Ex-FBI Chief Webster Nabs Jamaican Scammer

When a Jamaican called former FBI and CIA director William Webster saying he had won a lottery, Webster got the FBI to take part in a reverse sting that led to the man’s capture.

The caller with the Jamaican accent told the 90-year-old Washington, D.C., man he had won $72 million and a new Mercedes Benz in the Mega Millions lottery, but the man must send $50,000 in taxes and fees to get his money. “You’re a great man,” the Jamaican man cajoled. “You was a judge, you was an attorney, you was a basketball player, you were in the U.S. Navy, homeland security. I know everything about you. I even seen your photograph, and I seen your precious wife.” The Jamaican didn’t learn that the man he was calling was William Webster, the former director of the FBI and the CIA, the only person ever to hold both jobs, the Washington Post reports. He didn’t know that Webster would call him back the next day with the FBI listening in.

In the reverse sting, Webster obtained the man’s real name and email address, while stringing him along and never quite committing to sending the $50,000. “It’s going to take me a few weeks to come up with it,” said Webster, also a former federal district and appeals court judge. “I’m as anxious as you are to get the money, but it’s going to take me a while to do it,” he told the caller, later identified as Keniel Thomas. The conversation was one of many calls that Thomas made to Webster or his wife, Lynda, in 2014, including one in which he promised a bullet “straight to the head” of Lynda. Thomas wasn’t arrested until 2017, after he landed in New York on a flight from Jamaica. He pleaded guilty and was sentenced to a prison term of nearly six years. Jamaican-based telephone scams have mushroomed in recent years, targeting older or vulnerable people.

from https://thecrimereport.org

Federal Corruption Probes Roil Four Big Cities

Atlanta, Chicago, Los Angeles and Philadelphia are under major federal corruption investigations. Residents, politicians and power brokers in all four places are waiting for signs of how deeply their civic cultures will be shaken. The investigations raise questions about whether there can be any lasting cure for the corruption problems that dog big cities dominated by a single party or political machine.

Atlanta, Chicago, Los Angeles and Philadelphia are under major federal corruption investigations, reports the New York Times. Residents, politicians and power brokers in all four places are waiting for signs of how deeply their civic cultures will be shaken. The investigations raise questions about whether there can be any lasting cure for the chronic corruption problems that seem to dog big cities dominated by a single party or political machine. Dick Simpson, a former Chicago alderman now a political scientist at the University of Illinois at Chicago, called corruption a part of the municipal culture. To change that, he said, “you have to not only destroy the political machine, but also actually create a history of clean government — that’ll be decades of work.”

Criminal charges against Chicago Alderman Ed Burke have created complications for the municipal elections set for Feb. 26. Political insiders are watching to see whether the scandal will harm any of 14 candidates vying to succeed Mayor Rahm Emanuel. In Atlanta, former mayor Kasim Reed has not been implicated in the investigation swirling around his former administration. Even so, the scandal has effectively sidelined him. Los Angeles Mayor Eric Garcetti is not a known target of the widening probe in his city, either, though two of his appointees are under scrutiny. A federal indictment in the Philadelphia case centers on a union leader with major political influence and includes as a co-defendant the majority leader on the City Council, Bobby Henon, a former official of the union. The Chicago and Los Angeles areas are the two most corrupt in the U.S., based on the number of federal public corruption convictions from 1976 to 2016, say researchers at the University of Illinois at Chicago. Philadelphia comes in at No. 8.

from https://thecrimereport.org

Huawei Indictments Throws Hardball Into Trade Talks

A pair of indictments charging the Chinese company with stealing trade secrets and evading economic sanctions in Iran comes just days before U.S.-China trade talks are set to resume.

Just days before U.S.-China trade talks resume, the Justice Department unveiled sweeping charges against the Chinese telecom firm Huawei and its chief financial officer, Meng Wanzhou, outlining a decade-long attempt by the company to steal trade secrets, obstruct a criminal investigation and evade economic sanctions on Iran, The New York Times reports. The pair of indictments in Brooklyn and Seattle, which were partly unsealed on Monday, come amid a broad and aggressive campaign by the United States to try to thwart China’s biggest telecom equipment maker.

