The FBI Story: Leadership, Integrity, Agility, Integration

Cyberstalking

Woman Sentenced for Harassing Victim on Social Media

The messages were relentless. A California woman couldn’t escape the barrage of malicious texts, phone calls, and social media posts originating from a mysterious individual with whom she had no previous connection.

The harassment didn’t stop until the FBI intervened and uncovered a trail of threats and extortion that led to a Miami college student— who is now behind bars for cyberstalking.

An unwanted relationship was being pushed on a victim who ultimately felt terrorized by an obsessed individual she didn’t even know, said Assistant U.S. Attorney Jodi Anton, who supported the FBI during the investigation. The constant intimidation was destroying her life, to the point where she could barely function at work and considered suicide.

The perpetrator, Kassandra Cruz, was completing her criminal justice degree at Florida International University and spent countless hours behind the computer between her studies. In June 2015, she became fixated on a woman she found on a pornography website and tracked down the actress through her social media accounts.

The victim was an 18-year-old high school student at the time looking for ways to get ahead in life. She made a bad decision trying out pornography, said Special Agent George Nau, who investigated the case out of the FBI’s Miami Field Office. It was something she kept hidden from her family and employers. She didn’t realize her past would come back to haunt her 15 years later.

Cruz gained access to two of the victim’s social media feeds by creating a fake persona of an attractive male U.S. Marine named Giovanni and sending friend requests. The former adult film actress accepted, and Giovanni began liking and commenting on almost every picture she shared. But the victim’s suspicions began to mount in September 2015, when Giovanni started to follow and like her friends’ posts as well.

Even while Cruz was being driven to jail, she still wanted to talk to the victim. She was blinded by her obsession and oblivious to the impact of her crime.

By the end of the summer, Cruz’s fake profiles were blocked, which angered her. She resorted to harassment and often violent threats, which were aimed not only at the victim but also her friends and family. Included in Cruz’s messages were a plot to expose the victim’s hidden past making adult films as well as demands to be paid $100,000 in return for leaving the victim alone.

Cruz’s flurry of e-mails, letters, and social media messages were taking their toll on the victim’s personal life and professional career. From the beginning of 2016 until late April, the victim received more than 900 phone calls and text messages on her cell phone alone. Approximately the same amount of unwanted calls were made to the victim’s home and work phones before the FBI ended the stalking.

Cruz had many fake social media accounts, so it was difficult at first to track all of the threats to the source, said Nau. She would create a new profile as soon as she was blocked. But ultimately, the e-mails, phone calls, and letters led us to her.

A turning point in the investigation took place in May 2016, when the FBI lured Cruz into a video chat with the victim to discuss paying the $100,000 extortion demand. While the conversation further solidified that Cruz was behind the threats, it was the in-person meeting arranged during the chat that allowed agents to finally make an arrest.

In August 2016, Cruz was sentenced to 22 months in prison after having been found guilty of cyberstalking.

Even while Cruz was being driven to jail, she still wanted to talk to the victim, said Nau. She was blinded by her obsession and oblivious to the impact of her crime.

Federal Funds Stolen from Non-Profit Health Care Clinics

Investigation Leads to Former CEO

Jonathan Dunning used clinic money to buy this now-shuttered facility, titled the building in his company’s name, and charged about $20,000 a month in rent.

The staff of two non-profit health care clinics diligently worked to offer critical medical care and services to the most vulnerable residents—young and old—of the Birmingham, Alabama, region. And to carry out its operations, the clinics received funds from a federal program specifically designed to offer a community safety net for the uninsured, the poor, the homeless, migrant and seasonal farm workers, and public housing residents.

But enter Jonathan Dunning, former CEO of both non-profits who—while working for the clinics and even after he left— orchestrated and carried out a seven-year criminal scheme to defraud the clinics and the federal government out of more than $16 million. The scheme severely affected the quality of care that clinic patients received.

After a joint federal investigation into his activities, Dunning was eventually convicted on nearly 100 counts of fraud and money laundering-related charges and was recently sentenced to a federal prison term of 18 years. He was also ordered to pay $13.5 million in restitution to the entities he defrauded, in addition to an order of forfeiture that divested him of any interest in real property he obtained through his criminal scheme.

