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1
2
November
02 Thursday
2006

U.N. official charged on contracts

NEW YORK (CNN) -- A senior United Nations official and a Miami businessman were arrested Wednesday as a two-count indictment was unsealed, charging them in connection with a procurement scheme involving more than $50 million in U.N. contracts, federal prosecutors said.

Sanjaya Bahel, 55, who is currently the chief of the commercial activities service in the U.N. Postal Administration and was previously the chief of the Commodity Procurement Section with the U.N.'s procurement division, is accused of using his influence as a procurement officer to benefit Nishan Kohli in getting U.N. contracts.

According to the indictment, Kohli in return provided New York real estate to Bahel.

Kohli, of Miami, represented companies including Thunderbird Industries and Telecommunications Consultants India Ltd. (TICL), an enterprise owned by the Indian government.

The indictment alleges the scheme began in or about 2000.

"Bahel granted exceptional access to Kohli, providing Kohli with a line of communication and source for information within the U.N. that exceeded what U.N. vendors could typically expect to receive," said a statement issued by the U.S. Attorney's Office for the Southern District of New York.

"In addition, Bahel was a vocal advocate within the U.N. for the companies represented by Kohli. On occasion, Bahel even canceled bids by competing companies and re-bid contracts in order to give a competitive advantage to Kohli's business interests."

Bahel also helped Kohli when problems arose regarding contracts, the indictment charged. On Aug. 6, 2000, Bahel received a memo from the U.N. officer responsible for evaluating Thunderbird's proposal for a contract, saying the company lacked sufficient documentation and suggesting the U.N. investigate its Dun and Bradstreet report.

"That very same day, Kohli, for the first time, listed Thunderbird with Dun and Bradstreet," the indictment said.

During the period, TCIL secured U.N. contracts for radio communications equipment, desktop computers, laptop computers and other items.

In 2003, Kohli bought a mid-town Manhattan apartment and provided it to Bahel and his family for two years, the indictment alleges. "During that time, Bahel paid a greatly-reduced monthly rent, and no rent at all for certain months."

Kohli sold the apartment to Bahel in May 2005, prosecutors said, at a purchase price that was so low the condominium board of the building considered blocking the sale.
Suspended without pay

A spokesman for U.N. Secretary-General Kofi Annan said Wednesday in a statement that Bahel had been the subject of an internal allegation by the U.N.'s Office of Internal Oversight Services and was formally charged with misconduct on Aug. 31. He has been suspended without pay since that time.

The United Nations provided its final report to authorities in the United States and India and has cooperated with prosecutors during the investigation, the spokesman said.

"Today, the secretary-general has received a request from the U.S. authorities to waive Mr. Bahel's immunity from legal process," the statement said. "The secretary-general confirms that he has waived Mr. Bahel's immunity."

Both men are expected to appear in federal court on Thursday -- Bahel in Manhattan and Kohli in Miami.

If convicted, authorities said, each faces a maximum sentence of 10 years in prison. Prosecutors are also seeking the forfeiture of proceeds including Bahel's interest in the Manhattan apartment.

"Sanjaya Bahel allegedly sold his influence as a U.N. procurement official. He favored Nishan Kohli's companies in obtaining and maintaining valuable U.N. contracts, and he personally profited as a result," said U.S. Attorney Michael Garcia.

-- CNN's Sarvi Batmanhelidj and Deborah Brunswick contributed to this report.

August
09 Tuesday
2005

Ex-U.N. official admits taking bribes

UNITED NATIONS (CNN) -- A former U.N. official pleaded guilty to corruption charges Monday in the first case involving a U.N. staff member stemming from investigations into the defunct Iraq oil-for-food program.

Alexander Yakovlev, a former senior contracts officer, admitted he received several hundred thousand dollars in bribes from companies that sought to do business with the world body.

Yakovlev, a 52-year-old Russian, pleaded guilty to three counts in U.S. District Court in Manhattan -- conspiracy to commit wire fraud, wire fraud and money laundering.

The bribes came from three unidentified companies -- all U.N. vendors -- between 2001 and 2005, prosecutors said.

His attorney, Arkady Bukh, said Yakovlev agreed to plead guilty in the hopes of receiving a more lenient sentence. Bukh would not say whether Yakovlev is cooperating with investigators.

Yakovlev surrendered to authorities Monday after the United Nations lifted the diplomatic immunity that protects its employees from prosecution. He has no prior criminal record.

The move by prosecutors came just as a panel appointed by the United Nations to probe the oil-for-food program issued a harsh report on Yakovlev's actions. (Full story)

The Independent Inquiry Committee investigation, led by former U.S. Federal Reserve Chairman Paul Volcker, found that more than $1.3 million was wired into an account for a dummy firm called Moxyco that Yakovlev established in 2000 in the Caribbean island of Antigua.

