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Fifty Individuals Indicted in Puerto Rico with Alleged Identity Fraud
Fifty individuals were charged in an indictment unsealed yesterday in Puerto Rico, a U.S. territory, with conspiracy to commit identification fraud in connection with their alleged roles in a scheme to traffic the identities of Puerto Rican U.S. citizens and corresponding identity documents.
The one-count indictment was returned by a federal grand jury on December 29, 2011. Defendants were arrested yesterday in multiple districts throughout the United States and Puerto Rico and will make initial appearances in federal court in the districts in which they were arrested. At this time, it is not clear if the individuals will be transported to Puerto Rico to face charges, or will remain in the district in which they were arrested.
According to the indictment, from at least April 2009 to December 2011, alleged conspirators in 15 states and Puerto Rico trafficked the identities of Puerto Rican U.S. citizens, corresponding Social Security cards, Puerto Rico birth certificates and other identification documents to undocumented aliens and others residing in the United States.
Although Puerto Rico is an unincorporated territory of the United States, those born in Puerto Rico are U.S. citizens. U.S. federal law is applied to Puerto Rico, such as federal taxes and federal criminal laws, yet Puerto Ricans are not permitted to vote in U.S. federal elections. Current actions are being taken by the Government of Puerto Rico to establish itself apart from the United States, but as it stands today Puerto Ricans are U.S. citizens, thereby opening themselves up to this kind of identity theft.
The indictment alleges that conspirators located in the Savarona area of Caguas, Puerto Rico, (Savarona suppliers) obtained the Puerto Rican identities and corresponding identity documents. Conspirators in various locations throughout the United States (identity brokers) solicited customers. The identity brokers allegedly sold Social Security cards and corresponding Puerto Rico birth certificates for prices ranging from $700 to $2,500 per set. The indictment alleges that identity brokers ordered the identity documents from Savarona suppliers, on behalf of the customers, by making coded telephone calls, including using terms such as “shirts,” “uniforms” or “clothes,” to refer to identity documents. Specifically, the brokers asked for “skirts” for female customers and “pants” for male customers in various “sizes,” which referred to the ages of the identities sought by the customers.
According to the indictment, payment was made through a money transfer service. Savarona suppliers allegedly retrieved the payments from the money transfer service and then sent the identity documents to the brokers using express, priority or regular U.S. mail. The indictment alleges that various conspirators sent or received money and mail parcels.
As alleged in the indictment, the customers 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.
If convicted, each individual faces a maximum sentence of 15 years in prison and a $250,000 fine, as well as forfeiture. To view the Department of Justice press release on this case, please click here.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
Philippine Nationals Arrested in International Arms Trafficking Case
According to a press release issued last week by the Department of Justice, three Philippine nationals were arrested last week on charges of violating the Arms Export Control Act and are facing prosecution in the Central District of California.
Sergio Santiago de Leon Syjuco, aka “Yogi,” 25, of Muntinlupa City, Philippines; Cesar Paolo Inciong Ubaldo, aka “Arvi,” 26, of Paranaque City, Philippines; and Arjyl Revereza, 25, of Manila, Philippines, were charged in criminal complaint unsealed yesterday in the Central District of California with importing defense articles into the United States without a license, in violation of the Arms Export Control Act. Syjuco, Ubaldo and Revereza were arrested upon their entry into the United States on January 5, 2012. They made their initial court appearances last Friday in U.S. District Court in Los Angeles before U.S. Magistrate Judge Alicia G. Rosenberg. According to the complaint, the case is part of an undercover FBI investigation of transnational Asian organized crime groups involved in the illicit trafficking of firearms to the United States and Mexico.
The Arms Export Control Act controls the importation and exportation of defense articles and defense services. The Act is meant to ensure that the import and export of weapons and the like are for licensed purposes only.
The complaint alleges that on June 7, 2011, Syjuco, Ubaldo and Revereza imported various defense articles – items specifically designed, developed, configured, adapted or modified for military application – into the United States from the Republic of the Philippines, including 12 fully automatic Bushmaster M-4 .223 caliber rifles, a .50 caliber sniper rifle, an M14 7.62mm assault rifle, a single-shot grenade launcher, a rocket propelled grenade (RPG-7) launcher, a mortar launcher, an AK-47 rifle and ballistic vests. The three individuals did not have a license to import these items into the United States. Law enforcement officers took possession of the items when they entered the United States.
The individuals were charged under Title 22 of the United States Code, Section 2778. If convicted for willfully violating the statute, the Philippine nationals face up to 10 years in prison. This does not take into account other charges, such as conspiracy to violate the statute.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
DEA Launders Millions to Track Drug Traffickers
It is not a well kept secret that the U.S. government, mainly the Drug Enforcement Agency (DEA), engages in undercover operations in order to take down alleged drug traffickers in foreign countries. But what may be less well known is the fact that the DEA launders millions of dollars into the drug trafficking operations of Mexico.
With the recent increase of drug related violence in Mexico over the past several years, the U.S. government has taken a more active role in the surveillance and investigative efforts into the Mexican drug cartels. The question remains, how far is too far? Should it be considered a legitimate effort by government resources when it engages in money laundering between the United States and Mexico?
