Chapter 4: Continuing to Respond to Protect Americans
It may sometimes appear to the public that the FBI devotes an inordinate share of its time and attention to the types of crimes that appear on Page One of the local newspaper or on the evening television news--individual violent crimes, drugs, terrorism, espionage. And it is indeed true that those are among the FBI's highest priorities, and properly so.
But that is only a part of the picture. The FBI also has many more priorities as it seeks to protect the public from harm: personal harm, economic harm, violation of civil rights, and the harm that comes from the fear of crime. The FBI enforces approximately 500 federal laws that in one way or another touch vast numbers of Americans:
- The FBI has joined with local and state authorities to combat violent street gangs.
- New enforcement techniques have been developed against crimes that target children.
- Special emphasis is placed on health care fraud and other thefts of government funds. Annual losses run into the billions.
- There are intensive efforts against organized crime and its many evils, such as labor racketeering and corruption.
- The FBI works diligently to protect the civil rights of all Americans, particularly those relating to police misconduct and crimes of hate.
- New emphasis is being placed on enforcement against those who violate environmental laws.
- Corruption by law enforcement and public officials has become a significant FBI enforcement priority.
The FBI works to prevent crime and to apprehend those who commit unlawful activities. The goal is to gather legal evidence that can be used to convict offenders so they cannot commit new crimes. The FBI's work touches every aspect of American life in its efforts to protect the public and uphold the rule of law.
One of the most disturbing crime trends facing our country is the increase of violent street gangs--often made up of juvenile offenders. The rise of gangs and the violence perpetrated by these organizations are of grave concern. These organizations are no longer only in our urban centers--they are appearing in suburban neighborhoods, rural areas and small towns. Fighting these gangs cannot be left to individual law enforcement agencies. The "Safe Streets" initiative has a coordinated approach. These Safe Streets Task Forces are made up of teams of federal, state, and local law enforcement officers and prosecutors.
The initiative is designed to allow the Special Agent in Charge of each FBI field division to address street gang and drug related violence through the establishment of FBI sponsored, long term, proactive task forces focusing on violent gangs, crimes of violence, and the apprehension of violent fugitives.
There are 164 Task Forces operating in 52 of our field offices. These Task Forces team nearly 785 FBI Special Agents with nearly 142 other Federal Agents and some 1,255 state and local law enforcement participants. Since the beginning of this program, there have been almost 159,960 arrests and over 56,000 convictions or pre-trial diversions.
In 1998, one of the major Safe Streets operations was carried out by FBI Special Agents and police officers in Los Angeles and Little Rock against the drug trafficking operations in both cities of a large gang, the Grape Street Crips. Fifty-six indictments were issued in Little Rock and 17 in Los Angeles. The arrests also disrupted drug trafficking in four other cities: Minneapolis, Cleveland, Jackson, and Memphis.
Another major case was Operation Crown, in which the FBI and the New York City Police Department targeted the entire top echelon of a major gang, the Almighty Latin King and Queen Nation, and arrested 94 members and associates. The investigation focused on trafficking in firearms and drugs, and the felony charges against the defendants ranged from weapons and narcotics possession to conspiracy to commit murder.
Successes are taking place across the country as law enforcement agencies join together to make communities safer for all. One of the major successes was in Connecticut. In Bridgeport and Hartford, two Safe Streets Task Forces, composed of seven FBI Agents and 15 police officers representing ten agencies, committed their investigative efforts and resources to an investigation involving the criminal activities of the Almighty Latin King/Queen Nation (ALKQN) and the Los Solidos (LS) street gangs. These investigative efforts required the use of court-approved electronic surveillance, focusing on the leadership and members of the two street gangs. These investigations culminated in the arrests and indictments of over 50 ALKQN and 52 LS members and associates. Sixteen ALKQN and eight LS members were charged under the Racketeering Influenced and Corrupt Organizations (RICO) statute, to include 13 homicides. These were the first prosecutions that utilized the RICO statute for gang members in Connecticut. Furthermore, the incarceration of these gang members had a measurable effect in reducing the violent criminal activity in these communities as reported by the local police departments.
The FBI believes that the Safe Streets program has been a significant factor in reducing violent crime nationally. Reported violent crimes decreased 13 percent nationally from 1992 to 1996, including a 17 percent decline in murders. Preliminary figures show that violent crimes dropped five percent in 1997 and seven percent in the first six months of 1998.
The FBI has achieved major successes against the largest traditional organized crime groups in the nation--the source of vast and deadly crimes.
In 1994, the "Hard Crust" investigation culminated in the indictment of 25 members and associates of the Marcello, Gambino and Genovese La Cosa Nostra Families related to their efforts to infiltrate the legalized gaming industry in the state of Louisiana. Among those convicted in 1996 were Marcello Family Boss Anthony Carollo, Underboss Frank Gagliano Sr., a Consigliere in the Marcello Family, Gambino Acting Capo Joseph Corozzo and a soldier in the Gambino Family.
In 1995, Philadelphia LCN Family Boss John Stanfa and other high-ranking family members were convicted of RICO charges which included predicate acts of murder.
