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FBI

Two Ex-FBI Agents Say the Agency Should Have Done More to Head Off Mortgage Fraud Disaster

Sure the FBI saw this mortgage mess way back when. And sure it was clear it didn’t have enough resources to deal with it. But back then it wasn’t a disaster. Now it is. And that’s our nature: we seldom address things until they become a crisis. Now we’ve got us a real crisis. Now the FBI wants more resources to deal with it all.

By PAUL SHUKOVSKY
Seattle Post-Intelligencer
SEATTLE — The FBI was aware for years of “pervasive and growing” fraud in the mortgage industry that eventually contributed to America’s financial meltdown, but did not take definitive action to stop it.
“It is clear that we had good intelligence on the mortgage-fraud schemes, the corrupt attorneys, the corrupt appraisers, the insider schemes,” said a recently retired, high FBI official. Another retired top FBI official confirmed that such intelligence went back to 2002.
The problem, according to the two FBI retirees and several other current and former bureau colleagues, is that the bureau was stretched so thin that no one noticed when those lenders began packaging bad mortgages into bad securities.
“We knew that the mortgage-brokerage industry was corrupt,” the first of the retired FBI officials told the Seattle P-I. “Where we would have gotten a sense of what was really going on was the point where the mortgage was sold knowing that it was a piece of dung and it would be turned into a security. But the agents with the expertise had been diverted to counterterrorism.”
For Full Story

FBI Investigating LA PD Perjury Allegations

The last thing this police department needs is more bad publicity. The question is whether this probe will have any legs.

By Jack Leonard
Los Angeles Times
LOS ANGELES — Federal authorities have launched a civil rights investigation into several Los Angeles police officers accused of lying under oath in a drug possession case that was dismissed last year when a videotape sharply contradicted their testimony.
An FBI agent and a federal prosecutor last week surveyed a Hollywood apartment complex where a security camera documented the 2007 arrest of Guillermo Alarcon Jr. by LAPD officers, according to an attorney who represents Alarcon in a civil claim against the Police Department.
An FBI spokeswoman confirmed the existence of the probe and said that Department of Justice officials in Washington, D.C., would ultimately weigh in on whether federal charges would be filed against the officers.
“We’re investigating allegations that the defendant’s civil rights may have been violated,” said spokeswoman Laura Eimiller. She declined to provide further details.

For Full Story

FBI and IRS Looking at Memphis Mayor’s Lavish Parties

Mayor WIllie Herenton

Mayor WIllie Herenton

In Detroit, the mayor recently went to jail. In Birmingham, Ala., the mayor faces public corruption charges. Ditto for ex-Illinois Gov. Rod Blagojevich. In Arizona, ex-Rep. Rick Renzi faces trial. Ex-U.S. Sen. Ted Stevens was recently convicted of wrongdoing. And on and on. Is it that our politicians are doing more and more questionable things, or are authorities getting better at unearthing their indiscretions?

By Amos Maki and Marc Perrusquia
Memphis Commercial Appeal
MEMPHIS — The lamb chops were tender, the wine fine and the setting exquisite — an upper room at the luxurious Peabody hotel.
The exclusive parties came at a price: a $1,000 donation to honor Mayor Willie Herenton.
The annual fetes, thrown at Christmas by the mayor’s aide, Pete Aviotti, are legend in Memphis, yet never has interest been more intense or more consuming.
In recent weeks, agents with the FBI and the Internal Revenue Service have been asking about those lavish parties as part of a federal probe focusing on Herenton’s private business dealings.
But if Aviotti is worried that agents have gathered evidence of wrongdoing in staging the parties, he isn’t showing it.
For Full Story

The Anthrax Suicide, Washington Espionage and More

Joseph Persichini Jr./ticklethewire.com photo

Joseph Persichini Jr./ticklethewire.com photo

WASHINGTON – One recent morning, shortly after this city had come down from the high of a historic inauguration, Joseph Persichini Jr., head of the FBI’s Washington field office, sat down with ticklethewire.com editor Allan Lengel. Persichini, a 33-year veteran of the FBI, took charge of the Washington office in 2006. In crisp white shirt and yellow tie, and his blackberry and navy blue FBI coffee mug close at hand, he talked about Chinese espionage in the Washington area, how his office sorted through intelligence tips leading up to the inauguration and the perplexing anthrax investigation and how he felt when anthrax suspect Dr. Bruce Ivins committed suicide:  “It wasn’t the ending we wanted.” The following answers were condensed and the questions were edited for clarity.

