Former Oak Ridge Complex Employee Pleads Guilty to Unlawful Disclosure of Restricted Atomic Energy Data

WASHINGTON – Roy Lynn Oakley, 67, a resident of Harriman, Tenn., pleaded guilty today in U.S. District Court in Knoxville, to count one of an indictment charging him with unlawful disclosure of Restricted Data under the Atomic Energy Act, in violation of 42 U.S.C., Section 2274(b).

The guilty plea was announced today by Matthew G. Olsen, Acting Assistant Attorney General for National Security, and James R. Dedrick, U.S. Attorney for the Eastern District of Tennessee.

Oakley had been scheduled to start trial today, but appeared instead before U.S. District Court Judge Thomas A. Varlan, to enter his plea of guilty. Oakley had formerly been employed as a laborer and escort by Bechtel Jacobs at the East Tennessee Technology Park (ETTP) in Oak Ridge, Tenn. The ETTP, formerly known as Y-25, had previously been operated by the U.S. Department of Energy (DOE) as a facility to produce highly enriched uranium.

According to the plea agreement, while employed at the ETTP in 2006 through 2007, Oakley had a security clearance that permitted him to have access to classified and protected materials, including instruments, appliances and information relating to the gaseous diffusion process for enriching uranium. Some of the materials and information to which Oakley had access were classified as "Restricted Data" under the Atomic Energy Act, any disclosure of which was illegal. While he worked at the ETTP, Oakley had been instructed and informed that this Restricted Data could not be disclosed.

The plea agreement further states that based on the investigation the Federal Bureau of Investigation (FBI) determined that Oakley may have been in possession of protected materials that belonged to the DOE and was offering to sell the materials to a foreign government. The FBI initiated an undercover investigation and, in January 2007, the FBI contacted Oakley using an undercover agent assuming the role of an agent of a foreign government.

In recorded calls and during a face-to-face meeting with the FBI undercover agent, Oakley stated that he had taken certain parts of uranium enrichment fuel rods or tubes and other associated hardware items from the ETTP work site and that he wanted to sell these materials for $200,000 to the foreign government. Once Oakley handed over the pieces of tubes and associated items to the undercover FBI agent and received $200,000 in cash, he was confronted by agents of the FBI and admitted to his efforts to sell these materials to a foreign government.

The materials Oakley had tried to sell to a foreign government were, in fact, pieces of equipment known as "barrier" and associated hardware items that play a crucial role in the production of highly enriched uranium, a special nuclear material, through the gaseous diffusion process.

The maximum penalty for violation of the Atomic Energy Act by disclosing Restricted Data is a maximum of ten years imprisonment and a criminal fine of $250,000. A sentencing hearing has been set before Judge Varlan for May 14, 2009, at 10:00 a.m., in U.S. District Court in Knoxville.

Matthew G. Olsen, Acting Assistant Attorney General for National Security, said, "Today’s guilty plea should serve as a strong warning to anyone who would consider selling restricted U.S. nuclear materials to foreign governments. The facts of this case demonstrate the importance of safeguarding America’s atomic energy data and pursuing aggressive prosecutions against those who attempt to breach those safeguards."

U.S. Attorney James R. Dedrick said, "Vigorous enforcement of the law controlling the protection of national security information, especially that involving materials associated with atomic energy and weapons, is of the highest priority for the Department of Justice and is a vital part of our duty to protect national security and the nation’s defense system. The exposure of Oakley’s conduct and subsequent investigation by the FBI, the U.S. Attorney’s Office, and the Department of Justice reflects the Department’s dedication to combating any threat to the security of our nation’s atomic secrets wherever it may happen."

The indictment was the result of an investigation by the FBI, DOE’s Oak Ridge Counterintelligence Field Office, and DOE’s Headquarters Office of Intelligence and Counterintelligence. Assistant U.S. Attorney A. William Mackie from the U.S. Attorney’s Office for the Eastern District of Tennessee, and Trial Attorney Anthony P. Garcia, from the Counterespionage Section of the Justice Department’s National Security Division, represented the United States in this case.

For additional information, please contact U.S. Attorney James "Russ" Dedrick, Assistant U.S. Attorney William Mackie or Public Information Officer Sharry Dedman-Beard at (865) 545-4167.

Defendant Pleads Guilty to Conspiring to Export Military Aircraft Parts to Iran

WASHINGTON – Hassan Saied Kehsari and his corporation, Kesh Air International, pleaded guilty this morning in the Southern District of Florida to charges of conspiring to illegally export military and commercial aircraft parts to Iran.