In 1996, an indictment was returned in New York charging Liborio Bellomo, the Acting Boss, Michele Generoso, the Acting Underboss, and James Ida, the Consigliere, and 16 other members and associates of the Genovese LCN Family with various racketeering charges. The racketeering acts included murder, extortion, labor racketeering, gambling, loansharking, money laundering, the fraudulent operation of the Feast of San Gennaro, obstruction of justice and tax evasion. All 19 defendants in this case either pled guilty or were convicted at trial.
One of the FBI's most intensive organized crime investigations was code-named GAMTAX. It was a five-year operation in Detroit that culminated in the 1996 RICO indictment of 17 members and associates of the Detroit La Cosa Nostra Family--nearly the entire hierarchy of the Family, including the boss, underboss, four capos, and four soldiers. This investigation focused on the Detroit LCN Family's collection of "street taxes" from illegal gambling operations, loansharking, extortion, and acts of violence used to support these activities. In January, 1998, a Detroit LCN Family capo, Vito Giacalone, pleaded guilty to one RICO count, admitting in court that he was a member of the Detroit LCN Family. This was of special significance because it refuted decades of denial by LCN members concerning the existence of the Detroit LCN Family.
The first of two trials in this massive case concluded in April, 1998, when guilty verdicts were returned against four of the five defendants. Those convicted included Jack Tocco, the boss of the Detroit LCN Family, who was found guilty of two RICO counts. Others convicted included Anthony Corrado, a capo in the Detroit LCN Family, and Detroit LCN Family soldiers Paul Corrado and Nove Tocco. A trial date for the remaining nine defendants has not been scheduled.
To discourage LCN rebuilding efforts nation-wide, in March 1996 the FBI launched "Operation Button Down" as a five-year strategic plan. Since the inception of "Operation Button Down", through December 1998, the following accomplishments have been obtained: 53 LCN members and associates have been indicted or convicted in FBI labor racketeering cases; indictments and/or convictions against the Gambino and Genovese Families have totaled three Bosses, one Underboss, one Consigliere, 20 Capos, 26 Soldiers, and 270 associates; FBI investigations of all LCN Families have resulted in indictment or conviction of nine Bosses, two Underbosses, five Consiglieres, 45 Capos, 73 Soldiers, and some 861 associates; and FBI Offices have seized assets worth an estimated $68 million in LCN cases.
In 1997, Genovese LCN Family Boss Vincent "Chin" Gigante was convicted of two murder conspiracy charges and several racketeering and extortion counts. Prior to this conviction, Gigante, one of the most powerful mob bosses in the U.S., had successfully avoided prosecution by faking mental illness.
Other Organized Crime Initiatives
One of the most significant Asian organized crime cases was the "Bytes Dust" investigation, which identified gangs involved in heroin and firearms trafficking, armed and violent takeover robberies of computer warehouses, home invasions, kidnaping of computer executives, murder, alien smuggling, loansharking, extortion, smuggling of stolen vehicles, illegal gambling and credit card fraud. The indictment was returned in San Francisco and arrests were made in Northern California, Los Angeles, New York, and Virginia. The gang was believed to be responsible for the commission of 90 percent of the armed takeover robberies of computer companies nationwide. Twenty-four subjects were charged with racketeering and drug trafficking.
In 1997, the "Island Green" investigation targeted known violent Jamaican drug-trafficking organizations which were operating between Jamaica and the United States and involved in exchanging Immigration Service green cards for drugs and money. This investigation identified seven significant and extremely violent Jamaican drug-trafficking organizations and 25 drug-smuggling groups. One hundred and twenty-seven significant subjects were indicted in Boston, Kansas City, Los Angeles, Miami, New York, Newark, and Philadelphia.
In 1997, the "Mobstocks" investigation by the FBI's New York field office culminated with indictments of 21 individuals, including ranking members of the Genovese and Bonnano LCN Families. This investigation uncovered a sophisticated stock manipulation scheme in which elements of the LCN have succeeded in taking control of small cap NASDAQ stocks and several brokerage firms through bribery and intimidation. In January, 1999, ten of 21 subjects charged in this investigation pled guilty to extortion and/or fraud charges. Among those pleading guilty to extortion charges were: Genovese LCN Family capo Rosario "Ross" Gangi; Bonnano LCN Family capo Frank Lino; Genovese LCN Family soldier Ernest "Butch" Montevecchi; and Bonnano LCN Family soldier John Cerasani.
A federal grand jury in the Eastern District of New York returned a Racketeering Influenced and Corrupt Organizations (RICO) indictment in 1996 against: Andrew Russo, the acting Boss of the Colombo LCN Family; Dennis C. Hickey, a Colombo LCN Family associate and operator of Hickey's Carting, Inc., a garbage carting company in Central Islip, Long Island; four other defendants; and four companies. The indictment alleged that the defendants operated garbage collection businesses in Suffolk County, New York, through a pattern of racketeering, including money laundering, fraud against the Town of Islip, and insurance fraud. The indictment alleged that through companies they controlled, the Luchese and Gambino LCN Families formed a partnership that allowed them to operate in the Long Island region without any competition.
