Tag Archives: obstruction of justice

Two Former Employees of House Member Indicted On Federal Charges in Cyberstalking Case

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Thursday, July 13, 2017

WASHINGTON – Two former staff employees of a member of the U.S. House of Representatives have been indicted following an investigation into the circulation of private, nude images and videos of the member and the member’s spouse, announced U.S. Attorney Channing D. Phillips and Matthew R. Verderosa, Chief of the United States Capitol Police.

Juan R. McCullum, 35, of Washington, D.C., was indicted by a grand jury on two counts of cyberstalking, and a co-worker, Dorene Browne-Louis, 45, of Upper Marlboro, Md., was indicted on two counts of obstruction of justice. The indictment, which was unsealed today, was returned on July 11, 2017, in the U.S. District Court for the District of Columbia.

According to the indictment, McCullum worked from April 2015 until June 2016 in the House member’s legislative office in Washington, D.C. Browne-Louis worked in the same office from January 2015 until April 2016.

The indictment alleges that, during the course of his employment, McCullum offered in March 2016 to assist the House member in repairing the member’s malfunctioning, password-protected cellular iPhone by taking the device to a local Apple store. According to the indictment, the House member provided McCullum with the device solely to have the iPhone repaired. McCullum was not given permission to take, copy, or distribute any of the contents of the iPhone. The iPhone contained the private, nude images and videos.

As alleged in the indictment, in July 2016, after McCullum left the House member’s staff, he engaged in a course of conduct that included creating a Hotmail account and a Facebook social media account, using a fictitious name, to distribute and post the private images and videos. Further, according to the indictment, he encouraged others on social media to redistribute the images and videos in the member’s congressional district. The indictment alleges that McCullum also sent text messages to Browne-Louis alerting her to his activities as early as July 2, 2016, as well as e-mail messages containing several of the images and videos.

On July 6, 2016, federal law enforcement initiated a criminal investigation into the unauthorized distribution and publication of the images and videos. The charges against Browne-Louis involve text messages from McCullum that she allegedly deleted from her cellular phone, as well as false, incomplete, and misleading statements that she allegedly made to law enforcement and a federal grand jury regarding her knowledge of the activities.

Browne-Louis made her first appearance today in the U.S. District Court for the District of Columbia. She pled not guilty to the charges and was released on personal recognizance pending a status hearing scheduled for July 19, 2017. McCullum’s first court appearance has not yet been scheduled.

The charge of cyberstalking carries a statutory maximum of five years in prison and potential financial penalties. The charge of obstruction of justice carries a statutory maximum of 20 years of incarceration and potential financial penalties.

An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.

This case is being investigated by the United States Capitol Police. It is being prosecuted by Assistant U.S. Attorneys Veronica Jennings and Tejpal S. Chawla of the U.S. Attorney’s Office for the District of Columbia. Assistance was provided by former Assistant U.S. Attorney Natalia Medina, Criminal Investigator John Marsh, Paralegal Specialists Bianca Evans and Matthew Ruggiero, and Litigation Technology Specialists Leif Hickling, Thomas Royal and Paul Howell, all of the U.S. Attorney’s Office.

Former Silk Road Task Force Agent Pleads Guilty to Money Laundering and Obstruction

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Ex-Secret Service Agent Used Status to Pocket $820,000 Worth of Bitcoin 

A former U.S. Secret Service special agent pleaded guilty today to money laundering and obstruction of justice in connection with his theft of digital currency during the federal investigation of Silk Road, an online marketplace used to facilitate the purchase and sale of illegal drugs and other contraband.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California, Chief Richard Weber of the IRS-Criminal Investigation (IRS-CI), Special Agent in Charge David J. Johnson of the FBI’s San Francisco Division, Special Agent in Charge Michael P. Tompkins of the Justice Department’s Office of the Inspector General’s Washington, D.C. Field Office, and Special Agent in Charge Lori Hazenstab of the Department of Homeland Security’s Office of the Inspector General in Washington D.C. made the announcement.

Shaun W. Bridges, 32, of Laurel, Maryland, had been a special agent with the U.S. Secret Service for approximately six years in the Baltimore Field Office and was assigned to the Electronic Crimes Task Force.  He pleaded guilty before the U.S. District Judge Richard Seeborg of the Northern District of California and a sentencing hearing is scheduled for Dec. 7, 2015.

