Month: April 2022

Source: United States Department of Justice Criminal Division

A former coal company executive was arrested today on charges of violating the Foreign Corrupt Practices Act (FCPA), laundering funds, and receiving kickbacks as part of an alleged scheme to pay bribes to government officials in Egypt in connection with contracts with an Egyptian state-owned and state-controlled company, Al Nasr Company for Coke and Chemicals (Al Nasr).

The seven-count indictment alleges that Charles Hunter Hobson, 46, of Knoxville, Tennessee, engaged in the bribery and money laundering scheme between late 2016 and early 2020. During part of that time, Hobson was the Vice President of a coal company in Pennsylvania (referenced as Company 1 in the indictment) and responsible for the company’s business relationship with Al Nasr. Hobson and others, including Company 1’s sales intermediary, allegedly paid bribes to Al Nasr officials in Egypt to obtain approximately $143 million in coal contracts for Company 1. To effectuate the bribery scheme, the indictment alleges, Hobson and others caused Company 1 to: (1) pay commissions to the sales intermediary, who passed on bribes to Al Nasr officials in exchange for the coal contracts, and (2) transfer the corrupt commission payments from a bank account in the United States to a bank account in the United Arab Emirates. The indictment also alleges that Hobson conspired to secretly receive a portion of the commissions paid to the sales intermediary as kickbacks.    

Hobson is charged with one count of conspiracy to violate the FCPA, two counts of violating the FCPA, one count of conspiracy to launder money, two counts of money laundering, and one count of conspiracy to commit wire fraud. He faces up to five years in prison for each of the bribery conspiracy and bribery charges, and up to 20 years in prison for each of the money laundering conspiracy, money laundering, and wire fraud charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The defendant will make his initial court appearance this afternoon in the Eastern District of Tennessee.  

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, U.S. Attorney Cindy K. Chung for the Western District of Pennsylvania, Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division, and Assistant Director in Charge Steven M. D’Antuono of the FBI’s Washington Field Office made the announcement. The Justice Department’s Office of International Affairs provided assistance.

The FBI’s International Corruption Unit in Washington, D.C., and the Washington Field Office are investigating the case.

Trial Attorneys Leila E. Babaeva and Natalie R. Kanerva of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Eric G. Olshan of the Western District of Pennsylvania are prosecuting the case.

The Fraud Section is responsible for investigating and prosecuting Foreign Corrupt Practices Act (FCPA) matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice Criminal Division

A Vermont man was sentenced today to 27 years in prison for paying a woman in Venezuela to make videos for his sexual pleasure in which victims were sadistically abused and at least one video in which he demanded a victim be killed.

Sean Fiore, 38, of Burlington, pleaded guilty in October 2021 to conspiracy to kidnap and kill a person overseas, murder-for-hire, conspiracy to produce child pornography, and possession of child pornography.

“The defendant paid for and scripted unspeakably vile and horrific videos of a child being tormented, and an adult sadistically abused,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “This prosecution, in partnership with the U.S. Attorney’s Office for the District of Vermont and Homeland Security Investigations (HSI), sends a clear message that these reprehensible acts will not go unanswered or unpunished.”

“It is difficult to imagine more depraved conduct than that of Sean Fiore,” said U.S. Attorney Nikolas P. Kerest for the District of Vermont. “We are grateful for the tremendous support and teamwork provided by HSI and Vermont’s Internet Crimes Against Children Task Force during the investigation of this case. We are also thankful for our partners in the Criminal Division in Washington, D.C., who helped bring Fiore to justice. This office along with its partners will continue to prioritize protecting the vulnerable and prosecuting dangerous offenders such as Fiore.”

“Fiore committed some of the darkest, most heinous deeds humanity can imagine,” said Special Agent in Charge Matthew Millhollin for HSI in New England. “Today’s sentence ensures that he will be locked away, unable to repeat the depraved crimes he has admitted to. We are grateful to our partners here in Vermont and around the world who worked tirelessly alongside us to investigate and prosecute this case.” 

According to court documents, Fiore paid a woman in Venezuela $600 to produce a video that depicted the sadistic abuse of a prepubescent child. After Fiore received that video, he paid the woman approximately $4,000 for another video, this time to kidnap “a slave,” show his brutal abuse, and kill him. Specifically, Fiore sent the woman a 600-word script with the details of what he wanted the video to show, including her hitting and kicking the victim, burning him with cigarettes, urinating and defecating on him, filling his mouth with feces, wrapping his head with plastic, and smothering him to death by sitting on his face. Fiore then received a 58-minute video, in which, at the end, the adult male victim appeared to be dead.

Also, according to court documents, in May 2019 Fiore possessed videos and other images depicting the sadistic sexual abuse of prepubescent minors.

Moraima Escarlet Vasquez Flores, 39, of Colombia, the woman accused of sending Fiore the videos and of conspiring with him to produce child pornography, is charged with conspiracy to murder and kidnap a person in a foreign country, conspiracy to produce child pornography, production of child pornography, and aiding and abetting the receipt of child pornography. Vasquez Flores was arrested in Colombia in September 2020, and Colombia recently approved her extradition to the United States. The charges against Vasquez Flores are merely allegations and she is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Trial Attorney Patrick Jasperse of the Criminal Division’s Human Rights and Special Prosecutions Section, Trial Attorney Eduardo Palomo of the Criminal Division’s Child Exploitation and Obscenity Section, and Assistant U.S. Attorney Barbara Masterson for the District of Vermont are prosecuting the case with the assistance of the Justice Department’s Office of International Affairs.

