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Posted on July 6, 2024


SIX PEOPLE INDICTED FOR CONSPIRACY TO COMMIT SEX TRAFFICKING IN MASSACHUSETTS

Source: United States Department of Justice Criminal Division



An indictment was unsealed last week in Boston charging Christy Parker, 26;
Alexander Smalls, 25; Cory Primo, 42; Avvani Jeffers, 22; Tre’sean Reid, 21; and
Tyreik Reid, 20, with conspiracy to commit sex trafficking and other sex
trafficking charges.

According to the indictment, between January and August 2023, Parker, Smalls,
Tre’sean Reid and Tyreik Reid used force, threats of force, fraud and coercion
to compel an adult woman to engage in commercial sex. The indictment further
alleges that, between July and August 2023, Parker, Smalls, Primo and Jeffers
used force, threats of force, fraud and coercion to compel a minor to engage in
commercial sex. The indictment further alleges that, in August 2023, Parker,
Primo and Jeffers knowingly recruited, enticed, harbored, transported, provided,
obtained and maintained another minor for commercial sex. Finally, the
indictment alleges that all defendants conspired to commit sex trafficking
between January and August 2023.

Jeffers was arrested on June 27 and made an initial appearance later that day.
Jeffers is currently detained pending a detention hearing on July 8. Parker and
Primo will appear in U.S. District Court in Boston on July 8. Smalls is awaiting
trial in South Carolina and will be arraigned in Boston at a later date. Tyreik
Reid will appear in US District Court in South Carolina for a detention hearing
on July 10. Tre’sean Reid is currently a fugitive.

If convicted of sex trafficking by force, fraud or coercion, the defendants each
face a mandatory minimum of 15 years in prison and a maximum penalty of life in
prison. If convicted of sex trafficking of a minor, the defendants face a
mandatory minimum of 10 years in prison and a maximum penalty of life in prison.
If convicted of conspiracy to commit sex trafficking, the defendants face a
maximum penalty of life in prison. A federal district court judge will determine
any sentence after considering the U.S. Sentencing Guidelines and other
statutory factors.

Assistant Attorney General Kristen Clarke of the Justice Department’s Civil
Rights Division, Acting U.S. Attorney Joshua S. Levy for the District of
Massachusetts and Special Agent in Charge Michael J. Krol of the Homeland
Security Investigations (HSI) New England Field Office made the announcement.

The Somerset Police Department and HSI New England Field Office are
investigating the case.

Assistant U.S. Attorney Elizabeth Riley-Cunniffe for the District of
Massachusetts and Trial Attorney Francisco Zornosa of the Civil Rights
Division’s Human Trafficking Prosecution Unit are prosecuting the case.

HSI asks anyone with information about the defendants to contact the HSI New
England Field Office at (617) 565-7400. If you or someone you know is a victim
of human trafficking, please call the National Human Trafficking Hotline at 1
(888) 373-7888.

An indictment is merely an allegation. All defendants are presumed innocent
until proven guilty beyond a reasonable doubt in a court of law.



Posted on July 6, 2024


ALASKA BUSINESSWOMAN PLEADS GUILTY TO TAX EVASION SCHEME

Source: United States Department of Justice Criminal Division



An Alaska woman pleaded guilty on Wednesday to evading taxes on income she
earned from the business she operated.

According to court documents and statements made in court, Tina H. Yi, of
Anchorage, was the sole owner and operator of SJ Investment LLC, a hotel, bar
and liquor store in Nome, Alaska, that did business as Polaris HBL. Yi created
the business in approximately April 2007 and operated it until approximately
October 2017, when the physical property was destroyed in a fire.

From approximately 2014 to 2018, Yi maintained two sets of financial records
relating to the business’ income and expenses, one of which accurately captured
SJ Investment’s income and expenses, and one that understated the business’s
income. Yi provided the false records to her accountant to prepare her tax
returns. As a result, her 2014 through 2018 tax returns were all false.

Yi caused a total tax loss to the IRS of over $550,000.

Yi is scheduled to be sentenced on Oct. 11, and faces a maximum penalty of five
years in prison. She also faces a period of supervised release, restitution and
monetary penalties. A federal district court judge will determine any sentence
after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice
Department’s Tax Division and U.S. Attorney S. Lane Tucker for the District of
Alaska made the announcement.

IRS Criminal Investigation is investigating the case.

Trial Attorney John C. Gerardi of the Tax Division and Assistant U.S. Attorney
Tom Bradley for the District of Alaska are prosecuting the case.