“There is a bright line between enforcing the law and breaking it,” said Assistant Attorney General Caldwell.  “Law enforcement officers who cross that line not only harm their immediate victims but also betray the public trust.  This case shows we will act quickly to hold wrongdoers accountable, no matter who they are.”

“Mr. Bridges has now admitted that he brazenly stole $820,000 worth of digital currency while working as a U.S. Secret Service special agent, a move that completely violated the public’s trust,” said U.S. Attorney Haag.  “We depend on those in federal law enforcement having the highest integrity and unshakeable honor, and Mr. Bridges has demonstrated that he utterly lacks those qualities.  We appreciate the hard work of our federal partners that went into bringing Mr. Bridges to justice.”

“Through a series of complex transactions, the defendant stole bitcoins worth hundreds of thousands of dollars,” said Chief Weber.  “This case is an excellent example of the financial expertise of our special agents. Through the analysis of both the block chain and data from the Silk Road servers, we were able to trace the flow of funds, which eventually led to the defendant.”

Between 2012 and 2014, Bridges was assigned to the Baltimore Silk Road Task Force, a multi-agency group investigating illegal activity on Silk Road.  Bridges’ responsibilities included, among other things, conducting forensic computer investigations in an effort to locate, identify and prosecute targets, including Ross Ulbricht, aka Dread Pirate Roberts, who ran Silk Road.

According to his plea agreement, Bridges admitted that in January 2013 he used an administrator account on the Silk Road website that belonged to another individual to fraudulently obtain access to that website, reset passwords of various accounts and to move bitcoin from those accounts into a bitcoin “wallet” that Bridges controlled.  Bridges admitted that he moved and stole approximately 20,000 bitcoin, which at that time was worth approximately $350,000.

Bridges admitted that he moved the stolen bitcoin into an account at Mt. Gox, an online digital currency exchange based in Japan.  According to his admissions, he liquidated the bitcoin into $820,000 of U.S. currency between March and May 2013, and had the funds transferred to personal investment accounts in the United States.

Bridges’ plea agreement also established that he obstructed the Baltimore federal grand jury’s investigations of Silk Road and Ulbricht in a number of ways, including by impeding the ability of the investigation to fully utilize a cooperator’s access to Silk Road.  In addition, Bridges admitted that he made multiple false and misleading statements to investigators in connection with the San Francisco federal grand jury’s investigation into his own illegal acts, and that he encouraged another government employee to lie to investigators.

Bridges is one of two federal agents to plead guilty in connection with illegal activity during the investigation of Silk Road.  Carl M. Force, 46, of Baltimore, was a special agent with the Drug Enforcement Administration and was also assigned to the Baltimore Silk Road Task Force.  On July 1, 2015, Force pleaded guilty to a three-count information charging him with money laundering related to his theft of over $700,000 in digital currency while acting as an undercover agent on the Task Force.  Force is scheduled to be sentenced by Judge Seeborg on Oct. 19, 2015.

The case was investigated by the FBI’s San Francisco Division, the IRS-CI’s San Francisco Division, the Justice Department’s Office of the Inspector General and the Department of Homeland Security’s Office of the Inspector General in Washington, D.C.  The case is being prosecuted by Assistant U.S. Attorneys Kathryn Haun and William Frentzen of the Northern District of California and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, with assistance from Assistant U.S. Attorney Arvon Perteet.

French Citizen Sentenced for Obstructing a Criminal Investigation into Alleged Bribes Paid to Win Mining Rights in Guinea

