National Intelligence Estimate Due in January

The U.S. intelligence community is near completion of a major assessment of the national security threat posed by international organized crime, according to administration officials and experts.

The National Intelligence Estimate, which could be finished as soon as January, was conceived more than two years ago to address the dangers posed by Eurasian criminal groups’ suspected infiltration of energy and other strategic markets.

But its focus broadened over time to include a wide swath of criminal syndicates and issues, from
drug-trafficking by Mexican cartels to the relationship between terrorism and organized crime, the officials and experts said.

“Globalization has done great things for organized commerce, but it’s also helped organized criminal groups to advance as well,” said one senior Justice Department official, who spoke in general terms about the threat.

The threat was underscored in recent weeks, as reports emerged of an FBI investigation into a major cyberattack on Citibank Inc., which Citibank denies. And the Justice Department announced drug charges in New York against alleged Al-Qaeda associates arrested in Ghana during a Drug Enforcement Administration sting.

NIEs are produced under a classified process and carry the full weight of the U.S. intelligence community’s judgment. The existence of the NIE on international organized crime has not been previously reported.

The assessments are compiled by the National Intelligence Council, a research arm of intelligence community that reports directly to Director of National Intelligence Dennis Blair. The NIC incorporates in its estimates expertise from inside and outside of the federal government.

The estimate’s focus expanded over time as more agencies sought to reap the benefits of inclusion, including increased funding and more say in policy direction. In this case, the departments of Homeland Security, Justice, State and Treasury contributed to the NIE, the officials said. The National Intelligence Council is expected to release a public overview of the threat assessment, increasing its visibility and impact, experts say.

“I think it’s going to open this field up to some serious academic research and funding,” said Louise Shelley, director of the Terrorism, Transnational Crime and Corruption Center at George Mason University. “We’re going to be focusing on a whole range of issues that we haven’t thought enough about, and connecting the dots on other issues.”

A sensitive subject: Russia

One effect of broadening the NIE is that it allows the Obama administration to sidestep the diplomatically sensitive issue of Russia, where authorities have long suspected that the tentacles of organized crime reach into the government.

In 2008, then-Attorney General Michael Mukasey gave a speech that identified as the top security threat organized criminals who control significant positions in the global energy and strategic materials markets, threatening U.S. geopolitical interests.

He never mentioned Russia. But as an example, Mukasey pointed to Semion Mogilevich, who is thought to be at the pinnacle of Russian organized crime and is said to have influence over large portions of the natural gas industry in former Soviet-bloc states. (Mogilevich is wanted in the U.S. on racketeering charges, and the FBI recently placed him on its Top Ten Most Wanted list.)

Russian control of energy supplies and transport networks is a security issue for the European Union, which relies heavily on Russian natural gas. But Russia controls the spigot for pipelines that service Central and Western Europe through the former Soviet state of Ukraine. Twice since 2006, Russia has cut off gas to Ukraine in payment disputes, affecting EU supplies.
Of further concern to intelligence analysts is the murky ownership of some middleman companies crucial to European energy supplies.

In 2006, the Wall Street Journal reported that the Justice Department’s organized crime unit was investigating the ownership of a Ukrainian energy trading company named Rosukrenergo AG, half owned by Russian state company OAO Gazprom.

In response to U.S. concerns about who ultimately controlled Rosukrenergo, company representatives met with the DOJ in Washington to disclose the ownership stake of a Ukrainian businessmen with ties to Mogilevich – the suspected organized crime figure on the FBI Most Wanted list, the Wall Street Journal reported.

There’s also the case of William Browder, a U.S. native and British citizen who founded Hermitage Capital Management, once the largest foreign investment fund in Russia but now accused in Russian courts of tax evasion. Hermitage has denied evading taxes. It has countered with allegations that a government-affiliated “criminal enterprise” siphoned off $230 million in taxes paid by Hermitage units. Browder has retained the law firm of former Attorney General John Ashcroft to investigate.

Hermitage has filed an application for judicial assistance in the Southern District of New York federal court, asking the U.S. to compel access to information it says it needs to defend itself in Russia.

In a recent declaration filed in the case, Neil Mickelswaithe, a British solicitor and outside counsel to Hermitage, said the fund is the victim of a “criminal enterprise” in Russia spanning senior offices of the Russian Interior Ministry, the Russian Federal Security Service (the successor to the KGB), senior Russian tax officers, and certain Russian court judges and “numerous private individuals in Russia, some of whom have previous criminal convictions.”

In another high-profile case, U.S. authorities have long suspected billionaire Oleg Deripaska, one of Russia’s most powerful tycoons, of having ties to Russian organized crime. Deripaska, who made his fortune in the post-Soviet aluminum industry, is close to Russian Prime Minister Vladimir Putin, often traveling with him abroad. He presides over a business empire that spans metals, finance and construction.

