District of Delaware

Charles M. Oberly, III, United States Attorney for the District of Delaware and Federal Bureau of Investigation (“FBI”) Special Agent in Charge Stephen E. Vogt announced that former Camden Town Manager James O. Plumley, III, age 62, pleaded guilty today to conspiracy to commit mail fraud before United States District Court Judge Richard G. Andrews.  Plumley’s guilty plea stems from his role in a kickback scheme that he orchestrated to unlawfully defraud the State of Delaware of over $200,000 in years 2004 through 2008.   Plumley’s partner in the scheme – William P. Mahon, of W.P. Mahon, Inc., a contractor in Wilmington – also pleaded guilty today.
             
From facts disclosed at the plea hearing, Plumley was employed at Roofing Resources, Inc., in 2004 through 2008 and was responsible for assisting the State of Delaware’s Division of Facilities Management (“DFM”) select qualified contractors to repair and maintain roofs at state-owned facilities.  Plumley used this position to steer roofing contracts to Mahon.  In return and at Plumley’s direction, Mahon inflated his project bids by a specified amount, which he later deposited into Plumley’s checking account as a kickback after the DFM paid him for the job.    Over the course of the scheme, the FBI was able to identify $204,000 in kickbacks that Plumley received from Mahon – money that Plumley and Mahon agreed to repay to the State of Delaware pursuant to their plea agreements.
           
This case was made possible through substantial cooperation by the Camden Police Department – including Chief of Police William E. Bryson and Captain Gary Melvin – who conducted the initial investigation of Plumley and provided the FBI with a strong foundation for its case here.
           

The case was prosecuted by Assistant United States Attorneys Shawn A. Weede and Jennifer L. Hall.  For further information, please contact Public Information Officer Kimberlynn Reeves at (302) 573-6277, ext. 16287.

WILMINGTON, Del. — The Justice Department and U.S. Attorney for the District of Delaware Charles M. Oberly III announced today the filing of a lawsuit alleging that Regal Contractors LLC, Regal Builders LLC and Noble Pond Homes willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by terminating U.S. Air Force Reserve Member Lon Fluman following his return from required military training with his reserve unit.

Fluman is a Senior Airman with the U.S. Air Force Reserve serving with the 712th Aircraft Maintenance Squadron at Dover Air Force Base.  According to the complaint, filed in the U.S. District Court for Delaware, Fluman was scheduled for reserve military duty to begin on Sept. 3, 2012 but was rescheduled on short notice to start one day later.   Subsequently, Fluman served weekend reserve duty in early December of 2012.  Following his second duty, the defendants terminated Fluman from his position as a maintenance technician.  Although Fluman satisfied USERRA’s notification requirements before departing for his military leaves, according to the complaint,  the defendants terminated Fluman anyway, claiming the notice provided was not sufficient.

USERRA explicitly protects the rights of members of the uniformed services to retain their employment following absences due to military service obligations. “Congress enacted USERRA to protect our men and women in uniform from experiencing this kind of injustice,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to vigorously enforcing federal laws that protect the employment rights of our servicemembers.”

“Members of the Air Force Reserve sacrifice time away from their jobs to serve their country,” said U.S. Attorney Oberly.  “USERRA ensures that they are not discriminated against and that their employment rights are protected.”

This case stems from a referral by the U.S. Department of Labor following an investigation by the Department of Labor’s Veterans’ Employment and Training Service.  The case is being handled by the Civil Rights Division and the U.S. Attorney’s Office for the District of Delaware, who work collaboratively with the Department of Labor to protect the jobs and benefits of National Guard and Reserve servicemembers upon their return to civilian life.

Additional information about USERRA can be found on the Justice Department website: www.servicemembers.gov and www.usdoj.gov/crt/emp, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.

Fluman Complaint

WILMINGTON, Del.  – David C. Weiss, Acting United States Attorney for the District of Delaware, Stephen Vogt, Special Agent in Charge, Federal Bureau of Investigation, Baltimore Division, and Nathaniel McQueen, Jr., Colonel, Delaware State Police, announced that a federal grand jury sitting in Delaware returned a four-count indictment on August 6, 2013, charging David T. Matusiewicz, his mother, Lenore Matusiewicz, and his sister, Amy Gonzalez, with one  count of conspiring to commit interstate stalking and cyberstalking, in violation of Title 18, United States Code, Sections 371 and 2261A(1)-(2), two counts of interstate stalking, in violation of Title 18, United States Code, Section 2261A(1), and one count of cyberstalking, in violation of Title 18, United States Code, Section 2261A(2).

David T. Matusiewicz’s father, Thomas Matusiewicz, was named as a deceased co-conspirator in the indictment, which was unsealed this morning following the arrests of Lenore Matusiewicz and Amy Gonzalez in McAllen, Texas.  David T. Matusiewicz has been in federal custody on a supervised release violation since the February 11, 2013 murders of his ex-wife, Christine Belford, and her friend, Laura Mulford, in the lobby of the New Castle County Courthouse in Wilmington, Delaware.

Pursuant to Title 18, United States Code, Section 2261, if convicted of the most serious charges and aggravating factors contained in the indictment, all three defendants face a maximum sentence of life in prison, a $250,000 fine, and a 5-year term of supervised release.  Additionally, because David T. Matusiewicz and Lenore Matusiewicz were subject to “no contact” orders in place during their alleged criminal conduct, they also face a mandatory minimum term of one year in prison if convicted.

According to the indictment and court documents filed in this case and in prior cases, David T. Matusiewicz and Christine Belford were engaged in divorce and child custody proceedings in the Family Court of Delaware in 2007.  In August 2007, David T. Matusiewicz and his mother, Lenore Matusiewicz, kidnapped the three young children born of his marriage to Christine Belford and fled to South America.  In March 2009, David and Lenore Matusiewicz and the young children were found living in a motor home in Nicaragua.  David and Lenore Matusiewicz were arrested and prosecuted in Delaware, and the children were returned to the care of their mother, Christine Belford.

In September 2009, David and Lenore Matusiewicz both pled guilty to crimes relating to their kidnapping of the children.  In December 2009, David T. Matusiewicz was sentenced to 48 months in prison to be followed by 5 years of supervision by the United States Probation Office.

In the days following his December 2009 sentencing, David T. Matusiewicz began to orchestrate, from a prison cell, a course of conduct designed to stalk, harass, and intimidate Christine Belford and her children.  He enlisted his father, mother, sister and various other persons in this effort, which stretched from December 2009 to February 2013.

The Matusiewicz family began their stalking campaign by broadly disseminating -- by mail, email, websites, Internet postings, and other means -- false allegations that Christine Belford had, among other things, abused her children, suffered from mental illness and had attempted to harm Lenore Matusiewicz.  They used a website, posted YouTube videos, and sent letters to Christine Belford’s church and her children’s schools repeating their false and defamatory allegations.  Christine Belford and her children were well aware of the Matusiewicz family’s widespread, public dissemination of this false and defamatory information.

In August 2011, the Family Court of the State of Delaware terminated David T. Matusiewicz’s parental rights as to his children with Christine Belford.  In doing so, the Family Court rejected David T. Matusiewicz’s assertion that Christine Belford was abusing the children, referring to those allegations as “baseless” and “made up.”  Following the completion of the Family Court termination of parental rights proceeding, the Matusiewicz family recruited and used a variety of people to conduct physical and online surveillance of Christine Belford and her children.

After his release from federal custody, David T. Matusiewicz resided in southern Texas first with Amy Gonzalez and then with Lenore and Thomas Matusiewicz.  Between September and November 2012, the United States Probation Office twice denied David T. Matusiewicz’s requests for permission to travel from Texas to “New Jersey.”  On November 9, 2012, David T. Matusiewicz filed a petition to reduce the monthly child support arrearage payments he owed Christine Belford in the Family Court of the State of Delaware.  That petition ultimately resulted in the scheduling of the February 11, 2013 court hearing.  Christine Belford was ordered to attend that hearing in the New Castle County Courthouse.

On January 8, 2013, David T. Matusiewicz sought and received permission from the United States Probation Office in Texas to travel to Delaware to attend the child support arrearage hearing scheduled for February 11, 2013.  David T. Matusiewicz never informed the probation officer that he intended to travel to Delaware with Thomas and Lenore Matusiewicz.

Between February 4 and 7, 2013, David, Lenore and Thomas Matusiewicz traveled from Texas to the Delaware Valley in two vehicles – a Honda Civic and Honda CRV – later found to contain numerous weapons, ammunition, restraints, an electric shock device, several gas cans, a shovel, and numerous pictures of Christine Belford’s children and residence.

On the morning of February 11, 2013, David and Thomas Matusiewicz drove to a hotel parking garage near the New Castle County Courthouse in the Honda CRV, which contained ammunition, a military style knife, three sets of restraints of progressively smaller sizes, a bullet proof vest, an electric shock device, binoculars, and photographs of Christine Belford’s children and residence.  After entering the courthouse lobby at approximately 7:30 a.m., David T. Matusiewicz entered and stayed in the security screening line, while Thomas Matusiewicz moved around the lobby, occasionally approaching and talking to David T. Matusiewicz.

Shortly before 8:00 a.m., David T. Matusiewicz passed through courthouse security screening and walked to another floor of the building.  Thomas Matusiewicz remained in the lobby, where he shot Christine Belford multiple times as she entered the courthouse lobby, killing her.  He then shot Laura Mulford multiple times as she attempted to flee.  After a shootout during which he shot and injured two Capitol Police officers, Thomas Matusiewicz died on the sidewalk of the courthouse of a self-inflicted gunshot wound.

On February 15, 2013, Amy Gonzalez filed a petition for custody of Christine Belford’s three children in the New Castle County Courthouse, which houses the Family Court of the State of Delaware.  The enclosed check written to the Family Court was dated February 12, 2013 – the day after the Courthouse murders.

Acting United States Attorney Weiss stated the following: “From 1976 through 2005 over 64,000 people were killed as a result of domestic violence.  These staggering numbers contributed to the enactment of the federal stalking statutes that are part of the Violence Against Women’s Act, passed initially in 1994 and reauthorized on multiple occasions, most recently in February of this year.  This Office is staunchly committed to the enforcement of federal domestic violence laws.  I want to thank the Federal Bureau of Investigation, Delaware State Police and the Delaware Attorney General’s Office for their extraordinary work on this case.”           