Volcker reported that "more than $950,000 of these payments came from various companies or persons affiliated with such companies that collectively won more than $79 million in United Nations contracts and purchase orders."

Volcker told CNN in an interview, "Mr. Yakovlev received bribes." He said the payments were not necessarily associated with oil-for-food business.

A law enforcement source said the timing of Volcker's report and the plea was "coincidental," noting that Volcker was originally going to report Tuesday.

Yakovlev was initially investigated for soliciting a bribe from a French company that bid for a key U.N. contract to monitor Iraqi oil exports made under the oil-for-food program, which supplied Iraq with food and medicine during years of international sanctions.

That company, Societe General de Surveillance, did not win the contract; it went instead to Saybolt, which bid slightly less. Nor did the Volcker committee find evidence that the company paid a bribe.

Prosecutors, meanwhile, said Yakovlev's illicit funds landed in bank accounts he controlled in New York City and Yonkers, the city in New York's Westchester County where he lives.

Yakovlev resigned his U.N. job in June amid allegations that he helped his son get a job with a firm doing business with the world body.

U.N. officials lifted Yakovlev's diplomatic immunity Monday afternoon at prosecutors' request, said Mark Malloch Brown, chief of staff for Secretary-General Kofi Annan.

Brown said the United Nations brought the allegations to the U.S. attorney's office in New York "more than a month ago" and has been sharing information with prosecutors as part of efforts to reform the world body.

Yakovlev was released on $400,000 bail after pleading guilty. No sentencing date has been set.

Federal and state prosecutors also are investigating Benon Sevan, who ran the oil-for-food program for seven years.

Volcker's panel said Monday that Sevan received more than $147,000 in kickbacks from oil sold under the program. (Full story)

Sevan resigned Sunday from the United Nations. In his resignation letter, he called his management of the program "transparent" and denied any wrongdoing. (Full story)

One company involved in oil-for-food probes, Texas-based Bayoil, and three of its officers were indicted previously on charges they paid illegal kickbacks to the Iraqi regime, which controlled who could buy its oil.

Two other people have been indicted on charges of illegally lobbying for Iraq. One of them, Samir Vicent, pleaded guilty.

March
15 Tuesday
2005

U.S. charges 18 in Russian weapons-smuggling plot

NEW YORK (CNN) -- U.S. authorities on Tuesday announced the arrests of more than a dozen men on charges of attempting to smuggle Russian-made military weapons into the United States for sale to terrorists.

Eighteen men of various nationalities were charged by federal prosecutors for attempting to smuggle into the country arms that ranged from shoulder-fired missiles and rocket-propelled grenades, U.S. Attorney David Kelly said at a news conference in New York.

The identity of the potential buyers of the arms was unknown, authorities said.

The defendants were arrested late Monday and early Tuesday inside the United States, where they allegedly plotted the illegal sales. They were charged in a 62-page complaint with conspiring to traffic in machine guns and other weapons, and allegedly sold eight automatic weapons to a paid confidential informant who posed as an arms trafficker, authorities said.

"It appears the defendants were planning to obtain that weaponry through contacts they had developed in Eastern European military circles," Kelley said. "We are now working with our counterparts overseas to secure the weapons and to bring to justice conspirators who may be abroad."

"These defendants may not have been terrorist themselves, but they have showed transparent willingness to do anything with anybody, so long as it generates money for their organization," added FBI Special Agent Andy Arena at the news conference.

The arrests resulted from a yearlong undercover investigation by the FBI that included wiretaps of some 15,000 telephone calls.

The defendants are predominantly Armenian, Russian, and Georgian. The group's alleged ringleaders -- Artur Solomonyan, 26, from Armenia and Christian Spies, 33, of South Africa -- were among the 10 suspects arrested in the New York area.

Six suspects were arrested in Los Angeles and two others were arrested in south Florida.

All suspects were due to make their first court appearances before federal judges later Tuesday.

Solomonyan and Spies, who were in the U.S. illegally, were arrested Monday night at a Manhattan hotel, where they believed the informant was going to provide them with "green cards" enabling them to leave and re-enter the United States.

According to the criminal complaint, the conspirators offered the informant a shopping list of available weapons, including rocket-propelled grenades (RPGs), shoulder-fired "Stinger" missiles, Russian-made AK-47 assault rifles and Claymore mines, a type of explosive.

Solomonyan at one time told the informant that he could also obtain enriched uranium, which he suggested could be used in the New York subway system, according to the complaint.

"There was never, however, any such uranium," Kelley said at the news conference.

Solomonyan and Spies allegedly gave the informant a password to a Russian Web site where he viewed 17 digital photos of available weapons, and Solomonyan discussed importing 200 RPGs from Armenia as recently as January, according to the complaint.