The FBI portion of the investigation began in 2011 when the Birmingham FBI Field Office received an allegation that former CEO Dunning was taking money from the two clinics through seemingly illegal contracts with the group of for-profit businesses he had created. Our investigator soon learned that the Department of Health and Human Services Office of the Inspector General (HHS-OIG) had recently opened up its own investigation into Dunning after receiving similar allegations, so both agencies joined forces. An agent from the Internal Revenue Service-Criminal Investigation Division (IRS-CID) rounded out the team.

As a result of the investigation, law enforcement learned that Dunning had begun his scheme to skim some of the federal funds earmarked for the clinics while serving as their CEO, and he was able to continue the scheme even after he left and formed his own businesses, known collectively as Synergy companies. Dunning selected the men who replaced him as CEO for each clinic and was able to steer a variety of contracts to his own companies.

The investigation was extensive— FBI forensic accountants painstakingly examined the clinics’ and a related credit union’s accounting records. Investigators reviewed Dunning’s personal financials and the records of his for-profit businesses, as well as his electronic communications. They also interviewed over a hundred witnesses, including Dunning’s former employees from the clinics, persons affiliated with Synergy companies, and bankers associated with real estate transactions.

And investigators also found Dunning living a lavish lifestyle that had been funded by his fraud. Dunning was living large up until the moment of his arrest, which occurred in a luxury hotel room.

What was the impact of Dunning’s actions on the clinics he formerly oversaw? It was significant. Less money going to patient care meant that a number of doctors and other staff members had to be let go over time, aging equipment wasn’t replaced, and much-needed maintenance on the buildings went undone.

Eventually, as a result of Dunning’s actions, one of the health clinics had to close, leaving one less facility in Alabama to care for its most vulnerable residents. But the second clinic remains open for business, although it has changed its name.

Upon Dunning’s October 2016 sentencing, FBI Birmingham Special Agent in Charge Roger Stanton said, Stealing money away from programs that provided health care to poor and homeless people in order to live lavishly is an abominable crime. The FBI and its law enforcement partners are committed to joining forces and putting in the hours, and years if necessary, to stop this kind of crime.

Payback for a Debt Collector

Illegal, Aggressive Tactics Result in Jail Time

John Todd Williams, the owner of a debt collection company based in Georgia, used illegal and aggressive tactics to squeeze millions of dollars from thousands of victims. Now Williams is paying his own debt—to society—in the form of a five-year prison sentence.

The debt collection fraud scheme went on for nearly five years as Williams and those he employed ruthlessly tricked their victims into paying by pretending to be law enforcement officers and lawyers and illegally threatening arrest and other legal action. Some of the victims were so intimidated that they paid debts that had already been paid.

It was no holds barred in terms of what they told people over the phone, said Special Agent Brian Comisky, who investigated the case from the FBI’s New York Division. They yelled, screamed, harassed. They said, ‘We’re going to revoke your driver’s license. We’re going to send you to jail.’ It was nasty.

Often working from scripts, Williams and his employees at Williams, Scott & Associates (WSA) gave themselves fake dunning names and personas, telling victims they were detectives or investigators. They falsely claimed to be affiliated with law enforcement agencies such as the Department of Justice and the FBI, and regularly used legal jargon to scare and confuse victims.

They would take legal terms and throw them around, Comisky said, even though they made no sense. During Williams’ July 2016 trial, for example, evidence showed that victims were told that the statute of limitations on their civil legal rights had expired and that their debt was now a criminal matter that could only be resolved by voluntary payment or arrest.

What Williams and his collectors were saying—scaring the victims into paying by threatening them with arrest and jail—was fraudulent and illegal.

Debt collection companies like WSA buy debts—referred to in the industry as paper—from businesses whose customers failed to pay. WSA and other third-party collectors buy that debt at a fraction of the debt’s value, sometimes for pennies on the dollar. Then whatever they collect is profit. Although the industry has come under scrutiny for predatory collection practices, Comisky noted, WSA broke all the rules.