In 1998, the FBI's New York field office "Garment Center" investigation culminated in a RICO indictment of 12 individuals, including Luchese LCN Family acting boss Joseph Defede. This investigation targeted LCN influence/control of the New York Garment Center where, more than 30 years ago, the LCN Commission ruled that the Luchese LCN Family would control the criminal enterprises associated with the Garment Center. Luchese LCN Family influence of the Garment Center focused on their control of the Union of Needle Trade Industrial Textile Employees (UNITE). In December, 1998, seven individuals, including acting boss Joseph Defede, pled guilty to Hobbs Act extortion charges.
John Gotti, Jr., alleged boss of the Gambino LCN Family (and son of incarcerated LCN boss John Gotti), capo John D'Amico (a member of the three person committee that allegedly assists John Gotti, Jr., in running the Gambino LCN Family) and other ranking members of the Gambino LCN Family were indicted in 1998 on RICO charges with underlying criminal conduct that included conspiracy to commit murder, money laundering, extortion, loansharking, bank fraud, bankruptcy fraud, perjury, obstruction of justice and tax evasion.
In 1997, Gambino LCN Family members Nicholas Corozzo (Capo), Leonard Dimaria (Capo), and Louis Scida, and associates Ralph Davino and Anthony Ruggiano, Jr., pled guilty in U.S. District Court, Southern District of Florida, to their involvement in running a loansharking operation in Southern Florida. This case was significant in that it highlighted extensive LCN operations in the Miami area. Corozzo was a member of a committee of three Gambino members that assisted John Gotti, Jr., in allegedly running the family after the conviction of John Gotti, Sr.
The FBI has also made it a priority to develop multi-national organized crime cases. One was an investigation of a drug trafficking conspiracy involving three Italian groups--the Sicilian Mafia, Ndrangheta, and Cammora--collaborating with Colombian cocaine cartels to distribute heroin and cocaine in the United States and in Europe. In addition to the arrest of 29 Italian organized crime associates in New York, four Colombian nationals were charged and 56 subjects were arrested in Italy for violations of Italian law. This investigation used extensive court-approved electronic surveillance and was the result of the close working relationship between the FBI, the Royal Canadian Mounted Police, the Italian National Police, and the Colombian Fiscal De La Nacion Office.
The FBI also has worked to disrupt organized crime groups with ties to Western Europe, Russia, Asia, South America, Africa, and the Middle East.
Close ties with foreign law enforcement agencies are essential for success against organized crime. One major step occurred in 1994 when a working agreement between the Russian Ministry of Internal Affairs (MVD) and the FBI was signed. A working relationship with the Russian Federal Counterintelligence Service, which has organized crime investigative responsibilities, was also established and a new FBI Legal Attache office was set up in Moscow.
All of us in the struggle against organized crime must remember the work of Judge Giovanni Falcone. He waged an unprecedented and exceptional fight against organized crime and drug trafficking for the good of people everywhere. Judge Falcone, his wife, and three police officers were killed in May 1992 in a bomb blast set off in Sicily by organized crime. The FBI has erected a bust of Judge Falcone at its Quantico Academy to serve as a monument to his devotion to duty and to humanity. He did not fear organized crime. Organized crime feared him. All of us in law enforcement--here and abroad--must remember his sacrifice and bravery, and by following his deeds organized crime, drug trafficking, and other crimes which prey on people everywhere can be defeated at last.
Solving crimes involving children is of paramount importance, for the nation must not allow child predators to remain at large. That is why the FBI will always provide its resources to our state, local, and tribal partners, and FBI assistance can make a difference. For example, in Portage, Indiana, an eight-year-old girl was found brutally murdered and sexually assaulted. At the request of local officials, the FBI provided assistance. FBI Laboratory tests were carried out and a suspect was linked to the crime. After being confronted with the evidence, the suspect not only confessed to the murder of the child but he also confessed to ten unsolved homicides and five rapes in the area. Because of this inter-agency cooperation, this crime was solved and the most prolific serial killer in Indiana's history was arrested, thereby preventing murder and harm to other potential victims and their families.
The rapid expansion of the Internet as communications and entertainment media has been a major innovation for knowledge and education during the past five years. Unfortunately, it has also given child predators a new way to lure unsuspecting child victims. To combat this new field of operations by child predators, the FBI began the "Innocent Images" investigation in 1995. The investigation targets persons using the Internet to recruit minors into illicit sexual relationships and to receive or distribute child pornography. Undercover FBI Agents and local police task force officers go online into chat rooms, news groups, and Internet relay channels utilizing fictitious screen names and engaging in real-time chat or E-mail conversations with predicated subjects to obtain evidence of criminal activities. As of June 1998, 427 consent searches and search warrants had been executed, 246 information/indictments were filed, 177 arrests have been made, and 201 convictions obtained. I have been pleased with our success in this investigative effort and the carefully controlled operations. We must do our utmost to protect the Nation's most precious resource -- our children -- from harm and exploitation. The FBI has also embarked on a program to educate parents and children about such dangers on the Internet. Prevention through education and investigation is essential.
To better capture and highlight crimes against children, the FBI began recording child abductions and the sexual/physical abuse of children occurring on government reservations under unique investigative classifications. Earlier, child abductions were reported within an investigative classification covering all abductions and kidnapings of adults and children and the sexual/physical abuse of children on government reservations in an investigative classification that included all government reservation violent crimes. Capturing these statistics separately enables us to identify crime trends and help focus prevention resources in a more efficient manner.
