Archive for August, 2009

Computer Hacker Agrees to Plea Deal

Monday, August 31st, 2009

Miami—According to court documents filed earlier this week, a computer hacker who perpetrated one of the largest cases of identity theft in United States history will plead guilty and serve time for his crimes.
Facing charges of conspiracy, wire fraud and aggravated identity theft, in New York and Boston federal courts, is Albert Gonzalez, 28. He agreed to plead guilty to 19 counts, in a deal which would combine the two cases in Massachussetts, and will serve 15 to 25 years in a federal prison.

Authorities say that Gonzalez was the mastermind behind a crime ring that eventually netted more than 170 million credit and debit card numbers. The group infiltrated the computer systems of such giant retailers as T.J. Maxx, Barnes and Noble, OfficeMax and Sports Authority.

Indictments claimed that Gonzalez, in addition to two co-defendants, used a hacking method known as “wardriving,” or cruising around with a laptop and trying to access retailers’ wireless Internet signals. Upon locating a network, the hackers used special programs called “sniffer programs” to capture the data as it moved through the retailer’s processors.

While Gonzalez was negotiating a plea agreement, the United States Attorney’s office in New Jersey slapped him with additional charges, including targeting customers of 7-Eleven and Hannaford Brothers, as well as Heartland Payment Systems, a New Jersey-based card payment processor. These charges are not included in the plea deal.

Gonzalez was a self-taught computer whiz who had been previously arrested for hacking, but not charged, because he agreed to cooperate with the Secret Service and help investigators identify other hackers. At the same time he helped the government as an informant, however, he was hacking into Fortune 500 companies. Court documents also said that Gonzalez had hacked into the computer systems of the national restaurant chain called Dave & Buster’s.

The hacker lived a lavish lifestyle. He threw himself a birthday party costing $75,000, bought a condo in Miami and a BMW, and gave expensive gifts to his friends, girlfriend and family. When he was arrested in May 2008, at Miami Beach’s swanky National Hotel, agents seized $22,000 in cash, computer equipment and a 9mm Glock handgun.

As part of the deal, Gonzalez must forfeit his computers, condo and car, as well as the $1.1 million found buried in his parents’ backyard. His girlfriend must return a Tiffany ring she was given as a present, and Gonzalez’s father and family friends must give back Rolex watches he gave them.

R&B Singer Gets Probation for Assaulting Girlfriend

Friday, August 28th, 2009

Los Angeles—Earlier this week, R&B singer Chris Brown received five years’ probation as well as six months’ community labor in an assault case. In June, Brown pled guilty to felony assault in the beating of his then-girlfriend, pop star Rihanna.

Brown, 20, was arrested in February 2009 after brutally attacking Rihanna in a rented sports car. In an affidavit, a Los Angeles police detective described the attack, claiming that Brown hit, choked and bit Rihanna, and that he tried to push her from the car.

His musical career has suffered since the attack, with radio stations and DJs refusing to play his music and sponsors dropping him. Both Brown and Rihanna were forced to cancel several planned appearances, including performances at the televised Grammy Awards on the day of the incident.

Another felony charge, that of making criminal threats, was dropped during the sentencing hearing on Tuesday.

Los Angeles Superior Court Judge Patricia Schnegg also stipulated that Brown must stay 100 yards away from Rihanna, with the exception of music industry events where they might of necessity be placed into close proximity with one another, for the next five years.

Attorneys for Rihanna say that the singer is satisfied with the outcome of the sentencing, and that Rihanna did not object to the stay-away order. Under its terms, the two pop stars could maintain a mere 10-yard distance from one another during music industry events.

If Brown violates any of the terms of his sentence, Schnegg warned, he could be sent to state prison. Compliance with the sentence’s terms, however, could result in the charges being reduced to a misdemeanor.

In a probation report, two other abusive incidents are detailed. One, during which the couple was traveling in Europe, describes Brown shoving Rihanna into a wall after she slapped him; the other took place in a borrowed Range Rover in Barbados, Rihanna’s home country. During that incident, Brown allegedly broke the front and passenger side windows of the vehicle. Neither of these attacks were reported, however.

