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Tag: Fraud

Former FBI Agent, Wife Face Prison Today in Investment Fraud Case That Targeted Seniors

Steve Neavling
ticklethewire.com

 A former FBI agent and his wife face prison time Tuesday  for preying on seniors in an investment fraud case, the Associated Press reports.

John and Sara Graves, of Fredericksburg, Va., were convicted in April of mail fraud, conspiracy and four counts of wire fraud.

Prosecutors said the couple opened an investment company in 2003 and used the funds of elderly people to buy real estate and other personal belongings, the AP wrote.

John Graves faces up to 17 and a half years under federal sentencing guidelines. His wife faces nine years.

Defense attorneys are calling for no more than five years for the former FBI agent and home confinement for his wife, the AP wrote.

Feds Seek forfeiture of home of Michigan Supreme Court Justice Accused of Bank Fraud

Judge Diane Hathaway/court photo

Steve Neavling
ticklethewire.com

 DETROIT — An FBI investigation has prompted the federal government to seek forfeiture of the home of Michigan Supreme Court Justice Diane Hathaway on accusations that she and her husband defrauded a bank of $600,000 in mortgage debt, the Detroit News reports

U.S. Attorney Barbara McQuade ‘s office wrote in a criminal complaint that Hathaway and her husband, attorney Michael Kingsley, “systematically and fraudulently transferred property and hid assets in order to support their claim to (ING Direct) that they did not have the financial resources to pay the mortgage on the Michigan property.”

McQuade and her husband are accused of money laundering and bank fraud.

The Republican Party has called on McQuade to resign but to no avail.

If Hathaway resigns, Republican Gov. Rick Snyder could replace her in a special election that could give the GOP a 5-2 majority on the court, the Detroit News reported.

Recently Retired FBI Agent to Plead Not Guilty in Alleged Scheme to Derail Defense Contracts

Steve Neavling
ticklethewire.com

 A recently retired FBI agent accused of trying to derail a federal investigation into defense contract spending is expected to plead not guilty today to charges of fraud, conspiracy and obstruction of justice, the Associated Press reports.

Prosecutors say Robert Lustyik, a former White Plains, N.Y.-based counterintelligence officer, sidetracked an investigation into $54 million in Army contracts given to a Boston-based company.

Also charged were three business associates accused of committing fraud during the bidding process.

Federal authorities says Lustyik took money in exchange for impeding the investigation.

STORIES OF OTHER INTEREST

NY FBI Agent Charged With Trying to Derail Fraud Probe into Business Partner

By Steve Neavling
ticklethewire.com

An  FBI agent was charged with using his position to try and derail a federal probe into a business partner, the Justice Department announced.

A federal grand jury in Salt Lake City on Thursday charged  FBI special agent Robert G. Lustyik Jr., 50, of Sleepy Hollow, N.Y.; Michael L. Taylor, 51, of Harvard, Mass., the principal of Boston-based American International Security Corporation (AISC); and Johannes W. Thaler, 49, of New Fairfield, Conn., each with one count of conspiracy, eight counts of honest services wire fraud, one count of obstructing justice and one count of obstructing an agency proceeding.

“According to the indictment, while active in the FBI, former Special Agent Lustyik used his position in an attempt to stave off the criminal investigation of a business partner with whom he was pursuing lucrative security and energy contracts,” said Assistant Attorney General Breuer in a statement. “He allegedly acted through a childhood friend to secure promises of cash, purported medical expenses and business proceeds in exchange for abusing his position as an FBI agent. The alleged conduct is outrageous, and we will do everything we can to ensure that justice is done in this case.”

According to the indictment, Lustyik, who was an agent until September, was assigned to counterintelligence work in White Plains, N.Y.

The indictment alleges that he had a business relationship with the co-defendants to pursue contracts for security services, electric power and energy development, among other things, in the Middle East, Africa and elsewhere.

The indictment alleges that in September 2011, Taylor learned of a federal criminal investigation, begun in Utah in 2010, into whether Taylor, his business and others committed fraud in the award and performance of a contract with the U.S. Department of Defense, the Justice Department said in a press release.