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Frederic Cilins, a 51-year old French citizen, was sentenced today in the Southern District of New York to 24 months in prison for obstructing a federal criminal investigation into alleged bribes to obtain mining concessions in the Republic of Guinea.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York and Assistant Director in Charge George Venizelos of the FBI’s New York Field Office made the announcement.    The sentence was imposed by U.S. District Court Judge William H. Pauley III.
“Cilins offered to bribe a witness in an FCPA investigation to stop the witness from talking to the FBI,” said Assistant Attorney General Caldwell.  “Today’s sentence holds Cilins accountable for his effort to undermine the integrity of our justice system, and sends a message that those who interfere with federal investigations will be prosecuted and sent to prison.”
“Frederic Cilins went to great lengths to thwart a Manhattan federal grand jury’s investigation into an alleged bribery scheme in the Republic of Guinea,” said U.S. Attorney Bharara.  “In an effort to prevent the federal authorities from learning the truth, Cilins paid a witness for her silence and to destroy key documents.  Today, Cilins learned that no one can manipulate justice.”
“Cilins obstructed the efforts of the FBI during the course of this investigation,” said Director in Charge Venizelos.  “His guilty plea and sentence demonstrate our shared commitment with the department’s Criminal Division and U.S. Attorney’s Office to hold accountable those who seek to interfere with the administration of justice. This case should be a reminder to all those who try to circumvent the efforts of a law enforcement investigation: the original crime and the cover-up both lend themselves to prosecution.”
According to court documents, Cilins obstructed an ongoing federal investigation concerning potential violations of the Foreign Corrupt Practices Act (FCPA) and other crimes.    Federal law enforcement was investigating whether a particular mining company with which Cilins was affiliated paid bribes to officials of a former governmental regime in the Republic of Guinea to obtain and retain valuable mining concessions in the Republic of Guinea’s Simandou region.    During monitored and recorded phone calls and face-to-face meetings, Cilins agreed to pay substantial sums of money to induce a witness to the alleged bribery scheme to leave the United States to avoid questioning by the FBI, as well as to give documents to Cilins for destruction that had been requested by the FBI as part of the investigation.    Cilins also sought to induce the witness to sign an affidavit containing false statements regarding matters under investigation by the grand jury.    That witness was the former wife of a now-deceased Guinean government official who held an office in Guinea that allowed him to influence the award of mining concessions.
Cilins pleaded guilty on March 10, 2014 to a one-count superseding information charging him with obstruction of a federal investigation.    In addition to his sentence, he was ordered to pay a fine of $75,000 and forfeit $20,000.
The case was investigated by the FBI.    The case is being prosecuted by Trial Attorney Tarek Helou of the Criminal Division’s Fraud Section and Assistant United States Attorney Elisha J. Kobre of the Southern District of New York.    The Criminal Division’s Office of International Affairs and Office of Enforcement Operations provided valuable assistance in the investigation.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .

 

GeyerGorey LLP Issues Updated Representative Matters List; Experience is Wide and Deep

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Representative Matters

Our attorneys have led and participated in some of the highest profile matters in the past decade, both while in the government and in private practice. We have been involved in the most significant criminal cartel cases, the most important mergers, the most notable civil antitrust investigations, the largest procurement fraud cases, and game-changing antitrust cases that reached the United States Supreme Court. Our collective experience stands as a testament to our work ethic, our drive for excellence, and the trust and responsibility we have been given by our clients and the government.

International Cartels:

  • Led investigation and prosecution of marine contractors engaged in conspiracy to suppress and eliminate competition to install deep sea oil platforms
  • Led investigation and prosecution of international freight forwarders engaged in conspiracy to fix prices on international air cargo shipments
  • Led investigation and prosecution of household-goods moving contractors engaged in conspiracy to fix prices for international moving services provided to Department of Defense
  • Investigation and prosecution of graphite electrodes manufacturers
  • Investigation and prosecution of ocean shipping companies
  • Investigation and prosecution of a FTSE 250 engineering company that resulted in the indictment, extradition and conviction of its former chief executive
  • Defended foreign construction company in investigation and prosecution of alleged billion-dollar bid rigging scheme, in related qui tam litigation, and in other related matters
  • Defended foreign vitamin manufacturers in investigations and prosecutions of alleged international price-fixing agreements
  • Defended foreign specialty chemical manufacturers in investigations and prosecutions of alleged international price-fixing agreements
  • Defended U.S.-based executive of foreign company in criminal and civil litigation related to his alleged role in an international cartel to fix prices in the marine supply industry
  • Defended foreign executive of foreign company in criminal and civil litigation related to his alleged role in the conspiracy to fix air cargo rates around the world
  • Defended international freight forwarder in criminal litigation related to its alleged role in an international conspiracy to rig bids on U.S. military shipping contracts
  • Investigation and subsequent prosecution of foreign vitamin manufacturers for price fixing conspiracy

Domestic Price Fixing and Bid Rigging:

  • Defended electrical products manufacturer in first felony prosecution under the Sherman Act and in civil treble damage litigation
  • Represented a class of nurses in litigation against a hospital association and a number of Arizona hospitals
  • Represented the State of Ohio against a number of dairies for allegedly rigging bids of school milk
  • Investigation and prosecution of highway paving contractors in multiple districts for bid rigging
  • Investigation and prosecution of military insignia providers supplying the Army Air Force Exchange System with over 4,000 items of insignia
  • Represented metal drum manufacturer in prosecution for price fixing
  • Investigation of polypropylene bag manufacturers and that resulted in the prosecution of a manufacturer for Buy American Act violations and conspiracy to defraud
  • Investigation and prosecution of nearly 40 cases against paving contractors for conspiring to rig bids in connection with federal and state highway and airport contracts
  • Investigation and prosecution of an auction rigging conspiracy involving auto parts to by the Department of Defense at Defense Reutilization Marketing Offices (DRMO)
  • Investigation and prosecution of multiple electrical construction contractors for conspiring to rig bids for major power wiring contracts associated with steel mills and waste water treatment plants
  • Investigation and prosecution of multiple wholesale grocery companies and bid managers for rigging bids to school districts, hospitals and jails in southern Texas
  • Investigation and prosecution of multiple dairies for rigging bids for school milk sold to districts in Louisiana
  • Investigation and prosecution of crawfish processors for fixing prices paid to crawfish farmers and fishermen
  • Investigation and prosecution of bribery conspiracy involving the reconstruction of the New Orleans levee system after Hurricane Katrina
  • Investigation and prosecution of fire protective services company and its president
  • Investigation and prosecution of an Iraq-based general construction bid rigging scheme
  • Investigation and prosecution of conspiracy to solicit kickback scheme involving security services on a US Agency for International Development contract
  • Investigation and prosecution of fuel theft from an overseas United States military facility
  • Investigation and prosecution of a Europe-based scheme to defraud the Iraqi government by facilitating the fraudulent claim for payment of armored vehicles that were never delivered
  • Represented individual accused of defrauding government defense agency out of hundreds of thousands of dollars of grant money
  • Represented company accused of defrauding government by failing to supply vitamin-enriched food products with the proper level of enrichment
  • Represented large computer software company in internal investigation of improper influence on government contracting process

General Criminal:

  • Defended CEO and three closely-held companies in a multi-state racketeering and tax fraud prosecution
  • Investigation and prosecution of multiple labor racketeering cases ranging from prosecutions of United Mine Worker Union officials for theft of union funds used to pay for the murder of a political opponent of the union president to the prosecution of two Boston-based racketeers for actions associated with their travel to California in connection with a union organizing effort at a San Rafael newspaper
  • Investigation and prosecution of the mayor of a New Jersey town for taking bribes in connection with the permitting of a tank farm at the terminus point of a major Gulf Coast to East Coast pipeline
  • Investigation and prosecution of the most prolific serial bank robber in United States history
  • Investigation and prosecution of the murder for hire of a government witness and one of the largest cocaine importation conspiracies East of the Mississippi River
  • Investigation and prosecution of numerous gun, drug and false identity cases
  • Investigation and prosecution of multiple obstructions of justice, contempt, false statement, witness tampering and perjury cases arising out of grand jury investigations
  • Investigation and prosecution of bank fraud cases
  • Represented individuals before the District of Columbia Court of Appeals in appeals from criminal convictions (more than a dozen cases)
  • Defended individual in intelligence community in investigation by DCIS for alleged violations of public corruption statutes (18 U.S.C §§ 207 & 208)
  • Defended individual in criminal investigation by Inspector General of NASA
  • Defended individual in federal bribery investigation
  • Defended government contractor in investigation by the Inspector General of the Department of Agriculture
  • Defended several regional hospitals in various unrelated federal investigations of allegedly fraudulent billing practices, Stark violations
  • Represented hospital CEO in investigation of alleged Stark violations
  • Represented pathology laboratory in healthcare fraud investigation
  • Represented national healthcare company in investigation of allegedly criminal off-label marketing
  • Represented various individuals in applications for presidential pardons

Mergers and Acquisitions:

  • Represented Warner Music in connection with the proposed acquisition of EMI by Universal Music
  • Represented DISH Network in opposition to the proposed acquisition of T-Mobile by AT&T
  • Represented Merck in connection with its acquisition of Schering Plough
  • Represented Simon Properties in connection with its acquisition of Prime Outlets
  • Obtained antitrust clearance in the acquisition of Liquid Container by Graham Packaging
  • Obtained consent decree against nuclear engineering firm which had acquired another firm with the same engineering specialty
  • Represented major home healthcare provider in acquisition valued in excess of $500 million
  • Represented pathology laboratory in merger valued in excess of $100 million
  • Represented foreign mining company in acquisition of US coal mines valued over $1 billion
  • Represented hospital management company in acquisition valued in excess of $500 million
  • Represented individual in several acquisitions of stock each valued in excess of $100 million
  • Represented major over-the-counter pharmaceutical company in four different acquisitions over several years whose values ranged from over $100 million to over $500 million
  • Represented national restaurant chain in acquisition valued at about $1 billion
  • Represented regional hospital chain in acquisition of a hospital valued above $50 million
  • Represented hospital valued in excess of $100 million in sale to state hospital system

Civil Antitrust Matters:.

  • Defended large telecommunications provider in three week trial for alleged exclusionary conduct directed towards telecom services resellers.
  • Represented large telecommunications provider as plaintiff in case alleging monopolization of market for telecom switch software.
  • Represented leading music copyright licensing organization in a decade-long investigation by the Department of Justice
  • Led the investigation of Ticketmaster at the Department of Justice
  • Led major, successful prosecution by United States Department of Justice of conspiracy among twenty-four leading market-makers in NASDAQ stocks, including Goldman, Sachs & Co. and J. P. Morgan Securities,  Inc. who had conspired to maintain spreads between buying and selling prices of NASDAQ stocks
  • Defended large telecommunications provider in multi-year litigation brought by competitive telecom carrier alleging monopolization of market for high speed data services
  • Led successful investigation and prosecution of Salomon Bros Inc. and two hedge funds, Caxton Corporation and Steinhardt Partners, LP, to limit the supply of two-year Treasury notes to the “repo,” or “repurchase agreement,” market
  • Successfully brought the Reagan Administrations ‘s first challenge to a merger (brewing industry)
  • Successfully represented the United States in a litigated matter challenging field of use restrictions in patent licensing agreement in specialty chemicals
  • Successfully represented the United States in challenge to professional rules of conduct limiting competition among accountants in Texas
  • Successfully represented the United States in challenge to acquisition by Texaco, Inc. of an independent oil refining company
  • Represented high-tech electronic service provider with respect to antitrust issues in a bet-the-company patent infringement case
  • Represented sporting goods manufacturer in vacating a consent decree
  • Represented leading music copyright pool in civil antitrust investigation leading to vacating of an earlier consent decree and modification of another consent decree
  • Represented hospital CEO in litigation arising from denial of physician staff privileges

Antitrust Compliance Counseling:

  • Advised large telecommunications provider on its price and product bundling
  • Advised large telecom provider in connection with a joint venture of three carriers to entire the mobile payments market with mobile phones
  • Advised major manufacturer of household appliances on antitrust compliance
  • Advised major manufacturer of high-end kitchen appliances on antitrust compliance
  • Advised major manufacturer of over-the-counter pharmaceutical on antitrust compliance
  • Advised regional airport on state action doctrine and compliance with antitrust laws
  • Advised national trade association on antitrust compliance and Noerr-Pennington doctrine
  • Advised international shipping company on compliance regarding competition, fraud, and foreign corrupt practices
  • Advised African government on contracting and anti-fraud and anti-corruption best practices

Other Civil Litigation:

  • Represented Haiti in multinational investigation and litigation leading to the recovery of money stolen by its former president Jean-Claude Duvalier
  • Represented developers in multiple appeals involving alleged illegal cooperative conversion terms
  • Defended law firm in $10 million professional malpractice action
  • Defended various healthcare providers in numerous different federal investigations of alleged fraud, related qui tam cases, and related whistleblower termination actions
  • Defended CMS contractor in qui tam case
  • Represented regional Medicare Advantage organization in suit against the U.S. Government
  • Defended book distributor and publisher in defamation case
  • Defended author in defamation case
  • Represented gaming company in civil rights action relating to state gaming regulations
  • Defended copyright and trademark owner in intellectual property litigation
  • Defended local retailer of gray market goods in trademark infringement litigation
  • Represented major multinational corporation in suit seeking refund of local corporate franchise tax
  • Represented government contractor in appeal of denial of security clearance
  • Defended employers in cases alleging violation of wage-and-hour statute
  • Represented developers in multiple appeals involving alleged illegal cooperative conversion terms
  • Defended employer in case alleging employment discrimination
  • Defended employer in case alleging sexual harassment
  • Defended employers in cases alleging unlawful discharge

