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Category Archives: 47B Racketeering (RICO) / Illegally Conducting an Enterprise (State Charge) Victories

State v. Mr. C (DMC No. 14920) – Felony Benefits Fraud – Not Charged – Social Security Administration Investigated:  Mr. C had secured two different Social Security numbers and had been receiving benefits from Social Security which were duplicating under the two different identities.  We were able to put together a letter and speak with the Investigating Agent to show that somewhere along the line there had been a confusion or Scribner’s error regarding Mr. C’s Social Security number.  We negotiated the repayment of any overages that may have been paid, and the Investigator agreed that once the problem was fixed, that this took care of the incident.  No charges were ever brought against Mr. C.

State v. Ms. O (DMC No. 14836) – Felony Money Laundering ($25,000) and Felony Conspiracy – Not Charged Due to Cooperation and Testimonial Agreement – Pinal County Sheriff’s Office and Arizona Attorney’s Office Investigated.  Ms. O had befriended a man by the name of Francis and had begun dating him.  While she was dating him, he always had money but was unemployed.  He claimed he was a refrigeration repairman.  However, his house always smelled of marijuana and many people were coming in and out of the residence.

He would ask her to constantly deposit cash into a bank account which she opened.  That account was initially shut down at the first bank because it was “a risk to the institution.”  She then opened a second account at another bank and began depositing money into that bank account.  She began observing her boyfriend packaging marijuana in five-gallon paint buckets, and he would ask her to go to the PO Box in order to ship the packages.  He was eventually arrested and the police contacted her about potential Money Laundering in regard to the bank deposits.  She then retained our services, and we then became involved.

We contacted the Pinal Count Sheriff’s Office and the Arizona Attorney General’s office in order to negotiate a “Cooperation Deal.”  Due to Ms. O’s cooperation, she was never charged with any crimes.  Her ex-boyfriend was ultimately charged with multiple counts of Transportation of Marijuana and Conspiracy, along with multiple co-defendants.  If Ms. O was also convicted (as was her boyfriend) she would have gone to prison as well.

State v. Ms. S (DMC No. 13490) – Felony Illegal Control of an Enterprise/ RICO & Felony Conspiracy – ­Reduced to Misdemeanor Facilitation with Zero Days in Jail – Maricopa County Superior Court (Case No. CR2011-007595).

The Phoenix Police Department had received information that a place known as the “Phoenix Temple Goddess” was running an Illegal Enterprise as a House of Prostitution. A six month long investigation ensued in which they found there was numerous reviews posted on “The Exotic Review” (TER). That particular website purportedly detailed specific sex acts performed by employees of the temple in exchange for money. The Phoenix Police Department then deployed three female Undercover Detectives to go to the temple in order to secure employment.

The Undercover Officers were told that a “gatekeeper” for the Temple would take a “donation” in order for them to perform “naked life coaching.” They were also to be known as “healers” and “practitioners.” They were then given a handbook that showed that the donation amounts would range from $125 for a half hour, up to $804 for a 4 hour session. It also specified what percentage of the money would go to the Temple, and what percentage would go to the “Practitioner.” After that point, an indictment was handed down against multiple codefendants, and Ms. S was arrested for being one of the Practitioners.

We became involved in the case and we immediately discovered that we would have to reduce the case to a misdemeanor, otherwise our client would be deported to Canada, and she would not be allowed back into the United States. This has to do with the immigration rules as her charges were regarded as a crime of “moral turpitude.” We ultimately were able to show the Prosecutor that there was no direct evidence that Ms. S engaged in any sexual activity. In addition, she would be more useful as a witness for the Prosecution, as opposed to just being regarded as a defendant. Ultimately, the Prosecutor agreed to extend an offer to a misdemeanor of Facilitation which included Probation and Zero Days in Jail. Ms. S was allowed to remain in the country, and she has no Felony convictions on her record.