Rihanna did not attend the sentencing. At one point during the hearing, Brown agreed to the terms of the sentence even before the judge had finished explaining them all.

Brown will serve the sentence in Virginia, and his community labor will be overseen by the police chief in Redmond. Additionally, his community service must consist of physical labor rather than mentoring young performers. The singer will also undergo a year of domestic violence counseling.

Former Sheriff, Fifth-Grade Teacher Sentenced in Drug Conspiracy

Thursday, August 27th, 2009

McAllen, Texas—Among the eleven people who were sentenced this week for their involvement in a drug trafficking conspiracy were an elementary school teacher and a former sheriff.

Former Starr County Sheriff Reymundo “Rey” Guerra to 64 months in federal prison, as well as four years of supervision upon his release, for having helped Mexican drug smugglers transport drugs through his county. In exchange, he reportedly received thousands of dollars in bribes. He was called a “minor participant” in the entire conspiracy, which has resulted in 28 indictments to date.

Lead defendant Jose Carlos Hinojosa apparently gave Guerra one bribe of $3,000, and another that may have been as much as $5,000, although authorities are unsure of the total amount of payments. Guerra then gave information to Hinojosa, including information regarding where extra law enforcement patrols would be stationed, so that the smugglers could steer clear of those areas. Additionally, on at least one occasion Guerra provided false information in order to enable a deputy to close a drug trafficking case.

Hinojosa, who once worked in Mexican law enforcement and who later turned corrupt and began worked for the brutal Gulf Cartel enforcers known as the Zetas, is still awaiting sentencing.

Guerra, 52, had admitted his guilt early on and cooperated fully with authorities, said U.S. District Judge Randy Crane. After pleading guilty to conspiring to distribute narcotics in May, he received a lighter sentence than the eight to 10 years recommended by federal sentencing guidelines.

The conspiracy moved both cocaine and marijuana from Mexico throughout the United States, some of the drugs ending up as far away as Delaware. Included in the conspiracy were people who organized the cross-border smuggling operations, drivers who transported the drugs to Houston and returned with cash, and distributors who mailed drugs to customers across the country.

Also netted in the wide-ranging indictment were Houston schoolteacher Sharletha Woodard and her boyfriend, John Louis Jordan. Woodard, a fifth grade teacher who also held a Master’s degree, was sentenced to nearly four years in prison. Authorities say she received packages of cocaine and then mailed them to Jordan, who received a 15-year sentence.

Before Woodard’s sentencing, Crane said that “one of the lessons [of this case] is that nobody’s above the law.”

According to the Associated Press, more than 80 American law enforcement officers – all of whom worked on the United States-Mexico border at the local, state or federal level – have been convicted on charges of corruption.

Cuomo to Prosecute Harassing Debt Collection Group

Wednesday, August 26th, 2009

New York Attorney General Andrew Cuomo is fighting to protect consumers from harassing phone calls from debt collection agencies.

In 2006, Michelle Minton received a call from a debt collector stating that she would be arrested if she didn’t pay her $4400 debt that day. The caller went on to threaten her further, saying “ Your kids will see you arrested. If… your husband [who was away at the time of the phone call] can’t make it home, child protective services will take your kids.” The problem was, Michelle Minton wasn’t in debt.

The harassing phone call, however, was enough to make Minton give the collector her bank account information. She lost $900. “It was so embarrassing,” she later recalled. “I was convinced that … someone was going to be at my house that afternoon if I hung up the phone with him.”

Dorothy Gilbert also received a phone call in 2006 demanding that she settle a $187 debt. Gilbert did owe that money to a bank after she withdrew too much money from her account, but by the time she received the call, she had already paid it. The caller left a harassing message, calling her “ghetto” and an “uneducated reject.”

Cuomo is targeting a group of 13 collection companies run by the Benning-Smith Group in Buffalo, citing the above examples as well as reports of sexual harassment and callers that impersonate law enforcement officials and lawyers. All told, the Attorney General’s office, the Federal Trade Commission, and the Better Business Bureau have received over 850 consumer complaints against the group.

