Tag Archives: U.S. Attorney

Eight Area Men Plead Guilty to Federal Racketeering Charges Involving Conspiracy to Transfer Cash and Checks to the Palestinian Territories

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ST. LOUIS, MO—Eight members of a criminal enterprise operating out of five St. Louis area convenience stores have pled guilty to charges of federal racketeering or related charges, Acting United States Attorney Michael W. Reap and Roland Corvington, Special Agent in Charge, FBI St. Louis announced today.

As far back as 2000, the RICO conspiracy has involved bank fraud, receipt of stolen property, conducting an unlicensed money transmitting business, purchasing contraband cigarettes for resale, evading reporting requirement on exporting monetary instruments, and transporting monetary instruments and funds to avoid reporting requirements.

According to plea agreements, the Hamed Organization was a criminal enterprise that operated primarily in the City of St. Louis and St. Louis County. Members and associates of the enterprise, many who are related to each other, raises money through legal and illegal means for themselves and to transfer money to entities in the Palestinian territories.

The convenience stores were utilized to receive and sell stolen goods such as infant formula, computers, Global Positioning System devices and cigarettes. The enterprise bought the stolen property at rates significantly below fair market retail value and sold the items through the convenience stores at a large profit.

The criminal enterprise operated out of the following area convenience stores:

Regal Food I, 4201 McRee Avenue, St. Louis; Regal Food II, 3852 Virginia Avenue, St. Louis; Ferguson Market, 9101 West Florissant Avenue, Ferguson; Prince Market, 9826 St. Charles Rock Road, St. Louis; and St. Louis Supermarket, 4331 Natural Bridge Avenue, St. Louis.

Pleading:

Bassam Hisham Hamed, 34; Florissant, MO, chief executive of the enterprise – pled guilty to conspiracy to structure the exportation of monetary instruments to avoid reporting requirements; Ghandi Hisham Hamed, 32, Florissant, MO, leader of the enterprise and brother of Bassam Hamed – pled guilty to racketeering; Ayoub Hisham Hamed, 28; Hazelwood, MO, brother of Bassam Hamed – pled guilty to conspiracy to structure the exportation of monetary instruments to avoid reporting requirements; Said Jarabaa, 36, Florissant, MO, leader of the enterprise – pled guilty to racketeering; Suhail Jarabaa, 29, Florissant, MO, brother of Said Jarabaa – pled guilty to conspiracy to structure the exportation of monetary instruments to avoid reporting requirements; Mohammed Badwan, 35, Florissant, MO, brother of Mazen – pled guilty to racketeering; Mazen Badwan, 37,Florissant, MO, brother of Mohammed – pled guilty to racketeering; and Nael Abdeljabbar, 49, Florissant, MO – pled guilty to racketeering. These men appeared this afternoon before United States District Judge Charles A. Shaw and sentencing was set for March 2010.

Charges and maximum penalties:

RICO Conspiracy, 20 years prison and/or fines up to $250,000 or twice the gross profits/proceeds; Conspiracy to structure in order to avoid reporting requirements, five years prison and/or fines up to $250,000. “The current necessity to assure that money transported overseas is not directed to terrorist organizations requires compliance with existing monetary laws. Willful flaunting of the regulations will be vigorously prosecuted as reflected by this case,” said Reap.

Corvington said, “The pleas today culminate a multi-year investigation into a group of individuals sending ill-gotten gains overseas. The investigation and prosecution of organized criminals engaging in raising money to finance terrorism overseas is a top priority. The FBI Joint Terrorism Task Force is dedicated to not just arresting such individuals, but disrupting and dismantling all such operations.”

Reap commended the work on this case by the FBI Joint Terrorism Task Force, Assistant United States Attorneys John J. Ware, Matthew Drake and Steven Holtshouser who are handling the case for the U.S. Attorney’s office.&/p

Source: FBI

Dealer Responsible for Largest Grain Brokerage Failure in Missouri History Pleads Guilty to Mail Fraud

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ST. LOUIS, MO—Cathy M. Gieseker pleaded guilty to mail fraud and admitted to a wide-ranging fraud scheme involving $27 million dollars in proceeds from the sale of farm commodities, Acting United States Attorney Michael W. Reap announced today. As part of the plea, Gieseker also agreed to forfeit millions of dollars in personal property and real estate.

