On Wednesday, Europol released the results
of its first joint operation with the FBI against international child
predators, announcing the identification of eight child victims and the
arrest of 17 individuals for child sexual molestation and production of
pornography.
Operation Atlantic has led to the
identification of 37 child sex offenders in France, Italy, the
Netherlands, Spain, and the United Kingdom. The investigation, which began in December 2010, continues as individuals overseas are still being sought.
“Online child predators and child
exploitation are not just an American problem,” said FBI Director Robert
S. Mueller. “The FBI is committed to working with our law enforcement
partners around the world, such as Europol, to combat these horrendous
crimes. We share actionable intelligence and resources to keep children
safe and bring those who do them harm to justice.”
Sharing intelligence was our primary role
in Operation Atlantic, and it was facilitated by our Innocent Images
Operations Unit (IIOU) at FBI Headquarters. Agents working covertly set
up an electronic dragnet on a peer-to-peer network targeting pedophiles
located in European Union (EU) countries and forwarded investigative
results to our partners at Europol.
Previously, IIOU staff worked with our
legal attachés overseas to formalize a cooperative agreement with
Europol regarding several criminal investigative programs, including
online child sexual exploitation. “The results of Operation Atlantic
validate this new relationship and offer an example of outstanding
achievement through international law enforcement cooperation,” said
Audrey McNeill, IIOU chief.
Europol works with law enforcement
agencies in the 27 EU countries, along with non-EU members such as the
U.S. and Australia. Europol personnel do not have direct powers of
arrest, but instead support law enforcement in member countries through
coordination and intelligence gathering and sharing.
“Collaboration and cooperation between
Europol and our international law enforcement partners such as the FBI
is essential if we are to bring members of these child sex abuse
networks to justice and prevent the distribution of child exploitation
material across the Internet,” said Rob Wainwright, Europol’s director.
Noting that Operation Atlantic is the first joint operation conducted
by the FBI and Europol in the area of child sexual exploitation,
Wainwright added, “Europol is ready and willing to support ongoing and
future operations to infiltrate these networks.”
The leads and intelligence gathered by the
FBI that formed the basis of Operation Atlantic helped link suspects in
five countries to pedophile groups, including the notorious “Boylover”
network, the focus of a previous Europol action called Operation Rescue.
Subjects arrested in Operation Atlantic include a web of offenders that
were producing and distributing images depicting the severe abuse of
children—in some cases toddlers and infants.
“These individuals were not just
possessors of child pornography,” McNeill said. “Some were previously
convicted child sex offenders and were actively engaged in child sexual
abuse.” In addition to providing leads to Europol, the IIOU detailed an
agent to Europol headquarters in The Hague, Netherlands last summer to
help facilitate the investigation.
“Europol is a key and valued strategic
partner for the IIOU, and we look forward to a long and productive
relationship with them,” McNeill said. “I hope that Operation Atlantic
is the first of many future successes. We are working hard to increase
our international footprint and to stop child predators wherever they
are in the world.”
Monday, November 19, 2012
Teen Prostitution Gang Used Social Media Sites to Identify Potential Victims
It’s yet another reason why parents need
to keep a close eye on their kids’ involvement with social networking
websites—during a three-year period ending in March 2012, members of a
violent Virginia street gang used some of these websites to recruit
vulnerable high-school age girls to work in their prostitution business.
After a multi-agency state and federal investigation, all five defendants pleaded guilty to various federal charges related to the sex trafficking conspiracy. The leader of the gang—27-year-old Justin Strom—was just sentenced on September 14 to 40 years in prison, while the sentences handed down for the other four defendants totaled 53 years.
Strom headed up the Underground Gangster
Crips (UGC), a Crips “set” based in Fairfax, Virginia. The Crips
originated in Los Angeles in the late 1960s and early 1970s, and since
then, the gang has splintered into various groups around the country.
Law enforcement has seen a number of Crips sets in the U.S. engaging in
sex trafficking as a means of making money.
That’s certainly what was happening in Virginia. Strom and his UGC associates would troll social networking sites, looking for attractive young girls. After identifying a potential victim, they would contact her online using phony identities...complimenting her on her looks, asking to get to know her better, sometimes offering her the opportunity to make money as a result of her looks.
