US Seeks Approximately $540 Million From Conspiracy Involving Malaysian Sovereign Wealth Fund

Thursday, June 15, 2017

LOS ANGELES – The Justice Department today filed civil forfeiture complaints seeking the forfeiture and recovery of approximately $540 million in assets associated with an international conspiracy to launder funds misappropriated from a Malaysian sovereign wealth fund.

Combined with civil forfeiture complaints filed in July 2016 that seek more than $1 billion, and civil forfeiture complaints filed last week that seek approximately $100 million in assets, this case represents the largest action brought under the Kleptocracy Asset Recovery Initiative. Assets now subject to forfeiture in this case total almost $1.7 billion.

The complaints filed today seek the forfeiture of Red Granite Pictures’ interest in the movies “Dumb and Dumber To” and “Daddy’s Home,” a condominium in New York City worth nearly $5 million, diamond jewelry, artworks by Picasso and Basquiat, and a $260 million megayacht called The Equanimity.

According to the complaints, from 2009 through 2015, more than $4.5 billion in funds belonging to 1Malaysia Development Berhad (1MDB) was allegedly misappropriated by high-level officials of 1MDB and their associates. 1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment, and its funds were intended to be used for improving the well-being of the Malaysian people.

“These cases involve billions of dollars that should have been used to help the people of Malaysia, but instead was used by a small number of individuals to fuel their astonishing greed,” said Acting United States Attorney Sandra R. Brown. “The misappropriation of 1MDB funds was accomplished with an extravagant web of lies and bogus transactions that were brought to light by the dedicated attorneys and law enforcement agents who continue to work on this matter. We simply will not allow the United States to be a place where corrupt individuals can expect to hide assets and lavishly spend money that should be used for the benefit of citizens of other nations.”

“The Criminal Division is steadfast in our efforts to protect the security, safety, and integrity of the American financial system from all manner of abuse, including by kleptocrats seeking to hide their ill-gotten or stolen wealth,” said Acting Assistant Attorney General Kenneth A. Blanco. “Today’s complaints reveal another chapter of this multi-year, multi-billion-dollar fraud scheme, bringing the total identified stolen proceeds to $4.5 billion. This money financed the lavish lifestyles of the alleged co-conspirators at the expense and detriment of the Malaysian people. We are unwavering in our commitment to ensure the United States is not a safe haven for corrupt individuals and kleptocrats to hide their ill-gotten wealth or money, and that recovered assets be returned to the victims from which they were taken.”

As alleged in the complaints, the members of the conspiracy – which included officials at 1MDB, their relatives and other associates – diverted more than $4.5 billion in 1MDB funds. Using fraudulent documents and representations, the co-conspirators allegedly laundered the funds through a series of complex transactions and shell companies with bank accounts located in the United States and abroad. These transactions allegedly served to conceal the origin, source and ownership of the funds, and ultimately passed through U.S. financial institutions to then be used to acquire and invest in assets located in the United States and overseas.

The complaints filed today allege that in 2014, the co-conspirators misappropriated approximately $850 million in 1MDB funds under the guise of repurchasing certain options that had been given in connection with a guarantee of 2012 bonds. As the complaints allege, 1MDB had borrowed a total of $1.225 billion from a syndicate of banks to fund the buy-back of the options. The complaints allege that approximately $850 million was instead diverted to several offshore shell entities. From there, the complaints allege, the funds stolen in 2014, in addition to money stolen in prior years, were used, among other things, to purchase the 300-foot luxury yacht valued at over $260 million, certain movie rights, high-end properties, tens of millions of dollars of jewelry and artwork. A portion of the diverted loan proceeds were also allegedly used in an elaborate, Ponzi-like scheme to create the false appearance that an earlier 1MDB investment had been profitable.

“Today’s filing serves as a reminder of the important role that the FBI plays in rooting out international corruption. When corrupt foreign officials launder funds through the United States in furtherance of their criminal activity, the FBI works tirelessly to help hold those officials accountable, and recover the misappropriated funds,” said Assistant Director Stephen E. Richardson of the FBI’s Criminal Investigative Division. “I applaud all my colleagues and our international partners who have worked to help recover an immense amount of funds taken from the Malaysian people, who are the victims of this abhorrent case of kleptocracy.”

