TERROR ALERT - GROCERY STORE SCAMS

TERROR WATCH

GROCERY OPERATIONS ACROSS AMERICA

BABY-FORMULA SCAM –
CONTINUING MIDDLE-EAST STOREOWNER FRAUD


In the Eastern District of New York, federal charges were unsealed against Ibriham Qunbar and Salah Nabban, owners of Palco Trading LLC of Brooklyn New York. The United States Attorney charged the individuals in a scheme to defraud the Internal Revenue Service, “to attempt to evade and defeat substantial income tax due and owing to the United States of America.” It’s alleged that they filed false and fraudulent income tax returns, filed for an S Corporation, defraud the United States for “impeding, impairing, obstructing and defeating the lawful functions of the Internal Revenue Service”.

These tax charges stem from a scheme by the two defendants in a scam involving stolen and expired baby formula. It’s alleged that Qunbar and Nabban through their company Palco Trading, LLC turned black-market infant formula into profits that they never reported to the IRS.

This scam has been an ongoing method of Middle Eastern Grocery Store Owners over the past 20 years. The sale of adulterated baby formula in the South West and the Mid-West was ongoing during the late 1980’s and early 1990’s by organized criminal Middle-Eastern enterprises affiliated with terror cell operations within the United States.

In this matter, Qunbar and Nabban owned a business that supplied grocery products by distribution to numerous grocery outlets. Palco Trading LLC is located at 791 Rogers Ave. Brooklyn, New York. This address has a history as being associated with Arab Mini-Marts during the late 1980’s and early 1990’s which was identified as “M & M Supermarket” then listed as affiliated and associated with Radwan Ayoub, the “Coupon King” of the 1980’s and 1990’s who helped finance the first bombing of the World Trade Center 1993, through more than $100 million dollars in coupon fraud in the New York Metropolitan area. It was Ayoub’s scheme that financed the World Trade center bombers, all whom have been convicted of the attack on the World Trade Center, and are serving more than 200 years in Federal Prison for their criminal attack.

Qunbar and Nabban are accused of buying baby formula for between $6000 and $16000 a batch, and then through Palco Trading distributed goods to grocery chains like Key Food and Associated Supermarkets. After securing the formula at under market prices, Qunbar and Nabban would contact the two manufacturers Ross and Mead Johnson a subsidiary of Bristol Meyers Squibb it’s alleged that they would seek refunds at full price.


At times they would buy stolen non-expired formula and sell it to groceries. It’s also alleged that at times they would create fake invoices to show that they purchased the formula at full-price from the corporations to receive the refunds, profits they never reported to the IRS.

It’s reported that they sold the store in 2003 for $1.6 million, two years before Qunbar was found guilty by jury trial for falsely reporting to federal officers at JFK Airport in New York City that he and his wife were bringing $12,000 in cash with them before a trip to Jordan. He actually had $22,687.

Is this an ongoing scheme by middle-eastern grocery store owners to defraud the manufacturers or is it a method of support of terror operations within the United States. Not to say the Qunbar or Nabban are affiliated with terror cell operations within the United States, it seems that the familiar behavior, the links to the storefront operations identified as a financial supporter of the 1993 World Trade Center bombing, and the use of Enfamil Baby Formula as a product to defraud the manufacturers and the IRS follows a pattern of years identified as affiliated with PLO operations, Hezbollah Terror financing, and Abu Nidal Terror operations in the Mid West.

Is this a coincidence or is it a method of business by middle–eastern businessmen to defraud, destabilize and impact American corporations.
E-MAIL US YOUR OPINION..

IOS / A QUESTION OF SLIGHT OF HAND / AN INSIDE LOOK AT THE COUPON FRAUD FROM THE FEDERAL POINT OF VIEW AND OURS

INTERNATIONAL OUTSOURCING SERVICES

A QUESTION OF SLIGHT-OF-HAND
Or
MISDIRECTION

AN INSIDE LOOK AT THE IOS FRAUD

On June 28, 2007 FBI Special Agent, Stephen P. Vitale presented an affidavit to the United States District Court, Eastern District of Wisconsin which details numerous issues relating to the IOS fraud and the actions of Bruce Furr, Lance Furr and Steven Furr. Special Agent Vitale is the lead case agent in the IOS matter, with assignment to investigate U.S. violations of mail and wire fraud.

His affidavit details the efforts of the law firm of Greenberg Traurig a defense on behalf of IOS and its principles that the business practice of “store tag defense”, is a business practice and method used by IOS and its predecessor corporation International Data Inc. They practiced “store tag” methods in accounting for coupon redemption for small independent owned grocery stores by submitting consumer coupons for redemption to International Data, (IOS) coupon redemption processing coupling them with large grocery chain coupon submissions.

The affidavit explains the practice that was submitted by the defense attorneys for Furr’s that “store tag defense” appeared to be nothing more than an accounting practice. In an explanation of the “store tag defense”, IOS would bundle the submitted coupons from small grocery stores with large submissions from such corporate clients as Pathmark, Winn Dixie etc. As the practice of coupling the submissions to manufacturers for payment under the mask of Pathmark (as an example) the submission may have been in the amount of $1 million dollars for payment to IOS by the manufacturers and its representatives. Research finds that the average monthly submission by Pathmark often does not exceed $400,000 of consumer coupons submissions. Pathmark was not involved; Winn-Dixie had no knowledge of these excessive submissions. Only IOS, Lance Furr and others within IOS not only knew but also participated.

The defense presented by Furr’s attorneys (remember IOS was released from criminal liability in a cooperation agreement), met with the U.S. attorney’s office in Milwaukee, asserting that “since IOS invoiced coupons a certain way, the company had in fact committed no fraud.” The defense strategy asserted that although coupons from small stores were sent along with coupons from larger stores on the same IOS invoice (listing only the larger stores) it was done only as a matter of convenience. The coupons were processed at the same location and efficiency and even saving toner was the logic. The defense poised that although the coupons were shipped together, no one could have been defrauded because each packet of coupons contained a “store tag” that accurately listed the store at which they purportedly had been redeemed.

S/A Vitale investigation into this defense lasted for several weeks. The government learned from a combination of multiple witnesses and physical evidence that this defense was FALSE. Indeed it was fabricated by IOS perhaps more than a year earlier with the intent that its attorneys pass the falsehood on to the government in a bid to prevent the government from going forward with its indictment for coupon fraudulent invoicing practices. The invoicing “example” also was revealed as a fraudulent document that had been prepared for members of the joint defense group during a plant tour in March 2006.

Between February and April 2007 in the context of litigation in the grand jury matter in Case No. 07-Misc-26, IOS lawyers from the Scott Hulse law firm, assisted by Greenberg Traurig, cited the “store-tag defense” as their key argument against application of the crime-fraud exception to certain subpoenaed documents. Counsel’s reliance on this defense was withdrawn after the United States presented IOS’s lawyers and the Court with evidence indicating that the defense was a sham.

S/A Vitale explained that in April 2007 during an interview with a Greenberg Trauig attorney, the attorney had concluded that the “store tag” defense likely rested on false factual information.

The investigation has revealed that each of the Furr defendants would have known that the “store tag” defense was false. Multiple witnesses have described the Furrs’ participation in the alleged diversion scheme. Lance Furr had admitted the diversion and the reasons for it to an IOS auditor. Exhibits A & B (encompassing Lance Furr’s description of IOS’s “deuce strategy” and further indicating that in 2000 alone, over $49,000,000 in small store coupons had been billed out under the name larger retailers such as Pathmark. Likewise in late 2005 Bruce Furr admitted that IOS had billed out small-store coupons as if they had been redeemed at large stores, claiming this had been a “bad business decision” but not illegal. Similarly, a cooperating defendant has reported that in early 2007, Steve Furr had a conversation with him specifically addressing the January 10, 2007 presentation of the false “store tag” defense to the government.

In June 2005, S/A Vitale reports that Pathmark, one of IOS’s largest clients, expressed concern that IOS may be using Pathmark’s name when billing out coupons purportedly redeemed at small stores. Steve Furr wrote Pathmark the (1) only Pathmark coupons are invoiced under Pathmark’s name, (2) all small store coupons were invoiced under specific well-recognized small store designation and (3) small store coupons were processed at a location 500 miles apart from where IOS processed coupons redeemed at large stores like Pathmark.

This is inconsistent with the “store-tag” defense presented in the claim that the coupons were processed in the same place and included on a single invoice to reduce costs.