If the victim expressed interest (and many did, being young and easily flattered by the attention), Strom or one of his associates would ask for her cell phone number to contact her offline and make plans to meet.
After some more flattery about their attractiveness, sometimes hits of illegal drugs and alcohol, and even mandatory sexual “tryouts” with Strom and other gang members, the girls were lured into engaging in commercial sex, often with the help of more senior girls showing them the ropes. The girls might be sent to an apartment complex with instructions to knock on doors looking for potential customers…or driven to hotels for pre-arranged meetings…or taken to Strom’s house, where he allowed paying customers to have sex with them.
In addition to using the Internet, Strom and his associates recruited vulnerable young girls from schools and bus and rail stops. He also went online to find customers—postings ads on various websites showing scantily-clad young women.
Some of the juvenile victims were threatened with violence if they didn’t perform as directed and many were given drugs or alcohol to keep them sedated and compliant.
Strom and his associates did not discriminate—their victims were from across the socio-economic spectrum and represented different ethnic backgrounds.
The FBI’s Washington Field Office worked the investigation alongside the Fairfax County Police Department, with the assistance of the Northern Virginia Human Trafficking Task Force.
After the group’s indictment in March 2012, then-Special Agent in Charge Ronald Hosko of our Washington Field Office reiterated the importance of working with our partners and community groups in combating these types of despicable crimes. He also said, “Trafficking in humans, especially for the purpose of underage prostitution, is among the most insidious of crimes…and the FBI will leave no stone unturned in our efforts to track down those who exploit our children and engage in human trafficking.”
After a multi-agency state and federal investigation, all five defendants pleaded guilty to various federal charges related to the sex trafficking conspiracy. The leader of the gang—27-year-old Justin Strom—was just sentenced on September 14 to 40 years in prison, while the sentences handed down for the other four defendants totaled 53 years.
Protect Your Kids on Social Networking Sites
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That’s certainly what was happening in Virginia. Strom and his UGC associates would troll social networking sites, looking for attractive young girls. After identifying a potential victim, they would contact her online using phony identities...complimenting her on her looks, asking to get to know her better, sometimes offering her the opportunity to make money as a result of her looks.
If the victim expressed interest (and many did, being young and easily flattered by the attention), Strom or one of his associates would ask for her cell phone number to contact her offline and make plans to meet.
After some more flattery about their attractiveness, sometimes hits of illegal drugs and alcohol, and even mandatory sexual “tryouts” with Strom and other gang members, the girls were lured into engaging in commercial sex, often with the help of more senior girls showing them the ropes. The girls might be sent to an apartment complex with instructions to knock on doors looking for potential customers…or driven to hotels for pre-arranged meetings…or taken to Strom’s house, where he allowed paying customers to have sex with them.
In addition to using the Internet, Strom and his associates recruited vulnerable young girls from schools and bus and rail stops. He also went online to find customers—postings ads on various websites showing scantily-clad young women.
Some of the juvenile victims were threatened with violence if they didn’t perform as directed and many were given drugs or alcohol to keep them sedated and compliant.
Strom and his associates did not discriminate—their victims were from across the socio-economic spectrum and represented different ethnic backgrounds.
The FBI’s Washington Field Office worked the investigation alongside the Fairfax County Police Department, with the assistance of the Northern Virginia Human Trafficking Task Force.
After the group’s indictment in March 2012, then-Special Agent in Charge Ronald Hosko of our Washington Field Office reiterated the importance of working with our partners and community groups in combating these types of despicable crimes. He also said, “Trafficking in humans, especially for the purpose of underage prostitution, is among the most insidious of crimes…and the FBI will leave no stone unturned in our efforts to track down those who exploit our children and engage in human trafficking.”
Operation Universal Money Fast Putting the Brakes on Health Care Fraud
With its aging, affluent population, South
Florida is ground zero for the multi-billion-dollar criminal industry
of health care fraud. Few cases illustrate the depth of the problem—and
our efforts to fight it—more than Operation Universal Money Fast.
