Man Pleads Guilty to Identity Theft and Tax Evasion

A New Jersey man pleaded guilty Wednesday, January 30, 2013, in connection with his role in a large-scale identity-theft scheme. If convicted, he faces up to 52 years in prison. This case is being investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), FBI, Internal Revenue Service's (IRS) Criminal Investigation and the Bergen County Prosecutor's Office.

Sang-Kyu Seo, 63, of Palisades Park, N.J., pleaded guilty to charges of conspiracy to unlawfully produce identification documents and false identification documents, aggravated identity theft, conspiracy to commit wire fraud, conspiracy to commit bank fraud and tax evasion.

According to court documents, Seo was the owner and operator of Hang Jin Yi Inc., doing business as Hwangini, a salon located in North Bergen, N.J., and Pier 7 Corporation, a purported small business located in Palisades Park.

Seo conspired with Sang-Hyun Park, aka Jimmy, and others, to obtain a Social Security number beginning with the prefix '586' for another individual. These 586 Social Security numbers were issued by the U.S. to individuals, usually from China, who were employed in American territories, such as Guam. Park is alleged to have been the leader of a criminal organization headquartered in Bergen County that obtained, brokered and sold identity documents to customers to commit credit card fraud, bank fraud, tax fraud and other crimes.

Park pleaded guilty Jan. 9 to his role in the enterprise, and is awaiting sentencing.

This criminal enterprise engaged in the fraudulent 'build-up' of credit scores associated with the Chinese identities. They did so by adding the Chinese identity as an authorized user to the credit card accounts of various co-conspirators - members of the enterprise's credit build-up teams who received a fee for this service. By attaching the Chinese identities to these existing credit card accounts, the teams increased the credit scores associated with the Chinese identities to between 700 and 800. The members of the build-up teams did not know the real person to whom the identity belonged or virtually any of the customers who had purchased the identities.

After building up the credit associated with these identities, Park and his co-conspirators directed, coached and assisted the customers in opening bank accounts and obtaining credit cards. Park and his co-conspirators then used these accounts and credit cards to commit fraud. Park relied on several collusive merchants who possessed credit card processing machines. For a fee, known as a 'kkang fee,' these collusive merchants charged the fraudulently obtained credit cards, although no transaction took place. After receiving the money into their merchant accounts from these fraudulent transactions, the collusive merchants gave the money to Park and his co-conspirators, minus their kkang fee.

Seo admitted that he obtained a 586 Social Security card and counterfeit driver's licenses through Park for a family member, who then used this identity to 'bust out' credit cards. Seo also admitted that he gave his corporate and personal credit cards to Park for the purpose of 'busting out' these maxed-out credit cards. In furtherance of this conspiracy, Park and his co-conspirators issued worthless checks, drawn on bank accounts that had been established using the 586 identities, as payment toward the balances on Seo's credit cards.

Before the banks and credit card companies realized that these checks were bogus, Park and his co-conspirators charged Seo's credit cards through collusive merchants or used them to purchase merchandise.

Seo also admitted that in 2007, with the assistance of a loan broker, he fraudulently obtained a $100,000 commercial loan on behalf of Pier 7. Seo admitted that he and the loan broker made false statements to obtain the loan including falsely representing that his businesses annual revenue was about $620,000.

Finally, Seo admitted that he committed tax evasion by issuing checks to himself and others, representing income derived through the operation of Hwangini, and then failing to report this income on his personal tax returns.

Seo admitted that in April 2008, he filed an individual income tax return for tax year 2007. This return declared that his taxable income for calendar year 2007 was about $197, and the amount of tax due and owing was about $19. Seo admitted that this return failed to include $304,848 in additional taxable income that he had received in 2007, thus having an additional tax of $81,643 due to the United States government.

Seo's sentencing is scheduled for May 14.

Dutch Citizen Pleads Guilty to Tax and Mortgage Fraud

A Dutch citizen and resident of Canada pleaded guilty Friday, December 28, 2012, to several tax and mortgage fraud charges, following an investigation by the Internal Revenue Service's (IRS) Criminal Investigations, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the FBI.

Rudolf Straat, 49, of Sarnia, Ontario, Canada, pleaded guilty to mail fraud, conspiracy to commit mail fraud, conspiracy to defraud the United States, failure to file a tax return and conspiracy to commit money laundering.

In March, a federal grand jury in Tallahassee, Fla., returned an eight-count indictment against Straat and his wife and co-conspirator, Maria Gudelis, 45, of Sarnia, Ontario, Canada. Both were accused of falsely obtaining mortgage loans in excess of $8.8 million to purchase homes in Sandestin, Fla. Straat claimed he was a U.S. citizen, but he is a citizen of the Netherlands. He claimed that he was single, even though he married Gudelis in May 2000. He also misrepresented his employment status.

Additionally, Straat and Gudelis both lived in Sandestin from at least October 2005 through July 2007. While living in Sandestin, Straat did not file 2005 and 2006 income tax returns. As a result, he failed to report more than $1 million to the IRS during those years. Straat used a portion of his unreported capital gains to fraudulently obtain additional properties.

Straat faces up to 20 years in prison for conspiracy to commit mail fraud, conspiracy to commit money laundering and mail fraud. He faces up to five years in prison for conspiracy to defraud the United States and up to one year in prison for failing to file tax returns. He is scheduled to be sentenced March 12.