S/A Vitale continues to describe IOS’s position and efforts to obstruct justice by intimidation of witnesses, employees and using financial threats and holding back payments to resigned employees as a method to have the employee agree to sign an agreement to remain silent to the FBI and then the money would be released. Agreements were drawn up by attorneys of Greenberg Trauig in these matters on behalf of IOS. (See affidavit for further details).

RAPID PAY PROGRAMS

International Data 12/31/00 Memo of “Rapid Pay Program”
“Rapid Pay” type programs are for Mom & Pop type grocery stores which need coupons processed. These are funded programs with average terms of 14 days from receipt of the coupons. There are three general types of programs”;



DEPOSITS

These programs usually require a deposit before payments are remitted to the retailers. The purpose of the deposits is to cover International Data (International Outsourcing Services) exposure on manufacturer chargeback’s generated from coupon shipments. Manufacturers payment denials often are the based on coupon expiration, foreign coupons (coupons sent to wrong manufacturer), not able to substantiate purchase volumes, not having the proper forms on file show that the customer even exists. The chance for fraudulent coupons in the small grocery stores is greatly higher than the large funded programs.

Normally deposits are not paid directly by the retailer, but rather most of the time deposits represent retailer payments for coupons received from the manufacturer that are held by the clearinghouse ( basically the first few coupon shipments are run through the system and payments to the retailer is withheld as a deposit until a deposit threshold is met. Once the initial deposit levels are reached and retailer payments start. The deposit levels continue to be monitored and compared against chargeback’s generated to cover clearinghouse exposure.

To mitigate the higher chargeback rates, International Outsourcing (ID) has invoiced RP coupons under other big funded programs that have lower chargeback rates. ID is a major player in the Rapid Pay type program. With the purchase of UCCH (Coupon Express) and NCRS programs, they have solidified their market share. Since these purchases, ID has kept the names in tact and has not advertised that they purchased these companies. Therefore, the smaller retailers don’t have a clue that all of the programs are the same company ID. This creates a problem for ID in that store owners jump from clearing house programs to other programs. ID has had trouble merging the information to transfer the data on chargeback’s from the stores to the new accounts within the ID operation. To do so, they transferred the information data gathering to their operating in El Paso to move the chargeback’s and deposits to the store with most current shipments. ID is still trying to complete the store merger program.

The purpose of Rapid Pay is to reduce the chargeback’s from the manufacturers and get a higher collection percentage from the manufacturer for the Rapid Pay customers. This reduces ID’s chargeback’s receivables.

One can question the issue of fraudulent submissions to the manufacturers by ID to increase levels of payment from the manufacturers and reduction of chargeback’s by coupling the Rapid Pay program with the larger more stable chain grocery stores.

NCRS – National
B&M
Rapid Pay includes Coupon Express, Priority and Rapid Pay.
(See Memo dated 12/31/00)

International Data memo dated 12/31/00
“Deuce Memo and Analysis”

The “Deuce” strategy – (a) all coupons are received through Rapid Pay – The retailers are paid through Rapid Pay for all coupons received.

“Some Rapid Pay coupons are still invoiced to the manufacturers through the Rapid Pay program.

Deuce coupons are invoiced to the manufacturers through the 5 programs mentioned using specific invoice ranges (8000-9000). The range is distinctive from the programs normal invoice range to make them easily identifiable.

The invoicing is loaded onto the A/R system in the respective program that it was invoiced under.

Manufacturers pay the program and the cash is applied on the A/R in each program that it was invoiced under.

The shortfall in the Rapid Pay program between total Rapid Pay audited receipts paid to the retailer compared to the amounts received from the manufacturer for Rapid Pay invoices shows up as a negative inventory gain.

The surplus in the other five programs between the audited receipts paid to the retailer compared to the regular program invoice and deuce program invoice manufacturer receipts shows as additional inventory gain for the programs.

The end result is a lower rate of deductions from the manufacturer since they do not see Rapid Pay as the invoicing entity.

It is understood that the large grocery chains, Pathmark, Winn-Dixie, and others similar to the large grocery chains have an approximate 14% coupon rejection rate from the manufacturers, while its known in the redemption business that the Mom-Pop grocery stores, small independent stores experiences nearly a 60% return rate.

This explains why IOS and other redemption centers concentrate on the larger legitimate grocery chains. Past experiences shows that coupon fraud by organized coupon redemption rings, terrorist groups and criminal enterprises submit bulk coupons to redemption houses which submit to the centralized clearing house like NCH- NuWorld who represents manufacturers redemption programs.

It is alleged that IOS and its predecessor International Data (ID) used a method of deception, fraud and intimidation to protect its interests. Where is Nu-World in its role between the manufacturers and the coupon redemption processing houses?

Where is Supervalu is the scheme of things? They are a 25% share holder in IOS; two Supervalu executives are on the Board of IOS. Supervalu owns NAFTA, while NAFTA has a business relationship, partial ownership of IOS.

Which Supervalu stores were submitting coupons to IOS? Were they in the Rapid Pay program or the Deuces program?

Where did the money from the difference in the submissions of “Mom/Pop” stores submitted under the banner of Pathmark find its resting home? Whose pockets were lined with the excess cash collected from the coupon submissions of the bulk co-mingled manufacturers payments?

We’ve seen over the past 20 years organized groups, some associated with international terrorism, others funding terror activities, and more directly a New York operation that helped finance the 1993 Bombing of the World Trade Center, killing six and injuring more than 1000, all using coupon redemption from listed Mom/Pop grocery stores.
Without the proper verification by such systems as “Rapid Pay” and the co-mingled submissions of coupons to manufacturers questions the intent of IOS and its former ID behavior as a means of greed, while inadvertently assisting the financing of terror operations within the United States.

Such programs fuel fraud, diversion and criminal behavior by individuals and corporations. In the IOS matter, the original offenders all Middle Eastern grocery store owners or registered coupon brokers obtained payment from IOS and transferred funds to Ramallah, Palestine. Where did this money go? Too whom? What for? We need answers!

Let us know what you think!!!
This is a look inside the IOS Fraud. While the company has been released from criminal liability, the principles of IOS, officers, specific employees and others are awaiting criminal prosecution, therefore they are innocent until found guilty. This report is an explanation of the details of a portion of the fraud presented to the United States Court in response to criminal proceedings.

SEE AFFIDAVIT

Comments Accepted:

MAIL ROOM SECURITY / BIO ATTACKS / A SOLUTION IS HERE

BIO-CHEMICAL BUSINESS ATTACKS

$12.1 million TO OPEN NEW OFFICES –
.41 cent STAMP TO SHUT THEM DOWN

Corporate offices, schools, industry, manufacturing plants, governmental offices, the offices of former President William Jefferson Clinton and even Presidential Candidate John Edwards have all fallen victim to “WHITE POWDER” mail threats, hoaxes and attacks. These are not random acts of violence, but rather a selected controlled attack on the institution, corporation or person.

www.CrimeTalkAmerica.com reports our investigation to enlighten the reader, educate the corporate executive and explore our F3IR newest product to protect your business and life. While I try to make sure that Crime Talk America is independent of our consulting business, I find it EXTREMELY IMPORTANT that you the business reader, the crime talk reader and corporations within America and others from around the world that visit our site consider prevention and protection mode which is essential and NOW available.

Just after the 9/11/2001 attack on America, several news agencies, politicians, businesses and governmental agencies fell victim to an onslaught of U.S. Mail envelopes delivered that contained white powder substances. Most were false or hoax mailings. Some were not. We will never know how many of these attacks were real, but it really doesn’t matter, its VERY DISRUPTIVE to business and the individuals involved.

Let’s consider the American Media offices in Boca Raton, Florida. This world famous news agency fell victim to an anthrax attack that took the life of Robert Stevens, a photo editor with the Sun. He took ill after approximately five days. Examination by doctors at John F. Kennedy Hospital determined that he had contracted ANTHRAX. The CDC confirmed that it was anthrax. Mr,. Steven died on October 5, 2001, just a few days after becoming ill.

Upon specific tests of American Media employees, it was determined that two others tested positive. All employees of American Media were tested. The results were positive for five other employees. Those identified as having contracted anthrax exposure were hospitalized and treated and recovered.

The Florida Department of Health announces that it had discovered minuscule amounts of Anthrax spores were found in the Boca Raton Post Office. During the same period, Anthrax was sent to NBC television in New York. It was determined that this was the same as the Boca Raton anthrax.

The American Media building was closed, sealed off and guarded from any public visitors or employees. CDC members and FBI investigators explored the building wearing protective hazardous material suits.

Three years after the closing of the American Media building, the building received approval for cleaning. It took several more years to declare the building as a safe environment. It was just a .37 cent U.S. Postal Stamp that shut down a billion dollar empire.