The case involved a massive, sophisticated fraud against Medicare and private insurance companies by scammers who set up more than a dozen fake clinics across five states and submitted tens of millions of dollars in bogus claims related primarily to HIV infusion therapy.
Using stolen identities and bribing
physicians to lend an air of legitimacy to the fraud, the thieves bilked
the system for an estimated $70 million before we dismantled the
enterprise.
Despite the many safeguards built into the Medicare reimbursement process—such as audits and onsite visits to clinics and providers—the system is largely based on trust. If a business believed to be legitimate submits claims using proper paperwork and billing codes, those claims are paid quickly.
The crooks were counting on that. They knew the fraud would eventually be discovered, but they stayed one step ahead of authorities by opening shell companies and phantom clinics across Florida, Georgia, Louisiana, North Carolina, and South Carolina. In reality, the clinics were empty storefronts—some were nothing more than a post-office box. No patients were ever seen or treated, and no doctors worked there.
“All they needed was a laptop, stolen identities, and billing codes,” said Special Agent Randy Culp, who works health care fraud investigations out of our Miami office. “By the time the insurance companies suspected fraud, the fraudsters had already moved on to some new fictitious clinic.”
To conceal their true identities, the subjects registered the bogus businesses in the names of nominal owners and opened a check-cashing store—called Universal Money Fast—to launder more than $50 million in benefits paid by Medicare and private insurers.
“Insurance companies were alerted by their customers to the fraud,” Culp said. “People were getting statements and seeing benefits for infusion therapy, and they were calling and saying, ‘Hey, I’m not HIV-positive. What’s going on?’ ”
During the height of the scam, said Special Agent Liz Santamaria, who worked on the case, “the subjects were submitting Medicare bills at the rate of $100,000 per week. They were making easy money and spending it as soon as they made it,” she added, explaining that the scammers thought nothing of dropping $10,000 in one evening for a lavish dinner.
Our Medicare Fraud Strike Force (see sidebar) opened an investigation in 2009 and used investigative tools such as informants and search warrants to stop the fraud and arrest the perpetrators. In 2010, ringleader Michel De Jesus Huarte received a record sentence for health care fraud of 22 years in prison. Nine other defendants received significant sentences as well. Three remaining subjects in the case remain at large and are believed to be out of the country (see posters).
“Large-scale fraud like this undermines the financial integrity of the Medicare program,” Culp said. “The FBI and our partners are committed to fighting these white-collar criminal enterprises, and we are gratified that those who commit these frauds are getting significant prison terms for their actions.”
The case involved a massive, sophisticated fraud against Medicare and private insurance companies by scammers who set up more than a dozen fake clinics across five states and submitted tens of millions of dollars in bogus claims related primarily to HIV infusion therapy.
 Medicare Fraud Strike Force |
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Despite the many safeguards built into the Medicare reimbursement process—such as audits and onsite visits to clinics and providers—the system is largely based on trust. If a business believed to be legitimate submits claims using proper paperwork and billing codes, those claims are paid quickly.
The crooks were counting on that. They knew the fraud would eventually be discovered, but they stayed one step ahead of authorities by opening shell companies and phantom clinics across Florida, Georgia, Louisiana, North Carolina, and South Carolina. In reality, the clinics were empty storefronts—some were nothing more than a post-office box. No patients were ever seen or treated, and no doctors worked there.
“All they needed was a laptop, stolen identities, and billing codes,” said Special Agent Randy Culp, who works health care fraud investigations out of our Miami office. “By the time the insurance companies suspected fraud, the fraudsters had already moved on to some new fictitious clinic.”
To conceal their true identities, the subjects registered the bogus businesses in the names of nominal owners and opened a check-cashing store—called Universal Money Fast—to launder more than $50 million in benefits paid by Medicare and private insurers.
“Insurance companies were alerted by their customers to the fraud,” Culp said. “People were getting statements and seeing benefits for infusion therapy, and they were calling and saying, ‘Hey, I’m not HIV-positive. What’s going on?’ ”
During the height of the scam, said Special Agent Liz Santamaria, who worked on the case, “the subjects were submitting Medicare bills at the rate of $100,000 per week. They were making easy money and spending it as soon as they made it,” she added, explaining that the scammers thought nothing of dropping $10,000 in one evening for a lavish dinner.
