Veteran New Jersey State Police Trooper Staff Sgt. Steven M. Jones Stole Thousands Of Dollars Worth Of Gasoline From State Fuel Pumps – Gets Sweet Retirement Deal With Pension That Doesn’t Include Prison Time

June 26, 2012

TRENTON, NEW JERSEY — For more than three years, a veteran State Police trooper stole thousands of dollars worth of gasoline from state fuel pumps for his personal vehicles without being detected — and when authorities did catch on, he was not charged criminally and was allowed to retire with pension.

Disciplinary records obtained by The Star-Ledger show Staff Sgt. Steven M. Jones admitted in April that he stole 3,128 gallons of gas valued at $7,038 from October 2007 to March 2011. The 25-year trooper then retired under a negotiated plea agreement with internal affairs.

At the same time that Jones was fueling up on the taxpayers’ dime, a government watchdog warned the State Police it was not doing enough to track gas use by troopers.

“There are documented cases where abuses have been discovered,” the Office of the State Auditor said in a 2008 report. “However, systematic monitoring is not performed.”

The findings echoed the auditor’s concerns raised a year earlier about weaknesses in how the state monitors fuel fill-ups for its entire fleet — a system overseen by the state Treasury Department, which at the time vowed to make improvements.

Five years later, the state has yet to award a contract that would enact safeguards to curtail state troopers and other employees from stealing gas.

“Until all safeguards are in place, there remains a risk of abuse,” said Peter McAleer, spokesman for the state Comptroller’s Office, which documented weak oversight over vehicles used by the Department of Children and Families in 2009.

The Treasury Department said it is now reviewing contract proposals for a new system to monitor fill-ups through real-time reporting of details such as who requested the gas and how much was pumped. Officials would not say if there is a timetable for awarding a contract.

“These types of things, particularly high-tech systems like this, tend to take awhile to actually get the contract in place,” a spokesman for Treasury, Bill Quinn, said.

In the case of trooper Jones, a spokesman for the State Police, Acting Sgt. 1st Class Brian Polite, said the incident focused on the “inappropriate actions of one individual.”

“A thorough internal investigation was conducted and appropriate disciplinary actions were taken,” Polite said.

He did not respond to questions about how the theft went on for years without being detected, how Jones was caught or what is done to monitor gas use.

Jones was suspended without pay in March for about two weeks before retiring under the plea agreement with internal affairs. Records show he forfeited his accrued personal, holiday and vacation time, which was worth roughly the same amount that he stole in gas. He is also barred from holding another law enforcement job in New Jersey and from obtaining a gun permit for retired officers, records show.

The State Police Retirement Board last month reduced Jones’ pension from 65 percent of his final salary to 50 percent because of the theft and also revoked his medical benefits. Last year, Jones earned a regular salary of about $105,000, not including overtime and other pay, according to state payroll records.

During the board’s hearing, Jones, 47, said he was a recovering alcoholic but did not always follow his treatment routine during the time he stole the gas. He also said he worked a large amount of overtime but could not overcome his debt, which led to his actions.

“Sometimes I do things I don’t normally do,” Jones said. He did not return a phone call seeking further comment.
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Jones was not charged criminally, and case law prevents a police officer’s admission during an administrative review to be the basis for subsequent criminal charges. A spokesman for the Attorney General’s Office, Paul Loriquet, declined to comment specifically about the case.

“If we have sufficient proof that a law enforcement officer has committed a crime, we’ll prosecute that officer, as we would any other individual that committed a crime,” Loriquet said.

A source familiar with the case said it was reviewed by prosecutors at the Attorney General’s Office and there was not enough evidence to bring charges. The source was not allowed to discuss criminal investigations and requested anonymity.

The state Auditor’s report in 2008 noted the weak protections of the State Police’s fueling system. Most gas cards are assigned to individual patrol cars, though some are “transient” cards that can be used by any trooper at a particular barracks.

Three sources with knowledge of the State Police’s fueling system said it relies largely on the honor system and not every fueling yard has cameras to deter abuse. The sources requested anonymity because they were not allowed to speak with the media.

In addition, though fuel pumps ask for a badge number after a card is swiped, a trooper can enter anyone’s badge number and get gas. The auditor’s report said that makes tracking individual usage difficult.

“Having a more secure identification number associated with each transaction would make monitoring more effective,” the report said.

In its review of the state’s entire fuel monitoring system in 2007, the auditor noted there were multiple fill-ups on the same day, fill-ups exceeding fuel tank capacities and inconsistent mileage tracking.

The state has in the past charged public employees for stealing gas.

In 2008, the Attorney General’s Office charged a dozen public employees, including six with ties to the Department of Children and Families, in connection with stealing about 1,400 gallons of gas for their personal vehicles from government-run pumps.

In response to the arrests, the Comptroller’s Office reviewed the department and found hundreds of questionable fuel transactions and weak oversight. McAleer, the spokesman for the office, said the department has since made substantial improvements.

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New Jersey Shuts Down Red Light Cameras In 21 Cities After Finding They Don’t Meet Legal Requirements For Yellow Light Timing

June 21, 2012

NEW JERSEY – The New Jersey Department of Transportation (NJDOT) yesterday ordered a halt to red light camera ticketing in 21 cities. The agency became concerned drivers are being shortchanged and the law violated after learning that 63 of 85 photo ticketing intersections failed to meet legal requirements for yellow signal timing. The agency prohibited ticketing at these locations pending certification of each individual intersection’s timing.

“It has come to the attention of the department that the pilot program legislation specifies a formula to determine the proper duration of the yellow light in a traffic signal that differs from the legally required, nationally accepted formula that NJDOT or municipalities use when installing traffic signals,” NJDOT explained in a statement yesterday.

NJDOT said any camera operating with an overly short yellow will be removed from the camera program. In 2008, lawmakers skeptical of the motives behind photo ticketing inserted a provision into the camera program authorization that put in place one of the most stringent yellow timing provisions in the country. Their goal was to reduce the likelihood that municipalities and private vendors would exploit timing deficiencies to generate ticketing revenue. The National Motorists Association, which helped push for the signal timing law, believes the claims of photo enforcement proponents have been undermined by municipalities in New Jersey.

“Even with the law, the program was not implemented properly,” NMA’s New Jersey chapter coordinator Steve Carrellas said. “It goes to show that camera enforcement should never be allowed since it’s almost never fair to motorists.”

According to NJDOT, only 22 out of 85 intersections were certified with an appropriate yellow signal timing. The law specifies a typical 35 MPH intersection must have at least 3.5 seconds of yellow time, and a 45 MPH intersection would be 4.5 seconds, and so on. Most cities achieve shortened yellow times by posting speed limits far below the actual travel speed of traffic. The law prevents this with a provision specifying that the yellow time can only be set according to the speed at which 85 percent of traffic moves. The net result is that the law mandates significantly longer yellows.

“This requirement aims to ensure that the traffic signal is timed properly to provide motorists with sufficient time to avoid a violation and fine by entering an intersection when the light is red,” NJDOT explained.

The Texas Transportation Institute concluded in 2004 that yellows shorter by a second than the ITE recommended amount generated a 110 percent jump in citations (view report). The vast majority of those extra violations happened within the first 0.25 seconds after the light turned red (see chart).

Ohio and Georgia have similarly tough statues, requiring one second be added to the yellow time of any intersection that has a red light camera. In Georgia, implementation of the law produced an immediate 80 percent reduction in violations, so much that the state’s primary photo ticketing vendor, Lasercraft, was forced to sell its business.

New Jersey’s automated ticketing ban applies to Newark, Linden, Wayne, Palisades Park, Union Township, Springfield (Union County), Roselle Park, Rahway, Englewood Cliffs, Pohatcong, Piscataway, Edison, East Windsor, Lawrence, Cherry Hill, Stratford, Monroe, Brick and Glassboro.

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84 GSA Employees Got $1.1 Million In Taxpayer Funded Bonuses While Already Under Investigation For Wrongdoing Or Misconduct

June 4, 2012

WASHINGTON, DC – An ongoing congressional investigation reveals $1.1 million in bonuses were awarded to 84 employees of the General Services Administration since 2008 — while the inspector general was probing these individuals for wrongdoing or misconduct.

Sen. Claire McCaskill (D-Mo.), who is heading the investigation, said the overall number of employees receiving bonuses while under investigation is likely to be “far higher” since not all information for current investigations is now available, according to a release from the senator.

Of the 84 GSA employees, each received an average of eight bonuses, totaling $13,000.

One program officer received more than $38,000 in bonuses since 2008, despite being reassigned for abuse of authority. Another employee, a GS-14 level supervisor, received more than $20,000 in bonuses, even after being reprimanded for interfering with an IG investigation, according to the release.

“It doesn’t pass the smell test to be awarding huge bonuses in taxpayer dollars to officials who are being investigated, or have already been found responsible, for fraud and waste of those very taxpayer dollars. That’s why I’m not letting up on our fight for accountability in government,” McCaskill said in the release. McCaskill is the chairman of the subcommittee on contracting oversight in the Senate Homeland Security and Governmental Affairs Committee.

The GSA has no policies to freeze bonuses to employees under investigation by the IG, according to the release.

The scrutiny of GSA came most heavily starting in April after an investigation by the IG revealed the agency spent more than $823,000 on a Las Vegas conference in 2010. Among the employees investigated was Public Buildings Service Region 9 Commission Jeff Neely, who received a $9,000 bonus despite being under investigation.

In a letter to Office of Personnel Management Director John Berry, McCaskill asked for information from 2008 to 2011 on bonuses awarded to all federal agencies, “including what actions OPM could take to ensure that bonuses that would otherwise be awarded to federal employees under investigation by the Inspector General are withheld pending the resolution of the investigation.”

McCaskill gave OPM a deadline of June 20 for the federal employee bonus information.

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Yemassee South Carolina Police Officer Capt. Gregory Alexander Arrested, Suspended, And Charged After $11,000 Goes Missing

May 26, 2012

YEMASSEE, SOUTH CAROLINA — A police captain from the Lowcountry community of Yemassee has been suspended without pay after being charged with talking almost $11,000 seized in police traffic stops.

The Beaufort Gazette reports town officials were notified this week that Capt. Gregory Alexander had been charged with one count of misconduct in office and two counts of breach of trust with fraudulent intent.

He says he has full faith and confidence in the officer and that the matter will be resolved.

Police Chief Jack Hagy said the charges follow a State Law Enforcement Division investigation. Investigators say the money came from traffic stops in 2009 and 2010.

Hagy says the department is standing by Alexander. He says he has full faith and confidence in the officer and that the matter will be resolved. A phone number for Alexander could not be located.

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Second Buffalo New York Police Officer, Patrick S. O’Mara, Arrested And Charged With Fraud – Claimed Injury For Picking Up 2 Reams Of Copier Paper

May 18, 2012

BUFFALO, NEW YORK – U.S. Attorney William J. Hochul, Jr. announced Thursday that Patrick S. O’Mara, 50, of Buffalo, N.Y., was arrested and charged by Criminal Complaint with mail fraud and health care fraud. The charges carry a maximum penalty of 20 years in prison, a $250,000 fine or both.

Assistant U.S. Attorney John E. Rogowski, who is handling the case, stated that on February 16, 2004, the defendant, a Buffalo Police Officer, was placed on Injured on Duty Status (IOD) by the City of Buffalo. According to the Complaint, O’Mara was placed on IOD status for exacerbation of cervical and lumbar strains previously suffered while on duty. The defendant remained on IOD status until October 18, 2004 when he was ordered to return to light duty. O’Mara again claimed to have injured his right arm on March 21, 2005 while lifting two reams of copy paper. While the defendant did not report the injury to his superiors until 23 days later, the defendant was placed on IOD status once again on September 6, 2005 where he remained until he retired on March 31, 2012.

The Complaint states that while the defendant’s primary care physician did not recommend that O’Mara return to work, several independent medical exams concluded that the defendant was not permanently disabled. One doctor noted that the defendant walked into his office using a cane, but later witnessed O’Mara walking in the parking lot without any limp. In addition, the investigation determined that the defendant worked as a paid musical director and church organist during most, if not all, of the time that he has been on IOD status. Such work would have involved the use of his right arm.

The defendant retired from the Buffalo Police Department effective March 31, 2012, following an independent medical exam and administrative hearing. The Complaint alleges that during an interview with Special Agents from the Federal Bureau of Investigation on May 9, 2012, the defendant stated (among other things) that he was capable of performing light duty and had been playing the organ for a church. Nevertheless, the defendant stated there was no incentive to return to work on light duty status, “it is demeaning to sit at a desk and answer phones and I consider it to be punishment,” and “the pay on IOD status which is without taxes is actually an incentive to stay off duty in IOD status.”

“By prosecuting those who defraud the Injured on Duty System, we protect and support the hard working police officers who may someday need this program for bona fide injuries suffered in the line of fire,” said U.S. Attorney Hochul. “Abuse of the program not only compromises the integrity of the entire system, it also deprives City residents of one additional police officer who would otherwise be available for patrol and safety. This arrest, the second involving a Buffalo Police Officer in a week, sends a strong and clear message that this type of fraudulent behavior will not be tolerated.”

“As we stated after last week’s arrest of Buffalo Police Officer Robert Quintana, the charging of retired Police Officer Patrick O’Mara today reinforces the FBI and Buffalo Police Department’s commitment to remove abusers of the Injured-On-Duty program from the ranks of the police department,” said Christopher M. Piehota, FBI Special Agent in Charge. “Members of law enforcement must discharge their duties with the utmost respect for ethics and the law. Continued abuse of this worthwhile program drains city resources and undermines the public’s trust and confidence in its public servants.”

O’Mara’s arrest is the second in a week involving a Buffalo Police Officer. On May 9, 2012, Robert Quintana, who has been on IOD status since March of 2005, was arrested and also charged with mail and health care fraud.

