Contract Conspiracy Brings Prison Sentence

   ALEXANDRIA, Va. – 10/27/2016 - Kenneth Apple, 65, of Beaverton, Oregon, was sentenced to 50 months in prison on October 14 for his role in awarding $2 million in micro-dairy contracts from the U.S. government for use in Iraq. The court also ordered Apple to serve three years of supervised release, pay approximately $1.9 million in restitution, and forfeit $551,838.73.
   According to the court documents and evidence presented at trial, Apple, a former employee with the U.S. Department of State, helped to steer the sole-sourcing of $2 million in micro-dairy contracts to a company in which his son, Jonathan Apple, owned a 50 percent interest. However, Jonathan Apple and his partner had no technical experience in the industry. Kenneth Apple conspired to use his official position to pass on non-public information to his son in order to fraudulently award and administer government contracts. The conspirators further provided false information to, and concealed material details from the U.S. government.
   According to the court documents and evidence presented at trial, Kenneth Apple provided templates and technical specifications used in the proposal submitted by Jonathan Apple and his partner to the U.S. government. In addition, Kenneth Apple caused false and misleading statements to be made to the U.S. government regarding his experience, ownership interest, and the status of the projects. For example, Kenneth Apple directed a conspirator to keep Jonathan Apple’s name off the company’s website and any ownership documents. When federal law enforcement agents confronted Kenneth Apple about the scheme, he made false statements, including that he could not recall the owner of the company that won the micro-dairy contracts and that he did not receive any money from the contracts.
   Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU); and Robert E. Craig, Special Agent in Charge for the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office, made the announcement. Assistant U.S. Attorneys Uzo Asonye and Katherine Wong are prosecuting the case.
   Source: Financial Fraud Enforcement Task Force  (October 14, 2016)

More Documents Released On Torture Program

   (ACLU) – NEW YORK - June 14, 2016 - In response to a lawsuit filed by the American Civil Liberties Union, the Central Intelligence Agency released over 50 documents on June 14 detailing the agency’s torture and rendition program under the Bush administration.
   The ACLU filed the Freedom of Information Act lawsuit seeking documents that were referenced in the Senate report on the CIA program made public in December 2014. The report found that torture did not work and the agency lied about it to Congress, the White House, the Justice Department, and the public.
   “These newly declassified records add new detail to the public record of the CIA's torture program and underscore the cruelty of the methods the agency used in its secret, overseas black sites,” ACLU Deputy Legal Director Jameel Jaffer said. “It bears emphasis that these records document grave crimes for which no senior official has been held accountable.”
   The documents include new records about the death of Gul Rahman, who died at a CIA secret prison in Afghanistan in 2002. The CIA “Death Report” on Rahman released on June 14 details the horrific conditions he was subjected to: “Often, prisoners who possess significant or imminent threat information are stripped to their diapers during interrogation and placed back into their cells wearing only diapers. This is done solely to humiliate the prisoner for interrogation purposes. When the prisoner soils a diaper, they are changed by the guards. Sometimes the guards run out of diapers and the prisoners are placed back in their cells in a handcrafted diaper secured by duct tape. If the guards don't have any available diapers, the prisoners are rendered to their cell nude.”
Rahan froze to death in his cell, naked from the waist down. The ACLU represents Rahman’s family in a lawsuit against the two CIA-contracted psychologists who designed and implemented the torture program, James Mitchell and John “Bruce” Jessen.
   “In a visceral way, these raw documents drive home the inhumanity of the torture conceived and carried out by Mitchell and Jessen in collaboration with the CIA,” said Dror Ladin, a staff attorney with the ACLU National Security Project. “The documents reveal that Rahman was brutalized in part because his torturers decided that complaining about his torture was a form of resistance and he needed to be ‘broken.’”
   Also included is a draft letter from the CIA to the Justice Department — cc-ing Mitchell — concluding that the torture they intended to inflict on Abu Zubaydah “normally would appear to be prohibited under the provisions” of the Torture Act, a federal law against torturing people. The draft letter is a “request” that the attorney general “grant a formal declination of prosecution” for torture.
   Other new disclosures reveal the CIA’s concerns that detainees who had been tortured should be kept hidden from representatives of the International Committee of the Red Cross for the rest of their lives.
“We’re seeing just how much Mitchell, Jessen, and their CIA co-conspirators knew that what they were doing was wrong and illegal. They talked about seeking a get-out-of-jail-free card for torturing people, and then discussed how to make sure their victims were silenced forever, even if they survived their torture,” Ladin added.
   In April, a federal court ruled that the ACLU’s lawsuit against the psychologists could proceed. On June 22, Mitchell and Jessen must provide their answer to each of the allegations in the legal complaint.
   The documents also include a 2007 CIA inspector general’s report finding that the kidnapping and torture of German citizen Khalid El-Masri was a case of mistaken identity. The report referenced CIA cables on El-Masri’s despair:
   “The cable cited that al-Masri compared his situation to a Kafka novel—he could not possibly prove his innocence because he did not know what he was being charged with. The cable reported al-Masri as saying he had nearly reached the end of what he could bear and as of May 2004 he would begin a total hunger strike to his death.”
   A 2005 ACLU lawsuit on behalf of El-Masri against former CIA Director George Tenet was dismissed by lower courts on the grounds that it would reveal “state secrets,” and the Supreme Court declined to hear the case. The ACLU now represents El-Masri in a pending case against the U.S. before the Inter-American Commission on Human Rights.
   At least two of the documents concerning Gul Rahman — the IG report and the detainee death investigation — were simultaneously provided to Vice News in response to its FOIA request.

