GCIS INTELLIGENCE BRIEFING: CEO of Telecommunications Company Pleads Guilty in Foreign Bribery Conspiracy

 

ISSUED BY: GCIS Communications Command Center

SOURCE: FBI

19May2011 6:25pmEST

GCIS INTELLIGENCE UPDATE:  WASHINGTON—Jorge Granados, the former chief executive officer of Miami-based telecommunications company Latin Node Inc. (LatiNode), pleaded guilty today to conspiring to pay bribes to government officials in Honduras, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. To date, four former senior executives of LatiNode have pleaded guilty to conspiring to pay bribes to the Honduran officials.

Granados, 54, pleaded guilty before U.S. District Judge Joan A. Lenard in U.S. District Court in Miami to conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA).

"Jorge Granados today admitted to authorizing illegal bribe payments to Honduran officials, and now he must pay for his crime," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "Foreign bribery undermines competition in the marketplace and weakens democratic institutions. CEOs and other corporate executives should know that now, more than ever, violating the Foreign Corrupt Practices Act will lead to criminal prosecution."

"Today's plea reflects the FBI's commitment to aggressively pursue individuals and businesses that engage in corruption around the globe," said Special Agent in Charge John V. Gillies of the FBI's Miami Field Office. "Those who elect to pay illegal bribes to further their business interests in the United States or abroad should know that they are not beyond the reach of the FBI. We will work with our law enforcement partners and prosecutors to bring these corrupt individuals to justice."

"Business executives should beware that paying bribes in foreign countries leads to prosecution in the United States," said U.S. Immigration and Customs Enforcement (ICE) Director John Morton. "Our Foreign Corruption Investigative group will continue to provide resources and support to our international partners in an effort to fight corrupt business practices.

According to court documents, LatiNode provided wholesale telecommunications services using Internet protocol technology to countries throughout the world, including Honduras. In December 2005, LatiNode learned that it was the sole winner of an "interconnection agreement" with Empresa Hondureña de Telecomunicaciones (Hondutel), the wholly state-owned telecommunications authority in Honduras. The agreement permitted LatiNode to use Hondutel's telecommunications lines in order to establish a network between Honduras and the United States, and to provide long distance services between the two countries.

According to court documents, Granados and other LatiNode executives, including Manuel Salvoch, the chief financial officer; Manuel Caceres, the vice president for business development; and Juan Pablo Vasquez, the chief commercial officer, agreed to a secret deal to pay bribes to Hondutel officials, including the general manager, a senior attorney for Hondutel, and a minister of the Honduran government who became a representative on the Hondutel board of directors. According to court documents, between September 2006 and June 2007, LatiNode executives paid more than $500,000 in bribes to the Honduran officials, concealing many of the payments by laundering the money through LatiNode subsidiaries in Guatemala and to accounts in Honduras controlled by the Honduran government officials. Granados admitted that he authorized bribe payments.

At sentencing, scheduled for Aug. 22, 2011, Granados faces up to five years in prison and a fine of the greater of $250,000, or twice the value gained or lost.

On April 7, 2009, LatiNode pleaded guilty to a one-count information charging the company with a criminal violation of the FCPA. As part of the plea agreement, LatiNode agreed to pay a $2 million fine. The resolution of the criminal investigation of LatiNode reflected, in large part, the actions of eLandia International Inc. in disclosing potential FCPA violations to the department after eLandia's acquisition of LatiNode in 2007 and discovery of the improper payments. Granados and Caceres were charged in a Dec. 14, 2010, indictment with violations of the FCPA and international money laundering. On Dec. 17, 2010, criminal informations were filed against Salvoch and Vasquez, charging them with conspiracy to violate the FCPA. Salvoch, Vasquez, and Caceres pleaded guilty to conspiracy to violate the FCPA on Jan. 12, 2011, Jan. 21, 2011, and May 18, 2011, respectively. The three defendants face prison sentences of up to five years.

The case is being prosecuted by Acting Senior Deputy for Litigation Jeffrey H. Knox and Trial Attorney Amanda Aikman of the Criminal Division's Fraud Section. Significant assistance was provided by Trial Attorney James M. Koukios. The case was investigated by the FBI's Miami Field Office and ICE Homeland Security Investigation's Foreign Corruption Investigations Group in Miami.

(read full report)

"GCIS INTELLIGENCE UPDATE" is an intelligence briefing presented by Griffith Colson Intelligence Service, and provided to the public for informative purposes only. All subject matter is credited to it's source of origin, and is not intended to represent original content authored by GCIS, it's partners or affiliates. All opinions presented are those of the author, and not necessarily those of GCIS or it's partners.

GCIS INTELLIGENCE BRIEFING: Goldman Sachs Computer Programmer Sentenced for Stealing Trade Secrets

ISSUED BY: GCIS Communications Command Center

SOURCE: FBI

21March2011 1:31pmEST

GCIS INTELLIGENCE UPDATE:  PREET BHARARA, the United States Attorney for the Southern District of New York, announced that SERGEY ALEYNIKOV, a former computer programmer at Goldman Sachs & Co. (“Goldman Sachs”) was sentenced today in Manhattan federal court to 97 months in prison for stealing valuable, proprietary computer code of Goldman Sachs. A jury in Manhattan federal court previously found ALEYNIKOV guilty on December 10, 2010, of theft of trade secrets and interstate transportation of stolen property charges. U.S. District Judge DENISE L. COTE imposed the sentence on ALEYNIKOV.