The Criminal Complaint is the culmination of an investigation by Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Christopher M. Piehota and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty

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Former Rhode Island Governor Donald Carcieri Pissed Away $75 Million In Taxpayer Funds On Video Game Venture That Included Baseball Pitcher Who Liked Video Games But Had Never Made One

May 18, 2012

RHODE ISLAND – In the final months of two mostly unmemorable terms in office, Rhode Island Governor Donald Carcieri boasted about his little state’s big splash – stealing former Red Sox pitcher Curt Schilling and his nascent video game company from Massachusetts.

“This is a risk worth taking,’’ said Carcieri, a Republican, announcing the 2010 deal that lured Schilling’s company, 38 Studios, to Providence, and put Rhode Island taxpayers on the hook for up to $75 million in guaranteed loans to an athlete who liked video games but had never developed one.

“I think the governor had stars in his eyes, the whole idea of playing ball with a baseball player intrigued him and others,’’ said Republican state Representative Robert Watson, former Rhode Island House minority leader. “And I think they got blinded by that celebrity.’’

What Carcieri and supporters saw as the seed of a glittering new business sector for Providence, which has struggled for decades to replace jobs lost with the decline of its jewelry industry, now seems to be crashing down.

After missing a $1.1 million payment May 1 and a personal plea from Schilling for more public assistance this week, 38 Studios has said it does not not have enough money to pay its employees. On Wednesday, the state economic development official who oversaw the loan guarantees resigned abruptly. In a bizarre twist, at one point Thursday, company representatives hand-delivered a check to the Rhode Island Economic Development Corporation, apparently to cover the late $1.1 million payment, but then later said the company had insufficient funds to cover it.

The precise cause of 38 Studios’ current trouble is unclear; its latest negotiations with the economic development agency are confidential. But what is clear is that Schilling steered the company through a feverish hiring spree and into a high pay-off – but high-risk – realm of the gaming industry that requires enormous start-up money.

“It’s a vibrant market, but it’s a fairly risky market,’’ said Barry Gilbert, vice president of Strategy Analytics, a Newton consulting firm that advised the Rhode Island agency during its negotiations with 38 Studios. “To be successful in the space requires superb timing, superb management, superb talent, and a good dose of luck.’’

The economic development agency’s board is scheduled to meet on Monday to discuss any action the state could take to protect its investment.

In the beginning, Schilling’s company was aimed at Massachusetts, and his star power fueled it. He founded it on Aug. 28, 2006, as Green Monster Games LLC, a reference to the landmark left-field wall in Fenway Park, where Schilling became a legend after the 2004 American League Championship Series against the New York Yankees. He later changed the name to 38 Studios LLC, a reference to his Red Sox jersey number. The company’s original office was in Maynard.

Schilling was not chief executive of the company. His title was founder, chairman, and executive visionary.

He had massive ambitions. The company promised each of its original 37 employees a bonus of $1 million if 38 Studios reached $1 billion in value, a huge stretch for a start-up. By comparison, Warner Bros. agreed to pay as much as $160 million for Turbine Inc., one of the Boston area’s largest established video game companies.

Schilling has long been interested in gaming. As a baseball player, he collaborated on “massively multiplayer online’’ games – called MMOs – with Sony Online Entertainment. His office in Maynard was filled with decorative swords, a sign of the fantasy world his new company planned to create. From its infancy, 38 Studios imagined it would elbow into a multibillion-dollar market filled with games such as Blizzard Entertainment’s World of Warcraft, which boasts millions of fans.

MMOs are hugely elaborate and expensive, with the potential to become either blockbusters or giant busts, analysts say.

Because the games are so expensive to produce, strong funding is critical. “It does take hugely deep pockets,’’ said Gilbert, the consultant. Schilling claimed he personally invested as much as $30 million in the venture. Schilling also personally guaranteed a $2.5 million line of credit that 38 Studios took out in 2010, which the company repaid with a portion of the proceeds it received from Rhode Island.

Schilling had originally hoped to launch the game’s first product in 2010. But he immediately hit trouble raising money. He shocked venture capitalists with an audacious pitch for $48 million – far more than gaming companies typically receive in an initial round of funding. In addition, Schilling was reportedly reluctant to give up much stock in exchange for funding. Flybridge Capital Partners and several other Boston area firms passed on 38 Studios.

“More than one VC who has met Schilling has come away with the impression that an investment would require quite a bit of ‘babysitting,’ ’’ noted a trade publication, Private Equity Week, at the time.

Schilling estimated he might need more than $100 million to complete the multiplayer game, code-named Copernicus.

In March 2010, Schilling finally found his cash cow. After Schilling met Carcieri at a fund-raiser, state officials began quietly talking to Schilling about relocating 38 Studios to Rhode Island.

In April, Democratic leadership in the Rhode Island House brought forth a supplemental budget that included $125 million in loan guarantees for job creation, Watson said.

“I had heard rumors that both the governor and House leadership were desperate to cut a deal with Schilling,’’ Watson said. “Nobody was admitting to anything at the time. Frankly, Keith Stokes [director of the Rhode Island Economic Development Corp.] and Governor Carcieri’s office were full of obfuscation, camouflage, and possibly outright lies.’’ Watson said he opposed the program as “a scandal waiting to happen.’’

When the proposal came back for more debate in May, Representative Laurence Ehrhardt, a North Kingstown Republican, was ready with an amendment that would cap at $10 million the loan guarantee available to any one company. Loan guarantees would mean the state would be obligated to pay if the company defaults.

As debate began on the House floor, Ehrhardt got a note that someone wanted to see him in the hall, he said. It was Stokes, the economic development director.

“He had learned of my amendment and made a personal request that I not submit it,’’ said Ehrhardt. Stokes never mentioned Schilling, suggesting only to Ehrhardt that the cap would “cause some difficulties with some negotiations they were having. But nothing more specific then that.’’

Under the terms of the loan, 38 Studios must pay $5.3 million in interest this year, and $12.7 million in interest and principal every year from 2013 to 2020.

Schilling’s company released its first effort earlier this year, a role-playing video game called Kingdoms of Amalur: Reckoning. It was well-reviewed and has sold about 1 million copies at about $60 each, according to market research company VGChartz.

Governor Lincoln Chafee, an independent, criticized the deal with 38 Studios as a candidate in 2010. He has been cool to Schilling’s request for more public assistance, though Chafee has said it is in the state’s interest to find a way to save the company.

Other opponents blasted the deal on Thursday, and warned against any more taxpayer dollars for Schilling’s company.

“We got hoodwinked; we got played,’’ Watson said. “How many millions of dollars does Curt Schilling have? He can’t write a check? It’s Rhode Island that is supposed to provide the money? I think not.’’

Stokes, who resigned late Wednesday, had little to say about the unraveling deal with Schilling, insisting the economic development agency’s negotiations with the company remain confidential. He would not directly address whether the agency gave proper oversight to the state’s investment in 38 Studios.

“I really can’t comment on the nature of the transaction,’’ he said. “I can give you my favorite William Faulkner quote, which is: ‘All of us failed to match our dreams of perfection.’’’

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States Using Hundreds Of Million Of Dollars Meant To Help Homeowners To Other Uses

May 16, 2012

WASHINGTON, DC – Hundreds of millions of dollars meant to provide a little relief to the nation’s struggling homeowners is being diverted to plug state budget gaps.

In a budget proposed this week, California joined more than a dozen states that want to help close gaping shortfalls using money paid by the nation’s biggest banks and earmarked for foreclosure prevention, investigations of financial fraud and blunting the ill effects of the housing crisis. California was awarded more than $400 million from the banks, and Gov. Jerry Brown has proposed using the bulk of that sum to pay the state’s debts.

The money was part of a national settlement valued at $25 billion and negotiated with five big banks over abuses in their mortgage and foreclosure processes.

The settlement, reached in February after a year of talks and intervention by the Obama administration, was the second-largest in history involving the states, trailing the tobacco industry settlement, and represented the first large-scale commitment by banks to provide direct aid to borrowers.

As part of the settlement, the banks agreed to pay the states $2.5 billion, money intended to help homeowners and mitigate the effects of the foreclosure surge. But critics complained that this was the only cash the banks were required to pay — the rest comes in the form of “credits” for reducing mortgage debt and other activities. Even that relatively small amount has proved too great a temptation for lawmakers.

Only 27 states have devoted all their funds from the banks to housing programs, according to a report by Enterprise Community Partners, a national affordable housing group. So far about 15 states have said they will use all or most of the money for other purposes.

In Texas, $125 million went straight to the general fund. Missouri will use its $40 million to soften cuts to higher education. Indiana is spending more than half its allotment to pay energy bills for low-income families, while Virginia will use most of its $67 million to help revenue-starved local governments.

Like California, some other states with outsize problems from the housing bust are spending the money for something other than homeowner relief. Georgia, where home prices are still falling, will use its $99 million to lure companies to the state.

“The governor has decided to use the discretionary money for economic development,” said a spokesman for Nathan Deal, Georgia’s governor, a Republican. “He believes that the best way to prevent foreclosures amongst honest homeowners who have experienced hard times is to create jobs here in our state.”

Andy Schneggenburger, the executive director of the Atlanta Housing Association of Neighborhood-Based Developers, said the decision showed “a real lack of comprehension of the depths of the foreclosure problem.”

The $2.5 billion was intended to be under the control of the state attorneys general, who negotiated the settlement with the five banks — Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally. But there is enough wiggle room in the agreement, as well as in separate terms agreed to by each state, to give legislatures and governors wide latitude. The money can, for example, be counted as a “civil penalty” won by the state, and some leaders have argued that states are entitled to the money because the housing crash decimated tax collections.

Shaun Donovan, the federal housing secretary, has been privately urging state officials to spend the money as intended. “Other uses fail to capitalize on the opportunities presented by the settlement to bring real, concerted relief to homeowners and the communities in which they live,” he said Tuesday.

Some attorneys general have complied quietly with requests to repurpose the money, while others have protested. Lisa Madigan, the Democratic attorney general of Illinois, said she would oppose any effort to divert the funds. Tom Horne, the Republican attorney general of Arizona, said he disagreed with the state’s move to take about half its $97 million, which officials initially said was needed for prisons.

But Mr. Horne said he would not oppose the shift because the governor and the Legislature had authority over budgetary matters. The Arizona Center for Law in the Public Interest has said it will sue to stop Mr. Horne from transferring the money.

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Buffalo New York Police Officer Robert Quintata Arrested, Charged By Feds With Mail Fraud And Health Care Fraud – Claimed To Be Injured For 7 Years – Found Working At Restaurant

May 9, 2012

BUFFALO, NEW YORK – U.S. Attorney William J. Hochul, Jr. announced today that Robert Quintana, 50, of Buffalo, New York, was arrested and charged by criminal complaint with mail fraud and health care fraud. The charges carry a maximum penalty of 20 years in prison, a $250,000 fine, or both.

Assistant U.S. Attorney John E. Rogowski, who is handling the case, stated that on March 16, 2005, the defendant, a Buffalo police officer, was placed on injured on duty (IOD) status by the city of Buffalo. According to the complaint, Quintana was placed on IOD status for alleged injuries to his lower back and buttocks after he slipped and fell on icy steps while responding to a 911-call.

The complaint further states that on numerous occasions while allegedly out of work due to this injury, the defendant was observed working at a local restaurant. The observed work included the lifting of supplies, cleaning tables, stocking, kneeling and bending, and chipping ice. Nevertheless, during the course of an independent medical exam requested by the city of Buffalo in January 2012, Quintana told doctors he was unable to perform any work. The defendant remains on IOD status to this date (seven years after his initial injury) and has resisted efforts to have him return to work.

“It is the duty of all sworn police officers to uphold the law and the vast majority of officers do just that each and every day,” said U.S. Attorney Hochul. “All should also recognize that police work can be hazardous, and for that reason, communities frequently pay for officers injured in the line of duty until such time as they can return to their posts.”

Hochul further stated that “by falsely claiming to be too injured to return to work, an officer not just breaks the law, she or he hurts the credibility of those legitimately injured in the line of duty. This type of lie also leaves one less officer to patrol the streets of the city, requires working officers to perform overtime duty and thereby increase their own risk of injury, and drives up the cost of health care in these times of difficult economic circumstances. This office can and will act when presented with evidence of this type of fraud.”

“We, as members of law enforcement, are keenly aware of how dangerous it is to be a law enforcement officer,” said Steven L. Lanser, FBI Acting Special Agent in Charge. “Every day we see how the good, hardworking men and women in the Buffalo Police Department out their lives and safety on the line. The injured on duty program is in place to ensure members of the police department are secure in knowing this benefit is available should they sustain a serious injury while discharging their duties. Abuse of the IOD system is an affront to the taxpayers of the city of Buffalo.”

The criminal complaint is the culmination of an investigation by special agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Christopher M. Piehota, and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.

The fact that a defendant has been charged with a crime is merely an accusation, and the defendant is presumed innocent until and unless proven guilty.

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Obama’s $8,000,000,000.00 HHS Slush Fund To Mask Debilitating Effects Of ObamaCare On Seniors In Key Markets Long Enough For His Re-Election Attempt

April 23, 2012

WASHINGTON, DC – Call it President Obama’s Committee for the Re-Election of the President — a political slush fund at the Health and Human Services Department.

Only this isn’t some little fund from shadowy private sources; this is taxpayer money, redirected to help Obama win another term. A massive amount of it, too — $8.3 billion. Yes, that’s billion, with a B.

Here is how it works.

The most oppressive aspects of the ObamaCare law don’t kick in until after the 2012 election, when the president will no longer be answerable to voters. More “flexibility,” he recently explained to the Russians.

But certain voters would surely notice one highly painful part of the law before then — namely, the way it guts the popular Medicare Advantage program.

