McHenry County Blog

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

FORMER MEXICAN HOTEL OPERATOR PLEADS GUILTY IN FIRST STAGE OF RESOLVING $500 MILLION SCHEME TO DEFRAUD THOUSANDS OF U.S. INVESTORS IN SALES OF PROMISSORY NOTES AND TIME-SHARE LEASES

CHICAGO — Partially resolving one of the largest investment fraud cases ever in Federal Court here, a defendant who owned hotel properties in Mexico pleaded guilty yesterday to securities fraud, admitting that he fraudulently obtained approximately $500 million from some 8,000 investors throughout in the United States.

The defendant, MICHAEL E. KELLY, was sentenced today to the maximum term of five years in prison, ensuring that final orders of restitution and forfeiture will be imposed despite Kelly’s ill health. Meanwhile, Kelly still faces additional charges carrying substantial additional periods of incarceration.

On Nov. 20, U.S. District Judge Ronald Guzman, ordered the first distribution of $50 million in restitution to more than 7,000 victims, who collectively lost more than $340 million as a result of Kelly’s fraud scheme.

Kelly has remained in federal custody in Chicago since he was arrested in December 2006.

Since then, authorities, including a court-appointed special master, have worked to untangle and liquidate a complex web of businesses and properties in Mexico and Panama to provide restitution to victims.

Judge Guzman stressed today that these developments are only a “small step” in the overall proceedings against Kelly.

Kelly, 63, formerly of South Bend, Ind., who holds citizenship in the United States, Mexico and Belize, and others associated with him used a significant portion of the funds raised from investors for their own personal benefit, including the purchase of hotels, businesses, homes, boats, automobiles, an airplane, a night club, and an interest in a real estate development project in Cancun, Mexico, where Kelly resided for several years before he was arrested.

Kelly’s guilty plea to one count of securities fraud was designed to be the first step in resolving his entire prosecution since final orders of restitution in criminal cases may only be issued at the time of sentencing.

As part of today’s sentencing, Kelly agreed to, and Judge Guzman ordered, restitution totaling $342,143,221, minus any credit for funds distributed by the court-appointed special master overseeing the liquidation of Kelly’s assets.

Before imposing the five-year sentence, which exceeds the amount of time Kelly has been in custody, Judge Guzman granted Kelly’s request to be released temporarily under home incarceration, with global position electronic monitoring, for up to four months or no longer than necessary to receive medical treatment for colon cancer at his own expense without using any investor or government funds.

Kelly’s relatives co-signed a $10 million signature bond and posted properties in Lakeville, Ind., and Double Springs, Ala., to secure his release.

Kelly still faces 13 additional counts of mail, wire, and securities fraud, which remain pending until they are resolved by a trial or a second guilty plea at a later date.

If convicted of those counts, Kelly will be subject to substantial additional terms of imprisonment.

The guilty plea and sentence were announced today by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, and Thomas R. Trautmann, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. FBI agents in South Bend, Ind., also participated in the investigation. The U.S. Securities and Exchange Commission also cooperated with the investigation.

In pleading guilty, Kelly admitted that beginning in 1998 he defrauded purchasers and prospective purchasers of two types of investments — one, a nine-month promissory note, and the second, a so-called “universal lease.”

Kelly was the president and sole shareholder of Yucatan Investment Corp., and Resort Holdings International, Inc., both of which at various times offered and sold either the promissory notes or universal leases.

Between January 1998 and June 1999, Kelly fraudulently obtained approximately $34 million from the sale of the promissory notes, which guaranteed an annual rate of return as high as 10.75 percent of the purchase price, and could be renewed for one or more additional nine-month terms.

Through various companies and a network of salesmen, Kelly fraudulently obtained approximately $500 million from the sale of promissory notes and interests in universal leases, which had a 25-year term and purported to relate to particular rooms for particular time periods in particular Mexican hotels operated by Kelly.

A lease investor had three options:

1. use the room;
2. rent the room; or
3. allow a purported independent third-party management company, World Phantasy Tours, Inc., doing business as Majesty Travel, Viajes Majesty or, later, Galaxy Properties Management, to rent the room in exchange for guaranteed payments to the investor.

Almost all of the lease purchasers chose the third option under which World Phantasy Tours guaranteed investors an annual return as high as 11 percent, regardless of whether the room was actually rented.

Kelly and others promoted the investment as carrying little risk by promising to buy back the interest in the universal lease at any time at a slight discount and further promising to pay back 100 percent of the purchase price in as little as either two or three years.

Between 1999 and 2004, Kelly regularly met with salesmen and prospective purchasers to explain the terms of the universal lease investments, often as part of an all expenses paid trip to Cancun.

Many of the investments were sold to retirees who found the promised high fixed rates of return, coupled with the reported safety of the buy-out (or repurchase) provision, to be an attractive investment.

In the offer and sale of both the promissory notes and the interests in the leases, Kelly and others made material misstatements and omissions about the return on investments, the guaranteed nature of the returns, and the liquidity and risks of the investments.