The FBI seeks to utilize all possible resources in its work to protect children from harm. One of the FBI's most productive relationships with a non-Federal agency is with the National Center for Missing and Exploited Children (NCMEC), which has carried out land-mark work in this area and provided a great service to the Nation.
To help develop the closest ties possible, the FBI now has a Supervisory Special Agent assigned full-time at the NCMEC. In 1998, a new CyberTipline was dedicated at NCMEC, and is an excellent example of the cooperative ties between government and the private sector. Through its extensive information system, the NCMEC is able to help the prompt referral to FBI field offices of complaints and tips concerning missing children and children in harm's way.
One example is a new dimension the FBI has added to its National Crime Information Center (NCIC), which allows state and local law enforcement agencies to "flag" entries to NCIC when a child is missing under suspicious circumstances or may be in danger. This information is relayed to both the FBI's own National Center and to the NCMEC, which then puts its own formidable resources to work.
To assist in the management and development of policy for its nationwide initiative, the FBI created an Office of Crimes Against Children in its headquarters. There are at least two Crimes Against Children Coordinators in each of the FBI's 56 field offices. The Coordinators are working with local, state and federal government and non-government organizations to establish Response Teams capable of facilitating the investigation and prosecution of crimes against children while providing the necessary victim and witness services.
In an effort to streamline the FBI's behavioral services to law enforcement, the Child Abduction and Serial Killer Unit and Profiling and Behavioral Assessment Unit were combined, forming the National Center for the Analysis of Violent Crime (NCAVC) within the Critical Incident Response Group (CIRG). Within this new organizational structure, teams of experienced FBI agents and other professionals consult with law enforcement from around the world and provide immediate investigative support through violent crime analysis, technical and forensic coordination, and application of the most current expertise.
The FBI has continued to enhance the resource support to the "Innocent Images" investigation, including assigning two Supervisory Special Agents and a professional analytical support employee to the NCAVC to assist with consultation and research in this area. Another NCAVC Supervisory Special Agent with extensive experience investigating cases in Indian Country is dedicated to providing training and assistance in the special area of victimization of children and death investigations in Indian Country.
The former Child Abduction and Serial Killer Unit (now part of the NCAVC) also produced the Child Abduction Response Plan, a guide for law enforcement agencies investigating a child abduction or mysterious disappearance of a child. Over 17,000 copies of the Plan were distributed through the FBI field offices and legal attaches to local law enforcement agencies. A second printing is being run, and a Spanish-language version has been prepared.
The 105th Session of Congress emphasized its interest in crimes against children and other violent crimes, particularly serial murder, by passing the "Protection of Children From Sexual Predators Act of 1998." The Act authorizes the FBI to investigate serial killings if requested by the head of a law enforcement agency with jurisdiction over the offense. The Act also establishes the Morgan P. Hardiman Child Abduction and Serial Murder Investigative Resource Center (CASMIRC), to be managed by the NCAVC. The purpose of CASMIRC is "to provide investigative support through the coordination and provision of Federal law enforcement resources, training, and application of other multi-disciplinary expertise, to assist Federal, State, and local authorities in matters involving child abductions, mysterious disappearances of children, child homicide, and serial murder across the country."
The NCAVC has been used in a variety of ways. For example, the FBI created Operation HALT (Homicide/Abduction Liaison Team) in Houston to assist with the alarming number of homicides and abductions of young women and children in the Galveston area. The NCAVC has created a unique database which the entire FBI is using to assist with these types of investigations. The database allows investigators to determine similarities in homicide cases to identify the possible activity of a serial killer. This program has been widely accepted and the Houston office is building the program to include all sheriffs' offices and police departments in its 46 county jurisdiction.
Another case that has attracted major attention is the kidnaping and murder of three girls in Spotsylvania County, Virginia: Sofia Silva, 16, in 1996; and Kati Lisk, 11, and her sister, Kristin Lisk, 15, in 1997. The FBI entered both investigations at their outset and similarities between the homicides were discovered. As a result, a task force of federal, local, and state authorities was set up to investigate the case. The task force, headed by an FBI supervisor, was created in late 1998--18 investigators and three analysts, plus the support of the FBI Laboratory.
Violent Criminal Apprehension Program (VICAP)
The new VICAP is a state of the art behaviorally-based crime analysis tool which has been significantly redesigned and structured to address violent crime problems impacting law enforcement agencies. It is available free of charge to any agency willing to become a part of this effective network of crime analysis. VICAP will enable law enforcement agencies to collect, collate, and analyze their own violent crime information on a local level, and to assist in identifying similar cases on a regional, state, or national basis.
This new system consists of a revised VICAP crime analysis Report Form and a user-friendly computer system designed for stand-alone application on a Pentium-based computer equipped with a CD drive and Windows 95. It enhances crime analysis for specific violent crimes, including solved and unsolved homicides, missing persons, and unidentified dead persons.
In 1996, a powerful bomb exploded at Centennial Olympic Park in Atlanta during the Olympic Games. The blast killed a woman and injured more than 120 other persons, and a man at the scene died of a heart attack. The terrorist incident was viewed as a national and international tragedy.
