Three Plead Guilty in Email Scam; Wire and Mail Fraud

Three people have pleaded guilty to charges related to spam e-mail that promised U.S. victims millions of dollars from an estate and a lottery; in one scenario, it was asserted that the defendants sent e-mails purporting to be from an individual suffering from terminal throat cancer that needed assistance distributing approximately US$55 million to charity.^[1]

The three defendants, two from Nigeria and one from Senegal, sent spam e-mail to thousands of potential victims, in which they falsely claimed to control millions of dollars, located abroad.^[2] The fraud victims lost $1.2 million by giving the defendants advance fees.^[3]

In the throat cancer scheme, the defendants offered to give a 20 percent commission to the victim, or a charity of his or her choice, in exchange for the victim's help; the defendants would send a variety of fraudulent documents, including a "letter of authority" or a "certificate of deposit," making it appear that the promised funds were available, as well as pictures of an individual claiming to suffer from throat cancer.^[4] Defendant Anisiobi allegedly telephoned victims, disguising his voice to give the impression that he was suffering from throat cancer.^[5]

After obtaining their victims’ trust, the defendants asked them to wire-transfer payment for a variety of advance fees for legal representation, taxes and additional documentation. The victims then received nothing back.^[6]

Nnamdi Chizuba Anisiobi pled guilty to one count of conspiracy, eight counts of wire fraud and one count of mail fraud. Anthony Friday Ehis pled guilty to one count of conspiracy and five counts of wire fraud. Kesandu Egwuonwu pled guilty to one count of conspiracy, three counts of wire fraud and one count of mail fraud.

The maximum penalty for mail and wire fraud is 20 years in prison. The conspiracy charge carries a maximum penalty of five years in prison.

Mail Fraud
Mail fraud is a crime under 18 U.S.C. § 1341. Under this section, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme. The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both. If convicted, money laundering carries a maximum 20-year prison sentence and a $500,000 fine, and mail fraud carries a maximum 20-year sentence and a $250,000 fine.

Wire Fraud
Wire fraud is covered under 18 U.S.C. §1343 whereunder it states that whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.^[7]

Federal criminal attorney Douglas McNabb has previously discussed mail fraud in his blog, which can be found here; he has also discussed the federal crime of wire fraud which can be found here.

---

^[1] Grant Gross, Three Plead Guilty in Nigerian Spam Scheme, The New York Times, January 30, 2008, available at http://www.nytimes.com/idg/IDG_002570DE00740E18852573E000750D52.html?ref=technology (last visited January 30, 2008).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] 18 U.S.C. §1343 (2007).

"Smiling Bob" Enhancement Company Set for Fraud Trial

Executives of a company known for the "Smiling Bob" ads that promote "natural male enhancement" are set to go on trial in an 111-count indictment that accuses them of defrauding consumers out of over $100 million.^[1]

Government lawyers have assert that they expect to call about 90 witnesses in a trial anticipated to take about a month in which company president Steven Warshak, his mother and four other employees of Berkeley Premium Nutraceuticals are accused of conspiracy to commit money laundering plus mail, wire and bank fraud.^[2]

Products made by Berkeley Nutraceuticals include vitamins, nutrients and Enzyte, a products whose television pitchman was a character called "Smiling Bob." The company claims Enzyte has 2 million users worldwide.^[3]

Federal criminal attorney Douglas McNabb has previously discussed mail fraud in his blog, which can be found here; he has also discussed the federal crime of wire fraud which can be found here; money laundering can be found here.

---

^[1] Associated Press Staff, Enzyte Fraud Trial Set to Start, Associated Press Newswire, January 8, 2008, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.

Federal Honest Services Fraud Crackdown Yields More Arrests

Roberto Ruiz, former managing director for the Bear Stearns Dallas office, and Christopher Chol-Su Pak, former vice president of the Bear Stearns Dallas office, pleaded guilty to charges related to an ongoing federal public corruption scandal in El Paso County.^[1]

Ruiz pleaded guilty to four counts of conspiracy to commit mail and wire fraud and a scheme to defraud the citizens of their right to the honest services of elected officials at the El Paso Independent School District, the El Paso Community College District, the city of El Paso and members of the El Paso County Commissioners Court.^[2]

Ruiz tried to bribe elected officials from those offices to win votes for particular vendors trying to do business with the city, according to his guilty plea.^[3] Pak pleaded guilty to engaging in a scheme to bribe county commissioners to win votes for a specific vendor.^[4]

The two are the latest officials accused of wrongdoing in a massive corruption investigation that became public earlier this year when federal agents raided the officials of County Judge Anthony Cobos, two commissioners and a local hospital board member.^[5]

Honest Services Fraud
When a person is convicted of some type of “honest services” fraud, it really means that 18 U.S.C. § 1346 is being used, which it is in Bryant’s case. Under section 1346, the term “scheme or artifice to defraud,” as found in the mail fraud statute, is understood to include a scheme or artifice to deprive another of the intangible right of honest services.

Mail fraud
Mail Fraud is criminalized by 18 U.S.C. § 1341. Section 1341 is a rather dense and convoluted statute. Under this section, it is a crime for a person who has devised or intends to devise any scheme or artifice, to defraud, or to obtain money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice, to place in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or to deposit or cause to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or to take or receive therefrom, any such matter or thing, or to knowingly cause to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing.