Because of the poor economy, debt collectors are using more invasive tactics to make money, including calling those who don’t have any debt. “Some companies, for example, they have a debt from a John Brown, let’s say. They go to the telephone directory and they call all the John Browns with the same tactics, hoping that one of the John Browns will actually pay the bill,” Cuomo stated.

New Mexico Governor Bill Richardson Reported to be Cleared in Federal Investigation

Tuesday, August 25th, 2009

SANTA FE—An investigation by federal officials into a possible pay-to-play scheme organized by New Mexico Governor Bill Richardson will not result in criminal charges, according to a source.

The source, who wanted to remain nameless because the results of the investigation haven’t officially been disclosed yet, said that Justice Department officials will not seek indictments in the case.

The investigation, begun in 2008, looked into the possibility that campaign contributions played a role in the awarding of state bond projects. CDR Financial Products, a firm based in California, was chosen as an advisor for state transportation bond transactions in 2004. Aides to Governor Richardson had ties to the firm. David Harris was deputy chief of staff to Richardson before becoming executive director of the New Mexico Finance Authority, the body responsible for selecting CDR Financial Products. Michael Stratton served as a senior adviser to Richardson’s unsuccessful 2008 presidential bid. He was a consultant for CDR when the firm landed the state contract. Both men were subpoenaed in the investigation.

CDR collected $1.5 million from the deal, which used the firm’s services to raise funds and manage state bonds for a large transportation project.

Over $100,000 was contributed to Richardson’s political committees between 2003 and 2005 by CDR head David Rubin and the firm. The largest contribution, amounting to $75,000, came just a week before the contract was delivered.

CDR managed bonds that financed the $1.6 billion state transportation project – called GRIP, Governor Richardson’s Investment Partnership – which includes plans for a commuter rail service between Albuquerque and Santa Fe.

Richardson withdrew his name from consideration to be nominated as President Barack Obama’s Secretary of Commerce in January 2008, because of the investigation, though he did mention that he expected to be cleared. Richardson served as Secretary of Energy under President Bill Clinton.

Richardson is currently in Cuba with members of his staff on a trade mission to improve relations between the island nation and the United States. His spokesman, Gilbert Gallegos, did not respond immediately to e-mails about the investigation.

A spokesman for the U.S. Attorney in Albuquerque also declined to comment, saying he had no information on the findings of the Justice Department’s investigation.

The Finance Authority, made up of gubernatorial appointees and state executive branch administrators, issues bonds and assists in financing duties for both state and local authorities.

Michael Vick Returns to Playing Field, Court

Monday, August 24th, 2009

Earlier this week, Michael Vick returned to the football field for the first time since he was sent to jail in November 2007. He also returned to the courtroom.

Vick, 29, has faced financial troubles stemming from his arrest in the wake of his involvement in an extensive and unlawful interstate dogfighting ring. He owes creditors over $20 million. This week, he and his lawyers were in court to present a plan to pay them back and emerge from bankruptcy. A similar plan has already been denied by a judge, but Vick has since signed a one year contract worth $1.6 million with the Philadelphia Eagles, with an option for a second year at $5.2 million. That signing was “a huge development in the case,” according to a lawyer for one of the groups of creditors. With testimony that Vick expected to make $5 million a year for the next several years, creditors were convinced that the plan presented would work.

Under it, Vick will pay 10 percent of all the money he makes under $750,000. For any money between $750,001 and $2.5 million he makes, he will pay back 25 percent. He’ll pay 30 percent on money between $2.5 million and $10 million, and 40 percent of anything over $10 million.

Vick’s financial planner will invest all but $300,000 per year, ensuring that Vick will live within those bounds. And most of Vick’s property will be liquidated, except his home in Hampton, Virginia, a 2008 Infiniti truck, two retirement accounts, and personal items. Four other houses owned by Vick, as well as a number of cars and boats, will be sold.