Since then, the FBI has conducted one of the most intensive investigations in its history for the person who planted the bomb.
Late in 1998, that investigation produced results: federal charges were filed against Eric Robert Rudolph, 32, of Murphy, North Carolina.
A criminal complaint charged Rudolph with the fatal bombing at Centennial Park as well as with two other Atlanta bombings that injured a number of persons. He was accused of five counts of malicious use of an explosive in violation of federal law.
During its two-year-plus investigation of the bombing at the Olympic Games site, the FBI conducted more than 20,000 interviews and examined thousands of photographs taken by persons at Centennial Park during the period before and after the bombing. Hundreds of pieces of evidence have been examined by FBI specialists.
Before the Atlanta charges, Rudolph also had been charged and sought for another bombing: the February 1998 explosion at an abortion clinic in Birmingham, Alabama, that killed an off-duty policeman serving as a guard at the clinic and gravely wounded a clinic nurse.
Late in 1998, the hunt for Rudolph continued in the rugged and wooded mountain areas of Western North Carolina. The FBI has made it clear that the search will remain a priority until the fugitive is in custody. The FBI is totally committed to carrying on the search and the effort is intensive. More than 15 Federal, local, and state law enforcement agencies are contributing to the search for Rudolph.
A $1 million dollar reward has been offered by the Department of Justice and FBI for information leading to Rudolph's capture.
White collar crime and fraud against both the government and members of the public are crimes that harm vast numbers of Americans. These have become priority enforcement matters for the FBI.
The federal government has estimated that health care fraud impacts on every person in the nation and costs Americans $100 billion annually in fraud and abuse. The FBI has made health care fraud one of its major priorities, along with other types of white collar crime that have a deep impact on the public.
Enhanced enforcement has been greatly aided by Congressional passage of the Health Insurance Portability and Accountability Act of 1996, which the FBI strongly supported. The Act provides greatly-enhanced funding in the fight against health care fraud. The Act provided $47 million for the FBI in 1997, a $9 million increase. Funding will continue to grow, with annual increases in Special Agents assigned to health care fraud, until the budget reaches a permanent level of $114 million in 2003. As a result of the Bureau's priority on health care fraud FBI resources and investigations have been building steadily. For example, the number of Special Agents assigned to health care fraud increased from the equivalent of 112 in 1992 to 356 in 1997. At the same time, there has been a massive increase in the health fraud caseload--from 591 cases to 2,582 cases. The majority of FBI Field Offices participate in either multi-agency Health Care Task Forces or Working Groups.
Convictions have also climbed dramatically: from 116 in 1992 to 485 in 1997. Long prison terms have been imposed on offenders. Large fund recoveries from companies have been achieved.
In one major prosecution, 11 physicians recently pleaded guilty in San Diego to conspiracy in a case involving medical fraud against insurance companies. In New York, 11 physicians have been charged with taking kickbacks in exchange for referral of Medicare patients for medical equipment and other services. Late in 1998, seven physicians, 12 nurses, and 20 other persons were indicted in Miami for health care fraud offenses. In another Florida case, seven persons, including four physicians, pleaded guilty to health care fraud. In a Midwest case, two persons in Michigan were both sentenced to 57 months in prison in connection with $25 million in fraudulent billings to Medicare.
FBI investigations of health care fraud have also helped lead to massive fund recoveries. In 1997, Smith Kline Beacham Clinical Laboratories, Inc., paid the government $325 million for filing false federal claims. In 1996, Damon Clinical Laboratories, Inc., pleaded guilty to conspiracy to defraud Medicare, and the company agreed to pay the government $119 million in criminal fines and a civil settlement. The Laboratory Corporation of America agreed to pay the government $187 million in 1996 in criminal fines and a civil settlement in a case involving submission of false claims.
One major telecommunications investigation, "Senior Sentinel," focused on fraud against senior citizens. The investigation used innovative recording techniques and ended on December 7, 1995, with over 38 FBI field divisions, 12 U.S. Attorney's Offices, more than a dozen state attorney general's offices, and the Fraud Section of the Criminal Division of the Department of Justice having participated in the operation. As of July 31, 1996, Senior Sentinel had resulted in the conviction of 598 persons for telemarketing fraud-related offenses, the execution of 104 searches, and the investigation of 180 telemarketing "boiler rooms." This investigation's success would have been impossible without the cooperation the FBI received from the American Association of Retired Persons and the many senior citizens who posed as potential victims. They refused to allow criminals to go free and performed a great service for all.
Another telecommunications investigation that met with great success was "Operation Disconnect", a national covert investigative effort designed to address telemarketing fraud aggressively. At its conclusion, Operation Disconnect encompassed a total of 18 FBI field offices and proved to be the most significant investigative initiative undertaken to counter illegal telemarketing operations. This investigation resulted in the indictment and conviction of 402 subjects, the execution of 101 searches, the seizure of $7.65 million of property, and the forfeiture of $6.76 million.
Other Major White Collar Crime Cases
"Operation Counter Copy" was a national initiative designed to locate and identify products, principal distributors, and publishers of unauthorized trademarks and/or copyrighted products for the purpose of eliminating these sources of illicit productions. In 1997, a national effort by 11 field divisions resulted in the arrest and indictment of 17 individuals on federal trademark/copyright violations.