The guilty pleas were announced by Matt Olsen, Acting Assistant Attorney General for National Security; R. Alexander Acosta, U.S. Attorney for the Southern District of Florida; Michael Johnson, Special Agent in Charge, U.S. Department of Commerce; Office of Export Enforcement; Anthony V. Mangione, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Office of Investigations; and Sharon Woods, Director, U.S. Department of Defense, Defense Criminal Investigative Service.

Keshari appeared on behalf of himself and Kesh Air International in federal court today to announce their guilty pleas. Charges are still pending against two remaining defendants charged in the indictment, Traian Bujduveanu and his corporation, Orion Aviation Corp. Sentencing is scheduled for April 8, 2009, at 8:30 a.m. before U.S. District Judge Patricia A. Seitz.

Count 1 of the Indictment, to which Keshari and Kesh Air International pleaded guilty, charges conspiracy to export and cause the export of goods from the United States to the Islamic Republic Iran, in violation of the embargo imposed upon that country by the United States and in violation of the International Emergency Economic Powers Act, and to export and cause to be exported defense articles, in violation of the Arms Export Control Act, all in violation of Title 18, United States Code, Section 371.

On the conspiracy count, Hassan Saied Keshari faces a maximum statutory term of five years’ imprisonment and a maximum fine of $250,000. Kesh Air International faces a statutory maximum fine of $500,000.

According to documents filed with the court during the plea hearing, Keshari, an Iranian national and naturalized United States citizen, by and through his Novato, Calif., corporation, Kesh Air International, purchased aircraft parts on behalf of purchasers in Iran and exported the aircraft parts to Iran by way of freight forwarders in Dubai, United Arab Emirates. The military aircraft parts were purchased from defendant Traian Bujduveanu, who operated through his Broward County, Fla., business, defendant Orion Aviation Corp.

Among the aircraft parts illegally exported to Iran through the conspiracy were parts designed exclusively for the F-14 Fighter Jet, the Cobra AH-1 Attack Helicopter, and the CH-53A Military Helicopter. All of these aircraft are part of the Iranian military fleet, while the F-14 is known to be used exclusively by the Iranian military.

Moreover, all of the parts supplied by Keshari as part of the conspiracy are manufactured in the United States, are designed exclusively for military use, and have been designated by the U.S. Department of State as "defense articles" on the United States Munitions List, thus requiring registration and licensing with the Department of State, Directorate of Defense Trade Controls. Neither Keshari nor his co-defendants are registered or had the required licenses to ship defense articles to Iran.

According to the Indictment and documents filed with the court during the plea hearing, Keshari received orders by email from buyers in Iran for specific aircraft parts. Keshari then requested quotes, usually by e-mail, from Bujduveanu and other suppliers and made arrangements for the sale and shipment of the parts to a company in Dubai through the use of false or misleading shipping documents. From Dubai, the parts were then shipped on to the purchasers in Iran.

Keshari has been in federal custody since his arrest in June 2008 and will remain in custody pending his sentencing. Co-defendant Bujduveanu also remains in federal custody awaiting trial, which is scheduled for May 2009.

The investigation was conducted by the U.S. Department of Commerce, Office of Export Enforcement, U.S. Immigration and Customs Enforcement, Office of Investigations, and the U.S. Department of Defense, Defense Criminal Investigative Service. The case is being prosecuted by Assistant U.S. Attorney Melissa Damian.

FORMER NEW YORK STATE SENATE MAJORITY LEADER INDICTED FOR SCHEME TO DEFRAUD CITIZENS OF HIS HONEST SERVICES

ALBANY, N.Y. — A federal grand jury in Albany returned an indictment today against Joseph L. Bruno, the former majority leader of the New York State Senate, Acting U. S. Attorney Andrew T. Baxter and Special Agent in Charge John F. Pikus of the Albany Division of the FBI announced. Bruno is charged with carrying out a scheme to defraud the State of New York and its citizens of the right to his honest services by soliciting private business from, and entering into direct and indirect financial relationships with, persons or entities who were pursuing interests before the New York State legislature or other state agencies.

The indictment alleges further that Bruno concealed and failed to disclose the existence and nature of such financial relationships, and resulting conflicts of interest, while taking discretionary official actions benefitting parties with whom he had those relationships.

The charges arise from Bruno’s alleged receipt of almost $3.2 million from five groups of individuals and related entities, either directly or through so-called consulting companies, between 1993 and 2006. While New York state legislators are part-time officials permitted to pursue other employment or business activities, the indictment alleges that Bruno improperly exploited his official position and concealed conflicts of interest, contrary to state ethics and reporting laws, with respect to his private “consulting” business.