The charges underscore Washington’s determination to prove that Huawei poses a national security threat and to convince other nations that it cannot be trusted to build their next generation of wireless networks, known as 5G. The indictments, based in part on the company’s internal emails, describe a plot to steal testing equipment from T-Mobile laboratories in Bellevue, Wash. They also cite internal memos, obtained from Meng, that prosecutors said link her to an elaborate bank fraud that helped Huawei profit by evading Iran sanctions. The acting attorney general, Matthew G. Whitaker, flanked by the heads of several other cabinet agencies, said the United States would seek to have Meng extradited from Canada, where she was detained last year at the request of the United States. The Canadian government has warned that it will not extradite Meng if it appears that the request is being made for political reasons.

from https://thecrimereport.org

Cohen to Give ‘Full and Credible’ Account of Trump Work

Michael Cohen, President Trump’s former personal lawyer who implicated him in a scheme to pay hush money to two women claiming to have had affairs with him will testify next month to a House committee. The president says he is “not worried” about the prospect.

Michael Cohen, President Trump’s former personal lawyer who implicated him in a scheme to pay hush money to two women claiming to have had affairs with him will testify next month to a House committee and give “a full and credible account” of his work for Trump, the New York Times reports. Cohen’s decision to appear before the House Oversight and Reform Committee on Feb. 7 sets the stage for a blockbuster hearing that threatens to damage the president’s image further and could clarify the depth of his legal woes. Cohen, who worked for Trump when he was a real estate developer and presidential candidate as well as informally when he was president, was privy to the machinations of Trump’s inner circle and to key moments under scrutiny by both special counsel Robert Mueller and federal prosecutors in New York.

Committee chairman Elijah Cummings (D-MD) warned that Cohen most likely would be barred by Mueller from discussing matters related to Russia. In August, Cohen pleaded guilty to tax fraud, making false statements to a bank and a campaign finance violation. He said that violation was the result of payments he made at Trump’s behest to a woman who was prepared to go public during the 2016 campaign about an affair with Trump years earlier. Since then, Cohen has spent more than 70 hours with federal prosecutors in Manhattan as well as with Mueller, who is investigating Russian efforts to influence the 2016 election and Mr. Trump’s campaign. In November, Cohen admitted to an additional charge of lying to Congress about how long negotiations for a Trump Tower project in Moscow went on in 2016. Asked during a visit to the border in Texas whether he was concerned about Cohen’s plan to testify, Trump said, “I’m not worried about it at all.”

from https://thecrimereport.org

Russian Lawyer With Trump Ties Charged in Tax Case

Natalia Veselnitskaya, who met with senior Trump campaign officials at Trump Tower in 2016, has been charged with obstruction of justice tied to a money laundering case in New York City.

A Russian lawyer who met with senior Trump campaign officials at Trump Tower in 2016 has been charged with obstruction of justice tied to a money laundering case in New York, reports NPR. Federal prosecutors in Manhattan announced the single criminal count against the attorney, Natalia Veselnitskaya, on Tuesday. The  indictment suggests she has close ties to the Russian government, something she has denied in the context of the special counsel’s Russia investigation. The case stems from legal work Veselnitskaya was doing for Prevezon Holdings.

Prosecutors allege the company laundered millions of dollars of proceeds as part of a complex Russian tax refund scheme that defrauded Russian taxpayers out of more than $200 million. The U.S. government was seeking to recover millions of dollars’ worth of property, much of it tied up in New York real estate, on the ground that it was connected to the scheme. The indictment alleges that while representing Prevezon, Veselnitskaya submitted “false and deceptive declarations” to a federal judge in New York City. Prosecutors allege that she helped draft supposed independent findings “in secret cooperation with a senior Russian prosecutor.” Veselnitskaya has come under scrutiny for her role in a June 2016 meeting with Donald Trump Jr., Paul Manafort and Jared Kushner. The sit-down at Trump Tower was arranged on the pretext that Veselnitskaya had dirt to offer on Trump’s campaign opponent, Hillary Clinton. Participants say nothing came of their conversation, but the meeting has emerged as an important moment in the broader Russia investigation.

from https://thecrimereport.org

Queen of Back Taxes? IRS Claims Aretha Franklin Estate Owes $6.3 Million

Aretha Franklin left no will for an estate estimated at $80 million, with untold sales and royalties still to come. A lawyer for her estate says he’ll dispute the claim for back taxes, explaining that the singer left uncashed checks “lying around” for years and shouldn’t be dinged for undeclared income.