“Today’s announcement is the result of untangling a global labyrinth of multi-layered financial transactions allegedly used to divert billions of dollars from the people of Malaysia and fund the co-conspirators’ lavish lifestyles,” said Deputy Chief Don Fort of IRS Criminal Investigation. “The IRS is proud to partner with other law enforcement agencies and share its world-renowned financial investigative expertise in this complex financial investigation. It’s important for the world to see, that when people use the American financial system for corruption, the IRS will take notice.”

As alleged in the earlier complaints, in 2009, 1MDB officials and their associates embezzled approximately $1 billion that was supposed to be invested to exploit energy concessions purportedly owned by a foreign partner. Instead, the funds allegedly were transferred through shell companies and were used to acquire a number of assets. The complaints also allege that the co-conspirators misappropriated close to $1.4 billion in funds raised through the bond offerings in 2012, and more than $1.2 billion following another bond offering in 2013.

The FBI’s International Corruption Squads in New York City and Los Angeles, and IRS Criminal Investigation are investigating the case.

Assistant United States Attorneys John Kucera and Christen Sproule of the Asset Forfeiture Section, along with Deputy Chief Woo S. Lee and Trial Attorneys Kyle R. Freeny and Jonathan Baum of the Criminal Division’s Money Laundering and Asset Recovery Section, are prosecuting the case. The Criminal Division’s Office of International Affairs is providing substantial assistance.

The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section, in partnership with federal law enforcement agencies and U.S. Attorney’s Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered asset to benefit the people harmed by these acts of corruption and abuse of office. In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.gov(link sends e-mail) or https://tips.fbi.gov/.

A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime. These allegations are not proven until a court awards judgment in favor of the United States.

PTC Inc. Subsidiaries Agree to Pay More Than $14 Million to Resolve Foreign Bribery Charges

Two subsidiaries of Massachusetts software company PTC Inc. entered into a non-prosecution agreement and agreed to pay a $14.54 million penalty today to resolve the government’s investigation into whether the companies improperly provided recreational travel to Chinese government officials in violation of the Foreign Corrupt Practices Act (FCPA), announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.

According to admissions made in the resolution documents, Parametric Technology (Shanghai) Software Company Ltd. and Parametric Technology (Hong Kong) Ltd. (collectively, PTC China), through local business partners, arranged and paid for employees of various Chinese state-owned enterprises to travel to the United States, ostensibly for training at PTC Inc.’s headquarters in Massachusetts, but primarily for recreational travel to other parts of the United States, including New York, Los Angeles, Las Vegas and Hawaii.  PTC China paid a total of more than $1 million through its business partners to fund these trips, while during the same time period, PTC China entered into more than $13 million in contracts with the Chinese state-owned entities.  Company employees typically accompanied the Chinese officials on these trips.  PTC China admitted that the cost of these recreational trips was routinely hidden within the price of PTC China’s software sales to the Chinese state-owned entities whose employees went on the trips.

As part of the non-prosecution agreement, PTC China agreed to pay the criminal penalty, to continue to cooperate with the department, to enhance its compliance program and to periodically report to the department on the implementation of its enhanced compliance program.  The department reached this resolution based on a number of factors.  Among other factors, PTC China did not receive voluntary disclosure credit or full cooperation credit because, at the time of its initial disclosure, it failed to disclose relevant facts that it had learned in connection with a prior internal investigation and did not disclose those facts until the department uncovered additional information independently and brought them to PTC China’s attention.  By the conclusion of the investigation, however, the companies had provided to the department all relevant facts known to them, including information about individuals involved in the FCPA misconduct.

In a related matter, PTC Inc. reached a settlement today with the U.S. Securities and Exchange Commission (SEC) under which it agreed to pay $11,858,000 in disgorgement plus $1.764 million in prejudgment interest.  Thus, the approximately $28 million in combined penalty and disgorgement far exceeds the $13 million in contracts associated with the improper payments.

The FBI’s Boston Field Office investigated the case.  Trial Attorney Aisling O’Shea of the Criminal Division’s Fraud Section prosecuted the case.  The U.S. Attorney’s Office of the District of Massachusetts and the SEC also provided assistance during the investigation.

