Prosecutors charged more than 50 correctional officers and inmates Wednesday in a widespread bribery and drug conspiracy inside Maryland’s largest state prison.
A federal complaint was unsealed Wednesday charging Candace Marie Claiborne, 60, of Washington, D.C., and an employee of the U.S. Department of State, with obstructing an official proceeding and making false statements to the FBI.
The felonies alleged that Claiborne concealed numerous contacts she had over a period of years with foreign intelligence agents, according to officials.
“Candace Marie Claiborne is a U.S. State Department employee who possesses a Top Secret security clearance and allegedly failed to report her contacts with Chinese foreign intelligence agents who provided her with thousands of dollars of gifts and benefits,” said Acting Assistant Attorney General Mary McCord for National Security. “Claiborne used her position and her access to sensitive diplomatic data for personal profit. Pursuing those who imperil our national security for personal gain will remain a key priority of the National Security Division.”
The FBI arrested Claiborne on March 28.
He is facing up to 20 years for obstructing an official proceeding. The maximum penalty for making false statements to the FBI is five years in prison, according to authorities.
“Candace Claiborne is charged with obstructing an official proceeding and making false statements in connection with her alleged concealment and failure to report her improper connections to foreign contacts along with the tens of thousands of dollars in gifts and benefits they provided,” said U.S. Attorney Channing D. Phillips. “As a State Department employee with a Top Secret clearance, she received training and briefing about the need for caution and transparency. This case demonstrates that U.S. government employees will be held accountable for failing to honor the trust placed in them when they take on such sensitive assignments”
According to the court affidavit, Claiborne began working as an Office Management Specialist for the Department of State in 1999.
She has served overseas at a number of posts, including embassies and consulates in Baghdad, Iraq, Khartoum, Sudan, and Beijing and Shanghai, China.
As a condition of her employment, Claiborne maintains a Top Secret security clearance. Claiborne also is required to report any contacts with persons suspected of affiliation with a foreign intelligence agency, according to the affidavit.
Despite such a requirement, the affidavit alleges, Claiborne failed to report repeated contacts with two intelligence agents of the People’s Republic of China, even though these agents provided tens of thousands of dollars in gifts and benefits to Claiborne and her family over five years.
According to the affidavit, the gifts and benefits included cash wired to Claiborne’s USAA account, an Apple iPhone and laptop computer, Chinese New Year’s gifts, meals, international travel and vacations, tuition at a Chinese fashion school, a fully furnished apartment, and a monthly stipend.
Some of these gifts and benefits were provided directly to Claiborne, the affidavit alleges, while others were provided through a co-conspirator.
According to the affidavit, Claiborne noted in her journal that she could “Generate 20k in 1 year” working with one of the Chinese agents, who, shortly after wiring $2,480 to Claiborne, tasked her with providing internal U.S. Government analyses on a U.S.-Sino Strategic Economic Dialogue that had just concluded.
Claiborne, who allegedly confided to a co-conspirator that the Chinese agents were “spies,” willfully misled State Department background investigators and FBI investigators about her contacts with those agents, the affidavit states.
After the State Department and FBI investigators contacted her, Claiborne also instructed her co-conspirators to delete evidence connecting her to the PRC agents, the affidavit alleges.
The defendant is innocent unless proven guilty.
Claiborne pleaded not guilty in federal court.
The FBI Bank Robbery Task Force arrested Cornetta Newton, 46, who is believed to be the “SOS (Slip-On Shoe) Bandit,” federal officials announced Tuesday.
Newton was arrested last week during an attempted bank robbery at Amtrust Bank in Scottsdale .(8764 E. Shea Boulevard).
Newton is charged with four bank robberies in Scottsdale, Chandler, and Tempe between January 30, 2017 and February 16, 2017. She is also charged with the attempted bank robbery in Scottsdale on March 7, 2017.
The suspect was nicknamed the Slip-On Shoe bandit because she wore slip-on shoes during some of the bank robberies.
