Windsor (CA) plumber pleads no contest in $1 million real estate fraud

In the following press release Sonoma County (CA) District Attorney Stephan Passalacqua announced today that Juan Carlos Alcala, age 32, of Windsor, plead no contest to nineteen felony counts and admitted three special allegations for defrauding real estate investors, money laundering, and elder fraud. By his pleas, Alcala admitted that the total loss resulting from his criminal activity exceeded $1,000,000.00. Alcala faces a maximum sentence of twenty-five years in prison and a fine of up to $2,000,000.00. Alcala entered his pleas today after Sonoma County Superior Court Judge Gary Medvigy indicated that he would sentence him to no more than seven years in prison for these crimes. The defendant will be sentenced in Department Four on March 24, 2010 at 9:00 a.m.

District Attorney Passalacqua said, “Law enforcement is working together to bring to justice those who commit investment scams and particularly those who target our elders.”

The charges in this case arose out of an investigation which began when an undeveloped Healdsburg property, owned by Mr. Alcala, went into foreclosure and several investors, who had funded mortgages for Mr. Alcala on the property, discovered that he had secured the mortgages using forged documents and false information. Alcala’s fraudulent use of documents resulted in an inflated appraisal of the property, which was relied upon by various investors in three different real estate transactions. After the real estate loan fraud was reported to law enforcement, and after the land had been foreclosed upon, Mr. Alcala attempted to sell the land, no longer owned by him, to a Sonoma County Sheriff’s Detective who was working undercover. Further investigation revealed that Mr. Alcala was laundering the money he had received from the real estate loans.

While law enforcement was investigating the real estate loan fraud case, Sheriff’s Detectives also discovered that Alcala had stolen approximately $450,000 from an 80-year-old Sebastopol woman by convincing her to invest in a home improvement project that never actually occurred. Over the course of approximately three years, Alcala convinced the elder adult to give him almost $200,000 in cash and to take out three mortgages on a home that she had owned outright. Much of the money stolen from the elder victim was laundered through Alcala’s bank accounts as well. Mr. Alcala met the elder victim when he was hired as a plumber to do some work around her home.

Sonoma County Sheriff’s Detective James Naugle was the investigating officer who spearheaded the investigation in this matter and Deputy District Attorney Robin Hammond is the prosecutor assigned to the case.

Two arrested in Carlsbad (CA) in real estate invesment and loan modification fraud allegations

In the following press release Carlsbad Police Department announced that it has arrested two men believed to be responsible for an investment fraud scheme dating back to as early as 2001. Alan Espiritu, age 35, and Cesar Moreno, age 40, were both arrested by Carlsbad Police at their residences on November 3.

The case has been under investigation since May 2008 when a victim called Carlsbad Police Department to report a fraud. Since then, the case has grown to 25 victims with a total loss of over $1.2 million. Victims are from throughout San Diego County including Fallbrook, Valley Center, and Chula Vista, as well as other Southern California locations such as Temecula and the San Fernando Valley.

Espiritu and Moreno targeted non-English speaking Hispanics. They told victims that their company, Permex, was a development company and guaranteed investment returns as high as 25%. Espiritu and Moreno would befriend their victims, often getting involved socially with their families. In exchange for their investment, victims received little or nothing in return. Some victims were offered loan modifications and encouraged to stop making house payments and instead, invest those funds with Permex. Many victims lost not only their investments but also their homes.

“What makes this case so awful is that Espiritu and Moreno preyed on a vulnerable group of hard-working people who lived frugal lives, saving every dollar they could,” said Carlsbad Detective Patty Parra, lead investigator.

Investigators are seeking additional victims. Anyone who has lost money in their dealings with Permex or either of the suspects is asked to call Carlsbad Police Department at 760-931-2294.

“This is a good time to remind people to be wary of any investment opportunity that they are approached with – if something sounds too good to be true, you can guarantee that it is,” said Parra.

Additional fraud prevention tips are available at www.carlsbadca.gov/crime-prevention.

Espiritu and Moreno have been charged with numerous counts of grand theft as well as security fraud violations, and are in the Vista jail with bail set at $1 million each; arraignment is set for Thursday afternoon in downtown San Diego.

