Millions Wasted On Shoddy FBI Investigation, Prosecution, And 2 Federal Jury Trials – Casino Owner, State Lawmakers, And Others Not Guilty Of Laundry List Of Bogus Charges

March 7, 2012

MONTGOMERY, ALABAMA — A jury Wednesday acquitted a casino owner, three state lawmakers and two other defendants on all counts in a high-profile federal case that alleged cash offers for votes to legalize gambling in the state.

The jury returned its verdict after seven days of deliberations in the trial for VictoryLand casino owner Milton McGregor, state Sen. Harri Anne Smith of Slocomb, former Sens. Larry Means of Attalla and Jim Preuitt of Talladega, VictoryLand lobbyist Tom Coker, and Country Crossing casino spokesman Jay Walker.

McGregor was accused of offering large campaign contributions to legislators for their votes for gambling legislation. State Sen. Harri Anne Smith and former Sens. Larry Means and Jim Preuitt were accused of agreeing to accept bribes in return for their votes.

The jury found McGregor and the others innocent of all counts, including conspiracy and bribery.

The case was the latest in a series of government corruption investigations in Alabama, including the conviction of former Gov. Don Siegelman and former HealthSouth CEO Richard Scrushy on bribery charges in 2006 and a probe of Alabama’s two-year college system that brought down three legislators and the system’s former chancellor in 2008.

The federal investigation of vote buying began with three Republican legislators telling the FBI they were offered campaign contributions if they would support legislation designed to let electronic bingo games operate in Alabama. The three used recording devices to tape calls and meetings and the FBI tapped phones during a yearlong probe that coincided with Republican Gov. Bob Riley creating a task force to shut down electronic bingo. Riley contended the machines, featuring flashing lights and sound effects, were illegal slot machines and not simply an electronic version of paper bingo.

Riley’s task force seized machines and won court battles while casino operators failed in 2009 and in 2010 to pass protective legislation.

Federal prosecutors said behind the scenes, two casino operators and their lobbyists were offering millions in campaign contributions, benefit concerts by country music entertainers, free polling and other incentives for votes.

Ronnie Gilley, the developer of Country Crossing casino in Dothan, and two of his lobbyists, Jennifer Pouncy and Jarrod Massey, pleaded guilty to conspiracy. Former state Rep. Terry Spicer of Elba also pleaded guilty to accepting bribes from Massey and Gilley. All four helped the prosecution and are scheduled for sentencing in April.

Prosecutors said Gilley provided Smith with $200,000 in campaign money, plus a fund-raising concert by John Anderson and Lorrie Morgan. They accused Gilley and McGregor of promising Means $100,000 for his vote. They accused Gilley, McGregor and Walker of promising Preuitt $2 million in contributions, a fund-raising concert by country music starts and other campaign support.

Defense attorneys argued the case was based on lies told by the guilty in hopes of getting lighter punishment.

All three indicted senators voted for the gambling legislation when it passed the Senate on March 30, 2010. The FBI announced its investigation two days later, and the bill died in the House without coming to a vote.

McGregor’s casino, 15 miles east of Montgomery, was once the state’s largest with 6,000 machines, but it has been closed since the crackdown in 2010. Other casinos, including one in Dothan operated by Gilley’s former partners, are operating.

The trial was the second for the defendants. The first ended in August with no convictions, two defendants acquitted, and the jury unable to resolve all charges against the remaining defendants.

One thing that was never in dispute in the trial was the profitability of electronic bingo. McGregor’s attorneys acknowledged his casino in Shorter made $40 million in 2009 when it was operating all year and lost $4 million in 2010 when it was closed most of the year.

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Feds Wrongly Shut Down 84,000 Websites, Claiming Child Pornography

February 16, 2011

WASHINGTON, DC – The US Government has yet again shuttered several domain names this week. The Department of Justice and Homeland Security’s ICE office proudly announced that they had seized domains related to counterfeit goods and child pornography. What they failed to mention, however, is that one of the targeted domains belongs to a free DNS provider, and that 84,000 websites were wrongfully accused of links to child pornography crimes.

As part of “Operation Save Our Children” ICE’s Cyber Crimes Center has again seized several domain names, but not without making a huge error. Last Friday, thousands of site owners were surprised by a rather worrying banner that was placed on their domain.

“Advertisement, distribution, transportation, receipt, and possession of child pornography constitute federal crimes that carry penalties for first time offenders of up to 30 years in federal prison, a $250,000 fine, forfeiture and restitution,” was the worrying message they read on their websites.

As with previous seizures, ICE convinced a District Court judge to sign a seizure warrant, and then contacted the domain registries to point the domains in question to a server that hosts the warning message. However, somewhere in this process a mistake was made and as a result the domain of a large DNS service provider was seized.

The domain in question is mooo.com, which belongs to the DNS provider FreeDNS. It is the most popular shared domain at afraid.org and as a result of the authorities’ actions a massive 84,000 subdomains were wrongfully seized as well. All sites were redirected to the banner below.
This banner was visible on the 84,000 sites

CP banner

The FreeDNS owner was taken by surprise and quickly released the following statement on their website. “Freedns.afraid.org has never allowed this type of abuse of its DNS service. We are working to get the issue sorted as quickly as possible.”

Eventually, on Sunday the domain seizure was reverted and the subdomains slowly started to point to the old sites again instead of the accusatory banner. However, since the DNS entries have to propagate, it took another 3 days before the images disappeared completely.

Most of the subdomains in question are personal sites and sites of small businesses. A search on Bing still shows how innocent sites were claimed to promote child pornography. A rather damaging accusation, which scared and upset many of the site’s owners.

One of the customers quickly went out to assure visitors that his site was not involved in any of the alleged crimes.

“You can rest assured that I have not and would never be found to be trafficking in such distasteful and horrific content. A little sleuthing shows that the whole of the mooo.com TLD is impacted. At first, the legitimacy of the alerts seems to be questionable — after all, what reputable agency would display their warning in a fancily formatted image referenced by the underlying HTML? I wouldn’t expect to see that.”

Even at the time of writing people can still replicate the effect by adding “74.81.170.110 mooo.com” to their hosts file as the authorities have not dropped the domain pointer yet. Adding mooo.com will produce a different image than picking a random domain (child porn vs. copyright), which confirms the mistake.

Although it is not clear where this massive error was made, and who’s responsible for it, the Department of Homeland security is conveniently sweeping it under the rug. In a press release that went out a few hours ago the authorities were clearly proud of themselves for taking down 10 domain names.

However, DHS conveniently failed to mention that 84,000 websites were wrongfully taken down in the process, shaming thousands of people in the process.

“Each year, far too many children fall prey to sexual predators and all too often, these heinous acts are recorded in photos and on video and released on the Internet,” Secretary of Homeland Security Janet Napolitano commented.

“DHS is committed to working with our law enforcement partners to shut down websites that promote child pornography to protect these children from further victimization,” she added.

A noble initiative, but one that went wrong, badly. The above failure again shows that the seizure process is a flawed one, as has been shown several times before in earlier copyright infringement sweeps. If the Government would only allow for due process to take place, this and other mistakes wouldn’t have been made.

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