Federal criminal defense attorney Douglas McNabb has previously discussed the federal crime of mail fraud in his blog; these posts can be found here. His discussions on wire fraud can be found here.

---

^[1] AP Staff, Former execs plead guilty in El Paso corruption case, Associated Press Newswire, December 22, 2007, available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.

Radler Sentenced for Fraud

U.S. District Judge Amy St. Eve sentenced former Chicago Sun-Times publisher F. David Radler to 29 months in prison for taking millions of dollars in unauthorized payments from the tabloid's parent company.^[1]

St. Eve accepted the plea agreement between Radler and federal prosecutors that gave him a reduced sentence in exchange for pleading guilty and cooperating with government's investigation of a mail fraud scheme at Hollinger International Inc; in addition e was fined $250,000.^[2] Radler has paid $53 million to Hollinger International in restitution and as part of settlements with the Securities and Exchange Commission and civil lawsuits.^[3]

St. Eve acknowledged Radler's attempts to right things by cooperating with prosecutors and paying back $61 million.^[4] For his cooperation, Radler cut his possible jail term in half. Under the plea agreement, Radler can also request to serve his time in his native Canada, in which case he could serve as little as six months.^[5]

Radler testified against his former colleagues during a nearly four-month trial that ended in July with their fraud convictions; a jury also found Black guilty of obstructing justice for removing 13 boxes from his Toronto office during the investigation, an infraction that was caught on tape.^[6]

Radler was the only senior executive charged by the government who pleaded guilty.^[7] His long-time business partner Conrad Black received 78 months in prison last week for his role in the scheme.^[8] Co-defendants John Boultbee and Peter Atkinson received 27 months and 24 months, respectively.^[9] The fifth executive, Mark Kipnis, received five years of probation and will not go to prison.[10]

Radler's affiliation with Black began nearly 40 years ago when he was 27 and Black was 25. Since then the two men built a massive media empire that at its peak had more than 300 papers, including the Chicago Sun-Times, the London Daily Telegraph and the Jerusalem Post.^[11] But allegations of fraud arose after shareholders questioned payments made to Black, Radler and others in connection with the sale of Hollinger newspapers.^[12] In September 2005, Radler pleaded guilty to helping loot the company of more than $32 million.^[13]

Radler asserted that the payments were disguised as compensation for Hollinger International's promise not to open rival newspapers to compete with the papers that were being sold; furthermore he admitted there was no legitimate business reason for the payments other than to steer money to himself and others.^[14]

He was on the witness stand for eight days, and testified that Black initiated the payments, while they both deliberately kept the company's audit committee in the dark about the transfers.^[15] He also endured punishing attacks to his credibility and character under cross-examination; federal defense attorneys for the defendants called him a serial liar and a turncoat who cut a sweetheart deal to reduce his punishment.

Federal criminal attorney Douglas McNabb has also previously discussed mail fraud in his blog, here; and a further discussion of the Conrad Black case can be found here, and here.

---

^[1] Ameet Sachdev, Former Sun-Times publisher Radler sentenced to 29 months for fraud, Chicagotribune.com, December 17, 2007, available at http://www.chicagotribune.com/business/chi-071217radler-sentencing,0,5990462.story?coll=chi-newslocal-utl (last visited December 17, 2007).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.
^[10] Id.
^[11] Id.
^[12] Id.
^[13] Id.
^[14] Id.
^[15] Id.

Woman Arrested for Selling Fake Art on Ebay

Angela Hamblin, a Massachusetts woman, was arrested Oct. 10 on charges she sold fake works of art on the Internet.[1] She was charged with one count of mail fraud, and was arrested in Boston on a criminal complaint brought in U.S. District Court in Manhattan.[2]

Authorities are accusing her of claiming that the works she was selling on Ebay were created by accomplished artists such as Joseph Mallord, William Turner, or Milton Avery, an American abstract expressionist painter.[3] The Government asserts that the paintings actually were not authentic, despite her claims that she acquired the pieces from long-dead relatives or through other family connections.[4]

She has been charged with mail fraud which is covered under 18 U.S.C. § 1341.[5] In that statute it states that whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both.[6] If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.[7]

If convicted, Hamblin could face up to 20 years in prison the mail fraud count brought against her.[8] Federal criminal defense attorney Douglas McNabb has previously discussed the federal crime of mail fraud, at length, here.

---

[1] AP Staff, Woman accused of selling fake art work, Associated Press Newswire, October 10, 2007, available at LEXIS, News Library, Wire News Services File.
[2] Id.
[3] Staff and wire reports, The Ticker, Boston Globe, October 11, 2007, available at http://www.bostonherald.com/business/general/view.bg?articleid=1037366 (last visited October 18, 2007).
[4] AP Staff, supra note 1.
[5] Id.
[6] 18 U.S.C. § 1341(2007).
[7] Id.
[8] AP Staff, supra note 1.