Q. In the anthrax case, obviously it took a long time to solve. How frustrating was that for the first few years?.
A. Any case of that magnitude that you can’t solve immediately is frustrating to any investigator. We all wanted to bring the case to a logical conclusion and work it as fast as we could. This case brought us challenges that were never faced by law enforcement ever in the history of the world. Nobody had ever used bacillus anthracis as a weapon to murder people. There was no scientific analysis based on anthrax, no DNA about anthrax. The potential subjects were the world. How do you start from there and whittle all that down?
Q. There was a lot of talk that the scientists were never going to narrow it down to a person. Were you always confident the science would catch up?
A. Well, we were optimistic. We knew it was a piece of the puzzle we needed. But it didn’t stop us from pursuing it as a normal homicide investigation. We didn’t know if the science would come through. It was explained during the press conference about anthrax how eventually the DNA for bacillus anthracis was developed. That was a major factor in coming up with our conclusion
Q. I don’t know how much you can say about scientist Steven Hatfill. Obviously he was considered a ‘person of interest’– as the attorney general had said before. Was there any lesson learned from looking at him?
A. I’m not going to talk about Steven Hatfill. Nobody would condone any type of leak. As I said in the very beginning, the world was our suspect and you begin to eliminate the potential subjects. We had many potential subjects.
Q. The Ft. Detrick lab was always tops on the list.
A. I’m not going to get into the internal side of it. Our first impression, I’m sure all of the world thought…this is terrorism. Any time you have a case of that magnitude there are lessons learned and it’s an experience you hope as we mature, all of us learn how to approach a case of that magnitude again. It was uncharted waters.

Q. Some politicians on the Hill were criticizing the FBI. Was it hard not to step up and say ‘We’ve really got something cooking, we just can’t talk about it? Essentially you took the criticism.
A. I’m not going to talk about politics. It’s no different than Ted Kaczynski and the decision to print the manifesto . You’ve got to keep focusing on your job and you have to understand, everybody was frustrated. If you’re a victim’s family member you want to see progress, you want to bring closure to this. So did we. People that were criticizing, you have to understand, they didn’t have the facts. There is no investigation that we’re going to lay out our investigative plan, it’s just counterproductive to what we do. Everybody looks at the prism with a different perspective.
Q. Were family members of the vicitms understanding about the pace of the investigation or were they critical?
A. We established relationships with them at the outset and we tried to keep them abreast as much as possible without revealing our investigation to them. I think for the most part they understood that. They knew we couldn’t lay out our whole case, our whole strategy. I’m sure everybody goes through a sea of emotions in a case like this. I used to say to them: “I’m not walking in your shoes, I can try to be compassionate, I can try to understand and we’ll do the best we can.” I think the moment of truth was obviously on the day we revealed the conclusion of the case, with the director spending over an hour or so with them, sitting down, and the prosecutors and investigators going through the case in its entirety.
Q. Are you convinced Bruce Ivins was the guy and Hatfill was not the guy?
A. Without a question. Dr. Bruce Ivins used anthrax to murder those individuals.
Q. When he committed suicide, was that a frustration? Was it shocking?
A. It wasn’t the ending that we wanted. This team was prepared to take its case in chief and present it to a jury of his peers. That’s our job and that’s what we wanted to do. We would have presented that to the grand jury and taken the case to trial.
Q. Your reaction when you first heard he committed suicide?
A. Frustrating. Again concerned about the team , the families. Where’s closure? We knew he was the subject. He obviously knew that. How would we have closure to this case.? How can we notifiy the public? There’s a sense of , you know, they need to know what happened here.
Q. When he committed suicide, it didn’t get out right away. Was there some talk of “how do we break the news?”
A. I think that conversation began immediately with all parties, the investigative team, the U.S. Attorney’s Office, the Department of Justice, headquarters , FBI , Postal Service, determining what we can and cannot say. And how is it that you close an investigation of this magnitude that had global implications?
Q. Did you personally call some of the family members of the victims about this?
A. The team did.
Q. Their reaction?
A. I’m not going to speak for them. Again, I’m not walking in their shoes. It’s been a long road for them. And that grieving process is different for everybody. We wanted to inform them as soon as possible. But I know there was a gap between the suicide and when we could physically get everybody here to Washington to brief them. And that really was why it took so long to go public because we wanted to brief them first.
Q. Were you in on the briefing.
A. Yes.
Q. And their reaction at that time?.
A. Again, different reactions. Some were relieved to to hear the progress that had been made that we couldn’t tell them about. So they heard exactly what we were doing, how we were approaching it, how we would have brought it to trial and how we would have presented the case. Everybody grieved different.
Q. Was it an emotional meeting?
A. Yes.
Q. People crying?
A. Yes. Emotional for everybody. It’s not over. That grieving process continues. There’s an important lesson learned reaching out to the victims. We did a pretty good job. We wanted them to be informed. We wanted them to understand what we were trying to do.
Q. Do you look back at some things that you guys did and say, “Oh boy, we could have saved a lot of time.”
A. That’s very difficult. Things were developing, the science was developing. The science again being a pivotal point; it took us a long time. How long did it take us to develop DNA in the world, and now all of a sudden, we, within a couple years, developed a DNA profile of anthrax. It was never ever done before in history. Even though it took a long time, that’s a phenomenal development by the scientists who were working with us, our FBI laboratory. You had agents that were working on the case as investigators who were scientists, who then went to the FBI lab in a promotional aspect and continued to work on the development of the DNA. That’s good work.