In phone calls and meetings, the alleged conspirators used code words to discuss the weaponry. "Fliers" meant RPGs, while "toys," "puppies," "condos" and "SUVs" were code for machine guns, according to the complaint.

Solomonyan told the informant that the "fliers" were from Russian military surplus in Chechyna, according to the complaint.

The alleged conspirators met around New York City and were under surveillance in restaurants and at least once in a Brooklyn steam bath.

Despite the talk of high-end explosives, prosecutors allege only eight machine guns were delivered between last September and December -- three each in New York and Los Angeles and two in Fort Lauderdale, Florida -- to warehouses rented by the informant.

Videotaped evidence shows the informant giving Solomonyan $3,000 for the first two machine guns, while the prices for later sales were in the same range, according to the complaint.

The attempted sales of shoulder-fired, surface-to-air missiles (SAMs) and rocket-propelled grenades never went beyond the discussion phase, and those weapons never entered the United States from abroad, the complaint says.

The sting began when Spies - the South African defendant -- told the informant he had connections to Russian mafia figures who wanted to sell weapons they could obtain from former KGB officials. The informant said he had $2.5 million to spend.

 

January
15 Thursday
2004

Credit card firm at center of child porn ring

NEWARK, New Jersey (AP) -- Federal officials on Thursday announced they had cracked an international child pornography ring with arrests in New Jersey, France, Spain and Belarus.

The cases stem from an Internet processor of Web site subscriptions in Minsk, Belarus, which collected fees for memberships to child pornography Web sites that brought in millions of dollars, the U.S. Attorney's Office said.

An executive with a Florida company has pleaded guilty in the case.

"When we followed the money, we ended up getting both the operators of this outfit ... and meanwhile back here at home we were doing search warrants on people's computers who had subscribed via credit card to these child pornographic Web sites," said Michael Drewniak, a spokesman for the U.S. Attorney's Office.

About two dozen people in New Jersey and 20 others around the nation have been charged with downloading child pornography, including a doctor, a minister and a teacher, the office said.

The Belarus company, Regpay Co. Ltd., and Connections USA, of Fort Lauderdale, Florida, were indicted in a money-laundering scheme involving paid memberships to about 50 pornography Web sites.

Four of Regpay's leaders were indicted, and three were arrested over the summer in France and Spain. U.S. authorities are seeking to have them transferred the United States for prosecution.

Regpay was formerly known as Trustbill, while Connections did business as Iserve. Regpay operated at least four child pornography sites from Minsk, and it carried advertising for other pornographic Web sites. One Regpay site referred to itself as "underground pedo world," the indictment said.

"Today's indictment strikes at the heart of the commercial trade of child pornography by attacking the commercial profits derived from such a deplorable venture," Attorney General John Ashcroft said.

He said the ring was dismantled through efforts of agents from the Internal Revenue Service, Bureau of Immigration and Customs Enforcement, the U.S. Postal Inspection Service and the FBI, as well as law enforcement in Belarus, France and Spain.

"Regpay Co. Inc. allegedly processed nearly $3 million in subscription fees by persons seeking pornography -- much of it being child pornography," Ashcroft said.

The investigation is part of Operation Falcon, aimed at severing commercial support of child pornography. As of Tuesday, $800,000 in sales proceeds has been seized and 160 cases initiated, the Justice Department said.

Connections CEO Eugene Valentine, 38, of Hollywood, Florida, pleaded guilty Wednesday in federal court in Newark to a conspiracy to launder money for Regpay and its principals.

May
13 Saturday
2000

Hacker hits up to 8M credit cards

NEW YORK (CNN) - The Secret Service and the FBI confirmed Wednesday they have been involved for the past two weeks in trying to track down the computer hacker who breached the security system of Data Processors International, which processes credit card transactions on behalf of merchants.

MasterCard, Visa, Discover Financial Services and American Express all have said this week that some of their card accounts had been affected by the breach.

MasterCard estimated that the hacker may have gotten access to information on as many as 8 million credit card accounts overall, including 2.2 million of its own cards. Visa said 3.4 million of its cards were affected, while Discover said only that a small percentage of its cards were involved. American Express, meanwhile, has not disclosed how many of its card accounts were affected.

Data Processors International, which does business as DPI Merchant Services in Omaha, Neb., and was recently acquired by TransFirst, said in a statement Thursday that "information targeted by the system intruder did not include any personal information that could relate a card number to an individual. ... Personal information including account holder name, address, telephone number and Social Security number were not obtained through the attempted intrusion."

Both DPI and a federal law enforcement official familiar with the case told CNNfn on Wednesday that so far there has been no reported misuse of the information stolen or evidence that any individual account has been tampered with.

Visa, American Express and Discover said earlier this week that they had not seen any fraudulent use of the stolen account numbers so far, and a MasterCard spokeswoman could not say whether any of its cards had been used fraudulently.