Kelly and others concealed from investors that the ability to make promised payments depended on continually raising funds from new investors and using those funds to pay earlier investors.

The government is being represented by Assistant U.S. Attorneys Edward Kohler and Daniel Gillogly.

The case 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.

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

McHENRY COUNTY BUSINESSMAN PLEADS GUILTY TO $7 MILLION FRAUD

ROCKFORD — A Woodstock, Ill., man pleaded guilty today in federal court in Rockford to conducting a $7 million mail fraud scheme. Francis X. Sanchez (“Sanchez”), 51, co-owned and operated a business in McHenry County, known as InvestForClosures, with his business partner James D. Bourassa. In his guilty plea today, Sanchez admitted that he fraudulently obtained more than $7 million from InvestForClosures’ investors.

Sanchez’s and Bourassa’s business was initially known as InvestForClosures.Com, but later changed its name to InvestForClosures Financial, LLC. According to Sanchez’s plea agreement, he represented to potential investors that this business bought distressed houses, rehabilitated those houses, and sold the houses for a profit.

Sanchez admitted in his plea agreement that he, Bourassa, and their employees solicited people to invest in InvestForClosures.Com and InvestForClosures Financial. Sanchez acknowledged that he and his employees made various representations to their potential investors, including:

1. their investments would be safe because they would be backed by real estate;
2. InvestForClosures used the majority of their investors’ funds to purchase real estate; and
3. because of the business’ efficient cash flow from buying and selling houses, InvestForClosures Financial had never failed to make an interest payment on time or return an investor’s principal when requested.

As Sanchez admitted today, each of these representations was false.

First, the business did not own sufficient real estate to secure all of the investments.

Secondly, the business did not use the majority of investor funds to purchase real estate, but instead used most of the investors’ funds to pay other expenses, including the salaries of the defendants, and to pay Ponzi type interest to prior investors.

In addition, InvestForClosures was not making enough money from property sales to pay the interest owed to the investors, but was instead using cash received from new investors to pay the prior investors with Ponzi type payments.

Sanchez further admitted that, in order to conceal from the investors his false promises and misrepresentations, and to prevent the investors from demanding the return of their principal, he told the investors that he was developing an exclusive, luxury, residential community in Mexico known as the “Sands of Gold.”

Sanchez and Bourassa formed a new business, known as InvestForClosures Ventures, LLC, doing business as Realty Opportunities International, to operate the Sands of Gold project. Sanchez acknowledged that he and Bourassa solicited their investors to purchase lots at Sands of Gold and to invest additional monies with InvestForclosures Ventures.

Sanchez admitted that he made several misrepresentations to his investors regarding Sands of Gold, including:

1. the government of Mexico had promised to invest millions of dollars in infrastructure necessary for the development of the Sands of Gold;
2. efforts to obtain financing for the project were going well and a financing deal was imminent; and
3. they were finishing negotiations with a major hotel chain for the construction of a hotel at Sands of Gold.

Sanchez further admitted that, during the course of the scheme, he and co-defendant Bourassa fraudulently obtained approximately $7,238,506.40 from the investors.

Of this amount, approximately $1,711,711.18 was paid back to the investors through Ponzi type payments.

The indictment, which was filed on November 16, 2010, charged both Sanchez and Bourassa with mail fraud and wire fraud. Bourassa pled guilty to mail fraud on February 27, 2012.

The sentencing hearing for Sanchez will be conducted on August 13, 2012, at 9:00 a.m.

Bourassa will be sentenced on June 11, 2012, at 9:30 a.m.

Mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater, as well as restitution to the victims. The actual sentences will be determined by the United States District Court, guided by the advisory United States Sentencing Guidelines.
The case was investigated by the Rockford Office of the Federal Bureau of Investigation, the Chicago Office of the United States Postal Inspection Service, and the Illinois Secretary of State’s Securities Department. The investigation was conducted under the auspices 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

The guilty plea was announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Robert D. Grant, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; Thomas P. Brady, Postal Inspector-In-Charge of the Chicago Division of the U.S. Postal Inspection Service, and Illinois Secretary of State Jesse White.

The government is being represented by Assistant U.S. Attorney Scott A. Verseman.

Reported in the Northwest Herald,  the finding of two bodiless heads by resident named Leanne Garcia’s (See-Garcia, according to the Daily Herald)  child on Cherry Valley Road just north of Mason Hill Road could represent something more serious than just the deaths of the two persons.

There are two groups known to behead people.

One is the Muslim terrorists.

They like to post them on the internet.

But I don’t remember hearing of such an occurrence in the Western hemisphere.

The other groups are the Mexican drug cartels.

There was a big take-down of Zetas Drug Cartel members announced in Chicago by the U.S. Attorney, FBI and DEA on November 16h.

They use beheadings to terrorize people, to send messages.

But not usually in the United States.

That is changing, according to this story from Rio Grande Valley, Texas’ KRGV-TV. .

The unlit stretch of Bull Valley’s Cherry Valley Road where she lives is a short-cut from Crystal Lake to Wonder Lake.

