US Political Activist Linked to Russian Agent Charged with Money Laundering, Fraud

Reuters

A conservative U.S. political activist romantically linked to admitted Russian agent Maria Butina has been indicted by a federal grand jury on wire fraud and money laundering charges, the U.S. Attorney’s Office in South Dakota said on Wednesday.

Paul Erickson, 56, was indicted on 11 counts of wire fraud and money laundering on Tuesday and pleaded not guilty to the charges in an appearance before U.S. Magistrate Judge Mark Moreno, the office said in a statement. Erickson’s attorney did not immediately respond to a request for comment.

Erickson is a well-known figure in Republican and conservative circles and was a senior official in Pat Buchanan’s 1992 Republican presidential campaign.

He was romantically linked to Butina, a 30-year-old native of Siberia, who pleaded guilty in December to conspiracy.

Butina admitted working with a top Russian official to infiltrate the powerful National Rifle Association gun rights group and to make inroads with American conservatives and the Republican Party as an agent for Moscow.

Butina, a former graduate student at American University in Washington, had publicly advocated for gun rights. She was the first Russian to be convicted of working to influence U.S. policy during the 2016 presidential race.

Erickson’s indictment did not specifically refer to Butina by name, but it indicates he made a payment of $8,000 to an “M.B.” in June 2015 and another payment of $1,000 to “M.B.” in March 2017. The indictment also indicates he paid American University $20,472.09 in June 2017.

The indictment against Erickson alleges that between 1996 and 2018, Erickson made “false and fraudulent representations” to people in South Dakota and elsewhere about his business schemes in an effort to convince potential investors to give him money, the U.S. Attorney’s Office said.

Erickson owned and operated Compass Care Inc, Investing with Dignity LLC, and an unnamed venture to develop land in the Bakken oilfields in North Dakota, the U.S. Attorney’s Office said.

He faces a maximum penalty of 20 years in prison on each count as well as possible fines, the U.S. Attorney’s Office. He was released on bond, and no date has been set for a trial.

In corruption-plagued Chicago, high-level shakedown charges loom over mayoral race, candidates

By Aamer Madhani

CHICAGO – Over the last four decades, federal prosecutors have racked up more than 1,700 corruption convictions of elected officials, government employees and contractors, a whopping toll of graft and malfeasance that’s left longtime Chicagoans accustomed to the sight of public servants taking perp walks on the evening news.

Former Illinois Gov. Rod Blagojevichex-Rep. Jesse Jackson Jr. and disgraced public schools chief Barbara Byrd-Bennett are among the many who in recent years have done or are still doing time in the federal penitentiary for using their office to enrich themselves.

More than 30 Chicago aldermen – members of the City Council – have been convicted of political corruption since 1973. Another, Willie Cochran, heads to trial in June to answer charges of wire fraud, bribery, and extortion. Federal authorities say the retired police officer solicited a bribe from a local business owner and made off with $30,000 he collected to help people in his ward.

But the latest political scandal unveiled by federal prosecutors this month has shocked even hardened veterans of Chicago’s political scene – and cast a shadow over next month’s mayoral election.

Authorities say Democratic Alderman Ed Burke, a 50-year veteran of the City Council and chairman of its powerful finance committee, tried to shake down officials of a company that operates dozens of Burger King franchises in Illinois.

The 14-candidate mayoral race already was shaping up to the city’s most competitive in decades. In the weeks since charges of attempted extortion against Burke were unsealed Jan. 3, political corruption has become the dominant topic in the campaign.

“Chicago is still America’s most corrupt city,” said former Alderman Dick Simpson, a political scientist at the University of Illinois at Chicago.

Simpson co-authored a study last year that showed Chicago had tallied more convictions for political corruption than any other U.S. city between 1976 and 2016.

“There is still a patronage problem left over,” Simpson told USA TODAY. “The bold corruption isn’t as rampant as it once was. But as we saw in Alderman Burke’s criminal charge, the old-style politics of shaking down businessmen for illegal bribes or campaign contributions still continues.”

Burke, who is running for re-election to the City Council next month, said he’s “not guilty of anything.”

“I have not done anything wrong,” Burke said. “And I’m sure that once it gets to court it will be clear.”

The nation’s third-largest city abounds with thorny challengesPersistent gun violence terrorizes pockets of the city, taxpayers face $27 billion in unfunded pension obligationsfor city workers, and an ongoing exodus of residents from Chicago complicates nearly all facets of governing.

Mayor Rahm Emanuel, who has served as Chicago’s mayor for nearly eight years, announced in September that he would not seek a third term.

