3 California Men Indicted for Credit Card Fraud Scheme

Three Los Angeles-area residents have been indicted by a federal grand jury following a probe by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the U.S. Secret Service that allegedly revealed the defendants orchestrated a far-reaching scheme to import and produce counterfeit debit and credit cards.

The defendants - Jose Rolando Renderos, 38, of Montebello; his son, Jose Ulloa, 18, of San Bernardino; and Milagro del Carmen Alvarez Hernandez, 27, of Montebello - are charged in a nine-count indictment handed down Tuesday, February 12, 2013, with a variety of violations, including access device fraud; possession of counterfeit access devices; and trafficking in counterfeit goods. All three defendants are currently in federal custody. They are expected to be arraigned Feb. 25.

According to the case indictment, defendants Renderos and Ulloa would obtain blank counterfeit credit cards from China. The phony cards bore the names and logos of such well-known financial institutions as American Express, Capitol One, U.S. Bank and Wells Fargo. The indictment alleges the father and son then embossed and activated the counterfeit cards using actual credit card numbers illegally obtained from point of sale devices.

"Credit card fraud scams like this result in major losses for the affected financial institutions and it's ultimately consumers who pay the price," said Claude Arnold, special agent in charge for HSI Los Angeles. "HSI will continue to work closely with its federal law enforcement partners to target criminal schemes that undermine the integrity of our financial system."

The defendants allegedly kept unembossed card stock in a storage unit in Monterey Park. When federal agents executed a search warrant at the location Feb. 6, they recovered a cache of more than 80,000 cards, along with an embossing machine and multiple credit card skimmers. So far, investigators have seized more than 90,000 counterfeit credit cards in connection with the case. Given the minimum credit limit of $500 per card, authorities conservatively estimate the value of the phony access devices at $45 million.

"Cooperation and partnerships have allowed us to focus our resources and respond quickly to uncover and prevent these types of crimes, whether they originate within or outside our borders," said U.S. Secret Service, Los Angeles Field Office Special Agent in Charge Joseph F. Beaty Jr.

The probe into the credit card scheme is still ongoing, but investigators believe the defendants may have been using the counterfeit cards to purchase high-end merchandise for re-sale. According to the indictment, Alvarez used one of the counterfeit cards in December to purchase more than $1,600 worth of merchandise at a children's boutique in Los Angeles.

The probe leading to the indictments of Tuesday, February 12, 2013, began two weeks ago after officers with U.S. Customs and Border Protection (CBP) intercepted four packages from China that were being shipped to San Bernardino, Calif. Inside, officers discovered more than 12,000 counterfeit credit cards.

The probe is being spearheaded by HSI with substantial assistance provided by the Los Angeles Field Office and Riverside Residence Office of the U.S. Secret Service.

Federal Authorities Shut Down Mexican Drug Tunnel

On Wednesday, February 13, 2013, federal authorities shut down a just-completed, cross-border drug smuggling tunnel and seized more than 1,200 pounds of marijuana following a multi-agency investigation by the Nogales Tunnel Task Force, with significant assistance from U.S. Customs and Border Protection Border Patrol in Nogales.

Officers with the Tunnel Task Force, which is led by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), were conducting surveillance in Nogales around noon and observed a van in a parking lot at the south end of Nelson Avenue, approximately 200 yards east of the Morley Pedestrian Gate. After noticing suspicious activity, the investigators approached the van, which was loaded with marijuana bundles. Two men near the van attempted to flee on foot, but were apprehended by task force officers not far from the tunnel and taken into custody.

Task force officers seized 22 bundles of marijuana from the van and 29 bundles of marijuana from inside the tunnel, weighing a total of 1,210 pounds.

The crude, hand-dug tunnel is approximately 68-feet-long and averages approximately two feet wide. The passageway does not contain any wooden shoring, ventilation or electrical equipment. The tunnel location closely parallels a March 2012, drug tunnel discovered in the same location. The tunnel entrance is located in the front yard of a private residence in Nogales, Mexico, and runs for approximately 26-feet underground before passing under the international boundary and running 42-feet on the U.S. side of the border. The tunnel exits on an embankment at the south end of Nelson Avenue.

Mexican authorities responded to the area and secured the tunnel entrance in Mexico. The tunnel will be guarded by Border Patrol agents until it is rendered unusable. The investigation remains ongoing, but investigators believe the tunnel had just been completed early Wednesday, February 13, 2013.

"Members of the Tunnel Task Force each bring unique capabilities from their respective agencies, which greatly enhances our ability to identify and interdict drug tunnels," said Eric Balliet, assistant special agent in charge of HSI Nogales. "In this case, the task force developed information that a tunnel was being excavated in the area. Through the diligence and hard work of all the participating agencies, we were able to shut this tunnel down just as it was completed, stopping its very first load of drugs."

In the last three years, federal authorities have discovered and shut down 26 completed cross-border smuggling tunnels in the Nogales area.

The Border Enforcement Security Task Force (BEST) is an HSI-led, multi-agency U.S. Department of Homeland Security (DHS) initiative to identify, disrupt and dismantle criminal organizations that seek to exploit vulnerabilities along U.S. borders. There are currently 34 BEST units deployed across the country, covering major seaports and southern and northern border regions. BEST units are composed of more than 750 law enforcement officers from more than 100 federal, state, local, tribal, and foreign law enforcement and intelligence resources.

BEST Nogales Tunnel Task Force is composed of full time members from HSI, U.S. Customs and Border Protection, Office of Border Patrol, Nogales Police Department, the Santa Cruz County High Intensity Drug Trafficking Area task force and the U.S. Drug Enforcement Administration. BEST Nogales Tunnel Task Force is responsible for identifying, investigating and eliminating illicit subterranean tunnels in one of the nation's busiest border areas with Mexico and combating the Transnational Criminal Organizations that finance, build and use them.