The day after Newton’s arrest, the Scottsdale Police Department’s Violent Crimes Unit arrested Sherbly Gordon, 46, who is suspected of driving Newton in three of the bank robberies. Gordon is also charged with committing a separate bank robbery in Chandler.
A massive drug-trafficking crackdown resulted in 55 defendants being charged, according to federal officials.
Ten federal indictments unsealed Wednesday indicate the defendants were involved in crimes ranging from money laundering to heroin, methamphetamine and firearms trafficking. in what officials have described as one of the most significant crackdowns in recent memory.
Officials described the drug bust as one of the most significant crackdowns in recent memory.
The defendants, including prominent drug dealers and documented gang members, were responsible for supplying a substantial portion of the heroin and methamphetamine distributed in North County, California.
Early this morning, more than 150 members of the North County Regional Gang Task Force plus other law enforcement agencies made numerous arrests.
During the course of the investigation, law enforcement officers searched more than 20 locations in Oceanside, Vista and elsewhere in North County in California as well as Kingman, Arizona, according to officials.
Special Agent in Charge Eric S. Birnbaum of the FBI stated, “This investigation demonstrates the complex, international and multi-faceted nature of the gang threat in North County where heroin, methamphetamine, and firearms related crimes threaten our communities. The FBI will continue to work tirelessly alongside our law enforcement partners at the North County Regional Gang Task Force to restore these neighborhoods to the good citizens who live in them.”
As of today at noon, 46 of the 55 defendants are either in federal or state custody:
- Fourteen were arrested this morning; the rest were arrested earlier in the week or were already in custody.
- Authorities are continuing to search for seven defendants
- Two are in Mexico.
The yearlong investigation was led by the North County Regional Gang Task Force.
It involved months of federal wiretaps, dozens of undercover drug and gun buys and extensive surveillance.
“Today we’ve taken out one of North County’s largest heroin suppliers,” said Acting U.S. Attorney Alana Robinson. “This crackdown is our most significant response to date to the heroin epidemic ravaging our communities. We anticipate seeing a huge impact now that these defendants are removed from our community, particularly in the North County cities of Oceanside, Vista, San Marcos and other areas plagued by gangs.”
Many of the defendants are documented members or associates of violent North County street gangs, including the Vista Home Boys, Varrio Fallbrook Locos, Varrio Carlsbad Locos, Encinitas Tortilla Flats, Varrio San Marcos and Escondido Viejo Diablos, officials said.
According to charging documents, the defendants were involved in a variety of crimes, including drug distribution, firearms trafficking, robberies, vehicle thefts, burglaries and assaults.
In total, authorities seized heroin, methamphetamine and 25 firearms, including handguns, revolvers and assault rifles.
These drugs and guns were being stored and sold in our North County neighborhoods, including across the street from Vista High School.
The charging documents describe a trafficking organization allegedly led by a Mexico-based woman who used dozens of street gang members to distribute heroin.
Defendant Yadira “Pini” Villalvazo attended Vista High School and was an associate of Vista Home Boys street gang before she was deported following a federal drug trafficking conviction in 2002, according to officials.
According to charging documents, Villalvazo is now running her own Sinaloa Cartel-linked organization from Tijuana. Her specialty is still heroin.
According to court records, this drug trafficking organization supplied at least 25 percent of the heroin sold and consumed in North County and grossed tens of thousands of dollars in proceeds that were sent back to Mexico.
The Villalvazo network distributed heroin in North County and also supplied pound quantities of heroin to a prolific distribution ring in Kingman.
During this investigation, the gang task force also targeted major methamphetamine distribution cells connected to North County street gangs, including rings allegedly led by Sabrina Yzaguirre, Ivan Bazan, aka “Dreamer” and Jorge Enrique Jara Cervantes, aka “Scorpion.”
In addition, the ring allegedly led by Jara shipped pound quantities of methamphetamine for distribution in Alabama and Tennessee.