"Operation Total Disclosure" targeted individuals engaged in committing bankruptcy fraud. In 1996, there was a national investigation which resulted in the participation of 25 field divisions and over 110 subjects were indicted.
"Operation Rogue Brokers" was initiated in 1995 in an effort to address securities cases focusing on investment brokers and other market participants who utilized a host of schemes to defraud their clients out of invested funds. This initiative resulted in 25 investment brokers being indicted in 11 field division areas.
"Operation CHECKMASTER" targeted organized groups in 25 FBI field divisions and focused on a variety of check fraud, counterfeiting and credit card fraud organizations. Since its inception, the operation has resulted in 201 indictments and informations, 174 arrests, and 111 felony convictions.
Operation "Broker Bust" was an undercover operation initiated to target fraudulent mortgage brokers and other corrupt real estate professionals involved in providing false information to financial institutions in order to secure mortgage loans. This operation resulted in indictments of 27 real estate professionals, including mortgage brokers and accountants, throughout the Los Angeles area.
Another fraudulent scheme which affected large numbers of innocent Americans involved insurance fraud. The FBI investigation, "Sudden Impact," culminated in 1995 and targeted false medical claims in connection with staged or fictitious accidents. In all, over 40 field offices participated in 22 undercover operations and the arrest or indictment of 723 people.
In 1997, the FBI announced that its 16-month investigation of the crash of TWA Flight 800 into the ocean off New York City had produced no evidence to indicate that a criminal act was the cause of the tragedy that killed all 230 persons aboard the airliner.
In many ways, the investigation was unprecedented. It extended from the New York area and other parts of the United States to a number of countries abroad. More than 7,000 interviews--some as far away as Athens, Greece--were conducted by hundreds of FBI agents. Recovery of possible evidence was hindered by the fact the wreckage of the aircraft was in 120 feet of water.
Other factors also complicated the work of the FBI and the National Transportation Safety Board, which worked closely with the Bureau in trying to determine the cause of the crash.
Ninety-six percent of the aircraft was recovered, about one million pieces in all, and there was extensive reconstruction of large sections of the plane.
In all, 230 victims were recovered and identified.
The FBI did everything humanly possible to determine whether a criminal act was involved. Every lead was pursued. Every possible criminal scenario was studied, ranging from sabotage to a bomb to a missile.
The one-million-plus pieces of aircraft debris were inspected by bomb technicians and laboratory personnel. This process included extensive chemical tests and x-rays along with other sophisticated laboratory examinations.
As the FBI's most expert personnel working on the case said at its conclusion, no stone was left unturned.
A variety of specialists--including bomb technicians, metallurgists, and chemists--took part in examinations of the wreckage recovered from the ocean. Experts from the private sector as well as from other federal and foreign agencies participated in the painstaking tests and analyses.
At one point, traces of high explosive chemicals were found on the wreckage. The FBI then learned that in 1996 St. Louis Airport Police had conducted canine explosives training aboard the aircraft. Explosives put on board the plane at that time were consistent with the traces found in the post-crash tests. This was a major matter, and all of our tests and examinations show that the FBI got it right--the traces were from the earlier canine testing and not from a bomb aboard the aircraft.
During the course of the 16-month investigation, the FBI took every step possible, within the necessary guidelines of our priority investigation, to keep the families and loved ones of the crash victims fully informed--from the time of the very first briefings for family members to the announcement at the conclusion of the investigation late in 1997.
One of the FBI's most important responsibilities is the protection of the rights of all citizens and residents of America. The top priority of our Civil Rights Program is the investigation of racial and religious violence. The FBI has been a full participant in the National Church Arson Task Force since its inception in 1996. As of mid-January 1999, 715 investigations were initiated; 326 arrests have been made, including 64 Federal arrests; and 241 incidents have been solved by arrests.
In recognition of growing concerns regarding race/bias-based crimes, the FBI has given urgent attention to the investigation of hate crimes, and made a commitment to hate crimes enforcement. In July, 1997, the new Hate Crimes Unit was formed within the Corruption/Civil Rights Section of the Criminal Investigative Division at FBI Headquarters. The former Civil Rights Unit, renamed the Color of Law Unit, focused on civil rights violations by law enforcement officers. In 1993, the FBI was funded for 130 Special Agents to conduct civil rights investigations. By 1997, the FBI had received additional resources for the civil rights program, which increased the number of Special Agents dedicated to working civil rights investigations to 156 Agents. The FBI's commitment to this important national crime problem has exceeded the funded resources. In FY 1998, the FBI dedicated approximately 190 Special Agents to civil rights investigations.
Beyond the investigative commitments, the FBI's Hate Crimes Unit has ensured FBI participation in the National Church Arson Task Force, investigations into violations of the Freedom of Access to Clinic Entrances (FACE) Act, Hate Crimes Working Groups established in each Federal Judicial District, and training of police officers in all aspects of civil rights enforcement, to include the detection, investigation, and reporting of hate crimes under the federal Hate Crimes Statistics Act. The FBI's Uniform Crime Reports Section serves as the repository for the data gathered from the Hate Crimes Statistics Act. The Civil Rights Section has conducted a minimum of four annual training sessions for all FBI Special Agents, Supervisors and managers involved in hate crime investigations and law enforcment misconduct in civil rights matters.