This case is being investigated by Federal Bureau of Investigation and the Delaware State Police, and is being prosecuted by Assistant United States Attorneys Jamie M. McCall and Edward J. McAndrew

Matusiewicz Indictment Unsealed Redacted 8-8-13.pdf

Criminal indictments are only charges and are not evidence of guilt.  A defendant is presumed to be innocent unless and until proven guilty.

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Kelvin Cook, age 35 of Wilmington, Delaware, was sentenced on June 20, 2013, to a term of imprisonment of fifteen (15) years for his role as a leader of an international drug trafficking conspiracy.

 According to facts introduced in prior hearings, Cook was one of the leaders of an organization that recruited multiple drug couriers to travel to Panama in order to smuggle cocaine and heroin into the United States.  Agents identified a total of at least nineteen (19) couriers who took smuggling trips on behalf of the organization, and who smuggled, or attempted to smuggle, more than thirteen (13) kilograms of cocaine and five kilograms of heroin from Panama to Delaware.  Cook was also responsible for a significant crack cocaine distribution network on the 500 block of West Sixth Street in Wilmington.  In addition, on one occasion Cook obtained more than 100 grams of heroin from a Texas source, who in turn imported heroin directly from the country of Afghanistan.

United States Attorney Charles M. Oberly, III, stated, “The Court’s sentence appropriately punished Mr. Cook for his involvement in a major drug trafficking organization that had a negative impact on Wilmington and the surrounding communities.  It further sends a message that there are significant consequences for engaging in large-scale drug trafficking within the State of Delaware.  I commend our law enforcement partners for their hard work and considerable cooperation over the course of a three-year investigation that dismantled the organization and brought over 20 individuals to justice.”

            The investigation was led by the Drug Enforcement Administration, the Department of Homeland Security – Homeland Security Investigations, the Internal Revenue Service – Criminal Investigation Division, and the Wilmington Police Department.

            This case is being prosecuted by Assistant United States Attorney Robert F. Kravetz.  For further information, contact Press Information Officer Kimberlynn Reeves at (302) 573-6277, ext. 16287.

For additional information regarding the case, see also:  http://www.justice.gov/usao-de/pr/man-pleads-guilty-panamanian-drug-trafficking-conspiracy http://www.justice.gov/archive/usao/de/news/2011/Panama%20Press%20Release.html http://www.justice.gov/archive/usao/de/news/2012/07-27.html http://www.justice.gov/archive/usao/de/news/2012/07-25.html http://www.justice.gov/archive/usao/de/news/2012/Banerjee%20Plea%20Release.html

WILMINGTON, Del. – Charles M. Oberly, United States Attorney for the District of Delaware, announced today that Michael J. Barndt, a/k/a “mikecoach73,” age 39, of Sellersville, Pennsylvania, was arrested and charged by criminal complaint on June 19, 2013 with attempted enticement and coercion of a minor and attempted transfer of obscene matter to a minor, in violation of Title 18, United States Code, Sections 2422(b) and 1470.  These charges stem from communications in aid of and travel from Pennsylvania to Delaware to engage in sex acts with an individual whom Barndt believed to be a 14 year old girl.  In fact, the defendant was communicating over the internet with a Special Agent employed by the Department of Homeland Security, Homeland Security Investigations.

If convicted of the charges, Barndt faces a mandatory minimum sentence of at least ten years of imprisonment and up to life in prison, fines of up to $250,000 for each offense, and a term of supervised release following any prison sentence of at least five years to life.

According to the Complaint, on or about June 7, 2013, Barndt posted an on-line personals ad on www.craigslist.com, “Real Teen Fantasy,” wherein Barndt expressed interest in a teenaged fantasy liaison. An undercover HSI agent posing as a 14 year old girl responded to the ad.  Thereafter, Barndt, using screen name “mikecoach73,” engaged in a series of online chats with the undercover agent wherein Barndt both expressed his interest in engaging in sexual relations with the person whom he believed to be a 14 year old child and transmitted to the undercover agent photographs of his exposed genitalia to entice the “girl” to meet him.

On or about June 19, 2013, Barndt made arrangements to travel from his home in Pennsylvania to Delaware for the purpose of engaging in sexual relations with the person whom he believed to be a 14 year old girl.  Barndt checked into a hotel at the corner of Route 202 and Naamans Road in New Castle County, Delaware.  Barndt also traveled to the nearby Concord Mall and purchased lingerie for the child.  Shortly thereafter, Barndt traveled back to the Concord Shopping Mall to pick up the child as planned, where he arrested. 

According to the Complaint, Barndt is employed as a cook at the Lakeside School in  Horsham Township, Pennsylvania during the school year.  During the summer months, Barndt is employed as a camp counselor at “Blue Bell Camp,” in Blue Bell, Pennsylvania.  In the fall of 2012, Barndt was also a middle school football coach in the Springfield School District in Montgomery County.

Resident Agent in Charge Jonathan Free, Department of Homeland Security, Homeland Security Investigations noted of the investigation, “HSI will relentlessly pursue those who would try to steal the innocence of Delaware’s children.”

Members of the public with any information about this case are encouraged to contact the Department of Homeland Security’s Wilmington office at (302) 428-0104 x7005.

The charges in the Complaint are only allegations and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

The case is being prosecuted by Assistant United States Attorney Edward J. McAndrew and investigated by Department of Homeland Security, Homeland Security Investigations. For further information, please contact AUSA McAndrew at 302-573-6277.

WILMINGTON, Del. – David C. Weiss, Acting United States Attorney for the District of Delaware, announced today that ten men were indicted by a federal grand jury on drug trafficking charges, including conspiracy to distribute heroin, crack cocaine, cocaine, and marijuana, in violation of Title 21, United States Code, Sections 841(a)(1) and 846.  The sixteen-count indictment was partially unsealed yesterday.

The charged defendants include Qiydaar Miller, age 33 from Wilmington, Albari Malik Johnson, age 37 from Wilmington, Tamir Collins, age 32 from Wilmington, Keenan Williams, age 55 from Wilmington, Walter Thomas, age 51 from Wilmington, Ibrahim Sesay, age 37 from Wilmington, Andre Cephas, age 42 from Ellendale, Harry Coverdale, age 35 from Wilmington, Corey Pendergrass, age 33 from Wilmington, and Daqwan Riley, age 20 from Wilmington. If convicted of any of the remaining offenses, the defendants charged in those offenses could face either a mandatory minimum sentence of at least five years of imprisonment, and up to forty years in prison, in addition to fines, and supervised release, or up to twenty years in prison, in addition to fines, and supervised release, depending on the amount of drug charged in the offense.

The Indictment alleges that the conspiracy to distribute controlled substances existed between March 2012 and June 2013.  Moreover, the prosecution presented information during detention hearings held yesterday in federal court that the defendants were part of a drug-trafficking organization that distributed drugs throughout Wilmington, Delaware, including a residence located at 30th and Madison Streets, which served as the group’s base of operations. 

The Indictment and arrests of these individuals was the product of a long-term investigation into the drug-trafficking organization, led by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Wilmington Police Department and the State of Delaware Department of Corrections Division of Probation and Parole.  Critical support for the investigation and arrests was provided by Delaware State Police, Delaware Division of Gaming Enforcement, New Castle County Police Department, United States Marshals Service, and the United States Department of Agriculture.

Acting United States Attorney David C. Weiss thanked the federal, state, and local law enforcement agencies for their participation in this investigation, and stated, “The defendants are charged with participating in a conspiracy to distribute substantial quantities of illegal drugs in the city of Wilmington.  We are determined to pursue these charges to the fullest extent of the law, and we will continue the investigation into others who had joined with the charged defendants in trafficking illegal drugs here in Delaware.”  

The charges in the Indictment are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

The case is being prosecuted by Assistant United States Attorneys Jamie M. McCall and Ilana Eisenstein, District of Delaware.  For further information, please contact AUSA McCall at 302-573-6079 or AUSA Eisenstein at 302-573-6082.

A close confidant of Adolf Hitler, Alfred Rosenberg was one of the most influential members of the “Third Reich” and of the Nazi Party.  His tome The Myth of the Twentieth Century articulated the philosophical underpinnings of National Socialist ideology.  Rosenberg served as head of the Nazi Party’s foreign affairs department and as the Reich Minister for the Occupied Eastern Territories, which included the Baltic States, Ukraine, and parts of Belorussia.  As Reich Minister, Rosenberg played a significant role in the mass murder of the Jewish people in the Occupied Eastern Territories, as well as the deportation of civilians to forced labor camps to support the German war effort.  Rosenberg also established and headed an organization, Einsatzstab Reichsleiter Rosenberg, the mission of which was to loot cultural property from all over Europe.

Rosenberg was a defendant at the International Military Tribunal, held at Nuremberg, Germany from 1945 – 1946. He was found guilty on all four counts of the indictment for conspiracy to commit aggressive warfare, crimes against peace, war crimes, and crimes against humanity.  Rosenberg was hanged on October 16, 1946. 

Rosenberg was privy to much of the planning for the Nazi racial state, the mass murder of the Jewish people and other civilians, the planning and conduct of the Second World War, and the occupation of Soviet territory.  His diary entries are a potential wealth of information, hitherto unknown, regarding the history of this period.

Allied forces advancing through Germany seized documents, books, and other records of strategic or tactical importance.  After the surrender of Germany in May 1945, governmental authority for Germany was placed into Allied hands.  This authority included ownership of all documents created by the defeated German government or captured by Allied forces.  To prepare for war crimes trials after the cessation of hostilities, agencies of the United States Government examined and selected relevant documents as potential evidence. 

Among the documents seized by Allied forces was the Rosenberg Diary.  On August 10, 1945, the Records Subsection of the Documents Unit of the War Crimes Branch, United States Army, received from the Berlin Documents Control Center, the “…private papers of Alfred Rosenberg, former Reichsminister for the Occupied Eastern Territories.”  Among these papers, according to the receipt prepared on August 15, 1945, were “Handwritten diary notes” from the years 1934 – 1944.  These included notes, dated 1941, “dealing in the early part of (Apr 41) with the conspiracy to dominate Russia and preparations for this occupation (conferences with HITLER and others).”