For years, 12 million seniors have relied on these policies, a more market-oriented alternative to traditional Medicare, without the aggravating gaps in coverage.

But as part of its hundreds of billions in Medicare cuts, the Obama one-size-fits-all plan slashes reimbursement rates for Medicare Advantage starting next year — herding many seniors back into the government-run program.

Under federal “open-enrollment” guidelines, seniors must pick their Medicare coverage program for next year by the end of this year — which means they should be finding out before Election Day.

Nothing is more politically volatile than monkeying with the health insurance of seniors, who aren’t too keen on confusing upheavals in their health care and are the most diligent voters in the land. This could make the Tea Party look like a tea party.

Making matters even more politically dangerous for Obama is that open enrollment begins Oct. 15, less than three weeks before voters go to the polls.

It’s hard to imagine a bigger electoral disaster for a president than seniors in crucial states like Florida, Pennsylvania and Ohio discovering that he’s taken away their beloved Medicare Advantage just weeks before an election.

This political ticking time bomb could become the biggest “October Surprise” in US political history.

But the administration’s devised a way to postpone the pain one more year, getting Obama past his last election; it plans to spend $8 billion to temporarily restore Medicare Advantage funds so that seniors in key markets don’t lose their trusted insurance program in the middle of Obama’s re-election bid.

The money is to come from funds that Health and Human Services is allowed to use for “demonstration projects.” But to make it legal, HHS has to pretend that it’s doing an “experiment” to study the effect of this money on the insurance market.

That is, to “study” what happens when the government doesn’t change anything but merely continues a program that’s been going on for years.

Obama can temporarily prop up Medicare Advantage long enough to get re-elected by exploiting an obscure bit of federal law. Under a 1967 statute, the HHS secretary can spend money without specific approval by Congress on “experiments” directly aimed at “increasing the efficiency and economy of health services.”

Past demonstration projects have studied new medical techniques or strategies aimed at improving care or reducing costs. The point is to find ways to lower the costs of Medicare by allowing medical technocrats to make efficient decisions without interference from vested interests.

Now Obama means to turn it on its head — diverting the money to a blatantly nonexperimental purpose to serve his political needs.

A Government Accounting Office report released this morning shows, quite starkly, that there simply is no experiment being conducted, just money being spent. Understandably, the GAO recommends that HHS cancel the project.

Congress should immediately launch an investigation into this unprecedented misuse of taxpayer money and violation of the public trust, which certainly presses the boundaries of legality and very well may breach them.

If he’s not stopped, Obama will spend $8 billion in taxpayer funds for a scheme to mask the debilitating effects on seniors of his signature piece of legislation just long enough to get himself re-elected.

Now that is some serious audacity.

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Comptroller In Dixon Illinois Syphoned $30 Million In Town Funds Over 6 Years To Finance Her Lavish Lifestyle – Released By Federal Judge On $4,500 Bond

April 19, 2012

DIXON, ILLINOIS – Allegations that a finance officer for a small northern Illinois city was able to steal a staggering $30 million from government coffers to run a nationally renowned horse breeding business inspired calls Wednesday for more rigorous oversight in small communities that typically face less scrutiny.

Dixon’s mayor pledged new measures to protect the city’s finances a day after FBI agents arrested longtime comptroller Rita Crundwell. She is accused of using the money to fund one of the nation’s leading horse breeding operations and feed a lavish lifestyle that kept her outfitted with cars and hundreds of thousands of dollars worth of jewelry.

According to a criminal complaint, the siphoning of city funds went undetected for years until another staffer filling in as vacation relief became suspicious and discovered a secret bank account. How an enormous sum – it dwarfed the city’s current annual budget of $20 million – could be stolen and escape the notice of a yearly audit left many puzzled.

A Chicago-based corruption watchdog, the Better Government Association, called it a wakeup call for state and local officials to put in place better safeguards, especially in smaller towns that lack rigorous oversight.

“Tens of billions of our tax dollars flow through 7,000 plus units of government in Illinois every year. And we can only watch a few of them,” said the association’s president, Andy Shaw. “Most of them don’t have inspector generals. Most of them don’t have auditor generals. Most of them don’t have watchdog groups looking closely. … It’s ripe for rip-offs.”

Dixon, a city of about 16,000 people west of Chicago where Ronald Reagan grew up, was especially vulnerable because Crundwell, who has been comptroller since the early 1980s, had control over all of the city’s finances, a common arrangement in smaller cities and towns.

Federal prosecutors say she stole $3.2 million since last fall alone and misappropriated more than $30 million since 2006.

Crundwell is free on a $4,500 recognizance bond. A federal judge barred her Wednesday from selling any property while the wire fraud case proceeds and limited her travel to northern Illinois and to Wisconsin, where she has horse ranches.

Agents searching her home, office and farms in Dixon and Beloit, Wis., seized seven trucks and trailers, three pickup trucks, a $2.1 million motor home and a Ford Thunderbird convertible – all allegedly bought with illegal proceeds. Authorities also seized the contents of two bank accounts she controlled.

Between January 2007 and March of this year, she is accused of racking up more than $2.5 million on her personal American Express card – including $339,000 on jewelry – and using Dixon funds to pay back the charges.

Prosecutors say she used $450,000 in stolen funds for operations at her Meri-J Ranch, where she keeps about 150 horses.

Crundwell is one of the top horse breeders in the nation. Her ranch produced 52 world champions, according to the American Quarter Horse Association in Amarillo, Texas, the world’s largest equine breed registry and membership organization.

“Rita has owned more world champions than anyone else in our industry,” said Jim Bret Campbell, the association’s spokesman.

He said she mainly showed her horses in halter classes, competitions where the animals are led by hand rather than ridden and are judged on their beauty. A November photo from the association’s 2011 world championship in Oklahoma City shows a smiling Crundwell posing in a white cowboy hat and spotless white shirt beside a horse named Pizzazzy Lady.

She is so widely known that the association announced her arrest on its website and promised those inquiring more information when it was available.

“People are shocked,” Campbell said of the reaction from the industry.

Dixon placed Crundwell on administrative leave without pay and named a new interim comptroller.

Trying to explain how that much money could disappear unnoticed, Mayor James Burke said Dixon has struggled financially with big infrastructure expenditures, reduced revenues and cash flow problems made worse because the state is far behind on income tax disbursements. That provided plausible reasons to think the extra hole in the budget was related to those financial problems, he said.

How Crundwell could sustain such an extravagant lifestyle on an $80,000 salary was mostly attributed to her success in the horse industry, Burke said.

“She definitely was a trusted employee, although I’ve had some suspicion for quite a while just because of her lifestyle she lived,” Burke said in an interview. “But there wasn’t anything that was brought to my attention or that I could see that would give cause to think that there was something going on.”

He said the city has appointed an independent panel that includes a certified public accountant, a banker and an attorney to recommend internal financial controls.

Marianne Shank, director of the Illinois Government Finance Officers Association, said more training is needed for officials in setting up such controls, including requiring dual signatures in issuing checks, monthly cash flow reports to document budget shortfalls and comprehensive annual financial reports.

“The concern I hear most often is that there are not enough staff to have checks and balances,” she said.

Auditors also talk of the need to divide up financial duties among different staff members, each one acting as a potential check on the other, said Steve Carter, city manager for Champaign, Ill.

“It’s a good lesson for all cities that these things happen and can be very dramatic if you’re not careful and really stress the importance of having those checks and balances in place,” he said.

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“Youngest-Ever Black CEO” Ephren Taylor II Ran Massive Ponzi Scheme Targeting Investors In Black Churches

April 12, 2012

NEW YORK, NEW YORK– Federal officials announced Thursday that they had charged a man who billed himself as the youngest-ever black CEO of a publicly traded company with running a Ponzi scheme.

The Securities and Exchange Commission alleged that Ephren Taylor II — a self-described “social capitalist,” author and entrepreneur — had defrauded investors in his firm of more than $11 million between 2008 and 2010.

Taylor’s City Capital Corporation (CTCC) targeted investors from African-American church congregations, telling them their money would go to support charities and businesses in poor communities, the SEC said. In reality, Taylor used it to operate his scheme and finance a lavish lifestyle, the agency alleged.

Taylor was an aggressive self-promoter, using investor funds to embark on a speaking tour, publicize his three books and support his wife’s singing career, the SEC said. In interviews with outlets like CNN, CNBC, Fox News and NPR, he offered business advice and boasted of earning his first million running a software company while still in high school.
U.S. charges oldest Swiss bank in tax fraud case

“Ephren Taylor professed to be in the business of socially-conscious investing. Instead, he was in the business of promoting Ephren Taylor,” David Woodcock, director of the SEC’s Fort Worth regional office, said in a statement.

“He preyed upon investors’ faith and their desire to help others, convincing them that they could earn healthy returns while also helping their communities.”

The SEC also charged City Capital Corporation and its former chief operating officer, Wendy Connor, with fraud. The agency, which cannot bring criminal charges, is seeking civil penalties and the return of ill-gotten profits.

A lawyer for Connor did not immediately return a request for comment.
Mortgage execs charged with accounting fraud

It was not clear whether Taylor had legal representation. His former spokeswoman said she no longer represented him, and his personal contact information was unavailable.

Cathy Lerman, a lawyer in Florida who is preparing a class action suit on behalf of Taylor’s investors, said she has dealt with dozens of people who have been rocked by his scheme.

“People have lost their homes, people have become estranged from their families,” she said. “He devastated a lot of people, and he targeted his own — he targeted African-American Christians, and those people have suffered greatly from being affiliated with Ephren Taylor.

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Fraud And Waste At US General Services Administration – Including $800,000 Las Vegas “Training Conference” For 300 Employees ($2,666.67 Per Person)

April 9, 2012

WASHINGTON, DC – An investigation by the inspector general of the General Services Administration found rampant abuse of an employee awards program of the agency’s Pacific Rim region, the same region that has come under fire for spending more than $800,000 on a Las Vegas training conference for 300 employees.

The report on the “Hats Off” employee recognition program, obtained by The Washington Post, found numerous violations of agency directives, theft and misuse of government purchasing cards in the maintenance of the awards program.

The inspector general found “significant control weaknesses in the Hats Off Program.”

The report found that in fiscal year 2009, Pacific Rim employees received $256 in awards and Public Buildings Service employees in the region averaged $328.

The budget for the program rose dramatically in recent years. In 2008, employees at the Pacific Rim region, which oversees federal property in California, Arizona, Nevada and the Pacific Islands, received $47,012 in gifts. The next year it increased to $211,842, then dropped to $134,596 by 2010. In 2011, the program issued $844 worth of awards.

Jeffrey E. Neely became acting commissioner of the region in January 2009, having been public buildings commissioner. Neely was placed on administrative leave for planning the Vegas training conference. Expenditures for the awards program dropped dramatically after the inspector general began his investigation.

The findings in the report include:

■ Employees associated with administering the Hats Off Program were in the top 10 of recipients.

■ Instances of employees swapping awards with each other and supervisors accepting items from employees.

■ One employee, whose name was redacted from the report, gave “out 635 awards to 113 individuals, totaling $3,175.”

■ The Pacific Rim region maintained an inadequate inventory system and meager security on the storage room that held the gift items.

■ Total employee awards exceeded GSA’s 4 percent cap on employee annual salaries. Awards for Region 9 employees also exceeded GSA’s limit of $99-per-item limit on gifts.

Five government-issued purchasing cards were used to make purchases for the online “Hats Off” store, the inspector general found. In four instances, holders split the purchases to circumvent the cards’ single-purchase limit, a violation of agency regulations.

Unidentified public building service card holders allowed others, including two student interns, to make purchases with the cards to buy items for the store, a violation of GSA regulations.

The employee awards program was founded in 2001 as a merit-based point system that would offer coupons that could be redeemed at the “Hats Off” store. Initially, prizes included GSA-stamped mouse pads and backpacks but eventually included electronic goods.

At the start of each fiscal year all non-supervisory employees received 40 virtual “hats” which would be given as peer-to-peer recognition. One virtual hat was worth about $5. Employees could not give hats to themselves, but the investigation found numerous instances of employees swapping hats with each other.

Items in the virtual store included 8G iPod Nanos (redeemable with 30 virtual hats) and Coby 7 Portable DVD Player Tablets (redeemable with 20 virtual hats).

The Pacific Rim region maintained a storage facility on the fourth floor of the Phillip Burton Federal Building in San Francisco. A former GSA employee said items could either be redeemed physically at the storage space, or through an online mall.

The report cited significant security lapses with the storage room. Too many people had access to the space, and administrators often gave out the code to the lock. The office of the inspector general was first alerted to improprieties in the Pacific Rims region’s Hats Off program after more than 40 iPods were found missing and reported to the Federal Protective Service of the Department of Homeland Security. A further inquiry by the inspector general found that 115 iPods valued at $20,000 were unaccounted for and possibly stolen.

The Pacific Rim region organized the 2010 conference that cost $823,000 and included penthouse suites, a clown and a mentalist. GSA Administrator Martha N. Johnson resigned last Monday following revelations of the conference, and two of her senior assistants were fired.

GSA has since terminated the Hats Off program, an agency spokesman said.

The public buildings subcommittee of the House Transportation and Infrastructure Committee, chaired by Rep. Jeff Denham (R-Calif.), will hold a hearing on GSA on April 19.

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Major Obama Campaign Donor Abake Assongba Accused Of Fraud – Accused Of Stealing More Than $650,000 To Build Multi-Million Dollar Home In Florida

April 1, 2012

WASHINGTON, DC – A major donor to President Barack Obama has been accused of defrauding a businessman and impersonating a bank official, creating new headaches for Obama’s re-election campaign as it deals with the questionable history of another top supporter.

The New York donor, Abake Assongba, and her husband contributed more than $50,000 to Obama’s re-election effort this year, federal records show. But Assongba is also fending off a civil court case in Florida, where she’s accused of thieving more than $650,000 to help build a multimillion-dollar home in the state – a charge her husband denies.