The FBI's investigation into the alleged brutalization of Abner Louima, a Haitian immigrant, has led to five federal indictments of officers from the New York Police Department for civil rights violations.
The FBI's investigation into the alleged systemic abuses of prisoners at California's Corcoran State Prison has led to eight federal indictments of correctional guards employed at the Corcoran facility for civil rights violations.
In 1991, a Hasidic Jew, providing convoy security for Rabbi Menachem Schneerson, lost control of his vehicle and struck two African-American children in Crown Heights, Brooklyn, New York. As a result, a seven-year-old child died and another child was critically injured. This accident triggered four days of intense violence in the Crown Heights community. Immediately following the accident, large groups of African-Americans began roaming nearby neighborhoods. One of these groups attacked and stabbed Yankel Rosebaum, a doctoral student from Australia, who died of his injuries several hours later. Lemrick Nelson was tried locally for this murder and acquitted.
In 1994, after an FBI investigation, Nelson was indicted by a Federal Grand Jury on charges of Interference with Federally Protected Rights. A grand jury later also indicted Charles Price on the same charge as a principal in the assault on Rosebaum. At a trial in U.S. District Court, both subjects were found guilty of violating the civil rights statute by a jury. Nelson was sentenced to 19½ years in prison. Later in 1998, Price was sentenced to serve 21 years and 8 months in prison.
The FBI investigated the murder of James Byrd, Jr., an African American resident of Jasper, Texas, as a possible violation of federal civil rights statutes. Evidence developed by the FBI and local law enforcement officers and examined by the FBI Laboratory was introduced at the local trial of the first defendant to be tried on state capital murder charges, and he was convicted. Two other persons also have been charged by the state in the case.
In a major antitrust case investigated by the FBI, the Archer Daniels Midland Company (ADM) pleaded guilty to price fixing conspiracies and three ADM corporate officials were found guilty of criminal antitrust violations.
The case began in 1992, when the FBI's Springfield, Illinois, Division initiated an investigation of antitrust activities at ADM, the forty-eighth largest publicly-held corporation in America. The investigation focused on international price and volume fixing of lysine, a feed additive for livestock, by five corporations. The corporations were ADM, based in the United States; Ajinomoto Company and Kyowa-Hakko Togyo Company, based in Japan; and Sewon Corporation and Cheil Jedung Company, based in Korea. The Springfield Division investigation also surfaced indications of price fixing activities in high fructose corn syrup and citric acid, a flavor additive and preservative. Spin-off investigations were initiated by the FBI's Atlanta and San Francisco Divisions in these product areas.
The FBI gathered evidence for more than two-and-a-half years in this unique and complicated investigation. The FBI secured over 100 consensually monitored audio and video recordings of the conspirators discussing their illegal activities. The tapes captured the lysine competitors negotiating price and volume agreements and establishing a formal industry association to provide an artificial reason for the competitors to meet. In taped conversations, the competitors discussed scheduling meetings in foreign countries to avoid strict United States antitrust laws.
All foreign competitors and ADM pled guilty to violations of the Sherman Antitrust Act. ADM paid a $100 million fine which established a new benchmark for antitrust fines. Fines in both the civil and criminal cases total over $400 million.
In 1998, a jury in the Northern District of Illinois found Michael Andreas, former ADM Vice-Chairman; Terrance Wilson, former President of the Corn Processing Division; and Mark E. Whitacre, former Vice-President of the Corn Processing Division, guilty of one count each of violation of the Sherman Antitrust Act.
I am proud of the role played by the FBI in the ADM case. It began with the work of one FBI Special Agent in a small town in Illinois and grew into the largest FBI antitrust investigation ever.
The FBI and the Environmental Protection Agency (EPA) enjoy a close working relationship aimed at safeguarding the public health and environment, ensuring efficient use of resources, fostering the development of favorable case law, and assisting both agencies in establishing priorities for environmental crime investigations. In recent years, the FBI has assumed a prominent role in identifying environmental crime problems and enforcing applicable environmental laws. For example, in FY 1998, 485 pending environmental crime cases investigated by the FBI resulted in 136 convictions and $56 million in fines and restitution.
In partnership with the EPA, the U.S. Department of Justice, and other regulators, the FBI participates in a number of important national initiatives designed to combat environmental crime problems such as smuggling of illegal chlorofluorocarbons (CFCs), vessel pollution and ocean dumping, and laboratory fraud. Additionally, the FBI participates with the EPA, other federal agencies, and state and local regulators in 35 task forces across the nation. This coordinated task force approach has yielded important results. For example, in 1998, investigations by the FBI, EPA, and others in Miami and San Juan resulted in a $9 million criminal fine against Royal Caribbean Cruise Lines, Ltd., for illegally dumping oil from three of its cruise ships. Also in 1998, Eklof Marine, a Staten Island marine transportation company, pled guilty to causing a 826,000 gallon oil spill off Rhode Island's southern coast. The company and its owners paid $8.5 million--the largest environmental settlement in the continental United States, as well as a $3.5 million state fine and $1.5 million to the Nature Conservancy to restore the area.