Dr. Robert M.W. Kempner was a German lawyer who fled Germany for the United States during the war. At the conclusion of the war, Dr. Kempner served as the Deputy Chief Counsel and was the Chief Prosecutor in the “Ministries Case” in the Nuremberg International Military Tribunal.  In this role, Dr. Kempner had access to seized Nazi documents in his official capacity as an employee of the United States Government.  At the conclusion of the Nuremberg Tribunals, Dr. Kempner returned to the United States and lived in Lansdowne, Pennsylvania.  Contrary to law and proper procedure, Dr. Kempner removed various documents, including the Rosenberg Diary, from United States government facilities in Nuremberg and retained them until his death in 1993.

In November, 2012, the United States Attorney’s Office for the District of Delaware and Homeland Security Investigations agents received information from an art security specialist, who was working for the United States Holocaust Memorial Museum,as to the Rosenberg Diary.  The Rosenberg Diary was subsequently located and seized pursuant to a warrant issued by the United States District Court for the District of Delaware. 

United States Attorney Charles M. Oberly, III said, “This seizure is the result of the joint efforts of this office and Homeland Security Investigations.  The discovery and return of this long-lost, important historical document to the government of the United States is a significant achievement.  Although it is a reminder of a dark time, the Rosenberg Diary is important to our understanding of history.  Our hope is that it will provide valuable insight to historians.”

“Thanks to the tireless investigative work of ICE Homeland Security Investigations (HSI) special agents, and years of perseverance by both the U.S. Attorney’s Office for the District of Delaware and the U.S. Holocaust Memorial Museum, the long-lost Rosenberg Diary has been recovered, not in Germany but in the United States.  This important record of the crimes of the Third Reich and the Holocaust is now preserved for all to see, study and learn from,” said ICE Director John Morton.  “The work of combating the international theft of cultural heritage is a key part of our work, and no matter how long these items may appear to be lost to history, that hard but important work will continue.”

The United States Holocaust Memorial Museum is thrilled to have recovered the diary of Alfred Rosenberg, a leading Nazi ideologue.  As we build the collection of record on the Holocaust, having material that documents the actions of both perpetrators and victims is crucial to helping scholars understand  how and why the Holocaust happened," said Museum Director Sara J. Bloomfield.  "The story of this diary demonstrates how much material remains to be collected and why rescuing this evidence is such an important Museum priority."

This case was investigated by David L. Hall and Jamie McCall, Assistant United States Attorneys.  For further information, contact Assistant United States Attorney David L. Hall at (302) 573-6118.

View the Immigration and Customs Enforcement press release (contains pictures and video)

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today the sentencing of one man on narcotics trafficking and attempted murder convictions, and the separate conviction of that man’s brother for using Facebook to threaten to kill a government witness during the narcotics trafficking and attempted murder trial.

United States v. William Boney

William Boney, age 39, of Pike Creek, was sentenced to 220 months in prison today for conspiracy to possess with intent to distribute cocaine, in violation of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(A), and 846; attempted murder by retaliating against an informant, in violation of Title 18, United States Code, Section 1513(a)(1)(B); and soliciting another person to retaliate against an informant by committing murder, in violation of Title 18, United States Code, Sections 1513(a)(1)(B) and 373.  In January 2013, a federal jury returned  guilty verdicts against Boney after a one-week trial.

According to statements made at the sentencing hearing and documents filed in court, Boney was initially arrested on November 7, 2010, for attempting to broker a cocaine deal worth approximately $217,000 at his residence.  Boney, however, was released to cooperate with the DEA in ongoing drug investigations.  While released, Boney discovered the identity of a confidential informant who assisted the DEA with the investigation of the November 7, 2010 drug deal.  Boney then began to plot that informant’s murder. 

Unbeknownst to Boney, DEA agents uncovered the plot before Boney could find a “hit man” to kill the confidential informant.  DEA agents then had a second confidential informant pose as a would-be “hit man” who was willing to kill the first confidential informant.  Boney met with the purported “hit man” three times between May 22, 2011 and July 3, 2011.  During these meetings, Boney discussed the details of killing the confidential informant, instructing the “hit man” to kill the informant’s young child if the informant was not present when the “hit man” broke into the informant’s home.  Boney proposed to pay the “hit man” by having him also conduct home invasion robberies of those whom Boney believed had large amounts of cash or drugs in their residences.  Evidence submitted at trial also showed that Boney was a long-time drug dealer, with two prior convictions for trafficking in marijuana. 

United States v. John Boney

John Francis Boney, Jr., age 35, of New Castle, pled guilty on June 4, 2013 to Interstate Transportation of Threats, after using Facebook to threaten to kill a government witness who was scheduled to testify at his brother, William Boney’s, federal narcotics trafficking and attempted murder trial.  John Boney faces a maximum sentence of five years in prison, a $250,000 fine, and three years of supervised release.  He is scheduled to be sentenced on September 18, 2013 by United States District Judge Sue L. Robinson, who presided over brother William Boney’s trial and sentenced William Boney to 220 months in prison earlier today. 

According to statements made and documents filed in court, during a recorded prison phone call made in the weeks before his January 2013 narcotics trafficking and attempted murder trial, William Boney used an intermediary to inform his brother, John Boney, of the identity of a government witness whom William Boney believed would testify as a government witness during the trial.

John Boney attended the January 2013 trial of William Boney, which was held in the federal courthouse, in Wilmington.  During the early days of the trial, John Boney learned that the government planned to call the witness identified by William Boney weeks earlier.  On January 23, 2013, John Boney used a smartphone to post a message on Facebook threatening to kill the government witness who his brother, William Boney, had identified if that witness took the stand against William Boney.    

On the morning of January 24, 2013, the government witness entered the federal building, but told court security officers that he would not report to Judge Sue L. Robinson’s courtroom to testify until he could speak with the federal agents involved in William Boney’s trial.  The agents located the government witness on the lower level of the federal courthouse and learned that John Boney had posted a threat to kill the witness on Facebook the previous day.

The agents then responded to the courtroom in which the trial was occurring and removed John Boney from the audience.  The agents also took custody of a smartphone that John Boney brought to the courthouse.  On that phone, the agents found the Facebook message in which John Boney threatened to kill the government witness if that witness testified for the government.  When confronted by the agents, John Boney admitted to posting the message.

Following the court proceedings, United States Attorney Oberly stated:  ?The protection of witnesses who walk into federal courtrooms to aid in the pursuit of criminal justice, as well as the families of those witnesses, is of paramount concern, and accordingly should expect to be prosecuted.”

Drug Enforcement Administration Special Agent in Charge David G. Dongilli stated, “The sentence imposed by the court reflects the extreme seriousness of Mr. Boney’s efforts to kill a DEA confidential informant who was going to testify against him.  I wish to thank all of the law enforcement agencies and prosecutors that, through their dedication and diligence successfully brought Mr. Boney to trial despite his efforts to subvert justice.  DEA will not tolerate threats against witnesses and will continue to work closely with its law enforcement partners and prosecutors to investigate and prosecute individuals and organizations that threaten witnesses and their families.” 

These cases were investigated by the Drug Enforcement Administration and were prosecuted by Assistant United States Attorneys Jamie M. McCall, Ilana Eisenstein and Edward J. McAndrew.

WILMINGTON, Del. – Xiang Li, age 36, of Chengdu, China, was sentenced to 12 years in prison today for conspiracy to commit wire fraud and criminal copyright infringement based on cyber-theft and online piracy of over $100 million worth of sensitive, industrial-grade software and confidential data stolen from the internal server of a cleared defense contractor.  Li will be deported to China pending his release from prison.

            According to statements made at the sentencing hearing and documents filed in court, in December 2009, the U.S. Department of Homeland Security, Homeland Security Investigations, identified a website located at www.crack99.com that was advertising thousands of software titles at a fraction of their retail value.  The investigation revealed that Xiang Li operated this website and a series of other websites that sold pirated, industrial-grade software in which the access and copy controls had been “cracked,” or circumvented.

Between April 2008 and June 2011, Xiang Li engaged in over 700 transactions through which he distributed over $100 million pirated software to over 400 customers located in at least 28 states and over 60 foreign countries.  These software products were owned by approximately 200 different American software manufacturers, ranging from large corporations to small businesses.  Xiang Li also sold 20 gigabytes of confidential and proprietary data obtained from the internal computer network of at least one “cleared defense contractor.”

The tightly controlled and very valuable software products that Xiang Li sold and distributed online are industrial-grade, digital tools used to design myriad products essential to the daily life, health and safety of the public, and to U.S. national security.  For example, the software is used in a wide range of applications including aerospace simulation and design, defense, electronics, energy, engineering, explosive simulation, intelligence gathering, manufacturing, mining, space exploration, mathematics, storm water management, explosive simulation, and manufacturing plant design.

Xiang Li’s customers included those in embargoed countries in the Middle East, employees of foreign governments, and federal government employees and contractors holding security clearances in the United States.  More than one-third of the unlawful purchases were made by individuals within the United States, including small business owners, government contractors, students, inventors, and engineers.  For instance, Xiang Li sold twelve cracked software programs worth over $1.2 million to Cosburn Wedderburn, who was then a NASA electronics engineer working at NASA’s Goddard Space Flight Center, in Greenbelt, Maryland.  Wedderburn uploaded this cracked software to a NASA computer network and used it to perform on a side contract he negotiated to design a thermal simulation project for China-based Huawei Technologies, Inc.

Xiang Li also sold ten cracked software programs worth over $600,000 to Dr. Wronald Best, the “Chief Scientist” of a Kentucky-based government contractor that services the U.S. and foreign militaries and law enforcement with a variety of applications such as radio transmissions, radar usage, microwave technology, and vacuum tubes used in military helicopters.  Dr. Best used the cracked software to design components for Patriot missiles and the radar systems of the “Marine One” Presidential helicopter and the Army’s Black Hawk helicopter.