State v. Mr. H (DMC No. 11744) – Felony Illegally Conducting an Enterprise/RICO ($132,755 in Counterfeit Checks), Felony Computer Tampering, Felony Attempted Fraudulent Schemes & (2 Counts) Forgery – Reduced to Possession of a Forgery Device with Probation and Zero Days in Jail – Maricopa County Superior Court (Case No. CR2013-002470).

Mr. H was involved in an Illegal Enterprise which was engaged in manufacturing fake checks and then cashing them. The checks were manufactured by utilizing a computer to print false checks with false bank routing numbers. This particular activity is known as “Computer Tampering.” Once the Illegal Enterprise would create the fake checks, they would then be distributed to individuals to cash at various retail outlets. Mr. H. was one of the people who received checks that were created by the Enterprise and he was one of the individuals responsible for cashing them. Once the Police became aware of this, they arrested several of the check cashers and had them become “Confidential Informants.” Eventually, a 61 co-defendant indictment, which included 328 charges, was handed down by a Grand Jury.

When we became involved in the case, we immediately began working with Detectives and Prosecutors in order to cooperate and to provide Mitigation on Mr. H’s behalf. Unfortunately, Mr. H. had become addicted to heroin, and had only gone for various brief stretches in his life where he was sober. He was married and had several small children when he fell off the wagon. He had lost his job and started using heroin again.

He became involved in the Conspiracy in order to receive money to support his drug habit. During the Pretrial phase of the case, we had Mr. H. go into inpatient rehab, which he successfully completed. We also had him make Restitution in full for his portion of the Fraud Scheme. Ultimately, the Prosecutor offered a plea to Possession of a Forgery Device, which included Probation and Zero Days in Jail. If Mr. H. had been convicted of all charges, there would have been mandatory Prison time required due to the amount of the loss being greater than $100,000. He is now sober and his family is intact.

State v. Mr. A (DMC No. 9146) – Felony Embezzlement/RICO ($88,000 Misappropriated from Law Firm), Felony Fraudulent Schemes & Felony Theft – Not Charged – Resolved with Civil Settlement – Scottsdale Police Department Investigated (DR#20XX-XXXX2); Maricopa County Superior Court, Civil Division (Case No. CV2008-015240).

Mr. A. owned a collection service business. He contracted with a local Phoenix law firm to conduct their collections regarding overextended accounts receivables. Things were not going well at first, and Mr. A. convinced the law firm to let him take over all of the bookkeeper’s duties. This gave him access to all of the law firm’s bank accounts and he was authorized to sign checks into a bank (cost account) only. Over the course of a two month span, he began transferring all of the law firm’s money into various accounts. He would then use electronic transfers, write checks or use “check by phone” transfers to transfer money to himself. These were monies that he was not entitled to.

In addition, Mr. A. began charging the law firm for overhead incurred while working on the law firm’s accounts. The law firm received no benefit for this and they had no idea that this was going on. In essence, Mr. A. was “padding” the bills. The total amount of loss for the two months totaled $88,000. Once this was discovered, Mr. A. secured our services.

We began negotiating with the lawyer who was working on behalf of the law firm. As we were in Settlement negotiations, they filed a Civil Lawsuit against Mr. A., which included accusations of, among other things; RICO, Theft, Breach of Contract and Breach of Fiduciary Duty. We were eventually able to work out a Settlement with the law firm and they agreed that this appeared to be a situation of a miscommunication and bad bookkeeping practices. They decided that they were not going to seek any criminal charges against Mr. A. Initially, he could have been facing mandatory prison time, however, he has no criminal charges on his record.

State v. Ms. R (DMC No. 12851) – Felony Illegal Control of an Enterprise/RICO ($143,000), Fraudulent Schemes & (4 Counts) Trafficking in Stolen Property – Reduced to Solicitation with 2.5 Years in Prison – Maricopa County Superior Court (Case No. CR2014-002286).