Gieseker operated a “Ponzi” scheme whereby payments to farmers for grain sales were paid through monies gained through the subsequent sale of grain supplied by other farmers despite the fact that insufficient funds were generated to pay all farmers the promised rates. Ultimately, the scheme collapsed in February 2009 with scores of farmers left with no grain and no payments for their crops.

Gieseker operated a grain trucking and marketing company from her residence at 35424 Audrain Road 708, Martinsburg, MO. Between October 2002 and February 2009, in addition to transporting grain, Cathy Gieseker began to market grain on behalf of farmers. In this capacity she quoted above‑market prices to farmers and represented that she had contracts from Archer Daniels Midland Company (ADM) to guarantee the prices. During the course of this scheme, Gieseker delivered and sold virtually all of the grain at ADM. However, Gieseker did not hold contracts that guaranteed the above‑market prices she had quoted farmers from ADM. Instead, she sold all of her grain at the “spot price” (local cash price for immediate settlement and delivery) and used the proceeds from subsequent grain transactions to pay the above‑market prices she had previously promised other farmers. In this manner, Gieseker defrauded approximately 180 farmers out of at least $27,000,000 in proceeds from grain sales she made on their behalf. Most of the proceeds went to pay other farmers who had previously been quoted above‑market prices but Gieseker also used a substantial portion of these proceeds on automobiles, gifts to family and friends, and an expensive hobby of acquiring and showing livestock.

Gieseker, 45, Martinsburg, MO, pleaded guilty to one felony count of mail fraud. She appeared before United States District Judge Charles A. Shaw in St. Louis.

Additionally, Gieseker pleaded to a forfeiture count, which requires the forfeiture of cash and property derived from the illegal activity. Subject to forfeiture are four parcels of property in Martinsburg, MO; one property in Rush Hill, MO; 22 vehicles consisting of multiple semi tractors, trailers, vehicles, and ATVs. Gieseker faces up to 20 years imprisonment, a fine of up to $250,000, or both at sentencing which will occur on February 25, 2010. Restitution will also be ordered for the victims.

“For several years, Cathy Gieseker got away with her ponzi scheme,& said Roland J. Corvington, Special Agent in Charge of the FBI in St. Louis. “But perpetrators of such schemes will always get caught once the victims at the bottom of the pyramid are left holding the bag and the scheme collapses.”

Acting U.S. Attorney noted that, “This case, like most frauds, required a breach of trust. These hardworking farmers trusted Mrs. Gieseker to market their grain with honesty and integrity. I hope it is some comfort to them that Mrs. Gieseker has been called to account for such an outrageous breach of trust.”

Reap commended the work on the case by the St. Charles Office of the Federal Bureau of Investigation, the Missouri Attorney General’s Office, the Missouri Department of Agriculture; and Assistant United States Attorney Matthew Schelp, who is handling the case for the U.S. Attorney’s Office.&/p

Source: FBI

Virginia Resident Pleads Guilty to Bribing Panamanian Officials for Maritime Contract

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WASHINGTON—Charles Paul Edward Jumet, of Fluvanna County, Va., pleaded guilty today in connection with his role in a conspiracy to pay bribes to Panamanian government officials to secure a maritime contract, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney for the Eastern District of Virginia Neil H. MacBride, Joseph Persichini Jr., Assistant Director-in-Charge of the FBI’s Washington Field Office, Jennifer Smith Love, Special Agent-in-Charge of the FBI’s Richmond Field Office and James A. Dinkins, Special Agent-in-Charge of U.S. Immigration and Customs Enforcement’s (ICE) Office of Investigation, Washington.

Jumet, 53, pleaded guilty before U.S. Magistrate Judge Dennis W. Dohnal in Richmond, Va., to a two-count information charging him with conspiring to make corrupt payments to foreign government officials for the purpose of securing business for Ports Engineering Consultants Corporation (PECC) in violation of the Foreign Corrupt Practices Act (FCPA); and making a false statement.

PECC, a company incorporated under the laws of Panama, was affiliated with Overman Associates, an engineering firm based in Virginia Beach, Va. According to Jumet’s plea, PECC was created so Jumet, Overman Associates and others could corruptly obtain a maritime contract from the Panamanian government.