Former mortgage broker pleads guilty in Georgia to mortgage fraud

In the following press release Sally Quillian Yates, Acting United States Attorney for the Northern District of Georgia announced that Edward William Farley, 47, of Hoschton, Georgia, today pleaded guilty in federal district court to committing a mortgage fraud, a real estate investment “Ponzi” scam involving over 150 victims, a check-kiting scheme and a bankruptcy fraud.

According to Acting United States Attorney Sally Quillian Yates and the information presented in court:  FARLEY, a former mortgage broker, operated through “Creative Home Search,” “Southern Land Partners,” “Georgia Land Group,” and “Global Mortgage” in Dunwoody and Norcross, Georgia, to defraud mortgage lenders through same-day “flips” of properties located in Buford, College Park, Conyers, Cumming, Dacula, Grayson, Lawrenceville, Lithonia, Norcross, Marietta, Roswell, Snellville, and Suwanee.  

Indictment

FARLEY paid an appraiser to fraudulently inflate the value of each property by $50,000 to $100,000, and recruited often unqualified investor/borrowers to purchase them from one of his companies.  The loan applications of these investor/borrowers who were purchasing the properties were often supported by false income, employment, bank deposits, bank statements, W-2s, and/or leases.  However, as is common with “flips,” FARLEY did not purchase the properties he was selling to the investor/borrowers until after the fraudulently obtained loan proceeds on the “second” purchase had been disbursed.  At that time he purchased the properties for up to $100,000 less than the amount of the inflated mortgage loans he had arranged for the investor/borrowers in the “second” purchase, thereby causing lenders to lose millions of dollars.

In the real estate investment-Ponzi part of the scheme, FARLEY then began to operate under the name of “Alliance Resource Management” (“ARM”) in Lawrenceville, Georgia, to conceal his new source of income from prior victims.  He falsely represented that ARM was in the business of purchasing primarily residential properties which were being renovated and sold at a profit, when ARM had insufficient equity and income to do so.  Real estate investors and lenders, including private investors, corporate lenders, and banks, were induced through false promises that their investments and loans were fully secured by a first security position in property, plus a personal guarantee, and sometimes title insurance.  FARLEY also provided promissory notes falsely promising ARM investors an interest rate between 14% and 60%.  The same property was used to “fully secure” multiple investors and lenders, causing losses in excess of $20 million, with any victim repayments made from scheme proceeds generated from new investors and lenders in what is commonly known as a “Ponzi” scheme.   

FARLEY also received $1.2 million from Washington Mutual Bank in a check-kiting scheme by transferring funds he did not have among several ARM bank accounts, and withdrawing scheme proceeds before the “insufficient funds” checks were returned.  He then used $400,000 in investor funds solicited for property refinance loans to address the check-kiting problem.

Near the end of the scheme, FARLEY diverted assets of ARM to himself after a bankruptcy petition was filed, and concealed that diversion from the United States Bankruptcy Court and ARM creditors.

FARLEY was charged in a Criminal Information on October 15, 2009 with bank fraud and conspiracy, which included the bankruptcy fraud.  He pleaded guilty to those charges today.  He could receive a maximum sentence of up to 60 years in prison and a fine of up to $2,000,000, plus full restitution to all victims.  In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders. There is no parole in the federal system.

Sentencing is scheduled for February 3, 2010, at 10:30 a.m., before United States District Judge Timothy C. Batten, Sr.

This case is being investigated by Special Agents of the Federal Bureau of Investigation, assisted by the Office of the United States Trustee. Assistant United States Attorney Gale McKenzie is prosecuting the case.

Former NYC Police Commissioner pleads guilty to 8 counts including a mortgage fraud

In the following press release PREET BHARARA, the United States Attorney for the Southern District of New York, JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and PATRICIA J. HAYNES, the Special Agent in Charge of the New York Field Office, Criminal Investigation, Internal Revenue Service (“IRS”), announced today that BERNARD B. KERIK, [pictured below] former Commissioner of the New York City Police Department and the Department of Corrections, pleaded guilty in White Plains federal court to eight felonies, two of which were separately charged in an Indictment in the District of Columbia.

