Phoenix Central Neighborhood Association

Miko Dion Wady, 36, of Phoenix, Arizona, was sentenced late Monday by U.S. District Judge James A. Teilborg to nine years? imprisonment and ordered to pay over $30 million in restitution and perform 250 hours of community service. Wady previously pleaded guilty to five counts of wire fraud and five counts of transactional money laundering.

At sentencing Judge Teilborg also ordered that Wady forfeit numerous seized items, and the proceeds from the sale of additional seized items, including a 41 foot Rinker Express Cruiser boat, a Ferrari, over $100,000 held in cash and accounts, jewelry, firearms and recreational equipment including a Weekend Warrior 5th wheel trailer.

?This individual sought to profit by creating a sophisticated money laundering scheme designed to scam investors out of their money,? said Acting U.S. Attorney Ann Birmingham Scheel. ?The court?s stiff sentence reflects the seriousness of his crime and this office?s resolve to prosecute individuals who profit from unsuspecting investors.?

In the course of his guilty plea, Wady admitted that he operated and had an ownership interest in various business enterprises that purportedly were engaged in the business of promoting concerts or tours of well known entertainers and artists. The enterprises included Dezert Heat Entertainment, Inc.; Dezert Heat, Inc.; Dezert Heat Worldwide, LLC; NATO Enterprises, LLC; and NATO Entertainment, LLC.

Wady admitted that he and others misled victim investors into believing that Wady entered into performance contracts and other business arrangements with nationally and internationally known entertainers, arranged performance venues throughout the world, and greatly profited by putting on these concert or tour events. Wady, with the assistance of others, falsely claimed during the period 2004 through 2007 to have promoted concerts for at least forty artists and entertainers, including many who were nationally and internationally known.

Through various entities and associates, Wady obtained victim investor funds to finance purported concerts and tours supposedly being promoted by Wady. From at least August 2004 through March 2007, Wady and associates entered into loan and event funding agreements, totaling approximately fifty million dollars, with approximately 250 victim investors. The ?investments? were purportedly to finance approximately 150 concerts or concert tours ?promoted? by Wady. At the time of Wady?s sentencing, approximately 240 investors and groups of investors were known to have sustained losses totaling $30,040,197.

The ?investment? loan agreements victim investors entered into regularly specified that each ?investment? loan was for the financing of a particular concert or tour of a designated performer. The ?investment? loan terms regularly called for repayment to the victim investors within 30 days after receipt of the net concert proceeds for the designated concert or tour. Victim investors were typically promised interest rates of 4 percent per month for the first two months, and 2.5 percent per month thereafter until the investment loans were repaid.

Upon receipt of victim investor funds by associates of Wady, the associates transferred the funds to Wady for the purported financing of concert or tour events. Because Wady had no association or contractual arrangement with any of the concerts or tours, the investor funds given to Wady by his associates were never actually used as represented to the victim investors. Most of the funds were instead returned by Wady to his associates within a short period of time, typically one or two days, under the guise that these repayments represented the net proceeds from some other concert or tour that was recently completed. In essence, because no actual investments were used for the represented concerts or tours, new victim investor monies were simply used to repay old victim investors. From beginning to end, this was primarily a Ponzi scheme. The Ponzi scheme collapsed in March 2007.

From January 2004 through March 2007, Wady used no less than three million dollars of victim investor funds to pay for his lavish lifestyle. During this period, Wady purchased for himself and others, at least 30 vehicles, including a Lamborghini, Ferrari, and Bentley. Wady also purchased a $175,000 luxury boat and $800,000.00 in real estate. All of these purchases were paid from funds Wady obtained from victim investors.

The investigation in this case was conducted by the Federal Bureau of Investigation, the U.S Postal Inspection Service and the Internal Revenue Service - Office of Criminal Investigation with assistance from the Maricopa County Sheriff?s Office and the Mesa Police Department. The prosecution is being handled by Frederick A. Battista and Peter Sexton, Assistant U.S. Attorneys, District of Arizona, Phoenix.

CASE NUMBER: CR 09-1485-PHX-JAT

RELEASE NUMBER: 2011-255(Wady)

Source: FBI - Phoenix, AZ Office

Former Fiesta Bowl Chief Operating Officer Indicted
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A federal grand jury in Phoenix returned a nine-count indictment yesterday against Natalie Wisneski, 47, of Tempe, Ariz., for making campaign contributions in the name of another, causing false statements to be made to the federal election commission, filing false tax returns and conspiring to commit the above offenses.

The indictment alleges that Wisneski, as an officer and high-paid employee of the Fiesta Bowl, solicited campaign contributions from Fiesta Bowl employees for federal, state, and local candidates for elective office, and arranged to reimburse the employees for their contributions with Fiesta Bowl money.

Reimbursement for federal campaign contributions is prohibited under the Federal Election Campaign Act, and it also causes the political campaigns to file false information with the Federal Election Commission as to the identity of the true donor. The federal campaigns identified in the indictment have cooperated in the investigation, and no evidence suggests that the campaigns knew that the Fiesta Bowl reimbursed its employees.

