McHenry County Blog

A press release from the U.S. Attorney’s Office:

OHIO MAN CHARGED WITH SWINDLING MORE THAN $300,000 IN ADVANCE FEES FROM CHURCHES AND SMALL BUSINESSES IN LOAN FRAUD SCHEME

CHICAGO — An Ohio man was indicted on federal charges for allegedly engaging in a fraud scheme in which he promised to fund more than $500 million in mortgage loans to some 20 churches and a dozen small businesses nationwide and fraudulently obtained more than $300,000 in advance fees that he used for personal expenses instead of securing loans as he had promised.

Three of the churches were located in Chicago, while additional churches and small businesses allegedly victimized by the scheme were located in Georgia, New Jersey, North Carolina, Ohio, Oregon, and Virginia.

The defendant, Jamal E. Lawson, was charged with three counts of wire fraud in an indictment returned yesterday by a federal grand jury, announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and Thomas P. Brady, Inspector-in-Charge of the Chicago Office of the U.S. Postal Inspection Service.

Lawson, 42, of Dayton, Ohio, will be ordered to appear for arraignment in U.S. District Court. The indictment seeks forfeiture of at least $308,000, which represents the amount that Lawson allegedly fraudulently obtained and used for such personal expenses as travel, clothing, food and cars.

According to the indictment, between June 2009 and December 2010, Lawson offered to provide loans to pastors of churches and owners of small businesses through one of his companies:

• Evangel Capital Group LLC and Evangel Capital Partners Ltd.,
• Ascendant Capital Partners LLC and Ascendant Commercial Mortgage, and
• Destiny Capital Group LLC and Destiny Capital Partners Ltd.

Lawson advertised low-interest loans to churches and small businesses and, after receiving a loan application, advised the borrowers that his companies had approved loans in amounts ranging from approximately $300,000 to $206 million and that firm closing dates had been set.

Lawson allegedly knew that he lacked the ability to fund the loans through his companies and he had not secured funding or closing dates from other outside lenders.

As part of the scheme, Lawson allegedly told the borrowers that, before any loans would be disbursed, they were required to pay certain advance fees, in amounts ranging from approximately $1,250 to $35,000, that would be used to obtain appraisals, loan documents, title reports, and audited financial statements. The indictment alleges that Lawson directed the borrowers to pay the advance fees by mailing checks or transferring funds to accounts that he controlled.

Lawson told borrowers that he would refund their application fees if they did not receive the loans, knowing that he never intended to provide the actual loans, the charges allege.

Altogether, Lawson allegedly promised to fund loans totaling at least $537.4 million to some 20 churches and 13 small businesses.

In Chicago, he alleged defrauded

• one unnamed church of $3,950 in fees for a purported $742,000 mortgage loan;
• a second church of $4,000 in fees to provide a mortgage loan of $1,546,000; and
• a third church of $3,950 in fees for a $3,045,000 mortgage loan.

The government is being represented by Assistant U.S. Attorney Christopher McFadden.

Wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory. The Court may also impose a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. If convicted, the Court must impose a reasonable sentence under sentencing statutes and the advisory United States Sentencing Guidelines.

The investigation falls under the umbrella of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: www.StopFraud.gov.

An indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Those who fight illegal drugs had a big day. Here is the most recent press release from the U.S. Attorney’s Office in Chicago.

NEARLY 100 ALLEGED TRAVELING VICE LORDS STREET GANG MEMBERS AND ASSOCIATES FACING STATE OR FEDERAL NARCOTICS CHARGES

31 federal and 65 state defendants accused in west side crack cocaine and heroin sales

CHICAGO — Around-the-clock retail street sales of crack cocaine and heroin, averaging between $3,000 and $6,000 per day, seven days a week, were conducted by a core group of several alleged members of the Traveling Vice Lords street gang and their associates on the city’s west side, according to new federal and state charges.

The daily routines of these individuals and dozens of others ended today when hundreds of Chicago Police officers, FBI agents and deputy U.S. Marshals began serving arrest warrants on nearly 100 state and federal defendants and conducting searches, ending a two-year investigation.

Significant multi-ounce quantities of crack cocaine and heroin were seized during the investigation.

The Chicago Police Department’s Organized Crime Division began investigating an alleged drug-trafficking organization led by members of the TVL street gang that operated in the area of Kedzie Avenue and Ohio Street, known as “KO,” in August 2008.

The FBI joined the investigation three months later.

The federal defendants arrested today were expected to begin appearing at 1:30 this afternoon before Magistrate Judge Young Kim in Courtroom 1944D in U.S. District Court, and will continue through the afternoon and tomorrow morning.

“For the fifth time in the last four months, local, state and federal law enforcement agencies are joining forces to announce significant arrests involving street gang members, their associates and drug-trafficking.

“These cases, which we believe weaken the grip of gangs and drugs in our community, happen because dedicated police officers and federal agents, along with state and federal prosecutors, work together to attack these problems,”

said Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois.

Mr. Fitzgerald announced the charges together with

• Anita Alvarez, Cook County State’s Attorney;
• Jody P. Weis, Superintendent of the Chicago Police Department; and
• Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

The U.S. Marshals Service assisted with the arrests.

The investigation was conducted under the umbrella of U.S. Organized Crime Drug Enforcement Task Force (OCDETF), and with assistance from the High Intensity Drug Trafficking Area Task Force (HIDTA). The investigation is continuing.

“We will continue to combine our law enforcement resources in order to maximize our impact in targeting and eliminating this type of organized drug trafficking that brings so much havoc and unrest to our communities,” Ms. Alvarez said.