Texas Resident Guilty of Smuggling Marijuana

A Kingsville, Texas, man was found guilty Monday, February 4, 2013, of conspiracy to possess with the intent to distribute more than 100 kilograms of marijuana, announced U.S. Attorney Kenneth Magidson.

This conviction resulted from an investigation conducted by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), and the Kingsville Narcotics Task Force.

Michael "Mickey" Pena, 45, was found guilty by a federal jury for participating in a drug trafficking organization that transported large amounts of marijuana concealed in the hulls of altered shallow-bottom fishing boats. The marijuana was transported via the intracoastal waterway from Port Mansfield to Corpus Christi to circumvent Border Patrol checkpoints in Falfurrias and Serta, Texas. The federal jury returned their verdict in Corpus Christi after deliberating only 30 minutes following the trial that lasted less than a day.

"Drug smugglers seek the path of least resistance," said Brian M. Moskowitz, special agent in charge of HSI Houston. "The great collaborative work of our special agents and law enforcement partners in this case should give pause to trafficking organizations who seek to exploit our coastal waters to move illegal drugs into this country."

Court testimony revealed that in early 2012, drug trafficking organization members deconstructed a 21-foot Dargel Scout fishing boat over 20 days. The hull of the vessel was then loaded with more than 1,100 pounds of marijuana, and the deck of the boat was rebuilt. The boat was then launched in Port Mansfield and co-defendant Rogelio Mendoza drove it north. 

Marine interdiction agents with U.S. Customs and Border Protection (CBP) intercepted the vessel just south of Corpus Christi.

Subsequent investigation by HSI revealed that Pena arrived at marker 37 with an empty boat trailer shortly after the boat was intercepted and had registered the vessel in his name two weeks earlier. Certified state documents showed that the previous owner of both the boat and the empty trailer were members of the drug trafficking organization. Special agents also testified that they had conducted surveillance of organization members scouting boat ramps near marker 37 about six weeks before the seizure and then immediately drove to Pena's Kingsville residence.

Mendoza, 37, and five other members of the conspiracy had previously pleaded guilty before U.S. district judges in Corpus Christi and have been or are awaiting sentencing. Those drug trafficking members include: Alberto Lopez, aka Alberto Lopez-Reyna, 39, Lombardo Zarate, 49, Glen Dial, 56, Luz Ramirez, 25, and Hector Perez-Gonzalez, 39.

Senior U.S. District Judge Janis Graham Jack, who presided over the trial, has set sentencing for April 17, at which time Pena will face a minimum of five and up to 40 years in prison, as well as a possible $5 million fine, and a substantial money judgment. Pena will remain in custody pending sentencing.

Assistant U.S. Attorney Jeffrey D. Preston, Southern District of Texas, prosecuted the case. 

Texas Resident Extradited from Mexico for Defense Articles Smuggling

An Eagle Pass, Texas, man appeared Monday, February 4, 2013, in San Antonio federal court following his extradition from Mexico Friday, February 1, 2013, on federal charges of smuggling prohibited defense articles.

This extradition and criminal charges were announced by U.S. Attorney Robert Pitman, Western District of Texas, and Deputy Special Agent in Charge Monica Mapel, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) San Antonio.

A federal grand jury in Del Rio returned an indictment in June 2012 against Erik Alan Garza, 25, on six counts of aiding and abetting smuggling goods from the United States. According to the indictment, on various occasions between June 19, 2010 and Feb. 17, 2012, Garza and an accomplice, Rolando Tamayo, 32, also of Eagle Pass, illegally attempted to smuggle defense articles into Mexico from the United States.

These defense items included: night-vision monocular goggles, a thermal goggle, 400 sets of AR-15 front and rear flip-up tactical sights, about 5,000 high-capacity assault rifle magazines, and about 6,000 rounds of ammunition, including 100 rounds of .50-caliber ammunition.

The indictment also charges Tamayo, who remains a fugitive, with two counts of aiding and abetting the smuggling of goods from the United States. Each charge calls for a maximum sentence of 10 years in federal prison upon conviction.

"Gun and drug trafficking fuels violence by criminal organizations, and threatens the security of the people along our borders and throughout the country," said Mapel. "HSI special agents will continue to work jointly with our law enforcement partners to utilize our expertise in import and export enforcement to help keep our citizens safe and secure."

This case was investigated by special agents with HSI, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The Department of Justice Office of International Affairs, and the U.S. Marshals Service assisted with Garza's extradition.

An indictment is merely a charge, and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.

Assistant U.S. Attorney Michael Galdo, Western District of Texas, prosecuted the case. 

ICE and CBP's "Operation Red Zone" Seizes $13.6 Million Worth of Counterfeit NFL Merchandise

Speaking at a National Football League (NFL) news conference Thursday, January 31, 2013, U.S. Immigration and Customs Enforcement (ICE) Director John Morton and NFL Vice President for Legal Affairs Anastasia Danias announced the record-breaking results of a nationwide enforcement operation. The initiative, dubbed 'Operation Red Zone,' commenced Sept. 1, 2012, and targeted international shipments of counterfeit merchandise as it entered the United States. Authorities targeted warehouses, stores, flea markets, online vendors and street vendors selling counterfeit game-related sportswear and tickets throughout the country.

Fake jerseys, ball caps, T-shirts, jackets and other souvenirs are among the counterfeit merchandise and clothing confiscated by teams of special agents and officers from ICE's Homeland Security Investigations (HSI), U.S. Customs and Border Protection (CBP), U.S. Postal Inspection Service, and state and local police departments around the country - all in partnership with the NFL and other major sports leagues.

"The Super Bowl is one of the nation's most exciting events. Organized criminals are preying on that excitement, ripping consumers off with counterfeit merchandise and stealing from the American businesses who have worked hard to build a trusted brand," said Morton. "The sale of counterfeit jerseys and other sports items undermines the legitimate economy, takes jobs away from Americans and fuels crime overseas. No good comes of counterfeiting American products - whether NFL jerseys, airbags, or pharmaceuticals - and we must go after the criminals behind it."