According to court documents, Jumet was involved in a conspiracy to pay money secretly to Panamanian government officials for awarding PECC contracts to maintain lighthouses and buoys along Panama’s waterway. In December 1997, the Panamanian government awarded PECC a no-bid, 20-year concession to perform these duties. In exchange for the concession, Jumet and others authorized corrupt payments to the Panamanian government officials.

In 2000, Panama’s Comptroller General’s Office suspended the contract while it investigated the government’s decision to award PECC a contract without soliciting any bids from other firms. In 2003, the Panama government resumed making payments to PECC.

In connection with his guilty plea, Jumet admitted that from at least 1997 through approximately July 2003, he and others conspired to make corrupt payments totaling more than $200,000 to the former administrator and deputy administrator of Panama’s National Maritime Ports Authority and to a former, high-ranking elected executive official of the Republic of Panama.

In his guilty plea, Jumet also admitted that he knowingly made a false statement to federal agents about a December 1997 “dividend” check payable to the bearer in the amount of $18,000, which was endorsed and deposited into an account belonging to the former, high-ranking elected executive official. Jumet admitted that he had falsely claimed that this “dividend” check was a donation for the high-ranking official’s re-election campaign. Jumet also admitted that the “dividend” check was in fact given to the former official as a corrupt payment for allowing PECC to receive the contract from the Panamanian government.

As part of his plea agreement, Jumet has agreed to cooperate with the Department of Justice in its ongoing investigation. The conspiracy count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the gross gain or loss from the scheme. The false statement count carries a maximum penalty of five years in prison and a fine of $250,000. Sentencing is scheduled for Feb. 12, 2010.

The case was prosecuted by Trial Attorney Rina Tucker Harris of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Michael S. Dry of the U.S. Attorney’s Office for the Eastern District of Virginia. The case was investigated by the FBI’s Washington Field Office, the FBI’s Richmond Field Office and ICE’s Office of Investigation, Richmond and Washington.&/p

Source: FBI

Former West New York Public Works Engineer Sentenced to 12 Months in Prison for Taking Bribes from Contractors

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NEWARK—The former Project Coordinator and engineer for the West New York Department of Public Works was sentenced today to 12 months in federal prison for taking corrupt cash payments from contractors, U.S. Attorney Paul J. Fishman announced.

U.S. District Judge Stanley R. Chesler also ordered Tommaso Calautti, 44, of New Milford, to pay $21,000 in restitution to West New York and to serve three years of supervised release upon the completion of his prison term. Judge Chesler continued the Calautti’s release on a $100,000 unsecured bond pending his surrender to officials with the U.S. Bureau of Prisons on a date to be determined by prison authorities.

Calautti pleaded guilty before Judge Chesler on April 6, 2009 to one count of obstructing and attempting to obstruct interstate commerce by obtaining corrupt cash payments under color of official right.

At his plea hearing, Calautti admitted that he accepted a total of at least $30,000 from three separate contractors who sought to do maintenance and repair work for the town of West New York. Calautti admitted he took the corrupt payments in exchange for exercising his official influence in favor of the contractors’ companies.

Calautti was the Project Coordinator and engineer for the town West New York between May 2003 and July 2008. As part of Calautti’s responsibilities, he reviewed certain bids submitted for municipal construction and maintenance projects; inspected the work performed under such bids; and determined whether the work performed satisfied the bid specifications.

In one case, Calautti ensured that a contractor was awarded bids to do sidewalk and paver repairs in West New York in exchange for corrupt payments totally approximately $10,000, which he received in separate cash payments. From a second contractor, Calautti accepted $1,000 in cash to expedite payment on an outstanding invoice of approximately $29,000 for construction work done for the town. And finally, Calautti accepted and agreed to accept a total of approximately $24,000 in separate cash payments from another contractor seeking to obtain the yearly maintenance and sidewalks contract with West New York.

Calautti admitted that between May 2003 and July 2008 he took at least $30,000, but not more than $70,000, in corrupt payments.

Fishman credited Special Agents with the FBI, under the direction of Special Agent in Charge Weysan Dun in Newark, with the investigation.

