International Law Enforcement File Charges Against E-Mail Hackers

An international investigation coordinated by the Federal Bureau of Investigation has identified the operators of 10 hacking websites.

In a series of cases filed in Los Angeles last week week, prosecutors charged five domestic defendants with obtaining unauthorized access to e-mail accounts. All five defendants are expected to plead guilty in the coming weeks.

The domestic cases were announced after authorities in Romania, India, and the People’s Republic of China arrested six defendants on various computer hacking charges.

In the first case, Mark Anthony Townsend, 45, of Cedarville, Arkansas; and Joshua Alan Tabor, 29, of Prairie Grove, Arkansas, who operated the e-mail hacking website needapassword.com, were each charged with a felony violation that carries a potential prison sentence of five years. According to court documents, customers of the website operated by Townsend and Tabor provided names of e-mail accounts, and Townsend and Tabor would obtain the passwords to those accounts. The customers made payments into PayPal accounts and were given the passwords. Nearly 6,000 e-mail accounts were affected by the scheme.

The other three defendants charged last week each face misdemeanor offenses for hiring computer hackers. These customers, who face up to one year in federal prison, are:

  • John Ross Jesensky, 30, of Northridge, California, who paid $21,675 to a Chinese website to get e-mail account passwords;
  • Laith Nona, 31, of Troy, Michigan, who paid approximately $1,081 to get e-mail account passwords; and
  • Arthur Drake, 55, of Bronx, New York, who paid approximately $1,011 to get e-mail account passwords.

Orthopedic Clinics to Pay $1.85 Million to Settle Medicare Billing Allegations

“This scheme is yet another example of illegal actions by health care providers to profit from drugs imported into the United States.

Medicare and FDA requirements are designed to prevent potential harm to patients. Non-compliance with the law to increase profit at the risk of patients will be pursued by the Department of Justice.”

U.S. Attorney for the Eastern District of Tennessee William C. Killian made these comments as he announced that two orthopedic clinics in Tennessee will pay a combined $1.85 million to resolve state and federal False Claims Act allegations that they knowingly billed state and federal health care programs for reimported osteoarthritis medications, known as viscosupplements.

Tennessee Orthopaedic Clinics P.C., headquartered in Knoxville, will pay $1.3 million, and Appalachian Orthopaedic Clinics P.C., headquartered in Kingsport, will pay $550,000.

Viscosupplements, such as Synvisc and Orthovisc, are injections approved by the Food and Drug Administration for the treatment of osteoarthritis pain in the knee. Viscosupplements are reimbursed by Medicare, Medicaid, and other federal health care programs at a set rate based on the average sales price of the domestic product.

The government contended that the clinics knowingly purchased deeply discounted viscosupplements that were re-imported from foreign countries and billed them to state and federal health care programs in order to profit from the reimbursement system. Reimported viscosupplements are not reimbursable by those programs.

The reimported product allegedly included labeling in foreign languages and in English for additional uses not approved in the United States, which demonstrated that the product was re-imported. Moreover, because the product was reimported, the government alleged there was no manufacturer assurance that it had not been tampered with or that it was stored appropriately.

Businessman Pleads Guilty to Trafficking Contraband Cigarettes

36-year-old Abdullah Alnahas of Cranston, Rhode Island, the owner and operator of a Cranston convenience store and a Providence laundromat, is facing up to 10 years in federal prison for his participation in a contraband cigarette conspiracy.

The conspiracy allegedly brought more than six million contraband cigarettes valued at more than $1.2 million dollars into Rhode Island from Virginia and allegedly cheated Rhode Island out of more than $500,000 in tax stamp payments.

Alnahas appeared before U.S. District Court Chief Judge William E. Smith on Thursday and pleaded guilty to one count each of conspiracy to engage in contraband cigarette trafficking and contraband cigarette trafficking. He is scheduled to be sentenced by Chief Judge William E. Smith on May 9, 2014.

Alnahas is one of eight defendants named in federal grand jury indictments returned in May and September 2013 against alleged participants in the scheme.