Gudelis, a Canadian citizen, is charged with the same crimes included in the indictment against her husband. She turned herself in to authorities Thursday, December 27, 2012, and pleaded not guilty at her arraignment Friday, December 28, 2012. Her trial is scheduled to commence Feb. 4. 

Foreign Nationals Sentenced for Trafficking Identities of Puerto Rican US Citizens

Five foreign nationals were sentenced to prison for their respective roles in trafficking the identities of Puerto Rican U.S. citizens and corresponding identity documents, announced Assistant Attorney General Lanny A. Breuer of the Justice Department's Criminal Division; U.S. Attorney Rosa E. Rodríguez-Vélez for the District of Puerto Rico; Director John Morton of U.S. Immigration and Customs Enforcement (ICE), which oversees Homeland Security Investigations (HSI); Chief Postal Inspector Guy J. Cottrell of the U.S. Postal Inspection Service (USPIS); Scott P. Bultrowicz, Director of the U.S. State Department's Diplomatic Security Service (DSS); and Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber.

Daniel Aparicio-Lara, 29, a Mexican national formerly of Burlington, N.C., was sentenced Tuesday, December 18, 2012, to 66 months in prison by U.S. District Judge Thomas D. Schroeder in the Middle District of North Carolina. In addition to his prison term, Aparicio-Lara was sentenced to serve three years of supervised release and ordered to forfeit $140,800 in proceeds. On Sept. 18, 2012, Aparicio-Lara pleaded guilty in front of Judge Schroeder to one count of conspiracy to commit identification fraud and one count of aggravated identity theft.

Manuel Guzman-Santos, 37, a Dominican national formerly of Worcester, Mass., and Marco Pena, 37, a Dominican national formerly of Dorchester, Mass., were sentenced Monday, December 17, 2012, by U.S. District Judge Joseph L. Tauro in the District of Massachusetts. Both Guzman-Santos and Pena were sentenced to serve 30 months in prison. On Aug. 2, 2012, Guzman-Santos and Pena each pleaded guilty in front of Judge Tauro to one count of conspiracy to commit identification fraud.

Adelfo Perez-Garcia, 36, a Mexican national formerly of Seymour, Ind., and Alma Yesenia Garcia-Ramirez, 29, a Mexican national formerly of Crystal Lake, Ill., were sentenced yesterday by U.S. District Judge Gustavo A. Gelpí in the District of Puerto Rico. Perez-Garcia was sentenced to serve 24 months and one day in prison and Garcia-Ramirez was sentenced to serve 24 months in prison. Judge Gelpí ordered the removal of both defendants from the United States after the completion of their sentences and ordered that Garcia-Ramirez forfeit $35,900 in proceeds. On Aug. 28, 2012, Perez-Garcia pleaded guilty to one count of conspiracy to commit identification fraud in the District of Puerto Rico in front of U.S. Magistrate Judge Silvia Carreño-Coll. On Sept. 4, 2012, Garcia-Ramirez pleaded guilty to one count of conspiracy to commit alien smuggling for financial gain in the District of Puerto Rico before U.S. Magistrate Judge Bruce J. McGiverin.

The five defendants were charged in a superseding indictment returned by a federal grand jury in Puerto Rico Mar. 22, 2012. To date, a total of 53 individuals have been charged for their roles in the identity trafficking scheme, and 23 defendants have pleaded guilty.

Court documents allege that individuals located in the Savarona area of Caguas, Puerto Rico, obtained Puerto Rican identities and corresponding identity documents. Other conspirators located in various cities throughout the United States (identity brokers) allegedly solicited customers and sold Social Security cards and corresponding Puerto Rico birth certificates for prices ranging from $700 to $2,500 per set. The superseding indictment alleges that identity brokers ordered the identity documents from Savarona suppliers, on behalf of the customers, by making coded telephone calls. The conspirators are charged with using text messages, money transfer services and express, priority or regular U.S. mail to complete their illicit transactions.

Court documents allege that some identity brokers assumed a Puerto Rican identity themselves and used that identity in connection with the trafficking operation. Their customers allegedly generally obtained the identity documents to assume the identity of Puerto Rican U.S. citizens and to obtain additional identification documents, such as legitimate state driver's licenses. Some customers allegedly obtained the documents to commit financial fraud and attempted to obtain a U.S. passport.

According to court documents, various identity brokers were operating in Rockford, Ill.; DeKalb, Ill.; Aurora, Ill.; Seymour, Ind.; Columbus, Ind.; Indianapolis; Hartford, Conn.; Clewiston, Fla.; Lilburn, Ga.; Norcross, Ga.; Salisbury, Md.; Columbus, Ohio; Fairfield, Ohio; Dorchester, Mass.; Lawrence, Mass.; Salem, Mass.; Worcester, Mass.; Grand Rapids, Mich.; Nebraska City, Neb.; Elizabeth, N.J.; Burlington, N.C.; Hickory, N.C.; Hazelton, Pa.; Philadelphia; Houston; Abingdon, Va.; Albertville, Ala.; and Providence, R.I.