According to the indictment, Bruno received approximately $2 million from two financial services firms. These payments were essentially fees relating to labor union benefit funds that invested or conducted brokerage transactions with the firms, ostensibly as a result of referrals by Bruno. The unions, whose benefit funds were solicited by Bruno, had frequent business before the New York State legislature and other state agencies, and Bruno took discretionary official actions benefitting the unions. The union officials solicited by Bruno were responsive to his “business” proposals because of his official position and his perceived ability to influence legislative or other state actions on behalf of their unions. In required financial disclosure statements, and in other contexts, Bruno concealed the fact that he enriched himself by exploiting relationships with unions that benefitted from his official actions. For example, rather than reporting that he was paid for soliciting union benefit funds, Bruno misleadingly reported most of his income as fees for “consulting.”

Bruno was also paid approximately $1.2 million in “consulting” fees by three individuals and a myriad of related entities. Some of those entities had interests before the New York State legislature and other state agencies, and several benefitted from official acts of Bruno. According to the indictment, Bruno did not perform legitimate work commensurate with these substantial “consulting fees”, which were, in essence, gifts from these individuals or related entities. Bruno failed to report these payments as gifts, as required under state ethics and reporting laws. Bruno also misrepresented to two of these “consulting” clients that he had received clearance from the Legislative Ethics Committee to receive payments from them when, in fact, Bruno had never sought ethics opinions relating to these particular outside activities.

An indictment is merely an accusation and defendant Joseph. L. Bruno is presumed innocent unless and until proven guilty. None of the other persons or entities identified in the indictment have been accused of federal criminal violations. If convicted, Bruno faces a maximum sentence of up to 20 years in prison and fines of up to $250,000 on each of the indictment’s eight counts under the federal wire and mail fraud statutes. Bruno was arraigned earlier this afternoon before U.S. Magistrate Judge David R. Homer in Albany.

Acting U. S. Attorney Baxter stated: “As the Senate Majority Leader, Joseph L. Bruno had a fiduciary relationship with the State of New York and its citizens requiring disinterested decision-making and candid disclosure of the potential motivation behind his official acts. Mr. Bruno exploited his office by concealing the nature and source of substantial payments that he received from parties that benefitted from his official actions and the resulting conflicts of interest. This investigation and prosecution demonstrates the commitment of federal law enforcement in the Northern District of New York to strive to ensure that public officials who breach their public trust will be held accountable.”

Special Agent in Charge Pikus stated: “This complicated investigation has been conducted in a professional and thorough fashion, notwithstanding the significant difficulties in overcoming the lack of transparency in New York State government. The FBI will continue to root out public corruption within New York State government to ensure the integrity of the legislative process.”

Daniel R. Petrole, Deputy Inspector General, U.S. Department of Labor, stated: “Former State Sen. Joseph L. Bruno allegedly used his powerful position improperly to induce union officials to invest their organizations’ pension plan funds through several investment companies in return for just under $2 million. I’d like to thank our law enforcement partners at the FBI and the U.S. Attorney's Office for working with us to ensure that corruption at all levels will be thoroughly investigated and aggressively prosecuted.”

The investigation that led to this indictment was conducted by the Albany Division of the FBI, with the assistance of the Inspector General of the U.S. Department of Labor, and the Criminal Investigation Division of the Internal Revenue Service. The United States is represented in this prosecution by Assistant U. S. Attorneys Elizabeth C. Coombe and William C. Pericak.

FBI: BEYOND FINGERPRINTS - Our New Identification Sytem

Palm prints are taken from the scene of a diffused roadside bomb in Iraq. Later, an individual entering a New York airport is arrested on an unrelated charge. A full set of prints are taken during the booking process and submitted to our Next Generation Identification (NGI) system. A positive ID connects the man to the roadside bomb.

A ski mask-wearing bank robber leaves with his loot, and witnesses tell police they noticed a red skull tattoo on his hand. A search of NGI’s Interstate Photo System for a red skull tattoo provides a potential candidate list that could ultimately lead to the identification of the bank robber.

Both cases are hypothetical, but in the not-too-distant future these scenarios could really happen…thanks to the ongoing development of the Next Generation Identification system—a logical evolution of our current Integrated Automated Fingerprint Identification System (IAFIS).

That evolution will include not only enhanced fingerprint capabilities but also other forms of biometric identification like palm prints, iris scans, facial imaging, scars, marks, and tattoos—in one searchable system.