The indictments alleged that several “shell” corporations were created in Virginia and that several vacant retail storefronts in Virginia were rented for the stated purpose of purchasing and reselling cigarettes. The cigarette packages purchased included Virginia tax stamps, reflecting a Virginia tax of 35 cents per package.

However, according to the indictments, more than 30-thousand cartons (six million cigarettes) of cigarettes valued at more than $1.2 million that were purchased in Virginia were shipped to Rhode Island for resale in a truck bearing Rhode Island War Veteran Plates. It is alleged that on numerous occasions, the truck was driven by a Rhode Island man, while wearing his United States Army uniform, in an effort to gain favor and avoid law enforcement detection.

To date, co-defendants Valeria Mendez (Khalil) and Richard Larrain have filed notice with the court of their intention to plead guilty for their roles in the conspiracy and other alleged illegal activities. A trial date of April 8, 2014, has been scheduled for the remaining defendants, Bassam Kiriaki, Wissam Khalil, Bassam Khalil, and Najd Khalil. An arrest warrant has been issued for an eighth defendant, Nazir Khalil.

A Justice Department statement on the matter reminds the public that an indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Former Virginia Governor and Former First Lady Indicted on Public Corruption and Related Charges
A federal grand today returned a 14-count indictment against former Virginia Governor Robert F. McDonnell and former First Lady Maureen G. McDonnell for allegedly participating in a scheme to violate federal public corruption laws.
The McDonnells are accused of participating in a scheme to use the former governor’s official position to enrich themselves and their family members by soliciting and obtaining payments, loans, gifts and other things of value from Star Scientific, a Virginia-based corporation, and “JW,” then Star Scientific’s chief executive officer.  The McDonnells allegedly obtained the things of value in exchange for the former governor performing official actions on an as-needed basis to legitimize, promote and obtain research studies for Star’s products, including the dietary supplement Anatabloc®. 
Through the scheme, the McDonnells allegedly obtained more than $135,000 in direct payments as gifts and loans, thousands of dollars in golf outings, and numerous other things of value. 
The couple are accused of trying to hide their receipt of these goods, of neglecting to claim them on a loan application, and of denying their existence to federal officials.
The indictment, returned in the Eastern District of Virginia, charges Robert McDonnell and Maureen McDonnell, both 59 and of Glen Allen, Va., with one count of conspiracy to commit honest-services wire fraud; three counts of honest-services wire fraud; one count of conspiracy to obtain property under color of official right; six counts of obtaining property under color of official right; and one count of making false statements to a federal credit union.  Robert McDonnell is also charged with an additional count of making a false statement to a financial institution, and Maureen McDonnell is charged with one count of obstruction of an official proceeding. 
f convicted, the McDonnells could each face a maximum statutory sentence of 20 years in prison and a fine of the greater of $250,000 or twice the gross gain or loss on the conspiracy to commit honest-services wire fraud count, the honest-services wire fraud counts, the conspiracy to obtain property under color of official right count, and the obtaining property under color of official right counts; a maximum statutory sentence of 30 years in prison and a fine of the greater of $1,000,000 or twice the gross gain or loss on the false statement counts; and a maximum statutory sentence of 20 years in prison and a fine of the greater of $250,000 or twice the gross gain or loss on the obstruction of an official proceeding count. 

Former Virginia Governor and Former First Lady Indicted on Public Corruption and Related Charges

A federal grand today returned a 14-count indictment against former Virginia Governor Robert F. McDonnell and former First Lady Maureen G. McDonnell for allegedly participating in a scheme to violate federal public corruption laws.

The McDonnells are accused of participating in a scheme to use the former governor’s official position to enrich themselves and their family members by soliciting and obtaining payments, loans, gifts and other things of value from Star Scientific, a Virginia-based corporation, and “JW,” then Star Scientific’s chief executive officer.  The McDonnells allegedly obtained the things of value in exchange for the former governor performing official actions on an as-needed basis to legitimize, promote and obtain research studies for Star’s products, including the dietary supplement Anatabloc®. 