Our Medicare Fraud Strike Force (see sidebar) opened an investigation in 2009 and used investigative tools such as informants and search warrants to stop the fraud and arrest the perpetrators. In 2010, ringleader Michel De Jesus Huarte received a record sentence for health care fraud of 22 years in prison. Nine other defendants received significant sentences as well. Three remaining subjects in the case remain at large and are believed to be out of the country (see posters).
“Large-scale fraud like this undermines the financial integrity of the Medicare program,” Culp said. “The FBI and our partners are committed to fighting these white-collar criminal enterprises, and we are gratified that those who commit these frauds are getting significant prison terms for their actions.”
LCD Price Fixing Conspiracy Taiwanese Company, Execs Sentenced
Did you buy a computer notebook, computer
monitor, or big-screen TV anytime from late 2001 to 2006? If you did,
odds are that you paid too much for it because of an international
criminal conspiracy to fix the prices of the LCD (liquid crystal
display) panels used in these products.
Recently, AU Optronics Corportation—the largest Taiwanese producer and seller of LCD panels—and two of its former top executives were sentenced for their roles in this conspiracy. The company was ordered to pay a $500 million criminal fine, and the executives each received three years in federal prison. AU Optronics is the eighth company convicted as a result of a joint FBI-Department of Justice (DOJ) Antitrust Division effort to uncover this worldwide price-fixing conspiracy.
Anatomy of a conspiracy. A few days
after the terrorist attacks of 9/11, top-level executives from a number
of Asian manufacturers of LCD panels met secretly in a Taiwan hotel
room and agreed to a plan to fix the prices of LCDs in the U.S. and
elsewhere.
During subsequent monthly meetings, group members exchanged production, shipping, supply, demand, and pricing information on LCD panels used in computer notebooks, monitors, and flat-screen TVs. Participants agreed on prices and would then sell their products at these prices to some of the world’s largest technology companies who used LCD panels in their products.
During the same time period, senior-level employees of AU Optronics Corp. regularly exchanged information with its Houston-based subsidiary—AU Optronics Corp. America—on sales of LCD panels for the purpose of monitoring and enforcing adherence to the prices agreed upon by other LCD manufacturers in the U.S.
The end result of all this price-fixing? Artificially inflated prices for consumers, and more money into the coffers of the conspiracy’s participants.
Change in tactics. These meetings went on until mid-2005, when participants learned that one or two of their major LCD customers may have become aware of the conspiracy, so the top leaders who had been attending these meetings began sending lower-level employees. The meetings were also moved out of hotel rooms and into public restaurants and cafes.
And a year later, the co-conspirators became even more concerned when they heard about an ongoing price-fixing investigation in the U.S. into the dynamic random access memory (DRAM) industry. To avoid detection, group members decided to meet one-on-one with each other in restaurants and cafes.
The FBI became involved in the case in mid-2006 at the request of DOJ’s Antitrust Division, and Bureau investigators joined forces with Antitrust Division prosecutors. In antitrust cases, as in many of our white-collar crime cases, the FBI uses its full arsenal of investigative weapons—executing search warrants, interviewing witnesses and others, analyzing records, conducting lawful surveillance, using cooperating witnesses, etc.
Additional sanctions. In addition to the extraordinary criminal fine levied on AU Optronics and the sentencing of two former executives, the company was also ordered to implement an internal compliance program, hire an independent corporate compliance monitor, and take out ads in U.S. and Taiwanese newspapers publicizing the criminal sanctions taken against it.
These actions send a powerful message to would-be perpetrators of price-fixing and other antitrust schemes—the U.S. criminal justice system will uncover your illegal activities and hold you accountable.
Recently, AU Optronics Corportation—the largest Taiwanese producer and seller of LCD panels—and two of its former top executives were sentenced for their roles in this conspiracy. The company was ordered to pay a $500 million criminal fine, and the executives each received three years in federal prison. AU Optronics is the eighth company convicted as a result of a joint FBI-Department of Justice (DOJ) Antitrust Division effort to uncover this worldwide price-fixing conspiracy.