Heroin deaths in San Diego County more than doubled in the last decade, from 40 in 2005 to 90 in 2015. And this is despite the use of naloxone, which first responders have used to save countless lives. In 2015 alone, paramedics used naloxone 1,340 times.
Heroin treatment admissions have risen every year in San Diego County since 2011.
Meth-related deaths increased more than 80% between 2011 and 2015. And about half of adults arrested in 2015 tested positive for meth at the time of their arrest.
“The Sheriff’s Department is committed to working with our law enforcement partners to keep the influence of drugs and gangs away from our children and out of our community,” said County Sheriff Bill Gore of San Diego, California.
Federal agencies announced Thursday that Western Union Company, a global money services business headquartered in Englewood, Colorado, agreed to forfeit $586 million.
Western Union admits to criminal violations, including willfully failing to maintain an effective anti-money laundering program and aiding and abetting wire fraud, according to the Department of Justice.
According to admissions and the evidence, between 2004 and 2012, Western Union violated U.S. laws – the Bank Secrecy Act and anti-fraud statutes – by processing hundreds of thousands of transactions for Western Union agents and others involved in an international consumer fraud scheme.
As part of the scheme, fraudsters contacted victims in the United States and falsely posed as family members in need or promised prizes or job opportunities.
The fraudsters directed the victims to send money through Western Union to help their relative or claim their prize.
Various Western Union agents were complicit in these fraud schemes, often processing the fraud payments for the fraudsters in return for a cut of the fraud proceeds.
Western Union knew of the fraud schemes but failed to take action against it.
Beginning in at least 2004, Western Union recorded customer complaints about fraudulently induced payments in what are known as consumer fraud reports.
In 2004, Western Union’s Corporate Security Department proposed global guidelines for discipline and suspension of Western Union agents that engaged in fraud transactions.
In these guidelines, the Corporate Security Department effectively recommended automatically suspending any agent that paid 15 Consumer Fraud Reports within 120 days.
Had Western Union implemented these proposed guidelines, it would have prevented significant fraud losses to victims and would have resulted in corrective action against more than 2,000 agents worldwide between 2004 and 2012, according to officials.
Court documents also show Western Union’s BSA failures spanned eight years and involved, among other things, the acquisition of a significant agent that Western Union knew prior to the acquisition had an ineffective MWWoney Laundering program and had contracted with other agents that were facilitating significant levels of consumer fraud.
Despite this knowledge, Western Union moved forward with the acquisition and did not remedy the AML failures or terminate the high-fraud agents.
Similarly, Western Union failed to terminate or discipline agents who repeatedly violated the BSA and Western Union policy through their structuring activity in the Central District of California, the Eastern District of Pennsylvania, New York City and elsewhere.
The BSA requires financial institutions, including money services businesses such as Western Union, to file currency transaction reports (CTRs) for transactions in currency greater than $10,000 in a single day.
To evade the filing of a CTR and identification requirements, criminals will often structure their currency transactions so that no single transaction exceeds the $10,000 threshold.
Financial institutions are required to report suspected structuring where the aggregate number of transactions by or on behalf of any person exceeds more than $10,000 during one business day.
Western Union knew that certain of its U.S. Agents were allowing or aiding and abetting structuring by their customers. Rather than taking corrective action to eliminate structuring at and by its agents, Western Union, among other things, allowed agents to continue sending transactions through Western Union’s system and paid agents bonuses.
Despite repeated compliance reviews identifying suspicious or illegal behavior by its agents, Western Union almost never identified those agents as the subjects of required reports to law enforcement
In California, an investigation by the FBI’s Los Angeles Field Office, IRS Criminal Investigation and local partners into Western Union’s largest West Coast agent found that U.S. Shen Zhou International in Monterey Park sent more than $310 million in Western Union transactions to China – approximately 50 percent of which were structured.
The owner of Shen Zhou – Zhihe “Frank” Wang, 60, of Monterey Park – plead guilty late 2013 to one count of structuring international transactions to evade reporting requirement in Santa Ana federal court.