Through the scheme, the McDonnells allegedly obtained more than $135,000 in direct payments as gifts and loans, thousands of dollars in golf outings, and numerous other things of value.

The couple are accused of trying to hide their receipt of these goods, of neglecting to claim them on a loan application, and of denying their existence to federal officials.

The indictment, returned in the Eastern District of Virginia, charges Robert McDonnell and Maureen McDonnell, both 59 and of Glen Allen, Va., with one count of conspiracy to commit honest-services wire fraud; three counts of honest-services wire fraud; one count of conspiracy to obtain property under color of official right; six counts of obtaining property under color of official right; and one count of making false statements to a federal credit union.  Robert McDonnell is also charged with an additional count of making a false statement to a financial institution, and Maureen McDonnell is charged with one count of obstruction of an official proceeding. 

f convicted, the McDonnells could each face a maximum statutory sentence of 20 years in prison and a fine of the greater of $250,000 or twice the gross gain or loss on the conspiracy to commit honest-services wire fraud count, the honest-services wire fraud counts, the conspiracy to obtain property under color of official right count, and the obtaining property under color of official right counts; a maximum statutory sentence of 30 years in prison and a fine of the greater of $1,000,000 or twice the gross gain or loss on the false statement counts; and a maximum statutory sentence of 20 years in prison and a fine of the greater of $250,000 or twice the gross gain or loss on the obstruction of an official proceeding count. 

Virginia Man Sentenced to 51 Months for Fraudulent Loan and Credit Schemes

Atef Mekki Haj Hassen, 38, of Woodbridge, Virginia, has been sentenced to 51 months in prison, followed by three years of supervised release, for wire fraud in connection with multiple fraudulent schemes to obtain bank financing, mortgage loans and credit cards.  Hassen will also be required to pay restitution to the victims in the amount of $683,749.10.

Hassen pleaded guilty to wire fraud on Oct. 7, 2013.

According to court documents, Hassen and his brother-in-law, Atef Ben Amor Amri, operated the New York Pizza Factory, with two locations in Annandale and Fairfax, Va.  In October 2005 and May 2007, Hassen and Amri obtained a total of $240,000 in loans from BB&T Bank to remodel their first restaurant, and to open at their second location.  Hassen and Amri defaulted on both loans, and they then evaded foreclosure by creating a sham transfer of the business to another person.  As a result of this scheme, BB&T Bank lost over $186,000.

Court documents further show that, in June 2008, Hassen obtained a loan from Acacia Federal Savings Bank by inflating his income and assets.  In support of his loan application, Hassen forged documents such as W-2 earnings statements, payroll statements and bank account statements.

In addition to these fraudulent loans, Hassen forged similar documents for others to use in obtaining mortgage loans and credit on their own behalf.  Using forged documents or templates created by Hassen, his associates purchased properties in Woodbridge, Va. and obtained bank and auto loans based on fraudulent pretenses.  Each of those associates— Atef Amri, Henda Bkhairia, Haider Hagui, Khalil Bouzhghaia and Monica Rychel—has pleaded guilty in federal court and will be sentenced later this month.

Court documents further reflect that, from 2005 to 2008, Hassen obtained numerous credit cards by falsely inflating his income.  As a result of Hassen’s fraud, four credit card providers—Bank of America, American Express, Discover and Chase—suffered over $169,000 in losses through 12 separate credit card accounts obtained by Hassen.

In addition, Hassen provided forged documents to several people who used those documents to purchase expensive vehicles, walk away from the loans and then ship the vehicles out of the country.  Hassen also used multiple aliases and identities, including while he arranged a staged auto accident in Washington, D.C. to obtain insurance proceeds for an associate.

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International Fugitives Sentenced to 66 Months in Prison for Asset Tracing Scheme

Elaine White, 70, formerly a resident of Toronto, Canada, and her husband, Cullen Johnson, 65, have each been sentenced to terms of 66 months in prison followed by 3 years of supervised release, for their roles in an international asset tracing scheme.

