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July 2021


How to Become a Bounty Hunter

Tag: scheme

Prosecutors Drop Case Against ex-DEA Agent Accused of Posing As FBI Agent

dea-badgeBy Steve Neavling

A former DEA agent who was accused of posing as an FBI agent in a fraud scheme no longer faces charges.

The Daily Breeze reports that federal prosecutors dropped their case against David Garcia Herrera, 70, this week.

The decision comes after U.S. District Court Judge Jesus Bernal said he would inform jurors that the U.S. Attorney’s Office had used bad evidence in the case.

Herrera and his alleged conspirator, Jerome Arthur Whittington, are accused of convincing a victim that they would help him recover money he lost in investment schemes if he paid about $290,000.

In another scheme, Herrera and Whittington are accused of convincing another victim to pay them about $8,500 to help with his wife’s immigration case.

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.

Former and Current Law Enforcement Officials Arrested in Theft Scheme

Steve Neavling

The FBI arrested four people – three of them former and current cops – accused of scheming to steal cash from drug dealers, the bureau announced Wednesday, according to the Jackson Free Press.

In September 2011, the men allegedly entered a Jackson, Mississippi, hotel room of suspected drug dealers and stole $23,000 in cash, the FBI reported in a press release.

One of the men arrested, Zack Robinson, 45, is a deputy at the Hinds County Sheriff’s Office. Two others are a former Jackson Police officer (Kent Daniels, 44) and former deputy with the Madison County Sheriff’s Office (Watson Lee Jackson, Jr., 42).

A fourth person, George Hilliard, 43, was arrested.

All made initial court appearances Wednesday.