Q. Bruce Ivins’ name came up early on in the investigation because nearly everbody at Ft. Detrick was polygraphed and his polygraph came up a little irregular at that time. Was there any indication that you should have gotten back to him sooner?
A. I won’t talk about that.

Q. About the inauguration. How do you think things went?
A. I think it was just a very successful day. We concentrated on inauguration day, but you know we actually had 4 days with the concert on Sunday . I think the nation’s capital rose to the occasion, and I mean that by all aspects of the nation’s capital, the law enforcement community, the business community.
Q. During that time obviously there were little scares that came up. For one, the Somalia terrorist rumors. Were you getting a lot of intelligence coming from overseas in relation to the inauguration?
A. This was a global event, so this wasn’t just an event in Washington D.C. The eyes of the world were upon us. The first African-American president of the United States was being sworn in. So I think the law enforcement community, not just here in the region, but nationally and internationally, they all were very cognizant of the heightened awareness present. It’s evident that as we became closer and visitors began to arrive here, tips came in, information came in, intelligence came in, information from our partners nationally, police departments, fusion centers across the country and of course the intelligence community. Bulletins had gone out on awareness and yes, intelligence did increase as we got closer and closer to Jan 20.
Q. It must have been massive, the amount of intelligence. How do you sort through all that in an orderly fashion?
A. Again, I go back to the progress of the FBI since 9/11 and our ability to gather intelligence, analyze that intelligence and then disseminate that intelligence. The stream of intelligence is very robust. Information coming in either from the fusion centers or the intelligence community is coordinated either at the headquarters level or here at the field office level. We had the capability of gathering it and then disseminating, which is important. You may get a lead that comes in and says well, we need to check out an individual in Detroit. Well that’s not a lead that we would do. Here we would automatically send leads to our Detroit division. We had a conference call with all the field office leadership across the country and advised them what the latest threat matrix was, and that each field office was to have staff available and ready if leads or investigative assignments were delegated to each one of those divisions. Everybody understood what we were facing across the FBI, not just nationally but internationally.