In 2006, five years after the 9/11 attack and the Anthrax attack on American Media, NBC, Congressmen and governmental buildings, former President William Jefferson Clinton’s offices located in the heart of Harlem, New York received an envelope filled with white powder. This caused two floors of the building to be shut down. Most of the building was evacuated by New York Police but eleven people were quarantined as the police, FBI, Secret Service, Fire Department and Homeland Security responded to the building. It turned out that the white powder was not toxic, and was harmless but another disruption to businesses and people.

Anthrax hoaxes and attacks are worldwide. More than 750 such incidents have been reported around the world in 2001 and continue today. ABC News offices were victimized, Senate offices were attacked, and abortion clinics also receive these letters. More than 17 people came down with symptoms of anthrax attack around the world.

These attacks whether a Hoax or Real are ongoing today and are used to terrorize business and individuals more than ever.

While some would argue that many of the envelopes were a HOAX, its still extremely disruptive to business and law enforcement. It takes time away from business operations, creates fear by employees and can shut down a billion dollar business in a matter of seconds.

We at www.CrimeTalkAmerica.com have discovered the only actual solution to cleaning incoming mail to businesses and governmental agencies. F3International Resources, our Consulting Group, has reached an agreement to represent the Bio Chemical Cleaner to our corporate and government clients.

I decided after receiving several inquiries from our readers on how to help protect their businesses, to offer this information. It is extremely important so I decided to present this great new protective counter chemical attack measure to protect your business, offices and government agencies from that .43 cent postal stamp attack,.

Visit our www.F3IR.com website, Products section for details. It’s a great protective resource.

IOS Coupon Fraud Federal Case / POSSIBLE ADDITIONAL INDICTMENTS TO COME!!!

BREAKING NEWS

IOS FEDERAL CASE
POSSIBLE ADDITIONAL INDICTMENTS TO COME!!!

On June 14, 2007 the U.S. Justice Department summarized their case in the matter of United States v. Balsiger, et al, Case # 07-Cr-57, which details the ongoing follow-up investigation and the volume of documents being examined by FBI agents and U.S. Attorney’s Office.

The summary letter details the granting of the governments motion to dismiss the indictment against International Outsourcing Services. They report that the agreement, “as part of an Agreement for full cooperation by the corporation, including full government access to all IOS files.”

As part of the agreement, IOS secured promises from its attorneys including law firms of Scott Hulse, Matrshall, Feuille Finger & Thurmond,P.C., of El Paso, ?Greenberg Trauig LLP of Chicago and Mallor Clendening Grodner & Bohrer, LLP of Bloomington, In. to make their case and coupon related files available to the government for review.
A question on “Privileged Communication” and probable privileged litigation may exist.

The U.S. Attorney asserts that “the ongoing investigation has shown that at least some attorneys for IOS were used, perhaps unwittingly in most of all cases, to pass along false information to the government in an attempt to obstruct justice.” The U.S. Attorney further suggests that “some attorneys were also deployed to harass one or more government witnesses for the same purpose.”

The U. S Attorney also suggests that “still other witnesses were subject to coaching before they were interviewed in the government’s investigation.”

An ongoing investigation seeks to determine precisely which individuals were responsible for this apparent additional criminal conduct. The U.S, Attorney went on to suggest that “when that is determined, we expect to seek superseding indictments.”

The documents of the law firms are “highly relevant” to the inquiry into possible obstruction. The need for the U.S, Attorney’s office to seek further information will; require a court approval that the information they seek is not privileged attorney client documents. A future hearing will settle this question,

SEE the U.S. attorney case summary letter to Magistrate Judge Patricia J. Gorence, dated June 14, 2007.

( CLICK HERE TO SEE LETTER )

Comments????

NIFONG UPDATE! - DISBARED FOR FRAUDULENT BEHAVIOR

NIFONG UPDATE

DISBARED – FOR FRAUDULENT BEHAVIOR

WHO ELSE WAS PARTY TO THIS SCHAM


June 16, 2007 the North Carolina Bar Association after hearing found against Raleigh, North Carolina District Attorney Mike Nifong for committing amongst other technical legal infractions, fraudulent behavior in the Prosecution of the Duke University Lacrosse Players.

As we reported on April 12, 2007, (* “Prosecutor Gone Wild”) has now been answered by the North Carolina Bar Association.

The way we see this, it’s not an isolated incident. Prosecutorial overzealous behavior has often been the case in criminal matters. Misrepresentations, fabrication of information, withholding crucial information, falsely accusing individuals and other incidents are often seen in many jurisdictions. However, in the Nifong matter, it was more than just bad prosecutorial behavior. Some would argue that this behavior was the result of his desire to be politically correct. A decision was made by Nifong to withhold certain information from the defendant’s attorneys and the court, while presenting to the court that such information did not exist. In the DNA matter, the dramatic turning point of the case, Nifong withheld the results from the defendants and their attorneys knowing that the DNA was not a match against the accused. It took forensic DNA evaluation to find that the rogue District Attorney was playing with the lives of three innocent Duke Students. It was an injustice to the entire University, the legal profession that a District Attorney and the people of Raleigh, North Carolina, that the Peoples Attorney would do anything possible to convict the innocent to favor himself with a selected community. It wasn’t a matter of black against white; it was a Nifong matter to ingratiate himself to the Black community that he serves with an upcoming election knocking at his backdoor.

The remaining question that CrimeTalkAmerica asks is; Who Else in the Raleigh, North Carolina District Attorney’s Office participated in the cover-up? Who knew what? Who DIDN”T STEP UP to bring the truth forward? They had a legal responsibility to tell the court and report the facts to the States Attorney General before it went as far as it did, to trial for the three students.

Nifong’s behavior was callus, indifferent and elitist. He apparently misunderstood his role in his service to the people. As an elected official, he represents all the people. The investigators in this matter were suspect of the claimant’s complaint, but followed the path of Nifong and his assistants.

This calls for a CLEAN SWEEP of the Raleigh, North Carolina’s Prosecutor’s Office, and those law enforcement official’s that participated, committed malfeasance and obstruction of justice. It calls for a sweeping Grand Jury Investigation into the behavior of not only Nifong, but the Assistant Prosecutor’s, Police Investigator’s and others in official capacity that ignored their sworn responsibility.

Not to say that the Duke students didn’t set themselves up for their own plight. Something that the university will have to deal with, however, the allegations from the beginning were suspect. The changing story of the claimant, the testimony of the fellow stripper, who denied that a rape had been committed, she had not seen a rape she claimed, and the lack of physical evidence, namely the DNA of any of the accused was the signal that the claimant was a questionable victim. While I would agree that the District Attorney’s office is required to investigate these serious allegations, the element of political expediency, racial complications and a naive District Attorney, all added up to a disaster, and a national disgrace of the legal prosecution profession in the State of North Carolina.

As the evidence mounted that questioned the claimant’s complaint, it was the responsibility of the prosecutor to examine all the facts, not turn his back on exculpatory evidence so that he could meet his political agenda.

Shame on the justice system that allow political expediency to be the decider in the prosecution of cases. Shame on the political animals that find it more important to withhold crucial data, evidence that would clear any individual.

Some years ago, I developed information about an individual that had been found guilty and was serving a 15 year sentence for Burglary and Arson. He was in his eighth year of his sentence, when I discovered that the Prosecuting Attorney in Brooklyn New York had withheld physical evidence, detailed statements from witnesses and physical crime scene evidence. This information was never presented to the defense attorney or the court. The information held by the prosecutor’s office CLEARED the defendant and presented information that would have proven that the original target of the investigation was the actual offender. It took eight years and a court hearing on the newly discovered evidence, (that the prosecutor had all along) before State of New York Court, to exonerate the defendant and have him released from prison. He lost eight years of his life, his family moved on, his children moved on and his employment was gone. All beacons of an overzealous prosecutorial and a prosecutor that ignored his legal responsibility to present all the facts known at the time.

To the State of North Carolina, I ask the Attorney General to conduct an independent Grand Jury to evaluate and prosecute any others in Nifong’s office that had knowledge but failed to STEP-UP for the integrity of the office and the law.

www.CrimeTalkAmerica.com recognizes that the majority of prosecutors are hard working, sometimes overworked, defenders of our legal system, citizen’s rights and a criminal’s worst enemy. We recognize also that there are some people who become prosecutors for political reasons, indifference to the rules of evidence, rules of procedures and rule of law for the benefit of their career. To this I say, step aside!