Could this have been a message to someone or just a convenient place to toss two people’s remains out the window?

This is not the first time a skull has been found along the side of a McHenry County Road.

I can’t place the year, but believe it was in the 1970′s when a head was found where the most eastbound lane of Route 14 is just under the railroad tracks between Crystal Lake and Cary.

It never was identified, but most folks figured it was the result of a mob hit.

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If you in for gruesome Google “mexican drug cartel beheadings.”

32-year old Orlando Tapia-Fonseca, the illegal alien from Mexico who was sentenced to 41-months in Federal prison and, then, a second deportation, was convicted in Brown County, Wisconsin, in 1998 of second degree sexual assault on a child.

He got nine months in jail and two years probation and was deported on August 8, 1998.

Tapia-Fonseca was arrested May 30, 2011, for resisting arrest and possession of cannabis.

December 15, 2010, there was a Rockford court hearing in which 15-year McHenry County Sheriff’s Deputy Scott Milliman’s sworn deposition testimony was discussed in Zane Seipler’s wrongful termination case against the Sheriff’s Department.

Now the arena moves to Woodstock where Zane Seipler attorney Blake Horwitz has filed a request to broaden his request for a special prosecutor to investigate McHenry County Sheriff Keith Nygren.

The motion outlines Horwitz’ previous allegation:

“Pending before this Court is a Petition to Appoint a Special Prosecutor with regard to theft of services concerning the illegal use of the Seven Point Star for both political and official purposes.

“New allegations have now surfaced warranting the supplementation of the second with additional data in support of the pending Petition.”

The motion continues,

“Since the most recent hearing in this cause, a transcript of a federal civil rights action involving Sheriff Nygren, has become publicly available.  [A footnote here reads, "The transcript contains the proceedings of a court hearing before Federal Magistrate Judge Mahoney of the Northern District of Illinois held on December 15, 2010 in a cause entitled Seipler v. Cundiff, et. al,, Case No. 8 C 50257.  The transcript of this hearing is attached hereto as Exhibit A."]

Continuing the motion reads,

“The transcript discloses statements made by Deputy Scott Milliman, a 15-year veteran of the McHenry County Sheriff’s Department, which reveal previously secret criminal conduct by Sheriff Nygren.  Specifically, the transcript discloses deposition testimony by Deputy Milliman in Seipler v. Nygren, et. al., regarding criminal activity by Sheriff Nygren to which Mr. Milliman was a witness.  The transcript also establishes that a code of silence exists in the McHenry County Sheriff’s Department and discloses that seven other officers set forth that they will be retaliated against if they break this code.  The transcript also reveals that Sheriff Nygren was observed to have committed and/or participated in the following:

• “Engaged in ‘Solicitation of Murder,’ in violation of 720 ILCS 5/8-1
• “Facilitated and promoted the trafficking of illegal aliens from Mexico to McHenry County, in violation of 720 ILCS 5/8-2 and the Federal Immigration and Nationality Act (8 U.S.C. Par. 1324(a)(1)(A)(iv)(iii)
• “Covered up racial profiling in the McHenry County Sheriff’s Department where at least one member in 2008 falsified the race of Hispanic drivers on at least 140 occasions, in violation of 720 ILCS 5/8-2.1 and
• “Participated prior to 2007 in a pay-off scheme with a member of the McHenry County State’s Attorney Office, whereby pending criminal prosecutions were dropped as nolle prosequi in exchange for money, in violation of 720 ILCS 5/33-1 and 720 ILCS 5/33-2.”

“The specific facts attesting to the criminal allegations noted above are subject to a protective order in Seipler v. Nygren, et. al., and therefore are not publicly available.  Hence, Petitioner cannot tender these additional facts to this Court at present, but can and does refer to the publicly-available hearing transcript discussed above.”

Under the heading, “Other Information in the Public Domain,” Horwitz notes, “There is one other item of information that is in the public domain regarding Sheriff Nygren’s alleged criminal participation in a conspiracy to murder: Deputy Milliman testified that one victim of attempted murder was a political adversary of Sheriff Nygren.”

The next paragraph reads, “With regard to the trafficking of illegal aliens, it is well-established that Sheriff Nygren developed an exchange program between a local police department from Zacatecas, Mexico and McHenry County. Petitioner has sound reasons to believe that this exchange program facilitated the transportation of illegal aliens to McHenry County.”

“With regard to the pay-off scheme (money for case dismissals),” the December 27th motion continues, “if current members of the McHenry County State’s Attorney Office were also involved in this scheme, it would be prudent for this Court to appoint a Special Prosecutor to investigate this matter on behalf of the People. [A footnote here says, ”The appearance of impropriety mandates the appointment of a special prosecutor.  See People v. Lang, 805 N.E.2nd 1249, 346 Ill. App. 3rd 677 (2nd Dist. 2004); In re Guardianship of Angell, 26 Ill.App.2nd 239, 243 (State's Attorney has an allegiance to the People); Fleming v. Kane County, 1986 WL 1414 (N.D. Ill 1986) (accord)."]

