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Stejskal: Robin Hood in Reverse – A $1.1 Million SCAM

2000px-robin_hood_logo-svg

Greg Stejskal served as an FBI agent for 31 years and retired as resident agent in charge of the Ann Arbor office.

By Greg Stejskal
ticklethewire.com

In 2005 Female Jones (not her real name), an indigent woman living in public housing in Ann Arbor, Mich., discovered she wasn’t eligible for federal housing assistance. The reason she wasn’t eligible was because it appeared she was already receiving “Section 8” voucher payments. Jones wasn’t aware of receiving any assistance. So it was assumed that there was a bureaucratic snafu, but an investigation revealed something far more nefarious.

Section 8 vouchers are so-called because they are authorized under Section 8 of the Federal Housing Act of 1937, part of the New Deal legislation designed to help people suffering the effects of the Great Depression. In 1974 the Housing Act was amended to create the Section 8 voucher program. Low income people would be eligible for vouchers that would pay a percentage of their rent in approved housing facilities. The money for the program would be provided by U.S. Department of Housing and Urban Development (HUD), but the program would be administered by the state and local public housing agencies.

There was only a limited amount of funding available. So not all eligible people would receive vouchers. In Michigan a waiting list existed and waits of 3-6 years were not uncommon.

Greg Stejskal

Greg Stejskal

The voucher payments were made directly to the indigent tenants’ landlords to minimize the opportunity for fraud. Housing voucher agents working for the state prepared the application forms for the indigent applicants. These agents obtained background information and determined whether the applicants met the eligibility requirements.

Female Jones’ caseworker determined that she was enrolled in the Section 8 program, and voucher payments were being sent to Washtenaw Payee Services, a company that appeared to receive Section 8 payments on behalf of several landlords in Washtenaw County. Because the woman was unaware of the payments, and they were not being received by her landlord, the caseworker reported the problem to the Michigan State Housing Development Authority (MSHDA).

MSHDA’s initial investigation indicated there might be some fraudulent activity. As the Section 8 program is federally funded, they reported their concerns to the FBI, and a joint FBI/MSHDA investigation was begun.

Although Washtenaw Payment Services (WPS) appeared to have an office with a street address, it turned out to be a private mailbox service which is often a red flag in a fraud investigation.

The bank records for WPS were obtained via subpoena. Those records showed that WPS was formed in 1990 when LaToya Cotton filed business papers with Washtenaw County and opened a bank account. Since 1994, about 11 years, WPS had been receiving Section 8 voucher payments ostensibly for landlords of low-income tenants enrolled in the program.

The striking thing was the founder of WPS, LaToya Cotton, was a Michigan housing agent responsible for enrolling prospective low-income applicants for Section 8 vouchers. But even more troubling, it didn’t appear that any money had been paid from the WPS account to any landlords on behalf of the Section 8 enrollees.

LaToya Cotton became a Michigan housing agent for MSHDA in 1994. Very soon thereafter she concocted her scheme.

Read more »

Orange County Register: Why FBI Should Disclose How iPhone Was Hacked

Apple-iphoneBy Editorial Board
Orange County Register

After the San Bernardino attack in December that killed 14 people and wounded 22 others, the FBI hired a private hacker to unlock the iPhone of one of the two dead terrorists. Perhaps the FBI learned some of Syed Rizwan Farook’s evil secrets. But it also created unsettling secrets of its own.

The mysteries left over from the episode start with these: Who is the unnamed private party the FBI paid to break the smartphone’s security device? How much taxpayer money did the agency pay?

News organizations that have been stiff-armed by the FBI in their Freedom of Information Act request now are suing the bureau for answers.

We hope they succeed. The public should be able to know more about how the FBI cracked the privacy safeguards on the terrorist’s Apple phone. This is about more than one investigation and one wrongdoer’s phone – it’s about the threat that the government’s ability to break into electronic devices could pose to anybody’s online privacy and safety, especially if the tools fell into the wrong hands.

As stated in the lawsuit – filed last week by the Associated Press, the Gannett media company and the Vice Media digital and broadcasting company – “Understanding the amount that the FBI deemed appropriate to spend on the tool, as well as the identity and reputation of the vendor it did businesses with, is essential for the public to provide effective oversight of government functions and help guard against potential improprieties.”

To read more click here. 

FBI: Did NYPD Lt. Shoot Himself to Avoid Testifying Against Former Boss?

nypd badgeBy Steve Neavling
ticklethewire.com

Authorities are questioning whether an NYPD lieutenant shot himself twice in the stomach to avoid testifying against his friend and former boss.

The New York Post reports that Lt. Peter Salzone shot himself after he was interviewed by the FBI as part of a corruption investigation into the NYPD.

Salzone had been asked to testify against his former boss, NYPD Deputy Inspector James Grant.

The Post wrote:

The NYPD’s Force Investigation Division is looking at the possibility that Salzone never intended to kill himself and merely wanted to appear emotionally unstable to sabotage his credibility as a witness, according to sources.

Salzone was stripped of his gun and badge Saturday. He could not be reached for comment.

