Patrick Randell McIntosh: Source: Fulton County Sheriff’s Office
BULLETIN: The U.S. Secret Service, the FBI and federal prosecutors in the Northern District of Georgia say a South Carolina man threatened on Facebook to kill the President of the United States.
Patrick Randell McIntosh, 28, of Charleston, was indicted on charges of possessing three firearms and ammunition while under indictment for a felony and for threatening the life of the President.
“Threats against the president of the United States and others we are statutorily authorized to protect are the Secret Service’s number one investigative priority,” said Reginald G. Moore, special agent in charge of the Secret Service Atlanta Field Office. “Every threat, no matter if made by telephone, in person, in writing, or on social media is examined to the fullest extent possible.”
The FBI and the Atlanta Police Department assisted in the probe, prosecutors said.
Today’s announcement of the McIntosh indictment marked the second time this week that an individual who allegedly used Facebook to threaten public officials was charged criminally. Lawrence Mulqueen, 49, was charged in New York with threatening to kill local, state and federal officials, including a threat to kill “every Congressional Black Caucus member there is.”
From a statement in the McIntosh case by the office of U.S. Attorney Sally Quillian Yates (italics added):
According to United States Attorney Yates, the charges, and other information presented in court, McIntosh posted on his Facebook page his intention to shoot patrons at a local Atlanta lounge and to kill the president of the United States. After posting the various threats, the defendant purchased three firearms from individuals who advertised weapons for sale.
McIntosh also threatened a woman in the Atlanta area. The woman reported to Gwinnett County authorities that McIntosh was stalking her. She gave police the location of a hotel where McIntosh was staying. Law enforcement officers subsequently arrested McIntosh at the location and recovered guns and ammunition in his possession.
The threat against the President and the acquisition of the weapons occurred after McIntosh had been indicted in South Carolina for felony stalking, prosecutors said.
EDITOR’S NOTE: The PP Blog first reported on the arrest in France of alleged international fraudster Vladislav Anatolievich Horohorin on Aug. 11, 2010. The arrest came as the result of an undercover operation the U.S. Secret Service conducted on online forums.
As the Blog reported at the time, “The arrest of Vladislav Horohorin is notable on a number of levels. First, the arrest in Europe was a result of an online fraud scheme that allegedly crossed international borders and made its way to the United States, where criminal charges were filed. At the same time, the crime allegedly involved the transfer of money though international payment processors. Perhaps more than anything, however, the case against Horohorin demonstrates that the U.S. Secret Service is “plugged into” forums that promote international lawlessness. His arrest is very bad news for credit-card crooks and HYIP and autosurf Ponzi schemers — and their corrupt colleagues.”
Today the PP Blog is reporting that the United States successfully arranged the extradition of Horohorin. His first court appearance was made in the District of Columbia, the venue from which the AdSurfDaily Ponzi case brought by the Secret Service is playing out. The office of U.S. Attorney Ronald C. Machen Jr., which was instrumental in guiding the ASD case, is in charge of certain elements of the Horohorin case.
The office of U.S. Attorney Sally Quillian Yates of the Northern District of Georgia also is handing elements of the Horohorin prosecution.
The allegations in the case are alarming: “According to the indictment filed in the Northern District of Georgia, Horohorin was one of the lead cashers in an elaborate scheme in which 44 counterfeit payroll debit cards were used to withdraw more than $9 million from over 2,100 ATMs in at least 280 cities worldwide in a span of less than 12 hours,” the Justice Department said in a statement. “Computer hackers broke into a credit card processor located in the Atlanta area, stole debit card account numbers, and raised the balances and withdrawal limits on those accounts while distributing the account numbers and PIN codes to lead cashers, like Hororhorin, around the world.”
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UPDATE: Alleged international credit-card fraudster Vladislav Anatolievich Horohorin, also known as “BadB,” is in an American jail after an undercover probe on online forums by the U.S. Secret Service and a parallel investigation by the FBI.
Ronald C. Machen Jr., U.S. Attorney for the District of Columbia
“We are pleased that he has been extradited to the United States to face these criminal charges in a District of Columbia courtroom,” said U.S. Attorney Ronald C. Machen Jr. of the District of Columbia. “This prosecution demonstrates that those who try to rip off Americans from behind a computer screen across an ocean will not escape American justice.”
Horohorin, whose age was listed as 27 after his August 2010 arrest in France on U.S. charges, also will be prosecuted in U.S. District Court for the Northern District of Georgia.
“International cyber criminals who target American citizens and businesses often believe they are untouchable because they are overseas,” said U.S. Attorney Sally Quillian Yates of the Northern District of Georgia. “But as this case demonstrates, we will work relentlessly with our law enforcement partners around the world to charge, find and bring those criminals to justice.”
News of Horohorin’s extradition by France to U.S. soil occurred against the backdrop of claims by an HYIP “program” known as JSS Tripler/JustBeenPaid that members must affirm they are not with the “government” and that the “program” is not located in any “unfriendly political jurisdictions.”