'Hard goods' seizures

Special agents from HSI and officers with CBP operated in multiple teams with the NFL and law enforcement agencies throughout the nation to identify illegal shipments imported into the U.S., as well as stores and vendors selling counterfeit trademarked items. With only days left before Super Bowl XLVII, these teams have already seized more than 160,000 items of phony Super Bowl-related memorabilia along with other counterfeit items for a total take of more than $13.6 million. Due to the increased activity of counterfeiting operations around the world, this year the operation began Sept. 1, 2012, and will continue through Feb. 6, 2013.

"We're delighted to once again partner with federal law enforcement to help combat the influx of counterfeit merchandise," said Danias. "We are grateful for their tireless efforts to keep counterfeiters from illegally profiting off of the fans' enthusiasm for their team and the Super Bowl and from hurting the local businesses that play by the rules."

"In collaboration with the NFL and our (Department of Homeland Security) partners, we are providing critical support in the effort to protect consumers from counterfeit goods," said Robert C. Gomez, director of field operations in Atlanta and New Orleans for CBP. "The enforcement of iintellectual property rights is a national agency priority, and our CBP officers and import specialists are actively working to intercept these products. Counterfeit merchandise hurts our economy and, in many cases, presents safety issues. It is a potential source of funding illegal activities that present a threat to our national security."

Arrests

In September 2012, HSI Boston - assisted by HSI Providence - executed a search warrant at a residence in Warwick, R.I. HSI seized 226 boxes of counterfeit goods containing 4,016 sports jerseys with a manufacturer's suggested retail price (MSRP) of $724,340 and approximately $477,000 worth of additional counterfeit goods, as well as $130,057 in U.S. currency and checks. The owner of the home was subsequently arrested and is currently facing federal charges of trafficking in counterfeit goods and smuggling.

In November 2012, HSI Indianapolis special agents responded to a call from Indiana State Fairgrounds Security that an individual at the Indianapolis International Fest was selling items suspected to be counterfeit. Upon arriving at the festival, the special agents were able to verify the goods to be counterfeit and seized 1,319 counterfeit sports ball caps from the individual with an MSRP of $30,095 and approximately $7,600 worth of additional counterfeit goods. HSI arrested the man for illegally trafficking in counterfeit merchandise. 

Twenty-one other individuals were arrested in partnership with state and local law enforcement
agencies on state charges at locations around the country.

Website seizures

Furthering HSI's efforts to combat the international counterfeiting supply chain and piracy online, special agents seized a total of 313 websites identified to be selling counterfeit merchandise.

The website seizures during Operation Red Zone are the next iteration of Operation In Our Sites, a long term law enforcement initiative targeting counterfeiting and piracy on the Internet. The 313 websites have been seized by law enforcement, and are now in the custody of the federal government. Visitors to these websites will find a seizure banner that notifies them that the domain name has been seized by federal authorities and educates them that willful copyright infringement is a federal crime. Since the launch of Operation In Our Sites in June 2010, the ICE HSI-led Intellectual Property Rights (IPR) Center has seized a total of 2,061 domain names.

HSI has continued to work closely with payment processor PayPal to identify bank accounts being used to facilitate the transfer of money to these illegal operations. To date, PayPal and HSI have identified and seized more than $66,000 in assets in these accounts.

"PayPal and eBay Inc. pride ourselves in going above and beyond in the fight against the illegal online trafficking of counterfeit goods by partnering with law enforcement and rights owners globally, and as part of providing safe and trusted payments and commerce platforms," said Tod Cohen, eBay's vice president and deputy general counsel of government relations.

Operation Red Zone continues

Operation Red Zone will continue this weekend at the Super Bowl, throughout the New Orleans-area and around the nation.

The operation was spearheaded by the IPR Center in coordination with the Department of Justice's Computer Crime and Intellectual Property Section and five U.S. Attorneys' Offices, including the District of Maryland, District of New Jersey, District of Colorado, Eastern District of Louisiana and the District of Utah.

The IPR Center is one of the U.S. government's key weapons in the fight against criminal counterfeiting and piracy. Working in close coordination with the Department of Justice Task Force on Intellectual Property, the IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to intellectual property theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety and the U.S. economy.

New York Jewelry Wholesaler Pleads Guilty to Forging CBP Seal

A jewelry wholesaler has pleaded in federal court to forging the seal of a U.S. government federal agency. The guilty plea is the result of an investigation by U.S. Immigration and Customs Enforcement's (ICE) Office of Professional Responsibility (OPR) and the Internal Revenue Service, Criminal Investigation (IRS-CI).

Tejas Mehta, 36, was arrested Aug. 5, 2012, by OPR and IRS special agents for forging the seal of U.S. Customs and Border Protection (CBP). CBP is a component of the U.S. Department of Homeland Security.

Mehta, the owner of Saritijediam Inc., doing business as Design Trends, is a jeweler who conducts business in Manhattan's diamond district. He used the fraudulent CBP seal to allegedly steal hundreds of thousands of dollars from his business associates and other diamond and precious stones wholesalers.

According to court documents, Mehta received diamonds, jewelry and precious stones from other wholesalers under consignment. Once in his possession, he would sell the jewels. Instead of giving the proceeds to the owner of the merchandise as he agreed to do, he would falsely claim that he could not return or sell the merchandise because it had been seized by federal authorities.

Mehta defrauded three victims by accepting hundreds of thousands of dollars in precious stone diamonds.

Mehta then allegedly made excuses and did not return the stones or any funds from the sale of the diamonds. He told the victim's attorney that the stones had been seized by federal authorities. He used the fraudulent seal to falsely state that the diamonds, precious stones and jewelry – which were consigned to him – had been seized by CBP.

This case is being prosecuted by the U.S Attorney's Office, Southern District of New York.