He is the second police officer to shoot himself after getting called into the federal inquiry, which has seen dozens of cops get grilled.

Homeland Security: Hackers Targeted Election Systems in 20+ States

ballot box flintBy Steve Neavling
ticklethewire.com

The voter registration systems of more than 20 states have been targeted by hackers in recent months, a Homeland Security official said.

The discovery comes as election officials are worried about foreign hackers compromising the elections. But federal officials said hackers likely would not be able to alter the outcome of an election because the systems are generally not connected to the Internet, the Associated Press reports. 

It’s still not clear where the hackers are from and what their motives are.

The FBI has warned state officials about election security in the wake of the suspected hacking attempts.

FBI Director James Comey said last week that the bureau is investigating whether Russian hackers are trying to disrupt the election.

Homeland Security Secretary Jeh Johnson encouraged state election officials to secure their election systems by implementing existing technical recommendations.

Authorities Say Black Box Wasn’t Working During N.J. Train Crash in Hoboken

New Jersey Transit train, via Wikipedia.

New Jersey Transit train, via Wikipedia.

By Steve Neavling
ticklethewire.com

Authorities hoping to determine what caused a New Jersey Transit train to crash in Hoboken received bad news Sunday.

The black box that was recovered was not working at the time of the accident, the New York Daily News reports. 

The black box, which was recovered from the rear of the train, recorded no information. It was built in 1995.

The engineer of the train told the National Transportation Safety Board that he doesn’t remember the fatal crash, but said the train was traveling 10 mph as it entered the station.

Another recorder was located at the front end of the train, but it has not been found.

“Right now it is very dangerous to get in there,” NTSB vice chair Bella Dinh-Zarr said. “We’re hopeful that that will have information, that it will be functioning.”

The Thursday morning crash killed one person and injured more than 100 people.

Other Stories of Interest

Justice Department: DEA Paid Informants Millions of Dollars without Proper Oversight

dea-badgeBy Steve Neavling
ticklethewire.com

The DEA is under fire for spending millions of dollars on confidential informants without proper oversight and using sources in a way that potentially violates the Constitution, the Justice Department inspector general has found.

The 65-page report lists serious missteps in the handling of confidential informants and recommended better policies and procedures, the Washington Post reports. 

Inspector General Michael Horowitz found a lack of oversight that led to fraud and abuse. One example showed that the DEA paid a source more than $469,000, even though he had previously been “deactivated” for lying in court and depositions.

The investigation found that the DEA used more than 18,000 informants between October 2010 and September 2015, and half were paid about $237 million.

The Washington Post wrote:

The sources ranged from criminals providing information on their associates to airline, train and parcel-service employees providing tips on suspected drug traffickers’ movements.

The work, for all involved, can be lucrative. The inspector general found one airline employee who received more than $600,000 in less than four years, and a parcel employee who received more than $1 million in five years.

The inspector general found, though, that more money did not always come with more oversight. The DEA’s Intelligence Division, for example, paid $25 million to eight sources over a five-year period and “did not independently validate the credibility of these sources, or the accuracy of the information they provide,” according to the inspector general. The Intelligence Division, according to the report, generally relied on “DEA field offices’ risk assessments and determinations that confidential sources are reliable.”

Weekend Series on Crime History: Nixon, The FBI, Al Haig and Deep Throat

Creepy Clown Hysteria Prompts Sheriff to Ask for Help from FBI, Homeland Security

Creepy clown, via Wikipedia

Creepy clown, via Wikipedia

By Steve Neavling
ticklethewire.com

A clown hysteria has swept across social media and is now prompting law enforcement to take some drastic – and potentially unconstitutional – measures.

The panic appeared to start in August in Greenville, S.C., where clowns were reportedly luring children into the woods.

“From there, it ballooned into reports of people in clown costumes lurking in parks, assaulting people, chasing people and even threatening to kill people,” reports Network World, which chronicled law enforcement actions in light of the hysteria. 

A sheriff in Kentucky has asked the FBI and Homeland Security to help investigate a “creepy clown” threat. The sheriff in Gallatin County even warned that “clown threats” may face charges of “inducing panic and terroristic threatening.”

This week, Gallatin County Kentucky Schools said it received a “vague threat of violence” from two “clowns” who threaten to shoot high school students. As a result, school attendance plummeted 48%.

Network World wrote that most of the clown reports are rumors or pranks.

Gallatin County Sheriff Josh Neale told people to forward threatening messages from clowns to the police, who were “aggressively looking into each and every message.” Neale said he was consulting with the FBI and Homeland Security over the clown threats. He added, “The person or people making the ‘clown threats’ could face local charges of inducing panic and terroristic threatening.”

Other police have also addressed the clown threat after it was going viral in social media. Wearing a “full clown costume” in public got one man arrested in Kentucky. He was charged with “wearing a mask in a public place and disorderly conduct.” He’s notthe only “clown” who has been arrested.

Kentucky’s Barbourville Police warned that dressing like a clown “can create a dangerous situation.” While “approaching people in a threatening manner” is illegal, so too is “assaulting, shooting, attacking or otherwise injuring someone simple because they are wearing a costume.”