The indictment also alleges that Wisneski filed false tax returns on behalf of the Fiesta Bowl when she denied in the tax returns that the Fiesta Bowl had any lobbying expenses or political expenditures. Wisneski will be summonsed to appear for her arraignment on Nov. 30, 2011, at 10:30 a.m. The overall investigation continues, and the Fiesta Bowl organization continues to cooperate with the investigation.

A conviction for conspiracy carries a maximum penalty of five years, a $250,000 fine or both. A conviction for making campaign contributions in the names of others in an amount greater than $10,000 in a single calendar year is punishable as a felony, and carries a maximum penalty of two years, a $250,000 fine or both; A conviction for making campaign contributions in the names of others in an amount between $2,000 and $10,000 in a single calendar year is punishable as a misdemeanor, and carries a maximum penalty of one year, a $100,000 fine or both.

A conviction for false statements carries a maximum penalty of five years, a $250,000 fine or both, and a conviction for filing false tax returns carries a maximum penalty of three years, a $250,000 fine or both.

An indictment is simply a method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

The investigation has been conducted by the FBI and the Internal Revenue Service - Criminal Investigation. Federal prosecutors and agents have also worked with state of Arizona prosecutors and agents who are participating in the continuing investigation conducted by the Arizona Attorney General?s Office.

The federal prosecution is being handled by Frank T. Galati and Gary M. Restaino, Assistant U.S. Attorneys from the District of Arizona?s Phoenix Office.

Source: FBI - Phoenix, AZ Office

Former Arizona Army National Guard Member Charged with Participating in Bribery and Drug Trafficking Conspiracy
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A former member of the Arizona Army National Guard was charged today for his alleged role in a widespread bribery and illegal drug trafficking conspiracy that operated from January 2002 through March 2004, announced Assistant Attorney General Lanny A. Breuer of the Justice Department?s Criminal Division.

The 10-count indictment returned today in U.S. District Court in Arizona charges Adalberto Valenzuela, 31, of Tucson, Ariz., with two counts of conspiracy, two counts of bribery, two counts of bribery involving programs receiving federal funds, two counts of Hobbs Act extortion under color of official right and two counts of possession with intent to distribute cocaine. The charges arise from Operation Lively Green, an undercover FBI investigation that began in December 2001.

According to the indictment, Valenzuela was a corporal in the Arizona Army National Guard at the time he participated in the conspiracy. Valenzuela allegedly conspired to enrich himself by obtaining cash bribes from individuals he believed to be illegal narcotics traffickers, but who were actually FBI agents. The indictment alleges that in return for the bribes, Valenzuela used his official position as a corporal in the Arizona Army National Guard to assist, protect and participate in the activities of an illegal narcotics trafficking organization that was transporting and distributing cocaine within Arizona and from Arizona to other locations in the southwestern United States. In order to protect the shipments of cocaine, Valenzuela allegedly wore official uniforms and carried official forms of identification, used official vehicles, and used his official authority where necessary to prevent police stops, searches and seizures of the narcotics.

According to the indictment, Valenzuela transported cocaine on two separate occasions and, as a result, received bribe payments totaling $7,000 for the 40 kilograms of cocaine involved.

In 2006, an arrest warrant was issued for Valenzuela. Repeated attempts to locate and contact him have been unsuccessful. Valenzuela is now considered a fugitive and anyone with information regarding his whereabouts is encouraged to contact their local FBI office.

If convicted on the conspiracy charges, Valenzuela faces a maximum of five years in prison. The bribery and Hobbs Act charges each carry maximum prison sentences of 20 years. The federal program bribery charges each carry a maximum penalty of 10 years in prison, as do each of the drug conspiracy and possession charges. Valenzuela also faces a maximum $250,000 fine for each charged count.

To date, 57 additional defendants have been convicted and sentenced on related charges as part of Operation Lively Green. An additional 14 defendants have pleaded guilty in the Western District of Oklahoma in a related investigation known as Operation Tarnish Star.

Operation Lively Green cases are part of a joint investigation being conducted by the Southern Arizona Corruption Task Force (SACTF), which includes the FBI, the Drug Enforcement Administration, the U.S. Immigration and Customs Enforcement at the Department of Homeland Security, and the Tucson Police Department. The Arizona Air National Guard, Air Force Office of Special Investigations, Defense Criminal Investigative Service and the Criminal Investigation Division of the Internal Revenue Service are also participating in the investigation.

The case is prosecuted by Trial Attorneys Peter Koski and Monique Abrishami of the Criminal Division?s Public Integrity Section.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.

Source: FBI - Phoenix, AZ Office

Phoenix Man Pleads Guilty to Defrauding 1,800 Victims in Foreclosure Rescue Scam
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Luis Belevan, 34, of Phoenix, pleaded guilty in federal court to conspiring to commit wire fraud and mail fraud. Belevan and his co-conspirator, were charged with defrauding at least 1,800 local distressed homeowners out of a $1,595 up-front fee for bogus promises of assistance in avoiding home foreclosure in 2009 and 2010.