The fact that some of the victims did owe money is not what this case was about, he said. What Williams and his collectors were saying—scaring the victims into paying by threatening them with arrest and jail—was fraudulent and illegal.

The Federal Trade Commission, mandated to protect consumers, had received multiple complaints about WSA’s tactics, and in 2014, prosecutors at the United States Attorney’s Office in the Southern District of New York alerted the FBI about possible criminal activity on the part of the company.

An investigation was opened, and a search warrant executed in May 2014 at WSA’s office revealed the bogus scripts employees used to coerce victims. Testimony at trial revealed that approximately 6,000 victims nationwide paid WSA nearly $4 million.

After a jury found Williams guilty of conspiracy to commit wire fraud, a federal judge in November ordered the 50-year-old to serve five years in prison and pay nearly $4 million in restitution to victims.

Comisky, who specializes in white-collar crime and financial fraud investigations, said it was gratifying to put a stop to WSA’s illegal practices. When you heard some of the victims’ stories, he said, you realized that Williams and his employees would go to any lengths to collect.

If you would like to report a crime by a debt collector, contact the Federal Trade Commission: 1-877-FTC-HELP.

For information about dealing with debt collection companies, the FTC offers valuable information on its website, www.ftc.gov.

Seizing Crime Proceeds and Compensating Victims

Forfeiture as an Effective Law Enforcement Tool

Shown is one of the Rutland, Vermont, properties used as a drug house that was seized through the civil forfeiture process and returned to the Rutland community, where it will be rehabilitated for families.

Last fall, the U.S. Attorney’s Office in Vermont held a press conference and issued a press release announcing that the government and its public and private partners have completed an agreement to convert forfeited Rutland drug houses to safe, renovated houses.

So what’s the significance of that announcement? The legal forfeiture action it referred to grew out of a multi-agency law enforcement investigation into heroin and crack cocaine dealers who were operating out of various residences on the same street in Rutland, Vermont, spreading their poison throughout the community. Seven subjects were ultimately sentenced to federal prison terms. But beyond that, through the civil forfeiture process, the government was able to take possession of the very properties that were used in the commission of these crimes and facilitate their return to the Rutland community victimized by the criminals.

The FBI was one of the agencies involved in this investigation, which is just one example of how we use the federal forfeiture provisions. Forfeiture in general as a law enforcement tool allows us to accomplish a number of goals—from disrupting and dismantling criminal and terrorist organizations and punishing criminals to compensating victims and protecting communities.

What exactly is forfeiture? In a nutshell, it’s the legal taking of property by the U.S. government because the property was either used in the facilitation of a federal crime or obtained through the illegal proceeds of a federal crime. The FBI, like other federal investigative agencies, began using forfeiture in earnest when Congress passed the Comprehensive Crime Control Act of 1984, which established the Department of Justice’s Assets Forfeiture Fund to receive and lawfully manage the proceeds of federal forfeitures.

What sort of items can be seized for forfeiture? Just about anything of value—including cash, financial accounts, securities, businesses, real estate, jewelry, professional licenses, antiques, artwork, lottery winnings, vehicles of all kinds, high-end electronics, and weapons.

Examples of Forfeiture in Action

Criminal and/or civil forfeiture actions are often a vital part of FBI cases. Here are a few examples:

•In December 2016, a civil complaint filed in Washington, D.C.—seeking the forfeiture of multiple antiquities associated with the Islamic State of Iraq and the Levant (ISIL)—alleged that ISIL markets and sells antiquities to finance its terror operations.

•In September 2016, a civil complaint was filed in New Jersey seeking the forfeiture of six dogs seized in connection with an interstate dog fighting ring.

•In April 2016, a civil forfeiture complaint was filed in New York seeking forfeiture of the proceeds of a $100 million international business e-mail fraud scheme from at least 20 accounts worldwide. The funds were allegedly stolen from an American company.

•In August 2015, the U.S. Attorney for the Western District of Kentucky announced that nearly half of the more than $1.1 million diverted and stolen from a variety of political campaigns, political action committees, and non-profit organizations has been recovered and returned to the victim organizations. These assets were forfeited as part of a parallel proceeding where some of the assets were forfeited through a civil administrative forfeiture process and the rest through criminal forfeiture.