The government is represented by Assistant U.S. Attorney Dustin Chao of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

Source: FBI

Roberto Heckscher Pleads Guilty to Mail Fraud Bay Area Bookkeeper Defrauded Investors Out of at Least $20 Million

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SAN FRANCISCO—Pursuant to a plea agreement, Roberto Heckscher, a resident of San Mateo, Calif., pleaded guilty today before U.S. District Court Judge Susan Illston to one count of mail fraud, announced United States Attorney Joseph P. Russoniello.

On Oct. 16, 2009, the United States charged Heckscher, 55, with mail fraud, charging that between approximately 1979 and June 2009, he defrauded investors by promising to arrange and broker a series of commercial loans between his clients and himself and represented that the funds would in turn be loaned to other businesses. Heckscher promised that these loans would generate regular interest payments to his investors. Instead, Heckscher operated a sophisticated ponzi scheme whereby new investment money was transferred to existing investors as interest payments and/or repayment of principal upon request. Heckscher used the remaining portion of investors’ funds for his own, unauthorized purposes, including gambling at Nevada casinos as well as speculative investments in the equities and commodities markets.

In addition to pleading guilty to this charge, Heckscher agreed to pay restitution in connection with his misuse of funds.

The plea agreement provides for a calculation of imprisonment between no less than 151 months and up to life imprisonment. However, the sentence will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. The maximum statutory penalty for mail fraud in violation of 18 U.S.C. Section 1341 is 20 years imprisonment and a fine of $250,000 or up to twice the defendant’s gain or the victims’ loss, plus restitution if appropriate. The defendant is next scheduled to appear in U.S. District Court in San Francisco on May 14, 2010. At that time, Judge Illston will determine whether to accept the plea agreement and impose sentencing.

Timothy J. Lucey is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Ponly Tu. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

Further Information:

Case #: CR 09-0998 SI

A copy of this press release may be found on the U.S. Attorney’s Office’s Web site at www.usdoj.gov/usao/can.

Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.

Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s Web site at www.cand.uscourts.gov.

All press inquiries to the U.S. Attorney’s Office should be directed to Jack Gillund at (415) 436-6599 or by e-mail at [email protected]&/p

Source: FBI

San Francisco Mortgage Broker Pleads Guilty to Federal Charges Defrauded Mortgage Lenders, Financial Institutions

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SAN FRANCISCO—Michael Chou pleaded guilty in federal court today to wire fraud conspiracy, United States Attorney Joseph P. Russoniello announced.

In pleading guilty, Chou admitted that, in a scheme that began in 2003 and continued until approximately April 30, 2009, he defrauded mortgage lenders and financial institutions by providing false and fraudulent information in support of mortgage loan applications. Working out of an office in San Francisco, Chou and his colleagues assisted individuals who wanted to obtain mortgages from mortgage lenders so they could purchase residential properties in the Northern District of California and elsewhere. As a part of this scheme, Chou routinely transmitted fraudulent loan applications to mortgage lenders. Those loan applications contained false employment information and false and inflated income and bank account information, which was intended to inflate the borrowers’ creditworthiness. In addition, the loan applications were supported by false and forged documents that purported to verify the borrowers’ employment, income and assets. Chou, and other members of the scheme, used a network of co-conspirators who agreed to pose as the borrowers’ employers and falsely verify to the mortgage lenders the accuracy of the employment and income information listed on the loan applications. As a result of Chou’s participation in this conspiracy he illegally earned $360,800.

Chou, who is currently not in custody, is scheduled to be sentenced on March 19, 2010, before U.S. District Court Judge Susan Illston in San Francisco. The maximum statutory penalty for wire fraud conspiracy in violation of Title 18, United States Code, Section 1349 is 30 years and a fine of $1 million. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Pursuant to the plea agreement, Chou has agreed to forfeit $360,800 to the United States.

Eleven other individuals have been charged in connection with the case.

Jeffrey Rabkin and Jeffrey Finigan are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Elizabeth Garcia. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

Further Information:

Case #: 09-770 (SI)

A copy of this press release may be found on the U.S. Attorney’s Office’s Web site at www.usdoj.gov/usao/can.

Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.

Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s Web site at www.cand.uscourts.gov.

All press inquiries to the U.S. Attorney’s Office should be directed to Jack Gillund at (415) 436-6599 or by e-mail at [email protected]&/p

Source: FBI