Month: July 2024

Source: United States Department of Justice Criminal Division

Richard Zagger, of Blue Point, New York, pleaded guilty today to a charge of conspiracy and three charges of obstruction. A sentencing hearing is scheduled for Oct. 16.

The four-count indictment alleges that Zagger was a supervisor for Northridge Construction Corporation, located in East Patchogue, Long Island, New York. On Dec. 8, 2018, Zagger was overseeing employees of Northridge Construction Corporation who were constructing a metal shed on the Northridge property. During the construction, one of the employees fell from the improperly secured shed roof and died.

The Occupational Safety and Health Administration (OSHA) investigated the employee’s death and violations of worker safety standards. Among other worker safety standards, OSHA regulations require maintaining the stability of a metal structure at all times during construction. The indictment charges that during the investigation, Zagger made false statements and conspired with others to make false statements to obstruct the federal agency’s inquiry. 

The maximum penalty for the conspiracy count and each obstruction count is five years in prison and a $250,000 fine, or twice the economic gain to the defendant or loss suffered by the victim because of the crime.

Also, in regards to the same fatal incident, Northridge previously pleaded guilty to violating a worker safety standard causing the death of one of its employees and to making two false statements that obstructed OSHA’s investigation. The corporation is scheduled to be sentenced on Aug. 6.

Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division made the announcement.

The Department of Labor’s Office of the Inspector General investigated the case.

Senior Trial Attorneys Daniel Dooher and Richard J. Powers and Trial Attorney Rachel Roberts of the Environment and Natural Resources Division’s Environmental Crimes Section are prosecuting the case.

Source: United States Department of Justice Criminal Division

Saleem Hakim was sentenced today to four years in prison following his conviction in January on charges of tax evasion and failing to file tax returns.

According to court documents and evidence introduced at trial, during at least the years 2009 through 2013, Hakim was in the business of brokering the sale of precious metals to clients. Hakim earned more than $2.8 million in commissions for converting cash to precious metals for his clients during those years which enabled him to fund a lavish lifestyle that included purchases of high-end watches, jewelry, designer accessories and furs. Despite earning substantial income during 2009 through 2013, he did not file income tax returns for those years. Hakim last filed an income tax return for tax year 1999.

The evidence introduced at trial additionally showed that, from 2020 through 2022, Hakim and his wife worked for businesses in Atlanta that were engaged in the purchase and sale of jewelry and luxury handbags. The Hakims earned a combined income of more than $260,000 for those years but did not file returns. The evidence also established that Hakim attempted to conceal his and his wife’s income from the IRS by diverting their income into a trust that he established after being initially charged with tax crimes for the years 2011 through 2013.

Hakim attempted to obstruct the investigation into his tax misconduct for 2020 through 2022. After a witness received a grand jury subpoena for records relating to income that the witness paid to Hakim and his wife, Hakim drafted a letter for the witness falsely stating that the witness did not have any business records in his possession relating to the Hakims and asked the witness to send the letter. The witness sent the letter to federal prosecutors and IRS agents.

In addition to his prison sentence, U.S. District Judge Michael L. Brown for the Northern District of Georgia ordered Hakim to serve three years of supervised release and pay $1,219,225.73 in restitution to the IRS, and $4,490.52 in prosecution costs.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.

IRS Criminal Investigation investigated the case.

Trial Attorneys Melissa S. Siskind and Colleen McCarthy of the Justice Department’s Tax Division prosecuted the case.

Acting Deputy Assistant Attorney General Goldberg thanked the U.S. Attorney’s Office for the Northern District of Georgia for the substantial assistance they provided in the investigation and prosecution of this matter. Acting Deputy Assistant Attorney General Goldberg also thanked Trial Attorney Christina Grimes and former Trial Attorneys Jeffrey Bender and Kathryn Carpenter of the Tax Division who previously worked on this matter.

Source: United States Department of Justice Criminal Division

The Justice Department, Environmental Protection Agency (EPA) and State of Colorado today announced a settlement with Enterprise Gas Processing LLC and Enterprise Products Operating LLC (jointly, “Enterprise”). The agreement, which includes a $1 million civil penalty, will protect community health and the environment by strengthening leak detection and repair practices at the Meeker Gas Plant in Rio Blanco County, Colorado.

A complaint filed concurrently with the settlement alleges that Enterprise violated leak detection and repair requirements in accordance with the Clean Air Act and state clean air laws. The violations resulted in excess emissions of volatile organic compounds (VOCs) and other pollutants to the atmosphere.

“All gas refining and processing facilities must comply with the Clean Air Act,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “This settlement includes important provisions to improve leak detection, repair practices and staff training, which applied here will help protect public health in western Colorado.”

“Together, EPA and CDPHE are committed to delivering enforcement, inspections and compliance assistance that provide tangible benefits for Colorado’s communities,” said EPA Regional Administrator KC Becker. “This action will secure facility compliance and reduce emissions of air pollutants in Meeker and the surrounding area.”