During a four month period of time, six grocery stores had reported a high incident of retail theft revolving around baby formula. Baby formula is used by drug dealers to cut other types of drugs (such as cocaine) in order to increase the actual volume/weight of the drug, which increases the sales volume. The six stores that were being targeted were Walmart, Fry’s, Bashas’, Albertson’s, WinCo, and Food City. Surveillance was set up on one of the stores, and one of the thieves was observed loading a shopping cart with empty bags, he then entered the store and began loading those bags with baby formula. The person then ran directly for the exit door to jump in a waiting getaway car. The Police swooped in and arrested this individual.

This individual was questioned, and then became a “Confidential Informant” for the Police Department. He ended up leading Police to Ms. R. and a Search Warrant was obtained for her house. When the house was searched, 6,000 cans of baby formula were discovered with a value of $143,000. She was then taken into custody and questioned. During questioning, she admitted that she was selling all of the baby formula to one particular lady in California, who would then have her ship it to New Jersey and New York. She admitted she suspected it was for drug dealers, who used it to cut cocaine.

We became involved in the case, and cooperated with Detectives in order to have the case transferred to prosecuting and investigating agencies in California, New Jersey, and New York. We also presented significant Mitigation on behalf of Ms. R. This included the fact that she had no prior criminal history and had 14 year old twins who lived at home. Ultimately, we were able to secure an offer which included 2.5 years of prison. Originally, Ms. R. was facing the possibility of two decades in prison. She had originally been charged with Illegally Conducting an Enterprise per ARS 13-2308(A)(1), Felony Fraudulent Schemes per ARS 13-2310(A), and 4 Counts of Trafficking in Stolen Property per ARS 13-2307(B). With the final disposition of 3 Counts of Solicitation, this allowed her to receive a much lower sentence. Initially, Prosecutors wanted to give her a much harsher sentence due to the amount of actual cocaine that ended up on the streets, which was thereby affecting thousands of people.

State v. Ms. C (DMC No. 15373) – Felony Benefits Fraud/Fraudulent Schemes ($7,758 misappropriated from DES Contractor), Felony Conspiracy and Felony Theft – Reduced to Probation with Zero Days of Jail – Maricopa County Superior Court (Case No. 2017-001677).  Ms. C had been working through a company that contracted through DES’ Division of Developmentally Disabled (DDD).  It appeared that she had been overbilling people for services that were never performed.  The company that had contracted with DES discovered that their employee (Ms. C) had inconsistent hours which were being billed on the hard copies as opposed to what was billed on the computer systems.  Once the company had discovered this, they reported the Fraud Scheme to the police.  Multiple checks had been written to Ms. C for work that had never been completed.  These checks total $7,758.  We became involved and began cooperating with the Prosecutor and Detectives in order to secure a reduced sentence.  A co-defendant, who had been part of the scheme, was ultimately charged and convicted of the more serious crimes.  Ms. C was facing several years in prison if she would have been sentenced and convicted on all charges.

State v. Mr. S (DMC No. 14311) – Felony Money Laundering ($3,000,000 from Drug Sales), Felony RICO/Illegally Conducting an Enterprise, Felony Dangerous Drugs For Sale (Heroin) and Felony Marijuana For Sale – Not Charged – Phoenix Police Department (DR No. 20XX-XXXXXXX0) and Arizona Attorney General Investigated.

The Phoenix Police Department had officers working with the Arizona Financial Crimes Task Force (AZFCTF) who were investigating Money Laundering by various drug cartels. They received a tip from the FBI Gang Unit regarding possible Drug Sales and Money Laundering by a local beauty salon. After conducting surveillance, they ultimately pulled over and arrested a person who had 2.5 pounds of heroin in their possession. There was also copies of money transmitter receipts showing large amounts of money consistently being wired into Mexico. The Detectives received different information that this was all occurring out of a beauty salon in Phoenix. The officers then set up surveillance and observed a man and a woman who would constantly answer a specific telephone and talk for about 15 seconds while writing down information. They would then exchange pieces of paper and information with each other. Officers spoke with a customer service agent of OMNEX – the company that services wire transfers in and out of Mexico. The company which actually fulfills the completion of the transaction in and out of Mexico is GIROMEX money transfer services. That service agent was interviewed, and they were able to confirm that it appeared the calls were coming from two separate people who were constantly wiring money into Mexico.