According to court documents, Aparicio-Lara admitted that he was an identity broker who operated in North Carolina and Missouri; Guzman-Santos and Pena admitted that they were identity brokers who operated in Massachusetts; and Perez-Garcia admitted that he was an identity broker who operated in Indiana. Garcia-Ramirez admitted to assisting an Illinois-based identity broker and transferring money on behalf of the organization. The five defendants used either a real Texan or Puerto Rican identity themselves to commit identification fraud and to facilitate their identity trafficking business.

The charges are the result of Operation Island Express, an ongoing, nationally-coordinated investigation led by HSI Chicago and USPIS, DSS and IRS-CI offices in Chicago, in coordination with HSI San Juan. The Illinois Secretary of State Police (Elgin, Ill.) Police Department; Seymour (Ind.) Police Department; and Indiana State Police provided substantial assistance. HSI Dominican Republic and International Organized Crime Intelligence, and Operations Center as well as various ICE, USPIS, DSS and IRS-CI offices around the country provided invaluable assistance.

The case is being prosecuted by Trial Attorneys James S. Yoon, Hope S. Olds, Courtney B. Schaefer, and Christina Giffin of the Justice Department Criminal Division's Human Rights and Special Prosecutions Section, with the assistance of Acting Deputy Chief Jeannette Gunderson of the Criminal Division's Asset Forfeiture and Money Laundering Section, and the support of the U.S. Attorney's Office for the District of Puerto Rico. The U.S. Attorney's Offices in the Northern District of Illinois, Southern District of Indiana, District of Connecticut, District of Massachusetts, District of Nebraska, Middle District of North Carolina, Southern District of Ohio, District of Rhode Island, Southern District of Texas and Western District of Virginia provided substantial assistance.

Potential victims and the public may obtain information about the case at: www.justice.gov/criminal/vns/caseup/beltrerj.html. Anyone who believes their identity may have been compromised in relation to this investigation may contact the ICE toll-free hotline at 1-866-DHS-2ICE (1-866-347-2423) and its online tip form at www.ice.gov/tipline. Anyone who may have information about particular crimes in this case should also report it to the ICE tip line or website.

Anyone who believes that they have been a victim of identity theft, or wants information about preventing identity theft, may obtain helpful information and complaint forms on various government websites including the Federal Trade Commission ID Theft Website, www.ftc.gov/idtheft. 

Joint HSI and IRS Probe Arrests 53 for Identity Theft, Tax Fraud, and Government Theft

Fifty-three individuals charged with theft of government property and identity theft were arrested Wednesday, November 14, 2012, in several municipalities of Puerto Rico following a joint Internal Revenue Service (IRS) and U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) probe.

The case involves a scheme to defraud the United States by fraudulently obtaining and converting to cash U.S. Treasury checks issued by the IRS in connection with fraudulent tax returns filed with the agency. As part of the scheme, tax returns were filed using the personal identifying information of individuals, when in reality, said individuals never filed such tax returns with the IRS. The investigation has revealed that the fraudulent tax returns were filed without the consent of the taxpayers who appear in the returns.

The majority of the defendants would attempt to negotiate the Treasury checks by depositing them in their accounts at financial institutions such as banks and credit unions. Other defendants cashed or attempted to cash the checks at post offices. When a defendant attempted to cash the check at a post office, he or she would present a false identification document such as a driver's license.

If convicted, the defendants face a maximum possible sentence of 10 years on the theft of government property charge, plus two consecutive years if convicted on the aggravated identity theft charge. The investigation is ongoing.

The case is being investigated by the IRS, Criminal Investigation Division, with the collaboration of HSI, the U.S. Postal Inspection Service and the U.S. Secret Service, and is being prosecuted by First Assistant U.S. Attorney Maria A. Dominguez. The Puerto Rico Police Department and the San Juan Municipal Police participated in the arrests.

ICE encourages the public to report suspected fraud and identity theft-related information by calling 1-866-DHS-2ICE.

Life Sentence for JFK Baggage Handler who Ran Drug Trafficking Ring

A former American Airlines baggage handler was sentenced to life in prison Tuesday, October 16, 2012, for his leadership of an international drug trafficking organization. This sentencing comes as a result of an investigation by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), U.S. Customs and Border Protection, the Port Authority (of New York & New Jersey) Police Department, the Internal Revenue Service, the United States Postal Inspection Service, and the Drug Enforcement Administration.

"Victor Bourne and his crew of corrupt former American Airline employees mistakenly viewed drug smuggling as a path to riches. The sentencing today serves as a stern warning about the consequences awaiting drug smugglers," said James T. Hayes Jr., special agent in charge of HSI New York. "HSI will continue to use its resources and the expertise of its law enforcement partners to flush out criminals who attempt to exploit our borders."

"Using his insider status, Bourne turned American Airlines into his personal narcotics shuttle service, running a criminal organization that ignored passenger safety and security in the pursuit of their greater goal - enriching Victor Bourne," said Loretta E. Lynch, U.S. attorney of the Eastern District of New York. "Bourne not only abused the trust of American Airlines to satisfy his own financial greed, but by compromising security at JFK Airport he placed all travelers at risk. In this post-9/11 era, we will continue to aggressively investigate and prosecute those at our ports of entry who violate our nation's drug trafficking laws and threaten the integrity of our borders."

