task Forces, funded for the purpose of assisting local police in identifying and addressing violent crime in America.

Philadelphia Police Commissioner Calls In Feds To Review Deadly Force By Philly Cops

Sam Wood at Philly.com offers a piece on the Philadelphia Police Commissioner request that the federal government review the shootings by Philadelphia cops.

With shootings by Philadelphia police rising to the highest level in over a decade, Commissioner Charles H. Ramsey has asked the Department of Justice to review the department's use of deadly force.

The request follows a Philly.com story published May 14 documenting a 50-percent increase in the number of police shootings in 2012.

Police in Philadelphia shot 52 suspects last year. Of those, 15 people died. In 2011, police wounded or killed 35 people.

"When you have as many as we've had, it gets people wondering if they were all justified," Ramsey said. "We've been looking at this issue since December. The Civil Rights Division of the DOJ knows and agrees this is a good course of action."

You can read the rest of the story via the below link:

http://www.philly.com/philly/news/Feds_to_review_use_of_lethal_force_by_Philly_police_.html

Algerian National Extradited From Thailand To Face Federal Cyber Crime Charges In Atlanta For SpyEye Virus

The U.S. Justice Department and the FBI released the below on May 3rd:

ATLANTA—Hamza Bendelladj, an Algerian national also known as Bx1, will be arraigned on federal cyber crime charges for his role in developing, marketing, distributing, and operating the malicious computer virus SpyEye.

“No violence or coercion was used to accomplish this scheme, just a computer and an Internet connection,” said United States Attorney Sally Quillian Yates. “Bendelladj’s alleged criminal reach extended across international borders, directly into victims’ homes. In a cyber netherworld, he allegedly commercialized the wholesale theft of financial and personal information through this virus which he sold to other cyber criminals. Cyber criminals, take note—we will find you. This arrest and extradition demonstrates our determination to bring you to justice.”

“Hamza Bendelladj has been extradited to the United States to face charges of controlling and selling a nefarious computer virus designed to pry into computers and extract personal financial information,” said Acting Assistant Attorney General Mythili Raman.

 “The indictment charges Bendelladj and his co-conspirators with operating servers designed to control the personal computers of unsuspecting individuals and aggressively marketing their virus to other international cybercriminals intent on stealing sensitive information. The extradition of Bendelladj to face charges in the United States demonstrates our steadfast determination to bring cyber criminals to justice, no matter where they operate.”

“The FBI has expanded its international partnerships to allow for such extraditions of criminals who know no borders,” stated Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office. “The federal indictment and extradition of Bendelladj should send a very clear message to those international cyber criminals who feel safe behind their computers in foreign lands that they are, in fact, within reach.”

Bendelladj, 24, was indicted by a federal grand jury in Atlanta, Georgia on December 20, 2011. The 23-count indictment charges him with one count of conspiring to commit wire and bank fraud, 10 counts of wire fraud, one count of conspiracy to commit computer fraud, and 11 counts of computer fraud. Bendelladj was apprehended at Suvarnabhumi Airport in Bangkok, Thailand, on January 5, 2013, while he was in transit from Malaysia to Egypt. The indictment was unsealed on May 1, 2013. Bendelladj was extradited from Thailand to the United States on May 2, 2013, and was arraigned in United States District Court before United States Magistrate Judge Janet F. King.

According to court documents, the SpyEye virus is malicious computer code, or malware, which is designed to automate the theft of confidential personal and financial information, such as online banking credentials, credit card information, usernames, passwords, PINs, and other personally identifying information. The SpyEye virus facilitates this theft of information by secretly infecting victims’ computers, enabling cyber criminals to remotely control the computers through command and control (C&C) servers. Once a computer is infected and under the cyber criminals’ control, a victim’s personal and financial information can be surreptitiously collected using techniques such as “web injects,” which allow cyber criminals to alter the display of webpages in the victim’s browser in order to trick them into divulging personal information related to their financial accounts. The financial data is then transmitted to the cyber criminals’ C&C servers, where criminals use it to steal money from the victims’ financial accounts.

The indictment alleges that from 2009 to 2011, Bendelladj and others developed, marketed, and sold various versions of the SpyEye virus and component parts on the Internet and allowed cyber criminals to customize their purchases to include tailor-made methods of obtaining victims’ personal and financial information. Bendelladj allegedly advertised the SpyEye virus on Internet forums devoted to cyber crime and other criminal activities. In addition, Bendelladj allegedly operated C&C servers, including a server located in the Northern District of Georgia, which controlled computers infected with the SpyEye virus. One of the files on Bendelladj’s C&C server in the Northern District of Georgia allegedly contained information from approximately 253 unique financial institutions.

If convicted, Bendelladj faces a maximum sentence of up to 30 years in prison for conspiracy to commit wire and bank fraud; up to 20 years for each wire fraud count; up to five years for conspiracy to commit computer fraud; up to five or 10 years for each count of computer fraud; and fines of up to $14 million.

Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges, and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.

This case is being investigated by special agents of the Federal Bureau of Investigation.
Special Assistant United States Attorney Nicholas Oldham and Assistant United States Attorney Scott Ferber of the Northern District of Georgia and Trial Attorney Carol Sipperly of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case. Valuable assistance was provided by the Criminal Division’s Office of International Affairs, which worked with its international counterparts to effect the extradition.