HSI Seizes $100,000 of Counterfeit Goods

U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) seized more than $100,000 of counterfeit cosmetics, designer handbags and electronics after executing a search warrant at a Conway home Jan. 16, 2013. The U.S. Postal Inspection Service and the Conway Police Department assisted HSI with the investigation leading to the seizure.

"Counterfeit products cost law-abiding Americans their jobs and allow criminals to fund illegal activities with black market sales," said Special Agent in Charge of HSI New Orleans Raymond R. Parmer Jr. "Counterfeit cosmetics are a particular danger to the public because of the potential to ingest harmful substances that might be present in an unregulated product."

 Parmer oversees a five-state area of responsibility including Arkansas, Alabama, Louisiana, Mississippi and Tennessee.

HSI Little Rock began its investigation after receiving information from the U.S. Postal Inspection Service regarding multiple suspicious packages addressed to Vanchello Craig, 33, originating from overseas. On Oct. 22, HSI Little Rock subsequently found two parcels containing counterfeit items in Craig's home during a consensual search of the premises.

On Jan. 14, HSI Little Rock learned Craig was the recipient of another suspicious package. HSI conducted an inspection of the parcel pursuant to its border search authority and discovered additional counterfeit items destined for Craig.

Seattle Company Indicted for Conspiracy to Traffic Counterfeit Goods

A Lynnwood electronics company, a China-based manufacturer and four individuals were indicted by a federal grand jury Thursday, January 17, 2013, for conspiracy to traffic in counterfeit goods, following a probe by the Seattle-Tacoma Border Enforcement Security Task Force (BEST), including U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

ConnectZone.com, LLC, its owner Daniel Oberholtzer, 50, of Lynwood, sales manager Warren Lance Wilder, 46, of Auburn, and production manager Edward Vales, 31, of Seattle, are alleged to have sold counterfeit network products bearing the trademark of Cisco Systems through their online store. They falsely advertised the knockoffs as genuine and offered them for sale at a much lower price than genuine Cisco products. Through the investigation, authorities learned the U.S.-based conspirators were responsible for arranging the manufacture of the counterfeit goods through Mao Mang, aka "Bob Mao," a representative for Shenzhen Xiewei Electronic, LTD of Shanghai, China. Both Mang and the company are also named in the indictment.

In addition to HSI, the other members of BEST that played a prominent role in the case included the Seattle Police Department, the Port of Seattle Police Department, with additional assistance provided by U.S. Customs and Border Protection Office of Field Operations (CBP OFO).

"Counterfeiting high dollar goods can be very lucrative for enterprising criminals," said Brad Bench, special agent in charge of HSI Seattle. "Their illicit activities ultimately come at the expense of trademark owners and consumers. They don't contribute to research and development, and the knockoffs they sell generally don't match the quality and safety of genuine items."

The indictment alleges that Oberholtzer, Wilder and Vales would advise Mao and Xiewei Electronic, and other Chinese firms on how to manufacture products to look like genuine Cisco trademarked goods. In an attempt to evade U.S. customs officials, merchandise would be labeled "samples" when shipped to the United States. The indictment describes the various emails sent between the conspirators as they ran their scheme, including discussions on how to reverse-engineer products. In addition to the conspiracy count, the indictment also charges two counts of mail fraud and four counts of trafficking in counterfeit goods. Prosecutors believe Oberholtzer has been distributing counterfeit equipment from China since at least 1997.

"Protecting the intellectual property of American companies is critical to job growth and economic recovery – especially in our high tech industries," said U.S. Attorney Durkan. "I commend the dedicated investigators who uncovered this scheme."

Conspiracy to traffic in counterfeit goods is punishable by up to 10 years in prison and a $2 million fine. Mail fraud is punishable by up to 20 years in prison and trafficking in counterfeit goods is punishable by up to 10 years in prison. The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

BEST Seattle is comprised of full time members from HSI; CBP OFO; the U.S. Secret Service; the Port of Seattle Police Department; the U.S. Coast Guard Investigative Service; and the FBI. BEST Seattle investigates smuggling and related crimes and combats criminal organizations seeking to exploit vulnerabilities at the Seattle and Tacoma seaports and adjacent waterways. 

The case is being prosecuted by the U.S. Attorney's Office for the Western District of Washington.

British National Sentenced for Attempting to Export Military Equipment to Iran

A British businessman was sentenced Wednesday, January 9, 2013, to 33 months in federal prison for attempting to export to Iran a special component of the Hawk Air Defense Missile. The case was investigated by U.S Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

British businessman Christopher Tappin, 66, of Orpington, Kent, was sentenced Jan. 9 to two years and nine months in federal prison.

In addition to the prison term, the U.S. district judge ordered Tappin to pay an $11,357.14 fine and to be placed under supervised release for three years after he completes his prison sentence.

On Nov. 1, Tappin appeared in federal court to reverse his original not-guilty plea, and he admitted culpability in the scheme. He pleaded guilty to aiding and abetting the illegal export of defense articles, waiving his right to appeal his conviction or challenge the sentence handed down.

By pleading guilty, Tappin admitted that from December 2005 to January 2007 he knowingly aided and abetted others, including his Cyprus-based business associate Robert Frederick Gibson and Portland, Ore., resident Robert Caldwell, in an attempt to illegally export zinc/silver oxide reserve batteries to Iran. These batteries are a special component of the Hawk Air Defense Missile; they are designated as a defense article on the U.S. Munitions List. They require a license or written authorization from the U.S. State Department to be exported.

"Protecting our national security is one of HSI's highest priorities," said Dennis A. Ulrich, acting special agent in charge of HSI El Paso. "This sentence is the result of more than six years of tenacious investigative work by HSI special agents, who are relentless in their efforts to prevent U.S. military products from being illegally exported and falling into the wrong hands."