Victor D'Costa Bourne, 37, was the leader of an international drug trafficking organization that smuggled narcotics from the Caribbean into the United States through John F. Kennedy International Airport (JFK). A federal jury in Brooklyn returned guilty verdicts against Bourne on charges of leading a continuing criminal enterprise, importing and distributing illegal narcotics, and money laundering, after a month-long trial in October 2011.

In total, the investigation that culminated in Bourne's conviction and sentence has resulted in 20 convictions, including the conviction of 19 airline employees, the seizure of 13 kilograms of cocaine and 2,900 pounds of marijuana, and the forfeiture of $6.9 million.

The evidence at trial proved that, between 2000 and 2009, the Bourne organization utilized corrupt employees of commercial airlines, including American Airlines, working at domestic and international ports of entry to smuggle illegal narcotics into the U.S. and throughout the Caribbean. Bourne paid dispatching crew chiefs at American Airlines to assign crews of baggage handlers, who, in turn, were paid tens of thousands of dollars by the Bourne organization to retrieve the cocaine from the flights upon arrival.

The cocaine smuggled aboard American Airlines flights into JFK was hidden behind panels in the front and rear cargo holds, the ceiling, wing assembly, avionics, and other vital equipment compartments. After removing the cocaine from these locations, the corrupt baggage handlers hid the drugs inside their coats and airline equipment bags to avoid detection by law enforcement and safely transport the drugs to Bourne.

The government proved at trial that, in this manner, the Bourne organization was responsible for the importation into the U.S. of over 150 kilograms of cocaine. At the time of his arrest in 2009, Bourne was preparing to transport even larger quantities of cocaine in cargo containers from the Caribbean to the United States.

The evidence presented by the government at trial included testimony from six former American Airlines employees who pleaded guilty to narcotics trafficking charges resulting from their participation in the Bourne organization. Each witness described Bourne's control of the drug smuggling operation, including the recruitment and payment of his workers, the secret locations on the aircraft where the cocaine was hidden, and the growth of the organization over time. One of the employees recounted a conversation in which Bourne stated, in substance, that he "started with half a kilo, then got 1, 2, 3, 4, 5, 30, 50."

Another government witness, an American Airlines employee at JFK who was not involved in drug trafficking, testified that Bourne accused him of stealing two kilograms of cocaine. This witness testified that Bourne threatened to "kill me, my family, my kids" if the drugs were not returned. Shortly thereafter, Bourne confronted the same employee at the airport and pushed him off of a truck, causing a neck injury.

The evidence at trial also established that Bourne was responsible for the shipment of over 5,000 pounds of marijuana aboard cargo vessels, in part through a Brooklyn footwear company, to businesses in Barbados.

Bourne reaped millions of dollars in illegal cash proceeds from his illegal drug trafficking, and laundered his drug proceeds through businesses and real estate ventures in Brooklyn and Barbados.

In addition to a lifetime term of imprisonment, Bourne was ordered to forfeit $5.1 million.

ICE and HSI Dismantle Extensive Identity Tax Fraud Scheme

One of the nation's largest and longest running stolen identity tax refund fraud schemes – involving more than 8,000 fraudulent U.S. income tax returns seeking $65 million in illicit refunds – has been shut down by a New Jersey-based task force.

U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) special agents assisted in the investigation as part of the New Jersey Financial Crimes Task Force.

Fourteen people were charged Wednesday, September 19, 2012, with conspiracy to defraud the United States and substantive counts of theft of government property, which resulted in $11.3 million in losses. They were arrested as part of a coordinated investigation by a New Jersey-based task force that includes IRS-Criminal Investigation and the U.S. Postal Inspection Service (USPIS).

Ten of the defendants made their initial appearances before U.S. Magistrate Judge Joseph A. Dickson Sept. 19 in Newark federal court while other defendants will be making their appearances in out-of-state federal courts including: New York; Grand Rapids, Mich.; and Greensboro, N.C. One defendant is already in custody in Texas on unrelated charges.

"The New Jersey Financial Crimes Task Force has proven to be an effective tool in dismantling criminal organizations that threaten the financial stability of our nation," said Andrew McLees, special agent in charge of HSI Newark. "Today's arrest exemplifies that HSI stands on the front line of financial crimes and continues proactive cooperation with our federal law enforcement partners to serve as a unified force in the fight against these illegal financial schemes that have far-reaching impact."

"The defendants in this case allegedly tried to steal $65 million using stolen identities to obtain refunds to which they were not entitled," U.S. Attorney Fishman said. "No matter how sophisticated, these crimes are pure theft. They victimize all members of the public, especially those whose identities are stolen."

"These types of tax fraud schemes have been around for many years," USPIS Inspector in Charge Phillip R. Bartlett said. "The Postal Inspection Service noted a significant increase in tax refund fraud schemes approximately three years ago and formed the New Jersey Financial Crimes Task Force in an effort to identify, disrupt and dismantle organized groups engaged in these schemes."

"Using stolen identities to file fraudulent tax returns seeking bogus refunds is a serious crime that we do not take lightly at the IRS," Richard Weber, chief, IRS-Criminal Investigation, said. "The refund fraud alleged in today's complaints was highly organized and relied on many willing accomplices. IRS-Criminal Investigation has made investigating refund fraud and identity theft a top priority and we will relentlessly pursue those who attempt to undermine the integrity of our tax system."

