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Archive for February, 2014

Robert J. Shields Becomes Head of FBI’s Milwaukee Office

Steve Neavling
ticklethewire.com 

Robert J. Shields, who began his FBI career as a special agent in Chicago, is the newest head of the FBI’s Milwaukee office.

The Associated Press reports that Shields, who most recently served as chief inspector at FBI headquarters, officially began his job Monday.

He replaces Teresa Carlson, who was moved to Washington last year.

Shields began his career tackling white-collar crime and later handled computer forensics.

Drug Traffickers Increasingly Taking to High Seas to Avoid Driving Across U.S. Border

coast guard photo

Steve Neavling
ticklethewire.com

Drug smugglers are a stubborn bunch.

When security is tight, smugglers find another way into the country.

The Associated Press reports that drug traffickers are increasingly using boats to reach the U.S.

They take the Pacific Ocean from Mexico and South America to California.

Smugglers likely are finding the task easier too because the Coast Guard – the only U.S. military service capable of making arrests so far offshore – lost a quarter of its operating costs last year.

 

OTHER STORIES OF INTEREST


 

Advice: “Gradual Withdrawals” from Fraud & Other Wrongdoing: Guidance for Corporate Officers and In-House Counsel in the Whistleblower Era

Steven Pelak and Jason Prince are attorneys with the law firm Holland & Hart.  Pelak, a former federal prosecutor,  focuses his practice on civil and criminal enforcement proceedings and internal investigations. Prince  helps companies to navigate the business disputes and compliance risks that arise from the domestic and international sale of goods and services

Steven Pelak

By Steven W. Pelak and Jason E. Prince

Upon discovery that employees or third-party agents may be committing a fraud or may be violating anti-corruption, export control, trade sanctions, money laundering, environmental or other laws, corporate officers and in-house counsel might determine that the circumstances allow a gradual withdrawal from the conduct, instead of an immediate termination of the activity.

Company officials might be inclined – as a result of often well-placed feelings of loyalty – to preserve a long-established business relationship or to help a long-term employee mitigate his or her error by allowing the misconduct to end gradually over time. Often, the thinking is that this approach will end the problem, avoid detection, and allow the party to repair the damage quietly.

Although a very human reaction in certain circumstances, such a gradual withdrawal from wrongdoing or merely inaction – particularly for government contractors – may result in administrative penalties or even jail time, as recently learned by David Grinstead, the former CEO of the Alabama-based U.S. Defense Department contractor Adams Produce Company.

On October 29, 2013, a federal judge sentenced Mr. Grinstead to 16 months in prison and $450,000 in restitution for fraud against the company, failing to file federal tax returns, and concealing his employees’ fraud scheme against the U.S. Defense Department by letting the scheme end slowly rather than ending it immediately so as to avoid raising red flags and better avoid detection by the U.S. government.

Jason Prince

The last charge against Mr. Grinstead stemmed from Adams Produce’s multi-million dollar contract with the Defense Supply Center Philadelphia (“DSCP”) to supply fresh fruits and vegetables to military bases, public school systems, junior colleges, and universities. Four employees of Adams Produce conspired to defraud DSCP by creating false invoices and purchase orders which falsely inflated the purchasing costs the company actually paid to a national distributor of fruits and vegetables.

Mr. Grinstead did not participate in his employees’ fraudulent scheme, and he apparently only learned about the scheme after it was underway. According to the U.S. Department of Justice (“DOJ”), however, Mr. Grinstead nevertheless violated the federal “misprision of felony” statute by joining an effort to withdraw and end the theft by Adams Produce quietly and slowly to lessen the likelihood of detection by the U.S. government.

Was Famous Boxing Match Between Muhammed Ali and Sonny Liston Fixed? FBI Suspected So

Steve Neavling
ticklethewire.com

It was one of the most storied sports moments in history – Muhammed Ali defeating heavyweight champion Sonny Liston 50 years ago today.

But was the fight fixed?

The Washington Times asks this question after receiving four-decade-old records that show the FBI believed the fight may have been decided by a Las Vegas figure, Ash Resnick, who is tied to organized crime and Liston.

The most eye-opening evidence comes from a 1966 interview with Houston gambler Barnett Magids.

“On one occasion, Resnick introduced Magids to Sonny Liston at the Thunderbird, [one of the Las Vegas hotels organized crime controlled],” the memo states. “About a week before the Liston and Clay fight in Miami, Resnick called and invited Magids and his wife for two weeks in Florida on Resnick. Magids‘ wife was not interested in going, but Magids decided to go along, and Resnick was going to send him a ticket.