Between January 2010 and June 2011, undercover agents made a series of purchases of pirated software worth hundreds of thousands of dollars from Xiang Li’s CRACK99 website.  The investigation culminated in a face-to-face meeting between Xiang Li and undercover agents on the Island of Saipan, in June 2011.  Xiang Li agreed to travel from China to Saipan to deliver pirated software, design packaging, and 20 gigabytes of proprietary data from a U.S. software company (a cleared defense contractor) to undercover agents posing as would-be co-conspirators willing to assist Li with distribution of counterfeit software in the United States.  The undercover agents arrested Xiang Li on June 7, 2011, after he delivered the stolen intellectual property to them at a Saipan hotel.  Xiang Li was transported to the District of Delaware, where he has remained in custody since June 2011.

The investigation revealed that Xiang Li was part of a larger cybercrime organization based in China.  Through emails sent to various customers, Xiang Li described himself as being part of “an international organization created to crack” software.  When another customer asked Li who cracked the software, Li replied:  “Experts crack, Chinese people Sorry can not reveal more.”

The investigation revealed that Chinese and Russian software “crackers” loosely organize into “Fan Groups” and crack software by disabling the access/dissemination controls.  The “Fan Groups” then make the hacked software available on web forums or other online portals.  “Middle men,” such as Xiang Li, obtain the cracked software from forums, websites, and file transfer protocol sites.  These “middle men” operate websites that advertise the sale of cracked software products and distribute that software through the Internet.  The “middle men” specialize in, and guide customers through, the complex technical installation process.  Without “middle men” like Xiang Li, complex, industrial-grade software that has been cracked is often inoperable and non-transferable.

This case is being investigated by the United States Department of Homeland Security, Homeland Security Investigations, and the Defense Criminal Investigative Service.  This case is being prosecuted by Assistant United States Attorneys David L. Hall and Edward J. McAndrew.

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, and Stephen E. Vogt, Special Agent in Charge of the Baltimore Field Office of the Federal Bureau of Investigation, announced today that defendant Phillip Collier pled guilty yesterday afternoon to two counts of committing Hobbs Act Robbery, in violation of Title 18, United States Code, Section 1951, and one count of possessing and using a firearm in furtherance of a crime of violence, in violation of Title 18, United States Code, Section 924(c), for his role in two armed robberies of Zales Jewelry Stores located in the Christiana Mall in Newark, Delaware, and the Owings Mills Mall in Owings, Maryland.

According to facts disclosed at the change of plea hearing, on May 7, 2012, Collier, a forty-year old man from Brooklyn, New York, robbed a Zales Jewelry store in the Owings Mills Mall in Owings Mills, Maryland.  During the robbery, Collier pointed a firearm at store employees and directed employees to empty approximately $116,277.82 worth of jewelry into a bag he carried into the store.  Collier then ordered the employees into a back room of the store before he fled the mall. 

On August 6, 2012, Collier struck again, when he robbed another Zales Jewelry store in the Christiana Mall in Newark, Delaware.  Like the prior robbery, Collier pointed a firearm at store employees and directed employees to empty approximately $163,008.08 worth of jewelry into a bag he carried into the store.  Collier then ordered the employees into the store’s bathroom before he fled the mall.  However, before Collier could escape, Christiana Mall security notified the Delaware State Police about the robbery, and that Collier had entered another car located in the mall parking lot. 

Troopers from Delaware State Police-Troop 2 immediately responded to the scene and executed a traffic stop of the car in which Collier was located.  Collier was subsequently arrested in the car along with the stolen jewelry and the firearm used during the robbery.  Following his arrest, the FBI, along with the Baltimore County Police Department, also linked Collier to the Owings Mills Mall armed robbery through positive fingerprint identification.

United States Attorney Charles M. Oberly, III, said of the case: "This plea reflects the outstanding work of the Wilmington FBI office, the Delaware State Police, the Baltimore County Police Department, and Jamie McCall, the AUSA handling the prosecution, in the apprehension and conviction of a particularly brazen and dangerous offender, who carried out his crimes in crowded malls, risking the lives of patrons and employees of Zales Jewelry Stores.”   

Individuals who commit violent criminal acts with handguns in Delaware and Maryland will always be a priority for the FBI”, said Special Agent in Charge Stephen E. Vogt. “Our law enforcement partners in both states, along with security personnel in Delaware, did an outstanding job in investigating and prosecuting this case.”

A sentencing hearing has been scheduled by the District Court for September 19, 2013 at 9:30 a.m.  At sentencing, Collier faces a maximum penalty of 20 years in prison for each Hobbs Act Robbery offense, and a maximum penalty of up to life imprisonment, with a mandatory minimum sentence of 7 years to be served consecutively to any other sentence for possessing and using a firearm in furtherance of a crime of violence. 

This case was investigated by the FBI, Wilmington Resident Agency, the Delaware State Police, and the Baltimore County Police Department.  Assistant United States Attorney Jamie M. McCall prosecuted the case.

For further information, contact Assistant United States Attorney Jamie M. McCall or United States Attorney Charles M. Oberly, III

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Joseph Terranova, entered a guilty plea before the Honorable Gregory M. Sleet  to a one count felony information charging him with conspiracy to commit bank fraud, in violation of Title 18, United States Code, Section 371.

According to the criminal Information and plea agreement, Terranova, who was employed as Vice President/Division Manager of the Delaware Commercial Real Estate Division of Wilmington Trust Company the “Bank”) conspired to extend credit to customers of the Bank under terms inconsistent with those approved by the Bank’s Loan Committee, or under terms that would not have been approved had they been presented to Loan Committee.  These included loans extended to Dover real estate developer, Michael Zimmerman, who has been charged in a separate indictment.  Terranova further conspired to conceal the true financial condition of the Bank, in part by extending new loans to clients to enable these clients to keep existing loans current and by causing the Bank to misrepresent its reporting of past due and non-performing loans.

Terranova, age 45, is a resident of Newark, Delaware.  He faces a maximum penalty of 5 years imprisonment and a $250,000 fine.

United States Attorney Oberly said, “Today’s guilty plea is an important step in holding responsible those individuals whose criminal conduct contributed to the failure of Wilmington Trust.  The Bank was a Delaware institution and its demise came at significant cost, economically and emotionally, to the citizens of this state.  We hope that in bringing these charges and securing a conviction, others will be deterred from engaging in similar conduct.”

“As a senior bank official at TARP recipient Wilmington Trust, Terranova concealed the bank's true financial condition by engaging in ‘extend and pretend’ schemes to keep loans current and to hide past-due loans from regulators and investors,” said Christy Romero, Special Inspector General for TARP (SIGTARP).  Those responsible for fraud related to TARP will be held accountable and brought to justice by SIGTARP and our law enforcement partners.”

“Bank executives engaged in fraud to deceive regulators and the public must be brought to justice for their actions,” said Mark Bialek, Inspector General of the Board of Governors of the Federal Reserve System.  “We will continue to work with our law enforcement partners to hold accountable any wrongdoers whose actions have a fraudulent impact on the supervision program of financial institutions regulated by the Federal Reserve Board.”

“The FBI is committed to ensuring banks and similar financial institutions are seen as sound and stable, said Stephen Vogt, Special Agent in Charge of the FBI’s Wilmington Office.  “Those who perpetrate sophisticated fraud schemes threaten the stability of financial institutions and, with the assistance of our law enforcement partners, will be prosecuted to the fullest extent of the law.”

“Bank fraud, like all financial crimes, adds to the underground economy, erodes the integrity of our tax system and threatens the financial health of our communities,” said Akeia Conner, Special Agent in Charge IRS Criminal Investigation, Philadelphia Field Office. “Pursuing individuals that intentionally abuse our financial systems is a vital component in the collaborative efforts of our Federal law enforcement team.”

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Office of Inspector General, Board of Governors of the Federal Reserve System and is being prosecuted by Assistant United States Attorneys Robert Kravetz and Lesley Wolf.

Terranova Information (PACER)

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, and Edward J. Hanko, Special Agent in Charge, Philadelphia Field Division, Federal Bureau of Investigation (FBI), announced today the return of a rare glass bottle to the Wistar Institute in Philadelphia, Pennsylvania.  The bottle was made at the first successful glass factory in the American Colonies, established by Caspar Wistar near Alloway, New Jersey, in 1739. The bottle bears the initials of Richard Wistar, the eldest son of Caspar Wistar.  It is one of only two known existing Caspar Wistar bottles with the “RW” seal.  Caspar Wistar's bottles were made of impure green glass using a formula in use since the Middle Ages.  Wistar’s bottles were designed to resemble popular European bottles of the day.
             
              The bottle was granted to the Wistar Institute by General Isaac J. Wistar, great nephew of Caspar Wistar, in 1905.  The bottle was taken from the Wistar collection without permission after 1958.  Thereafter, the bottle was purchased and sold on several occasions, without actual knowledge that it was stolen.  In 2011, the bottle was discovered in a museum exhibit, on loan from its purported owner.  The purported owner ultimately agreed to its return to the Wistar Institute.  The Caspar Wistar bottle is pictured below.
    
United States Attorney Charles M. Oberly, III said, “The return of this rare bottle to the Wistar Institute is the result of the joint efforts of this office and the FBI Art Crime Team. I commend all parties for their efforts in producing this positive outcome.  Artifacts like this glass bottle are an important part of American history.  Unfortunately, this bottle was stolen and entered the stream of commerce.  I am pleased it can be returned to its rightful owner.”

         This matter was investigated by David L. Hall, Assistant United States Attorney, Special Prosecutor, FBI Art Crime Team.  For further information Assistant United States Attorney David L. Hall at (302) 573-6277.

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Miguel A. Lavenant, age 38, of San Diego, California, was convicted by a federal jury of conspiring to distribute and to possess with the intent to distribute five (5) kilograms or more of cocaine.  The jury also convicted Lavenant of three counts of money laundering.  For his convictions, Lavenant faces a maximum sentence of life imprisonment, with a mandatory minimum sentence of ten years imprisonment.  Sentencing is scheduled for August 16, 2013, at 1:00 p.m.

At trial, the United States established that Lavenant shipped over 50 kilograms of cocaine from San Diego to the East Coast.  Some of the cocaine for which Lavenant was responsible was later distributed in the State of Delaware.  Lavenant’s customers on the East Coast, including in Delaware, paid for their cocaine by making large-scale cash deposits into different bank accounts that Lavenant controlled.