According to the criminal complaints, Stolen Identity Refund Fraud (SIRF) is a common type of fraud that results in more than $2 billion in losses annually to the U.S. Treasury. SIRF schemes generally share a number of hallmarks:

·                             Perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico. (Puerto Rican citizens are issued Social Security numbers, but are not required to pay federal income tax unless they derive income from United States-based companies or from the United States government. These Social Security numbers are a valuable commodity for perpetrators of SIRFs, because they are usually not already associated with a tax return.)

·                             Participants complete and file – frequently filing electronically – individual income tax returns using the fraudulently-obtained information, and falsifying wages earned, taxes withheld and other data. Perpetrators make it appear that the "taxpayers" listed on the fraudulent returns are entitled to tax refunds.

·                             Perpetrators direct the U.S. Treasury Department to issue the refunds through tax refund Treasury checks generated by the fraudulent tax returns to locations they control or can access.

Recognizing the seriousness of the problem, federal law enforcement agencies created a multi-agency task force in New Jersey led by investigators from the IRS and the USPIS, along with support from the U.S. Secret Service, HSI and the Drug Enforcement Administration.

The task force has revealed that at least as early as 2007, dozens of individuals in the New Jersey and New York area have been engaged in a large-scale, long-running SIRF scheme involving more than 8,000 fraudulent U.S. income tax returns seeking $65 million in illicit refunds and with losses to the United States government of more than $11.3 million.

The scheme was carried out by Jose Torres, aka Jose Quilestorres, 46, of Bronx, N.Y.; Roberto Diaz, 44, of Demarest, N.J.; Elian Matlovsky, 27, of New York; Porfirio Paredes,44, of Hazelton, Pa.; Rosa Marmol, 34, of Grand Rapids, Mich.; Luis Martinez, 47, of Matthews, N.C.; Ennio Guzman, 44, and Alejandro Javier, 50, both of Newark, N.J.; David Pinski, 73, of Fort Lee, N.J.; Michael Senatore, 41, of Moscow, Pa.; Rosario Terzulli, 38, of Brooklyn, N.Y.; Manuel Rodriguez, 50, of New Brunswick, N.J.; Rigoberto Torres aka R. Torres, 40, of New Brunswick, N.J., and others.

The complaints set forth the specific role that each conspirator played in the scheme, including obtaining the personal identifying information from Puerto Rican citizens, creating and filing the fraudulent 1040 forms, and obtaining, selling, depositing and cashing the tax refund Treasury checks.

Torres, Rodriguez and others gained control of refund checks in various ways, following the pattern of a classic SIRF scheme. Sometimes they bribed mail carriers to intercept checks and deliver them to other conspirators. One mail carrier, Bennie Haynes, who delivered mail along a route in Somerset, N.J., has previously been charged.

Torres and others also purchased "mail routes," that is, lists of addresses covered by a single mail carrier, from other conspirators, including Diaz. Once the mail route was purchased, Torres and others applied for tax refund checks, inserted addresses along the mail route as the purported home addresses of the "taxpayers," and obtained the checks sent to those addresses.

Hundreds of refund checks were mailed to just a few addresses in a few towns, including Nutley, Somerset and Newark, N.J., and Shirley, N.Y.

They induced third parties or straw account holders to open bank accounts at various banks in New Jersey and elsewhere or caused the checks to be cashed at check cashing businesses, and the proceeds deposited into bank accounts controlled by conspirators.

Members of the task force identified certain "hot spots" of activity related to the scheme, where conspirators were directing millions of dollars' worth of refund checks to just a few towns and cities in and around New Jersey. The task force members interacted with U.S. Postal Service employees in these hot spots, and more than $22 million worth of refund checks – fraudulently applied for – were interdicted by law enforcement officers.

The complaints also include forfeiture allegations seeking the seizure of more than $11 million in ill-gotten gains, including luxury autos that were seized.

The charges and allegations contained in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Guilty Plea for Former US Army Captain Who Smuggled Heroin from Afghanistan

A South Carolina man and former captain in the U.S. Army, pleaded guilty to charges of importing heroin and possession with the intent to distribute the drug. This case was investigated by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Drug Enforcement Administration (DEA), the Internal Revenue Service – Criminal Investigations Division and the Wilmington Police Department.

Saleem Sharif, 36, of Johns Island, S.C., pleaded guilty to the charges. Each charge carries a maximum term of 40 years in prison. Sharif is scheduled to be sentenced January 15, 2013.

"This joint investigation is a terrific example of how law enforcement, with support from our partners abroad, were able to successfully dismantle this narcotics smuggling network," said John P. Kelleghan, special agent in charge of HSI Philadelphia. "HSI will continue to utilize its broad authorities to target those individuals that pose direct threats to our communities."

According to court documents, Sharif, a U.S. Military Academy graduate, admitted that he imported into the country at least 2.5 kilograms of heroin from Afghanistan while employed there as a contractor. Sharif concealed the heroin in DVD cases, each case containing approximately 2.5 ounces of heroin.