KERIK pleaded guilty before United States District Judge STEPHEN C. ROBINSON to: one count of obstructing and impeding the due administration of the internal revenue laws from 1999 to 2007, one count of aiding in the preparation of a false tax return (for the 2000 tax year), one count of making a  false statement on a loan application, and five counts of making false statements to the federal government. Two of the false statement counts – the two counts that KERIK also agreed to transfer to White Plains from Washington, D.C. – relate to materially false statements that KERIK made to White House officials vetting him for the position of Secretary of the United States Department of Homeland Security.

 Indictment [Page 23 contains the reference to mortgage fraud]

At today’s plea hearing, KERIK admitted, among other things, that in 1999 and 2000 he received substantial renovations to his Riverdale apartment through Interstate (a metropolitan area-contractor) and conceded that Interstate paid approximately $255,000 for the renovations. KERIK also admitted that around the same time, he contacted New York City regulators concerning Interstate. KERIK further admitted that he failed to report the value of the renovations he received through Interstate on his federal tax returns. And KERIK admitted that he made false statements to the White House concerning the renovations he received on his Riverdale apartment and his relationship with Interstate when he was being vetted for the position of Secretary of the United States Department of Homeland Security.

“It is a sad day when the former chief law enforcement officer of New York City pleads guilty to eight federal felonies,” said United States Attorney PREET BHARARA. “But no one is above the law. And this Office will not hesitate to pursue any public official who violates his oath and betrays the public trust.”

KERIK, 54, faces a statutory maximum sentence of 61 years. KERIK has agreed to pay restitution in the amount of $187,931 and is also subject to additional fines. The statutory maximum penalties for the eight federal felonies to which KERIK pled guilty today are outlined in the attached chart.

Judge ROBINSON scheduled KERIK’s sentencing for February 18, 2010 at 10 a.m. Mr. BHARARA praised the investigative work of the IRS Criminal Investigation Division and the FBI. Mr. BHARARA also thanked the New York City Department of Investigation, the Bronx District Attorney’s Office, the New Jersey Division of Gaming Enforcement, and the United States Attorney’s Office for the District of Columbia for their assistance.

Assistant United States Attorneys ELLIOTT B. JACOBSON, PERRY A. CARBONE, and MICHAEL S. BOSWORTH are in charge of the prosecution.

10 people indicted in Puerto Rico mortgage fraud allegations

The following article has been reproduced by kind permission of the Caribbean Business

Puerto Rican singer Aldo Matta was among the suspects rounded up by federal authorities Tuesday morning in connection with a purported $14 million mortgage fraud scheme allegedly masterminded by local developer Joseph McCloskey Díaz.

McCloskey and Matta, who was picked up by federal agents in Juncos, were among 10 people indicted [Indictment] by a federal grand jury on 33 conspiracy, mortgage fraud and money laundering counts in connection with the scheme centered on luxury residences in the exclusive Palmas del Mar area of Humacao.

Authorities had taken custody of nine suspects by Tuesday morning and McCloskey flew in from South Florida and turned himself in, according to the U.S. Attorney’s Office.

The alleged scheme involved fraudulently inflating the value of homes during the appraisal process through a conspiracy between the buyers and seller McCloskey. They would then split the inflated portion of the appraised value between each other.

“Matta was one of the buyers in this scheme,” FBI spokesman Harry Rodriguez said.

The singer bought three properties for $4.2 million during a six-month period and got a $600,000 kickback from the developer, federal authorities allege.

Among the other suspects is Nahir Dominicci, the sister of TV reporter Carmen Dominicci, who allegedly served as a buyer and recruited other buyers in the scheme.

Federal authorities said the mastermind was McCloskey, the developer of the 12 luxury homes involved in the scheme in The Castles and Sunrise II developments at Palmas del Mar.

McCloskey, a prominent Puerto Rico developer and president of Swiss Chalet Inc., recently built the massive Gallery Plaza complex in the Condado with millions of dollars in Law 212 tax incentives from the local government. He also owns the neighboring DoubleTree Hotel.

The other suspects were identified as Angel Millán, Esteban Llanos, Jesús Suárez, Harold Mestey, Lorny Seda, Sarahid Gómez and Yhanira Alberti.

“These people were dedicated to a fraud scheme that took place between 2004 and 2006 where they stole $14 million,” FBI Special Agent in Charge Luis Fraticelli said.

U.S. Attorney Rosa Emilia Rodríguez said the scheme was built on McCloskey inflating the prices of the homes and then kicking back cash to the buyers who had taken bank loans to buy the homes.

