Month: April 2023

Source: United States Department of Justice News

Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang today sentenced Daniel Velcu, age 43, of Baltimore, Maryland, to 34 months in federal prison, followed by three years of supervised release, for conspiracy to commit bank fraud and wire fraud.  As part of his sentence, Velcu will be required to pay $1,313,499.79 in restitution.

The sentence was announced by Erek L. Barron, United States Attorney for the District of Maryland; Postal Inspector in Charge Damon E. Wood of the U.S. Postal Inspection Service – Washington Division; Special Agent in Charge James C. Harris of Homeland Security Investigations (HSI) Baltimore; Acting Special Agent in Charge Michael Serra of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG) Mid-Atlantic Region; Chief Marcus Jones of the Montgomery County Police Department; Chief Terry Sult of the Cary, North Carolina, Police Department; and Sheriff Dusty Rhoades of the Williamson County, Tennessee, Sheriff’s Office.

According to his guilty plea, beginning in June 2018 to October 2020, Velcu and his co-conspirators conspired to steal checks from the U.S. mail intended for religious institutions and deposit the illegally obtained funds into multiple fraudulent bank accounts at various victim financial institutions.  Conspirators, including Velcu, conducted the thefts by driving to roadside mailboxes of churches and other religious institutions and removing the mail, specifically targeting donation checks.

As part of the scheme to defraud, Velcu and other co-conspirators fraudulently opened bank accounts at victim financial institutions, often in fictitious names, with the aid of co-conspirator Diape Seck, who was an employee at one of the victim financial institutions.  Velcu used false names and accompanying fraudulent identity documents containing his photograph to open accounts and receive ATM cards and account information, in addition to using accounts opened by Seck.  Velcu and others deposited stolen checks into the fraudulently opened bank accounts and into bank accounts held in his own or a family member’s identity.  Velcu and co-conspirators then withdrew cash from the fraudulent bank accounts through ATMs and spent the illegally obtained proceeds using debit cards associated with the bank accounts. 

During the course of the conspiracy, Velcu personally deposited at least 70 stolen checks, totaling at least $40,357.50 and those accounts received at least $48,987.44 from approximately 101 stolen checks.  Information found on Velcu’s cellular phone revealed that eight additional accounts in the name of Velcu or a family member received at least $82,872.65 from approximately 145 stolen checks

On October 9, 2020, law enforcement executed a search warrant at Velcu’s residence and storage unit in Baltimore and recovered approximately $87,064 is cash, assorted gold coins and jewelry, all of which are being forfeited as proceeds of the conspiracy.  Law enforcement also seized fraudulent French identity documents containing photographs of Velcu and a false name.

Five other conspirators previously pleaded guilty to the conspiracy and were sentenced to up to five years in federal prison.  Former bank employee Seck was convicted after trial.  Seck faces a maximum sentence of 30 years in federal prison for each of conspiracy to commit bank fraud; bank fraud; making false entries in bank records; and receipt of a bribe or reward by a bank employee.  U.S. District Judge Theodore D. Chuang has scheduled sentencing for Seck on June 2, 2023, at 2:30 p.m.

United States Attorney Erek L. Barron commended the U.S. Postal Inspection Service, HSI, the FDIC Office of Inspector General, the Montgomery County Police Department, the Cary (North Carolina) Police Department, and the Williamson County (Tennessee) Sheriff’s Office for their work in the investigation.  Mr. Barron thanked Assistant U.S. Attorney Elizabeth Wright, who prosecuted the case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.

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Source: United States Department of Justice News

DETROIT – A former police lieutenant in charge of the Detroit Police Department’s Integrity Unit  was sentenced to 2 ½ years in prison for accepting bribes in a conspiracy with another Detroit police officer in connection with corruption in the towing industry in Detroit, United States Attorney Dawn N. Ison announced today.

Ison was joined in the announcement by James A. Tarasca, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.

John F. Kennedy, 57, of Rochester Hills, Michigan, at one point commanded the Detroit Police Department’s Integrity Unit—a division of the department’s Internal Affairs Division—and was responsible for investigating reports of law violations and professional misconduct by police officers and other city employees. Kennedy conspired with fellow Detroit police officer Daniel S. Vickers to commit bribery by accepting money and other items of value in exchange for Kennedy using and promising to use his influence as a supervisor to persuade other officers to make tow referrals to a towing company in violation of the city’s ordinance and Detroit Police Department policy. Under the city’s towing rotation, qualifying private towing companies are called by the police to tow cars that are seized by the police or reported stolen. Kennedy and Vickers were aware that by making towing referrals directly to a towing company which was not on the city’s towing rotation, they were violating the city’s rules and an ordinance which prohibit a towing company from receiving towing referrals if they are not on police department’s towing rotation. 