Obama is the only presidential contender this year who released his list of “bundlers,” the financiers who raise campaign money by soliciting high-dollar contributions from friends and associates. But that disclosure has not come without snags; his campaign returned $200,000 last month to Carlos and Alberto Cardona, the brothers of a Mexican fugitive wanted on federal drug charges.

Obama campaign spokesman Ben LaBolt declined comment to The Associated Press. He instead referred the AP to previous statements he made to The Washington Post, which first reported the allegations against Assongba in its Sunday editions. LaBolt told the paper 1.3 million Americans have donated to the campaign, and that it addresses issues with contributions promptly.

Assongba was listed on Obama’s campaign website as one of its volunteer fundraisers – a much smaller group of about 440 people.

Assongba and her husband, Anthony J.W. DeRosa, run a charity called Abake’s Foundation that distributes school supplies and food in Benin, Africa.

In one Florida case, which is still ongoing, Swiss businessman Klaus-Werner Pusch accused Assongba in 2009 of engaging him in an email scam – then using the money to buy a multimillion-dollar home, the Post reported. The suit alleges Assongba impersonated a bank official to do it. Pusch referred the AP’s questions to his attorney, who did not immediately return requests seeking comment Sunday.

Meanwhile, Assongba has left a trail of debts, with a former landlord demanding in court more than $10,000 in back rent and damages for a previous apartment. She was also evicted in 2004 after owing $5,000 in rent, records show.

In an interview with the AP on Sunday, DeRosa said the allegations against his wife were untrue, although he couldn’t discuss specifics because of pending litigation. He said he and Assongba were “very perturbed” by the charges, and said the couple’s charity does important work in Africa.

Assongba has given more than $70,000 to Democratic candidates in recent years, an AP review of Federal Election Commission data shows. Her larger contributions include $35,000 to the Obama Victory Fund, a joint fundraising committee between Obama and the Democratic Party, and at least $15,000 to the Democratic National Committee. She also contributed to Hillary Rodham Clinton’s 2008 presidential campaign.

Abake’s Foundation is listed by the IRS as a registered nonprofit organization; its financial reports were unavailable. A representative who picked up the phone at the foundation’s Benin office declined to answer questions, and instead referred the AP to Assongba.

Obama’s campaign declined to comment on whether its vetting procedures were thorough enough, or whether Assongba’s contribution would be refunded. All told, Obama has raised more than $120 million this election, not counting millions more from the Democratic Party – giving him a financial advantage thus far over any of his Republican challengers.


Associated Press writer Emily Fredrix and news researcher Susan James in New York contributed to this report.

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Nutcase Hermosa Beach California Police Officer Anthony Parente Intentionally Rear Ended Car With His Motorcycle – Motorist Faced Bogus Charges Based On The Cops Lies – Cop Has Record Of Causing Accidents And Claiming Injuries – Black Box On Motorcycle “Mysteriously Disappeared” – Video Proved Cop Was Lying

March 23, 2012

HERMOSA BEACH, CALIFORNIA – After 18 months of intense investigation, that was the prosecution’s position when it finally came time to put up or shut up in its controversial assault-on-a-cop case filed against South Bay motorist Brian Hitchcock.

Hitchcock had always insisted he was being unfairly blamed for a traffic accident after a Hermosa Beach motorcycle cop rear-ended him in Redondo Beach, flew off his bike and landed headfirst in the backseat of Hitchcock’s convertible — a bizarre mishap that produced a globally viral photo showing the cop’s booted feet sticking up.

But after the Redondo Beach city attorney suddenly dropped charges of assault and reckless driving without any explanation or apology, Hitchcock viewed his ordeal in a more sinister light.

“This was no accident,” he told L.A. Weekly. “This was an ambush by a cop operating under the color of authority.”

Moments before jury selection was to begin in January, Redondo Beach City Prosecutor Brenda Coe dismissed three misdemeanor charges against Hitchcock. Yet the case had turned his life upside-down. Facing up to two years in jail, he was eager for his day in court.

His lawyer, Thomas Beck, said he was ready to prove that Hermosa Beach Police Officer Anthony Parente was lying about the collision and had a record of causing accidents and claiming injuries in which he not only filed for workman’s compensation and collected hundreds of thousands of dollars in taxpayer money but also targeted the victim’s insurance company.

“This was part of a pattern on Officer Parente’s part to scam people for money,” Beck said. “He’s made a career out of it. This guy ought to be prosecuted for filing a false police report and workman’s comp fraud.”

Beck said the 44-year-old Parente had taken medical leave and filed for workman’s comp six times — three times during his four years with the Inglewood School Police Department and three with the Hermosa Beach PD, where he was hired July 1, 2005.

Parente did not respond to a half-dozen messages from the Weekly seeking comment. Coe was not available for comment because she quit soon after she dropped the charges against Hitchcock.

Hermosa Beach interim Police Chief Steve Johnson declined to comment on Parente, who is on disability leave and collecting workman’s comp — 20 months after he suffered so-called soft-tissue injuries.

While the law enforcement agencies that once pursued Hitchcock have gone silent, Beck gladly laid out his version of a prosecution-turned-persecution against the 60-year-old, churchgoing Mormon, who works as a technical writer at Skechers in Manhattan Beach.

Beck said Hitchcock soon will file a lawsuit against Parente and the Hermosa Beach Police Department.

The case became notorious because of a WTF picture of Parente’s legs sticking out of Hitchcock’s backseat on June 8, 2010. Seconds before that, Hitchcock had pulled up next to Parente’s motorcycle at a red light at the intersection of Artesia Boulevard and Ford Avenue in Redondo Beach.

Parente later claimed that when the light turned green, Hitchcock started speeding in the parking lane and then abruptly pulled over, cutting the officer off. Parente turned on his siren, he said, to cite Hitchcock for a traffic violation.

However, there were problems with Parente’s version. By his own written admission, he turned on his siren when he was only two to three feet behind Hitchcock — far closer than law enforcement training guidelines. The noise startled Hitchcock so badly that he hit the brakes — exactly the danger training warns of. The next thing he knew, a cop was upside down in his car.

Parente put out an “officer down” call, and the baffled Hitchcock was swarmed by officers from Hermosa, Redondo and Manhattan Beach. He was interviewed several times at the scene and his car was impounded.

Hitchcock maintained that he was never in the parking lane, had accelerated normally and didn’t cut Parente off. As reported in the Weekly in February 2011 (“Officer Down,”), three eyewitnesses supported Hitchcock’s account and L.A. District Attorney Steve Cooley refused to bring charges.

But Redondo Beach detectives continued their investigation. “They were carrying water for the Hermosa PD,” Beck alleged. “These little suburban PD’s stick together when a cop does something wrong.”

Six months after the collision, Coe filed three misdemeanor charges against Hitchcock. Then, during the discovery process, Hitchcock’s attorney learned that Redondo detectives had a surveillance video of the collision. The detectives claimed the video was too grainy to reveal anything. But Beck took it to a video specialist, who slowed it down. Beck said the tape clearly showed Hitchcock was telling the truth.

Then the dogged Beck learned that Parente’s motorcycle had a “black box,” which records traffic data such as speed — yet Hermosa police reported to the court that it had mysteriously disappeared.

Beck also interviewed three eyewitnesses who were prepared to testify that Hitchcock was telling the truth.

Beck’s star witness, however, was to be another motorist, Peter Brown, who had a similar experience with Parente. Brown, a field engineer for General Electric, told the Weekly that in April 2008 he was stopped at a red light in Redondo Beach when Parente rear-ended him with a police car.

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Vermont Voting Officials Handing Out Ballots To Anyone Showing Up With No ID And Using Dead Residents Names

March 13, 2012

VERMONT – James O’Keefe’s Project Veritas has released a new video exposing just how easy it is to commit voter fraud in Vermont.

The video, a sequel to O’Keefe’s “Primary of the Living Dead” in New Hampshire, shows a Veritas agent entering various voting places around the state of Vermont, giving a different name each time. Each time, he is given a ballot without showing an ID, to his disbelief.

In the video, the agent repeatedly requests (but does not take) a Republican primary ballot. As he explained to “We wanted to remind viewers this is not a partisan issue. This is a situation wherein anyone — Republican or Democrat — can exploit the system.”

The new video follows in the wake of a highly-politicized media attack on Mr. O’Keefe after his exposure of voter fraud in New Hampshire. Those videos resulted in calls from the left for O’Keefe’s arrest. However, the videos soon resulted in the New Hampshire State Senate passing a new bill requiring voter ID.

O’Keefe’s new video from Vermont could not be more timely, coming the day after the U.S. Department of Justice’s civil rights division blocked a Texas photo ID requirement for voters–to the applause of the American Civil Liberties Union, which claimed that the law was “discriminatory” against “Latinos, African-Americans, elderly citizens, and others.”

As the Project Veritas video shows, the current system in Vermont discriminates against actual legal voters, who must face the prospect of disenfranchisement by those who would vote in their stead illegally, or have their votes cancelled out by those voting illegally in place of deceased voters who have yet to be removed from the rolls. If it is not discriminatory for Vermont citizens to be required to show ID to get married or buy alcohol, it is certainly not discriminatory to make them show ID to vote.

“It is a national disgrace that ballots can be given out in the names of dead people,” O’Keefe told “Threats of government intimidation will not stop us from protecting the integrity of the ballot box. If any state has a system which encourages ballots to be given out to the wrong person, dead or alive, we will come to your state, we will film your poll workers, and Project Veritas will put the videos on YouTube. States like Vermont and New Hampshire have to take dead people off voter registration forms and clean up their act, once and for all.”

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Blogger Exposes Major Flaw In TSA’s Body Scanners – How To Smuggle Anything Onto An Airplane – Same Scanners Europe Banned Over Cancer Concerns

March 7, 2012

WASHINGTON, DC – Controversial nude body scanners used at U.S. airports have come under fire again – after a blogger claimed he could easily smuggle explosives through them onto a plane.

Engineer Jonathan Corbett has published a video where he shows how he took a small metal case through two of the TSA’s $1billion fleet in a special side pocket stitched into his shirt.

This is because, he suggests, the scanners blend metallic areas into the dark background – so if an object is not directly placed on the body, it will not show up on the scan.

The metallic box, he claims, would have set off an alarm had he passed through the old detecting system.

His revelation comes just weeks after Europe banned the ‘airport strip-searches’ over fears the X-ray technology could cause cancer.

MailOnline has decided not to publish the video because it details exactly how to circumvent the safety procedure – but it is freely available to watch online.

Corbett, standing in his living room as he speaks to the camera in the video for his ‘TSA Out of Our Pants’ blog, acknowledges the technique could be used by terrorists.

But he believes they would already know about the loophole, and took the steps to show ‘how much danger the Transportation Security Administration (TSA) is putting all us all in’.

Usual: In this TSA scan the metal items, located on the traveller’s body, can clearly be seen as the body appears against a black background


Contrast: In this image, the metallic object is not directly placed on the body and so does not show up on the scan as it blends into the background


Europe banned the controversial airport ‘strip-search’ scanners last year over fears the X-ray technology could cause cancer.

They emit low radiation doses and the European Union told members in November not to install them until the potential risks are assessed.

The TSA, in contrast, has continually defended their safety, saying they expose passengers to the same radiation as two minutes on a flying plane.

Britain’s Manchester Airport, which has 16 of the $125,000 ‘backscatter’ machines, was told it can continue using them for another year.

But no new machines will be allowed there. They were once used at London Heathrow but scrapped amid complaints over privacy invasion.

They have also been tested in Germany, France, Italy, Finland and Holland but will be completely banned in April if experts rule they are dangerous.

The body scanners were introduced in a security crackdown after incidents such as the attempted ‘underwear bomb’ plot in 2009.

Around 250 X-ray scanners and 264-millimetre-wave scanners are currently used in America’s airports.

Corbett, who is suing the TSA for rolling out the scanners, explained how the loophole worked.

He said: ‘Here are several images produced by TSA nude body scanners. You’ll see that the search victim is drawn with light colours and placed on a black background in both images.

‘In these samples, the individuals are concealing metallic objects that you can see as a black shape on their light figure. Again that’s light figure, black background, and black threat items.

‘Yes that’s right, if you have a metallic object on your side, it will be the same colour as the background and therefore completely invisible to both visual and automated inspection.

‘It can’t possibly be that easy to beat the TSA’s billion dollar fleet of nude body scanners, right? The TSA can’t be that stupid, can they? Unfortunately, they can, and they are.’

He said he put his theory to the test by buying a sewing kit to sew a pocket directly onto the side of his shirt. He then took a metallic case and walked through a backscatter X-ray at Fort Lauderdale-Hollywood International Airport – all of which he recorded on film.

He said: ‘While I’m not about to win any videography awards for my hidden camera footage, you can watch as I walk through the security line with the metal object in my new side pocket.

‘My camera gets placed on the conveyor belt and goes through its own x-ray, and when it comes out, I’m through, and the object never left my pocket.

‘Maybe a fluke? OK, let’s try again at Cleveland-Hopkins International Airport through one of the TSA’s newest machines: a millimetre wave scanner with automated threat detection built-in.

‘With the metallic object in my side pocket, I enter the security line, my device goes through its own x-ray, I pass through, and exit with the object without any complaints from the TSA.’


‘I was embarrassed and humiliated’: TSA forces nursing mother to show freshly pumped milk in order to take breast pump on plane
Man busted for trying to smuggle marijuana into an airport in a Skippy peanut butter jar (which is banned, anyway)
US Airways worker caught in luggage conveyor belts dies

He added: ‘While I carried the metal case empty, it could easily have been filled with razor blades, explosives, or one of Charlie Sheen’s infamous seven gram rocks of cocaine.