•In January 2015, after the convictions of several Texas individuals for fraud-related crimes involving the receipt of federal funds, nearly $900,000 of forfeited funds went back to the school district victimized by the scheme.

Many—though not all—federal crimes have forfeiture provisions, but just about every law the FBI is charged with enforcing has some forfeiture aspect—from organized crime activities, financial frauds, drug trafficking, and cyber crimes to public corruption, child pornography, human trafficking, and terrorism. In all Bureau cases, the burden of proof to demonstrate that the property in question is forfeitable under the applicable federal law rests with the government.

There are two different kinds of forfeiture—criminal and civil.

In general, criminal forfeiture is an action brought against individuals as part of a criminal prosecution. Their illegal assets can be seized or frozen by the government, and then after a conviction or guilty plea, a forfeiture order is meted out during the sentencing of the defendant(s).

Civil forfeiture, on the other hand, is brought against property rather than the actual wrongdoer—it’s not dependent on a criminal prosecution, it’s based on the strength of the evidence at hand, it’s available whether the owner of the property is living or dead, and it allows us to obtain the assets of fugitives who have escaped the arm of the law or subjects who reside outside our borders.

There are two kinds of civil forfeiture: administrative forfeiture that generally involves property worth less than $500,000, and judicial forfeiture that can be of any value but generally involves property worth more than $500,000. But criminal and civil forfeiture aren’t mutually exclusive. In some instances, the FBI—in conjunction with U.S. Attorney’s Office—will run parallel criminal and civil forfeiture cases. There are several reasons for this. Parallel proceedings help us get the proceeds of a crime back to the victims more quickly. Also, if the case involves depreciating assets (like cars), we can civilly forfeit those assets faster than in the criminal proceeding, then liquidate the assets and get them back to the victim at a better return than if we had held the assets until the criminal case was completed. We also do parallel cases to ensure we can forfeit the assets civilly in case the defendant flees or dies before the forfeiture order is handed down.

Why use forfeiture at all? First of all, it deprives criminals of the illegal proceeds from their crimes. It helps dismantle criminal organizations and takes away the tools or instruments they use to commit their crimes, and also takes away the funds they use to operate. Forfeiture can also serve as a deterrent to others who might be considering criminal activities— is it worth the risk? And, it can compensate crime victims for the financial losses they suffered.

We’ve had a lot of success with forfeiture actions in terms of going after criminal enterprises, but our emphasis on compensating victims has paid off as well. In the past two fiscal years, FBI forfeitures— criminal and civil—have allowed the government to return more than $100 million to victims of crime following criminal restitution orders. And since fiscal year 2000, the Department of Justice as a whole has returned more than $4 billion in forfeited funds to crime victims.

Unearthing a Coal Mining Fraud

Investors Bilked out of Millions; 10 Fraudsters Sent to Prison

Salesmen from New Century Coal used sophisticated—but bogus—marketing brochures like the ones shown here to convince investors that the company owned mines that produced high-quality Blue Gem coal. But it was all a fraud, and investors lost millions of dollars.

Brian C. Rose ran a Tennessee company that claimed to be mining and processing a highly profitable type of coal used to manufacture silicon and computer electronics. On the basis of that claim, Rose and his employees raised more than $14 million from more than 160 investors—knowing all along that the only thing they were mining was their victims’ cash.

For more than three years beginning in 2011, Rose and his co-conspirators at New Century Coal sold shares in limited partnerships by convincing investors the company owned mines that produced high-quality Blue Gem coal—a scarce commodity that commands premium prices in the marketplace because of its use in computer semiconductors.

They sold the idea that they had Blue Gem coal, said Special Agent Brian O’Hare, one of the agents who investigated the case from the FBI’s Knoxville Division. But there were never any high-quality mines, and there was never any high-quality coal, he said. Our investigation led us to the conclusion that this was envisioned as a fraud from the outset.