“The protection of Colorado’s air quality made possible through this settlement with Enterprise is a testament to the power of collaboration between dedicated state and federal public officials,” said Colorado Attorney General Phil Weiser. “We are proud to support the state’s Air Pollution Control Division as it continues to lead the way to reduce air pollution from oil and gas operations and pursue better air for all Coloradans.”

As part of the settlement, Enterprise will take corrective actions and pay a $1 million civil penalty. Half of the penalty will go to the federal government and half will go to the State of Colorado, where a portion will fund projects to benefit disproportionately impacted communities through the state’s environmental justice grant program.

Under the settlement, Enterprise will strengthen its leak detection and repair practices at the Meeker Gas Plant. These commitments include:

• Installing equipment that leaks less pollution to the atmosphere;
• Reviewing compliance with leak detection and repair requirements; and
• Repairing leaking equipment faster.

Enterprise will also improve staff training and use optical gas imaging technology to improve the visual detection of leaks to address them more quickly.

Equipment leaks at the Meeker Gas Plant emit VOCs, which lead to the formation of ground-level ozone. Ozone contributes to serious public health concerns, including respiratory illness, aggravation of existing heart disease and temporary breathing difficulty for people with asthma. Young children and older people are especially sensitive to these impacts. Leaks from equipment at the Meeker Gas Plant also emit methane, a powerful greenhouse gas.

The EPA investigated the case.

Attorneys of the Environment and Natural Resources Division’s Environmental Enforcement Section are handling the case.

The Justice Department filed the consent decree with the U.S. District Court for the District of Colorado. The consent decree is subject to a 30-day public comment period. It is available on the Justice Department’s website at www.justice.gov/enrd/consent-decrees.

Source: United States Department of Justice Criminal Division

Two former Northwoods, Missouri, police officers were indicted last week for violating a man’s civil rights in 2023. One officer turned himself in yesterday, and the other turned himself in today.

Samuel Davis and Michael Hill were each indicted in relation to a July 4, 2023, encounter with a man, identified in the indictment as “C.G.,” after they were called to a Walgreens in Northwoods. Each were indicted on one count of conspiracy to intimidate C.G. in the free exercise and enjoyment of his right to be free from unreasonable seizure and deprivation of rights under color of law. Davis was also indicted on one count of engaging in misleading conduct with the intent to hinder, delay and prevent the communication of information relating to the possible commission of a federal offense and one count of altering records in a federal investigation. Hill was also indicted on one count of lying to the FBI.

According to the indictment, Hill, who was Davis’ supervisor, told Davis to take C.G. to Kinloch, Missouri. Davis then took C.G. to a field in Kinloch, where he struck the handcuffed man with his police baton. To cover up the incident, Davis told a dispatcher that C.G. was gone before Davis arrived at the Walgreens. Davis also allegedly turned off his body camera. The indictment also alleges Hill lied to FBI agents investigating the incident when he falsely stated that C.G. asked to go to Kinloch because he “had people” there.

If convicted, Davis and Hill each face a maximum penalty of life in prison for the charges of conspiracy to violate civil rights and deprivation of rights under color of law. Davis also faces a maximum penalty of 20 years in prison for witness tampering and a maximum penalty of 20 years in prison for destruction of records. Hill faces a maximum penalty of five years in prison for lying to the FBI. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. 

Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Saylor A. Fleming for the Eastern District of Missouri and Acting Special Agent in Charge Christopher Crocker of the FBI St. Louis Field Office made the announcement.

The FBI St. Louis Field Office and St. Louis County Police Department investigated the case.

Assistant U.S. Attorney Christine Krug for the Eastern District of Missouri and Trial Attorney Taylor Payne of the Civil Rights Division’s Criminal Section are prosecuting the case.

An indictment is merely an allegation. 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

Note: View the affidavit for search of 968 X accounts here and affidavit for domains seizure here.

The Justice Department today announced the seizure of two domain names and the search of 968 social media accounts used by Russian actors to create an AI-enhanced social media bot farm that spread disinformation in the United States and abroad. The social media bot farm used elements of AI to create fictitious social media profiles — often purporting to belong to individuals in the United States — which the operators then used to promote messages in support of Russian government objectives, according to affidavits unsealed today.

In conjunction with the domain seizures and search warrant announced today, the FBI and the Cyber National Mission Force (CNMF), in partnership with Canadian Centre for Cyber Security (CCCS), the Netherlands General Intelligence and Security Service (AIVD), Netherlands Military Intelligence and Security Service (MIVD), and Netherlands Police released a joint cybersecurity advisory detailing the technology behind the social media bot farm, including details regarding how the bot farm’s creators leveraged their bespoke AI system in furtherance of the scheme. The advisory will allow social media platforms and researchers to identify and prevent the Russian government’s further use of the technology. In addition, X Corp. (formerly, Twitter) voluntarily suspended the remaining bot accounts identified in the court documents for terms of service violations.

“With these actions, the Justice Department has disrupted a Russian-government backed, AI-enabled propaganda campaign to use a bot farm to spread disinformation in the United States and abroad,” said Attorney General Merrick B. Garland. “As the Russian government continues to wage its brutal war in Ukraine and threatens democracies around the world, the Justice Department will continue to deploy all of our legal authorities to counter Russian aggression and protect the American people.”