Four Army National Guardsmen Indicted

   5/28/2016 - Greenbelt, Maryland – Three guardsmen from the District of Columbia Army National Guard have been indicted on charges arising from a scheme to use Bitcoin to buy stolen credit and debit card numbers from foreign websites, re-encode cards issued in their names with those stolen numbers, and then fraudulently purchase items at Army and Air Force Exchange Service (AAFES) stores on military bases and elsewhere for use and resale (Shelton Stewart Indictment). Those indicted included Derrick K. Shelton, II, 28, of Washington, D.C.; James C. Stewart, III, (J. Stewart) 25, of District Heights, Maryland; and Quentin T. Stewart, 28, of Parkville, Maryland.
   A fourth national guardsman, Vincent Anthony Grant, 27, of Laurel, Maryland was also indicted in a separate case involving a similar fraud scheme (Grant Indictment). The indictments were returned on May 9 and unsealed on May 20 following the arrests of the defendants.
   The indictments were announced by United States Attorney for the District of Maryland Rod J. Rosenstein, Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office (DCIS); and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.
   Shelton, J. Stewart and Grant were specialists, and Q. Stewart was a former sergeant, all in the District of Columbia Army National Guard.
   “Bitcoin” is a digital currency that operates through an online, decentralized ledger system. Bitcoin is not issued by any government, bank, or company, but rather is generated and controlled through computer software operating through a decentralized network. Bitcoin can be exchanged for other currencies, products, or services.
   The Shelton Stewart Indictment alleges that from July 2014 to May 2015, Shelton, J. Stewart and Q. Stewart, along with co-conspirator Jamal Moody and others, used Bitcoin to purchase stolen credit and debit card numbers of individuals and businesses from foreign internet websites. They selected and purchased stolen credit and debit card numbers of individuals and businesses holding federal credit union accounts, and those with billing addresses in or near Maryland. They bought magnetic strip card-encoding devices and software to re-encode credit, debit and other cards with the stolen credit and debit card numbers.
   According to the Shelton Stewart Indictment, the defendants used the cards they fraudulently re-encoded to buy merchandise, including gift cards, electronic items, and luxury goods, from AAFES stores on U.S. military bases, and other locations in Maryland and elsewhere. They used the merchandise themselves or resold the merchandise.
   The Grant Indictment alleges that from July 2014 to April 2015, Grant, along with co-conspirator Moody and others, engaged in a scheme similar to the one described above.
   Shelton, J. Stewart and Q. Stewart face a maximum sentence of 20 years in prison for conspiring to commit wire fraud, and wire fraud. Grant faces a maximum sentence of seven and half in prison for conspiring to commit access device fraud. All four defendants also face a mandatory minimum of two years in prison for aggravated identity theft, consecutive to any other sentence imposed. The defendants had their initial appearances last week and were released under pretrial supervision, except for Quentin Stewart who is scheduled to have a detention hearing tomorrow, May 24, 2016, at noon before U.S. Magistrate Judge Charles B. Day in U.S. District Court in Greenbelt.
   An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
   In a separate proceeding, Jamal Alexander Moody, age 28, of Oxon Hill, Maryland, and Waynesboro, Pennsylvania, who was also a specialist in the District of Columbia Army National Guard, pleaded guilty to conspiring to commit access device fraud and aggravated identity theft. Moody admitted that from July 2014 to April 2015, he purchased a magnetic-strip card-encoding device which he used to re-encode credit and debit cards issued in his name with more than 100 stolen credit and debit card numbers of other individuals that he purchased through Bitcoin transactions. Moody used the fraudulently re-encoded cards to purchase – often from AAFES stores - gift cards or electronic and luxury goods for resale. Moody is awaiting sentencing.
   The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
   Source: Financial Fraud Enforcement Task Force

Photo by Steve Rensberry (c) 2014