‘With a bigger pocket, perhaps sewn on the inside of the shirt, even a firearm could get through. ‘
Dangerous? A demonstration of a full body scan (left) and a screen showing the results of the scan (right)

Dangerous? A demonstration of a full body scan (left) and a screen showing the results of the scan (right)
American use: In February 2011, a trial of new ‘non-intrusive’ body scanners started at Atlanta, Las Vegas, and Washington, D.C. before they were rolled out permanently in July

American use: In February 2011, a trial of new ‘non-intrusive’ body scanners started at Atlanta, Las Vegas, and Washington, D.C. before they were rolled out permanently in July

While Corbett’s actions have not been independently verified, and the TSA have not commented on the video, he said it proved the organisation’s ‘disregard for safety’.

He added: ‘Now, I’m sure the TSA will accuse me of aiding the terrorists by releasing this video, but it’s beyond belief that the terrorists haven’t already figured this out and are already plotting to use this against us.

‘It’s also beyond belief that the TSA did not already know everything I just told you, and arrogantly decided to disregard our safety. The nude body scanner program is nothing but a giant fraud.’

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Convicted Murderer Received Over $30,000 In Unemployment Benefits While In Los Angeles County California Jail – Money Deposited To His And Other Gang Members Inmate Accounts

March 4, 2012

LOS ANGELES, CALIFORNIA – Authorities say a convicted killer who gained notoriety for having a murder scene tattooed on his chest received unemployment benefits while he was in jail.

Sheriff’s Capt. Mike Parker said Saturday that Anthony Garcia, nicknamed “Chopper,” received more than $30,000 in fraudulent unemployment while in Los Angeles County jail from 2008 to 2010.

Parker says Garcia’s father and two girlfriends would get the checks then cash them and deposit the money in the inmate accounts of Garcia and fellow gang members.

Garcia’s father 47-year-old Juan Garcia, and girlfriends 45-year-old Sandra Jaimez and 25-year-old Cynthia Limas, were arrested Thursday on charges including grand theft.

Parker says authorities have not decided whether to charge Garcia.

He was convicted of the 2004 killing of a gang rival in Pico Rivera. The evidence against him included a tattoo on his chest of the crime scene.

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Fraud: 130 Washington DC Employees Claimed Unemployment Benefits

February 6, 2012

The D.C. government has accused 90 of its employees of pilfering from the city’s unemployment-insurance system as part of a three-year habit of deliberate fraud totaling $840,000.

Mayor Vincent C. Gray announced Monday that an investigation spearheaded by the Department of Employment Services identified at least 130 current and former city employees who are suspected of obtaining unlawful payouts since 2009 and could face criminal prosecution.

Many of the accused employees were notified on Monday and placed on administrative leave with pay. Each almost certainly will be terminated if there is sufficient evidence of fraud, officials said.

DOES Director Lisa Mallory said Monday that her agency uncovered the cases after a cash injection into their overpayment-detection systems from the federal government. The agency found a number of D.C. employees among those who had received illegitimate unemployment benefits.

“Were we surprised? Yes we were,” Ms. Mallory said.

Ms. Mallory said there is no evidence of collusion among the suspected employees, who should have known they were obtaining checks unlawfully.

“It’s their responsibility every week to certify they don’t have any other income,” Ms. Mallory said. “I just think it’s gross misconduct.”

Employees caught up in the probe work for about 20 agencies across the city, including D.C. Public Schools, the Office of the State Superintendent for Education, the District Department of Transportation and a staff member of the D.C. Council, according to Ms. Mallory.

A spokeswoman for council Chairman Kwame R. Brown said the council staffer worked for former council member Harry Thomas Jr. before joining the chairman’s staff when Thomas resigned in disgrace for theft and tax fraud. The staff member, who was not identified, has been placed on leave, the spokeswoman said.

One of the accused employees worked for DOES, agency officials said.

Each of the people suspected of fraud received checks of $50 to $359 per week, depending on their prior contributions and position before they became unemployed, officials said. The fraud did not skew the District’s unemployment rate — which stands at 10.4 percent as of December but reaches more than 20 percent in parts of the city — because it is tabulated with sampling instruments that do not include payouts, Ms. Mallory said.

Ms. Mallory said her agency reported about 60 of the cases to the D.C. Office of the Inspector General late last year and plans to send more cases by Tuesday.

She also has alerted the city’s attorney general, the U.S. Attorney’s Office and the U.S. Department of Labor of the agency’s findings. Her efforts “send a strong and clear message that we will not tolerate fraud in this government, but will root it out and hold people accountable,” Mr. Gray said.

Federal prosecutors will handle cases of criminal wrongdoing, and D.C. Attorney General Irvin B. Nathan may launch civil actions to reclaim any money that was disbursed through improper means, city officials said.

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California – Most Expensive Red Light Camera Tickets In The World – Individual Cameras Earning Millions For Cities And State

February 6, 2012

CALIFORNIA – California has the most expensive red-light camera tickets in the world – the fine is so steep that one camera in Oakland generates more than $3 million a year – and a Fremont man is launching a protest group to do something about that.

If Roger Jones has his way, that freezing dread that knifes through a driver the moment he sees the overhead flash of a traffic camera will become a thing of the past.

But he’s facing quite an uphill fight against officials hungry for the cash the cameras sweep in and police who are convinced they make the roads safer.

Anyone in California snapped violating a red light pays a fine of $480, and according to the traffic-watch site, no other jurisdiction anywhere has a tab that high. The second-highest fine in the United States is $250, and it is usually more like $100.

The Legislature passed two bills in the past two years that would have reduced the fine or limited the cameras’ use, but both were vetoed. When he killed the most recent measure, Gov. Jerry Brown said the matter should be left to local jurisdictions.

The state Department of Finance has estimated that red-light cameras bring in more than $80 million annually to the state and $50 million to cities and counties – and that, Jones and his supporters say, is the real reason they continue to snap away at motorists.

Not all $480 from each ticket goes to the cities or counties that authorize the cameras – more than half goes to the state or to the companies that run the devices. And not all tickets result in convictions.

But the haul is still out of proportion to the overall set of offenses, critics say. And so even though the fine for running a red light is the same whether a camera or a live police officer generates it, the cameras draw the fire because they can issue far more tickets than a single cop sitting at an intersection.

“Is there a limit to how much ‘gotcha government’ we have to put up with?” asked Jones, 62, a retired distribution manager who began crusading against red-light cameras after he got a ticket from one in 2009. “Just because you can do it doesn’t mean you should.”

His newly formed organization, the Red Light Camera Protest Group, picketed at Mowry Avenue and Fremont Boulevard in Fremont on Saturday, waving signs to approving honks from several motorists. It was their first protest, and the two dozen who participated plan more in the coming months – all calling for the elimination of red-light cameras and a reduction in the fine.

“I think we’d all be better off without them,” Jones said. “There are better ways to address the problem.”
Longer yellows

His foremost suggestion is to increase yellow-light durations, giving people more time to stop safely – and to avoid tickets.

After he pushed the city of Fremont in 2010 to tack 0.7 of a second onto the yellow light at Mission Boulevard and Mojave Drive, pushing it to five seconds, the city noted a 62 percent drop in red-light camera tickets there.

Jones and other camera foes also insist that rolling a red light on a right turn, also known as making a “Hollywood stop,” is not as dangerous as other violations – even though the vast majority of tickets given by most red-light cameras are for that violation.

One recent study in South San Francisco, cited in the Legislature during a 2010 debate over the issue, found that 98 percent of its tickets at one red-light camera were for rolling right turns.

Few oppose the usefulness of any device, including cameras, for reducing the number of people who blow straight through red lights. But that’s not the main issue, camera foes say.

A study last year by Safer Streets L.A., a community group opposed to traffic cameras, found that of the 56,000 annual accidents in Los Angeles, fewer than 100 are caused by rolling right turns.
Cops disagree

Law enforcement officers have a sharply different view of the topic.

City of Newark studies found that collisions at the intersections overseen by its five cameras since 2006 dropped by half – from 46 in the four years before the installations to 23 in the four years afterward.

And in Fremont, where Jones lives, police studies concluded that the city’s 10 cameras contributed significantly to a 40 percent drop in intersection accidents between 1995 and 2009. The cameras were installed in 2000.

“This is not a big moneymaker for us,” said Fremont police Sgt. Mark Riggs, who helps oversee the red-light camera program. The annual take for the city is about $250,000, after all the other parties get their cut, he said.

“It’s about safety,” Riggs said. “The big thing for us is aiming for a reduction in accidents.

“As far as the price is concerned,” he added, “we have nothing to do with that. We are simply about safety.”

As for “Hollywood stops” – he insisted they are vehicular dynamite.

“The right turn on a red is a very dangerous move, especially when the driver is looking to the left and the pedestrian is on the right,” Riggs said. “We investigate a lot of accidents like that, and they are bad.”
Lots of bucks

Despite the safety question, the price of the ticket, and the money it drags in, sticks most in the craw of those who hate red-light cameras.

Opponents consider it a form of regressive tax. The $480 tab consists of a base fine of $100, with extra fees tacked on by the Legislature to help pay for maintaining courthouses, jails, courts and emergency services.

Unlike most taxes and fees, it takes only a majority vote of the Legislature to add such charges. Assemblyman Jerry Hill, D-San Mateo, authored a bill that would have cut the ticket in half for rolling a red light, but then-Gov. Arnold Schwarzenegger vetoed it, saying reducing the fine would send the wrong message to drivers about traffic safety.

State Sen. Joe Simitian, D-Palo Alto, took a cut at the issue last year, writing a bill to prohibit use of the camera tickets merely to raise revenue, and to make it easier to fight them in court. That’s the bill Brown vetoed in October.

“There are accuracy issues, privacy issues and due process issues with these tickets,” Simitian said. “The trouble is that more and more cities depend on this for revenue.”

He stops short of saying red-light cameras should be eliminated, saying they do have a safety value. “I just don’t think the current system gives the public a fair shake,” he said.

Brown’s press secretary, Gil Duran, said the veto was not about money.

“Running a red light can cost lives,” he said in an e-mail. “The fine is cheap by comparison.”
Pricey corner

The sums hauled in by some of the red-light cameras in the 14 Bay Area cities that use them are anything but paltry.

The highest, apparently, is in Oakland at the on-ramp to Interstate 980 at 27th Street and Northgate Avenue.

In 2010, the most recent year for which city figures were available, 9,273 tickets were issued there through violation pictures – worth a gross of $4.2 million, based on the 2010 red-light ticket fine of $450. Figures available for much of 2011 put the gross worth at more than $3 million.

Ken Germann, a 65-year-old teacher who lives in Oakland, knew he was in trouble, and probably out a few bucks, the second he saw the dreaded red-light camera light flash at that intersection one day in December. But then he pulled over, watched two other cars get flashed right after him – and he got mad.

He got even madder when he found out how much the ticket fine is.

“I stopped full, and so did the others, and the camera snapped me anyway,” he said last week as he stood in line at the Alameda County courthouse to book a trial date, traffic ticket in hand. “These things must just be there to make money.”

Ticketing the family

Halfway down the block on 27th from the light, Phuong Nguyen works at MP Flowers and sees the camera light flicker all day. She shook her fist in its direction.

“Three members of my family got tickets at that light in the past month while driving to work,” she said. “Lot of money for the government, not such a good idea for the rest of us.”

Jessica Lubnieski, 27, lives a few blocks north of the light, though, and says she is grateful for it.

“I walk my dog this route all the time, and people go flying through that light when they turn,” she said as she strolled by the intersection with Cooper, her mutt. “They so often don’t even see us.

“I just have to think that camera makes people more careful.”

$480 Current fine for violating a red light in California.

$80 million Paid annually to state.

$50 million Fines paid annually to cities and counties.

$4.2 million Amount generated in 2010 by one camera near the on-ramp to Interstate 980 at 27th Street and Northgate Avenue in Oakland.

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White House Hides Obama’s Involvement And/Or Ties To Bankrupt Solyndra Company – $535 Million Loan From Feds

October 15, 2011

WASHINGTON, DC – Congress isn’t getting a glimpse of what’s on President Barack Obama’s Blackberry – or any more internal White House communications related to the bankrupt solar company Solyndra, which received a $535 million loan guarantee from the federal government.

House Republicans investigating the loan controversy had requested all internal White House documents about the issue. House Energy and Commerce subcommittee chair Rep. Cliff Stearns said that includes emails on the President’s Blackberry.

On Friday the White House Counsel sent a letter to the House Energy and Commerce Committee explaining they won’t comply with the request because it “implicates longstanding and significant institutional Executive Branch confidentiality interests.”

The response is hardly a surprise given past administrations’ refusal to comply with similar congressional requests. The difference here? President Obama is the first Chief Executive to carry a Blackberry, so it’s the first time a White House counsel has – even indirectly – turned down an attempt to peek at his email. Neither the Blackberry nor his personal email is explicitly mentioned in the letter.

On October 5, Republican Chairmen Fred Upton and Cliff Stearns requested “all communications among White House staff and officials related to the $535 million loan guarantee to Solyndra” because they believed “the White House was closely involved in the monitoring of the Solyndra loan guarantee after it was issued.”

They said these documents are necessary “to better understand the involvement of the White house in the review of the Solyndra loan guarantee and the Administration’s support of this guarantee.’

In her letter Friday, White House Counsel Kathryn Ruemmler said, “the three federal agencies most directly involved in the Solyndra loan guarantee, the Department of Energy, the Office of Management and Budget and the Department of the Treasury, are all cooperating with the Committee’s investigation into the Solyndra loan guarantee.”

Together she says the three agencies have turned over 70,000 pages of documents and are continuing to do so “on a rolling basis.” The letter states the White House has turned over another 900 pages related to communications between the White House and Solyndra, its representatives and investors. She offers to cooperate further with the investigators.

CNN has attempted to reach the Chairs of the Energy and Commerce Committee for comment. Expect some kind of political fallout.