Posted on July 4, 2024


DEFENSE NEWS: SECRETARY OF THE NAVY CARLOS DEL TORO’S STATEMENT ON THE UPCOMING
DEPARTURE OF THE UNDER SECRETARY OF THE NAVY ERIK RAVEN

Source: United States Navy



“Erik Raven has been a true leader in executing the Department of the Navy’s top
priorities. He has demonstrated unfailing commitment to protecting our Nation,
strengthening our Navy and Marine Corps Team, and building enduring warfighting
advantages. His expertise ensured our naval forces are equipped with the
capabilities to deter and, if necessary, prevail decisively in time of war,
while also ensuring the welfare of our service members, civilians, and their
families.

For the past two years his steadfast leadership has been a driving force for
actions that will have long-lasting, positive impacts, not just for the United
States but also for our Allies and partners.  His efforts contributed
significantly to the AUKUS trilateral security partnership, the largest-ever
investment in shipbuilding, improving Guam’s infrastructure to support defense
in the INDOPACOM region, as well as improving the Department of Navy’s business
operations, optimizing information management and cyber operations while
improving efficiency.

We have benefited from Erik’s wise counsel and loyal service to the Department
and to our Nation. Our national security, Navy, and Marine Corps are stronger
because of his service. We wish him the best in his future endeavors.”

###



Posted on July 4, 2024


FORMER DEFENSE CONTRACTOR AND HIS WIFE INDICTED FOR EVADING U.S. TAXES ON
PROFITS FROM SELLING JET FUEL TO U.S. MILITARY

Source: United States Department of Justice Criminal Division



An indictment was unsealed today charging Douglas Edelman, a former defense
contractor, and Delphine Le Dain, his wife, with a decades-long scheme to
defraud the United States and evade taxes on more than $350 million in income
Edelman made as a defense contractor during the United States’ post-9/11
military efforts in Afghanistan and the Middle East. Edelman was arrested on
July 3 in Spain based on the U.S. criminal charges. The United States will seek
Edelman’s extradition to stand trial in the United States.

According to the indictment, between 2003 and 2020, Edelman allegedly was the
50% owner of Mina Corp. and Red Star Enterprises (Mina/Red Star), a defense
contracting business that received more than $7 billion from contracts with the
Department of Defense to provide jet fuel to U.S. troops in Afghanistan and the
Middle East. Working with Le Dain and several other co-conspirators, Edelman
allegedly engaged in a lengthy scheme to hide his profits from Mina/Red Star,
including by concealing his income in undisclosed foreign bank accounts,
creating false documents and making false statements that Le Dain — who, as a
French citizen residing abroad, did not have U.S. tax obligations — founded and
owned Mina/Red Star. Le Dain allegedly signed some of the false documents,
including those that purported to “gift” Edelman money for certain personal
expenses.   

The indictment further alleges that to carry out his scheme, Edelman conveyed
this false story of Le Dain’s ownership to arms of the U.S. government,
including to a Subcommittee of the House of Representatives during a 2010
Congressional investigation, to the Department of Defense during contract
negotiations, to the Internal Revenue Service in a 2015 application to the
Offshore Voluntary Disclosure Program, and to the Justice Department in a 2018
presentation. 

Until approximately 2015, Edelman allegedly did not file any U.S. individual tax
returns and did not pay any tax on the tens of millions of dollars he was
allegedly making each year from Mina/Red Star. In 2015, Edelman allegedly filed
false returns for tax years 2007 to 2014, claiming that his business interests,
income, and assets belonged to Le Dain. From 2015 to 2020, Edelman allegedly
filed false tax returns reporting that his only income was as a consultant, and
that he had no interests in any foreign businesses. 

The indictment further alleges that Edelman directed his profits from Mina/Red
Star into banks known at the time to shield account holder identities from U.S.
authorities, in countries such as Switzerland, the Bahamas, Singapore and United
Arab Emirates. He allegedly held the accounts in the name of non-U.S. entities
created in countries such as Panama, Belize and the British Virgin Islands.
Edelman allegedly always controlled the money in these accounts and used it to
fund his other business ventures around the world, including a business selling
internet services to U.S. troops and contractors at Kandahar Air Base in
Afghanistan, a Mexican fuel infrastructure project and a music television
franchise in Eastern Europe. Edelman allegedly also used the money to buy a ski
chalet in Austria, a house in Spain, a townhouse in London and multiple yachts —
all of which were purchased in the name of nominees.

Edelman and Le Dain are charged with conspiring to defraud the United States and
15 counts of tax evasion. Edelman is also charged with two counts of making
false statements to the United States, and 12 counts of willfully violating his
foreign bank account reporting obligations, as part of a pattern of unlawful
activity.