One of Sharif's customers was Darrold Thomas. Thomas, who pleaded guilty to a drug trafficking offense August 9, 2012, lived in Killeen, Texas. During his plea hearing, Thomas admitted that on two occasions he sold heroin directly to several individuals from the Wilmington area. Thomas stated that he sold approximately five ounces of heroin to Kelvin Cook in Killeen, Texas, in the summer of 2010. Thomas sold the heroin, which was concealed in two DVD cases, for $5,000.

Thomas also admitted he sold approximately 500 grams of heroin to Ronaldo Edmund and Kevin Morris in Washington, D.C., in December 2010. Thomas sold the heroin, which was packaged in several DVD cases, for $30,000. Edmund and Morris have each pleaded guilty to drug trafficking offenses in the District of Delaware.

In addition to heroin transactions with Cook, Edmund and Morris, Thomas also admitted that he directed the shipment of approximately 210 grams of heroin, which he had received from Sharif, to a DEA confidential source at an address in Newark, Del., in September 2011. The heroin was concealed in a DVD case and located within the false bottom of a can of oil.

Ultimately, Thomas placed the source in direct contact with Sharif. On April 27, 2012, Sharif and co-defendant Charles Richardson traveled to Wilmington to meet with the source. They were arrested while meeting with the individual in a vehicle outside the Amtrak train station. In a later search, agents found two DVD cases that contained heroin – one in a bag belonging to Sharif, and another in a bag belonging to Richardson. The total net weight of the heroin was approximately 115 grams.

Following his arrest, Sharif admitted to traveling to Delaware to sell the heroin to the source. He also admitted that he imported heroin into the U.S. during his time in Afghanistan.

Sharif is the 15th individual charged in connection with the Wilmington-based drug organization to enter a guilty plea. Eleven defendants have entered guilty pleas in the United States District Court, District of Delaware, while four other defendants have entered guilty pleas in the United States District Court, Southern District of Texas. Six other individuals remain in custody in Panama.

ICE Trains Federal Enforcement Agents in Computer Forensics

For the past 14 years, U.S. Immigration and Customs Enforcement has been responsible for training ICE officers and special agents to become computer forensic investigators.

ICE teaches the class in conjunction with the U.S. Secret Service and the Internal Revenue Service.

Each year, two, six-week classes are offered at the Federal Law Enforcement Training Center in Charleston, S.C. The class is comprised of 24 students – eight from each agency. Next year will be the 14th consecutive year of the program.

After each session, instructors get together to figure out what tweaks need to be made for the next class. Keeping the sessions as up-to-date as possible is a key priority.

"It's ever changing," said Computer Forensic Unit's Matthew Swenson. "Each year, we try and take into account and implement things that are relevant."

The course is comprised of two parts: Basic Computer Evidence Recovery Training (BCERT) and Post Computer Evidence Recovery Training (PCERT). The first two weeks are taught by Hewlett Packard employees who teach students the ins and outs of computer software and hardware. The next four weeks focus on teaching students how to use that knowledge to actually conduct a computer forensic investigation. Participants learn how to examine the computer, how to find evidence and how to write a report that all parties involved in an investigation can understand.

Swenson noted that it's not only the investigators who have to be able to understand the report, but also everyone in the justice system who will be involved in the sentencing.

As technology continues to advance, Swenson said the need for computer forensic investigators also rises. These days, he said, almost all criminals use some kind of technology that evidence can be found on.

"We take regular investigators off the street and teach them everything the need to know," he said.

There are currently 250 computer forensic agents within ICE, working at fields offices throughout the nation and attaché offices across the world.

New York Jeweler Arrested for Forging Government Seal

A jewelry wholesaler was arrested Sunday, August 5, 2012, for allegedly committing wire fraud and forging the seal of U.S. Customs and Border Protection (CBP). The arrest is a result of an investigation by U.S. Immigration and Customs Enforcement's (ICE) Office of Professional Responsibility and the Internal Revenue Service, Criminal Investigation.

Tejas Mehta, 36, the owner of Saritijediam Inc., doing business as Design Trends, is a jeweler who conducts business in Manhattan's diamond district. He is accused of allegedly forging the seal of CBP, a component of the U.S. Department of Homeland Security. Mehta used the fraudulent CBP seal to allegedly steal approximately $1 million from his business associates and other diamond and precious stones wholesalers.

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

"The production and use of fictitious government documents and seals is a serious crime," said Terence S. Opiola, special agent in charge of the ICE Office of Professional Responsibility in the Northeast. "ICE OPR is committed to aggressively investigating these crimes and takes great pride in protecting the integrity of all ICE and CBP employees."

"IRS-Criminal Investigation is always eager to work with our federal law enforcement partners and share our financial investigative expertise," said Toni Weirauch, acting special agent in charge for IRS-CI in New York. "We are proud to work with ICE on this important investigation, especially because of its governmental integrity aspect."

According to court documents, one victim consigned $650,000 in diamonds to Mehta, who then allegedly made excuses and did not return the stones or any funds from the sale of the diamonds. Mehta told the victim's attorney that the stones had been seized by U.S. authorities. Mehta allegedly 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 for the Southern District of New York.