Experience by Industry:

  • Air Cargo
  • Aircraft Parts (Domestic)
  • Airlines
  • Airport Contracts
  • Automobile Dealers (Domestic)
  • Airlines
  • Asset Forfeiture
  • Auction Rigging (Multiple Industries)
  • Banking (International)
  • Baked Goods (Domestic)
  • Baking Soda
  • Book Publishing
  • Bridge Construction
  • Carbon Products
  • Caustic Soda
  • Cell Towers (Domestic)
  • Chemicals (Multiple Products, Domestic and International)
  • Clothing and Textiles (Multiple Products, Domestic and International)
  • Computer Software
  • Construction (Domestic and International)
  • Copyright and Trademark
  • Dairy Products
  • Deep sea Oil Platforms
  • Democratization Programs
  • Electrical Products
  • Embassy Construction
  • Engineering
  • Export-Import Bank Clients (Multiple Industries, International)
  • Food Service Contracts (Multiple Industries, Domestic and International)
  • Financial Institutions (Domestic and International)
  • Fire Protection Services
  • Freight Forwarding (Domestic and International)
  • Fuel Supply (Domestic and International)
  • General Construction (Multiple Industries, Domestic and International)
  • Government Contracts (Multiple Industries, Domestic and International)
  • Graphite Electrodes
  • Highway Construction
  • Hospitals
  • Housing Foreclosure Auctions (Domestic)
  • Information Technology (Multiple Industries, Domestic and International)
  • Industrial Gases (Domestic and Multiple Products)
  • LIBOR
  • Marine Contractors
  • Medical Products (Multiple Products, Domestic and International)
  • Metal Drums
  • Military Insignia (International)
  • Military Moving and Storage
  • Mining and Related Products (Multiple Industries, Domestic)
  • Motor Vehicles (Domestic)
  • Municipal Bonds (Multiple Industries, Domestic and International)
  • Nursing
  • Ocean Shipping (International)
  • Oilfield Supplies
  • Pharmaceuticals (Multiple Products, Domestic and International)
  • Polypropylene bags
  • Rock Salt
  • Seafood
  • Security Contracts
  • School District Contracts (Multiple Industries)
  • Soda Ash
  • Shipping (Multiple Industries, Domestic and International)
  • Slag Removal
  • Telecommunications
  • Tobacco
  • Translation Services
  • Trucking
  • US Agency for International Development Contractors and Grant Recipients
  • Vitamins
  • Warzone
  • Waste Hauling
  • Wholesale Groceries
  • Wireless
  • World Bank Contractors and Grant Recipients (International)
  • Vitamins

 

Experience by Subject Matter:

  • Antitrust (Civil and Criminal)
  • Auction Rigging
  • Bank Robberies (Domestic)
  • Bank Fraud
  • Bid-Rigging
  • Bribery
  • Buy American Act Violations
  • Capital Crimes
  • Cartels (Multiple Products, Domestic and International)
  • Cash Smuggling (International, multiple procurements by multiple governments)
  • Civil Merger and Non-Merger Cases (Multiple Products, Multiple Industries Domestic and International)
  • Civil Rights Actions
  • Competition Advocacy
  • Contempt
  • Contracting Fraud
  • Corporate Defense (Multiple Industries, Domestic and International)
  • Criminal Conspiracies
  • Defamation
  • Disaster Fraud
  • Drug Cartels and Trafficking
  • Embezzlement
  • Employment Law
  • False Claims
  • False Statements
  • Federal Trade Commission Matters
  • Firearms and Weapons Offenses (Domestic and International)
  • Foreign Corrupt Practices Act (FCPA) (Multiple Industries)
  • Forgery
  • Fuel Theft
  • Grant Fraud (Multiple Industries, Multiple Agencies, Domestic and International)
  • Hart-Scott-Rodino Pre-Merger Notification
  • Health Care Fraud (Compliance, Organizational Defense, Whistleblowers)
  • Kickbacks
  • Identity Theft
  • Intellectual Property
  • Mail Fraud
  • Market Allocation
  • Mergers and Acquisitions
  • Money Laundering (Multiple Industries, Domestic and International)
  • Monopolies (Multiple Industries, Domestic and International)
  • Murder for Hire
  • Non-governmental Organizations (International)
  • Obstruction of Justice
  • Overseas Contingency Operations
  • Perjury
  • Presidential Pardons
  • Price Fixing
  • Procurement Fraud (Multiple Industries, Domestic and International)
  • Professional Malpractice Defense
  • Public Corruption
  • Qui Tam Matters
  • Racketeering
  • Securities Fraud
  • Stark Violations
  • Tax Fraud (International, Domestic and State)
  • Territorial Allocation
  • Webb-Pomerene Organizations (International)
  • Weapons Offenses (Domestic and International)
  • Whistleblowers (Multiple Industries, Domestic and International)
  • Wire Fraud
  • Witness Tampering