Wang admitted making numerous transmission to China in $2,500 amounts, which is just below the $3,000 amount that triggers various Bank Secrecy reporting and record-keeping requirements for money transmitters, as well as the $10,000 amount that triggers CTR filings.
Despite finding repeated violations of Western Union policies, Western Union took no disciplinary action against Shen Zhou beyond one 90-day probation in January 2006 during which Shen Zhou continued to process transactions.
Wang is currently scheduled to be sentenced by United States District Judge Andrew J. Guilford on June 5, at which time he will face a statutory maximum sentence of five years in federal prison.
Based on information uncovered in the Shen Zhou investigation, further investigation by the FBI into Western Union and its “China Corridor” agents found widespread structuring violations.
Despite the fact that these high-volume agents failed multiple compliance reviews and continued to aid their customers in illegal activity, Western Union took little to no discipline against the agents, continued to allow the agents to process money transfers and actively encouraged the China Corridor agents to expand their businesses.
Between 2003 and 2012, the top five China Corridor agents in the United States structured hundreds of millions of dollars in Western Union transactions.
“Los Angeles defendant Wang’s company was considered to be among the largest Western Union agents in the United States as over $310 million was sent to China in a span of five years, half of which was illegally structured and transmitted using false identification,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office.
Adding,“Rather than ensuring their high volume agents were operating above-board, Western Union rewarded them without regard to the blatant lack of compliance and illegal practices taking place. This settlement should go a long way in thwarting the proceeds of illicit transactions being sent to China to fund human smuggling or drug trafficking, as well as to interrupt the ease with which scam artists flout U.S. banking regulations in schemes devised to defraud vulnerable Americans.”
“In taking responsibility for their actions, Western Union has agreed to cooperate and forfeit more than $500 million for their role in circumventing Bank Secrecy Act reporting requirements,” stated Anthony J. Orlando, the Acting Special Agent in Charge of IRS-Criminal Investigation’s Los Angeles Field Office.
Since 2001, the Justice Department has charged and convicted 29 owners or employees of Western Union agents for their roles in fraudulent and structured transactions.
Authorities have arrested 17 members and associates of the Wilmas street gang who are named in a federal racketeering indictment.
It alleges acts of murder, attempted murder, narcotics trafficking, robbery and witness intimidation – as well as a series of armed attacks on law enforcement officers dating back to 2008, according to officials.
The 17 people arrested Wednesday are among 29 defendants named in a 111-page indictment that alleges violations of the federal Racketeer Influenced and Corrupt Organizations (RICO) Act.
The arrests were made by officers with the Los Angeles Police Department, special agents with the Drug Enforcement Administration and other law enforcement authorities, including the United States Marshals Service and the FBI.
In addition to those arrested during the Operation “Tidal Wave,” 10 defendants were already in custody on unrelated charges. Authorities are continuing to search for two defendants.
During the course of the investigation, law enforcement seized nearly eight pounds of methamphetamine and 10 firearms, including one linked to a shooting, according to authorities.
“This federal indictment seeks to dismantle the leadership of the Wilmas street gang, a particularly violent street gang that regularly targets members of the community and law enforcement officers for murder,” said U.S. Attorney Eileen M. Decker. “The devastating impact that this gang has had on the community cannot be overstated, but today’s takedown will help to restore order across Wilmington and ensure that those responsible for the violence and other criminal acts will be taken off the streets for years.”
Operation Tidal Wave targeted the Wilmas gang, which has operated in the Wilmington District of Los Angeles since the 1950s and is affiliated with the Mexican Mafia. As a “surenos” gang, the Wilmas gang “is loyal to, supports and contributes to the Mexican Mafia,” according to the indictment, which outlines how leaders of the prison gang issues orders to kill rival gang members and members of law enforcement.
The federal indictment unsealed Wednesday outlines a criminal enterprise that controls the drug trade in Wilmington, collects “taxes” from drug dealers for the benefit of Mexican Mafia members, maintains a supply of often-illegal firearms, and takes retribution against people who may be cooperating with law enforcement.
