Federal Crime

Oakland Union Rep Accused of Taking Bribes From Marijuana Dispensaries (18 U.S. Code 201)

A 54-year-old man, formerly a labor union official out of Oakland, has been arrested on charges of bribery. Local law enforcement officials believe that he was taking kickbacks from persons operating marijuana dispensaries in exchange for favors. He has been fired from the labor union (the cannabis portion of the United Food and Commercial Workers Union) and faces the consequences of an investigation conducted by the FBI.

When officials or other powerful persons accept bribes, it is considered by many to be a betrayal of the people that they represent. More than this, the federal government takes these types of crimes quite seriously. According to 18 U.S. Code 201 (“Bribery of public officials and witnesses”), any person who is a Member of Congress, acting on behalf of the United States government, or simply an official in any capacity or with any function (from Mayors to union reps to jury members) is considered a “public official” and may not legally take bribes. The bribes themselves could come in any form, not just in the cash-stuffed envelopes we often seen in television programs. A bribe could be anything of value; and both the person offering the bribe and the one accepting it could be subject to arrest.

Federal penalties for bribery are harsh. First, you could be subject to fines not in excess of 3 times the amount received (or value thereof). Second, you could spend up to 15 years in a federal facility. Third, you will be barred from ever holding public office in the United States for the rest of your natural life.

Wildlife Trafficking Charges for Napa Vintner and Curator (U.S. Endangered Species Act)

The proprietor of Blackbird Vineyards in Napa has recently been arrested for misdemeanor charges relating to illegal wildlife trafficking, specifically in parts of various endangered animals such as sea turtles and whales. Allegedly, the man did not understand that there are laws against purchasing and accepting any part of an animal on the endangered species list. However, law enforcement agents involved in the case claim that the vintner attempted to cover his tracks, labeling the shells and vertebrae he used for decorative purposes as other items, such as chairs.

Wildlife trafficking is most often defined as either actually poaching or taking endangered or managed species from their habitats or the trade of their parts, like horns, shells, and other desirable items. The U.S. Endangered Species Act (ESA) is the national version of the Convention on the International Trade of Endangered Species of Wild Flora and Fauna (CITES), which created an arrangement between approximately 173 countries to protect managed species across the world.

In the case above, a sting operation was launched in order to catch the alleged perpetrator. Someone posing as a buyer purchased parts of endangered animals from an online website called “Hedley’s Humpers,” the provider for the vintner’s sideline business, Masonry. The accused has already been asked to pay a $75,000 fine and been put on a 3-year probation. Whether or not the owner will spend any time in jail is still to be determined. The total market value of all illegal items identified was about $81,000.

Feds Sentence Hayward Man for Filing False Tax Returns (26 U.S. Code 7206)

Many people understand just how important it is to find a credible tax preparer when it comes to paying the IRS. More to the point, your tax preparer could be held liable, criminally, for making false statements on your tax return (26 U.S. Code 7206). Just recently, a 54-year-old man from Hayward was sentenced to 2 years in a federal facility for his part in preparing false tax forms for clients over a 3-year period (2009-2011). At least 24 clients were involved in the scam, in which the tax preparer knowingly reported incorrect deductions in paperwork for the IRS. He has been charged with a federal felony, aiding and assisting in the preparation of false tax returns.

The federal government takes the preparation of false tax returns quite seriously. In fact, if it can be proven that any individual has been involved in such a scheme to defraud the IRS (for that is what this type of action is considered) by inflating the number of deductions, falsifying business expenses or deductions, or allowing for unallowable credits, then that person has broken the law.   According to the IRS website, the incarceration rate for fiscal year 2006 was nearly 90%, suggesting that federal investigators go after preparers of false tax returns with a fury.

Tax evasion itself is a federal felony and could result in a 5-year prison sentence and a $250,000 fine. Technically, it is called ‘tax perjury’ when an individual purposefully falsifies their own tax forms. However, if someone, as in the case above, assisted you in making these false claims, then they are guilty of the same crime. Felony penalties for tax perjury are harsh, you can expect, even if you only assisted, to spend up to 3 years of incarceration in a federal prison and pay a fine of $100,000.

Saratoga Postal Inspector Admits to Stealing Mail (18 U.S. Code 1708)

A 53-year-old former Postal Inspector out of Saratoga has recently admitted to stealing various items that were sent through the mail to other folks, including Playboy magazines, prescription medications, cash, jewelry, and marijuana. He claims that he asked to be alerted when items were found loose in the mail due to improper packaging or improper handling. Lying to his fellow postal workers, he originally claimed to attempt to find the owners of the lost valuables, but kept them for himself instead. He was caught on surveillance video and has been charged with theft of stolen mail matter and with intent to distribute marijuana.