According to the factual basis filed in this case, which Tappin admitted was truthful and accurate, Tappin knowingly violated U.S. law by obtaining the specialized batteries under false pretenses.

Tappin engaged in phone and email communications with an undercover federal agent to discuss payment and delivery arrangements. In October 2006, Tappin wired about $25,000 from a London financial institution to a U.S. bank account as payment for five of the specialized batteries. Using false shipping documentation and without an export license, Tappin arranged to transfer the batteries to the United Kingdom through his specifically designated freight forwarders, which violates export control regulations.

During the investigation, Tappin agreed to reimburse the undercover agent for $5,000 in fines purportedly being assessed against him by U.S. Customs and Border Protection after it seized the shipment of batteries. Tappin, admittedly, also caused Caldwell to travel to San Antonio in January 2007 to take delivery of the batteries, ensure that they were shipped to him, and to pay the undercover agent $5,000 for the current fines. Tappin, in court, acknowledged that his anticipated profit from the transaction was $11,357.14.

In 2007, Gibson and Caldwell were sentenced to 24 months and 20 months, respectively, in federal prison for their roles in the scheme.

Assistant U.S. Attorney Greg McDonald, Western District of Texas, prosecuted this case.

Stolen Italian Cultural Property to be Returned to Italy

A rare Etruscan black-figure kalpis, which has been traced back to 510 B.C., will be returned to the Italian government following a transfer ceremony Tuesday, January 8, 2013, at the Toledo Museum of Art.

A June 2012 agreement between the United States and the Toledo Museum of Art followed by the transfer ceremony of Tuesday, January 8, 2013, is the culmination of an extensive investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) to restore the true provenance of the kalpis.

The kalpis, a ceramic vessel used in ancient times for holding water, depicts a mythological scene of pirates being transformed into dolphins by Dionysos. It was smuggled out of Italy after an illegal excavation prior to 1981. It was then sold in 1982 to the Toledo Museum of Art by art dealers Gianfranco and Ursula Becchina, who had earlier purchased it from convicted art smuggler Giacomo Medici. The Becchinas misrepresented the true provenance of the vase to the museum by providing falsified documentation.

Following a January 2010 lead from HSI Rome, Cleveland-based HSI special agents launched an investigation into the true provenance of the artifact. Working closely with law enforcement officials in Italy, HSI special agents were able to definitively establish that the documentation provided to the Toledo Museum of Art was falsified and part of a larger scheme by the Becchinas to sell illegitimately obtained cultural property. Gianfranco Becchina was convicted in February 2011 of illicitly dealing in antiquities by a court in Rome. That conviction was appealed by Becchina and remains in the Italian court system.

According to court documents, the kalpis has been valued at more than $665,000.
"Art and antiquities are given a monetary value in the marketplaces in which they are traded," said William Hayes, acting special agent in charge of HSI Detroit. "But the cultural and symbolic worth of these objects far surpasses any dollar value to the people and nations of the origin of these works. We are pleased today that this ancient vessel will be returned to the people of Italy. And other governments around the world can be assured that HSI remains a committed partner in the effort to return stolen and looted priceless cultural objects to their rightful owners."

Ambassador of Italy to the United States Claudio Bisogniero said, "Collaboration with U.S. authorities in this sector is one of our top priorities, not only because of the intrinsic value of the properties as in the case of the Etruscan black-figure kalpis, but also because these returns are a tangible way to restrain international trafficking in works of art. We are very pleased by this result, especially since it coincides with the start of our celebrations for 2013-Year of Italian culture in the United States."

"It has been said that, 'Principles only matter if you stick to them even when it is inconvenient,'" said U.S. Attorney for the Northern District of Ohio Steven M. Dettelbach. "And so, I want every museum, every business and every school child here in Toledo to see and understand that today is about living up to a very basic principle. When you find out that something is not rightfully yours – no matter how special, no matter how beautiful or no matter how costly that thing might be – you give it back."

"Today we transfer to law enforcement authorities a celebrated Etruscan kalpis because we have uncovered evidence that it has inadequate provenance," said Toledo Museum of Art Director Brian Kennedy. "This is the first step toward this object being repatriated to Italy, where we understand it will be placed on public view in Rome."

HSI plays a leading role in criminal investigations that involve the illegal importation and distribution of cultural property, including the illicit trafficking of cultural property, especially objects that have been reported lost or stolen. The HSI Office of International Affairs, through its 73 offices in 47 countries, works closely with foreign governments to conduct joint investigations, when possible.

HSI's specially trained investigators, assigned to both domestic and international offices, partner with governments, agencies and experts to protect cultural antiquities. They also provide cultural property investigative training to law enforcement partners for crimes involving stolen property and art, and how to best enforce the law to recover these items when they emerge in the marketplace.

Since 2007, more than 6,600 artifacts have been returned to 24 countries, including paintings from France, Germany, Poland and Austria, 15th to 18th century manuscripts from Italy and Peru, as well as cultural artifacts from China, Cambodia and Iraq.

Baltimore Man Pleads Guilty to Trafficking Counterfeit Goods

Liang Lin, 34, a resident of Delaware, who owned and operated two shops on the boardwalk in Ocean City, Md., pleaded guilty Thursday, January 3, 2013, to trafficking in counterfeit goods.

The guilty plea follows an investigation led by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

"Entrepreneurs are free to sell cheap clothing, shoes, handbags, perfume and other consumer items," said U.S. Attorney Rod J. Rosenstein. "But they cannot use someone else's trademark."

"Counterfeit goods traffickers like Lin are looking to gain profit but in reality are committing a crime that results in American jobs lost, American business profits stolen and American consumers receiving substandard products," said Special Agent in Charge of HSI Baltimore William Winter. "Consumers now pay more for legitimate products to make up for the money being lost to counterfeits. HSI enforcement operations into intellectual property theft protect not only the companies who have copyrighted products, but the consumers who believe they are legitimately buying those copyrighted products."