?This defendant, owner of The Guardian Group, LLC, left over 1,800 victims in his wake,? said Acting U.S. Attorney Ann Birmingham Scheel. ?The defendant used false promises on the company website to convince consumers that it could help them save their home?if the homeowner paid an upfront fee. The unfortunate reality was that the homeowners were never helped and they were scammed out of their hard-earned money. I want to thank the FBI for its work in this investigation and its continued efforts to address mortgage fraud.?

Special Agent in Charge, Phoenix Division, James L. Turgal, said, ?The Phoenix metropolitan area has been severely impacted by the vast number of housing foreclosures. In many instances, a frustrated public, desperate to save their homes, have turned to re-modification companies, only to find empty promises and no relief. The plea of Belevan illustrates but one example of an individual taking advantage of the public?s trust and vulnerability by defrauding the public for their own personal gain. The FBI?s Mortgage Fraud Task Force and the United States Attorney?s Office will continue to investigate and prosecute those involved in foreclosure rescue scams to the fullest extent of the law.?

Belevan admitted in his guilty plea proceedings to telling homeowners who were unable to make their mortgage payments that his company, The Guardian Group, would purchase and refinance their mortgages based on the lower property values that followed the housing market crash of 2007.

Belevan falsely claimed that his company had access to a $40 billion hedge fund for this purpose, when it actually had no financing at all. Belevan?s company charged each homeowner a $1,595 up front fee, generating almost $3 million in funds in just nine months, which he and others used for personal expenses and for other failed business ventures.

A conviction for conspiracy carries a maximum penalty of five years? imprisonment, a $250,000, or both. In determining an actual sentence, the judge will consult the U.S. Sentencing Guidelines, which provide appropriate sentencing ranges. The judge, however, is not bound by those guidelines in determining a sentence.

As part of his plea agreement, Belevan agreed to pay restitution to the victims in the amount of $2,871,000.

Sentencing is set before Judge Teilborg on January 9, 2012.

The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution is being handled by Monica Klapper, Assistant U.S. Attorney, District of Arizona, Phoenix.

CASE NUMBER: CR-11-2025-PHX-JAT
RELEASE NUMBER: 2011-230(Belevan)

Source: FBI Phoenix

Arizona Man Sentenced to Federal Prison for Counterfeit Software Conspiracy
- Christopher Loring Walters, 31, of Laveen, Ariz., was sentenced yesterday by U.S. District Judge G. Murray Snow to 27 months in federal prison. Walters pleaded guilty on February 24, 2011, to one count of conspiracy, one count of mail fraud, and one count of criminal copyright Infringement for his role in selling counterfeit brand-name software.

?Intellectual property crimes rob legitimate companies of revenue and deny customers quality, licensed products,? says Ann Birmingham Scheel, Acting U.S. Attorney for the District of Arizona. ?We appreciate the diligence of the Software & Information Industry Association for bringing this case to the attention of our law enforcement partners.?

?Software counterfeiters cost legitimate businesses billions in lost revenue,? said FBI Special Agent in Charge James L. Turgal, Jr. ?Investigating intellectual property theft is a top priority of the FBI?s Cyber Program and we will continue to work with our partners in law enforcement to combat these types of crimes.?

Between November 2003 and February 2006, Walters and his co-defendant, Matthew Purse, deceived consumers by mass producing counterfeit copies of brand-name software, from companies such as Adobe, Symantec, and others, and selling them for a discounted price over the Internet while claiming to be authorized distributors. They sold the counterfeit software using various eBay merchant accounts and commercial websites such as SoftwareDiner.com. Walters often used an alias to set up merchant and bank accounts in order to conceal his involvement in the criminal activity. Purse was sentenced in January 2010 and served approximately 13 months in federal prison for his role in the conspiracy.

?Software piracy impacts consumers, hurts American businesses and damages our economy,? said Keith Kupferschmid, General Counsel and Senior Vice President for Intellectual Property Policy & Enforcement at the Software & Information Industry Association (SIIA)?which launched the initial investigation into Walters? piracy schemes. ?For these reasons, SIIA leads the industry?s most aggressive anti-piracy campaign, identifying and shutting down sites that peddle illegal software. The Walters case is a prime example of SIIA?s commitment to fighting software piracy. And as Walters found out, software piracy is a serious crime that can land you in federal prison.?

The investigation in this case was conducted by the Federal Bureau of Investigation and the U.S. Postal Inspection Service and stemmed from a referral from the Software & Information Industry Association (SIIA). The prosecution was handled by Peter Sexton and Jennifer Levinson, Assistant U.S. Attorneys, District of Arizona, Phoenix.

CASE NUMBER: CR-08-1359-PHX-GMS

RELEASE NUMBER: 2011-233(Walters)

Source: FBI - Phoenix

CRIME