Month: August 2024

Source: United States Department of Justice 2

A federal jury in Brooklyn, New York, convicted the former Finance Minister of Mozambique for his role in a $2 billion fraud, bribery, and money laundering scheme that victimized investors in the United States and elsewhere.

According to court documents and evidence presented at trial, Manuel Chang, 68, of Mozambique, received $7 million in bribes in exchange for signing guarantees on behalf of the Republic of Mozambique to secure funding for three loans for maritime projects. As part of the scheme, Chang and his co-conspirators falsely told banks and investors that the loan proceeds would be used for the projects and not to pay bribes to government officials. In fact, however, Chang and his co-conspirators diverted more than $200 million of the loan proceeds that were used, among other things, to pay bribes and kickbacks to Chang and others.

“While serving as Finance Minister of Mozambique, Manuel Chang obtained $7 million in bribe payments in exchange for signing guarantees to secure more than $2 billion in loans,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Not only did Chang’s abuse of authority betray the trust of the Mozambican people, but his corrupt bargain also caused investors—including U.S. investors—to suffer substantial losses on those loans. Chang’s conviction today demonstrates that the Criminal Division is committed to combatting foreign corruption in violation of U.S. law, no matter where these schemes occur or whom they involve.”

The trial evidence showed that, between approximately 2013 and 2015, Chang, together with his co-conspirators—including executives of Privinvest Group, a United Arab Emirates-based shipbuilding company—ensured that a United Kingdom subsidiary of Credit Suisse AG and another foreign investment bank arranged for more than $2 billion to be extended to companies owned and controlled by the Mozambican government: Proindicus S.A. (Proindicus), Empresa Moçambicana de Atum, S.A. (EMATUM), and Mozambique Asset Management (MAM). The proceeds of the loans were intended to fund three maritime projects for which Privinvest was to provide the equipment and services.

“Today’s verdict is an inspiring victory for justice and the people of Mozambique who were betrayed by the defendant, a corrupt, high-ranking government official whose greed and self-interest sold out one of the poorest countries in the world,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Chang now stands convicted of pocketing millions in bribes to approve projects that ultimately failed, laundering the money, and leaving investors and Mozambique stuck with the bill.”

Chang and his co-conspirators illegally facilitated Privinvest’s diversion of more than $200 million of the loan proceeds to bribes and kickbacks. These funds included more than $150 million that Privinvest used to bribe Chang and other Mozambican government officials to ensure that companies owned and controlled by the Mozambican government entered into the loan arrangements, and that the government of Mozambique guaranteed those loans. The loans were subsequently sold in whole or in part to investors worldwide, including in the United States. In so doing, the participants defrauded these investors by misrepresenting how the loan proceeds would be used. Ultimately, Proindicus, EMATUM, and MAM each defaulted on their loans and proceeded to miss more than $700 million in loan payments, causing substantial losses to investors.

The jury convicted Chang of one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. He faces a maximum penalty of 20 years in prison on each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

In October 2021, Credit Suisse AG and CSSEL (together, Credit Suisse) admitted to defrauding U.S. and international investors in the financing of an $850 million loan for the EMATUM project. CSSEL pleaded guilty to conspiracy to commit wire fraud and Credit Suisse AG entered into a deferred prosecution agreement with the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section (MLARS), and the U.S. Attorney’s Office for the Eastern District of New York. As a part of the resolution, Credit Suisse paid approximately $475 million in penalties, fines, and disgorgement as part of coordinated resolutions with criminal and civil authorities in the United States and the United Kingdom.

The FBI New York Field Office investigated the case. 

Trial Attorney Peter Cooch of the Criminal Division’s Fraud Section, MLARS Trial Attorney Morgan Cohen, and Assistant U.S. Attorneys Hiral D. Mehta, Genny Ngai, and Jonathan Siegel for the Eastern District of New York are prosecuting the case.

The Justice Department’s Office of International Affairs provided substantial assistance. The Justice Department also appreciates the assistance of South African authorities, particularly those in the South African Department of Justice and Constitutional Development, as well as authorities in the United Kingdom, Switzerland, Spain, and Portugal.

MLARS’ Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.

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

Source: United States Department of Justice 2

The Justice Department announced today that Five Point Enterprises LLC (5PE) has agreed to pay the United States $2,049,159 to resolve allegations that it submitted false claims to the Department of Veterans Affairs (VA) for educational assistance benefits under the Post-9/11 Veterans Educational Assistance Act of 2008 (Post-9/11 GI Bill). Until 2021, 5PE was a for-profit company based in Austin, Texas, that operated vocational schools across the country offering non-college degree programs to students, including veteran students, under a franchise agreement with New Horizons Inc.