NORTHERN CALIFORNIA REAL ESTATE INVESTOR INDICTED – Superseding Indictment Adds Obstruction of Justice to Bid-Rigging

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A federal grand jury in U.S. District Court for the Eastern District of California in Sacramento today returned a superseding indictment charging Andrew B. Katakis, of Danville, Calif., with obstruction of justice related to a federal investigation into conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions held in San Joaquin County, Calif., the Department of Justice announced.

The remaining allegations are unchanged from the original indictment, which was returned by a federal grand jury on Dec. 7, 2011. The pre-existing counts charge Katakis, Donald M. Parker, Anthony B. Joachim and W. Theodore Longley with conspiring with other unnamed co-conspirators to rig bids and commit mail fraud when purchasing selected properties at public real estate foreclosure auctions. Wiley C. Chandler, another real estate investor who was also charged in the original indictment, pleaded guilty on Feb. 24, 2012.

The added charge alleges that after Katakis received a letter notifying him that a federal grand jury had subpoenaed his bank account, he deleted and caused others to delete electronic records and documents related to the conspiracies. The superseding indictment alleges that Katakis also installed and caused others to install and use a software program that overwrote deleted electronic records and documents so that they could not be viewed or recovered.

“Obstruction of a grand jury investigation is a crime the Antitrust Division takes seriously,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “We will prosecute those who subvert the competitive process, as well as those who attempt to conceal their illegal actions by destroying evidence.”
According to the superseding indictment, Katakis, Parker, Joachim, Longley and co-conspirators agreed to suppress and restrain competition by rigging bids to obtain selected properties offered at public auctions in San Joaquin County. The conspirators also devised a scheme to fraudulently acquire titles to selected properties sold at the public auctions and to divert money to co-conspirators that would have gone to the beneficiaries. The indictment alleges that the conspiracy lasted from at least September 2008 until at least October 2009.
“This superseding indictment includes allegations that, in addition to the charges previously alleged, this defendant obstructed justice,” said Benjamin B. Wagner, U.S. Attorney for the Eastern District of California. “The new charge arises out of a long-running investigation that has already resulted in guilty pleas by numerous other defendants who participated in the scheme charged in this case.”

Katakis, Parker, Joachim and Longley are charged with bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. They are also charged with conspiracy to commit mail fraud, which carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud. The newly added obstruction of justice charge against Katakis carries a maximum sentence of 20 years and a $250,000 fine.

To date, 10 individuals have pleaded guilty in U.S. District Court for the Eastern District of California in connection with the investigation: Anthony B. Ghio, John R. Vanzetti, Theodore B. Hutz, Richard W. Northcutt, Yama Marifat, Gregory L. Jackson, Walter Daniel Olmstead, Robert Rose, Kenneth Swanger and Chandler.

The additional charge today is the latest filed by the department in its ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate auctions in San Joaquin County. The investigation is being conducted by the Antitrust Division’s San Francisco office, the U.S. Attorney’s Office for the Eastern District of California, the FBI’s Sacramento Division, and the San Joaquin County District Attorney’s Office. Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s San Francisco office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm, contact the U.S. Attorney’s Office for the Eastern District of California at 916-554-2700 or contact the FBI’s Sacramento Division at 916-481-9110.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established 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. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.