Manhattan U.S. Attorney PREET BHARARA said: “Protecting the proprietary information of America’s companies is critically important. Today’s sentence sends a clear message that professionals like Sergey Aleynikov who abuse their positions of trust to steal confidential business information from their employers will be prosecuted and punished.”

According to the evidence presented at trial and at the sentencing hearing:

From May 2007 to June 2009, ALEYNIKOV was employed at Goldman Sachs as a computer programmer responsible for developing computer programs supporting the firm’s high-frequency trading on various commodities and equities markets. Since acquiring the system in 1999 for approximately $500 million, Goldman Sachs modified and maintained it and took significant measures to protect the confidentiality of its computer programs. Goldman Sachs’ trading system generated millions of dollars per year in profits for the firm. They took several measures to protect the system’s source code, including requiring all Goldman employees to agree to a confidentiality agreement.

In April 2009, ALEYNIKOV resigned from Goldman Sachs and accepted a job at Teza Technologies (“Teza”), a newly-formed company in Chicago, Illinois. He was hired to develop Teza’s own version of a computer platform that would allow Teza to engage in high-frequency trading. His last day of employment at Goldman Sachs was June 5, 2009.

Beginning at approximately 5:20 p.m. on June 5, 2009—his last day working at Goldman Sachs—ALEYNIKOV, from his desk at Goldman Sachs, transferred substantial portions of the firm’s proprietary computer code for its trading platform to an outside computer server in Germany. He encrypted the files and transferred them over the Internet without informing Goldman Sachs. After transferring the files, he deleted the program he used to encrypt them and deleted his computer's “bash history,” which records the most recent commands executed on his computer.

In addition, throughout his employment at Goldman Sachs, ALEYNIKOV transferred thousands of computer code files related to the firm’s proprietary trading program from the firm’s computers to his home computers, without the knowledge or authorization of Goldman Sachs.

On July 2, 2009, ALEYNIKOV flew to Chicago, Illinois, to attend meetings at Teza’s offices, bringing with him his laptop computer and another storage device, each of which contained Goldman Sachs’ proprietary source code. He was arrested on July 3, 2009, as he arrived at Newark Airport following that visit.

In addition to the prison sentence, Judge COTE ordered ALEYNIKOV to serve three years of supervised release following his prison sentence. Judge COTE also ordered him to pay a $12,500 fine.

During the sentencing proceeding, Judge COTE said, “[Aleynikov’s] conduct deserves a significant sentence because the scope of his theft was audacious—motivated solely by greed, and it was characterized by supreme disloyalty to his employer.”

Mr. BHARARA praised the investigative work of the FBI in this case. Mr. BHARARA also thanked Goldman Sachs for its cooperation in the investigation. (read full report)

"GCIS INTELLIGENCE UPDATE" is an intelligence briefing presented by Griffith Colson Intelligence Service, and provided to the public for informative purposes only. All subject matter is credited to it's source of origin, and is not intended to represent original content authored by GCIS, it's partners or affiliates. All opinions presented are those of the author, and not necessarily those of GCIS or it's partners.

GCIS INTELLIGENCE BRIEFING: Previously Convicted Cambridge Sex Offender Pleads Guilty to Possessing Child Pornography

Also Admits to Sexually Exploiting Two Minor Girls to Produce Child Pornography

ISSUED BY: GCIS Communications Command Center

SOURCE: FBI

17March2011 9:18pmEST

GCIS INTELLIGENCE UPDATE: BALTIMORE, MD—Shane Stoner, age 28, of Cambridge, Maryland, pleaded guilty today to possession of child pornography.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; Chief Kenneth W. Malik of the Cambridge Police Department; and Dorchester County State’s Attorney William H. Jones.

According to the plea agreement, during at least October and November 2009, Stoner engaged in sexually explicit conduct with a 15-year-old girl. On November 8, 2009, Stoner took nude photographs of the girl. Beginning no later than July 2009, and continuing through February 2010, Stoner engaged in sexually explicit conduct with another 15-year-old girl and on January 14, 2010, Stoner photographed his sexual abuse of the minor girl.

On February 17, 2010, members of the Cambridge Police Department searched Stoner’s residence in Cambridge, and recovered the photos of the two minor girls from a memory card found in the home.

As part of his plea agreement, Stoner must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).

On May 22, 2002, Stoner pleaded guilty in the Circuit Court for Dorchester County, Maryland to a fourth degree sex offense and was sentenced the same day to one year in prison, nine months of which were suspended.

Since Stoner has a prior conviction relating to sexual abuse of a minor, he faces a minimum mandatory sentence of 10 years in prison and a maximum of 20 years in prison, followed by up to lifetime of supervised release. U.S. District Judge William M. Nickerson, has scheduled sentencing for June 8, 2011 at 9:30 a.m.

Stoner is currently serving a sentence of 20 years in prison, with five years suspended, on related state charges, as well another four-and-a-half years for violation of probation on his previous conviction.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov. Details about Maryland’s program are available at www.justice.gov/usao/md/Safe-Childhood/index.html.

United States Attorney Rod J. Rosenstein commended the FBI, Cambridge Police Department, and the Dorchester County State’s Attorney’s Office for their work in this investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorney Paul E. Budlow, who prosecuted the case. (read full report)

"GCIS INTELLIGENCE UPDATE" is an intelligence briefing presented by Griffith Colson Intelligence Service, and provided to the public for informative purposes only. All subject matter is credited to it's source of origin, and is not intended to represent original content authored by GCIS, it's partners or affiliates. All opinions presented are those of the author, and not necessarily those of GCIS or it's partners.