“The Post-9/11 GI Bill educational assistance benefits are part of our promise to the brave women and men who have served our country,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates our commitment to safeguarding the integrity of this important program.”

“My office is committed to protecting the integrity of our federal programs and the education benefits military veterans and their families have earned by serving this country,” said U.S. Attorney Jaime Esparza for the Western District of Texas. “We and our partners stand ready to hold accountable those who take advantage of them through fraudulent practices.”

The Post-9/11 GI Bill provides educational assistance benefits for eligible veterans and members of the armed services who enroll in qualified education or training programs. The VA restricts the number of veterans that schools may enroll in their courses, requiring that no more than 85% of students enrolled in a course have all or part of their tuition, fees, or other charges paid for them by the school or the VA. This is known as the “85/15 Rule.” The 85/15 rule ensures that educational institutions offer quality programs with a substantial number of non-supported students enrolled, which weeds out any institutions that survive only by the influx of federal benefits. For veteran students properly enrolled in a course, the VA pays the actual net cost for tuition and fees charged by the school after it has applied any scholarships, waivers, grants or other assistance designed to defray the cost of tuition and fees, which is known as the “Last Payer Rule.” The government contends that, between 2015 and 2020, 5PE knowingly enrolled Post-9/11 GI Bill funded veterans in courses at 20 New Horizons franchises across the country where 85% or more of the students were already veterans or supported students, in violation of the 85/15 Rule, and failed to report to the VA the tuition reductions it provided to veterans, in violation of the Last Payer Rule. As a result, the government contends that 5PE submitted false claims for educational assistance benefits to the VA and false certifications of compliance with the Post-9/11 GI Bill’s requirements material to those false claims.

“This settlement demonstrates that violations of Post-9/11 GI Bill benefits regulations will not be tolerated,” said Acting Special Agent in Charge Molly King of the Department of Veterans Affairs Office of Inspector General (VA OIG) Northwest Field Office. “The VA OIG will continue to work with our law enforcement partners to protect the integrity of VA’s education benefits program.”

The Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Western District of Texas handled the matter. VA OIG provided substantial assistance in the investigation.

Senior Trial Counsel Christopher Wilson of the Civil Division and Assistant U.S. Attorney Thomas A. Parnham Jr. for the Western District of Texas handled the matter.

The claims asserted against defendants are allegations only. There has been no determination of liability.

Source: United States Department of Justice 2

A former Syrian government official was indicted today in Los Angeles on criminal charges for lying to U.S. immigration authorities about his time running a Syrian prison where prisoners, including political dissidents, were physically mistreated.

According to court documents, Samir Ousman Alsheikh, 72, of Lexington, South Carolina, was a Syrian government official who held a variety of positions in the Syrian police and the Syrian state security apparatus, and was associated with the Syrian Ba’ath Party, the totalitarian party that ruled Syria. He allegedly served as the head of Damascus Central Prison (colloquially known as “Adra Prison”) from approximately 2005 to 2010. As described in the indictment, political dissidents and other prisoners were severely physically abused at Adra Prison during Alsheikh’s tenure there. The indictment further alleges that Alsheikh was subsequently appointed governor of the province of Deir Ez-Zour by Syrian President Bashar al-Assad.

Alsheikh allegedly concealed his employment at the prison, persecution of any person because of political opinion, and involvement in harming others when he applied for U.S. citizenship in 2023. He allegedly made similar false statements when applying for a visa that enabled him to enter the United States in 2020, become a lawful permanent resident, and obtain a green card.

Alsheikh is charged with one count of obtaining, using, and possessing a green card that was procured through false statements and one count of attempted naturalization fraud. If convicted, Alsheikh faces a maximum penalty of 10 years in prison on each count.

HSI and the FBI are investigating the case, with support from U.S. Citizenship and Immigration Services and the HSI-led Human Rights Violators and War Criminals Center (HRVWCC).

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Martin Estrada for the Central District of California; Special Agent in Charge Eddy Wang of HSI Los Angeles; and Executive Assistant Director Michael A. Nordwall of the FBI’s Criminal, Cyber, Response, and Services Branch made the announcement.

Trial Attorneys Patrick Jasperse and Alexandra Skinnion of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Joshua O. Mausner for the Central District of California are prosecuting the case. The Justice Department’s Office of International Affairs also provided assistance.

Members of the public who have information about human rights violators in the United States are urged to contact U.S. law enforcement through the FBI tip line at 1-800-CALL-FBI or the HSI tip line at 1-866-DHS-2-ICE, or complete the FBI online tip form or the ICE online tip form.

Source: United States Department of Justice 2

A former North Dakota State Senator pleaded guilty today to traveling to Prague, Czech Republic, to have commercial sex with minor boys. 