Now, the city’s long-simmering problem with corruption has moved to the forefront.

The four top-funded candidates to succeed him – Cook County Board President Toni Preckwinkle, Illinois Comptroller Susana Mendoza, former Chicago Board of Education President Gery Chico and former U.S. Commerce Secretary Bill Daley – have all found themselves under scrutiny for longstanding ties to Burke.

Preckwinkle, who was endorsed by the powerful Chicago Teachers Union, says she has returned $116,000 in political donations she collected at a fundraiser at Burke’s home last year.

She’s also faced questions about why her administration hired Burke’s son, Edward Burke Jr., in 2014 to serve as the training and exercise manager for the Cook County Homeland Security and Emergency Management Department. The younger Burke left the job last year.

Mendoza was married at Burke’s home in a ceremony officiated by the alderman’s wife, Illinois Supreme Court Justice Anne Burke.

When Mendoza announced she was running for city clerk in 2010, she called Ed Burke her “true champion,” and told supporters the alderman was “primarily the reason why I stand before you today.”

Burke endorsed Chico, who worked as an aide to the alderman 30 years ago and in recent years partnered in a law firm that has earned millions lobbying at City Hall on behalf of Cisco Systems, Exelon Generation and Clear Channel and other companies.

Burke said “there’s probably nobody more qualified” in the mayoral race than Chico.

Daley, commerce secretary under Bill Clinton and chief of staff to Barack Obama, is the son and brother of Chicago’s two most famous mayors – Richard J. and Richard M. Daley.

Burke has given the Daley family at least $30,000 in political contributions over the years, according to the Chicago Tribune. But the Daleys and Burke have also been rivals: Richard M. Daley beat Burke in the 1980 race for the Cook County State’s Attorney’s office.

Former Obama strategist David Axelrod, director of the Institute of Politics at the University of Chicago, said the Burke case “already has had an impact in that there is more focus on ethics than there has been in previous elections.”

“Elections are often turned by things you never anticipate,” he told USA TODAY. “This certainly fits that.”

The four candidates with ties to Burke are working mightily now to distance themselves. Some are trying to use the moment to tout ethics reform plans they say will purge city from the pay-to-play and kickback schemes that have bedeviled the political scene.

Preckwinkle has called on Burke to resign from City Council. She has proposed prohibiting council members from holding outside employment.

Bill Daley has also called for banning outside employment, shrinking the size of the council from 50 to 15 and imposing term limits.

Chico has also backed term limits and called for a ban on most outside income for aldermen.

He also wants to do away with aldermanic prerogative – the Chicago practice, dating back to the 1930s, that gives council members wide latitude over permits, zoning changes and parking and liquor licenses within their wards.

“The time has come to end this old-school practice,” Chico said. “No one deserves this much power.”

Daley says any politician who has been active in Chicago over the last half-century has inevitably had contact with Burke. Still, he said, his three rivals’ ties to Burke should be more concerning to voters than his own.

He said he’s had an “arms-length political relationship with Burke.

“You have to get along for political reasons,” Daley told USA TODAY. “The others have business, and really strong personal or political (ties) with Burke.

I have yet to have someone do a fundraiser of $110,000. … That is a big fundraiser. Getting married in someone’s home is more than just showing up at a political event. Having your law business be very focused on City Hall – where Ed Burke is a force – is a different thing than engaging him around politics every four years when there is a campaign.”

Preckwinkle has also tried to play down her connections to Burke while spotlighting her rival’s connection to the powerful alderman.

“I won’t have my name dragged through the mud over the alleged criminal conduct of Susana Mendoza’s mentor, Gery Chico’s best friend and Bill Daley’s long-time political ally,” she said in a statement.

Mendoza has attempted to turn the spotlight on her rivals without addressing her own connections to Burke.

In a statement to USA TODAY, she said there is a “stark contrast to Bill Daley, who won’t release his tax returns and has chosen instead to hide his conflicts of interest, Toni Preckwinkle, who has a history of lying until she gets caught, and Gery Chico, who spent years lobbying Ed Burke at City Hall and is Ed Burke’s endorsed candidate in this race.”

Some candidates untouched by the Burke scandal question whether any candidate who has long been part of Chicago’s political establishment has the will or ability to bring meaningful change.

Former federal prosecutor Lori Lightfoot, ex-chairwoman of a city police accountability task force, began pushing ethics reform as key to solving other issues soon after she announced her candidacy last year.

She says voters should question the credibility of candidates who waited until the Burke charges landed to talk about corruption.