Kennedy and fellow Detroit police officer Vickers agreed to accept bribes in the form of thousands of dollars in cars, car parts, car repairs, and new carpeting for Vickers’ home. Besides making illegal tow referrals in exchange for the bribes, Vickers and Kennedy also agreed to provide the towing company that Kennedy was investigating with confidential information about the status of the Integrity Unit’s case.

In total, Kennedy accepted bribes amounting to $14,950 during the course of the conspiracy.  In addition, Vickers accepted over $3,400 in bribe payments from the towing company.

Vickers has pleaded guilty to the bribery conspiracy and was sentenced in February of this year to 27 months in prison.

Vickers and Kennedy were charged as part of the government’s investigation of corruption within the government and the Police Department of the City of Detroit relating to the towing industry and other matters.  Thus far, six defendants have been charged in the probe, and five of those six defendants have been convicted.

U.S. Attorney Ison said, “Today’s sentence underscores our commitment to ensuring local police agencies embody the utmost commitment to excellence, integrity, and professionalism. Thankfully, today’s result is not emblematic of the character of our law enforcement partners. Nevertheless, this type of immoral conduct will and must be punished. We thank Chief of Police James White for his assistance in this investigation.”   

“Police officers take an oath to protect and serve their community. Today, John Kennedy is being held accountable for violating that oath and using his official position to benefit himself personally,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Field Office. “We appreciate the partnership and cooperation of Detroit Police Chief James White as the FBI’s Public Corruption Task Force continues to address public corruption in the City of Detroit.”

“This former officer’s actions are unacceptable for anyone who has the privilege to wear the Detroit Police badge,” said Detroit Police Chief James E. White. “We appreciate U.S. Attorney Ison’s work to bring accountability to those who fail in their sworn duty to serve and protect the public and will continue to collaborate with her office in any investigation of alleged wrongdoing by our officers. Delivering transparent, accountable, policing excellence that Detroiters deserve is a top priority of my administration.”

The case was investigated by the Detroit Area Public Corruption Task Force, which is led by the Federal Bureau of Investigation, with assistance from the Detroit Police Department, Michigan Attorney General’s Office, Customs & Border Protection, and the U.S. Department of Homeland Security. The case is being prosecuted by Assistant U.S. Attorney Eaton P. Brown.

Source: United States Department of Justice Criminal Division

EAST ST. LOUIS – A U.S. District Court judge sentenced a St. Louis man to a total of 50 years in federal prison after he murdered a security guard during a bank robbery in East St. Louis in August 2021.

Jaylan Quinn, 23, pled guilty to one count of bank robbery and one count of using a firearm to commit murder during and in relation to a crime of violence. After his imprisonment, the defendant will serve five years of supervised release. Quinn was also ordered to pay $7,280 in restitution.

“Although this sentence won’t bring back Ted Horn, it’s a small sigh of relief that the man responsible for taking his life will spend the foreseeable future in federal prison for his crimes,” said U.S. Attorney Rachelle Aud Crowe. “Swift action by the FBI, the Illinois State Police and the East St. Louis Police Department led to this successful investigation, and I applaud their efforts to remove this dangerous, uncivilized criminal from society.”

FBI Springfield Field Office Special Agent in Charge David Nanz said, “Today’s significant sentence reflects the severity of Jaylan Quinn’s actions. And while it brings a conclusion to this case, the loss experienced by the family of Ted Horn will last a lifetime. We hope that in some way today’s sentence provides a degree of comfort for the victim’s family.”

“Strong and swift investigation by law enforcement, working with the justice system, enabled us to send a convicted murderer to prison,” said ISP Zone 6 Commander Lt. Mike Lewis. “The Illinois State Police will continue working with our local and federal law enforcement partners, and the U.S. Attorney’s Office, to ensure those breaking the law are held accountable.”

According to court documents, Quinn and Andrew R. Brinkley, 21 of St. Louis, Missouri, entered First Bank in East St. Louis located at 350 River Park Dr. around 4 p.m. on Aug. 27, 2021. Wearing masks, the pair approached the teller and displayed a demand note. The note read, “I GOT A BOMB STRAPPED TO MY CHEST PUT ALL THE MONEY IN OR EVERYONE DIE.” After receiving funds, the two men ran toward the door.

Ted Horn, 56, of St. Libory, Illinois, was working at the bank as a uniformed security guard and followed the men to observe, but Quinn drew a semi-automatic handgun and fatally shot Horn in the head. The robbers then fled in a white Lexus sedan. Horn was pronounced dead at the scene.

Bank surveillance video quickly led to the identification of Brinkley as a suspect. By 2 p.m. the next day, FBI agents arrested Brinkley and Quinn at Brinkley’s residence in St. Louis.