Private Contractor Pleads Guilty to Bribing Former U.S. Postal Service Contracting Official

A private contractor pleaded guilty today to paying bribes to a U.S. Postal Service (USPS) contracting official in order to receive contracts to deliver the mail.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland and USPS Inspector General David C. Williams made the announcement.

Barbara Murphy, 52, of Rocky Mount, North Carolina, pleaded guilty before U.S. District Judge George Jarrod Hazel of the District of Maryland, who set sentencing for June 13, 2016.

According to a factual stipulation filed with the court, Murphy was the sole owner of ER&R Transportation and MC&G Trucking LLC, which she used to bid for and perform on transportation contracts with USPS.  Murphy admitted that from January 2011 to July 2012, she bribed Gregory Cooper, a former USPS contracting officer representative.  These bribes included cash paid directly into Cooper’s bank accounts, automobile loan payments, college tuition for Cooper’s daughter, five cell phone bill payments, an airline ticket and fitness equipment, Murphy admitted.

According to the plea agreement, Murphy gave all of these benefits in exchange for Cooper’s favorable treatment of her companies when contracting opportunities with the USPS arose, in violation of Cooper’s lawful duty to the USPS.  Specifically, Cooper recommended to his superiors that 10 USPS contracts on which Murphy bid during the relevant time period be awarded to Murphy’s companies, she admitted.  Additionally, Murphy admitted that Cooper provided her with advice on how to address specific issues that arose from her contract performance and drafted documents that Murphy provided to the USPS.

On Nov. 15, 2015, Judge Hazel sentenced Cooper to 15 months in prison for bribery.

The USPS Office of the Inspector General investigated the case.  Trial Attorneys Mark Cipolletti and Monique Abrishami of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney David Salem of the District of Maryland are prosecuting the case.

Executives of Swiss and Las Vegas Companies Convicted in International Investment Fraud Scheme

A federal jury in Las Vegas convicted two men of conspiracy, wire fraud and securities fraud yesterday for their roles in an approximately $10 million international investment fraud scheme involving numerous victims.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Special Agent in Charge Laura A. Bucheit of the FBI’s Las Vegas Field Office made the announcement.

Anthony Brandel, 48, of Las Vegas, and James Warras, 69, of Waterford, Wisconsin, were each convicted of one count of conspiracy, nine counts of wire fraud and eight counts of securities fraud following a five-day trial before Senior U.S. District Judge Kent J. Dawson of the District of Nevada.  The defendants are scheduled to be sentenced on March 2, 2016, by Judge Dawson.

According to evidence presented at trial, Brandel and Warras conspired with others in the United States and Switzerland to promote investments and loan instruments that they knew to be fraudulent.  The conspirators told victims that, for an up-front payment, a Swiss company known as the Malom (Make A Lot of Money) Group AG would provide access to lucrative investment opportunities and substantial cash loans.  To effectuate this scheme, the defendants fabricated bank documents purporting to show that the Malom Group had large amounts of money in several European financial institutions.  And as part of an effort to defraud an investor who held an equity stake in a corporation that had filed for bankruptcy, Warras submitted a sworn affidavit to the U.S. Bankruptcy Court in the District of New Hampshire in which he made false statements about the value of certain bonds that the defendants promoted to the investor.

Brandel and Warras were charged together with four other defendants, including Joseph Micelli, 62, a former California attorney who pleaded guilty to conspiracy to commit wire fraud and securities fraud and is set to be sentenced on Feb. 23, 2016.  The remaining defendants are either at large or awaiting extradition from other countries.

The FBI’s Las Vegas Field Office investigated the case.  Assistant Chief Brian R. Young and Trial Attorneys Melissa Aoyagi and Anna G. Kaminska of the Criminal Division’s Fraud Section are prosecuting the case with assistance from the Criminal Division’s Office of International Affairs and the U.S. Attorney’s Office for the District of Nevada.  The Securities and Exchange Commission’s Enforcement Division, which referred the matter to the department and is conducting a parallel civil enforcement investigation, also provided valuable assistance.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, visit www.stopfraud.gov.