According to his plea agreement, Lin owned and operated two stores in Ocean City: Hot Topik at 401 South Atlantic Avenue and Everything $5.99 and Up at 806 South Atlantic Avenue #8, as well as operating stores in Delaware. Lin admitted that from at least June 2010 through at least September 2011, he sold and attempted to sell counterfeit merchandise, including purses, handbags, shirts, jewelry, perfume, hats and shoes that bore trademarks such as Chanel, Coach, Gucci, Louis Vuitton, Michael Kors, Monster, Nike, Versace and Vera Wang.

During the summer of 2011, undercover investigators observed large quantities of counterfeit merchandise in Lin's stores in Ocean City, and several undercover buys of counterfeit merchandise were made, including the purchase of a counterfeit Coach purse.

On the morning of Aug. 17, 2011, HSI special agents executed federal search warrants at both of Lin's stores in Ocean City and approximately 8,000 items of counterfeit merchandise were seized. Two days after the execution of the federal search warrant, an investigator again saw counterfeit merchandise for sale at Everything $5.99 and Up, including merchandise of the same type seized during the search. On Sept. 1, 2011, an investigator made an undercover buy of a counterfeit Coach purse at Everything $5.99 and Up.

On Jan. 30, 2012, Lin was stopped re-entering the United States after a one-day trip to Canada and declared that the only thing he purchased in Canada was liquor from a duty free shop. A border search of his vehicle recovered approximately 869 pieces of counterfeit jewelry bearing trademarks such as Chanel.
It is estimated by the manufacturers whose goods were counterfeited that the lost retail value (or the retail value of the infringed items) of the goods seized and sold is estimated to be between $200,000 and $400,000. The estimated retail value of the counterfeit merchandise, based on what Lin was selling the infringing counterfeit items for is $153,585.

Lin faces a maximum sentence of 10 years in prison and a fine of $2 million at his sentencing March 27 at 9:30 a.m.

This law enforcement action is an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation's economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders.

The investigation was conducted by HSI Baltimore and Ocean City, the Maryland State Police and Ocean City Police Department. Blazer Investigations and Stumar Investigations assisted in the investigation.

The case was prosecuted by Assistant U.S. Attorney Justin Herring.

Guilty Plea from Florida Man Who Smuggled Dinosaur Fossils

A Florida man pleaded guilty Dec. 27 to engaging in a scheme to illegally import into the United States numerous dinosaur fossils that had been smuggled out of their native country. This guilty plea resulted from an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

As part of his plea agreement, Eric Prokopi, 38, agreed to the forfeiture of a nearly complete Tyrannosaurus bataar skeleton (the First bataar), which was looted from Mongolia and sold at auction in Manhattan for over $1 million. The First bataar was the subject of a separate pending civil forfeiture action. Prokopi also agreed to forfeit a second nearly complete Tyrannosaurus bataar skeleton, a Saurolophus skeleton, and an Oviraptor skeleton, all of which he possessed and were recently recovered by the government. In addition, Prokopi will forfeit his interest in a third Tyrannosaurus bataar skeleton believed to be located in Great Britain. All of the fossils originated in Mongolia. The skeleton of a Chinese flying dinosaur that Prokopi illegally imported has already been administratively forfeited.

According to court documents, and statements made in Manhattan federal court, Prokopi owned and ran a business out of his Florida home and is a self-described commercial paleontologist. He bought and sold whole and partial fossilized dinosaur skeletons. Between 2010 and 2012, he acquired dinosaur fossils from foreign countries and unlawfully transported them to the United States, misrepresenting the contents of shipments on customs forms. Many of the fossils were unlawfully taken from Mongolia in violation of Mongolian laws declaring dinosaur fossils to be the property of the Government of Mongolia, and criminalizing their export from the country.

Aware that the dinosaur fossils had been removed from Mongolia illegally, Prokopi worked with others to bring these dinosaur fossils into the United States, using false or misleading statements on customs forms concerning their identity, origin and value. He then sold or attempted to sell these fossils.

Among the fossils unlawfully procured, transported or sold in this fashion were the first bataar and an additional nearly complete Tyrannosaurus bataar skeleton (the second bataar), two Saurolophus skeletons, one of which was sold to the I.M. Chait Gallery in California for $75,000, and two Oviraptor skeletons. The Saurolophus skeleton sold to the auction house was seized in September 2012. The remaining Saurolophus skeleton and the Oviraptor skeletons were recovered from Prokopi during the investigation.

Tyrannosaurus bataar was a carnivorous dinosaur that lived during the late Cretaceous period, about 70 million years ago. The Saurolophus, which also lived during the late Cretaceous period, was a duckbilled, plant-eating dinosaur. The Oviraptor, of the same time period, featured a parrot-like skull.

Earlier, in 2010, Prokopi illegally imported into the United States the fossilized remains of a small, flying dinosaur from China, by directing another individual to make false claims on importation paperwork.

Prokopi pleaded guilty to one count of conspiracy with respect to the Chinese flying dinosaur, one count of entry of goods by means of false statements with respect to the Mongolian dinosaurs, and one count of interstate and foreign transportation of goods converted and taken by fraud. He faces a maximum sentence of five years in prison on the conspiracy count, a maximum of two years on the entry of goods by means of false statements count, and a maximum of 10 years on the interstate transportation of goods converted and taken by fraud.

In addition, Prokopi has agreed to forfeit the proceeds of his offense, including but not limited to, the first bataar, the second bataar, any and all interest in the Tyrannosaurus skeleton believed to be in Great Britain, the Saurolophus and Oviraptor skeletons that had been in Prokopi's custody, and any and all other fossil parts of Mongolian origin that Prokopi brought into the country between 2010 and 2012. For each of the three counts in the information, Prokopi faces a maximum fine of $250,000 or twice the gross gain or loss from the offense. Prokopi is scheduled to be sentenced by U.S. District Judge Alvin K. Hellerstein April 25, 2013.