The buyers allegedly submitted falsified documents, including bogus tax returns, to qualify for bank loans from R-G Mortgage, Santander Mortgage, Doral Bank and FirstBank. No bank officials or appraisers were charged in the scheme. However, Rodríguez said the investigation remains open and did not discard the possibility of additional arrests in the case.

The inflated prices for The Castles homes ranged from $2.8 million to $3.2 million, while the bogus prices in Sunrise II went from $685,000 to $900,000.

“Now the banks are stuck with these houses” that are not worth as much as the mortgages, FBI spokesman Harry Rodriguez said.

“This type of scheme is what is affecting the mortgage industry at the moment in the United States and Puerto Rico and we are going to keep fighting it,” U.S. Attorney Rodríguez said.

Federal authorities have focused on mortgage fraud cases in Puerto Rico and Fraticelli anticipated more busts in the future.

“We are investigating people within the mortgage industry. Puerto Rico should stay tuned for more arrests,” he said.

The indictments in the latest case were handed up Oct 30 and the arrests were carried out by FBI and IRS agents Tuesday morning in Bayamón, Carolina, Caguas, Juncos and the state of Florida.

The accused face up to 30 years in prison and fines as high as $1 million. The accusation also calls for the confiscation of properties valued at $14 million.

U.S. Magistrate Marcos López set bail at $100,000 for McCloskey, who is being represented by attorney Osvaldo Carlo. Matta, who is being represented by attorney Ernesto Hernández, entered a not guilty plea and was freed on $40,000 bail. Dominicci’s bail was set at $45,000.

In June, Justice Secretary Antonio Sagardía told CARIBBEAN BUSINESS that there are “more than 100” mortgage fraud cases underway involving “powerful people with a lot of economic resources.”

Fraticelli, citing department policy, has declined to comment on specific investigations but acknowledged federal authorities are concerned about the problem of mortgage fraud. “We are very active in mortgage fraud investigations,” he said. “Our focus mainly is on mortgage companies that have people inside participating in the fraud.”

Former New York Mortgage Bankers founder Nancy Hernández was sentenced to six years in prison on local charges stemming from a $1.75 million fraud case, and federal authorities are undertaking their own investigation.

Federal authorities also raided the offices of Beneficial Mortgage earlier this year.

Orange County (CA) man sentenced in HELOC fraud scheme

In the following press release George S. Cardona, United States Attorney for the Central District of California announced that an Orange County man has been sentenced to 132 months in federal prison for orchestrating two identity theft schemes in which he obtained personal information from hundreds of consumers and used the data in an attempt to fraudulently obtain approximately $1.5 million from home equity lines of credit (HELOCs) and credit cards accounts.

Martin Quoc Pham, 28, of Garden Grove, was sentenced yesterday by United States District Judge George H. Wu. In addition to imposing the 11-year prison term, Judge Wu ordered Pham to pay $537,973.

Press Release   HELOC Indictment

In June, Pham pleaded guilty to a series of felony charges - including aggravated identity theft - related to two identity fraud schemes that prosecutors say he orchestrated and played an instrumental role in. In both schemes, Pham obtained personal identifying information and, with the help of co-conspirators, fraudulently accessed victims’ accounts to obtain money and consumer goods.

In the first scheme, Pham and his associates used personal identifying information to take over HELOCs at JPMorgan Chase Bank. Once they had online access to the HELOCs, Pham and his co-conspirators transferred money into bank accounts they controlled. This scheme, which lasted only five months but netted well over $1 million, caused losses to the bank and to individual victims whose identities were taken over.

In the second scheme, Pham and his co-conspirators used personal identifying information to encode counterfeit credit cards that were used to obtain merchandise and gift cards at WalMart stores and Sam’s Clubs across Southern California. Once they encoded the counterfeit credit cards, Pham and his associates tested the cards by seeking approvals for small purchases through a merchant account they had obtained for a bogus online company. If the cards were approved for $1 to $3 “purchases” at their bogus company, members of the conspiracy then used the cards at WalMart stores and Sam’s Clubs, from which they obtained approximately $300,000 in merchandise.

