From the daily archives: Tuesday, January 19, 2010

Coffman Specialties, Inc. of San Diego has been awarded a $36.3 million contract to construct a rail spur and intermodal rail yard at the Mesquite Regional Landfill, where municipal solid waste (MSW) will be received for disposal by way of California’s first waste-by-rail project.
The Sanitation Districts of Los Angeles County today awarded the contract to Coffman Specialties, Inc., the lowest of eight bids received for the project that will include a rail spur, bridge and construction of the facilities where containerized trash will arrive by train for disposal at the regional landfill. The Mesquite Regional Landfill is located about 5 miles east of Glamis.
Work is expected to begin in the spring and take about 18 months to complete.
“Awarding the contract for the MRL rail spur and intermodal facility is a major milestone in the development of the waste-by-rail system that will provide an innovative, environmentally responsible, regional solid waste disposal solution,” said Janet Coke, manager of the Sanitation Districts waste-by-rail project. “The enormity of the project also will bring numerous construction jobs to the Imperial Valley.”
The MRL project calls for the construction of a 100-acre intermodal facility, similar to what is commonly seen at seaports where containers are moved by crane from ships onto tractor-trailer trucks for delivery.  A similar process will move containerized MSW from rail cars onto trucks for disposal in the landfill.
Additionally, the infrastructure project requires construction of a 4.5 mile rail spur to connect with the Union Pacific Railroad main line about 1-mile northwest near Glamis. A bridge to span storm water control channels on the landfill property also will be built.
The Sanitation Districts went out to bid on the project in July after signing an agreement with Union Pacific that spells out the terms and conditions for transporting up to two unit trains a day – each that will carry 4,000 tons of MSW – to the Mesquite Regional Landfill.
At the same time, construction is underway on the Puente Hills Intermodal Facility, where sorted trash will be loaded onto trains for the 200-mile trip to the Mesquite Regional Landfill.  The access road construction has begun for an intermodal project that is estimated to cost $100 million. The project is expected to be completed in early 2012.
The Mesquite Regional Landfill was fully built in 2008. The state-of-the art landfill includes a road and drainage system, a water distribution system and the modular offices to house landfill staff. The first cell of the landfill has been lined with a 5-foot-thick multi-layer system that exceeds state, federal and local standards.
To get the Mesquite Regional Landfill into operation before the rail infrastructure is completed and to provide greater flexibility in its early years of operation, the Sanitation District has proposed that Imperial County modify the permit governing the facility. The Sanitation District has requested that Imperial County allow the trucking of a limited amount of waste to the landfill.
The proposed permit modification seeks permission to truck up to 4,000 tons per day of waste a day, 1/5th of what the landfill is permitted to receive. A draft environmental impact report, with air and traffic studies of the proposal, is expected to be released soon.
The Mesquite Regional Landfill is permitted to receive up to 20,000 tons per day (tps) of municipal solid waste, after it has been sorted to remove recyclables and hazardous waste. Up to 1,000 tons per day of the waste that the landfill receives is reserved for Imperial County waste.
At peak operation, the Mesquite Regional Landfill is expected to employee about 250 people and to pay Imperial County fees of about $17 million a year.

 

Twenty-Two Executives and Employees of Military and Law Enforcement Products Companies Charged in Foreign Bribery Scheme

Defendants Arrested in Las Vegas and Miami; 21 Search Warrants Executed in United States and United Kingdom

Twenty-two executives and employees of companies in the military and law enforcement products industry have been indicted for engaging in schemes to bribe foreign government officials to obtain and retain business, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Channing Phillips for the District of Columbia; and Assistant Director Kevin Perkins of the FBI’s Criminal Investigative Division . Twenty-one defendants were arrested in Las Vegas yesterday. One defendant was arrested in Miami. The indictments stem from an FBI undercover operation that focused on allegations of foreign bribery in the military and law enforcement products industry.

The 16 indictments unsealed today represent the largest single investigation and prosecution against individuals in the history of DOJ’s enforcement of the Foreign Corrupt Practices Act (FCPA), a law that prohibits U.S. persons and companies, and foreign persons and companies acting in the United States, from bribing foreign government officials for the purpose of obtaining or retaining business. The indictments unsealed today were returned on Dec. 11, 2009, by a grand jury in Washington, D.C.