Wilmas gang members murdered two 16-year-old victims on February 26, 2012, according to the indictment.
“The Wilmas gang is also a racist organization and has been historically antagonistic to the presence of African-Americans in Wilmas gang territory,” the indictment alleges. “Wilmas gang members have frequently targeted African-Americans who enter or attempt to reside within the area claimed by the Wilmas gang.”
Operation Tidal Wave was conducted under the auspices of the Los Angeles High Intensity Drug Trafficking Area (HIDTA) Task Force, which is coordinated by the Drug Enforcement Administration.
“This joint investigation targeted a very violent and ruthless criminal gang that has terrorized the citizens of Wilmington for too long,” said DEA Special Agent in Charge Steve Comer. “The HIDTA Task Force is dedicated to dismantling the most prolific, local area drug trafficking organizations and today’s actions demonstrate that commitment – we’re allied with our law enforcement partners to make our communities safer.”
The 31-count indictment alleges a conspiracy to violate RICO; numerous criminal offenses that violated the RICO statute, including murder, distribution of methamphetamine, extortion, and witness tampering; violent crimes in aid of racketeering, conspiracy to trafficking narcotics, possession with the intent to distribute methamphetamine and one defendant is accused of being a felon in possession of a shotgun.
The defendants are presumed innocent unless proven guilty.
The Department of Justice spelled out the rules Tuesday involving rights that people have while casting votes, including the right not to be intimidated, discriminated or harassed.
Also federal officials noted that on Nov. 8, the U.S. Attorneys’ Offices will work with specially trained FBI personnel in each district to ensure that complaints from the public involving possible voter fraud are handled appropriately, officials announced Tuesday.
But federal officials said people should first call local police to report discrimination, harassment or intimidation.
The Civil Rights Division’s Criminal Section enforces federal criminal statutes that prohibit voter intimidation and voter suppression based on race, color, national origin or religion.
For more information click here: Department of Justice
Here is what the Department of Justice’s Civil Rights Division will also do at polling places around the nation:
Civil Rights Division attorneys in both the Voting and Criminal Sections in Washington, D.C., will be ready to receive election-related complaints of potential violations relating to any of the statutes the Civil Rights Division enforces.
Attorneys in the division will take appropriate action and will consult and coordinate with local U.S. Attorneys’ Offices and with other entities within the Justice Department concerning these complaints before, during and after Election Day.
Civil Rights Division staff will be available by phone to receive complaints related to voting rights (1-800-253-3931 toll free or 202-307-2767) or by TTY (202-305-0082).
A list of U.S. Attorneys’ Offices and their telephone numbers can be found at https://www.justice.gov/usao/find-your-united-states-attorney. A list of FBI offices can be found at https://www.fbi.gov/contact-us.
The Civil Rights Division is responsible for ensuring compliance with the civil provisions of federal statutes that protect the right to vote and the criminal provisions of federal statutes that prohibit discriminatory interference with that right.
The Civil Rights Division’s Voting Section enforces the civil provisions of a wide range of federal statutes that protect the right to vote including: the Voting Rights Act, the National Voter Registration Act, the Uniformed and Overseas Citizens Absentee Voting Act, the Help America Vote Act and the Civil Rights Acts.
The guards also are accused of warning inmates when prison officials were preparing to search cells for contraband and of using violence to retaliate against inmates who reported the smuggling to prison administrators.
The 18 guards “abused their positions of trust as sworn officers,” according to one of the two indictments unsealed in U.S. District Court in Baltimore on Wednesday. “This criminal conduct created a culture of corruption and lawlessness and perverted the intended purposes” of the prison.
At a news conference, U.S. Attorney Rod J. Rosenstein cited two stabbings of inmates who he said were set up by correctional officers who facilitated the attacks.
“Pervasive corruption leads to the break down in the legitimate operations of the institution,” Rosenstein said.
The investigation began in late 2013 with a tip from a correctional officer to the warden, according to Stephen T. Moyer, secretary of the state Department of Public Safety and Correctional Services.