Former Military Contractor Sentenced to 12 Months in Prison for Paying Bribes to Army Officers during Iraq War

The former president of a defense contractor providing services to the U.S. military in Iraq was sentenced today to 12 months and one day in prison for his role in a scheme to pay more than $1.2 million in bribes to U.S. Army contracting personnel in exchange for being awarded lucrative defense contracts, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania.

U.S. District Judge Joel H. Slomsky in the Eastern District of Pennsylvania sentenced Justin W. Lee, 37, of Philadelphia, the former president of Lee Dynamics International (LDI), who pleaded guilty in July 2011 to one count of conspiracy to commit bribery and four substantive counts of bribery.

In connection with his guilty plea, Lee admitted that as the president of LDI and previously as an officer of American Logistics Services (ALS), a Kuwaiti company providing supplies to the U.S. military in Iraq, he paid multiple bribes in the form of cash, airline tickets, trips and hotel stays, among other things, to military contracting personnel in exchange for their agreement to take official action to award lucrative contracts to both LDI and ALS.

Lee’s father and co-defendant, George Lee, who was the CEO of both companies, was sentenced to 54 months in prison in July 2015 for one count of bribery.  This marks the end of a long-running investigation, which began in 2006, that led to the conviction of seven other defendants, including several high-ranking contracting officers.

The U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service and the U.S. Department of Homeland Security – Immigration and Customs Enforcement investigated the case, and the Office of the Special Inspector General for Iraq Reconstruction, the FBI and the Internal Revenue Service previously contributed to the investigation.  Trial Attorneys Richard B. Evans and John Keller of the Criminal Division’s Public Integrity Section and the U.S. Attorney’s Office of the Eastern District of Pennsylvania prosecuted the case.  Mark W. Pletcher and Emily W. Allen of the U.S. Attorney’s Office of the Southern District of California previously provided substantial assistance.

Owner of Los Angeles Medical Supply Company Convicted in $4 Million Medicare Fraud Scheme

A federal jury in Los Angeles convicted a Los Angeles man and owner of a medical supply company today for his role in a $4 million Medicare fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Special Agent in Charge Christian J. Schrank of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Los Angeles Region and Assistant Director in Charge David L. Bowdich of the FBI’s Los Angeles Field Office made the announcement.

According to evidence presented at trial, Valery Bogomolny, 43, used his company, Royal Medical Supply, to bill Medicare $4 million between January 2006 and October 2009 for power wheelchairs (PWCs), back braces and knee braces that were medically unnecessary, not provided to beneficiaries or both.  The evidence further showed that Bogomolny created false documentation to support his false billing claims, including creating fake reports of home assessments that never occurred.  Bogomolny personally delivered PWCs to beneficiaries who were able to walk without assistance and signed documents stating that he had delivered equipment when the equipment was not actually delivered.  Bogomolny ultimately received $2.7 million from Medicare on these false claims.

A sentencing hearing is scheduled for Feb. 29, 2016, before U.S. District Judge S. James Otero of the Central District of California, who presided over the trial.

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section.  Trial Attorneys Fred Medick and Ritesh Srivastava of the Criminal Division’s Fraud Section are prosecuting this case.

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

Army Captain Pleads Guilty to Gratuities Charge

A Colorado Springs, Colorado, man pleaded guilty today in federal court before U.S. District Judge Terrence W. Boyle of the Eastern District of North Carolina to solicitation and receipt of a gratuity, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina.

In connection with his plea, Captain David Anthony Kline, 32, admitted that while serving as a first lieutenant in the U.S. Army stationed at Kandahar Air Field (KAF) in Afghanistan, he sought and accepted $50,000 in gratuities from a contractor who was doing business with the U.S. military.  Specifically, from January 2008 to April 2009, then-1st Lt. Kline was deployed to KAF where he oversaw the handling of transportation movement requests (TMRs) directing the transport of supplies from one location to another across Afghanistan.  Although contracting procedures technically did not permit the authorizing officer to specify the particular Afghan trucking company that would perform the transportation, in practice, Kline and others were able to designate the Afghan company of their choice.  Kline admitted that he sought and accepted $50,000 in U.S. currency from an Afghan national who owned a trucking company doing business on government contracts at KAF, in return for Kline’s facilitation of the award and payment of numerous transportation contracts.