“Two or three days before the fight, Magids called Resnick at the Fontainebleau Hotel in Miami to say he could not come,” the memo states. “On this call, he asked Resnick who he liked in the fight, and Resnick said that Liston would knock Clay out in the second round. Resnick suggested he wait until just before the fight to place any bets because the odds may come down.

“At about noon on the day of the fight, [Magids] reached Resnick again by phone, and at this time, Resnick said for him to not make any bets, but just go watch the fight on pay TV and he would know why and that he could not talk further at that time.

Magids did go see the fight on TV and immediately realized that Resnick knew that Liston was going to lose,” the document states. “A week later, there was an article in Sports Illustrated writing up Resnick as a big loser because of his backing of Liston. Later people ‘in the know’ in Las Vegas told Magids that Resnick and Liston both reportedly made over $1 million betting against Liston on the fight and that the magazine article was a cover for this.”

Influential Justice Department Official Steps Down Quietly After Less Than 3 Years on Job

Steve Neavling
ticklethewire.com 

Virginia Seitz, the leader of an influential Justice Department office that handles surveillance and security, quietly resigned from her job after less than three years on the job, NPR reports.

Seitz received Senate confirmation in 2011, taking over the unit responsible for the Justice Department’s Office of Legal Counsel.

Sources told NPR that Seitz was well-liked but the job was demanding, and she’s grieving from the loss of a close friend last year.

“Ms. Seitz served for 2 1/2 years in one of the most demanding jobs at the department and was deeply admired throughout the building. Her reasons for leaving were entirely personal, and we respected that,” said Justice Department spokesman Brian Fallon.

Border Patrol Agent Who Fatally Shot Rock-Throwing Suspect Had Just Over 2 Years on Job

Steve Neavling
ticklethewire.com 

The Border Patrol agent who pulled the trigger in a deadly shooting along the California-Mexico border last week had just over two years on the job, ABC 10 News reports.

Agent Daniel Basinger is now back on duty.

The shooting happened around 6:40 a.m. on Feb. 18 after two agents split up to capture fleeing suspects who were trying to cross the border into the U.S. That’s when a third suspect was spotted.

Basinger “ordered the man to stop in English and Spanish but he fled on foot,” Giannantonio said. “The agent chased after him, following him down a ravine and back up the opposite hillside.”

The agent then came under attack from fist-sized rocks thrown by the suspect.

“One of the larger rocks struck the agent in the head,” he said. “Fearing that another rock strike to the head could kill or incapacitate him, the agent fired his duty pistol at least twice at the man, striking him.”

DEA Applauds Arrest of Mexican Drug Lord But Distances Itself From Retired Agents’ Remarks

By Allan Lengel
ticklethewire.com

The DEA issued a statement Monday applauding the arrest of Joaquin “El Chapo” Guzman Loera while playing down statements made by retired DEA agents like Phil Jordan.

The DEA statement said:

Remarks made by retired Drug Enforcement Administration Agent Phil Jordan and those of other retired DEA agents do not reflect the views of the Drug Enforcement Administration.

The arrest of Joaquin “El Chapo” Guzman Loera was a significant achievement for Mexico and a major step forward in our shared fight against transnational organized crime, violence, and drug trafficking. We congratulate the Mexican people and their government on the capture of the alleged head of the Sinaloa Cartel. The DEA and Mexico have a strong partnership and we will continue to support Mexico in its efforts to improve security for its citizens and continue to work together to respond to the evolving threats posed by transnational criminal organizations.

Jordan had told CNN of the arrest:

“It is a significant arrest, provided he gets extradited immediately to the United States. If he does not get extradited, then he will be allowed to escape within a period of time.

“When you arrest the most powerful man in the Americas and in Mexico, if you talk to any cartel member, they’ll say that he’s more powerful than Mexican President Peña Nieto. This would be a significant blow to the overall operations not only in the Americas, but Chapo Guzman had expanded to Europe. He was all over the place. If he is, in fact, incarcerated, until he gets extradited to the United States, it will be business as usual.”

How a Kingpin Above the Law Fell, Incredibly, Without a Shot

By DAMIEN CAVE
New York Times
MAZATLÁN, Mexico — They reacted here with utter disbelief. Joaquín Guzmán Loera, El Chapo, drug kingpin to the world, the Robin Hood of Sinaloa, had been arrested in his home state, in the resort town that is a loyal fief of his empire?

“It was too easy,” said a young woman of model height, her back to the sea, her eyes fixed on the 12-story condominium where Mexican marines and United States agents grabbed him early on Saturday morning. “No shootout, no final stand?”

The takedown this weekend of the world’s most wanted man — the chief executive of what experts describe as the world’s most sophisticated narcotics enterprise, the Sinaloa cartel — upended long-held assumptions about the impunity of Mexican mobsters.

To read the full story click here.