“If we’re going to truly have a new day in city government where we put people first, then we have to start attacking the elephant in the room,” Lightfoot said. “In some ways, we’re rotting from the inside out. We’re losing population, we’re losing our tax base, and the gap between the haves and have-nots continues to grow. I think there is a moral imperative to do something about it.”

Amara Enyia, a community organizer and municipal consultant running for mayor, said the Burke scandal seems to be spurring voters to consider how corruption connects to the other ails of a cash-strapped city that has seen the closure of dozens of schools in African-American neighborhoods, the shuttering of mental health clinics and disproportionate levels of poverty in black and Latino neighborhoods.

“Voters don’t want business as usual,” Enyia said. “They want someone who does not carry the baggage of corruption.

Burke, who was forced to give up his role as chairman of the finance committee after he was charged, has faced a federal investigation before.

In February 2012, a federal grand jury subpoenaed finance committee records related to the city’s workers compensation program.

Burke denied wrongdoing and vowed to cooperate with authorities. No charges were brought.

In the alleged Burger King shakedown, Burke first applied a light touch on operators of Tri City Foods Inc., the second-largest franchisee of Burger King restaurants with stores in six Midwest states.

Federal prosecutors say in court papers that Burke told the company’s owner that he had been holding up permits to renovate one of its Burger King restaurants in his wardbecause constituents expressed concerns about trucks parking there overnight.

Prosecutors say the company promised to address the matter.

Prosecutors say Burke told owner Shoukat Dhanani and another Tri City official that he was a partner in a law firm that works with clients on property tax appeals.

Dhanani told the FBI that he “read between the lines” that Burke was suggesting he’d smooth the permits in exchange for their business, prosecutors say. Dhanani said he told Burke that his company already had legal representation.

Less than two weeks later, prosecutors say, another official with the restaurant group called to give Burke an update on steps they had taken to address concerns about the trucks parking at the restaurant.

This time, prosecutors say, Burke was more direct.

“Good,” Burke said, in a conversation the FBI says was wiretapped. “And, um, we were going to talk about the real estate tax representation and you were going to have somebody get in touch with me so we can expedite your permits.”

Dhanani and others working for the restaurant group said Burke pressed them to give his law firm their business, prosecutors say. The FBI surveillance also picked up talk from the alderman that suggested he wanted the company as a client, they say.

Burke slow-walked the permitting process for months, prosecutors say, causing the Burger King franchise to lose 40 to 50 percent in sales because it couldn’t open an unfinished dining room to customers.

Dhanani told the FBI he eventually relented and informed Burke his company would hire his law firm, prosecutors say, but he never followed through.

Dhanani also told the FBI that he made a $10,000 political donation to Preckwinkle at the urging of Burke, prosecutors say.

Preckwinkle said her campaign returned the contribution to the donor because it exceeded the $5,600 contribution limit for individual contributions.

Former federal prosecutor Patrick Cotter, a white-collar defense attorney in Chicago, said an alarming number of city politicians have been caught committing graft and stealing taxpayer money.

Still, he said, it’s important to keep in perspective that Chicago is hardly alone in having to deal with political corruption.

Federal prosecutors in Los Angeles tallied more than 1,500 convictions for public corruption between 1976 and 2016, according to Simpson’s study. Federal prosecutors in New York counted more than 1,300 convictions during those years.

“The problems here are not because every once in a while an alderman gets caught doing something crooked,” Cotter said. “It is a bad thing, and it’s important to prosecute. But it’s not why the schools are not good. It’s not why we have a homeless issue in this city that’s insane. It’s not why we have the pension problem that is going to make life hard for every Chicagoan’s kids and their grandkids.

“There are basic structural problems in this city, and solving corruption alone is not going to bring an end to these big issues.”

https://www.usatoday.com/story/news/2019/01/23/chicago-federal-political-corruption-scandal-mayor-election-alderman-ed-burke/2581411002/

 

DEA agent linked to Colombian money laundering scheme, prosecutors say

By Scott Glover

(CNN)An agent with the US Drug Enforcement Administration is under investigation in connection with a scheme to launder millions of dollars for Colombian drug traffickers, CNN has learned.