Q. There were reports of a lot of chatter in some of the white Supremacist chat rooms.
A. I think again, looking across the nation, that becomes a national domestic terrorism issue. All of the fusion centers , all the law enforcement community in the nation were briefed on what we call the vulnerabilities. What is the threat? We use the term “know your domain”. If you think there’s a threat, we’re asking people to go out and re-contact sources, maybe review cases and determine whether or not people had seen an increase of activity. As I sit here today, we had some increase of information, whether it’s an Internet threat or just basic conversation between groups, which is not illegal. Just remember, there’s a First Amendment here, freedom of speech. Anybody can have a conversation, that’s not illegal. So obviously we’re looking for information that if somebody believes somebody has the ability or has expressed an interest to take some sort of action , which would be illegal or to harm someone.
Q. In the past, there’s been some criticism of the FBI not sharing information. Were there any issues that came up during inauguration?
A. I think that’s probably one of the highlights. Our relationship with the leadership with the law enforcement here in this community is absolutely fantastic.  Again, we’ve been planning for this for six months. There were 23 different sub-committees, there was an executive steering committee. The Secret Service , because it was a national special security event, was responsible for the planning of the entire event. I can tell you up to the days, starting Friday with the train ride, the leadership talked every day. I started the morning talking to (D.C. police) Chief Lanier and usually our last call at 10 o clock at night was with Chief Lanier or (U.S. Park Police chief) Sal Lauro or (U.S. Capitol police chief) Phil Morse. Intelligence, I can tell you, was flowing by the minute, by the day,  between all of our agencies.
Q. Beyond the inauguration, in terms of Afghanistan  and Iraq,  you have agents in those countries. Are you getting helpful intelligence from there either through sources or raids or gathering of documents?
A. There’s a lot going on in that arena, both in Iraq and Afghanistan. Our  bomb technicians from FBI are there. They’re responding to all the bombings that are going off, that evidence is all coming into the FBI and the FBI lab so that a data base is being formed with just all evidence as it relates to bombings. Any time there’s any kind of activity across the world and they recover evidence , it can now be inputted into the data base. Intelligence both from the intelligence community and the activity both in Iraq and Afghanistan is being filtered through agencies. Our legal attaches in Baghdad and Kabul are working closely with the partners. That’s very very important on the war on terror as you would say. Significant advancements have been made.
Q. Do you feel any of the intelligence that’s been gathered there has helped prevent terrorist acts here in the states.
A. I won’t say whether there’s been something specific. As you always say, one small piece of intelligence may help put the whole puzzle together. That constant robust feeding of intelligence and analyzing that intelligence, there’s no finite end to that. That’s constant. That helps all of us, not just the FBI, it helps all of us across the world assess what the capabilities are, whether it’s al Qaeda or al-Shabab, or whoever other terrorist groups are out there.

Q. What about in terms of getting wiretaps in Afghanistan or Pakistan?
A. That I couldn’t give you.

Q. In terms of the FBI’s role in countries like Afghanistan and Iraq, do you see it expanding?
A. Again, our presence there is greater than just our legal attache so we have training aspects, we have investigations. Here in the Washington field office we’re responsible for some of the fraud investigations as it relates to rebuilding funds in Iraq, so I think anywhere across the globe, especially in nations that are developing now, our presence is important.
Q. In the last three or four years this office and headquarters has had a lot of public corruption cases. Do you attribute that to a shifting of resources or is some of it just luck that certain things unraveled like the Jack Abramoff case?

A. Public corruption is one of the our number one criminal priorities in this division and will continue to be. We burn more public corruption resources than anywhere in the nation. We have about 55 agents working public corruption here in the nation’s capital. You mentioned we have the Abramoff case, we’re doing a lot of work in the foreign corrupt practices act and anti-trust cases.