The estate of Aretha Franklin owes the federal government more than $6.3 million in unpaid income tax, according to documents filed in a Michigan probate court, the Detroit News reports.

The 76-year-old Queen of Soul died of pancreatic cancer in her Detroit apartment Aug. 16 and is survived by four sons. During her career, she sold 75 million records worldwide and won 18 Grammy Awards. Franklin left no will for an estate estimated at $80 million, with untold sales and royalties still to come.

A press spokesperson for the estate released a statement quoting the estate’s attorney, David Bennett, saying he will dispute the IRS claim. “The vast majority of Ms. Franklin’s personal 1040 tax obligations were paid prior to her death — something she wished to occur,” the statement reads. “The estate is diligently working to resolve any remaining issues.”

Bennett said the IRS doesn’t exactly understand the ways Franklin made her money — performing at concerts and making recordings. “She had a lot of (pay) checks lying around that she had never cashed,” Bennett said. “I had to have some of them reissued because they were so old. I don’t know why she didn’t cash them, but it seems that the IRS figured some of it as undeclared income and are going after it.”

Franklin was no stranger to tax problems or the IRS. In 2008, she nearly lost her home next to the Detroit Golf Club because of unpaid taxes, which the singer blamed on an attorney’s oversight. Franklin paid $19,192 in back taxes and kept the Hamilton Road mansion, which her estate sold in late October for $300,000. In 1992, the IRS slapped a lien on her Bloomfield Hills mansion for $225,618 over personal taxes not paid in 1991.

from https://thecrimereport.org

FBI Steps Up Campaign Against Fraud Using ‘Money Mules’

“Money mules” unwittingly use their own bank accounts to move money for criminals for purposes they think are legitimate. The “mule” concept is in the news with the release of Clint Eastwood’s “The Mule,” a real-life tale of a horticulturist who smuggled cocaine for a Mexican cartel.

The email caught the executive at a small Connecticut company by surprise in 2016. The company’s owner, he thought, was requesting a money transfer to pay for supplies from a new vendor. Hours after the money had been wired, the executive texted the owner to make sure he’d heard the request correctly. The owner replied, “I just saw your message about a wire transfer today. What is this about?” It was a fraud scam that that resulted this month in a 45-month prison sentence for one culprits. The case is part of a cycle of money laundering schemes that law enforcement officials are scrambling to slow through a combination of prosecution and public awareness, the Associated Press reports. It’s a trend involving “money mules” — people who unwittingly use their own bank accounts to move money for criminals for purposes they think are legitimate. The “mule” concept attracted attention with this month’s release of Clint Eastwood’s “The Mule,” a real-life tale of an elderly horticulturist who smuggled cocaine for a Mexican cartel.

The modern-day mules of most concern to the FBI are people who get themselves entangled in complicated, international money laundering schemes that cause millions of dollars in losses and show no signs of stopping. The FBI and international law enforcement agencies have stepped up efforts against the fraud. The FBI in June announced the arrests of 74 people, including 29 in Nigeria, for schemes targeting businesses and the elderly, and this month launched a publicity campaign called “Don’t Be a Mule.” The money mule cases are an offshoot of generic frauds such as schemes that dupe people into thinking they’ve won the lottery and can claim their prizes by wiring an advance payment or that trick the unsuspecting into believing a relative has been arrested and needs urgent bail money.

from https://thecrimereport.org

Morgan Stanley Fined $10M Over Money Laundering Failure

The Financial Industry Regulatory Authority (FINRA) penalized Morgan Stanley Smith Barney LLC  after concluding it failed to supervise an anti-money laundering program properly over five years.

The Financial Industry Regulatory Authority (FINRA) fined Morgan Stanley Smith Barney LLC  $10 million after concluding it failed to supervise an anti-money laundering program properly over five years, reports Law.com. FINRA, the nonprofit organization that protects investors and market integrity, concluded that Morgan Stanley’s anti-money laundering (AML) program failed to meet the requirements of the Bank Secrecy Act because of three major issues.