Thanks to sophisticated marketing brochures and presentations and a persuasive sales force that often traveled to meet with investors, the money started rolling in to New Century Coal. And Rose and his employees—including Rose’s father—were spending it as fast as they could on luxury lifestyles that included buying multiple homes, sports cars, thoroughbred horses, expensive trips to Las Vegas, and other extensive travel.

...there were never any high-quality mines, and there was never any high-quality coal. Our investigation led us to the conclusion that this was envisioned as a fraud from the outset.

The salespeople were very talented and very convincing, O’Hare said. Unfortunately, they knew they were involved in a scam and continued doing it.

New Century Coal fooled some savvy investors, too, many of whom asked to see the mining operation in person before they put up as much as $2 million. Rose went so far as to lease mines and bring in earth-moving equipment, O’Hare explained. But it was simply for show. The average investor couldn’t tell the difference between Blue Gem and regular coal. They assumed the operation was an ongoing, legitimate effort. But it was all a lie.

After several years, the fraud scheme had grown so large—in excess of $14 million—that one of New Century Coal’s employees got cold feet and came to the FBI. The person didn’t want to risk being a party to that kind of a fraud, O’Hare said.

Special Agent Drew Scown opened the investigation into New Century Coal’s activity, and, in partnership with the U.S. Secret Service and the Internal Revenue Service, the fraudulent operation was shut down in June 2014. Not long after, Rose and nine others were indicted on a variety of counts of wire fraud, mail fraud, and money laundering.

As of last month, a federal judge in Tennessee had sentenced 10 individuals to a collective 284 months in prison for their roles in the New Century Coal scam. Rose, the ringleader, received a nine-year term.

O’Hare said some of the co-conspirators are currently under indictment in Indiana for a similar investment fraud. These individuals, he said, had become highly effective and efficient in their schemes. They would start one, run it until the money ran dry, then start another one. They used aliases to conceal their true identity, and they stayed one step ahead of the law. It seems fraud is in their DNA.

In addition to prison terms for the fraudsters, O’Hare added that investigators have so far been able to recover more than $3 million in assets that will be returned to the victims.

Super Bowl Security

Behind the Scenes Look at Game Day Preparations

When tens of thousands of fans stream into NRG Stadium in Houston for the Super Bowl this Sunday, they will understandably be thinking more about the big game than the behind-the-scenes preparations that have gone into ensuring their safety—and that’s just the way law enforcement officials want it to be.

The Super Bowl will put Houston squarely in the international spotlight, and the FBI and its local, state, and federal law enforcement partners have been working hard to make sure the game and the events leading up to it in Houston are without incident.

We’ve been working for several years with our partners to make sure appropriate security is in place, said Perrye Turner, special agent in charge of the FBI’s Houston Division. We’re going to do everything in our power to make sure it’s a safe event.

On the day of the big game, we will be here, but our presence may not necessarily be seen, said Mark Webster, an FBI assistant special agent in charge in Houston who is coordinating the Bureau’s Super Bowl security efforts. We will have multiple elements in place onsite as well as offsite.

Working with the Houston Police Department—which has the lead role in security planning—and other local, state, and federal agencies, the FBI’s primary role is to provide intelligence about possible terror threats. But because the Super Bowl is a major national event, just about every aspect of the Bureau’s expertise will be called into play.

We are using all the elements within our office, Webster said. From SWAT teams and cyber squads to intelligence analysts and surveillance specialists, FBI personnel will be on the ground at the stadium and will also be staffing command posts set up for the 10-day operational period that includes a variety of festivities leading up to the game on February 5.

During the 10 days of festivities leading up to Super Bowl LI on February 5, the FBI will be working closely with the Houston Police Department and other local, state, and federal agencies to keep the city safe. At the Houston Emergency Center, a command post will monitor and coordinate law enforcement and public safety activities.

At the Houston Emergency Center recently, where the main command post is located, specialists gathered from more than a dozen partner agencies.

Today is called a rehearsal of concept, said George Buenik, an executive assistant chief with the Houston Police Department responsible for Super Bowl security and police operations. We invite everybody here to check the equipment, check the hookups, to see where they’re going to be sitting, and to also meet some of the other folks that they’re going to be working with. We have a great security plan in place, Buenik said.

Matt Slinkard, an assistant chief