PRODUCT DIVERSION .. MAUFACTURERS BIGGEST HURDLE EXPLAINED

PRODUCT DIVERSION

As requested by our readers!


At the request of many of our readers in the Johnson vs. Supervalu litigation report, they requested more information about DIVERSION and how it effects business operations. The following details a variety of methods which impacts all industries and a “Case of Diversion”.

“DIVERSION” of manufactured products, whether pharmaceutical, grocery goods or even sneakers finds corporate entities struggling within their own organizations to deal with the penetration of the production grid. Product diversion not only impacts the corporate bottom line, but seriously damages the credibility of the product identity, leaving the corporation with the potential for liability exposure, alteration and adulteration of products and its impact on the reputation of the manufacturer.

Diverted products are guided through a maze of planned manipulations, alteration of business records, and conversion of transportation from its original destination to another recipient or illicit market distribution network.

Product diversion simply starts from within the manufacturers facilities. Depending on the point line in the system, the products at any given point, from manufacturer, on the product assembly line, shipping and packaging, trucking and transport or even labeling, packaging and or the creation of false shipping label documents are all points of weakness within the corporate system. Distribution weakness points in the system chain, affords the diverters an opportunity to short the manufacturer of product, financial benefit and reputation.

What are the causes of Diversion?
Often companies maintain an internal policy that creates diverse geographical pricing and compensation programs. This contributes and triggers a diversion plan from a network of organized marketers, within or external from the corporation.

Protecting the company to reduce the level of diversion requires a need to mark the product. It also requires the company to track the product, integrate information including; production. packaging, shipping, transportation and receipt, of the products identity, computerized audit code, and even now RFD (Radio Frequency Device) marking the product from the start of the production to the finished authorized destination, protects the product in the distribution network.

With the creation of GPS tracking of containers, even individual products, creates an added expense, but will reduce diversion, or trigger information that the product has not reached its destination. Depending on the value and impact to the business, GPS tracking must be accompanied with internal controls and system wide audits.

Diversion’s impact on the business often leads to erosion of brand name, inadequate inventory levels in targeted market area, and lower revenues from high paid discounts, and higher cost of distribution due to slow sales. This has a greater impact on the financial growth of a company than counterfeited products. Supply chain partners and distributors exclusive territory rights are diluted, costs increase, brand value is eroded and profitability of all channel partners are affected.

Product diverter’s, third party marketers undercuts the company’s price of goods while reaping high profits. Diversion often referred to as “Grey Market Goods” or “parallel distributors” greatly disrupts the distribution channel of the legitimate business operations. Products that are diverted are often the result of deception and fraud. Discount, and warehouse retailer, supermarket chains, independent grocery stores and at times drug stores become the retailing marketplace for the diverted product. This impacts the legitimate distribution network, manufacturers, distributors, retailers and the consumer.

The international distribution network based on tax incentives, different pricing and new market distribution outside the United States aids in creating the diversion network. Because of these tax incentives, variable product pricing affords the diverters the opportunity to move products from its international destination and convert the product into the American marketplace at what appears to be a greatly discounted pricing from the legitimate distribution chain in America.

Hence, DIVERSION of goods from the directed international marketplace to the American retailer impacts the costs and value of the manufacturer.

In the Cigarette industry, product destined for the international market often finds their way into communities that are considered border communities. While the pack of cigarettes is marked for international sales only, they can be purchased in such cities as Miami, Arizona and Texas border towns. While legitimate business partners of the companies complain about the product availability, the goods are being diverted from the legitimate shipments to the American market.
They were sent with certain discount prices, have limited state tax restrictions and are sold on the open market through a chain of retailers with little disruption.

In the Medical Supply industry, price and volume incentives cause a dramatically lower price in the volume purchasing from distributors in different regions of the world. Thus allowing the distributors to take orders from “local trading companies”, which are then transferred to a shipping company with the manufacturer thinking the local industry is growing. However the shipping company is now sending the product to destinations where distribution prices are much higher. The Diversion of such goods creates a massive “Gray Market” for the parallel distribution line who can provide these products to stores or even manufacturers distributors at a lower price than the manufacturer would offer in that territory
Today, the pharmaceutical industry is exposed to “Parallel Importing” often seen as grey market importing is unauthorized, but not necessarily criminal, importation of patented drugs for resale via conventional distribution channels. Sourcing drugs for a free market economy from the United States to a country of price point fixed products below that found in the United States has legitimate incentives. In parallel importing cases, it robs the patent holders of legitimate profits and thus limits the incentive for pharmaceutical companies to invest in developing new drug solutions.

It is well known that pharmaceutical products purchased for third world nations at a tax free discount from United States to aid foreign markets, is purchased at discounted pricing, then converted into parallel goods for redistribution in foreign countries that were not scheduled to receive the reduced pricing of the drugs. The middle-men are receiving discounts, increase product levels at no cost, sample products and off-market goods for specific countries. In turn, the middle-men of the distribution network, sell off the reduced priced goods at an inflated price, yet under the cost prices of the United States marketplace.

Supervalu/ Johnson Diversion Program:

In the Johnson v. Supervalu litigation, in which Johnson won a $16 million dollar judgment against Supervalu, it was disclosed and alleged that Supervalu and Johnson participated in product diversion from manufacturers, causing Johnson’s grocery stores to be shorted of products, and not benefiting from the product rebates offered by the manufacturers.

In the complaint by Johnson in this matter Section 3. “Fraudulent Diverting Transactions, is detailed in the following;
“62. Diverting in its purest form is a process by which a person who can obtain a product at a discounted price resells that product to another who is not able to obtain a discounted price.”
“65. Nerveless, Johnson alleges that Richford has an entire department dedicated to diverting. Johnson also alleges that Richfood has a warehouse used for unpacking cases, removing stingers, and repacking products for resale.”

As a result of the diversion scheme, Johnson alleges that it cost his corporation more than 102,000 in billbacks that he could not claim with the manufacturers, since the products were diverted and never received by Johnson’s stores. Johnson admits that his company “participated fully”, but was unaware there was no product movement in the illegal Richfood scheme. Johnson’s company MPH’s diverting losses resulted from 35 product deals for which it was not able to obtain product movement data from Richfood to support billback invoices to manufacturers.

The world of diversion has become computer based, on-line and extremely sophisticated. Trails of today’s diversion may be very well hidden in the depth of computer generated information systems.


Supply chain professionals need to be in the front lines in the battle against diversion of manufactured goods. Manufacturers need to take charge of there supply chain to insure the integrity of the production line, the transportation and the end distributor or retailer has received the products that they sell to keep the market going. Any hiccup, hesitation, disruption or pattern of diversion should be immediately addressed, not just as a misstep, but rather as a scheme to defraud the manufacturer, its shareholders and the consumer public.

CASE STUDY WITH A POSITIVE END:

Some time ago a manufacturer of a “NEW” hygiene product, a depilatory hand-held shaver, made in Israel, was being manufactured in China and distributed around the world. The corporate owners wanted to enter the U.S. market and had been planning a major introductory advertising campaign. It was discovered, a surprise to the manufacturer that their product was already in the United States and being advertised in circulars of two of the largest retail chains in America. How did this happen?

Our investigation (Ben Jacobson) identified the marketing agent within the United States, his business name, a legitimate authorized business enterprise. He was sitting on two containers of the product that had been DIVERTED from a European shipment to a Trans-Atlantic cargo shipment into the U.S. The marketer had a distribution chain of major retailers whom he had done business with for years. He was not the originator of the diversion, just a cog in the wheel of the diversion chain, the recipient and distributor. His associates were associated with the manufacturer in Israel and China had developed access from the manufacturing plant. They knew that the product was not yet available in the United States, but the company had a marketing plan, and an advertising explosion about to be put into place. The manufacturers had spent millions in development and creating the American market buzz, but had been beaten to the distribution point by diverters. This was a very sophisticated diversion operation. The product did not have government restrictions, or was required to pass other than normal customs inspections. Like many shipping containers entering into the United States, less than 3 of ten containers are inspected. In this case, the containers would have not raised any issues.

The result of our investigation found the manufacturers with a dilemma, a decision of litigation or distribution. They had a product that was receiving tremendous positive reaction from the consuming public. The retailers had been marketing the product nationally with an advertising campaign and introductory offers.

A meeting with the marketing diverter distributor was held. An agreement with the marketer was struck. The decision was to join with the diverters that already had a distribution network in place within the United States. It didn’t make business sense to engage the distributor in litigation, when the business decision decided to join forces with the distributor and reached a distribution agreement after reaching a settlement for the cost of the diverted goods previously sold.