If convicted, Edelman and Le Dain face up to five years in prison for the
conspiracy count, as well as up to five years in prison for each tax evasion
count. Edelman also faces up to five years in prison for each false statement
count and ten years in prison for each count of willfully violating foreign bank
account reporting while engaged in a pattern of unlawful activity involving more
than $100,000 per year. They each face a period of supervised release,
restitution and monetary penalties. A federal district court judge will
determine any sentence after considering the U.S. Sentencing Guidelines and
other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice
Department’s Tax Division and U.S. Attorney Matthew M. Graves for the District
of Columbia made the announcement.

IRS Criminal Investigation and the Special Inspector General for Afghanistan
Reconstruction are investigating the case, with assistance from His Majesty’s
Revenue & Customs of the United Kingdom. Assistance was also provided by the
Joint Chiefs of Global Tax Enforcement (J5), which brings together the taxing
authorities of Australia, Canada, the Netherlands, United Kingdom and United
States. Assistance with the arrest was provided by the U.S. Drug Enforcement
Agency and Guardia Civil of Spain.

Senior Litigation Counsel Nanette Davis, Assistant Chief Sarah Ranney and Trial
Attorney Ezra Spiro of the Tax Division and Assistant U.S. Attorney Joshua Gold
for the District of Columbia are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent
until proven guilty beyond a reasonable doubt in a court of law.



Posted on July 4, 2024


SWEEPSTAKES OPERATORS PLEAD GUILTY TO BANK SECRECY ACT VIOLATIONS

Source: United States Department of Justice Criminal Division



Two Missouri men pleaded guilty yesterday to conspiring with bankers to
willfully fail to implement appropriate anti-money laundering (AML) controls at
a Missouri bank, as required by the Bank Secrecy Act (BSA).

Kevin Brandes, 60, and William Graham, 56, both residents of Kansas City,
Missouri, owned and operated multiple sweepstakes businesses and held accounts
for those businesses at the Missouri bank. According to court documents, from
2013 to 2019, Brandes and Graham abetted bank officials in failing to implement
key components of the bank’s AML program. 

Under the BSA and its implementing regulations, the bank was required to file
currency transaction reports (CTR) with the Department of the Treasury’s
Financial Crimes Enforcement Network (FinCEN) for any transaction in currency of
more than $10,000. In 2017, at the request of bank officials, Brandes and Graham
signed FinCEN CTR Exemption Review Forms that classified their companies as
“direct mail advertising” businesses. After receiving the signed exemption
forms, the bank failed to file CTRs with FinCEN on transactions involving
Brandes’ and Graham’s businesses. Additionally, Brandes’ and Graham’s companies
were deemed “high risk” and subject to heightened monitoring under the bank’s
policies and procedures. Brandes and Graham understood that by signing the CTR
exemption forms the bank would apply less scrutiny to their companies’
transactions.  

Additionally, on or about Oct. 11, 2016, at the direction of two bank officials,
Brandes and Graham had an outside attorney sign a legal opinion letter, then
sent it to the bank, knowing that it contained false information. Specifically,
the letter indicated that one of Brandes’ companies “in over 3 years has not
received negative or unwanted legal action by way of regulatory bodies or
private suits.” Brandes and Graham knew at the time, however, that this
information was false because a state regulatory agency had filed a legal action
against the company in question. Brandes and Graham both believed this letter
would help the bank circumvent its requirements under the BSA.

Brandes and Graham each pleaded guilty to one count of conspiracy to cause the
willful failure to implement and maintain an appropriate anti-money laundering
program. Brandes and Graham will be sentenced at a later date and face maximum
penalties of five years in prison. A federal district court judge will determine
any sentence after considering the U.S. Sentencing Guidelines and other
statutory factors.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the
Justice Department’s Criminal Division, U.S. Attorney Teresa A. Moore for the
Western District of Missouri, Special Agent in Charge Justin R. Bundy of the
Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG)
Kansas City Region, Special Agent in Charge Thomas F. Murdock of the IRS
Criminal Investigation (IRS-CI) St. Louis Field Office, and Assistant Director
Michael Nordwall of the FBI’s Criminal Investigative Division made the
announcement.

FDIC-OIG, IRS-CI, and the FBI are investigating the case.

Trial Attorneys Chad M. Davis and Christopher Ting of the Criminal Division’s
Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorneys
Patrick D. Daly and Matthew N. Sparks for the Western District of Missouri are
prosecuting the case.

MLARS’ Bank Integrity Unit investigates and prosecutes banks and other financial
institutions, including their officers, managers, and employees, whose actions
threaten the integrity of the individual institution or the wider financial
system.




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