Three Men Sentenced for Food-Stamp Fraud and Selling Counterfeit Goods

Three local men were sentenced in federal court Thursday, August 2, 2012, for selling counterfeit clothes, shoes and merchandise in the Rockford area. These sentences resulted from a joint investigation into food-stamp fraud and counterfeit merchandise sales conducted by the following agencies: U.S. Department of Agriculture's Office of Inspector General, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the FBI, the Internal Revenue Service's Criminal Investigation Division, and the Rockford Police Department.

Two brothers, Abdul Hariz, 23, and Mohammad Hariz, 21, of Rockford, each pleaded guilty Feb. 8 to conspiring to sell counterfeit shoes and apparel. According to their plea agreements, they sold counterfeit merchandise at the Fashion Show store in Rockford between Aug. 19 and Dec. 14, 2010.

Mohammad Hamad, 44, was charged in a separate indictment and pleaded guilty March 8 to selling counterfeit goods at the Westside Groceries store in Rockford Oct. 21, 2010. In his plea agreement, Hamad admitted that he was part owner of Westside Groceries. He also admitted that his store employees improperly allowed an individual cooperating with law enforcement officers to use a LINK card (food stamp benefits) to purchase counterfeit shoes.

All three defendants were sentenced Aug. 2 by U.S. District Judge Frederick J. Kapala to five months in federal prison followed by three years of supervised release. During the first five months of their supervised release, each defendant will be placed on home confinement with electronic monitoring. After they complete their home confinement, each defendant must then serve the remaining 31 months of supervised release. All three defendants were ordered to pay full restitution to the victims of their crimes, and to repay the government for the costs incurred in the undercover investigation. Hamad was also sentenced to pay a $5,000 fine.

As a result of the investigation, five other Rockford men were charged in federal court with offenses relating to food stamp fraud (LINK cards). Those five men have pleaded guilty and have already been sentenced.

Assistant U.S. Attorney John G. McKenzie, Northern District of Illinois, prosecuted the case.

Extensive ICE Operation Arrests 90, Millions of Synthetic Narcotics Seized

More than 90 individuals were arrested and approximately five million packets of finished designer synthetic drugs were seized in the first-ever nationwide law enforcement action against the synthetic designer drug industry responsible for the production and sale of synthetic drugs that are often marketed as bath salts, Spice, incense, or plant food. More than $36 million in cash was also seized.

As of July 26, 2012, more than 4.8 million packets of synthetic cannabinoids (K2, Spice) and the products to produce nearly 13.6 million more, as well as 167,000 packets of synthetic cathinones (bath salts), and the products to produce an additional 392,000 were seized.

Operation Log Jam was conducted jointly by the U.S. Drug Enforcement Administration and U.S. Immigration and Customs Enforcement (ICE), with assistance from the IRS Criminal Investigation, U.S. Postal Inspection Service, U.S. Customs and Border Protection, FBI, Food and Drug Administration's Office of Criminal Investigations, as well as state and local law enforcement members in more than 109 U.S. cities and targeted every level of the synthetic designer drug industry, including retailers, wholesalers and manufacturers.

"Today, we struck a huge blow to the synthetic drug industry. The criminal organizations behind the importation, distribution and selling of these synthetic drugs have scant regard for human life in their reckless pursuit of illicit profits," said Acting Director of ICE's Office of Homeland Security Investigations James Chaparro. "ICE is committed to working with our law enforcement partners to bring this industry to its knees."

"Although tremendous progress has been made in legislating and scheduling these dangerous substances, this enforcement action has disrupted the entire illegal industry, from manufacturers to retailers," said DEA Administrator Michele M. Leonhart. "Together with our federal, state and local law enforcement partners, we are committed to targeting these new and emerging drugs with every scientific, legislative and investigative tool at our disposal."


"The synthetic drug industry is an emerging area where we can leverage our financial investigative expertise to trace the path of illicit drug proceeds by identifying the financial linkages among the various co-conspirators," said Richard Weber, chief, IRS Criminal Investigation. "We will continue working with our law enforcement partners to disrupt and ultimately dismantle the highest level drug trafficking and drug money laundering organizations that pose the greatest threat to Americans and American interests."

"The U.S. Postal Inspection Service aggressively investigates the use of the U.S. Mail system for the distribution of illegal controlled substances and its proceeds. Our agency uses a multi-tiered approach to these crimes: protection against the use of the mail for illegal purposes and enforcement of laws against drug trafficking and money laundering. This includes collaboration with other agencies," said Chief Postal Inspector Guy J. Cottrell.

"The mission of U.S. Customs and Border Protection is to guard our country's borders from people and goods that could harm our way of life," said Acting Commissioner David V. Aguilar. "We are proud to be part of an operation that disrupts the flow of synthetic drugs into the country and out of the hands of the American people."

Over the past several years, there has been a growing use of, and interest in, synthetic cathinones (stimulants/hallucinogens) sold under the guise of "bath salts" or "plant food." Marketed under names such as "Ivory Wave," "Purple Wave," "Vanilla Sky," or "Bliss," these products are comprised of a class of dangerous substances perceived to mimic cocaine, LSD, MDMA and/or methamphetamine. Users have reported impaired perception, reduced motor control, disorientation, extreme paranoia, and violent episodes. The long-term physical and psychological effects of use are unknown but potentially severe.