Lavenant is a former enforcer and drug smuggler for the Arellano-Felix Organization (“AFO”) – a drug trafficking cartel based in Tijuana, Mexico.  He was featured prominently in a National Geographic Documentary, “Tijuana Drug Lords,” in which he discussed his role in the AFO.

Regarding the convictions, United States Attorney Oberly said, “I commend the DEA offices in Delaware and San Diego, Homeland Security Investigations, the Internal Revenue Service Criminal Investigative Division, the Wilmington Police Department, the Newark (DE) Police Department, and the California Department of Justice for their collaborative efforts in dismantling a major drug source whose cocaine made it to the streets of Wilmington.  This investigation shows our Office’s commitment to prosecute drug dealers who have a negative impact on Delaware, regardless of where they reside.” 

The case was investigated by the Drug Enforcement Administration, Department of Homeland Security – Homeland Security Investigations, and the Internal Revenue Service Criminal Investigative Division.  The case was prosecuted by Assistant United States Attorneys Robert F. Kravetz and Jennifer L. Hall.  

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that the federal grand jury returned a Superseding Indictment charging Michael A. Zimmerman, age 56, of Dover with additional fraud and money-laundering offenses.

The Superseding Indictment alleges that Zimmerman made a false statement in April 2008 in connection with a $685,206.00 construction draw request to The Bancorp Bank (“Bancorp”) for the Long Neck project in Sussex County, Delaware.  The Superseding Indictment alleges that two line items within that draw request, totaling $440,206.00, were false and were not for work that was not connected to the Long Neck project.  According to the Superseding Indictment, Zimmerman submitted several forged and/or fraudulent documents to Bancorp in connection with the construction draw request.  Zimmerman’s conduct in submitting the false draw request comprises Count 10 of the Superseding Indictment, which is punishable by a maximum term of 30 years imprisonment, a fine of $250,000.00, and mandatory restitution.

The Superseding Indictment further alleges that Zimmerman utilized at least a portion of the construction draw request for personal purposes unrelated to the Long Neck project.  In particular, Zimmerman caused the transfer of Bancorp loan proceeds from his company account to his personal bank account in the amount of $106,672.00.  Zimmerman ultimately used those funds to reimburse himself for a check he had written on or about May 7, 2008, toward his partnership investment in Club Wild Quail, LLC – an entity which owned the Wild Quail Country Club in Camden-Wyoming, Delaware.  The diversion of Long Neck project funds to Zimmerman’s personal account constitutes the money laundering count in Count 11 of the Superseding Indictment.  This charge carries a maximum term of 10 years imprisonment and a fine of up to $250,000.00.

The case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Office of Inspector General, Board of Governors of the Federal Reserve System and is being prosecuted by Assistant United States Attorneys Robert F. Kravetz and Lesley F. Wolf.

Members of the public are reminded that an Indictment is only an allegation and that a defendant is presumed innocent until proven guilty.

See also:  http://www.justice.gov/usao/de/news/2013/01-29.html

Zimmermin First Superseding Indictment

$2.6 Million Will Go To Projects to Aid Coastal
Environment Hit by Hurricane Sandy

WASHINGTON – Two shipping firms based in Germany and Cyprus today pleaded guilty to felony obstruction of justice charges and violating the Act to Prevent Pollution from Ships related to the deliberate concealment of vessel pollution from four ships that visited ports in Delaware, New Jersey, and Northern California, the U.S. Attorney’s Offices in Delaware, New Jersey and, the Department of Justice Environment and Natural Resources Division and the U.S. Coast Guard announced.

U.S. Attorney for the District of New Jersey Paul J. Fishman and U.S. Coast Guard Deputy Commander of the Delaware Bay Sector Capt. Todd Wiemers announced the plea agreement – which includes a $10.4 million penalty, $2.6 million of which will be used to address environmental damage caused by Hurricane Sandy – at a press conference in Newark.

According to a multi-district plea agreement arising out of charges brought in the District of Delaware and District of New Jersey, Columbia Shipmanagement (Deutschland) GmbH (CSM-D), a German corporation, and Columbia Shipmanagement Ltd. (CSM-CY), a Cypriot company, have agreed to pay a $10.4 million penalty and be placed on probation for four years. During probation, the companies will be subject to the terms of an environmental compliance program that requires outside audits by an independent company and oversight by a court appointed monitor. The shipping firms admitted that four of their ships (three oil tankers and one container ship) had intentionally bypassed required pollution prevention equipment and falsified the oil record book, a required log regularly inspected by the U.S. Coast Guard. The case is the largest vessel pollution settlement in either Delaware and New Jersey. The guilty pleas were entered before U.S. District Judge Susan D. Wigenton in Newark federal court.

“This prosecution is a fine example of multi-district cooperation in enforcing federal environmental law and achieving a just sentence,” U.S. Attorney for the District of Delaware Charles M. Oberly III said.

“Deliberate pollution and intentional falsification of ship records to hide environmental crimes are serious offenses. These reprehensible actions not only damage the marine environment, but also put law breakers at a competitive advantage over those who respect the law and play by the by rules,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “We intend to send a message with these prosecutions that those engaged in deliberate despoiling of our precious natural resources will be vigorously prosecuted.”

“We in New Jersey are as sensitive as anyone to the need to preserve the shoreline,” U.S. Attorney Fishman said. “Shipping companies who foul the water by deliberately discharging oil and lying about it to the Coast Guard can expect to be prosecuted.”

“This was a case of willful pollution and deliberate falsification of records designed to deceive the Coast Guard,” said Captain David Fish, Chief of Investigations for the Coast Guard. “It takes both resources and a culture of compliance to abide by the law. We are hopeful that the remedial measures required as part of this criminal conviction will have a positive impact on these companies and serve as a message to other maritime companies as to what is expected.”

According to documents filed in this case and statements made in court:

 The $10.4 million penalty includes $2.6 million in organizational community service payments to assist the coastal maritime environment in New Jersey and Delaware damaged by Hurricane Sandy. The plea agreement directs the funds to environmental projects that will be selected by the National Fish & Wildlife Foundation to help conserve, preserve and restore the coastal environment of New Jersey and Delaware hit by Hurricane Sandy.

 The investigation into the M/T King Emerald was launched on May 7, 2012, after several crew members provided cell phone photos and other evidence to Coast Guard officers conducting a routine inspection. The King Emerald was engaged in various types of illegal discharges of bilge waste dating back to at least 2010. The defendants admitted that illegal discharges of both sludge and oily bilge waste were discharged at night off the coast of Central America, including a discharge within the Exclusive Economic Zone of Costa Rica where a national park is located. The ship’s second engineer pleaded guilty previously and will be sentenced in Newark on April 3, 2013.

 The Delaware investigation began in October 2012, after several crew members of the M/T Nordic Passat provided the Coast Guard with a thumb drive containing photographs and video showing how illegal discharges had been sent overboard through the ship’s sewage system. They also alleged that sludge had been put into the ship’s cargo tanks and that logs showing sludge had been incinerated onboard had been falsified. The charges involving the M/V Cape Maas stem from a whistleblower report to the Coast Guard when the ship visited the port in San Francisco. He provided a video showing the operation of the oily water separator pumping overboard without the use of the oil content monitor to detect and prevent oil from being illegally discharged.

 Just two weeks prior to today’s plea, the defendants and their attorneys disclosed violations on a fourth ship, the M/T Cape Taft that was then anchored in New York waters and destined for New Jersey. After the ship disclosed problems to the company, an internal investigation revealed that the ship’s oily water separator had been used improperly for some time. Instead of sensing a sample of overboard discharges, it was instead flushed with fresh water by the crew. The ship’s oil record book was revised by CSM-D to reveal 16 instances where it was false. The defendants cooperated with the investigation and provided the government with video replays of the oil content monitor showing when the crew had “tricked” the sensor with fresh water.

In pleading guilty, the defendants have admitted the following in a detailed joint factual statement filed in Court:

• The King Emerald oil tanker used three different methods to illegally dispose of oily bilge waste. In April 2012, approximately five tons of oily waste was discharged in the exclusive economic zone of Costa Rica approximately 45 miles from a national park.

• At least three chief engineers and the second engineer were involved in illegal discharges and intentional falsification of the oil record book for the King Emerald. In one instance, the oily water separator was operated solely for the purpose of generating data on the ship’s electronic recording device to account for an illegal discharge that had already taken place.

• During the Coast Guard boarding in Carteret, N.J., the second engineer lied to inspectors and then hid a valve used to make illegal discharges in an overhead space on the ship.

• Oil contaminated bilge waste was illegally pumped overboard from the M/T Nordic Passat on the orders of the chief engineer and second engineer with a portable pump and “magic hose” that was draped down three levels of the engine room to dump overboard through the sewage system.

• Illegal discharges have been made from the M/T Nordic Passat since 2006 by “tricking” the sensor designed to detect oil with fresh water during overboard discharges on a regular and routine practice by or at the direction of the chief engineer and second engineer. As a result, virtually every discharge totaling approximately 2,000 tons of unmonitored and oil contaminated bilge waste were discharged into ocean waters illegally and in violation of MARPOL over at least a six-year period, and all of the corresponding entries in the oil record book were false.

• During the Coast Guard boarding of the Nordic Passat, senior ship engineers lied to the Coast Guard and told lower level crew members to lie.

• On the M/V Cape Maas, a container ship, the manufacturer’s seal on the oil content monitor had been broken and fresh water had been used to trick the sensor.

The plea agreement sets forth the counts charged as to each defendant in each district including six counts involving three vessels in New Jersey and four counts involving one ship in Delaware. The guilty pleas include violations of the Act to Prevent Pollution from Ships for failing to maintain an accurate oil record book, obstruction of justice and making false statements. The maximum penalty for each of these felony offenses is $500,000 or up to twice the gross gain or loss from the offense for a corporation.

This prosecution was made possible through the combined efforts of the U.S. Coast Guard Districts 1, 5 and 11; Coast Guard Sectors New York, Delaware Bay, and San Francisco; Coast Guard Investigative Service, Coast Guard Office of Maritime and International Law; and Coast Guard Office of Investigations and Analysis.

The government is represented by Edmond Falgowski, Assistant U.S. Attorney in Delaware; Kathleen P. O’Leary, Assistant U.S. Attorney in the Criminal Division in New Jersey; Richard A. Udell, Senior Trial Attorney, and Stephen Da Ponte, Trial Attorney, of the Environmental Crimes Section of the U.S. Department of Justice Environment and Natural Resources Division. Assistance was also provided by the U.S. Attorney’s Office for the Northern District of California.