“Lastly, given the gravity of the offenses that have been alleged by Deputy Milliman, it would be in the best interest of McHenry County for an independent Special Prosecutor to further investigate these matters.

“WHEREFORE, Petitioner respectfully requests that this Honorable Court appoint a Special Prosecutor to investigate allegations of criminal wrongdoing by Sheriff Nygren.”

This motions is signed by Blake Horwitz, Zane R. Seipler’s attorney.

Seipler attorney Horwitz concludes that “given the gravity of the offenses that have been alleged by Deputy Milliman, it would be in the best interest of McHenry County for an independent Special Prosecutor to further investigate these matters.”

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See these posts by McHenry County Blog, which reprint the first parts of the transcripts of the December 15, 2010, Federal Court hearing before P. Michael Mahoney:

Part 1

Part 2

Part 3

Part 4

Part 5

Part 6

The rest of the over 10,000 word transcript will be published in bite-sized pieces as the days roll on.

Now the Mexican drug lords are bringing marijuana into Chicago by the train.

Whole cars filled with marijuana.

It is really hard to comprehend such a large scale operation.

The U.S. Attorney’s press release is below:

U.S. SEIZES NEARLY 11 TONS OF MARIJUANA ABOARD TRAIN FROM MEXICO;

SEVEN DEFENDANTS ARRESTED AT CHICAGO HEIGHTS STORAGE SITE

Homeland Security/DEA investigation yields largest marijuana seizure ever in Chicago area

CHICAGO — Federal marijuana distribution conspiracy charges were filed today against seven defendants who were arrested yesterday during what law enforcement officials said they believe is the largest seizure ever of marijuana in the Chicago area — conservatively estimated at approximately 21,800 pounds, or nearly 11 tons, packed into six railroad cars from Mexico that arrived at a warehouse in south suburban Chicago Heights earlier this month.

The marijuana is estimated to have a value of approximately $22 million.

The arrests and seizure followed an intensive month-long investigation and were announced today by

• Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois;
• Gary J. Hartwig, Special Agent-in-Charge of ICE Homeland Security Investigations (HSI) in Chicago;
• Jack Riley, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration;
• David Murphy, Director of Field Operations for U.S. Customs and Border Protection (CBP) in Chicago; and
• John Beutlich. Director of Operations for CBP Air and Marine, Northern Region.

The Illinois State Police, the Will County Cooperative Police Assistance Team Task Force (WCPAT), and the Union Pacific Railroad Police Department also participated in the investigation, which was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF).

The defendants are:

• Carlos Osvaldo Quintero, also known as “Carlos Gomez” and “Miguel Dominguez,” 31;
• his father, Martin Quintero, 63;
• Felipe de Jesus Magana-Campos,aka “Padrino,” 47;
• Eduardo Angel Zalayaran-Ruiz, aka “Other Inge,” 54;
• Javier Vera, aka “Ducky,” 24; Christian Gonzalez, aka “Chris,” 24; and
• Miguel Cordova, aka “Mike,” 20.

All seven were charged with conspiracy to possess and distribute marijuana in a criminal complaint filed today in U.S. District Court. They appeared this morning before U.S. Magistrate Judge Arlander Keys and remain in federal custody pending detention and preliminary hearings, which were scheduled for 2:30 p.m. next Tuesday.

“This historic drug seizure represents law enforcement partnership and cooperation at their best,” said Mr. Hartwig.

“HSI and DEA agents, together with our state and local partners, removed nearly 11 tons of marijuana intended for our communities. ICE will continue identifying and dismantling criminal organizations that smuggle drugs across our borders and into our communities.”

Mr. Riley, of the DEA, said:

“The estimated $22 million dollars worth of marijuana seized in this joint investigation translates to a significant blow to the availability of marijuana in the region, as well as a denial of illicit proceeds back to those responsible for this shipment.”

According to a 74-page affidavit by an HSI special agent, on Nov. 17, CBP officers in Eagle Pass, Tex., discovered that a Union Pacific train bound for Chicago Heights was carrying approximately 21,800 pounds of suspected marijuana.

CBP officers observed a number of large bundled packages, referred to as “super sacks,” in six cars on the train. A CBP canine alerted officers to the presence of narcotics in the train cars near several of the super sacks. CBP officers then opened a super sack and observed 13 cubic bundles, which were encrusted in a thick layer of fine red masonry pigment dust. CBP officers broke open several of these cubic bundles and observed a green leafy substance, which field tested positive for the presence of marijuana. In total, CBP officers observed that approximately 109 super sacks in the train cars contained cubic bundles comprised of a green leafy substance. Officers weighed 13 of the cubic bundles from one super sack and determined that they weighed approximately 200 pounds.

The bill of lading associated with these cars stated that they contained 58 super sacks in each train car, or a total of approximately 340 super sacks.

The shipping documents stated that the super sacks contained packages listed as “TITANIUM PIGMENTS OR.”

The documents further stated that the train cars were loaded and sent by a company called Comercializadora De Minerale, located in Jalisco, Mexico, and were being imported by a company called Earth Minerals Corp., in Rockdale, just south of Joliet.