These products have become increasingly popular, particularly among teens and young adults and those who mistakenly believe they can bypass the drug testing protocols that have been set up by employers and government agencies to protect public safety. They are sold at a variety of retail outlets, in head shops and over the Internet. However, they have not been approved by the Food and Drug Administration for human consumption or for medical use, and there is no oversight of the manufacturing process.

Smokable herbal blends marketed as being "legal" and providing a marijuana-like high have also become increasingly popular, particularly among teens and young adults, because they are easily available and, in many cases, they are more potent and dangerous than marijuana.

These products consist of plant material that has been coated with dangerous psychoactive compounds that mimic THC, the active ingredient in marijuana. Just as with the synthetic cathinones, synthetic cannabinoids are sold at a variety of retail outlets, in head shops and over the Internet. Brands such as "Spice," "K2," "Blaze," and "Red X Dawn" are labeled as incense to mask their intended purpose.

While many of the designer drugs being marketed today that were seized as part of Operation Log Jam are not specifically prohibited in the Controlled Substances Act (CSA), the Controlled Substance Analogue Enforcement Act of 1986 (AEA) allows these drugs to be treated as controlled substances if they are proven to be chemically and/or pharmacologically similar to a Schedule I or Schedule II controlled substance. A number of cases that are part of Operation Log Jam will be prosecuted federally under this analogue provision, which specifically exists to combat these new and emerging designer drugs.

DEA has used its emergency scheduling authority to combat both synthetic cathinones (the so-called bath salts like Ivory Wave, etc.) and synthetic cannabinoids (the so-called incense products like K2, Spice, etc.), temporarily placing several of these dangerous chemicals into Schedule I of the CSA. Congress has also acted, permanently placing 26 substances into Schedule I of the CSA.

In 2010, poison centers nationwide responded to about 3,200 calls related to synthetic "Spice" and "bath salts." In 2011, that number jumped to more than 13,000 calls. Sixty percent of the cases involved patients 25 and younger.

Foreign Nationals Charged with Extensive Drug Trafficking and Identity Fraud Scheme

Eleven foreign nationals were charged Thursday, July 19, 2012, in a 90-count superseding federal indictment alleging they conspired to distribute cocaine and engaged in tax fraud, money laundering, identity theft and other financial crimes.

The indictment comes following a multi-agency Organized Crime and Drug Enforcement Task Force (OCDEF) investigation, stemming from an initial Drug Enforcement Administration (DEA) and Anchorage police drug probe. The magnitude of the financial crimes, money laundering and identity theft, resulted in the Internal Revenue Service (IRS) Criminal Investigations and U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) taking a lead role.

According to the indictment, the Dominican and Mexican-national defendants engaged in a conspiracy to defraud the United States by filing false tax returns and illegally claiming millions of dollars in tax refunds. Investigators believe that between January and March the defendants conducted their scheme using names and Social Security numbers of individuals from the Commonwealth of Puerto Rico.

"Today's indictment is a clear warning that anyone who steals the identities of innocent taxpayers and uses the information for personal profit will be aggressively pursued, investigated and prosecuted, in Alaska or throughout the United States," U.S. Attorney Karen Loeffler said. "This case is an example of how interagency cooperation and teamwork can successfully bring down an entire organized criminal conspiracy."

Three laptop computers seized by investigators contained information for approximately $19 million in fraudulent refund claims, 2,600 stolen identities including individual names, Social Security numbers and other identity information. It is also alleged that one or more of the defendants obtained the physical addresses used on the tax returns by stealing mail from mailboxes in and around the Anchorage area.

The defendants obtained Alaska identification cards using the stolen identities, which were necessary to open the numerous bank accounts needed to cash their tax refund checks. They also falsely claimed to be U.S. citizens to obtain the identity documents and open the accounts.

"These criminals illegally posed as U.S. citizens and exploited our financial system for personal gain," said Brad Bench, special agent in charge of HSI Seattle, who oversees HSI investigations in Alaska. "By pooling our unique resources, legal authorities and expertise, HSI and the IRS were able to dismantle a significant scheme to defraud the people of the United States."

"The charges brought forth today against these 11 individuals serve as another reminder that IRS Criminal Investigation is aggressively pursuing those who choose to defraud the government and disrupt the lives of innocent taxpayers," stated Richard Weber, IRS Criminal Investigations chief.

"Drug traffickers' greed clearly has no limits, as evidenced by this investigation," said Douglas James DEA acting special agent in charge. "The DEA is proud of its partnership with the Anchorage Police Department, which brought this case to their federal counterparts, exposing this multi-faceted criminal organization."

The indictment also charges various defendants with submitting false claims for refund, possessing stolen mail, making false claims of U.S. citizenship, committing passport fraud, making false statements to banks and credit unions, and passing forged U.S. Treasury checks, as well as aggravated identity theft.

The fraud charges each carry maximum penalties of between two and 30 years imprisonment, in addition to the five-year mandatory minimum prison term required upon conviction on the drug charges.

The U.S. Postal Inspection Service and U.S. State Department's Diplomatic Security Service also investigated. The case is being prosecuted by the U.S. Attorney's Office for the District of Alaska and the U.S. Department of Justice Tax Division.

An indictment is merely a formal accusation. Defendants are presumed innocent until proven guilty in a court of law.