WILMINGTON, Del. – Dr. Wronald Best, age 55, of Owensboro, Kentucky, was sentenced to one year in prison today for conspiracy to commit criminal copyright infringement, in which Best obtained over $2.3 million in stolen software from Chinese and Russian cybercriminals.  Best also was sentenced to three years of supervised release, which will commence following his prison term.

Investigation of China-based Cybercriminal Leads to Identification of Dr. Wronald Best

According to statements made at today’s hearing and documents filed in court, the U.S. Department of Homeland Security, Homeland Security Investigations, identified a China-based website located at www.crack99.com that was advertising thousands of pirated software titles at a fraction of their retail value.  The investigation revealed that this website was operated by Xiang Li, age 36, of Chengdu, China, who used the website to distribute pirated or cracked software to customers all over the world, including the United States.  Software is “cracked” when its digital license files and access control features have been disabled or circumvented.

            The HSI investigation revealed that between April 2008 to June 2011, Xiang Li engaged in over 500 transactions, in which he distributed approximately 550 different copyrighted software titles to at least 325 purchasers located in at least 28 states and over 60 foreign countries.  These software products were owned by approximately 200 different manufacturers and were worth over $100 million.  The software is used in a wide range of applications including defense, engineering, manufacturing, space exploration, aerospace simulation and design, mathematics, and explosive simulation. More than one-third of the unlawful purchases were made by individuals within the United States, including small business owners, government contractors, students, inventors, and engineers.

Between January 2010 and June 2011, undercover agents made a series of purchases of pirated software worth hundreds of thousands of dollars from Xiang Li’s CRACK99 website.  The investigation culminated in a face-to-face meeting between Xiang Li and undercover agents on the Island of Saipan, in June 2011.  Xiang Li had agreed to travel from China to Saipan to deliver pirated software, design packaging, and 20 gigabytes of proprietary data obtained from an internal computer server of a U.S. software company to undercover agents posing as U.S. businessmen.  In addition, Xiang Li and the undercover agents were meeting to discuss a plan to distribute pirated software to small businesses in the United States.  The undercover agents arrested Xiang Li on June 7, 2011, after he delivered the stolen intellectual property to them at a Saipan hotel.  Xiang Li was transported to the District of Delaware, where he has remained in custody since June 2011.

            On January 7, 2013, Xiang Li pled guilty to conspiracy to commit criminal copyright infringement and wire fraud in the United States District Court for the District of Delaware.  Li is scheduled to be sentenced by United States District Judge Leonard P. Stark on May 3, 2013. 

Dr. Wronald Best Conspires with International Cybercriminals to Commit IP Theft

            During the investigation, agents learned that Dr. Wronald Best was one of CRACK99’s top customers in 2008 and 2009.  As the investigation shifted focus to Best’s activities, agents learned that between September 2008 and May 2011, Best conspired with Xiang Li and other computer software crackers located in China and Russia to obtain and utilize unauthorized copies of industrial-grade software in the performance of government contracts for the military and law enforcement sectors.  At the time, Best held the position of “Chief Scientist” at MPD, Inc., a Kentucky-based government contractor that services the U.S. and foreign militaries and law enforcement agencies.

The HSI investigation revealed that Best communicated electronically with approximately 35 different computer code crackers and obtained over 60 pirated software applications from Chinese and Russian sources.  He paid over $6,000 to obtain pirated software worth over $2.3 million.  Best told special agents that he used that cracked software to conduct computer simulations on components MPD, Inc. was designing for use in military helicopters, including the Black Hawk helicopter and the presidential helicopter fleet, commonly referred to as “Marine One.”  Other projects on which Best used cracked software included designing Patriot missile components, police radars and breath analysis equipment widely used by American police departments.

The investigation also confirmed that Best was more than a customer of Chinese and Russian cybercriminals.  Best also used his position as Chief Scientist” for a government contractor to obtain trial licenses to use various software applications, which he then provided to cybercriminals for cracking and future dissemination.  He also provided these international software pirates with instructions on how to disable the security devices in certain software.

Following the sentencing hearing, United States Attorney Charles M. Oberly, III, stated: “Each year, American companies lose intellectual property valued in the billions of dollars to international cybercriminals engaged in rampant digital theft.  Mr. Best’s offenses are aggravated by the fact that he used pirated software obtained from these thieves to design parts for our military and law enforcement personnel.  The successful prosecution of this conspiracy ring proves that neither the international cybercriminal behind a computer in China nor his customers behind computers in America are beyond the reach of U.S. law enforcement.”

“Dr. Best betrayed our country and those who are sworn to protect it, by conspiring with international cyber thieves who believed they could remain anonymous in cyberspace.  They were wrong,” said John P. Kelleghan, special agent in charge of Homeland Security Investigations in Philadelphia.  “HSI and our law enforcement partners will continue to ensure that those who commit these crimes, no matter where they reside, are held accountable for their actions.”

This case is being investigated by the United States Department of Homeland Security, Homeland Security Investigations, and the Defense Criminal Investigative Service.  This case is being prosecuted by Assistant United States Attorneys David L. Hall and Edward J. McAndrew.

WILMINGTON, Del. – David Osborn, age 41, of New Castle, Delaware, was sentenced today to 5 years in prison for transportation of child pornography via AOL chat rooms and email.  Osborn also was sentenced to 5 years of supervised release following his prison sentence.  He also will be required to register as a sex offender in any jurisdiction in which he lives, works, or attends school.  United States Attorney Charles M. Oberly, III made the announcement following Osborn’s sentencing hearing before United States District Judge Richard G. Andrews.

According to statements made at today’s hearing and documents filed in court, Osborn was identified by the Federal Bureau of Investigation through reports of child pornography trafficking that had been provided by AOL LLC to the National Center for Missing and Exploited Children (“NCMEC”).  Under federal law, internet service providers, such as AOL, are required to report suspected child pornography being transmitted over their servers to NCMEC, which then directs these “cybertips” to the appropriate law enforcement agency.  AOL reported that an AOL user, later identified as Osborn, used AOL email to trade images of child pornography with another AOL customer in South Florida.     

On May 26, 2011, federal agents executed a search warrant at Osborn’s New Castle residence and arrested Osborn after finding over 700 images of child pornography on his computer equipment.  Law enforcement agents also searched Osborn’s email account, which was found to contain additional images of child pornography.  Osborn’s child pornography collection focused mainly on girls between the ages of four and sixteen.  Forensic data found on the equipment indicated that Osborn had been receiving and distributing images of child pornography for over eight years.  Also found were over 500 internet chat logs between Osborn and others regarding child sexual exploitation.  Investigators also learned that Osborn was the moderator of an online chat room devoted to discussions of hitting and beating children to coerce them into engaging in sexual acts. 

Over the 13 years prior to his May 26, 2011 arrest, Osborn worked as a substitute teacher in the Appoquinimink School District and as a school bus driver for elementary and high school students at various New Castle County Schools.  Osborn also was a member of Masons Lodge Number 26, in Newport, Delaware, where he held various positions supervising youth groups for pre-teen and teenage boys and girls. 

This case is being investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Edward J. McAndrew, of the District of Delaware, and Trial Attorney Michael Grant, of the United States Department of Justice’s Child Exploitation and Obscenity Section.

For more information about reporting online child exploitation to the national CyberTipline, visit the National Center for Missing and Exploited Children’s website at: www.missingkids.com.  For more information about the United States Department of Justice’s Project Safe Childhood program, visit http://www.justice.gov/psc/.

39 Count Indictment Alleges The Defendant Defrauded The Irs, The State Of New York, And Her Own Clients

WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that an Indictment has been handed down by a federal grand jury charging Dawn Chamberlain, age 36, of Claymont, Delaware, with seven counts of mail fraud (18 U.S.C. § 1341), one count of wire fraud (18 U.S.C. § 1343), eight counts of aggravated identity theft (18 U.S.C. § 1028A), and twenty counts of submitting false claims to the United States (18 U.S.C. § 287).  The defendant faces up to 20 years in prison on each count of wire fraud and mail fraud, up to 5 years in prison on each count of false claims, and consecutive 2-year terms of imprisonment on each of the aggravated identity theft charges, in addition to possible fines and restitution. 

According to the Indictment, from 2009 through 2012, the defendant acted as a tax preparer in Delaware.  She filed false and fraudulent U.S. Individual Federal Income Tax Returns for other people.  In the returns, the defendant claimed more than $730,000 in credits to which her clients were not entitled, including the American Opportunity Tax Credit and the Earned Income Tax Credit.

The Indictment further alleges that the defendant caused the refunds generated by the fraudulent federal income tax returns to be deposited into her own bank accounts, and bank accounts of her family members.  She returned less than the full amount of the refunds to her clients, converting the remaining proceeds to her personal use. 

The Indictment charges that the defendant used her client’s names, dates of birth, and social security numbers to file false and fraudulent New York State Resident income tax returns, without their knowledge.  The defendant took advantage of New York’s tax laws, requesting refunds of more than $210,000.  The Indictment alleges that the defendant knew or should have known that these clients did not live in the State of New York.

U.S. Attorney Oberly gave the following comment, “This case should send a clear signal during this tax filing season that individuals who file false claims against the United States Treasury will face significant penalties.  I find fraud upon the government to be particularly troubling, and I am committed to working with the Internal Revenue Service to prosecute these cases and seek incarceration wherever possible.”
“Individuals who commit refund fraud and identity theft of this magnitude deserve to be punished to the fullest extent of the law,” stated Akeia Conner, Special Agent in Charge, IRS Criminal Investigation.  “We, along with our law enforcement partners and the United States Attorney's Office, continue to do our part in protecting the integrity of the tax system and those individuals whose identities were stolen, as well as a monetary loss against the U.S. Treasury."

This case is the result of an investigation conducted by the Internal Revenue Service, the United States Postal Inspection Service, and the Social Security Administration, Office of the Inspector General, with cooperation from the State of New York.  The prosecution is being handled by Assistant United States Attorney Lauren Paxton, District of Delaware. 