U.S. Post Office to Crack Down on International Email Fraud

The e-mails arrive from Nigeria, Russia, Holland or other countries. They assert inheritances, political strife, long lost loves, and some have resorted to death threats. The common theme, however, is that they all need to get money out of whatever country they are in and if you help, they promise to let you share the bounty.^[1] It would seem easy to write this off as a bogus piece of spam, but thousands of people believe these are real and lose, on average, $3,000 to $4,000 each.^[2]

Hoping to stem the losses, the U.S. Postal Inspection Service announced a massive international crackdown in which more than 540,000 fake checks with a face value of $2.1 billion have been seized.^[3] There have been 60 arrests in the Netherlands, 16 in Nigeria and one in Canada, the Postal Inspection Service said, and the effort is continuing.^[4]

Most of the cons start with e-mails telling of an inheritance or lottery win and ask the victim to help bring the money to the United States.^[5] The victim is asked to cash a check that comes in the mail and to send part of the money back to the person sending it, then that person disappears with the money and the original check bounces, leaving the victim with a loss.^[6]

Many of the cases originate in the Netherlands, where West African con artists operate from Internet cafes, said Johan Van Hartskamp, commissioner of the Amsterdam police. In what he called ''Operation Dutch Treat,'' police have arrested 60 people there, with three extradited to the United States and four more facing extradition.^[7]

This crime could possibly fall under email fraud, mail fraud, or wire fraud because it uses all those mediums to commit the fraud. Specifically mail fraud is an act of fraud using the U.S. Postal Service, such as making false representations through the mail to obtain an economic advantage. As actually defined by 18 U.S.C. § 1341, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme. The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both.^[8]

Similarly wire fraud would also cover the aforementioned crimes because wire fraud, which is covered under 18 U.S.C. §1343, is the act of having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.^[9]

Federal criminal defense attorney Douglas McNabb has previously written about the federal crime of Email fraud in his blog, here

---

^[1] Randolph E. Schimd, Post Office Cracks Down On Fake Check Scam, Associated Press Newswire, October 3, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id., So far this year, averages of 800+ people a month have filed complaints about such scams.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] 18 U.S.C. § 1341(2007).
^[9] 18 U.S.C. §1343 (2007).

Le-Nature's Inc. Officials To Be Investigated for Fraud

Federal prosecutors are seeking the forfeiture of more than $20 million in jewelry allegedly bought by former officials of bankrupt drinks maker Le-Nature's Inc.^[1] Le-Nature’s is also being investigated in an alleged money laundering and fraud scheme.^[2]Company officials are being investigated on possible counts of mail, wire and bank fraud, laundering of monetary instruments, and engaging in unlawful monetary transactions.^[3]

Le-Nature's was forced into bankruptcy in October last year amid allegations of accounting fraud.^[4] The company, which made bottled waters, teas, juices and nutritional drinks, is believed to have accumulated more than $820 million in debt.^[5]

Federal agents seized gems, diamond-encrusted watches, pearls and gold, silver and platinum jewelry worth more than $20 million from safes in a secret room at the company's Latrobe facility, the filing said. ^[6]

Authorities alleged in court documents that the company's annual revenues were substantially overstated and financial statements doctored for 2005 to show revenues of more than $287 million when it was actually about one-tenth of that amount.^[7] Prosecutors are also alleging that two sets of books were kept; one reflecting true business activity; the other fictitious but allegedly used to prepare financial statements.^[8]

Mail Fraud
Mail fraud is a crime under 18 U.S.C. § 1341. Under this section, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme. The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both. If convicted, money laundering carries a maximum 20-year prison sentence and a $500,000 fine, and mail fraud carries a maximum 20-year sentence and a $250,000 fine.

Wire Fraud
Wire fraud is covered under 18 U.S.C. §1343 whereunder it states that whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.^[9]

Federal criminal attorney Douglas McNabb has also previously discussed mail fraud in his blog, which can be found here; he has also discussed the federal crime of wire fraud which can be found here.

---

^[1] Daniel Lovering, Feds seek forfeiture of $20M in jewelry seized from Le-Nature's, Associated Press Newswire, September 26, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] 18 U.S.C. §1343 (2007).

Grand Jury Indicts Mortgage Brokers for Fraud

A federal grand jury has indicted four mortgage brokers and real estate agents for allegedly running a mortgage fraud scheme that allegedly netted them $277,000 in illegal commissions and payments for 19 homes.^[1] The four men are accused of recruiting buyers to purchase homes in Elk Grove last year with no money down.^[2] The buyers were told that renters would make the mortgage payments and buy the homes from them after two years. But after the mortgages were processed and the defendants collected loan commissions and real estate fees, none of the renters materialized.^[3] The four also allegedly inflated the buyers' incomes in loan applications to subprime lenders.^[4]

Assistant U.S. Attorney Matt Stegman said the case is one of several mortgage fraud cases his office is investigating in the wake of a fallout in housing prices that experts have partially attributed to subprime mortgage loans and inflated housing prices.^[5]

James Martin, Mario Fellini III, Gabriel Viramontes, and Joseph Gallo were all indicted on charges of bank fraud and conspiracy to launder money for their alleged roles in the fraud in question.^[6] Martin, Fellini and Gallo also were indicted on charges of making false statements on loan applications, while Martin, Fellini and Viramontes were indicted on mail fraud charges.^[7] Martin, Fellini and Gallo pleaded not guilty to the charges in federal court Tuesday, and Viramontes was scheduled to appear next week.^[8]