When someone steals mail, whether they are a postal service employee or an individual citizen, they are subject to penalties under federal law. 18 U.S.C.1708 addresses just this type of theft. To be prosecuted under this law, a person could have stolen mail from a post office, letter box, mail receptacle, or mail bag. The U.S. Postal Inspection Service is charged with protecting the nation’s mail and its mail delivery system from just this kind of crime. If convicted, you could spend up to 5 years in federal prison.

As one of the items that was stolen included a large amount of marijuana, law enforcement officials have also levied the charge of intent to distribute against this same gentleman. Although certain states have made marijuana legal, it is still considered illegal at the federal level, and the penalties are harsh. Depending upon the amount of marijuana found in the former inspector’s possession, he could face anywhere from 5 years to 10 years to life in a federal facility; possession of any amount of marijuana for sale or cultivation is considered a felony by federal law.

Bay Area Ponzi Scheme Aimed at Asian Americans (18 U.S. Code 1956)

Out of the corporate scandals of the early 2000s, one that stands out in the memory of the public is the Ponzi scheme perpetrated by the infamous Bernie Madoff.  In general, Ponzi schemes, so-called ‘white collar’ crimes named after Charles Ponzi, the first to use this type of scam in 1920, are setups for fraudulent investments.  The way it works is simple: investors give an individual money with the understanding that they will receive a reasonable return; their investments seem to give back a good return when, all the while, the ‘new’ money has come from other investors, not from proceeds originating from the actual investment.  Just such a scheme, one aimed at Asian Americans, has been uncovered in the Bay area and involves a local oil and gas company.  The company told investors in both the U.S. and Asia that they would receive a large return on their invested monies (they were promised anywhere from 12% to 30% returns) and that they would receive green cards in the process.  In fact, the company was near bankruptcy and needed the funds to continue operating and lining the pockets of the individuals involved.  In the end, the chief executive officer received approximately $68 million.

Although there has been a civil lawsuit filed in a U.S. district court pertaining to this particular scheme, it is useful to note that the Federal Trade Commission also prosecutes participants in such fraudulent scams criminally, for money laundering (18 U.S. Code 1956), tax fraud (26 U.S. Code 7201), securities fraud (18 U.S. Code 1348), and the like.  While there are civil penalties for money laundering, specifically $10,000 in fines or the value of the property or funds illegally gained, there are criminal penalties for the latter two violations of the law mentioned above.  For example, a conviction for securities fraud could end in a 5-year federal prison sentence for each offense and a $10,000 fine.  A tax fraud conviction, on the other hand, leads to felony charges, 5 years in federal prison for each offense, and a $100,00 fine (for individuals) or a $500,000 fine for corporations.

SF Federal Appeals Upholds Prison Sentence for Man Convicted of Securities Fraud (18, U.S. Code 1348)

A jury in a San Francisco federal appeals court determined that an individual businessman will spend 3 years in a federal facility for his part in an insider trading scheme involving Citigroup.  Charges included conspiracy and 4 counts of securities fraud.  The Orland Park, Illinois man received tips concerning mergers and acquisitions occurring through Citigroup and was originally convicted of securities fraud in 2013.  He then shared that information with several family members, who have also been sentenced, though to lighter terms, probation, or house arrest.

18, U.S. Code 1348  prohibits securities and commodities fraud. This crime involves defrauding any person or company in connection with insider information.  Clearly, this information must be gained fraudulently in order to be considered illegal.  A ‘security’ could refer to many different things.  In the main, this term most often signifies investment contract, municipal bonds, bank notes, or corporate stocks.  Securities fraud is considered to occur when someone uses what should be private information in order to promote financial gain.  The Securities and Exchange Commission is the federal arm responsible for prosecuting frauds of this kind.”

The fines involved in securities fraud can be quite cumbersome, though the amount authorized by a particular court will likely be determined by the circumstances of each individual case, these can range anywhere from $10,000 to millions of dollars.  Prison sentences are often set at 5 years, no matter what the offense.  Monetary restitution may also be required of any person convicted under this law.

East Palo Alto Man Accused of Murder-For-Hire (18 U.S. Code 1958)

A man from East Palo Alto has recently been accused of having hired another man to kill a woman he strongly disliked, referring to the target in derogatory terms on several occasions.  What he could not have known is that the man he hired was actually an informant with the federal Bureau of Alcohol, Tobacco, Firearms, and Explosives.  Using coded language (“fixing the car”), the two planned out the murder-for-hire.  The ATF informant set up a meeting with an undercover ATF agent, the man was arrested and charged.

Murder-for-hire is a serious federal offense and is addressed in 18 U.S. Code 1958.  This particular law was put into effect as part of the Comprehensive Crime Control Act of 1984 and makes it illegal to hire another person, for money or exchange of goods or services, to murder another person.  The law covers both the ‘hit man’ and the person hiring them.  In other words, either one of them, or both, could end up facing serious consequences.