CBP officers contacted HSI special agents for further investigation.

The HSI agents then placed the suspected marijuana back into the rail cars and sealed them.

The rail cars were then placed back into the normal course of commerce, and with the railroad’s cooperation, HSI and DEA agents surveilled the train cars as they traveled to a storage warehouse in the 1200 block of S. State Road, in Chicago Heights, with rail access.

One defendant, identified as Carlos Osvaldo Quintero, allegedly spoke to a Union Pacific employee on multiple occasions to coordinate the delivery of the train cars to the warehouse.

From Dec. 6 through 10, the rail cars were unloaded by individuals who used forklifts to move large bundled packages containing marijuana from inside the cars to a storage facility located approximately 50 yards from the initial warehouse.

On several occasions on Nov. 17 and 18, CBP officers spoke with a customs broker who works in Eagle Pass, Tex.

The broker stated that he had been hired by Earth Minerals, and that a man identifying himself as “Miguel Dominguez” had called him multiple times on Nov. 17 to inquire about the whereabouts and estimated arrival date for the rail cars.

Further investigation yielded no public records of any businesses named Chicago Earth Minerals Corp. or Earth Minerals Corp. in Illinois.

On Dec. 1, agents arranged for the delivery of a test train car, believed to be carrying no marijuana, to the Chicago Heights warehouse premises. The gate to the premises was locked and the test rail car was parked outside overnight.

The next morning, agents observed an individual identified as “Carlos Gomez” and three unidentified men arrive at the premises. Gomez and the others were observed pushing the test car inside of the warehouse premises, using a mechanical device. Later that day, agents observed Gomez and the others use a forklift to move cargo from the test car onto pallets. Using aerial surveillance, agents further observed the pallets being loaded onto a semi-tractor trailer, with a flatbed.

On Dec. 6, agents caused the six interdicted rail cars to be delivered to train tracks adjoining the Chicago heights warehouse. Agents observed several individuals arrive at the site and watched as the individuals moved one of the rail cars inside of the warehouse premises, using a mechanical device.

Throughout last week, HSI and DEA agents, using court-authorized video recording inside the facility and aerial surveillance, observed individuals unloading the large super sacks from the rail cars, and specifically observed the following pattern of activity:

• approximately four individuals used forklifts to unload super sacks from one of the rail cars that was parked inside of the site;
• the individuals loaded the majority of the super sacks from the rail cars onto a flatbed semi-truck.  Once the flatbed was filled with super sacks, the truck was driven approximately 50 yards to an a smaller storage facility located just to the west; and
• the individuals then used a forklift to unload the super sacks from the flatbed, and moved them inside of the warehouse where they were stored until yesterday.  Between Dec. 7-10, the process was repeated of unloading the super sacks from the six rail cars and moving them to the warehouse.

Agents maintained constant surveillance and did not observe any marijuana being removed from the storage facility. Between Dec. 6 and 15, agents used court-authorized wiretaps to intercept numerous telephone conversations in which Carlos Osvaldo Quintero and others allegedly discussed unloading, transporting and distributing the marijuana.

The marijuana distribution conspiracy carries a mandatory minimum sentence of 10 years in prison and a maximum of life imprisonment and a $4 million fine. If convicted, the Court must determine a reasonable sentence to impose under the advisory United States Sentencing Guidelines.

The government is being represented by Assistant U.S. Attorneys Steven Grimes, Nicole Kim and Erika Csicsila.

A complaint contains only charges and is 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.

Big doings locally Monday and Tuesday as Sister City representatives from Mexico’s Guadalupe and its state government, Zacatecas visit Woodstock, Carpentersville and Marengo.

President of Guadalupe Rafael Flores Mendoza and Zacatecas Governor Miguel Alejandro Alonso Reyes head a delegation that will land at O’Hare and then travel to the Crystal Lake Holiday Inn.

Monday, according to the schedule from Woodstock Mayor Brian Sager’s office, they will eat breakfast at Woodstock North High School with the Culinary Arts students and faculty doing the honors.

From 10-10:20 they will view a bus donated by Chuck and Helen Ruth and District 200 where photographs will be taken.

Mary Endres Middle School is the next stop.  A tour and a stop at the dual language classrooms is on the schedule before heading off to the McHenry County Courthouse.

There, they will be too late to see the McHenry County Board members swore in and organize, but they will visit Sheriff Keith Nygren for an hour.

Centegra CEO Mike Eesley will provide lunch and show them around the hospital.

After freshening up at the Holiday Inn, a reception is being given by Seasons by Peg and Cobblestones on the Woodstock Square.

Dinner is being held at La Patite Creperi.

Breakfast Tuesday will be at Carpentersville’s La Alcancia Resturant.

Afterward, the group will travel to Chicago to meet with Federal Judge Manuel Barbarsa, who is Rockford-based.

A long lunch is scheduled at Nuevo Leon Restaurant.

After returning to the Crystal Lake hotel, the group will be hosted for drinks, socialization and dinner by Marengo’s Manny and Gina Figueroa.