Overall Impact of Conspiracy
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During subsequent monthly meetings, group members exchanged production, shipping, supply, demand, and pricing information on LCD panels used in computer notebooks, monitors, and flat-screen TVs. Participants agreed on prices and would then sell their products at these prices to some of the world’s largest technology companies who used LCD panels in their products.
During the same time period, senior-level employees of AU Optronics Corp. regularly exchanged information with its Houston-based subsidiary—AU Optronics Corp. America—on sales of LCD panels for the purpose of monitoring and enforcing adherence to the prices agreed upon by other LCD manufacturers in the U.S.
The end result of all this price-fixing? Artificially inflated prices for consumers, and more money into the coffers of the conspiracy’s participants.
Change in tactics. These meetings went on until mid-2005, when participants learned that one or two of their major LCD customers may have become aware of the conspiracy, so the top leaders who had been attending these meetings began sending lower-level employees. The meetings were also moved out of hotel rooms and into public restaurants and cafes.
And a year later, the co-conspirators became even more concerned when they heard about an ongoing price-fixing investigation in the U.S. into the dynamic random access memory (DRAM) industry. To avoid detection, group members decided to meet one-on-one with each other in restaurants and cafes.
The FBI became involved in the case in mid-2006 at the request of DOJ’s Antitrust Division, and Bureau investigators joined forces with Antitrust Division prosecutors. In antitrust cases, as in many of our white-collar crime cases, the FBI uses its full arsenal of investigative weapons—executing search warrants, interviewing witnesses and others, analyzing records, conducting lawful surveillance, using cooperating witnesses, etc.
Additional sanctions. In addition to the extraordinary criminal fine levied on AU Optronics and the sentencing of two former executives, the company was also ordered to implement an internal compliance program, hire an independent corporate compliance monitor, and take out ads in U.S. and Taiwanese newspapers publicizing the criminal sanctions taken against it.
These actions send a powerful message to would-be perpetrators of price-fixing and other antitrust schemes—the U.S. criminal justice system will uncover your illegal activities and hold you accountable.
North to Alaska
By the time he moved to Alaska in 2006,
Paul Rockwood, Jr. was an ardent follower of the American-born radical
cleric Anwar al-Awlaki, who he met at a Virginia mosque in late 2001.
Shortly after he settled with his family in the small fishing village of King Salmon to work for the National Weather Service, our agents in Anchorage were aware that Rockwood had begun compiling a list of targets in the U.S. military he might assassinate in the name of jihad.
“If you were wearing a U.S. military uniform,” said Special Agent Doug Klein, who worked the case from Anchorage, “as far as Rockwood was concerned, you were a target.”
A military veteran himself, Rockwood believed it was his religious duty to kill those who desecrated Islam. In 2009, he began sharing his deadly plans with an individual he thought held similar views. But that person was actually an undercover operative employed by our Joint Terrorism Task Force (JTTF) in Anchorage.
For a time, JTTF personnel wondered how determined Rockwood was about his plans. “But one day when he was with our undercover in Anchorage he identified the building of a cleared defense contractor and said, ‘This is the kind of building I want to blow up,’ ” Klein said. “That’s when we knew he was a serious threat.”
Keeping track of Rockwood was difficult, however, because King Salmon is some 300 miles from Anchorage and only accessible by airplane. And with only a few hundred residents, outsiders would be immediately spotted, so attempts at surveillance were impractical. “We couldn’t use 90 percent of the traditional investigative techniques we use in the Lower 48,” Klein explained.
In addition, small, regional airlines in Alaska are not regulated by the Transportation Security Administration, so anyone can fly with weapons. On Rockwood’s frequent trips from King Salmon to Anchorage, Klein said, “he could have had a gun or a bomb and we never would have known.”
During those Anchorage visits, Rockwood met the undercover operative and discussed buying electronics and downloading schematics of cell phones to make bomb detonators. At one meeting, he said he was getting ready to relocate to the mainland and had plans to steal a cache of explosives in Boston—where he grew up—that would help him go operational.
By early 2010, Rockwood had formalized his hit list to include 15 specific targets—all outside Alaska—and he gave the list to his wife, Nadia, who was aware of his intentions.