Soon thereafter, Taylor allegedly started giving things of value to Lustyik in exchange for Lustyik’s agreement to use his official position to impair and impede the Utah investigation. The indictment also alleges that Thaler, a childhood friend of Lustyik’s, served as a conduit between Taylor and Lustyik, passing information and things of value.

The press release stated:

Specifically, the indictment charges that Taylor offered Lustyik a $200,000 cash payment; money purportedly for the medical expenses of Lustyik’s minor child; and a share in the proceeds of several anticipated contracts worth millions of dollars.

According to the indictment, Lustyik used his official FBI position to impede the Utah investigation by, among other things, designating Taylor as an FBI confidential source, texting and calling the Utah investigators and prosecutors to dissuade them from charging Taylor and attempting to interview potential witnesses and targets in the Utah investigation. As alleged in the indictment, Lustyik wrote to Taylor that he was going to interview one of Taylor’s co-defendants and “blow the doors off this thing.” Referring to the Utah investigation, Lustyik also allegedly assured Taylor that he would not stop in his “attempt to sway this your way.”

According to the indictment, Lustyik, Taylor and Thaler attempted to conceal the full extent of Lustyik’s relationship with Taylor from the Utah prosecutors and agents, including by making and planning to make material misrepresentations and omissions to federal law enforcement involved in the investigation of Taylor.

 

 

Ex-FBI Agent Accused of Disrupting A Probe into Military Fraud Not Jailed

Steve Neavling
ticklethewire.com

 A former New York FBI Agent accused of an “extensive scheme” to derail a criminal investigation into potential military fraud will remain free from jail – for now, reports the Salt Lake Tribune.

U.S. District Court Judge Ted Stewart dismissed prosecutors claims that Robert G. Lustyik Jr., 50, would continue to disregard the law.

Lustyik was arrested Saturday at his home in Sleepy Hollow on four counts of conspiracy. wire fraud, obstruction of justice and obstruction of an agency proceeding.

Lustyik, a 20-year veteran of the FBI’s counter-intelligence squad in New York, is accused of attempting to derail an investigation into a business partner, Michael Taylor, in exchange for cash and other favors, the Tribune reported.

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Justice Department to Shed Light on Rising Cases of Investment Fraud

Steve Neavling
ticklethewire.com 

The rise of investment fraud cases in the sluggish economy has prompted the Justice Department to begin holding summits to warn investors of scams, the Associated Press reports.

The first conference is scheduled for Oct. 1 in Connecticut, followed by summits later in the month in Miami, Denver, San Francisco, Cleveland and Nashville, according to the AP.

“We see it as a growing problem. We see it as a serious problem,” Connecticut U.S. Attorney David Fein told the AP.

In the past two years, federal prosecutors reported $20 billion in fraud from 500 cases involving 800 defendants, the AP reported.

Included in the conferences will be FBI agents and top federal prosecutors.

FBI Agent Convicted of Fraud May Get New Trial

 
Steve Neavling
ticklethewire.com 

A Nashville FBI agent who was sentenced last year to four years in prison for wire and bankruptcy fraud may get a new trial after allegations of racial discrimination surfaced, a federal appeals court ruled Thursday, the Tennessean reports.

The 6th Circuit Court of Appeals said the case should be sent back to district court to determine if Darin Lee McAllister is entitled to a new trial.

At issue is the dismissal of two black prospective jurors.

McAllister, who was accused of a scheme to defraud a bank, argues the District Court should have allowed him to challenge the jurors’ dismissals.

Ex-Border Patrol Union Leader Accused of Fraud

istock file photo

 
Steve Neavling
ticklethewire.com 

A retired president of the union representing U.S. Border Patrol Agents is accused of using hundreds of thousands of dollars in labor funds for personal use beginning in 2007, New American reports.

Terrence J. “T.J.” Bonner, who is accused of 12 counts of conspiring to commit fraud, was indicted by a federal grand jury in San Diego late last week.

Authorities said Bonner used dues-paying funds to visit a mistress in Chicago, store pornography and attend hockey games, according to New American.

“Siphoning hundreds of thousands of dollars from hard-working fellow Border Patrol agents, many of whom put their lives on the line every day to protect this country, is a particularly troubling form of corruption that must be addressed,” U.S. Attorney Laura Duffy said.