In relation to the HELOC scheme, Pham pleaded guilty to three counts of bank fraud, aggravated identity theft and money laundering. In the scheme targets WalMart and Sam’s Club, Pham pleaded guilty to conspiracy and aggravated identity theft. Each count of aggravated identity theft carries a mandatory sentence of two years in federal prison that must run consecutive to the sentence imposed for any other offense.

Previously in this case:

Viet Nguyen pleaded guilty in the Sam’s Club/WalMart scheme to conspiracy and fraudulent activity in connection with access devices, and he is scheduled to be sentenced by Judge Wu on December 10.

Joe Inthisone pleaded guilty to bank fraud and aggravated identity theft in the HELOC scheme. Inthisone also pleaded guilty to conspiracy in the Sam’s Club scheme. He is also scheduled to be sentenced on November 19

Kyle Kongchan pleaded guilty to conspiracy and fraudulent activity in connection with access devices. He was sentenced last month to serve two years in federal prison.

The investigation into Pham and his cohorts was conducted by the Identity Theft and Economic Crime (ITEC) Task Force which is sponsored by the Los Angeles Division of the United States Postal Inspection Service. Members of ITEC include Postal Inspectors, and agents and detectives from the United States Secret Service, Los Angeles Police Department, and Los Angeles County Probation Department - Special Enforcement Operations Unit. Significant assistance was provided by numerous financial institutions including JPMorgan Chase and Wells Fargo bank. ITEC was established in 2004 in response to increased complaints of identity theft in Southern California. Since its inception, the ITEC Task Force has arrested over 261 suspects, executed nearly 530 search warrants, and seized more than $2.4 million in assets.

SEC charges promoter of real estate investment fund that targetted seniors

In the following press release the Securities and Exchange Commission (SEC) today charged an Oak Beach, N.Y.-based real estate funds promoter and the former president of a broker-dealer firm in Smithtown, N.Y. for orchestrating a multi-million dollar real estate investment scheme. The SEC also charged two brokers at the firm with selling unregistered securities by means of “free lunch” seminars they used to coax elderly investors into making the risky investments.

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Additional Materials

• Press Release
• Litigation Release No. 21258
• SEC Complaint [6.2mb]

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SEC Chairman Mary L. Schapiro announced the enforcement action during remarks she made today at a forum in Washington D.C. sponsored by AARP and the National Consumers League. When discussing senior fraud, Chairman Schapiro noted that the SEC has brought nearly 70 enforcement actions during the past three years against fraudsters targeting elderly investors.

According to the SEC’s complaint in this case, filed in federal court in Brooklyn, N.Y., the investment scheme collected nearly $12 million from approximately 90 investors while the promoter made numerous misrepresentations, including that the return was more than 50 percent on the sale of some properties in which they were investing. The SEC also alleges that the real estate funds promoter, Charles C. Slowey, Jr., misappropriated more than $1 million of investor funds in such ways as charging excessive management fees and taking out an interest-free personal loan to purchase his own home.

“We allege that these securities professionals handed out free lunches to senior investors to win their trust and sell them risky, unregistered securities that eventually lost most of their value,” said Chairman Schapiro.

George S. Canellos, Director of the SEC’s New York Regional Office, added, “Although advertised as educational workshops, so-called free lunch seminars are very often sales presentations in disguise. These men used these supposed educational seminars to entice retirees with misrepresentations and convince them to invest in risky real estate ventures. And while those ventures were losing money, Slowey helped himself to investor funds to buy real estate of his own.”

The SEC charged four entities involved in the scheme. Endeavor Partners LLC and Endeavor Capital Management Group LLC, both of which are controlled by Slowey, acted as the managing members of all four real estate investment funds involved. The broker-dealer firm Advanced Planning Securities, Inc. (APS) sold the Endeavor Funds through its agents. Oldham Harris, Inc. (OHI) is a Kenosha, Wisc.-based retirement advisory business through which two of the brokers provided their brokerage services to APS.

The three brokers at APS charged by the SEC are Edward D. Puttick, Sr., Gregory L. Oldham and Glenn R. Harris. Puttick was the firm’s former owner and president.