Q. Can we expect some indictments this year in public corruption?
A. I can say we have resources committed to it and obviously an indictment is up to the grand jury, but as we move forward on cases I expect some statistical accomplishments and some judicial action to take place.
Q. In terms of espionage here in Washington, we traditionally think of Russians and Chinese. Are they still the key groups?
A. Espionage is here. It’s present. I think what’s important also is economic espionage. We continue to be a government that invests in more R and D (research and development) than anywhere else in the world. There are countries, there are companies, there are entities, that are always looking at stealing the R and D that we are investing in this country. We are in the nation’s capital. We have the largest military contractors in the nation here doing a lot of sensitive work. We have a very robust espionage group here in WFO (Washington Field Office). They’re doing great work.
Q. Have you made some espionage cases?
A. We made some case against some individuals from China who were paying for classified material. L.A. just made another case. It’s out there and we’re making cases and developing intelligence about the methods of technological  transfers and R and D theft.

Q. The cases that have come up so far, have they involved China and…?
A. Primarily China; still a country that is very interested in our technology and our military development.
Q. And the Russians. Are they players anymore?

A. We have a host of target countries that continue to be interested in classified material of the United States government.
Q. When you talk about a host, are we talking about three or six?
A. I’m not going to get into who. It’s a limited group.

Q. Do you feel sometimes the bad guys have access to some technology, and law enforcement hasn’t quite caught up?
A. I think it’s a challenge.

Q. How has the FBI acclimated to such venues as Facebook and Twitter?
A. You’ve got Voice Over Internet, you have so many different mediums out there whether it’s Facebook…. Ten years ago if you went out and did a search warrant of a residence — and maybe it was a drug case — odds are you went in, you did a search you walked out with possibly physical evidence , whether it would be drugs or preparation equipment or scales or whatever; never thought about a computer or a PDA or a Blackberry or a fax . Today when we do a search, that search now includes so many different modes of communications, and that’s a challenge. So you’re the agent looking at that case and now you have maybe eight different methods of communication to analyze to make your case. All the new modes of communication are obviously a challenge for us.

Q. When you think in the past year or so when you think about communication among bad guys, has anything surprised you?
A. We were having a discussion about this. People are talking about gaming on the Internet. I’m talking about, you can go online and you and another friend and another friend can go on line and you can be at your house and your friend can be at their house and you’re doing a battle game, whatever kind of battle game it is. You can use Voice Over Internet while you’re playing this game, you can be communicating with each other, and you ‘re thinking to yourself, that’s a mode I can communicate with. To me that’s a challenge, that’s phenomenal to think, here we have people sitting in their own residence playing a video game with somebody in China or maybe down the street. As progress of technology grows, the challenge of us capturing that grows.
Q. As for mortgage fraud, are you seeing it peak, or is it still growing?

A. I think we haven’t even reached the peak of where we’re going with mortgage fraud. Right now, we’re analyzing as you know. Northern Virginia communities were hit the hardest.
Q. Do you hope to get more resources to deal with this?
A. Yes, I think that’s important. I know at the headquarters level, if you’re looking at the magnitude of the problems. .. it’s going to be important to get some commitments and additional resources to take a look at this.
Q. What’s your future at the FBI?
A. I’ve been here 33 years. I love coming to work everyday.. As long as the director allows me to stay in this position, I’d like to stay. Obviously we have mandatory retirement at 57, I’m not that old yet. It is an honor and privilege to work with the men and women of this division who just knock it out of the box everyday and the inauguration is probably a good example of that.

N.Y. U.S. Atty Office Breeding Ground for Stars

This office has an alum list of whos who including Sen. Charles Schumer,Rudy Guiliani, Rep. Charles Rangel and former FBI director Louis Freeh. Not a bad list.

Alum Sen. Charles Schumer

Alum Sen. Charles Schumer

By BENJAMIN WEISER
New York Times

When a longtime federal prosecutor, Cathy Seibel, was sworn in as a federal judge last month, the onlookers included many former colleagues from the office of the United States attorney for the Southern District of New York, in Manhattan, some of whom had gone on to become law professors, defense lawyers and judges themselves.
Among those former co-workers were three men who had been mentioned as candidates to become the next United States attorney in Manhattan: Preet Bharara, now chief counsel to Senator Charles E. Schumer; Mark F. Pomerantz, a defense lawyer; and Lev L. Dassin, now filling the position temporarily.
And if President Obama chose none of the three? Chances are the job would go to someone else in the room.
For decades, presidents have picked the United States attorney in Manhattan, perhaps the most prestigious federal prosecutor’s job outside Washington, from an elite pool of candidates who have worked in the office. And this agency, located next to the old federal courthouse at Foley Square, has also catapulted so many former prosecutors into other premier jobs that it has become, in a sense, one of the city’s most powerful clubs.