What did this mean to the corporation? As a result of the agreement, the American distributor provided the contacts and resource names of businesses that were part of the diversion. The manufacturer closed the loop-holes by reaching this agreement with its Chinese partner on the accountability of manufacturing, quality control and stopping over-run productions. The business decision brought an end of the diversion of the product and created a product that reached into every retail community within the United States. The loss of millions from the diversion was converted to a profitable distribution point.

This is not to say that rewarding diverters is suggested, but in this case, the corporation made a sound business decision to enter the American marketplace, with an already built distribution network. They got into bed with the diverters. It saved time and money to reach their distribution and sales objectives.

What happens when diversion occurs? All manufacturers suffer from diversion of products. The real question is what percentage of diversion impacts the manufacturers business. Often, diversion has a greater impact on the company than counterfeit products.

Controlling diversion is not a simple task, but rather the constant diligence of the entire process. From beginning of the manufacturing to the destination of the product, audited movement is required. However, in the real world, the human factor impacts the method of diversion and its destination.

You Have the Questions, We Report!!!

We look forward to you comments.

Supervalu, Bad Business, Questionable Diversions, $16 Million Judgment

SUPERVALU

THE JURY SPEAKS
$16 MILLION AGAINST SUPERVALU IN THE JONNY JOHNSON, RICHMOND, VIRGINIA CIVIL SUIT

As we reported last week, Jonathan Johnson, an African American businessman from Richmond Virginia, took on the behemoth Supervalu in a Civil Action seeking damages for breach of contract.

For approximately 12 years Johnson’s grocery business had entered into a business relationship with Richfood, Inc and Supervalu. Supervalu and Richfood extended credit, provided warehousing services, accounting and other services typical in the grocery business.

The agreements between the parties fell apart when it was discovered by Johnson that after reaching a contract “obligation to provide assistance.. With opportunities to grow” the business.

Johnson discovered that his companies were being subject to questionable business practices, such as being shorted on product deliveries, failing to receive timely credits and rebates and improper charges. Johnson also discovered that Supervalu, without his knowledge, was in discussions with his store landlord to secure sites for Supervalu’s “Save-A-Lot” chain of retail stores, a competitor to Johnson’s business.

Johnson had also discovered through inquiries with manufacturers, that without his knowledge his companies unknowingly had been involved in a series of transactions by which Supervalu/Richfood allegedly collected manufacturers rebates on products, but not actually purchased by Supervalu/Richfood through Johnson’s company stores.

These fraudulent DIVERTING transactions benefited Supervalu/Richfood financially, while siphoning substantial revenues from Johnson’s companies.

The four man - three woman jury awarded Johnson a $16 million judgment, a decision upholding the numerous allegations that the nation’s third largest grocery chain, Supervalu, forced him out of business.

Lawyers for Supervalu immediately told Judge Margaret P. Spencer that they will appeal the decision and renew motions to throw out Johnson’s evidence in the case.

Johnson and his legal team argued that Supervalu defrauded Johnson by singling him out as a troublemaker, while it had extended high-interest loans and supplied contracts worth millions.

Johnson stores went out of business in April 2004 ending a 15 year business operation in an inner-city community in the State of Virginia.

As we had reported earlier, Johnson witness Susan Rhyberg, a former technical employee for Supervalu had testified for Johnson. Supervalu Senior executives took the witness stand claiming that Rhydberg was not in meetings or even known. As rebuttal, Rhyberg returned to the witness stand this past week and provided testimony, e-mails and other information showing her employ and participation in the Supervalu business meetings disputed.

Was this a typical “BUST-OUT” takeover of a business by Supervalu, or was Johnson just a victim of aggressive business practices by the behemoth food giant.

Like the scene in the movie “Goodfellas”, the bar owner goes to the boss and asks for him to take the goons off his back. He agrees, and then takes over the business, keeping it afloat, using the bars contacts and credit with suppliers, then upon delivery moving the products out the back door, selling to other stores for cash. No payments made by the bar to the suppliers, then the bar is closed. No credit, no suppliers, no business. The next scene is the torching of the bar.

In this scenario, Johnson’s business was forced to close as the result of Supervalu’s business practices, high interest loans, rebate diversions and product diversion. So after 15 years of business Johnson lost it all. Supervalu entered into the community and began new grocery markets in the region.

What a take over!!!

Congratulations to Jonny Johnson for his taking on the goliath Supervalu. Like “David” beating the giant by the small guy is not only a win for Johnson, but a win for the community he served for so many years.

What do you think? Is a Pattern Developing in the Coupon and Rebate Industries?

Are our nations Manufacturers bearing the brunt of a deceptive industry?

Have a Comment, send it in...

We Report, You Report...

IOS UPDATE! A Question of Value , Supervalu Litigation , Sounds Familiar

IOS UPDATE

A QUESTION OF VALU

SUPERVALU LITIGATION

Research of the International Outsourcing Services indictments found that Supervalu, one of the nations leading food services company, a publicly traded corporation, rated 153 in the Fortune 500 listings, is a 25% shareholder of IOS.
IOS recently separated from the Criminal Indictment, is not relieved of it’s responsibility of cooperating with the U.S. Attorney’s prosecution of the principles of IOS, namely Thomas Chris Balsiger et al.

A look into Supervalu and its affiliation with IOS finds more than just a shareholder, but a business partner. Supervalu has built a business on development of gobbling-up small community grocery chains over the past several years. Good business, expansion of the bottom line sometimes at the expense of the local community. Lets Take A Look at the case of Jonathan F. Johnson, Richmond, Virginia.

In this matter, Johnson v. Supervalu, Inc. and Richfood, Inc., Circuit Court, Richmond. Virginia, file # L5785-4. Mr. Johnson has filed a $25 Million Dollar claim for compensatory damages and $350,000 in punitive damage claim. This is an ongoing trial.

Mr. Johnson, a 40 something African American businessman is President and CEO of Marketplace Holdings, Inc., The Market, LLC, Community Pride, Inc. and R&S Stores, Inc. in the State of Virginia. All of these businesses are grocery stores operated by Mr. Johnson. He has been in the grocery business for more than 23 years, and has been recognized as a leader and authority in the grocery industry. Particularly to the establishment and operation of retail grocery stores in urban markets and the marketing of consumer products to minority consumers. In 1999 Johnson was considered the owner of the nation’s largest African American owned grocery chain.

For 12 years, it’s claimed in the law suit, that Johnson and his companies purchased grocery products from Richfood and/or Supervalu based on specific agreements between the parties. At times both Richfood and Supervalu extended credit to the “Companies”, as well as warehousing, accounting and other services to the Companies, a common practice in the grocery business.

In 2001 a dispute between the parties arose at which time an agreement was reached between the Companies, Supervalu and Richfood. A settlement agreement was reached and specific obligations were created by the Settlement Agreement. One specific form of the agreement was that the Companies were subject to Supervalu’s “standard screening approval process and standard lending practices” As a result of the multi-year supply agreement, the defendants, Supervalu and Richfood are the “EXCLUSIVE” supplier for the Plaintiff’s retail stores.

Johnson discovered in 2000 that his Companies were being subjected to a variety of questionable business practices, such as being “SHORTED” on product deliveries, failing to receive timely credits and rebates and other improper charges.

Johnson alleges that after inquiries from manufacturers, without his knowledge, the “Companies” had allegedly been involved in a series of transactions by which the defendants, Supervalu and Richfood collected manufacturer’s rebates on products but not actually purchased by the defendants through the “Companies” stores.

Sound familiar! International Outsourcing Services (IOS) business operators have been indicted in a widespread consumer coupon scam that involved manufacturer’s consumer coupons and rebate items. The relationship between IOS and Supervalu is a shareholder relationship, whereas Supervalu owns approximately 25% of the shares of IOS.

A common practice identified that the Johnson matter is a scheme to defraud by a means of diverting product. Johnson’s confirms that his companies joined Richfood in a scheme with a value identified as $1.5 million worth of diverting sales. In most of the cases the Market Place Holdings, Inc. (MPH) would secure a discounted product price in the form of rebates or a reduced price from a vendor or broker purchase extra cases of the discounted products, then sell those cases to another retailer who would pick up the products at MPH stores or the Richfood warehouse.

It’s alleged that Richfood implemented the scheme in a manner that did not involve product movement and left MPH liable for uncollected bill backs. Analysis by MPH through January 2003 its reported in the complaint filed by Mr. Johnson, that a total of $102,946.03 in billback debited from MPH from Richfood and that MPH was not able to collect from manufacturers. MPH’s inability to collect these billbacks arises from Richfood’s inability or unwillingness to provide product movement data showing the products were actually purchased and sold.