A raid was then executed on the business and a male and female stylist inside the salon were arrested. It turned out they were brother and sister, and there was also an owner, who was arrested, who was also present in the salon. The owner was questioned and admitted that she would receive a list of fictitious names and would create the money transfers which were all sent to Mexico. She also confirmed that the funds were derived from heroin sales. It was estimated that approximately $4 million had been run through the salon.

After the arrests, we were retained by Mr. S (the male hair stylist) in order to see if we could keep him from being charged with any crimes. The owner of the hair salon pled guilty and was sentenced to prison. The other female hair stylist was deported. We were able to work with the Arizona Attorney General’s Office to show them that they could not make a case against Mr. S based upon “opinion” that his voice was the person on the phone who constantly called and made wire transfers. Because they had deported his sister to Mexico, they had lost the only other direct witness who could positively confirm Mr. S. as the person making the wire transfers. Ultimately, the Attorney General sent the case back to Detectives to see if they could gather more information. No more information could be found regarding Mr. S’s involvement, and he was never charged with any crimes.

State v. Mr. L (DMC No. 14773) – Felony Illegal Control of an Enterprise (RICO), Felony Money Laundering and Felony Possession of Marijuana for Sale – Not Charged – Scottsdale Police Department Investigated (DR No. 20XX-XXXXXX9).

Mr. L was an independent contractor who was working to sell e-tickets for various sporting and entertainment events.  He worked out of a side office for the owner who also owned a mail and parcel express service. While he was working there selling event tickets, he learned that the owner was running a business known as Arizona Cancer Center. Basically, he would take “donations” of $250 in exchange for an ounce of marijuana.

This owner of Arizona Cancer Center was not licensed with the Dispensary Department/Medical Marijuana Program with the Arizona Department of Heath Services. At some point, the office was raided by Scottsdale PD and HEAT (High Enforcement Arrest Team). All of Mr. L’s computers and e-ticket company information was seized.

We became involved and we immediately contacted the Scottsdale Police Department. We were able to show that Mr. L had no involvement with the co-conspirators. All people involved were being investigated for Illegal Control of an Enterprise (RICO), per A.R.S. 13-2312A; Conspiracy, per A.R.S. 1003A; Possession of Marijuana for Sale, per A.R.S. 13-3405(a)(4); and Money Laundering, per A.R.S. 13-2317. We explained that Mr. L was an independent contractor who never sold any marijuana, and never received any money for the co-defendants selling of marijuana. In addition, we were able to show the authorities that he was a witness, not a co-conspirator. Although, all of the other members of the conspiracy were charged, Mr. L was never charged with any crimes, and has no felony record.

For a 1 ½ year period, the Drug Enforcement Agency conducted an undercover investigation of various drug trafficking organizations. This particular organization was known for trafficking large amounts of money, marijuana, methamphetamine and cocaine. All of which was imported from Mexico into the United States. Using wire taps and other undercover activities, the DEA observed Mr. K at a high level hotel in Chicago, Illinois exchanging money.

Subsequently, a traffic stop was conducted and Mr. K was found to have a duffel bag containing $84,900 in his possession. Ultimately, indictments of 43 co-conspirators were handed down, of which Mr. K was one. During the investigation with Mr. K, he accepted responsibility and admitted that on five or six other occasions, he went to Mexico and trafficked in money. This was due to severe financial hardship as a result of many years of drought in his home state which affected his farming business.

Due to his cooperation with the Prosecutor, combined with an extensive amount of mitigation, we were able to secure an offer that would allow the Judge to potentially sentence Mr. K to no jail time at all. He was facing 4.5 years minimum if he were to have gone to Trial and been convicted on all counts. Ultimately, Mr. K plead to a reduced charge of Conspiracy to Commit Money Laundering and received Probation with zero days in jail.

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