The case was investigated by the Defense Criminal Investigation Service, Army Criminal Investigation Command, the Special Inspector General for Afghanistan Reconstruction and FBI.  The case was prosecuted by Trial Attorney Wade Weems of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Banumathi Rangarajan of the Eastern District of North Carolina.

Two Former Rabobank Traders Convicted for Manipulating U.S. Dollar, Yen LIBOR Interest Rates

A federal jury convicted two former Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) derivative traders – including the bank’s former Global Head of Liquidity & Finance in London – today for manipulating the London InterBank Offered Rates (LIBOR) for the U.S. Dollar (USD) and the Yen, benchmark interest rates to which trillions of dollars in interest rate contracts were tied.  Five former Rabobank employees have now been convicted in the Rabobank LIBOR investigation.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division and Assistant Director in Charge Paul Abbate of the FBI’s Washington Field Office made the announcement.

“Today’s verdicts illustrate the department’s successful efforts to hold accountable bank executives responsible for this global fraud scheme,” said Assistant Attorney General Caldwell.  “This investigation—which also resulted in the recent conviction of a bank executive in the U.K.—exemplifies the department’s work with our international partners to protect our global markets from fraud.  The verdicts also demonstrate the department’s ongoing efforts to hold individuals who use their corporate positions to commit fraud personally responsible for their actions.”

“The department will continue to pursue aggressively those involved in illegal schemes that undermine the integrity of financial markets,” said Assistant Attorney General Baer.  “And we will hold individuals criminally accountable for directing illegal corporate behavior.”

“These convictions make clear that bank executives and traders will be held accountable for manipulating world interest rates for their own personal benefit,” said Assistant Director in Charge Abbate.  “Today’s verdict is a testament to the dedication of the special agents, analysts and prosecutors who worked tirelessly to uncover manipulation and fraud in the global financial system.”

After a four-week trial, a jury in the Southern District of New York found Anthony Allen, 44, of Hertsfordshire, England, and Anthony Conti, 46, of Essex, England, guilty of conspiracy to commit wire and bank fraud and substantive counts of wire fraud.

As the trial evidence showed, LIBOR is an average interest rate, calculated based upon submissions from leading banks around the world and reflecting the rates those banks believe they would be charged if borrowing from other banks.  At the time relevant to the charges, LIBOR was calculated for 10 currencies at 15 maturities, ranging from overnight to one year, and was published by the British Bankers’ Association (BBA), a London-based trade association, based on submissions from a panel of 16 banks, including Rabobank.  Allen, Conti and Paul Robson, who previously pleaded guilty to the conspiracy charge, each determined Rabobank’s LIBOR submissions on various occasions.

LIBOR serves as the primary benchmark for short-term interest rates globally and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products.  Rabobank invested in various derivatives contracts that were directly affected by the relevant LIBOR rates on a certain dates.  If the relevant LIBOR moved in the direction favorable to the defendants’ positions, Rabobank and the defendants benefitted at the expense of the counterparties.  When LIBOR moved in the opposite direction, the defendants and Rabobank stood to lose money to their counterparties.

Evidence at trial established that Allen, who was Rabobank’s global head of liquidity and finance and the manager of the company’s money market desk in London, oversaw a system in which Rabobank employees who traded in these LIBOR-linked derivative products influenced the employees who submitted Rabobank’s LIBOR contributions to the BBA.  These traders asked Allen, Conti, Robson and others to submit LIBOR contributions that would benefit the traders’ or the banks’ trading positions.

Sentencing is scheduled for March 10, 2016.

In addition to Allen and Conti, three other former Rabobank employees have been convicted in the Rabobank LIBOR investigation.  Robson, Lee Stewart and Takayuki Yagami each pleaded guilty to one count of conspiracy in connection with their roles in the scheme.  Two other former Rabobank employees, Tetsuya Motomura, 42, of Tokyo, and Paul Thompson, 48, of Dalkeith, Australia, have also been charged.  Rabobank entered into a deferred prosecution agreement with the department on Oct. 29, 2013, and agreed to pay a $325 million penalty to resolve violations arising from Rabobank’s LIBOR submissions.