MPH admitted that it participated fully, but was unaware there was no product movement in the illegal Richfood scheme. In May 2003, Supervalu became concerned about the decrease in the level of sales at “The Market” and wanted to increase sales in the grocery department. Johnson informed Supervalu that better pricing from Supervalu would improve sales. One month later, its alleged, that Supervalu began giving MPH what was represented as the “GreatValu” pricing on orders for all of his stores.

GreatValu store orders and purchases its groceries independently and the products are delivered to each store by SuperValu. The complaint further reports that SuperValu reports the quality of GreatValu sales “movement” for purposes of obtaining “billback” rebates from manufacturers.

Its alleged that while SuperValu represented that MPH was then receiving GreatrValu pricing, MPH did not. Johnson, MPH’s owner operator, learned from several manufacturers that SuperValu reports MPH “movement” as part of the total GreatValu movements for purposes of obtaining billbacks. SuperValu failed to inform Johnson and MPH of this “movement” reporting practice.

Other similar issues suggested by owner’s of “Shop N Save” grocery stores in Pennsylvania alleges that after agreements with SuperValu, they pulled out of a project that he had committed $4.4. Million dollars in construction. Mark Scozio of Penn Township Pennsylvania filed a federal civil action against SuperValu alleging a “Breach of Contract” and “Negligent Misrepresentation”. He accused SupervValu of misuse of advertising money contributed by the Scozio franchise and damaged the franchise sales with its Greenpoints program, a customer incentive venture that SuperValu started the previous year, 2002. Scozio family and Mark Scozio owned six grocery stores, of which were franchises of SuperValu, under three different Supervalu grocery store names, Shop N Save and Save A Lot.

It’s alleged, SuperValu mingled $1.4 million of Scozio advertising money for the benefits of Foodland retailers, a competitor of Scozio. The tension between Scozio’s and SuperValu heightened when SuperValu added 19 new corporate “Shop N Save” stores in the Pittsburgh area, closing in on Scozio’s limited territory and limiting growth.
The Scozio Group realigned themselves with other markets and left SuperValu that want to control most of their business operations.

It seems that the practice of control by SuperValu is more than an investment into local small grocery chains. Control of the product shipments, financing assistance, partnering between SuperValu and the local or regional grocery stores in the expectation of expansion of the local grocery chain, the shipping of products to the local stores, the rebates that would go to the store operations becomes part of SuperValu financial position, Manufacturers rebates alleged being diverted to other business enterprises of SuperValu, while the small grocery store partner awaits rebate funding and special pricing for selected special products offered as an incentive discount by manufacturers to have grocery stores push their products.

What’s going on here?
Today, June 4, 2007, in Richmond Virginia, Circuit Court the civil suit brought by Mr. Johnson, a local African American businessman who had partnered with SuperValu, heard the testimony of a Senior SuperValu executive. The executive was to counter one of Johnson’s primary witnesses, a former employee of SuperValu, as having no credibility. At the end of the day, Circuit Judge Margaret P. Spencer refused a renewed effort by SuperValu to strike Johnson’s evidence in the case.

Susan Rydberg, the former SuperValu employee who worked in the technology related department, returned to court today for the second time during the trial. Today she presented a letter of commendation from SuperValu Chairmen Jeffrey Noodle for her work. She also presented numerous e-mails that suggested she attended meetings with high-level company executives. The Supervalu executive testified last week that Rydberg was unknown to them and was not part of top-level discussions of the company’s business plans.

It’s apparent that Judge Spencer agreed with Johnson’s attorney and the credibility of Rydberg, by refusing to strike Johnson’s evidence in the case.

What’s going on here? Is this business practices gone wrong, or is it something more that may be corrupt business practices. Only time, documents and witnesses will tell. Perhaps we’ll see a cooperating witness in the IOS Federal Prosecution step up to the plate and bat for the bleachers to free himself of the criminal liability they face in the IOS fraud accusations. Maybe then the schemes will open up to expose those involved in the diverting and rebate programs. This all has an effect on the pricing of groceries on the shelves in every marketplace. Or, is the practice of diverting inventory a legitimate business practice and the manufacturers accept then practice of the rebates so that brand managers reach their goals and those bonuses are given based on productivity.
Who’s looking out for you the consumer?
SuperValu we’re watching this one!
We’ll report on the results when a decision is returned.

Any Opinions, you report, we’ll report.
Send us your comments.

IOS FRAUD COOPERATION AGREEMENT INTERPRETATION / THE IMPACT OF THE SCANDAL

IOS FRAUD
COOPERATION AGREEMENT INTERPRETATION
THE IMPACT OF THE SCANDAL

The IOS (International Outsourcing Services LLC,) fraud has many implications in the world business community. It has been determined that Supervalu, a publicly traded $44 billion corporation, based in Eden Prairie, Minnesota, is the third largest grocery chain, and is a 25%, (one quarter) owner of International Outsourcing Services, LLC.

Michael Horne of www.Milwaukeeworld.com tells us that the 25% ownership by Supervalu puts an “interesting twist” in the May 21, 2007, cooperation agreement by U.S. Attorney Steven M. Biskupic to DROP criminal charges against IOS for its involvement in a $250 million dollar coupon fraud scheme.

This agreement removes IOS from criminal culpability in the wire fraud charges that remain pending against eleven individuals charged in the March coupon fraud scheme. Of the eleven, two individuals own 75% of IOS. As [part of the agreement IOS is required to “installing a new management team and removing the indicted individuals from their roles with the company”. The agreement also; places “all putative distributions to shareholders, including any potential proceeds available for shareholders if the company were ever sold, in escrow pending resolution of the criminal cases.”

This provision was put into place to assure that Bruce Furr, 70, who owns approximately 51% of IOS and Thomas “Chris” Balsiger, 53, who owns 49% in his partnership with Supervalu, do not reap the financial rewards of their conduct, if found guilty. ie: Michael Horne, Milwaukeeworld.com

This leads us to evaluating the Dismissal Agreement against IOS. First, and most importantly; how does it affect the shareholders of Supervalu? It is obvious that the shareholders may not benefit from the profits of IOS, and may in fact have a chilling effect on the value of their shares. If Supervalu is implicated in any form with the coupon fraud, shareholders may suffer. What was the role of Supervalu in the management of IOS? Who sits on the Board of IOS that is an Executive of Supervalu?

We at www.CrimeTalkAmerica.com believe that the agreement by the U.S. attorney’s office took into consideration the fact the IOS business position in the coupon redemption industry can have a tremendous financial impact on the grocery manufacturers and consumers. By allowing IOS to continue operations with new management, keeping the ship afloat, as one would say, is a savvy business decision, not only for IOS, but to the entire coupon and grocery retail industry.

Dismantling IOS would not only impact the thousands of workers of IOS, those that depend on a weekly or monthly paycheck, but it would have an impact on the entire grocery distribution network; advertising, marketing, clearinghouses and possibly even NUWORLD NCH, the leader in the coupon industry. IOS has a majority of the market share in clearing coupons for grocery manufacturer’s, but was insulated by their own national and international business development. It wasn’t until a coupon fraud in New Jersey uncovered by FBI and the U.S. attorney’s office took a look at the excessive coupon submissions from this group of Middle Eastern grocery store owners.

I will say that until the testimony of Ben Jacobson (myself) before the Senate Judiciary Committee Hearings on “Terrorism and Technology” in 1998 exposed the probability connecting terror financing in the United States by Coupon Fraud, the subject of coupon fraud received little attention from law enforcement. Since 9/11 the FBI, Postal Inspectors and other law enforcement agencies now understand the impact that coupon fraud and its relationship to financing terrorism has in the big scheme of things.

The other implication in the Federal Dismissal Agreement with IOS stands at the doorway of legal hypocrisy. Understanding the implications of an indictment of the individuals and a corporation that aided, solicited and agreed to conduct itself in a criminal manner should not release the entity of its criminal liability. IOS books, records, transactions and employees all have a story to tell. It’s a story of greed, financial crimes, and possibly aiding and abetting criminal enterprises, allowing such networks as the New Jersey Coupon Fraud ring to operate with impunity and free reign on American business values. How many more rings will be identified now?

What profits did Supervalu take out of IOS? If IOS is an LLC, the implications are that of individuals, not a corporate entity. Shareholders are not part of an LLC, but rather a corporate entity. LLC ownership is generally a percentage partnership by individuals. An LLC protects individuals from certain corporate tax liabilities, and a protection from personal liability, except when the principles are acting in a criminal manner. While it has not yet been proven in a Criminal Court that all those charged are criminally liable, this would only happen after trial or pleadings of guilty to charges, then we can find that the LLC and it’s partners are all criminally liable.