Next Generation Identification is…
A state-of-the-art identification system that will be “bigger, faster, and better” than IAFIS, says Assistant Director Tom Bush of our Criminal Justice Information Services Division.

“Bigger” because it will increase the capacity of our fingerprint storage plus house multimodal biometrics records like palm prints and iris scans…and still have room to accommodate future biometric technologies (i.e., voice, gait, etc.) as they become available and prove reliable.

“Faster” because it will speed up response time for high priority criminal ten-print submissions from two hours to about 10 minutes on average. There will also be a special category called the “Repository of Individuals of Special Concern” containing records of known or suspected terrorists, wanted persons, and sexual offender registry names. These records can be quickly searched to help law enforcement in the U.S. and American soldiers in places like Iraq and Afghanistan assess the level of threat during an encounter.

“Better” because going beyond fingerprints as biometric identifiers will enhance the investigative and identification processes. For example, adding palm prints makes sense: some of the latent prints left behind by criminals at crime scenes are palm prints. NGI is also being developed to be compatible with other U.S. biometric systems and potentially with those of some foreign partners.

Next Generation Identification is not…
A tool to expand the categories of individuals from who the fingerprints and biometric data may be collected, nor will it change existing legal authorities.

It doesn’t threaten individual privacy. As required with any federal system, the FBI is doing Privacy Impact Assessments on what information will be collected, how it will be shared, how it will be accessed, and how the data will be securely stored…all in an effort to protect privacy.

NGI is not strictly an FBI system. It’s a joint effort and is being developed in full collaboration with its primary users—our local, state, and federal partners…in particular the CJIS Advisory Policy Board and the National Crime Prevention Compact Council.

Over the next few years, we’ll be rolling out NGI capabilities incrementally so our partners will have the benefit of each capability as soon as it gets our stamp of approval. Stay tuned for future updates, and visit our new NGI webpage.

FORMER NEW YORK POWER AUTHORITY EMPLOYEE SENTENCED TO 37 MONTHS IN JAIL FOR BRIBERY AND FRAUD SCHEME

WASHINGTON — A former employee of the New York Power Authority (NYPA) was sentenced today to serve 37 months in jail and to pay a $5,000 criminal fine for his role in a kickback and bribery scheme, the Department of Justice announced.

Edward P. Goldblatt of Melville, N.Y., a former purchasing warehouse assistant at NYPA, pleaded guilty on Aug. 26, 2008, in the U.S. District Court in Brooklyn to conspiring to defraud NYPA in a bribery scheme where he accepted $167,000 in kickback payments from a vendor. Goldblatt also caused NYPA to pay approximately $86,000 in fraudulent overcharges. Half of these overcharges were included in Goldblatt's kickback payments and half were retained by the vendor. Goldblatt also pleaded guilty to income tax evasion for failing to report as income any of the kickbacks that he received for the years 2005 through 2007.

Goldblatt was also ordered to pay, with another individual, $253,836 in restitution. He was arrested in connection with this investigation by Special Agents of the FBI and the Internal Revenue Service (IRS) Criminal Investigation on April 2, 2008.

"Today's sentencing should make clear that those who conspire to subvert the competitive bidding process will be held accountable," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department's Antitrust Division. "The Department of Justice will not hesitate to prosecute those who defraud their employers, both public and private, for personal gain by ignoring competition standards."

NYPA is a nonprofit energy corporation established by New York State for the public benefit of the citizens of New York by providing low-cost power to government agencies, municipalities and private entities. NYPA finances its projects through bond sales to private investors and does not use tax revenue or state credit. NYPA is headquartered in Albany, N.Y., with power plants and offices located throughout New York.

Goldblatt was responsible for purchasing and awarding contracts for millions of dollars in goods and services annually for NYPA's plants and offices. In addition, Goldblatt was responsible for issuing purchase orders, reviewing and authorizing vendor invoices for payment, and monitoring warehouse stock levels. NYPA's policies and procedures include a competitive bidding policy to which Goldblatt was expected to adhere.

These charges arose from an ongoing federal antitrust investigation of bid rigging, bribery, fraud and tax-related offenses in the power generation industry. The investigation is being conducted by the Antitrust Division's New York Field Office, with the assistance of the FBI and IRS Criminal Investigation. NYPA cooperated with the Department's investigation.

Anyone with information concerning bid rigging, bribery, tax offenses or fraud in the power generation industry should contact the Antitrust Division's New York Field Office at 212-264-9308 or the New York Division of the FBI at 212-384-3252.