Deripaska, who has denied any ties to organized crime, had been barred entry to the U.S. for years. But recently, the FBI made secret arrangements to allow him into the country to seek his assistance in an ongoing criminal probe, the Wall Street Journal reported. In two visits to the U.S. this year, Deripaska also met with executives of Morgan Stanley and Goldman Sachs Group Co.

Putin and other Russian officials have raised the visa issue with their U.S. counterparts, and in the past Deripaska hired high-powered Washington lobbyists — including former Senate Majority Leader Bob Dole (R-Kan.) — to make his case for entry into the U.S.

New approach more measured

The Obama administration, in contrast, has been careful not single out any country or group. Deputy Attorney General David Ogden, in a speech and in interviews given at the Interpol General Assembly in October, noted continuing threats posed by Mexican drug cartels, South Asian heroin-trafficking syndicates, and traditional crime families from Asia and Eastern Europe.
Ogden made no mention of strategic markets. The apparent shift in message is reflected in the intelligence estimate, officials said.

Under Mukasey, the Justice Department pushed for a finished product before President George W. Bush left office. After a draft NIE was circulated late in the Bush administration, officials in the departments of Homeland Security, State, Treasury advocated a broader sweep, officials said. The recommendations were ultimately passed on to the Obama administration.

“When the Justice Department first started working on the estimate, there was much more focus on energy issues,” said George Mason’s Shelley, who was first contacted in March by government officials involved in drafting the estimate.

“They asked me what I thought was wrong with it, and I told them they needed to broaden the scope and the geographical range. There’s a tendency to stovepipe too much. When you broaden the scope, you are able to see the diversity of the problem and the relationship amongthe different aspects of transnational crime,” she said.

The Obama administration has been actively highlighting fronts in the battle against international organized crime.

In November, the State Department and Immigration and Customs Enforcement co-hosted a symposium in Honolulu. The event drew attention to criminal networks that span East Asia, the Pacific and Latin America — and that engage in a broad range of criminal activity, including drug, gun and human trafficking, money laundering and corruption.

Earlier this month, officials from the departments of Commerce, Homeland Security and Justice, as well as the White House, met with entertainment industry executives to focus on intellectual property crimes. The connection between piracy and organized crime is well-documented, particularly in Asian countries such as China.

At the event, billed as the first of its kind, Attorney General Eric Holder called on the international community to respond.

“This is a problem that the United States cannot solve by itself,” said Holder. “We want to confront these nations, quite frankly, where too much of this occurs.”

Narco-trafficking also a danger

Violent Mexican cartels, responsible for thousands of killings south of the border, have emerged as a singular threat. Their vast drug-trafficking networks reach deep into the U.S., and law enforcement officials fear a scenario in which the cartels rent their smuggling routes to terrorists.

“If you were to ask me what is the biggest organized crime threat, I would say it’s more the cartels in general and other organized crime syndicates engaged in narco-trafficking and other illicit activities,” said David Luna, director for anti-crime programs at the State Department’s Bureau for International Narcotics and Law Enforcement Affairs. “They’re not just in our backyard, they’re actually in the U.S.”

The link between terrorism and crime is also of growing concern, officials said. The case of the three alleged Al-Qaeda associates charged in New York, who are believed to be in their 30s and originally from Mali, appears to show a direct link between the terror group and drug traffickers. Authorities long maintained that Al Qaeda and the Taliban profit from the heroin trade in Afghanistan. Michael Braun, who retired as DEA’s chief of operations last year, told The Associated Press the case was “the tip of the iceberg.”
Decade-long focus

The intelligence community’s interest in international organized crime dates back more than a decade. In the mid-1990s, intelligence officials began work on a separate estimate, with the help of the FBI and other law enforcement agencies, said Jim Moody, a former FBI Deputy Assistant Director who oversaw organized crime investigations.

The estimate, he said, “helped get rid of a lot of barriers to sharing information” between the intelligence and law enforcement communities and set priorities for developing intelligence on international criminal groups.

But its impact was curtailed by the events of Sept. 11, 2001. “Given the trauma that the country faced after the 9/11 attacks, international organized crime was relegated understandably to a second-tier national security priority” as the Bush administration redistributed resources to deal with terrorist threats, the State Department’s Luna said.

Officials said they hoped the estimate would cement international organized crime as top national security priority, motivate agencies to develop stronger policies and make an argument for increased funding.

Jay Albanese, former chief of the International Center at the National Institute of Justice, the research arm of the Justice Department, was cautiously optimistic.
“Estimates are a mixed bag,” he said, adding that international organized crime is neither easily quantified, nor easily defined.