Mortgage Fraud is covered under 18 U.S.C. § 225 which is also called continuing financial crimes enterprise and it states that whoever organizes, manages, or supervises a continuing financial crimes enterprise; and receives $5,000,000 or more in gross receipts from such enterprise during any 24-month period, shall be fined not more than $10,000,000 if an individual, or $20,000,000 if an organization, and imprisoned for a term of not less than 10 years and which may be up to life.^[9] For purposes of subsection (a), the term “continuing financial crimes enterprise” means a series of violations under section 215, 656, 657, 1005, 1006, 1007, 1014, 1032, or 1344 of this title, or section 1341 or 1343 affecting a financial institution, committed by at least 4 persons acting in concert.^[10]

Federal criminal attorney Douglas McNabb has also previously discussed all of the federal crimes discussed in this blog previously, these can be found here. Specifically, mail fraud can be found, here; money laundering can be found here; and mail fraud can be found here.

---

^[1] AP Staff, Four Indicted In Alleged Scheme To Get Mortgages, Associated Press Newswire, September 26, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] 18 U.S.C. § 225(a)(2007).
^[10] Id., at §225(b).

San Francisco City Supervisor Charged with Mail Fraud

Ed Jew, a San Francisco supervisor who has been accused of attempting to extort $80,000 from a group of fast-food business owners has pleaded not guilty and was released on $1 million bail.^[1]

Jew was charged Thursday with one federal count of mail fraud after an accustations stemming from an FBI sting where it is asserted that operators of a group of tapioca drink shops gave Jew $40,000 in cash and said they would pay him another $40,000 later.^[2]

Jew has acknowledged taking the money, but asserts that he did so at the businessmen's insistence and on behalf of a consultant he recommended they hire to help with their permit problem.^[3]

Jew was already facing felony charges of perjury and election code violations for allegedly lying about where he lived so he could run for office in San Francisco; he has pleaded not guilty to those charges as well. Jew's federal criminal defense attorney, Steven Gruel, called the mail fraud count a "throwaway charge because you can't get something else…[what kind of influence could Jew possibly have had over the issuing of city permits]….He doesn't control the planning commission, and he certainly doesn't control what types of permits are necessary for retailers."^[4]

Jew's trial on the perjury and election code allegations is to begin late next month.^[5] Gruel questioned the timing of the "media-friendly" federal charge, claiming that the surrounding publicity will taint the jury pool in the other case.^[6] "I have grave concerns whether or not the supervisor can get a fair trial in San Francisco on those state charges," Gruel asserted.^[7]

Mail Fraud
Mail fraud is a crime under 18 U.S.C. § 1341. Under this section, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme. The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both.If convicted, money laundering carries a maximum 20-year prison sentence and a $500,000 fine, and mail fraud carries a maximum 20-year sentence and a $250,000 fine.

Federal criminal attorney Douglas McNabb has also previously discussed mail fraud in his blog, here; and the federal crime of perjury has been discussed here.

---

^[1] Marcus Wohlsen, SF Supervisor Pleads Not Guilty to Fraud, Associated Press Newswire, September 21, 2007, available at LEXIS, News Library, Wire News
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.

Kopiloff Accused of Using Limewire to Steal Identitys

Gregory Thomas Kopiloff, who hails from Seattle, has been arrested in what may be the first identity theft case against someone whose medium may have been file-sharing computer programs such as Limewire or KaZaa.^[1]

Kopiloff used "peer-to-peer" file-sharing programs to scan other people's computers for financial information that he then used to open credit cards which he used to shop online.^[2] He purportedly bought more than $73,000 worth of goods such as iPods and laptop computers online, and then resold those items at half-price; investigators asserted that spent most of the money supporting a gambling habit.^[3]

Authorities said they have identified at least 83 victims — most of whom have teenage children and did not know the file-sharing software was on their computer.^[4] But investigators also said they believe the number of people affected was in the hundreds — and that in all they lost hundreds of thousands of dollars.^[5]

Kopiloff was arrested Wednesday and is charged with mail fraud, accessing a protected computer, and two counts of aggravated identity theft; he did not enter a plea during an appearance in U.S. District Court on Thursday.^[6] A detention hearing was set for Monday.^[7]

Though people have been prosecuted for using peer-to-peer networks to share copyrighted music, movies and software, the Justice Department called this case the first in what experts say is an equally — if not more — troubling matter.^[8] Each day, computer users inadvertently share sensitive files through such programs, from banking statements to legal documents, says Robert Boback, chief executive of Tiversa Inc., a Pennsylvania firm that monitors file-sharing.^[9] Typically it occurs when a user downloads the file-sharing software and accidentally allows it to share all files on a computer, rather than just the music files, in some cases this is the default setting for these programs and only the computer savvy user can find a way to turn off that option.