A JSS/JBP “defender” known as “MoneyMakingBrain” asserted in March that “law enforcement agencies don’t pay attention to what’s being said on forums and blogs.” The claim was at odds with various public records that show U.S. law enforcement pays close attention to forums and Blogs and even conducts undercover operations by infiltrating forums.
Among other things, “MoneyMakingBrain” asserted he’d defend JSS/JBP’s purported operator Frederick Mann “so help me God.” The PP Blog became the subject of threats from “MoneyMakingBrain.” JSS/JBP, which uses offshore payment processors, purports to provide a return of 60 percent a month, has no known securities registrations and may have ties to the “sovereign citizens” movement.
Underscoring the importance of the Horohorin arrest and extradition, Machen and Yates were joined in the announcement by the head of the U.S. Department of Justice’s Criminal Division and top officials from both the U.S. Secret Service and the FBI.
Horohorin, said Assistant Attorney General Lanny Breuer, was “one of the most notorious credit card traffickers in the world.”
“Due to our strong relationships with our international law enforcement partners, we secured his extradition to the United States, where he now faces multiple criminal counts in two separate indictments,” Breuer said. “We will continue to do everything we can to bring cybercriminals to justice, including those who operate beyond our borders.”
A top U.S. Secret Service official, meanwhile, said the agency viewed the alleged Horohorin caper as an “attack” on America’s financial system.
“The Secret Service is committed to identifying and apprehending those individuals that continue to attack American financial institutions and we will continue to work through our international and domestic law enforcement partners in order to accomplish this,” said David J. O’Connor, assistant director of investigations.
In addition to providing security for the President of the United States, the Secret Service is in charge of protecting America’s financial infrastructure. The agency has described AdSurfDaily as a “criminal enterprise,” with the Justice Department asserting that ASD was an example of an “insidious” business that permitted fraud to spread globally.
Just two days after Horohorin’s first appearance in a U.S. courtroom in the District of Columbia, AdSurfDaily members Todd Disner and Dwight Owen Schweitzer claimed that the federal prosecutors who brought the ASD Ponzi case in August 2008 had gone shopping for a “frendly [sic] forum” in which the government could enlist “some of their Washington D.C. operatives to become members of ASD, thereby making them potential witnesses.”
Disner and Schweitzer sued the United States in November 2011 for alleged misdeeds in the ASD case. Among other things, Disner and Schweitzer asserted that undercover agents who joined ASD had a duty to inform ASD management. The Secret Service described ASD as a massive online Ponzi scheme involving at least $110 million. ASD President Andy Bowdoin pleaded guilty to wire fraud last month, admitting ASD was a Ponzi scheme and that the company never operated legally from its inception in 2006.
Disner and Schweitzer now are affiliates for Zeek Rewards, a “program” that plants the seed it can provide an ASD-like return of 1 percent or more per day without being a pyramid scheme and without constituting an investment opportunity. The payout Zeek plants the seed it can provide is on par with the returns advertised by JSS Tripler/JustBeenPaid, which does not disclose its base of operations.
A top FBI official said the arrest of Horohorin showed that international agencies are working together to divorce criminals from their abilities to use computers to reach across borders to pull off egregious crimes.
“Horohorin’s extradition to the United States demonstrates the FBI’s expertise in conducting long-term investigations into complex criminal computer intrusions, resulting in bringing the most egregious cyber criminals to justice, even from foreign shores,” said Brian D. Lamkin , special agent in charge of the Atlanta division. “The combined efforts of law enforcement agencies to include our international partners around the world will ensure this trend continues.”
Court and other records show that Horohorin, like ASD, had a presence in both the District of Columbia and the Northern District of Georgia.
BULLETIN: Two men — one from Salt Lake City, the other from Belleville, Ontario — have been charged by federal prosecutors in Atlanta with operating a Ponzi and fraud scheme in which tens of millions of dollars mysteriously disappeared overseas.
Thomas Repke, 57, was arraigned today in Atlanta. Prosecutors said he worked with the Canadian man, James Jeffery, 58, to fleece more than $30 million from investors.
“This indictment alleges a major international investment fraud scheme that defrauded over 100 victims around the country out of tens of millions of dollars, most of which has been transferred to overseas accounts,” said U.S. Attorney Sally Quillian Yates.
The scheme began in 2006 and centered around a company known as Coadum Capital in which investors were told that they were purchasing shares in hedge funds and that their investment capital was kept in “escrow” accounts and thus not at risk. Participants expected to earn up to 5 percent a month.
“[A]lthough investors were instructed to and did transmit much of their funds to one or more supposed ‘escrow’ accounts, including one in Atlanta, the money did not stay in any such account,” prosecutors said. “Rather, unbeknownst to investors, Repke and Jeffery transferred over $20 million overseas to accounts in Switzerland and the Mediterranean island of Malta.
“This money was supposedly invested in a series of hedge funds or other investments operated by a supposed Malta-based trader,” prosecutors said.