The FBI expects that as additional personnel resources continue to be dedicated to environmental enforcement, the number of investigations and convictions will also continue to increase, as will settlements, fines and restitutions needed to restore polluted areas.
An FBI investigation led to the indictment of Governor John F. Symington of Arizona on charges of making false statements to lending institutions in connection with a commercial real estate venture. He was convicted of six counts of false statements and one count of wire fraud, and was sentenced to 30 months in prison.
Following an FBI investigation, former governor Edwin Edwards of Louisiana was indicted in New Orleans in 1998 on racketeering, conspiracy, extortion, and other charges. The indictment alleged that Edwards was the leader of an enterprise whose objectives included illegal manipulation of the riverboat gaming license process. The offenses occurred during and after his last two terms as governor, the government charged. The case is pending.
Another major case, Operation "GREENPALM," targeted corruption within the city of Miami. This matter initially involved the alleged extortion of the Unisys Corporation by Assistant City Manager Manohar Surana. Surana allegedly demanded money to ensure the Miami City Commission awarded three contracts to the Unisys Corporation valued at approximately $14,000,000. This aspect of the case led to the arrest of Surana; City Commissioner Miller Dawkins; and Howard Gary, the former City Manager and a bond consultant for the city.
Surana cooperated and unveiled a separate scheme to defraud the city involving Cesar Odio, Manager for the City of Miami, and Jorge Decardenes, an outside consultant to the city. Decardenes was awarded a $12,000 a month fraudulent consulting contract which overlaid the city's health insurance contract with Cigna Corporation. Surana awaits trial, while all other participants in this scheme have been convicted.
An undercover operation codenamed "SILVER SHOVEL" was initiated in 1993 to identify public officials within the city of Chicago engaged in corruptly offering, soliciting and accepting bribes in return for local government public works contracts.
During the investigation, a cooperating witness and an Undercover Agent paid bribes to numerous public officials for a variety of assistance in obtaining construction work, minority certification and being permitted to operate a rock crusher without interference from local authorities.
This investigation has resulted in 24 indictments. Thirteen people have pled guilty, six have been convicted, and one acquitted. Two persons are awaiting trial.
The corruption of police and other public officials is also viewed as a grave offense by the FBI, which has developed major law enforcement programs against those who violate their oaths to uphold the law and protect the public.
In a period of a few weeks in early 1998, nearly 80 law enforcement officers were arrested and charged in four separate corruption cases throughout the country.
The overwhelming majority of police officers are honest and dedicated. But those few who are dishonest have an insidious impact on one of democracy's basic tenets: that law enforcement officers will honestly and fairly protect and serve the citizens to whom they answer.
Police corruption is an FBI national priority, which is shown by the Bureau's performance. From 1994 to 1997, a total of 508 persons were convicted in law enforcement corruption cases investigated by the FBI.
In many investigations involving allegations of corruption, the FBI works closely with the head of the local law enforcement agency and the agency's Internal Affairs Division.
The FBI continued its efforts to combat the theft of government property including military weapons and explosives. In one case, eight civilians and six members of the U.S. Armed Forces were arrested on charges relating to the theft and resale of stolen military weapons and explosives. Among the weapons recovered were 234 machine guns and assault rifles, 60 handguns, two grenade launchers, four mortars, and 215,000 rounds of ammunition. To date, 13 of 14 defendants either pleaded guilty or were convicted.
The Evidence Response Team Unit was established in 1994 to provide guidance to field offices regarding Evidence Response Team (ERT) formation, operations, responsibilities, training, logistical support, budgets, and on-scene assistance. ERTs are groups of highly motivated, well-trained and equipped personnel that specialize in organizing and conducting major evidence recovery operations. They handle the identification, collection, and preservation of evidence at crime scenes. In recent years, I have directed the FBI Laboratory to coordinate activities and information exchange among field ERTs to establish and standardize organizational and operational protocols regarding all aspects of their work. Because of their outstanding performance, the FBI has been able to collect more and preserve better crime scene evidence than ever.
The Evidence Response Teams have made major contributions in the investigations of a large number of complex cases, including the recent bombings of U.S. Embassies in East Africa and the bombing of the Federal building in Oklahoma City.
The services of the Evidence Response Teams are in great demand by local, state, and foreign law enforcement agencies.
Under a provision of the Brady Act created by Congress, the FBI developed in late 1998 the National Instant Check System to process background checks on prospective firearms purchasers.
Sixteen states exercised an option in the Act to conduct their own background checks on all firearms, while 11 other states check for handguns only, with the FBI checking for long gun purchases. The FBI does not have access to the statistics of those states. Checks in the remaining 26 states/territories are conducted by the FBI with a staff of some 500 persons at its complex in West Virginia.
In the first 41 days of operation into early 1999, a total of 1,030,606 background checks were processed on people seeking to purchase handguns, rifles, and shotguns. Of the checks conducted by the FBI, the Bureau denied 11,584 transfers of firearms under provisions of the Act. Of the 11,584 denials, 1,541 were the subjects of outstanding arrest warrants. The program, formally known as the National Instant Check System, was designed by Congress to keep firearms out of the hands of criminals and the mentally ill.
Source: Federal Bureau of Investigation -- http://fbi.gov