"If you are running file-sharing software, you are giving criminals the keys to your computer, [c]riminals are getting access to incredibly valuable information," said assistant U.S. attorney Kathryn Warma.^[10]

According to the indictment, Kopiloff began using Limewire and Soulseek about 2 1/2 years ago to search for people who had inadvertently allowed access to their sensitive files. To get the files he needed Kopiloff would allegedly search for "federal tax return," or for student financial aid forms or other financial information.^[11] It is asserted that he then screened the names before opening accounts in their name to ensure that they earned at least $150,000 a year and had good credit.^[12]

He was arrested after one of his alleged victims told his company's security officer — a former Secret Service agent — about how his bank account had been compromised, with someone in western Washington passing bad checks on his account.^[13] The agent forwarded the information to Secret Service agents and police in Seattle.^[14]

Aggravated Identity Theft
Aggravated identity theft occurs when the crime of identity theft is coupled with another felony, here it is mail fraud. Under 18 U.S.C. § 1028A, if a person knowingly and unlawfully transfers, possesses, or uses a means of identification of another person in conjunction with the commission of a set list of felonies, that person will be punished as those felonies provide and that person will additionally be imprisoned for 2 years. If the felony happens to be a terrorism offense, that person will receive an additional 5 years of imprisonment.^[15] Furthermore, that person will not be placed on probation, nor will the term of imprisonment run concurrently, unless the court has been given discretion to do by the Sentencing commission.^[16]

Federal criminal attorney Douglas McNabb has also previously discussed identity theft in his blog, here; and the federal crime of mail fraud has been discussed, here.

---

^[1] Gene Johnson, Man Arrested in Online ID Theft Scheme, Associated Press Newswire, September 7, 2007, available at available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.
^[10] Id.
^[11] Id.
^[12] Id.
^[13] Id.
^[14] Id.
^[15] 18 U.S.C. § 1028A (2007).
^[16] Id.

Ahmad and Singh Indicted for Mail Fraud

A federal grand jury has indicted Iftikhar Ahmad, and Manpreet Singh for allegedly engaging in a subprime mortgage fraud scheme during the recent California housing boom.^[1]

Ahmad and Singh were charged with multiple counts of mail fraud Thursday in U.S. District Court in Sacramento.^[2] They are accused of using rapid, inflated sales of homes in the Stockton area to steal from a subprime lender.^[3] Ahmad is also charged with multiple counts of money laundering, and Singh faces additional mail fraud charges.^[4]

Prosecutors allege Ahmad bought homes and sold them at inflated prices to buyers he created through identity theft or false documents, and that Singh acted as his straw buyer.^[5]

Ahmad’s federal criminal defense attorney asserted that his client denies federal prosecutors' claims that he earned $1.5 million from fraudulent loans taken from 2003 to 2005.^[6] "My client is adamant that he's not guilty of any of these charges the government is coming at him with," said federal criminal defense attorney Charles Pacheco.^[7]

Mail Fraud Mail fraud is a crime under 18 U.S.C. § 1341. Under this section, it is illegal to devise a scheme to defraud and then use the mail to carry out the scheme. The punishment for committing mail fraud is a fine, imprisonment for up to 20 years, or both.

If convicted, money laundering carries a maximum 20-year prison sentence and a $500,000 fine, and mail fraud carries a maximum 20-year sentence and a $250,000 fine.

Federal criminal attorney Douglas McNabb has also previously discussed mail fraud in his blog, here; and the federal crime of money laundering has been discussed here.

---

^[1] AP Staff, Two indicted in San Joaquin Valley mortgage fraud, Associated Press Newswire, August 31, 2007, available at available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.

Conrad Black Asks Judge to Overturn Jury Verdict

Press baron Conrad Black has filed a formal request for his trial judge to overturn his convictions, claiming that there was insufficient evidence for jurors to find him guilty of mail fraud and obstruction of justice.^[1] In a series of motions to Chicago's federal court, Black's federal criminal defense lawyers demand either immediate acquittal or a fresh trial, arguing that "no rational jury could find beyond a reasonable doubt" that the former Telegraph owner deliberately stole $6.5m from his Hollinger media empire.^[2]

The instant motion will represent the last chance for Judge Amy St. Eve to throw out the jury verdict before Black's sentencing hearing, which is scheduled to happen in November.^[3]

"It is a pretty rare case when a trial judge reverses herself, so I suspect that the chances of Lord Black prevailing at this stage are less than one in ten….He probably has a better shot on appeal," asserted Hugh Totten, a Chicago federal attorney.^[4]

Federal criminal defense lawyer Marc Martin says Judge St Eve was wrong to give the jury a so-called "ostrich instruction" which allowed a conviction if they felt that Black had displayed willful blindness to the asserted wrongdoing.^[5]

"An ostrich, or conscious avoidance, instruction is warranted only in rare circumstances where a defendant suspected wrongdoing or deliberately avoided the truth," argued Martin, who says the government failed to produce evidence that Black took deliberate steps to avoid knowledge of any crimes.^[6]

The defense went on to say that the only evidence linking Black to the theft of phony "non-compete" payments from Hollinger was the word of his former business partner, David Radler.^[7] Additionally, Radler's evidence was given under a plea agreement, and it should have been allowed to call sentencing experts as witnesses to explain to jurors how his co-operation was reducing his punishment.^[8]

The US government is pushing for the 62-year-old peer to serve between 15 and 20 years in jail, although legal commentators believe a more likely sentence is between five and 10 years' imprisonment.^[9]

Federal criminal attorney Douglas McNabb has also previously discussed mail fraud in his blog, here; and a further discussion of the Conrad Black case can be found here.