The charges in the Indictment are only allegations.  The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Kelvin Cook, age 34 of Wilmington, Delaware, pleaded guilty to conspiracy to possess with the intent to distribute five kilograms or more of cocaine and one kilogram or more of heroin, in violation of Title 21, United States Code, Sections 841 and 846.  The charge carries a maximum term of life imprisonment, with a mandatory minimum term of ten years imprisonment.  The Court scheduled a sentencing hearing for Thursday, June 20, 2013, at 3:00 p.m.

According to facts introduced at the change of plea hearing, Cook was responsible for recruiting a number of drug couriers to take smuggling trips to Panama to illegally import cocaine and heroin into the United States.  Agents identified a total of 19 couriers who took smuggling trips on behalf of the organization, and who smuggled, or attempted to smuggle, more than 13 kilograms of cocaine and five kilograms of heroin from Panama to Delaware.  Cook also was responsible for a significant crack cocaine distribution network on the 500 block of West Sixth Street in Wilmington.

Cook is the fourteenth individual charged in connection with the Wilmington-based Panama drug conspiracy to enter a guilty plea in federal court.   Ten defendants have entered guilty pleas in the United States District Court for the District of Delaware, while four other defendants have entered guilty pleas in the United States District Court for the Southern District of Texas.  In addition, three defendants are in Panamanian custody, while two other defendants remain at large.

The investigation was led by the Drug Enforcement Administration, the Department of Homeland Security – Homeland Security Investigations, the Internal Revenue Service – Criminal Investigation Division, and the Wilmington Police Department.

This case is being prosecuted by Assistant United States Attorney Robert F. Kravetz.  For further information, contact Press Information Officer Kimberlynn Reeves at (302) 573-6277, ext. 16287.

For additional information regarding the case, see also:  http://www.justice.gov/archive/usao/de/news/2011/Panama%20Press%20Release.html; http://www.justice.gov/archive/usao/de/news/2012/07-27.html; http://www.justice.gov/archive/usao/de/news/2012/07-25.html; http://www.justice.gov/archive/usao/de/news/2012/Banerjee%20Plea%20Release.html

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that a federal grand jury sitting in Delaware returned an indictment charging John Boney, age 35, of New Castle, Delaware with witness tampering and interstate transportation of threats, in violation of Title 18, United States Code, Sections 875 and 1512. 

If convicted of the charges contained in the indictment returned today, John Boney faces a maximum sentence of 20 years in prison, a $250,000 fine, and 3 years of supervised release following any prison sentence. 

According to the indictment and court documents filed in the case, John Boney was arrested on January 24, 2013 in the U.S. Courthouse in Wilmington after he used Facebook to threaten a government witness scheduled to testify that day in a federal criminal trial.  In that federal criminal trial, John Boney’s brother, William Boney, age 39, of Pike Creek, was charged with narcotics trafficking, attempted murder by retaliating against an informant, and soliciting another person to retaliate against an informant by committing murder. 

The trial of William Boney stemmed from his November 2010 attempt to broker a seven-kilogram cocaine deal worth approximately $217,000 at his residence in Delaware.  Drug Enforcement Administration (“DEA”) agents intervened before the deal could be completed, and William Boney, along with four other individuals, was arrested.  While attempting to cooperate with DEA agents against other narcotics traffickers, William Boney plotted the murder of a confidential informant who had notified DEA agents about the November 2010 cocaine deal. During meetings with a person he solicited to carry out the murder, William Boney discussed killing the confidential informant or the informant’s young child.

John Boney was present in the U.S. Courthouse during William Boney’s criminal trial, which began in the Wilmington federal building on January 22, 2013.  On the morning of January 24, 2013, a government witness arrived at the courthouse to testify, but refused to enter the courtroom.  The government witness informed law enforcement agents that John Boney sent a message to the witness’s brother on Facebook threatening to kill the witness if he testified against William Boney.  In the message, John Boney wrote:  “Snitches get laid in ditches right isn’t that the street rule and your bro is a state witness against my bro after he owes him 30 grand.”  John Boney ended the message by writing, “if he testifies against someone who helped him out I’m sorry for what happens to him.”  

After learning of the threat, federal agents removed John Boney from the courtroom in which William Boney’s trial was being held, interviewed him, and seized an Android smartphone that John Boney admitted using to post the threat on Facebook.  John Boney was arrested and remains in federal custody. 

On January 29, 2013, the jury returned guilty verdicts against William Boney on charges of conspiracy to possess with intent to distribute cocaine, in violation of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(A), and 846; attempted murder by retaliating against an informant, in violation of Title 18, United States Code, Section 1513(a)(1)(B); and soliciting another person to retaliate against an informant by committing murder, in violation of Title 18, United States Code, Sections 1513(a)(1)(B) and 373. 

This case is being investigated by U.S. Drug Enforcement Administration and is being prosecuted by Assistant United States Attorneys Jamie M. McCall and Edward J. McAndrew. 

Criminal indictments are only charges and are not evidence of guilt.  A defendant is presumed to be innocent unless and until proven guilty.

WILMINGTON, Del – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that a federal jury after less than four hours of deliberation over lunch found defendant William Boney guilty on charges of conspiracy to possess with intent to distribute cocaine, in violation of Title 21, United States Code, Sections 841(a)(1) and (b)(1)(A), and 846; attempted murder by retaliating against an informant, in violation of Title 18, United States Code, Section 1513(a)(1)(B); and soliciting another person to retaliate against an informant by committing murder, in violation of Title 18, United States Code, Sections 1513(a)(1)(B) and 373.  The jury returned its verdict yesterday after a one-week trial.

According to the evidence presented at trial, on November 7, 2010, Boney attempted to broker a seven-kilogram cocaine deal worth approximately $217,000 at his residence in Delaware.  Before the cocaine deal could be completed, however, Drug Enforcement Administration (“DEA”) agents intervened after using a confidential informant to infiltrate the cocaine deal.  Boney, along with four other individuals, was arrested, and the DEA seized nearly five kilograms of cocaine.  Following his arrest, Boney was released to cooperate with the DEA in ongoing drug investigations. 

While released, Boney discovered the identity of the confidential informant who assisted the DEA with the investigation of the November 7, 2010 drug deal.   Boney then began to plot this person’s murder.  DEA agents, however, uncovered Boney’s plot and inserted a second confidential informant into the Defendant’s scheme to portray the role of a “hit man.”  Boney met with the purported “hit man” three times between May 22, 2011 and July 3, 2011.  During these meetings, Boney discussed killing the confidential informant.  If the informant was not present when the “hit man” entered the informant’s home, Boney requested the “hit man” kill the informant’s young child.  Boney also provided critical information to the purported “hit man” to carry out this act.  Boney further showed the “hit man” where various individuals lived who he believed possessed large amounts of cash or drugs so that the “hit man” could conduct home invasion robberies of these residences to collect the cash or drugs as payment for the murder of the confidential informant.  

A sentencing hearing will be scheduled by the District Court.  At sentencing, Boney faces a mandatory minimum sentence of 10 years of imprisonment, and up to life in prison for the drug conspiracy offense.  He also faces a maximum penalty of 30 years in prison for attempted murder by retaliating against an informant; and a maximum penalty of 15 years in prison for soliciting another person to retaliate against an informant by committing murder. 

United States Attorney Oberly congratulated the DEA investigators and the prosecution team on a well-earned conviction of a defendant whose ruthlessness included soliciting a hit man to kill the informant and/or his baby.  He stated: ?The protection of witnesses and other innocents is of paramount concern and threats, intimidation or other actions against witnesses and others will always be fully investigated and prosecuted fully.”

Drug Enforcement Administration Special Agent in Charge David G. Dongilli said, “DEA will not tolerate threats against any person that has provided assistance or cooperated with DEA.  I wish to extend my thanks to all of the law enforcement agencies that participated in this investigation, including the Delaware State Police, Delaware Department of Probation and Parole, Wilmington Police Department, Newark Police Department, and the New Castle County Police Department.  I also want to extend my appreciation to the U.S. Attorney’s Office for the District of Delaware for their dedication, cooperation, professionalism, and support in the investigation and prosecution of this case.”

The case was prosecuted by Assistant United States Attorneys Jamie M. McCall and Ilana Eisenstein, District of Delaware.  For further information, please contact AUSA McCall at 302-573-6079 or AUSA Eisenstein at 302-573-6082.

WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Michael A. Zimmerman, age 55, of Dover was indicted by a federal grand jury on January 23, 2013 for numerous bank fraud-related offenses.  More specifically, Mr. Zimmerman was charged with one count of conspiracy to commit bank fraud and seven counts of making a false statement to a financial institution, each punishable by a maximum term of 30 years imprisonment and a fine of $1,000,000.00.  The indictment also charges Mr. Zimmerman with one count of money laundering in violation of Title 18, United States Code, § 1957.  This charge carries a maximum term of 10 years imprisonment and a fine of $250,000.00.

Zimmerman, a developer operating primarily in Kent and Sussex Counties, obtained financing in excess of $37 million from the Wilmington Trust Company (“Wilmington Trust”) in connection with three development projects— Salt Pond Plaza, Compass Pointe, and the Shoppes at Fieldstone.  In March 2011, prior to its acquisition by M&T Bank, Wilmington Trust sold the debt associated with these, as well as other projects in which Zimmerman was a buyer, to a third party.  Wilmington Trust incurred a loss on these three projects alone in excess of $26 million. 

The Indictment alleges that in 2007 and 2008, in connection with the Salt Pond Plaza, Compass Pointe, and Shoppes at Fieldstone projects, Zimmerman and uncharged co-conspirators submitted false draw requests for payment from the bank and requested and received advanced funds in violation of the terms of the loan agreements with Wilmington Trust.  Wilmington Trust funded the draw requests, which were not utilized for the purposes that Zimmerman and his co-conspirators had represented.  In one instance, Zimmerman requested and received $150,000.00 in funds from Wilmington Trust that he represented to be for architectural and engineering costs, but instead used the money to finance acquisition of a personal interest in a development in the Bahamas.

United States Attorney Oberly said, “The Indictment reflects this Office’s commitment to hold accountable those who criminally contributed to the failure of the Wilmington Trust Company.  The shareholders and employees of the bank, as well as the community, have been harmed by this failure, and the government remains firmly committed to prosecuting those whose fraudulent acts compromised the soundness and viability of a Delaware institution.  The investigation continues.”        