According to court documents and facts established in public proceedings, Ray Holmberg, 80, of Grand Forks, took approximately 14 trips to Prague between 2011 and 2021 to engage in commercial sex acts with minor boys. During some of these trips, Holmberg used the alias “Sean Evans” while staying at a brothel where young boys provided commercial sexual services. Holmberg also went to a public park in front of the main train station in Prague to procure sex from minor boys.   

Holmberg also used the “Sean Evans” alias to communicate with friends about the trips. In those communications, Holmberg discussed “his twink,” and commented that “no one is ever too young . . . remember Prague.”  He emailed another friend a link to a known brothel in Prague named the “Villa Mansland,” and wrote “[l]et’s go, this summer . . . The boys rent at around $60 (sex is extra).” Later in the communications, Holmberg wrote “it will be decadent but oh so much fun bro. What happens in Prague—Stays in Prague.” In other emails, he requested at least one of the employees at the brothel to find him a “kid.” 

Holmberg pleaded guilty to one count of traveling with intent to engage in illicit sexual conduct. He faces a maximum penalty of 30 years in prison. A sentencing date has not yet been set. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; First Assistant U.S. Attorney Jennifer Puhl for the District of North Dakota; and Special Agent in Charge Jamie Holt of Homeland Security Investigations (HSI) St. Paul made the announcement.

HSI and the North Dakota Bureau of Criminal Investigations are investigating the case.

Trial Attorney Charles Schmitz of the Criminal Division’s Child Exploitation and Obscenity Section and First Assistant U.S. Attorney Puhl for the District of North Dakota are prosecuting the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse, launched in May 2006 by the Justice Department. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

Source: United States Department of Justice 2

Two former corrections officers from the Southern Regional Jail in Beaver, West Virginia, pleaded guilty today for their respective roles in an assault that resulted in the death of an inmate, identified by the initials Q.B., on March 1, 2022. Ashley Toney and Jacob Boothe each pleaded guilty to violating inmate Q.B.’s civil rights by failing to intervene to protect Q.B. from being physically assaulted by other correctional officers.

According to their plea agreements, Toney and Boothe each acknowledged that they separately responded to a call for officer assistance after Q.B. tried to push past another correctional officer and leave his assigned pod. After Toney and Boothe arrived, officers restrained and handcuffed Q.B. Toney, Boothe and other officers then escorted Q.B. to an interview room, where Toney and Boothe watched as other officers struck and injured Q.B. while he was restrained, handcuffed and posed no threat to anyone. Toney and Boothe each admitted that officers struck and injured Q.B. in the interview room in order to punish him for attempting to leave his assigned pod. Toney and Boothe each further admitted that they each knew that officers could not use unreasonable force to punish inmates, including pretrial detainees, and that officers had a duty to intervene to stop other officers from using such unreasonable force.  

In her plea agreement, Toney further admitted knowing that the interview room to which officers brought Q.B. was a “blind spot” at the jail — meaning, there were no surveillance cameras to record what happened inside the room. Toney was aware that officers would bring inmates, including pretrial detainees, who had engaged in misconduct to “blind spots” in the jail, where the officers could use unreasonable force without video evidence that would result in accountability for the misconduct.

In addition, in plea documents, Toney admitted that to help officers escape liability, she knowingly provided false information during the ensuing investigation of Q.B.’s death. Toney also intentionally failed to report officers’ unreasonable use of force against Q.B. to state investigators inquiring into Q.B.’s injuries and death, and she conspired with officers to instruct fellow officers to give false information to investigators.

Toney and Boothe were among six former correctional officers indicted by a federal grand jury in November 2023. Trial for the remaining four defendants is scheduled for Oct. 8.

Two other defendants had separately pleaded guilty in connection with Q.B.’s death. On Nov. 2, 2023, former Southern Regional Jail officers Steven Nicholas Wimmer and Andrew Fleshman each pleaded guilty to conspiring with other officers to use unreasonable force against Q.B.

Toney and Boothe each pleaded guilty today before U.S. District Court Judge Joseph R. Goodwin. Sentencing hearings are scheduled for Nov. 4. According to their respective plea agreements, Toney and Boothe each face a maximum penalty of 10 years in prison and a fine of up to $250,000.

Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney William S. Thompson for the Southern District of West Virginia and Special Agent in Charge Kevin P. Rojek of the FBI Pittsburgh Field Office made the announcement.

The FBI Pittsburgh Field Office is investigating the case.

Deputy Chief Christine M. Siscaretti and Trial Attorney Tenette Smith of the Justice Department’s Civil Rights Division and Deputy Criminal Chief Monica Coleman for the Southern District of West Virginia are prosecuting the case.