But the investments “produced no earnings at all,” prosecutors said. “[B]y the end of 2007 only a fraction of the transferred funds remained deposited in these European accounts.”
Regardless, Repke and Jeffery “continued to send account statements every month to investors continuing to represent that their funds remained intact, preserved in escrow accounts, and that monthly earnings of 3-5% continued to accrue,” prosecutors said.
Both Repke and Jeffery had “no control” over the overseas accounts — accounts “about which they received little or no information,” prosecutors said.
Investigators obtained correspondence that showed Repke and Jeffery both “were frustrated in their repeated requests to obtain information about where the funds were being held, how they were being used by the trader, and whether and to what extent earnings were being generated,” prosecutors said.
The SEC referred the case for criminal investigation after bringing an administrative action and lawsuit against Repke and Jeffery in 2008, according to records.
“Those who prey on the investing public in this way will continue to find themselves facing federal felony charges,” Yates said.
The investigation was coordinated by the Financial Fraud Enforcement Task Force. prosecutors said Jeffery had not yet made his initial court appearance in the case.
Repke potentially faces decades in prison, if convicted. He was charged with multiple counts of mail fraud, wire fraud and conspiracy.
(NOTE: The SEC complaint references a Malta company known as “Exodus Equities Inc,” which apparently was tied to an entity known as “Exodus Platinum Genesis Fund Ltd.” Also of note for additional case information/filings is the website of Pat Huddleston, the court-appointed receiver in the SEC case.)
A Georgia banker accused of lending a now-accused Florida real-estate fraudster money to buy a “private island” in the Caribbean has pleaded guilty to conspiracy to commit bank fraud and to receive bribes, and to a single count of tax evasion, federal prosecutors said.
Douglas Ballard, 40, of Atlanta, formerly was the executive vice president in charge of lending at Integrity Bank, a $1 billion institution that collapsed in August 2008 and was taken over by the Federal Deposit Insurance Corp. (FDIC).
“Among the roots of our nation’s financial crisis were criminal acts by bank insiders and major borrowers that contributed to the failures or bailouts of financial institutions previously believed to be secure,†said U.S. Attorney Sally Quillian Yates of the Nortern District of Georgia.
Ballard, Mitchell and Joseph Todd Foster, another Integrity vice president, were indicted under seal in April. Mitchell, 50, of Coral Gables, Fla., is a developer. Foster, 42, of Atlanta, was in charge of risk management at the bank.
Prosecutors now say Ballard has admitted that he conspired with Mitchell “to receive bribes from Mitchell and to assist Mitchell in receiving millions in loan draws under false pretenses.”
Ballard, prosecutors said, “admitted in court to receiving over $200,000 in cash and other corrupt payments from Mitchell in exchange for Ballard’s assistance in distributing millions of loan draws.
“During this same time, Ballard caused Integrity Bank to distribute nearly $20 million in loan proceeds to Mitchell’s personal account, much of which was allegedly used for Mitchell’s personal consumption (including the purchase of a private island in the Bahamas),” prosecutors said.
About $7 million of the sum was related to draws on a “construction loan relating specifically to supposed construction and renovation at the ‘Casa Madrona,’ a luxury hotel owned by Mitchell in Sausalito, Calif.
“The indictment alleges that none of this money was used for construction, and in fact no renovations had occurred,” prosecutors said.
“While Mitchell was spending much of the loan proceeds on himself, the indictment alleges that [he] paid little, if any, of his money back to Integrity to satisfy interest payments,” prosecutors said in May.
Instead, prosecutors alleged, “Mitchell paid interest on existing loans by taking draws or disbursements from other loans, and continually borrowed more and more money to keep paying the ever-increasing interest payments.”
For his part, Foster pleaded guilty to securities fraud amid allegations of insider trading.
Prosecutors said Foster “dumped his shares of Integrity stock based on his knowledge that the bank was facing an increasingly substantial but undisclosed risk that its major customer, Mitchell, would default on over $80 million in outstanding loans.”
“These officers of Integrity Bank sure weren’t living up to the bank’s name,” Yates said in May, after the April indictments were unsealed. “While the developer was living the good life, even buying a private island with Integrity’s money, and the bank’s senior loan officer was making huge commissions and taking payoffs from the developer, the bank was dying a slow death. The defendants were going to leave the bank’s shareholders and the FDIC holding the bag, but now they are being held accountable.â€
The case was brought as part of the undertakings of President Obama’s Financial Fraud Enforcement Task Force.
Mitchell paid about $1.5 million for the private island in the Bahamas, prosecutors said.
“Those who line their pockets with profits of bank fraud schemes should know they will not go undetected and they will be held accountable,†said Reginael McDaniel, special agent in charge of the IRS Criminal Investigations unit.
No sentencing dates have been set for Ballard and Foster. Ballard faces up to 10 years in prison and a fine of up to $500,000. Foster faces up to 20 years in prison and a fine of up to $5 million.