“Mr. Vick went from the height of wealth and celebrity to imprisonment, and back again … and he is to be commended for that,” U.S. Bankruptcy Judge Frank J. Santoro, who is overseeing the case, said.

Pop Star’s Death Ruled A Homicide By LA County Coroner

Friday, August 21st, 2009

Two months after the death of pop star Michael Jackson at age 50, the Los Angeles County coroner’s office has ruled that it was a homicide. The ruling increases the possibility that charges will be filed against the doctor who was with Jackson at the time of his death, and who allegedly administered a series of sedatives and anesthetics that led to it.

Dr. Conrad Murray, a cardiologist who was hired just weeks before Jackson’s death as the superstar’s personal physician, is the subject of a manslaughter investigation by the Los Angeles Police Department. Murray had been treating Jackson for insomnia with intravenous doses of a strong anesthetic called propofol. He claimed that, because of a fear that Jackson was becoming addicted to the drug, he was attempting to wean the singer to a lower dose by adding in the sedatives lorazepam and midazolam.

On the day of Jackson’s death, Murray told detectives, he had attempted to help Jackson sleep with a series of sedatives, instead of propofol. When nothing worked, and in response to Jackson’s “repeated demands/requests,” Murray eventually administered 25 milligrams of propofol. He then stayed with the sedated singer for ten minutes before going to the bathroom. When he returned just a few minutes after that, he found Jackson unresponsive and not breathing.

Forensic tests conducted by the coroner’s office confirmed that the anesthetic propofol, in combination with at least two other sedatives, were the cause of Jackson’s death. The toxicology report also revealed that there were other drugs found in Jackson’s body, but that they were most likely not a factor in the death.

A law enforcement official told the Associated Press of the pop star’s death having been ruled a homicide. The finding could result in criminal charges, but does not necessarily mean that a crime was committed; homicide simply means that the victim died at the hands of another and is not always an illegal act.

Murray has cooperated with authorities, speaking with detectives and giving a videotaped statement claiming that he “told the truth and I have faith the truth will prevail.” According to an affidavit released in Houston, however, the doctor did not tell doctors or paramedics about the propofol he had given to Jackson on the day of his death.

Propofol is usually given only in a hospital setting, for general anesthetic purposes. Since there was no valid medical reason for administering the drug to Jackson, the death can be ruled a medical homicide, rather than a medical malpractice death.

Baseball’s Black List Obtained Illegally

Thursday, August 20th, 2009

LOS ANGELES—The toothpaste is out of the tube, and it can’t be put back in. But a federal court has ruled that the seizure of a list of 104 Major League Baseball players who failed a drug test in 2003 was illegal.

In a decision that could have a far-reaching effect on police searches in the digital age, the 9th U.S. Circuit Court of Appeals ruled that federal agents made an unreasonable search when they took the list from a computer at Comprehensive Drug Testing Inc. of Long Beach, California. That’s because the original search warrant only included the names of 10 players on the list. The Court, in a 9-2 ruling, stated that the feds overstepped their bounds in taking the list, which contained the names of 94 players not on the search warrant.

Some names from the list were then leaked to the media, including those of Yankees All Star Alex Rodriguez and Red Sox home run hitter David Ortiz. “This was an obvious case of deliberate overreaching by the government in an effort to seize data as to which it lacked probable cause,” wrote Judge Alex Kozinski. Privacy rights of those not on the warrant were violated, including protections against unreasonable searches, which is a right guaranteed by the Fourth Amendment of the Constitution.

Federal prosecutors argued that the list, which was accessed to find information about the 10 players found on the warrant, was in plain sight. Judge Kozinski, on the other hand, stated that taking the other names constituted an unreasonable search. He laid out guidelines for such computer searches in the future, including information sorting by an independent party in the case of lists like this one, where related and unrelated information is mixed.

The federal government has now returned the list to the Players’ Union, and will not be able to use any of the other information from the list in their investigation.