The case was investigated by special agents, forensic accountants and intelligence analysts in the FBI’s Washington Field Office.  The prosecution is being handled by Senior Litigation Counsel Carol L. Sipperly and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Trial Attorney Michael T. Koenig of the Antitrust Division.  The Criminal Division’s Office of International Affairs and Deputy Chief Daniel Braun and Assistant Chief Brent Wible of the Criminal Division’s Fraud Section are thanked for their substantial assistance in this matter.

The Justice Department expresses its appreciation for the assistance provided by various enforcement agencies in the United States and abroad.  The Commodity Futures Trading Commission’s Division of Enforcement referred this matter to the department and, along with the U.K. Financial Conduct Authority, played a major role in the LIBOR investigation.  The Securities and Exchange Commission also played a significant role in the LIBOR series of investigations, and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation.   The department has worked closely with the Dutch Public Prosecution Service and the Dutch Central Bank in the investigation of Rabobank.  Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance.

This prosecution is part of President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.  For more information about the task force visit: www.stopfraud.gov.

Former Contracting Officer Sentenced for Bribery in Connection with Awarding of U.S. Postal Service Contracts

A Glenn Dale, Maryland, man and former U.S. Postal Service contracting officer was sentenced today to 15 months in prison for receiving bribes in connection with the awarding of mail delivery contracts.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland and Special Agent in Charge Paul L. Bowman of the U.S. Postal Service’s Office of Inspector General made the announcement.

In May 2015, Gregory Cooper, 59, pleaded guilty to accepting more than $25,000 in bribes from a co-defendant who owned two companies that bid on and secured transportation contracts with the Postal Service for mail delivery.  Those bribes came in a variety of forms, ranging from fitness equipment delivered to Cooper’s Maryland home to a semester’s worth of college tuition for Cooper’s daughter, in addition to $15,900 in cash.  Cooper admitted that in exchange for these payments, he gave favorable consideration to his co-defendant’s companies in the bidding process for nine Postal Service contracts, all of which were awarded to the co-defendant’s companies.

In addition to his prison sentence, U.S. District Judge George J. Hazel of the District of Maryland ordered Cooper to forfeit the amount of the bribes, $25,931.76, and to serve three years of supervised release following his prison sentence.

This case was prosecuted by Trial Attorneys Mark J. Cipolletti and Monique Abrishami of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys David Salem and Arun G. Rao of the District of Maryland.  The case was investigated by special agents from the U.S. Postal Service Office of Inspector General.

Florida Investment Advisor Sentenced to 18 Months in Prison for Orchestrating $9 Million Investment Fraud Scheme

A Tampa, Florida, area investment advisor was sentenced to 18 months in prison today for perpetrating a $9 million investment fraud scheme involving Facebook stock.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney A. Lee Bentley III of the Middle District of Florida, Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office and Inspector in Charge Ronald J. Verrochio of the U.S. Postal Inspection Service (USPIS) Miami Division made the announcement.

Gignesh Movalia, 40, a registered investment advisor, was also ordered by Chief U.S. District Judge Steven D. Merryday of the Middle District of Florida to pay $5,394,419 in restitution and to three years of supervised release following his prison sentence.  Movalia pleaded guilty on Aug. 13, 2015, to one count of investment advisor fraud.

In connection with his guilty plea, Movalia admitted that he founded OM Global Investment Fund LLC in 2009 and subsequently used the fund to defraud investors.  Specifically, in 2011 and 2012, Movalia raised more than $9 million from 130 investors by falsely claiming to have access to pre-initial public offering shares of Facebook Inc.  Rather than using this money to buy Facebook shares as promised, however, Movalia invested the money in other securities and concealed that fact from investors.  By September 2013 when it went into receivership, the OM Global Fund lost approximately $9 million, with $6 million of those losses as a result of the fraud scheme.

The case was investigated by the FBI and USPIS, with assistance provided by the U.S. Securities and Exchange Commission’s Miami Regional Office.  The case was prosecuted by Trial Attorney Andrew H. Warren of the Criminal Division’s Fraud Section.