In fact, a conviction for the violation of 18 U.S.C. 1958 comes with varying penalties.  For example, any violation of this law brings with it a 10-year sentence in a federal detention facility and a fine.  However, if anyone is harmed during the attempt to carry out the murder, the prison sentence rises to 20 years and a $250,000 maximum fine.  Still further, if death of the intended target results, then both ‘hit man’ and employer will face life imprisonment or in certain circumstances, the death penalty (USAM 9-10.000).  In the case above, the murder was never even attempted as 2 of the 3 individuals involved were already working for the federal government.

Counterfeit Warriors Gear Seized in Federal Bust (18 U.S. Code 2320)

Homeland Security agents have seized approximately $500,000 worth of counterfeit Warriors merchandise on its way to fans via Bay area vendors.  This recent crackdown on unofficial merchandise started after the Western Conference finals in May.  A group consisting of federal agents, ‘brand security’ investigators, and attorneys for the NBA from their intellectual property division actually went out into the streets of San Francisco to seek out these vendors.  Not only is selling counterfeit merchandise illegal, they argue, but it also supports criminal enterprises.  Tatum King, the agent in charge, has even gone so far as to suggest that buying cheaper merchandise is a matter of national security!  Some of the shirts, hats, and other goods involved were printed with slogans like “Dub Nation: We Rep the Bay.”  Investigators claims that buyers must look for official tags when purchasing gear related to their favorite team.

According to federal law (18 U.S. Code 2320: “Trafficking in counterfeit goods or services”), purposefully selling counterfeit materials is illegal.  This includes any items with counterfeit ‘marks,’ such as a fake label, badge, t-shirt, patch, or the like.  Penalties for such a violation of the law are harsh.  For each offense, an individual person could spend, if convicted, up to 10 years in prison and pay up to $2,000,000 in fines.  If an organization or company (anyone other than an individual) is found guilty of this crime, they will likely be subject to a fine of $5,000,000.  Second offense consequences are even worse.  If caught violating this federal law a second time, an individual can expect to spend up to 20 years in a federal facility and to pay a $5,000,000 fine.

 

E-Bay Seller Sentenced to Federal Prison for Copyright Infringement (Title 17, U.S. Code 501)

You may remember the FBI warning that appears before every DVD or Blu-Ray that you happen to watch.  Most people, however, do not think about what the actual consequences would be if they violated federal copyright law.  One man certainly did not take the warning seriously.  Through the use of e-Bay, a 43-year-old man from the Bay area managed to infringe on federal copyright laws by selling illegally copied DVDs.  He was charged with having accepted 20,000 counterfeit DVDs from Asia and selling them through the popular online auction site.  Although several different members of law enforcement tried to warn the man that he was violating federal law before they finally made his arrest, he continued to sell the illegal items to customers across the nation.

Title 17 of the U.S. Code 501 addresses federal copyright infringement, while U.S. Code 106 of the Copyright Act (Title 17, U.S.C. 106) covers copyright law in general.  This particular issue has been a particular problem for federal agents as the ease of gaining access to and selling illegal copies of movies on DVD and Blu-Ray has increased.  The only person or persons who has the right to sell copyrighted material is the person or persons who own the actual copyright.

506 of Title 17 also states that anyone who purposefully infringes upon a copyright could be brought to federal court on criminal charges, especially if the copyright infringement was for the express purpose of financial gain. Generally, violators are asked to pay restitution in the amount of up to $150,000 per infringed work.  When considered criminal, the penalties may include up to 5 years in a federal institution and a $250,000 fine.  In the case above, the gentleman was sentenced to 15 years in a federal facility.

Pacific Grove Policeman Sentenced for Federal Extortion (CA Penal Code 518)

A former police officer associated with the Pacific Grove Police Department has been sentenced to over 2 years in federal prison and been fined upwards of $15,000 for his part in extortion, fraud (CA Penal Code 518), possession of stolen guns, and the abuse of his position as an officer of the law.  Although it sounds like a scene right out of a gangster movie full of ‘dirty’ cops, the true story is a bit more complicated.

It seems that the former law enforcement official first asked a woman who was a stalking victim to hire him to investigate the case on his own, taking upwards of $10,000 for the work, which prosecutors claim he never followed through with.  Then, in a separate matter, while a police academy instructor at Monterey Peninsula College, he brokered an arrangement between the police department and the school by which the school would donate certain firearms to the department.  As it turns out, he did not realize that it was against the rules, not only to organize such a donation, but also to accept the guns at all.

At trial, prosecutors argued that the guns never made it to the Pacific Grove Police Department, but were, instead, sold for profit by the former officer.  The charges against him included:  keeping an individual from reporting an important crime (the stalking victim), being an accessory after the fact in a theft and/or burglary, and being an accomplice in the burglary of a business.  He also admitted to federal charges of extortion, wire fraud, and to possessing stolen firearms.  Pursuant to the various and myriad violations of the law he was convicted of, he was sentenced to 30 months in federal prison (for the most recent charges), which he will serve concurrently with the sentence the state has already handed down, and has been ordered to pay $10,000 in restitution and $5,000 in fines.