The performance enhancing drug testing, which led to creation of the list, according to the court, “was solely to determine whether more than five percent of players tested positive, in which case there would be additional testing in future seasons.” Players gave the tests on the condition that their results would be anonymous, a condition players are going to be reluctant to believe in future tests, according to players’ union officials and Judge Kozinski, who wrote, “the risk to the players associated with disclosure, and with that the ability of the Players’ Association to obtain voluntary compliance with drug testing from its members in the future, is very high.”

Sports Betting Bill Becomes Law in Delaware

Wednesday, August 19th, 2009

Delaware may become the first state east of the Mississippi to take wagers on pro football and other contests, due to a sports betting bill recently signed into law by Delaware Governor Jack Markell. Before the bill actually turns into law, however, it’s expected that there will be court battles to stop it.

NFL spokesman Brian McCarthy said the league is “not ruling anything out” on the subject of legal action to halt sports betting’s start in the state. On Thursday, the NFL revealed it had filed a brief last week with the state’s supreme court pertaining to Markell’s request for an advance ruling on the legality of single-event sports betting in the state.

Skill comes before chance in sports betting therefore, “the sports lottery proposed by the Governor is not a constitutionally permissible lottery” under state law, Kenneth Nachbar, an attorney working on behalf of the NFL, wrote in the brief.

Delaware was sued by the NFL in 1977 after the state launched its first sports lottery a year prior.

The state supreme court ruled that since “chance was the dominant, determining factor,” they sided with the NFL.

Markell said he expects to have the sports gaming running by the beginning of the NFL season. Vendors have been notified to implement the betting systems at the state’s three casinos.

The project annual amount brought in from the sports lottery is $55 million to state coffers.

“My administration is looking forward to working with our business partners. .. to make the Delaware sports lottery as successful as possible,” Markell said in a statement.

Ed Sutor, CEO of Dover Downs, said his company is working to get sports betting live before the first fall football game, even if that means operating out of the track’s horse-racing simulcast area until an empty restaurant in the casino can be renovated into a sports-betting parlor, complete with big-screen TVs.

Bill Fasy, CEO of Delaware Park, said his facility will not have to take on any extravagant chances, just training his employees in order to receive the bets.

Both executives said if everything goes as planned, they can have table games such as poker, blackjack, craps and roulette ready by the end of December.

Allowing table games was something casino executives lobbied for because they receive less of a percentage under the new law for gambling revenue.

Poker Players Unable to Cash in Their Chips

Tuesday, August 18th, 2009

A number of online poker players recently got a nasty surprise. When they went to cash checks that had been made out to them for reimbursement for their poker Website winnings, the checks were no good.

This is because the Department of Justice had seized more than $30 million in assets related to online poker. At issue here is whether or not the playing of poker online is illegal.

Former New York State Senator Alfonse D’Amato, who is currently chairman of the Poker Players Alliance, says that playing poker online is not illegal. The U.S. Attorney’s Office for the Southern District of New York agrees, but says that it is illegal, however, to collect cash for your winnings.

Previously, the government has used the Wire Act, which governs specific kinds of betting in the United States, to enforce online gambling. The Wire Act, however, is generally assumed to refer only to sport betting and not to other types of gaming. The government also relies on laws surrounding money laundering and some other statutes to crack down on gamblers who use the Internet.

Also applicable here, but not particularly stringent as a law, is the Unlawful Internet Gambling Enforcement Act, which Congress passed three years ago. The Justice Department has always stated that online gambling is illegal, although it has never really attempted to seize the assets gained by this form of gaming.

Representative Barney Frank (D-MA) has recently written a bill that aims to legalize online poker outright. D’Amato, whose group the Poker Players Alliance thinks that the Unlawful Internet Gambling Enforcement Act is a bad law, agrees with Frank.

“To try to stop people playing poker on the Internet should be one of the last considerations of government,” he said. He thinks a law that legalizes poker, as well as regulating it as a potential source of tax revenue, is what’s called for.

Experts say that the poker sites will eventually find a different, and better way, of reimbursing their winners. Currently the assets are handled by such banks as Wells Fargo and Citibank, but poker sites could turn to different methods of payment which are not so easily accessible to the Department of Justice.