Agents executed a search warrant at the residence and recovered a loaded 9mm handgun, two marked bills that were taken during the First Bank robbery and clothing that matched the description of the robbers. A white Lexus sedan was found parked at the residence.

Brinkley was sentenced to 20 years in prison on Jan. 12, 2023. He was ordered to pay $7,280 in restitution and will serve three years of supervised release following his prison sentence.

The FBI-Springfield Field Office led the investigation with assistance from the Illinois State Police and the East St. Louis Police Department. Assistant U.S. Attorneys Laura Reppert and Ali Burns prosecuted the case.

Source: United States Department of Justice News

A nine-count indictment was unsealed today in the Eastern District of New York charging Nazem Ahmad and eight co-defendants with conspiring to defraud the United States and foreign governments, evade U.S. sanctions and customs laws and conduct money laundering transactions by securing goods and services for the benefit of Ahmad, a Lebanese resident and dual Belgian-Lebanese citizen who was sanctioned by the United States for being a financier for Hezbollah, a foreign terrorist organization.

According to court documents, despite being sanctioned and prohibited from engaging in transactions with U.S. persons since December 2019, Ahmad and his co-conspirators relied on a complex web of business entities to obtain valuable artwork from U.S. artists and art galleries and to secure U.S.-based diamond-grading services all while hiding Ahmad’s involvement in and benefit from these activities. Approximately $160 million worth of artwork and diamond-grading services were transacted through the U.S. financial system. One defendant was arrested today in the United Kingdom at the request of the United States, and the eight remaining defendants, including Ahmad, are believed to reside outside the United States and remain at large. The government obtained seizure warrants for millions of dollars in assets that include a diamond ring, cash in an account and artwork.

“Despite being sanctioned for his dealings with a terrorist organization, Mr. Ahmad remained active in the U.S.-based art and diamond trade while concealing his illicit involvement,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Today, we hold Ahmad and his associates accountable and demonstrate that those who would flout our sanctions cannot hide from U.S. justice.”  

“The United States implemented terrorism sanctions so that terrorist organizations like Hezbollah would be cut off from the goods and services needed to fund violent acts of terrorism,” said U.S. Attorney Breon Peace for the Eastern District of New York. “As alleged, Nazem Ahmad and his co-defendants benefitted from the multimillion-dollar trade in diamonds and artwork even after Ahmad was sanctioned for his involvement with a terrorist organization. Our office will continue to prosecute individuals who evade these sanctions and thereby offer a lifeline to designated foreign terrorist organizations.”

“Let this action against Nazem Ahmad’s international criminal organization serve as a reminder that the U.S. government and its allies will tirelessly prosecute those who are sanctioned for illicitly financing terrorist activities and wantonly violate those sanctions in order to continue accruing substantial wealth that can be used to continue financing Hezbollah,” said Deputy Secretary John K. Tien of Department of Homeland Security. “We are grateful to our partners across the federal government and our partnership with the United Kingdom that demonstrates international commitment and cooperation to preventing future atrocities by dismantling illicit financial networks supporting terrorism.”

“The funding of foreign terrorist organizations like Hezbollah is illegal, regardless of whether that funding comes in the form of cash or the export of high-priced diamonds and art,” said Assistant Secretary Export Enforcement Matthew S. Axelrod of the Department of Commerce. “We are proud to have partnered with the Justice Department and HSI to bring this significant enforcement action.” 

As alleged, Ahmad was involved in real estate development, the international trade of diamonds, and the international acquisition and sale of artwork, and operated these enterprises through a complex web of business entities. Ahmad was also an associate of high-level members of Hezbollah, a Lebanon-based terrorist group that was designated by the United States as a Foreign Terrorist Organization and Specially Designated Global Terrorist. On Dec. 13, 2019, pursuant to the International Emergency Economic Powers Act (IEEPA) and the Global Terrorism Sanctions Regulations, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) designated Ahmad and 11 businesses associated with Ahmad as Specially Designated Nationals (SDNs) for Ahmad’s material support of, and provision of goods and services to, Hezbollah. At the time of the designation, OFAC explained that Ahmad was “considered a major Hezbollah financial donor who laundered money through his companies for Hezbollah and provided funds personally to Hezbollah Secretary-General Hassan Nasrallah” and was also “involved in ‘blood diamond’ smuggling” who “stores some of his personal funds in high-value art.”

Despite being sanctioned and prohibited from engaging in most transactions with U.S. persons, Ahmad continued to secure valuable goods and services from U.S. persons notwithstanding that such transactions constituted violations of U.S. sanctions and other federal laws. Specifically, Ahmad, together with his son Firas Michael Ahmad, daughter Hind Nazem Ahmad and brother-in-law Rami Yaacoub Baker, as well as associates Mohamad Hijazi, Mohamad Hassan Ismail, Sarya Nemat Martin, Ali Said Mossalem Sundar Nagarajan and others, used numerous corporate entities and individuals to disguise Ahmad’s control and beneficial interest in the companies and in financial transactions, and facilitate the acquisition of multiple pieces of valuable artwork and diamond-grading services for millions of dollars’ worth of diamonds from U.S. persons.