Wednesday the group flies back to Mexico.

Click to enlarge the images.

The Ponzi schemes being uncovered by the U.S. government are getting closer to home. This case had assistance from the Illinois Secretary of State’s Office and is based in Woodstock:

TWO McHENRY COUNTY BUSINESSMEN INDICTED ON FEDERAL CHARGES FOR DEFRAUDING INVESTORS OUT OF MORE THAN $7 MILLION

ROCKFORD — PATRICK J. FITZGERALD, United States Attorney for the Northern District of Illinois, ROBERT D. GRANT, Special Agent-In-Charge of the Chicago Office of the Federal Bureau of Investigation, THOMAS P. BRADY, Postal Inspector-In-Charge of the Chicago Division of the U.S. Postal Inspection Service, and Illinois Secretary of State JESSE WHITE today made the following announcement:

A federal grand jury in Rockford today returned a twenty-count indictment charging FRANCIS X. SANCHEZ (“Sanchez”), age 49, of Woodstock, Illinois, and James D. Bourassa (“Bourassa”), 53, of Gilberts, Illinois, with twenty counts of mail fraud and wire fraud.

The indictment charges Sanchez and Bourassa operated various businesses which were used to defraud investors out of more than $7,000,000.

According to the indictment, Sanchez and Bourassa operated a business known as InvestForClosures.Com, which later changed its name to InvestForClosures Financial, LLC.

This company was located in Woodstock, Illinois.

This business allegedly bought distressed houses, rehabilitated those houses, and sold the houses for a profit.

As stated in the indictment, Sanchez, Bourassa, and their employees solicited people to invest in InvestForClosures.Com and InvestForClosures Financial. The indictment alleges that defendants made various representations to their potential investors, including:

1. their investments would be safe because they would be backed by real estate;
2. InvestForClosures Financial used the majority of the investors’ funds to purchase real estate; and
3. because of the business’ efficient cash flow from buying and selling houses, InvestForClosures Financial had never failed to make an interest payment on time or return an investor’s principal when requested.

According to the indictment, each of these representations was false.

The indictment states that the business did not own sufficient real estate to secure all of the investments made and that the majority of the investors’ funds were used to pay other expenses, including the salaries of the defendants, and to pay interest to prior investors.

In addition, the indictment charges that InvestForClosures Financial was not making enough money from property sales to pay the interest owed to the investors, but was instead using cash received from new investors to pay the prior investors.

According to the indictment, in order to conceal from the investors their false promises and misrepresentations, and to prevent the investors from demanding the return of their principal, Sanchez and Bourassa told the investors that they were developing a real estate project in Mexico known as the “Sands of Gold.”

Sanchez and Bourassa formed a new business, known as InvestForClosures Ventures, LLC, doing business as Realty Opportunities International, to operate the Sands of Gold project.

Sanchez and Bourassa marketed Sands of Gold as an exclusive, luxury residential community that would be built on oceanfront property in the area of Playa Ventura, Mexico. Sanchez and Bourassa then solicited their investors to purchase lots at Sands of Gold and to invest additional monies with InvestForclosures Ventures.

The indictment charges that Sanchez and Bourassa made several misrepresentations to their investors regard Sands of Gold, including:

1. the government of Mexico had promised to invest millions of dollars in infrastructure necessary for the development of the Sands of Gold;
2. efforts to obtain financing for the project were going well and a financing deal was imminent; and
3. they were finishing negotiations with a major hotel chain for the construction of a hotel at Stands of Gold.

The arraignment on the indictment is scheduled for Tuesday, November 23, 2010, at 10:30 a.m. The arraignment hearing will be conducted by United States Magistrate Judge P. Michael Mahoney at the federal courthouse in Rockford.

The investigation was conducted under the auspices 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

Each of the charges carries a maximum potential sentence of up to 20 years in prison without parole, and a fine of up to $250,000, as well as any restitution ordered by the court. If convicted, each defendant’s actual sentence will be determined by a United States District Court Judge, guided by the United States Sentencing Guidelines.

The case is being investigated by the Rockford Office of the Federal Bureau of Investigation, the Chicago Division of the Postal Inspection Service, and the Securities Department of the Illinois Secretary of State’s Office. The case is being prosecuted in federal court by Assistant United States Attorney Scott A. Verseman.

Members of the public are reminded that a criminal indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial at which time the government has the burden of proving each defendant’s guilt beyond a reasonable doubt.

I have such mixed emotions on this issue.

On the one hand, I have seen the hope in the eyes of a late 20-something mother leading her children with husband bringing up the rear to a meeting in the First Methodist Church of Crystal Lake which I am sure she thought was about learning how to become an American citizen.

I have heard from McHenry County’s chief jailer how Chinese women buy their way to O’Hare Airport, where they and men who have arrived with the help of Chinese gangs, get taken into custody and bused to ICE detention floor of the McHenry County Jail.

I don’t know how the Chinese women get out our jail, but he told me when they do they basically become sex slaves to pay off their debts, while the men work in Chinese restaurants. (You may remember the Chinese connection to the massage parlor arrests in Crystal Lake and Hampshire, which may or may not be of any relevance.)