Solyndra is a California solar panel manufacturer that had received $535 million in federal loan guarantees before it was forced to halt operations and file for bankruptcy at the end of August, putting more than 1,000 workers out of work.

Before its failure, the company had been touted as an example of the benefits of creating green jobs by the Obama administration. But since then, it has become the center of congressional criticism and a probe by the FBI.

Brian Harrison, the CEO of Solyndra, resigned Wednesday amidst the scandal.

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Former FBI Agent John R. Graves And Wife Indicted By Federal Grand Jury In Investment Scam

October 13, 2011

MARYLAND – A former FBI agent and his wife have been charged in what authorities say is a $1.3 million investment fraud scheme.

John R. Graves, 52, and his wife, Sara T. Graves, 44, of Fredericksburg, were indicted by a federal grand jury in Richmond on charges of mail and wire fraud. Prosecutors say Graves, who left the FBI in 1999, is a certified investment planner.

Through his company, Brook Point Management, Graves sold insurance, performed estate and tax planning services and recruited investment clients.

Prosecutors say that during a three-year span ending in July, Graves and his wife raised $1.3 million in funds from 11 people through “misrepresentations about the safety and security of the investments.” The couple then used the money to buy real estate, pay back previous investors and to pay off personal expenses, including credit card bills, prosecutors said.

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Department Of Justice Caught Pissing Away Taxpayer Dollars At Conferences – $16 Muffins…

September 20, 2011

WASHINGTON, DC – U.S. Justice Department agencies spent too much for food at conferences, in one case serving $16 muffins and in another dishing out beef Wellington appetizers that cost $7.32 per serving, an audit found.

“Some conferences featured costly meals, refreshments, and themed breaks that we believe were indicative of wasteful or extravagant spending,” the Justice Department’s inspector general wrote in a report released today.

The inspector general reviewed a sample of 10 Justice Department conferences held between October 2007 and September 2009 at a cost of $4.4 million. The Justice Department spent $73.3 million on conferences in fiscal 2009, compared with $47.8 million a year earlier, according to the report.

The muffins were served at a conference of the Executive Office for Immigration Review and the beef Wellington was offered at a meeting hosted by the Executive Office for U.S. Attorneys. A conference of the Office on Violence Against Women served Cracker Jacks, popcorn and candy bars at a single break, costing $32 per person, according to the report.

The report is a follow-up to one from 2007 that found the Justice Department had few controls to limit the costs of conference planning, food and beverages. That audit cited a reception that included Swedish meatballs costing $5 apiece.

In April 2008 the Justice Department issued policies and procedures designed to control conference spending.

The new report found that agencies were able to “circumvent meal and refreshment cost limits” when conferences were planned under cooperative agreements, a type of funding awarded by a Justice Department agency.

Justice Department agencies “did not adequately attempt to minimize conference costs as required by federal and DOJ guidelines,” the report said.

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$330,000 In Tax Money Went Towards AIDS Program Opening Washington DC Strip Club

August 31, 2011

WASHINGTON, DC – D.C. Attorney General Irvin Nathan has accused a District HIV/AIDS service provider of spending nearly $330,000 in federal tax dollars to open a strip club.

In a lawsuit filed Tuesday, Nathan said Miracle Hands Inc. promised the city it was using the cash to renovate a warehouse in Northeast for use as a job training center for residents with HIV/AIDS. Instead, the warehouse was turned into the Stadium Club, a strip club that continues to operate, the suit says. Miracle Hands shares an address with the club, according to the company’s website. Nathan asked in the suit that the city be awarded at least $988,959 in damages.

D.C. Councilman David Catania requested in a February letter to Nathan that the attorney general open an investigation into Miracle Hands and its relationship with Stadium Club.

“I am pleased that the attorney general has decided to take action regarding this egregious impropriety,” Catania said Tuesday.

Attempts to reach Miracle Hands owner Cornell Jones were not successful. Jones is a self-described former D.C. drug kingpin with convictions for narcotics distribution on his record.

In 2009, federal authorities told the Washington Post they had started an investigation into how the money was spent. On Tuesday, a spokesman for the U.S. Attorney’s Office declined to comment on the status of the investigation.

The grants for the renovations to the warehouse at 2127 Queens Chapel Road NE, were first given to Miracle Hands in 2006 by the District’s HIV/AIDS administration. Earlier this month, an inspector general’s audit of the administration found that during the four-year tenure of the agency’s former director, Debra Rowe, little attention was paid to how dollars were spent by service providers, even as the city’s HIV/AIDS rate reached epidemic levels.

When Rowe was fired in 2008, she went to work for Miracle Hands as its executive director. She could not be reached for comment Tuesday.

In November 2006, nearly one year after Miracle Hands first won its grant to renovate the Queens Chapel Road warehouse, a city grant monitor visited the site and found little work had been done toward meeting a March 2007 deadline, the lawsuit said.

The monitor advised Rowe that Miracle Hands’ funding should be cut. But Rowe, called a “close friend of Jones” in the lawsuit, reportedly said the project was on pace and kept the funding in place. By then, though, Jones had already transferred a liquor license from a strip club he owned in Southeast to the Miracle Hands warehouse in Northeast, the suit said.

In March 2007, “the renovation work … was at best, many months from completion,” the lawsuit said. In April 2007, HIV/AIDS administration gave Miracle Hands an additional $139,000 to continue the renovations, adding another year to the nonprofit’s deadline.

In the middle of that year, Miracle Hands informed the administration that it had decided to open the job training center at a different warehouse and it would be applying the funds to that project, the suit said. A job center never opened at either location. Stadium Club opened in early 2010.

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Former Pennsylvania Highway Patrol Officer Drexel Reid Sentenced To 30 Months In Federal Prison For $400,000 Insurance Fraud Scheme

April 26, 2011

PHILADELPHIA, PENNSYLVANIA – The U.S. Attorney for the Eastern District of Pennsylvania issued the following news release:

Drexel Reid, 39, of Philadelphia, was sentenced today to 30 months in prison for an insurance fraud scheme that cost insurance companies more than $450,000, announced United States Attorney Zane David Memeger. Reid pleaded guilty on June 22, 2009, to eleven counts of mail fraud, one count of wire fraud, and one count of extortion under color of official right.

Reid was a Philadelphia Highway Patrol Officer at the time of the scheme. Between August 2003 and May 2007, Reid’s co-defendant, tow truck driver Jerry Blassengale, Jr., solicited people to be involved in staged or completely fictitious accidents and fictitious vandalism claims for purposes of submitting fraudulent insurance claims. Reid would create false police reports to send to insurance companies for which Blassengale paid him. Blassengale staged a total of 11 phony events for which claims were sent to the respective insurance companies.

In addition to the prison term, U.S. District Court Judge Michael M. Baylson ordered Reid to pay restitution in the amount of $211,709.22, a $1,300 special assessment, and to complete three years of supervised release.

The case was investigated by the Federal Bureau of Investigation and the Insurance Fraud Unit in the Philadelphia District Attorney’s Office. It was prosecuted by Assistant United States Attorney Anthony J. Wzorek.

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Philadelphia Pennsylvania Police Officer Gary Cottrell Arrested, Charged With Fraud For Accepting Bribes

April 22, 2011

PHILADELPHIA, PENNSYLVANIA – A Philadelphia police officer with the 14th District, Gary Cottrell, was arrested April 19 for allegedly accepting bribes on- and off-duty.

According to a press release from the Philadelphia Police Department, Cottrell, 44, allegedly used his position as a police officer to direct the victim of car accidents to University Collision Centers for repairs. Cottrell allegedly received cash payments for doing so. The police department calls this practice “wreck chasing.”

In addition to wreck chasing, Cottrell also allegedly filed fraudulent claims for damage to his personal vehicles.

The Philadelphia District Attorney’s Office Insurance Fraud Unit launched an investigation into Cottrell’s practices, which resulted in an arrest Tuesday on charges of Corrupt Organization, Dealing in Proceeds of Unlawful Act, Insurance Fraud, Theft by Deception, Conspiracy and Bribery, according to police.

Cottrell has been an officer with the Philadelphia Police Department for 14 years. He has been placed under a 30-day suspension by Commissioner Charles Ramsey, with intent dismiss.

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Alexandria Virginia Police Officer Angel Roa Arrested For Fraud In Salvage Car Sales Scam

April 22, 2011

ALEXANDRIA, VIRGINIA – Loudoun County authorities arrested an Alexandria police officer on fraud charges for allegedly reselling a salvaged vehicle to at least one unwitting buyer.

Angel Roa, who has served with the department for four years, is charged with obtaining money by fraud or false pretenses. Roa is now on administrative leave without pay pending the investigation’s findings, city authorities said.

Roa allegedly bought the vehicle legally, but then sold it without telling the buyer it was titled as salvaged, said Kraig Troxell, spokesman for the Loudoun County Sheriff’s Office. When the victim went to the Department of Motor Vehicles to get it titled, officials told them the vehicle wasn’t roadworthy, he said.

Troxell said there may be more than one victim and are pursuing the investigation.

The Alexandria Police Department is likewise conducting an internal review, said Ashley Hildebrandt, spokeswoman. In a statement, Police Chief Earl Cook said his department takes a hard line against “inappropriate behavior” on the part of its employees.

“Officer Roa is entitled to due process, however, I want to assure residents that the Alexandria Police [Department] does not tolerate criminal or other inappropriate behavior of any kind from its employees,” Cook said.

Roa isn’t the first department employee to run into legal trouble in recent months. Det. Eric Ratliff was arrested on DUI charges after crashing his unmarked cruiser into a concrete pole on the corner of Gibbon and South Patrick streets in January.

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Mesa Arizona Police Officer Mark Escarcega And Wife Arrested, Charged With Mortgage Fraud

April 22, 2011

PHOENIX, ARIZONA – A Mesa police officer and his wife have been arrested for lying to their mortgage lender after a federal investigation.

Blanca and Mark Escarcega purchased a home four years ago in Santa Rita Ranch in Mesa. According to, they paid $344,000 for the 1,880-square-foot home. Today, estimates it’s only worth $175,000.

According to the Maricopa county attorney’s office, the trouble began when Blanca wrote a hardship letter to their lender, Bank of America, asking for a loan modification, claiming she and her husband had separated.

According to court documents, she wrote the letter between October 2009 and August 2010. Bank of America gave her a loan modification, with the stipulation she live there at least another year.

[This 4,000-square-foot home in Valencia Groves in Mesa was purchased by fraud suspects Mark and Blanca Escarcega.]
This 4,000-square-foot home in Valencia Groves in Mesa was purchased by fraud suspects Mark and Blanca Escarcega.

But the county attorney’s office said the couple was never separated. Instead, they rented out their Santa Rita home, and together purchased a 4,000-square-foot home in Valencia Groves in Mesa last August. According to county records, the couple paid $325,000 for their new home, using $10,395 as a down payment.

According to sources, Mark Escarcega came to work bragging about how he and his wife had rigged a deal with their lender to move up in house, but his colleagues recognized fraud and told the chief, who notified the FBI.

On Monday, both Blanca and Mark Escarcega were booked and charged with one count of residential mortgage fraud. If convicted, they could get up to three years behind bars. Both pleaded not guilty.

Michelle Christie is their current tenant, who knew nothing of her landlords’ legal troubles. “It’s kind of upsetting,” Christie said. “Hopefully the owners will contact me and let me know what’s going to happen to me, and my kids.”

Kelly Gorman is a real estate attorney in Glendale. He said even the slightest fib on a mortgage application is considered fraud.

“There are people now that will try to game the system, because they know there are others catching breaks on their loans. So they’ll try to restructure it,” Gorman said.

The Mesa police department has suspended Escarcega on administrative leave until it can conduct its own internal investigation.

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U.S. Government Fell For “Disabled Vet” Story – Earning Him $16 Million In Federal Contracts

April 21, 2011

A man claiming to be a disabled vet was convicted Wednesday of ripping off the government for $16 million in federal contracts.

A Manhattan federal jury said John Anthony Raymond White and his firm, Mitsubishi Construction Corp., bid on contracts the VA awarded under the Service-Disabled Veteran-Owned Small Business Program.

White at times claimed he hurt his back while a Navy ROTC; other times he said he was in Special Forces.

The jury concluded he was always a fraud – and he faces up to 75 years in jail and $3.7 million in fines when sentenced.

He won several contracts, including a $5.7 million job in 2009 to build a flood wall around the Veterans Administration Medical Center on E. 23rd St. in Manhattan.

“Those contracts were supposed to go to real veterans,” prosecutor Alvin Bragg said.

Eventually, the VA got suspicious and discovered White has a rap sheet for forgery and grand larceny.

White ultimately told the VA he was not a vet.

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Secret Documents Released By Court Order – U.S. Bank Bailout Was A Scam: BILLIONS Went Mostly To Non US Banks Overseas

April 1, 2011

WASHINGTON, DC – U.S. Federal Reserve Chairman Ben S. Bernanke’s two-year fight to shield crisis-squeezed banks from the stigma of revealing their public loans protected a lender to local governments in Belgium, a Japanese fishing-cooperative financier and a company part-owned by the Central Bank of Libya.

Dexia SA (DEXB), based in Brussels and Paris, borrowed as much as $33.5 billion through its New York branch from the Fed’s “discount window” lending program, according to Fed documents released yesterday in response to a Freedom of Information Act request. Dublin-based Depfa Bank Plc, taken over in 2007 by a German real-estate lender later seized by the German government, drew $24.5 billion.

The biggest borrowers from the 97-year-old discount window as the program reached its crisis-era peak were foreign banks, accounting for at least 70 percent of the $110.7 billion borrowed during the week in October 2008 when use of the program surged to a record. The disclosures may stoke a reexamination of the risks posed to U.S. taxpayers by the central bank’s role in global financial markets.