Morgan Stanley’s automated AML surveillance system didn’t receive data from several systems, “undermining the firm’s surveillance of tens of billions of wire and foreign currency transfers.” Second, it “failed to devote sufficient resources to review alerts generated by its automated AML surveillance system,” and Morgan Stanley didn’t “reasonably monitor customers’ deposits and trades in penny stock for potentially suspicious activity, despite the fact its customers deposited almost 2.7 billion shares of penny stock, which resulted in sales totaling approximately $164 million.” FINRA also concluded that Morgan Stanley “failed to establish and maintain a supervisory system that complies with Section 5 of the Securities Act of 1933 which generally prohibits the sale of unregistered securities.” Susan Schroeder of FINRA said that “firms must ensure that their AML programs are reasonably designed to detect and cause the reporting of potentially suspicious activity.”

from https://thecrimereport.org

Trump Foundation to Dissolve Amid Fund Misuse Charges

President Trump’s family foundation will dissolve under a judge’s supervision amid allegations it misused funds to further Trump’s interests. The agreement stems from a lawsuit by the New York attorney general’s office.

President Trump’s family foundation will dissolve under a judge’s supervision amid allegations it misused funds to further Trump’s interests, reports the Wall Street Journal. The agreement stems from a lawsuit by the New York attorney general’s office alleging that Trump used the Donald J. Trump Foundation to pay legal settlements, further his 2016 campaign, and promote his businesses. The deal requires the attorney general to approve the charities that will get the foundation’s remaining assets. Alan Futerfas, a lawyer for the charity, said it had been seeking to dissolve and distribute its assets since the 2016 election. “Unfortunately, the NYAG sought to prevent dissolution for almost two years, thereby depriving those most in need of nearly $1.7 million,” he said, citing the remaining assets.

When the lawsuit was filed, Trump called it “ridiculous,” and his lawyers have said the suit was politically motivated. It is unusual for the attorney general’s office to seek to dissolve a charity, said Jason Lilien, former chief of the office’s charities bureau. “It’s a rare remedy,” said Lilien. “It only occurs when the attorney general’s office believes a charity is incapable of governing itself.” The suit—filed against  Trump, his three older children and the charity—sought to dissolve the foundation and to ban Trump from serving on charity boards for 10 years, as well as seeking restitution. It accused the foundation of violating state laws that govern charities.

from https://thecrimereport.org

Cohen Sentence, Media Deal Implicate Trump

The sentencing of Michael Cohen and the disclosure of a key agreement with the parent company of the National Enquirer intensified the focus on Trump’s alleged role in coordinating efforts to suppress the stories of two women to protect his 2016 campaign.

The sentencing of Michael Cohen and the disclosure of a key agreement with another one-time ally of President Trump intensified the focus on Trump’s alleged role in coordinating efforts to suppress the stories of two women to protect his 2016 campaign, the Wall Street Journal reports. The legal saga has led Trump’s own Justice Department to implicate him in federal crimes, exposing him to potential legal and political peril as he enters the second half of his term. Cohen, Trump’s longtime fixer and personal lawyer, was sentenced Wednesday to three years in prison. He had pleaded guilty to nine felonies, including campaign-finance violations related to payments he arranged during the 2016 presidential campaign to silence two women who said they had sexual encounters with Trump.

Prosecutors said American Media Inc., the National Enquirer’s parent, admitted to coordinating with the Trump campaign in making an illegal payment. The company said paid $150,000 payment to a former Playboy model to quash her story of an affair with Trump to prevent it from influencing the election—not for legitimate editorial reasons. Because American Media has provided “substantial” assistance,  the government won’t prosecute the company. Cohen, 52, apologized for lying to the public and told the judge his “blind loyalty to Trump” had led him astray from his values. “Time and time again, I felt it was my duty to cover up his dirty deeds, rather than listen to my own inner voice,” Cohen said. Statements by Cohen and American Media could undercut Trump’s ability to argue the payments weren’t intended to protect his campaign. U.S. District Judge William Pauley said Cohen admitted to a “veritable smorgasbord of fraudulent conduct,” including crimes that undermined democratic institutions. He ordered Cohen to pay $1.3 million in restitution and $100,000 in fines, as well as forfeit $500,000. Cohen reports to prison March 6

from https://thecrimereport.org