---

^[1] Andrew Clark, Conrad Black asks judge to quash convictions, Guardian Unlimited, August 28, 2007, available at http://business.guardian.co.uk/story/0,,2157624,00.html (last visited August 29, 2007).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.

Judge Overturns Jury Verdict in Public Corruption Case

Former Mayor Ted LeBlanc was found guilty last April as a result of a probe that also netted convictions of former Norristown administrator Anthony Biondi and contractor Thomas Carbo.^[1]

LeBlanc was also found guilty of honest services fraud, bribery, bank fraud, and tax charges.^[2] LeBlanc, a republican, allegedly accepted a $10,000 bribe from borough insurance agent Herbert Bagley in exchange for LeBlanc insuring that Bagley (who is charged with paying a bribe to LeBlanc) continued to be appointed the borough’s insurance broker.^[3] Bagley was in danger of losing his contract because his business partner had been charged in state court with stealing hundreds of thousands of dollars of borough insurance payments in late 2002.^[4]

Carbo, who owned Tommy's Paving & Excavating and was involved in the contracting with the other men, was convicted of mail fraud and conspiracy in June 2006 and was facing 24 to 30 months in prison. ^[5] The jury deliberated for a little more than four hours following a six-day trial.^[6]

However now a federal judge has taken the rare action of overturning the jury’s verdict, saying no "rational" jury would have found a suburban contractor guilty in a public corruption case.^[7] According to testimony, Biondi paid Carbo for use of a truck that Biondi needed to do moonlighting jobs, and then awarded Carbo borough work without disclosing their financial relationship.^[8]

Federal criminal defense lawyer Dino Privitera had argued that Carbo should not be held criminally responsible for Biondi's lapse.

In a 75-page ruling issued Friday, Aug 10, U.S. District Judge Mary McLaughlin agreed.^[9] "The evidence presented is insufficient to allow a rational jury to find beyond a reasonable doubt that Mr. Carbo knew that Mr. Biondi was required to disclose their relationship to the state," she wrote.^[10]

Honest Services Fraud
When a person is convicted of some type of “honest services” fraud, it really means that 18 U.S.C. § 1346 is being used. Under section 1346, the term “scheme or artifice to defraud,” as found in the mail fraud statute, is understood to include a scheme or artifice to deprive another of the intangible right of honest services.

Mail Fraud
Under 18 U.S.C. § 1341, it is a crime for a person to devise a scheme or artifice to defraud, and then use the nation’s mail system to carry out that scheme. The punishment for a violation of section 1341 is a fine, imprisonment for up to 20 years or both. If a financial institution is harmed in the scheme, the fine can be as high as $1,000,000, and the prison sentence can be as long as 30 years.

Federal criminal defense attorney Douglas McNabb has previously discussed the federal crime of bank fraud in his blog, here.

---

^[1] AP Staff, U.S. judge overturns contractor's guilt in Norristown corruption, Associated Press Newswire, August 13, 2007, available at available at LEXIS, News Library, Wire News Services File.
^[2] Rich Manieri, U.S. Attorneys Office Press Release, Former Norristown, PA, Mayor Found Guilty, April 17, 2007, available at http://www.usdoj.gov/usao/pae/News/Pr/2006/apr/LeBlanc.html (last visited August 13, 2007).
^[3] Id
^[4] Id.
^[5] AP Staff, supra note 1.
^[6] Manieri, supra note 2.
^[7] AP Staff, supra note 1.
^[8] Id.
^[9] Id.
^[10] Id.

Black's Federal Criminal Defense Attorneys To Investigate Juror Comments

Former media mogul Conrad Black was convicted Friday, July 13, of defrauding newspaper empire Hollinger International out of millions of dollars.^[1] He was found guilty by a federal jury of three counts of mail fraud and one count of obstruction of justice for removing documents out of his Toronto office in defiance of a court order.^[2]

However federal criminal defense attorneys are "looking into" a conversation among jurors in the Conrad Black fraud trial about a news story related to the case, that may have taken place despite the fact that juries in civil and criminal cases are repeatedly instructed not to discuss the case outside of deliberations, and not to read media reports about it.^[3]

The Chicago Sun-Times reported Monday, July 16, that, during deliberations, a juror told her colleagues that she had been told some foreign press suggested the jury was too stupid to understand the complex case which "It didn't settle well with anyone," said Margaret Williams, a juror on the case.^[4] Williams said she had reassured her fellow jurors that they were all smart people and "let's do this," but she asserts that the comment didn't affect the jury's verdict one way or the other.^[5]

Ron Safer, an attorney for former Hollinger corporate counsel Mark Kipnis, said he may file a motion this week regarding the juror's remark.^[6] "Generally, you can't look behind the jury's deliberations….There are limited exceptions. This might be one of them," Safer said.^[7] Federal criminal defense attorneys for Black and former Hollinger executive Peter Atkinson also confirmed that they were looking into the Sun-Times report.^[8]

"I honestly don't think it's a big deal…….We had 18 weeks of trial, and we're going to have to do a do-over because someone's brother-in-law said something? That would be silly….[the comment would have to have had a prejudicial impact, but it is] a regular occurrence in lengthy trials where people would hear from their relatives about the case," said DePaul University law professor Stephan Landsman.^[9]

Obstruction of Justice
Under 18 U.S.C. § 1503(a), it is a crime for a person to corruptly influence, obstruct, or impede the due administration of justice. The punishment for a violation of section 1503(a) is a fine, imprisonment for up to 10 years, or both.