“The caricature of the Fed is that it was shoveling money to big New York banks and a bunch of foreigners, and that is not conducive to its long-run reputation,” said Vincent Reinhart, the Fed’s director of monetary affairs from 2001 to 2007.

Separate data disclosed in December on temporary emergency- lending programs set up by the Fed also showed big foreign banks as borrowers. Six European banks were among the top 11 companies that sold the most debt overall — a combined $274.1 billion — to the Commercial Paper Funding Facility.
Bank of America

Those programs also loaned tens of billions of dollars to each of the biggest U.S. banks, including JPMorgan Chase & Co. (JPM), Bank of America Corp., Citigroup Inc. and Morgan Stanley.

The discount window, which began lending in 1914, is the Fed’s primary program for providing cash to banks to help them avert a liquidity squeeze. In an April 2009 speech, Bernanke said that revealing the names of discount-window borrowers “might lead market participants to infer weakness.”

The Fed released the documents after court orders upheld FOIA requests filed by Bloomberg LP, the parent company of Bloomberg News, and News Corp.’s Fox News Network LLC. In all, the Fed was ordered to release more than 29,000 pages of documents, covering the discount window and several Fed emergency-lending programs established during the crisis from August 2007 to March 2010.
Public Outrage

“The American people are going to be outraged when they understand what has been going on,” U.S. Representative Ron Paul, a Texas Republican who is chairman of the House subcommittee that oversees the Fed, said in a Bloomberg Television interview.

“What in the world are we doing thinking we can pass out tens of billions of dollars to banks that are overseas?” said Paul, who has advocated abolishing the Fed. “We have problems here at home with people not being able to pay their mortgages, and they’re losing their homes.”

The Monetary Control Act of 1980 says that a U.S. branch or agency of a foreign bank that maintains reserves at a Fed bank may receive discount window credit.

David Skidmore, a Fed spokesman, declined to comment.

Wachovia Corp. was the only U.S. bank among the top five discount-window borrowers as the crisis peaked.

The Charlotte, North Carolina-based bank borrowed $29 billion from the discount window on Oct. 6, in the week after it nearly collapsed, the data show. Wachovia agreed in principle to sell itself to Citigroup Inc. on Sept. 29, before announcing a definitive agreement to sell itself to Wells Fargo & Co. (WFC) on Oct. 3. The Wells Fargo deal closed at the end of 2008.

Wells Fargo spokeswoman Mary Eshet declined to comment on Wachovia’s discount-window borrowing.
Bank of Scotland

Bank of Scotland Plc, which had $11 billion outstanding from the discount window on Oct. 29, 2008, was a unit of Edinburgh-based HBOS Plc, which announced its takeover by London-based Lloyds TSB Group Plc in September 2008.

The borrowings in 2008 didn’t involve Lloyds, which hadn’t completed its acquisition of HBOS at the time, said Sara Evans, a spokeswoman for the company, which is now called Lloyds Banking Group Plc. (LLOY)

“This is historic usage and on each occasion the borrowing was repaid at maturity,” Evans said. “The discount window has not been accessed by the group since.”

Other foreign discount-window borrowers on Oct. 29, 2008, included Societe Generale (GLE) SA, France’s second-biggest bank; and Norinchukin Bank, which finances and provides services to Japanese agricultural, fishing and forestry cooperatives. Paris- based Societe Generale borrowed $5 billion that day, and Tokyo- based Norinchukin borrowed $6 billion.

Bank of China

“We used it in concert with Japanese and U.S. authorities in the purpose of contributing to the stabilization of the market,” said Fumiaki Tanaka, a spokesman at Norinchukin.

Bank of China, the country’s oldest bank, was the second- largest borrower from the Fed’s discount window during a nine- day period in August 2007 as subprime-mortgage defaults first roiled broader markets. The Chinese bank’s New York branch borrowed $198 million on Aug. 17 of that month, while two Deutsche Bank AG divisions borrowed $1 billion each, according to a document released yesterday.

Arab Banking Corp., then 29 percent-owned by the Libyan central bank, used its New York branch to borrow at least $1.1 billion from the discount window in October 2008.

The foreign banks took advantage of Fed lending programs even as their host countries moved to prop them up or orchestrate takeovers.

Dexia received billions of euros in capital and funding guarantees from France, Belgium and Luxembourg during the credit crunch.

Dexia’s outstanding balance at the Fed has been reduced to zero, Ulrike Pommee, a spokeswoman for the company, said in an e-mail.

“This information is backward-looking,” she said. “We experienced a great deal of tension concerning the liquidity of the dollar at the time of the crisis. The Fed played its role as central banker, providing liquidity to banks that needed it.”

Depfa was taken over in October 2007 by Hypo Real Estate Holding AG, which in turn was seized by the German government in 2009. Oliver Gruss, a spokesman for Depfa’s parent company, didn’t respond to requests for comment.

Many foreign banks own large pools of dollar assets –bonds, securities and loans — funded by short-term borrowings in money markets. The system works when markets are calm, said Dino Kos, former executive vice president at the New York Fed in charge of open-market operations. In times of stress, banks can be subject to sudden liquidity squeezes, he said.
‘Playing With Fire’

“They are playing with fire,” said Kos, a managing director at Hamiltonian Associates Ltd. in New York, an economic research firm. “When the market dries up, and they can’t roll over their funding — bingo, you have a liquidity crisis.”

The potential for dollar shortages remains. As the Greek fiscal crisis roiled financial markets last year, the Fed had to open swap lines with the European Central Bank, the Swiss National Bank, the Bank of England and two other central banks to make more dollars available around the world. That move was partially the result of U.S. money market funds shrinking their exposure to European bank commercial paper.

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Milwaukee Wisconsin Police Officer Lymon Taylor Arrested, Charged After Financing A Mercedes Using 7 Year Old Boy’s Social Security Number

March 18, 2011

MILWAUKEE, WISCONSIN — A Milwaukee police officer who allegedly bought a 7-year-old boy’s Social Security number and used it to buy a Mercedes was arrested this week.

Lymon Taylor, 33, was freed on $5,000 bond Wednesday, the Milwaukee Journal Sentinel reported. He was charged with felony identity theft, which carries a potential sentence of six years in prison.

The Milwaukee Police Department suspended Taylor, spokeswoman Anne Schwartz said.

Investigators said another man, Lee Ellis, told them he and Taylor discovered a California company that said it could repair credit ratings and charged a $2,500 fee. Both were given Social Security numbers and told to use them with their own names and a different address.

Taylor was allegedly using a number assigned to a 7-year-old boy in Racine, Wis. The boy’s parents insisted on prosecution, police said.

The police officer allegedly used the new number to obtain a loan for the purchase of a 2007 Mercedes-Benz S550 with a Blue Book value of around $48,000.

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Incompetent Phoenix Arizona Police Chief Jack Harris Refuses To Step Down After Department Lied To Get Extra Federal Tax Dollars

March 2, 2011

PHOENIX, ARIZONA – Speaking from the scene of an early morning home invasion in West Phoenix, Police Chief Jack Harris said he will not be stepping down amid controversy over his department’s reported kidnapping statistics for 2008.

“Anyone who wants these stars can come and get them,” a visibly angry Harris said. “But I’ve got news for you. I’m not giving them to you. You’re going to have to take them.

“I am absolutely outraged by what is happening in this community, by some people with a political agenda who are trying to convince the community that incidents like this [home invasion] aren’t happening.”

The controversy stems from allegations that the Phoenix Police Department misrepresented the number of kidnappings in the city. The department received $1.7 million in federal grant money to deal with the problem.

The Office of the Inspector General launched an audit in December to try and determine if the department deserved that money.

Initially, the department reported more than 350 kidnappings in 2008. Based on that number, the department and many politicians labeled Phoenix as the “kidnapping capital of America.”

Supposedly, Mexico City was the only city in the entire world that had more kidnappings. Now the Phoenix Police Department is saying some of the reports, as many as 100, included in that initial number should not have been counted.

“If there is anybody in this community who does not believe that we have a kidnapping/home invasion problem in this community, they either just got off the bus today or they’ve been living under a rock in this community for the last several years,” Harris said.

“I’ve been accused of doing something wrong because I went to the federal government and said, ‘Give me money to help me protect this community and to protect my officers.’ … If I did something wrong by doing that, stand by, because I’m going to do it again and again and again as long as I’m wearing this uniform ….”

In the wake of the revelation that the initially reported number of kidnappings was incorrect, some have been calling for Harris’ resignation. The police chief says they are not going to get it.

“I am not stepping down,” he said. “I am not voluntarily giving up my job.”

In an e-mail sent to city managers Tuesday, the Phoenix Law Enforcement Association reportedly requested an independent investigation into the Phoenix Police Department’s management.

The e-mail alleges misconduct, saying, “The kidnapping statistics were manipulated and flawed in order to obtain federal monies.”

There has been talk that Harris, who also holds the title Public Safety Director, could be moved from the Phoenix Police Department to City Hall. Such a move could spark another issue in terms of his pension and recent talk regarding “double dipping.” A public watch group called Judicial Watch sued Harris in late 2009 for douple dipping, which is collecting both pension benefits and a yearly salary.

It’s not yet known if or when any action against Harris might be taken.

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Jacksonville County Florida Deputy Sheriff Lt. Reginald Lott Arrested, Quits And Keeps Pension, Charged With Theft And Fraud After $50,000 Disappeared From Police Association Fund

February 25, 2011

JACKSONVILLE, FLORIDA — A Jacksonville police officer is no longer in jail following his arrest this morning on theft charges.

Jacksonville Sheriff’s Office Lt. Reginald Lott, 44, was released this afternoon around 1 p.m. after being arrested this morning on charges of grand theft and organized fraud.

His next court date is 9 a.m. Thursday.

JSO undersheriff Frank Mackesy says he took more than $50,000 from the Brotherhood of Police Officers while serving as Treasurer. He used it for his personal use.

“He spent the money at a couple of high end retailers, and college tuition for a member of the family,” said Mackesy.

“We won’t have a guy like that working here. We will have men and women of character and will investigate any time we hear of wrongdoing. If it results in one going to jail, and retiring under a cloud of betrayal, so be it,” said Mackesy.

He said it really hurt a group that is admired for helping others while doing charity work. ” It was over half their assets, and will impact their ability to help others because of Mr. Lott.”

Lott retired rather than be fired by the Sheriff. He will still be able to receive his pension. Lott’s salary was approximately $89,000 per year.

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Veteran Newark New Jersey Police Officer Victor Patela Arrested By Feds, Charged In Connection With $1.9 Million Fraud

February 25, 2011

NEWARK, NEW JERSEY – FBI agents today arrested a Newark police officer and a former employee of an Elmwood Park bank on charges they plotted to fraudulently secure a $1.9 million commercial real estate loan to buy apartment buildings, authorities said.

Victor Patela, 35, a 13-year veteran of the department, and Jose Dominguez, 44, both of Newark, were charged in a criminal complaint with one count of conspiracy to commit bank fraud. They are scheduled to appear before a federal magistrate judge in Newark this afternoon to be advised of their rights and to have bail set.

As the owner and managing member of JVI Realty LLC, Patela applied for a loan from the Spencer Savings Bank with the assistance of Dominguez, a loan officer, who later recommended the loan for approval, authorities said.

The loan, in the amount of $1,920,000, was intended to cover 80 percent of the $2.4 million purchase price for the apartment buildings in Elizabeth, the complaint said. Patela was required to come up with the remaining $480,000 and to provide evidence of the source of those funds.

To that end, Patela allegedly submitted a bogus sales contract for a Newark property, which he had actually sold more than a year earlier.

Patela’s 2004 mortgage agreement with Spencer Savings barred him from further encumbering the Elizabeth apartments without the bank’s written consent. But JVI Realty subsequently obtained a second mortgage on the property, for $300,000, with both Patela and Dominquez signing the documents as corporate officers of JVI.

Dominquez, who worked at Spencer Savings from January 1988 to January 2007, kept his relationship with JVI and Patela hidden from the bank while serving as the loan officer on those transactions, authorities charged.

JVI ultimately defaulted on the $1.92 million mortgage with Spencer Savings and Patela surrendered the deed to Elizabeth apartments in lieu of foreclosure in 2010. After selling the buildings, the bank’s loss was over $400,000.

In a bankruptcy filing in 2009, Patela stated he took out a second mortgage on the Elizabeth apartments for $300,000 from the seller.

A spokesman for the Newark Police Department said it is fully cooperating with a federal investigation and that as a result of the probe Patela was suspended from duty.

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New Jersey Turnpike Officals Pissed Away $43 Million While Raising Tolls For Motorists

October 21, 2010

NEW JERSEY – Auditors say the New Jersey Turnpike Authority wasted $43 million on unneeded perks and bonuses. In one case, an employee with a base salary of $73,469 earned $321,985 when all payouts and bonuses were included.

The audit says that toll dollars From the New Jersey Turnpike and the Garden State Parkway were spent on items ranging from an employee bowling league to employee bonuses for working on birthdays and holidays.

It took place as tolls were being increased.

The biggest expense uncovered in the audit was $30 million in unjustified bonuses to employees and management in 2008 and 2009 without consideration of performance.

One example was paying employees overtime for removing snow and working holidays and then giving additional “snow removal bonuses” and “holiday bonuses.”

The Comptroller’s Office audit released Tuesday says taxpayers also paid $430,000 for free E-ZPass transponders for employees to get to work and nearly $90,000 in scholarships for workers’ kids.

The audit shows turnpike authority employees got bonuses and overtime for working their birthdays and holidays.

Comptroller Matt Boxer says tolls are set for another increase in 2012.

“While tolls are going up, the Turnpike Authority is overpaying its employees, overpaying its management, overpaying for its health plan and overpaying for legal services,” Boxer said in a statement.

Public money was also used to cover costs for a toll operators event that none of the authority’s employees actually attended.