HSI plays a leading role in criminal investigations that involve the illegal importation and distribution of cultural property, including the illicit trafficking of cultural property, especially objects that have been reported lost or stolen. The HSI Office of International Affairs, through its 73 attaché offices in 47 countries, works closely with foreign governments to conduct joint investigations, when possible.

HSI's specially trained investigators, assigned to both domestic and international offices, partner with governments, agencies and experts to protect cultural antiquities. They also provide cultural property investigative training to law enforcement partners for crimes involving stolen property and art, and how to best enforce the law to recover these items when they emerge in the marketplace.

Since 2007, more than 6,600 artifacts have been returned to 24 countries, including paintings from France, Germany, Poland and Austria, 15th to 18th century manuscript from Italy and Peru, as well as cultural artifacts from China, Cambodia and Iraq. 

Guatemalan ICE Detainee Passes Away in Phoenix

A Guatemalan man in the custody of U.S. Immigration and Customs Enforcement (ICE) passed away early Sunday, December 23, 2012, at St. Joseph's Hospital, where he had been undergoing treatment for diabetes complications.

Manuel Cota-Domingo, 34, a detainee at the Eloy Detention Center, was rushed to Florence Anthem Hospital in Florence Thursday, December 20, 2012, after complaining of chest pains and labored breathing. Physicians at the hospital determined Cota-Domingo was suffering from diabetic ketoacidosis, an emergency condition caused by untreated hyperglycemia. 

On Saturday, December 22, 2012, Cota-Domingo was transferred by air ambulance to St. Joseph's Hospital in Phoenix, where he was placed in the intensive care unit. Hospital staff notified ICE officials that Cota-Domingo passed away Sunday, December 23, 2012, just before 1 a.m.

Cota-Domingo, who had recently crossed the border unlawfully, originally came into ICE custody after he was encountered Dec. 8 by U.S. Border Patrol near Sasabe. He had been detained at the Eloy Detention Center since Dec. 12, pending his removal to Guatemala, which was scheduled for Dec. 26. While at Eloy, Cota-Domingo received two routine medical screenings, but he did not disclose his health condition to medical staff until he became ill.

ICE advised the Guatemalan consulate that Cota-Domingo had been admitted to the hospital and provided consular officials with regular updates regarding his condition. Consular officials notified Cota-Domingo's next of kin in Guatemala of his death.

Cota-Domingo is the first detainee to pass away in ICE custody in fiscal year 2013.

HSI Special Agents Train Iraqi Police to Combat Illegal Goods Trafficking

The U.S. Embassy in Baghdad hosted a delegation of nine American subject matter experts in the fields of federal law enforcement, justice and cultural heritage protection including U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) special agents, from Dec. 17 to 20 at a training conference on "Countering Antiquities Trafficking." The four-day training, sponsored by HSI in collaboration with the U.S. Department of State, was provided to the Iraqi Ministry of Interior police investigators representing 15 provinces on methods of identifying Iraqi cultural heritage sites, and preventing and investigating looting and illegal trafficking within and beyond Iraq's borders.

Assistant Chief of Mission Ambassador James Knight opened the conference stating that, "Perhaps the most important reason for organizing a meeting such as this is Iraq's unparalleled cultural heritage. Preserving that heritage is to preserve some of mankind's greatest treasures. Not only are they a precious window into the past, they are tangible reminders to future generations of Iraqis of a glorious history."

"The countering antiquities trafficking conference in Baghdad marked a new beginning in HSI's efforts in assisting Iraqi Antiquities Police in their fight against the illegal trafficking of Iraq's cultural property," said Assistant Special Agent in Charge Ransom Avilla, HSI liaison in Baghdad. "We are hopeful that this training conference will provide the tools necessary for Iraqi Ministry of Interior police to detect, investigate and protect their national heritage."

Other law enforcement agencies that participated in the training conference included U.S. Customs and Border Protection, U.S. Department of Justice, Interpol and the U.S. National Park Service.

In July 2011, ICE repatriated to the government of Iraq a collection of objects illegally imported into the United States from Iraq. The objects included Saddam Hussein-era paintings and two AK-47 rifles, and a Western Asiatic necklace (circa 3rd-2nd millennium B.C.). These objects were discovered as part of four separate investigations by HSI special agents in Tampa, Fla.; Newark, N.J.; El Paso, Texas, and Little Rock, Ark. In February 2010, ICE repatriated six objects to Iraq ranging from its ancient past to its recent political history. The collection that was returned included a stone tablet with ancient writing, a Babylonian clay statue, a Roman coin, ancient gold earrings and a chrome-plated AK-47 inscribed with a picture of Saddam Hussein. 

In 2008, ICE returned 1,046 artifacts that were seized in four separate investigations dating back to 2001. The items included terra cotta cones inscribed in Cuneiform text, a praying god figurine that was once imbedded in a Sumerian temple and coins bearing the likenesses of ancient emperors. Remnants of ancient Cuneiform tablets, which were seized by the Customs Service in 2001, were recovered from beneath the ruins of the World Trade Center. The ancient tablets were subsequently restored and returned to the government of Iraq. These repatriations are the latest in a series that ICE has returned to the people of Iraq since the agency was created in 2003.

HSI plays a leading role in criminal investigations that involve the illegal importation and distribution of cultural property, including the illicit trafficking of cultural property, especially objects that have been reported lost or stolen. The HSI Office of International Affairs, through its 73 attaché offices in 47 countries, works closely with foreign governments to conduct joint investigations, when possible.

HSI specially trained investigators, assigned to both domestic and international offices, partner with governments, agencies and experts to protect cultural antiquities. They also provide cultural property investigative training to law enforcement partners for crimes involving stolen property and art, and how to best enforce the law to recover these items when they emerge in the marketplace.