Keeping IOS operating allows the investigators, FBI, U.S. Attorney and other law enforcement entities the opportunity to review documents, collect information, survey the extent of the fraud and determine if any other entities, like the New Jersey group reaped the rewards of coupon fraud while IOS management looked the other way, while their hands were allegedly in the cookie jar.

_________________

Today, May 23, 2007 IOS announced the anticipated resignation of Bruce Furr as Chairman and of Chris Balsiger as CEO of IOS. Willaim L. Babler, CFO also reigned.

Furr and Balsiger were replaced by Greg Rayburn, CEO, the new CFO is Sean Gumbs of FIT Palladiun Partners of New York. Furr and Balsiger remain the 75% ownership of the company.


Tell us what you think!!!

e-mail us your evaluation or information about this story.

IOS FRAUD! BREAKING NEWS ALERT !!! IOS Becomes Cooperating Witness !

BREAKING NEWS ALERT

May 17, 2007

United States of America

Plaintiff
v. Case No. 07-CR-57 (CNC)

INTERNATIONAL OUTSOURCING
SERVICES, LLC.

Defendant

ORDER TO DISMISS THE INDICTMENT (Corporation Only)


On May 17, 2007 IOS has reached a cooperation agreement with the U.S. attorney’s Office.

The federal charges dismissed before the Federal Court, with prejudice.

THIS DOES NOT RELEASE THE INVDIVIDUAL PARTICIPANTS, CORPORATE OFFICERS OF IOS, EMPLOYEES AND OTHERS FROM THEIR CRIMINAL INDICTMENT AND PERSONAL LIABILITY.

As part of this Dismissal agreement, the corporation agrees to cooperate with the investigation, assisting in the investigation, and prosecution of individuals concerning the fraud scheme charged in the above captioned case, provide and the collection of business records, providing statements and documentation to further the prosecution of the individuals identified and others not yet identified in this case and persons associated with IOS for possible obstruction of justice both before and after the indictment in this case.

IOS has agreed to cooperate after installing a NEW MANAGEMENT team and after removing the indicted individuals from their roles with the company.

Therefore, the DISMISSAL of the Corporations Indictment in this matter DOES NOT relieve the criminal liability of the individual officers, participants and others indicted in this matter.


READ the MOTION to DISMISS INDICTMENT by the United States Attorney Steven M. Buskupic

READ the DISMISSAL ORDER by United States District Judge, Charles N. Clevert.

In addition, IOS has agreed to replace the management of the corporation

Look for Detailed Explinations and Upcoming Stories detailing what happens next and the effects on the industry!!!

Signup for our newsletter to stay informed.

Gangland Invasion by Crossing Our American - Border / Border Protection, Imigration Policy or both, ITS TIME!

GANGLAND INVASION BY AMERICAN – BORDER CROSSERS


The recent development of the New Jersey Six Al Qaeda sympathizer arrests for planning an attack on the U.S. Army base at Ft. Dix, New Jersey reminds us at www.CrimeTalkAmerica.com that the absence of enforcement of the simplest laws, like traffic infractions, could have prevented the planning and execution of the alleged conspiracy to attack our military base on American soil. Once again we see that “Sanctuary Cities” ideology (an argument coming in future articles) failed to enforce our immigration laws. Our police are instructed to pass illegal immigrants back into the community. We enforce our laws by being politically correct. After more then two dozen traffic infractions, stops and summons, one of the New Jersey six was allowed to go back to the community. This release and indifference of our legal obligations to the American people and those that have come to America through the proper process of Immigration, allowed those conspirators to further the alleged plan to commit a murderous attack on our military. The lack of immigration notification, kin police jargon FOA ( For Other Authority) afforded him and his associate’s time to purchase and practice with automatic weapons in the Pocono’s Mountains, Pennsylvania, to sharpen their skills at “killing”.

Whether they had an affiliation with Usama Bin Laden, or just were disciples or sympathizers, the issue of illegal immigration has once again been in the forefront of these criminal conspirators. Do they come here as criminals, with a plan or did they develop a hatred of the United States based on religious fanaticism, anti-American ideology or are they ideolog's who want their virgins in heaven?

The discussion of GANG infiltration into America, across the country is the result of the ability of international Gangsters having America as a target of free enterprise and growth. They seek the American Dream.

Gang penetration into our cities brings crimes of; extortion, murder, alien smuggling, weapons smuggling, drug distribution, prostitution and assault on American law enforcement. American law enforcement have seen an explosion of gang violence by groups affiliated with such identities as MS-13, Calle-18, which have flowed freely from the South and Central American countries across the borders of Mexico into the U.S. MS-13 has spread to more than 42 states across America, preying on and recruiting other Latino immigrants.

The increase flow of illegal aliens, illegal migrant workers, deportations by the U.S. Government, and easy access to transportation offers the two groups expeditious entrance into the U.S. Protected by Mexican gangs and corrupt officials, they enter into the Los Angeles area then flow across America. The FBI has suggested that more than 3000 members of MS-13 or Calle-18 that may reside in the Virginia area.

Affiliate groups have penetrated the Atlantic seashore towns in North Carolina. Moving through Guatemala and into Mexico they stretched into the Southwest. It is not uncommon that MS-13 members would ambush Central American immigrants trying to sneak into America. El Paso, Texas has seen a rise in criminal assaults, and has found that human traffickers often hire the MS-13 members as a means of enforcement of the illegal immigrants.

It is estimated that MS-13 has more than 22,000 members while Calle -18 enjoys the status of more than 12,000 members. (FBI REPORT)

In Honduras, the murder rate in the country’s capital city had increased by 50% in 2005. These killings are attributed to these gangs.

Some States have established GANG TASK FIORCES, by law enforcement agencies, costing millions in enforcement funding. In 2004, Fairfax County, Virginia budgeted 1.4 million dollars to fund the gang task force.

In President’s George W. Bush’s 2005 State of the Union address, the U.S. government pledged $150 million over three years to community based groups to help “troubled youth” to avoid a path to jail. “Taking on Gang life” the President called on community leaders, religious leaders, coach’s and schools to promote safe youth programs. This is not the answer to MS-13 or Calle-18. They need enforcement and incarceration, as well as deportation.

In 2004 the U.S. House Appropriations Committee established a National Gang Intelligence Center in the FBI.

Our neighbors to the south, Honduras, Guatemala, Panama attacked the gang problem by “Friendly Hand” to at-risk youth, or in Honduras, tattooed juvenile have been incarcerated, dropping the crime rate of kidnappings, bank robberies and gang-related killings.

America’s burgeoning gang network, may lead to terrorist support, political activism allows them to go unchecked. This will destabilize our cities and enforcement efforts. More than social benefits, the need to document gang members, identify locations, gang affiliations, activities and with the help of local law enforcement, U.S. Government Law Enforcement agencies like Immigration, Customs Enforcement (ICE) and the ability to enforce illegal immigration into our communities will greatly impact gang activity, reduce city costs of enforcement, incarceration and even medical services. What a savings!

The National Gang Taskforce Conference in 2007 led by FBI MS-13 Agent Brian Truchon claim that “when the gang migrates throughout the United States, there is always a road back of Los Angeles from Los Angeles there is always a road back to Central America.”

The FBI identifies primary cities that MS-13 has spread too. They are; Los Angeles, Washington, DC, Baltimore, New York, Houston, Charlotte, Sacramento, San Francisco, Las Vegas, Omaha, Newark, NJ and Boston.

The FBI has foreign connectivity from MS-13 and the Calle0-18 back to El Salvador, Mexico, Guatemala and Honduras. Truchon went on to explain that that “gang cliques” in the U.S. are often influenced by gang members in Latin America. Gang members in a prison in El Salvador are able to reach out from prison and kill gang members in L.A.”(See WorldNet Daily May 11, 2007.)

Currently the FBI has instituted a criminal/fingerprint retrieval initiative known as Central; American Fingerprint Exploitation (CAFÉ). They have retrieved the criminal fingerprints from countries of El Salvador, Mexico, Guatemala, Belize and Honduras.

The FBI currently has 3 million criminal fingerprints from Central America and Mexico. A test batch resulted that 3,800 hits (11.75 percent) on existing records, 86 have active wants. Offenses include; murder, armed robbery, sexual assault, burglary, numerous drug related charges and immigration violations.