Even with no overt acts of terrorism to charge him with, it was decided that for the sake of public safety, Rockwood and his wife could not be allowed to leave Alaska. In May 2010, JTTF agents questioned Rockwood and his wife as they attempted to fly out of Anchorage. Both denied any involvement with a hit list or terrorist plot.
The couple was charged with making false statements to the FBI in a domestic terrorism investigation, and in July, Rockwood was found guilty and sentenced to eight years in prison—the maximum sentence under the law. His wife was also found guilty and received five years of probation.
“We can never be sure if he would have acted,” Klein said, “but Rockwood was clearly a threat, not only to the individuals on his list but to the entire community.”
Shortly after he settled with his family in the small fishing village of King Salmon to work for the National Weather Service, our agents in Anchorage were aware that Rockwood had begun compiling a list of targets in the U.S. military he might assassinate in the name of jihad.
“If you were wearing a U.S. military uniform,” said Special Agent Doug Klein, who worked the case from Anchorage, “as far as Rockwood was concerned, you were a target.”
A military veteran himself, Rockwood believed it was his religious duty to kill those who desecrated Islam. In 2009, he began sharing his deadly plans with an individual he thought held similar views. But that person was actually an undercover operative employed by our Joint Terrorism Task Force (JTTF) in Anchorage.
For a time, JTTF personnel wondered how determined Rockwood was about his plans. “But one day when he was with our undercover in Anchorage he identified the building of a cleared defense contractor and said, ‘This is the kind of building I want to blow up,’ ” Klein said. “That’s when we knew he was a serious threat.”
Keeping track of Rockwood was difficult, however, because King Salmon is some 300 miles from Anchorage and only accessible by airplane. And with only a few hundred residents, outsiders would be immediately spotted, so attempts at surveillance were impractical. “We couldn’t use 90 percent of the traditional investigative techniques we use in the Lower 48,” Klein explained.
In addition, small, regional airlines in Alaska are not regulated by the Transportation Security Administration, so anyone can fly with weapons. On Rockwood’s frequent trips from King Salmon to Anchorage, Klein said, “he could have had a gun or a bomb and we never would have known.”
During those Anchorage visits, Rockwood met the undercover operative and discussed buying electronics and downloading schematics of cell phones to make bomb detonators. At one meeting, he said he was getting ready to relocate to the mainland and had plans to steal a cache of explosives in Boston—where he grew up—that would help him go operational.
By early 2010, Rockwood had formalized his hit list to include 15 specific targets—all outside Alaska—and he gave the list to his wife, Nadia, who was aware of his intentions.
Even with no overt acts of terrorism to charge him with, it was decided that for the sake of public safety, Rockwood and his wife could not be allowed to leave Alaska. In May 2010, JTTF agents questioned Rockwood and his wife as they attempted to fly out of Anchorage. Both denied any involvement with a hit list or terrorist plot.
The couple was charged with making false statements to the FBI in a domestic terrorism investigation, and in July, Rockwood was found guilty and sentenced to eight years in prison—the maximum sentence under the law. His wife was also found guilty and received five years of probation.
“We can never be sure if he would have acted,” Klein said, “but Rockwood was clearly a threat, not only to the individuals on his list but to the entire community.”
Most Wanted Terrorists
| Poster: Omar Shafik Hammami | Poster: Raddulan Sahiron |
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Two Most Wanted Terrorists Named
Third Man Sought for Questioning
Two individuals—one a United States citizen who allegedly provided support to a foreign terrorist organization, the other wanted for his alleged role in the overseas kidnapping of an American—have been added to the FBI’s Most Wanted Terrorists list.
A third man wanted for questioning in connection with providing material support to terrorists has been added to our Seeking Information—Terrorism list.
Omar Shafik Hammami, formerly from Alabama, has reportedly been a senior leader in al Shabaab, an insurgency group in Somalia. Al Shabaab was designated a foreign terrorist organization by the U.S. State Department in 2008; it has since repeatedly threatened terrorist actions against America and American interests. Hammami allegedly traveled to Somalia in 2006 and joined al Shabaab’s military wing, eventually becoming a leader in the organization. Hammami—who has been indicted in the U.S. on various terrorism charges—is believed to be in Somalia.