Another audit finding was that employees were allowed to cash out a portion of their unused sick and vacation days at the end of the year to circumvent the current $15,000 limit for sick leave payouts upon retirement. That cost $3.8 million a year.

Among the questionable legal expenses was a billing for $111,840 for a law firm’s weekly internal status meetings that were generally attended by 10 to 15 of the firm’s attorneys and two to three of its paralegals.

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Seattle Washington Firefighter Mark Jones Awarded $13 Million Despite Video Of Him Chopping Wood, Playing Horseshoes, And Dancing – City Lawyers Took Too Long To Investigate Mans Injury Claims

October 19, 2010

SEATTLE, WASHINGTON – A King County Superior Court judge refused Monday to vacate a nearly $13 million award to a Seattle firefighter who was injured at a fire station in 2003.

The city of Seattle appealed the award after an investigator it hired captured Mark Jones on surveillance video dancing, chopping wood, playing horseshoes and bocce ball this past spring.

But in Monday’s ruling, Judge Susan Craighead said the city had ample time and means to have pursued evidence of Jones’ condition since the case was brought forward in 2006, but failed to do so.

“The city devoted little effort to investigating this case until its third set of lawyers was retained in early 2009,” Craighead wrote in her ruling. She wrote that the city never asked to have Jones examined independently by any medical doctors to verify any of his physical complaints, instead relying only on evaluations from Labor and Industries physicians.

“The city cannot now take a second bite of the apple because it failed to make the most of the first,” Craighead said.

The city had also claimed the video proved Jones was fraudulently portraying the effects of his injuries to the jury, but Craighead said proving fraud requires a very high level of proof, and the video could not conclusively prove Jones was not suffering from mental effects that were a large part of the documented injuries relevant to his claim.

In 2009, a jury agreed Jones was permanently disabled at a fire station when he fell 15 feet through an opening near the fire pole in the middle of the night. He was awarded nearly $12.8 million, which included almost $2.5 million for lifetime medical care and assistance. Jones claimed he was permanently disabled and in constant pain.

“That’s what my day consists of. It’s just such a struggle from the point when I get up, I’m trying to get going through it,” Jones said during testimony.

But Jones’ attorney, Dick Kilpatrick, claims it has always been accepted that his client could perform daily tasks; it was his brain injury that called for such a large award, he said.

“We never claimed at trial, like the defense is trying to show, that he somehow is unable to do most things of daily life. The jury was told he was able to do most things of daily life,” Kilpatrick said after the city’s appeal was filed. “There was bleeding in two parts of his brain that were documented at Harborview (Medical Center). So that’s what the case was primarily about. It wasn’t about a person who’s practically an invalid, or whatever.”

The attorneys representing the city said Monday they had no comment on the substance of the court’s decision.

“We stand by the materials we filed on behalf of the City in superior court. We expect this ruling will become part of the City’s appeal from the judgment, which is already pending in the court of appeals.”

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$50 Million In Jail Funds Found To Have Been Misused By Nutcase Maricopa County Arizona Sheriff Joe Arpaio’s Department

September 24, 2010

The Maricopa County Sheriff’s Office misused at least $50 million from a fund for jail operations, and county supervisors may have to use the general fund to repay the money, top county officials say.

Findings by the county’s Office of Management and Budget show the Sheriff’s Office tapped the money to pay for functions not allowed under jail-fund rules, such as salaries for deputies who worked on public-corruption investigations into county supervisors and judges.

MARICOPA COUNTY, ARIZONA – The findings will be presented publicly for the first time at 10 a.m. today to the Board of Supervisors.

“A very substantial amount of money is going to have to be paid back to the jail fund,” County Manager David Smith told The Republic. “It’s just a monumental financial headache that (Sheriff Joe Arpaio) has created.”

The county would not release detailed findings Tuesday, saying the material was protected by executive-session rules, but officials provided The Republic with the key finding: $50 million in misspent detention funds.

They said the county’s report will cover problems dating back about four years and involving travel, use of county credit cards and extradition trips.

Separate investigations by The Republic have documented the questionable use of public funds by high-ranking sheriff’s officials, who routinely used county-issued credit cards to charge expensive meals and stays at luxury hotels.

The Republic also found that another fund meant to improve conditions in county jails was spent by sheriff’s officials on out-of-state training, stays at luxury hotels, a staff party at a local amusement park and a $456,000 bus to transport inmates to court. That bus remains parked in a county lot because supervisors have refused to license and insure it, claiming it was illegally purchased.

Top sheriff’s officials met with county budget officials Tuesday afternoon on the matter. Lt. Brian Lee, a Sheriff’s Office spokesman, said the office “will continue to meet with them and work with them to try and resolve the discrepancies.”

County officials largely substantiated their findings through records provided by the Sheriff’s Office under a subpoena.

Budget officials said the most egregious misspending came from the sheriff’s detention fund, which makes up a large portion of the sheriff’s budget.

That money comes from a general sales tax approved by voters. Its use is restricted to spending on jail items such as food, detention officers’ salaries and equipment.

County officials said they found the Sheriff’s Office used that money elsewhere:

• For years, it used detention-fund money to pay for employees to patrol Maricopa County, among other duties.

• County human-resources data, information from a racial-profiling lawsuit and other documents show many Sheriff’s Office employees were not working in the same job assignments recorded for them in county records.

Money used to pay for staffers performing duties not allowed under the tax has to be paid back, county officials said.

• In some instances, sheriff’s administrators are believed to have used money from the agency’s detention fund to pay for controversial public-corruption investigations and activities involving its human-smuggling unit and other units.

The questioned spending came at a time when sheriff’s officials failed to meet the state-mandated function of getting inmates to court on time, prompting a chief deputy to be held in contempt.

The board could consider a range of budgetary actions today against the Sheriff’s Office.

For example, it could put the agency on a restricted budget or impose new administrative policies to try to prevent future misspending.

Officials agree the county must act to reimburse the jail fund. The board could decide to make a lump-sum payment, reimburse the fund over time, or take the money out of the county’s contingency fund.

“I believe we are obligated to pay (the money) back,” said Deputy County Manager Sandi Wilson, who oversees the county Office of Management and Budget. “I don’t know if we have to do it all at once, but I believe it has to be paid back.”

Smith said the overall impact would be significant, although it is too early to determine just how deeply it will affect county operations.

This summer, the Sheriff’s Office turned over 70 boxes covering five years of financial documents subpoenaed by the board.

Budget officials have been reviewing the records and recently hired an attorney at a yearly salary of $109,000 to help study the records and advise on spending issues.

Last week, the supervisors reinstated a portion of the sheriff’s yearly share of federal Racketeer Influenced and Corrupt Organizations Act funds and jail-enhancement funds. Months ago, supervisors withheld those funds amid concerns of possible misspending.

Those funds have been the center of a separate legal battle between the supervisors and Arpaio.

The board has set a hearing next Wednesday for the Sheriff’s Office to appear and explain why it should not be held in contempt for not turning over additional financial and other records.

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Los Angeles California Pissed Away Stimulus Funds Creating Jobs – Each Position Cost U.S. Taxpayers Between 1 To 2 Million Dollars Each

September 17, 2010

The Los Angeles City Controller said on Thursday the city’s use of
its share of the $800 billion federal stimulus fund has been

The city received $111 million in stimulus under American Recovery
and Reinvestment Act (ARRA) approved by the Congress more than year ago.

“I’m disappointed that we’ve only created or retained 55 jobs after
receiving $111 million,” says Wendy Greuel, the city’s controller, while
releasing an audit report.

“With our local unemployment rate over 12% we need to do a better job
cutting red tape and putting Angelenos back to work,” she added.

According to the report, the Los Angeles Department of Public Works
generated only 45.46 jobs (the fraction of a job created or retained
correlates to the number of actual hours works) after receiving $70.65
million, while the target was 238 jobs.

Similarly, the city’s department of transportation, armed with a
$40.8 million fund, created only 9 jobs in place of an expected 26 jobs.

The audit says the numbers were disappointing due to bureaucratic red
tape, absence of competitive bidding for projects in private sectors,
inappropriate tracking of stimulus money and a laxity in bringing out
timely job reports.

“While it doesn’t appear that any of the ARRA funds were misspent,
the City needs to do a better job expediting the process and creating
jobs,” she said.

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Oak Harbor Washington Police Officer Patrick Horn Admits He Is Full Of Shit, Returns To Work After Year Of Paid Leave

August 16, 2010

OAK HARBOR, WASHINGTON – An investigation by the Washington State Auditor’s Office into an Oak Harbor police officer’s inaccurate time sheets concludes that the exact amount of public funds lost is impossible to determine.

The report of the auditor’s special investigation was made public last week and likely spells the end to a controversy that has cost the city many tens of thousands of dollars. The auditor started the investigation in November of 2008 after learning that Oak Harbor Police Officer Patrick Horn was accused of providing false information on his time cards.

Horn was charged in Island County Superior Court with first-degree theft in connection with the timesheet inaccuracies, but the charge was later dismissed. Horn eventually returned to work after more than a year of paid leave under an agreement in which he admitted he falsified his time card, took 30 days’ leave without pay and agreed to be assigned away from patrol.

Also under the agreement, Horn was supposed to reimburse the city based on the investigation by the State Auditor’s Office. But the investigation concluded that auditors couldn’t determine the amount of the loss “because internal controls at the Police Department were not in place or were not being followed.”

“The auditor’s report really wasn’t helpful, from my point of view. But I understand their problem,” Oak Harbor Police Chief Rick Wallace said.

Without a number from the auditor, Wallace said the city prosecutor will have to negotiate with Horn’s attorney to decide the exact restitution amount. An investigator at the Island County Sheriff’s Office found that Horn was paid for 117 hours, totaling $3,443, for work that there was no evidence he performed.

The special investigation by the State Auditor’s Office concludes that Horn submitted time records that “did not reflect actual time worked from January 1, 2005, through August 12, 2008.”

The investigation finds that Horn recorded hours worked on time sheets when records show he had taken a day or partial day off; that he recorded vacation time on days he actually worked; that he did not always submit leave requests for time off; and that he did not comply with the overtime policy.

In addition, the auditors found that police supervisors did not enforce policies and procedures regarding payroll reporting and approval.

“Supervisors kept leave records that did not match the time sheets,” the investigation states. “They also approved timesheets for payment even when they noted discrepancies.”

Furthermore, the report states that the city, under state law, should have notified the State Auditor’s Office immediately after learning about any suspected loss of public funds.

The city’s response states that the city has implemented new internal controls over the payroll tracking process used at the police department. In addition, the police department staff received additional training about time sheets and leave requests.

According to Wallace, Horn was assigned to the jail after returning to work and has done a good job.

“He’s working his way back into a position of trust with the officers in the office,” Wallace said. “Time will tell.”

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US Census Counts Imprisoned Illegal Aliens Awaiting Deportation

May 31, 2010

TACOMA, WASHINGTON – Paulo Sergio Alfaro-Sanchez, an illegal immigrant being held at a detention center in Washington state, had no idea that the federal government would count him in the census.

No one gave him a census form. No one told him his information would be culled from the center’s records.

But counted he was, along with other illegal immigrants facing deportation in detention centers across the country – about 30,000 people on any given day, according to U.S. Immigration and Customs and Enforcement.

By the time the census delivers the total tallies to the state and federal government, most of the immigrants will be long gone. But because the population snapshot determines the allocation of federal dollars, those in custody could help bring money to the towns, cities and counties in Texas, Arizona, Washington and Georgia where the country’s biggest and newest facilities are located.

“I think the irony, if there’s any irony, is that the locality is what’s going to benefit, because you have a detention center in a particular city where people have been brought from different parts of the region, and that community will benefit,” said Arturo Vargas, executive director of National Association of Latino Elected and Appointed Officials, an organization that has pushed Latinos to participate in the census.

This census brings a twist, though. For the first time, states have the option of counting people in detention centers and prisons as residents of their last address before they’re detained, worrying some local lawmakers who say cities and counties that host detention centers could lose money.

“Detention centers and prisons should probably count where they are located, that’s where resources would be required,” Rep. Sanford D. Bishop, D-Georgia wrote in a May letter to the chairman of the subcommittee that oversees the census. Bishop represents Stewart County, Georgia, population 4,600, where the nation’s largest detention center housed a total of 14,000 people between April 2007 and March 2008.

ICE operates 22 immigrant detention centers and also houses people in hundreds of other jails or prisons. Most of the largest centers are in small towns in Texas, Arizona and Georgia. Texas is home to six detention centers, and Arizona has three.

The payout can be hefty for small towns. Federal money being distributed from the census averaged about $1,469 per person in fiscal year 2008, according to the Brookings Institution, and other grants are also available to small towns depending on their population.

In Raymondville, Texas, a town of nearly 10,000 people, the Willacy Detention Center holds an average daily population of about 1,000. The center opened in 2006 and was a boon to the community as ICE and the private company that runs the center rushed to hire personnel.

Now, the detention center’s population may push Raymondville over the town’s goal of surpassing 10,000, a number that will allow them to qualify for more federal help, Mayor Orlando Correa said.

“As long it’s humane, as long as the facility respects the rights of these people and they’re not treated like animals, I’m OK with it,” Correa said.

For safety reasons, most detainees are counted through administrative records, rather than forms being passed out, U.S Census Bureau spokesman Stephen Buckner said. The census will cull data from records kept on April 1.

Alfaro-Sanchez, for his part, is glad he’s being counted. He entered the country when he was about 15 through Tijuana, and worked as a handyman in Goldendale, a small town in eastern Washington.

He arrived in at the Northwest Detention Center in Tacoma on March 30 after being arrested in a fight. The charges were dropped, he said, but immigration officers had already flagged him for arrest.

“I think that even though we may be sent back, there’s a lot of people who may need that money, the Hispanic people that are here,” the 32-year-old said in Spanish.

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