“This puts those of us in the crime businsess at a severe disadvantage,” said Albanese, a criminologist and professor at Virginia Commonwealth University. “It’s very diffcult to say with any degree of accuracy how much we should be focusing on human-trafficking versus arms-trafficking.”

By Joe Palazzolo December 28, 2009
Mary Jacoby contributed to this report.

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Central American Truck Theft Ringleader Sentenced

12/24/2009

HOUSTON—A Houston man who recruited others to steal and transport millions of dollars of truck tractors, trailers and other heavy equipment to Central America has been sentenced to prison, United States Attorney Tim Johnson announced today.

United States District Judge David Hittner sentenced Yuri David Melendez, 43, to a total of nine years in federal prison for his leadership role in the truck theft scheme and in an unrelated narcotics charge during a hearing today.

Melendez, who was convicted of conspiracy to export and transport stolen motor vehicles after pleading guilty, was sentenced to five years imprisonment, the maximum punishment under the law. In addition, Melendez was also sentenced today to 108 months in federal prison on an unrelated narcotics trafficking charge filed in federal court in Florida.

The Florida case was transferred to this district after Melendez was apprehended in this district and agreed to plead guilty to the narcotics trafficking charge pending in Florida. Judge Hittner ordered that the terms of imprisonment imposed on each count of conviction be served concurrently. Melendez was ordered to pay $815,951.91 in restitution and to serve a five-year term of supervision upon his release from federal prison.

Beginning in 2001, Melendez received requests from his contacts in Central America for stolen tractor trucks, trailers, tankers, and other heavy equipment.

• Melendez would then locate the requested equipment at various industrial and commercial sites in the Houston area and recruit co-conspirators to assist with the theft of the equipment.
• Once stolen, the equipment was transported south by Melendez’s recruits to staging locations near Edinburg, Texas. Melendez frequently accompanied the drivers in his own private vehicle on the way to Edinburg, serving as a guide and look-out for law enforcement.
• Once in Edinburg, other unidentified members of the conspiracy would arrange for transportation of the equipment across the border into Mexico.
• Drivers took the equipment to Melendez’s customers—most of whom resided in Guatemala and Honduras. Following delivery, Melendez’s contacts would pay him by wire transfer or cash delivery in Houston.
• Melendez managed to evade law enforcement for a number of years until early February 2009 when two of his recruits were arrested in possession of recently stolen tanker trucks.

In mid-January 2009, after receiving an order for two tanker trucks, Melendez sent Victor Antonio Garcia, 27, who had stolen equipment for Melendez in the past, to Reynosa, Mexico, to recruit Orlando Gonzalez Huerta, 29, as a second driver for the job.

Melendez then arranged for Garcia and Huerta to fly to Houston. The men stayed at a local motel while Melendez located two tanker trucks to be stolen.On the evening of Feb. 8, 2009, Melendez drove Garcia and Huerta to the Colorado Oil Company in Sealy, Texas, where the two broke through a chain link fence with bolt cutters.

Garcia and Huerta each drove a tanker truck out of the company’s compound south towards Edinburg and Melendez followed the pair in his private vehicle. Employees of the Colorado Oil Company reported the equipment missing. Using GPS tracking devices attached to the tanker trucks, officers with the Texas Department of Public Safety located and arrested Garcia and Huerta in Live Oak County, Texas.

Huerta identified Melendez in a photographic line-up and within days FBI agents located and arrested Melendez at his home in Houston.Investigating agents definitively linked Melendez and his conspirators to other thefts by viewing surveillance photographs taken at the Falfurrias checkpoint located north of Edinburg.

Since March 2007, the photographs revealed more than 20 pieces of stolen equipment passing through the checkpoint, typically during early morning hours. In each case, the stolen piece of equipment was accompanied by a vehicle associated with Melendez.

Since March 2007, Melendez and his co-conspirators were found to have transported more than $4 million of stolen equipment through the Falfurrias Border Patrol checkpoint.Garcia, Huerta, and a third co-defendant, Rito-Jasso-Zorilla, 32, all of whom also pleaded guilty to conspiring to export and transport stolen motor vehicles and equipment, were previously sentenced to terms of imprisonment of between 24 and 51 months.

In the Florida case, Melendez admitted to attempting to purchase two kilograms of cocaine. The United States seized and has forfeited Melendez’s interest in $33,000 in cash.The investigation leading to the truck theft charges was conducted by the FBI and the Texas Department of Public Safety. The narcotics charges were investigated by the Drug Enforcement Administration. Assistant United States Attorney David Searle prosecuted the cases.

Source Houston FBI via Apostille

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