Source: United States Department of Justice Criminal Division

The former Comptroller General of Ecuador made his initial appearance today in Miami, Florida, for allegedly engaging in a scheme to use the U.S. financial system to launder money to promote and conceal an illegal bribery scheme in Ecuador.

According to the March 24 indictment unsealed today, between approximately 2010 and 2016, Carlos Ramon Polit Faggioni (Polit), allegedly solicited and received over $10 million in bribe payments from Odebrecht S.A., the Brazil-based construction conglomerate, in exchange for using his official position as Comptroller General of Ecuador to influence official actions by the comptroller’s office in order to benefit Odebrecht and its business in Ecuador. Additionally, Polit is alleged to have received a bribe from an Ecuadorian businessman in or around 2015 in exchange for assisting the businessman and his company in connection with certain contracts from the state-owned insurance company of Ecuador.

The indictment alleges that, from in or around 2010 and continuing until at least 2017, at the direction of Polit, another member of the conspiracy caused proceeds of Polit’s bribery scheme to “disappear” by using Florida companies registered in the names of certain associates, often without the associates’ knowledge. The conspirators also used funds from Polit’s bribery scheme to purchase and renovate real estate in South Florida and elsewhere and to purchase restaurants, a dry cleaner and other businesses. 

Odebrecht S.A. pleaded guilty on Dec. 21, 2016, in the Eastern District of New York to conspiring to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) in connection with a broader scheme to pay nearly $800 million in bribes to public officials in 12 countries, including Ecuador.

Polit is charged with one count of conspiracy to commit money laundering, three counts of concealment money laundering, and two counts of engaging in transactions in criminally derived property. If convicted, he faces up to 20 years in prison for each count of money laundering and conspiracy to commit money laundering and up to 10 years in prison for each count of engaging in transactions in criminally derived property. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division, U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida, and Special Agent in Charge Anthony Salisbury of Homeland Security Investigations (HSI) Miami office made the announcement.

HSI’s Miami Field Office is investigating the case. 

Trial Attorneys Jill Simon and Alexander Kramer of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Michael N. Berger of the U.S. Attorney’s Office for the Southern District of Florida are prosecuting the case. Assistant U.S. Attorney Peter Laserna is handling asset forfeiture.

The Justice Department’s Office of International Affairs also provided substantial assistance. The Justice Department also wishes to thank law enforcement authorities in Ecuador, Brazil, Panama, and Curacao for their assistance with the investigation.  

The Fraud Section is responsible for investigating and prosecuting Foreign Corrupt Practices Act (FCPA) matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice Criminal Division

A federal jury convicted a California man yesterday for submitting fraudulent applications seeking money from the Paycheck Protection Program (PPP), submitting false statements to a financial institution, and money laundering. 

According to court documents and evidence presented at trial, Robert Benlevi, 53, of Encino, submitted 27 PPP loan applications to four banks between April and June 2020 on behalf of eight companies solely owned by Benlevi. In the applications, Benlevi sought a total of $27 million in forgivable PPP loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In his fraudulent applications, Benlevi represented that each of his companies had 100 employees and average monthly payroll of $400,000, even though he knew that the companies did not have any employees or payroll expenses. The evidence further showed that Benlevi also submitted fabricated IRS documents falsely stating that each of the companies had an annual payroll of $4.8 million.

Based on Benlevi’s fraudulent loan applications, three of Benlevi’s companies — 1Stellar Health LLC, Bestways2 Health LLC, and Joyous-Health4U LLC — obtained $3 million in PPP funds. Although Benlevi falsely represented that the funds sought through the PPP loan applications would be used to pay payroll and certain other business expenses, the evidence showed that he instead used them for personal expenses, including cash withdrawals, payments on his personal credit cards, transfers to other personal and business accounts he controlled, and renting an oceanfront apartment in Santa Monica. In a single day, Benlevi withdrew from the Bestways2 Health account $248,000 of PPP funds in cashier’s checks, which were deposited into other accounts that Benlevi controlled.

Benlevi was convicted of bank fraud, false statements to a financial institution, and money laundering. He is scheduled to be sentenced on June 27 and faces up to 30 years in prison for each of the bank fraud and false statement charges, and up to 10 years in prison for each count of money laundering. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Tracy L. Wilkison of the Central District of California; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office; Special Agent in Charge Jeffrey D. Pittano of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG); and Special Agent in Charge Weston King of the SBA Office of Inspector General (SBA-OIG) Western Region made the announcement.

The FBI, SBA-OIG, and FDIC-OIG investigated the case. 

Trial Attorneys Emily Culbertson and Justin Givens of the Criminal Division’s Fraud Section are prosecuting the case.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Source: United States Department of Justice Criminal Division

Third federal conviction for introducing misbranded drugs into commerce; repeatedly ignored state licensing rules