The FBI has reached across the borders of Mexico and Central America to work with these countries law enforcement to destroy the gangs. This reach across jurisdictions will benefit all law enforcement in the countries involved.

At the same conference, the U.S. Immigration and Customs Enforcement (ICE) informed the attendees that “Operation Community Shield” has arrested some 1,362 MS-13 members or associates since the program began in February 2005. Of those arrested, 343 were for criminal activity. 637 of the arrestees were found to have criminal histories. ICE believes that MS-13 controls the smuggling corridors along Mexico’s border, for both drugs and weapons.

MS-13 is not going away. These federal officials are seeing second generation MS-13 members and an increase in recruiting. A more formal criminal structure appears to be developing within MS-13 both in the U.S. and in Mexico.

Why have American politicians of both parties allow the illegal alien invasion? As we see with the violent MS-13 gang; why are government officials, local politicians creating “Safe Harbor” cities? They continue to put their heads in the sand. This problem is not going away. Criminal Violent gangs like MS-13 and Calle-18 are developing political power-bases within the Lain community. With these gangs comes the ideology of subverting American laws, stability and often connected to communist organizations within their homeland, the “OPEN BOARDERS” policy created by President Bill Clinton has effectively changed the make-up of American cities. Border cities live in fear, the police are overwhelmed, our hospital emergency rooms are over-crowded will illegal aliens and the violence that MS-13 brings to El Salvador is now being found in the streets of America, across 42 states.

STOP the FLOW of MS-13 and other illegals. Enforce our immigration laws, protect America. Or are we waiting for a war in the streets that American law enforcement are not capable of handling. It will take our military. Do we want to see Tanks and military patrolling out cities, like they do in Central and South American countries? That’s not the America I know!

Tell us what you think!!

Write us and register for FREE Membership to Crimetalkamerica.com

M-13 / MS-13 The New American Mafia; Terror, Gangs, and Destabilization

THE NEW AMERICAN MAFIA
M-13
SALVADORIAN GANGSTERS



It’s Presidential Candidate time and both parties, Democrats and Republicans, have held their first televised debates. During the debates, the issue of illegal immigration was discussed as a main stream topic, but the domestic policy by either party failed to address the bigger picture, the “M-13” Illegal Immigrant criminal enterprise actively operating within our cities.

The May Day 2007 demonstration across America discovered a new dimension facing America. “Illegal Immigration” has raised many issues. However, none is more important than establishing control and enforcement of those GANG members that have come into America illegally, representing an organized criminal enterprise as never seen before. Not like the old time Mustache Pete’s, or the Al Capone’s or even the John Gotti’s, the M-13 Gang is not only ruthless in their methods of control, but violent to the community and to themselves. In California, the State has a Special Section within one of its prisons, a separate segregated section just for M-13 members. Each is held individually, has little or no contact with other M-13 members, and is

USA Today photo
locked down approximately 23 hours a day. These are violent killers, violent extortionists and have a criminal agenda to disrupt the inner cities and the Latino community. Mostly made up of Salvadorians, M-13 have a political base with an ideology to mandate the overthrow of American communities, one community at a time. Like its predecessor May 13 Terror Group, the M-13 has been in existence for many years, destabilizing South American and Central American cities. They are here in America, reaching across this country with a tight knit organization of crime and violence.

What’s lost in the rhetoric for control of our South West borders, the illegal immigrants are a mixture of people with hope and a mixture of people with organized criminal intent. Building walls and fences across Arizona, Texas and California, adding Border Patrols, armed Citizens patrolling their land does not address M-13. America needs to focus on this violent gang, it’s supporters and sympathizers to prevent them from entering into the United States or spreading across the county. American citizens are split on the flood of illegal immigrants. Some want them to stay and offer them a chance at becoming American citizens, while most want them returned to their homeland, and seek entry the legal procedural way.

More than 68% of the American’s polled want illegal immigrants returned to their countries. Easier said than done! In 2007 it is guesstimated that more than 12 million illegal aliens are in the United States. They work off the books in a variety of businesses, some pay their taxes, send their children to school and are law abiding. Many are looking for a better life for themselves and children. Others have come with evil intentions, criminal gangs, taking over the inner cities from the old line Mafia.

Government agencies have no idea where they are, who they are and what they are doing here. While the illegal aliens have melted into our American cities, government entities, cities, states and even the Federal establishment are locked in the debate about what to do. Local governments are crying foul because of the unexpected costs attributed to these illegal aliens living within their city. Increase in hospital emergency room and medical visits, increased education classroom costs for illegal children, and then increased population in our prison system.

Many in the Prison population are identified as illegal aliens associated with M-13. Our police departments have daily encounters with these violent gangs. Our police departments are understaffed, under financed and lack intelligence about the activities of these gangs, they are often subject to violent attacks, gun fights and face high powered weapons.

This may not be a police issue, but rather a military action to control this criminal army of soldiers from other countries trying to destabilize American cities. The FBI has committed a $10 million dollar budget to attack this criminal enterprise; however, it will take more than the FBI, or even a Joint Task Force of Police and Federal Agents to get a handle on this organization.

The violent M-13 or “Mara Salvatrucha” street gang has migrated with the illegal aliens entering this country. They have a significant presence in the large cities and now are reaching into the suburbs and small towns. From Rhode Island to the Carolinas, to Los Angeles, the migration of M-13 follows the movement of illegal seeking work and legalization into American culture. Whether it’s in farming, crop picking or construction trades these groups are present.

M-13 is the FBI’s number one target from it newly created Gang Task Force. The gang violence includes murder. In one instance identified by law enforcement, an order was given by gang leaders to hit (kill) an Alexandria, Va. 17 year old pregnant teenager, suspected by gang leaders that she became an informant. M-13 gang members pled guilty in Alexandria for attacking another teenager.

M-13 members use “street” names and coded messages similar to the methods used by the Mafia. Even in prison, written coded messages, often written in urine have been confiscated from gang leaders. By writing in urine, it is not visible to the human eye, after it dries.

According to the FBI Gang Task Force, they are trying to determine if an organized hierarchy exists. They have observed an effort to organize in the same way that the Mafia is structured. The question of who is calling the shots for the gang has the FBI stumped. Observations find that gang members spread from Los Angeles throughout America, carrying out orders in other cities. It was reported that 20 members of the M-13 Gang from Los Angeles traveled to Northern Virginia because they were “upset” that the local M-13 members failed to kill a Fairfax County police officer, in 2002.

During a summit of U.S. Conference of Mayors, Chicago Police Superintendent Philip J. Cline said that street gangs like M-13 are far more violent than the Mafia ever was. M-13 members receive protection in prison from Mexican gangs. They pay tribute to the Mexican gangs for protection.

It’s time American’s wake up to the fact that we are under attack from foreign interests, with armies, not necessarily in uniform, on our soil, raping our cities of the stability of a democratic society.

The May 1, 2007 demonstration in Los Angeles McArthur Park left at least 15 LAPD officers injured and assaulted. The illegal alien supporters set fires, and confronted the police with violent response. Many of the protesters were illegal socialists, and radical illegal aliens. It was estimated that more than 35,000 protesters in two cities in California were demanding illegal immigrant status. Some waving American flags, other with Mexican and Salvadorian flags. The T.V. news pictures show a reaction by the LAPD, the use of tear-gas, rubber bullets and batons, thus demanding an investigation about over reaction. The LAPD was greatly constrained, until the rocks and bottles began to be thrown by those criminal antagonists that want to disrupt a peaceful demonstration and turn it into a riot. We’ve seen this in their countries, now it’s here! Welcome to Democracy, Welcome to Freedom of Speech! In Salvador or Mexico, they would be shot, dragged off to prison and not heard from for months. In America, the speedy trial and immediate justice prevails. For the Gang members, they are using America’s democratic doctrine to advance thier socialist and anti-American rhetoric.

In New York a violent melee resulted from thousands of people who assembled in Union Square. Police tried to contain the group, but the overwhelming crowd blocked traffic and pedestrian sidewalks. One police officer was injured. See: www.nj.gov/org/gang-sign

America can no longer accept an Amnesty like “Guest Workers” or a “Path to Citizenship” without first clearing the communities from the vermin of organized gangs like the M-13. Immigration and Customs Enforcement along with local police agencies need to address and enforce the illegal alien population, while politicians must stop establishing “Safe Harbor” cities. The failure to enforce the immigration laws like the terrorists and their sympathizers that live within America, will grow in strength unless our law enforcement community take action to control, rescue and enforce our laws. Selective enforcement should not rule here. This is not a political question, but rather a question of American stability.
See** www.lib.msu.edu/harris23/gangs html. For further details