Federal criminal attorney Douglas McNabb has also previously discussed mail fraud in his blog, here.

---

^[1] Mike Robinson, Black Convicted of Swindling Millions, Associated Press Newswire, July 14, 2007, available at LEXIS, News Library, Wire News Services File
^[2] Id.
^[3] Mary Wisniewski, Defense in Black case looks into juror's remark, Chicago Sun-Times, July 17, 2007, available at http://www.suntimes.com/business/hollinger/470995,CST-NWS-conrad17.article (last visited July 18, 2007).
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.

El Paso Public Corruption Investigation Goes Further Than Expected

Elizabeth “Betti” Flores, a former El Paso County commissioner pleaded guilty to conspiracy to commit mail fraud and wire fraud for accepting bribes in exchange for votes, the latest plea in an ongoing public corruption investigation.^[1]

In recent months, the FBI has raided the offices of El Paso County Judge Anthony Cobos, two county commissioners and other local officials, including Cobos’ former chief of staff. The latest plea came from former County Commissioner Flores, who admitted in her plea to taking bribes in exchange for votes on county contracts and other issues.^[2] According to one count, she was paid $10,000 to vote in favor of a contract for the $20 million El Paso County Parking Garage Annex and to advocate change orders to that contract. The contract was awarded in 2004.^[3]

Flores pleaded guilty Friday to four charges of conspiracy to commit mail fraud and the deprivation of honest services and two charges of conspiracy to commit wire fraud. Each count could bring her 20 years in prison.^[4]

Cobos’ former chief of staff, John Travis Ketner, pleaded guilty last month to corruption charges and claimed he was hired specifically to solicit bribes from vendors looking for county contracts.^[5] He filed an 18-page document in federal court implicating others and describing how a campaign donation, cash or trip could secure a lucrative taxpayer-funded contract.^[6]

We have previously blogged at length about the following crimes: Mail Fraud, Wire Fraud, and Public Corruption

---

^[1] AP Staff, Ex-El Paso Official Pleads to Corruption, Associated Press Newswire, July 9, 2007, available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.

Jury Deliberates in Black Fraud Trial

The jury has begun deliberating in the fraud and racketeeting trial of former media mogul Conrad Black.^[1] The panel has been in court for three months of testimony, more than 40 witnesses about 30 hours of closing statements and the presentation of hundreds of documents in the trial of Black and three other Hollinger executives.^[2]

The jury will be considering all 43 of the charges, which include mail and wire fraud, obstruction of justice, racketeering and tax fraud; there are 13 counts against Black, 11 against each of former Hollinger International executives Jack Boultbee and Peter Atkinson and eight against former company lawyer Mark Kipnis.^[3]

The key issue in this case rests on non-compete payments from sales of Hollinger newspapers which were made in exchange for promises not to compete in the same markets where the papers circulated.^[4] Such agreements are not unusual in the publishing industry, but prosecutors say the money should have gone to Hollinger's shareholders, not the executives.^[5]

As they deliberate, the mostly female jury was instructed that it must decide whether prosecutors have proven beyond a reasonable doubt that Black and the others intentionally lied to enrich themselves at the expense of Hollinger International shareholders.^[6]

Obstruction of Justice
Under 18 U.S.C. § 1519, any person who falsifies documents with the intent to impede, obstruct, or influence the investigation of any matter within the jurisdiction of a department of the United State can be fined, imprisoned for 20 years, or both.

Racketeering
Racketeering is generally covered by 18 U.S.C. § 1951 wherein it states that interference with commerce by threats or violence is a crime that occurs when a person, in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion or attempts or conspires so to do, or commits or threatens physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section shall be fined under this title or imprisoned not more than twenty years, or both.

Racketeering charges should be differentiated from RICO charges. Racketeering is the interference of commerce through threats of violence.^[7] RICO charges,^[8] on the other hand, concern organized crime and systematic racketeering activity infiltration into legitimate organizations. However, because the statutes are written loosely enough to be applied to drug traffickers, it would not surprise us to find out that the individuals in question in this case had been charged under the RICO statutes, rather than solely under the racketeering statutes.

---

^[1] Romina Maurino, In the jury’s hands, The Canadian Press, June 28, 2007, available at http://thechronicleherald.ca/Canada/851159.html (last visited June 28, 2007)
^[2] Id.
^[3] Id.; AP Staff, A look at the Conrad Black trial, Associated Press Newswire, June 27, 2007, available at LEXIS, News Library, Wire News Services File.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] See 18 U.S.C. §§ 1951 et seq.; see also Id. § 1961(a) (“racketeering activity” defined).
^[8] Id. §§ 1961 et seq.

