FBI’s Top Ten News Stories for the Week Ending August 28, 2009

Washington, D.C. August 28, 2009

Houston: Stanford Financial Group CFO Pleads Guilty in Connection with $7 Billion Fraud Scheme

James M. Davis, the former chief financial officer of Houston-based Stanford Financial Group, pled guilty to fraud and obstruction charges related to a $7 billion scheme to defraud investors. Davis was charged with conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct a U.S. Securities and Exchange Commission investigation. The criminal information also seeks forfeiture of up to $1 billion in fraud proceeds.

Albany: Former State Supreme Court Justice Convicted of Attempted Extortion and Bribery

Former New York State Supreme Court Justice Thomas J. Spargo was convicted of attempted extortion and soliciting a bribe. Evidenced introduced at trial showed that Spargo solicited a $10,000 payment from an attorney with cases pending before him in Ulster County.

St. Louis: Two Missouri Lawmakers and Associate Plead Guilty to Federal Obstruction Charges

Missouri State Senator Jeff Smith, Missouri State Representative Mark Brown, and Nicholas Adams pled guilty to federal obstruction charges involving their conspiracy and attempt to obstruct a Federal Election Commission proceeding. In addition, Smith and Adams pled guilty to federal obstruction charges involving their conspiracy and attempt to obstruct a Federal Grand Jury proceeding.

Houston: Six Charged in Domestic Sex Trafficking Case

Five men and one woman were charged in a 16-count indictment with conspiracy and sex trafficking of children and forcing and coercing adults to engage in commercial sex acts. This case represents the single largest domestic sex trafficking case in the history of the Southern District of Texas.

Phoenix: South Phoenix Gangs Disrupted by Operation Tri Dent

The FBI Violent Street Gang Task Force and the Maricopa County Attorney’s Office announced the execution of 14 search warrants and the indictment of over 100 gang members as a result of Operation Tri Dent. The defendants indicted in this matter are charged with drug trafficking, weapons trafficking, aggravated robbery, and conspiracy.

Washington: Former Department of Defense Contractor Sentenced for Scheme to Steal Fuel from U.S. Army in Iraq

Lee William Dubois, a former Department of Defense contractor, was sentenced to three years in prison for his participation in a scheme to steal fuel worth approximately $39.6 million from the U.S. Army in Iraq.

Anchorage: Final Defendant Sentenced in Alaska’s Largest Mortgage Fraud Investigation

Lance Lockard, the final defendant to be sentenced in the largest mortgage fraud investigation in Alaska’s history, was sentenced to 70 months in prison for his leadership of a scheme to defraud 13 mortgage lenders and banks of over $1.7 million in profits and causing over $2.5 million in losses to the financial institutions. In total, nine individuals and one corporate defendant were convicted and sentenced for their roles in the scheme.

Portland: Son of Imprisoned Spy Pleads Guilty to Two Counts of Federal Indictment

Nathaniel James Nicholson pled guilty to conspiracy to act as an agent of the Russian Federation and conspiracy to commit money laundering. Nicholson’s father, Harold J. Nicholson, a former CIA employee, is serving a 283-month sentence for a 1997 conviction of conspiracy to commit espionage. Harold J. Nicholson, working through his son, allegedly received cash proceeds for his past espionage activities from agents of the Russian Federation between 2006 and 2007

San Francisco: Electronics Manufacturer Agrees to Pay $26 Million Fine for Price-Fixing Conspiracy

Japanese electronics manufacturer Epson Imaging Devices Corporation agreed to plead guilty and pay a $26 million criminal fine for its role in a conspiracy to fix prices in the sale of Thin Film Transistor-Liquid Crystal Display panels sold to Motorola Inc.

New York: Nemazee Capital Corporation CEO Charged with Bank Fraud

Hassan Nemazee, the chairman and chief executive officer of Nemazee Capital Corporation, was arrested and charged with bank fraud in connection with a scheme to defraud Citibank, N.A. (Citibank). According to the complaint, Nemazee engaged in a fraudulent scheme to induce Citibank to lend up to $74 million to Nemazee based on false representations that Nemazee owned millions of dollars in collateral.