For Full Story

OTHER STORIES OF INTEREST

Colorado Man Charged With Threatening to Kill Obama and Blow Up Mall

By P. SOLOMON BANDA
Associated Press Writer
DENVER-A Colorado man has been indicted on charges of threatening to kill President Barack Obama and blow up the Mall of America in suburban Minneapolis.
A federal grand jury in Denver handed up the indictment Tuesday against 20-year-old Timothy Ryan Gutierrez of Cortez, in southwestern Colorado.
The U.S. attorney’s office said Gutierrez turned himself in at the FBI’s Durango office Thursday afternoon and was being held without bond.
He was to appear in court Friday afternoon. Gutierrez had no listed phone number and it was not immediately known if he had an attorney.
“Both threats were taken seriously, and both threats were investigated immediately by the FBI,” said Jeff Dorschner, spokesman for acting U.S. Attorney Dave Gaouette.
For Full Story

FBI Cuts Off Contact With Islamic Group

Interestingly enough, in the post 9/11 era, the FBI prided itself on fostering relationships with Islamic groups like the Council on American-Islamic Relations (CAIR). Now that’s changing. Will this set back FBI relations with the Islamic American communities across the country?

By Mary Jacoby
IPT News
WASHINGTON — The Federal Bureau of Investigation (FBI) has cut off contacts with the Council on American-Islamic Relations (CAIR) amid mounting concern about the Muslim advocacy group’s roots in a Hamas-support network, the Investigative Project on Terrorism has learned.
The decision to end contacts with CAIR was made quietly last summer as federal prosecutors prepared for a second trial of the Holy Land Foundation for Relief and Development (HLF), an Islamic charity accused of providing money and political support to the terrorist group Hamas, according to people with knowledge of the matter.
CAIR and its chairman emeritus, Omar Ahmad, were named un-indicted co-conspirators in the HLF case. Both Ahmad and CAIR’s current national executive director, Nihad Awad, were revealed on government wiretaps as having been active participants in early Hamas-related organizational meetings in the United States. During testimony, FBI agent Lara Burns described CAIR as a front organization.
Hamas is a US-designated foreign terrorist organization, and it’s been illegal since 1995 to provide support to it within the United States.

For Full Story

UPDATE: FBI spokesman John Miller issued a statement early Thursday afternoon in response to the story: ” The FBI has had to limit its formal contact with CAIR field offices until certain issues are addressed by CAIR’s national headquarters. CAIR’s leadership is aware of this. Beyond that we have no further comment.”

FBI and IRS Agents Raid Home in Slugger Barry Bonds Case

Trial is approaching and the feds are trying to put the hammer on Barry Bonds. Was the latest action a fishing expedition? We’ll soon find out when trial begins March 2 at 8:30  a.m.

By PAUL ELIAS
Associated Press Writer
SAN FRANCISCO — Some 20 federal agents on Wednesday morning raided the home of the mother-in-law of Barry Bonds’ personal trainer Greg Anderson.
Madeleine Gestas and her daughter Nicole Anderson, the trainer’s wife, are the target of a tax investigation that Anderson’s lawyer said is aimed at pressuring the trainer to testify at Bonds’ upcoming perjury trial.
Bonds, baseball’s career home run leader and a seven-time MVP, has pleaded not guilty to charges he lied to a federal grand jury in 2003 when he denied knowingly using performance-enhancing drugs.
“Even the mafia spares the women and children,” said attorney Mark Geragos, who represents Anderson.
Lead prosecutor Matthew Parrella didn’t immediately return a telephone call Wednesday.
Geragos said he believes the raid was in response to his refusal to tell prosecutors whether Anderson would testify. Geragos said he ignored a letter faxed to his Los Angeles office Monday by prosecutors that asked about Anderson’s plans for the Bonds’ trial.
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