Mr. Grant said: “The charges announced today were the result of a joint FBI/Chicago Police investigation that targeted drug-dealing in the North Lawndale area of Chicago. Community involvement was critical to the success of this investigation and demonstrates once again the importance of citizen cooperation in aiding law enforcement.”

“The Chicago Police Department is committed to working with our partners to rid our communities of gangs, guns and drugs. Focused, collaborative investigations such as this send a clear message to gang members and their associates that their illegal activity will not be tolerated,” Superintendent Weis said.

The investigation, code-named Operation Blue Knight, is part of a sustained, coordinated effort by local, state and federal law enforcement agencies to disrupt Chicago’s highly-organized drug-trafficking organizations. The investigation employed wiretaps, cooperating witnesses, undercover surveillance and undercover drug transactions, resulting in seizures of evidence.

A total of eight federal complaints filed yesterday and unsealed today charged a total of 31 federal defendants in connection with this investigation.

One complaint alleges that several TVL members and their associates, led by brothers,

• Jason Austin, also known as “J Rock,” and
• Charles Austin, aka “Bubba,” both alleged TVL members,

conspired to distribute

• crack cocaine, known as “rocks,” and
• heroin, known as “blows,”

customers via hand-to-hand transactions in the “KO.”

During the investigation, law enforcement officers repeatedly surveilled the conduct of alleged co-conspirators at KO.

Surveillance, often video recorded, observed hand-to-hand drug transactions, controlled purchases of narcotics by undercover Chicago police officers, and controlled purchases of narcotics by confidential sources.

According to an 89-page complaint affidavit by a Chicago police officer assigned to an FBI task force, the heroin was named “Blue Magic,” and when the quality of the “Blue Magic” was good, customers came from as far away as Elgin and parts of Iowa to purchase the heroin.

Members of the KO drug-trafficking organization obtain, possess, and use firearms to both protect and further advance the drug operation, the charges allege, adding that the TVL members have sold drugs at KO for decades.

In the fall of 2008, the KO organization temporarily moved to Chicago and St. Louis avenues due to a strong police presence in the KO area.

When the move occurred, the organization initially conducted a “pass out” of heroin, and later resumed sales, but sold only about half the amount that was sold previously at the KO, which often ranged from 60 to 120 grams of heroin per day.

The drug operation at Chicago and St. Louis avenues allegedly was managed by Kevin Terry, Jr.

In the Fall of 2009, the heroin operation temporarily relocated to Ferdinand Street and Hamlin Avenue, which he also ran, due to J. Austin’s failure to successfully keep the heroin operation running at KO, according to the charges.

The KO drug operation allegedly relied on various defendants to store packaged drugs in common areas and residences at KO, such as 520 N. Kedzie and the liquor store parking lot located at 501 N. Kedzie.

“Runners” distributed the packaged drugs to “managers,” who supervised the drug operation at KO.

The managers distributed the drugs to “pack workers,” who worked shifts selling the drugs to customers and those same managers were also responsible for collecting the proceeds of the drug sales at KO.

The customers paid the “pack workers” and, in exchange for cash, the “pack workers” gave the customers narcotics.

After the narcotics were sold, the workers provided the cash to the “runners” and/or “managers” of the drug spot, according to the complaint affidavit.

The Cook County State’s Attorney’s Office obtained arrest warrants for 65 defendants, including four juveniles, on narcotics possession and delivery charges, including more than 20 Class X felony narcotics charges.

The federal defendants were charged with various narcotics distribution counts.

All but two defendants (Bell and Bonds) face penalties ranging between a mandatory minimum of five years in prison to a maximum of life in prison and fines ranging between $2 million and $4 million, while Bell and Bonds each face a maximum of 20 years in prison and $25,000 fine. If convicted, the Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines.

The government is being represented by Assistant United States Attorneys Maribel Fernandez-Harvath, Matthew Madden, Marny Zimmer and Christopher McFadden.

The public is reminded that complaints contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

A list of the federal defendants follows (with best known ages, and all reside in Chicago unless noted otherwise):

CASE NO. DEFENDANT ALIAS AGE TOWN

10 CR 971

• Jason Austin J Rock 28
• Charles Austin Bubba 32
• Milton Riley Milt 36 Bensenville
• Emanuel Young Miko 32
• Danielle Duncan 28
• Avery Irby Pete 35
• Kevin Terry, Jr. Little Kurt 21
• Jeffrey Scott Scotty 24
• Kenneth Terry Terry 37
• Juanica Blassingame 48
• Charles Ward Charlie 63
• Robert Ewing 59
• Antoine Jones Black 31

10 CR 962

• Kevin Terry Sr., Captain Kurt / Kurt 46
• Lionel Brown, June / Shorty 29
• Derrick Lewis, Colby / D.C. 45

10 CR 961

• Vernon Chapman C-Dog 31

10 CR 967

• Corey Griffin Fat Rat unknown
• Edmund Forrest Furb 28
• Timothy Allison Shaw 30
• Calvin Williams Boski 22

10 CR 964

• Kenny Bell KB 30

10 CR 963

• Steven Collins 28
• Stephen Britton Choo 25
• Christopher Bonds Big Bro / Foo Nuts 20

10 CR 966

• Kevin White Big White 48 Oak Park
• Jalal Spearman Jay / J 33 Bellwood
• Maurize Cossom Big Lord 26
• Tommy Berry 33 Bellwood

10 CR 965

• Sharona Crawford Macaroni / Roni 39
• Dion Thomas 30