Since 2007, more than 6,600 artifacts have been returned to 24 countries, including paintings from France, Germany, Poland and Austria, 15th to 18th century manuscripts from Italy and Peru, as well as cultural artifacts from China, Cambodia and Iraq. 

Canadian National Sentenced for Smuggling Ecstasy into U.S.

Following an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), a Canadian man was sentenced to eight years in prison for his role in a conspiracy to import large amounts of ecstasy pills into the United States.

James Elliott, 62, of Windsor, Ontario, was sentenced Thursday, December 6, 2012, in federal court to eight years in prison.

"HSI will not tolerate the illegal movement of drugs into the United States," said John Kelleghan, special agent in charge of HSI Philadelphia. "HSI stopped these criminals, who are motivated by greed, from distributing large quantities of illegal drugs in our community and endangering the welfare of our citizens."

Elliott helped recruit and organize a group of smugglers, mostly from the Windsor area, who imported large quantities of drugs into the United States. These drugs were manufactured in Canada by Asian drug trafficking organizations. These organizations then hired Elliott and his couriers to transport the drugs to other drug dealers across the United States. Elliott's conduct came to light in September 2007 when two couriers were stopped in Philadelphia and law enforcement officers seized 102,000 ecstasy pills which the couriers had attempted to distribute to drug dealers in Philadelphia and Boston.

Eastern District of Pennsylvania Assistant U.S. Attorney Robert J. Livermore prosecuted the case.

ICE and CBP Join Forces with Mexican Government for Third Annual "Operation Holiday Hoax"

The National Intellectual Property Rights Coordination Center (IPR Center) recently announced the kickoff of Operation Holiday Hoax, an effort to track down those who are selling counterfeit and pirated products this holiday season.

The U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) –led IPR Center is working with partners U.S. Customs and Border Protection (CBP), the U.S. Postal Inspection Service, the Consumer Product Safety Commission, and the government of Mexico to target stores, flea markets and swap meets involved in the importation, distribution and selling of counterfeit and pirated products in cities across the United States and in Mexico. Additionally, CBP officers will be conducting inspections and seize counterfeit merchandise at various U.S. ports of entry.

"The counterfeiting and piracy epidemic continues to spread around the world," said IPR Center Director Lev Kubiak. "Our partnership with the government of Mexico and the rest of our partners at the IPR Center show that this is a problem that affects everyone in the world, not just the United States. Together, we will continue to deliver blow after blow to criminals worldwide making a positive impact on American jobs here at home."

This is the third year that the IPR Center has conducted Operation Holiday Hoax. Last year's operation led to the seizure of more than 327,000 counterfeit and pirated items with a manufacturer's suggested retail price worth an estimated $76.8 million. In 2009 the operation netted more than $26 million worth seized goods.

"The protection of intellectual property rights is one of CBP's top priority trade issues," said Assistant Commissioner for International Trade Al Gina. "Operations like this protect American businesses and consumers. CBP works daily to keep counterfeit goods out of the U.S. and to bring producers and distributors of these goods to justice."

Last year, Mexico's Tax Administration Service conducted 845 inspections in the main ports of entry, executed 160 search warrants nationwide and seized 23.8 million counterfeit and pirated items including 10 tons of used clothing, cigarettes, electronics, tools and DVD's. The estimated value of the seized goods was 96.7 million pesos, or $7.1 million.

Holiday Hoax began Nov. 26 and is scheduled to run until Dec. 26. During that time federal and local law enforcement officers will seize products such as perfume, holiday lights, electronics, clothing and DVD's. As in years past, most of these items are ordered online as part of the holiday shopping season.

The IPR Center is one of the U.S. government's key weapons in the fight against counterfeiting and piracy. Working in close coordination with the Department of Justice Task Force on Intellectual Property, the IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and the war fighters.

HSI Arrests Texas Man Who Threatened Murder of Local Law Enforcement

A local man who threatened to kill area law enforcement officers and members of their families remains in federal custody after special agents with U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) arrested him Tuesday, November 27, 2012.

Jacob Ramos Esparza, 30, of Pecos, was arrested about 1:30 a.m. on Tuesday, November 27, 2012, outside a Pecos truck stop.

He was scheduled to have his detention hearing at 10 a.m. Thursday, November 29, 2012, in Alpine, Texas, before U.S. Magistrate Judge Dwight Goains.

A federal complaint filed Tuesday, November 27, 2012, charges Esparza with unlawfully, knowingly and intentionally using interstate communications to threaten to injure a person. If convicted, he faces a maximum sentence of 20 years in federal prison.

According to the criminal complaint, Esparza was responsible for posting several death threats to Internet chat forums that targeted the Fort Stockton (Texas) Police Department officers and their families, as well as Texas police departments in Pecos, Big Spring and Midland, and the Midland County Sheriff's Office. Additional threats were made through emails, and several contained videos depicting graphic violence to taunt law enforcement. Some of the threats included the intent to use chemical weapons, car bombs and high-caliber munitions.

HSI special agents believe that among the threats Esparza allegedly made, were some posted by username "El Diablo," offering a reward for the head of a local police officer. El Diablo further threatened to "unleash 15 pipe bombs" around the Texas cities of Pecos, Midland and Odessa. He also threatened to place pipe bombs in public places Dec. 25 to "create carnage unimaginable," and kill Fort Stockton police officers and their families using large-caliber weapons, chemical weapons and car bombs.

Dennis A. Ulrich, special agent in charge of HSI El Paso, said: "HSI takes seriously all threats against law enforcement officers. Our special agents in west Texas worked cooperatively and vigorously with our local, state and federal law enforcement partners. This arrest exemplifies the efficiency and force-multiplying effect of law enforcement agencies working together."

The following law enforcement agencies assisted with this investigation: the FBI; Fort Stockton, Pecos and Midland police departments; and Ector and Midland county sheriff's offices.

A criminal complaint is merely a charge and should not be considered as evidence of guilt. The defendant is innocent until proven guilty in a court of law.