Johnson and White pleaded guilty to participating in a conspiracy to engage in money laundering on Sept. 26 and Oct. 7, 2013, respectively.

According to court documents, starting in 2006, Johnson and White owned and/or operated an asset location business called “Internal Affairs,” “World Solutions” and then “Occipital.” The businesses provided services to clients seeking to locate funds that had been stolen from them or who believed that relatives or former spouses had hidden money or were otherwise trying to trace lost, missing or stolen assets. White and Johnson were hired to investigate the location of such assets. Johnson was a former Toronto Police Department detective and White was a private investigator in Toronto.

According to court records, rather than providing valid information, White and Johnson provided the client-victims with fabricated banking records, purporting to show that the assets or money that clients sought had been moved from one banking institution to another in locations such as Monaco, Greece, Hong Kong, Switzerland, Latin America and the Caribbean. For additional payments, White and Johnson claimed that they could continue to trace the funds to their final destination.

On any occasion where the client-victims determined that the information provided by the defendants was false, the defendants claimed that the information was valid andaccused the client-victims or their representatives of improperly trying to collect the funds.

In 2009, White and Johnson were charged by the Ontario Provincial Police in Canada with crimes related to this asset tracing fraud. The couple fled Canada, traveling first to the Bahamas, and then to the Turks & Caicos Islands, where they continued to operate this fraudulent asset tracing business on U.S. and Canadian victims.

The couple claimed to client-victims that they had been wrongfully charged due to their discovery of government corruption in Canada and the hiding of Canadian funds by politicians and officials in offshore banks.

The couple resided there until they were apprehended by Turks & Caicos authorities.

All told, the couple solicited more than $1,000,000 from U.S. and Canadian victims, including about $500,000, which they wired to one of their co-conspirators.

In addition to their prison sentences, both White and Johnson were ordered to pay restitution in the amount of $1,021,738.60.

Broward County Clerk Sentenced to Three Years for Stealing Identities
25-year-old Porscha Kyles, formerly a clerk of court in Broward County, has been sentenced to three years in prison, followed by two years of supervised release for stealing identities in tax refund fraud scheme.
According to court documents, from October 2011 through February 2012, Kyles worked as a clerk of court in Broward County.
Through her job, Kyles, of Fort Lauderdale, had access to the Florida Department of Highway Safety and Motor Vehicle Driver and Vehicle Information Database (DAVID). On multiple occasions in 2011 and 2012, Kyles searched DAVID, copied personal identity information of individuals, and provided that information to a co-conspirator in exchange for a cash payment. The information included names, dates of birth, and Social Security numbers of the unwitting victims.
Kyles provided over one hundred individuals’ personal identity information to the co-conspirator for the filing of fraudulent tax returns seeking refunds with the Internal Revenue Service.
Kyles originally pleaded not guilty to seven federal charges — five counts of aggravated identity theft and one count each of computer fraud and conspiracy to possess unauthorized access devices. Three months later, she pleaded guilty to two felonies: a conspiracy charge and one count of aggravated identity theft. In her plea, Kyles admitted possessing fifteen or more unauthorized access devices.
In addition to her prison term, Kyles was ordered to pay $57,328 in restitution. 
Image Source: Pittsfield Police Department

Broward County Clerk Sentenced to Three Years for Stealing Identities

25-year-old Porscha Kyles, formerly a clerk of court in Broward County, has been sentenced to three years in prison, followed by two years of supervised release for stealing identities in tax refund fraud scheme.

According to court documents, from October 2011 through February 2012, Kyles worked as a clerk of court in Broward County.

Through her job, Kyles, of Fort Lauderdale, had access to the Florida Department of Highway Safety and Motor Vehicle Driver and Vehicle Information Database (DAVID). On multiple occasions in 2011 and 2012, Kyles searched DAVID, copied personal identity information of individuals, and provided that information to a co-conspirator in exchange for a cash payment. The information included names, dates of birth, and Social Security numbers of the unwitting victims.