In connection with these indictments, approximately 150 FBI agents executed 14 search warrants in locations across the country, including Bull Shoals, Ark.; San Francisco; Miami; Ponte Vedra Beach, Fla.; Sarasota, Fla.; St. Petersburg, Fla.; Sunrise, Fla.; University Park, Fla.; Decatur, Ga.; Stearns, Ky.; Upper Darby, Penn.; and Woodbridge, Va. Additionally, the United Kingdom’s City of London Police executed seven search warrants in connection with their own investigations into companies involved in the foreign bribery conduct that formed the basis for the indictments.

“This ongoing investigation is the first large-scale use of undercover law enforcement techniques to uncover FCPA violations and the largest action ever undertaken by the Justice Department against individuals for FCPA violations,” said Assistant Attorney General Lanny A. Breuer. “The fight to erase foreign bribery from the corporate playbook will not be won overnight, but these actions are a turning point. From now on, would-be FCPA violators should stop and ponder whether the person they are trying to bribe might really be a federal agent.”

“Corrupt payments to foreign officials to obtain or retain business erode public confidence in our free market system and threaten to undermine foreign governments,” said U.S. Attorney Channing Phillips. “These indictments set forth serious allegations and reflect the Department’s commitment to aggressively investigate and prosecute those who try to advance their businesses through foreign bribery.”

“Investigating corruption at all levels is the number one priority of the FBI’s Criminal Division,” said Assistant Director Kevin Perkins of the FBI’s Criminal Investigative Division.  “In this era of global commerce, the FBI is committed to curbing corruption at home or overseas.  Companies should prosper through honest business practices, not the practice of back room deals and bribery.”

The indictments allege that the defendants engaged in a scheme to pay bribes to the minister of defense for a country in Africa.  In fact, the scheme was part of the undercover operation, with no actual involvement from any minister of defense.  As part of the undercover operation, the defendants allegedly agreed to pay a 20 percent “commission” to a sales agent who the defendants believed represented the minister of defense for a country in Africa in order to win a portion of a $15 million deal to outfit the country’s presidential guard.  In reality, the “sales agent” was an undercover FBI agent.  The defendants were told that half of that “commission” would be paid directly to the minister of defense.  The defendants allegedly agreed to create two price quotations in connection with the deals, with one quote representing the true cost of the goods and the second quote representing the true cost, plus the 20 percent “commission.”  The defendants also allegedly agreed to engage in a small “test” deal to show the minister of defense that he would personally receive the 10 percent bribe.

The indictments charge the following executives and employees of the various companies in the military and law enforcement product industries:

  • Daniel Alvirez, 32, and Lee Allen Tolleson, 25, the president and director of acquisitions and logistics at a company in Bull Shoals, Ark., that manufactures and sells law enforcement and military equipment;
  • Helmie Ashiblie, 44, the vice president and founder of a company in Woodbridge, Va., that supplies tactical bags and other security-related articles for law enforcement agencies and governments worldwide;
  • Andrew Bigelow, 40, the managing partner and director of government programs for a Sarasota, Fla., company that sells machine guns, grenade launchers and other small arms and accessories;
  • R. Patrick Caldwell, 61, and Stephen Gerard Giordanella, 50, the current and former chief executive officers of a Sunrise, Fla., company that designs and manufactures concealable and tactical body armor;
  • Yochanan R. Cohen, aka Yochi Cohen, 47, the chief executive officer of a San Francisco company that manufactures security equipment, including body armor and ballistic plates;
  • Haim Geri, 50, the president of a North Miami Beach, Fla., company that serves as a sales agent for companies in the law enforcement and military products industries;
  • Amaro Goncalves, 49, the vice president of sales for a Springfield, Mass., company that designs and manufactures firearms, firearm safety/security products, rifles, firearms systems and accessories;
  • John Gregory Godsey, aka Greg Godsey, 37, and Mark Frederick Morales, 37, the owner and agent of a Decatur, Ga., company that sells ammunition and other law enforcement and military equipment;
  • Saul Mishkin, 38, the owner and chief executive officer of an Aventura, Fla., company that sells law enforcement and military equipment;
  • John M. Mushriqui, 28, and Jeana Mushriqui, 30, the director of international development and general counsel/U.S. manager of an Upper Darby, Penn., company that manufactures and exports bulletproof vests and other law enforcement and military equipment;
  • David R. Painter, 56, and Lee M. Wares, 43, the chairman and director of a United Kingdom company that markets armored vehicles;
  • Pankesh Patel, 43, the managing director of a United Kingdom company that acts as sales agent for companies in the law enforcement and military products industries;
  • Ofer Paz, 50, the president and chief executive officer of an Israeli company that acts as sales agent for companies in the law enforcement and military products industries;
  • Jonathan M. Spiller, 58, the owner and president of a Ponte Vedra Beach, Fla., company that markets and sells law enforcement and military equipment;
  • Israel Weisler, aka Wayne Weisler, 63, and Michael Sacks, 66, owners and co-chief executive officers of a Stearns, Ky., company that designs, manufactures and sells armor products, including body armor;
  • John Benson Wier III, 46, the president of a St. Petersburg, Fla., company that sells tactical and ballistic equipment.