The DEA doesn’t call it money laundering, of course. Rather, from their perspective, it is a “mission driven” initiative where the ends justify the means. That argument may be persuasive, but the facts to substantiate this claim seem to lack sufficiency in the big scheme of things in the drug world. The Mexican cartels’ profits can be anywhere from $18 to $39 billion dollars per year. Yet last year the U.S. government seized only an estimated $1 billion in cash and drug assets. This may seem like a lot, but when you factor into the equation the amount of violence associated with these cartels in addition to the fact that money is at the center of all cartel operations, the DEA’s facilitation becomes questionable.
The issue of how the money is being monitored is also an elusive practice. The DEA does not disclose how it monitors and tracks the laundered money, arguing that it would jeopardize the investigations. Yet the money travels back and forth, in and out of the U.S. financial system. With such a volatile economy as it is, one must only hope that the U.S. government knows what its doing. But as previous flounders have indicated, such as when the Bureau of Alcohol, Tobacco, Firearms and Explosives lost track of hundreds of weapons into the cartels, the government is not perfect. Only time will tell whether this undercover initiative will reap more benefits than its losses.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
U.S. Government Charges New York Assemblyman with Another Round of Alleged Bribery
It was announced yesterday in the Eastern District of New York the unsealing of a complaint charging New York State Assemblyman William F. Boyland, Jr. with allegedly soliciting more than $250,000 in bribes and accepting thousands of dollars of bribe money in exchange for performing official acts for the bribe payers.
The criminal complaint alleges that between August 2010 and June 2011, Boyland solicited and accepted a stream of bribes from a carnival promoter and two undercover FBI agents, whom Boyland believed to be out-of-state businessmen and real estate developers. Boyland allegedly agreed to take official action to secure business opportunities for the three individuals.
According to the FBI press release, Boyland met with the three individuals on multiple occassions, regarding three different bribery schemes. However, it is not mentioned whether Boyland sought out the supposed carnival promoter and two undercover agents, or whether they originally approached him.
While these alleged occurrences were taking place, Boyland was also busy fighting bribery charges for a separate case in the Southern District of New York. In March 2011, Boyland was charged for bribery arising from an investigation into former hospital executive David Rosen, who allegedly tried to pay off Boyland and two other New York lawmakers to help support medical facilities in Brooklyn and Queens.
Boyland was acquitted of those charges just recently in November. Following the acquittal, the government hit Boyland with this new round of charges. It is interesting that the government was still investigating Boyland while prosecuting him on separate charges at the same time. Ethically speaking, the government should not have charged Boyland in March while continuing to investigate him. It would seem that the government knew their first case lacked sufficient evidence, and was using the second investigation as a back up.
Boyland may have been lucky enough to dodge the bullet once, but clearly the government is going to throw everything they’ve got at Boyland in this new case.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
Former Hospital CEO Found Guilty for Bribery Scheme Linked to NY Legislature
Preet Bharara, the United States Attorney for the Southern District of New York, announced yesterday that David Rosen, the former CEO of MediSys Health Network, was found guilty in Manhattan federal court for participating in a scheme to bribe New York State Senator Carl Kruger, New York State Assemblyman William Boyland, Jr., and former New York State Assemblyman Anthony Seminerio with hundreds of thousands of dollars in exchange for their official acts. Rosen was convicted after a three-week bench trial before U.S. District Judge Jed S. Rakoff.
Rosen, 63, of Westchester County, was found guilty of two counts of honest services fraud in connection with his efforts to bribe Kruger, Boyland, and Seminerio. He was also convicted of three additional counts—one count of honest services fraud conspiracy, and two counts of conspiracy to commit bribery and to violate the Travel Act. Rosen faces a maximum of 70 years in prison. He also faces, on each count, three years of supervised release, and a fine of $250,000, or twice the gain or loss from the offense.
The “honest services fraud” statute, codified as 18 U.S.C. 1346, makes it a federal crime to engage in a scheme or artifice to deprive another of the “intangible right of honest services.” Historically, the statute was used by federal prosecutors as a broad avenue to pursue corruption cases in both the private and public sectors. Lower court struggled with the definition of “honest services” until the Supreme Court finally gave an answer.
In 2010, the Supreme Court decided the statute as written was unconstitutionally vague and limited the statute to only crimes involving bribery and kickbacks. After confronted with three similar cases, the Court discussed its reasoning in the case involving a former Enron official, Skilling v. United States, 130 S. Ct. 2896 (2010). In its decision, the Court rejected the Department of Justice’s argument that the statute should encompass “self-dealing” transactions, and strictly limited its application to only those cases involving bribery and kickbacks.
While limiting the statute was a small victory for Skilling and other cases similarly situated, the Court’s ruling has not limited the number of prosecutions of the honest services fraud statute particularly in instances involving public officials. Further, the government still has several options for prosecution available at its disposal, such as mail fraud, wire fraud, bank fraud and conspiracy.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
