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2011 Archives

The 81,000 cans of Baby formula seizure of 2007 ends up with jail time The Kaloti brothers plead guilty to tax and conspiracy counts and one brother will plead guilty to knowingly receiving stolen baby formula after 81,000 cans of stolen baby formula were seized four years ago in their Waukesha County warehouse.  Federal prosecutors laid out a complicated scheme in which the brothers hid millions generated by their grocery distribution company and a hotel they owned using secret bank accounts and secondary computer systems.  They also paid illegal immigrants in cash to sort and re-label baby formula – and to iron the brothers' clothes and wash their cars.  The case went public in February 2007 when FBI and IRS agents raided the Kaloti warehouse in New Berlin and seized, among other things, more than 81,000 cans of suspected stolen formula. A battle followed in court between the Kalotis and the government over the formula. As part of the plea agreement, the Kalotis have agreed to forfeit the infant formula to authorities.  The seizure of baby formula from the warehouse in February 2007 highlighted a lucrative and sometimes illegal trade in formula – sometimes called "liquid gold" because of its value. Thieves will steal the formula, strip it of price tags and other markings and then sell it to other stores that often sell it in exchange for government food aid vouchers.  In an affidavit to search the Kaloti warehouse in 2007, investigators alleged that Kaloti Enterprises reached across state lines to take in
$4 million in suspected stolen baby formula in one year.  Isaac Kaloti admitted to receiving $5,000 worth of stolen formula in May 2005. No other details were provided. Russ Kaloti was not charged in that count.  Under the sentencing guidelines, the brothers – who both live in Brookfield – each face a minimum of three years in prison, but prosecutors agreed to recommend 30 months behind bars for each and allow the terms to be "staggered" so one brother is always out to run the business.  The maximum penalty on the stolen infant formula charge is
10 years in prison and a $250,000 fine; on the conspiracy charge, five years' imprisonment and a $250,000 fine; and on the 2005 tax charges, three years' imprisonment and a $100,000 fine, according to the office. As part of the plea agreement, the brothers agreed to pay back taxes, a penalty and interest.  U.S. District Judge J.P. Stadtmueller will have the final say on sentencing. No court dates have been set.  (

Macy's Security guard spots two Romanian con-artists slight of hand – short change scam artists that may have been working the country Busted in Albuquerque by their Organized Crime Unit, says the suspects were short-changing store clerks around the country hitting a half-dozen states. They got word from Nevada to be on the lookout for a blue BMW with Maryland plates. A security guard from the Coronado Macy's spotted it and called APD. The suspects are now in the custody of Homeland Security. Police are not releasing their names because they say this is an active investigation and the men may be involved in other crimes.  Police say the pair had their M.O. down like the con-artists from the movie, The Grifters, working what's known as a slight of hand or a short change scam.  Police say in this case the men would buy high-dollar items and give the clerks big bills. They would then ask for the money back to double check the amount, but then stealthily pocket some of the cash before handing the money back to the clerk. The suspects would then go to another store and return the merchandise.   (Source

Operation Booster in South Florida leads to several arrests of an ORC ring targeting Wal-Mart and Target stores.  Freddy Rodriguez was the sixth suspect arrested in the multiagency law enforcement operation that nabbed a ring of shoplifting suspects preying on the stores. He faces 24 charges, including racketeering and grand theft.
Police said the thieves would shop at the stores and legitimately make purchases, but after taking the items to their cars, they would return to the stores, pick out the same items and, armed with their initial receipts, bypass the registers and walk out with the stolen goods.  Investigators said a man named Marlon Suarez was the ringleader and paid the shoplifters $60 per store. Hitting an average of four stores per night, the shoplifters made about $240 per night three or four times a week, police said.  The shoplifting ring was so lucrative that the thieves had to rent a storage unit to hold all the stolen merchandise. More than 1,400 items were sold on eBay, netting more than $145,000  Police said Suarez's girlfriend, Nancy Outerino, was the money manager, selling the merchandise on eBay and then cashing the checks. But when Local 10 showed up at her home, her family didn't know why.  "Did you know she sold stolen property on eBay?" Local 10's Todd Tongen asked a man who said he is Outerino's son.  "No. You guys can get out of here," he said.  Outerino's attorney released a statement saying, "Just because Nancy Outerino's name is on the eBay account doesn't mean she participated in selling stolen goods."  Both Walmart's and Target's loss prevention departments were involved in the investigation, and they have surveillance video. Scams like this are one of the reasons other stores, such as Home Depot and Brandsmart, have a worker sign customers' receipts when they leave, so they cannot use them again.

Follow up to last weeks "Operation Swiper" the largest ID theft ring busted in U.S. history.  Of the 111 indicted, 86 are now in custody and 25 remain at large.  More than 90 of the defendants have been charged in five indictments charging 784 pattern acts with, among other crimes, Enterprise Corruption under New York.  The indictments charge that Imran Khan, Ali Khweiss, Anthony Martin, Sanjay (a.k.a. Rocky) Deowsarran and Amar Singh were "bosses" of criminal enterprises and received the necessary raw material – lists of credit card account numbers and various blank credit cards. The materials were alleged to have come from overseas – unknown individuals in such places as Russia, Libya, Lebanon and China – or from statewide suppliers, such as "skimmers" (individuals who worked in a restaurant or bar, retail store or financial institution and used a skimming device to swipe a consumer's credit card information) or "Internet suppliers" (who obtained credit card accounts through illegal websites).  The boss then allegedly sent the stolen account numbers to a "manufacturer" who re-encoded the information onto the magnetic strips of blank credit cards using a "reverse" skimming device. The manufacturer was also allegedly responsible for putting the written four security numbers on the front of a credit card, as well as the seven security numbers on the back, as well as writing and embossing the account number on the credit card.  Once the forged credit cards were completed, the items were distributed to the criminal enterprise's "shopping crews," which consisted of "crew leaders" and "shoppers." Crew leaders allegedly supplied the fraudulent items to the shoppers and oversaw their planned shopping expeditions throughout New York and the U.S.  Among the local malls targeted by the shoppers were the Queens Center Mall, the Westchester Mall, the Americana Mall, the Roosevelt Field Mall, the Walt Whitman Mall and the Smithtown Mall.  According to the charges, aiding the shoppers were collusive store owners or employees who worked within a particular retail store where the shoppers were making their purchases or in a bank where they had access to cardholder information and could check the information for high-value targets and/or steal credit card information from the available files.    Sometimes, it is alleged, a fraud ring would employ an "impersonator," an individual who contacted financial institutions or retail stores and impersonated the true cardholder and made inquires in order to check the viability of the credit. Also employed were "bust out crews," individuals who used the skimmed information of another member of the criminal enterprise to make thousands of dollars in purchases.  Once a shopper purchased high-end merchandise with forged credit cards, the merchandise was turned over to the crew leader who, in turn, gave the merchandise to the boss of the operation. The boss would then allegedly contact a "fence" – such as Fnu Gustawian, Kah Sheng Poh, Allen Lam or Benny Ahoo Ahdoot – and sell the merchandise to the fence at a discounted price. The fence, in turn, would then allegedly offer the merchandise for re-sale to the public.  (Source

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