“The FBI is committed to ensuring banks and similar financial institutions are seen as sound and stable institutions, said Stephen Vogt, Special Agent in Charge of the FBI’s Wilmington Office.  “Those who perpetrate sophisticated fraud schemes threaten the stability of financial institutions and, with the assistance of our law enforcement partners, will be prosecuted to the fullest extent of the law.” 

“The IRS, along with our law enforcement partners, will vigorously pursue unscrupulous individuals who abuse our financial systems and violate the public trust,” said Akeia Conner, Special Agent in Charge, IRS Criminal Investigation. “This indictment demonstrates the federal law enforcement agencies’ collective determination to restore and ensure that trust.”

“Zimmerman’s alleged large scale fraud against a TARP bank included diverting construction loans for unauthorized purposes, such as for a project in the Bahamas,” said Christy Romero, Special Inspector General for Troubled Asset Relief Program (SIGTARP).  “Defrauding a TARP bank is the same as defrauding American taxpayers who funded the bailout, and SIGTARP and our law enforcement partners will bring to justice those responsible for crimes related to TARP.”

“We are committed to working with our law enforcement partners in holding accountable wrongdoers whose fraudulent actions materially impact the safety and soundness of financial institutions regulated by the Federal Reserve Board,” said Mark Bialek, Inspector General of the Board of Governors of the Federal Reserve System.

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Office of Inspector General, Board of Governors of the Federal Reserve System.  The case is being prosecuted by Assistant United States Attorneys Robert F. Kravetz and Lesley F. Wolf.

Members of the public are reminded that an Indictment is only an allegation and that a defendant is presumed innocent until proven guilty.

Indictment

WILMINGTON, Del. - Jamie Lynn Snyder, age 35, of Newark, Delaware, was sentenced to 58 months in prison today for criminal copyright infringement and identity theft in which she obtained over $1 million in illicit proceeds.  Snyder also was sentenced to 3 years of supervised release, which will commence following her prison term, and was ordered to pay a total of $1,013,407.69 in restitution to her victims. 

According to statements made at today’s hearing and documents filed in court, between January 1, 2008 and April 27, 2010, Snyder operated websites through which she sold, without authorization, at least 24,044 individual copies of pirated software products copyrighted by at least 81 different software manufacturers to thousands of customers.  The total estimated retail value of the pirated software sold by Snyder surpassed $5.9 million. 

The FBI made undercover purchases of over 20 software titles from the websites, which were located online at www.cheapestsoftwareanywhere.com and www.cheapestlegalsoftware.com.  Included among the purchased software were some of the most popular titles manufactured by Adobe, Apple, Autodesk and Microsoft.  The FBI also received numerous complaints from consumers across the country who believed they were lawfully purchasing software from Snyder’s websites, only to learn that Snyder was not authorized to sell the software, which could not be updated properly or registered with the manufacturers.  In fact, the professional-looking websites also contained various statements attesting to their legitimacy and lawful sale of the software to consumers.

The FBI’s investigation further revealed that Snyder personally profited in the amount of $971,935.10 from the unlawful software transactions between February 26, 2008 and March 3, 2010. 

In April 2010, the FBI executed a search warrant at Snyder’s Newark residence and interviewed Snyder.  During that interview, Snyder confessed to operating the websites while knowing that it was unlawful for her to sell the software titles without authorization.  She estimated that she was advertising approximately 400 software titles on the website, and had been earning approximately $25,000 to $35,000 per month from sales over past two years. 

On November 16, 2011, Snyder pled guilty to criminal copyright infringement and was released on her own recognizance pending sentencing.  Upon learning of Snyder’s guilty plea from news reports, the owners of TriMark Enterprises LLC, which employed Snyder as a bookkeeper, reported to the Delaware State Police and the FBI that Snyder had embezzled approximately $40,000 from the Wilmington-based company between February 2011 and January 2012.  According to the business owners, Snyder forged numerous checks payable to herself and her creditors and also made unauthorized purchases of personal items on a company credit card.  When confronted by a Delaware State Police detective about the allegations, Snyder admitted to the fraud.

Following the sentencing hearing, United States Attorney Charles M. Oberly, III, stated, “Fueled by the Internet, American companies lose billions of dollars each year to the unlawful distribution of products that they invent and manufacture.  What Snyder did from computers in her living room was digital theft of over $5.9 million in merchandise.  While in the process of pleading guilty to that offense, she went on to steal $40,000 from her local employer.  Today’s sentence demonstrates that serial fraudsters should expect to receive stiff sentences.”

This case is being investigated by the Federal Bureau of Investigation and the Delaware State Police, and is being prosecuted by Assistant United States Attorney Edward J. McAndrew.

WILMINGTON, Del. – Xiang Li, age 36, of Chengdu, China, pled guilty late yesterday to one count each of conspiracy to commit criminal copyright infringement and conspiracy to commit wire fraud, for his role in operating a website used to distribute over $100 million worth of pirated software around the world.  Li, who will be sentenced on May 3, 2013 by United States District Judge Leonard P. Stark, faces a maximum sentence of twenty five years in prison, a fine of $250,000, and 3 years of supervised release following his prison sentence.  The entry of the guilty plea was announced at a press conference held this morning by Charles M. Oberly, III, United States Attorney for the District of Delaware and John Morton, Director, United States Immigration and Customs Enforcement. 
           
According to statements made at the plea hearing and documents filed in court, the U.S. Department of Homeland Security, Homeland Security Investigations, identified Xiang Li as the operator of a website located at www.crack99.com that was advertising thousands of pirated software titles at a fraction of their retail value.  The investigation revealed that Xiang Li used the CRACK99 website to distribute pirated or cracked software to customers all over the world, including the United States.  Software is “cracked” when its digital license files and access control features have been disabled or circumvented. 

Through emails sent to customers of his website, Xiang Li described himself as being part of “an international organization created to crack” software.  In a November 2008 email exchange with a customer, for example, Xiang Li stated that he would charge $1,000 to obtain a cracked version of a particular software program.  When the customer wrote, “Yes ok tell me who do this,” Defendant replied:  “Experts crack, Chinese people Sorry can not reveal more.” 

During the course of the charged conspiracy (from April 2008 to June 2011), Xiang Li engaged in over 500 transactions, in which he distributed approximately 550 different copyrighted software titles to at least 325 purchasers located in at least 28 states and over 60 foreign countries.  These software products were owned by approximately 200 different manufacturers and were worth over $100 million.  The software is used in a wide range of applications including defense, engineering, manufacturing, space exploration, aerospace simulation and design, mathematics, and explosive simulation.

More than one-third of the unlawful purchases were made by individuals within the United States, including small business owners, government contractors, students, inventors, and engineers.  Some of Xiang Li’s biggest American customers held significant engineering positions with government agencies and government contractors.  For instance, Xiang Li sold twelve cracked software programs worth over $1.2 million to Cosburn Wedderburn, who was then a NASA electronics engineer working at NASA’s Goddard Space Flight Center, in Greenbelt, Maryland.  Xiang Li also sold ten cracked software programs worth over $600,000 to Dr. Wronald Best, who held the position of “Chief Scientist” at a Kentucky-based government contractor that services the U.S. and foreign militaries and law enforcement with a variety of applications such as radio transmissions, radar usage, microwave technology, and vacuum tubes used in military helicopters.  Both Wedderburn and Best have pled guilty to conspiracy to commit criminal copyright infringement and are awaiting sentencing in the District of Delaware.   

Between January 2010 and June 2011, undercover agents made a series of purchases of pirated software worth hundreds of thousands of dollars from Xiang Li’s CRACK99 website.  The investigation culminated in a face-to-face meeting between Xiang Li and undercover agents on the Island of Saipan, in June 2011.  Xiang Li agreed to travel from China to Saipan to deliver pirated software, design packaging, and 20 gigabytes of proprietary data from a U.S. software company to undercover agents posing as U.S. businessmen.  In addition, Xiang Li and the undercover agents were meeting to discuss a plan to distribute pirated software to small businesses in the United States.  The undercover agents arrested Xiang Li on June 7, 2011, after he delivered the stolen intellectual property to them at a Saipan hotel.  Xiang Li was transported to the District of Delaware, where he has remained in custody since June 2011.

One of the companies victimized by software piracy scheme stated, “Circumventing our commercial aerospace and defense software license mechanisms not only harms the competitiveness of our company, but also U.S. national security interests. In addition to the revenue lost, we spend significant legal resources obtaining patents and trademarks to protect our intellectual property.  We also invest a lot of energy administering software license agreements and product-based, end-user licenses, which are key components of our U.S. export control compliance and customer support programs.”

This case is being investigated by the United States Department of Homeland Security, Homeland Security Investigations, and the Defense Criminal Investigative Service.  This case is being prosecuted by Assistant United States Attorneys David L. Hall and Edward J. McAndrew.

WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Kyong Ho Kim, age 45, of Newark, Delaware, was sentenced today by the Honorable Leonard P. Stark, United States District Judge for the District of Delaware, to 97 months imprisonment and full restitution, after being convicted of wire fraud (18 U.S.C. § 1343), and engaging in monetary transactions in property derived from specified unlawful activity (Money Laundering, 18 U.S.C. § 1957).

The defendant solicited and obtained over US $2.2 million from more than eight victims in Delaware and elsewhere, through a fraudulent foreign currency trading scheme.  The defendant represented that he was a successful foreign currency trader and that he would invest his victims’ money in foreign currency markets.  Meanwhile, the defendant diverted most of the funds into his personal bank accounts.  The defendant continued the fraud over a decade by falsifying bank records and sending victims false financial statements, indicating that their investments had grown through foreign currency trading.  The defendant spent the diverted funds on personal items such as a high-end Mercedes, a yacht, and a lease on a waterfront home.

U.S. Attorney Oberly said of the sentence, “Fraud schemes targeting individual investors have a devastating impact on the victims’ financial and emotional well-being.  This case should send a clear signal that those who commit fraud by representing themselves as so-called investment advisors will face significant penalties.”

This case was prosecuted by Assistant United States Attorney Lauren M. McEvoy, and was investigated by the Federal Bureau of Investigation.