On the other hand, I have heard the anger in the voices of children whose parents and grandparents had to enter the country through Ellis Island.

Talk about intensity!

When we visited the Statue of Liberty and Ellis Island this summer, I was amazed at the variety of languages. Maybe 50% were not speaking English.

The draw of freedom and opportunity in the United States clearly is alive, even vibrant.

We took a tour of the main building on Ellis Island. The big room on the second floor of the building where people who passed the “six second medical exam” coming up the steps was empty.

No wire cages where prospective residents waited to be called to the front of the room to stand before “inspectors” who would decide whether they could proceed with the immigration process or be sent back to their ship for deportation.

I tried to put myself in the place of those in later years who sat on benches (the cages having been removed at the repeated requests of reformers) for their names to be called.

How afraid of rejection people must have been.

But nothing above has brought me to this article.

It’s political consultants replying to questions from the National Journal about the impact of the Obama Administration’s court suit in Arizona.

Here’s the question:

On balance, do you think the Justice Department’s legal challenge to Arizona’s immigration law helps or hurts your party in the midterm elections?

103 Democratic Party consultants split

Helps 42%
Hurts 49%

Republicans?

Helps 94%
Hurts 4%

The comments (no identities attached) were interesting.

A Democrat who thinks it will help says,

• “Will further cement Latinos to the Democratic Party — those opposed would most likely not vote Democratic anyhow.”

A couple who side with the majority of Democratic Party consultants comment,

• “Good long term for Obama in 2012; horrible for those running in 2010.”
• “The Democrats need to spend August talking about the economy and jobs; instead, now we have a month of talking about immigration.”

Republican comments:

• “The DOJ lawsuit helps Republicans in the midterms, but it no doubt is hurtful long term. The longer Republicans stand behind a plan of ‘border security first,’ the further we move away from Hispanics.”
• “The problem is what it means in the future. If Hispanics lock in for Democrats in the same percentages as African-Americans have done, Republicans could become the Whigs at the national level in the next decade.”
• “Lawyers, from D.C., suing voters, on behalf of illegal immigrants — you can’t write this stuff [any better].”
• “What Democrat in their right mind wants to debate illegal immigration in the last 90 days before November?”

Here’s who answered the National Journal’s questions:

National Journal Insiders

Democratic Political Insiders

Jill Alper, John Anzalone, Brad Bannon, Dave Beattie, Andy Bechhoefer, Cornell Belcher, Matt Bennett, Mitchell W. Berger, Mike Berman, Stephanie Bosh, Paul Brathwaite, Donna Brazile, Mark Brewer, Ed Bruley, George Bruno, Deb Callahan, Bonnie Campbell, Bill Carrick, Guy Cecil, Martin J. Chavez, Tony Coelho, Larry Cohen, Jerry Crawford, Stephanie Cutter, Jeff Danielson, Peter Daou, Howard Dean, Jim Demers, Tad Devine, David Di Martino, Debbie Dingell, Monica Dixon, Patrick Dorton, Pat Dujakovich, Anita Dunn, Jeff Eller, Steve Elmendorf, Carter Eskew, Eric Eve, Vic Fazio, Peter Fenn, Scott Ferson, Jim Fleischmann, Tina Flournoy, Don Foley, Don Fowler, Vincent Frillici, Gina Glantz, Niles Godes, John Michael Gonzalez, Joe Grandmaison, Anna Greenberg, Stan Greenberg, Pat Griffin, Larry Grisolano, Michael Gronstal, Lisa Grove, Marcia Hale, Jill Hanauer, Dick Harpootlian, Paul Harstad, Laura Hartigan, Mike Henry, Karen Hicks, Leo Hindery Jr., Harold Ickes, Marcus Jadotte, John Jameson, Steve Jarding, Jonathon Jones, Jim Jordan, Gale Kaufman, Lisa Kountoupes, Kam Kuwata, Celinda Lake, David Lang, Penny Lee, Chris Lehane, Jeff Link, Bill Lynch, Bob Maloney, Steve Marchand, Jim Margolis, Paul Maslin, Keith Mason, Terry McAuliffe, Susan McCue, Gerald McEntee, Tom McMahon, Phil McNamara, David Medina, Mark Mellman, John Merrigan, Steve Murphy, Janet Napolitano, David Nassar, Marcia Nichols, John Norris, Tom Ochs, Tom O’Donnell, Scott Parven, Jeffrey Peck, Debora Pignatelli, Tony Podesta, Jack Quinn, Larry Rasky, Bruce Reed, Mame Reiley, Steve Ricchetti, Will Robinson, Steve Rosenthal, David Rudd, John Ryan, Michael Sargeant, Wendy Sherman, Terry Shumaker, Sean Sinclair, Phil Singer, Erik Smith, Doug Sosnik, Greg Speed, Darry Sragow, Ken Strasma, Sarah Swisher, Jeffrey Trammell, Ed Turlington, Rick Wiener, Bridgette Williams, James Williams, JoDee Winterhof, Brian Wolff, Jon Youngdahl, and Jim Zogby.