The years-long conspiracy sometimes “involved the use of undercover accounts controlled by the DEA,” according to court papers filed in US District Court in Tampa, Florida.
The agent is not identified by name but is characterized as a “co-conspirator” in the case against a long-time DEA informant who has pleaded guilty to money laundering for the Colombians.
The agent, according to court papers, received cash payments from an account containing hundreds of thousands of dollars in drug money. The agent also directed additional money to be deposited into the accounts of his family members, the documents state.
A DEA spokeswoman in Washington declined comment.
Though the case was filed in Tampa, the prosecution is being overseen by the US Attorney’s Office in Atlanta, Georgia. The transfer of the matter to another jurisdiction is the sort of step federal authorities sometimes take in investigations involving allegations of official corruption.
Kurt Erskine, a top official in the US attorney’s office in Atlanta, declined comment on the case.
The information about the allegedly rogue agent is contained in a plea agreement between federal prosecutors and former DEA informant Gustavo Yabrudi, a Venezuelan-born Miami resident.
Yabrudi’s defense attorney, Leonardo E. Concepcion, said in an email that the case is “still active” and, “I cannot discuss it as this time.”
Yabrudi worked on and off as an informant for the DEA from 2010 to 2016 with stints in New York, Boston and Miami, according to court records. He was deactivated at one point in 2013 for “unauthorized money movements.”
According to court records, the agent identified as a co-conspirator instructed Yabrudi in 2015 to recruit someone to open a bank account under a false name in Miami. Hundreds of thousands of dollars “from illegal drug sales” was deposited into the account, the records state.
Neither the agent nor Yabrudi informed the DEA of the existence of the account, according to the court records.
The pair subsequently spread the money around among fellow conspirators who laundered the proceeds in various ways and got the money into the hands of traffickers in Colombia, the documents allege.
At least $7 million in “illegal funds” passed through a business account belonging to one co-conspirator, according to Yabrudi’s plea agreement.Yabrubi was charged with money laundering in September. He agreed to plead guilty later that same month.
In December, federal prosecutors and Yabrudi’s defense attorney filed a joint motion requesting that his sentencing be postponed for six months. He is currently set to be sentenced in May.
“The defendant is cooperating against others who facilitated sophisticated money laundering schemes, in part, by using undercover accounts that were shell companies and controlled by law enforcement,” the motion states. “Some of the illegal proceeds laundered during these schemes derived from drug trafficking and public corruption related offenses.” The agent’s current status with DEA is unclear.

East Bay defense contractors charged with money laundering, fraud, conspiracy

MARTINEZ — Three members of a respected San Ramon business family have been accused of engaging in money laundering, bribing employees, and insurance fraud, all while their companies were contracting with the U.S. Armed forces.

Wife and husband Selina Singh, 55, and Manjinder Paul “MP” Singh, 57, along with their son, Kabir Singh, 28, were charged in November with conspiracy, $1.5 million in money laundering and several counts of workers compensation fraud and insurance fraud, according to court records. The charges are tied to two San Ramon businesses owned by the family, Bara Infoware and Federal Solutions Group.

Selina and Kabir Singh have both posted bail, and are out of custody. MP Singh has not yet been arrested, prosecutors said. On Monday, a judge will review a prosecution motion to increase the bail amount to $500,000.

The charging documents allege that the defendants instructed employees not to report injuries, sometimes giving them bribes as an incentive, in order to avoid paying insurance fees. They’re also accused of providing false information to insurance companies.

Both companies are construction businesses that contract with the Department of Defense, according to the companies’ websites. Federal Solutions Group’s website says its clients include the U.S. Armed Services, the Federal Bureau of Prisons, the National Guard, and the U.S. Army Corps of Engineers.

Neither business nor Selina Singh immediately returned email requests for comment. A 2016 article by a business news site called American City Business Journals says Singh is Federal Solution’s Group’s CEO. She is quoted in the article saying she immigrated to the United States from Northern India and had no business experience in the U.S. when she started. She talked about the need for obsessive attention to detail in her field.

“One failed project can bring you down after five or six years of work,” she told the publication. “So we have to be extremely diligent in everything we do.”

A former manager at Federal Solutions Group is quoted in the story saying Singh “takes care of her employees.”

The charging records cover a seven-year period, starting in September 2010 until December 2017. All told, the Contra Costa District Attorney’s office filed 14 felony charges, including enhancements alleging aggravated white-collar crime.

Money laundering scandal involving people on both sides of jail

By Sarah Horne

Money laundering can land you in jail, but nine individuals used the jail itself as the setting for a fraudulent money scheme, officials said.

The scam allegedly involved nine men who are now all facing money laundering and telecommunications fraud charges. They are Parisian Fitzhugh, Georvaughn Campbell, Charles Harrell, Demontez Harrison, Dyerico Johnson, Dominic Lindsey, Jerome McCoy, Cortez Reed and Eric Sanks.

According to prosecutors, the scheme would start with a person using a bad credit card to transfer funds into an inmate’s account.