Kyles provided over one hundred individuals’ personal identity information to the co-conspirator for the filing of fraudulent tax returns seeking refunds with the Internal Revenue Service.

Kyles originally pleaded not guilty to seven federal charges — five counts of aggravated identity theft and one count each of computer fraud and conspiracy to possess unauthorized access devices. Three months later, she pleaded guilty to two felonies: a conspiracy charge and one count of aggravated identity theft. In her plea, Kyles admitted possessing fifteen or more unauthorized access devices.

In addition to her prison term, Kyles was ordered to pay $57,328 in restitution.

Image Source: Pittsfield Police Department

Florida Marine Life Dealer and his Company Sentenced for Illegal Wildlife Trafficking
47-year-old Jerrold C. Tieder of Dania, Florida and Tropical Fish Transhippers, Inc., a Florida corporation based in Dania Beach, have been convicted and sentenced in Key West for transporting and selling wildlife in interstate commerce in violation of the laws and regulations of the State of Florida and contrary to the federal Lacey Act.
The defendants specifically transported and sold nurse sharks, with a fair market value in excess of $350.00.
Tieder as President of TFT, was engaged in the day to day business of purchasing, importing, distributing, and selling in interstate and foreign commerce various species of marine life, including live corals, live fish, and live rock.
In October 2012, Tieder and his company purchased four juvenile nurse sharks from a supplier located in Monroe County, Florida. The supplier did not hold the required license or permit from the State of Florida which would permit the supplier to harvest or sell sharks.
In early November 2012, an employee of TFT confirmed the availability and willingness of TFT to sell eight juvenile nurse sharks to a customer outside the State of Florida. Thereafter, on November 6, 2012, a supplier in Monroe County transported four nurse sharks from Marathon Key to TFT at Dania. Unknown to the supplier or TFT, the four sharks had been outfitted with Passive Integrated Tags (PIT), each responding to an electronic reader with a unique 15 digit serial number.
On November 7, 2012, TFT delivered eight nurse sharks to Fort Lauderdale International Airport, for shipment in interstate commerce to a customer of TFT. Four of the sharks were scanned and found to be carrying the PIT Tags previously placed by Special Agents of the U.S. Fish & Wildlife Service. TFT subsequently received payment for the eight sharks in the amount of $440.00.
Tieder was sentenced to a term of probation of two years, a criminal fine of $1,000, and ordered to make a payment of $4,000 as a special condition of his probation to the National Fish & Wildlife Foundation, a Congressionally-chartered organization authorized by law to receive payments arising as a result of a criminal conviction. NFWF will distribute the funds to the Mote Marine Laboratory, Summerland Key Branch, to promote research, management, education, conservation, and restoration of marine life and corals throughout the waters of the Florida Keys National Marine Sanctuary and the Florida Keys.
Tieder’s company, TFT, was placed on probation for a period of three years and ordered to pay a criminal fine of $1,000, with an additional payment to the NFWF of $1,500.

Florida Marine Life Dealer and his Company Sentenced for Illegal Wildlife Trafficking

47-year-old Jerrold C. Tieder of Dania, Florida and Tropical Fish Transhippers, Inc., a Florida corporation based in Dania Beach, have been convicted and sentenced in Key West for transporting and selling wildlife in interstate commerce in violation of the laws and regulations of the State of Florida and contrary to the federal Lacey Act.

The defendants specifically transported and sold nurse sharks, with a fair market value in excess of $350.00.

Tieder as President of TFT, was engaged in the day to day business of purchasing, importing, distributing, and selling in interstate and foreign commerce various species of marine life, including live corals, live fish, and live rock.

In October 2012, Tieder and his company purchased four juvenile nurse sharks from a supplier located in Monroe County, Florida. The supplier did not hold the required license or permit from the State of Florida which would permit the supplier to harvest or sell sharks.