According to the SEC’s complaint, Oldham, Harris, and OHI solicited investors by means of invitations to free lunch or dinner “seminars” at restaurants. On several occasions, Slowey joined Oldham and Harris at the gatherings to help them make sales of Endeavor Securities to potential investors at the seminars or in meetings at the OHI office scheduled shortly afterwards. Many of the investors to whom Oldham, Harris, and OHI sold these investments were elderly and of limited means, and few had previously invested in private placement securities or securities based on distressed or subprime mortgages.

The SEC alleges that when the funds began to have increasing financial difficulties, Slowey continued to make false statements to investors. For example, he specifically told one senior investor in Florida that his investment was safe, when in fact the funds had little money left at that time. Slowey told another senior investor that the funds would recover by the following year, and he had no basis for making that statement. At other times, Slowey asked investors to reinvest their maturing interest in the Endeavor Funds even though he knew that the funds had lost substantial sums of money and owned only a handful of properties that were worth far less than the $10 million initially deposited by investors.

The SEC’s complaint alleges that Puttick and APS failed to conduct sufficient due diligence into the private placement securities they were selling and failed to resolve numerous red flags concerning Slowey and the funds. As a result, they violated the implicit representation that all brokers make to their customers that there is an adequate basis for recommending an investment. Puttick and APS also failed to disclose to investors their lack of due diligence.

The SEC further alleges that the defendants violated the registration provisions of the securities laws by selling fund securities for which there was no registration statement in effect. Many of the customers were elderly, unsophisticated investors who could not have been expected to understand the risks associated with the funds’ investments in distressed mortgages and other real-estate plays.

The SEC’s complaint charges each of the defendants with violations of Sections 5(a) and 5(c) of the Securities Act of 1933. Further, the SEC’s complaint charges Slowey, Endeavor Partners and Endeavor Capital, Puttick and APS with violations of Section 17(a) of the Securities Act, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC’s complaint seeks a final judgment permanently enjoining the defendants (except APS) from future violations of the above provisions of the federal securities laws, ordering them to disgorge their ill-gotten gains plus prejudgment interest on a joint and several basis, and ordering them to pay financial penalties.

The SEC acknowledges the assistance and cooperation of the Wisconsin Department of Financial Institutions — Division of Securities, and the Florida Financial Services Commission’s Office of Financial Regulation.

Mississippi woman pleads guilty in Memphis flipping scheme

In the following press release Lawrence J. Laurenzi, U.S. Attorney for the Western District of Tennessee announced that Paula Sharice Nelson a/k/a Paula Mason, a/k/a Paula Kimmons, 30, of Southaven, Mississippi, pled guilty to one count of mail fraud and one count of income tax evasion before U.S. District Judge S. Thomas Anderson.  Nelson faces a maximum penalty of 35 years in prison and a fine of $1.25 million when she is sentenced on January 28, 2010.

Press Release   Indictment    Press Release

Nelson was charged on March 12, 2008, with mail fraud, bankruptcy fraud, money laundering, and three counts of income tax evasion.  Nelson was also charged with devising a scheme to provide false and fraudulent information to financial institutions to secure mortgage loans on various [14] pieces of real property throughout Memphis, Tennessee.

[Editor note: one of the 14 properties was 4304 Crimson Tree, Memphis, TN which was bought and sold on the same day by Nelson. The other properties are not specifically mentioned]

According to a factual basis read during the hearing, between April of 2000 and September of 2005, Nelson engaged in a property flipping scheme in which she would purchase HUD homes that were in foreclosure at low prices and then sell those homes to purchasers who were family members and other associates at inflated prices.  These sales usually took place on the same day as the purchase by Nelson, and in some instances, before Nelson even purchased the property.  In connection with these property sales, Nelson and others would submit and cause to be submitted fraudulent information and documentation regarding the purchasers’ employment and income in order to obtain mortgage loans on the properties.  Nelson would also alter appraisal information before submitting it to mortgage lenders to delete necessary repairs.   In this fashion, Nelson bought and sold 14 properties in the Memphis area during this period of time. 

The evidence revealed that Nelson kept the proceeds from these sales and did not report them on her federal income tax returns.  Nelson admitted that she did not file a federal income tax return in 2004 and paid no federal income tax that year.  Nelson also admitted that she was aware of the requirement that she file a tax return and pay taxes on her income.

This investigation was conducted by the United States Postal Inspection Service  and IRS Criminal Investigation.  Assistant U.S. Attorney Christopher E. Cotten represented the government.