All of the defendants except Giordanella were arrested yesterday by FBI agents in Las Vegas. Giordanella was arrested in Miami, also by FBI agents.

Each of the indictments allege that the defendants conspired to violate the FCPA, conspired to engage in money laundering, and engaged in substantive violations of the FCPA. The indictments also seek criminal forfeiture of the defendants’ ill gotten gains.

The maximum prison sentence for the conspiracy count and for each FCPA count is five years. The maximum sentence for the money laundering conspiracy charge is 20 years in prison.

These cases are being prosecuted by Assistant Chief Hank Bond Walther and Trial Attorney Laura N. Perkins of the Criminal Division’s Fraud Section, and Matthew C. Solomon of the U.S. Attorney’s Office for the District of Columbia. The cases were investigated by the FBI Washington Field Office squad that specializes in investigations into FCPA violations.

 

San Ysidro — U.S. Customs and Border Protection officers and agents, U.S. Immigration and Customs Enforcement agents, and the U.S. Postal Inspection Service worked together to arrest a man attempting to leave the country with $30,323 and man with U.S. mail belonging to other people, during southbound inspections at the San Ysidro port of entry.

Yesterday morning at 11:55 a.m. on the I-5 freeway south, an ICE agent targeted a 29-year-old U.S. citizen male driving a 2005 Honda Civic and pulled him over for a secondary inspection. During the inspection, a CBP officer searched the man for officer safety and discovered bundles of money strapped to both ankles.

The man had a total three bundles strapped to his right ankle, two strapped to his left ankle, and money in his wallet totaling $30,323 in undeclared U.S. currency.

Immigration and Customs Enforcement agents arrested the man and transported him to the Metropolitan Correctional Center to await arraignment. CBP seized the money and vehicle.

Earlier in the day at about 11 a.m. a CBP officer and Border Patrol agent encountered a 23-year-old Mexican man onboard a bus heading into Mexico. During the course of their inspection the officer and agent found various documents, U.S. mail, and checks that did not belong to the man.

U.S. Postal Inspectors responded and arrested the man for possession of stolen property and transported him to the San Diego County Jail.

“These two apprehensions are great examples of what can be accomplished when there is cooperation and coordination between agencies,” said San Ysidro Port Director Chris Maston. “Not only did we stop money from getting into the hands of the cartels, but we also protected citizens from fraud and identity theft.”

Southbound examinations have successfully stopped a myriad of other illegal activity such as stolen vehicles and trade and immigration violations, he said.

“Instead of a trip out of the country, this individual gets a trip to jail by stealing the mail. The Postal Inspection Service remains committed to the protection and security of the nation’s mail system,” said Bernard B. Ferguson, Inspector in Charge, Los Angeles Division, U.S. Postal Inspection Service.

 

San Luis, Ariz. – U.S. Customs and Border Protection officers at the San Luis port of entry arrest another juvenile for marijuana smuggling.