In early November 2012, an employee of TFT confirmed the availability and willingness of TFT to sell eight juvenile nurse sharks to a customer outside the State of Florida. Thereafter, on November 6, 2012, a supplier in Monroe County transported four nurse sharks from Marathon Key to TFT at Dania. Unknown to the supplier or TFT, the four sharks had been outfitted with Passive Integrated Tags (PIT), each responding to an electronic reader with a unique 15 digit serial number.

On November 7, 2012, TFT delivered eight nurse sharks to Fort Lauderdale International Airport, for shipment in interstate commerce to a customer of TFT. Four of the sharks were scanned and found to be carrying the PIT Tags previously placed by Special Agents of the U.S. Fish & Wildlife Service. TFT subsequently received payment for the eight sharks in the amount of $440.00.

Tieder was sentenced to a term of probation of two years, a criminal fine of $1,000, and ordered to make a payment of $4,000 as a special condition of his probation to the National Fish & Wildlife Foundation, a Congressionally-chartered organization authorized by law to receive payments arising as a result of a criminal conviction. NFWF will distribute the funds to the Mote Marine Laboratory, Summerland Key Branch, to promote research, management, education, conservation, and restoration of marine life and corals throughout the waters of the Florida Keys National Marine Sanctuary and the Florida Keys.

Tieder’s company, TFT, was placed on probation for a period of three years and ordered to pay a criminal fine of $1,000, with an additional payment to the NFWF of $1,500.

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Man Sentenced for Defrauding Banks to Keep Business Afloat

William Leckey of Buffalo, New York, has been sentenced by U.S. District Judge Janet Bond Arterton in New Haven to 29 months of imprisonment, followed by three years of supervised release, for engaging in a fraud scheme that victimized financial institutions of more than $1.7 million.

Leckey, 45, pleaded guilty to one count of conspiracy to commit bank fraud on August 1, 2013.

From approximately 2002 until 2012, Leckey was the president and owner of Anchor Capital Services, Inc., which provided financing to companies looking to purchase heavy equipment. ACS provided its customers with high interest rate leases and funded the transactions through lines of credit it had available with various financial institutions. ACS drew on these lines of credit by pledging its lease agreements and the related equipment as collateral. After each deal was funded by the financial institutions, customers would make monthly payments to ACS on the lease, and ACS would use those funds to pay down the line of credit with the bank.

According to court records, however, Leckey and others made false representations to the financial institutions that the company had entered into lease transactions with customers when, in fact, they knew that no such lease transaction had been conducted.

As a result of these false statements, the financial institutions funded these nonexistent transactions in amounts well in excess of $100,000 on a number of occasions.

As a result of this scheme, ACS received more than $1.7 million from financial institutions on its letters of credit.

In addition to prison, Judge Arterton ordered Leckey to pay restitution in the amount of $1,709,640.

Passenger Charged with Making Threats to Take Down Airplane

The U.S. Attorney’s Office in the Southern District of Florida has filed a criminal complaint charging 22-year-old Francisco Fernando Cruz, a citizen of Brazil, with sending threatening e-mails claiming that a TAM Airline flight from Miami to Brasilia “will go down.”

According to the criminal complaint, on January 8, 2014, an e-mail was sent to MDPD, as well as TAM Airlines. The content of the e-mail made a specific threat against a TAM Airlines Flight that was to depart on January 10, 2014, from Miami to Brasilia. The threat stated the following:

“Flight must not take off. Targeted. It will go down. Retaliation. Cargo is dangerous. Be advised.”

MDPD was able to trace the origin of the e-mail and determined the e-mail originated from a computer at Montclair State University in Montclair, New Jersey. The university was able to capture video of the person that utilized the kiosk that sent the e-mail.

The following day, the e-mail was resent, again with the threat. Law enforcement were able to identity Cruz as the sender of the two e-mails. Cruz traveled from New York to Miami and was scheduled to travel to Brasilia on the flight against which he made the threat.

If convicted, the defendant faces a statutory maximum of five years in prison and a $250,000 fine. The case is set for pretrial detention hearing on January 14, 2014 and for arraignment on January 24, 2014. Both hearings are scheduled for 10:00 a.m. before the duty magistrate.