“Today’s action demonstrates that the Justice Department and our partners will not tolerate Russian government actors and their agents deploying AI to sow disinformation and fuel division among Americans,” said Deputy Attorney General Lisa Monaco. “As malign actors accelerate their criminal misuse of AI, the Justice Department will respond and we will prioritize disruptive actions with our international partners and the private sector. We will not hesitate to shut down bot farms, seize illegally obtained internet domains, and take the fight to our adversaries.”

“Today’s actions represent a first in disrupting a Russian-sponsored Generative AI-enhanced social media bot farm,” said FBI Director Christopher Wray. “Russia intended to use this bot farm to disseminate AI-generated foreign disinformation, scaling their work with the assistance of AI to undermine our partners in Ukraine and influence geopolitical narratives favorable to the Russian government. The FBI is committed to working with our partners and deploying joint, sequenced operations to strategically disrupt our most dangerous adversaries and their use of cutting-edge technology for nefarious purposes.”

“We support all civic engagement, civil dialogue, and a robust exchange of ideas,” said U.S. Attorney Gary Restaino for the District of Arizona. “But those ideas should be generated by Americans, for Americans. The disruption announced today protects us from those who use unlawful means to seek to mislead our citizens and our communities.”

“The disruption announced today is the result of a combined response with our international partners to a serious and unique threat,” said Acting U.S. Attorney Morris Pasqual for the Northern District of Illinois. “Multiple U.S. and foreign governmental components worked closely and efficiently to address the threat and develop and execute a mitigation strategy. Through vigorous enforcement efforts and collaborative international partnerships, the Justice Department works tirelessly to disrupt criminal cyber activity.”

Overview

According to court documents, a bot farm is an enhanced software package which allows for the creation of false personas on social media platforms. Bot farms are enhanced by integrating components which contain artificial intelligence, such as image production or text generation.

As described in the affidavits filed in support of the warrants, development of the social media bot farm was organized by an individual identified in Russia (Individual A). In early 2022, Individual A worked as the deputy editor-in-chief at RT, a state-run Russian news organization based in Moscow. Since at least 2022, RT leadership sought the development of alternative means for distributing information beyond RT’s standard television news broadcasts. In response, Individual A led the development of software that was able to create and to operate a social media bot farm. As planned, the social media bot farm would create fictitious online personas for social media accounts, through which RT, or any operator of the bot farm, could distribute information on a wide-scale basis. The development was executed by Individual B and others, who hid their identities and location (Russia) while beginning to purchase infrastructure for the social media bot farm in April 2022.

In early 2023, with the approval and financial support of the Presidential Administration of Russia (aka the Kremlin), a Russian FSB officer (FSB Officer 1) created and led a private intelligence organization (P.I.O.), as explained in the affidavits. The P.I.O.’s membership was comprised of, among others, employees at RT, including Individual A. The true purpose of the P.I.O. was to advance the mission of the FSB and the Russian government, including by spreading disinformation through the social media accounts created by the bot farm.

According to the affidavits, FSB Officer 1, Individual A, and other members of the PIO had access to the social media bot farm. The following are examples of Russian-government narratives that the bot farm posted on X in October and November 2023:

• A purported U.S. constituent replied to a candidate for federal office’s social media posts regarding the conflict in Ukraine with a video of President Putin justifying Russia’s actions in Ukraine;

• A purported resident of Minneapolis, Minnesota, posted a video of President Putin discussing his belief that certain geographic areas of Poland, Ukraine, and Lithuania were “gifts” to those countries from the Russian forces that liberated them from Nazi control during World War II;

• A purported U.S. resident of a city identified only as “Gresham,” posted a video claiming that the number of foreign fighters embedded with Ukrainian forces was significantly lower than public estimates;

• The same purported individual posted a video of President Putin claiming that the war in Ukraine is not a territorial conflict or a matter of geopolitical balance, but rather the “principles on which the New World Order will be based.”

To register the fictitious social media accounts, the social media bot farm relied on private email servers, which in turn relied on the two domain names seized by the FBI. An individual who controls an internet domain can create email accounts using the domain. For example, an individual controlling the domain name www.example.com can create email accounts using @example.com (e.g., EmailAddress@example.com). Here, the actors obtained and controlled the domain names “mlrtr.com” and “otanmail.com” from a U.S.-based provider. They then used those domains to create the email servers that ultimately allowed them to create fictitious social media accounts using the bot farm software.

The FSB’s use of U.S.-based domain names, which the software used to register the bots, violates the International Emergency Economic Powers Act. In addition, the accompanying payments for that infrastructure violate federal money laundering laws.

The Justice Department commends members of the private sector who coordinated with law enforcement efforts on this disruption, including X for its voluntary efforts to suspend the identified bot accounts from its platform. Prior to the government’s action, X identified and suspended a significant number of the bot accounts.

The Justice Department’s investigation is ongoing.

The National Security Division’s National Security Cyber Section, U.S. Attorney’s Office for the District of Arizona, and U.S. Attorney’s Office for the Northern District of Illinois are prosecuting the case, with valuable assistance from the National Security Division’s Counterintelligence and Export Control Section.