Raddulan Sahiron, a native of the Philippines, is wanted for his alleged involvement in the 1993 kidnapping of an American in the Philippines by the Abu Sayyaf Group, designated a foreign terrorist organization in 1997. Sahiron, believed to be the leader of the Abu Sayyaf Group, was indicted on federal hostage-taking charges and may currently be in the area of Patikul Jolo, Sulu, Philippines.
Shaykh Aminullah is wanted for questioning in connection with providing material support to terrorists…with the aid of Pakistan-based Lashkar-e-Tayyiba (designated a foreign terrorist organization in 2001). Among other activities, Aminullah allegedly provided assistance, including funding and recruits, to the Al Qaeda network; provided funding and other resources, including explosive vests, to the Taliban; and facilitated the activities of anti-coalition militants operating in Afghanistan by raising money in support of terrorist activities. He is believed to be in the Ganj District of Peshawar, Pakistan.
The FBI’s Most Wanted Terrorists List was created in October 2001. We subsequently created the Seeking Information—Terrorism list to publicize our efforts to locate terrorism suspects not yet indicted in the U.S.
In addition to the beneficial aspect of worldwide publicity, individuals named to the Most Wanted Terrorists list must:
- Have threatened the security of U.S. nationals or U.S. national security;
- Be considered a dangerous menace to society;
- Have indicated a willingness to commit or indicate to commit an act to cause death or serious bodily injury; prepare or plan terrorist activity; gather information on potential targets for terrorist activity; or solicit funds or other things of value for terrorist activity;
- Have provided material support such as currency or financial services or assistance to a terrorist organization but do not necessarily have to belong to that organization;
- Be subject to lawful detention, either by the U.S. government based on an active federal warrant for a serious felony offense or by any other lawful authority; and
- Be the subject of a pending FBI investigation.
If you have information about any of these men, please submit a tip or contact the nearest FBI office abroad or in the U.S.
Kenwood Managing Director Indicted for Fraud, Conspiracy
CINCINNATI—A federal grand jury has charged Matt Daniels,
48, managing director for Bear Creek Capital LLC and Kenwood Towne
Place LLC (KTP) with conspiracy and fraud for telling a lender that
money was being used to develop Kenwood Towne Place but actually
diverting the proceeds to other uses including personal enrichment.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Office; Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation (RIS) Cincinnati Field Office; and Hamilton County Sheriff Si Leis announced the indictment today.
The 25-count indictment includes one count of conspiracy to commit bank fraud, one count of bank fraud, seven counts of mail fraud, seven counts of wire fraud, eight counts of money laundering, and one count of obstruction.
The indictment alleges that in 2007, Daniels obtained from Bank of America a multi-million-dollar loan necessary to finance construction of Kenwood Towne Place. The lender agreed to disburse the loan proceeds over time through a series of periodic draws. Before obtaining these draws, Daniels agreed to provide truthful and accurate information to the lender concerning the status of the project and the precise manner in which the company intended to spend the money.
Between late 2007 and December 2008, KTP submitted paperwork on several occasions seeking multiple draws. Based on these representations, Bank of America authorized millions of dollars in draws, including an initial disbursement of over $25 million.
“By late 2008 and early 2009, despite having received millions of dollars from Bank of America, KTP effectively stopped work on the Kenwood Towne Place project as KTP had fallen substantially in arrears to numerous subcontractors working on the development,” the indictment alleges. “When the project collapsed financially, Kenwood Towne Place was only partially completed—the office complex only a steel shell towering over Sycamore Township.”
“This indictment is a result of nearly three years of painstaking investigations by agents and analysts of the FBI and IRS, Deputies of the Hamilton County Sheriff’s Office, and attorneys and staff of the U.S. Attorney’s Office,” stated FBI Special Agent in Charge Edward J. Hanko. “It is a true testament to what can be accomplished when agencies commit to working together to ensure justice is done for the citizens of Ohio.”
“When many of the subcontractors ultimately stopped work on the project for lack of payment, Daniels and his confederates continued to make false statements and fraudulent representations to Bank of America in an effort to conceal and prevent detection of the fact that KTP had not spent the bank’s money as promised.”