Then the inmate would ask someone at the justice center to send the money in his account to a friend or family member, officials said.

Finally, investigators said an employee at the jail would write a check to someone on the outside.

The banks connected to the credit cards lost about $4,000 were lost throughout this process, officials said.

Hamilton County Sheriff’s Office spokesman Lt. David Daugherty said this case is the first of its kind for the county.

The case has been under investigation for about two years, he said, and it has resulted in changes to how money is processed from inside to outside the jail.

Before inmates could transfer up to $500 out of the jail at once, Daugherty said. Now, the amount is up to $250.

He said now there is more internal and external vetting and credit cards are checked for clearance before transactions are made. Inmates are also restricted to one transaction per month, Daugherty said.

One of the nine defendants is already being held at the Hamilton County Justice Center. Trials in the case have not yet been scheduled.

FBI raids Wadsworth home in connection with money laundering, selling guns illegally to felons

By Drew Scofield

WADSWORTH, Ohio – The FBI descended on a Wadsworth residence early Wednesday morning that authorities say is connected to an investigation for laundering money and selling guns to felons, according to an FBI spokesperson.

The raid occurred around 4 a.m. in the 2500 block of Blake Road on the city’s West Side, authorities said.

Authorities arrested Francisco Flores, 39, during the raid.

Federal authorities also took 21 “illegals” into custody, according to the Department of Homeland Security.

The U.S. Attorney’s Office said Flores has been indicted on one count of the transfer of firearms for use in drug trafficking, three counts of selling firearms to felons, four counts of money laundering and one count of operating an unlicensed money transmitting business.

Flores is accused of selling various rifles and handguns to individuals who would use them in connection with illegal activities, authorities said.

Between August 2017 and January 2018, authorities say Flores made several financial transactions to “disguise” money he believed were made from drug trafficking. Attorneys said Flores also used his flooring business — Flores Flooring — to “engage in the unlicensed transmitting of money.”

“This is a man who put heavy firepower on the streets for drug dealers, and also helped them launder their drug money,” U.S. Attorney Justin Herdman said. “Ohio is a safer place with him behind bars.”

“Francisco Flores may be known to some in the community as a business owner but to law enforcement, he is known as someone engaged in dangerous unlawful activities,” said FBI Special Agent in Charge Stephen D. Anthony. “These actions will not be tolerated in our community. The FBI’s Northern Ohio Law Enforcement Task Force will continue to disrupt individuals that are a threat to our everyday lives.”

Mayfair Fine Art administrators struggle to trace paintings linked to money-laundering scandal

By Kabir Jhala

Administrators cannot locate two paintings supposedly belonging to Mayfair Fine Art Limited, whose former director Matthew Green is being charged with attempted money laundering following the scandal involving the city stockbroker Beaufort Securities earlier this year.

In a progress report, Kingston Smith & Partners, the corporate recovery and insolvency firm who have been administering Mayfair Fine Art following its bankruptcy in March, claim that the two paintings allegedly purchased from a third party cannot be found.

The contact information provided by Mayfair Fine Art, which states that the works were purchased by an “associated company” and were “apparently held in Dubai”, was found to be insufficient in ascertaining the ownership, location or existence of the artworks. A source at Kingston Smith has declined to share further details of the works in question.

The report also reveals that MBU Capital Limited, the secured creditor who called time on an overdue loan and initiated the administration of Mayfair Fine Art, is still owed an estimated £520,000 to be paid from the company’s assets. Kingston Smith & Partners are continuing to enquire into the full extent of the company’s assets and transactions, including examining the company’s historic bank transactions in order to reach a fair settlement.

In March, Green was charged with conspiring with Panayiotis “Peter” Kyriacou, an investment manager at Beaufort’s London office, and his uncle Aristos Aristodemou to “clean up” £6.7m through the attempted sale of a Picasso painting to an undercover FBI agent.

The ensuing multi-court indictment by US federal court has seen six individuals and four companies charged with an array of crimes relating to money laundering and conspiracy.

Of the six individuals charged, two defendants have since pleaded guilty. Arvinsingh Canaye, who ran the Mauritius branch of Beaufort Management, pled guilty to charges of conspiracy to launder money in August and Adrian Baron, the chief business officer of Loyal Bank pled guilty to conspiracy to defraud the US in September.

Green, 51, who left his directorial roles at his family’s company Richard Green & Sons Limited in 2012, is among the four remaining defendants who have yet to plead.

https://www.theartnewspaper.com/news/administrators-struggle-to-trace-paintings-linked-to-money-laundering-scandal