Today a 15-year-old juvenile applied for entry into the United States through the pedestrian entrance. The CBP officers who encountered the young man noticed something peculiar about his person and escorted him into the office. Once in secondary the officers found a package of marijuana with a weight of more than one pound taped to his inner thigh.

CBP officers seized the marijuana and the vehicle. The boy was turned over to the custody of Immigration and Customs Enforcement for further investigation and prosecution.

The Customs and Border Protection officers took him into custody and seized the marijuana and turned the case over to the San Luis, Ariz. Police Department for further investigation and processing.

The marijuana has an estimated street value of $2,710.

 
Ponzi schemes text on U.S. currency

Bernie Madoff stole billions, but two brothers in Michigan recently put a different twist on the traditional Ponzi scheme. They started out as willing participants in a get-rich-quick oil and gas scheme, only to learn it was all a fraud. Then, they decided to turn the tables…

Over the years, Jay and Eric Merkle had become well known and well liked in the community of Williamston and the surrounding area. They were successful and charismatic businessmen running their own company. They were active members of their church with plenty of family and friends.

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But in 2004, they decided to take their lives in a different direction. That’s when they realized that they had invested in an oil and gas exploration venture that was nothing but a scam. Instead of contacting authorities, the brothers chose to take a criminal turn: they continued working with those who had conned them in the first place…in the hopes of keeping the scheme afloat and recouping some of their losses.

house of cards illustration
What is a Ponzi Scheme?

A Ponzi scheme is essentially an investment fraud wherein the operator promises high financial returns or dividends that are not available through traditional investments.

Instead of investing victims’ funds, the operator pays “dividends” to initial investors using the principle amounts “invested” by subsequent investors.

The scheme generally falls apart when the operator flees with all of the proceeds, or when a sufficient number of new investors cannot be found to allow the continued payment of “dividends.”

This type of scheme is named after Charles Ponzi of Boston, Massachusetts, who operated an extremely attractive investment scheme in which he guaranteed investors a 50 percent return on their investment in postal coupons. Although he was able to pay his initial investors, the scheme dissolved when he was unable to pay investors who entered the scheme later.


Tips to Avoid Ponzi Schemes

  • As with all investments, exercise due diligence in selecting investments and the people with whom you invest.
  • Make sure you fully understand the investment before you invest your money.
  • See more common fraud schemes

    Apparently, that wasn’t enough, as the Merkles decided to take their criminal activity to the next level—by launching their own Ponzi scheme.

    They started by setting up their own front company—Platinum Business Industries (PBI)—ostensibly in the business of oil and gas exploration in Texas and Oklahoma. They promised potential investors high rates of return—up to six percent a month or 300 percent over three to five years. And they said that the risk was low, because even if no oil or gas was found, the land could be sold to recoup any money spent.

    And where did they turn for their initial investors? To their family, friends, and fellow church members.

    In traditional Ponzi style, it was all a house of cards. The investors’ money wasn’t used for oil and gas exploration. Instead, the Merkles used some of the funds to pay initial investors and used much of the rest to gamble on still more bogus get-rich-quick schemes (the brothers apparently didn’t learn their lesson as previous Ponzi victims).

    After bleeding their own clients dry, the brothers recruited crooked brokers, tax advisors, investment advisors, and other financial representatives—some in other states and even Canada—to find more investors. Eventually, that well also ran dry. To calm investors down, the brothers claimed they had a Nigerian buyer for their previous oil and gas assets and just needed some more money to get his $400 million into the U.S.

    Our investigation of the Merkles began when we were tipped off by a bank that noticed more than a million dollars had been moved through an account owned by the brothers. And after painstakingly questioning hundreds of witnesses, examining thousands of bank documents, reviewing e-mail correspondence, and interviewing victims, we determined that the Merkles’ schemes were responsible for about 600 investors in more than 20 shell companies losing upwards of $50 million—many their entire life savings, including IRAs.

    In the end, the brothers were convicted in court and given 10-year sentences (two other men who helped them also landed in jail).

    Their story is a lesson for us all. First, contact the FBI or other authorities if you suspect criminal activity. And second, beware of scams that sound too good to be true. They always are.

     
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