GOP Political Insiders

Dan Allen, Stan Anderson, Gary Andres, Saulius (Saul) Anuzis, Whit Ayres, Brett Bader, Mitch Bainwol, Gary Bauer, David Beckwith, Clark Benson, Wayne Berman, Brian Bieron, Charlie Black, Kirk Blalock, Carmine Boal, Jeff Boeyink, Ron Bonjean, Jeff Buley, Luke Byars, Nick Calio, Al Cardenas, Danny Carroll, Ron Christie, Jim Cicconi, Rob Collins, Cesar Conda, Jake Corman, Scott Cottington, Charlie Crist, Greg Crist, Diane Crookham-Johnson, Fergus Cullen, Tom Davis, Mike Dennehy, Ken Duberstein, Steve Duprey, Debi Durham, Sara Fagen, Frank Fahrenkopf, John Feehery, Don Fierce, Mindy Finn, Mindy Fletcher, Carl Forti, Alex Gage, Sam Geduldig, Adam Geller, Benjamin Ginsberg, David Girard-diCarlo, Bill Greener, Jonathan Grella, Lanny Griffith, Janet Mullins Grissom, Doug Gross, Todd Harris, Steve Hart, Christopher Healy, Ralph Hellmann, Chris Henick, Terry Holt, David Iannelli, Barry Jackson, Clark Judge, David Keating, David Kensinger, Bruce Keough, Bob Kjellander, Ed Kutler, Chris Lacivita, Jim Lake, Steve Lombardo, Kevin Madden, Joel Maiola, Gary Maloney, David Marin, Mary Matalin, Dan Mattoon, Brian McCormack, Mark McKinnon, Kyle McSlarrow, Ken Mehlman, Jim Merrill, Tim Morrison, Mike Murphy, Phil Musser, Ron Nehring, Terry Nelson, Neil Newhouse, David Norcross, Ziad Ojakli, Jack Oliver, Todd Olsen, Connie Partoyan, Dana Perino, Van B. Poole, Tom Rath, Scott Reed, David Rehr, Tom Reynolds, Steve Roberts, Jason Roe, David Roederer, Dan Schnur, Russ Schriefer, Rich Schwarm, Brent Seaborn, Rick Shelby, Andrew Shore, Kevin Shuvalov, Don Sipple, Fred Steeper, Bob Stevenson, Eric Tanenblatt, Richard Temple, Heath Thompson, Jay Timmons, Warren Tompkins, Ted Van Der Meid, Dirk van Dongen, Jan van Lohuizen, Stewart Verdery, Dick Wadhams, John Weaver, Lezlee Westine, Tom Wilson, Dave Winston, Ginny Wolfe, and Fred Wszolek.

Local thoughts tomorrow.

The Daily Herald was stiffed by Sheriff Keith Nygren when he revealed his intention to re-start his Mexican Sister City program exclusively in the Northwest Herald on Sunday.

Comments under the article were not what a neutral observer would consider favorable.

Not with the chaos caused by the Mexican drug gangs, which is forcing honest businessmen and their families to flee the county seeking political asylum.

Now Daily Herald courthouse reporter Chuck Keeshan has written an article combining the incumbent’s announcement and his Democratic and Green Party opponents’ reactions. Democrat Mike Mahon, you may remember, sent out a press release giving Keeshan the hook he needed.

As you might imagine, it is more balanced than the Northwest Herald’s main story on Sunday.

And, it starts with the obvious problem with going to Mexico, the one that cause the suspension of the program two years ago:

“As drug-related violence soared to unprecedented levels…”

Of course, the violence is much, much worse now.

The comments under the Daily Herald article are comparable to those in the NW Herald. One bitingly suggests Sheriff Nygren take his officers to Elgin.

The article notes that taxpayers have not paid for transportation and expenses for deputies who have gone to Zacatecas for up to 30 days.

Mahon pointed out that taxpayers do pick up the tab for salaries.

And, stating the obvious, Mahon says,

“I believe there is a political angle. He’s going after the Mexican vote on this.”

Nygren’s response:

“Absolutely not. It has nothing to do with currying favor with anyone.”

Green Party candidate Gus Philpott had this reaction:

“This is the wrong time to re-kindle this program.

“There is little to be learned in Mexico about its culture that cannot be learned right here in McHenry County.

“Effective, efficient training can be conducted right here in McHenry County. Deputies and corrections officers should learn Spanish, as should many civilians. Being mono-lingual in the U.S. is insanity personified. All drivers in the U.S. need to learn and obey U.S. driving laws.

“Nygren is a cop; he should not be dealing with the governor of a state of a foreign country.”

Previously I have written of this.

In neither the Northwest nor the Daily Herald article is any mention that Nygren has joined the Homeland Security Department’s Secure Communities program.  He joined in April.  In the first three months, the Sheriff’s Department detained 116 illegal aliens who fit the Secure Communities’ profile “to identify and remove criminal aliens from the United States.”