Evasion of Terrorism Sanctions in the Diamond Trade

As alleged, the defendants conspired to violate and evade U.S. sanctions by obtaining grading determinations and other services from a U.S.-based diamond grading company (Diamond Grading Company-1). The services of Diamond Grading Company-1, which were secured through multiple entities operating for Ahmad’s benefit, were valuable to the defendants because the services provided can affect the sales price of those diamonds and thus increase the amount that Ahmad can receive for the sale of his property. Collectively, the defendants and other conspirators sent approximately 482 diamond submissions to Diamond Grading Company-1 facilities after Ahmad was designated by OFAC in December 2019. The total weight of the diamonds submitted and graded post-sanctions was approximately 1,546 carats. For example, on or about March 18, 2021, an entity operating for the benefit of Ahmad shipped an approximately 45-carat diamond – valued at $80 million – to a facility belonging to Diamond Grading Company-1 in New York. Following the receipt of services from Diamond Grading Company-1, the 45-carat diamond was exported from the United States on April 26, 2021, back to the same entity.

Evasion of Terrorism Sanctions in the Art Market

The defendants also conspired to violate and evade U.S. sanctions by acquiring contemporary art from the United States, from U.S. persons outside the United States, or through U.S.-based financial transactions, on behalf of and for the benefit of Ahmad, despite his status as an OFAC-sanctioned SDN. Artwork allegedly obtained from the United States after Ahmad was sanctioned in December 2019 was valued at more than $450,000, while an additional $780,000 in artwork from U.S. persons located outside the United States was also acquired in violation of terrorism sanctions.

For example, in or about and between April 2021 and July 2021, Ahmad and several other defendants engaged in multiple transactions with a Chicago-based art gallery (Chicago Art Gallery-1), on behalf of and for the benefit of Ahmad. Ahmad allegedly commissioned multiple pieces of artwork, at least one of which can be seen in a picture with Ahmad, as depicted below:

 

Between approximately February 2021 and November 2021, Ahmad and two other defendants engaged in transactions with a New York-based artist (New York Artist-1), on behalf of and for the benefit of Ahmad. After Ahmad directly negotiated the sale of artwork from New York Artist-1 – pointedly directing the artist not to mention Ahmad’s name to anyone – six paintings valued at $199,800 were exported from the United States via John F. Kennedy International Airport to a Lebanese business entity used by Ahmad. At least one piece of artwork acquired from New York Artist-1 was hung in Ahmad’s residence in Lebanon.

As part of this criminal scheme, the defendants also caused the undervaluation of goods in U.S. customs records in violation of federal law and took other steps to obscure the value of the goods they received in order to avoid the payment of foreign taxes when the goods were imported into the relevant country.

The defendants and other conspirators engaged in this scheme to benefit Ahmad and themselves while at the same time evading terrorism-related sanctions, to avoid the payment of taxes to foreign governments on the import of valuable goods into foreign countries and to make it more difficult for the United States government to carry out its lawful functions. Entities controlled by or operating for the benefit of Ahmad engaged in more than $400 million worth of financial transactions between approximately January 2020 and August 2022; the conspirators were responsible for importing more than $207 million of goods to the United States and exporting more than $234 million of goods from the United States between approximately December 2019 and December 2022, consisting primarily of diamonds and artwork; and approximately $160 million worth of transactions involved the U.S. financial system. At least $6 million of the proceeds of the criminal scheme was transferred to Lebanon for use by Ahmad and his associates.

Assistant U.S. Attorneys Craig R. Heeren and Nicholas J. Moscow for the Eastern District of New York and Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section are in charge of the prosecution, with assistance from Paralegal Specialists Benjamin Richmond and Magdalena St. Surin. Assistant U.S. Attorney Claire Kedeshian of the is handling asset forfeiture. The Department of Justice Office of International Affairs is assisting with extradition and international legal assistance in this case.

This investigation was a collaboration between HSI Cedar Rapids, New York, HSI New York Counter Proliferation Investigations and Trade Transparency Unit which was made possible through support from HSI Chicago, Dallas, Houston, Kansas City, Los Angeles, Raleigh, St. Paul, and Santa Rosa. HSI Attaché offices in Africa, Asia, Europe, and the Middle East played critical roles in the investigation. U.S. Customs and Border Protection was also a key investigative partner.

The Department also appreciates the significant cooperation and assistance provided by the United Kingdom authorities.

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