The indictment also alleges that Daniels committed money laundering by transferring approximately $2,835,161 in funds derived from the bank fraud out of an account held by Bear Creek Capital to either himself or other business entities.
The indictment also seeks forfeiture of any proceeds Daniels received in connection with the alleged fraud, specifically the contents of two investment accounts, the proceeds from the sale of real estate, and three pieces of jewelry.
Darryl Williams, Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Cincinnati Field Office stated, “This investigation cuts to the very core of the current economic crisis our nation faces. Locally, it stopped a steady stream of income for small local businesses and subcontractors who worked on this project.”
Conspiracy to commit bank fraud, bank fraud, mail fraud, and wire fraud are punishable by up to 30 years in prison. Money laundering is punishable by up to 10 years in prison, and obstruction is punishable by 20 years in prison.
Daniels will be summoned to appear at an initial appearance to be scheduled by Senior U.S. District Judge S. Arthur Spiegel, who is presiding over the case.
The case was presented to the grand jury by Assistant United States Attorneys Brent Tabacchi and Jessica Knight following a collaborative investigation by the FBI, IRS, and Hamilton County Sheriff’s deputies.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Office; Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation (RIS) Cincinnati Field Office; and Hamilton County Sheriff Si Leis announced the indictment today.
The 25-count indictment includes one count of conspiracy to commit bank fraud, one count of bank fraud, seven counts of mail fraud, seven counts of wire fraud, eight counts of money laundering, and one count of obstruction.
The indictment alleges that in 2007, Daniels obtained from Bank of America a multi-million-dollar loan necessary to finance construction of Kenwood Towne Place. The lender agreed to disburse the loan proceeds over time through a series of periodic draws. Before obtaining these draws, Daniels agreed to provide truthful and accurate information to the lender concerning the status of the project and the precise manner in which the company intended to spend the money.
Between late 2007 and December 2008, KTP submitted paperwork on several occasions seeking multiple draws. Based on these representations, Bank of America authorized millions of dollars in draws, including an initial disbursement of over $25 million.
“By late 2008 and early 2009, despite having received millions of dollars from Bank of America, KTP effectively stopped work on the Kenwood Towne Place project as KTP had fallen substantially in arrears to numerous subcontractors working on the development,” the indictment alleges. “When the project collapsed financially, Kenwood Towne Place was only partially completed—the office complex only a steel shell towering over Sycamore Township.”
“This indictment is a result of nearly three years of painstaking investigations by agents and analysts of the FBI and IRS, Deputies of the Hamilton County Sheriff’s Office, and attorneys and staff of the U.S. Attorney’s Office,” stated FBI Special Agent in Charge Edward J. Hanko. “It is a true testament to what can be accomplished when agencies commit to working together to ensure justice is done for the citizens of Ohio.”
“When many of the subcontractors ultimately stopped work on the project for lack of payment, Daniels and his confederates continued to make false statements and fraudulent representations to Bank of America in an effort to conceal and prevent detection of the fact that KTP had not spent the bank’s money as promised.”
The indictment also alleges that Daniels committed money laundering by transferring approximately $2,835,161 in funds derived from the bank fraud out of an account held by Bear Creek Capital to either himself or other business entities.
The indictment also seeks forfeiture of any proceeds Daniels received in connection with the alleged fraud, specifically the contents of two investment accounts, the proceeds from the sale of real estate, and three pieces of jewelry.
Darryl Williams, Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Cincinnati Field Office stated, “This investigation cuts to the very core of the current economic crisis our nation faces. Locally, it stopped a steady stream of income for small local businesses and subcontractors who worked on this project.”
Conspiracy to commit bank fraud, bank fraud, mail fraud, and wire fraud are punishable by up to 30 years in prison. Money laundering is punishable by up to 10 years in prison, and obstruction is punishable by 20 years in prison.
Daniels will be summoned to appear at an initial appearance to be scheduled by Senior U.S. District Judge S. Arthur Spiegel, who is presiding over the case.
The case was presented to the grand jury by Assistant United States Attorneys Brent Tabacchi and Jessica Knight following a collaborative investigation by the FBI, IRS, and Hamilton County Sheriff’s deputies.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
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