The case was initially handled locally but quickly grew in scope and was turned over to federal prosecutors, who worked with state prison internal affairs detectives.
Through recorded phone conversations, investigators learned inmates were directing the highly lucrative operation from the inside. According to court records, they used the prison phone system and illegal cellphones to place orders and make direct payments to correctional officers through the online payment system PayPal.
The union representing prison guards said Wednesday that “no one wants correctional officers to be honest more than fellow correctional officers, who depend on their co-workers to have their backs.”
The statement from AFSCME also said the state system is understaffed by hundreds of officers and “needs men and women of the highest integrity to perform these dangerous jobs.”
The charges against a total of 80 defendants, including people outside the prison who helped in the alleged scheme, are the latest in a series of investigations to reveal problems inside Maryland prisons.
Three years ago, more than two dozen state correctional officers at the Baltimore City Detention Center and the Baltimore Central Booking and Intake Center were indicted over allegations that they helped leaders of a dangerous national gang operate a drug-trafficking and money-laundering scheme from behind bars.
In the 2013 case, an investigation uncovered smuggling operations and personal relationships between guards and inmates, including the shocking revelation about a gang leader who impregnated four guards.
Forty of 44 defendants in that case have been convicted, including 24 correctional officers. The Black Guerilla Family (BGF) gang leader, Tavon White, pleaded guilty to participating in the conspiracy and was sentenced to 12 years in prison.
The 2013 indictments put pressure on the administration of former governor Martin O’Malley and led to changes in leadership at the Baltimore detention center, tougher screening procedures for employees and inmates, and the creation of an anti-corruption investigation team.
On Wednesday, Maryland Gov. Larry Hogan took credit for making good on a campaign promise to combat corruption in the prison system.
“I hired Secretary Stephen Moyer with the directive to aggressively root out corruption in our state correctional facilities, and that is exactly what he has done,” Hogan said in a statement, noting the closure of one of the Baltimore facilities. “Our administration has been and will remain steadfastly committed to stopping this kind of illicit criminal behavior.”
There are about 7,000 correctional officers and 21,000 inmates in Maryland, according to Moyer, who said he agreed with the union that the corrections division is understaffed by 600 to 700 officers.
Moyer, a former Maryland state trooper, said one reason for the shortage is a recent requirement for new hires and those being promoted to undergo a polygraph test.
Unlike the Baltimore case, no single gang ran the smuggling operation that spanned the two compounds on 620 acres in Somerset County. Prosecutors said correctional officers became middlemen between inmates and their outside contacts, who provided the illegal cellphones and drugs.
The guards — men and women primarily hired in the past 10 years — hid contraband in their hair and underwear when they passed through security, prosecutors said. Inside, guards delivered packages to prearranged “stash” locations in bathrooms and storage closets or in the officers’ dining room, where guards could interact with inmates who worked as servers and kitchen staff.
In November 2015, court filings say, the inmate who hoped to build a $50,000 nest egg through the scheme, told a correctional officer, “I just passed out a pack today. So 1400 is owed to us. . . . We need more,” he wrote in reference to the tobacco sales.
Three days later, the inmate texted again, the indictment states.
“I want at least 50,000 leaving this place. I know I can get it.”
Some inmates traded sex with prison guards in exchange for the contraband, and “these sexual relationships cemented the smuggling and trafficking relationships,” prosecutors said.
The correctional officers, inmates and outside facilitators face a long list of charges in the racketeering and drug conspiracy and could face maximum sentences of 20 years in prison.
As Rosenstein spoke Wednesday, he was flanked by placards highlighting excerpts from recorded phone conversations that suggest the message from law enforcement in cases like this one and the previous investigation of the Baltimore jail known as BCDC may be getting through.
In an intercepted call in May 2016, a former correctional officer warned a contact: “Did you see on the news what happened down BCDC out here?
“It was a BGF dude, he was pretty much doing the same thing, the whole time like somebody was listening on the conversation.”