Phipps Pleads Guilty to Mail Fraud

Steven Phipps, a former longtime business partner of ex-state Sen. Gene Stipe, pleaded guilty Wednesday to a mail fraud charge and admitted paying kickbacks to three state legislators.^[1] The Legislators, who have since left office, received the money for their help in funneling taxpayer money to private businesses.^[2]

He has been cooperating with federal prosecutors; the charge carries a maximum penalty of five years in prison.^[3]Phipps was released on $20,000 bond by U.S. Magistrate Kimberly West; he became the second person to plead guilty to a felony charge linked to alleged kickbacks to legislators.^[4] Former Rep. Mike Mass pleaded guilty to a similar charge in April and also is cooperating with federal authorities.^[5]

"I agreed with Mike Mass and others on a plan to have state funds appropriated by the legislature and steered to an entity known as the Rural Development Foundation……..The RDF then provided funds to National Pet Products and Indian Nation Entertainment, businesses then largely owned and operated by me…..In order to secure state funding for RDF, that would then be provided to INE, I agreed to periodically pay Rep. Mike Mass and two other influential state legislators each a percentage of the gross income from the gaming machines that were manufactured as the result of the state funding." Phipps said.^[6]

His attorney, Dan Webber, said the state money did go to economic development. "This is not a case where taxpayer money ended up in some offshore bank account….Though obtained improperly, the state funds for National Pet Products and Indian Nation Entertainment were put to use by those companies and did help create manufacturing jobs in eastern Oklahoma,” he said.^[7]

Mail fraud
Mail Fraud is criminalized by 18 U.S.C. § 1341. Section 1341 is a rather dense and convoluted statute. Under this section, it is a crime for a person who has devised or intends to devise any scheme or artifice, to defraud, or to obtain money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice, to place in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or to deposit or cause to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or to take or receive therefrom, any such matter or thing, or to knowingly cause to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing.

We have discussed mail fraud at length in this blog, here.

---

^[1] AP Staff, Phipps pleads guilty in federal court, Associated Press Newswire, June 27, 2007, available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.

Soloway Denied Bail: Update

U.S. Magistrate Judge James P. Donohue said Robert Soloway, of Seattle, should remain in jail until his trial scheduled for Aug. 6 because he has minimal ties to Washington state and has family in Sweden.^[1] "These are allegations of cyber crimes that have no geographical borders......It's just as easy to continue these actions in Sweden as it is in the United States." Donohue said.^[2]

Donohue continued, asserting that Soloway's previous actions demonstrated an unwillingness to abide by court orders, citing a cases in the past where Soloway continued his spamming even after Microsoft Corp. won a $7 million civil judgment against him in 2005 and a small Internet service provider in Oklahoma won a $10 million judgment.^[3]

Soloway's attorney, Richard Troberman, wrote in a court filing that the government's evidence that Soloway would flee was "woefully short on facts," and asserting that, in fact, Soloway has only traveled out of the country with his parents.^[4]

Soloway, who was given the moniker "Spam King" by federal investigators, was arrested May 30 on 35 charges including mail fraud, wire fraud, aggravated identity theft and money laundering.^[5] Mail fraud, wire fraud and money laundering are punishable by up to 20 years in prison; the government is also seeking $773,000 as proceeds of Soloway's activities.^[6]

We have previously discussed Money Laundering, here; Mail Fraud, here; Wire Fraud, here; and Identity Theft here.

We have also previously written on the case of Robert Soloway in this blog, this can be accessed here.

---

^[1] Annie Flanzraich, No Bail for Alleged 'Spam King', The Associated Press Newswire, June 13, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.

Tenn. State Sen. Aquitted on All Charges of Fraud

Tennessee State Sen. Jerry Cooper was acquitted by a federal jury on all charges in his fraud case The jury of 10 women and two men returned the verdict on the fourth day of the Democratic lawmaker’s trial on charges of bank fraud, mail fraud and conspiracy.^[1]

The charges stemmed from the 1999 sale of Cooper’s lumber mill to an Alabama businessman.^[2] Cooper did not testify, however his attorney, Jerry Summers of Chattanooga, told jurors in closing arguments that the government should have ended the investigation after the lumber mill buyer, Tony Auyer of Huntsville, pleaded guilty last year to several counts of fraud, conspiracy and money laundering and was sentenced to prison.^[3]

Last year a separate jury acquitted co-defendant James Passons of McMinnville in the borrowing conspiracy case. Passons testified he acted at Cooper’s request when he prepared an inflated appraisal that showed the 13.6 acres in southern Middle Tennessee included a rail spur, even though it did not.^[4] However Rita D. Phillips, the jury foreman, said as jurors left that the 45-minute deliberation was a "good discussion.....I think we feel very good about the agreement we reached....[there just] was not enough evidence [against Cooper.]"^[5]

We have previously discussed bank and mail fraud in this blog, as well as money laundering.

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^[1] Bill Poovey, Sen. Cooper acquitted on all charges in fraud case, Associated Press Newswire, June 9, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.